Amendment of the Law

Mel Stride Excerpts

Tuesday 29th March 2011 Commons Chamber

[Mr Byrne]

Precisely right. Indeed, the Secretary of State presented to the House of Commons a Bill that would abolish DLA before he had even bothered to finish consulting people up and down the country about what the reform of DLA should look like.

One of the greatest failures stemming from the Secretary of State’s inability to extract further money from his right hon. Friend the Chief Secretary to the Treasury is, of course, the failure to get young people back to work. I met a delegation of young people from my constituency this morning and I asked them what they thought of the Government’s plans. Their thoughts were very simple: it just seems, they said, that the Government are stopping young people being what they could be. I could put it no better myself. Youth unemployment is now approaching 1 million. The Secretary of State likes to pretend—he did it again this afternoon—that this is somehow a problem that he inherited. [Interruption.] What he fails to remind us is that in the final nine months of our term of office, youth unemployment was falling by 67,000.

I know that the right hon. Gentleman is fond of quoting figures that do not include the number of people in higher education, for example. Fine: let us look at what the figures tell us. Since the election this is what has happened: after nine months in which youth unemployment was falling, it is now going up by 60,000—and that when the economy is supposedly growing. All the good work we did is now completely undone.

[Mel Stride (Central Devon) (Con)]

The right hon. Gentleman said that if Labour had won the last election unemployment would, of course, be falling. He raised the issue of youth unemployment, so will he inform the House whether youth unemployment fell or rose during the period of the last Labour Government?

[Mr Byrne]

All unemployment fell. Then, once the scale of the global recession we confronted became apparent, it of course went back up again. What we never had under a Labour Administration is unemployment going up through the 3 million mark—not once but twice, as it did under the Conservatives. Every job lost is a tragedy for one family, and all the jobs lost are a tragedy for all of us—and, indeed, for the Exchequer. Lost jobs mean not only that our performance as a country cannot match our full potential, but that a bill is created that we all end up paying.

The Governor of the Bank of England has warned us of what is to come. He says that we now confront the biggest squeeze on living standards since the 1930s, and that because this Government’s economic plan is creating so few jobs, there is less and less demand for workers. Now there are five people chasing every job and the growth in people’s pay packets and wages is slow. The Office for Budget Responsibility forecasts 2% earnings growth this year, 2.2% next year, but when prices are growing by more than 5% this year and 3.6% next year, the squeeze on family budgets is now all too obvious.

In the circumstances, one would have thought that the Government would step in to help. Not a bit of it. Next month 10 Tory raids on the family budget get into full swing: tax credits cut for families earning more than £40,000; tougher criteria on families wanting to claim family support; reducing the income disregard; freezing basic rates of working tax credit; removing the baby element of child tax credit; reducing payable costs of child care; abolition of grants for pregnant mums; £500 taken away from families with more than one child; child benefit increases ruled out for another three years; and cancelling the child savings accounts.

This Government are proud of some of the measures foisted on them by Liberal Democrat Members. I am sure that is right. Once we take this list into account, however, £1.1 billion is going to be stripped from family budgets starting from next month, with another £300 million coming from children. By the end of this Parliament, £16.5 billion will have been taken out of family pay packets.

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[Mel Stride (Central Devon) (Con)]

I have listened to this debate with growing incredulity this afternoon and for some hours yesterday, as speaker after speaker on the Labour Benches has risen to deny that the last Government’s profligacy could in any possible manner have had an effect on the economic situation that we now find ourselves in.

We need to remind ourselves that we have a £150 billion deficit, which, as my hon. Friend the Member for Spelthorne (Kwasi Kwarteng) pointed out, represents about 12% of GDP. Back in 1976, when another Labour Chancellor, Denis Healey, went cap in hand to the International Monetary Fund because we were bust, that figure was only 7%. Our economy has been completely and utterly out of balance. We spend £43 billion on interest alone, which is more than we spend on education, and more than we spend on defence, the Foreign Office and overseas aid combined. That is an absolute disgrace.

There is no doubt that the previous Government brought us to within a scintilla of being where Greece is. We would have been there, if we had had a credit downgrade and our interest rates had gone up. That is where we would have been headed if Labour had won the election.

The previous Government presided over a halving of the manufacturing sector in this country, a fall in our share of world trade, and an expansion of the gap in prosperity between the north and the south. We should take no lessons on economic management from Opposition Members.

I welcome the Budget, which is a Budget for growth and jobs, against a tough background. Nobody enjoys figures such as the 0.6% contraction in the last quarter, or the OBR’s downgraded forecast of 1.7% growth for this year, but equally, nobody who looks at the previous Government’s record can imagine that under Labour, those figures would be anything but worse.

Labour Members offer no constructive alternative. Instead, they offer opportunistic objections to every sensible suggestion by the Government about saving on expenditure. Every time an Opposition Member stands up and says, “No. We don’t want this measure on tuition fees and we don’t like moving from RPI to CPI in pensions,” and so on, they are really saying, “We’re going to increase expenditure, and we’re going to increase either the deficit or taxation as a consequence.” That opportunistic approach is at odds with their rhetoric of prudence, which is in turn at odds with the marchers’ placards on Saturday calling for no cuts whatsoever. That did not stop the Leader of the Opposition strutting his stuff on the stage in Hyde park and trying to assume the mantle of Martin Luther King. He had the dreams, but he did not have the detail or the substance.

Tax for corporations will be reduced under this Government to 23%, which is 16 percentage points lower than the rate in the US. On the radio the morning after the Budget, Sir Martin Sorrell told us that WPP, the largest advertising agency in the world, would relocate to this country from Ireland. On that subject, even when suffering and having to go to the IMF, what is the one thing that Ireland holds on to and defends above all else? It is its low corporate taxation rate, which, at just 12.5%, has enabled that country to attract double the average level of EU inward investment. We need to bring taxes down.

I welcome the fact that small business taxes will be reduced to 20%, and that we will support entrepreneurship by doubling the enterprise allowance to £10 million, so that those who go out and create businesses and wealth for themselves are encouraged to do so. In the process, they employ people, generate wealth, and pay the taxes that pay for the front-line services that we all want protected.

I was astonished by what the right hon. Member for Holborn and St Pancras (Frank Dobson), who I am pleased to see is in his place, said. He regaled us with all the benefits of red tape and told us all about how regulation was such a marvellous thing. In the real world of business, not a single business person would ever say that. I have not heard one business person further that argument.

I welcome the fact that we will implement Lord Young’s review in full, and that we will ensure that companies that employ fewer than 10 people and genuine start-ups will be exempt from domestic regulation. That is a step forward.

I also welcome the support that we are providing for the young. There will be 50,000 new apprenticeships, increasing to 250,000 over the period of this Parliament, and the work placement schemes—the 80,000 places that we heard about earlier. We will also double the number of university technology colleges from 12 to 24.

I am pleased that something was done on fuel, particularly for rural areas such as mine in Central Devon, and I am particularly pleased about the rise to 45p of the tax-deductible mileage allowance, which will help many voluntary organisations that rely on voluntary drivers. I also welcome the fact that the Budget is fair in raising the tax threshold, because it means that we will take more of the poorest hard-working people in our land out of tax altogether. That is the right and the decent thing to do. I shall conclude now—because I am aware that others wish to speak—by saying that this is a Budget for growth, it is a Budget that stands for enterprise, and it is a Budget to which Labour Members have no answer.