Comprehensive Spending Review

Grahame Morris Excerpts

Thursday 28th October 2010 Commons Chamber

[Grahame M. Morris (Easington) (Lab)]

In the short time that is available to me, I shall deal with a couple of aspects of the CSR, particularly its impact on my own region, the north-east, and look at some of the issues of fairness, which Members on both sides have raised this afternoon.

The CSR has no credible strategy for growing our economy in order to pay down the debt. Indeed, it will make the poorest pay for the damage that those at the very top of the financial ladder inflicted on our economy. As we know, from the statements and Members’ contributions that we have heard, children and families will be asked to bear a greater burden than the cavalier bankers who caused the crash in the first place.

Research by IPPR North has shown that the economy in the north grew substantially during the period of the previous Labour Government. However, the impact of the global credit crisis and economic recession has, sadly, had a disproportionately greater effect in those same areas, including my own. Caterpillar, one of our flagship private sector companies, reduced its labour force during that period by almost 50%. I am pleased to say that there are signs of recovery in that regard, however, and I am doing everything I can to assist.

The view of the IPPR in considering the decisions on jobs, welfare, capital investment and public services made by the Government in the comprehensive spending review, and how they will impact on the north-south divide, is that

“things look set to become significantly worse”.

On the general outlook of the CSR strategy, it says that

“it lacks an equally rigorous and challenging strategy for economic growth”.

That is the truth of the coalition’s plan.

The acid test of whether the CSR works is, first, whether it is fair and, secondly, whether it will deliver economic growth. Labour Members, myself included, believe that the CSR does not provide a credible growth strategy—certainly not for my region, the north-east. The impact is compounded by a series of announcements, including the disbanding of our regional development agency, One North East, and the axing of the regional Minister; in my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown), we had an excellent advocate. For the life of me, I cannot see that much money is saved by doing away with a regional Minister—it seems to be a symbolic gesture not to have such a person arguing the case for my region from the Government Benches. We have also seen the axing of the Government office for the north-east—GONE has gone.

The north-east is more reliant on the public sector than other regions, and about 46% of working women work in public sector occupations—one of the highest percentages in any region of the UK. In fact, the proportion in my constituency is even higher. The job losses arising as a direct result of the CSR will unfairly target these women.

In the very short time that I have left, I want to focus on the effects of the CSR on social housing. The National Housing Federation has recognised that it is likely that some of the poorest and most vulnerable in society will be worst affected by the CSR, and those who access services from housing associations are likely to see their personal financial situation worsen considerably. Its figures show a 60% cut—or, in real terms, a 63% cut —in cash terms in comparison with the 2008-11 national affordable housing programme. Where will the Government find the money to plug the gap created by these cuts? They will raise the rents on the poorest in society to 80% of market value, and this will end up displacing thousands of families from our cities. The Chancellor uses the word “fairness”, but it is a concept that he does not seem to grasp.

The Chancellor has criticised Labour for not being straight with the public, and he often accused us of hiding the details of Budgets, but he will not be straight with the British people. His spending review will leave more people out of work, it will stop in its track the recovery of regions such as ours in the north, it will decimate key local services for the most vulnerable, and it will force those on low incomes out of our cities.