Nigel Evans
Main Page: Nigel Evans (Conservative - Ribble Valley)Department Debates - View all Nigel Evans's debates with the HM Treasury
Government's Management of the Economy
Nigel Evans Excerpts(3 years, 8 months ago)
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Paul Maynard (Blackpool North and Cleveleys) (Con) [V]
Let us be clear about this debate: it was Labour who failed to fix the roof while the sun was shining, so that when the financial crisis struck, we lacked the resilience we needed as a nation to do what was necessary. Labour spent a decade pretending that it never happened—that it was a global crisis that did not affect us here and was nothing to do with them. But there was no money left, as that famous letter said. Despite having spent the last few weeks campaigning to regulate the “Buy now, pay later” sector, it is clear that Gordon Brown was the founder of the Klarna approach: he spent now and bought now, expecting the British people to be the ones to pay later.
After 2010, the Conservatives did fix the roof, and we now have the financial resilience we need to do what we have had to do to protect jobs and livelihoods as the coronavirus wave broke across our shores. Labour harp on about those they claim have not benefited from a Conservative Government, both before and during the pandemic. However, it would be remiss of me, representing a constituency with so much deprivation, not to observe that it is this Conservative Government who cut income tax by around £1,200 for the average basic rate taxpayer, by lifting the income tax threshold to £12,500. Labour’s approach, of course, was to abolish the 10p rate of income tax. Income inequality, however we measure it, is lower than it was in 2009-10, and a third fewer children live in a workless household. Although there is more to do to tackle in-work poverty, I find it hard to credit that some see this reduction still as a bad thing.
We introduced a national living wage, which raised incomes in areas of low average incomes such as my constituency, and universal credit to address the challenges of seasonal unemployment, which were such a scourge in seaside resorts, and let us not forget that the top 1% in this country pay a greater share of income tax than they did when Labour was in power.
To be fair to the shadow Chancellor, who I believe is that rare thing, a thoughtful politician, I do not think she would deliberately seek to drive the economy over the cliff. However, I fear that she would be too busy rummaging in the glove box for a Labour road map to see what was fast approaching. In her Mais lecture in January, she quoted Gordon Richardson’s 1978 Mais lecture, in which he said:
“We are now at an historical juncture when the conventional methods of economic policy are being tested.”
In trying to apply that to now, she seemed to miss the irony that it was a criticism of precisely the statist solutions that Labour offered in the 1970s and is reheating now.
Like every Opposition day debate so far in this Parliament, this debate has had an air of unreality about it. It is only thanks to Conservative policies that we are in the position we are in to deal with the crisis we face now.
Mr Deputy Speaker (Mr Nigel Evans)
We now go to Nadia Whittome. Nadia, can you hear me? We will go to the next speaker and come back.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con) [V]
The motion before the House today is not one to trouble serious observers. Over the 10 years that followed the crash of 2007 to 2009, this Conservative Government rebuilt our broken economy. Before the appalling shock of covid, we enjoyed effectively full employment. Public spending was back within our means and the UK ranked eighth in the World Economic Forum’s ease of doing business ranking for 2020. The widespread understanding that the Conservatives are the party who will look after people’s family, home and job is among the most important reasons why we have won four successive general elections, and it will underpin, I am sure, our success in a fifth.
This Government have a clear, bold plan to build back better. Our £280 billion to the crisis was deliverable only because of the tough choices that Conservative Chancellors made in the last decade to fix the roof while the sun was shining. We have made decisive interventions that have preserved much of the muscle power of the British economy during this period of suspended animation, and as my right hon. Friend the Chief Secretary to the Treasury said in his opening remarks, we have been praised by the IMF for the nature of the interventions that we have made.
Even before next week’s Budget, we have the Chancellor’s £30 billion plan for jobs, the £12 billion green industrial revolution and £8.6 billion of accelerated infrastructure spending. This stimulus is hugely exciting areas such as the Tees valley, which had the chance to leverage great amounts of private sector investment off the back of Government commitments of this nature.
Not all the decisions that lie ahead will be easy; there is no point in sugaring the pill. Our public finances are gravely damaged. Some of the damage will of course be repaired when the free market is allowed to operate normally again. However, we need to be realistic. Nothing we said during the course of the 2010s about the danger of running unsustainable levels of public debt has changed. The fact that borrowing costs are historically low is to be welcomed, but we should regard it as a stroke of great good fortune that it coincides with our hour of need, rather than an ongoing inevitability. I challenge anyone in the Chamber to tell me with certainty what the world will look like in the 2030s or 2040s, or what borrowing costs will be.
