Amendment of the Law
Diana Johnson Excerpts(13 years, 8 months ago)
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Diana Johnson (Kingston upon Hull North) (Lab)
Let me start by paying tribute to my hon. Friend the Member for Barnsley Central (Dan Jarvis) on making an excellent maiden speech. He talked about the spirit and aspiration of the people of Barnsley. I know that he will make a very good Member of Parliament and will certainly bring that spirit and aspiration to the House of Commons. Let me also say what pleasure I took in the election result in Barnsley. Seeing the good people of Yorkshire give the Liberal Democrats a real pasting—they put them in sixth place and made them lose their deposit—was enormously pleasurable.
The Chancellor talked about the necessity for growth across sectors and across the country. He also said that growth should be properly shared across all parts of the country. I want to talk about growth and the impact on the regions, and particularly the Yorkshire region and the sub-region in the Humber. We recently had some good news in Hull, which is that Siemens will hopefully set up a manufacturing site in east Hull to build wind turbines. That will result in about 10,000 jobs, which is excellent news for Hull and the Humber region. Like all Members across the House, I want a growing economy, high-skilled jobs for all the people in this country, and a well-educated and well-skilled work force. We have a history in Hull, having lost the fishing industry in years gone by, and other historic employment issues that we still need to address, so growth is important for my constituents and my city.
However, it is important that we take an economic reality check and ask what the Budget will actually deliver. The key thing—this has been mentioned by many hon. Members across the Chamber—is that the growth forecast was down last year, it was down this year and it is down the year after. The hopes and aspirations of all my constituents have been dashed by what has happened since this coalition Government came into power.
I want to set this debate in the context of what it means for my city of Hull. Since last May, £20 million has disappeared from Hull’s local economy because of the coalition’s council cuts. We will see £25 million leaving the NHS in Hull, while £160 million has already gone because plans for the regeneration project in Orchard Park have been axed. Hull’s housing pathfinder funding has gone. There is zero decent homes funding for the next three years. Some £21 million has been cut from Hull’s Building Schools for the Future programme, and the university of Hull is getting a 5% funding cut.
There are major cuts to services across the piece in the public sector in Hull, which has a direct impact on the private sector. I fail to understand why the coalition does not see that cutting the public sector to the extent that it is will not help growth, but produce even more problems.
Richard Fuller
Does the hon. Lady acknowledge that the country has record debts, and if so, which public expenditure cuts would she make?
Diana Johnson
I am concerned that our economy should grow, and I am trying to set into context—
Diana Johnson
Will the hon. Gentleman just let me finish? I paid him the respect of listening to his question; I would appreciate it if he would listen to what I have to say.
One way of getting out of the problems that we have experienced as a result of the bankers’ problems—not the Labour Government’s problems, as the hon. Member for Southend West (Mr Amess) tried to suggest—is to grow the economy. I am with the coalition Government on the need for a growth strategy for the economy, but the measures that have been taken so far will not help to grow the economy in Hull and the Humber.
Diana Johnson
No, I want to carry on making the point about why there is a real need in Yorkshire and, in particular, the Humber to grow the economy. The measures that have been taken are not helping. The result of all that money being taken out of my city is that construction jobs are going and we shall not have the training or the apprenticeships that the Chancellor has talked about. For the first time, we have seen compulsory redundancies at BAE Systems, a major private sector employer just outside Hull on which many of my constituents rely for skilled jobs. It is a place where people want to work, but private sector jobs are being lost there.
The abolition of the regional development agency, Yorkshire Forward, is a huge loss to the region and to the building up of the regional economy. The coalition has introduced local enterprise partnerships to assist regeneration. We all agree that we need to regenerate areas such as East Yorkshire and the Humber, and Yorkshire Forward was doing a very good job of building up the economy. The Government’s answer was to remove the RDA and create a regional growth fund. Now, whenever a question is raised about where funding can be accessed, we are told to go to the regional growth fund. The housing pathfinder has been scrapped, and the Prime Minister told my hon. Friend the Member for Kingston upon Hull East (Karl Turner) to go to the regional growth fund for money. It seems to me that the fund must already have been spent about 100 times over. It is just ridiculous.
Alison McGovern
Does my hon. Friend acknowledge, as I do, that the impact of these policies is borne out by the numbers, as the growth forecasts are downgraded?
Diana Johnson
That is absolutely clear.
The proposal for a business-led solution to deal with economic growth in the regions appears sensible. In my area, however, local authority politicians on Conservative-led East Yorkshire council and Liberal Democrat-led Hull council have been squabbling among themselves. The business leaders have made it clear that they want a pan-Humber LEP that will bring the economy together on the north and south banks of the Humber. As I said, we have had the wonderful announcement from Siemens on the future of renewable energy in our area, but because of the way in which the local councils in East Riding and Hull are behaving, the business community has been left without an LEP; the Business Secretary would not agree to one because it did not have the support of the business community.
