amendment of the law

Julie Elliott Excerpts

Monday 25th March 2013 Commons Chamber

[Julie Elliott (Sunderland Central) (Lab)]

I am grateful for the opportunity to speak in the debate. I intend to focus on three central issues emanating from the Budget: housing, infrastructure and employment practices.

Increasing the level of house building is vital to any economic recovery and to assisting families and young people to get on to the housing ladder, yet under this Government house building has fallen while rents have risen. Young people in Sunderland, where house prices are not as high as in other parts of the country, still face massive challenges in getting into the housing market. Those difficulties are augmented by the Government’s wider economic failures, and banks remain reluctant to give mortgages, even to financially secure applicants. Renters in Sunderland can only hope that the Government’s help to buy scheme will be more successful than the new homes bonus, which has led to housing starts falling by 11%, or the NewBuy scheme, which has helped just 1.5% of the 100,000 people who the Prime Minister claimed would be able to buy their home.

I welcome any action to help people get on to the housing ladder, but increasing credit without increasing supply will simply raise house prices, further widening the gap between those who own their own home and those who want to. Gentoo, the largest social housing provider in my constituency, manages over 29,000 properties in Sunderland, but it has over 22,000 people on its waiting list, and that is without taking into account new and emerging need. Simply put, Sunderland needs more homes.

In his Budget speech, the Chancellor used the phrase “work hard and get on” three times. What he does not understand is that people are working hard, despite stagnant wages, and they are getting on, despite cuts to vital services.

The Government are dithering on improving energy efficiency standards for new homes. Those delays are hugely damaging for investment in new homes and signal the Government’s abandonment of their “greenest ever” commitment.

I will now turn my attention to infrastructure and the Government’s response to the Heseltine report. Two things were clear from Lord Heseltine’s evidence to the Business, Innovation and Skills Committee: first, his passionate belief in the Government’s ability to boost growth, create jobs and raise living standards; and secondly, his concern about the Government’s direction and the fact that

“the UK does not have a strategy for growth and wealth creation”.

I agree that local leaders are best placed to understand the opportunities and obstacles to growth in their own communities. That the Chancellor has finally committed to investment in infrastructure projects is welcome, but those projects should have been announced in his first budget, not his fourth. I welcome the single local growth fund, but it will not be operational until 2015. We simply cannot wait that long. We cannot accept a five-year gap between the announcement of the abolition of the regional development agencies and the devolution of funds proposed by Lord Heseltine. We will not see economic growth until our regional economies are growing.

Where growth takes place matters, too. A report on foreign direct investment by the Institute for Public Policy Research North shows that since the Government announced the closure of the RDAs, FDI decreased by 31% in the north-east from 2010 to 2011, while it has increased in the south-east by 102%. We do not yet know the size of the “devolved pot”. Lord Heseltine recommended that a fund of £49 billion was needed, but Government sources now suggest that it will be in the low billions. The success of the Heseltine plan will be determined not by the quantity of recommendations that the Government will implement, but by the size and timing of the investment.

My final point in response to the Budget is on employment practices. The Chancellor looked particularly pleased to announce that the private sector had created 1.25 million new jobs since 2010. Although I welcome new jobs, I hope that my hon. Friend the Member for Dumfries and Galloway (Mr Brown) will get an answer to his question on what sectors those jobs are in and what hours people are working so we can understand better what is happening in the labour market, because I fear that many of the jobs are low-wage and low-hours. People on zero-hour contracts cannot take advantage of the Government’s child care help because they do not know when they will need child care. They cannot take advantage of the mortgage policies because they will not be eligible for mortgages.

It is vital that the Prime Minister and the Chancellor change course so that a lost Government do not lead to a lost decade.