Chris Leslie
Main Page: Chris Leslie (The Independent Group for Change - Nottingham East)Department Debates - View all Chris Leslie's debates with the HM Treasury
(10 years, 1 month ago)
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Chris Leslie (Nottingham East) (Lab/Co-op)
I beg to move,
That this House believes the Government has failed to deliver rising living standards and a recovery that works for the many, with working people on average £1,600 a year worse off since 2010; notes that the Office for Budget Responsibility has said that stagnant wages and too many low-paid jobs are leading to lower tax revenues and more borrowing, with the Chancellor of the Exchequer’s pledge to balance the books by 2015 set to be broken; calls on the Government to bring forward a plan in the Autumn Statement to deliver a recovery for the many, not just a few at the top, with proposals for a minimum wage rising as a proportion of average earnings, an expansion of free childcare for working parents, a cut in business rates for small firms, an independent infrastructure commission, and the building of 200,000 new homes a year; believes that a tough and fair plan to deliver a current budget surplus and falling national debt as soon as possible in the next Parliament would include reversing the Government’s £3 billion a year tax cut for the top one per cent of earners and introducing tougher measures to tackle tax avoidance; and further believes that the Autumn Statement should use £1 billion of fines from the recent foreign exchange manipulation scandal for an immediate boost to health and care, and announce a £2.5 billion a year fund to help save and transform the NHS, including funding for an extra 20,000 nurses and 8,000 GPs.
The Government deputy Chief Whip will have spotted that, next week, the Chancellor is bringing forward his autumn statement, which gives the Chancellor a chance to reflect on his nearly five years in office and on the impact made over that period on the living standards of millions of our constituents who have, of course, been following so carefully the choices he has made. I have taken the liberty of digging out the 2010 autumn statement of 29 November because it is always worth reflecting on what the Chancellor was saying four years ago, and worth comparing his intentions back then with the reality we and our constituents now face.
Back in 2010, then, when the right hon. Member for Chelsea and Fulham (Greg Hands) was knee-high to a grasshopper in political terms, the Chancellor of the Exchequer said that the Government
“will meet our fiscal mandate to eliminate the structural current budget deficit one year early, in 2014-15.”—[Official Report, 29 November 2010; Vol. 519, c. 531-2.]
He said:
“Britain is on course…to…balance the books, something that some people repeatedly said could not happen.”—[Official Report, 29 November 2010; Vol. 519, c. 530.]
Well, I am afraid to say that it has not happened. In fact, last year the deficit was £102 billion and so far, during the first seven months of this year, it is heading even higher.
Ben Gummer (Ipswich) (Con)
The hon. Gentleman has put a motion before the House on the performance of the economy. I have read the motion carefully, and before he starts reflecting on previous speeches, I wonder whether he could explain why unemployment is not included in it and why we now have the lowest unemployment and the highest rate of employment in our history?
Chris Leslie
I have only just started my remarks. I shall come on to employment, the levels of under-employment in our economy and the changing nature of the employment market because that is crucial. It links in particular to the health of our public finances and I want to touch on some of those issues, but I wanted to make sure that the House was aware of the Chancellor’s promises made in the autumn statement of 29 November 2010, just so everybody can see the context in which we have to appraise the Chancellor’s performance.
Chris Leslie
I will come to the hon. Gentleman in a moment, but it is not just on the deficit that we have seen difficulties, as there is a second aspect of the Chancellor’s promises back in 2010. He promised that by this financial year, he would
“get debt falling as a percentage of GDP”—[Official Report, 29 November 2010; Vol. 519, c. 532.]
Yet it turns out that he has failed on that, as well. In fact, he is now saying that debt is not going to start falling as a percentage of GDP until some time in the middle of the next Parliament. It is really important to pin down the Chancellor’s promises and the failure to deliver on them.
Chris Leslie
If my hon. Friend does not mind, I said I would give way to the hon. Member for Dover (Charlie Elphicke) first.
Charlie Elphicke
This morning, 30.8 million people went to work—a record in our country’s history. That is no mean feat after Labour’s crash. With the storm clouds gathering again in the eurozone, why would we ever want to go back to where we were four and a half short years ago?
Chris Leslie
When it comes to the nature of our recovery, the fact is that most people are not feeling the great benefit that the hon. Gentleman espouses. The vast majority of people—confirmed in opinion polls just last week—are reporting that, as far they are concerned, life is getting harder and their living standards are falling, not rising.
