Budget Resolutions and Economic Situation

Penny Mordaunt Excerpts

Wednesday 20th March 2013 Commons Chamber

[Mr Mitchell]

I do not agree at all, and I will come on to address the substantial part of what the Business Secretary said in a moment.

I was talking about the importance of engendering growth in the economy through local activity, and mentioned specifically the work that Lord Heseltine has done in respect of Birmingham. He underlined the importance of the local enterprise partnership and the importance of stimulating growth in an area that remains at the heart of this country’s industrial base. I am reminded that it was only three years ago that I visited the Jaguar factory just outside my constituency in Castle Bromwich. At that stage, two of the three production lines were lying idle and employees were unable to continue to secure work. Now, just three years later, all three production lines are in operation. We see a company that is storming ahead and cannot produce enough cars to satisfy market demand. Last year, it exported more than £10 billion-worth of cars made in Britain and paid in to the Exchequer more than £1 billion of taxation. That real transformation offers hope at a very difficult time in the area of the country I represent. The announcement that we will have a single pot of central money to support local initiatives is enormously important, as is the emphasis that Lord Heseltine places on more effective governance to address the fragmentation and lack of coherence of the business voice, which he has been loud in commenting on.

On the stimulation of growth nationally, today we have heard the Chancellor announce the excellent news about cutting taxes on jobs. I can think of few measures that could be more effective. Prioritising the changes that make growth easier, cutting business taxes—not easy, and not the popular thing to do—and facing down the vested interests that the Chancellor has to wrestle with every day, are all important measures if we are to ensure that growth is supported nationally. Making life easier for entrepreneurs and businessmen is not the route to easy popularity, but it is the route to long-term economic success and growth.

The way the Government have sought, with single-minded emphasis, to boost trade with the BRICs—Brazil, Russia, India and China—and the other countries with growing economies has had a significant effect. I wonder whether my right hon. and hon. Friends on the Treasury Bench think that all the lessons from around the world on how to boost growth and entrepreneurialism have been learned. Encouraging entrepreneurship, improving links between schools and business, and making sure that all the lessons from these emerging markets are learned are all very important. For example, I wonder whether there is more to learn from Singapore, Sweden, Finland and the Netherlands, which consistently top the global competitiveness report issued by the World Economic Forum. I wonder whether the lessons from New Zealand, Denmark and Canada, which are consistently identified as the best countries in which to do business, have been learned, or whether there is more that we can learn from the Nordic and Asian economies that have been so successful in harnessing information and communications technology for economic growth. The Chancellor deserves great credit for the brave steps he has taken today to secure growth.

The Scylla of debt has hung around our neck, and hangs around the economy’s neck, for the reasons that are well known across the House. Anyone who doubts its scale and the anxiety it causes, as my hon. Friend the Member for Chichester (Mr Tyrie) set out, needs only to look at the absurd proposition, coming out of the crisis in Cyprus, that one can confiscate arbitrarily people’s deposits. That underlines the extraordinary difficulties that overweening levels of debt, which we and other countries face, cause.

It is irksome to repeat so regularly the irresponsibility of the previous Government in the levels of debt they left and the measures they took during the good times, but that needs to be repeated so that people understand the sheer scale of what happened. I remember studying the papers on the National Security Council when we were conducting the defence review, and noting that there was, allegedly, from the previous Government a £38 billion black hole in their accounts. I was unable to believe that that was possible and sent back the papers on the assumption that there was a decimal point in the wrong place. But no, it was confirmed on the Monday morning that there was indeed, under the previous Labour Government, a £38 billion black hole in the defence budget. We should never allow them to forget the appalling difficulties that their stewardship of the economy and their legacy have left for the coalition to clean up.

[Penny Mordaunt (Portsmouth North) (Con)]

Will my right hon. Friend give way?

[Mr Mitchell]

I am afraid that I will be out of time, if my hon. Friend will forgive me.

It is difficult to confront the welfare budget, as the Government have done. We still spend £23 billion on housing benefit. In looking at the welfare budget, which I urge my right hon. and hon. Friends to continue to do, they should of course be guided always by the principles of fairness and decency. It is enormously difficult to cut the welfare budget. People blithely say that we can cut £1 billion off the welfare budget, as that is just 0.5% of that budget. However, cutting £1 billion would take £1,000 off 1 million people, or £100 off 10 million people. That underlines the scale and the difficulty, and the essential need to tackle welfare budget commitments, curtail expectations, and determine the sort of welfare system we will have as a society in the next 30 or 50 years and that we can afford. It is essential that our reforms do that.

In conclusion, I wish to praise the Government and the Chancellor’s courage and wisdom in continuing the international development budget and ensuring that next year we meet our historic pledge of spending 0.7% of GDP on development. Of course, the special protection for this budget is justified only by the results it achieves and the effect it has, and we should never forget that this hard-earned taxpayers’ money has to be justified. Every pound we take off the taxpayer must deliver 100p of value on the ground. This is a huge investment in our country’s future prosperity and security and in the prosperity and security of our children and grandchildren, which is why the Government are absolutely right to stand by the commitment, ensuring that the coalition delivers on that historic pledge.

