Finance (No.2) Bill

Nicholas Dakin Excerpts

Monday 8th November 2010 Commons Chamber

The Prime Minister will be attending the G20 summit in Seoul this week. Looking back at the G20 summit in April 2009, I believe that we as a country can be proud that we hosted that summit, and that it resulted in a package of measures that had a major effect on the way in which the financial services sector operates. Lord Turner introduced proposals on remuneration in the industry, which were tabled to all the G20 countries. Many of those proposals were adopted. The tax havens that had been operating around the world were clamped down on, and I believe that the banking levy was first proposed in an international context at that summit. Will the Minister tell us what leadership we can expect from the Prime Minister at Seoul this week? What measures will he argue for, and what can we expect to come out of that G20 summit that will make the financial services sector cease the reckless behaviour that led to the global financial crisis and, above all, contribute to paying down the deficit, on which the Chancellor is so fixated?

[Nic Dakin (Scunthorpe) (Lab)]

My right hon. and hon. Friends have asked a number of questions that deserve detailed answers. The new clause calls for a review of the total level of taxation on the banks and the financial services sector before the setting of the 2011 Budget, and at its heart is the simple question of accountability, transparency and openness. It must be made clear to the people of this country that the banks are paying their fair share. It was, after all, the banks that got us into this situation. At a time when this Government are taking so much away from honest, working people—particularly those with families—it is crucial to demonstrate that we are all in this together and that the banks are paying their fair share.

People are facing an increase in VAT, students are facing a trebling of tuition fees, the education maintenance allowance is being taken away, and child benefit is being capped, frozen and even taken away from many people. With all those massive cuts in public spending, it is crucial that we should know for certain that the banks are paying their fair share. That is all that the new clause endeavours to achieve. We want to make it clear that the banks are not continuing with their present bonus culture, and that they are making a fair contribution to the country. After all, it was the taxpayers who delved into their pockets to keep the banks afloat. This is a simple proposal, simply put, about openness, transparency and accountability, and I can see no good reason not to support it. It would give the people of this country great confidence in the Government if they were to accept this proposal tonight.

[Justine Greening]

The new clause relates to the taxation of the banking and financial services industry, and proposes that the Treasury publish a report before the 2011 Budget examining the level of taxation on those sectors. Before I discuss the new clause directly, I think it would be helpful to set out some of the background and context relating to the Government’s approach to taxation of the banking sector. The Chancellor set out clearly in the recent spending review the Government’s objective in taxing the banking industry. We inherited the largest peacetime deficit in UK history, and, during these difficult times it is only right that steps are taken to ensure that the banks pay a full and fair contribution.

I listened with interest to Opposition Members, who appear to have a very blinkered perspective of regulatory issues. They skimmed over their own Government’s part in the regulatory failures that led to the banking sector crisis. It is worth going back to some comments made by the previous Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). I know he is now making speeches in the House again, but it might have been helpful if he had participated in this debate, given his own involvement in these matters. When opening Lehman Brothers’ new European headquarters in 2004, he said:

“I would like to pay tribute to the contribution you and your company make to the prosperity of Britain”.

He also said that Lehman Brothers

“has always been an innovator, financing new ideas and inventions before many others even began to realise their potential.”

The last Government clearly had a huge role to play in that the regulatory system they brought in during their term in power absolutely failed the British public.

Comprehensive Spending Review

Nicholas Dakin Excerpts

Thursday 28th October 2010 Commons Chamber

[Bob Russell]

I am grateful to the hon. Gentleman for that point, but I was talking about the major, national Church leaders. There are excellent clergy at local level. Indeed, St Margaret’s church in my constituency, which is in a relatively prosperous part of one of the world’s richest countries, has started a food parcel system for hard-up families. The fact that the Church at community level is doing such things speaks volumes, but our national Church leaders are not. I look forward to the Archbishop of Canterbury speaking up.