Mr Sheerman
Did my hon. Friend hear John Humphrys interviewing Jim Rogers, one of the leading American investment gurus? When asked why he would not recommend investing in the UK, he said that it was a country with a Government who keep on borrowing and printing money.
Chris Leslie
I listen avidly to the “Today” programme, but I did not hear that interview. It is important that we pin these Tories down on their failure to deal with borrowing and the deficit. This situation is going to continue well into the next Parliament, and we need to address it in a serious way, not with more of the politicking that we have seen from the Chancellor.
Mr George Mudie (Leeds East) (Lab)
My hon. Friend the shadow Minister says that the debt has not started dropping. Will he confirm that when we left power, it was £750 billion, whereas today it is in the region of £1.4 trillion?
Chris Leslie
The Prime Minister likes to say—the Tories have said it in party political broadcasts and keep repeating it—that the national debt is somehow falling. The national debt has got larger and larger—[Interruption.] No, let me correct the hon. Member for Wyre Forest (Mark Garnier)—there is a difference between the national debt and the deficit. The national debt has got higher and higher and higher. My hon. Friend the Member for Leeds East (Mr Mudie) was right to say that it now stands at more than £1.4 trillion. He knows that the Prime Minister and the Chancellor have added more to the national debt in their four and a half years in power than the previous Administration did in 13 years.
Mark Garnier (Wyre Forest) (Con)
The hon. Gentleman is clearly struggling a little with the definitions of how we run the public finances. The reason why the national debt is going up is that in 2010 this Government inherited a deficit, which is the difference between income and outgoings, of £156 billion. That had been set in place some time before. If the hon. Gentleman remembers, the deficit in 2005—fully two or three years before the financial crisis—was already around £50 billion a year. The previous Government, then, were increasing the national debt. It is going up because the only way to account for the deficit is by putting it on the national debt. The hon. Gentleman must understand the most basic facts of fiscal policy.
Chris Leslie
We have an admission there—that the national debt is rising and has risen more in the past four and a half years than it did in the 13 years of the previous Administration.
Chris Leslie
I will give way to hon. Members in a few moments, but there are other facets of the Chancellor’s promise in that 2010 autumn statement we have to nail down and put on the record. In that statement, he also promised that he would cut the interest charges to service the national debt by £19 billion. Do hon. Members know where we are when it comes to the national debt’s servicing costs? This year, debt interest has hit £52 billion and is forecast to be £75 billion by 2018-19—a situation compounded, of course, by the Government’s failure to tackle the deficit. Each year that they add another £100 billion to the deficit, they have to fund and service the debt levies accrued.
Mr Marcus Jones (Nuneaton) (Con)
What the hon. Gentleman says is all very sanctimonious, particularly given that his leader could not even mention the word “deficit” in the speech he made at Labour’s party conference. Furthermore, the hon. Gentleman’s party has set out £166 billion more in spending than the Government have, so how will he pay for that?
Chris Leslie
The hon. Gentleman is slightly deluded in his understanding of our position. We have made it absolutely clear that we will not have any manifesto commitments funded by additional borrowing, yet we have not heard the same promise from Conservative Ministers, so I invite the Exchequer Secretary to stand up and tell us how the Conservative Front-Bench team are intending to pay for the £7 billion-worth of pledges that the Prime Minister has made. Opposition Members have to conclude that the Government are going to add it to VAT. That is what they have done in the past; it is their track record. Ducks quack, the sun comes up in the morning and Tories increase VAT. It is what they always do.
Jake Berry
I thank the hon. Gentleman for stating his party’s position so clearly. Just to restate it, he did not question the £116 billion-worth of extra commitments, but he did say that Labour has a commitment not to increase borrowing to pay for all these spending commitments. Will he now take the opportunity to clarify that point by saying which taxes he intends to put up to pay for his spending commitments?
Chris Leslie
I shall come shortly to the particular changes that we believe need to be made for our economy. For example, we believe that the national health service needs additional support and that we need to increase a levy on ultra-high-value properties to pay for such things. I shall come on to the specific details in a moment, but I want first to finish giving the Chancellor’s record and his promises in that autumn statement.
The Chancellor made other promises, too. He promised that business investment would zoom away over the four years, saying that it would be
“8% for each of the next four years”.—[Official Report, 29 November 2010; Vol. 519, c. 530.]
