Economic Growth

Debbie Abrahams Excerpts

Wednesday 15th May 2013 Commons Chamber

[Mr Jenkin]

I totally agree. The irony of this debate is that a lot of people in UKIP are saying things that are similar to what is felt by a lot of people who would like to vote Conservative at the next election. There is a majority in this country, and I think the Prime Minister was right to say that he wants a different relationship—a new relationship with our European partners.

This entire debate is conducted on the premise that membership of the single market is indispensable to our national interest, is it not? Those who say we must remain in the EU come what may believe that the single market is indispensable to our national interest, but here are the facts. I have already mentioned how little of our GDP that we export in goods would be subject to tariffs were we not to have a free trade arrangement with the EU—probably around 8.7% of GDP. The idea that 3 million jobs are dependent on exports to the EU and that we would lose them if we left is a myth. There is no substantial evidence that we would lose any jobs. On the contrary, if we had a freer and less regulated economy, we would probably create more jobs by trading more easily with the rest of the world.

The EU is in long-term structural decline and our non-EU markets are expanding. The UK enjoys a trading surplus with the rest of the world—with which we trade much more effectively—and we have a £70 billion trade deficit with the EU. The rest of the EU would therefore not want a trade war with the UK; it would not be in its interest. The idea that Ireland, or even Germany, would enter a trade war with the UK is absolutely ridiculous.

By the Commission’s own admission, EU red tape costs 4% of the EU’s GDP. The single market does not reduce the costs of doing business in the EU; it is a regulatory burden on trading in the EU.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Will the hon. Gentleman give way?

[Mr Jenkin]

I am not going to give way.

The EU internal market has become an end in itself—it is a means of promoting political integration. We must accept that, in the minds of our European partners, the single market is indivisible from the treaties. Even if the UK were to leave the EU altogether and apply for article 50, the EU would be legally required to negotiate free and fair trade with non-EU countries, so we would continue to have access to EU markets. That different perspective, which voters and large parts of business are beginning to appreciate, is shifting the burden of the debate.

Are we doing the right thing in creating such long uncertainty by putting off a referendum until 2017? Should we not have the referendum much sooner to bring the debate to a head? Are we too scared of our own voters to face the truth?

Finance (No. 2) Bill

Debbie Abrahams Excerpts

Thursday 18th April 2013 Commons Chamber

[Catherine McKinnell]

I suggest that the hon. Gentleman is quoting selectively in leaving out the fact that the greatest impact is on the bottom decile of earners. When you take the cuts and changes overall, those at the bottom bear the greatest proportional brunt.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I want to support what my hon. Friend has said. The Chancellor’s own distributional analysis shows that the cumulative impact of tax, tax credit and benefit measures mean net reductions in income for the poorest 4% of households. That is not selective analysis—your own Chancellor’s analysis shows that 40% of the poorest households will be affected.

[Catherine McKinnell]

It is the hon. Gentleman’s own Chancellor who is quoting selectively from the figures. I thank my hon. Friend for that intervention.

The facts are clear, and beyond the facts is the reality facing households up and down the country. We see people from those households coming into our constituency surgeries week in, week out. We hear stories every day from families who are clearly struggling to make ends meet.

The reality of the Chancellor’s failing plan is bearing out, not just in the statistics but in the reality of people’s day-to-day lives. The cuts to tax credits and child benefit, the granny tax, the mummy tax, the appalling bedroom tax and the huge hike in VAT, which disproportionately impacts on the poorest, hugely outweigh any small benefit from the rise in the personal allowance.

--- Later in debate ---

[Debbie Abrahams]

It is a pleasure to serve under your chairmanship, Mr Hood.

I came to this House just over two years ago, and the main reason I got into politics was my belief in making Britain a fairer society—a more equal society in which the gap between the haves and the have-nots is narrow and in which we protect and look after our most vulnerable people. I believe that to be intuitively right and just, and there is also significant evidence to show that a fairer society benefits everybody in respect not only of life expectancy improvements and mental health benefits, but of educational attainments, improvements in social mobility and in rates of offending. All of us benefit from having a fairer society. Unfortunately, the measures in this Bill contribute not one jot to such a society.

As I said in my speech on the Budget a week or so ago, this Government absolutely fail the anti-poverty test. My hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) mentioned the analysis by the Institute for Fiscal Studies, but there are also those of the Joseph Rowntree Foundation, the Child Poverty Action Group, the Resolution Foundation, the New Economics Foundation—and the list goes on. They all reached the same conclusion: the poorer people are, the worse off they are.

