Budget Resolutions and Economic Situation

Jim Fitzpatrick Excerpts

Friday 20th March 2015 Commons Chamber

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

This Government have put Britain on the road to economic recovery. In 2010, our country was on the cliff edge, staring into an abyss of financial oblivion. The economy was stalling, unemployment was rising and the national debt was spiralling out of control. From day one, pulling the country back on to safer, more secure ground was our top priority.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

Will the right hon. Gentleman give way?

[Mr Pickles]

In a few moments I will. It would be rather nice if I was able to start the speech, because I am sure that the hon. Gentleman would like something to critique.

Five years later, it is a different story: we have stepped back from the cliff edge, our growth rate is faster than that of anywhere in the G7, and our job creation is the envy of the developed world. It all confirms the old Yorkshire proverb, “Where there’s muck, there’s brass” and, boy, did Labour leave us a lot of muck. We have managed to start cleaning up the mess only because we stuck to our long-term economic plan. We stood our ground when ferocious economic headwinds blew in from the eurozone. We did not listen to those who said that the only solution was more borrowing and more spending beyond our means. Nobody now talks about plan B. We stood firm, and as a result today the deficit has been brought down by a half. Living standards are rising and a record number of people have found jobs. With our council tax freeze, there is more money in people’s pockets. The Budget is built on economic success. It will make our economy more resilient and protect taxpayers’ money. It will bring down the deficit and ensure that Britain pays its way in the world, so much so that the shadow Chancellor said that there is nothing in the Budget that Labour would vote against. Now the hon. Member for Blaydon (Mr Anderson) will tell me why the shadow Chancellor was wrong.

[Mr Pickles]

I kind of regret giving way to the hon. Gentleman. That sort of bellicose description is not worth considering. After all, Yorkshire is at the very heart of our economic growth, but naysayers like him—

[Jim Fitzpatrick]

rose—

[Mr Pickles]

I shall give way to my dear friend.

[Jim Fitzpatrick]

I thank the Secretary of State for giving way. I apologise for interrupting him prematurely at the beginning of his speech. I was just very curious to know whether, in outlining the economic recovery, he was going to refer to the report from the Institute for Fiscal Studies, which was covered by yesterday’s Telegraph and today’s Guardian and says that the 300,000 immigrants have fuelled the recovery. What does that do to the UK Independence party’s fox and some of the Members on the Government Benches who have been raising immigration as a scare story?

[Mr Pickles]

Of course if we create more jobs in the UK than in the rest of the European Union combined, it is not surprising that we are doing well, and that people are leaving our great friends in France to come here to increase our prosperity. I am surprised that the hon. Gentleman, who has such a distinguished record of supporting the firefighters, did not wish to congratulate the Government on changing the rules to ensure that spouses of firefighters who die in action will be able to remarry, should they desire to do so, and not lose their pension.

--- Later in debate ---

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

It is a pleasure to follow the hon. Member for Bury St Edmunds (Mr Ruffley). I have the highest regard for him, as I am sure he knows, and I am sorry that he is leaving the House. He has given another eloquent and solid performance on behalf of his Chancellor and his party, but he will not be surprised to learn that I do not agree with his analysis, as I shall outline in a few moments.

Many previous Budgets have taken until Sunday to unravel. It was to the credit of my right hon. Friend the Leader of the Opposition that he immediately spotted the big flaw in this Budget. In his response, he cited the Red Book to identify that the level of cuts impacting on the public sector over the next three years will be as deep as the cuts during the past five years. Many Labour colleagues have already referred to that in the debates during the past two days.

In fairness, there were some redeeming features, as there are in every Budget. The hon. Member for Bury St Edmunds mentioned that that was true of Budgets during Labour’s period in office. Those features include the initiatives on savings and the extra money for air ambulances, while bashing the banks is always popular—the hon. Gentleman is going back to the City, but that measure has gone down well with the public—and the measures on tax evasion and avoidance clearly have universal support.

There are, however, clear dividing lines between the parties. In east London, the big ticket issues are homes, training, the national health service and the public sector in general, including the issue of local authority budgets. I and my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali), who I am happy to see in her place, have not only assisted the campaign to save the local health service for the past 18 months, but are still trying to get a clearer picture of the budget for primary care in our part of east London as well as that for east London generally. There is real concern about the funding of health centres right across the country, and it is not clear whether the Budget will offer them any help.

On adult training and further and higher education, Tower Hamlets college has had a 25% in its budget during the past four years, and only this week there has been an announcement about another 24% cut. That will have a huge impact on adult training in east London; it will certainly do so in my constituency. The announcement has united the Association of Colleges, the University and College Union and the National Union of Students, as well as students themselves. The fact that such an alliance should come together demonstrates that the issue is very serious, and it is not just restricted to east London. My hon. Friend the Member for Coventry South (Mr Cunningham) raised it in an oral question yesterday, showing that other parts of the country are affected as well.

That announcement will also mean further cuts to English as a second language training, which is hugely important to east London. Last year, it was found that English for speakers of other languages training has already been reduced by 40% over the past five years. Such training is critical to train and educate people with English language challenges so that they can compete in the jobs market.

