Budget Resolutions and Economic Situation

Seema Malhotra Excerpts

Tuesday 14th July 2015 Commons Chamber

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

The political presentation of the Chancellor’s Budgets has improved year on year. Sadly, we cannot say the same about his economics. That is not to say there were not some good things in the Budget—indeed, many of them were proposed in the Labour manifesto—but there are holes, contradictions and poor judgments running right through it.

The Budget fails as a coherent and strategic plan for Britain’s growth and prosperity. It is also unfair and unjust. Women will be hit twice as hard as men. A couple working full time on the minimum wage with two kids will be £700 a year worse off. People currently paid more than the minimum wage will be even harder hit.

In 2011, the Chancellor stood at the Dispatch Box and proclaimed a march of the makers. He painted a picture of how he saw Britain’s economy growing and being rebalanced away from financial services. There was, however, no plan behind it and it proved to be more of a mirage than a reality. Manufacturing output began to fall in 2012 and 2013, in part as a consequence of the Chancellor’s reckless rate of cuts. It was only when he began to slow the pace of cuts that manufacturing output began to recover. Some economists argue that had he embraced Alistair Darling’s balanced plan for reducing the deficit this might have been less likely. The Office for Budget Responsibility forecasts that the Chancellor will miss his export target in 2020 by a massive £370 billion.

Today, I would like to focus on two specific issues: investment in logistics and further education. Local businesses in Feltham and Heston tell me that there is an acute shortage of qualified HGV drivers that is crippling the British road haulage industry, and a shortage of qualified forklift truck drivers for manufacturing and distribution. If our businesses do not have enough support to get their products to domestic and foreign markets, we are holding back growth. There are some welcome proposals in the Chancellor’s Budget, but they do not go far or fast enough for the UK logistics sector.

I welcome the proposed compulsory levy on large companies to fund new apprentices, but it will not come into effect until 2017. We have a national shortage of more than 45,000 lorry drivers, and more than 60% of HGV drivers are over 45, which means that the problem is likely to get worse, not better. At least 40,000 drivers are expected to leave the industry over the next two years, but road haulage firms are able to train only 17,000 drivers a year.

Recently, I attended the launch of West Thames College’s logistics centre at Feltham skills centre, near Heathrow. It is an excellent college delivering key skills training for the logistics sector in the local and national economy. The college, from its reserves and with support from the local enterprise partnership, has funded the new centre, but it is now struggling to fund the courses. In his March Budget, the Chancellor cut the adult skills budget, which funds this training, by 24%, and on 4 June, he announced further departmental spending cuts, which might reduce this even further. In his March Budget, he also promised that the Government would work with road haulage firms on an industry-led solution to the HGV drivers’ shortage, including access to, and funding support for, training, yet last week he proposed no resources to tackle these problems, which was a huge disappointment.

While the apprenticeship levy will help from 2017, the crisis is now. The Road Haulage Association has asked for funding for the “driving Britain forward” scheme, developed with Jobcentre Plus, to train new HGV drivers between now and the introduction of the industry-wide HGV apprenticeship scheme. The logistics industry and the British economy need this support, which is why I shall today be writing to the Chancellor urging him to provide the funding the RHA has requested to tackle the HGV driver crisis between now and the introduction of the industry apprenticeship scheme; to stop further cuts to the adult skills budget; and to allow colleges such as West Thames to provide the logistics training that the industry needs and that Feltham and Heston businesses have called for.

The Chancellor has failed to rebalance the economy. His march of the makers appears yet to have taken its first step. I urge him to show leadership and provide the highly skilled workers that the UK logistics sector needs—a capital investment in the British people and British businesses. Keeping people jobless while companies call out for highly skilled employees makes neither economic nor moral sense. If he really wants to get Britain back on the road to recovery, rather than stuck on the hard shoulder, I urge him to take action now.