In reality, it has been barely half that. Back then, in autumn 2010, the Chancellor promised that exports would grow on average by more than 6% a year. In fact, in 2012 he promised that he would more than double annual UK exports to £1 trillion by 2020. The problem is that that would require 10% annual growth in exports and we have had barely 4%, leaving them £330 billion short of their target.
It was not supposed to be like this. The Chancellor set out with a totally different set of ambitions and made a series of promises to the electorate. He set out his pledges and he has failed to deliver on them. What is worse, and what matters to our constituents, is the promise that the Conservatives made on living standards. They said that living standards would rise and that was the solemn pledge in their manifesto:
“We want to see an economy where not just our standard of living, but everyone’s quality of life, rises steadily and sustainably.”
These Tories—by which I also mean the Liberal Democrats—need to be held to account for the neglect they have shown and the distress they have caused, particularly to some of the poorest and most vulnerable people in society. After prices have been taken account of, wages have fallen in real terms by an astonishing £1,600 a year and prices continue to rise.
Rehman Chishti (Gillingham and Rainham) (Con)
The shadow Minister talks about the Chancellor’s record, what he has achieved and what he has set out to achieve. One of the key planks of the proposals was a reduction in youth unemployment. In the hon. Gentleman’s constituency, youth unemployment has gone down from 6.1% to 4.2%, and in my own constituency it has gone down considerably. That clearly supports what the Chancellor set out to do by giving young people a chance and opportunity in life through work.
Chris Leslie
My constituency has the 10th highest youth unemployment of any in the country and I will not take any lectures from the hon. Gentleman. The Government have no answer for the 700,000 young people who remain long-term unemployed. They have a Work programme that sends more people back to the jobcentre than it puts back into work—[Interruption.]
Mr Speaker
Order. I am very uncertain quite what the hon. Member for Wyre Forest (Mark Garnier) had for breakfast this morning. Without wishing to be personal, I would simply observe that a close family relative of his lives in my constituency and he is a person of impeccable manners, as the hon. Gentleman usually is. My constituent would not approve of the hon. Gentleman’s ranting from a sedentary position. If the hon. Gentleman undertakes to behave in a seemly manner from now on, I promise not to report his bad behaviour to my constituent.
Chris Leslie
I was about to give way to my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams).
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
My hon. Friend is making a powerful argument about the appalling economic context that the country faces. Does he agree that the reduction in full-time jobs—there are 670,000 fewer full-time jobs in the economy since 2008—is an indictment of the poor health of the economy under this Government?
Chris Leslie
My hon. Friend is right: the labour market is changing, and not always for the better. The instability, short-term assignments and zero-hours culture that are now much more prevalent add to the insecurity experienced by so many of our constituents.
Mr Sheerman
I do not usually chide my hon. Friend, but I am going to do so today for being too generous and kind to the Chancellor of the Exchequer. My hon. Friend has not mentioned the appalling performance of this country on productivity. We are 20% below our competitors. What is the Chancellor doing about that? My hon. Friend has to be tougher and nastier to the Chancellor.
Chris Leslie
All my hon. Friend will get from the Chancellor is the hollow slogan about the Government’s plan, but their plan contains nothing to tackle the productivity crisis in our economy. My hon. Friend hits the nail on the head. We need a plan that deals with those infrastructure challenges and with getting bank lending back on its feet again to help enterprises make the next move into growth and innovation. We must tackle the skills problem. They are all factors that would represent a genuine plan to tackle the productivity issue.
Chris Leslie
I would like to make a little progress, because I know that a lot of Members want to speak.
The problem with this Chancellor and the promises that he made back in 2010 is that he has failed abysmally to complete the deal and ensure that he delivers on those promises. It is not just about the record on the national health service or even on immigration, where the Government have failed to meet their target of reducing net migration to tens of thousands. They have failed to deliver a recovery shared by all, they have failed to eliminate the deficit, as they promised to do, and they have failed to detoxify their reputation on the NHS. The real question is whether the Chancellor and the Prime Minister, after nearly five years, are prepared to start taking some responsibility for the situation.
Chris Leslie
Will they do what I suspect the hon. Gentleman is about to do and blame Europe? They love to blame Europe, in particular, but they have also blamed the weather and even the royal wedding. Who is the hon. Gentleman going to blame?
James Morris
Is the hon. Gentleman seriously arguing that the challenges we are addressing through our long-term economic plan have nothing to do with the fact that we had the deepest economic recession since the second world war—a recession over which his Government presided—which led to thousands of people being made unemployed, hundreds of businesses going bust and an absolutely devastating long-term effect on many people’s lives? Does he not take any responsibility for that?