I have spent much of the past eight years of my life trying to work out the most effective use of public money and the most effective way of doing something about the colossal discrepancies in opportunity and wealth that scar our world and that our generations, for the first time ever, have a real chance to address. That is why I am pleased that the Government are standing by our commitment, that every day they continue to underline the effectiveness of development and that they are maintaining the implicit bargain with the public to spend the money well. I hope to hear far more from Ministers about why the development budget matters to our country. I want to hear all of them making that case, so that the sceptics outside can hear why it is important for our country’s economic and political future.

--- Later in debate ---

[Penny Mordaunt (Portsmouth North) (Con)]

I start by paying tribute to all the businesses in my constituency, and up and down the country, for all the jobs and opportunities they have created in the past few years. To have created six jobs in the private sector for every one lost in the public sector is one hell of an achievement. When the coalition came to power, in my constituency there were eight jobseeker’s allowance claimants per vacancy; now there are fewer than two per vacancy. Today’s announcements on cutting corporation tax to the lowest level in the G7 and on the employment allowance, which will see 450,000 business pay no jobs tax at all, are very welcome. Welcome, too, will be the measures the Chancellor announced on the cost of living—particularly, for my constituents, fuel duty. We have spent an enormous sum on holding duty levels down. A litre of petrol is 13p cheaper under this Government than it would have been under the previous Government. That has been money well spent for families and businesses.

I welcome the help on child care costs that has been announced in the past few days. Usually when the word “vouchers” is mentioned I come out in a rash, as vouchers tend to favour Sir Humphrey as opposed to the people who are most likely to benefit from them but are perhaps least likely to be able to navigate their way through a complex bureaucratic system to obtain them. I am very pleased about the care that has clearly been taken in assessing many different ways of administering this scheme, and I am very optimistic about it.

I want to concentrate on the measures we are introducing to help those on low incomes and those most in need. In 2009 the Prime Minister highlighted the plight of a single mother of two earning £150 a week who kept only 4p of every additional pound she earned due to the withdrawal of benefits and the additional taxes that she would suffer. Visibly angry, he told a Conservative party conference:

“Labour…have the arrogance to think that they are the ones who will fight poverty and deprivation…Who made the poorest poorer?... No, not the wicked Tories…you, Labour”.

The Prime Minister’s critique captured how we all felt. We were exasperated not only at Labour’s economic incompetence, which had disadvantaged the poorest, whether they were single mums taxed at 96%, baffled pensioners not collecting their credits or parents driven into poverty by working tax credit maladministration, but that Labour was doing it while hypocritically proclaiming itself to be the monopolistic guardian of the most vulnerable in our society. Its self-congratulation despite the misery of the demographic it proclaimed as its social constituency was insulting on so many levels. That outrage was also felt outside the conference hall, in my constituency and across the country.

In government the Conservatives have delivered. Some £30 billion has been saved from the welfare budget and the amount that used to be doled out in error and fraudulent claims will be spent on something useful—getting people back into work—and those who do work will not be penalised like that single mother.

Our values are right. If we do not believe that the poorest are best served by our policies, we might as well give up and go and do something else. The next time Labour Members line up to ask the Prime Minister or one of his colleagues to look at a particular casualty of the spare room subsidy, he should demand to know what the hell those MPs have done to assist their constituent. Have they tried to obtain a share of the locally administered £30 million, which has been set aside to ensure that those with a qualifying need for a spare room get one? How did that go? The “bedroom tax” label deployed by Labour and, I am afraid to say, the class war displayed in the Leader of the Opposition’s speech today, say more about Labour than about us. Labour is still to engage with any serious thinking about the challenges facing this country or how we can help its most vulnerable citizens in particular.

By contrast, we are reforming welfare, tackling the abuses perpetrated by payday loan companies, simplifying the tax system and taking millions out of paying tax altogether. I am particularly pleased with the Chancellor’s announcement to increase the income tax threshold to £10,000, which will lift 30 million people out of paying tax altogether. Given that the average wage in my constituency is £22,000, there will be a lot of delighted people there. Those on the minimum wage will pay less than half the tax they paid under the Labour Government.

Wearing my hat as the chair of the all-party group on ageing and older people, I also welcome the new flat-rate pension and the cap on social care. The Chancellor is right to protect pensioners, who are often wrongly portrayed as rolling in it. The older someone gets, the more their cost of living increases. I am also delighted that we have been able to do more for the victims of Equitable Life. The Chancellor was correct in saying that that is the right thing to do. I am also very pleased that Combat Stress will benefit from the LIBOR fines. It is a wonderful organisation that does very important work.

In the brief time I have left, I want to say something about the Evening Standard. I feel obliged to say it because its editor is a former hack at The Portsmouth Evening News and, in my view, a person of great integrity. I think that a mistake has been made by the Evening Standard today and to claim otherwise does it a great disservice. The editor issued an apology to Mr Speaker, the House and the Chancellor while he was still on his feet. However, given that Opposition Members are still exercised about it, I shall finish by mentioning a tweet sent today by Charlie Whelan, who was salmon fishing while following the Budget. He said that even if it was a leak we should not worry about it, because he used to do it all the time.