I believe it would be nothing short of immoral to mortgage our children’s and grandchildren’s futures to chance. For debt to exceed 100% of GDP for the first time since 1963 is simply not sustainable, so I would support and indeed urge some measures of fiscal consolidation in next week’s Budget. These should be targeted at hard-pressed families, and key drivers of employer behaviour such as national insurance should be protected, but I can well see the sense of looking at other options to raise revenue in the medium term, including increasing corporation tax.
Companies are realistic about the economic landscape. They care more about policy certainty and the general prosperity of the economy than about a moderate rise in corporation tax. So I hope the Chancellor will be prudent as well as bold and emphasise the need for discipline and sound money next week as part of our recovery.
Mr Deputy Speaker (Mr Nigel Evans)
We hope to get back to Nadia Whittome before the end of the debate, and sooner rather than later. So we now go by video-link to Paula Barker.
Claire Hanna (Belfast South) (SDLP) [V]
I thank my hon. Friend the Member for Oxford East (Anneliese Dodds) for bringing about this debate and giving us an opportunity to reflect on what has not been working in economic management, on the erosion of public services and on the unsustainable damage that we have been causing to the environment over the last decade, and to find new social democratic approaches that transform the economy for the benefit of everybody. The last 12 months have shown us that the state has to be one that protects what is important; the market cannot do that. This time has also shown us what it is possible to achieve when the will exists to do so.
Members have set out how threadbare public services had become, and how close to the financial edge many people had been living—through the gig economy, and through the punitive and pointless gouging of the welfare state. Existing inequalities have been exposed. Generational injustices have been exposed, with students facing tens of thousands of pounds of debt for Zoom degrees. Caring burdens have fallen to women, and we will see that working through into workplace equality over the months and years to come.
Similar divergences in fortune are happening in parallel before our eyes in business. Small businesses and the self-employed—the red blood cells of our economy—are facing unimaginable challenges, cash and debt crises, while online organisations and other monoliths are posting massive, eye-watering profits that are largely untaxed. I repeat the SDLP’s view that one-off windfall taxes should be applied to those businesses that have benefited so much from the pandemic.
Solutions exist, but we cannot afford to repeat the mistakes of the past. We cannot wander back into the distorted thinking of short-term management of sovereign debt over absolutely every other policy outcome. This Government have to learn—and I fear, from previous contributions, that they have not—the lessons of the 2008 crisis and of every other recession of the last 100 years. Sharp spending falls will choke the ability of families to spend, and that will have knock-on effects on businesses, jobs, growth and tax revenue for public services.
A real living wage is overdue. The rhetoric does not match the reality; work is no longer a way out of poverty. The universal credit uplift should be maintained. Short-term savings in public spending will be dwarfed by the long-term costs of managing intergenerational poverty. Even before covid, in economic terms Northern Ireland was at the top of all the bad economic charts and at the bottom of all the good ones, and the parties at home absolutely have to come together to create political stability and support the economy at home.
The last 12 months have shown that people can come together with solidarity, passion and innovation. This is our generation’s rethink opportunity. We need to build an economy that works for more people that is based on wellbeing, not just on GDP.
Suzanne Webb (Stourbridge) (Con) [V]
The charge today is that the concerted economic failure of the past decade has “weakened the foundations” of our economy, leading to the country
“suffering the worst economic crisis of any major economy”.
The simple truth—I talk as someone who walks the steps of an ordinary person—is that, under successive Conservative Governments, we have seen nine consecutive years of economic growth. We have seen tax cuts for families, tax cuts for businesses, a reduction in inequality and a record low proportion of low-paying jobs. We have been helping people to keep more of what they earn and driving up median household income. The conclusive evidence for all of that is that we have seen record numbers of people in work—an additional 3.4 million up until 2019. Thanks to the decisions taken by Conservative Governments over the last 10 years, we have been able to withstand the blow that this pandemic has inflicted on our economy.
We have seen an unprecedented set of economic measures and financial support at a time of national crisis. We have delivered one of the most comprehensive economic responses in the world to support jobs, businesses and livelihoods during this time. This is a Government who have not been blown off course by the pandemic—who have helped those most in need at a time of crisis, while paving the way for an even more prosperous future. This is a Government who are focused on building back better and levelling up, and who have a key eye on jobs, focusing on reskilling and retraining at a scale and pace probably only seen following the second world war, ensuring people can get the education and training they need to get great jobs—creating that firm and solid link and pipeline of opportunity for those seeking work—with a keen eye on trade and all that it can do to boost our productivity and improve our international competitiveness, and, of course, not forgetting their ambitious investment in research and innovation.
