The Economy

Damian Hinds Excerpts

Wednesday 18th November 2015 Commons Chamber

[The Exchequer Secretary to the Treasury (Damian Hinds)]

Protecting the economic security of working people in Britain is precisely what we set about doing in 2010, it is what we fought the general election on earlier this year, and it is what the British electorate asked us to continue to do following the decisive result at the May election, as we were reminded of by my hon. Friends the Members for Dudley South (Mike Wood) and for Fareham (Suella Fernandes) and, graciously, by the hon. Member for East Antrim (Sammy Wilson), who speaks for the DUP.

Our programme for working Britain stands on four interlocked pillars. The first is a stable economy, backed by a credible long-term economic plan. Low inflation and low interest rates support productive investment. The second is to back business. It is firms that give people jobs and families economic security, and it is innovation that generates economic growth. We know that only business can create the wealth that affords us the quality public services we all value so much. The third is the right incentives to work and the support to do so as we strive towards our goal of full employment. The fourth is a fiscal plan to eliminate our deficit and face up to the challenges of this generation, in this generation, instead of leaving an even bigger mountain of debt to our children and their children, as we were reminded by my hon. Friend the Member for Thornbury and Yate (Luke Hall).

We have made important strides on all these fronts. We are cutting the jobs tax, cutting red tape for business and creating record numbers of apprenticeships—my hon. Friend the Member for Eastleigh (Mims Davies) talked about the apprenticeship revolution. Since 2010, the private sector has created almost 2.5 million jobs. We have record levels of employment—indeed, more employment growth in the UK since 2010 than in the rest of the EU put together—and more women in work than before. Real wages have risen by almost 3% on the year, and we are leaving more cash where it belongs—in the pockets of hard-working people. Through our increases in the personal allowance, we are making the typical basic rate taxpayer £905 a year better off. We extended childcare support, and are doing so again, with tax-free childcare extensions under universal credit and free entitlement for pre-schoolers worth £5,000 per child per year. We have also set out a path for sustainable but solid deficit elimination so that we can live within our means and start paying down the debt.

[Geraint Davies]

What would the Minister say to Ben Bernanke, the former chairman of the US Federal Reserve, who has basically said he disagrees with the primary legislation that states we should always run a budget surplus because it provides no flexibility to respond to another crisis? In other words, is it inept?

[Damian Hinds]

At the present time, I have no particular message for the former head of the Federal Reserve, except to say that we inherited the most enormous deficit. We will continue to bring it down, which the British people gave us a mandate to do, and we will pay down the debt, because if we do not do that in the good times, when will we ever?

My hon. Friend the Member for Cheltenham (Alex Chalk) reminded us that when the financial crisis hit, the cupboard was bare, because of the structural deficit the Labour Government allowed to build up. In 2010, we immediately began the programme to bring that down. Since then, despite the oil price spike and the eurozone crisis, we have made great progress and have halved the deficit, but much more remains to be done. We set out what that would entail before the election and in the summer Budget: a combination of departmental spending reductions, tax measures and reductions to the welfare bill. Importantly, however, we are maintaining our commitment to the institutions on which Britons most rely: our schools and our world-leading national health service.

Elsewhere, however, we need to make savings, and next week, my right hon. Friend the Chancellor will set out the remaining detail in the autumn statement, alongside an updated fiscal forecast from the Office for Budget Responsibility. I know that right hon. and hon. Members will not expect me to pre-empt what my right hon. Friend will say next week.

We have set out a new settlement for working Britain. My hon. Friend the Member for Eastleigh enumerated some of what we have been doing to help hard-working families, including the increase in the personal allowance. The introduction of the national living wage will directly benefit 2.7 million workers on low wages, and up to 7 million people in total, and it is a measure that will disproportionately benefit women. We are doubling the free childcare offered to working families with three and four-year-olds, we have frozen council tax and fuel duty and we have capped payday loans—all actions that the Government have taken to support working families.

In the little time available I want to respond to some of the important points that have been raised. The hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) spoke powerfully—as he always does—on behalf of his constituents. He reminded us, as we know all too well, that economic growth does not take place evenly everywhere, and that some places and sectors face significant difficulties. This is a difficult and uncertain time for many people who have been affected by the issues that he raised. As he knows, the Government cannot control the world price of steel, and we cannot cover that entire complex subject in this debate. It is right, however, that the multi-million pound package has been put in place for Redcar and Scunthorpe, and my right hon. Friend the Business Secretary is fully engaged on that issue.

[Tom Blenkinsop]

rose—

[Damian Hinds]

I am so sorry, but I cannot give way because of time.

Many other Members have made important and interesting speeches. My hon. Friend the Member for Horsham (Jeremy Quin) took us back to the golden legacy that the Labour Government inherited, and he reminded us of the key role of work in escaping poverty. My hon. Friend the Member for Monmouth (David T. C. Davies) reminded us that if we are not strong financially we cannot be strong militarily or in our national security.

The hon. Members for Sefton Central (Bill Esterson) and for East Antrim spoke correctly about the importance of investment in driving forward the next phases of our economic growth, and the Government have committed to spending £100 billion in this Parliament on economic and social infrastructure. With the reforms to vehicle excise duty, we will have the strategic roads fund for England. Despite fiscal consolidation, investment as a share of GDP will on average be higher this decade than under the last Labour Government. The hon. Member for Islwyn (Chris Evans) spoke about the importance of ensuring that we fully exploit in this country the innovations we make in this country. That is improving in some of the ways listed by my hon. Friend the Member for Horsham, but we must focus on it constantly.

Being in government brings with it responsibilities, but every difficult decision that we have taken to get this country back on track was opposed by the Labour party. Those decisions were right, and they have put us firmly on a path to a fundamental strengthening of our nation’s prospects. We have got to the stage where the economy is turning the corner. The deficit is down by more than a half, a record number of people are in work, living standards are rising, and low inflation is keeping household bills under control. But, of course, the job is not yet done. Complacency and losing focus and fiscal discipline almost led our country to disaster in 2008, and that would be the worst thing that we could do now for the economic security of Britain.

Balancing the books is not a question of dry economics; it is a moral imperative and vital to our long-term economic security. It is the foundation behind the security of every family in Britain. Only through this Government’s long-term economic plan can we deliver the continued prosperity that Britain deserves, and I urge the House to reject the motion.

Question put.