Budget Resolutions and Economic Situation

Andrew Gwynne Excerpts

Thursday 9th July 2015 Commons Chamber

[Chris Leslie]

I want to make some progress, but I will give way again in a minute. [Interruption.] I will give way now to the hon. Member for Rossendale and Darwen (Jake Berry) if he wants to intervene. [Interruption.] He complains that I am not giving way, but he does not want to intervene.

We will not support self-defeating false economies in the Government’s approach to social security. We do not support an approach that will leave more than 3 million working families poorer, and in turn mean that the poorest children are more likely to grow up into poor adults, which will cost society far more in the longer run.

The Chancellor and Ministers on the Front Bench have a track record when it comes to false economies, particularly during the last Parliament. They scale back nurse training, and then spend a fortune hiring nurses from private agencies, as my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) knows. They cancel major road schemes, such as the one involving the A14, and then revive them later on at vast expense. They pay redundancy to senior officials at the Ministry of Defence or the Foreign Office, and then rehire them at higher cost. They restrain local councils from tackling fraud in housing benefit, and then the level of overpayments escalates to £1.5 billion. They reduce the number of Her Majesty’s Revenue and Customs staff so that phone calls go unanswered from businesses that need to get through, and then are surprised when the tax gap gets wider and revenues go uncollected. And we have a Chancellor with the gall to boast of a northern powerhouse while simultaneously pulling the plug on the electrification of major commuter rail lines.

[Andrew Gwynne (Denton and Reddish) (Lab)]

My hon. Friend will understand the dismay of many across Greater Manchester and the wider northern regions, not just at the pause in the electrification of the line between Manchester and Leeds—and the implications that will have for rolling stock in the north of England—but at the insult yesterday when we were told that we will get an Oyster-style piece of plastic to use on our Pacer trains.

[Chris Leslie]

It has been said many times, but the powerhouse has become a power cut. As time goes on, many—not just in the north but in the midlands—will see through the rhetoric to the reality that they are experiencing.

The Government are undercutting, not supporting, a productive economy. It says everything about the Chancellor that the impact of his Budget has been to worsen the outlook for productivity in our economy over the rest of this Parliament rather than to improve it. The OBR has done the calculations and its prediction is on page 77 of its report. Its conclusion is stark. The Opposition know that more productive businesses, and a more productive economy, are the key to a virtuous circle of higher growth, higher living standards and, as a consequence, more effective deficit reduction. For the Conservatives, productivity springs magically from thin air, but for us it is decent infrastructure and decent public services that can make all the difference to business success.

In his March Budget, the Chancellor did not even mention productivity, so perhaps we should be glad that he at least found time to mention it yesterday, even if we are still waiting for the much trumpeted productivity plan. I gather that it will be published on Friday, although the House is not actually sitting that day so we will not be able to scrutinise the details. Under this Chancellor, UK productivity has, in the words of the Office for National Statistics, undergone a period of “unprecedented” stagnation.