Budget Resolutions and Economic Situation

Mark Hoban Excerpts

Wednesday 18th March 2015 Commons Chamber

[Mr Mark Hoban (Fareham) (Con)]

May I first refer Members to my declaration in the Register of Members’ Financial Interests?

I commend the Chancellor for his Budget, which continues the themes of economic reform and fiscal consolidation that we have seen in each of the Budgets and autumn statements in this Parliament. It is that twin-track approach that has led to a fall in the deficit, putting the nation on a path towards a surplus in 2019-20, with one of the strongest growing economies among our competitors, falling inflation and a job-rich recovery confirmed by today’s unemployment figures.

It is absolutely vital that we continue the programme of deficit reduction. The previous Government spent beyond the nation’s means, increasing the deficit even when the economy was growing. In his speech, my right hon. Friend the Chancellor mentioned the fact that debt as a proportion of GDP increased in each year of the previous Labour Government. Even in the good times, Labour continued to spend more than the country could afford. The problem we inherited was not that the UK was under-taxed, but simply that the Government were spending too much. It has therefore been right that the bulk of deficit reduction has been borne by spending cuts.

I am pleased the Chancellor has reconfirmed our commitment to tackling the deficit after the next general election. It is wrong of both the Labour party and the Liberal Democrats to seek to slow the pace of deficit reduction. The longer the deficit takes to tackle, the more debt we will incur. Labour has failed to mention—I notice the Leader of the Opposition failed to mention it in his speech today—the £30 billion of cuts it has already signed up to. It is also pledging to spend £50 billion more than we are, which would require increased borrowing or increased taxes. The people of this country cannot afford borrowing on that scale, and to continue would be inequitable. There are three reasons why I think it is wrong.

[Mr Redwood]

I would just like to point out that although we have cut the planned spending increases of the previous Government, public spending has actually been going up. As the Red Book confirms, Government spending went up by 1.5% in real terms in 2014, and by another 1% this year.

[Mr Hoban]

That demonstrates the challenges we face to get the pace right. One thing we should be absolutely clear about is the importance of sticking to the course. There are three reasons why it is important to stick to the course of reducing the deficit and reducing debt. It is inherently unfair for future generations to bear the cost of debt we have built up.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Will the hon. Gentleman give way?

[Mr Hoban]

Let the hon. Gentleman answer this question: is it really fair for our children and grandchildren to pay the cost of debts we have built up? Let him answer that question.

[Geraint Davies]

Does the hon. Gentleman agree that since 2010 debt as a share of GDP has grown from 55% to 80%, and that the Tories have borrowed more in five years than we did in 13 years even though we had to bail out the banks? Is that not a complete failure of economic management?

--- Later in debate ---

[Mr Hoban]

That is a remarkable argument. Is the hon. Gentleman saying that we should have cut further and faster? That is not the prescription of the shadow Chancellor or the Leader of the Opposition. They always said we were cutting too far, too fast. They cannot have it both ways. That is the problem and that is why the Labour party has no economic credibility: it has no coherent argument on the economy or on the deficit.

While interest rates are at historically low levels we can afford to service those debts, but when interest rates return to more normal levels, money that could be better spent on schools or hospitals will have to diverted to meet higher interest payments. The Chancellor today talked about the £35 billion we have saved as a consequence of lower interest rates. If we return to the economic chaos of the previous Government, will interest rates remain low? Will we not see an increase in the cost of interest payments cutting the amount of money that can be spent on health and social care?

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

I was struck by the hon. Gentleman’s comments about economic credibility. What credibility do the current Government have, given that they insisted they would eliminate the deficit in this Parliament but have achieved only half that?

[Mr Hoban]

I am surprised by what the hon. Gentleman says, because he is a member of the Treasury Committee and has looked at these things very carefully. He will have seen what happened in the eurozone in the first half of this Parliament. The headwinds from the eurozone—the OBR confirmed this—had a negative impact on the UK economy. We cannot ignore the impact of turmoil abroad on the strength of the UK economy. It is surprising that a respected Member fails to recognise the lessons of what has happened over the course of this Parliament.

[David Rutley]

I congratulate my hon. Friend on the powerful speech he is making. Does he also recall that the OBR spelled out very clearly, a year or so after 2010, that it had underestimated the real impact of Labour’s recession?

