The Economy

Robert Syms Excerpts

Wednesday 26th November 2014 Commons Chamber

[Stephen Hammond]

The hon. Gentleman shakes his head again. This is not only deficit denial, but fact denial.

[Mr Robert Syms (Poole) (Con)]

My hon. Friend will, like me, remember sitting on the Opposition Benches and hearing the former Chancellor, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), saying that the previous Government had abolished boom and bust.

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[Mr Brooks Newmark (Braintree) (Con)]

Thank you, Madam Deputy Speaker. I am delighted to follow the right hon. Member for Oldham West and Royton (Mr Meacher).

Notwithstanding the opening remarks of the hon. Member for Nottingham East (Chris Leslie), the Government have made huge strides in cleaning up the economic mess they inherited in 2010. As the Governor of the Bank of England, Mark Carney, said on 9 September,

“There are now over one million more people in work in the UK than at the start of the crisis. Total hours worked are some 4% above their pre-crisis level. The recovery has exceeded all expectations. It has momentum. The Bank’s latest forecast expects real wage growth to resume around the middle of next year and then to accelerate as the unemployment rate continues to fall to around 5.5% over the next three years.”

[Mr Syms]

Does the higher employment not mean that the economy is healing as people’s wages start to rise?

[Mr Newmark]

Yes, my hon. Friend is absolutely right. I will get on to that a bit later on.

This Government have cut the budget deficit by a third. The International Monetary Fund says that the UK is achieving the largest reduction in the headline and structural deficits of any major advanced economy in the world. Furthermore, it is forecasting growth of 3.2% for 2014—the fastest-growing economy this year. Moreover, the Office for Budget Responsibility forecasts growth this year of 2.7%—the biggest upward revision between Budgets for at least 30 years. Employment is up by 1.7 million since the election. In the past year alone, long-term unemployment has fallen by 206,000 and youth unemployment has fallen by 244,000. I was especially delighted that, in the 2013 Budget, the Chancellor adopted the Million Jobs campaign manifesto idea of cutting national insurance contributions for under-21s, which will help young people get into work and open up opportunities for school leavers.

A record number of women are in work. In addition, the annual fall in female unemployment is the biggest on record. This Government have ensured that the UK now has more men and more women in work than ever, and the number of people claiming unemployment benefits has fallen at the fastest rate since 1997.

It is worth noting that the number claiming jobseeker’s allowance has declined. In relation to the previous speakers, it has fallen by 20% in the constituency of the hon. Member for Nottingham East, by 32% in the constituency of the hon. Member for Coventry South (Mr Cunningham) and by 34% in the constituency of the hon. Member for Bristol East (Kerry McCarthy). The right hon. Member for Oldham West and Royton will want to know that the number of JSA claimants has dropped by a whopping 50% in his constituency.

The Government have ensured a fall in borrowing costs to record lows, which has saved money for taxpayers, businesses, home owners and families alike. Inflation was down to 1.3% in October, helping to bring down the cost of living. By almost every benchmark, the UK has made huge strides in turning the UK economy around, and the Chancellor and his team at the Treasury should be congratulated on sticking with plan A and ensuring that the UK is on the path to recovery.

The Government have much to be proud of on the cost of living. I welcome the significant increases in the personal income tax allowance, which rose to £10,000 from April this year. As has been mentioned, that has ensured a tax cut for 25 million people, with individuals paying an average of £705 less in income tax than they did in 2010. Indeed, 2.7 million people have been taken out of tax altogether, thereby reducing their cost of living.

The Government have already reduced energy bills by £193 by removing the green levies originally imposed by the Leader of the Opposition. They are ensuring that energy companies offer the lowest tariffs to customers, thereby reducing the cost of living. The Government have frozen fuel duty for the longest time in more than 20 years, with pump prices 20p per litre lower than if Labour were in power, thereby reducing the cost of living. Indeed, the average motorist will save £11 each time they fill up their tank, as a result of the Government’s actions.

Councils are getting help to fund council tax freezes for a fourth consecutive year, through a grant for local authorities that could be worth more than £700 for average bill payers. The Government’s new tax-free child care scheme will provide 20% support on child care costs of up to £10,000 per child per year, meaning that parents will receive support of up to £2,000 per child per year.

