Budget Resolutions and Economic Situation

David Lammy Excerpts

Wednesday 19th March 2014 Commons Chamber

[Luciana Berger]

I will.

[Mr David Lammy (Tottenham) (Lab)]

That is generous.

[Ian Swales]

I am listening carefully to what the hon. Lady is saying about child care. I wonder whether she is going to mention the 85% of child care costs that will be paid for people who are on universal credit.

--- Later in debate ---

[Mr David Lammy (Tottenham) (Lab)]

I am grateful for the opportunity to speak in this Budget debate. I begin by welcoming the Chancellor’s announcement on new housing developments at Brent Cross and Barking-Riverside, and the overground extension at Barking. Those are much needed in London. There were also important announcements for the air ambulance service in London, particularly a reduction in VAT on fuel, which I know will be welcomed by the London ambulance service. For those who have campaigned for many years on air passenger duty—the Minister will recognise that that has been a real sore in the Caribbean community throughout this country and I know that Northern Ireland Members have also raised the issue—the announcements were surprising but very welcome.

I had hoped that the Chancellor would deal with one of the central challenges in our economy, which The Spectator described as one of the biggest and most disturbing social changes of our age: the polarisation in the unemployment market, referred to in a BIS report last year. Britain now has an hourglass economy, with a significant chunk of jobs at the top end—those on huge salaries in the banking industry or those who are part of the global industrial nature of our world—and a shrinking of jobs for those in the middle level and those who are working up and hoping to take part in our economy. It is why there is such a debate about the living wage and the minimum wage. We heard nothing in this debate about how we are to deal with this hourglass economy.

Our economy has lost 1.2 million semi-skilled jobs that so many hon. Members would have recognised just a few decades ago. I am talking about the manual operators, the secretarial and administrative jobs that existed in our economy. People are being squeezed as a result. Of the newly created jobs, 300,000 are in customer services. The number of men working in customer services has risen by 46%. There is a real issue about the quality of jobs in this economy, and how working people can provide for their families. Some 88% of Londoners are now reliant on the service economy. The fundamental question for any Chancellor is whether that is satisfactory when the bulk of those services are in the retail economy. We say that the economy is looking better and consumers are spending a bit more, but can we not learn from the economic crash in the first place and ask for an economy based on creativity and innovation, and not one based on consumption and predatory practices, as the Government seem to applaud without dealing with the structural problems in our economy?

I want to see more manufacturing in our capital city. If New York can do it, so can we. Advanced manufacturing means that people are paid more. We ought to be setting that as our aim, but the Budget did not seem to deal with those issues. Of course one welcomes the extra 15,000 homes in Ebbsfleet, but the vision is poor. Eleven new towns were set up in the Abercrombie plan—look to Stevenage, Crawley and Peterborough, where I went to school. The idea that we will solve our housing crisis with 15,000 homes is, frankly, pathetic.

In London, people’s rents have increased eight times faster than their salary and an average property costs 16 times the salary of those who want to buy their own home. The average age of a first-time buyer in London is 38 and they are doing it with the help of the bank of mum and dad: 70% of them are borrowing from their parents in order to get a deposit and get on the ladder. I did not hear enough about how this Budget will deal with the big housing challenge this country faces.

I welcome the decisions on energy in particular, but if we are really going to be a creative economy and the innovation nation that we have to be in order to compete with so many other countries, research and development is critical, but spending on it in Britain dropped again last year by 8%. What was in this Budget to support R and D and ensure that we will be the innovation nation that we have to be? Not enough.

The Budget felt complacent. It gave the impression that all is good. Apparently we are all in it together, but in fact, when this House votes on the Budget, we will be voting, in effect, for an increase in our pay, because the thresholds have changed and we will benefit. My concern is for the many out there who will not benefit from this Budget—the many who are dependent on an economy with structural problems that are not being addressed, on housing and on those jobs that that this country needs. We should see more from this Government.