This just shows that the Government’s approach is flawed. My area desperately needs economic growth, yet it has been left with no LEP and with the council in Hull squabbling with the councils on the south bank of the Humber. We have great potential for growth in the renewable energy sector, but there is no co-ordinating force. The idea is that LEPs will lead us into the growth strategy that we all want to see, but that is not going to happen in my area.
Mr Stewart Jackson
I fear that the hon. Lady might be suffering from selective amnesia. My recollection is that, in 13 years of a Labour Government, the per capita public expenditure for the people of Hull was significantly higher than for most parts of the UK—it was certainly in the top quartile—yet educational attainment, housing, skills and health outcomes were all in the bottom quartile. Why does she think that was?
Diana Johnson
I am sure the hon. Gentleman will be delighted to know that, because of the additional funding that the Labour Government put in from 1997, huge strides were made in education in my city, with more children achieving at GCSE level and more young people going on to college and university. That is important because it links into the growth strategy. Unless we have an educated, skilled work force, employers will not be attracted into the area. I disagree with the hon. Gentleman.
What the Chancellor announced today is a return to the 1980s. As mentioned earlier, the detail on the enterprise zones is very sketchy and it looks like only limited resources will be available to the 21 areas granted this status. Hull, however, is not in the initial 10 announced today, which is very disappointing because Hull and the Humber is one area where I would have hoped the Government would see the need to invest in and support the economy for it to grow.
The Financial Secretary to the Treasury (Mr Mark Hoban)
I am delighted that the hon. Lady is so supportive of our policy on enterprise zones. Perhaps she can encourage her local LEP to bid in the next round for one of them to be based in Humber and then to make a compelling case for the Humber to benefit from the policy.
Diana Johnson
With the greatest respect, if the Minister had listened to what I said, he would know that the Conservatives and Liberal Democrats who run the local authorities in my region cannot agree on an LEP, so there is not one. There is no procedure whereby anyone can lobby the Government for an enterprise zone. I question what will be delivered for local communities through an enterprise zone, and I also question how this policy fits with the localism agenda that the coalition is so keen to promote, whereby local areas are supposed to decide for themselves what they want to do and what best fits their particular needs. I question the announcement today, what it will mean and how it will help areas like the Humber.
I am also intrigued by this start-up Britain initiative. How is that going to help Yorkshire businesses? How is it going to help businesses in the Hull area? This start-up business sounds like a roadshow; I understand that the Prime Minister is going to tour around the country with some business leaders. If that is part of the growth strategy, then we have a long way to go.
Is this really a Budget for growth? I am concerned about some of the announcements that roll back people’s rights at work. A race to the bottom is not part of a sensible progressive growth strategy for our economy. We want high-skill jobs; we want a highly trained work force; and we want people treated properly in the workplace. Under the Labour Government, we married up social justice and economic efficiency from 1997 up until 2008, when we had the crisis with the bankers.
I am also concerned that women will lose out in this Budget. I was disturbed at Treasury questions yesterday when one of my hon. Friends raised the issue of how measures taken by the Treasury team were affecting women, only to have it dismissed along the lines of “We cannot possibly provide that information. We can only drill down to a household level. We can’t be gender specific.” In this day and age, the Treasury can be gender specific and should come clean on what these measures will mean for women and families.
Young people in Hull is another important issue. We are seeing a lost generation of NEETS—those not in education, employment or training. The coalition policies to remove education maintenance allowance and treble university fees will mean more and more young people deciding not to get the skills and the education that we all want them to have. It is a retrograde step when the Government pursue such an agenda against our young people.
Mr Sam Gyimah (East Surrey) (Con)
I am listening to what the hon. Lady says about young people not being given the skills they need and about NEETs. I do not know whether she was here earlier this afternoon when the Chancellor announced £200 million for 50,000 extra apprenticeships, which are targeted specifically at those young people who need training and skills to be able to get on the employment ladder.
Diana Johnson
Like all hon. Members, I think apprenticeships are an excellent idea. Employers in Hull, however, will tell anyone that the new criteria that have to be fulfilled to take on an apprentice mean that many of the young people cannot get into the workplace. They may be with a training provider, but actually finding an apprenticeship with a business is proving very difficult. I do not know where these 250,000 apprenticeships are going to come from. If the Government can do this, I say “Excellent, we are all supportive,” but to be honest, you are in la-la land—[Interruption.]—or, indeed, in the land of green ginger, which is another very good example.
Mr Deputy Speaker (Mr Nigel Evans)
When the hon. Lady said “you are in la-la land”, she was, of course, referring to me!
