Budget Resolutions and Economic Situation

Matthew Offord Excerpts

Friday 22nd March 2013 Commons Chamber

[Mr Kevan Jones (North Durham) (Lab)]

It is clear that plan A is not working—growth is down and borrowing is up by £245 billion. The Chancellor can meet the target set by the Office for Budget Responsibility only by doing the equivalent of hiding behind the curtains when the debt man comes, or saying when answering the door, “No, I can’t pay this week; I’ll pay next week.”

As has been mentioned, the OBR also said that people will be worse off in 2015 than they were in 2010. My hon. Friend the Member for Ilford South (Mike Gapes) has just said that the blame game in the early days was “This is all because of the mess Labour left the economy in.” I am sorry, but the Chancellor cannot get away with that after three years in power. Let us also look at the facts. In 1997, the debt inherited by the Labour Government was 42% of GDP, and the figure was 35% in 2008—the last Labour Government actually paid down debt. Debt then went up because of the economic downturn and the massive effect of the world banking crisis in 2008, as my hon. Friend mentioned.

It is also said that there was profligate spending. In 1997, we inherited a 3.9% deficit of GDP, which was down to 2.1% by 2008. I was in the House at the time, but never heard the then Opposition argue that our spending targets were reckless or that we should reduce spending at all. In fact, in some areas—including defence, which I know about—they were asking for more expenditure.

[Dr Matthew Offord (Hendon) (Con)]

Does the hon. Gentleman acknowledge that the Labour Government who came to power in 1997 followed the Conservatives’ spending plans for their first two years? Those plans were laid by my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke); he achieved the reduction in the deficit that the hon. Gentleman mentions.

[Mr Jones]

Following that logic, the hon. Gentleman cannot argue, as his party has continually done since the last election, that a mess was left by the last Labour Government. The situation was due to the economic downturn.

We are now three years into plan A, and who is to blame now? We have slightly moved away from the Labour party—now it is all Europe’s fault.

--- Later in debate ---

[Dr Offord]

I feel that my hon. Friend is being slightly unfair to the shadow Secretary of State for Work and Pensions. He may have left that note, but in a confidential briefing in 2006, the shadow Chancellor and the former Prime Minister were warned that the efficiency of the public sector needed to improve rapidly, and that unless it did, spending growth would slow. The former Prime Minister disregarded that advice, and embarked on a £90 billion spending programme once he became Prime Minister.

[Michael Ellis]

Exactly. The Labour habit of spending money that the country cannot afford almost brought this country to ruin. The lack of an apology grates, but it is difficult for Labour Front Benchers to offer one, because the team that wrecked the country’s economy and trebled the national debt are still on the Opposition Front Bench.

The Budget has been welcomed by the International Monetary Fund, the OECD, the Bank of England, the CBI, the Institute of Directors and the British Chambers of Commerce—it has been rightly welcomed by everyone who knows what they are talking about as far as the economy of this country is concerned. I say to the Chancellor that he should stick with it. We cannot have a situation in which Labour is allowed to borrow more, or we will end up with a Mili-shambles.

Plan A works. It tackles the appalling structural debt legacy. An IOD official has said:

“Deficit reduction is not an option…it is an absolute necessity”.

The Government started in 2010 with the worst debt to GDP ratio of any country—it was worse than that of Greece. Other countries with better figures than ours in 2010 had been put into special measures by the IMF.

--- Later in debate ---

[Grahame M. Morris (Easington) (Lab)]

rose—

[Dr Offord]

This will be a sensible contribution.

--- Later in debate ---

[Dr Matthew Offord (Hendon) (Con)]

I welcome the Budget, which I recognise has been produced in difficult economic times. I should like the Government to make further tax cuts, but I realise that that may not be acceptable to some of our constituents who are feeling the increases in their cost of living. As a consequence, I am pleased that the Chancellor has decided to abolish the 3p rise in a pint of beer. I am also pleased that he has decided to cut the price of a pint by a further 1p. Only last week the Adam and Eve pub in Mill Hill and the Bodhran bar in Hendon thanked me for lobbying the Chancellor to do just that. Perhaps on Sunday night we will all say “Cheers” to the Chancellor.

Those proposals, alongside the abolition of the fuel duty escalator, are welcome. I certainly feel the pressure every time I put petrol in my car, and I know that many of my constituents feel the same as they have e-mailed me to say so. That measure, in conjunction with the freeze in council tax in the London borough of Barnet, is helping my constituents. Most significantly, raising the amount of money that people can earn before paying tax—the personal allowance—to £10,000 is welcome. In my constituency, 49,360 will benefit from paying £700 less in income tax than they did in 2010, and 4,967 will be taken out of tax altogether, which is a very good thing.

