Budget Resolutions and Economic Situation

Austin Mitchell Excerpts

Wednesday 18th March 2015 Commons Chamber

[Austin Mitchell (Great Grimsby) (Lab)]

I will not follow the hon. Member for Braintree (Mr Newmark) into his fantasy world; the Government seem to be in danger of moving into a fantasy world where it is as if all the nation’s problems have been solved by the miraculous efforts of this Chancellor. The Budget seemed to me to be a matter of the Government moving furniture around a room in which they have just had four years of a very painful S and M party and inflicted 50 shades of austerity on the country, and they are now trying to clean up the mess for presentation to the electorate. It is a Budget of pathetic measures backed up by endless promises of a glowing future.

The fact is that the economy is better—we have to concede that—but not because of any Government long-term plan. I am getting fed up of hashtag politics and the endless mentions of the Government’s long-term economic policy. It is as if they think that, if they mention it for long enough and as many times as they can, people will believe that they actually had a long-term economic policy. But they did not: they came in with a fiscal policy of slash, cut and burn, and to roll back the state. It was an ideological policy, not an economic policy—that was the essence of what they offered the British people. The policy was designed to reward the rich, because if the state is rolled back and welfare and public spending cut, then taxes can be cut to reward the rich and start the trickle-down effect, but the trickle-down effect is what horses do to roads. That was the Government’s hope for the British people as a result of the money going to the rich.

On the basis of those expectations, the Chancellor made two promises right from the start: to pay off the debt, which he has singularly failed to do; and to eliminate the deficit, which he has also failed to do. Those two priorities have given us four wasted years of futile austerity in particular, and of pain, which has hit the poor and the north and cut the living standards and household incomes of people in this country. It has been four years of misery.

Growth in that period has now come about not because of the Government’s long-term economic plan but thanks to the efforts of the Bank of England. The Bank of England has been doing what the Government were not doing and has saved the Government’s bacon. If interest rates are kept flat to the floor for six years and £375 billion is pumped out, printed and shoved into the banks without any revival or economic benefits, the patient is dead. That is what has produced the economic revival, not the Government’s measures. It worked and now the Chancellor is trying to claim credit for it, by giving us a few pathetic tax cuts which he claimed were impossible a few years back; by benefiting the north, which he has been hitting for four years; and through glowing promises of a better future that has now been postponed until 2020. I have news for the Chancellor: that future will not come under this Government, fortunately, and it could not come from this Government’s policies. The Government are essentially the trade union of the rich, implementing policies to benefit the rich, and they will be thrown out by the people who have not benefited from those policies.

The Chancellor tells us that we are better off, but the nation does not believe him. The nation feels squeezed, as its living standards are being cut. It feels that it is still suffering and that it has been betrayed, and it does not like the spectacle of rewards being showered on the rich as a result of cuts to benefits and penalties on the poor. This has been the slowest recovery ever from any recession in this country and it has essentially been slowed by the cuts and reductions in demand introduced by the Government. The Government will not produce a glowing future because their policies cannot work. This is not a real recovery. A real recovery would involve building up British manufacturing strength so that Britain was able to pay its way in the world, and that has not happened and is not happening at the moment.

All the Government have done is repeat some old tricks for making people feel better off. For example, with rising house prices, everybody who owns a house feels better off, whereas the people who do not own houses feel and are worse off. Rising house prices, stoked by the Help to Buy scheme, have helped to produce a better feeling, as has the high pound. The pound is grossly overvalued at the moment, which means cheaper imports, even if it damages exports on a considerable scale. Falling food and fuel prices are transient factors and we can add the spending bonanza that the Government hope to see having given pensioners the freedom to spend their pension pots. Whatever the consequences in the future, that would produce an economic boost and a stimulus now.

This is not a recovery that will work and be sustained. It cannot, because the productivity gap has widened and investment is lower than it needs to be, in the private sector and, in particular, in the public sector, where it has been slashed. Programmes that were cut in 2010 have not yet been fully restored. This is not a real recovery because there is no substantial manufacturing revival on the scale that we need and it will not lead to a real recovery because we are still not paying our way in the world. The deficit has been 4%, 5% or 6% of GDP and has been rising. It came down in the past month, but that was a small dent in a long-term rise. We are paying our way only by importing capital, wealth and businesses and by people buying up British businesses, British land, British houses and the country in general. The profits from those buy-ups will eventually have to be exported. Those people will not want to stimulate demand here and it will be exported, dragging down our economy. Investments will be dictated by the long-term needs of overseas boards that take less account of the needs of this country.

Effectively, this has not been a revival in our ability to pay in the world and to stand proudly on our own two feet. The only march of the makers that has taken place seems to me to be the march of the Chancellor and the Prime Minister around factories, wearing hard hats and appealing pathetically for support from factory workers whose living standards have been reduced by their Government.

