amendment of the law

Chris Leslie Excerpts

Monday 25th March 2013 Commons Chamber

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Before I start, hon. Members will be pleased to join me in congratulating my hon. Friend the Member for Leeds West (Rachel Reeves) on the arrival of her new baby daughter Anna at 6 o’clock this morning—which might explain why she is not replying to this evening’s debate.

There can be no doubt that last week’s Budget certainly lived down to the low expectations that were billed for it. This was a Budget for lower wages and downgraded credit ratings; a Budget for lower confidence but higher debt; a Budget for poorer productivity, low growth or no growth at all in the economy. The Chancellor has been forced by his own failure to extinguish his deficit reduction plan, but keeps on whistling in the wind to convince his Back Benchers—perhaps even to convince himself—that he is sticking with it. This Government—or at least the largest part of this Government—were elected promising painful decisions in the short term, but said it would all be worth it in the end. As my right hon. Friends the Members for Neath (Mr Hain) and for Oldham West and Royton (Mr Meacher) said, although there has been pain for some—especially the most vulnerable in society—three years on, Britain has not advanced one jot.

The economy has flatlined, the country’s debts are mounting and now even the Office for Budget Responsibility says that deficit reduction has “stalled”. So much for the Chancellor’s plan A. After three years of austerity, stagnation and ever higher national debt, where has it left Britain? The triple A credit rating has been humiliatingly downgraded. The OBR says that this Budget will reduce, not increase, the prospects for growth this year, and all the time the Chancellor’s borrowing plans are being revised upwards, now reaching an astronomical £245 billion higher than forecast.

When the Chief Secretary to the Treasury replies, he will pretend that this is a Budget to build an aspiration nation, but it is just more of the same failed plan from a desperation Chancellor, presiding over a stagnation nation. As a result of his failure, the UK economy has grown by just 0.7%, compared with the 5.3% forecast at the time of the 2010 spending review. Now the failed plan of this failing Chancellor stands squarely in the path of progress, holding back the economy, making the situation far worse and digging us even deeper into the mire. As my right hon. Friend the Member for Edinburgh South West (Mr Darling) said, Britain now faces the real prospect of a lost decade of economic decline, with confidence sapped and businesses retreating from investment in the productivity we need to keep pace with our competitors.

Yet after four days of debate on this Budget, those on the Government Benches are still in denial, while mystery surrounds some of the details of the Treasury’s accounts and the measures announced. As my hon. Friends the Members for Aberdeen South (Dame Anne Begg) and for East Lothian (Fiona O’Donnell) said, we know that the Government plan a bedroom tax on some of the least well-off in the country, starting next week, which contrasts with their plans to offer subsidised mortgages, potentially to those who want to buy a second or third property for themselves—the spare-homes subsidy, as Ministers might like to characterise it. Under this Government, it seems that there is one rule for the rich, but only one room for the poor. Despite all the other competing priorities for tax and deficit reduction, the Chancellor has failed to propose any change to the obscene timing of the millionaires’ tax cut—a cut in income tax for the richest 1%, which will we vote against this evening.

When the Chief Secretary stands to speak, I am sure he will trumpet the changes to the personal allowance—it is what the Liberals believe they have achieved in their short period of collaboration. Before the right hon. Gentleman gets too excited with his achievement, let us take a look at it for a moment. The changes to direct taxes and benefits, including cuts to tax credits and child benefit, mean that the typical family will be £600 a year worse off by the next election—and that is before we include the hike in VAT to 20%, the cuts to maternity pay or the education maintenance allowance, or the Office for Budget Responsibility forecast of lower wages by the time of the next election. Those tax rises and cuts more than offset what the Government are promising in several years’ time on child care or changes to the personal allowance. Even the 1p taken off a pint of beer sinks without trace compared with the 5p the right hon. Gentleman has added through VAT.

