Budget Resolutions and Economic Situation

Russell Brown Excerpts

Wednesday 18th March 2015 Commons Chamber

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

Thank you for choosing me as the starting point for the reduced time limit of seven minutes, Madam Deputy Speaker.

I wish the hon. Member for Taunton Deane (Mr Browne) all the very best for the future in whatever he does. I will not engage with him in any kind of Eric Cantona-esque thoughts because I would probably do nothing more than confuse myself.

My right hon. Friend the Leader of the Opposition was exactly right to say that any recovery we have seen has not been a national recovery. I will return to that in reference to my constituency. I sat through his response to the Chancellor, and from the Opposition Benches the faces of both the Prime Minister and the Chancellor of the Exchequer were an absolute picture. I just got the impression that they wanted to be anywhere other than on that Front Bench.

When my right hon. Friend mentioned table 2.4 on implied departmental expenditure limits, on page 69 of the Red Book, it became glaringly obvious that there are still some major cuts to come. In fact, the OBR spokesman has said that the cuts will be on a greater scale than anything we have seen. From looking at the Red Book, we know that the return of a Conservative Government means major cuts in 2016 and 2017 followed, surprisingly, by an increase in spending thereafter. That may be just in time for the 2020 election, but perhaps that is just my suspicious mind. What if the long-term economic plan, as it is called, goes wrong, just as the economic plan of the past five years has not got rid of the deficit, as was promised in the Chancellor’s first emergency Budget?

On the issue of savings and annuities, the Chancellor said towards the end of his statement:

“First, we will give 5 million pensioners access to their annuity. For many, an annuity is the right product, but for some it makes sense to access their annuity now, so we are changing the law to make that possible.”

I do not have much of a problem with the policy or the concept, but there is a risk: the public will suddenly be exposed to a risk. I would tell him that such people do not need the right guidance, but they do need good, sound, solid advice. The vultures are circling and waiting to pounce, and the last thing we need is a different form of mis-selling that exposes the most unfortunate in our society.

I said at the beginning that this has not been a national recovery. I constantly share with the House the desperate plight of my constituency and the problems faced by many of its residents—not only the unemployed, but those in working households. Youth unemployment among 18 to 24-year-olds in Dumfries and Galloway has been above the national average every month since this Government came to power in 2010, and February’s figures showed the UK at 3.2%, Scotland at 4% and Dumfries and Galloway at 4.3%. The area is the lowest-paid region in Scotland, and it speaks volumes that the current average wage in the area is lower than when Labour left office. In 2010, the average hourly wage was £11.17, 11.3% below the national average. Last month, that average hourly wage was £10.96, 16.5% below the national average. The number of people in full-time work in 2010 was 34,100, but that has fallen to 33,300. So we are blighted with below-average wages, under-employment and a hard-core group of some 500 young people who are crying out for an employment opportunity and a chance to prove themselves.

The hon. Member for Fareham (Mr Hoban) said that we cannot ignore the deficit, and he is absolutely right, but we also cannot and dare not ignore the fact that some local economies are suffering and are not part of any recovery that the Chancellor painted in his Budget today. Once again, great play has been made of the increase in the personal tax-free allowance—going up to £10,800 next year and £11,000 the year after that—but only those working in excess of 31 hours a week and earning above the minimum wage will actually benefit from those increases. The employment profile in my area clearly indicates that many will see no benefit.

Small businesses are the lifeblood of the economy in my area. Some small businesses have made it clear to me over the last few years that it was a great boost to them when the previous Labour Government reduced VAT to 15%. Those businesses saw a real benefit from the reduction, and could employ one or two additional people. That is important, because if every small business in my constituency took on an additional pair of hands, there would be no unemployment. The fact that the Government have not ruled out a VAT increase, if the Conservatives were to win the next election, will be a worry to small and medium enterprises not just in Dumfries and Galloway, but—I strongly suspect—across the country.

The economy in my area cannot sustain another five years of Conservative Government. That is why May will present the country with an opportunity to take a different direction—a direction and a better plan that puts working people first. It will take a Labour Budget to deliver that.