[Nic Dakin (Scunthorpe) (Lab)]

Archbishop Sentamu said only the other day:

“I am not an economist, and I am not a politician, but to cut investment to vital public services, and to withdraw investment from communities, is madness.”

Does the hon. Gentleman recognise that Archbishop Sentamu is sticking up for people in this country? Does he agree with those sentiments?

[Bob Russell]

I applaud the Archbishop of York for that sentiment and those words—and indeed many others. He and I have something in common: we have both done a freefall sky dive with the Red Devils.

Earlier this morning I met the vicar of Dibley. Actually, that is not quite true. I actually met the Rev. Paul Nicholson, who is chair of Zacchaeus 2000 Trust. Before he took that position, he was the priest in the village of Turville, where “The Vicar of Dibley” was filmed. He is very concerned, as indeed I hope we all are. He points out that contrary to the Daily Mail examples, accommodation for people on benefits is expensive because there is a shortage of affordable housing, owing to the absence of any coherent housing policy for the past 30 years.

The market has failed to provide affordable housing. Property speculators and landowners have grown wealthy, but the poorest tenants face the misery of eviction through no fault of their own. Eviction for rent arrears triggers homelessness, and councils must somehow address that. However, those of us who have a local government background will know that when eviction is brought about by rent arrears, the legal term “intentional homelessness” creeps in, which is a serious problem. Those who were present at Prime Minister’s questions yesterday will know that I asked him about it, and I have spoken on the matter in Westminster Hall debates.

I am grateful to Family Action, a charity that was founded in 1869 and that is now sponsored by Barclaycard. Its analysis of the welfare reforms, which is entitled “Pushed Towards Poverty: 21 welfare cuts for low-income working families”, adds to the anxiety of recent times, which can only get worse. Family Action supports vulnerable and disadvantaged families throughout England, including families in which parents experience mental health problems, learning difficulties, addiction or domestic violence. Critically, it works with families within their homes to improve the parenting, ensure that the children’s development milestones are met, and to help them to access work, training and volunteering. The impact of the changes in general—not just housing benefit cuts—could make it harder for many families to lift themselves out of poverty through work and, in some cases, families such as the ones with whom Family Action works risk finding that employment is no longer sustainable.

In debates such as this, it is worth quoting local examples. The one big benefit of the cancellation of the Building Schools for the Future programme is that a secondary school in my constituency that the Labour Government would have closed will not now be closed. However, alongside that, we need funding for Colchester academy, which opened last month. It was Sir Charles Lucas Arts college. The pupils have a new uniform and the school a new name, but they are still using the same dilapidated building. I therefore look to the coalition Government to deliver a new building.

Finally, I shall draw the House’s attention to the possible unintended consequences and knock-on effects of halting capital schemes. The Sure Start capital grant project at Kendall school in Colchester has already had £102,000 invested, but if the grant is not now forthcoming, all that money will have been wasted. That takes into account only the financial aspects, not the provision of places for pre-school children and so on. A local building company was all set to start work, planning permission has been granted and a chain reaction of education provision is on the verge of commencing for the benefit of the school and the local community, but it needs the Sure Start money.

I also wrote to the Secretary of State for Education on 23 September. I headed the letter “The Big Society—common-sense and avoiding an own goal”. It relates to St John’s church in Colchester where the erection of a new church hall is again dependent on the Sure Start money. If that project does not go ahead, £115,000- worth of preparatory work will be wasted and donations, bequests and fundraising work will all have been to no avail. I urge the Government to look at what is going on. These are capital investments that would generate jobs and provide benefits for the local community.

Savings Accounts and Health in Pregnancy Grant Bill

Nicholas Dakin Excerpts

Tuesday 26th October 2010 Commons Chamber

[Nic Dakin (Scunthorpe) (Lab)]

To take a gamble with your own money, especially if you are a millionaire, is a reasonable choice to make, but to take a gamble with other people’s money—or, worse still, other people’s livelihoods and futures—is reckless in the extreme. But that is what the Government are doing. It is not Labour MPs who are saying that, but respected commentators such as Andrew Rawnsley of The Observer. On Thursday, the Financial Times described the Government’s plan as “an audacious gamble”. With economics Nobel prize winners queuing up to say that the policy of this naive Tory-Liberal coalition Government will have us floundering on the rocks of high unemployment and economic stagnation, we are in very difficult times.

