Budget Resolutions and Economic Situation

Ian Mearns Excerpts

Wednesday 19th March 2014 Commons Chamber

[Diana Johnson (Kingston upon Hull North) (Lab)]

Following on from the comments of the hon. Member for Vale of Glamorgan (Alun Cairns), may I gently remind him that we have had three wasted years before the recovery kicked in? I am sorry if he thinks that is a partisan or a party political point, but it is factually correct. The majority of my constituents in Hull North are certainly not feeling better off under this recovery, and I think the Budget will do very little to make them feel that things are going to get better for them and their families.

Few people in Hull will be taken in by the Tories rebranding themselves as the “workers’ party.” Some changes, such as the cut to bingo tax, are very welcome after some of the shambolic proposals we had in previous Budgets, like the caravan tax and the pasty tax in the infamous omnishambles Budget.

I listened very carefully to what the Chancellor said about building a resilient economy and delivering security for people in this country. Hull and the Humber should be at the forefront of fighting many of the challenges facing this country, such as climate change, generating green energy and developing the science of flood prevention. I believe we could turn issues that are seen as problems and costs into a positive opportunity for growth in the economy, but looking at this Budget in relation to Hull and the Humber, my constituents will be asking the following questions. Does this Budget help the real wealth creators and invest in the modern public services an efficient, growing economy needs? Does it help, for example, the part-time women workers I recently met in a Tesco in Hull who told me about the problems they were having in getting extra hours to make ends meet and pay their bills?

Hull has the 19th highest unemployment level in the country. Will this Budget help the 4,265 people still out of work in Hull North, according to today’s figures? Will it do anything for the long-term young unemployed in particular? Will it deal with the problem of those not in education, employment or training? It will not do any of those things. As the TUC said today, this is a

“short-term Budget…to shrink the state and help the rich.”

Thanks to the coalition’s confusion over energy policy, we are still awaiting good news from Siemens. If Siemens does not come to Hull, the jobs building wind turbines will in effect be exported out of the UK. Climate change deniers in UKIP might welcome that, but it would be a disaster for the economic regeneration of my city. The Budget also failed to announce rail electrification to Hull, but I hope that the Government will have some good news for us shortly.

We heard in the autumn statement that London is to get two new tube stations and a garden bridge, and there is talk of rebuilding Euston station. However, some bright civil servant thought it a good idea, when announcing the electrification of the trans-Pennine route, to stop in Selby, 20 miles short of the end of the line, which is Hull. Yet again, the people of Hull have said, “If the Government aren’t going to help us, we will help ourselves.” A proposal has been put together to bring in private sector money to electrify the line. If the Government put in some £2 million of public money, it will unlock approximately £96 million of private investment. I hope they will make that announcement shortly, and certainly in time for 2017, when Hull will be the city of culture.

[Ian Mearns (Gateshead) (Lab)]

My hon. Friend is highlighting a very important point about Government investment in electrification programmes in the north of England. I recently attended a meeting of the all-party group on rail in the north, and the map of the investment programme we were looking at had a line heading north-east that said “York”, and then an arrow saying “to Scotland”. The north-east of England was not mentioned at all.

[Diana Johnson]

My hon. Friend makes his point very well. If the Government are serious about rebalancing the economy, they need to invest in northern rail.

It is interesting to note that, because of recent events, the coalition has now realised that flooding is a major economic problem. Perhaps that had something to do with the fact that the Thames valley was affected and the playing fields of Eton were flooded. I am pleased that the Chancellor announced additional money for flood defence work, but of course that should be seen in the context of the Government’s slashing the flood defence budget in previous years. As those in any area that has been flooded know, spending £1 on flood defences saves £8 in the cost of clearing up after a flood, so such investment makes sense.

On flood insurance, I note that the Chancellor is extending the Help to Buy scheme. Advertisements encouraging people to buy are plastered everywhere in places like Kingswood, in Hull North. However, it is a shame that other parts of the Government do not seem to think that houses should be built in areas like Kingswood, because they will not be able to participate in the flood insurance scheme that the Government have negotiated with the insurance industry. I should also point out that the new garden city at Ebbsfleet will be in a flood-risk area, and the owners of the houses built there will not get flood insurance under the Government’s scheme. It seems that one part of the Government does not know what the other part is doing. Small businesses are guaranteed access to flood insurance under the Government’s current scheme, but they will be excluded from the new scheme. The Government need to look at that problem.

On the cost of living crisis, which many people in my constituency face, there has been much fanfare about raising the personal allowance, but we know that 5 million of the poorest workers gain nothing from that increase. Many of those will be women. We know that the Government wanted to give the 8,000 millionaires their £40,000 windfall from the cut in the 50p rate of tax, but it is interesting to note who is bearing the brunt of the coalition’s austerity. The majority of those now falling into poverty and ending up at food banks are actually in work. That shows that the Government are not making work pay: being in work is no longer a guarantee of escaping poverty. FareShare in Hull said this week that demand for its help is up 53%, and the Trussell Trust reported a trebling of food bank use in a year.

--- Later in debate ---

[George Freeman]

The hon. Gentleman makes an interesting point. The bigger point is that in the 1980s the Conservative party launched a historic renaissance of saving and wealth creation whereby more and more people, through ISAs and PEPs, were able to own shares and save. That was wilfully destroyed by the former Labour Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), through his stealth taxes. It has long been necessary for us to restore a culture and a set of incentives for a genuine renaissance in savings, and that is key to the resilience that the Chancellor set out today. That was the most important set of measures in today’s Budget, and it will stand the test of time.

What did we hear from Labour Members? I came here genuinely wanting to hear the Opposition’s response to this package. I wanted to hear the alternative economic policy that Labour is going to put to the British people next spring. For all the noise we hear on the Government side of the House, the real test, as we know, is the silence from the Opposition Benches. What we heard today was an embarrassing descent into business bashing and class war. If that is what the Leader of the Opposition defines as his “new socialism”, I wish him luck. I will be sending a copy of his speech to all the businesses in my constituency, because it fails the business test in spades, and it is the business test that will drive the growth and investment on which the public sector always depends.

[Ian Mearns]

Will the hon. Gentleman also be sending them a copy of the noise that was being generated by Government Members during the speech of the Leader of the Opposition today?

[George Freeman]

I will have a chance to read Hansard. I am not surprised there was noise. It was a shameful performance. When, 12 months from the election, this country needs a choice, and Her Majesty’s Opposition are supposed to set out an alternative economic policy, it was woeful. It gives me no pleasure to say it. The result is that the choice is now clear: a Chancellor, a Government and a Prime Minister with a long-term plan for resilience and recovery, led by the real economy and investment, and a Leader of the Opposition who seems now committed simply to going into the election on a ticket of partisan politics and gesturing to his trade union funders. It was not a Budget response that merited his title. It did not set out a serious economic programme for recovery, and I am afraid that it deserves the response that I think it will get at next year’s general election.