Financial Assistance (Ireland)
David Morris Excerpts(14 years ago)
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Mr Osborne
We will set out the terms and conditions and the exchange rate of the bilateral loan when we agree them over the next couple of weeks, and I will bring that information to the House of Commons.
David Morris (Morecambe and Lunesdale) (Con)
I congratulate the Chancellor on doing the right thing in this instance—[Interruption.] He did the right thing. Also, as a result of the fact that we have managed the economy better over the past six months, we are in a position to lend to Ireland. The Conservatives’ insistence on not joining the euro in the first place has saved us from an even bigger bail-out package than we are having to contemplate now.
Mr Osborne
As my hon. Friend says, we are now part of the solution rather than being part of the problem.
Finance Bill
David Morris Excerpts(14 years, 4 months ago)
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Helen Goodman (Bishop Auckland) (Lab)
In considering the Bill, we need to address three basic questions. First, does it raise the right amount of money? Secondly, will it promote growth? Thirdly, is it fair? Table 1.1 on page 15 of the Red Book is particularly useful. It lays the policy that the new coalition Government inherited alongside their own tax and spending increases. One of the most interesting things that it shows is that over the five-year period, the extra spending reductions required are £112 billion, and the extra tax increases required are £33 billion.
The policy that the Government inherited of halving the budget deficit over four years was set out by my right hon. Friend the Member for Edinburgh South West (Mr Darling) in March, and the detail of how that would be done was repeated today by my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne).
One of the key issues that we have not considered so far tonight is whether we should be more concerned about the size of the deficit or the size of the debt. Government Members continually stress the importance of the deficit, but the main reason that the deficit is significant is because it contributes to the debt. Page 23 of the Red Book contains chart 1.3, “Consolidation in the cyclically-adjusted current budget”, and chart 1.4, “Public sector net debt”. They show the tremendous difference that will be made by the policies being pursued by the coalition Government. The policies that my right hon. Friend the Member for Edinburgh South West laid out would have produced a debt to GDP ratio in 2014 of 75%—a high number and not where we would like to be in the long term. But for all the pain and agony that the coalition Government will impose on the country the net impact will be to reduce the debt to GDP ratio by 5% to 70%—just a 5% reduction. It is not even a 5% reduction now, but in 2014. We are being asked to believe that the markets will take a very different view of this small difference in four years’ time. That is the altar on which we are told we should smash our public services. That is why Labour Members regard this as a deeply ideological Budget.
David Morris (Morecambe and Lunesdale) (Con)
I have been sat here now for an hour and a half listening to this passionate debate and one thing has come across loud and clear. The hon. Lady just gave figures for four years down the line. Does that not give you an indication of the amount of debt your party left this country in?
Chris Williamson
There is an even bigger difference between those privileged former Bullingdon club members and the people whom they will throw on the dole—the tens of thousands, if not hundreds of thousands, and possibly millions of people who will be thrown out of work as a direct consequence of their policies.
The Chief Secretary concluded his remarks today by saying that the Budget was tough but fair.
David Morris
(Morecambe and Lunesdale) (Con): A debate that goes on till 12 minutes past one is an oddity so early in the Parliament. Call me cynical, but will the hon. Gentleman concede that the debate has just cost the taxpayers more than £200,000 to keep the House open and Members of Parliament in here, who can claim a free hotel after 1 o’clock under Independent Parliamentary Standards Authority rules? Shame!
Capital Gains Tax (Rates)
David Morris Excerpts(14 years, 5 months ago)
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Angela Smith
As I think I said earlier, equating the national economy to a household budget has already been declared by many respected economists to be ignorance economics. It has been discredited by respected economists throughout the world, including economists of the centre right in the United States who recognise the lessons of the 1930s and recognise that we need investment and public spending to bring back growth and jobs.
However, the question is whether the Budget is needed. According to the new body set up by the Government—the Office for Budget Responsibility, which I think we all support—the economy is in growth. OBR statements make it clear that the previous Government’s spending plans were credible and would have reduced the deficit gradually, over a four-year period. I believe, as I think everyone on the Labour Benches believes, that that was a sensible course forward. Therefore, it has to be said that the reason why the Government are pursuing this path is ideological dogma. They are cutting for the sake of cutting, in an ideological drive towards the small state. The language of the TaxPayers Alliance is alive and well in the corridors of power, but it is cloaked in the language of “Needs must”.
The prospect of a race to austerity is so worrying that President Obama’s Administration in the US have felt it necessary to write to the leaders of the G20 countries urging them to continue with the economic stimulus—something with which, as I have mentioned, many economists agree. Although the help for new start-up companies in the regions and the creation of regional development funds are welcome, those measures will be more than offset by the run-down of the regional development agencies, such as Yorkshire Forward, and the loss of no doubt thousands of public sector jobs. It has been said today in the Financial Times, but let me put it on the record, that the overall impact of the Budget, contrary to statements made yesterday, will be a 60% reduction in capital investment by the Government by 2016.
