Budget Resolutions and Economic Situation

Helen Goodman Excerpts

Wednesday 16th March 2016 Commons Chamber

[James Berry]

My hon. Friend is right. This is not just a London project. I heard the cat-calls from Members on the Opposition Benches saying, “What about this or that part of the country?” This is not just a London-centric project. It helps people across the south of England. Anyone coming into Waterloo will see a huge change, with a huge amount of space freed up because trains will be diverted to Victoria. Equally, people living Hertfordshire and Cambridgeshire will see much better connectivity into London. As always, my hon. Friend is right.

[Helen Goodman (Bishop Auckland) (Lab)]

A recent ONS study of my constituents found that one third had never even been to London.

[James Berry]

The place my family come from is not far from Bishop Auckland. I hope they take the opportunity, which will be much improved with HS2 and Crossrail 2.

The project is not due to open until 2030. That may seem like a long way off, but we will never get there unless we do this work now. Indeed, for many of my constituents Crossrail 2 cannot come too soon. This morning, if I had not got on the 6.35 am train, I would have been on a packed carriage with many other hard-working local people. They have to pay high train fares to stand in a packed carriage on the way into London. That is just not acceptable. Network Rail’s route study shows that peak time trains from my constituency require 20% extra capacity just to deal with current overcrowding. By 2043, 60% extra capacity will be needed to deal with additional passengers. That would be a challenge on any route, but it is an impossibility on the south-west route into Waterloo. Network Rail’s analysis is that no further trains can go into Waterloo at rush hour and other peak times. A new route is needed and, as my hon. Friend the Member for North Dorset (Simon Hoare) said, Crossrail 2 will divert trains from Waterloo, through a tunnel currently planned to be at Wimbledon, to Victoria, Tottenham Court Road, Euston, St Pancras and on to Hertfordshire.

Every station in my constituency will be upgraded to a Crossrail 2 station. Every station will have step-free access, which is important for disabled people, people with buggies and those who find it difficult to walk. There are shockingly few stations in my constituency that currently have that kind of accessibility. Overcrowding will be massively reduced. The proposals are definitely needed and I am pleased that they have been included in the Budget. I am not saying that the plans that Crossrail 2 has laid out so far are perfect. A lot more detail is needed. I submitted a detailed response to Crossrail 2’s consultation, as did more than 3,000 of my constituents.

Local concerns needed to be addressed, but the important things today are that that did not hold up the announcement of funding, and that the Chancellor, in the Budget, has backed Crossrail 2 for London and the south with the pre-legislative funding needed and the legislative time to ensure that the project can stay on track and go forward. For that, I thank him.

--- Later in debate ---

[Helen Goodman (Bishop Auckland) (Lab)]

I am pleased to follow the hon. Member for Edinburgh East (Tommy Sheppard), and I agreed with much of what he said about equality. Everybody understands that the Chancellor was in a tight spot when he came to construct the Budget, but it is difficult to feel very sympathetic towards him, because he has constructed that tight spot. He drew up fiscal rules to bring the budget into balance without taking account of the economy’s need to invest in capital infrastructure, and that is why he is in a tight spot. The Treasury Committee took evidence from a whole range of economists, and we did not find one who agreed with the Chancellor’s approach to fiscal policy.

Another problem is that the Chancellor’s focus has been very short-term, and he has failed to do the things that need to be done for the long term. He boasted that unemployment in the north-east had fallen rapidly recently, but that has to be set in the context of the fact that it is the highest in the country.

Many hon. Members have talked about the productivity problem. Productivity fell in all the major economies when we had the big crash in 2008, but whereas in America and the other G7 countries it is back above where it was before the crash, we are still just about reaching that level. The Chancellor highlighted the economic headwinds coming from the international economy. However, the downgrading of productivity, which is why his growth forecasts are down, is solely due to domestic factors. We cannot blame other countries if we have not invested enough in our infrastructure and skilled our workforce adequately. Those are the things that we need to do more of.