It makes no sense to talk of 10 years ago, but if we want to, let us talk about the fact that every Labour Government have left unemployment higher than when they started. By 2019, we cut unemployment to the lowest level since 1974. It is thanks to the Conservatives that we reduced the deficit by more than 80%. When we handed over the deficit to Labour, it was £13.1 billion. Under Labour, it did not triple or quadruple—it went up more than 10 times, to £153 billion, by 2009.
It is thanks to the sound financial management of this Government that we could afford the unprecedented support we have put in place to protect people’s livelihoods. That is why we can build back better out of this pandemic on solid foundations. We can see that already with the speed and pace of the vaccine roll-out—a vaccine that is accessible due to the incredible foresight in the procurement by this Government. We probably have one of the first robust and defined road maps out of this pandemic because of this—
Dave Doogan (Angus) (SNP) [V]
Tory economic incompetence is a rich seam to mine and it is a challenge to do justice to the millions of marginalised workers and families up and down these islands who pay the price of Tory policies. The Chancellor borrowed £55.2 billion in May 2020, nine times more than in the previous May, and the highest monthly borrowing since records began. Indeed, we need to go back 50 years to find UK gross borrowing exceeding the size of the whole UK economy as it now does—and this is a Government who are trying to tell us that they have this under control? National debt of £2.1 trillion might not worry the millionaires in the Tory Cabinet, but the rest of us are horrified.
The Chancellor said last June that the best way to restore public finances is to open the economy and get people back to work. Well, we now know what an ill-fated risk calculation that was, to the UK’s great public health and economic cost, brought to bear on the population by a Chancellor seemingly more invested in his personal brand than judicious ministerial responsibility.
The Labour party will need to be careful with its criticisms, though. It inherited falling debt and a surplus in ’97, and took only two years to revert that into rising debt. The current tenant of No. 11 Downing Street is the latest in a long line from both UK parties seemingly more chancer than Chancellor. And let us not forget that, in 2010, Labour was planning devastating austerity cuts that it was very clear were going to be tougher and deeper than Margaret Thatcher’s in the 1980s. In this, UK politics is revealed as the worst ever Hobson’s choice.
Today’s Chancellor, mirroring Alistair Darling when he shored up the banks, presents himself as something of a benevolent genius for wheeling out the furlough scheme, conveniently forgetting that it represents a very standard fiscal intervention by any Government in a developed economy in times of crisis, and of course it is future generations, not he, who will be paying down the bill. The UK Chancellor, like most before him in my 48 years, is neither genius nor generous, and there are 3 million excluded who will testify to that, not to mention our pensioners, who, by 2016 figures, endure the worst state pensions in the developed world.
We must then consider the shameful UK economic growth of 2% over the last 10 years of this Government, which compares with figures of 6% in the US, 9% in the EU and Japan, and 7% in the G7. We see clearly the chickens of historical UK underinvestment in science, engineering and manufacturing coming home to roost—the legacy of Thatcher alive and well—and that is before the long-term negative effects of Brexit flow through. Since devolution, the UK’s growth in output languishes at 23.8%, while Scotland’s has risen by 33.7%, outpacing the outmoded UK and doing so despite the dead hand of the UK Treasury holding us back. It will not do so for much longer, for at independence, Scotland will retake our place on the international global stage and forge ahead with our independent, progressive and inclusive economic future.
Mr Deputy Speaker (Mr Nigel Evans)
Before I call Ben Everitt, may I just ask the remaining MPs participating remotely to look at the clock on the left or right hand side of their monitors, wherever it may be? If they cannot see that, please could they use an alternative device, because they will be cut off after three minutes.
Jacob Young (Redcar) (Con)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests.
Today we have seen once again Opposition Members playing the blame game: trying to point the finger at the Government for everything and anything, including for a crisis that has come to us from well beyond our shores. I did find it odd when I read the subject of today’s Opposition day debate, given the legacy of the previous Labour Government. Our record in office has been tested by the electorate three times in the past 10 years, and each time the public have chosen to elect a Conservative Government over Labour’s woeful opposition. The reason I believe the Conservatives have been the public’s choice in each of those elections is that we chose to offer hope and aspiration. That is still true today, with an optimistic Government speaking about the immense challenges we still face, but ones that the British people will rise to, versus an Opposition who are focused on doing down our efforts to protect the economy and save as many jobs as we can.
