Budget Resolutions and Economic Situation

Debate between Andrew Mitchell and Brooks Newmark

Wednesday 19th March 2014 Commons Chamber

[Mr Mitchell]

My right hon. Friend is absolutely right, but can he imagine what it would be like today if the Opposition’s policies were being pursued?

I wish to make a point that the Chairman of the Treasury Committee, my hon. Friend the Member for Chichester (Mr Tyrie), will not agree with, although I thought his speech was excellent in every other respect. The Government deserve huge praise for sticking to their plans on international development. The House will be aware that as a result of the all-party support for that policy, countless lives have been saved. Hundreds of thousands of children are alive today in the horn of Africa who would not have been but for British leadership on the issue.

Through the House strongly supporting the Government’s policy to vaccinate, the British contribution means that we will vaccinate a child every two seconds in the poor world, and every two minutes it will save a child’s life from the effects of diseases that none of our children die from today. As a result of reforms introduced by the Government, such as building up governance structure and ensuring that poor countries have the benefit of effective taxation, independent media and so forth, we should all be incredibly proud of the success of that policy. I am enormously proud to have served in a Government who stuck to their promises to the poorest people in the world, and who did not seek to balance the books on the backs of the poorest, either in Britain or overseas. That is also hugely in British interests—this is not just soft-hearted altruism—because it is not only aid from Britain, but aid and development for the benefit of Britain. It enhances the security and stability of our generation and of future generations, and it builds on the prosperity that our generation enjoys, and that future generations will enjoy to a greater degree as a result of those successful international development policies.

I also believe that the Chancellor was right to raise the threshold at which tax becomes payable, and—at a time of great austerity—to target help on those who earn the least. Of course the 40% level bites much earlier than we intended, but the austerity we have faced was harder and deeper, and inevitably those with a little more have had to pay a little more in those circumstances. I am clear, however, that the 40% band needs to be raised as soon as we can, and the drag of people into that band should be reversed once the economy can withstand it.

[Mr Newmark]

Most importantly, does my right hon. Friend agree that raising the personal allowance from £10,000 to £10,500 will save up to 3 million individuals up to £800 extra a year, which is good news for their pockets?

[Mr Mitchell]

My hon. Friend, as always, is absolutely right, and bearing in mind the speech by the right hon. Member for Newcastle upon Tyne East (Mr Brown), it is important to remember that in 2010 the richest 1% in Britain paid a quarter of all income taxes. Today the richest 1% are paying a third, and everyone in the House would agree that under these circumstances, that is correct.

The focus on getting younger people in particular into work is enormously important, and the raised thresholds clearly provide some help to that group. Reducing and ending employer’s national insurance contributions for those under 21 was an important measure made last year that I strongly support, just as I support the emphasis from across the House on increasing the minimum wage. All those things are extremely important.

We have also seen other ways of improving the situation for those entering the world of work. Last year, 510,000 apprenticeships started, while in 2010 there were only 230,000. That is enormously important in the part of the world I represent in the west midlands. Money has also been announced for new locally generated policies in eight core cities in Britain, which is right. However, we still have 1 million people in this country—children who have left school or students who have left university—who are not in education, employment or training, and we need an unremitting attack on that. It is quite wrong that young people who have left school or university should find themselves doing anything other than earning or learning. Although we have seen a significant decrease in the JSA claimant count, unemployment—particularly among young people—remains far too high in the west midlands, and we must continue that unremitting attack.

My final point was touched on in an excellent speech by my hon. Friend the Member for Fareham (Mr Hoban) and concerns the changes that the Government are making to welfare. I believe there are aspects of those changes that Members across the House can, and should, support. Many right hon. and hon. Members will have seen “Benefits Street” on Channel 4, which I think did a huge service to public broadcasting. Benefits Street is six miles from my constituency of Sutton Coldfield as the crow flies, but light years away in most other respects. What that programme showed in connection with welfare was the effect over many years of a very non-interventionist policy. It was almost as if benefits were paid, and once paid the recipients were forgotten.

The Government deserve considerable credit for helping those who cannot help themselves—for example by maintaining disability benefits throughout the stage of austerity—while also ensuring that we give help to those who can work and should do so. It is tough, difficult and hard to re-craft welfare policy, but in that Channel 4 programme we saw why it is essential to tackle the issue.

In conclusion, I believe that the welfare reforms, aspects of which command support throughout the country, could be one of the coalition Government’s finest achievements during their term in office. I shall end where I started by saying that the Chancellor and his colleagues on the Treasury Bench deserve considerable credit for crafting this Budget, which tackles needs at this stage of the economic cycle. I have no doubt whatsoever that his own share price will be rising, and rightly so.