Policy for Growth

Debate between Michael Dugher and Lord Johnson of Marylebone

Thursday 11th November 2010 Commons Chamber

[Michael Dugher (Barnsley East) (Lab)]

Thank you, Mr Deputy Speaker, for the opportunity to speak briefly in this debate.

For the past six months, Labour Members have had to endure speeches from Government Members based on the Andy Coulson script. I am allowed to criticise the No. 10 scripts because I used to write them, which is probably just one of the reasons we lost the election. The script basically says that the deficit is the only thing that matters, and that the deficit was caused entirely by the profligacy, over a decade, of the Labour Government. [Hon. Members: “Hear, hear!”] My version was beautifully delivered, one might say.

Let me trouble the House with a couple of facts that run slightly counter to that script. Figures from the Institute for Fiscal Studies show that in the period from 1997 to 2007, public sector net debt fell from 42.5% of national income to 36.5%. That was caused—I know that this will come as a tremendous shock and disappointment to Government Members—by the economy growing and revenues increasing. Before the financial crisis hit this country—the biggest economic shock that we have had for nearly a century—our debt was down to the second lowest in the G7, despite our increasing public spending by the second largest amount among all the OECD countries. The size of the budget deficit was caused by the decisions that Labour Members took in response to that global financial crisis. I know that Government Members will disagree, but the truth is that there are people in my constituency who are in work, have managed to keep their home, and still have world-class public services because of the decisions that we took. We should not apologise for that.

The deficit does need to be reduced, but one of the ways of doing that is through economic growth—the subject of this debate. When I watched the Budget several months ago, I found it perverse when the Chancellor said in effect, almost as a matter of pride, “Because of the decisions we are taking as a Government, growth will be less than it was going to be, unemployment will be higher, tax revenues will be lower, and the payments we will make in benefits will be higher.” About 490,000 public sector jobs will go over the spending review period according to the Chancellor, and PricewaterhouseCoopers estimates that another 500,000 jobs are at risk in the private sector because of the measures that the Government are taking.

[Joseph Johnson]

Will the hon. Gentleman give way?

[Michael Dugher]

I will not; Yorkshire men are normally very generous, as the hon. Gentleman knows, but we are short of time today.

Even the director general of the CBI has voiced concerns about where the jobs will come from. Next week, Professor Steve Fothergill of the centre for regional economic and social research at Sheffield Hallam university will launch a report, which I urge all right hon. and hon. Members to read, called “Tackling worklessness in Britain’s weaker local economies”. It has an important foreword by the leader of Barnsley council, Steve Houghton, and makes it absolutely clear that, under the Government’s current framework, job demand in Britain’s weaker local economies, particularly in post-industrial areas such as Barnsley, is low and unlikely to grow significantly in the coming period.

The situation is made worse by the cuts that the Government are making to local authorities, which will be particularly bad in areas such as my own, where the council tax receipts are lower and there is greater reliance on central Government funding. In such areas, the local authority is critical not just as a direct provider of employment but in generating private sector economic activity and employment. The “public sector bad, private sector good” view that Conservative Members put forward completely fails to understand that there is often a greatly complementary relationship between the two. Government support for a strong public sector is critical.

I ask Members also to examine the coalfields review produced by the former Member for Barnsley, West and Penistone, Michael Clapham. It made it clear that areas such as my own are more isolated than others and have a higher mortality rate, greater health difficulties, greater overall deprivation, fewer businesses per head of population and 25% fewer jobs per resident, and there are more young people not in education, work or training. Such areas are very different from others, and because of the Government’s proposals, I, like other hon. Members, am very worried about their future.