Budget Resolutions and Economic Situation

Robert Syms Excerpts

Monday 21st March 2016 Commons Chamber

[Jon Trickett]

My hon. Friend is right. I shall come to that point shortly.

[Mr Robert Syms (Poole) (Con)]

Will the hon. Gentleman give way?

[Jon Trickett]

I shall make a little progress, if I may, as a lot of people want to speak in the debate.

I was talking about the unfair distribution of cuts. The three most affluent areas in the country have had the lowest amount of cuts to their Government support since 2010, yet lo and behold, the same three affluent councils then received an extra £33.5 million from the Secretary of State’s transitional grant. That £33.5 million was 10% of the entire amount of transitional grant that was given to the whole country, just focused on the three most affluent councils.

I will give way to my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) if she wishes. It seems she does not. I evidently made such a devastating point that she is still reflecting on it.

Let me draw a comparison between the three most affluent councils and the most deprived councils in the country. [Interruption.] This is an important point. I hope Government Members are not scoffing. Liverpool, Knowsley, Hackney and Manchester not only had the most severe cuts to their budgets since 2010, but they did not receive a single penny in transitional grant. There is no rational explanation for such a distribution of Government largesse. Perhaps the Secretary of State will consider publishing the criteria by which the civil service distributed that £300 million. We have had no luck so far in finding out how he managed to produce a distribution that favoured the richest councils and penalised the most deprived.

--- Later in debate ---

[Mr Robert Syms (Poole) (Con)]

I have sat in this House for a period of time, and Budgets come and go, but what is important is the direction of the country over a period of years. When we came into office in 2010 in coalition, we inherited the largest peacetime deficit—nearly 11%. That required some tough measures and also some persistence, but fortunately the Government have been quite sensible. They have not pushed the deficit down in four years, as we heard earlier in the debate; they have done so with regard to the real economy. We now find that the budget deficit over the next year or two will be down to the levels it was at pre-crash, before 2007. It is not caring or even very sensible to run large deficits or build up large debts for future generations.

The Government have met many spending commitments. In the course of the last six years, they have managed to reduce the tax rate, particularly on many of the lower paid, but the backdrop is that they have done something that many were sceptical about: they have created a jobs miracle. The British economy has performed tremendously well over the past six years at creating jobs. Compared with the rest of Europe or the rest of the world, we have done a fantastic job. That is because employers have been sensible and employees have been sensible, sometimes accepting the fact that they have to be more productive or accept lower pay rises, but it is also because the Government’s policies of ensuring a combination of welfare reform and pushing up allowances—the rate at which people pay tax—have provided a big incentive for people to take employment.

There were two events on Wednesday: one was the Budget, but the other was the employment figures, which I want to focus on briefly. We have employment in Britain of 31.42 million—a record. That is a massive number of people, and it is up nearly half a million over the last year. We have real wages growing at 2.1%—above inflation—which means that living standards are slowly starting to recover, albeit perhaps not fast enough. In this Budget, the Government have again pushed up the allowances before people pay tax, but they also have proposals for a living wage, which should help to repair living standards, which we all want.

The number of people in private sector employment is 26.1 million—a record level. The claimant count has fallen in the last year—102,500. Even youth unemployment is down, while the number of those on unemployment benefit is down to its lowest since the 1970s, so there is a pretty good record on what is happening in the British economy. The Government have created a framework and they have the stability and a plan—a long-term economic plan. Employers have been able to invest, employees have taken sensible decisions, and we have got a lot of our citizens into work. We all know that one of the best ways out of poverty—one of the best ways for people to skill themselves; one of the best ways to get the most out of life—is, for those who can, as my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) said, to be given a job. That gives people hope and an opportunity for the future.

I do not think we say enough in this House about how the British have done well. If we look in the back of The Economist, as I occasionally do, at the relative rates of unemployment and employment across Europe, we see that Britain’s unemployment rate is lower than Germany’s, which one would not have thought. Our unemployment rate is only a little above that of the United States, which has been recovering pretty well. Indeed, the chances of getting a job in this country are far better than in most countries across Europe. If there is a problem of people migrating to try to get into Britain, it is for reasons: we speak English and it is easy to get employment. Our employment market is far more flexible and robust than most of those in the continent of Europe.

When I looked at the Red Book and the other financial documents that were provided, I was glad to note that the Government were assuming that, although the rate of growth would slow as productivity picked up, we would still end up with unemployment below 5% over the next two to three years. That constitutes a real success of economic policy, changing people’s life chances and giving them far more opportunities to make the best of their lives.

This is a Government for hard-working people, and long may it remain so.