[Mr Hoban]

My hon. Friend is absolutely right. The problem for Labour Members is that when they are confronted with the facts, they hide. That is the problem they will all face in the course of the next 50 days. They have clearly not developed economic credibility, because their plans and message are confused. They have no idea how they would deal with the economy. All we know about Labour is that it will spend more and borrow more and tax more, the way all Labour Governments have behaved in office.

The final reason we should be moving towards a surplus and reducing the national debt is that if we continue to lock in debt at high rates, we are reducing the capacity of future Governments to withstand future economic shocks. One of the challenges we faced in this Parliament was that the high levels of debt racked up by the previous Government made it increasingly hard to put in place the measures to turn the economy around.

We cannot simply pretend to ignore, or rack up, unfunded spending cuts. We need to work hard to tackle the deficit to ensure debt falls as a proportion of national income, as it will at the end of this Parliament, to get the right messages across. Let us be responsible about how much we spend. Let us be responsible on taxation and spending. Running a surplus in the good times will help the economy when difficult times lie ahead.

[Mr MacNeil]

Does the hon. Gentleman not accept that this has been the slowest recovery from any recession just about ever? Research from the National Institute of Economic and Social Research shows that, had it not been for the austerity cult and the Government choosing austerity, GDP would be 5% higher and extra tax revenue would be about £32 billion—about a third of the current deficit. Cuts and austerity have cost not just the economy but people’s opportunities.

[Mr Hoban]

I am really not going to be lectured by a Member from the Scottish National party about economic realities. We heard in the Budget today that because the United Kingdom is together, we are able to support the North sea oil sector in a way it could not have been supported if the SNP had achieved independence, so I am not going to take any lessons on economic credibility from the SNP.

In preparing for this speech, the last I will make in this House, I looked back to my maiden speech. Unsurprisingly, it touched on the local economy. I highlighted the strength of the business community in Fareham and its low unemployment rate. I also talked about the pressures on public services and infrastructure from house building. Perhaps it is with this frame of reference that I should talk about the economic reforms the Government have introduced in the past five years.

Fareham’s economy is still strong. In 2010, unemployment was 2.2%; today it is 1%. Strong businesses have helped to contribute to that and they have benefited from the Government’s reforms. Lower employment and corporate taxes have helped businesses to recruit locally. The apprenticeship reforms introduced in the past five years have meant that Fareham businesses have taken 740 apprentices in the past year, compared with just under 600 in 2010-11. The reforms have led to a renaissance at Fareham college where, thanks in part to taxpayers’ money, it has opened a specialist advanced manufacturing centre to meet the growing needs of local business, as well as refurbishing its campus in Fareham.

In my maiden speech, I criticised the top-down housing quotas that characterised the old-fashioned approach to planning. They had failed Fareham. The Government’s planning reforms, focusing on securing consent through a bottom-up approach, have secured widespread consent for 6,500 homes to be built in the new community of Welborne. This new settlement has benefited from the local growth deal funding infrastructure improvements, such as the new all-ways junction at junction 10 of the M27. Whereas in the past infrastructure never quite met local needs, I am more confident now than ever before that new development in Welborne will not harm the quality of life of local residents.

One of the challenges we face in Fareham is getting young people on the housing ladder. The Help to Buy ISA announced today by the Chancellor in the Budget will help to make it easier for many young people in my constituency to get a home of their own.

The economy of south-east Hampshire is dependent on good infrastructure, which is why I am pleased that the M27 is scheduled to be upgraded to a smart motorway in the next Parliament. I encourage my hon. Friends on the Treasury Bench to ensure that that is delivered in the first half of the next Parliament, not in the second half. Poor road and rail infrastructure makes it harder for those out of work in the older urban areas of south-east Hampshire to access employment opportunities in Fareham.

In taking forward the economy in south-east Hampshire, we have benefited from the abolition of regional development agencies and the introduction of local enterprise partnerships. I always felt that the South East England Development Agency neglected south-east Hampshire and focused its money and efforts elsewhere. The Solent LEP has had a relentless focus on economic growth in our community, playing an outstanding role in delivering all aspects of economic infrastructure in our community. I believe that our economic reforms and long-term economic plan have benefited Fareham and its residents and provided a route for further prosperity and security for local families. It has been an honour to serve those families over the last 14 years as their Member of Parliament, and I am grateful to them for the trust they have shown in me.