Paul Krugman, the 2008 Nobel prize winner, said:

“The best guess is that Britain 2011 will look like Britain 1931.”

It is hardly surprising therefore that the Chancellor of the Exchequer most evoked by the policies being pursued is Philip Snowden, whose policies plunged the country into recession in the 1930s. At least the hon. Member for North East Somerset (Jacob Rees-Mogg) was frank when he said that the Government are following the policies of the 1930s. The Bill is part of an overall picture that shows that this Government are targeting their cuts at families and children, making them pay more than the banks whose proclivities got us into these difficulties.

The Bill will remove child trust funds, abandon the saving gateway and abolish the health in pregnancy grant. The Institute for Fiscal Studies clearly demonstrated in its analysis that the Government’s plan will have a more severe impact on the lowest-income households. These proposals are further proof of this Government’s desire to penalise children and jeopardise the nation’s future.

The child trust fund is a savings account for children born in or after September 2002. The Bill will end new child trust funds—worth £1,000 in their lifetime for the poorest children—from January 2011. The poorest children who were due to receive a £500 top-up on their seventh birthday will now not do so. Child trust funds have not only given children, especially the poorest children, a financial start in life, but shown the state encouraging saving and investment by example. These are habits that we need to establish in as many people as possible. If such habits are formed and nurtured, they will help us to address many of the great challenges of our age.

The saving gateway was designed to build on the child trust fund by promoting a savings habit among those of working age on lower incomes by providing an incentive to save. There would be a Government contribution of 50p for each £1 saved. That would promote financial inclusion by encouraging those most at risk to get involved with mainstream financial services. More than 22,000 people took part in the two very successful pilots, achieving more than £15 million in savings. A letter from the Save Child Savings alliance to The Sunday Times said:

“For a government that claims to want to promote savings, the decision to abolish the Child Trust Fund along with the Savings Gateway is short-term and misguided.”

The investment in the UK’s savings culture is under threat from these measures. Supporting and creating a national environment in which people are encouraged to save for their future should be a fundamental goal of any responsible Government. However, with overall savings ratios close to their 2009 all-time low and, according to the Office for Budget Responsibility, set to fall to 5.5% by 2015, the UK under this Government is sleepwalking into a situation in which the culture that we are encouraging on savings is exactly the opposite of the one that we need. Whatever their politics, all hon. Members surely agree that the fostering of a long-term savings culture is something that the UK badly needs. The process of achieving that must start with the initiatives that this Bill seeks to remove.

Even if one accepts the repealing of those positive initiatives, there can surely be no financial or policy logic in scrapping the core infrastructure of the child trust fund scheme, given that it demonstrably works. It would surely be far more sensible to leave that infrastructure in place to support future schemes that might be introduced. When introducing the Bill this afternoon, the Minister said that future initiatives would be coming forward. I ask him and the Government to consider leaving this infrastructure in place, because it is proven to support initiatives and, as mentioned earlier, would enable the state to show its corporate parenthood, via child trust funds, at least for looked-after children.

The other casualty of the Bill, if Liberal Democrats and Conservative Members, who tell us they care about children, troop into the Lobby and vote for it, will be the health in pregnancy grant, which is a one-off, tax-free payment for mothers who are 25 weeks into their pregnancy. My hon. Friend the Member for Stretford and Urmston (Kate Green) gave a full and cogent explanation of why the grant is effective and makes a difference, and if we cannot invest to ensure that our babies and children get the best start possible in life, what on earth are we about? Belinda Phipps, chief executive of the National Childbirth Trust, whom my hon. Friend quoted, said recently:

“At a time when families are trying to make ends meet, the Coalition Government has hit parents particularly hard. Cutting pregnancy and maternity grants, as well as child benefit and tax credits, will make it even more difficult for new parents or those wanting to start a family.”