Raising the personal allowance does little for the lowest-paid workers, many of whom do not pay tax anyway. Over 682,000 working families receiving child tax credit earn less than £6,420, so I am afraid that they will not benefit at all from the increase in the tax threshold. Taken in conjunction with the welfare cuts they are now facing, the lowest earning taxpayers will receive an income boost of 32p a week or £16.80 a year as compared with those not claiming housing benefit or council tax benefit of up to £112 a year. That does not take into account the impact of the 20% VAT hike back in 2011, the additional 26% rise in food prices since 2009 or the 20% increase in energy costs that households face on their household bills. Nearly 8,000 households in my Oldham East and Saddleworth constituency—nearly one in four—already live in fuel poverty. How are they meant to cope? As other Members have said, our constituency surgeries are crammed with families that are desperate about how they are going to cope in the coming weeks and months. My constituency now has a food bank—the first ever in modern Oldham—and the number of recipients of food bank support has trebled over the last quarter. I am deeply concerned about that.

[Geraint Davies]

I visited the food bank in my own constituency only last Monday, and the key issue put to me was that food banks were designed as places of crisis able to give two or three parcels to people in the moment of crisis—for instance, when benefits had been delayed or something had gone wrong. They were not designed to sustain life over time. I mentioned earlier a constituent whose money available for food had gone down from £21 to £11; he just cannot cope on an ongoing basis. If the food banks do not save him, he is on the way out.

[Debbie Abrahams]

My hon. Friend makes an excellent point. We are not talking only about people on out-of-work benefits either, as many of the families affected are working families that are struggling to survive.

As I have mentioned, the Chancellor’s own distributional analysis shows that the cumulative impact of tax, tax credit and benefit measures means net reductions in income for the poorest 40% of households in the country. Although there is strong evidence to show, as other countries have shown, that increasing the spending power of the poorest families helps to boost economies, the Chancellor has done nothing to help them or the economy.

In the short term, the Child Poverty Action Group has estimated that between 2010 and 2015 absolute child poverty will have increased by 600,000 as a result of the Government’s spending plans. Two wards in my constituency have child poverty levels affecting nearly one in two households. That is absolutely unacceptable in a society such as ours. It leads one to question what the Government mean when they say they are committed to child poverty, let alone how they are fulfilling their obligations under the Child Poverty Act 2010.

I also have deep concerns about the impact, particularly of the new benefit changes, on people with disabilities. One in four disabled people already live in poverty, and with the recent welfare changes that is set to increase. I fear that this could be enough to drive people over the edge.

Many of us have already said that these measures are ideologically driven. In tandem with the downgrading of equality and human rights in the Enterprise and Regulatory Reform Bill, which we debated on Tuesday, it is clear that this coalition Government have no commitment to a fairer society. As we have heard before, this is all about choices, and it is quite clear where this Government’s priorities lie. Their response to their failing economic policies is to give tax breaks to the wealthiest in society—£3 billion to more than 300,000 people earning over £150,000 a year, with an average gain of £10,000. What is there for people on low pay? Absolutely nothing. When we take the tax and tax credit benefits into account, we realise that it is not just the poor who are being hit. We know that the average loss to households for this coming financial year is £891.

The Chancellor said in last year’s autumn statement that we needed a welfare system that we could afford. Tax credits and benefits form part of the “automatic stabilisers” that help dampen economies in booms and boost them in recession. That is what we have seen. In spite of the disappointing employment figures yesterday, the effect on unemployment has been less during this recession and in the past because of these stabilisers.

The choices the Government make are underpinned by their ideology—to create an “us and them” culture with power and wealth retained by the wealthy and powerful. By attacking universal benefits such as child benefit, they hope people will start to see our welfare system as irrelevant—and then quietly dismantle it. I am proud of our model of social welfare, born out of the second world war when we literally were “all in it together”. I want to retain this model with its principles of inclusion, support and security for all, protecting any one of us, should we fall on hard times, assuring our dignity and the basics of life, and helping us all back on our feet.

It is often said that the mark of a civilised society is how we care for our most vulnerable. It is a mark of this Government, their ideological priorities and their economic incompetence that they are singularly failing to do that. Fortunately, as recent opinion polls have shown, the British public are seeing through this Government. They are exposing and seeing through the myths peddled by this Government. I shall leave it there to allow more hon. Members to participate in the debate.

amendment of the law

Debbie Abrahams Excerpts

Monday 25th March 2013 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Last Wednesday’s Budget was more of the same. In spite of failing every economic test they have set themselves, the Government have just carried on regardless. I want to recap their economic journey and absolute failure over the past three years.

After signs of a recovery at the end of 2010, the economy has been flatlining and we will be lucky if we escape a triple-dip recession. Growth has been downgraded at every turn. Amazingly, just over three months since the autumn statement, the Government have had to halve their growth forecast for this year to 0.6%. Borrowing is up £250 billion since 2010 and the deficit will not be eradicated by 2015 as promised. In spite of the Government telling us how important austerity was to economic confidence and low interest rates, they have lost the confidence of Moody’s credit rating agency, which downgraded our triple A status, and we have been put on notice by two other agencies.

