Oral Answers to Questions

George Osborne Excerpts

Tuesday 29th April 2014 Commons Chamber

[Jeremy Lefroy (Stafford) (Con)]

1. What assessment he has made of the effect of freezing fuel duty on the price of petrol.

[The Chancellor of the Exchequer (Mr George Osborne)]

This Government will freeze fuel duty for the rest of this Parliament. As a result, petrol will cost a full 20p per litre less than if we had stuck with the previous Government’s hated fuel duty escalator. We can afford to do this because we have got a grip on the public finances.

The House will also want to know that today we learned that GDP grew by 0.8% in the first quarter of this year. That is 3.1% over the year and today’s figures show that Britain is coming back. We cannot take that for granted. We have to go on working through our long-term economic plan, but for the first time in a decade all three main sectors of the economy—manufacturing, services and construction—have grown by at least 3% in the past year.

The impact of the great recession is still being felt, but the foundations—

[Mr Speaker]

Order. The Chancellor will resume his seat. The answer was not just too long—it was far too long.

[Mr Osborne]

Absolutely, Mr Speaker: having heard all the bad economic news in the previous Parliament, I thought Parliament would want to hear some good economic news. The reduction in fuel duty is one of the number of steps we have taken to support the British economy and families. As my hon. Friend says, we have just published a study that shows that the reduction and freeze in fuel duty has the potential to increase GDP by 0.5%. As Conservatives, we understand that lower taxes mean higher economic growth.

[Mr Andrew Tyrie (Chichester) (Con)]

The whole House will welcome the fact that we now have a policy to drive down costs on hard-pressed motorists, who have found it very tough in recent years. Can we take it from the Government that that reflects a wider shift in policy and that they are seeking to bear down on other energy input costs, including those of fossil fuels, in order to help hard-pressed consumers and encourage British competitiveness?

[Mr Osborne]

We need to have competitive energy prices while at the same time building a sustainable energy mix. The major £7 billion package in the Budget to help with the cost of energy for manufacturers has been welcomed not just by the big energy-intensive industries, but by many small business and, of course, families.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

2. What recent representations he has made to the European Union on the proposed cap on bank bonuses.

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[Graham Evans (Weaver Vale) (Con)]

3. What recent steps he has taken to make saving more flexible.

[The Chancellor of the Exchequer (Mr George Osborne)]

This Government believe that people who have worked hard and saved hard through their lives should be trusted with their own pension savings in retirement. That is why, following the Budget, we have already given people much greater access to their pension savings and why, from next April, they will have complete freedom of access to their defined contribution scheme.

[Graham Evans]

This year’s Budget exposed some people’s innate belief that those who have worked hard and saved all their lives could not be trusted with their own money. Will my right hon. Friend the Chancellor reassure savers in Weaver Vale that he rejects such patronising views, and will he update the House on his plans to let people choose how to spend their own money and to make savings far more flexible?

[Mr Osborne]

I absolutely agree with my hon. Friend. The fact that the Labour party had nothing to say in response reflects the muddled approach: it did not support the measure, but it did not know what to do with a popular Budget proposal. We are absolutely clear that we reject the patronising view, pursued by the previous Government, that the state knows better than individuals how to spend their money. Trusting people, reducing taxes, supporting savers—that is this Government’s approach.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Does the Chancellor agree that the traditional financial services sector has let down savers and borrowers? Is it not time that he gave more encouragement to the crowdfunding sector, which is flexible and gives a much better deal?

[Mr Osborne]

The hon. Gentleman has asked me about that matter at previous Treasury questions and I know that he takes a keen interest in it. He wrote to thank me for the measure in the Budget to include crowdfunding vehicles in individual savings accounts. That is an important step to support this new sector.

[Mr James Clappison (Hertsmere) (Con)]

As the Government’s long-term economic plan unfolds successfully, will my right hon. Friend consider giving further encouragement to savers through ISAs? Savers have warmly welcomed the greater flexibility that he has introduced with the new ISA regime.