Through you, Madam Deputy Speaker, I would like to thank the staff of this House for the support they provide to Members of Parliament. Their work over the past 14 years has been invaluable and has supported me in becoming a more effective Member. It is ironic that I am making my last speech in front of you, Madam Deputy Speaker, as we sparred many times on Finance Bills under the last Government. One of the most important roles of any Government is economic stewardship. We need to provide jobs and growth for families and economic stability, which is vital to people’s confidence and well-being. I leave Parliament at the next election knowing that the economic future of my constituency is much more secure than it was five years ago. We should not squander those hard-won gains by losing the next general election.

Wessex Route Study (Passenger Capacity)

Mark Hoban Excerpts

Tuesday 2nd December 2014 Westminster Hall

[Maria Miller (Basingstoke) (Con)]

It is a pleasure to serve under your chairmanship in this important debate on the Wessex route plan, Mr Streeter.

In 1996, when the railways were set free from Government control, it was assumed that we would need to manage their decline. Nothing could have been further from the truth. Privatisation stopped what had become a gradual decline. Passenger numbers on our railways have more than doubled since then, going from 750 million to 1.6 billion journeys a year. There has been a 60% increase in freight, too.

Passenger numbers on routes in and out of Waterloo have doubled since privatisation to 220 million journeys a year. Waterloo is Britain’s busiest mainline station, with over 100 million passengers a year. It has more passengers than Heathrow airport, yet Waterloo is the only major route into London that in the past 30 years has not had money spent on it to make sure that it can cater for the record numbers of people using it every day to get to and from our capital and to and from work. Waterloo uses track layout that was designed for steam trains in the 1930s, which was when the last very big investment in infrastructure on the Waterloo route was made.

Why the delay? Why has no money gone in there? It is because decisions about redesigning the route were put off, because they were too complicated and nobody came up with credible solutions. Even when the last Government set sky-high house-building targets for the south-east, the infrastructure investment was not there for the railways to match that growth. In my Basingstoke constituency, the then council called for the highest possible levels of house building, with 13,000 homes built in Basingstoke in the last 15 years alone, but again, there were no solutions on rail and no solutions on transport for residents. What that means for my constituents and those of right hon. and hon. Members here today is increasing overcrowding, not only at peak times, but throughout other points in the day. Passengers now regularly stand for the 50 minutes between Basingstoke and London at peak times, but late-night trains, such as the one I got last Monday that left Waterloo at 10.20 pm, are also full to capacity, and weekend services can see that sort of extreme overcrowding, too. Just to remedy the existing overcrowding, we would need 20% more space on our trains. Passenger numbers are forecast to grow by another 40% in the next 30 years, so now is exactly the right time for a radical redesign and a radical solution for the future.

As rail becomes the overcrowded option, so our roads have to take more of the strain. The knock-on effect is chronic congestion on the M3 and other roads in the local strategic network. I very much welcome this Government’s approach of investing in our roads, and in Basingstoke we have had £20 million allocated to alleviate some of the worst problems of road congestion, but Basingstoke residents are still paying the price for the past under-investment. As the now leader of the council, Councillor Clive Sanders, has made it clear:

“Investment in the railways is vital if Basingstoke is to thrive economically. Connectivity and accessibility are key factors affecting growth.”

We cannot repeat the mistakes of the past, and we have seen this week that this Government are not going to do so. Their commitment to investing in infrastructure is clear for all to see, and the national infrastructure plan launched today is designed to ensure that investment in roads and rail is made part of our long-term economic plan for the country.

I want to put on the record my thanks to Network Rail and the alliance for their hard work in producing the Wessex route study, published just last week, because I believe that, for the first time, it offers a way to get the extra capacity that the Wessex route so badly needs. I know that there are many competing demands for Government spending, but I believe that a strong case can be made for the Wessex route to be a priority of future Government investment.

The main line out of Waterloo serves the most important economic area in Britain. It brings workers into London and serves businesses throughout the south-east. My constituency of Basingstoke is part of that, and our growth in new business was double the average of the south-east last year, with growth expected to continue at a rate of between 4% and 6% in the next year. Basingstoke has seen some 1,000 new businesses formed in the past 12 months, and our draft local plan could mean another 13,400 homes being built in the next 15 years. Along the length of the main line out of Waterloo, thousands of new homes will be built. It is estimated that that will result in 60% more train capacity being needed by 2043—equal to an extra 37 trains an hour into Waterloo on the main line in high peak hours.