The Government have tried, as has happened again this afternoon, to blame everybody except themselves. They told us that austerity was the only way, only to receive a very embarrassing rebuke from the chair of the Office for Budget Responsibility, who said that public spending cuts wiped 1.4% from growth last year. We only have to look at how we are doing on growth compared with the other G20 nations. We are 18th out of 20. What the Government have been saying is absolute rubbish.

I could go on. Inflation, whether using the consumer prices index or the retail prices index, is well above the Bank of England’s 2% target. The Government have tried to say that we have more employment than ever before, but the rate of employment is lower than in 2008. One in 10 people is underemployed. Whatever indicator we go by, the Chancellor and the coalition Government are clearly failing. The public are starting to see that as well, with earnings falling by 2% a year in real terms. A recent poll showed that four out of five people feel that austerity is not working.

The Government are carrying on regardless. Is that really just down to economic incompetence? In the words of the Cambridge economist, Ha-Joon Chang,

“the coalition government isn’t as stupid or stubborn as it appears. It is sticking to its plan A because spending cuts are not about deficits but about rolling back the welfare state.”

If we look at this Budget, as with the other Budgets and autumn statements, we can see exactly what is happening.

The IFS analysis of the Budget shows that the Chancellor is funding some of his give-aways with underspends from across Whitehall Departments, including £2.2 billion of NHS savings. However, the IFS and others have shown that even with an increase in revenue from national insurance contributions, from 2015 we will need to make further public spending cuts or increase taxes to meet a £9 billion shortfall.

The housing measures are too little, too late. They reflect the Chancellor’s inability to sort out lending for mortgages, as well as for small businesses. Many people, including property developers, will welcome the measures, but I wonder what the impact will be on demand and on house prices at a time when earnings are still constrained. They have the potential to take us back to the financial conditions of 2008.

Most alarmingly, the Budget completely fails the anti-poverty test. The IFS, the Joseph Rowntree Foundation, the Child Poverty Action Group, the Resolution Foundation, the New Economics Foundation and others have concluded that the poorer people are, the worse off they will be following the Budget. Raising the personal allowance does little for the million lowest-paid workers, many of whom do not pay tax in any case. Some 682,000 working families who receive child tax credit earn less than £6,420. If next week’s welfare cuts are also taken into account, the lowest-earning taxpayers will receive an income boost of just 32p a week. Of course, that does not take into account the impact of the 20% VAT hike, the 26% rise in food prices or the 20% rise in energy prices.

The Chancellor’s distributional analysis shows that the cumulative impact of the tax, tax credit and benefit measures means a net reduction in income for the poorest 40% of households in the country. Although there is strong evidence that increasing the spending power of the poorest families is a way to boost the economy, the Government have failed to do that. This is about the Government’s choices and they have clearly failed.

Tax Fairness

Debbie Abrahams Excerpts

Tuesday 12th March 2013 Commons Chamber

[Mr Gauke]

I will take that as a Budget representation. It is perhaps worth pointing out that there was a measure that the previous Labour Government had to reduce the deficit, which was substantial increases in fuel duty over the course of this Parliament. That is a measure that we have been able to stop, and quite right too.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Will the Minister explain why four out of five people feel that austerity is not working? Is it related to the downgrading of the economy yet again for 2013? Is it the shrinking of the economy in the last quarter of last year by 0.9%? Or is it that the OBR had to call the Prime Minister to task and give him an economics lesson?

[Mr Gauke]

This is a difficult time for all major economies, and the UK is no exception, but matters would be much worse if we were to abandon our desire to bring some control to the public finances. We must ensure that there is the political will to deal with the public finances, and that is what this Government will continue to demonstrate. The approach of ignoring the deficit, believing that this is all an issue that can be addressed at some future time, is economically irresponsible and unfair on future generations who will face the bill that they will have to pick up because we failed to address those problems now.

--- Later in debate ---

[Mr Gauke]

This is starting to get interesting, because we have now learned that the Labour party has moved a motion trying to persuade Liberal Democrats to vote in support of a mansion tax, yet Labour will not confirm whether it thinks a mansion tax is a sensible policy for the next Parliament. The position of the Liberal Democrats is clear and the position of the Conservatives is clear; what is not clear is whether the Labour party, after all, supports a mansion tax. Will it be in its manifesto? That is a perfectly clear question.

[Debbie Abrahams]

rose—

[Mr Gauke]

I will give way to the hon. Lady, and she can tell us whether she thinks that ought to be in the manifesto.

[Debbie Abrahams]

The Minister is being very generous in giving way, but I want to ask him what his Government are doing. I tabled a written parliamentary question to his Department asking about the average tax rates for different groups of people, and he may be astounded to know—as I am sure many of my constituents in Oldham will be—that 6% of people on incomes over £10 million pay under 10% income tax. What is he doing to address that inequity?

[Mr Gauke]

That is exactly why in the last Budget this Government brought in a cap on reliefs preventing the wealthy from driving down their tax rate to such levels—something the Labour party never did in 13 years in government. I note, however, that I get no answers to my question.