[Mr Osborne]

Alongside the flexibility in and access to pension pots, we have increased the limit for both ISAs to £15,000. The new ISA will come in at the beginning of July and there will be complete flexibility in transferring funds from equity ISAs to cash ISAs. Of course, we have also abolished the 10p savings rate. Unlike the shadow Chancellor, when we abolish a 10p rate we get rid of it altogether, rather than doubling it.

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

The Chancellor said that last month’s Budget was a Budget for savers, so will he tell us why page 106 of the Red Book shows that the saving ratio is falling and that it has been revised down this year, next year, the year after and in every year up to 2018?

[Mr Osborne]

What the hon. Lady did not say is that by 2018 the saving ratio will still be double what it was under the Labour Government. That is a rather important piece of information that she failed to tell the House. We are 15 minutes into Treasury questions. When will a Labour MP welcome the GDP numbers?

[Robert Flello (Stoke-on-Trent South) (Lab)]

4. What recent assessment he has made of the level of bank lending to businesses since May 2010.

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[Mr Robin Walker (Worcester) (Con)]

5. What recent assessment he has made of growth in the economy.

[The Chancellor of the Exchequer (Mr George Osborne)]

As you know, Mr Speaker, GDP grew by 0.8% in the last quarter and 3.1% over the year. Growth is broadly balanced, and those who predicted a year ago that our plan would choke off recovery got it spectacularly wrong.

[Mr Walker]

In March last year, with youth unemployment in Worcester at 645, the shadow Chancellor said that

“the economy will get worse”.

Youth unemployment in Worcester is down by a quarter since then and by 40% since it peaked under Labour. Will my right hon. Friend the Chancellor update the House on how the wider economy has performed during that time?

[Mr Osborne]

My hon. Friend is absolutely right. Since the shadow Chancellor made his prediction, the economy has grown by more than 3% and almost 1 million jobs have been created. In Worcester the claimant count is down by 20% in the past year, so we have more of these predictions from the shadow Chancellor and the economy just keeps growing.

[Ian Austin (Dudley North) (Lab)]

Does the Chancellor not understand that despite the belated but welcome growth in the economy, the only people who are not worse off than they were four years ago are the super-rich—people such as him and the other multi-millionaires sitting around the Cabinet table? His wilful refusal to accept what every ordinary family in the country know, from their daily experience just goes to show how out of touch he is.

[Mr Osborne]

Of course families are feeling the impact of the great recession over which the last Government presided, but the hon. Gentleman talks about who has felt the benefit of growth. What about the people in his constituency who have got a job, where unemployment has fallen by 17% and youth unemployment is down 18%? What about the 1.5 million people who have got jobs as a result of this Government working through their long-term economic plan?

[Christopher Pincher (Tamworth) (Con)]

20. I welcome today’s excellent news. With the deficit down, growth up and more people than ever in work, the Government’s long-term economic plan is clearly delivering for my constituents. However, there is always more to do, so will my right hon. Friend tell me what further steps he can take to encourage growth in workplace apprenticeships? In Tamworth, they have grown by more than a third.

[Mr Osborne]

We have provided more than 1 million apprenticeships, and in the most recent Budget we provided more support for apprentices by extending grants to small and medium-sized companies to help them take on apprentices. We also introduced and expanded degree-level and post-degree-level apprenticeships. Apprenticeship schemes are one of this Government’s great successes, and we are going to build on it.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Does the Chancellor accept that the growth he is talking about is fuelled by mortgages pushing up house prices and consumer debt? Lending from banks is now at the 2008 level for mortgages but down 30% to businesses, which is why productivity and real wages are down. When will he deliver sustainable growth rather than a bubble before an election?

[Mr Osborne]

The hon. Gentleman obviously has not looked at today’s GDP numbers, because they show that the sector that has grown most strongly is manufacturing.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Services.

[Mr Osborne]

The hon. Gentleman mentions services, but manufacturing has grown by 1.3% in the last quarter and services by 0.9%. Even a Labour MP can work out that 1.3 is higher than 0.9.