It is true that we are doing better than Europe, but that is because Europe has embarked on the folly of deflation to make the euro work. Europe has become the low growth, high unemployment blackspot of the west, so to be doing better than that is no great advance or commendation.

The Budget will not lead to the prospects the Chancellor was holding out. We need a real recovery in manufacturing and jobs. Let us remember that, although unemployment is falling, it still stands at 1.86 million, which is very high, and that people who are receiving benefits are not paying taxes. So unless we get a real recovery and a substantial increase in earnings to boost demand in the economy, it follows as night follows day that this Government—if they are re-elected—will have to go in for a massive programme of cuts to achieve their promise to get rid of the deficit by 2020.

This Budget foreshadows an enormous programme of cuts. Welfare cuts of £30 billion have been talked about, and defence cuts have also been mentioned. The Government are not committing themselves to maintaining the defence spending target of 2% of GDP. They have, however, committed to making cuts in local government spending. The Public Accounts Committee has stated that the cuts in welfare and social security are not sustainable.

That is the future that this Government are offering the country if they win the election, but the country will reject that future. It is instead going to accept Labour’s offer to invest to grow, to put people back to work so that more people are paying taxes and fewer are receiving benefits, and to bring down the deficit in that way by reviving the economy. I think that people will accept that offer at the election because they have been so badly bruised and betrayed by this Government, and because they want a party that will offer them hope.

Rail Services (Northern Lincolnshire)

Austin Mitchell Excerpts

Wednesday 16th July 2014 Commons Chamber

[Martin Vickers (Cleethorpes) (Con)]

My first duty is to welcome the Under-Secretary of State for Transport, my hon. Friend the Member for Devizes (Claire Perry), to her new place on the Front Bench. I wish her well. I know that she will not want to let her colleagues down—no pressure. Madam Deputy Speaker, with your permission, my hon. Friend the Member for Brigg and Goole (Andrew Percy) will also contribute to the debate. The Minister has given her consent.

My constituency, despite having 10 railway stations, the largest port complex in the country and an international airport, does not have the best transport links and certainly needs improved rail connections if it is to maximise the potential for economic growth. The Government have indicated on many occasions the importance they place on northern Lincolnshire and the wider Humber area. It has been acknowledged that the area has great economic potential. Siemens has already confirmed its investment on the north bank. The massive development by Able UK is going through its final planning stages. I hope that that major scheme will start in the not too distant future. It has the potential to create thousands of jobs and no one, least of all the Government, would want to put those jobs at risk.

As I have pointed out, northern Lincolnshire does not have good rail connections. We have had no through services to London since 1992, although the open-access operator Alliance Rail Holdings has an application with the rail regulator at the moment. The proposal is for four services each day in both directions and I urge the Minister to consider the proposal carefully with a view to doing all she can to allow it to go ahead as quickly as possible.

Our main link to the rest of the network is provided by First TransPennine Express, which operates an hourly service between Cleethorpes and Manchester 15 times a day, plus an additional one that finishes its journey in Sheffield. It is those services that are central to this debate as one of the proposals is to end the through service and to replace it with services all of which will terminate in either Sheffield or, more likely, Doncaster.

The argument is that not enough people travel the full length of the route. If that is what the Department for Transport is to hang its proposal on, it must come clean. How many passengers travel the full distance between Euston and Glasgow: 20%, or perhaps 40%? How many travel the full distance between King’s Cross and Edinburgh? Many will get off at York or Newcastle, or indeed at Doncaster because they want to get to Cleethorpes. The Department cannot hide behind the phrase “commercial confidentiality”. It cannot release just the figures that support its argument, but must release all of them. Will the Minister agree to release the figures—yes or no?

I also draw the Minister’s attention to the role in the process of Rail North, a consortium of local authorities across the north of England with the aim of devolving decision making. That sounds fine and like something we could all agree with until we look at the make-up of Rail North, which is dominated by the big cities and passenger transport executives. Councils such as North East Lincolnshire might have signed up to the broad principles, but I am sure that they did not intend that their voice in determining the services that serve their area should be silenced or ignored. What they have at the moment is the equivalent of a vote at the annual general meeting.

I do not want to be too hard on Rail North, as we can all sign up to its key objectives as outlined in the consultation, in particular paragraph 12, which outlines the three key points. The first is to support economic growth by delivering more rail capacity and better rail connectivity. The second is to improve the quality of the railways in the north, with a better offer for passengers to encourage more use.