Let us be clear: we hear lots of complaints about the 50p rate being reduced to 45p, but we get no indication as to whether the Labour party would or would not reverse that if it were to win the next election. I can only assume that that is because deep down it knows that campaigning on 50p might look good on a leaflet but is lousy for the economy; after all, that seemed to be Labour’s approach when it was in government. We have also learned this afternoon that the Labour party is not committed to a mansion tax in the next Parliament, after all. So what do we have? We have opportunism on the 50p rate and opportunism on the mansion tax.

Autumn Statement

Debbie Abrahams Excerpts

Wednesday 5th December 2012 Commons Chamber

[Mr Osborne]

My hon. Friend is right that we are on the right track. We are making progress. To turn back would be a complete disaster. I congratulate him on speaking on behalf of the businesses that he represents. He has asked me what we can do on capital allowances for plant and machinery and on business rates for small businesses. I hope he can see in the announcements that we made today that we have been listening to him and to the people in his constituency.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Can the Chancellor confirm not only that growth has been downgraded yet again and the welfare bill is rising, but that child poverty and the number of working families living in poverty is increasing? This is happening at the same time as millionaires are getting their tax cuts. Is this fair? Are we really all in it together?

Public Service Pensions Bill

Debbie Abrahams Excerpts

Monday 29th October 2012 Commons Chamber

[Stephen Williams (Bristol West) (LD)]

I shall try to keep within the 12 minutes: it is my intention to make only a short contribution.

First, I wish to establish some general principles for why reform is needed. They can be grouped into two areas. The first is the general societal changes that have taken place that necessitate reform and to which the Government must respond, such as the increase in life expectancy and the changes in employment practices over recent decades. The second is the changing balance over time between the sharing of the cost of public sector pensions between the taxpayers, through the Government acting as employer, and the employees who receive the pensions.

It is important to establish that the reforms in the Bill would be needed with or without the current cost pressures that the Government face. We hope to bring public sector borrowing under control by 2017, but these reforms are intended to last for a generation. They are not driven by the short-term need to recover costs: they are driven by a long-term desire to ensure that public sector pensions survive into the future in a sustainable way.

Any reform should be done fairly and, as far as I and my Liberal Democrat colleagues are concerned, protect those in the public sector on the lowest earnings. The overriding principle should be that the public sector should continue to act as an exemplar to other employers. There should not be a race to the bottom: the public sector should set the gold standard for affordable and attractive public sector pensions that attract the very best people into the public sector, who are paid in a fair way and guaranteed a secure and attractive income into retirement.

The first principle is that of life expectancy. We all know that we would hope for ourselves and people in our families to live longer. Indeed, people retiring now at age 60 can expect to spend 40% of their adult life in retirement—so only 60% of their adult life would have been spent in work. The state pension age has been changed relatively infrequently over the 103 years of its existence. If it had been uplifted in line with life expectancies, people would now be drawing their state pensions at age 75. Several other countries, in particular Scandinavian countries, have ongoing commissions that examine life expectancy and uplift pension ages according to that evidence. That might be a good approach in the future for this country.

The biggest societal change driving the need for reform is the difference that has arisen over time between private sector and public sector remuneration. It always used to be much quoted that pay in the private sector was more attractive than in the public sector and that part of the balancing factor to make public sector employment attractive was a good pension, and perhaps other good terms and conditions. In recent decades, that maxim does not hold. Indeed, the Institute for Fiscal Studies said that in 2011 people in the public sector doing a broadly similar job to people in the private sector were likely to be paid about 8.3% more. But pension provision in the public sector continues to be much more attractive and offered on a much wider scale than to people in the private sector.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Does the hon. Gentleman regret the way in which the Government have pitted public sector pensions against private sector pensions, when in fact the average local government pension for men is £4,000 a year and for women is £2,600? There is no doubt in my mind that this is an intentional attack on public service and the public sector as a whole.

[Stephen Williams]

The hon. Lady’s final sentence illustrates her prejudice against the Government’s intentions. This is not an attack on the public sector. The coalition Government are trying to ensure that public sector pensions remain across the board, so that every person in the public sector is able to access a pension, which is not the case in the private sector, as I am about to say; that they are affordable to the taxpayer; and that they are offered on very good terms. Without reform, those provisions would not be in place. I would not want to be associated in any way with an attack on public sector employees who perform services that are absolutely vital to all of our constituents. I would not want to be associated with any reform predicated on that basis, and I genuinely think that that is not the basis on which the reforms are being carried out—from the perspective of both parties in the coalition.

On coverage, 100% of public sector employees are in theory eligible to join a pension scheme, because it is offered to everyone, but only 35% of employees in the private sector are able to join a scheme, and only about a third have a contribution made to their scheme by their employer. There are many schemes in the private sector in which the employer simply does not make a contribution. There may be a scheme, but it is not funded by the employer. The biggest anomaly is in the type of scheme available to people in the different sectors, between those on defined benefit, final salary or career average schemes, and those who are on defined contribution schemes. Currently, just under 80% of people in the public sector are in defined benefit final salary schemes, but only 9% of people who work in the private sector are able to access such schemes. That percentage is falling year on year, and soon nobody will be joining a final salary scheme in the private sector. Many of them will be closed and no further contributions made by current members.

