Budget Resolutions and Economic Situation

Debate between Simon Danczuk and Neil Parish

Wednesday 19th March 2014 Commons Chamber

[Simon Danczuk (Rochdale) (Lab)]

I am pleased to follow my hon. Friend the Member for Stretford and Urmston (Kate Green), who made an extremely good speech about how the Budget and the Chancellor’s actions have a direct impact on people—she discussed the social dimensions to this Government’s actions. I wish to concentrate on the economic aspects.

On Sunday, the Chancellor said that we need to tackle the long-term economic challenges facing the country, and I could not agree more. The problem is that he also said that we have “a balanced recovery”—I could not agree less. If we are serious about tackling the big problems in our economy, it is best to start by admitting what they are. The simple truth is that there is a huge imbalance in our economy between the north and the south, and that is one of the biggest challenges our country faces. The Chancellor came into office talking about rebalancing the economy, driven by what he called the “march of the makers”. But this Budget shows that this Chancellor is incapable of matching words with actions. Instead of the march of the makers, we have yet another championing of the capital; we have an economic policy that suits London but that does not suit the north of England.

To see that, we need look no further than tonight’s London Evening Standard, whose front page says it all: “Osborne’s Budget boost for London”. It talks about Barking Riverside housing, Brent Cross regeneration, the Ebbsfleet garden city and the air ambulance for London. I am not saying those things are not needed, but all that was in the Budget speech and it is all about the south-east and about London; there is nothing about the north—about Greater Manchester, Merseyside, Yorkshire or the north-east. That is the reality of it; there is no rebalancing of the economy.

Let us just look at this Government’s record on rebalancing the economy. All of this Government’s major infrastructure projects have been based in London and the south-east. Weeks ago we even had trains from the Pennines being hauled down to Oxfordshire—that is the reality of it.

[Neil Parish (Tiverton and Honiton) (Con)]

rose—

[Simon Danczuk]

I will not give way. These trains were needed in the north to provide vital links between our cities. There is no better example to show where this Government stand and what their priorities are.

Let me give the House another example: the new homes bonus. According to the National Housing Federation, it has taken £104 million from councils in the north and given £342 million to councils in the south, stuffing money into the back pockets of well-off local authorities—that is the reality of it. The regional development fund was supposed to counter many of these issues by pumping regeneration money into the north of England, but even that has been a failure under this Government, with more than £2 billion of the £2.6 billion budget still lying in Government coffers—it has not even reached the targets it was supposed to reach.

Perhaps the worst example of this Government’s southern bias is the way that they have treated business rates. Delaying the revaluation of business rates was a cynical and calculated move designed only to insulate southern businesses from paying fair rates. That is the reality. We now have the ridiculous situation in which struggling retail centres, such as Rochdale high street, are effectively subsidising places such as Regent street in London where business is booming. It is outrageous, and business people in the north of England are quite rightly furious about it.

[Simon Danczuk]

I appreciate the intervention. The reality is that the Government are writing off the north of England, because they know they will not have any success there in the forthcoming general election.

[Neil Parish]

rose—

[Simon Danczuk]

Let me make a little progress. Out of the 25 worst performing retail centres in the country, 21 are in the north. Those are businesses desperately in need of help from the Government, but they are not getting it. The Chancellor did not even mention business rates in his Budget, except in relation to enterprise zones. The Government collect £26 billion in business rates, and nearly every business in the constituencies of Government Members raise them as an issue and yet the Chancellor could not be bothered to mention them. The impact of those rates on businesses in the north of England is even bigger. The simple truth is that the Chancellor has not got the will to reform business rates because he knows that powerful interests in the south will lose out. Instead, what we get are quick fixes, as my hon. Friend the Member for Chesterfield (Toby Perkins) pointed out, and some tinkering around the edges. That is typical of the Government’s approach to the economy. They talk about their long-term economic plan, but the reality is that they shy away from every major challenge.

The Chancellor is very proud of raising the income tax threshold, and it is something that I welcome, but when it comes to addressing the causes of low pay and investing in the vocational skills we need, he has nothing to offer. When it comes to energy, he would rather tinker with the carbon tax than show real leadership and reform the energy market. The Chancellor talks of tough decisions, but he only takes the tough decisions that hit the poor and voiceless, not the rich and powerful. For all the talk of a long-term economic plan, it is becoming increasingly apparent that the only date that concerns this Government is May 2015.

It is clear that this Budget fails to address the fundamental challenge of our unbalanced economy. This London-centric Government cannot be trusted to make the big decisions about the economy of the north. The time has come for more fiscal devolution for our northern cities, such as Greater Manchester, so that they can keep more of their own money and use it to unlock the economic potential that is being wasted by this Government. More than that, we need a Labour Government committed to rebalancing our economy and securing the long-term economic future of the country.