The Economy and Living Standards

Debate between Ed Balls and Tobias Ellwood

Thursday 12th June 2014 Commons Chamber

[Ed Balls]

We know that the zero-hours contract is one of the symptoms of change in our labour market that is causing such insecurity. My hon. Friend raises that matter because the reality is that none of us on either side of the House can afford to bury our head in the sand and ignore the legitimate and mainstream concerns of people across our country about our economy not currently working for them and their families.

The challenge for this generation is how we respond. In my view, there are two quite wrongheaded ways to respond. The first is to assume that business as usual will just do the job—that the return of GDP growth will solve the problem. I must say to the Chancellor and to Government Members—particularly to the right hon. Member for Chelsea and Fulham, given the result in his constituency—that every time they boast that their economic plan is working, I am afraid most people in our country just think they are completely out of touch. It may be working for some—a privileged few—but people say time and again, “It’s not working for me. It’s not working for my family. It’s not working for our community.” That is what they have to solve.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

We have asked time and again, but will the shadow Chancellor rule out an increase in national insurance or not? I would add that businesses in Bournemouth are worried about another tax—a property owner’s tax, which is another Labour invention—so will he rule that out as well?

[Ed Balls]

To return to a previous debate, the hon. Gentleman has had a 700% rise in long-term youth unemployment in his constituency since 2010. What he should do is to engage with what we actually need in order to have a successful long-term economic plan.

[Mr Ellwood]

I am very pleased to see the shadow Chancellor has a briefing note that even has my picture on it. What he is not informed about is that long-term youth unemployment includes students. I am pleased to say that the three universities in Bournemouth are increasing their numbers. The statistic has gone up because it includes students.

[Ed Balls]

I am afraid that the hon. Gentleman got that wrong last time, and he is wrong again. I am referring to jobseeker’s allowance—the claimant count—and students are excluded from the figures. I must say that it is excusable to make that mistake once, but having done it twice, his chances of getting on to the Front Bench are severely diminished.

--- Later in debate ---

[Ed Balls]

I will. This is the most vital and difficult issue. We have seen a rise in unskilled jobs in our country in recent years. That is a good thing, but it is not good enough. If that goes alongside falling living standards year on year for people not just on the lowest but on middle incomes, what will we end up with? We will end up with rising poverty among working people and record numbers of working people going to food banks, as well as rising alienation and a view that mainstream politics is not delivering. Unless Conservative Members wake up to that, they will see the consequences of it next year.

[Mr Ellwood]

On a point of order, Madam Deputy Speaker. [Interruption.]

Amendment of the Law

Debate between Ed Balls and Tobias Ellwood

Thursday 20th March 2014 Commons Chamber

[Ed Balls]

When the hon. Gentleman referred to my gross assets, was he making a personal point? I am running the marathon in four weeks’ time, and I was rather hoping the Chancellor might join me, but unfortunately his assets do not seem to be up to it.

The hon. Gentleman made an important comment just two months ago, saying to the Tamworth Chronicle:

“There are too many young people without employment and there are too many in longterm unemployment.”

I agree. Why will he not back our bank bonus tax to get young people back to work? That is what he should be doing. The Chancellor has failed on living standards growth and deficit reduction; he has also failed to deliver the balanced recovery that we need.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

The right hon. Gentleman has just touched on banking. The Opposition constantly belittle our financial services industry. J. P. Morgan is an important bank, one of many in Bournemouth, with 5,000 employees who are not all millionaires. Every time Labour does that, all those companies think a little bit more about possibly leaving the UK and moving elsewhere, and that would be devastating for the economy.

[Ed Balls]

Jobs in our banking and financial services industry are very important indeed. We need to ensure that we have reforms that strengthen our banking industry rather than undermine it. Many hard-working people on ordinary salaries in our banks feel let down by the mistakes made in the banks and by the bonus culture. I have to say to the hon. Gentleman, though, that I have checked the figures in Bournemouth East. He opposes a tax on bank bonuses to get young people back to work, but in his constituency there has been a 1,000% rise in long-term youth unemployment since 2010. He is not willing to act.

[Mr Ellwood]

I am not sure where the right hon. Gentleman is getting those figures from. The figures released this week show that the number of people in employment has risen by 400 since a year ago. Employment is doing well in Bournemouth, as it is right across the country.

Budget Resolutions and Economic Situation

Debate between Ed Balls and Tobias Ellwood

Thursday 21st March 2013 Commons Chamber

[Ed Balls]

Unfortunately, the hon. Gentleman fought the last election by saying that his constituents should vote Liberal Democrat to stop the Tory VAT bombshell. VAT has gone up, petrol is up as a result and his constituents will make their choice in two years’ time.

What do we have to look forward to this morning? Another painful, contorted and pathos-bathed Budget debate speech from the Business Secretary. I look across at him sitting on the Front Bench and cannot bear to read out once again all those pre-election quotes. You know the ones I mean, Mr Deputy Speaker—[Hon. Members: “Go on!”] No, I just cannot bear it. They were the ones in which he warned that the Chancellor’s austerity plan, his VAT rise and his rapid spending cuts would choke off the recovery and make the deficit worse. The Business Secretary knew that this plan would fail and he now knows that he is deeply implicated in its catastrophic economic failure, yet he still does not have the courage to stand up and speak out about it. Long, contorted and fudged essays in the New Statesman just will not do. No wonder he was completely ignored in yesterday’s Budget. It is a personal tragedy as well as a national tragedy, but we will hear from the Business Secretary shortly.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

The right hon. Gentleman talks about economic failure. I have the UK annual debt figures going back a few years. When the right hon. Gentleman was in office, the UK debt was £347 billion. Before the crisis struck, it rose to £624 billion. After the crisis it ratcheted up another £200 billion. With this track record, why should the nation trust Labour with Britain’s finances ever again?