Chris Leslie
Government Members want to airbrush the fact that there was a banking crisis, and a global banking crisis—[Interruption.] They do not like the fact that there was a banking crisis. They want to pretend that it was everybody else’s fault—there they go again.
I must tell the hon. Member for Halesowen and Rowley Regis (James Morris) that he has been in government—perhaps he has not been a Minister, but he has supported the Government—for nearly five years. The Government must start taking some responsibility for the state of the economy.
Ian Lucas (Wrexham) (Lab)
On living standards, in Wrexham median weekly earnings have fallen by 7.4% in the past year. The Government show a complete lack of comprehension of my constituents’ lives. For as long as they continue to do that, they will not even begin to address this country’s fundamental economic problem.
Chris Leslie
It is the complacency from those on the Government Benches that will, I think, shock our constituents most of all.
Only last week, the Deputy Prime Minister said in questions that “the economy is fixed”. How out of touch are Ministers in this Government, whether they are Liberal Democrats or Tories?
Mr Jim Cunningham (Coventry South) (Lab)
If we listened to the Government, we would never think that the collapse of Lehman Brothers and the collapse of Fannie Mae in America caused the last economic crisis. They continually blame the previous Labour Government, but they have to face up to the truth, which is that it started in America and no Government could have legislated for it. They have now found out that there is an economic crisis and recession in Europe, so is that the next excuse for a punitive Budget?
Chris Leslie
The previous Government did the right thing after that banking crisis by getting growth moving forward—growth that had the rug pulled from under it by the lack of confidence shown by the Chancellor and the measures he took in that autumn statement back in 2010 and in his emergency Budget.
The Government’s long-term plan is little more than trickle-down economics, which has failed in the past and will fail again in the future. The share of national income held by 90% of earners has shrunk since this Government came to power, whereas the share of the cake held by the wealthiest 1% has—surprise, surprise—gone up.
We need a plan that genuinely delivers a recovery for the many, not just for the few. We do not need the slogan-heavy, content-light, trickle-down plan of Treasury Ministers, but we need action on house building, which is at the lowest level since the 1920s, with a goal of building 200,000 new homes each year by 2020. We need a minimum wage rising as a proportion of average earnings and real incentives for the living wage. We need the expansion of free child care for working parents, paid for by the bank levy that the Government failed so spectacularly to collect. We need a cut in business rates for small firms, rather than a reliance and a focus only on corporation tax cuts for big businesses. We need an independent infrastructure commission to deliver the transport networks that our economy needs, rather than what suits the Government’s short-term political needs. We need to tackle the abuse of zero-hours contracts, we need to hear the Government argue for Britain to play a leading role in a reformed European Union, and we need a real economic plan that can enable us to earn our way towards rising living standards for all, not just for the few. Those are the priorities for next week’s autumn statement.
Stephen Hammond
I am interested to hear the hon. Gentleman’s words, but let us write some facts into the debate about living standards. Will he deny the statistic from the House of Commons Library which shows that real average weekly earnings were falling faster between 2008 and 2010 than they were after 2010? Will he deny the statistic which shows that the average earnings of those who had been in a job for over a year have risen by more than 4% in the last year? Will he deny the fact—this, too, is a statistic from the House of Commons Library—that 71% of all the jobs created in the last year have been full-time jobs?
Chris Leslie
I do not know where the hon. Gentleman has been, but did he not see the headlines in all the newspapers about the results of the annual survey on hourly earnings that the Office for National Statistics published last week? According to the ONS, the average weekly pay of full-time workers went up by just £1 between 2012 and 2013. That is a rise of just 0.1%, far below the rate of inflation. Prices continue to rise, but pay, wages and earnings do not keep pace with them. Government Members may not realise that. In the world that they inhabit, life is sweet—everything is fine in the world that they inhabit—but for most of our constituents, times are tough and life is getting harder.
Chris Leslie
This may even be the worst situation since the 1870s. Perhaps we should ask the House of Commons Library to go back in history, and tell us how bad things were in the 19th century.
I have set out our priorities for the autumn statement. However, we do not just need a strong economy to ensure that everyone gets a piece of the action; we need a strong and sustained economy to deliver strong and sustained public finances, which is why the autumn statement also needs a plan to balance the nation’s books in a fair way.
