Budget Resolutions and Economic Situation

Debate between David Mowat and Robert Neill

Monday 21st March 2016 Commons Chamber

[David Mowat (Warrington South) (Con)]

I want to speak about two issues: the northern powerhouse and devolution. Neither of those initiatives is perfect, and I have some thoughts and suggestions on both, but they are an awful lot better than anything we have seen for the last 20 years. The Opposition might want to remember that.

I also want to talk about the direction of travel of the Budget. When we came into office, £1 was being borrowed for every £4 that was spent. We are trying to fix that. Labour Members are right; it has taken us longer than we thought. Perhaps they wanted us to cut harder. This evening, however, we have heard that as well as the bedroom tax being wrong, every single cut that has been made was wrong. The NHS apparently needs more, and the police need more. We have even heard from the right hon. Member for Birmingham, Hodge Hill (Liam Byrne)—this is a new one—that the pension age should not have been changed. The hon. Member for Harrow West (Mr Thomas) has told us that the schools funding formula is wrong. I was waiting for an intervention, but it did not come. The hon. Member for Copeland (Mr Reed) talked about the need for credibility. Labour Members would be credible if they occasionally said, “That cut is reasonable,” instead of just saying, “It is all wrong.”

[Robert Neill]

Does my hon. Friend agree that the real lack of credibility is in the failure to recognise that some public services can be based only on sound economics, and that unfunded costings and more and more debt constitute cruelty, not compassion?

[David Mowat]

It comes back to credibility. The hon. Member for Copeland made a plea for credibility from his Front-Bench team—a plea that, I fear, has fallen on deaf ears. It is true that we have had to make cuts, and I do not think that anybody likes to do that. I do not think that the cuts are ideological, but they are necessary to get from that 4:1 ratio to something close to balanced. It looks as though we made a mistake in this Budget; that has been acknowledged, and it will be fixed. The Labour party’s contribution has not been to say, “That was a mistake,” but to say, “Everything is a mistake.” That is an extraordinary position.

We had a lecture this evening from the Scottish National party, which was particularly interesting, because it is the progressive party in this place. We heard about what the Scottish Government are doing on homelessness, and how much better that is than what we are managing in England. If the SNP was progressive, and if it really cared about homelessness in England, its members would look at the Barnett formula and say, “We will go for a formula based on need. We will not just take everything that we can get, as our major policy initiative, and still call ourselves the progressive party.”

Before I move on to talk about the northern powerhouse, I have a point to make about tax cuts. “Tax cuts for millionaires”—we have heard that, have we not? Capital gains tax has been cut from 28% to 20%. I do not particularly approve of that, but at 20% that rate is still 2% higher than it was for the entire period of the last Labour Government. One could not make it up.

I said that I was going to talk about the northern powerhouse. I will not talk about it for very long, other than to say this. The problem that the northern powerhouse is trying to fix is the difference in gross value added between the north of our country, the English regions, and London, in particular. We are very London-centric. That difference reached a peak in 2009, in the last year of the previous Labour Government, when the City was allowed to run berserk. It is right that that has been fixed. I see that the Secretary of State is in his place, and I have got time to make one final point. I would like clear metrics to be assigned to the northern powerhouse initiative for GVA and transport infrastructure. It is rather hard to equate the money being spent on Crossrail 2—£28 billion—with any sort of real intent around the northern powerhouse.