Budget Resolutions and Economic Situation

Nicholas Dakin Excerpts

Thursday 21st March 2013 Commons Chamber

[Nic Dakin (Scunthorpe) (Lab)]

My hon. Friend is stating things very clearly. Does he believe that this Government will allow Lord Heseltine’s proactive approach to regenerate the regions?

[Andrew Gwynne]

I very much doubt it; we can but hope. There are some good ideas that build on the many regional initiatives that the last Labour Government left in place in May 2010. The strategy almost reinvents the wheel, but I do not care who reinvents the wheel; the fact is that the wheel should never have been smashed up in the first place.

My Denton and Reddish constituency has been badly affected by unemployment. The figures that were released yesterday showed an increase in those claiming jobseeker’s allowance over the past 12 months. There are now 2,642 unemployed claimants in my constituency, which is 6% of the economically active population. The longer-term picture is far worse. The number of those claiming jobseeker’s allowance over the past 12 months has now gone up 32%. The figure has gone up 44% for young people and, staggeringly, for people over 25 claiming jobseeker’s allowance, the figure has gone up 70% in the past year.

--- Later in debate ---

[Nic Dakin (Scunthorpe) (Lab)]

It is a pleasure to follow the hon. Member for Hexham (Guy Opperman), who was hyperactive and animated in his contribution. On balance, I feel that he protesteth too much about most things on this particular occasion.

The Chancellor can certainly talk the talk. The question the country is asking is whether he can walk the walk. In his Mais lecture on 24 February 2010, the then shadow Chancellor argued that there were a series of benchmarks for the policies of the next Parliament

“against which you will be able to judge whether a Conservative Government is delivering on this new economic model.”

He also said:

“I have set out the benchmarks against which we can be held accountable”;

that

“we will maintain Britain’s AAA credit rating”;

and:

“We have to deal with our debts”.

We can mark the Chancellor against his own benchmarks. He has lost the UK’s triple A credit rating because he has failed to deliver growth and to reduce the deficit. The lack of growth has resulted in more, not less, borrowing. It is up £254 billion. Today’s Financial Times has a graph that demonstrates that the deficit is getting wider and that debt is going up. The headline says, “Things are worse and Plan A is off course.” It is now forecast that national debt as a percentage of GDP will not start falling until 2017-18.

In a sense, the Chancellor has supervised his own deficit expansion programme. Nice work by the Chancellor! But it was all too predictable. At least one learned commentator gave a warning in 2010—the Business Secretary who spoke from the Dispatch Box earlier. He said:

“Slashing spending now could push the economy back into recession and inflict further structural damage on the UK that will make it harder to sustain our credit rating.”

He said of the then shadow Chancellor:

“He…fails to appreciate that what the markets are looking for is a credible plan to reduce the deficit, not a willingness to slash regardless of economic conditions. In the current climate, it is essential that decisions about the speed and timing of tackling the deficit are based on the state of the economy, not political dogma.”

There we have it: decisions made from millionaires’ row and in yesterday’s Budget are affecting ordinary, hard-working people in my Scunthorpe constituency, and they are not making a difference for the better.

People are suffering from the removal of the education maintenance allowance, tuition fees, the rise in VAT, short-term working, tax credits being taken away, rising energy bills, fuel bills still going up despite the welcome move in the Budget, and the bedroom tax; and they are £381 a year worse off than they were in 2010. This Budget prefers a bedroom tax to a mansion tax, and it prefers giving a second home subsidy to those who can take advantage of it to building homes for those who need them. This is a Budget for millionaires, not hard-working people. It is a Budget of desperation and exasperation rather than aspiration, and another omnishambles.

[Barbara Keeley]

On a point of order, Mr Deputy Speaker. There has been lot of confusion over the last few hours about the Government’s new mortgage guarantee scheme, and while we have the opportunity I would like to ask those on the Treasury Bench to clarify whether second home owners are eligible for the scheme. Can the scheme, which can be used for new builds and other types of housing, be used in that way?