Budget Resolutions and Economic Situation

David Anderson Excerpts

Tuesday 22nd March 2016 Commons Chamber

[Mr Osborne]

My hon. Friend is absolutely right—what a contrast! This Government turned the 10p tax into 0p as we raised the personal allowance and took the poorest out of tax altogether.

[Mr David Anderson (Blaydon) (Lab)]

If it has been relatively simple to absorb this change, why on earth did the Chancellor introduce it in the first place and frighten the life out of seriously disabled people in this country? People were terrified about what was being proposed, yet the Chancellor has just said that we can absorb this change easily. Why did he do it in the first place?

[Mr Osborne]

If we take no decisions to control welfare spending and public expenditure, we destroy the nation’s finances, and the people who suffer are precisely the most vulnerable in society. Yes, we have taken difficult decisions, but where we have not got them right, we have listened and we have learned. If we had not taken those decisions, the country would be in an even bigger mess than the one we inherited.

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[Mr Jackson]

I will not at the moment.

I welcome the lifetime ISA. I welcome the tax crackdown on offshore property developers and transfer pricing. It was good to see the changes in the personal allowance, which will take many of my constituents out of tax.

Indeed, my constituency is in a very fortunate position, and I pay tribute to the Chancellor for delivering nothing short of a jobs miracle. We have seen the largest reduction in youth unemployment in the history of my seat—and probably in England as a whole—at over 70%, and there has been a more than 60% reduction in adult unemployment. We also have record numbers of apprenticeships. That is taking people out of poverty. That is the great record of this Government.

The decision to resile from the commitment on PIP was absolutely right. There is a moral, social equity issue—[Hon. Members: “A U-turn.”] It is a U-turn—that was well spotted by Labour Members. However, it was absolutely right to make that decision. It was right for my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith) to point up the juxtaposition of tax reductions for well-off people and the change in PIP. However, it ill behoves Labour Members to lecture the Government, when they voted against every welfare change in the last Parliament. What would they have done, and what would they do now? It is incumbent on the Opposition to come through with a coherent, comprehensive alternative on fiscal policy, public expenditure and tax.

Let me raise two issues that have caused me some concern with the Budget. The problem the Government have encountered, which we have discussed over the last few days, has given rise to a proper debate about intergenerational fairness. We need to look again at pensioner benefits. We cannot discuss welfare without looking at things such as the triple lock and pensioners benefits. I rarely agree with my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), but he is absolutely right that we cannot see these things in a vacuum, and it is important that we look again at means-testing and pensioner benefits. It is morally wrong to make large transfers of wealth from the young to the old. There has to be a consensus on this issue.

One suggestion I would make is that, if we are going to means-test pensioner benefits, we should perhaps link that to the most acute societal issue we have at the moment, which is adult social care. We should have co-ordination and integration between acute district hospitals and the provision of care and housing for older people. I think there are older pensioners who would understand that, and it is something the Treasury needs to go forward with and look at very seriously.

The second concern is that, as we speak, Cambridgeshire County Council—it is not my local authority, because Peterborough City Council is a unitary authority—is looking at the devolution plans for East Anglia. At the moment, those do not stack up. We have not had enough information—in some senses, I am reprising the comments of my hon. Friend the Member for North West Norfolk (Sir Henry Bellingham) yesterday—and we need more. The proposal has been rushed to get it in the Budget statement. It needs to be finessed. We need to carry businesses with us. Neither local enterprise partnership agrees with it. The majority of councils are, at best, ambivalent, and that includes Cambridge City Council, which has rejected it. We need to look at this proposal again.

[Mr Anderson]

Will the hon. Gentleman give way?

[Mr Jackson]

I will not at the moment.

It may be that there are synergies between Lowestoft and Peterborough, or between Norwich and Ipswich, but I have yet to see them. Let us have more information about funding, governance, infrastructure spending, the role of an executive mayor and what will happen to the existing local government structure. I am not against this in principle, but we cannot promise £30 billion of spending over the next 30 years without more facts. We need to see those, and that is the challenge I give to those on the Treasury Front Bench.

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[Chloe Smith (Norwich North) (Con)]

It is a pleasure to follow the hon. Member for Newcastle upon Tyne North (Catherine McKinnell). This Budget, like my right hon. Friend the Chancellor’s previous Budgets, helps to create jobs. That is the right thing to do, which is why I continue to support the strategy of lowering business taxes to encourage growth. The corporation tax cut will benefit 1 million companies in Britain, and the business rates measure will help 600,000 small businesses. Cutting capital gains tax, as my hon. Friend the Member for Newark (Robert Jenrick) has carefully laid out, will help to boost enterprise. Reforming stamp duty and abolishing national insurance contributions will help the smallest businesses of all.

The Government have my wholehearted support in putting the next generation first. Our philosophy in the Conservative party is that debt is the most unethical thing of all to leave to the next generation, and I am proud that we continue to pay down the country’s debts; to reduce spending that cannot possibly have the consent of those who are yet to come; and to steer towards a surplus, which will put the public finances in the strongest position for today’s youngest.

Making it feasible for young people to buy a home or to save in a pension is crucial to intergenerational fairness, which is why I think that the lifetime ISA in this Budget is a positive thing. It should be seen alongside all the other measures that are already helping people in every corner of this country to get their first home. Ultimately, building homes is the most important way to provide homes at a price that can be afforded, and I urge the Chancellor and Housing Ministers to continue to build.

[Mr Anderson]

With the average pay for somebody on a zero-hours contract at £189 a week, how does the hon. Lady expect them to save in an ISA or buy a house?