The Bill is part of a pattern of penalising families and children for the economic problems caused by the meltdown of the global economy. [Hon. Members: “It was caused by Labour.”] No, it was caused by the meltdown of the global economy. Conservative Members cannot rewrite history and pretend that there was no global financial crisis and that their party in opposition did not support every spending plan up to the end of 2008. It was only when the global meltdown came that they did not want to spend the money to save this country from recession. That is the sort of party we are up against.

Withdrawing the child trust fund, ending the saving gateway and abolishing the health in pregnancy grant is bad enough, but add to that reducing tax credits, the withdrawal of the future jobs fund, the destruction of the education maintenance allowance and the hike in tuition fees, not to mention the significant cuts in funding to schools and colleges currently camouflaged by the smoke and mirrors of Government chicanery, and this represents a devastating programme. The Government are making families with children pay more than double what the banks are to pay to bring down the deficit—hardly fair, Mr Speaker, hardly fair at all.

Finance (No. 2) Bill

Nicholas Dakin Excerpts

Monday 11th October 2010 Commons Chamber

[Nic Dakin (Scunthorpe) (Lab)]

This is primarily a technical Bill and I support much of the detail in it. For example, the measures to close tax loopholes are welcome. I am sure that we are all united on the need to close such loopholes and recognise that successive Governments will need to be ever vigilant in that respect. But as the spending review approaches we need to be very careful to ensure that Revenue and Customs has the appropriate capacity and resources to tackle tax evasion and avoidance effectively. Assurances from the Economic Secretary on that point would be very welcome, as my hon. Friend the Member for Wallasey (Ms Eagle) said earlier.

There is much in the Bill to applaud. Unfortunately, there is also much to regret. It represents a missed opportunity to put in place a plan for growth. This is not surprising, as the Government see deficit reduction as the beginning, middle and end of their economic strategy—a symphony of despair, orchestrated by a coalition agreement and targeted at the lowest common denominator.

It is worth reminding ourselves of what the great British public voted for in May. They had two alternative economic strategies presented to them during the election. That promulgated by the Conservatives said that there was a need to cut hard and cut fast. The alternative argument was put forward by Labour and the Liberal Democrats—that the deficit reduction should be more carefully managed, as my hon. Friend the Member for Bassetlaw (John Mann) has suggested. A more gradual reduction would allow growth and tax increases to play their part. In that strategy, the reduction in spending would be managed in a way that allowed growth to pick up the economic slack. Doing so would avoid the spectre of a double-dip recession, with all the personal distress and misery that it would bring to people up and down the land. The British people delivered an inconclusive result at the last election, but one thing was clear: they did not support the Tory argument for fast and furious cuts. They backed Labour and the Lib Dems’ more considered approach.

[Alec Shelbrooke]

I am listening carefully to the hon. Gentleman, but I find it hard to understand how he can say that the Conservative party’s policies were rejected at the general election, when the party had its biggest result since 1931.

[Nic Dakin]

I think that there was a large feeling at the Conservative party conference last week that the Conservatives should have done better in the general election, given that they faced a Labour Government who were clearly struggling in the face of many challenges. I am interested in the hon. Gentleman’s spin on the outcome of the last election, but the reality is that nobody won it. What has happened since is that the Government parties have shown skill in developing a narrative that runs along the lines of what the hon. Member for Boston and Skegness (Mark Simmonds) outlined—it was also added to by the hon. Member for Bristol West (Stephen Williams)—which is essentially that everything comes down to Labour spending profligately and a massive deficit that needs to be tackled fast and furiously. That is the narrative, but it is not the truth. The truth is far closer to what we heard from my hon. Friend the Member for Bassetlaw, who demonstrated that what has really happened is that our deficit lies alongside that of Germany. The problem is serious, but it does not require us to go as far as is being suggested.