More train capacity is needed the entire length of the Wessex route in Hampshire. In the words of Andrew Finney, the president of the Hampshire chamber of commerce:

“The market leading status of the Port of Southampton is threatened by a lack of rail capacity for cruise passengers and rail freight. In linking Coast, National Park and Capital visitor attractions, the route simply has to grow to maximise future tourism opportunities.”

Others have added their voice to calls for that investment. Mr Geoff French, the chairman of the Enterprise M3 local enterprise partnership, has said:

“Good transport communications have always been an important part of Basingstoke’s and indeed all of the Enterprise M3 areas’ development and economic success. Today these transport links are more congested and under greater pressure than ever before. That is why the current Wessex Route Study by Network Rail is so vital…rail capacity improvements are needed urgently.”

The economic case for investment in the Wessex route is strong. It is a compelling case that will support the long-term economic plan for our country. Doing nothing is not an option for Basingstoke, it is not an option for the south-east and it is not an option for the British economy.

As in our road strategy, we need to tackle the problems in the short term and the long term. The route into Waterloo already has more trains on it than any other in the country, with one train a minute arriving at Waterloo across its three routes at peak hours. That is all done on signalling that is 30 years old, as many of my residents can attest, thanks to the delays that they experience. By comparison, Thameslink is investing more than £7 billion to achieve the same frequency of services on modern signalling. In the short term, we will need to squeeze extra capacity from the current rail network, using the additional 150 carriages recently ordered to increase the length of shorter shoulder peak services from Basingstoke into London, to help people to spread their journeys through the day. However, longer trains will also be needed for late-night and weekend services, as well as adjustments in the signalling.

In the long term, the Wessex route study identifies that the additional capacity that is most required is inwards from Basingstoke and Guildford. I think the plan offers a real opportunity of a step change and real solutions. It is now out for consultation and I urge all right hon. and hon. Members to submit their thoughts as part of that consultation.

[Mr Mark Hoban (Fareham) (Con)]

My right hon. Friend is making a very cogent case on the need for extra investment in the routes into Waterloo, but she should not forget the importance of linking large urban centres outside London. The Wessex capacity study talks, for example, about the routes between Portsmouth, Winchester and Basingstoke, and Portsmouth, Southampton and Poole. Those are important centres economically, they are important centres of business, and they are residential areas, too.

[Maria Miller]

As I would expect, my hon. Friend makes the very important point that the Wessex route plan covers not only the main line, but all the surrounding areas. He is absolutely right to say that investment in this plan will yield even greater benefits than those that rely on the main line. If we took forward some of the recommendations in the Wessex route plan, that would be important not only for those of us in that part of the country, but for people throughout the country.

Bigger, faster trains are needed on the Wessex route. When we examine the situation in some detail, we can see that the problems that we are experiencing are akin to some of the problems the airline industry has had to consider in recent years, which led to the development of the Airbus A380. We should be looking at how we can develop longer, faster trains for our route in the long term.

The Wessex route needs to be the Government’s priority for the rail industry’s control period 6. We need to make good the under-investment of the past. In the short term, technical ingenuity will squeeze in some additional space for our local residents, who are suffering some of the worst train overcrowding in the country, and extra carriages at shoulder periods will help, but there will be no real solution in the long term without a significant plan of investment in both the hardware of the route and the vehicles that travel on it. Those bigger, faster trains will help the M3 corridor to continue to provide the power that the British economy needs. We need to ensure that businesses continue to want to locate themselves in the M3 corridor, because the people whom we represent rely on businesses seeing our area as an attractive place in which to locate and providing jobs for them and their families in the future. That certainty and economic success help to ensure that our constituents have the jobs that they need and economic prosperity for the future.

I very much welcome the opportunity afforded by today’s debate to put that message very firmly on the agenda of the Government as they look at their investment in rail in the future. I am very grateful to my right hon. Friend the Minister for coming here today and listening to the debate and to right hon. and hon. Members who have taken the opportunity to come and lend their weight to the case for prioritising the Wessex route.