There is also the cost to the public purse of maintaining public sector pensions, which puts an onus on us to look at the case for reform. Those costs have to be shared between the Government as the employer, all of us as taxpayers, and the employees themselves, who will ultimately be the beneficiaries. Between 1999 to 2009, the cost of the NHS pension scheme rose by 47%, the cost of the civil service scheme by 23% and, as we heard from the hon. Member for Bognor Regis and Littlehampton (Mr Gibb), who is not in his seat, the cost of the teachers’ pension scheme by 37%. That has necessitated a shift in the contribution rates of the employee, who is the beneficiary, and the employer, who is the Government and the taxpayer. For instance, there used to be rough parity in the teachers’ pension scheme—the employee put in 5% and the Government 5%—but employees now contribute 6.4% and the Government about 14%. That is unfair on the general mass of taxpayers who cannot access these types of schemes. So there is an imbalance between the public and private sectors, and the cost to the Exchequer of public sector pensions is now £32 billion. Those costs cannot be allowed to grow uncontrollably.

The pension reforms must be done fairly, however, so I am pleased that there will be no change to the terms and conditions and contributions of employees who earn up to £15,000—about 15% of the public sector work force. Some 750,000 people will see no change in their pension contributions and will still be able to draw the pension they expect at the moment. Those on salaries of up to £21,000 will have their increases capped at 1.5%, so a typical employee on £21,000, after 20% tax relief—everyone gets tax relief on their pension contributions—will pay just £8 extra a month to remain in a defined benefit scheme. And, of course, employees within 10 years of retirement this April will see no change in their terms and conditions and expected pensions.

It is also entirely fair that over time we move to a career average scheme. That will benefit the broad mass of people in the public sector, who have annual salary increments but whose starting salary after inflation is not drastically different from what they start with. A final salary pension scheme, on the other hand, disproportionately benefits those in the public sector who someone described as the star performers—the people on huge incomes, the senior managers, head teachers and directors. It is fair, then, that we move to a career average scheme.

Our own arrangements, which no one has mentioned thus far, are now entirely a matter for the Independent Parliamentary Standards Authority. If, however, the public sector moves to a career average scheme, Members should expect IPSA, which now sets our terms and conditions, to move us on to a career average scheme, rather than a final salary scheme, as well.

There is no doubt that reform is needed—that is shown by demographics and the change in employment practices—and it is right that the Government are doing it in a way that is fair to public sector employees as well as to taxpayers. That will ensure that public sector pension schemes are not only the best on offer in the country but are offered on terms that are sustainable.

Jobs and Growth

Debbie Abrahams Excerpts

Thursday 17th May 2012 Commons Chamber

[Ian Swales (Redcar) (LD)]

The key to jobs and growth is wealth creation. We create wealth by digging it up, growing it or making things. Everything else is just moving it around. That is why I welcome the Government’s focus on real wealth creation, especially manufacturing.

Labour has been highly critical of almost everything done by the Government, but it is hard to discern what its programme or vision would be. I suppose we can tell a lot about its vision from what it did when it had its hands on the levers for 13 years. It had 13 long years in which to create the society it wanted, so what did it look like in the end? It loosened bank regulation, and further to help its friends in the City it scrapped the public interest test on takeovers in 2002, meaning that many of our cash-generative businesses are now foreign owned, especially in utilities and infrastructure.

Labour decimated manufacturing, taking it from 22% to 11% of the economy, which had knock-on effects for many other sectors, such as logistics. It left Hartlepool, Middlesbrough and Redcar and Cleveland in the weakest 10 of the 324 local economic areas. It widened the gap between the north and the south and the rich and the poor, and widened health inequalities. It created a benefits culture in which work did not pay for many people and having children became almost a career option in towns such as Redcar.

What about the tax system? Today, we again heard from the Opposition the mantra, “Tax cuts for millionaires.” I do not think that friends or even enemies of the right hon. Member for Wokingham (Mr Redwood) would describe him as left-wing, yet in his alternative Queen’s Speech the other day he called for a return to the former Prime Minister’s favoured tax levels—a top rate of income tax of 40% and capital gains tax at 18%. So how did millionaires fare under Labour? They had a 40% top tax rate until the last month of its 13 years. After the recent cut, it stands at 45%. It levied an 18% rate on capital gains—a lower rate than their cleaners and drivers would pay on their income. This Government have lifted that to 28%.

