Budget Resolutions

Stephen Hepburn Excerpts

1st reading: House of Commons
Tuesday 28th November 2017 Commons Chamber

[Mr Clarke]

No. I said that I am not going to re-fight the politics of the 2000s and I am not.

This was a strong and sober Budget that I am glad to welcome, just as I welcome the industrial strategy of my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy. It was not dramatic. Some Budgets have plenty of glittering prizes and dramatic changes. This was not exactly a non-event, but it contained quiet, small and valuable measures. That was what we needed. Indeed, it was a sign that the Chancellor of the Exchequer resisted some of the ridiculous lobbying he faced from all sides of the public sector and some of the ridiculous advice he was getting from those who wanted him to buy political popularity or to believe that reckless spending can solve all economic problems. This was the Budget of a competent Chancellor of the kind that this country very much needs at this difficult time.

Luckily for the Chancellor, the background to the Budget was made a little more gloomy by the OBR’s choosing this Budget to change the forecasts that it had, unfortunately, got wrong, and most people did not realise it. There were not many people who pointed out at the time that the OBR was going to be wrong, but the OBR took on a more sensible productivity projection, which gives us considerable problems for the years ahead. The Chancellor has also delivered a Budget at a time when growth has slowed because of the initial impact of the Brexit vote: devaluation and the effect of that on consumer demand.

The background is also one in which monetary policy is not of much assistance. Because of the actions the independent Bank of England had to take after the crisis, we are still being sustained by the aftermath of quantitative easing and quite artificially low interest rates, with the Governor having little opportunity to move rapidly to get back to something like normality. Those interest rates are actually having a distorting effect on some aspects of the markets inside this country. Consumer borrowing is rising to worrying levels and we are now beginning to see demand ease because of the effect of inflation on prices and on the ordinary customer, so it was hardly the kind of Budget that one would envy the Chancellor’s being faced with giving. He faces a lot of problems, and he had also to deal with the uncertainty over the next two or three years.

Uncertainty extends beyond our domestic obsessions: there is great uncertainty globally. We could be threatened if oil prices continue to rise—that has had a dramatic effect on our economy in the past. We are currently being helped by rapid growth in some of our most important markets. The US and eurozone economies are growing at strong rates, and they are important markets to us, particularly the second. Both look fragile, though, and I do not think anybody would guarantee that that growth is going to be sustained for the next two or three years.

The Chancellor and the Government must be careful because, quite plainly and indisputably, the reality is that we do not yet know what form our exit from the European Union will take—this is not the day for debating that—and we do not know what kind of trading deal we will have in a couple of years. As the Governor of the Bank of England confirmed yesterday, if, by mistake, we have a hard Brexit, or a deal-free Brexit—I am talking about mistakes on both sides of the channel because no sensible person would want that —it will be quite a serious shock to the economy of the western world and to this country in particular. Therefore, a prudent Budget was what was required.

Nevertheless, the Chancellor was able to relax fiscal discipline a little—it was rather more than one expected, but he did not lose control. He resisted all the lobbies that were piling in from every public service, with some really quite distinguished public servants giving dramatic descriptions, as they quite often do before a Budget, of the effect on their services. Tens, if not hundreds, of billions will be put in. He was able to ease some of the financial pressures on the national health service within a reasonable level. He rightly found some resources for housing, because we have a dysfunctional housing market. However, he would have been extremely reckless and irresponsible had he gone any further than the slight fiscal easing that he carried out.

How the Chancellor must have wished to give the traditional first Budget of a new Parliament. A Chancellor facing a new Parliament with a decent parliamentary majority does not set out to do a popular Budget— they do the tough and difficult things. One judges a Budget not by whether it makes good headlines the next week and whether everybody is getting very excited about it, but by its impact on the performance of the British economy and on the daily lives of its citizens in two or three years. Had we had a reasonable majority, the temptation would have been to take some tough and necessary decisions, which would have made it easier to shift into other areas. One day, we will stop a fuel tax freeze. One day, we will address the anomaly whereby self-employed people—if they can get themselves so categorised—pay far less in taxation than people in employment doing similar jobs. However, the idea that we can have a majority for either of those measures in this particular Parliament is, regrettably, an illusion.

Dare I say it, but one day, someone will address some of the happy gifts that I receive from the Government as a man past the ordinary retirement age still in full-time work, earning rather more than the national average income? I have just received my tax-free, cash present before Christmas, with which Mr Gordon Brown tried to buy my vote, and the winter fuel benefit. I get my free bus pass of course. I am receiving a retirement pension, which is protected by the triple lock, so that part of my income is rising much faster than that of most of the people I know. When it comes to paying taxation on my salary, which we all receive in this House, I pay less taxation than most people sitting in this Chamber because I pay absolutely no national insurance. Now that is very nice. If I could remember which party gave my generation all those bribes, I would probably vote for the one that gave me most of them, but I cannot for the life of me remember who put them in various Budgets over the years. I could go on.

There is a serious point. Before we all start making reckless promises for—dare I say it?—the next election that absolutely nothing of that kind will be touched by a future Government, we should remember that there are younger people who are in a less fortunate position than I am who are paying taxation to pay for all that and that there are constraints on the Government who would like to spend some more money—as we all would—on very important public services when the opportunity arises. The generational injustice—to use a rather corny phrase that is now very fashionable, but it sums up the problem—which exists in these affairs in this country will one day have to be addressed.