Diana Johnson
I meant no disrespect to you, Mr Deputy Speaker. Of course, I did not mean that.
Let me bring my remarks to a conclusion.
Mr Marcus Jones (Nuneaton) (Con)
The hon. Lady said that employers did not seem to want to take up the offer of apprenticeships. She is entirely wrong. The Government’s current scheme, which will generate a further 40,000 apprenticeships over the next couple of years, is over-subscribed. How can she square that with what she said?
Diana Johnson
With respect to the hon. Gentleman, that is not what I said. Employers in Hull tell me that the opportunities available to their businesses are limited because growth is so restricted, and that they therefore cannot take on apprentices. Meanwhile, providers tell me that they bring young people into the training centres, but then cannot find the apprenticeship places that would enable them to do their training.
There have been a good many academic debates today about what the Budget means—about bond markets and so forth—but in practical terms, for our constituents up and down the country, the real issues are connected with the cost of living. The rate of inflation in this country is now the highest in western Europe, people are worried about whether they will have jobs in the coming months, and there are problems with fuel duty. I am glad that the Government have been able to reduce fuel duty by 1p, but I find it rather ironic that the Conservatives are not able to challenge the European Union on VAT and derogation. Surely this is an opportunity for a party that is for ever wanting to take pot shots at the EU to do something constructive.
I believe that the deep cuts that are being made now will lead to social costs in the long term. It is dreadful that the coalition Government are targeting their cuts at communities in some of the most deprived areas, and at the most deprived and vulnerable groups in those communities. For instance, Hull city council’s early years service is being scrapped. We shall have no officers, no support for our nurseries, and no support for children in nurseries who have special educational needs, because the early intervention grant that the Government said would cover the cost of children’s centres and support for children under five does not do what it says on the tin. We shall end up with buildings that are open, with caretakers and receptionists, but with no children in them.
As I have said, the coalition Government’s cuts will store up a great many problems for the future. They utter plenty of fine words about the need for early intervention and support for families and communities, but they do not deliver the finance.
The Government strike me as a group of deficit deceivers and growth deniers who are making our country a less fair and secure place in which to live. Until 2008, the spending commitments of the right hon. Member for Tatton (Mr Osborne) matched those of the Labour Government across the board. Only when the banking crisis arrived did the then Opposition take a different approach. The Liberal Democrat council in Hull took the view that the Labour Government should be spending far more on Hull, but now Kingston upon Hull council is losing 9% of its budget, while Kingston upon Thames is losing 3%. That is not fair. The Chancellor may stand up and talk about a fair Budget, but this is not a fair Budget; neither is it a Budget for growth.
Oral Answers to Questions
Diana Johnson Excerpts(14 years ago)
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Diana Johnson (Kingston upon Hull North) (Lab)
16. What estimate he has made of the cost to the Exchequer of redundancy and retraining requirements arising from implementation of proposals contained in the comprehensive spending review.
The Chief Secretary to the Treasury (Danny Alexander)
The total cost of work force reforms will depend on the decisions of hundreds, if not thousands, of employers up and down the country. Detailed decisions regarding the number of redundancies and the associated costs that may be required have yet to be finalised in most cases, so it would not be appropriate for the Treasury to speculate on any aggregate numbers at this stage.
Diana Johnson
In the police service alone, major job losses are already being announced, such as in the west midlands, Greater Manchester and Lincolnshire, so not only will there be up-front redundancy costs, but there will be the loss of skills and experience. Does the Chief Secretary agree that the cost of redundancies could be as high as £8 billion?
Danny Alexander
I have to say that that sounds like rather an overestimate, but the hon. Lady is right to say that employers are spelling out their own plans for redundancies and for managing their work force in an appropriate way. I recognise that many staff will be very concerned about that, but I believe that it is right that they hear about specific plans from their own management, rather than draw conclusions from higher level aggregate numbers.
Mr Osborne
Of course we are urging fiscal restraint on the European Union. I should pay tribute to my colleague, the Economic Secretary, who has been out to Brussels twice in the past few days to argue vigorously for restraint in the European Union budget with considerable success. One of the problems we are dealing with is that the previous Government gave up half the rebate and that is one of the reasons why the budget is increasing.
Diana Johnson (Kingston upon Hull North) (Lab)
T5. The unemployment rate in my constituency was 10.7% in September. After the announcement in the comprehensive spending review of the slashing of jobs, services and skills, what does the Chancellor think will be the unemployment rate in my constituency in 12 months’ time?
Mr Osborne
The whole point is that we have given these forecasts to an independent body, rather than just relying on the forecasts given by the Chancellor of the Exchequer at this Dispatch Box, so that people can believe in their independence and credibility. The Office for Budget Responsibility will produce its autumn forecast on 29 November. But of course the OBR figure that all Labour Members seem to use is the one for the public sector head count, but they seem to forget that this same body made a forecast of an increase in net employment, which sadly they never use.
