Jobs and Growth

Debate between Debbie Abrahams and Ian Swales

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.

Health Inequalities (North-East)

Debate between Debbie Abrahams and Ian Swales

Tuesday 24th January 2012 Westminster Hall

[Ian Swales]

I absolutely agree with that and will go on to say more about it. The Department of Health has an important role in being the umbrella Department for monitoring action in this area, however. The report went on to say that the Department recognised its failings, admitting that it had been

“slow to put in place the key mechanisms to deliver the target it had used for other national priorities”

and

“slow to mobilise the NHS to take effective action.”

However, I agree with the hon. Gentleman that there is much more to this than simply the NHS.

There certainly has not been a shortage of reports on this subject. The Department of Health issued 15 major publications on the issue, starting in 1998 and rising to a crescendo in 2010. In fact, 2007 was the only year in which the previous Government did not issue a publication.

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

I wonder whether the hon. Gentleman could catalogue the action that was taken after the publication in 1980 of the Black report, which first demonstrated a causal link between ill health and poverty. In addition, “The Health Divide” was published towards the end of the ’80s. As I recall, because I was working in this field, there was absolutely nothing.

[Ian Swales]

I bow to the hon. Lady’s knowledge in this area. She certainly has a great deal more than I do. I do not know the answer to her question.

In 2003, the Government identified 12 cross-Government headline indicators and 82 cross-Government commitments, but sadly overall it was effective action that was the problem. In 2005, the Government identified 70 spearhead local authority areas for special attention, and credit to them for that. One third of those areas were in the north-east. However, only in London did those spearhead areas see a narrowing of health inequalities.

I know that this issue is complex, but some things are basic. The NAO report showed that more deprived areas had fewer GPs. Some had significantly fewer. They were also paid less. I was shown barely believable figures showing that Redcar and Cleveland had only half the average GP resource of the most deprived 20%. Clearly, that is not a good position to be in.