The Economy

Stephen Hammond Excerpts

Wednesday 26th November 2014 Commons Chamber

[Chris Leslie]

The previous Government did the right thing after that banking crisis by getting growth moving forward—growth that had the rug pulled from under it by the lack of confidence shown by the Chancellor and the measures he took in that autumn statement back in 2010 and in his emergency Budget.

The Government’s long-term plan is little more than trickle-down economics, which has failed in the past and will fail again in the future. The share of national income held by 90% of earners has shrunk since this Government came to power, whereas the share of the cake held by the wealthiest 1% has—surprise, surprise—gone up.

We need a plan that genuinely delivers a recovery for the many, not just for the few. We do not need the slogan-heavy, content-light, trickle-down plan of Treasury Ministers, but we need action on house building, which is at the lowest level since the 1920s, with a goal of building 200,000 new homes each year by 2020. We need a minimum wage rising as a proportion of average earnings and real incentives for the living wage. We need the expansion of free child care for working parents, paid for by the bank levy that the Government failed so spectacularly to collect. We need a cut in business rates for small firms, rather than a reliance and a focus only on corporation tax cuts for big businesses. We need an independent infrastructure commission to deliver the transport networks that our economy needs, rather than what suits the Government’s short-term political needs. We need to tackle the abuse of zero-hours contracts, we need to hear the Government argue for Britain to play a leading role in a reformed European Union, and we need a real economic plan that can enable us to earn our way towards rising living standards for all, not just for the few. Those are the priorities for next week’s autumn statement.

[Stephen Hammond (Wimbledon) (Con)]

rose—

[Chris Leslie]

I will give way one last time.

[Stephen Hammond]

I am interested to hear the hon. Gentleman’s words, but let us write some facts into the debate about living standards. Will he deny the statistic from the House of Commons Library which shows that real average weekly earnings were falling faster between 2008 and 2010 than they were after 2010? Will he deny the statistic which shows that the average earnings of those who had been in a job for over a year have risen by more than 4% in the last year? Will he deny the fact—this, too, is a statistic from the House of Commons Library—that 71% of all the jobs created in the last year have been full-time jobs?

[Chris Leslie]

I do not know where the hon. Gentleman has been, but did he not see the headlines in all the newspapers about the results of the annual survey on hourly earnings that the Office for National Statistics published last week? According to the ONS, the average weekly pay of full-time workers went up by just £1 between 2012 and 2013. That is a rise of just 0.1%, far below the rate of inflation. Prices continue to rise, but pay, wages and earnings do not keep pace with them. Government Members may not realise that. In the world that they inhabit, life is sweet—everything is fine in the world that they inhabit—but for most of our constituents, times are tough and life is getting harder.

--- Later in debate ---

[Priti Patel]

I am looking forward to coming to the hon. Lady’s constituency tomorrow.

I have made it perfectly clear that we have made a good start but the job is not yet finished. The UK currently has the highest rate of growth in the G7; it is over twice that of Germany.

[Stephen Hammond]

My hon. Friend is right that we have made a good start. The Opposition spokesman talked about opinion polls, but, interestingly, he did not talk about the opinion poll showing that the public saw we had done a good job, and that we have an economic competence lead of 26% over the Opposition and their plans.

[Priti Patel]

My hon. Friend is absolutely right and this brings us back to the heart of this debate. It is about having a long-term economic plan that is tackling the challenges for our economy left by the former Government, while also looking ahead to the future and making sure we have a plan in place.

--- Later in debate ---

[Stephen Hammond (Wimbledon) (Con)]

I am grateful for the opportunity to contribute to this debate this afternoon. It is a pleasure to follow the hon. Member for Coventry South (Mr Cunningham). I listened carefully to his remarks, and feel sure that he would have wanted to put it on the record that unemployment in his constituency has fallen by 32% over the past year and youth unemployment by 48%. That fact goes to the heart of what we are talking about today.

I read the Opposition motion extraordinarily carefully last night. I do not want to use unparliamentary language, so I will speak in economic terms. When we talk about being economical with the truth, we should look at the great speech from the Opposition Front Bench. We had not only deficit denial but fact denial. This motion shrinks away from reality. It is economically and historically inaccurate and, as those on the Opposition Front Bench know, economically inept. I am pleased that the motion has at least one virtue: it gives us the chance to remind everyone in this country that Labour left the largest ever budget deficit in peacetime. It caused the mess that this Government are clearing up. Of course, it is historically the job of Conservative Governments to clear up the mess that Labour Governments leave behind.

It was extraordinary that the speech made by hon. Member for Nottingham East (Chris Leslie) included not only deficit denial, but a denial of facts set out by the Office for National Statistics about the rise in living standards that is beginning due to this Government’s long-term economic policy. We heard no apology from him for the economic mess. No one says that there was not a financial crisis and a banking crisis, but had he listened to my hon. Friend the Member for Enfield North (Nick de Bois)—and responded to my hon. Friend’s point, rather than trying to deny the facts—he would have recognised that the previous Labour Government created a structural budget deficit over a full 10 years, which was why this country had a significantly worse budget deficit than any other European country.

[Chris Leslie]

indicated dissent.

[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.

--- Later in debate ---

[Stephen Hammond]

The former Chancellor certainly abolished boom for much of the time, and he also created busts.

