Budget Resolutions and Economic Situation

Debate between Rachel Reeves and Mel Stride

Thursday 16th March 2023 Commons Chamber

[Mel Stride]

I am very happy to engage in detail with the hon. Gentleman on the specific point he raises, but as to the general point of removing the pensions lifetime allowance, Labour has to decide exactly what its policy is. The right hon. Member for Leeds West (Rachel Reeves) tells us this afternoon that she is against the policy, but we know that it will mean that thousands upon thousands of additional highly skilled people working in the national health service will as a consequence stay in the national health service where we need them. The shadow Health Secretary, the hon. Member for Ilford North (Wes Streeting), who is in his place on the Front Bench, made exactly the same point not that long ago—[Interruption] —saying that a failure to act could cost lives. I say to the right hon. Lady: what is it? Political opportunism, or standing shoulder to shoulder with our national health service and the millions of people up and down the country who depend on it?

[Rachel Reeves]

My hon. Friend the Member for Ilford North (Wes Streeting) called for a targeted scheme for doctors. That would be at a fraction of the cost. Can the right hon. Gentleman tell me how many doctors will benefit from this scheme?

[Mel Stride]

I have made it very clear that thousands upon thousands will be affected. The right hon. Lady is adopting a completely perverse policy in view of the position taken by the shadow Health Secretary until quite recently, when political opportunism around this Budget reared its head. I say that we should stand up for the national health service and the millions of people who depend on it, and we should do what is right for them. That is the right thing to do.

This is also a Budget for parents, with a multibillion-pound extension to childcare support. I note and appreciate the right hon. Lady’s welcome for those proposals. They formed a major centrepiece of the Budget, and I am pleased that she has personally welcomed them.

Leaving the EU: Economic Analysis

Debate between Rachel Reeves and Mel Stride

Wednesday 28th November 2018 Commons Chamber

[Mel Stride]

My hon. Friend has invited me to go into some of the technical detail of what has been put before the House this afternoon. Let me direct him to my earlier remarks about the work that Stephen Nickell will be doing. It will be very detailed and very forensic, and will deal with all the assumptions, including the trading assumptions to which my hon. Friend has referred. Of course, that information will in time—in a short time—be available to the House.

[Rachel Reeves (Leeds West) (Lab)]

However people vote, they expect the Government to put our national interest first. The deal on which we will vote in 13 days’ time clearly does not do that, and we are now confronted with circumstances in which the Prime Minister and the Chancellor are expecting us to vote for a deal that they know—and we all know—means that our economy will grow more slowly, and we will have a smaller economy with fewer jobs and less investment. No one voted for that in the referendum in June 2016, so can the Minister understand why so few MPs are going to vote for this deal in 13 days’ time?

[Mel Stride]

What the British people voted for in 2016 was this. They voted for a responsible Government to enter into robust negotiations with the European Union on behalf of the British people and secure a deal which safeguards our economy, the jobs and the economic future of all our constituents, but which also—critically— delivers on several other issues including an end to free movement, an end to the common fisheries policy and the common agricultural policy, control of our borders, not sending vast sums of money to the European Union, maintaining the integrity of the United Kingdom, and ensuring that we are able to go out and strike trade deals around the world as a global country. That is what we are delivering on.

National Minimum Wage

Debate between Rachel Reeves and Mel Stride

Wednesday 15th January 2014 Commons Chamber

[Rachel Reeves]

Work by the Institute for Fiscal Studies has shown that, taking account of all the changes to taxes, tax credits and benefits since the Government came into office, the average worker is now £850 worse off. The hon. Gentleman points to one thing, but the VAT increase means that people are worse off, as do the tax credit changes. Overall, when all those things are added up, people are worse off, not better off. I hope that he will stay a little longer than his colleague to hear a bit more of the debate.

We know that we need to build on the success of the national minimum wage, because today we face a new challenge: getting our economy working for working people and tackling the worst excesses of insecurity and exploitation in our labour market.

[Mel Stride (Central Devon) (Con)]

Further to the point made by my hon. Friend the Member for Braintree (Mr Newmark), does the hon. Lady not accept that the pressure on living standards is a function not just of wages, but of the costs that average families face? Will she thank the Government, as I do, for having frozen council tax during the period we have been in office, unlike her party, which doubled it during its period in office?

[Rachel Reeves]

If the hon. Gentleman looks at what has happened to living standards, he will see that the average worker is £1,600 worse off than they were in 2010. I am surprised that he applauds what the Government are doing—I certainly do not—because workers in his constituency are worse off, not better off, after three and a half years of Conservative government.