When the right hon. Gentleman gets to his feet, perhaps he will explain to the House what sort of an achievement he thinks it is for him and his Liberal Democrat colleagues to prop up the failed plan of this failing Chancellor, which lightens the load for the typical millionaire by £100,000 while making life tougher for ordinary families up and down the country. Perhaps he will explain why there is no return yet of the 10p starting rate of tax to help millions of low and middle-income families, as we had hoped, and no sign of a mansion tax to pay for it, as the right hon. Gentleman’s Liberal colleagues had promised. [Interruption.] Will he tell hon. Members why there is no bank bonus tax to fund a jobs guarantee for young people out of work? [Interruption.] I will happily give way to the Chancellor if he wants to intervene on this particular point. [Interruption.] I was simply asking some questions.

As well as missing out on the chance to repeat the bank bonus tax, the Chancellor has gone soft on the bank levy. The banks paid £900 million less this year than the Chancellor said they would, on top of the £700 million less than they should have paid in the bank levy in the year before. Never mind the Chancellor; I would like to ask the Chief Secretary to explain his own support and that of his Liberal colleagues for the squalid plan to give away company shares to workers who sign away their employment rights, which even several former Tory Ministers, including Lord Lawson, could not stomach—and again, we will vote against that this evening.

Above all else, perhaps the right hon. Gentleman will set out for us just how far he is prepared to support the failing Chancellor in pretending that things are getting better on borrowing when quite plainly they are not.

We all know that the Chancellor has crafted his reputational raison d’étre around reducing the national debt, yet it has risen by 38% on his watch. We know that his woeful performance, placing the UK in the relegation zone of G20 nations on economic growth, has unsurprisingly torn his deficit reduction promises to shreds. We know, too, that the Office for Budget Responsibility says that borrowing this year will be the same as last year and the same next year—“stalled” is the word it uses. Frankly, there is no improvement. There is no longer a deficit reduction plan; it has failed; it is no more.

Let us for a moment just pause and reflect on the Chancellor’s overriding political desperation to prove that the deficit is still falling. This incredibly coincidental, manufactured figure of £100 million is the sum total of deficit reduction he has sweated buckets to achieve from last year to this. This is not a deficit reduction of 1%; it is not even one tenth of 1%. At that rate, it will take more than 1,000 years to clear the deficit and balance the books. That is not a deficit reduction plan; it is a millennium goal. A deficit reduction from £121 billion to £120.9 billion is something that should embarrass the right hon. Gentleman, not delight him. That is not getting the deficit down; it is just rounding it down.

The Chancellor’s embarrassment demands that the whole of the Budget should revolve around that one desperate political fig leaf. Everything has been sacrificed in the failing Chancellor’s drive to spare his blushes. There has been the last-minute dash for £11 billion of in-year cuts in health, education, transport and local services in recent weeks—all in time for midnight next Sunday—including the axing of at least 800 nursing posts from the NHS so far this month. There has been the invention of what the Chancellor called “exceptional inter-period flexibility” to push at least £1.6 billion of this year’s spending into next year’s accounts. There has been the reclassification of the UK’s contribution to the European Investment Bank in the accounts, which helpfully takes £1.3 billion out of the spending totals for this year. The whole House knows that if the normal accounting conventions had remained unchanged, Government borrowing would be up, not down, as sure as night follows day.

Tonight, the only deficit deniers sit on the Government Benches. I believe that these distortions and manipulations are so serious that they merit not just the usual Treasury Committee inquiry into the Budget, but a review of it by the National Audit Office, and a Public Accounts Committee inquiry into the extraordinary so-called “Budget exchange” practices.

This is a Budget that serve only to hold Britain back. The few positive measures that it includes will not come into force for a year or more. Its many negative consequences—lower growth, lower investment, lower productivity and lower pay—will delay, or will deny Britain, the recovery that we need. The accounting devices that it deploys simply serve to shift today’s spending into tomorrow’s deficit, while the deficit reduction plan itself has now stalled.

This is a Budget which delays the growth and recovery that our economy requires, and which puts off the stimulus that our economy demands. It is a Budget not for aspiration, but of procrastination. Far from building the goal of one nation that we all share, it will result only in the stagnation that we all fear.

--- Later in debate ---

[Danny Alexander]

Will the hon. Gentleman give me a moment? I am going to say something about him. He made some serious points about borrowing powers. As he knows, they are being considered in the light of the Silk commission recommendations.