[Austin Mitchell (Great Grimsby) (Lab)]

I congratulate the hon. Gentleman on raising this issue, which is uniting the whole of south Humberside and north Lincolnshire, or northern Lincolnshire, whichever we care to call it. Its political forces are all here; our mighty forces in flesh assembled to oppose this consultation proposal. I hope that I can encourage him to criticise Rail North, but I want to express my support for the view that the direct service from Cleethorpes to Manchester airport should not be cut off in the way that the consultation paper proposes. The transfer of the modern class 170 units to Chiltern to give southerners a more comfortable ride while we are put in cattle transport should be opposed. It is quite right to raise the question of the direct service to London and the electrification of the line, but the main thing now is to stop a service that is bad being made worse by this consultation document.

[Martin Vickers]

I entirely agree with the hon. Gentleman. As he points out, we are, as northern Lincolnshire, united in our opposition to the proposal to withdraw the Manchester services.

Let me return to Rail North’s objectives. Its third is to deliver a more efficient railway and to secure greater value for money for the support from the public purse. I point out that the north does not just mean the major centres of population in Leeds, Sheffield and the north-west. I support the Government’s policies to strengthen and expand the economies of the north based on city regions, but there is a danger that the focus can too often be on Liverpool, Manchester, Leeds and so on. That is all very well, but if northern Lincolnshire is to receive maximum benefit from the investment in the renewables sector, and much of that is taxpayers’ money, we need good rail connections to a growing number of major centres.

I was pleased that the senior civil servant from the Department for Transport confirmed to the Select Committee on 30 June that the Secretary of State would make the final decision, although at this week’s meeting of the Committee, Passenger Focus was clearly concerned that this might be a ritual signing-off. As far as I am concerned, if the Secretary of State has to sign it, the Secretary of State is responsible, and I will continue to bombard him and my hon. Friend the Minister with questions and correspondence at every opportunity to stress the importance of this vital service to Cleethorpes and northern Lincolnshire. What I and my constituents want is for this proposal to be killed off quickly. I recognise that the Department must consider all options, but some can quickly be consigned to the waste bin.

Paragraph 2 on page 6 of the consultation refers to the importance of

“views from passengers who travel on the Northern and TPE”—

that is, TransPennine Express—

“franchises, as well as from other members of the public”.

I can assure the Minister that she will be hearing from the travelling public in great numbers, thanks to the campaign being run by the Grimsby Telegraph and the Scunthorpe Telegraph, which have been inviting readers to complete a petition form and to date have received over 4,000 completed forms.

I put on record my thanks to the Secretary of State, who will be meeting me and the editor of the Grimsby Telegraph tomorrow morning to receive the petition forms. This, though, will not end the campaign as I will deliver further petitions in the weeks to come and urge local residents and businesses to continue completing them and to submit their own response to the consultation, highlighting the impact on their own circumstances.

The consultation document repeatedly draws attention to the potential for economic growth and the need to use rail services to drive that growth. Table 1.1 on page 11 states that one of the objectives of the franchise is to

“help the economy of the north of England to thrive by offering competitive inter-regional rail services between urban centres, providing sufficient passenger capacity and expanding rail’s mode share.”

It goes on to state that a further objective is to

“realise the benefits from rail investment in the north of England, ensuring the successful delivery of journey time, frequency, reliability and connectivity benefits for passengers.”

These statements are, of course, motherhood and apple pie—we can all sign up to them. Can the Minister explain how, if inter-regional rail services are essential for the northern economy to thrive, the Government intend to achieve this by proposing an end to the one inter-regional service that northern Lincolnshire has?

I draw the Minister’s attention to paragraph 2.19 which states:

“The growing demand for air travel will also drive increases in the number of rail journeys. In particular, by 2020 passenger numbers are expected to increase by 5 million at Manchester Airport compared with 2010, an important destination for rail travellers in the North.”

Manchester has become the airport of choice for many of my constituents simply because of the direct through trains. How can the Minister square that statement with the proposal to end through services to that very airport?

Paragraph 2.27 states that TransPennine Express has one of the newest fleets of any train operator. Can the Minister assure the House that, whatever the configuration of services and whichever company provides services to Cleethorpes, the new franchise will specify that the quality of rolling stock will be at least equivalent to the class 185 units currently in use? If the proposal that trains start and terminate at Doncaster is introduced, it is suggested that the Northern service from Sheffield to Scunthorpe be extended to Cleethorpes. That service stops at all stations. It would be totally unsatisfactory and would have to be more regular than the current hourly service, alternating fast and stopping services.

Having spoken to many involved in the rail industry, I recognise some of the difficulties. Indeed, some result from the success of this Government’s massive investment in the rail network. As more and more of the network is electrified, there is a temptation to treat the more peripheral areas as mere feeder services into the core electric network, but that is no help to the economy of those areas. More electrification means there are fewer diesel units both on the existing network and being manufactured. How best to make use of the available units is a conundrum for the Department, but not one to be resolved at the expense of my constituents.

