amendment of the law

Debate between Kwasi Kwarteng and Brooks Newmark

Monday 24th March 2014 Commons Chamber

[Mr Brooks Newmark (Braintree) (Con)]

This was a Budget for savers, for pensioners, for businesses, and for hard-working people, and most importantly of all it ably demonstrates that our long-term economic plan is working. Only last year, we were talking about a triple-dip recession, but in fact there was no triple-dip recession, or even double-dip recession. The Office for Budget Responsibility is now forecasting growth for this year to be 2.7%—the biggest upward revision in 30 years—and the Bank of England is forecasting growth to exceed 3%.

[Kwasi Kwarteng]

Will my hon. Friend tell the House who exactly was predicting the triple-dip recession, and pleading with the Government to go to plan B?

[Mr Newmark]

My hon. Friend makes a good point, and I think it was the shadow Chancellor who predicted 1 million people unemployed—I will get to that point in a moment.

More growth means more jobs, and over 1.5 million more jobs are forecast over the next five years, on top of the 1.7 million new jobs created in the past four years. Indeed, today we have more men and women in work than ever before. In Braintree, unemployment has dropped by a third since the general election, with general unemployment down from 3.4% to 2.3%, and youth unemployment from 6.3% to 4.1%. Last Friday we had a successful jobs fair in Braintree with more than 30 businesses and 450 local people attending. I thank Braintree Freeport and Amtek for sponsoring the event, and Braintree district council and Ignite—especially Liz Storey and her team—for their support.

Getting young people back into work is vital, as Councillor Stephen Canning, the youngest councillor in Braintree, keeps reminding me. As a founder of the Million Jobs campaign, I am delighted that the Chancellor has abolished national insurance contributions for employers hiring a young person under 21.

Apprenticeships, too, have been a great success, giving over 1 million people a first step on to the jobs ladder. In particular, I congratulate Braintree district council, especially Councillor Chris Siddall, cabinet member for prosperity and growth, on its apprenticeship programme, and Essex county council on supporting over 2,700 apprentices in the past five years.

The deficit is now down by one third and is due to fall to 5.5% next year. That is 50% of what we inherited in 2010. Yes, the Government’s long-term economic plan is indeed working.

This is a Budget for savers, with the raising of the annual limit on ISAs to £15,000, the abolition of the dreaded 10p rate on savings income helping over 1.5 million lower-income savers, and the new pensioner bonds offering up to 4% return on a three-year bond. This is a Budget for pensions and pensioners, with no one being forced to buy an annuity and no punitive 55% tax rate if people try to take more of their tax-free lump sum. This Budget puts pensions back in the control of pensioners, taking them away from the diktat of Government.

This is a Budget for business. At this point, I draw the House’s attention to my entry in the Register of Members’ Financial Interests. The annual investment allowance, which increased tenfold from £25,000 to £250,000, is now doubled again to £500,000. With the business confidence index at an all-time high, I hope that this will encourage businesses, including farmers in my area, to invest more in plant and machinery and to hire more people.

--- Later in debate ---

[Kwasi Kwarteng]

Absolutely, but I think we should, in this very partisan place, give credit where credit is due. That Labour Government ran a very good, tight ship for four years, but then of course the demons of their worst nature took over and they reverted to type, and from 2002 right through to the crisis we ran deficit after deficit after deficit. That was the inexcusable part of that Government. It was bad Gordon as opposed to good Gordon—prudent Gordon—that took over after 2001, and the previous Prime Minister himself, the then Member for Sedgefield, has suggested that they spent too much money. He has admitted that while he was Prime Minister the Government spent too much money, and that is clearly the case. In the Budgets from 2002 right up to 2007, before the banking crisis was even an issue and before Lehman Brothers went broke, the Government were continually running deficits.

[Mr Newmark]

Was not the flaw of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) the fact that he had never run anything? The fact is one can never beat the economic cycle, but he never put any money aside just in case things did not work out.

[Kwasi Kwarteng]

That is absolutely right. The right hon. Gentleman’s principal fault was that he thought he had abolished the business cycle—no more boom and bust. He essentially believed—and it is incredible to think he did believe this—that he had discovered perpetual motion and that the laws of economics and of economic gravity had been suspended or abolished. That was the problem we were in: we were borrowing money even when the economy was growing. In 2004 I recall the economy grew at 3%, yet we ran a deficit of 3%. There is no Keynesian in the world who would suggest it was a good policy to borrow 3% of GDP when the economy was growing, yet the previous Government persisted in doing that.