[Alison McGovern]

Does my hon. Friend agree that it is not merely we on the Labour Benches who disagree with the fake narrative that the Conservatives and Liberal Democrats are putting forward, but the recent report by the International Monetary Fund and the International Labour Organisation? Those bodies have tried to persuade countries such as ours not to disinvest from the economy, because they are worried about jobs and employment.

--- Later in debate ---

[Nic Dakin]

I thank my hon. Friend for that intervention. She is completely right to suggest that world public opinion is moving in the direction of expressing concern about global cuts in spending and their impact on the world economy. She is completely right to draw attention to that.

[Alec Shelbrooke]

rose—

[Nic Dakin]

I have already given way.

In the summer, the Chancellor was keen to hold up Ireland as an example of a country with an approach to the economic challenges that we face that should be applauded. There is less talk of Ireland now, as that economy spins into double-dip recession and loses its triple A rating, as we heard earlier. The Irish Government’s debt has increased rather than decreased, as a result of over-aggressive cuts in public expenditure, and the economy is now in serious peril. The last time we had a peacetime coalition, the then Governor of the Bank of England’s advice—to take an aggressive approach to reducing spending—was followed, precipitating the great depression of the 1930s. I am afraid that Governors of the Bank of England, like politicians, are only mortal and do not always get it right.

There is something very pessimistic about the Government’s approach. Where once they were optimistic, now they see only negatives, hence the biggest rise in VAT—the most unfair and regressive of all taxes—in a generation, despite cast-iron promises from the leaders of both parties in the coalition during the election that this would not happen. Representing Scunthorpe, I know a bit about cast iron: it should last a bit longer than a few months. There has been further pessimism, with the attacks on universal benefits signalled by last week’s breaking of another promise—the promise not to cut child benefit.

[Stephen Williams]

If the hon. Gentleman is seriously suggesting that taking away child benefit from families in the higher-rate income tax bracket is a cut that should not be proceeded with, will he say what cuts he thinks should be proceeded with?

[Nic Dakin]

The ending of universal child benefit is a cut against children and families, and I do not think it is the right thing to do. It would seem that children and families are to pay the price of the global economic crisis caused by the failure of financial businesses and markets around the world. That hardly seems fair to me. To answer the hon. Gentleman’s question, I would rather leave child benefit in place and not give £6.4 billion back to businesses, through changes in their taxes, much of which will go back to the banks that got us into this mess in the first place.

This Bill represents a real opportunity to put in place the infrastructure spending that is a crucial prerequisite for economic growth. Sadly, it appears to be a missed opportunity. We have seen excellent planned investment, such as Building Schools for the Future, the playbuilder programme and so on, scrapped. Ministers then appear surprised when construction companies have to lay people off.

[Stewart Hosie]

I am listening intently to the hon. Gentleman’s speech, but just in case my memory is skewed, can he confirm that Labour’s plans were to halve capital expenditure as well, and that many of the cuts in capital investment that he is bemoaning are precisely the same as those that would have happened under his Government?

[Nic Dakin]

My hon. Friend the Member for Nottingham East (Chris Leslie) will no doubt pick up that point later from the Front Bench, as he is more knowledgeable about the overall position than I am.

There is a relationship between the private sector and the public sector. Properly managed, they support each other. As my hon. Friend the Member for Bassetlaw pointed out so skilfully, if we take all the spending out of the economy, there will be nothing to buy, and therefore the businesses that sell things will go into a spiral of decline. That is the difficulty that we are on the cusp of at the moment.

[Neil Carmichael (Stroud) (Con)]

rose—

[Nic Dakin]

I have given away enough.