On policing, there seems to be something of a conundrum. Although crime figures are down, my office has supplied me with Library statistics that show that there were 825 police officers in Tower Hamlets in 2010 and 627 this year, which is almost 200 fewer. Theft is up by 8%, burglary by 24%, sexual offences by 28% and robbery by 33%. Notwithstanding the Government’s success in making efficiency savings in police budgets, at some point the pendulum is going to swing too far. We are already perilously close to that point, and, sadly, it looks like police budgets are going to be squeezed even more.

There is consensus on and support for the benefits cap, but it throws up some anomalies. In east London, a number of families live in private sector rented accommodation and are charged market rents, and the benefits cap has a disproportionate effect on their ability to live. That is one example of how a universal benefit cap affects families in London. The shadow Secretary of State, my right hon. Friend the Member for Leeds Central (Hilary Benn), outlined Labour’s proposals for a fairer rents policy and guaranteed rents over three years, which will go down very well in east London and elsewhere.

A number of colleagues, certainly the Chancellor, made great play of the minimum wage. Government Members have said a lot about Opposition predictions of the number of jobs that would be lost through austerity. We say that if there had been no austerity, we could have made progress a lot sooner, because when the coalition came to power the economy had been growing for a couple of months. I remind the Conservative Members that when Labour introduced the national minimum wage, they were very confident that it would cost 1 million jobs. That prediction proved to be entirely wrong. For many of us, the living wage is even more important than the minimum wage.

In Canary Wharf in my constituency there are some fantastically well-paid bankers, but 105,000 people work there, many of whom are in low-paid jobs in cleaning, security and retail. I am happy to report that the majority of companies on the wharf have a living wage policy. I would like to see the Government promoting the living wage far more aggressively than they currently do. I am sure that a Labour Government would bring that aggressiveness to bear in due course.

[Mr Andy Slaughter (Hammersmith) (Lab)]

Does my hon. Friend agree that the Conservatives are taking exactly the same view of the living wage as they did of the minimum wage? That is shown by the comments of the Tory peer Lord Wolfson, who, as head of Next, paid himself £4.6 million last year, but says that the living wage is “irrelevant”. It is not irrelevant to my constituents.

[Jim Fitzpatrick]

My hon. Friend makes a very good point. Low wages are costing the Exchequer, and higher, fairer wages would benefit both the Exchequer and families. That argument is borne out by statistics that show that the living wage would help not only families but the economy.

I intervened earlier on the Secretary of State for Communities and Local Government to ask him about the Institute for Fiscal Studies report on migrant labour fuelling the economy, which was reported on in yesterday’s Independent and today’s Guardian. We do not seem to have acknowledged the contribution of migrants to the economy and how they have helped it over the past five years. The Government do not deserve all the credit. As I said, the Government wasted a number of years—a point that has been made a number of times by the Opposition.

Moving towards a conclusion—I am sure you will be pleased to hear that, Madam Deputy Speaker—I want to draw attention to some comments that have been made about the Budget. The chief executive of Citizens Advice, Gillian Guy, said:

“People on the lowest income and those without savings benefit least from this Budget…Positive moves on the personal allowance and fuel duty provide some small gains for stretched households, but there was nothing to address challenges around childcare, energy bills and private rents.”

All those challenges are addressed by Labour’s programme, which will go down well with Citizens Advice.

The Chancellor might not have been happy to hear what two commentators from the right had to say. I do not often quote right-wing commentators, but the editor of The Spectator, Fraser Nelson, said:

“I wonder: how ‘independent’ is the OBR? Osborne created it, defined its remit, appointed its chairman, banned it from assessing Labour ideas”.

If the Government, particularly the Conservative party, are so convinced and confident that Labour’s plans do not stack up and that our figures would create a black hole, why not use the independent Office for Budget Responsibility to do the analysis and reinforce their argument? I find it very strange and curious that that has not happened.

In yesterday’s Times, the subheading to an article by Tim Montgomerie—I do not agree with a lot of what he and Fraser Nelson say, but they are great writers and always a pleasure to read—stated, “The chancellor’s statement was the latest example of the Tories’ risk-averse strategy and leaves them without a vision”, while the headline stated, “We need more than this dull, simplistic budget”. If the Chancellor is being attacked from the right and from the left, I assume that some people will say, “He must be getting it right, because he’s in the middle,” but Labour Members do not agree.

The Chancellor also referred a number of times to fixing the roof while the sun shines. In Tower Hamlets when Labour was in power, most of our health centres and schools were rebuilt or refurbished; more than 20 Sure Start centres and the new Royal London hospital were opened; and thousands—possibly tens of thousands —of council and housing association properties were raised to the decency threshold for the first time in years and in some cases decades.

I do not accept that we crashed the car. As the shadow Secretary of State, my right hon. Friend the Member for Leeds Central, said earlier, Lehman Brothers did not crash in New York because of public sector spending in east London. Labour Members not only think but know there is a better way, and on 7 May I hope people will give us a chance to show exactly what it is.