When will Ministers realise that the health of our economy shapes the health of our public finances? During the first seven months of this year, borrowing has been £3.7 billion higher than it was during the same period last year. Why? The Office for Budget Responsibility itself says that stagnant wages and all those low-paid jobs are keeping tax revenues down. The Chancellor has to realise that a low-wage, low-productivity economy will not deliver the goods. The OBR is predicting that growth will slow down next year, and yesterday the OECD cut its growth forecast for this year and next year.
The deficit has not been tackled effectively, and not just because of falling revenues. The Government like to sound tough on welfare inflation, but they do nothing to tackle the underlying causes of it. The Department for Work and Pensions has overspent by £25 billion since 2010. Let me give the House a few examples of where it has gone awry. It has spent £5 billion more than it planned to spend on tax credits during the current Parliament, because of the failure to tackle rising levels of low pay and insecurity. The number of working people—working people!—who are claiming housing benefit has risen by 50% since 2010 and is set to double by 2018, which will cost nearly £13 billion.
Whether the underlying issue is low pay, rising rents or the 700,000 young people who are in long-term unemployment, the Government have produced no serious, structural response. For them, tackling the deficit means little more than lopping off a fixed percentage from every departmental expenditure limit in each 12-month cycle. We need an economy that delivers higher-quality jobs, decent living standards, and robust and sustained growth, as well as tough decisions on spending and tax.
The Chancellor of the Exchequer caved in too easily to the lobbying of his friends who pushed him for that £3 billion a year tax cut for the top 1% who are earning over £150,000 a year. They must have been pestering him—“Give us that tax cut!”—and he did not have the will power just to say no. Instead, he piled higher VAT and cuts in tax credits on to millions of working people, because he did not mind that so much. I am afraid that a fairer plan for reducing the deficit must mean reversing the huge tax giveaway for millionaires—
Chris Leslie
Which I know the hon. Gentleman, in his heart, recognises is deeply unpopular with his constituents. Or am I wrong?
Charlie Elphicke
Let me point out not only that a record number of people went to work this morning, but that both long-term unemployment and worklessness rose under the Labour Government. Thanks to this Government’s welfare reforms and long-term economic plan, long-term unemployment has fallen by 99,000, and worklessness has fallen dramatically. Does the hon. Gentleman not accept that the Government’s long-term economic plan and welfare reforms have worked extremely well?
Chris Leslie
How disappointed the hon. Gentleman’s constituents must be to hear his comments, which contained no reflection or recognition of any of the problems that they face, including their cost of living difficulties. No, as far as the hon. Gentleman is concerned, everything is fine and wonderful: it is all working totally as it should be. I must tell him that he will have to face his electorate in a few months’ time, and that he will face their anger and concern about his failure to deal with the living standards that they have been experiencing.
Gordon Birtwistle
Will the shadow Minister remind the House what the growth of the economy was in 2009?
Chris Leslie
We had a global banking crisis, but, as I recall, growth was 1% in the first quarter of 2010. We had a strong level of growth as we came out of that crisis, because we took up the challenge to stimulate the economy and get it moving again. There was a VAT reduction at that time, and then what happened? What did the Chancellor of the Exchequer do? What did he do, with the help of the hon. Gentleman’s votes? He whacked up VAT to 20%, although the hon. Gentleman had not mentioned that in his election manifesto. He, too, will have to face his electorate and account for the decisions that he has made.
I do not want to take up too much time, because I know that many other Members wish to speak, but it is important for me to say something about the fiscal challenge. There will have to be other difficult decisions, which is why Labour is looking at every single Department and every item of expenditure, line by line, in our zero-based review, and identifying the different choices that can be made to enable us to live within our means. We have already proposed scrapping winter fuel payments for the richest 5% of pensioners, cutting Ministers’ pay by 5%, capping child benefit rises at 1% for two years, reviewing the value for money of assets and non-essential buildings owned by the Government, and making savings of £250 million in the Home Office budget—by, for example, scrapping police and crime commissioners—in order to better protect front-line policing. Over the weeks ahead, we will set out more of our early findings from other Departments.
Our plan is to balance the books and get the national debt falling as soon as possible in the next Parliament. While the Prime Minister and Chancellor think it is okay to make £7 billion of unfunded pledges—the Prime Minister said that again today at Question Time—although even the Secretary of State for Business, Innovation and Skills has described that as a “total fantasy”, our manifesto will not make commitments that would be paid for by additional borrowing. When we make promises, we will say where the money will come from. We would willingly put all our costings before the OBR so that it could check and validate them—but, of course, that would upset the Chancellor’s plan to smear our proposals and run a dirty election campaign based on fear rather than fact. If the Chancellor only had the guts to put his plans, and all our plans, in front of the OBR, perhaps we could let the public form a judgment based on the values and merits of the manifestos and their policy proposals.
