Future Government Spending

Lord Jackson of Peterborough Excerpts

Wednesday 4th March 2015 Commons Chamber

[Mr Gauke]

My hon. Friend is absolutely right. Indeed, as a distinguished Chair of the Public Accounts Committee, he was heavily involved in identifying that wasteful spending. One of this Government’s achievements is the measures we have introduced to reduce such wasteful spending. In particular, the efforts of the Minister for the Cabinet Office in pushing forward reform and identifying efficiency savings have reduced the cost of Whitehall strikingly.

[Mr Stewart Jackson (Peterborough) (Con)]

Is not it disingenuous—some might even say slightly dishonest—to pray in aid references to 35.2% of public expenditure, as opposed to GDP, as ideological extremism when we need look back only 12 years to the Blair-Brown Government to find a time when the percentage was 35.9%, which is almost indistinguishable? Is not that trying to hoodwink and fool the voters, and is not that pretty dishonest?

[Mr Gauke]

My hon. Friend makes an important point. The statistics he uses are absolutely right. With regard to public spending on services—I will turn to the detail in a moment—we are talking about returning to the levels of 2002-03, before the previous Government lost control of public spending.

--- Later in debate ---

[Mr Gauke]

It was an attempt to show how ridiculous the Labour party’s economic policy is when the only example it puts forward, apart from the 50p rate, which is likely to cost money, is increasing the cost of gun licences. I did not really expect the shadow Chief Secretary to take it seriously that that was the big policy. Does he disagree that the shadow Home Secretary has already claimed that that money will be spent on policing? It is going to be spent on policing, is it not? There was a time in debating these matters when the big argument from Labour Members, their big macro-economic analysis, was that we were going too far, too fast. Now it has come down to this. What have they got a few days away from a general election? They have a policy on gun licences—that is it. What has the great Labour party come to? Gun licences!

[Mr Stewart Jackson]

Perhaps the Minister can help me out. The Labour party had a top tax rate of 40% for 155 of its 156 weeks in office, which apparently was the epitome of social justice. Why does he think Labour is attacking us for having a 45% rate, which brings in more money but is suddenly seen as feathering the nest for the rich?

[Mr Gauke]

My hon. Friend is absolutely right. The problem with the 50p policy is that it is not an effective way to raise revenue. Our record is very clear: we have been very effective at getting more money out of the wealthy. As we see from the IFS analysis today, the wealthiest have made the biggest contribution. What we are left with is a symbolic gesture, not a tax policy.

--- Later in debate ---

[Mr Stewart Jackson (Peterborough) (Con)]

What a pathetic, facile motion the Opposition have brought forward for their last Opposition day debate during this Government. They could have introduced a proper costed programme. As my hon. Friend the Member for Wolverhampton South West (Paul Uppal) has said, they could have apologised for the huge number of errors they made in government. All elections, including the one in 63 days’ time, are about hope versus fear. From them we hear fear and smear, but we have a policy of hope, because we have turned around the economy following the disastrous economic legacy left by the Labour party.

[Mrs Main]

My hon. Friend is absolutely right. Elections should be about honesty and transparency. The Labour party has mentioned spending cuts, but it is not telling us which it will make.

[Mr Jackson]

Absolutely. In more than two hours, we have not heard anything, except in relation to gun licences and, of course, the recycled bankers’ bonuses.

What a contrast between the Opposition and the Labour party on the cusp of the election on 1 May 1997, when I was a candidate and lost by the not inconsiderable majority of 19,500 in Brent South. No wonder Labour MPs are depressed when they are sober and catatonic when drunk, quite frankly, because they know there is an acute contrast between that historic election and now. The Labour Government led by Tony Blair was ambitious, and their programme was thoughtful, forward looking, positive, generous and optimistic. Tony Blair is now persona non grata in the Labour party, and it now has a core vote strategy, with a mean-spirited, peevish, insular, dreary collection of bungs to special interest groups, and smears and caricatures aimed at the Conservative party.