Under Labour, millionaires could put £250,000 a year into a pension scheme and get tax relief. The cut to £50,000 by this Government has raised £4 billion from the rich. They received child benefit and paid 2.5% less tax on their spending. They could get unlimited taxpayer support for gifts to charities, including family- controlled trusts, public schools such as Eton and, as in the case of Andrew Lloyd Webber, a huge art collection, some of which he rents back cheaply to his own house. Add to that numerous loopholes, and millionaires must want Labour back as fast as possible. Meanwhile, people on the minimum wage were paying £700 a year in tax.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Will the hon. Gentleman remind me who introduced the minimum wage?

[Ian Swales]

It was one of Labour’s great achievements and one I totally support, but I do not support a tax level of £700 a year on the minimum wage, which was in place when the previous Government left office.

What do all these failures in Labour’s vision have in common? Apart from the takeover test, they are all being tackled by the Government. Of course we are doing a lot more than that to stimulate jobs and growth. We are dealing with Labour’s shocking education legacy, as a result of which employers, even in high unemployment areas such as mine, say they cannot find the people they need. We are starting from the bottom. The pupil premium is proving such a help to children in deprived areas. We are encouraging science study in school—it is already up 80%. The National Citizen Service is giving young people confidence in those all-important softer skills. We have made huge investments in apprenticeships, the number of which has more than doubled in my constituency.

We are dealing with Labour’s neglect of manufacturing. We have heard the good news today about Vauxhall and the Business Secretary’s involvement in it. He has also intervened recently in the bioethanol industry, and we will shortly see the restart of a plant in my constituency on which 2,000 jobs depend. We are also pushing green technology. I can look out my office window in Redcar and see 27 giant offshore wind turbines being constructed. Construction is about to start on a £500 million biomass power station at Teesport. The other day I met representatives of the Forewind company, which is starting a massive project on the Dogger bank and wishes to bring power ashore through my constituency. I thoroughly welcome the announcement in the Queen’s Speech of the green investment bank, which will bring more jobs and growth to this vital sector.

The Government are investing in technology and innovation centres, including a centre for process innovation in my constituency. They are investing to improve rail freight infrastructure from Teesport and have created enterprise zones, including three in my constituency at Wilton, Kirkleatham and South Bank. The regional growth fund has already given more help to manufacturing in the Tees valley than we ever saw under the north-east’s regional development agency, and I welcome the extra £1 billion that has been allocated. The work is being co-ordinated by the excellent new local enterprise partnership for the Tees valley.

The Government are beating the bushes to generate international trade, and we are beginning to see the fruits of that activity. Exports to non-EU countries are at record levels, and we now have the first net trade surplus on cars since 1976. The north-east region is already in trade surplus, and the figures will soon include the £20 million-worth of steel a week that is being exported to Thailand from the newly reopened Redcar steel works. The first ship left yesterday.

Private sector jobs are being created—there have been about 500,000 since the general election—but unemployment is still way too high, especially in the north- east and especially among the young and the long-term unemployed. My constituency still has the second highest unemployment level among those of Government Members, and that remains a high priority for me. I was therefore delighted to see a drop of another 85 in the figures yesterday.

As we watch the Olympics, the carbon fibre bikes, the Kevlar canoes, the space-age swimsuits, the polyurethane footballs and the Paralympian equipment will be a reminder of the vital role that chemistry and the process industries play, and will play in the recovery. There is optimism in the north-east’s process industries, and the position could be made even stronger by a Teesside carbon capture and storage network. I look forward to the result of the call for bids for that project. Large UK companies are ready to invest billions in it.

Times are tough for the economy as a whole, not least because of the debt burden. The eurozone is in chaos and there is still a lot more to do, but this Queen’s Speech contains more steps in the right direction and I commend it to the House.

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[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Last week’s Queen’s Speech was my first as an MP. Although nobody does pomp and pageantry better than we do, I was deeply disappointed with its content: lots of style but no substance.

When this Government came into office two years ago, we were in economic recovery. Since then, we have been bumbling along the bottom with very little growth, and now we are back in recession again. This is not due to the worst global financial crisis since the 1930s; it is due to the mismanagement of the economy by the current Downing street incumbents. Yesterday, the Bank of England yet again had to downgrade forecasts for economic growth, from 1.2% to 0.8%, and the outlook for inflation is well above the 2% target.

Yet this not the experience of every other country. The US, which was at the centre of the global crash in 2008, started to recover, like us, in 2009-10, and it is continuing to recover. Similarly, the rest of the G7 is performing better than we are. Our economic performance is one of the worst in the G7, with Italy coming up just behind us. Brazil has now overtaken us as the sixth largest economy. The austerity measures that this Government have introduced are clearly not working.

The impact on unemployment in the public and private sectors is already being felt. Last year, the public sector lost 276,000 jobs. Some have estimated that the figure will be as high as 700,000 by 2015. In Oldham, £24 million has been cut from next year’s council budget, meaning 400 job losses. That is not the end of it. My local hospital trust, Pennine Acute Hospitals NHS Trust, recently announced a statutory consultation on a further 160 redundancies. It has to find savings of £45 million this year. That comes on top of 600 posts that have already been lost. In spite of the Government’s reassurances that jobs will be created in the private sector, large and small businesses alike are closing, including BAE Systems in Chadderton, Warburtons Bakery in Shaw, Long’s Plumbing and, of course, Remploy.