Nick de Bois
How can the hon. Gentleman credibly expect the public to buy into Labour’s ability to balance the books? Every year, from 2001 onwards, the Labour Government spent far more than they took in, which is why they were left with one of the biggest deficits in the G7. You cannot spend more than you take in: that is the root cause of the problem, but Labour Members do not get it.
Chris Leslie
The hon. Gentleman and the Chancellor of the Exchequer were backing all the spending plans during those years. Moreover, the hon. Gentleman did not even mention the banking crisis. Where was he during that period? Does he really think that his constituents will be tricked by his airbrushing of the situation? The hon. Gentleman’s party has been in office for five years, but the Conservatives have failed on the promises they made to tackle the Budget deficit and get borrowing down. They promised that we would not have a Budget deficit, and they failed and it will be up to the next Government to finish the job.
Whoever wins the next election will have to pick up the pieces of this current mess. We will make sure that resources are channelled towards the issues that matter most to the public, but we should not have to wait until next May: the Chancellor has the opportunity to act now. That is why the third task for this autumn statement is to deliver a costed and funded plan to save and transform our national health service. In my constituency in Nottingham it is getting harder to see a GP; on cancer waiting times we still have a system struggling to meet the two-week target from GP referral to first outpatient appointment; and at the beginning of the month in Nottingham almost one in five patients had to wait more than four hours at our local emergency department. We have excellent staff and diligent management at our local hospital, but the pressures on their shoulders have been getting worse and worse, and Ministers have left the NHS to cope on its own, without finding the new sources of funding to put this situation right.
I therefore put this challenge to the Minister today: when she gets to her feet to respond to this debate, will she accept our suggestion to use £1 billion of banking fines from the recent foreign exchange rigging scandal and earmark this windfall for the NHS? More than that, will the Minister do what is required to tackle tax avoidance, and introduce a levy on tobacco firms and a tax on properties worth over £2 million to raise £2.5 billion a year—on top of the Government’s spending plans—for an extra 20,000 nurses and 8,000 doctors? These are necessary—and some of them are difficult—decisions, which focus relentlessly on supporting the NHS at this time of need.
These are the tests for next week’s autumn statement: a recovery for the many; a fairer approach to balancing the books; and a plan to save our NHS. Britain cannot afford another autumn statement of inactivity, neglect and the same old trickle-down economics. We need a Government who step up and take action to deliver a recovery shared by all. I commend the motion to the House.
Priti Patel
Our welfare reforms have been focused on ensuring that work pays. The Opposition were fully opposed to our reforms to the welfare system, and they still stand against welfare reform today—
Priti Patel
The Opposition are firmly against the reforms that we have brought in on welfare. We inherited a broken welfare system; let us get that on the record and be categorically clear about it. Our reforms are about making work pay and providing opportunities through work, training and employment.
Priti Patel
My hon. Friend is absolutely right. The public should be terrified of going back to the same old days of more borrowing and spending and higher taxes under Labour.
Chris Leslie
The Minister is talking about taxes. She will know that the Prime Minister made pledges at his party conference involving a total of £7 billion. Does she agree that if the Government are making such pledges, they really should say where the money will come from? I should like to give her an opportunity to put on record now specifically how she intends to pay for the £7 billion-worth of promises that the Prime Minister made.
Priti Patel
The answer is simple and straightforward: it is through sustainability in our economy. That means making hard choices, tackling the challenges of public spending and encouraging the economy to ensure that it grows more. It is about the creation of more jobs, not about higher taxes that penalise the wealth creators of this country.
Priti Patel
I say to the hon. Gentleman that, by growing the economy, we will see—[Interruption.] The hon. Member for Nottingham East is gesticulating with his hands, which is something I know the Labour party likes to do. The Prime Minister was very clear in his party conference speech. We are all about economic growth, growing the economy, getting our budget back on track and sorting out the finances, unlike the Labour party, which just wants to spend, borrow and tax more.
