Budget Resolutions and Economic Situation

Derek Twigg Excerpts

Monday 13th July 2015 Commons Chamber

[Derek Twigg (Halton) (Lab)]

The hon. Member for North West Leicestershire (Andrew Bridgen) spoke about productivity, as did a number of other Members in this afternoon’s interesting debate on the Budget. Productivity is a major challenge for this country, but that problem has not come about overnight. Up till now the Government have not had an answer.

As the hon. Member for North West Leicestershire mentioned, if we compare the UK with America or in some respects France, it is clear that there is a massive difference in productivity. It is such a significant problem that it impacts on our ability to continue to grow as a country and to take the strides forward that are needed for us to become a high-skilled, high-income economy. That needs to be addressed, but I did not see it set out in the Budget or the later statement by the Chancellor. There is a gap in his proposals.

Manufacturing is one of our most important industries and could bring a lot of income to this country, but it has suffered greatly over the past 20 or 30 years. No solution seems to have been put forward to help our manufacturing base, although those who work in manufacturing and those who manage and lead manufacturing have some very good ideas and proposals, but for some reason the Government do not want to listen to them.

In an article last Wednesday the Financial Times stated:

“Manufacturing’s miserable start to the year shows little sign of ending, highlighting the chancellor’s lack of progress in rebalancing the economy as he delivers his Budget statement.”

I share that concern, as I still have a reasonable amount of manufacturing in my constituency. On Friday I visited Hutchinson Engineering, which is doing pretty well but could do a lot better. I saw for myself the work that that manufacturing company does and I was very impressed. The firm is an important part of our economy.

The other problem that we have had is investment. We know that companies have been sitting on a lot of cash, although there has been more investment recently in plant, machinery and IT. That has not happened quickly enough or in sufficient amounts, and I am not sure that companies have the confidence to continue to do that over the long term. We need that investment but the issue does not seem to have been addressed. It is very important to do so.

Investment in infrastructure has been mentioned by other hon. Members. Clearly, there is not enough investment in infrastructure. If one talks to business and companies, one finds that that is their view as well. We must up our game as a country, and I did not see that from the Chancellor. The Mersey Gateway in my constituency, for example, was started under the Labour Government with all-party support, and the present Government continue to support it. That is a fantastic scheme which will improve the area and ensure extra investment, but we need many more such infrastructure schemes around the country.

We have seen the Government backtracking on railway investment in schemes that were started under Labour. Investment in infrastructure is key. At a time when such low-cost borrowing is available to the Government, it beggars belief that they are not doing more to borrow in order to invest in our infrastructure and re-energise our economy.

In the time I have left, I want to touch on two other topics. The first is the Government’s insistence on cutting the public sector and stopping public sector workers having more than a 1% pay rise. This Government do not seem to realise how important our public sector is to us. I shall return to that important issue.

Secondly, on tax credits, as the Budget unravelled the following day, we saw that people on low and middle incomes will be hit badly, despite the so-called living wage, which we know is a minimum wage. Thousands of families in my constituency will suffer a loss of many hundreds of pounds, perhaps even £1,000, as a result, and that is not something they should have to bear. That is unacceptable and it is one of the reasons that I will vote against the Budget.

I mentioned the public sector. I cannot understand the Government’s insistence on slashing council budgets. Councils such as mine in Halton have been a major part of bringing in investment, leading to growth in our local economy over the past 20 or 30 years. It is a very important part of the regeneration that can take place in our economy, but the Government seem to want to continue to cut budgets, forcing councils into an extremely difficult position. In the not-too-distant future, councils will have real difficulty in providing even the basic services that they must provide. That will be a major problem for our country and our communities.

The Government must think again about their austerity plans and the cuts that they are forcing upon councils. It is the poorest communities, such as mine, in one of the most deprived boroughs in the country, that face some of the most difficult times because of the cuts that are taking place. The Government do not seem to care. They seem to want to write off a certain section of the population. The Budget did not have a strategic vision, it was not fair, and it did not have a plan to take this country forward. As the debate has shown, so many problems will result from the Budget that we must oppose it.