We are still able to do some adventurous things. The industrial strategy of the Secretary of State for Business, Energy and Industrial Strategy shows that, looking ahead, the right things are being addressed and the right priorities are being chosen. We are seeking to advance those changes that have to take place in our economy that will give the next generations the best prospect of making this country, once again, one of the most rapidly growing and prosperous nations in the world.

I applaud the priorities that have been chosen. Plainly, we must invest more in infrastructure. However, I add, as we all agree that we should spend more on infrastructure, that we should avoid believing that all infrastructure spending is automatically a good thing for the environment. Successive Governments of the past have gone in for prestige projects or politically useful ones in marginal seats and so on. All of them need to be appraised sensibly with the help of the private sector and a good business case, so that we prioritise in our infrastructure spending those things that actually boost the real economy and manufacturing and services in this country.

I welcome all that has been said about continuing to address the kind of education required for a modern economy and about dealing with the productivity problem, which has baffled most people. We are not the only country that has found that productivity—for some unforeseen and, actually, not totally understood reason—has failed to rise in the aftermath of the crash. I think that the two things to concentrate on are education and skills training. We have to be sure, and I am not sure myself, that we are going to have the right human capital for the kind of economy that we wish to develop. I represent an east midlands seat, and it has to be conceded that it is particularly in the midlands and in the north of the country that we need to get our schools’ education standards up to the norm in the more prosperous areas. We also need to get skills training of the quality required to provide attractive employees in the kind of sectors of the economy that the Business Secretary described.

Skills training is probably the biggest problem facing the country, except perhaps housing. I have been here for a long time—as I am occasionally reminded by Mr Speaker when he is in the Chair—and we have known for decades that this country has a skills problem. Successive attempts have been made to tackle it, and we are still talking about the same things. It is the quality of the skills training and the relevance of the skills training to the local employment market that we still have to get right.

Finally, a big gap that we still have to address is retraining. Most people will not have one career for their whole life. Even people in work will want to improve their skills or their education to prepare themselves for the next step.

[Mr Stephen Hepburn (Jarrow) (Lab)]

Will the right hon. and learned Gentleman give way?

[Mr Clarke]

I am running out of time; I do apologise.

We are still extremely weak in this country in providing the opportunities for reskilling and midlife training that future workforces will require.

I conclude as I started. This was the right kind of Budget. It shows that we have a competent Government. The Chancellor is the nearest one gets to the strong and stable Government that we promised before we started. He keeps his head, and that is what we require. He has a view to the national interest and a very considerable resilience to the short-term, silly pressures to which he is subjected, particularly by an Opposition who, as never before, go through every problem that is mentioned by saying that the only thing we need to debate is the quantity of money being spent on it. They promise untold billions of unfunded spending in an apparent belief that there is no question in the whole field of government that is not soluble by a little more borrowing and a little more printing of money. That just makes it more important that this side of the House gets it right. The Chancellor and the Business Secretary are getting it right, and I hope that they stay steady on the course they have set for the country.

--- Later in debate ---

[Mr Stephen Hepburn (Jarrow) (Lab)]

We were told that this Budget was going to be a game-changer. We were informed that it would lead to a bright future. I would just like to know, for who? This Budget should have been about tackling the emergency crisis in our public services such as the NHS, where dissatisfaction is up, waiting lists are up and waiting times are up. In fact, the only thing that is down is staff morale, which is at rock bottom.

When we look at what is going in areas like mine, we find that, since 2010, we have had closures of successful NHS walk-in centres used by 26,000-plus people a year and closures of wards, with more to come, under an NHS plan called the “The Path to Excellence”. Local people, having come through cuts and closures throughout the years, call this NHS plan, which was brought up by local NHS management, “the road to ruin” because they have experienced the bogus consultation exercises, only for the result at the end to be that their valued local service was closed.

On pay, there might be a pay increase in the future if NHS staff increase productivity. What a disgrace! It is NHS staff who have kept the NHS going—whether the porters, the nurses or the ambulance drivers—during all the years since 2010 and during these Tory party cuts.

Let me go on to employment issues and social issues. The Chancellor said at the weekend that unemployment did not exist. Well, he wants to come to Jarrow, where unemployment is nearly 2,000—real people and individuals. Everybody on the Government Benches is talking about the jobs boost, but two out of three of those jobs in the north-east are on temporary contracts and that sort of thing. They are insecure jobs—they are not proper jobs.

Somebody should have tackled the right hon. and learned Member for Rushcliffe (Mr Clarke) when he criticised Labour for creating the crash. In the 1970s, the crash was caused by the tripling of the oil price by OPEC in the middle east. The right hon. and learned Gentleman said that Labour caused the crash in the 2000s, but it was an American crash, which George Osborne now acknowledges, caused by the banks.

The right hon. and learned Gentleman talked about the decades of skills we have lost, but that predominantly started in the ’80s, when he was a member of the Government and Thatcher was closing the shipyards, the pits and the steelworks. They were privatising all the utilities and taking out of Britain the skills that we need now. People would not have to be employing Polish plumbers now—they would have a plumber trained in England—if we had the services we had in the past.

As for what we have heard about housing, I laugh—I mean no disrespect—because the 2,000 people on the waiting list in my area cannot afford that sort of thing. They need council housing; they want housing that they can afford—that is what they need. They cannot afford stamp duty and these gimmicks such as Help to Buy, which are absolute rubbish. If that is an example for the northern powerhouse, heaven help us with where we are going.

To sum up, there is lots I would like to say on universal credit, the Women Against State Pension Inequality campaign, social care and education, all of which are so important to the productivity of this country. All I will say is that the Budget was a whitewash, and we cannot wait for a Labour Government to bring in our programme.