Amendment of the Law

Debate between Ed Balls and Phil Wilson

Thursday 20th March 2014 Commons Chamber

[Ed Balls]

Can the hon. Gentleman tell me how many people are long-term unemployed in his constituency? No? If I were him I would not try, because he would almost certainly get it wrong.

The Chancellor has failed on living standards, growth and the deficit, and he has also failed on balanced recovery. When the country is crying out for reforms to our banks to balance the recovery, back wealth creation and get an economy that works for all, not just a few, all that he seems to do is say that we can wait for the wealth to trickle down. Why are apprenticeship numbers for young people falling? Why is bank lending to small businesses still falling? Why are the Government planning to cut infrastructure investment next year?

[Phil Wilson (Sedgefield) (Lab)]

Is my right hon. Friend aware that today, Hitachi has announced that its global rail building capacity is moving to the UK? Is he aware that the factory where the trains will be built is in my constituency, and that it was a Labour Government who had the wherewithal to bring about the intercity express programme to ensure that Hitachi came to this country?

[Ed Balls]

The site for that new and welcome investment was designated under the last Labour Government as a result of my hon. Friend’s campaigning. We all want manufacturing investment to rise, but what worries me is that over the past two years, since the Chancellor’s “march of the makers” speech, manufacturing output has actually fallen by 1.3%. That is the reality.

As for house building, it is at its lowest level since the 1920s. We believe that the new Governor of the Bank of England is right to be worried that the recovery is not yet secure or balanced. That is why it is vital that the Chancellor does more to get more homes built for millions who aspire to get on to the housing ladder but find it hard at the moment. I have to say to him, we backed Help to Buy, but he should have reduced the limit from £600,000. There should not be a taxpayer guarantee for people buying homes for £500,000 or £600,000. We also need to do more to invest in affordable housing. That is the only way to avoid a lop-sided recovery, demand running ahead of supply and rising prices, putting pressure on the Governor of the Bank of England to slow the housing market through higher mortgage rates earlier than we need in the recovery. That would put business investment at risk and undermine the budgets of hard-working people across our country.

The Chancellor should have listened to the CBI, the International Monetary Fund and the Opposition and acted more boldly to boost investment in housing supply. He should have listened to Labour, and he should have listened to the Business Secretary, too. We have both warned of the danger of lop-sided and unbalanced growth. Like us, the Business Secretary was right to warn back in 2010 that the pace of deficit reduction risked choking off recovery. The Prime Minister was wrong last autumn to dismiss the Business Secretary as a Jeremiah when he warned about the unbalanced nature of the recovery by saying:

“We mustn’t now settle for a short-term spurt of growth, fuelled by an old-fashioned property boom…there are already amber lights flashing.”

I also remind the House of what the Business Secretary said about unbalanced growth just a few weeks ago:

“The shape of the recovery has not been all that we might have hoped for”.

He was right to make those warnings, but time after time over the past few years when he has publicly made such warnings about the risks, he has been ignored. The problem is, the Business Secretary is a member of the Cabinet that is doing the ignoring. How can he keep on ignoring himself again and again?

As for the top-rate tax cut, which I know a number of Government Members have criticised, I remind the Business Secretary that he said at the weekend:

“I don’t understand why people need a million quid a year.”

What we do not understand is why he has given people on a million quid a year a tax cut of £42,500 each and every year. He asks for sympathy—he told The Guardian a few weeks ago that

“since being in government I have become much more enslaved these days”.

I say “Free the Cable One”. Is it not the sad truth that he is not enslaved but in hock? He is not captive, he has capitulated. It is a Tory agenda, and he is part of it. He knows it, and he should get out of it before it is too late.

As for the Chancellor, he has certainly been busy in recent weeks, and not just preparing his Budget. The manifesto is being written, the team is being assembled, the campaign is under way. But the enemy is not called Ed, and it is not the general election that is preoccupying him. He has his eyes on a different prize. This is what his new best friend, the Education Secretary, said to The Mail on Sunday—[Interruption.] Government Members do not want to hear what he said, do they? [Interruption.]