Budget Resolutions and Economic Situation

Debate between Dan Jarvis and Duncan Hames

Thursday 21st March 2013 Commons Chamber

[Dan Jarvis (Barnsley Central) (Lab)]

I am grateful for the opportunity to contribute to this important debate at this important time. The Chancellor told us yesterday that his priority was to promote an “aspiration nation” with a Budget for those who want to work hard and get on. I hope he will understand if we are sceptical about his ability to deliver, given that in each of his last three Budgets he set out his key priority and test for the Budget, and in each of those three Budgets, he has failed to deliver.

In 2010, the Chancellor’s priority was tackling the deficit. That Budget was, he said, the Budget to deal with our country’s debts. But what has happened to our country’s debts? Today, national debt as a percentage of gross domestic product is not forecast to start falling until 2017-18, and borrowing is forecast to be £245 billion more than planned at the time of the spending review, to pay for the mounting costs of this Government’s economic failure.

In 2011, the Chancellor’s priority was promoting growth. That was the Budget that the Chancellor named the “Budget for growth”. Since 2010, however, the UK economy has grown by just 0.7%, compared with the 5.3% forecast at the time. Last year, the UK endured a double-dip recession and the economy shrank by 0.3% in the final quarter. Only three other G20 countries have grown more slowly than the UK in that time, and the Office for Budget Responsibility’s growth forecast has halved from 1.2% to 0.6% since the autumn statement.

In 2012, the Chancellor placed an emphasis on rewarding those who work. I concede that he has made some progress towards that goal. For the wealthiest in today’s society, there is a huge reward for work—in fact, a £100,000 reward. Unfortunately, it is those who are struggling on low and middle incomes who are suffering, including many people in constituencies such as mine.

Barnsley is a town with a proud history and it should have a bright future, but each week, I see what the Chancellor failed to address yesterday: a lack of opportunity, a lack of growth in our economy and a lack of vision from a Government who are more interested in running the country than in changing it. According to the latest figures for my constituency, the number of people claiming jobseeker’s allowance is at its highest since May 2010, at 7.8%. The figure for young people claiming JSA is 13.7%.

[Duncan Hames (Chippenham) (LD)]

Unemployment is an important matter, and it is important that our constituents should have jobs. Is the hon. Gentleman trying to tell us through those statistics that unemployment in his constituency was higher under the last Labour Government than it is today?

[Dan Jarvis]

I was simply stating a matter of fact: unemployment in my constituency is higher now than it was in May 2010. The number of young people claiming jobseeker’s allowance is now 13.7%, which is higher than it was in 2010. Those people in my constituency want to work, to provide for their families and to earn a living. They want to get on the housing ladder, to save for their old age and to contribute to our town, but the jobs are simply not available.

Yesterday, we heard the Chancellor set out his latest scheme to provide growth: a new infrastructure plan. During the course of this Parliament, we have already heard about the Government’s national infrastructure plan—in 2010, 2011 and 2012. Despite the promises, however, infrastructure spending in the public and private sectors has fallen, year on year, according to the Office for National Statistics. Frankly, my response to this latest announcement is, “We’ll believe it when we see it.”

A lack of growth has a multitude of effects, and they are being felt most acutely by our low and middle income families. Utility bills are rising, the price of food is rising and fuel costs are rising, all at the same time as wages are stagnating. A typical low income family will see their net income fall by 15% by 2020, while the wealthiest households will see their living standards grow.

Fairness has been the one consistent priority for the Chancellor in every Budget since 2010, yet fairness is the area in which he is failing to deliver the most. This Government’s favoured slogan, “We’re all in this together”, simply does not ring true as inequality deepens and the Chancellor’s policies target those who have the least to give. It cannot be right that millions of ordinary families are being forced to pay more for this Government’s economic failure, through cuts to tax credits, child benefit and maternity pay and through the bedroom tax, while at the same time, the most well off in society are set to receive an average £100,000 tax cut.

The Budget, and the Chancellor’s record, have failed to secure economic recovery, and that is certainly not fair. We have had three Budgets and three failures. On every economic test that the Chancellor has set himself, he has fallen short. On deficit reduction, on growth, on rewarding those who work and on fairness, he has failed those who need the Government the most. Despite numerous opportunities and calls to change course from the Opposition and from Members within his own party and even from members of the Cabinet, the Government continue on a reckless course that is serving only to prolong the economic crisis, and it is people in my constituency of Barnsley Central who, sadly, will pay the price of this failure.