[Andrew Percy (Brigg and Goole) (Con)]

Long before the great recession, the region that it is my privilege to represent was getting poorer relative to the rest of the UK, with youth unemployment rising and private sector jobs shrinking. Now, however, things seem to be on the turn. May we have an assurance that, this time, the recovery will be for all, particularly for the north of England, and that we will finally start to bridge the gap that grew under the Labour party?

[Mr Osborne]

My hon. Friend is right that the gap between the north and south grew under the last Government, who put all their bets on the City of London, which went spectacularly wrong. In his part of the world, which he represents so ably, we are not only helping manufacturing by reducing energy costs, which is important for steelworks in his area and elsewhere, but helping with the tolls on the Humber bridge. We have also had the great news that Siemens will open its new wind turbine factory in the area. Those are all examples of how we will have a more balanced economy than the one that we inherited.

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

Back in 2010, the Chancellor promised to balance the books in 2015 and said that living standards would rise “steadily and sustainably”. Following today’s welcome news that the economy is finally growing again, will the Chancellor tell us whether he is now on track to keep either of those two promises?

[Mr Osborne]

I am delighted that the shadow Chancellor is still here. He is the man who, quite literally, crashed the car. On that occasion he fled the scene, but when it comes to crashing the British economy he cannot escape scrutiny of his record. Let me be clear: we said we would get the deficit down, and the deficit has come down; we said we would recover the economy, and recovery is taking place. He predicted that 1 million people would lose their jobs, but 1.5 million jobs have been created. He has apologised to the lady whose car he crashed into—why does he not apologise to the British people?

[Ed Balls]

If this Chancellor wants to have a discussion about whiplash we can do that any day of the week—Mr, Mrs or Mistress. However, let us not go back to biographies of the past; let us get back to the serious issue. The fact is that the Chancellor has failed to answer my question. For all his promises, he has broken them, even on the deficit, and living standards are not rising but falling year on year on year. People are £1,600 worse off under the Tories. If the Chancellor really thinks that his economic plan is working, let him answer this one simple question: at the next election, after five years of this Chancellor, will working people be better off than they were in 2010—yes or no?

[Mr Osborne]

Of course Britain will be better off because we will not have the mess of an economy on the brink of collapse, a banking system on its knees, and an 11% budget deficit. The only way to help people in this country is to grow the British economy. What the figures reveal today is that Britain is coming back, but we cannot take that for granted. People are still experiencing the impact of the shadow Chancellor’s economic policies, and the only thing he can say to us is “Why are you not clearing up our mess quickly enough?” That is literally what he is saying; it is absolutely pathetic. His car crash was caused by a seven-point turn that he was trying. Why does he not just get up, make a simple U-turn, admit that he got it wrong and that Britain is growing again?

[Stella Creasy (Walthamstow) (Lab/Co-op)]

6. What comparative assessment he has made of trends in the annual rates of inflation and growth in average earnings since May 2010.

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[Mr Philip Hollobone (Kettering) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Chancellor of the Exchequer (Mr George Osborne)]

The core purpose of the Treasury is to ensure the stability and prosperity of the economy.

[Mr Hollobone]

My constituents were very worried indeed when the shadow Chancellor told them four years ago that the Chancellor’s attempts to rebalance the economy would result in a 1 million increase in the number of unemployed people. Would the Chancellor be kind enough to inform the House of the actual impact of his long-term economic plan on the Kettering economy, and to explain how my constituents can look forward to a more secure financial future as a result?

[Mr Osborne]

Our economic plan is delivering stability, and it is now also delivering the economic growth and jobs that we all want to see. We are coming out of the very deep mess in which the shadow Chancellor and his team left the country, with the result that in Kettering the claimant count is down by 30%, and 1,500 new jobs have been created in the last year. As my hon. Friend well knows—because, as an assiduous Member of Parliament, he has lobbied hard for them—major improvements have been made in the road and rail infrastructure in the Kettering area, to ensure that there is a balanced economic recovery.