[Ed Balls]

This is the Conservative Member who stated just two months ago that

“the past 2 and a half years have set Britain on the right track.”

The economy flatlined, borrowing stalled and the national debt is rising year by year by year on his Chancellor’s watch. The right track? I can scarcely think what the wrong track would be.

This morning we heard the Deputy Prime Minister on “Call Clegg” attacking the Leader of the Opposition for repeating the same attacks in this year’s Budget response as he used last year. I went back to my opening speech of a year ago, the one following the Chancellor’s third Budget, the omnishambles Budget. We all remember that one, don’t we? This is what I said a year ago:

“The British economy is stagnating, unemployment is rising…the Government’s deficit reduction plans have gone wildly off track, middle and lower-income families and pensioners are facing rising…prices, rising energy bills and falling living standards—and what did the Chancellor do in his Budget yesterday? Did he admit that his economic plan has failed? Did he act to kick-start the stalled recovery?...No.”—[Official Report, 22 March 2012; Vol. 542, c. 957.]

That was a year ago, and the tragedy is that 12 months on the position is even worse. In the words of the great Yogi Berra, it really is déjà vu all over again. It is a groundhog day Budget from a failing and out-of-touch Chancellor.

Twelve months on, living standards are still falling. The Office for Budget Responsibility says that real wages adjusted for inflation will be a full 2.4% lower in 2015 than in 2010—worse off under the Tories. It is groundhog day too because 12 months on, the economy is still flatlining. As recently as the autumn statement, the Chancellor was expecting growth of 1.2% this year, but the OBR has now halved that forecast to just 0.6%—not the right track; the wrong track. At the time of the spending review in autumn 2010 the Chancellor was expecting growth by now of 5.3%. So far it has been just 0.7%, and the stagnation and flatlining continue.

--- Later in debate ---

[Ed Balls]

I will take some more interventions if Members want. Let us have the hon. Member for Bournemouth East (Mr Ellwood) again.

[Mr Ellwood]

I am grateful to the right hon. Gentleman. He spoke about a deficit reduction plan. What year was he referring to? Was it 2001-02, when the deficit was £0.8 billion, or was it any one of the years leading up to the last year that Labour was in government, when it was a staggering £158 billion? Under the previous Government, the deficit increased in every single year after 2001. Will he tell me in which year his deficit was supposed to kick in?

[Ed Balls]

I do not want to have to give the hon. Gentleman an economics lesson, although given that he thinks we are on the right track, perhaps he needs one. The Chancellor’s fiscal rule is to balance the current structural budget, excluding investment—[Interruption.] Don’t be so silly. [Interruption.]

The Economy

Debate between Ed Balls and Tobias Ellwood

Tuesday 6th December 2011 Commons Chamber

[Ed Balls]

If the hon. Gentleman is quoting the figures for this year, they might be the result of the Chancellor’s policies. Let me return to concerns about Dover and Deal. While campaigning for a new hospital in Dover, the hon. Gentleman said:

“I am very, very concerned that Dover has not had and does not get its fair share of health care. I have taken this up with ministers and hammered home just how angry people are”.

Perhaps he should also hammer home with his Front Bench the failure of cuts in tax credits.

In last week’s statement, in today’s debate and in every interview the Chancellor has given, we hear him give excuse after excuse and blame anyone except himself. Earlier in the year he blamed the snow, the earthquake, the royal wedding and higher oil prices. America was badly affected by the snow, and every country was affected by the Japanese earthquake and higher commodity and oil prices, so why did Britain have slower growth than any other country in the G7 except Japan? Why do we have higher inflation than any other country except Estonia? It was the Chancellor’s decision to raise VAT in January that pushed up fuel and petrol prices, hit confidence and reduced real living standards for families. He then blamed the euro crisis, but the fact is that our economic recovery was choked off a year ago, well before the recent crisis.

The Office for Budget Responsibility has downgraded its growth forecast for Britain in 2011, but it has upgraded its growth forecast for the euro area. Only Greece, Portugal, Denmark, Cyprus and Slovenia have grown more slowly than Britain over the past year. As the OBR figures show, the fact is that it is the lack of domestic demand that has slowed down our economy. It is only net trade, the contribution of exports, that has kept us out of recession over the past year. If the eurozone countries fail to sort out their problems, that will of course have an impact, which is why it is important that they are sorted out. Far from the eurozone dragging us down this year, it is actually the euro that has been buoying us up.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

The right hon. Gentleman speaks of asking for, or demanding, an apology, but an apology is required from Labour Members. To give credit where it is due, however, I remember that when he was Secretary of State for Education he looked for savings in that area. But he did not do so right across the board. Page 15 of the OBR report shows that in 2008 borrowing went up to £68 billion, that in 2009 £152 billion was required, and that in 2010 another £145 billion was required: spending, spending, spending. It was not until this Government came in that such spending was halted.

[Ed Balls]

The hon. Gentleman makes an important point: there was a major financial crisis that hit Britain and all countries throughout the world. The Chancellor always wants to blame Labour, as he does the snow, the earthquake and the euro area.