Savings Accounts and Health in Pregnancy Grant Bill
Diana Johnson Excerpts(14 years ago)
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Mr Hoban
Let me make some progress. Although the previous Government said the grant was intended to support the general health and well-being of women in the later stages of pregnancy, there is no requirement to use the grant for better health and well-being. Women can spend the money on whatever they want, and the grant also goes to pregnant women regardless of their income and their need for it.
Diana R. Johnson (Kingston upon Hull North) (Lab)
It seems to me that that money was also for meeting the additional costs of having a baby. It was very much linked with women receiving advice from health practitioners too; there was a link between our making sure that women were getting the very best advice and their being able to access the money.
Mr Hoban
Well, other schemes are available to help women ensure that their diet is healthy. May I tell the hon. Lady what others have said about this one? Zoe Williams, writing in The Guardian in April 2009, said that this is
“a universal grant to mothers who may or may not need it, and may or may not spend it on vegetables that may or may not positively influence the health of their unborn children.”
[Interruption.] I am simply quoting from The Guardian—I did not realise just how much outrage that would cause in the House. Paul Waugh, writing in the London Evening Standard in June 2010, said:
“The Health in Pregnancy Grant is frequently not even spent on healthy food.”
[Interruption.]
Paul Maynard
No, I am sorry, but I am not giving way to you, madam, so kindly take notice of that.
Having a piggy bank—[Interruption.] I am going to make the point that having a piggy bank in one’s bedroom is a much greater spur to saving and learning about the culture of savings than any attempt to lock away money until the age of 18.
The right hon. Member for Wythenshawe and Sale East (Paul Goggins), and the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) in her Westminster Hall debate, have raised the issue of looked-after children and how we deal with them. It is a very important issue, but the Opposition should hang their head in shame at the outcomes that looked-after children obtain after 13 years of Labour rule. The points that those Members made were an example of what I call the rhododendron test. By focusing on the tiny issue of whether such children should continue to receive child trust fund payments, they overlook the much wider public policy issues. There are many other ways in which we can and do help looked-after children.
Paul Maynard
Sorry, but if you are going to make interventions, madam, please stand up.
Diana R. Johnson
I should like to make two points. First, before the election in May, the Tories voted against introducing personal, social and health education—including economic and financial education—and making it a statutory subject in all schools. So, the Tory party should hang its head in shame. Secondly, on looked-after children, what are they doing as a Government—
Diana R. Johnson (Kingston upon Hull North) (Lab)
Let me start by addressing a point that the hon. Member for Mid Norfolk (George Freeman) made. He implied that there was no glee on the Government Benches last Wednesday at the comprehensive spending review announcement, but I was in the Chamber and I clearly remember the cheering and waving of Order Papers when those vicious cuts were announced.
Diana R. Johnson
I am not going to give way.
I also take issue with the hon. Member for North East Somerset (Jacob Rees-Mogg), who reminded me very clearly why I am on the Opposition side of the Chamber and of my commitment to a modern, enabling welfare state that not only meets needs but opens opportunities to the poorest and extends people’s life chances and opportunities. Those were key objectives of the progressive politics behind the child trust funds, the saving gateway and the health in pregnancy grant. I want to tell hon. Members why, for my constituents, the decision of the Liberal Democrats and the Tories to scrap these three policies is short-sighted and fundamentally wrong.
I have heard Ministers and Government Members talk at length about the economic environment and about cuts being inevitable, but the cuts disproportionately affect children and families, and that is not fair. All the decisions that the Government side is making are choices of the coalition Government. The cuts are not inevitable: the Government are taking those decisions. They decide where to allocate funding and what their priorities are—and their priorities clearly are not women and children.
We have also heard a lot from Government Members about wanting to target benefits more, but that is not what the Bill is about. It is about the wholesale scrapping of three important policies. As an MP in Hull, I know only too well that people often struggle to provide for their families on a day-to-day basis. They often live week to week, juggling as best they can paying bills and meeting their commitments. In Hull, the average household income is just £21,623 compared with the English average of £35,544 and the Yorkshire and Humber average of £29,902. Since 1997, there has been a 5% increase in average household income, but it is still a low-income area. The opportunity provided by child trust funds of a savings vehicle for Hull children and a nest egg for young adults is something that many families have never been able to provide no matter how much they wished to do so.
