Amendment of the Law

Richard Graham Excerpts

Thursday 20th March 2014 Commons Chamber

[Vince Cable]

The hon. Gentleman has anticipated the point I was about to make. One of the really positive announcements the Chancellor made yesterday recognises the difficulties facing the energy-intensive industries. I am aware that the Alcan smelter closed. I was there; I talked to the management about it and they acknowledged that although energy prices in the UK were one factor in their decision, it was by no means the only one. However, our energy-intensive industries are crucially important and it is not clever for them to close and migrate overseas, as we then simply get carbon leakage and do not do anything to improve the environment. It is therefore very important that they are protected from the increased costs that result from green taxation. The interventions the Chancellor made yesterday, which are very radical and meet the concerns of the industry, primarily centre on the renewables obligations and the feed-in tariffs and giving the industry effective compensation for those costs. I shall now be pursuing that with the European Commission, trying to ensure we get state aid clearance. The feedback we have had this morning from the engineering employers and other manufacturers suggests they are satisfied that the Government have taken a radical step that overwhelmingly meets their concerns.

[Richard Graham (Gloucester) (Con)]

The Secretary of State is making powerful points about the importance of supporting manufacturing. Under the last Government, the city of Gloucester lost 6,000 jobs. We have created 2,500 jobs since this Government came in, quadrupled the number of apprenticeships and seen manufacturing increase in a way that has not happened for about 30 years. Does the Secretary of State agree that the Opposition simply do not understand what manufacturing needs, and that the doubling of the capital allowance is a huge step forward?

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[Richard Graham (Gloucester) (Con)]

Yesterday we heard a Budget which, as The Sun put it, we can all cheer—but not quite all, because the response from the Leader of the Opposition was a litany of class warfare slogans, along with the line “You’re worse off under the Tories”, which, as The Sun rightly concluded, could convince only those with the memory of a goldfish. Today we had another goldfish to entertain us. The shadow Chancellor was more entertaining than his boss, but there was little danger of the truth interrupting his cracks; for he has form, and—whether we are talking about his claim of an end to boom and bust, his prediction of a triple dip, or the flatlining gesture that we saw for nearly three years—the truth has consistently been the opposite of what he says. So when he claimed there was nothing in this Budget to help with the cost of living, he only confirmed to everybody listening that there was, in fact, plenty, and that the statement was consistent with his role as the best reverse indicator in politics.

My constituents in Gloucester will have been absolutely delighted with another axing of Labour’s hated fuel escalator. Some 25 million people around the country will keep £800 more a year from their earnings and 1.5 million lower-income pensioners will not pay 10% tax on their first £5,000 of savings: these things make a difference.

The Opposition is off the mark not just on those changes, but also in their response to some of the smaller, but symbolic, steps, like the changes in bingo tax and the beer duty escalator. I am sure the hon. Member for Rutherglen and Hamilton West (Tom Greatrex) supports his constituents who play bingo and recognises the social benefits of that, but can he explain to them why his Government taxed bingo more than any other form of gambling throughout their 13 years in office?

The shadow Chancellor derided the cut in beer duty. I invite him to come to the second Gloucester beer festival on 4 April this year. The Gloucester brewery was created three years ago; for all 13 years of the Labour Government we did not have a brewery at all, but we do now. Let him come and meet the beer lovers in Gloucester and try to convince them we should get back on to his hated beer duty escalator.

The truth, too, is that we know what manufacturing needs, whereas under the previous Government manufacturing halved. My city, the city of Gloucester, has always made things. We have always manufactured, but manufacturing was the main loser when we lost 6,000 private sector jobs under the previous Government. Between 1997 and 2010 the number of apprentices went down so sharply that by the time of the change of Government there were only 25 people going into Gloucestershire engineering training. Today the figure is more than four times greater.

The changes in the carbon pricing for heavy energy users and the extension and doubling of capital allowances to £500,000 a year are incredibly important to a city such as Gloucester, because our engineering is close to capacity and it needs the stimulus to invest and the opportunity to expand and to grow. If it gets that, it will go on creating more jobs and more opportunities for the young people of my city. Already the numbers of new apprentice starts are four times higher than in 2009-10. This is not about cost of living in terms of energy prices miraculously suddenly being halved; it is about cost of living in terms of the opportunities for young people.

The shadow Chancellor recently came to Gloucester. He did not stay for long and he did not visit a business—he certainly did not visit a manufacturing company and see the transformation that has taken place in that sector over the past four years—but he did make a speech to Labour party members and he spoke briefly to the press afterwards, telling them he was deeply concerned about the rate of youth unemployment in Gloucester. In one respect he was correct in saying that because we always need to do more—we must go on bringing it down—but actually the figures have come down sharply and are some 25% lower than they were at the last general election. Youth unemployment is coming down and will go on coming down.

Today we have been discussing a Budget for people who make things, and in a city that makes things, such as Gloucester, that is good news indeed.

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[Mr Ellwood]

Again, my hon. Friend makes a valid point.

Finally, I come to the deficit, and how much the Government must borrow to balance the books. The OBR predicts that the deficit will continue to fall. We should remind the Opposition that when they took office in 1997, they inherited a sound economy. Up to 2002, the Labour Government made a surplus. Then the wheels came off, one by one. By 2004, the deficit was up to £33 billion, by 2008-09, it had increased to £69 billion, and in their final year of office, they had to borrow £156 billion to balance the books. Thankfully, a change in Government brought in a new economic strategy and our deficit has reduced to £108 billion this year, which will drop to £95 billion next year. If we stick to this economic plan, we will balance the books by 2018.

Of course, productivity, exports and savings figures are not what they should be, and the Budget addresses that. Time is limited and I cannot go into the details, but I welcome greater incentives.

[Richard Graham]

Does my hon. Friend agree that the remarks from the shadow Chancellor earlier, and indeed some of his colleagues, about the long-term unemployment situation, are important, but only as a proportion of the total unemployment rate in our constituencies, which has come down sharply in most cases since the last election? Those who are long-term unemployed were often not very well educated under the previous Government.