The Government have introduced the triple lock, which means that pensions increase each and every year by the highest out of price inflation, earnings growth or 2.5%. Over the course of their retirement, the average pensioner is about £12,000 better off under the triple lock guarantee, thereby helping with the cost of living. The Government have introduced the warm home discount scheme, which gives pensioners a £135 rebate on their electricity bills, thereby reducing the cost of living. They have permanently increased the cold weather payment from £8.50 to £25, thereby reducing the cost of living.

In conclusion, the Government have much to be proud of. The Chancellor had to make some difficult decisions back in 2010 to ensure that the country could have a long-term sustainable economic recovery. Although we inherited an unemployment rate of 3.4% in Braintree, I am delighted to say that it has now fallen to 1.5%. There has been a marked improvement in youth unemployment too, with the figure falling from 6.3% in May 2010 to 2.6% last month.

As the Governor of the Bank of England said in September, the economic recovery “has exceeded all expectations.” We should not jeopardise all this by returning to Labour’s tax and spend policies which created the financial mess that we have finally begun to clean up. The Government must stick with their long-term economic plan as it is the only sustainable way to raise living standards, help families to manage the cost of living, and offer a better and brighter economic future for our constituents and for our country.

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[Mr Robert Syms (Poole) (Con)]

I thank the Opposition for affording us the opportunity to laud the success of the Government’s economic policy. I do not think we debate economics and how the economy is doing enough, and this is a useful opportunity.

The trick in running an economy is to ensure, as the world economy goes up and down, that the downs are small and the ups are large. We had the biggest downturn in our history at the end of the Labour Government, some of it down to the facts of world economics but some of it down to the fact that you spent rather more than you should have done and did not regulate the banks as well as they should have been regulated—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I do not think I was responsible. Others might wish to take the blame, but I certainly do not.

[Mr Syms]

I am sorry, Mr Deputy Speaker. I have not been in the Chamber for a while, as I have been on a Bill Committee.

We have a coalition that has set out a firm framework for managing the economy and a long-term economic plan. The result is that we have pretty good employment figures, but we all know that many of those jobs are low paid. That is the start of a recovery. The main benefit of people getting jobs is that they are afforded the opportunity to upskill and move into better-paid jobs as the recovery takes hold.

The economy is healing, but it is a long-term project and it will take a while before we get back to what most of us would consider normal economics. Indeed, interest rates will have to go up at some point so that my retired constituents can also get some benefit from the economic recovery. Good progress has been made and the Government have taken a sensible point of view.

The reality is that it is difficult to export if one’s main export markets in the eurozone have trashed their economies by running stupid economic policies, and if the far east is going into recession as well. If we compare Britain and the United States with most of the world, we can see that we are doing better. We have created more jobs in the past four and a half years than the rest of the 27 European Union states combined. Clearly, there is more to do, but Britain has proved that it has an open and resilient economy. We still have some excellent companies. The car industry is reviving and we still have extremely good educational establishments. Ours is an open economy and the City of London is one of the major financial centres. So long as we provide the framework for a decent economy, I am sure the British public will rise to the challenge by producing jobs, wealth and prosperity.

We have all seen an improvement, but there is more to do. We appreciate that many people are struggling on low pay and having a difficult time of it. We do not deny that, but we must set out that we need to stick with the economic policy, and people’s living standards will start to rise. Wage increases are picking up over and above inflation, which is the start of a slow march towards improving living standards.

We should stick to what we are doing, have confidence in our economic policy—

[David Rutley (Macclesfield) (Con)]

Will my hon. Friend give way?

[Mr Syms]

I had better not, because time is limited.

The British economy will benefit from that confidence. I look forward to hearing the Minister’s reply. There is a good story to tell, but we are only part of the way there. There is more to do, and certainly more to do for the many of our constituents who have been hurting over recent years. That is the consequence of a pretty big downturn and a big adjustment. The British people have gone through the period of adjustment pretty well and have accepted the realities. Now, they are looking forward to a sunny upland, and I hope the Government can provide that as the economy strengthens over the next year or two.