Amendment of the Law

Danny Alexander Excerpts

Monday 23rd March 2015 Commons Chamber

[The Chief Secretary to the Treasury (Danny Alexander)]

We have had a good debate with distinguished contributions from Members across the House, and like the shadow Chief Secretary I particularly wish to recognise the contributions of those who are not seeking re-election to this House. A number of hon. Members said that their speech would be their final contribution here, including the hon. Members for Sheffield, Heeley (Meg Munn) and for Thirsk and Malton (Miss McIntosh), the right hon. Members for Holborn and St Pancras (Frank Dobson), for Sheffield, Brightside and Hillsborough (Mr Blunkett), for Salford and Eccles (Hazel Blears) and for Edinburgh South West (Mr Darling). I am sure the House will agree that in their different ways they have all made a significant contribution to British public life, and the whole House will be grateful for their service to their country.

The right hon. Member for Salford and Eccles spoke movingly about the circumstances in which she grew up and the commitment to social mobility that that imbued in her—a commitment I strongly share. I am grateful for her kind words about the Government’s decision to support the Speaker’s parliamentary placement scheme, which as the House will know provides opportunities for many young people from disadvantaged backgrounds to work in this House. Credit should go to the right hon. Lady, and to you, Mr Speaker, for promoting that scheme. In her remarks she gave some examples of young people who have benefited from the scheme that she promoted, and many hon. Members will have encountered young people who have gained apprenticeships through it.

My hon. Friend the Member for Thirsk and Malton spoke about her rural constituency, and drew attention to the issues facing rural communities and the need for broadband. As a Member who represents a very rural constituency, I share that concern. I draw her attention to the supplementary document that was published alongside the Budget which included the strategy for superfast broadband, and indeed for moving to ultrafast—[Interruption.] The shadow Chief Secretary is muttering, but I will come to that point. The supplementary document on the move to ultrafast broadband set out a new and ambitious strategy for this country, including moves towards superfast broadband for 95% of households through the BT scheme, the roll-out of 4G broadband to 98% of households, and the availability of a vouchers scheme for the most remote households to gain satellite connections. I hope that that answers her point, which I am sure is an important issue for many hon. Members.

Other strong contributions included the one from my hon. Friend the Member for Cheltenham (Martin Horwood)—I do not know whether he is in his place. He made an important point about the decision in the Budget to extend the pension changes to police and fire service widows and widowers where someone has lost their life in the line of duty. We made clear in the Budget that we also intend to extend that change to apply to members of the security services who have lost their lives in the line of duty. That pension change is not yet fully worked out, but we intend to make it along the same lines as the measure announced for police officers and members of the fire service who lose their lives in the line of duty.

The hon. Member for Liverpool, West Derby (Stephen Twigg) made a balanced speech—I think he was the only Labour Member to welcome the strong record of job creation we have seen since 2010, and I credit him for that. He also—fairly, I think—called for further improvements to the quality of job creation, and the measures that the Government announced in the Budget, as well as the creation of more than 2 million apprenticeships during this Parliament, will help to support the agenda he described.

We also heard distinguished contributions from two former Chancellors of the Exchequer. My right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) provided distinguished service in government during this Parliament, and indeed for many, many decades before that—[Laughter.] I know he is standing again; I am not citing him as a Member who is stepping down. He is an immortal in this House as far as many of us are concerned. In his remarks he gave strong support for a balanced, fiscally neutral Budget, and responsible measures from the coalition Government. He rightly celebrated the rise in the income tax personal allowance, a matter to which I will return. I am bound to say, however, that his customary generosity deserted him when describing the political heritage of this particular policy commitment. My hon. Friend the Member for Cheltenham corrected the balance of the ledger in that respect, when he made clear that this policy emerged from the 2010 Liberal Democrat manifesto. It is making a huge difference to 27 million people.

[Mr Kenneth Clarke]

I cannot remember whether I raised personal allowances once or twice in my Budgets, but once certainly, so it does have slightly older antecedents. I always thought it was a good idea. I was unfortunately discouraged by the then Prime Minister who told me that he thought there were no votes in it.

[Danny Alexander]

It is fair to say that the current Prime Minister also discouraged this policy. In the television leaders debates in 2010 he said it could not be done and could not be afforded. We have shown in this Parliament that we can afford it. The difficult decisions we on the Government Benches have been willing to make in other areas have meant that we have been able to deliver the largest income tax cuts for working people in a generation. That is something of which I am very proud indeed.

My right hon. and learned Friend also rightly highlighted how much progress we have made in tackling tax avoidance during the course of this Parliament. He was humble enough to admit that progress had not always been as strong during his time as Chancellor. There were many measures in the Budget to tackle tax avoidance and evasion.

