Amendment of the Law

David Miliband Excerpts

Monday 26th March 2012 Commons Chamber

[Mr Vaizey]

My hon. Friend makes a very good point. Because we believe in devolution and localism, the implementation of the plans is down to the Welsh and Scottish Governments. It is therefore up to them to roll them out as quickly as possible. I am sure the hon. Member for Wrexham (Ian Lucas) will send an e-mail from his iPad to the leader of the Welsh Assembly Government to tell him to pull his finger out.

Ten million premises will be covered by BT by the end of the year in one of the largest engineering projects the country has ever seen. Those areas will get speeds of up to 80 megabits a second.

Mobile broadband is becoming increasingly important, with more people purchasing smartphones. Last year, the Chancellor announced an additional £150 million to help with mobile broadband coverage. By 2015, that will extend mobile coverage to 60,000 rural homes that have no mobile connection whatever, including, perhaps, villages in the constituency of the right hon. Member for Stirling (Mrs McGuire), as well as along at least 10 key roads. We will also continue to look at how we can improve coverage on our railways.

At the end of this year, we will auction spectrum that will allow mobile companies significantly to increase their capacity, as well as offer faster speeds to their customers, and we continue to make progress on our plans to release some 500 MHz of the public sector spectrum.

World-leading digital infrastructure is the cornerstone of economic growth in the 21st century. Some estimates show that a 10% increase in broadband penetration can deliver a boost of up to 1.4% of gross domestic product. By the end of this Parliament, at least 90% of the country will have superfast broadband; our great cities will have ultrafast broadband; and 60,000 rural homes and businesses will have mobile coverage for the first time.

As the House knows, the UK has some of the most successful creative industries in the world. I know the whole House will wish to congratulate One Direction on topping the US charts with their debut album—a feat not matched by either the Rolling Stones or the Beatles. Adele’s “21” is the best-selling digital album of all time, and for the first time in 25 years, UK acts were at Nos. 1, 2 and 3 in the US charts. We have the second- biggest music exporting industry in the world, and our UK animation industry has a huge impact worldwide. In 2010, Peppa Pig’s UK licensing and merchandising sales were £200 million alone.

Last year saw the most UK film production activity ever—it grew by 7% to £1.16 billion. UK television formats dominate television schedules all across the globe, accounting for two in every five global programmes, and of course “Downton Abbey” has continued UK success at the Globes. Exports of UK television content are the second highest in the world, worth more than £1.3 billion per year, having grown by more than 20% a year for about the last decade. [Interruption.] The right hon. Member for South Shields (David Miliband) looks astounded by this success. I urge him to get out more and see what some of our successful creative industries are doing.

[David Miliband (South Shields) (Lab)]

I was actually wondering how many more pages of this drivel we had to sit through. The hon. Gentleman said that infrastructure is the seedcorn and the basis of future prosperity. How, then, does he explain the fact that 45% of the infrastructure investment that the Chancellor announced in the autumn statement will not happen until 2014-15?

[Mr Vaizey]

I have just spent two or three minutes talking about the success of the UK music, animation, film and television industries, and the right hon. Gentleman, who was meant to be the Labour leader, describes that as utter drivel. Let the message go out to the UK creative industries that one of the most senior members of the Labour party regards their success as drivel. And I make no apology for continuing to list some of those successes.

BBC Worldwide increased international sales by almost 10% last year. We are the European hub for the video games industry, with 35% of video games software sold in Europe being developed by UK studios, and almost half of the world’s top 100 development studios based in the UK, generating sales of almost £2 billion a year. The visual effects hub in Soho is home to four of the largest visual effects companies in the world. We have one of the most innovative and successful advertising industries in the world, and it is growing despite the recession. We have one of the most successful and creative fashion capitals anywhere in the world, with Burberry, a UK company, increasing its sales by a quarter. And, of course, our largest creative industry, the UK publishing sector, has a turnover of almost £20 billion.

We want to build on this success. We do not regard it as drivel. We regard it as vital to our economic success. That is why we will introduce a tax credit for our video games and animation industries and our high-end television production sector. We are confident that this will bring increased investment and growth in these sectors too.