If the hon. Member for Nottingham East reads the ONS statistics, he will see that productivity fell so dramatically while Labour was in government that we had to redefine it. The Labour Government had to redefine long-term unemployment because the numbers were becoming so large. They put people on a course—any course; it did not matter whether it was relevant to a job—and did not create any apprenticeships.

One of the messages that will ring out from the Chamber is Labour’s failure to apologise. Until the Opposition accept that they were responsible for the economic mess, no one in the country will think that they have any credibility. The motion refers to

“a recovery for the many, not just a few”.

I know that the Labour party does not like to discriminate because while it was in power, it was not a question of the many or the few at the top, because we all undoubtedly suffered economic hardship. Labour Members do not want to face the fact that living standards were falling faster between 2008 and 2010 than they have since.

The wording of the motion is simply wrong. While it cites a “recovery for the many”, the many are recovering at the moment. More than 1.5 million people have been taken out of tax, while 26 million are paying less tax. People’s mortgage payments are underpinned by low interest rates. Some 1.3 million people are in new jobs, and although shadow Ministers do not like to accept this, in the past year, 71% of those jobs were full time. Unemployment among to 16 to 24-year-olds is falling faster than ever before. I do not think that the families who are experiencing such things would regard the economic recovery as something that does not benefit them.

I assume that the words “few at the top” in the motion refer to the cut in the 50% tax rate. Labour Members may wish to address that, but I suspect that, like with measures on bankers bonuses, they would spend the money raised many times over to fund a number of things. However, let us examine the supposed injustice about which they make so much noise. Does the hon. Member for Nottingham East wish to intervene to tell us for how long there was a 50% tax rate under the previous Government? It was 36 days in the whole 13 years when Labour was in government.

[Ian Austin (Dudley North) (Lab)]

Would the 50p tax rate be so necessary if people such as the hon. Gentleman did not exploit complex offshore tax arrangements to minimise their tax bills? How can he lecture the rest of us in the House about ordinary families who are not able to afford accountants and offshore tax arrangements?

[Stephen Hammond]

I say clearly to the hon. Gentleman that I pay every piece of tax that is due. I have never exploited anything. The Daily Telegraph wrote a story that was a lie, and he ought to be very careful about making such a remark outside the Chamber. I have made clear statements, which are on the internet, that show clearly that I pay every piece of tax that I am supposed to pay. I have never avoided tax and I pay it entirely. He should be very careful about making those accusations. He is using parliamentary privilege to do so, but that is cheap. He should be very careful because that is unfair. It is wrong, and he should apologise.

[Ian Austin]

I would have no hesitation whatsoever in apologising to the hon. Gentleman, but the story in The Daily Telegraph has not been amended or withdrawn—

[Stephen Hammond]

It has.

[Ian Austin]

I have just read it now. If I have said something about the hon. Gentleman’s personal affairs that is not correct, of course I apologise without hesitation.

[Stephen Hammond]

At the end of the article, quite rightly, The Daily Telegraph points out all the facts that my lawyers have made available, and it now recognises those facts. If the hon. Gentleman wants to make an apology, I shall happily accept it.

The motion refers to a

“tough and fair plan to deliver a current budget surplus and falling national debt”,

yet the Opposition’s spending plans involve £166 billion of extra spending. The hon. Member for Nottingham East talks about Labour’s tough and fair plan and its zero-based review of every pound spent, yet the shadow Chancellor’s article in last night’s Evening Standard said that Labour had so far identified £250 million of savings against that £166 billion of unfunded promises. We hear about unfunded spending promises from the hon. Member for Nottingham East, so will he clarify whether the zero-based review has identified any more savings than that £250 million?

[Chris Leslie]

Our zero-based review of all Government Departments is an ongoing process, but I want to ask the hon. Gentleman about the £7 billion promised by the Prime Minister. The hon. Gentleman is a man of integrity—he has been debating this with my hon. Friend the Member for Dudley North (Ian Austin)—so surely he does not think that the Prime Minister can get away with saying that future growth will pay for that £7 billion. How should that £7 billion be paid for?

[Stephen Hammond]

I am delighted to accept the hon. Gentleman’s word that I am a man of integrity and I hope that the hon. Member for Dudley North (Ian Austin) will also make that clear in the Chamber. It is perfectly reasonable to say that we will implement the policy when the economy allows. That was exactly what the Prime Minister said, as the hon. Member for Nottingham East knows.

The hon. Gentleman also knows that growth in our economy is at 0.7%, in line with data from the past eight or nine quarters, and that the OECD forecasts that the UK will be the fastest-growing economy in the G8 this year and the second fastest next year. He also knows that the deficit has been cut and that our interest rates mean that mortgage rates remain low for many. There is long-term economic progress in an economy that is now 3.4% larger than when we went into recession. Under Labour, borrowing steadily rose throughout the period of economic activity, but this Government are starting to cut the deficit, which is benefiting the many. People have been taken out of tax and business investment is rising. It is clear that our long-term economic plan is delivering for the people of this country, and the only thing that would put that plan in danger would be the election of a Labour Government. The public see through Labour’s plans, as an opinion poll shows that on economic competence, the Conservative party’s rate is, understandably, 26% higher than Labour’s.