Let us not think for a minute that this is a Budget for investment. The Government have fallen at the first hurdle on that idea. With the £80 million loan to Sheffield Forgemasters, they had the chance to show that they were interested in investing in growth and exports, in state-of-the-art technologies and in UK manufacturing. However, they chose not to do that. The loan would have earned a 3.5% interest rate, and would have involved Westinghouse taking a stake in the company and giving a guarantee of forward orders. It would also have transformed Forgemasters into a major player in the nuclear castings sector. The loan was secured against the company and would have been part of a total package worth around £140 million, with £80 million from the Government on a loan basis.
That would have meant £140 million for Sheffield and UK manufacturing, allowing for the purchase of a 15,000-tonne press capable of making the pressure vessels at the centre of a nuclear power plant. To put things into perspective, the only other company in the world currently making forgings of a sufficient size for the international market is Japan Steel Works, which has recently tripled its capacity in order to make 10 pressure vessels a year. However, 11 new nuclear power stations were commissioned around the world last year, and the pace is accelerating, with 55 reactors in planning at the end of 2009 and more than 30 licence applications under active discussion in the US. Not only that, but with only one company in South Korea and two companies in China now intending to enter the business of making such forgings, any future project for building new nuclear power stations in the UK will have to import pressure vessels.
As my right hon. Friend the Member for South Shields (David Miliband) said last week on hearing the announcements, the champagne corks will indeed be popping in Japan and South Korea. The investment was not, as the Deputy Prime Minister would have us believe, set up in the dying days of the previous Government. I would testify anywhere, in any court in the land, that those negotiations had been going on for more than two and a half years, and they went through the most rigorous scrutiny possible. The scheme would not only have given value for money; it would have been of major strategic importance to the economic future of advanced manufacturing in the UK. Again as my right hon. Friend said, pulling the plug on that loan is a piece of gratuitous economic vandalism—but then again, what should one expect from a Tory party that almost completely destroyed steel making in south Yorkshire in the 1980s?
We heard a lot in the previous speech, by the hon. Member for The Cotswolds (Geoffrey Clifton-Brown), about the importance to the economy of an export-led recovery. I completely agree with what he said, so why did his Government not put the money into Sheffield Forgemasters, as that was all about exports, the future of UK manufacturing and the rebalancing of the UK economy? They turned down the chance to help this economy to recover. They failed the challenge on grounds of—[Interruption.] Well, tell me what the grounds were—ideology, dogma, pressure from Sheffield Forgemasters’ competitors to say no? We would like to hear about them.
If this is an example of the Government’s investment strategy, we should all be worried. For a relatively small loan that carried a commercial rate of interest, the UK would have had a company capable of being at the forefront of the supply chain for the nuclear power industry. It would have created jobs not only in south Yorkshire, but throughout the country. It would have led to high-value exports and secured the future of high-value steelmaking in the UK. Crucially, I know from working with Corus, Forgemasters and Fox Wire in my constituency how important it is for UK steel to stay ahead of the game when it comes to skills and advanced technologies. We cannot compete with China and the rest of the Asian economy on low-value steel casting and steel forging, yet we are giving that advantage to our foreign competitors.
It is also of interest to note that on the day the plug was pulled on the Forgemasters loan, the Department for Business, Innovation and Skills confirmed the building of a research ship for £75 million. There is nothing wrong with that investment, and I will support it, but the ship will be built in Spain because there are no longer any British yards capable of building it. The Tory Government of the 1980s decided that investment in shipbuilding was a waste of resources.
We should add to all this the fact that this Government have pulled the future jobs fund and slashed university places by 10,000. The hon. Member for Bournemouth East (Mr Ellwood) mentioned earlier that he had a relatively elderly constituency. Well, I have a lot of young people in my constituency, and they are worried about whether they will get the places they are looking for in the university system over the next five years or so.
David Morris (Morecambe and Lunesdale) (Con)
We are having a history lesson in here, but I think you would agree with me that every time there have been cuts like those in yesterday’s Budget, they have always been on the back of a Labour Government who have brought the country to its knees. I originate from an area similar to your constituency, and I lived in a community that was depleted by the miners’ strike. I saw exactly what it did to my community, but what has to be addressed here is the fact that that was then, but this is now. This country is on its knees as a result of the Labour Administration. You are in complete denial that this has happened. It has taken a coalition Government with a Conservative Prime Minister to try to put some equilibrium back into the country and into the politics of this House.