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[David Miliband (South Shields) (Lab)]

The Minister did not manage to mention in his speech the export potential of football, but I am happy to refer the House to my declared interest as the vice-chairman of Sunderland football club.

Since last Wednesday, the consensus has formed that the Budget spin was cack-handed. I want to make the case that the substance was dangerously complacent about growth and youth unemployment. Growth in our economy has tanked since the Chancellor’s Budget at this time last year. The hon. Member for Bury St Edmunds (Mr Ruffley) said that we had had a nascent recovery, but the truth is that we have had a non-existent recovery. We have had stagnation. British business is sitting on £750 billion-worth of cash, but it is not investing. It is not refusing to invest because of the planning laws or tax rates or because of public sector pay rates; it is not investing because there is no demand in the economy for the goods and services it wants to produce. No wonder the OBR has slashed its forecast not just for growth but for business investment from nearly 8% to less than 1%.

I have never believed the argument that without the austerity programme Britain was about to become Greece; neither do I believe the Chancellor’s argument from last Wednesday that it is essential to keep austerity to keep international investors buying British gilts. Why? Some 89% of conventional gilts issued by the Debt Management Office in the past year have been bought by the Bank of England, not by international investors. Even within the fiscal straitjacket that the Chancellor has set, he could have done more. He found £1 billion to support business. We all want to support business. His corporation tax cut will add to the corporate cash pile, but it will not change the arithmetic of demand. Meanwhile, far from increasing investment in capital allowances that would do so, he is cutting them by £1.7 billion. Instead of focusing on regional policy, the Treasury has abolished its regional policy unit. Instead of the strength of higher education being exploited, higher education visas are being cut. Instead of tackling the finance gap for small and medium-sized enterprises, a British investment bank was nowhere to be seen in this Budget. No wonder the OBR concluded, after studying each and every one of the Chancellor’s plans that had been announced since the autumn statement, that the plans will do nothing for growth this year and that it will have to reduce its forecast for growth next year.

We have learned, since the Chancellor’s new definition of simplification last Wednesday, that the price is to be paid by the old. There has been a lot of commentary on that, but there has been far less commentary on the price to be paid by the young. By the Government’s own admission there is a crisis of youth unemployment, with more than a million under-25s out of work, with 1.4 million not in education, employment or training, with 250,000 young people having been unemployed for at least a year and with 200,000 more having been unemployed for more than six months. The net present value cost of all that has been independently calculated at £28 billion. In my constituency, there has been a 250% rise in long-term youth unemployment, with 590 young people having been looking for work for more than six months.

This Government did not invent the problem, but they have made it worse. The Budget was their chance to make a difference, but while the Chancellor insulted the elderly he ignored the young—he spent longer talking about taxing hot snacks. Ministers say, “Look at what we have already announced,” but the flagship Work programme covers only one in 10 of the young unemployed. By the Government’s own admission, the Work programme itself, according to the voluntary sector group that comes together to discuss these things, will help only one in five of those on the programme. So, in total, the Government’s programme will help only one in 50 of the young unemployed get into work.

The Government’s wage subsidy programme, which starts in April, is designed to help 50,000 young people but that number could be doubled by bringing forward the spending for 2014 when the Government say that unemployment will be falling. What about the apprenticeship programme? We all support apprenticeships. Some 75% of the increase in apprenticeships is going to the over-25s. The administration of the £120 million plan for 16 and 17-year-olds is putting at risk precisely the voluntary organisations that the big society was meant to help.

The Deputy Prime Minister has said that he cannot think of a better use of money than creating jobs, hope and optimism for young people. The Prime Minister and the Chancellor say we are all in it together, but the truth is that they got lost in the endless tactical dance about how to dress up the cut in the top rate of tax and in the endless leaking about who would claim credit for raising the personal allowance. They have completely flunked the issue of how to get our economy back on its feet. The loveless coalition will say anything but will do nothing. That is the true story of the Budget and that is the tragedy for the country.