Policy for Growth

Debate between Rachel Reeves and Mel Stride

Thursday 11th November 2010 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

I thank the Backbench Business Committee and the right hon. Member for Wokingham (Mr Redwood) for organising the debate. On the eve of the G20 summit in Seoul, it is especially timely, because growth is the missing plank in the Government’s policy. Yes, we need to bring down the budget deficit, but if we deny the need to grow the economy, we will fail to create the jobs that we need, and a rising dole queue means a bigger welfare bill with less tax coming in, as the shadow Chancellor has put it.

History has taught us that economic recovery following a large-scale financial crisis is tough and that the wrong economic policies from the Government can make things worse. The USA saw signs of positive growth in the 1930s, and fiscal stimulus was withdrawn. The result was the great depression. In the UK during the 1980s, the Government maintained that there was no alternative and raised interest rates to tackle inflation. The result was recession, massive social disruption, huge unemployment, rising public spending and communities that have only recently begun to recover.

[Mel Stride]

Will the hon. Lady tell the House what the lesson was of 1976, when a former Labour Chancellor had to go cap in hand to the International Monetary Fund, because once again a Labour Government had spent the economy out into the long grass?

[Rachel Reeves]

When the hon. Gentleman makes his speech, perhaps he will explain the exchange rate mechanism crisis.

In 1990 Japan had a debt to GDP ratio of 50%. The Government failed to take the swift action necessary to help the economy recover from recession and the result is that, 20 years later, debt in Japan stands at 190% of GDP. Those are the facts. Concentrate too much on one economic variable and we have an unbalanced economy that fails to achieve our economic objectives.

Despite these facts, the Government say again that there is no alternative. Let me offer an alternative programme for growth in which the Government act strategically on the side of business and industry. What would that mean in practice? First, there is a real and pressing need for the UK to be at the forefront of businesses for the future, especially low-carbon industries. To make the most of Britain’s potential requires a Government who support businesses. Instead, we had the tragedy of the cancellation of the loan to Sheffield Forgemasters. That company is a UK success story. It is British-owned, high tech and high skill. The owners built the company up from scratch and it has become a leader in its field. The loan—I emphasise that it was a loan and not a grant—was signed off by civil servants in the Treasury and was a product of two years of careful negotiation. Lord Digby Jones said that the loan would have been paid back 100 times over in benefits to the economy. Before the election, the Deputy Prime Minister described the loan as

“just the sort of thing”

we should be doing, and I have to admit that, on this occasion, I agree with Nick. The loan would have created jobs in the low-carbon industry of the future and added greatly to Britain’s export capability. However, as we all know, the loan has been cancelled, so instead of exporting civil nuclear components, we are exporting jobs to Japan and South Korea. That is not a strategy for growth, but a strategy for undermining it.

The second part of a strategy for growth must include promoting bank lending. The Prime Minister met business people in Watford last week who talked to him about the reluctance of banks to lend and how it was stifling job creation, and the Prime Minister admitted that it was difficult to know which levers to pull to get banks to lend more. His confusion does not surprise me, because I have read the Government’s Green Paper on bank lending. I read it once and assumed that I had missed the section on the action the Government plan to take, so I read it again. But it was not me; it was the Green Paper—a very green paper indeed. There was nothing there! The Government are not taking action. The review of the structure of the banking sector is still a year away, and in the meantime businesses are being denied the chance to grow.

The third component of a growth strategy is investment in the skills of the future. As the Prime Minister has just led a delegation to China, it is timely to reflect that in China and India last year 8 million people graduated from university. In contrast, on investment in higher education, the Government have reduced the university teaching grant by 80% and are making students bear the full cost of a university education. This is no way to grow the British economy.

The fourth component in a strategy for growth must be investment in our regional economies. In my region of Yorkshire, we take huge pride in our industrial heritage, and we want to build a future we are proud of as well. However, while the Leeds local enterprise partnership has been given the chance to go ahead, I have not found a single business leader in Leeds who would not prefer to continue with our successful regional development agency, Yorkshire Forward. A quarter of Yorkshire will not even be covered by a local enterprise partnership, and in the north-east that rises to more than 70%. Support for RDAs is strong not just in Yorkshire. John Cridland, the policy director at the CBI, likened the Government’s regional and economic strategy to throwing the baby out with the bathwater.

Where does this leave us? Investment in Sheffield Forgemasters will not go ahead, the banks continue to rein in lending, university funding is cut to the bone, and powers are being taken away from our regions to determine their own economic future. We all agree that the budget deficit needs to be cut, but the Government must match their ambitions for cuts with an ambition for growth that British businesses and workers can be proud of. Britain could be a world leader in the jobs and technologies of the future, but only if the Government put in the policies to make this a reality.