Amendment of the Law

Nicholas Dakin Excerpts

Monday 28th March 2011 Commons Chamber

[Caroline Flint]

They have already U-turned on the forests; let us see how much they respond to the elections in a month when the people of this country will make it loud and clear what they think of the past 10 months. The sad thing is that we have had to wait 10 months for a so-called plan for growth. In those 10 months, we have seen unemployment and borrowing rise and growth fall. That does not bode well for anybody in the country, be they those with families, those in the public or private sectors, those with a business trying to grow or those trying to start up a business.

[Nic Dakin (Scunthorpe) (Lab)]

Does my right hon. Friend not agree that what we need in order to promote growth is demand in the economy? However, with public spending being cut and people losing their jobs, which will cut private spending, where will the demand come from to fuel private sector growth?

[Caroline Flint]

My hon. Friend makes a very good point. I could not make it better myself.

The fact is that this is not a Budget for growth. We have the highest unemployment rate in nearly two decades, with nearly 1 million young people out of work and inflation spiralling out of control. Even Moody’s credit rating agency, which all of us have heard so much about from Government Members, are warning that our triple A credit rating could be at risk. What is the price of this failure? It will be another £43.4 billion in borrowing. Yet all the Government can come up with is more of the same: the same old excuses; the same failed policies; and the same old stories from the same old Tories.

No number of excuses can hide the fact that the Government have cut too far and too fast, hitting jobs and growth, and putting our recovery at risk. However, there is an alternative. We could get our country’s finances back on track by halving the deficit in four years; we could give families and businesses real help by scrapping the VAT increase on fuel; we could repeat last year’s tax on bankers’ bonuses, and invest the money in building 25,000 new homes and getting 90,000 young people into work; and we could boost the regional growth fund by £200 million.

With the Government’s first major elections just weeks away, this Budget sets out a very clear choice: between Labour, which will do everything it can to protect jobs and the services people rely on, and this Tory-led Government imposing cuts with barely disguised relish; between Labour, which knows that there are difficult decisions to be made, but will make them in a way that is fair and open, and the broken promises and underhand tactics of the Tories and the Liberal Democrats; between Labour, which will support people into work and get our economy back on track, and a Government who are taking a reckless gamble with the economy that is hurting but not working. In one month’s time, people up and down the country will have their chance to send the Government a very clear message—and their voices will be heard.

--- Later in debate ---

[Nic Dakin (Scunthorpe) (Lab)]

It is always a pleasure to follow the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw), and I will try to respond to his challenges.

The Budget statement treads water while this reckless Government cut too fast and too deep. While the Deputy Prime Minister confides that there will be nothing for him to disagree with the Prime Minister about in future television debates, the nation suffers. Indeed, the nation is bracing itself for worse to come. I was proud to join more than 250,000 honest Britons on the march for the alternative on Saturday. That was the big society in action, rising up to say no thank you to the Government, and I am happy to spell out what the alternative is. Strangely, it is the very alternative that the British people voted for last May. Let us be clear: no individual party won the 2010 election. The British people essentially said, “A plague on all your houses.” One thing is certain, however: they roundly rejected the Conservative argument that there was a need to clear the deficit in double-quick time over four years. That argument was well put by the Tory party and the Tory media, but the British people gave it a resounding no. Instead, more people voted for candidates who argued that the deficit needed to be reduced more carefully and more slowly.

As someone who has run an organisation employing more than 250 people, I well know the difference between making cuts of, say, 8% and 16%. Chief constables said that they could manage a cut of up to 12%, but that anything greater would harm front-line services. The front-loading of cuts in public expenditure will also make the situation far worse. There are many of us in the Chamber who have run real organisations in the real world, and we know that savings can be more intelligently and better made when they are properly planned and actioned over time. There is a massive difference between the quantum of the service reductions being recklessly driven forward by this Government and the approach that Labour has argued for.

Alongside cuts in spending and tax increases, there is a need for growth to address the deficit. The Government’s plan for growth is this vacuous document, and in its four-point plan, it is silent on how to stimulate the biggest driver for growth—demand. That is not surprising as the actions of this Government have been to machete demand. With consumer confidence in free-fall, unemployment rising exponentially and inflation fuelled by a VAT hike, living standards are being eroded and the economy is contracting. All this is before the cuts in public expenditure hit next month and we see record job losses in the public sector and the lowering of demand for goods and services in the private sector. It is not, I am afraid, a pretty picture.

[Charlie Elphicke]

I have been listening carefully to the hon. Gentleman’s argument. I am unable yet, however, to understand or hear what alternative he suggests. Will he tell us what his alternative is?

[Nic Dakin]

The alternative is to go much more slowly and much more carefully so that things can be managed out there in the real world. [Interruption.] I am sorry that Conservative Members just do not understand the difference between double and half. They simply do not understand it, but perhaps that will get through to them over time.

[Nadhim Zahawi]

rose—

[Nic Dakin]

I turn to deal with aspects of regulation and economic reform.

[Several hon. Members]

rose—

[Nic Dakin]

I am not giving way, as other Members want to speak.

Let me welcome the decision to defer the fuel duty rise in line with what Labour called for. It is disappointing, however, that the rise in VAT on fuel means that even allowing for a 1p reduction, people still have to pay 2p more a litre.

There is potential merit in the incentives for further charitable giving, but these are limited in their scope. I hope that the Government will examine carefully the proposals brought forward, with strong cross-party support, in my recent ten-minute rule Bill. It is designed to ensure that charities taking over the delivery of services from the NHS—for hospice care, for example—are treated in the same way as the NHS in respect of the application of VAT to non-business supplies.

The Budget’s proposals to increase support for technical innovation and research and development are movements in the right direction, as are the faltering steps forward for the green investment bank. However, I am disappointed not to see greater emphasis placed on ensuring that future investment in energy infrastructure will be carried out and supplied by UK-based companies. Such an approach would support the sort of renaissance that is needed in steel-based manufacturing supply chains.

I am further concerned about the introduction of the carbon floor pricing. It is not only steel manufacturers such as Tata in my Scunthorpe county constituency that are sceptical, but organisations like Greenpeace, which said:

“The carbon floor price will put up bills, deliver a windfall profit for existing nuclear power stations and yet it won’t drive investment into clean energy and improved efficiency. It’s not so much a green tax as a stealth tax and it’s exactly the kind of measure that gives green levies a bad name.”

The proposals on planning law are confusing when set alongside the direction outlined in the Localism Bill. At first glance, these are Janus-like policies, pointing in two directions. As the hon. Member for Mid Dorset and North Poole (Annette Brooke) pointed out, they present mixed messages to an already confused world.

Finally, there is nothing in this Budget to support getting young people into work and much to create greater worklessness. The investment in apprenticeships is to be welcomed, but the key issue around apprentices is not student demand—there is plenty of student demand out there—but employer supply. As the Federation of Small Businesses says, small businesses

“are willing to take on apprenticeships given the right incentives.”

This remains sadly unclear. There was also disappointment that the Government had chosen not to extend the graduate internship scheme.

To conclude, this is a Budget that disappoints rather than inspires. It leaves the UK economy charging pell-mell in the wrong direction. It is a helter-skelter ride of falling demand, rising joblessness and falling living standards. I hope the Government will listen to the people, take stock and pause—before it is too late.