Budget (North-East)

Phil Wilson Excerpts

Tuesday 17th April 2012 Westminster Hall

[Phil Wilson (Sedgefield) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate my hon. Friend the Member for Gateshead (Ian Mearns) on securing the debate.

People talk about investment in the region, and three examples of investment have been mentioned. GlaxoSmithKline in Cumbria, which also has a plant in the constituency of my hon. Friend the Member for Bishop Auckland (Helen Goodman), SSI in Redcar, and Hitachi in my constituency have one thing in common: they would not be there were it not for a Labour Government. They were the result of initiatives established and settled under a Labour Government and which came to fruition after the general election. From personal experience, I know how much time and effort went in to ensure that Hitachi came to the north-east of England—it was not certain that it would.

I set a “We are all in this together” test for the Budget, and it did not pass that test. Some 57,000 households in the north-east will lose tax credits. I met a young mother at the weekend with twins—two little boys—who will start school in September. She has lost more than £300 in tax credits every month. That is a lot of money for someone with a young family. I know that 940,000 people will be better off under the new tax threshold, but let us not forget that the Institute for Fiscal Studies has said that the changes coming in this month will mean that on average they will be £511 worse off.

[Tom Blenkinsop]

My hon. Friend gave three examples of programmes starting under the Labour Government: SSI, Hitachi and GSK. That is also the case with DigitalCity in Middlesbrough, where public-led investment increased private-led investment. The hon. Member for Redcar (Ian Swales) referred to information from Experian in relation to Middlesbrough, Hartlepool and Redcar being the hardest-hit areas, but those statistics related not to the RDA, but to an investigation post this Government’s autumn statement.

[Phil Wilson]

My hon. Friend is right. That proves how much we have to celebrate what the previous Labour Government did for the north-east of England. The hon. Member for Redcar (Ian Swales) mentioned the minimum wage. The minimum wage has been frozen for people under the age of 21. It has gone up by only 11p this year as a consequence of the decisions made by this Government. At the same time, 4,000 to 5,000 taxpayers on the 50p tax rate in the region will on average receive a tax cut of £10,000 each. If that does not show that we are not all in this together, I do not know what does. The Government put VAT on pasties, but they did not put VAT on caviar.

The 40p tax rate has been ignored by many people. The threshold has been reduced from £42,475 to £41,450, so that 300,000 people will be brought into the 40p tax rate. How many more people will lose a proportion of their child benefit because of the reduction in that threshold? Will the Minister indicate whether she knows that figure? By reducing the threshold, the number of people paying the 40p tax rate in the region has gone up by 8%. There are now nearly 110,000 people paying the 40p tax rate. Little by little, the Government’s fairness agenda is being found out—actually, we are not all in this together.

I am very concerned about regional pay. The hon. Member for Stockton South (James Wharton) mentioned the flexibility in local pay in the court system, but we reduced the number of bands from 40-odd to five; we did not increase the number of bands. The latest survey by the TUC states that 68%—more than two thirds—of Conservative voters do not believe that regional pay in the public sector will boost jobs in the private sector.

The Budget is divisive. It is also complacent. It does nothing for growth, not just in the north-east of England, but in the rest of the country.

[Sir Roger Gale (in the Chair)]

Order.