Budget Resolutions and Economic Situation

Diana Johnson Excerpts

Wednesday 20th March 2013 Commons Chamber

[Diana Johnson (Kingston upon Hull North) (Lab)]

I was hoping that the Budget would produce a plan for jobs, growth and investment. I was hoping that it would help areas such as mine, and help to rebalance the economy between the south and the north. I was hoping that it would address the problems of my constituents in Hull North and the problems that are becoming far too apparent in other areas of the country. We are becoming “food bank” Britain. That sits badly with other policies the Government are pursuing, such as giving tax cuts to millionaires and fighting hard in Europe to protect bankers’ bonuses.

Jobs are the key issue in my constituency. The latest statistics available show that more than 40 jobseekers go after every vacancy. Today’s figures show that there is 12% unemployment in my constituency against a national average of just over 5%. Young people are particularly hit by unemployment problems. Despite the good work that the local council does with the private sector to try to get young people into work, it is proving difficult to do that. The Work programme has a success rate of 0.83% in my constituency. Jobs are the key to ensuring that my city has a future.

The Chancellor said that 1.25 million private sector jobs have been created, but in my area in the past few months, more than 1,000 private sector jobs have gone from big names such as Kimberly-Clark and Seven Seas. There were job losses in Hull following the underspend on the Warm Front scheme—Hull was one of the bases for the scheme. We need policies that will work throughout the country and not just in specific areas.

The Chancellor said that, for every public sector job that had gone, six private sector jobs were created, but those jobs are often temporary, part-time or zero-hour contracts. A part-time job in Poundland is not the type of job we want in our economy. We want high-skilled, good-quality jobs. I am told that more people will be employed in “McJobs” at McDonalds than in the British Army. That says we are not getting our priorities right.

The Government’s response is the idea that employers have a national insurance contribution reduction of £2,000. That is welcome—the idea is similar to ideas in the five-point plan, which the Labour party has been talking about for many years. However, the managing director of PAT Testing Expert Ltd in Hull has said that the measure is a reduction, not a cut, which is what he was hoping for. The business community is saying that the measure is not quite what they were hoping for.

Overall, the Budget has failed. There is nothing on the skills agenda, which is so important in ensuring that our people have the skills they need to get the jobs for the future. Last night, the caravan industry told the BBC in my region that it needs help in getting investment. The Minister will know jolly well that, come April, there will be 5% VAT on caravans, which was part of the deal that had to be cobbled together after the omnishambles of the previous Budget. The industry is getting no help.

There is nothing in the Budget about business rates. There is nothing on roads or the work that needs doing in my area on the A63—I note that, in the autumn statement, work was planned for the port in Thurrock, which is in the south. The money available for infrastructure is all post-2015. There will be £3 billion, but it will be too little, too late.

The Budget contains no support for the renewables industry, which is where the real potential for growth lies. In my city, we have been trying desperately to get Siemens to build and manufacture wind turbines, so that lack of support is very disappointing.

While there is much in the Heseltine report that it is important to commend, it is disappointing that the Government have not accepted some of the recommendations on the need to protect British innovation and enterprise. As I understand it, there is nothing about the commitment to strengthening local chambers of commerce, which are important organisations for local economies. I am concerned that the single pot might not become available until 2015. Again, that is too late: we need the help now.

On overseas students, our universities’ export of quality education has been vital, with potential for further growth. However, the Government need to get their act together. A lot of overseas students are put off coming to this country by the messages the Government send out on immigration. That is a great shame. The university of Hull has a large number of overseas students and wants to see more of them. It is disappointing that the Government seem to be facing both ways on this issue.

On housing, although I welcome some of the initiatives the Government have brought forward, there are a lot of questions to ask about how they will work and not be abused. More importantly for my constituents, there was absolutely nothing in the Budget about flood insurance. If flood insurance is not available after the summer when the statement of principles comes to an end, that could blight the housing market in large parts of the country. There has been no agreement. As I understand it, the Treasury is standing in the way of an agreement between the Association of British Insurers and the Government. It will not ensure that money is available in the first few years of any new scheme and underwrite it if there are bad floods, such as those in Hull in 2007. That is shameful. My constituents are finding it very difficult to get house insurance now. If they cannot get house insurance after the summer, the housing market in Hull and in other parts of the country that have suffered from flooding in recent years will be in dire straits. The Government need to address this situation urgently. It will become a powerful issue if it is not addressed properly.

The Government talk a lot about how they want the economy to start to improve, but it is clear that growth has been downgraded, there is more borrowing, unemployment is starting to go up—3,000 of the 7,000 rise in the number of job losses announced today were in Yorkshire and the Humber—and millionaires are getting a tax cut in just a few days’ time. The Government have got their priorities wrong.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. The last speech is by Emma Reynolds. Emma, I will not put the clock on you, but if you are still speaking at 7 pm, I will you interrupt you as gently as I can.