It is interesting that in many contributions from Opposition Members, I have heard repeated mentions of the so-called bedroom tax. The use of the word “tax” just goes to show how out of touch Labour Members are. As many people who work in this country will know, tax is levied on income earned. Housing benefit is paid to those who either do not have an income high enough to pay their appropriate accommodation costs, or do not have an income at all. In both those scenarios, if someone finds that they do not have enough income, they need to change their accommodation circumstances. I must make special mention of an hon. Member who spoke about her 17-year-old constituent who will receive a reduced income for his two-bedroom flat. The most shocking aspect of that to Government Members is that the Government are paying a 17-year-old to live in a two-bedroom flat. I wonder how many of my 17-year-old constituents would like a two-bedroom flat paid for for them.

[Mr Kevan Jones]

Would it not cost the Government a hell of lot more to keep that person in care?

[Dr Offord]

Yes, of course it would, but I think we need to focus on ensuring that families do not break down, rather than putting someone into care. I know that the circumstances the hon. Gentleman is talking about—[Interruption.] Members are chuntering from a sedentary position, but unless they wish to intervene—

[Bridget Phillipson]

We talk about family breakdown, which of course none of us wants to happen, and I do not know the young man’s particular circumstances, but we are dealing with his case now, not what we might like to be the case. Surely it is wrong that vulnerable young men like him will be punished by the bedroom tax—call it what you like.

[Dr Offord]

The young man is 17 years old, and obviously for the past 17 years we have not had a Government who have addressed social issues in our country.

There is no dispute, at least among the serious political parties, that the country has to make difficult financial decisions in order to reduce the deficit. My disappointment is that there are no such proposals coming from Labour Front Benchers. The Labour party’s 2010 election manifesto stated:

“Housing Benefit will be reformed to ensure that we do not subsidise people to live in the private sector on rents that other ordinary working families could not afford.”

However, the shadow Work and Pensions Secretary, who is no longer in his place, was recently forced to concede that the cost of housing benefit, at £20 billion a year, is too high. He has also admitted that the Labour party does not have a solution for that. How can they be a credible Opposition if they cannot tell people where they would make cuts?

The most appealing part of the Budget for my constituents is the proposed help to assist people to get on the housing ladder. My constituency is the victim of its own success. Good schools, green spaces and a comparatively low crime rate for London ensure that many people want to move there. Although I certainly welcome them, they put pressure on the availability of the housing stock. My constituents’ children find it hard to buy a property, or indeed to rent one, when they return from university or go to work. We should not forget that not everyone is given a deed of variation by mummy and daddy that allows them to stay in part of the family’s house in places such as Primrose Hill, ensuring that they never have to go to a job interview or get a proper job in order to put a roof over their heads.

Many of my constituents are forced to move away from their family and friends and the places they grew up in. The Help to Buy scheme will help them, because in my constituency there are huge regeneration schemes in progress. The Beaufort Park and Grahame Park regeneration schemes are transforming the landscape of the social rented sector in Colindale, and the Mill Hill barracks site is also providing homes for people in the area. Only this morning—this explains my absence at the beginning of the debate—I met John Morris and the resident representatives of the West Hendon regeneration scheme. It has been a hugely difficult social sector regeneration scheme that was not progressed by the previous Government. Indeed, I suspect the motives of local Labour politicians who want to keep people in substandard accommodation instead of getting homes built. [Interruption.] From a sedentary position, Mr Morris says that that is disgraceful—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The hon. Gentleman must refer to hon. Members by constituency.

[Dr Offord]

I apologise, Mr Deputy Speaker. I can only say to the hon. Member for Easington (Grahame M. Morris) that perhaps he would like to see some of the conditions that my constituents experience, and then he can conclude whether the previous Member of Parliament, or indeed some of the Labour councillors, did anything to assist them.

[Grahame M. Morris]

I did not want to intervene, but I really cannot let that pass. As someone who served on a local housing authority for almost 20 years and came into contact with many elected Labour councillors, I can tell the hon. Gentleman that it was a top priority for us to try to ensure decent housing, and I am sure that that philosophy has also applied in Hendon.

[Dr Offord]

I can assure that hon. Gentleman that in my experience it certainly has not. I certainly would never wish to impugn his reputation, or indeed the work he has done over the past 20 years on the housing authority. I only wish that some of my Labour councillors had the credibility that he has.

[Mr Slaughter]

Will the hon. Gentleman give way?

[Dr Offord]

I can only extend to the hon. Gentleman the same courtesy he extended to my hon. Friend the Member for Northampton North (Michael Ellis) and say, “I think we’ve heard enough from you today, thank you.”

All those schemes in my constituency will allow my constituents to get a home near their family and friends, which can only be a good thing. I urge the Government to agree on those proposals as quickly as possible so that my constituents can start buying their first homes. That is a good thing that we can agree will emerge from the Budget.

The Budget rewards those who aspire to work hard and get on. It is for those who want to own their own home in Hendon, or indeed in Easington. It is for those who want to get their first job, to start a business or to save for their retirement. It is a Budget for people who realise that there are no easy answers to our financial problems but that we are on the right track, so let us get on with it.