A few years ago I held a child trust fund surgery at a children’s centre in my constituency—it is worth reminding Government Members that there is no ring-fenced funding for Sure Start, so we will wait to see whether those centres continue—and there was clearly a lack of financial literacy among many of the parents to whom I spoke. The child trust fund provided a real opportunity for families to think about finances and about having some capital set aside for their children when they reached the age of 18. Many families are able to save regularly for their children so that there is a capital asset that their children can use when they reach 18 to pay for driving lessons, buy a car or pay for higher education. Having assets and savings is something that more privileged people, such as the 20 millionaires in the Cabinet, take for granted, but in my constituency that is not the case. That is why the child trust fund was such a good idea: it was universally progressive—I am glad that we have been able to teach Government Members what that means—as poorer children received more.
Cutting the child trust fund and cutting the saving gateway are just two examples of how the coalition’s spending review attacks families, and attacks women and children from poorer backgrounds with special venom. They have already seen child benefit frozen and cuts to the child tax credit, and in the comprehensive spending review the education maintenance allowance is going, there are higher tuition fees for universities and now there will be tuition fees in further education colleges. The pupil premium, the Deputy Prime Minister’s fairness fig leaf, turns out not to be new money within the schools budget, and will do little to mitigate cuts in schools, including the switch of funds to free schools. There will also be cuts to local authority budgets, particularly in children’s services. We have heard lots of warm words on the coalition Benches about looked-after children, but looked-after children are paid for out of local authority budgets for children’s services, so let us see what the outcomes are for those looked-after children after the 30% cuts to local government finance.
To be fair, before the general election, as my hon. Friend the Member for Rochdale (Simon Danczuk) pointed out, the Lib Dems made it clear that they wanted to abandon and abolish the child trust fund. Even though the Conservatives had indicated that they wished to make the fund more targeted, the Bill would scrap the whole lot.
The coalition of those who now say that a child trust fund, or something very similar, should be reinstated includes the Daycare Trust, the Family and Parenting Institute, the National Childbirth Trust and think-tanks such as ResPublica, whose director Phillip Blond is often in the media as the red Tory mentor of the Conservatism of the right hon. Member for Witney (Mr Cameron). Abolishing the child trust fund will be a regressive measure, and will not promote social mobility and equality of opportunity—something that Conservative Members go on and on about. This measure will not deliver that for them. It will also be a backward move.
Many of those groups argue that we should promote a savings culture. It is ironic that when the Secretary of State for Business, Innovation and Skills, the right hon. Member for Twickenham (Vince Cable), was on the Opposition Benches he used to speak at length about the need to promote a savings culture in this country, and yet he is part of a Government doing exactly the opposite. That links in with the saving gateway policy—a scheme that was successfully piloted in Hull. It was designed to promote a savings habit among people on lower incomes, with the Government incentive that every pound saved by an individual would be matched, and to encourage people to engage with mainstream financial services. That latter point was very important, as loan sharks and doorstep lenders are a real problem in parts of Hull, and it is vital to promote the excellent work of credit unions, such as the Hull and East Yorkshire credit union, managed by John Smith in Hull. Individuals would be passported in to the saving gateway if they were in receipt of certain benefits and tax credits. All that has fallen by the wayside, and it is such a shame for constituents who could have benefited from that excellent scheme.
The health in pregnancy grant was a clear example of an enlightened potential spend-to-save policy, paid to expectant mothers from the 25th week of pregnancy on condition that they had received maternal health advice from a health professional, and paid for the first time from April 2009. I have always been concerned about health inequalities in Hull compared with other areas of this country, and we need to focus generally on maternal health and the early years of life. It has been very important to focus on good nutrition, for example. In July 2010, 86% of pregnant women and mothers of young children in my constituency were eligible for the healthy start programme, which is a targeted programme, compared with a Yorkshire and Humber average of 82%. In the light of that statistic, if the Government are willing to listen and think about targeting the health in pregnancy grant, it seems to me that a vast number of my constituents would be eligible.
I asked Ministers how many people in my constituency were receiving the health in pregnancy grant, but I was told that information was not available. It is ironic that a Government who are requiring councils to list all spending over £500 are not keeping that kind of information, which would help us in our decision making. The grant is also important in helping with the additional costs incurred by families when a new baby is on the way, and it is the link with the health advice that is so important. We heard the quote from the Royal College of Midwives, which was quite clear about the importance of that health advice.
The Government are making the wrong choices. There are alternatives. There are different ways to deal with the deficit. It is unfortunate that the Government will not listen and are taking an ideological view of where the cuts fall, and it is unfair that women, children and babies are being penalised.
Capital Gains Tax (Rates)
Diana Johnson Excerpts(14 years, 5 months ago)
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Diana R. Johnson (Kingston upon Hull North) (Lab)
May I welcome you to your new position, Mr Deputy Speaker, and thank you for calling me so early in the debate?