I have a couple of questions for the Exchequer Secretary to the Treasury, and I hope that I will get answers to them.

[Mr Speaker]

Order. It is very important that our proceedings should be intelligible to all those who follow them, and I just remind the hon. Lady that there are no Front-Bench wind-up speeches tonight. Answers may or may not be forthcoming, but they will not be forthcoming from the Dispatch Box this evening. I am sure that the hon. Lady is a notably patient person.

[Helen Goodman]

I do not mind whether I get the answers today, next week or even in a letter from the Treasury. One of my questions is about infrastructure in the north. The increase in spending on that infrastructure is only £300 million. We see in the Budget:

“£75m to fast-track development of major new road schemes including…the…A66”.

When is the A66 going to be widened? I am not talking about getting some little feasibility study done. When will we actually get a change to the infrastructure, which is so essential for people who make things in the north-east and sell them to the rest of the country?

[David Morris]

Will the hon. Lady give way?

[Helen Goodman]

I would rather not take another intervention, because I am running out of time.

On the skills gap, there is no evidence that changing the governance status of our schools will make any difference to their effectiveness. In four academies in my constituency, GCSE scores have fallen in the past three years. At one point they achieved a figure of 66% of children getting five A to C grades, but last year they were down to 50%. There has been no analysis of such falls.

It is regrettable that the Chancellor has not produced any distributional analysis along the lines of what we on the Treasury Committee have repeatedly asked for—in other words, an analysis of the impact by decile of tax and benefit changes in this Budget. It is absurd that we have to wait for the IFS because the Treasury is trying to hide the impact of the measures in the Budget.

Many hon. Members have pointed to the unfairness of the measures that will give people £700 million through cuts to capital gains tax and give higher rate taxpayers £400 million, but take £1.2 billion from disabled people. This is not only about fairness, but about economic efficiency. The OECD has looked at all economies and has found that more equal societies grow faster. Giving money to the bottom half of the income distribution raises the growth rate by 0.4% for every 1% redistributed, whereas giving money to the rich hinders growth and slows it down.

There are a number of hidden things in what the Chancellor is trying to do. Table 2.1 in the Red Book sets out the £3.5 billion of cuts that he needs to make to hit his fiscal target in 2019, but it does not specify which Departments those cuts will come from. We would like Ministers to explain that.

The Chancellor flunked the tax reforms on pensions, because he is concerned to maintain support in the run-up to the referendum.

[David Morris]

I am waiting to hear what the hon. Lady will say about pensions, but does she not agree that setting up a young people’s ISA so that they can put in £4,000 every year if they are under 40 years of age, with the Government putting in £1,000, will put them in a better position in their old age?

[Helen Goodman]

If I may say so, what the hon. Gentleman says is somewhat unrealistic and optimistic. Even the Treasury’s own figures on Help to Save, which were published this week, suggest that only one person in six will use the new scheme. People’s incomes have been cut, so they do not have the money to set aside large amounts for savings.

On tax reforms, my hon. Friend the Member for West Bromwich West (Mr Bailey) gave a thorough critique of the changes to business rates. We need to change business rates, and I was feeling quite optimistic about that until he spoke. There are questions for the Treasury to which everybody would like answers: what will be the impact on local authorities? What will the distributional impact be—where in this country will the changes to business rates have the most significant effect? Will such changes tip some local authorities into having even more serious financial problems than they have already?

It would be churlish not to welcome the new sugar tax on fizzy drinks and the measures on tax avoidance. The Treasury Committee is doing an inquiry on tax avoidance, and we will look at those measures in more detail.

As hon. Members may know, people who have been advised to have music therapy can go to or listen to operas that deal with their particular problems. At the moment, the Royal Opera House has an opera on about a regent who is trying to become the tsar, but he has to do some rather unpleasant things to achieve his ultimate ambition. I thought it would be ideal for the Chancellor to go to until I discovered that it was called “Boris Godunov”.