[Mr William Bain (Glasgow North East) (Lab)]

T3. The Chancellor spends taxpayers’ money in Brussels on defending big bank bonuses, but he has not lifted a finger in four years to deal with the falling real wages of millions of ordinary working people. Is he not just presiding over recovery by the few, of the few, and for the few?

[Mr Osborne]

Well, I do not think the hon. Gentleman is Abraham Lincoln, but the point I would make is that we can only see an increase in the living standards of the British people if the British economy is growing and jobs are created. That is exactly what our economic plan is delivering.

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

T2. Further to the question from my hon. Friend the Member for Kettering (Mr Hollobone), the House will also recall that earlier this year the shadow Chancellor said:“do I think the level of public spending going into the crisis was a problem for Britain? No, I don’t, nor our deficit, nor our national debt”.As the last Government were spending more than they took in as early as 2002, does my right hon. Friend agree that this shows they still cannot be trusted to take the difficult decisions needed to control public spending and get the deficit down?

[Mr Osborne]

I absolutely agree with my hon. and learned Friend. [Interruption.] The shadow Chancellor is chuntering away, but this is what he said on the radio this morning: “I don’t think I’ve been too pessimistic in the last few years.” He predicted that the economy would be choked off and that jobs would be lost, but the reverse is happening. In Sleaford and North Hykeham, as my hon. and learned Friend knows, the claimant count has come down and 1,700 jobs have been created.

[Julie Hilling (Bolton West) (Lab)]

T4. When the Chancellor said earlier this month, “If you are hiding your money offshore, we are coming to get you”,did he mean “coming to get you to work in the Treasury”?

[Mr Osborne]

This Government have taken action against tax avoidance that the last Government never dreamed of taking. We have increased the resources for tackling avoidance and evasion. I will tell the House something else: we do not preside over a tax system in which cleaners pay higher tax rates than the people they work for. That was the tax system that the Labour party voted for, and we have got rid of it.

[Andrew George (St Ives) (LD)]

T5. I thank my right hon. Friend the Chief Secretary to the Treasury for visiting Cornwall last week, when he will have been impressed by the resourcefulness and enterprise in the Cornish economy. Will he make sure that those charged with managing the Cornwall EU structural fund programme are granted the appropriate delegated powers of intermediate body status in future?

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[Mike Kane (Wythenshawe and Sale East) (Lab)]

T6. With average wages down, ordinary working people are increasingly being driven into the arms of payday loan lenders with their usurious rates of interest. What measures are the Government taking to give ordinary working people access to fair credit?

[Mr Osborne]

We are introducing a cap on payday lending, and that will be an important—[Interruption.] The shadow Chancellor chuckles. He was the City Minister; he could have taken that decision at any point when he was—[Interruption.]. Why has it taken so long? Labour had 13 years to do these things—13 years when its team were running the Treasury. That is why people will not listen to what they have to say. The answer to the hon. Gentleman’s question is this: by supporting credit unions, capping payday lending and encouraging competition on the high street, we will help his constituents and many others.

[Bob Blackman (Harrow East) (Con)]

T8. As the economy continues to prosper and grow under the excellent stewardship of our Chancellor, will my right hon. Friend join me in congratulating the tube workers who turned up to work today to keep London moving, and in congratulating the workers who went to work this morning despite the antics of the RMT?

[Mr Osborne]

I join my hon. Friend in thanking those who went to work today on our tube system. The strike is totally irresponsible and unnecessary. It impacts on the economy and makes it difficult for people in London to get to work. [Interruption.] Well, perhaps the reason that so few Labour MPs are at Treasury questions is that they are manning the barricades with the RMT.

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

T7. My constituent Mr Effard works on a zero-hours contract and does not know from week to week whether he will be given enough hours to be able to cover his bills. Mr Effard wants to work, but admits that in many ways jobseeker’s allowance provided him with more stability. Will the Chancellor admit that the normalisation of these contracts under his Government means that for people such as my constituent a job no longer guarantees financial security?