We can see the same thing playing out locally in Teesside in our upcoming mayoral elections. In 2015, Redcar lost its steelworks with the closure of SSI, but rather than accepting our fate as a once great region that built the world, we rose to the challenge of transforming the site, taking public control of 4,500 acres, beginning our regeneration of it and being backed by more than £200 million of Government investment so far. This regeneration is being spearheaded by our Conservative Mayor, Ben Houchen, with ambitious plans for the Teeswork site to build a new greener Teesside that champions carbon capture and storage, wind power and hydrogen. Key to all of this is our goal of a free port in Teesside, with an ambitious plan to bring in more than 18,000 jobs over the next five years. Meanwhile, Labour locally offers only negativity, doing down the opportunity presented to us and talking down Teesside and the plans that we have.
Let me speak directly to today’s motion. I thank the Labour party for this opportunity to remind ourselves how grateful we are to successive Conservative Governments who have fixed the roof while the sun was shining. Never could we have been in a better position to deal with a crisis of this magnitude—if, of course, it is at all possible to be prepared for such a crisis. Since 2010, after nine years of consecutive growth, our economy has grown by 19%, which is faster than Italy, France and Japan. That is an entire decade of uninterrupted growth. We had to turn this country around from where Labour had left it, with no money in the Treasury and a deficit running out of control. The Conservative management of the economy has meant that we were able not only to rebalance the books, but to create record high employment across the country to support the public services on which we so heavily rely at this time.
The reality is that those very successes were built on the strong foundations on which we relied when the pandemic hit. Without solid finances, we would not have been able to put in place some of the most generous support schemes in the world, including for businesses and the self-employed, and millions would have suffered unnecessarily. I am proud to stand behind this Government’s record of fixing the roof while the sun was shining.
Mr Deputy Speaker (Mr Nigel Evans)
Order. The wind-ups will begin no later than 3.40 pm.
Christian Wakeford (Bury South) (Con)
It is a privilege to follow the hon. Member for Sheffield, Hallam (Olivia Blake) if only to highlight how she is wrong about 10 years of Conservative management of the economy. There has been much talk about how the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) left that infamous note that said how sorry he was that there was no money left. Not content with doing that damage to the Treasury, he is now wanting to do that to the west midlands, too.
What we see from the Labour party and definitely from the Front Bench is a collective amnesia. Let us not forget that, in 2010 and in 2015, Labour, too, was campaigning on a platform of tackling the deficit and delivering its own austerity, so I guess that all cuts are bad unless they are Labour cuts. We have seen the shadow Chancellor today again inadvertently mislead by confusing the deficit with the debt. The deficit, which we campaigned on and have spoken about for over 10 years, has come down massively; that is what we campaigned on, not tackling the debt issue.
After nine years of economic growth, pre-covid we saw the highest level of recorded employment, an increase in the national insurance threshold giving 41 million people a tax cut, and an income tax cut for 32 million. When that is combined with the national insurance threshold change, it means that a typical basic rate taxpayer is now over £1,200 a year better off, which in turn means more money into the local economy. The number of workless households is down by a third, income inequality is down, there are 1.5 million more businesses in the economy, and there is the pension triple lock.
I know you are thinking, Mr Deputy Speaker, that these are the greatest hits of the last decade. However, that is not the case: this is just the first album, with the second album still to come. So what do we have? We have £14 billion extra for schools in the next three years, hundreds of billions of pounds being put into infrastructure investment, over £30 billion extra for the NHS, £1 billion for the future high streets fund, £3.6 billion for the towns fund, and £4 billion for the levelling up fund.
Thanks to the long-term economic plan of former Chancellors we have been able to repair the roof while the sun was shining, which means we have been in a stronger position to deal with this crisis and have been able to swiftly put into action measures for our recovery. We have been able to invest in the furlough scheme, invest in business support grants, and put more money into the NHS.
The hon. Member for Oxford East (Anneliese Dodds), on the Opposition Front Bench, spoke about the limits on council tax, but no one is forcing anyone to put council tax bills up. If councils do not want to do that—and I urge my own local council to take heed—we are not forcing them to do so. So I say to the hard-working families of Radcliffe, Whitefield and Prestwich that if their council tax bills go up, they have only one party to blame, and that is their local Labour council.