What is more, Labour policy does not stand up to any form of scrutiny. We have heard about the utilities price freeze—a disastrous policy that has damaged the industry and, perversely, will damage the interests of consumers. Wither Labour’s cost of living crisis? Today, the IFS says that prices are being outstripped by wages for the first time since 2007. There is no more cost of living crisis because wages are growing at 2.1% against a retail prices index of 0.9%. On fuel, council tax, food, beer duty and children’s air passenger duty, the Government have made efforts to reduce the cost of living of ordinary families. We have driven up the personal allowance, and we are committed to drive it up to £12,500 in the next Parliament.

[Sheila Gilmore]

Will the hon. Gentleman give way?

[Mr Jackson]

No, I will not give way at present.

As we have already heard, the 45p tax rate has raised more income for public services than was ever done by the 50p rate, which was put in place for cynical political reasons. We will not take any lectures from the party that abolished the 10p tax rate for the poorest working families. What sticks in my craw is the moral superiority of the Labour party in this debate. In 2011, 1,200 people in my constituency had been parked on out-of-work benefits—incapacity benefit or invalidity benefit—for more than 10 years during a period of economic growth. Some 5.2 million were parked on out-of-work benefits when the economy was growing quarter by quarter during the 13 years of the Labour Government. We will not take any lectures or moral indignation from the hon. Member for West Dunbartonshire (Gemma Doyle) and other Labour Members.

The top 1% of taxpayers are paying 25% of income taxes. We have driven up employment levels. More women than ever are working. Some 30.9 million people are working, despite the ludicrous prognostications of people such as David Blanchflower, who told us that 5 million people would be unemployed, and the right hon. Member for Morley and Outwood (Ed Balls), who said that we could not cut expenditure and have growth in private sector jobs—complete and utter nonsense. In my constituency, unemployment has gone down by almost 60% and youth unemployment by almost 66%.

[Stephen Mosley]

Under the last Government, almost 1 million young people were out of work. Through apprenticeships and job opportunities, those people now have opportunities and hope for the future. They are the people who are benefiting from this Government. Does my hon. Friend agree?

[Mr Jackson]

I absolutely agree. My hon. Friend has put forward the strong views of his constituents in Chester for the past five years, and I expect him to be handsomely re-elected.

What I find depressing is the pernicious smear and myth that we are going back to the 1930s, when there was no NHS. That is a lie. It is disingenuous to make that point. First, the figures were not even collected until 1956. Secondly, the economy is at least 10 times bigger than it ever was in the 1930s. As I made clear in an earlier intervention, expenditure as a proportion of GDP is more or less the same as it was in 2002—the fifth year of a Labour Government.

I will not dwell on Labour’s record on the economy, other than to say that we had a record decline in manufacturing—that is for the benefit of the hon. Member for Blaydon (Mr Anderson)—we had disastrous school results, youth unemployment doubled, a quarter of all public expenditure was borrowed by the end of Labour’s rule and there was a structural deficit when the economy was growing. While we are at it, inequality grew between 1997 and 2010. The gap between the poorest 10% and the richest 10% grew wider during the time of the Labour Government.

What a contrast that is to what we have done. We have capped benefits, focused on capital investment, driven up the number of apprenticeships, created 760,000 new jobs, increased the state pension and come up with a properly costed plan for our future. I am proud of the work that this Government have done, given the appalling financial inheritance they were encumbered by in May 2010.

Let us have a little humility from Labour Members. The reason they have zero credibility with electors on the deficit and the management of the economy is that they do not believe they did anything wrong. That is normal for a party that won 258 seats, even though if we had got the same number of votes, we would have got fewer than 200 seats because of the boundaries. They think, “One more heave. More spending and more borrowing is absolutely fine.”

However, the election of a Labour Government is an existential threat to the health and prospects of the economy and my constituency, and to the mortgages, jobs, pensions, savings and businesses of my constituents. Higher mortgage rates, higher unemployment, higher prices, more debt and borrowing, punishing middle-class earners, punishing aspiring wealth creators, same old class envy, same old spiteful prejudice, same old economic failure, same old Labour—on 7 May, the British people just won’t risk it.