Chris Leslie
The hon. Lady is being very patient in allowing us to intervene on her. It is important that we pin this down. The Prime Minister has announced £7 billion of unfunded pledges, and she is standing there and saying, “We’ll pay for it through sustainable growth.” If the Opposition said that they were going to put £2.5 billion into the NHS through unfunded growth, what would she really say in response? It is our duty to ask her to be specific and to say what she will cut to fund those pledges or how she will raise the money by raising other taxes such as VAT.
Priti Patel
It is our duty to be clear about the fact that we will tackle public spending, as the Chancellor and the Prime Minister highlighted during their conference speeches, in addition to supporting the economy through wider economic growth.
Stephen Hammond (Wimbledon) (Con)
I am grateful for the opportunity to contribute to this debate this afternoon. It is a pleasure to follow the hon. Member for Coventry South (Mr Cunningham). I listened carefully to his remarks, and feel sure that he would have wanted to put it on the record that unemployment in his constituency has fallen by 32% over the past year and youth unemployment by 48%. That fact goes to the heart of what we are talking about today.
I read the Opposition motion extraordinarily carefully last night. I do not want to use unparliamentary language, so I will speak in economic terms. When we talk about being economical with the truth, we should look at the great speech from the Opposition Front Bench. We had not only deficit denial but fact denial. This motion shrinks away from reality. It is economically and historically inaccurate and, as those on the Opposition Front Bench know, economically inept. I am pleased that the motion has at least one virtue: it gives us the chance to remind everyone in this country that Labour left the largest ever budget deficit in peacetime. It caused the mess that this Government are clearing up. Of course, it is historically the job of Conservative Governments to clear up the mess that Labour Governments leave behind.
It was extraordinary that the speech made by hon. Member for Nottingham East (Chris Leslie) included not only deficit denial, but a denial of facts set out by the Office for National Statistics about the rise in living standards that is beginning due to this Government’s long-term economic policy. We heard no apology from him for the economic mess. No one says that there was not a financial crisis and a banking crisis, but had he listened to my hon. Friend the Member for Enfield North (Nick de Bois)—and responded to my hon. Friend’s point, rather than trying to deny the facts—he would have recognised that the previous Labour Government created a structural budget deficit over a full 10 years, which was why this country had a significantly worse budget deficit than any other European country.
Stephen Hammond
The hon. Gentleman shakes his head again. This is not only deficit denial, but fact denial.
Stephen Hammond
At the end of the article, quite rightly, The Daily Telegraph points out all the facts that my lawyers have made available, and it now recognises those facts. If the hon. Gentleman wants to make an apology, I shall happily accept it.
The motion refers to a
“tough and fair plan to deliver a current budget surplus and falling national debt”,
yet the Opposition’s spending plans involve £166 billion of extra spending. The hon. Member for Nottingham East talks about Labour’s tough and fair plan and its zero-based review of every pound spent, yet the shadow Chancellor’s article in last night’s Evening Standard said that Labour had so far identified £250 million of savings against that £166 billion of unfunded promises. We hear about unfunded spending promises from the hon. Member for Nottingham East, so will he clarify whether the zero-based review has identified any more savings than that £250 million?
Chris Leslie
Our zero-based review of all Government Departments is an ongoing process, but I want to ask the hon. Gentleman about the £7 billion promised by the Prime Minister. The hon. Gentleman is a man of integrity—he has been debating this with my hon. Friend the Member for Dudley North (Ian Austin)—so surely he does not think that the Prime Minister can get away with saying that future growth will pay for that £7 billion. How should that £7 billion be paid for?
Stephen Hammond
I am delighted to accept the hon. Gentleman’s word that I am a man of integrity and I hope that the hon. Member for Dudley North (Ian Austin) will also make that clear in the Chamber. It is perfectly reasonable to say that we will implement the policy when the economy allows. That was exactly what the Prime Minister said, as the hon. Member for Nottingham East knows.
The hon. Gentleman also knows that growth in our economy is at 0.7%, in line with data from the past eight or nine quarters, and that the OECD forecasts that the UK will be the fastest-growing economy in the G8 this year and the second fastest next year. He also knows that the deficit has been cut and that our interest rates mean that mortgage rates remain low for many. There is long-term economic progress in an economy that is now 3.4% larger than when we went into recession. Under Labour, borrowing steadily rose throughout the period of economic activity, but this Government are starting to cut the deficit, which is benefiting the many. People have been taken out of tax and business investment is rising. It is clear that our long-term economic plan is delivering for the people of this country, and the only thing that would put that plan in danger would be the election of a Labour Government. The public see through Labour’s plans, as an opinion poll shows that on economic competence, the Conservative party’s rate is, understandably, 26% higher than Labour’s.
