Budget Statement

Lord Stevenson of Balmacara Excerpts

Wednesday 25th March 2015 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, with some notable exceptions, including the last speaker, this has been quite a good debate. There is no question but that the prizes for economic literacy lie on this side of the House, although notable exceptions might be made for the noble Lord, Lord Skidelsky, who, as usual, put his finger exactly on the button and made a number of points which I am sure had the Minister squirming in his seat. At least they bloomin’ well ought to have done—I did not see much squirming, but I hope he will read the remarks in Hansard.

The advantages of being the last Back-Bench speaker are often not recorded. Several noble Lords at the end of this debate have said that they did not like the fact that they were among the last, but I quite like it. For one thing, what you say is usually ringing in the ears of those who have to wind up, so you will get some response to what you have said. Secondly, if like me you are the sort of person who deals with the fag-end, if you like, of the political spectrum, you can often get in without having all your remarks previously made. I will speak about the arts and the importance they have in the economy—your Lordships may not like that, but I am going to do it anyway, because it needs to be said. The remarks by my noble friend Lady Thornton on disability and women were also refreshing and very apposite to the debate.

Like many other Members of your Lordships’ House, I was present at the moving memorial ceremony for the late Dickie Attenborough—Lord Attenborough—who died last year. As part of the ceremony, his brother David read an extract from his maiden speech, given in November 1994, which I would like to quote. He said:

“From the very earliest of times the arts have been an instinctive essential of our humanity … The arts not only enrich our lives but grant us the opportunity to challenge accepted practices and assumptions … The arts are not a luxury. They are as crucial to our well-being, to our very existence, as eating and breathing … The arts are not a perquisite of the privileged few; nor are they the playground of the intelligentsia. The arts are for everyone—and failure to include everyone diminishes us all”.—[Official Report, 22/11/94; cols. 178-81.]

As my right honourable friend the leader of the Opposition observed in his excellent speech after the Budget last week, a glaring omission from the Budget Statement was public spending. Why, he asked, was there,

“no mention of investment in our national health service and our vital public services”?—[Official Report, Commons, 18/3/15; col. 780.]

I am sure that he meant public services including arts, culture and sport, which I will mention later.

The figures are there to be seen in the Red Book. Page 69 shows what is planned in the next Parliament, particularly for 2015 to 2018. There are as many cuts in departmental spending in this period as there have been over the last five years, and what is striking is that the pace intensifies in the early part of the next Parliament.

In its Budget commentary, the Office for Budget Responsibility says that achieving the Government’s plans,

“depends heavily on cuts in public spending—particularly on public services and administration”,

in,

“the first two years of the Government’s medium-term spending policy assumption”.

That represents a,

“3.6 per cent of GDP (or £65 billion in today’s terms) cut in day-to-day spending on public services and administration”.

The OBR’s briefing note says:

“The real cut in public services spending … is … much more severe than anything we have seen to date”.

It comments:

“It is important to emphasise that this profile arises from what the Government itself describes as a ‘fiscal assumption’ and not from firm and detailed departmental plans”.

You might ask why there are no plans—it is very surprising to find at the end of the Parliament that there are no plans set out for the next few years. According to the OBR, these assumptions,

“will form the baseline for whichever party or parties are in government after the election and have to carry out the next spending review. This profile for implied public services spending may have ticked a number of boxes for this Budget, but it will not have made that task any easier”.

According to the Red Book, the Budget implies real cuts in departmental allocations, which I make to be 5.5%, 5.25% and then 2.3% over the first three years. I would be grateful if the noble Lord could confirm that those are the figures and I have read them correctly. I make that total £65 billion in round terms. However, given that certain departments are protected, there is going to be a differential impact on departments such as the DCMS, which is what I want to speak about. Again, the figures are not there in the Red Book, but I reckon that will be 30% over three years, which is almost exactly the same as the cut made in that department over the last five years. Given that the DCMS has a current baseline figure of about £1.2 billion, that suggests that a body such as Arts Council England, for instance, will face a cut of some £85 million in that three-year period, which is roughly 10% of its grant. That of course is on top of cuts already imposed in this Parliament of about 30%.

Like my late noble friend Lord Attenborough, I believe that the arts are important for the economy as well as the country more generally. At a time when people ask where the jobs of the future are going to come from and how we are going to pay our way in the world, we should be in no doubt that the arts and creative industries are the important sector that we must be supporting, because it will provide the jobs, the growth and the support for the economy.