I have referred to the Government’s repeated statements that economic growth is increased where good rail connectivity exists. This was again acknowledged by my right hon. Friend the Chancellor in his northern powerhouse speech only two or three weeks ago. It may be opportune at this point to emphasise the importance of the area now, even before potential expansion is considered. That is why, I am pleased to say, that both North Lincolnshire and North East Lincolnshire councils will be fighting this proposal vigorously, and Councillor Liz Redfern, the leader of North Lincolnshire, contacted me this morning to report that the council has agreed to a joint campaign with North East Lincolnshire and that they have committed to a feasibility study on the potential to electrify the 50 miles of track between Cleethorpes and Doncaster—something the Government ought to be supporting. Perhaps they would like to contribute.

Twenty-five per cent. of the freight tonnage moved by rail starts or ends in Immingham. The Humber local enterprise partnership predicts that investment linked to renewables and regeneration could result in up to £7 billion of further investment across the Humber. More than 30% of the UK’s coal and an increasing amount of the biomass to fuel power stations passes through Immingham, and approximately 27% of UK oil refining capacity is provided by refineries at Immingham. The port handles 10% of the UK’s seaborne trade amounting to 50 million tonnes annually, including 30 million tonnes of coal and petroleum. I recognise that rail freight companies, because they move goods to so many different locations, do not always benefit as much from electrification, but with more and more of the network now electrified the case for electrification into Immingham and the remaining few miles to Grimsby and Cleethorpes is more compelling.

To return to the Chancellor’s powerhouse speech, he pointed out that the Yorkshire and Humberside region was where construction is strongest. He also spoke of the economic advantages of developing clusters and, as the Government have previously acknowledged, northern Lincolnshire and the Humber is where the renewables cluster is taking place.

I am sure that my hon. Friend the Minister will have noticed one very important passage in the Chancellor’s speech when he said that

“we cleaned polluted rivers like the Mersey and the Humber. Now we should take the next steps in improving them and making them great places for leisure and tourism and natural beauty.”

As I have said on more than one occasion in this Chamber, Cleethorpes is the premier resort of the east coast. No one has ever contradicted that statement and I am sure they will not this evening. I suspect that the Chancellor was unaware of the existence of this consultation document when he delivered his speech, but I hope he has had his attention drawn to the letter from me and my hon. Friend the Member for Brigg and Goole pointing out the inherent contradictions of developing an area for tourism and withdrawing its main rail service.

I appreciate that the Minister will be in a difficult position in replying to this debate because she will not want to pre-empt the outcome of the consultation, but she can give an absolute reassurance that the essential points from this debate will be considered in detail by all the relevant Departments involved in the development and regeneration of the northern economies, and if she will emphasise the unique circumstances that prevail in northern Lincolnshire the debate will have been worth while.

There are other issues to be considered. The Cleethorpes to Barton service, one that is essential to the outlying areas, is something of an anomaly. It is part of the existing Northern franchise but entirely cut off from the rest of its network and is crewed by TransPennine. Yes, it could be operated by East Midlands, which currently operates between Grimsby and Newark via Lincoln. All I will say is that I and my constituents will want an assurance that it will not be treated as an inconvenient Cinderella service but as an essential part of the network.

We do not want a return to the days of British Rail when we had a slow, stopping service to Doncaster with a few trains that continued beyond that. It was intermittent, slow and uncomfortable. The arrival of TransPennine transformed the situation. In May, I was invited to a photo-shoot at Cleethorpes station to celebrate the improved services and the provision of an extra 90,000 seats in the summer timetable. If we lose our Manchester service, the economy of the area will suffer, not just new burgeoning businesses but traditional ones in Cleethorpes that serve the tourist trade. We need as many services from as many different locations as possible.

I know that the Minister shares my passion for providing good rail services because the edition of “Marlborough News Online” on 27 June—just three weeks ago—said that she had written to the then rail Minister, telling him that she and her constituents were “horrified” by the options offered in his Department’s consultation on services to her constituency. She continued:

“I cannot stress enough, the importance of fast and frequent rail links to my Constituents”,

and rounded off her comments by stating that the two options would almost certainly mean people leaving the area

“with catastrophic effects on the local economy.”

With an ally like my hon. Friend in the Department, I am sure all will be well.

It seems that the rail industry is like politics. Change can come quickly. Someone wakes up as a Whip and goes to bed as the rail Minister, with the ability not only to save their own constituents from a decline in services, but those in northern Lincolnshire as well. My hon. Friend has come along at just the right time; the Government have a good record on rail investment, allowing train operators to provide improved services, and they now have a chance to prove that to the people I represent. I urge the Minister to visit North East Lincolnshire on 18 October—that is what her predecessor had agreed to do—and act quickly to remove this threat, recognise the strength of feeling in the House and in northern Lincolnshire, and announce, if not tonight then very soon, that this particular proposal has hit the buffers.