Andrea Leadsom
My hon. Friend is absolutely right. In particular, our achievements must be seen against the backdrop of our inheriting the toughest economic conditions in living memory.
I do not accept that we have broken our pledge to balance the books; nor do I accept that the recovery has somehow insulated the richest. What total nonsense! The richest are contributing more in income tax than they ever did under Labour, with over 28% of income tax revenue coming from the top 1%. In every single Budget, we have raised revenues from the most well off, and we have used those extra revenues to help the most vulnerable in our society. It is a sad fact that many have been hit hard by this recession, and I know how genuinely difficult many people have found it. We owe it to them not just to improve their living standards through an economic recovery, but to make sure we never get into this mess again. That is why it is all about finding the right balance: between ensuring that those with the broadest shoulders take the biggest burden and ensuring the UK remains internationally competitive and open for business.
This Government have looked to strike the right balance. That is why our above-inflation increase of the adult national minimum wage came into force on 1 October: more than 1 million people benefited from the largest cash increase since 2008 and the first real-terms increase since 2007. On child care for working parents, we are introducing comprehensive support. Under our tax-free child care plans, 20% support for child care costs of up to £10,000 per year for each child will be available. We have also doubled small business rate relief for a further year, helping more than 500,000 small businesses and giving 300,000 local shops, pubs and restaurants a £1,000 discount. We have made infrastructure a top priority—we are setting out a long-term pipeline of infrastructure investment of £383 billion to 2020 and beyond. Housing is a major part of this, and we are investing £7.8 billion to deliver 335,000 new affordable homes.
However, it is not our plan to reinstate the 50p tax rate. That rate was crudely thought out, distortive and economically inefficient. It failed to raise the £2.5 billion Labour claimed it would and it gave a damaging signal that the UK was not open for business. We have instead raised far more from tax changes targeting the richest, including the bank levy, which will raise £8 billion during this Parliament. We have also taken tough measures against tax avoidance: we have closed loopholes; we have clamped down on stamp duty avoidance; we have given Her Majesty’s Revenue and Customs new powers to collect disputed tax; and we have led international tax reforms through the G20.
The motion's final point related to creating new funds for health and care. Since 2010, the Government have increased the NHS budget in real terms every year. Health funding will continue to grow in real terms in 2015-16, which means an additional £2.1 billion for the NHS next year. But a strong NHS needs a strong economy, and our long-term economic plan is designed to provide both.
Chris Leslie
The £1 billion from the foreign exchange-rigging scandal is coming in as a windfall. Will the Minister do the right thing and allocate it for the NHS?
Andrea Leadsom
As the hon. Gentleman will appreciate, a strong NHS needs a strong economy. In answer to the point raised by the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) about foreign exchange fines, she is absolutely right to say that we are talking about disgusting, appalling behaviour, which represented extreme arrogance on the part of the bankers who thought they could rig foreign exchange. Our Chancellor decided that those fines for misdoing would no longer go back to reducing the levy for the industry’s own regulation, but would instead be used for the public good. This is a big sum and we intend to think carefully about how we use it, but it will be used for the public good.
Whatever happens, we cannot go back to the bad old days. What a shocking mess we were left with—total economic carnage. The Opposition’s motion, calling for a current budget surplus and falling national debt as soon as possible, shows complete economic illiteracy. They want to keep on borrowing, hiding behind so-called “capital spending”, as if, somehow, one type of borrowing does not count. I do not see how voters can be fooled by that; it is the equivalent of saying, “I will spend my wages on food, clothes and petrol, but if I buy a car or a house, that’s investment and so borrowing to fund it doesn’t count.” It is this Government’s plan that will get our debts under control; eliminate borrowing over time to ensure that our debts fall as a share of GDP; and allow future Governments to respond much more quickly to any economic shocks, while continuing to support individuals and businesses across the country.
We know that the job is far from finished. As storm clouds gather once again over the world’s economies, we need to be clear about the scale of the task that we face. When a country loses control of its finances, it loses control of everything, and it is the poorest who are hit the hardest. Labour’s recession proved that only too clearly. This Government have taken the tough decisions to pull our economy back from the brink and, through our long-term economic plan, to put an economic recovery in place, so now, more than ever, it is a plan that nobody can afford to abandon.
Question put.