Budget Resolutions and Economic Situation

Helen Goodman Excerpts

Thursday 21st March 2013 Commons Chamber

[Vince Cable]

There are two elements to the Chancellor’s housing package. The first is the development of the FirstBuy scheme, which will provide £3.5 billion for shared ownership. That has been widely welcomed because it will increase the demand for housing and get the housing market going. The other, more ambitious scheme is a form of insurance for mortgages, which has been very successfully applied in Canada, for example, where it prevented a collapse of the market of the kind that occurred here and introduced greater stability. The Chancellor is now consulting on how that scheme should be designed, which is absolutely right.

[Helen Goodman (Bishop Auckland) (Lab)]

The Secretary of State needs to be a champion of the mansion tax, which would be a very sensible thing to do at the moment. Why is he supporting this scheme, which will support the purchase of houses up to the value of £600,000?

[Vince Cable]

I remain a champion of the mansion tax and will continue to champion it with my colleagues on the Liberal Democrat Benches. The Chancellor is going to consult on how this major reform to the housing market will be implemented. We recognise that there are many complex products in the mortgage market. For example, many parents support their children’s housing acquisitions. Those kinds of transactions have to be properly analysed before the scheme is launched.

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[Tom Blenkinsop]

Further to that point, places such as Wilton, which has the largest chemical industry in the country—

[Helen Goodman]

It is the largest in Europe.

[Tom Blenkinsop]

As my hon. Friend reminds me, it is the largest in Europe. Wilton has lost out on the carbon capture and storage programme, which would have added 20 or 30 years’ longevity to the capital on site. The north-east is pushing more than any other region in providing exports for the country, and yet the Secretary of State is not providing the financial support for the infrastructure that was provided by the Labour Government.

--- Later in debate ---

[Vince Cable]

I recommend that the hon. Gentleman look at the OBR’s figures to see what has happened to Government consumption in the past three years. In 2010, it grew by 0.5%; in 2011, it grew by 2.6%; and last year, it grew by 0.6%. It is true that aspects of Government spending have been cut in a way that has been damaging. The Chancellor has acknowledged, as I have, that capital spending cuts were a mistake. That was the one bit of fiscal consolidation that the Labour Government launched, and it has had damaging consequences, which is why we are now reversing it.

[Helen Goodman]

That is not how things look from the perspective of the north-east. The Government destroyed regional development agencies. Of the capital spending the Government have introduced, only 0.5% has gone to the north-east. Why?

[Vince Cable]

Job creation in the north-east is growing more rapidly than it is in many other parts of the country. It is precisely because the north-east has a higher share of exports in its regional gross domestic product than any other region that it is benefiting from the shift that is now taking place to manufacturing.