Comprehensive Spending Review

Gordon Banks Excerpts

Thursday 28th October 2010 Commons Chamber

[Ian Austin (Dudley North) (Lab)]

rose—

[Gordon Banks (Ochil and South Perthshire) (Lab)]

rose—

[Danny Alexander]

I will press on, and give way in a moment.

Thanks to Labour’s profligacy, there really was no money left. The country knew it, our business leaders knew it, and, as we discovered, the Labour Chief Secretary knew it too. By May, the alarm bells were ringing—the danger was real. Whether one wants an expansive social policy, a smaller state, or more or less public spending, it must be underpinned by proper control of the public finances. If that control is lost, the policies that have been built, whatever they are, will inevitably crumble.

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[Danny Alexander]

I am going to press on and make some progress. I will take further interventions later, but I answered the point that the shadow Chief Secretary made.

Rising interest rates choke the finances of those who borrow, and rising inflation bites on those on fixed incomes. It was the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) who once observed:

“Public finances must be sustainable over the long term. If they are not, the poor…will suffer most.”—[Official Report, 2 July 1997; Vol. 297, c. 303-304.]

For once, I agree with Gordon. Those who say that there is a choice between fiscal discipline and supporting growth could not be further from the truth. The choice is between a sound platform to support growth and a lack of control that would undermine it. In reality, it is no choice at all.

[Gordon Banks]

rose—

[Ms Angela Eagle]

rose—

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[Danny Alexander]

I will not give way again, I am going to press on.

The Chancellor’s statement set out the level of departmental spending for the next four years. I will not repeat every decision now, but of course I am happy to take interventions. [Hon. Members: “You’re not!”] I have taken a great deal of interventions, and I will take a few more later. Instead, I want to focus on our priorities: growth, fairness and reform.

[Gordon Banks]

rose—

[Danny Alexander]

I give way to the hon. Gentleman.

[Gordon Banks]

I am very grateful to the Chief Secretary for finally seeing me up at the back here. One of the words that he mentioned was growth. How can we have growth when 1 million people are being put on the dole?

[Danny Alexander]

How could I miss the hon. Gentleman? I will explain the answer to his question as I make progress in my speech. He will just have to listen carefully.

Our priorities—growth, fairness and reform—guide every choice that we make. We are a pro-growth Government, focusing our capital resources on key infrastructure projects in transport and green energy.

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[Lilian Greenwood (Nottingham South) (Lab)]

I was particularly keen to speak in today’s debate because, the day after the Chancellor delivered his statement in the Chamber, his draconian cuts greeted with cheering and waving from the Government Benches, the Prime Minister and Deputy Prime Minister headed off to a primary school in my constituency. I am not quite sure why they were there, and it seemed as though they did not know why either, but of course the kids at Welbeck primary greeted them with great delight. Prince Charles came up to the Meadows recently, so people are getting used to visitors from London.

[Gordon Banks]

Could the Prime Minister and Deputy Prime Minister possibly have been at the school in my hon. Friend’s constituency getting some arithmetic lessons?

[Lilian Greenwood]

If only. I thank my hon. Friend.

What did I hear in the media coverage of the visit? I heard about the Prime Minister’s amazement that he had found a lad who liked broccoli. I did not hear the Prime Minister or Deputy Prime Minister telling the kids about the huge gamble that the Government are taking with their future. They are performing a huge economic experiment. They have a theory that if we cut public spending, lose 490,000 public sector jobs and, as PricewaterhouseCoopers tells us, lose another 500,000 private sector jobs that depend on the public sector, the rest of the private sector will somehow fill the gap. They do not seem to hear the warnings of economists who disagree. Listening to Ministers last week, one would have thought that the PricewaterhouseCoopers figures had about the same credence as Mystic Meg. The Government do not want to hear about the effect of their cuts, because they want to make them.

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[Gordon Banks (Ochil and South Perthshire) (Lab)]

We have heard a lot today about the impact that the CSR will have on some of the most vulnerable people in society. I support the view that it cannot be acceptable that families are expected to pay more than the banks, and that the public and private sector workers who did not cause the crisis will pay more and lose their jobs, while the banks are treated lightly.

Among the doom and gloom of last week’s statement, there was a real prospect that the Chancellor would lay out a strategy for growth that would support our small businesses, which are the real drivers of the UK economy. He failed to grasp that opportunity, and I am not the only one who thinks so. Even this week, the Prime Minister and the Business Secretary have both failed to deliver a credible growth plan not just for the UK but for its small businesses.

The Federation of Small Businesses, of which I am a member, believes that a missing link in the Government’s deficit programme is the need to create growth by widening the tax base, creating more businesses and incentivising small firms to grow and innovate. I agree. As the shadow Chancellor said last week:

“Without growth, the job of getting the deficit down becomes impossible.”—[Official Report, 20 October 2010; Vol. 516, c. 968.]

Even after today’s statement, we are still waiting to hear a growth strategy that has any new thinking in it.

It has been well documented that the Government’s approach will throw 1 million people out of work, but I want to take the Chancellor to task about part of his speech last week. He said:

“Of course, there is a very understandable concern about the reduction in the total public sector head count that will result from the measures in the spending review.”—[Official Report, 20 October 2010; Vol. 516, c. 951.]

He used the phrase “head count”, but he was talking about people’s lives, jobs and futures. He should have the decency not to talk about people’s futures in such an insensitive way—off-hand, impersonal and using the phrase “head count”.

We make a fundamental mistake by trying to separate the public and private sectors because, as we have heard, they are intrinsically linked and mutually reliant. The construction industry is significantly of the private sector but it survives with a reliance on a large state commitment to improving our infrastructure, as under the previous Labour Government, with investment in hospitals and the Building Schools for the Future programme. PricewaterhouseCoopers suggests that more than 100,000 construction workers will lose their jobs as a result of this Government’s actions—that is more than 5% of the total employment in this sector and five times the loss expected in the financial services.

There are many ways to support businesses such as those in the construction industry, one of the best of which is having a well-trained and efficient work force. As my right hon. Friend the Leader of the Opposition has suggested, that could be done by offering tax cuts to employers who pay a living wage as an incentive to develop the skills of the people who work for them. Preventing our brightest students from following their chosen career path is not the best way of achieving those goals, and the cuts that will lead to reduced in-job training such as Train to Gain, which has supported more than 1 million workers in the UK, will make the job market stagnate.

My right hon. Friend the Leader of the Opposition said recently:

“There have been…too few in British politics who speak up for small business.”

Well, the genie is out of the bottle now, because my right hon. Friend saw fit to give me the business brief for the Opposition. I want to take this opportunity to stress that, given my small business background, this is one voice that will support the ambitions of small businesses, support the contribution they can make to the economy and skills of the UK and support my right hon. Friend in his endeavour to stand up for small businesses in the UK.

The comprehensive spending review did nothing to stimulate funding for small businesses, nothing to provide an opportunity for small businesses to grow and nothing to allow small businesses to grow their skills base. Quite the opposite, in fact: it takes money away from small businesses. Why? Because it puts 1 million people on the dole. It prevents small businesses from growing. Why? Because it puts 1 million people on the dole. And it shrinks the skills base of small businesses. Why? Because it puts 1 million people on the dole. It is clear from the CSR that the Government do not value small businesses in the UK, but in this House in the future there will be a voice that engages with them, and it will be on the Opposition side.