We then had a contribution from the right hon. Member for Edinburgh South West. It is fair to say that there were many things in the Budget that he was not very keen on. He certainly made that clear. He did not like the rollercoaster, as he described it, of the public finances. I have set out my own alternative scenario on that. He did not mention the big dipper that the public finances had been on during his time in office.

The right hon. Gentleman rightly welcomed the package of measures to support the oil and gas sector, which was a very strong feature of the Budget. The measures will ensure that the sector, which is suffering from a dramatic fall in the oil price, has some confidence in the future. He welcomed those measures, but he rightly pointed out that the oil revenues in the OBR forecast at this Budget were a little more than a 10th of those predicted by the nationalists in the recent Scottish referendum. He made the point that had Scotland voted for independence and experienced the fall in oil prices, the difficult decisions made in this Parliament—I think I quote him correctly—would have seemed like a school picnic in comparison.

The right hon. Gentleman was too modest to remind the House of the service he rendered to his country with the leadership he showed in the Better Together campaign. I hope that Members on all sides of the House express their appreciation for that. It was certainly something I experienced first hand. It was immensely important in ensuring that the people of Scotland voted the right way in the referendum. The experience of working with him on that campaign, although we may have disagreed on many other matters over the years and will no doubt continue to do so, is one I will always remember. He showed himself to be a man of the greatest statesmanship in his conduct of that campaign.

Before I respond to some of the other points, I want to respond to the jibes from the shadow Chief Secretary—[Interruption.] It certainly is not—there are another 10 minutes to go. The shadow Chancellor, the shadow chunterer, is in his place chuntering as usual. He doesn’t have many policies, but he sure does like to chunter.

The Budget, as set out in the Red Book, was agreed by Conservatives and Liberal Democrats working together in the coalition Government. There is no policy measure in the Budget which Liberal Democrat Ministers did not sign off. Are there differences in the way the two parties in the coalition would approach the task of deficit reduction in the next Parliament? Yes, of course there are. I have made clear in this House and outside that there is another way we can meet the fiscal mandate that all parties signed up to when we voted for the charter for budget responsibility in January. Opposition Front Benchers appear to have forgotten about that, but we can do it in a more responsible and stable way. For that reason, last week I published and set out an alternative fiscal scenario for the next five years—a plan to borrow less than Labour and cut less than the Conservatives, a plan to give the UK a brighter future without sacrificing financial prudence. As the independent OBR mentioned in its economic and financial outlook, this profile of public expenditure

“is driven by a medium-term fiscal assumption”,

but

“both parties have said that they would pursue different policies if they were to govern alone.”

The Budget that my right hon. Friend the Chancellor presented last week is a coalition Budget that reflects the hard work the coalition Government have carried out over the past five years to turn the country around from the mess we inherited from Labour and to set us on a path back to prosperity. I do not hesitate, therefore, to speak in favour of it.

[Chris Leslie]

This is very confusing. So the right hon. Gentleman supports the Budget, but he opposes the Government. He wants to be a Minister, but he does not want to be a Minister. Will he at least agree that the cuts for the next three years are extreme and would be damaging, and will he confirm that he does not support the depth of the cuts to our public services over the next three years?

[Danny Alexander]

It really is not that confusing. Even the shadow Chief Secretary ought to understand that two different parties in a coalition Government will have different views about the future direction of policy in this country. I would say—[Interruption.] If the hecklers would silence themselves, I would say that Labour signed up to £30 billion of deficit reduction in the first three years of the next Parliament when they voted for the charter for budget responsibility. I am sure you remember the occasion, Mr Speaker. It was an important debate in the House, and one to which the country should be paying great attention. It is fair to say that all parties in the House have different views about how to achieve that £30 billion of cuts, and I set out my view to the House on Thursday.

[Andrew Gwynne]

Tell us!

[Danny Alexander]

If the hon. Member for Denton and Reddish (Andrew Gwynne) had not been cavorting so loudly, the shadow Chief Secretary might have been able to listen to my speech on that occasion.

[Sir Nicholas Soames]

Inexplicably, my right hon. Friend seems to have failed to mention the excellent points I made about my constituency, particularly the need for more spending on infrastructure in Mid Sussex and compensation for passengers being grievously delayed by improvements on the railway line. Will he look into these matters and let me have an answer before 6 May?

[Danny Alexander]

My right hon. Friend made his points so powerfully I did not see the need to repeat them, but I will certainly look into the matters he raises and respond to him. However, the Government have a very good record of investment in infrastructure, including the largest programme of rail investment since Victorian times; the largest programme of rail investment since the 1970s; and a huge investment programme in broadband infrastructure.

