Finance (No. 4) Bill

Debate between Nick de Bois and Russell Brown

Monday 16th April 2012 Commons Chamber

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

I want to look at what the Bill does for the economy, the country and the people of our nations. What does it mean in terms of jobs, growth and fairness?

After the global recession, there needed to be tough decisions on tax and spending and how best we pay the deficit down. As was indicated earlier, much has been said about the previous Government spending in an excessive manner, but when my party was in government, those who now find themselves on the Government Benches said nothing at all about programmes for new schools and hospitals. That was not excessive spending; it was all needed after years of lack of investment, and it was welcomed with open arms. Members now on the Government Benches went to official openings, and applauded what was happening in their back yards, yet suddenly it has become “excessive spending” by the Government who were in power at the time.

The 50p top tax rate on the richest was introduced by the previous Government, and it is why we set out the difficult cuts that would be required to police, education and welfare budgets. However, by raising taxes and cutting spending too far and too fast, this Tory-led Government have choked off the country’s economic recovery and put hundreds of thousands more people out of work.

As I have said on many occasions in the House, my constituency is a rural one. The two biggest employers are the national health service and local government, so in the private sector my constituency depends on small and medium-sized enterprises. This afternoon, we have heard what SMEs are looking for. Yes, they want to be able to employ an extra pair of hands—if the work is there—and people have said that should be made easier for them. I am not about making life difficult for SMEs, but I can tell Members who are still in the Chamber that SMEs are looking for a bit of optimism. They want to see the optimism that, when the national minimum wage was introduced, allowed them to invest and employ additional hands; it was a sign of growth or green shoots—call it what we may.

America had the same deficit problem as Britain after the worldwide slump, but President Obama stuck to the plan that we were pursuing when we were in government: supporting the economy until recovery was secure. The US is growing, as we can all see, and unemployment is falling—the opposite of what is happening here. As we have no growth and so many more people are out of work—on the dole rather than paying taxes—the Chancellor’s deficit reduction plan is not working. In fact, as has been recognised on both sides of the House, the Government are set to borrow an extra £150 billion to pay for that economic failure.

The sole Scottish National party Member who was in the Chamber has left his place for the time being. Much was said in the ’80s and ’90s about the abundant revenues that were accumulated in this country from North sea oil and gas, but it was clear even in those heady days that they were being used up in economic failure. We are seeing a repeat of the mistakes of the late ’80s and the early ’90s; we are paying a heavy price for economic failure. That is why to a certain extent it is difficult to oppose some public sector pay restraint when others are losing their jobs, but in tough times, it is even more important to do things fairly. We should freeze wages for top-paid public sector workers to fund bigger pay rises for those on the lowest incomes, because if they have more money in their pocket, they will spend it in our high streets, which will give a glimmer of hope to SMEs.

Ministers simply have not listened, but that is no surprise. Only last week, the right hon. Member for Haltemprice and Howden (Mr Davis) wrote that with every passing day the Government seem more and more out of touch with people on modest and middle incomes. They are not just out of touch; they are already showing signs of increasing incompetence. Over the last couple of weeks, we have seen half-hearted attempts at U-turns—going back and wishing to consult and reconsider. The next few days will really test this Government and this Chancellor and his Treasury team.

We all witnessed the Government’s incompetence when we read in our newspapers, heard on our radios and saw on our televisions that they had caused panic at filling stations the length and breadth of the country. The Government’s economic policies are failing. Working families are paying the price, and it is a heavy price. We all live in hope of a change of heart. Unless there is one, next year pensioners will be hit hard, as millions are asked to pay more so that millionaires can pay less.

The Budget does nothing to give Britain the jobs and growth we desperately need now, and nothing to support families and pensioners on modest and middle incomes. Instead, it will do the opposite. This month, families are starting to find out what the Government’s decisions will mean for their budgets. As my Front-Bench colleagues have pointed out, according to independent experts the changes coming into effect this month will leave a family with children worse off by an average of £511 a year. To many of us in this place, £10 a week may not seem a lot, but it is to a family merely getting by.

[Nick de Bois (Enfield North) (Con)]

The hon. Gentleman would do well to reflect on one thing that would really hurt families: it would be far more devastating if the Government did not stick to their policies, and there was an increase of 1% or more to the interest rate, and to mortgage rates. Does he agree?