[Chloe Smith]

I make two points to the hon. Gentleman. First, the percentage of people on zero-hours contracts remains about 2.5% of all who are in work. Secondly, as he will know from the small print of the Budget, for every £4 that somebody saves, the Chancellor will put in £1. That means that at the rate that the hon. Gentleman cites, for example, it is possible to consider taking up a savings product.

It is vital that those who come out of education and skills training have every possible opportunity, which is why the Budget is right to keep up job creation and investment in infrastructure. It is also crucial that we try to represent the values of the next generation. Generation Y —my own generation—and those coming after us value enterprise. Many will set up their own businesses, and many will work in a totally different pattern over their lifetime, so the Budget is smart to turn attention to the growing army of the self-employed. Many of the smallest businesses of all will welcome a drop in their NIC burden.

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[Mr David Anderson (Blaydon) (Lab)]

It has been a bad week for the Chancellor. It was his eighth Budget and sixteenth economic statement, so he ought to know better. The Budget unravelled in 24 hours and then it got worse: outrage at PIP cuts as it became clear that the disabled were being sacrificed for the rich; education in chaos as he forced academisation on every school, using our kids in his war against local government; stealth cuts on the NHS and local government, with changes to employer pension contributions; and, to cap it all, the Secretary of State for Work and Pensions giving in after six years.

This latest mess only builds on the Chancellor’s catalogue of failure. He is still nowhere near eliminating the deficit, despite his plans to have done so two years ago. In February, we had the lowest manufacturing output for four years. National debt is up 50% under this Chancellor—up to an eye-watering £1.6 trillion—and he has lurched from one missed target to another. He has blamed everybody and everything except himself. He blamed the Greeks. He blamed the Queen for having a jubilee holiday. He even blamed the snow. He did not find any money down the back of the settee this week, unlike the £27 billion he found miraculously before Christmas.

Who pays for the Chancellor’s folly? Who else but the poor, the vulnerable and the sick—those least able to fight back. The Resolution Foundation has him bang to rights. It showed that what the Budget really means is that on average the richest will get a £225 rise, while the poorest might get a measly rise of £10 a year. In fact, it shows that, with other changes and the cuts announced since last year, the richest in our nation can expect to be £235 a year better off, while the poorest will be £375 a year worse off by the end of this Parliament. He is the Robin Hood-in-reverse Chancellor. He has made a career out of making the poorest in our country even poorer.

It is worse than that, however, because in an amazing show of puffed-up pride, the Chancellor stated in his speech that the northern powerhouse is

“the most radical devolution of power in modern British history.”—[Official Report, 16 March 2016; Vol. 607, c. 960.]

Has he not heard what is happening in Scotland and in Northern Ireland, where they are running their own affairs, getting extra money and having proper devolution?

[Mary Glindon]

Does my hon. Friend agree that devolution for the north-east is no deal at all? It is a raw deal, because we cannot even agree between councils what we want. We are just not getting the real democracy we need.

[Mr Anderson]

I thank my hon. Friend for her intervention. I will come on to the north-east in a moment.

The Chancellor should be aware of what is happening in this city, where £2,000 a head is being spent on transport, while in my part of the world the figure is £5 a head. Where is the fairness in that?

The institutions of devolution were set up properly under a Labour Government who trusted the people with referendums and democratic discussion, but that is unlike what has happened in my part of the world. It is one thing to exaggerate—we all do it in this House, and I am as guilty as anybody else, believe it or not—but last week the Chancellor said from the Dispatch Box that

“powerful elected Mayors have been agreed for Manchester, Liverpool, Tees Valley, Newcastle and Sheffield.”—[Official Report, 16 March 2016; Vol. 607, c. 960.]

At least in the case of Newcastle, that is simply untrue. Newcastle is not being offered an elected mayor. That is exactly as it should be, as it is less than four years since the people of that great city rejected a mayor in a referendum by 62% to 38%. What is actually on offer is an elected mayor for the north-east, but that has certainly not been agreed yet. In fact, this morning Gateshead Council, one of seven councils involved, threw that out. Northumberland Council says is will agree to it only with certain additional powers that do not look like being given. Durham County Council has already said it wants a delay and not to be forced to make a decision on Thursday on proposed legislation that has not even gone through this House and will not do so until November.

So did the Chancellor—the great manipulator; the political strategist; the man who does not get out bed in the morning without weighing up the political advantage; the Machiavelli of Downing Street—make a mistake? He might have. If he made a mistake by saying that that had been agreed in the north-east, he should come and apologise for it. If he did not make a mistake, however, and if he deliberately tried to mislead the House, he should come back here and tell the truth—that he was deliberately misleading the nation and pretending that the so-called northern powerhouse was up and running in the north-east of England, as it is struggling to do in the rest of England. I have been really chuffed in these past two days to hear the right hon. Member for North Norfolk (Norman Lamb) and the hon. Member for Peterborough (Mr Jackson)—I never, ever thought I would agree with the hon. Member for Peterborough—share exactly the same concerns as me and my hon. Friend the Member for North Tyneside (Mary Glindon), and saying very clearly that what is on offer is not fair, not democratic and not open to proper consultation.

The proof is in what the Chancellor said last Wednesday. This is a party political Chancellor who puts his and his party’s interests first. He said last week, in relation to the £20 million for building houses in the south-west:

“it is proof that when the south-west votes blue, their voice is heard loud here in Westminster.”—[Official Report, 16 March 2016; Vol. 607, c. 961.]

Unfortunately for those of us who vote red, our voice is never heard, but we are going to keep on shouting at ’em.