This is a Budget for fiscal responsibility that meets the supplementary target for debt as a share of GDP that the Government set in 2010. The deficit has fallen by a half over the Parliament, and every year we have borrowed less than set out in the autumn statement. This is a Budget, too, for a strong economy. The UK is the fastest-growing major economy in the G7. We have record numbers of people in work and the highest employment rate in our country’s history. It is very different from the predictions we heard from Labour Members, who said that jobs would be lost this Parliament. Instead, nearly 2 million jobs net have been created. Astonishingly, more jobs have been created in the UK since 2010 than in the whole of the rest of the EU combined. That is a truly extraordinary record.

There were measures in the Budget to support job creation and key sectors in the economy. I have mentioned the measures to support the oil and gas sector, which have been widely welcomed by Oil & Gas UK, Sir Ian Wood, who authored the Wood review, and many other figures in the oil and gas sector who see the package as one that will increase confidence in the sector.

I could mention the measures we took on alcohol duties, which were particularly warmly welcomed by the Scotch Whisky Association, as I discovered at its reception at the Scottish Liberal Democrat conference in Aberdeen on Friday evening. We also announced radical new measures to pilot full retention of business rate increments in Manchester and Cambridge, and a number of hon. Members have welcomed the wide review we announced of the way in which the business rate system operates.

This is a Budget that delivered on several key Liberal Democrat party priorities. I particularly note the package of measures to support mental health. The hon. Member for Birmingham, Edgbaston (Ms Stuart) wrongly said that the Budget did not mention the national health service. In fact, it contained a full package of measures to help fund additional support for people suffering from mental ill health. I pay tribute to the Minister of State, Department of Health, my right hon. Friend the Member for North Norfolk (Norman Lamb), who worked very hard to devise this package. It is a £1.25 billion package that provides measures for children’s mental health services, perinatal mental health services, and to improve support for the mental health of people who are out of work. Worth more than £1 billion over the next five years, we will be able to start new access standards and see 110,000 more children cared for over the next Parliament. Some £118 million will be invested over the next four years to complete the roll-out of the children and young people’s increasing access to psychological therapies programme. The measures to support mental health in this Budget mark a radical departure and a radical change. It is perhaps not surprising that some hon. Members said that the national health service was not mentioned in the Budget—so weakly has mental health been accorded its proper status under previous Governments. Because of the Liberal Democrat involvement in this Government, that particular thing has changed.

The Budget included further big increases in the income tax personal allowance, increasing the tax-free allowance to—[Interruption.]

[Sheila Gilmore (Edinburgh East) (Lab)]

rose—

[Danny Alexander]

No, I am not giving way. I am going to make some progress. The hon. Lady was not here for the debate, so I am certainly not giving way to her.

[Chris Leslie]

rose—

[Danny Alexander]

No, I am not giving way. I am going to finish.

The income tax personal allowance will increase to £10,800 in 2016-17 and—

[Chris Leslie]

Will the right hon. Gentleman give way?

[Danny Alexander]

No, I will not.

This is the most significant tax cut for working people in a generation. As a result of the increases to the personal allowance, a typical basic rate taxpayer will be £905 a year better off in 2017-18, and 27.2 million individuals will have benefited from increases to the personal allowance since 2010. As a result of these changes, over 3.7 million people—[Interruption.] Opposition Members do not like to hear about tax cuts for working people, Mr Speaker.

[Chris Leslie]

rose—

[Danny Alexander]

No, I will not give way. Opposition Members do not like to hear about tax cuts for working people because they did not deliver those cuts themselves. If they cared about cutting taxes for working people, they would be welcoming and celebrating the fact that 3.7 million working people on the lowest incomes no longer have to pay any income tax at all. That is something that Government Members would celebrate; Opposition Members should be celebrating it, too.

When a Government lose control of the public finances, it is the poorest who are hardest hit. That is why imposing fiscal discipline was such a priority for us in 2010. We created the stability necessary to deliver growth, jobs and investment. Last year, the shadow Chancellor channelled Ronald Reagan and asked, “Are you better off than you were in 2010?” On Thursday, the independent Institute for Fiscal Studies confirmed that families are set to be £900 better off in 2015 than they were in 2010.

Compared with five years ago, we have lower inequality; child poverty is down; pensioner poverty is at record lows; the gender pay gap is smaller than ever; and the number of students at university from disadvantaged backgrounds is at an all-time high. Some 1.9 million people are now in work, which is 1,000 new jobs a day, four fifths of them full time and four fifths in skilled occupations. This is a record to be proud of, and I am proud of these achievements. I am proud of the role my party has played in achieving them.

Responsible government does not mean standing on the sidelines and complaining about how long other people are taking to clean up the mess they created. Responsible government is about stepping up to the challenges and not flinching from taking the tough but necessary decisions. That is what we have done since 2010. We have created a stronger economy, we have created a fairer society, and we have delivered for the people of the United Kingdom. I commend the Budget to the House.

Question put.