Of course, this country excels in the arts and culture in all their forms. We produce some of the greatest creativity on the planet. Whether it is music, fashion, film, theatre, broadcasting, design, art, libraries or museums, our cultural creativity is admired, envied and consumed right around the world. The creative economy already accounts for more than 2.5 million jobs and contributes more than £70 billion a year to the UK’s economy and £15.5 billion of exports. The creative industries are growing faster than any other sector.

However, the artistic and creative success which is so evident today did not come out of the blue. It is built on years of public support and investment—investment which nurtured the creative talent of people from all walks of life, in all parts of the country, because arts and culture thrive on the widest pool of talent. For our economic success in this sector to continue to grow in the future, it needs a widening, not a narrowing, talent pool. These cuts will destroy this growth.

Let us take, for example, the decline in arts provision in our schools. The fact is that since this Government came to power there has been a marked reduction in the participation of our children in the arts. The Government’s own report Taking Part spells it out. For primary schoolchildren, participation in arts activities is down by a third: music down from 55% to 36%; theatre and drama down from 49% to 33%; dance down from 45% to 29%; and visits to heritage sites have almost completely declined.

Your Lordships’ House will recall the debates on the much vaunted EBacc, which the arts community fought so valiantly against because it sent a damaging signal to schools that they could, with impunity, downgrade the arts they already provided. So now the number of children sitting arts GCSEs is declining. Since the election, music is down 9%, drama down 13% and film—my topic—is excluded from the curriculum altogether. Incidentally, the Government have also cut teacher training places in arts education by 35%, so the numbers of specialist arts teachers have fallen. This makes no sense in terms of the arts and our creative industries but it makes no sense at all in wider cultural terms either.

Britain is for some reason blessed with brilliant creative talent, dynamic artistic cities, vibrant festivals and one of the world’s most iconic cultural institutions—the BBC—but what we do not have from the current Government is substantial, strategic, visionary leadership in this sector, an arts policy fit for the 21st century which ensures art and culture for all, or the investment, particularly for young people. As Lord Attenborough said in 1994:

“The arts are for everyone—and failure to include everyone diminishes us all”.—[Official Report, 22/11/94; col. 181.]

--- Later in debate ---

[Lord Deighton]

I thank noble Lords for an excellent and wide-ranging debate. When I first did a Budget debate, the discussion was all about whether growth would ever return. Today, we are discussing whether having the fastest-growing economy in the world, creating 2 million jobs and having zero inflation is a good thing or not. I will drill a little more into the detail on that.

I had thought that we were talking about this Budget but we have also had an interesting discussion because the party opposite has wanted to wallow in whether it was responsible for the financial crisis, which is an open goal that I can scarcely resist. I think everybody agrees that the recession was caused by the financial crisis, starting off in the American mortgage system. However, as my noble friend Lord Northbrook said, the rate at which public spending had expanded by the time we got to the financial crisis left this economy more exposed than it should have been. This was a problem for all recent Governments, who left us too exposed to the financial sector.

The other point, which is not often raised, is that we clearly had very poor financial regulation in the financial crisis. That exacerbated the problems with the banks. I am afraid that the previous Government were the architects of a highly flawed regulatory system, which failed to detect many of the problems. While I am not saying that they are completely guilty, I am saying that there are some very serious cases to answer.

[Lord Stevenson of Balmacara]

I appeal to the noble Lord to move on in this debate because we are going to get nowhere with it. The regulation he is talking about was of course fully endorsed by his party. It was absolutely thrust on us but with pressure on all sides to do it. He cannot evade or duck the responsibility in this. This was something that happened outside the UK. It was brought into the UK and we did our best about it. We have already heard my noble friend Lord Layard and others explain how we managed to get the economy back on track. I think that it would be worth moving on.

[Lord Deighton]

I am very happy to move on. I did not really bring it up. I was just expanding my perspective on a topic that many noble Lords opposite had rehearsed.

With that incentive, I shall move on to living standards. I think everybody accepts that the financial crisis has created an extraordinarily difficult period. As I said in my opening remarks, it affects people at the bottom end of the income spectrum, people with other difficulties to cope with, more than anybody else. The noble Baronesses, Lady Thornton and Lady Smith, were eloquent on some of those issues.