Budget (North-East)

Debate between Stephen Hepburn and Baroness Chapman of Darlington

Tuesday 17th April 2012 Westminster Hall

[Mr Stephen Hepburn (Jarrow) (Lab)]

This Budget has been drawn up by a Chancellor with no perception or idea of what it is like to live in the north-east of England, and to have to live on a day-to-day basis. On one hand, the Budget cuts the wages and pensions of people in the north-east, and cuts their public services; on the other hand, it turns round and gives a tax cut to the richest 1% of people in this country. It is a Budget that will condemn thousands of families in the north-east to poverty, while it makes a priority of giving tax cuts to business by way of corporation tax cuts. It is a Budget built not on fairness, but on privilege.

This is not the Budget that we wanted for the north-east. We wanted a Budget for growth, to create jobs and the necessary economic activity to make the north-east alive again. Instead, we have a Budget that lines the pockets of the rich by cutting income tax and corporation tax. The Government say that they have changed tax thresholds, and that people will be better off, but that is more than compensated for by the cuts in tax credits and benefits, the scanty increase in the minimum wage, and the increasing cost of travel and utility bills for people in the north-east.

The move to regional pay will be a disaster. As the Secretary of State for Business, Innovation and Skills said, it will stigmatise the north-east as a region of failure. It must not be allowed to go ahead. The Government justify the regional pay policy on the basis that public sector pay hurts the private sector and curtails job creation. What nonsense. How come we live in a region with the lowest wages in the country, yet we still have the highest unemployment, with nine people chasing every job vacancy? It is nonsense.

[Mrs Jenny Chapman (Darlington) (Lab)]

My hon. Friend is making a very good point about regional pay, but the situation is worse than he indicates because up to £1 billion could be taken out of the north-east economy, which would hit all sectors of industry in the north-east, particularly the service sector, cultural industries and retail.

[Mr Hepburn]

My hon. Friend makes a very good point. It is not just the pay of teachers and nurses that affects job growth in the north-east; it is lack of demand. The point that she rightly makes is that every 1% taken out of regional pay in the form of public sector pay cuts sucks an extra £80 million from the north-east economy, causing a spiral down and down.

I am pleased that the Budget is already beginning to implode daily, because people are catching on to the fact that because of tax cuts for the richest in society, charities will receive less, pensioners will receive less, and Greggs pasty eaters will have to pay more. The Budget will not help the people of the north-east. It is a Budget of the privileged, by the privileged, for the privileged. If we really are all in this together as a society, surely it is right that the better-off pay a little more and take the burden off working-class people in the north-east.