There are many things we should be proud of; instead we have an Opposition who, after 10 years of collective amnesia—
Christine Jardine (Edinburgh West) (LD) [V]
It is a pleasure to speak today and to follow the hon. Member for Aberavon (Stephen Kinnock). When I look around me, I see that the Government’s handling of the pandemic has left us with the worst economic recession of the G7 and that their botched trade deal with the EU has caused unnecessary avoidable damage.
I am slightly disappointed with this debate. At a time when this country faces an enormous challenge to its future, when my constituents are crying out for an economic plan that will save their jobs or allow the company that they have invested years and their family’s future in to survive, and when taxi drivers, hairdressers and florists who have not been able to earn for most of the past year are desperate for some hope that the Government will help them, I am disappointed that the Labour party wants to talk about the past. It is a past that we cannot change. Surely Labour Members must appreciate that when they look back to the times when their own economic policies were less than universally successful. So please let us park the political tribalism and avoid point scoring. Let us look at where the country is and what it needs.
The economy has shrunk 10% in the past year. Unemployment this morning is at 5.1%, and half of those who have joined that massive figure from paid employment are less than 25 years old. Our young people do not know if the future they have worked and planned for is now going to be possible. The future is uncertain for so many. Of course we should learn from what has gone before, but we should be talking about and planning for what is ahead of us, because this is about recovery. Our experiences may differ, but surely we have all felt the pain of the past year and more, through the people we serve. Many have felt it more acutely than others, and that is the point. We have to keep people in work and businesses afloat, so that they are as strong as they can be as we slowly come through to the other side of this. Some will have to rebuild, and it is our responsibility to give them the tools to be able to do that. That is why the country is holding its breath, hoping to hear some hope from the Chancellor next week.
We need to innovate our way out of this crisis and to put the environment back at the heart of the UK’s agenda. We need to tackle mass unemployment and establish ourselves as the country of the green industrial revolution. We need to bring under Government support the countless self-employed people who have been excluded from all help, and we need a long-term extension to the furlough. We need a bold green recovery plan, an increased carers allowance, access to free school meals and better mental health services, and maybe the time has come to recognise that universal credit has gone wrong. We need to investigate a universal basic income, and listen to the voices from our cross-party parliamentary groups, the devolved Administrations, the Mayors and the public bodies up and down the country—
Imran Ahmad Khan (Wakefield) (Con) [V]
To the uncorrected myopic, today’s Opposition day debate could appear as a chance for Labour to claim an advantage, by criticising the Conservatives’ economic record. This view is a mirage. I thank the Leader of the Opposition for choosing this subject. He has given us a wonderful opportunity to showcase the Conservatives, who time and again repair the damage and clean the mess that Labour leaves.
Labour’s economic mismanagement and failure remain the only constants that characterise the end of every period of Labour Government in our history. As day follows night, the Conservative party steadfastly toils to build back better a stronger and fairer economy. In 2010, the outgoing Labour Chief Secretary to the Treasury left a note to his successor saying:
“I’m afraid there is no money.”
Labour’s deficit, which we inherited, was a stunning £153.1 billion. Only through Conservative policies, which reduced Government spending and unleashed the power of the market economy, were we able to enjoy nine years of uninterrupted economic growth.
When we examine the immediate effect of Conservative economic policies in 2010, it is clear that they were the right policies. There was no prolonged or double-dip recession; rather, our recovery outstripped that of all other G7 economies in terms of growth. Conservative management of the economy has meant that 3.4 million more people have entered employment since Labour left office. All measures of inequality fell between 2010 and 2019, and more people were filled with the confidence to set up their own businesses. Since 2012, 75,000 entrepreneurs have been supported through our start-up loans programme, worth more than £623 million. Without these Conservative policies, the Government would not be in the position to provide the support that they have to businesses and individuals affected by the covid pandemic.
Opposition Members might herald our response to the pandemic as a turn towards more Government intervention and a command structure economy, but this is yet another mirage. Conservatives see clearly that the state is the only entity that possesses the necessary heft and resources to respond to national emergencies and, crucially, recognise that such responses are, and must be, only temporary. Labour Members would do well to look at their own track record before trying to lambast the Conservatives and to see how the policies they advocate fail the people in socialist states. It is clear that Conservative policies of less state intervention and unleashing the power of business—