[Mr Osborne]

The last study on the impact of zero-hours contracts was undertaken by the previous Labour Government, who concluded that they wanted to retain the flexibility that such contracts offer to business. However, we are not satisfied that all the work has been done on this, which is why the Department for Business, Innovation and Skills is consulting on what changes potentially need to be made to zero-hours contracts. We have received a lot of representations, we are looking through them and of course we will come forward with a response shortly.

[Simon Wright (Norwich South) (LD)]

T9. Within a few months, Norwich will no longer be the UK’s largest city not to be connected to the dual carriageway network. Can the Chancellor confirm that the excellent progress of the coalition’s A11 dualling scheme in Norfolk is meeting Treasury expectations, and will he keep this in mind when considering destinations for further infrastructure investment?

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[Lindsay Roy (Glenrothes) (Lab)]

If the Government’s economic plan is working so well, why is the Chancellor planning to borrow £190 billion more than previously planned?

[Mr Osborne]

This country was borrowing £150 billion a year when this Government came to office, and we are on course to reduce the deficit by a half this year. We are taking—[Interruption.] What exactly is the Labour party’s complaint? Is it that we are not doing enough to reduce the deficit? Labour said that we were doing it too quickly and opposed all the things we proposed in recent years. Labour simply has no explanation for why the economic growth it said could not happen has happened.

[Lorraine Fullbrook (South Ribble) (Con)]

T10. Does my right hon. Friend agree that politicians would do well to listen to senior business figures who warn that the anti-business policies put forward by the Labour party would put jobs and investment at risk, and would prevent Britain from having a stronger, more competitive economy?

[Mr Osborne]

The Opposition do have an anti-business agenda, but the Government are taking a different approach. We are reducing business taxes; we have introduced an employment allowance this month which will help small companies with their jobs tax; and of course next year we are taking under-21s out of the jobs tax. Labour’s plan is now not only to increase corporation tax; the party is discussing plans to put up the jobs tax, which would be a total disaster.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Since May 2010, long-term unemployment in my constituency has increased by 27%, long-term youth unemployment has increased by 40% and average real weekly wages have decreased by £116.93. Does the Chancellor want to take credit for that?

[Mr Osborne]

The hard-working people of the hon. Gentleman’s constituency should take credit for the fact that unemployment is down by 21% in his constituency and youth unemployment is down by 29% there.

[Mr James Gray (North Wiltshire) (Con)]

Will the Chancellor join me in warmly welcoming this morning’s announcement that Dyson is to invest £250 million in expanding its headquarters in Malmesbury in my constituency and intends to employ 3,000 more people, 2,000 of whom will be high-quality engineers, designers and a large number of apprentices? Does he agree that that is hard evidence that that shrewd operator Sir James Dyson has every possible confidence in the Chancellor’s long-term economic plan?

[Mr Speaker]

I think the hon. Gentleman is planning an Adjournment debate on the subject. I have that distinct sense, although some people may think he has already had it.

[Mr Osborne]

The jobs being created by Dyson at Malmesbury are excellent news. Many people will know Dyson’s products, but its facility at Malmesbury, which I have visited, is fantastic. We went to James Dyson to ask how we could replicate some of that success elsewhere in our economy. He came forward with proposals—which became our innovation and catapult centres—to bring applied science to commercial success. We are building on the success of Dyson, not just for the people my hon. Friend represents, but for the whole country.

[Fiona Mactaggart (Slough) (Lab)]

How often have the Chancellor and his colleagues referred to the long-term economic plan during this Question Time? Is it because the shorter-term economic plan that he announced in 2010, allegedly to get rid of the deficit and reduce the debt by next year, has failed and he is instead adopting something much closer to the two-term offer that Labour proposed?

[Mr Osborne]

I have not been keeping count of how many times the long-term economic plan has been mentioned, but the hon. Lady has just added two more to the total. That long-term economic plan is reducing the deficit, which is due to be down by a half this year, seeing the creation of 1.5 million jobs in our economy and supporting the growing economy, as we have seen in the GDP numbers today.

[Mr David Ruffley (Bury St Edmunds) (Con)]

The elimination of the deficit by the end of the next Parliament still requires reducing general Government consumption to its 1948 level. Will the Chancellor confirm that that is in the national interest and that the Labour party does not have a snowball’s chance in Hades of achieving it?