Many Government Members celebrated both the reaching of the £10,000 income tax personal allowance and the reductions in fuel duty, which one or two Opposition Members also welcomed. I will not single out every contribution, but my hon. Friends the Members for Halesowen and Rowley Regis (James Morris) and for Mid Dorset and North Poole (Annette Brooke) spoke passionately about those subjects. They also mentioned housing, including the important role played by affordable housing in the Budget.

[Chris Leslie]

rose—

[Danny Alexander]

I am going to press on.

[Chris Leslie]

rose—

[Danny Alexander]

Will the hon. Gentleman just let me finish the point?

The hon. Members for Huddersfield (Mr Sheerman) and for Stalybridge and Hyde (Jonathan Reynolds) made passionate speeches about manufacturing. The hon. Member for Coventry South (Mr Cunningham) celebrated the presidency of George Bush, which was somewhat surprising. My hon. Friend the Member for Colchester (Sir Bob Russell) called for a tax on television rights relating to football matches, which is not a suggestion that I shall be following up immediately.

Now I will give way to the shadow Financial Secretary.

[Chris Leslie]

The Chief Secretary mentioned housing. May I ask him about the new homes subsidy? In yesterday’s Daily Telegraph, he was quoted as saying:

“I do not want to get into all the details.”

Has he decided tonight to rule out making that scheme available for second or third homes?

[Danny Alexander]

We have made it clear throughout that there is no intention that this scheme should work to the benefit of second-home owners, but as I said yesterday and as the Chancellor has said repeatedly, we will consult on the detail of the scheme to make sure it benefits those whom it needs to benefit.

There is a very serious problem in this country: many people, especially young couples, can afford the monthly repayments on their mortgage but cannot afford the large deposits that are now required by mortgage—

[Chris Leslie]

Will the right hon. Gentleman give way?

[Danny Alexander]

No, I am going to press on.

--- Later in debate ---

[Chris Leslie]

rose—

[Danny Alexander]

Sit down; I am going to press on. The help to buy scheme, in its several manifestations, is designed to provide support.

We heard no apology whatsoever from Opposition Front Benchers for the mess they got this country into when in government. That is what we were looking for from the shadow Secretary of State for Local Government and the shadow Financial Secretary.

There were contributions from a number of distinguished members of the—

--- Later in debate ---

[Danny Alexander]

I say, as I said directly to the Scotch whisky industry, that this Government are giving considerable support to it as it seeks to broaden its reach into export markets across the world. The work of UKTI, in particular, is of great assistance to that industry.

We are building a stronger economy and a fairer society, and we are also helping people who want to get on in life. If you want to get on in life, last week’s was a Budget that will support you. It was a Budget that will give thousands of people the opportunity to step on to the housing ladder or step up the housing ladder. Our £5.4 billion housing package will boost home ownership and kick-start the building of new homes. The intention of the help to buy scheme is to provide help to people who want to get their first home or move home but cannot afford the deposit that today’s mortgages now require. This is a complex policy area, and we are working with the industry to find a practical and sensible way of taking the scheme forward without blunting its radicalism or its reach. I am sure we will achieve that.

[Chris Leslie]

rose—

[Danny Alexander]

I am going to press on, as there is no time left.

There are many other ways the Government are helping people to get on in life. Our tax-free child care measures, for example, will ensure that from autumn 2015 vouchers supporting 20% of child care costs will be available to families when both parents or a single parent is working, neither parent is earning more than £150,000 a year and the parents are not already receiving a more generous level of support through the tax credit system.

The Government are helping people to get on in life and plan for their financial futures. Thanks to the excellent work of my the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), we have already brought in auto-enrolment, which will help bring 9 million people into a workplace pension scheme, and we are also radically simplifying the state pension system and bringing that simplification forward through the single tier.

Of course, there is a lot of work to do in the longer term to strengthen our economy, but we must start by cleaning up the mess made by the Labour party. We believe that we are putting the right measures in place to bring the deficit down and to speed up growth. The Budget is another step towards building a stronger economy and a fairer society to help those people who want to get on, and I commend it to the House.

Question put.