Although I welcome yesterday’s unemployment figures that show a reduction in the previous quarter, I am afraid that the trend in long-term unemployment is upwards, as we have heard. In Oldham, more than 8,000 people are out of work across the borough, with 11 people chasing every job. The number of women out of work is the highest since 1995. There has been a 25% increase in long-term unemployment among the over-50s. In my constituency, the number of jobseeker’s allowance claimants has increased by 20% since June and doubled since 2006. Young people in my constituency have been particularly badly hit, with a 288% increase in long-term unemployment since last year. Worryingly, young black and Asian men are disproportionately affected, with 56% and 23% respectively being unemployed. Those figures have doubled since 2008, so we should be very worried about that problem.

What was there in the Queen’s Speech for those people? Absolutely nothing. At the Select Committee on Work and Pensions yesterday, I was profoundly disappointed by the apathy and complacency about what is going on and about how it can be addressed. The youth contract is not geared towards focusing on these problems and only quick fixes have been introduced. There are inequalities not only between different population groups, but on a geographical basis. The urban heartlands of Greater Manchester, Liverpool, Newcastle, Glasgow, Cardiff and parts of London are most affected. The Government’s talk about fairness is just that—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I call Mr Mark Spencer.

Amendment of the Law

Debbie Abrahams Excerpts

Monday 26th March 2012 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Last week’s Budget did little to address the current issues of a flatlining economy and rising unemployment. In my constituency long-term youth unemployment has increased by 137% in the past six months, with 13 people chasing every job, and there is the highest unemployment rate for women in 17 years. Housing repossessions have increased by 10%, with more than 300 mortgage and landlord repossession claims this year. Those are the tragic consequences of that devastating economic policy and ideologically driven cuts.

The Chancellor put a positive spin on a worsening economic and fiscal forecast, when in reality he is meeting his borrowing forecast this year only because the £5 billion lost in tax receipts has been offset by a more than £6 billion under-spend in Government. He failed to disclose last week that, at a time when nursing posts are being cut, waiting times are increasing and there is an unprecedented top-down reorganisation costing billions of pounds, that figure includes £500 million being clawed back from the NHS.

According to independent analysis, the Budget includes £900 million less for the NHS than the 2010-11 comprehensive spending review, with £500 million being used on the deficit reduction programme. With increases in debt interest, rising public sector pension costs and social security payments, it is estimated that annual management expenditure will grow by 1.8% a year in real terms, leaving the total pot for public services falling by 3.8% a year in real terms in 2015-16 and 2016-17.

The Chancellor appears to be storing up further pain for an already beleaguered public sector while failing to address the real issues of the financial sector, and he has also failed small businesses. Instead of cutting corporation tax, which benefits the largest companies, in the hope—and it is just a hope—that that will lead to business investment, why did he not delay the rise in business rates? His latest scheme to boost credit to small businesses whereby banks pay a fee to the Treasury to access £20 billion-worth of funding at a low rate, in turn passing it on to SMEs for cheaper loans, suffers from serious design flaws. First, the £20 billion is to be released over two years. Secondly, the scheme has no targets. The previous attempt to boost lending to small business, Project Merlin, under which the UK’s five biggest banks agreed to make £76 billion of credit available, did not achieve the Government’s goals, even though it had targets attached, and the new plan is not compulsory. HSBC has already said that it will not be taking part. The scheme’s biggest flaw is that it does not address the real problems facing businesses. It will not be available to SMEs that have already been refused finance.

I want to record my dismay at the Chancellor’s priority of cutting from 50% to 45% the highest income tax rate for those on incomes of over £150,000. His explanation for doing so was that, because people were so successful in avoiding paying this tax, HMRC had recouped less than anticipated. In other words, he was saying, “Let’s not bother with collecting the tax at this level; let’s reward these people’s behaviour by cutting the rate by 5% and just hope that they see the light.” The Chancellor may say in response that he is clamping down on stamp duty avoidance. However, his commitment to address what he refers to as “morally repugnant” tax avoidance rings hollow given that on the day before the Budget he did a deal with Switzerland to block the EU savings tax directive, which is specifically designed to help to deal with tax evasion. Through that bilateral deal, the Chancellor has, in effect, set up a tax loophole that any dodgy accountant would be proud of in allowing people to carry on evading paying their tax.

Amendment of the Law

Debbie Abrahams Excerpts

Wednesday 21st March 2012 Commons Chamber

[Jesse Norman (Hereford and South Herefordshire) (Con)]

Several speeches have reminded me of Herbert Asquith speaking on the Licensing Bill in 1907, when he gave an eloquent speech for about an hour and a quarter and was then asked for a summary of his notes, which consisted of one page with the words, “Not so many pubs.” In other words, we have had an enormous amount of words but not much content; a lot of

“sound and fury,

Signifying nothing.”