If the Attlee Government had taken the view that the only solution for dealing with the debt was to cut public spending further, there would have been no NHS, no major house building and no platform for a modern Britain. That Government faced far greater debt problems than we do, and they did the right thing: they built an optimistic future. It is our responsibility now, faced with the challenges before us, not to make things worse, but to make things better. That is why I oppose the measures to cut investment allowances and cancel support for the industries of the future, such as advanced manufacturing, including wind turbine manufacturing, why I oppose the reneging on the loan to Sheffield Forgemasters—a loan that would help to position the UK to play a key role in the civil nuclear energy of the future—and why I oppose the planned increase in VAT, which will serve to dampen demand when the private sector needs a demand stimulus.

Finance Bill

Nicholas Dakin Excerpts

Tuesday 6th July 2010 Commons Chamber

[Nic Dakin (Scunthorpe) (Lab)]

I compliment the hon. Member for North East Cambridgeshire (Stephen Barclay) on an excellent maiden speech, which gave us a clear vision of the opportunities and challenges of his fenland constituency. His contribution was clear and measured.

I thank you, Mr Deputy Speaker, for allowing me to make my maiden speech just 23 years to the day after my predecessor, Elliot Morley, made his. What is more, 6 July appears to be a popular day for novice MPs from Scunthorpe—it was the day on which Michael Brown, who now scribbles so ably for The Independent, made his maiden speech. Elliot Morley served the constituency for nearly a quarter of a century as a respected, hard-working MP. He rightly gained a national and international reputation for his steadfast work on animal welfare and climate change. His record in helping to create a better world should not be lost in the wake of recent events.

I am the first MP for 80 years to represent the constituency after an adult lifetime of living and working in it. It is my adopted home town, and I love it. The first Labour MP for the area, David Quibell, was elected at the age of 50. He was born in Messingham, which still lies within the constituency boundary. A passionate early socialist who was active within the trade union movement and Independent Labour party, he, like me, knew the constituency inside out when he was elected in 1929 and took his place on the Labour Government Benches in an interlude between failing coalition Governments.

A contemporary of Quibell said:

“He was a revolutionary and a rough customer. If, at his meetings, anyone at the back interrupted, he would not think twice about getting down off the platform and thumping the interrupter.”

You will be pleased to hear, Mr Deputy Speaker, that I do not plan to imitate Mr Quibell’s style in that respect. My friends tell me that, if anything, I am too consensual in my approach. In that respect, I follow more in the footsteps of Ian Cawsey, who was the MP for Brigg and Goole until the election. Thanks to boundary changes, I inherited the village of Scawby from him. Ian demonstrated the power of cross-party working when he persuaded three other MPs—a Welsh Labour, a Scots Nat and a well spoken English Conservative—to join him in the band MP4. Out of those discordant political notes, musical harmony came forth, and I am told that their CD, “Cross Party”, can be bought for just £10.99. It is still in stock in Oxford street’s HMV, with all proceeds to Help for Heroes. I hope that hon. Members will not all rush off just yet.

I must also mention my friend, neighbour and mentor John Ellis, who represented Scunthorpe from 1974 to 1979. He does his level best to keep me on the straight and narrow, but has his work cut out, despairing from time to time at what he sees as my new Labour pragmatism.

The industrial garden town of Scunthorpe always surprises new visitors with its fine parks, green open spaces and magnificent floral displays. Its people are hard-working, neighbourly and welcoming. There is much to be proud of. It is home to the world-famous Corus steelworks, whose track record in producing high quality steel at competitive prices is second to none. There are vibrant businesses large and small, from the construction and logistics giant Clugstons to the organic farm shop, the Pink Pig, where you can buy, among other things, pink pigs—the soft, cuddly variety. All these businesses are witness to the innovation, hard work and enterprise of local people.

Scunthorpe boasts a Championship football team—up the Irons—and a rugby union team that achieved promotion to the national leagues this year, as well as a fine speedway outfit and a range of other great sports clubs. The area also has a vibrant arts, drama and musical community and is home to last year’s BBC choir of the year, the Scunthorpe Junior Co-operative Choir. It has good schools and two high performing colleges, one of which, John Leggott, is renowned for the excellence of its education and which I have been privileged to lead as principal for the last four years.