I pay tribute to the hon. Member for Harrogate and Knaresborough (Andrew Jones). I am very pleased indeed to follow a fellow Yorkshire MP making his maiden speech. In particular, he talked about some of the best traditions of Yorkshire—first, the community spirit of Yorkshire people and, secondly, the great Yorkshire institution of Betty’s tea rooms. I am sure that hon. Members on both sides of the House will appreciate the fact that people can get a good cup of tea and a good piece of cake at Betty’s tea rooms.
I wish to comment on one of the other contributions to the debate. The Secretary of State for Business, Innovation and Skills made quite an attempt at explaining his about-face in respect of what the Liberal Democrats fought the general election on and how he now comes to the Dispatch Box to defend the vicious and savage cuts in the economy. He is obviously a distinguished and well-thought-of economist, so it was rather strange that he did not pick up before that the position was so bad that he would have to change his party’s policy. He was seen as brilliantly forecasting some of the problems in the economy during the previous Parliament and he has been given great recognition for some of his forward-thinking views, but he was not able to pick that up in the weeks before the election. I was rather taken aback by how out of touch he claimed to be and by how he had to have the meeting to explain the current economic situation and to change his party’s policy.
I was also very surprised indeed to hear a Liberal Democrat try to argue that VAT is not a regressive tax. I have never heard anything like it, and it took my breath away when I recalled that my Liberal Democrat opponent in the general election made it clear on every hustings where I appeared with him that increasing VAT was not something that the Liberal Democrats would support. He constantly attacked the Conservatives for the fact that, whenever they have been in government, they have always put up VAT.
The main reason that I wish to speak in this debate is the growing anger—not only in my constituency of Kingston upon Hull North, but in vast swathes of the north of England—at the coalition’s policies so far announced and those in the Budget statement yesterday. Many of the policies that the coalition Government have proposed to the British people have no mandate—obviously, the deal was done after 6 May—and the electorate, particularly Liberal Democrat voters, feel misled, betrayed and disfranchised. When I talk to people in my constituency, they tell me that they did not vote for many of the polices proposed in recent weeks and yesterday. In fact, they feel that they were not given the opportunity to vote on the very policies that the coalition Government have proposed. As I have indicated, the Liberal Democrats sought election clearly on the mandate that they would not let cuts come during this financial year and that they were against VAT increases, but look at them now.
John Thurso
May I reassure the hon. Lady that I have spent a great deal of time talking to my constituents since the Government were formed and that the only thing that they wish to express is their overwhelming relief that the Labour party is no longer in government?
Diana R. Johnson
If the hon. Gentleman talks to the electorate in Yorkshire, he will find they express a different view. He might also find that the views of his electorate have changed considerably since they heard the Budget.
Angela Smith
To underline that point, I am sure that my hon. Friend understands the feelings of the people of Sheffield. They write to the local newspaper every day to say that the Deputy Prime Minister will pay the price.
Diana R. Johnson
That is absolutely right. We have seen a political blind date, but we should not worry because it is clear that Dave agrees with Nick, and that Nick agrees with Dave, so perhaps it will be okay in the end.
There are a few measures in the Budget that I can support, such as the change to capital gains tax and the bankers levy, although I am surprised that the levy will raise only about £2 billion because I think we could raise much more. However, the broad thrust of the Budget is very bad news for my constituents. Hull North will see more individuals out of work, with people’s opportunities wrecked and a decline in their quality of life. The programme of fighting child poverty and inequality will go backwards, not forwards, and there will be big problems in health and housing. Most importantly, wealth creation and enterprise will suffer in Yorkshire.
I want to talk about four things in particular: the rewriting of the history of the economic situation by the Conservatives and Lib Dems; the dogma that drives the Budget; my constituency, and Yorkshire and the Humber; and Labour’s approach to dealing with the economic situation in which we find ourselves.
I am worried by the rewriting of the economic history of the recession and the falsification of the cause of the deficit. We know that the Prime Minister is familiar with airbrushing, and his deputy routinely airbrushes away more than 100 years of his party’s history when it suits him. The deficit was caused not by big government, but by big greed. Bankers and international speculators are at its root.
In 2006 and 2007, I was fortunate to be the Parliamentary Private Secretary to the then Chief Secretary to the Treasury, my right hon. Friend the Member for East Ham (Stephen Timms), whom I was pleased to see back in the Chamber today. During that time, early work was being carried out on the current 2008 to 2011 public spending period. We had enjoyed a decade of low inflation, steady growth and falling unemployment, and there was no serious deficit problem. At that time, the present Prime Minister and Chancellor used a soundbite about sharing the proceeds of growth. They also said that they wanted to match the Labour Government’s spending plans up to 2011, as they kept saying until the end of 2008.