I welcome the Budget on three grounds. First, I welcome it for my county of Herefordshire. Many of its provisions are extremely good. We have 100% council tax relief for servicemen and women, which will make a great difference to many of my constituents. We have a commitment to infrastructure, which we need in our rural areas. We have support for smaller cities and broadband, of which we hope to take advantage, and we have tax simplification for small businesses. All that is extremely welcome.

I also welcome the Budget from the standpoint of the nation as a whole. It has so many things to recommend it. I think of the expansion of support for exports; the northern hub, which will start to fill the gap created by the amazing lack of infrastructure linking northern cities; the integration of the tax and national insurance systems; and the new tax statement, for which my hon. Friend the Member for Ipswich (Ben Gummer) is greatly to be thanked. I also think of the Treasury’s work on its new review of employee ownership. That would be an important repopulation of our system and a move away from the crony capitalism of the past decade.

[Debbie Abrahams]

Does the hon. Gentleman agree with the Chancellor that “aggressive tax avoidance” is “morally repugnant”? If he does, why does he believe the Chancellor failed to mention how he will address the tax avoidance of private health care companies—the same companies that have been lobbying in favour of the Health and Social Care Bill?

[Jesse Norman]

The answer is that a general anti-avoidance rule is what it is. If there is avoidance by health care companies, I hope they will be captured by the rule, in just the same way that I hope the rule extends to include the tax affairs of Ken Livingstone as he runs for the London mayoralty.

Finally, I welcome the lower corporate tax rise, and most of all the rise in the income tax threshold. This is an extraordinarily important moment in British history, in which we begin to roll back the ever-pervasive state created under the previous Government, and in which people are given freedom and control over their economic affairs. I greatly welcome that.

The Budget continues a path of renewal that was begun two years ago. We must never forget that this country lost ground during the so-called boom years of the late 1990s and 2000s. When we adjust the gross domestic product per capita numbers, we see that, in fact, they overstate the country’s success, which relied on immigration, a boom in house prices and a boom in personal indebtedness. When those booms collapsed, so too did our economy.

We lived under the illusion of growth. We thought we were doing better than other European countries, but in fact we were not. We were having our breakfast, lunch and dinner eaten in front of us by Brazil, Russia, India and China and other emerging countries. That was also a time in which a culture of crony capitalism took over this nation. The effect of uniquely targeting inflation gave support to those asset bubbles, which in turn created an economy that was reliant on revenues from the financial sector and fed into the lack of balance, which the Government and this Budget are doing much to address.

On local grounds, speaking for Herefordshire, on national grounds, speaking for the country as a whole, and on historical grounds, as this country continues a transition from cleaning up the mess to rebuilding and renewal, I welcome this Budget.

Living Standards

Debbie Abrahams Excerpts

Monday 5th March 2012 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I have been a Member of Parliament for just over a year now, during which time I have seen the significant impact of this Government’s devastating and detrimental economic policies in my constituency. The flatlining economy has led to a 15-year high in unemployment in Oldham with over 8,000 people out of work across the borough and 12 people chasing every job. The number of women out of work is the highest since 1995, and youth unemployment is well above the regional and national averages.

Young people at Oldham sixth-form college, which I visited on Friday, are devastated about their future. The cut in education maintenance allowance is preventing many of them from taking college courses, and because of the trebling of tuition fees, they do not know whether they can go on to university. Given the lack of available jobs, things are looking dire for them.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

I congratulate the hon. Lady on her first year in Parliament. In my view, the unemployment figure is the key statistic. Today the British Chambers of Commerce announced that it was likely to reach 3 million by the end of the year. Will that not have a hugely detrimental effect on living standards?

[Debbie Abrahams]

It will indeed. I thank the hon. Gentleman for his comments.

It is not just our young people who are suffering as a result of the Government’s economic mismanagement. Last month, Oldham’s first borough-wide food bank was set up to help struggling residents who are finding themselves in desperate economic conditions—not just homeless people, but people in work.

My constituents are being squeezed every which way, experiencing increases in outgoings as a result of higher energy costs and food prices while the incomes of most people—unless they are bankers—remain the same. As we have heard, the Halifax and Royal Bank of Scotland are raising their standard variable mortgage rates, which will mean increasing problems with repossessions. We have already discussed the working tax credit changes that will affect 650 families and 1,500 children in my constituency.

These are ideologically driven cuts that reflect the Government’s desire for a United States-style welfare system. Health care is not the only welfare pillar under threat. The Government’s skilful media machine hoped that using the language of the blitz—a time when people were literally “all in it together”, accepting rationing of food and fuel regardless of where they were on the social spectrum—would whip up nostalgia and reassure people that the protective safety net in which we all invest through our taxes and national insurance, and to which we all have access if we need it, would keep them safe. Well, it is not doing so.