In addition to those already mentioned, the constituency includes more fantastic towns and villages, Bottesford, Kirton, Redbourne, Hibaldstow, Gainsthorpe, Holme, Manton, Cadney and Howsham—all great places to live.

All of us, regardless of party or seniority, should have the humility to listen carefully to the people we seek to serve. The parties opposite are right when they say that Labour lost the election. We did, but let us be completely honest—no party won the election. Labour lost, the Conservatives lost and the Lib Dems lost. We all lost the election. Deals done behind closed doors put together the present ruling coalition, a coalition that—we were promised—would act in the national interest and be committed to protecting the vulnerable. Already, few believe that to be true. VAT destroyed that illusion. The hon. Member for Dundee East (Stewart Hosie) described the increase in VAT as “unforgivable” and has already mentioned the analysis of Save the Children. Only yesterday Flora Alexander of Save the Children said:

“VAT is a regressive tax, affecting those on low incomes disproportionately. The 2.5% increase will mean families living in poverty will be put under even more pressure.”

Save the Children is calling for the poorest not to have to pay the price for the economic crisis.

Neither party opposite told the electorate, “Vote for us and we’ll put up VAT to 20%, vote for us and we’ll cut public spending by 25%, vote for us and we’ll cancel Building Schools for the Future.” My electorate in Scunthorpe was certainly not told this by my Conservative and Lib Dem opponents.

The argument that we need to cut fast and cut furiously, as if it were some virility test, does not have the support of the electorate. The electorate rejected this Conservative argument—which was well put by the Conservatives during the election—just two months ago, and instead supported proposals to tackle the deficit in a measured, proportionate way.

We should all have the humility to recognise that there is no mandate for the Budget proposals before us today, no mandate for fast and furious cuts and certainly no mandate for a huge rise in VAT or for the freezing of child benefit—measures at the heart of this unprincipled Government’s approach. Both the Labour and Lib Dem parties made it clear—and the public agreed on 6 May—that the British economy is too fragile to bear these cuts without plunging us back into recession. That is why the electorate rejected the Tory offer at the polls. The public know full well that cuts in the public sector lead to job losses in the private sector. The public are not daft—they know that the private sector prospers when it is able to sell its goods and services. With Europe’s economies contracting and the squeeze put on the UK economy, individuals and companies will stop spending and jobs will be lost in the private sector to add to job losses in the public sector. That is what the leaked Treasury papers said last week and that is what I fear—I hope that they and I am wrong. I would rather that the analysis of the right hon. Member for Wokingham (Mr Redwood) were correct, but I fear that it will prove to be false and flawed.

There is no justification for what is about to happen. The well respected economist, David Blanchflower, has said:

“Economic policy in the UK is being run by a bunch of ideological amateurs who are destined to fail, at enormous cost to the British people.”

The so-called black hole in our finances is an invented story to camouflage the truth and to wriggle out of promises made to the electorate at the election. It is a story that I have heard before. I heard it on North Lincolnshire council when the Conservatives briefly took control and went on about a black hole in its finances. It was not true then and it is not true now. It is a story, a figment, a fantasy. It is something to con themselves with—I think that they have achieved that—and then con everybody else. It cuts no ice with me, nor with the people of Scunthorpe. While at present it might resonate with some people, it will reverberate in a most hollow way if this Budget ends up devastating people’s lives. I sincerely hope that it does not, because there is no mandate for this and there is no need for this.

I urge all Members of this House to vote in line with the manifestos on which they were elected just two short months ago. I urge all Members of this House to be true and faithful to their promises. I am immensely proud to have been chosen by the voters of Scunthorpe county constituency to represent them in this Parliament. I will carry out my duties in line with the promises that I made to them. To that end, I will vote against the measures in this Finance Bill and I call on all honourable Members to do the same.