We all realised at that time that the spending round would need to be tighter than the one immediately after the millennium, but the adjustment was not remotely on the scale of the deficit in the public finances that opened up from 2008. The events of the two years that followed came about because of the greed-fuelled banking crisis that tipped the world into the worst recession since the 1930s. It is wrong to airbrush out what happened, to blame the problem on big government, and to be oblivious to the fact that public services are important not just for fighting poverty and inequality, and for providing opportunity, but for an efficient, growing, modern economy. Since the middle of 2007, taxpayers have had to pay to rescue the banking system—and not just in Britain—but now hard-working families and public service workers are being asked to pay again because of the greed of the bankers and the speculators.
The Budget is driven by dogma, not good housekeeping. It cuts too early and too deep, and it will hold back growth, which my party saw as the main engine for cutting the deficit. We know that further cuts will follow, including departmental cuts of up to 25%, but I think that the coalition Government will make further cuts again and again, meaning that we have a spiral of cuts and debt.
When Labour was in office, the Chancellor berated our Government for not mending the roof while the sun was shining, but it now seems that he is up the ladder removing the slates as the storm clouds of a double-dip recession gather on the horizon. In Hull, we need public services and investment. They are important to the local economy. The coalition cuts, however, will harm our quality of life. The Tories said in the past—I think that they still say this—that mass unemployment is a price worth paying. The market zealots on the Government Benches who said for years that they wanted less regulation of the markets and smaller government are now getting their way.
Mr Ellwood
I am sad to hear the hon. Lady advocate a double-dip recession so early in a new Parliament. The public do not want to hear those sorts of words. We need to get behind the Government and allow the coalition to do its job. I would like to ask her who was responsible for allowing Bradford & Bingley to give away 125% mortgages? Who was responsible for removing regulations in the banking industry in the late 1990s and thus allowing banks to lend people money in ways that they did not understand and when the payments could not be afforded?
Diana R. Johnson
I remind the hon. Gentleman that Conservative Members vociferously argued in the House year after year that there should be less regulation of the financial markets. They criticised the Labour Chancellor and Government for the regulations that they introduced. The hon. Gentleman has a rather selective memory of his party’s position in the late 1990s.
I fear that Yorkshire and the Humber will bear the brunt of the majority of cuts that come out of the Budget. I am pleased that my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) is in the Chamber. She has been a powerful advocate for her city of Sheffield and wanted to ensure that the sensible arrangements that the Labour Government put in place for Sheffield Forgemasters went ahead. It is shocking that the coalition Government have refused to continue the process. Sheffield Members are making a strong case for the assistance, so it is a shame that the Deputy Prime Minister is out of step with his city colleagues.
Angela Smith
Will my hon. Friend comment on the fact that the investment offered by the previous Government was covered by an equity stake from Westinghouse, one of the world’s largest nuclear industry companies? Given that that stake reduced the financial risk to the Government, the earlier comments made by the Secretary of State for Business, Innovation and Skills were entirely incorrect.
Diana R. Johnson
I am sure that that is absolutely right. I must give credit to our civil service. Civil servants advise Ministers and respect the decisions that they make, but the civil service would have been clear if it thought that the assistance should not go ahead because public money would not be protected as fully as it should be.
I was surprised by the vague way in which the Business Secretary talked about the opportunities that his Department will make available in the regions. He cited just two examples: an incentive on national insurance contributions for small businesses and a proposed fund to be distributed in the regions. There were no details of the fund, however, and it is unsatisfactory that businesses and enterprises in Yorkshire and the Humber have to wait to find out what money might be available to them. That is not good government.
I am sorry that the Business Secretary is not in his place, but perhaps I will get some answers to my questions. First, in view of the cuts to Yorkshire Forward, the regional development agency, and the demise of Hull Forward, and given that the Liberal Democrat-controlled council in Hull does not have a great record on regeneration and moving quickly and effectively, how will we be able to promote investment in my city, which still needs public investment to go in, year on year?
Secondly, what will happen to opportunities for those not in education, employment or training with the end of the future jobs fund and cuts to university places? I have the great pleasure of the university of Hull being slap-bang in the middle of my constituency. I am worried about local youngsters in particular not being able to access their local university.
How will the region’s construction sector fare, with council house building schemes being cancelled, road schemes threatened and questions still to be answered about flood defence and protection work? Despite the promised good news on port ratings, will the Humber actually get the investment that the Labour Government had identified for the Hull port area and the use of the site for wind turbine manufacturing? That is under review by the coalition, which is worrying, because it might well put off businesses coming to Hull. With the Typhoon fighter project’s future uncertain, what will happen to the skilled jobs at BAE Systems at Brough?