[Mr Osborne]

The Labour Government left us the highest budget deficit in the peacetime history of this country. The numbers to which my hon. Friend refers assume that there are no savings in welfare. I have made it clear that I think we should consider savings in welfare. Of course, other parties, such as the Labour party, have put forward proposals to increase tax.

[Nia Griffith (Llanelli) (Lab)]

Given the great success of the Labour Welsh Government’s Jobs Growth Wales scheme, which is on target to help 16,000 young people into sustainable jobs, mostly in the private sector, will the Chancellor now commit to a similar UK-wide scheme funded by a repeat of Labour’s tax on bankers bonuses?

[Mr Osborne]

This week, the help to work scheme came into force, which is helping long-term unemployed people, providing them with more support and ensuring that those who need to sign on daily do so, and that those who need work experience and who need to be in work can take community jobs. We are reforming welfare, and that is part of the approach that we are taking to create jobs in this country by ensuring that work always pays.

[Steve Baker (Wycombe) (Con)]

There is no doubt that low interest rates have played a crucial part in the Chancellor’s long-term economic plan and brought about today’s widely welcomed news, but low rates will not be good news for those people who have worked hard, done the right thing and now wish to see a safe return on their cash. Will he explain to the House and to savers in my constituency what he is doing to promote their interests by supporting saving?

[Mr Osborne]

My hon. Friend is absolutely right that the low interest rates put in place by the independent Bank of England have made life more difficult for savers, although, of course, the growing economy is good news for savers as well as borrowers. My hon. Friend has warmly supported what we have done in the Budget, not only to give people access to their pension pots but to introduce the new ISA. We have also introduced the new savings bond for pensioners, which will come into effect at the end of the year, with higher interest rates to help those in his constituency who have worked hard and saved hard.

[John Cryer (Leyton and Wanstead) (Lab)]

Real wages have fallen by £1,600 since the election, so will the Chancellor now answer the question repeatedly asked by Opposition Members: will wages in real terms be higher or lower at the next election than they were at the last election?

[Mr Osborne]

Britain is better off because we are rescuing this country from the economic mess in which the Opposition left us. There is a complete fantasy in the Labour party, demonstrated again in the past hour, that one can have an economic policy that destroys the banks, destroys business and destroys the public finances but somehow helps the people of the country in the process. As we learned to our cost under the previous Labour Government, that is not the case. They wrecked the economy and we are recovering it.

[Duncan Hames (Chippenham) (LD)]

Last Friday, my right hon. Friend the Chief Secretary saw the world-class robotics engineers of Anthony Best Dynamics in Bradford-on-Avon. What is he doing to create the conditions in which such successful manufacturers can continue to grow right where they are?

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[Valerie Vaz (Walsall South) (Lab)]

According to the Office for National Statistics, unemployment in the west midlands has risen to 8.2%. Can the Chancellor explain why?

[Mr Osborne]

The statistics for the hon. Lady’s constituency show that unemployment is down 20%, youth unemployment is down 20% and long-term unemployment is down 20%. In the west midlands, during the boom years—the unsustainable boom—private sector employment actually fell. That points to what went wrong with the previous Government—they put all the bets on the City of London, the shadow Chancellor did not regulate it properly, it blew up and we are now retrieving the situation that he created.

[Jake Berry (Rossendale and Darwen) (Con)]

In Rossendale and Darwen, the majority of our large employers are in the construction and manufacturing sectors. People want not just new jobs, but security and stability in those jobs. Will my right hon. Friend confirm that the latest figures show that those two sectors are growing at their fastest rate for 10 years?

[Mr Osborne]

My hon. Friend, who so ably represents his constituency, is absolutely right that in his constituency, manufacturing is doing better. That is because, in the Budget, we introduced a package of measures to support manufacturing and, above all, through the long-term economic plan, we are providing the economic stability that allows for investment in construction. I have every confidence that, when he takes that argument to the British people, he will see off the red princeling who is standing against him.