I see other hon. Members from the Yorkshire and the Humber region in the Chamber. What about the reduction or elimination of the Humber bridge tolls, which we were so close to achieving under the previous Government? Those are all questions that will affect the economic viability of Yorkshire and the Humber, and I want some answers.
Andrew Percy (Brigg and Goole) (Con)
I was previously a councillor in the hon. Lady’s constituency, so I consider her a friend. I was interested to hear that we were close to eliminating the bridge tolls. Exactly where had the money for that been identified? Will she confirm that the study started by the previous Government is continuing? To give the impression that nothing is happening on the Humber bridge tolls is not fair. I would very much like an answer to my first question, because some of us think that the previous Government started to talk about the Humber bridge simply because an election was coming.
Diana R. Johnson
The hon. Gentleman does a disservice to the fact that long before the general election, there was cross-party working by hon. Members on both sides of the House to make the economic case for reducing the Humber bridge tolls. He will know that the then Transport Minister, my right hon. Friend the Member for Tooting (Sadiq Khan), had decided not to allow the increase in the tolls and a review was being conducted of whether the toll could be reduced to £1. All I was doing was questioning what was going to happen, and I would be grateful if the coalition partners threw some light on the subject. I am sure that all hon. Members are keen to get a satisfactory resolution to that ongoing problem.
I have a few comments to make about what Labour would have done, had we secured a majority at the election. It is clear—the shadow Chancellor made it clear—that of course we need to get the deficit down. Before the election we had legislated to say that we would halve the deficit within four years, and in the Departments work was being done to identify where reductions could be made. I was in the Department for Children, Schools and Families, so I know that areas had been clearly identified, and my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) told me that clearly identified savings had been put together in the Home Office. It is wrong to say that the Labour Government had not started work; however, we made it clear that we had to wait until the growth in the economy was secure.
A key issue that the coalition Government have to grapple with is the fact that just making cuts across the board is not the sensible approach. We need to think about what policies we can introduce to spend and invest now so that we can ensure that we save in future. One of the policies very dear to my heart is healthy free school meals, which piloted in Hull but was slashed by the Lib Dem council without the evidence being evaluated. I believe that there is an economic case to be made. Investing in children early on, making sure that they eat healthily and well and do as well as they can in their education, will reap benefits for us as a society later on. I was disappointed to see that the extension of the free school meals pilot has been abandoned by the coalition Government, as well as the extension of eligibility to those in receipt of working families tax credit, which would have made more families eligible to get free school meals for their children. That is very short sighted.
By cutting too deep and too early, we will risk jobs—jobs in Hull, jobs in Yorkshire and the Humber, and jobs nationally. We will have higher welfare costs and less tax revenue. Growth will be suppressed and I think that the deficit will be much worse.
Geoffrey Clifton-Brown
The hon. Lady has spent her entire speech carping about my right hon. Friend the Chancellor’s Budget. Can she not at least welcome the large regional fund that is to be set up, through which funding will probably come to her area and which may well benefit her constituents by providing jobs?
Diana R. Johnson
I do not know—there is no detail. We have had vague promises from Ministers about what the regions will get, but no detail. I cannot explain to business men and entrepreneurs in my constituency where the money is coming from to support and incubate their businesses. As far as I am concerned, this is all hot air. [Interruption.] Wait and see? Businesses in my constituency cannot do that. They need to know whether there is to be investment and support. If the coalition Government are serious about supporting the economy in the regions, they should have had their proposals and policies ready for yesterday’s debate and been able to explain what money is available to people in the north.
The welfare reforms and the tax changes announced yesterday will cause great problems in my constituency. Although basic rate taxpayers are promised an extra £170 a year in income tax allowance, that will be far outweighed by the VAT increase to 20% from 4 January next year. We have heard at length about the Lib Dem election campaign poster saying that there would be a Tory VAT bombshell, but the Deputy Prime Minister—bless him!—has done another U-turn that takes his party to a new level of opportunism. That regressive tax on growth will cost the average household £425 a year. That is without counting the other regressive changes in things such as housing benefit, child benefit and child trust funds and the disgraceful scrapping of the health in pregnancy grant.
As my right hon. Friend the Member for Kingston upon Hull West and Hessle told the Prime Minister and the Deputy Prime Minister—the self-righteous brothers—they are leading this Government and repeating the PR mantra, “We’re all in it together,” but some parts of our country will be altogether more in it than others. A party that has never been known for sharing wealth and opportunity fairly is very keen to share austerity with everyone.
This past month shows that we have replaced a one-nation Government with a coalition of the two oldest parties, representing the misconceived interests of the privileged classes in this country. My constituents in Hull North, Bransholme, Orchard Park and similar areas, who need public support and public investment to give them the opportunities that, through no fault of their own, they lack, will suffer because of this Budget and this coalition Government.