Amendment of the Law

Steve McCabe Excerpts

Thursday 22nd March 2012 Commons Chamber

[Mr Sam Gyimah (East Surrey) (Con)]

Listening to today’s debate, I have heard little from Opposition Members to dissuade me from the conclusion I arrived at yesterday after hearing the Chancellor’s speech: that this is a fiscally responsible and fair Budget, but one that continues to build the foundations for our long-term growth and prosperity. What the Government are doing for growth and prosperity will be the focus of my speech. First, however, I want to make a few comments about fiscal responsibility allied to fairness.

I am pleased that the Chancellor chose to stick to the plan—a framework within which all the Government’s decisions are being made. At the beginning of this Parliament, the Chancellor made the right decision, to pay the debts of the past and, after a decade of uncontrolled borrowing, to tighten our belts. It is encouraging that the Chancellor continues to stick to that plan, which was initially unfashionable but has now entered the international mainstream.

The task facing us is not easy, and it will continue to be challenging. The gap between how much we earn and therefore take in and how much we spend has fallen from £156 billion—an all-time high, set just before the coalition came to office—to £126 billion. We have therefore made a lot of progress in balancing the books, but we must not take our foot off the gas, which is why I am glad the Chancellor continues to stick to his plan in this Budget.

It is interesting that Opposition Members no longer call for a plan B. A year or so ago not a day would pass without their calling for that. They are no longer calling for it because plan A is working: the deficit is falling and we are beginning to see private sector-led job creation. That is why the Chancellor is right to stick to his plan and to focus on being fiscally responsible. Very few western Governments could these days have announced the Budget that he has just delivered, and he has been able to achieve that because of his past decisions.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

The hon. Gentleman says plan A is working. Does he agree that it must have been an oversight not to mention at the outset that it would result in damaging growth and therefore pushing up unemployment and the costs of some areas of borrowing?

[Mr Gyimah]

It is precisely because plan A is working that in this Budget we can afford to lift 2 million people out of tax—2 million people who were penalised by the 10p tax introduced by the last Labour Government. Because plan A is working, 24 million of the 30 million workers in the UK can get a tax cut—a very important tax cut in very difficult times. The hon. Member for Birmingham, Erdington (Jack Dromey) said that he would compare his record with our record any day. I say to him that we are lifting 2 million of the poorest people out of tax, while the previous Labour Government penalised them. Our record certainly stands up to scrutiny on that.

Labour has now quietly dropped its plan B, and is instead opportunistically opposing our measure on the 50p tax rate. However, Labour does not say that it would reinstate that rate if it were elected to office tomorrow. It is also saying it would somehow give child benefit to higher rate tax payers.

--- Later in debate ---

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

I begin by apologising to you, Mr Speaker, to the respective Front Benchers and to other colleagues for the fact that I will not be here for the end of the debate. No discourtesy is intended, but I have a pressing constituency engagement.

As I listened to the tail end of the Business Secretary’s speech, I heard him outline the many problems confronting the economy and he cited the banks as one of the remaining problems. It strikes me that for that reason, it is important that Government Members try to appreciate that my constituents in Selly Oak, who work long hours for low pay or care for sick children or elderly relatives, will struggle to understand why one of the key tax give-aways in the Budget will amount to £325,000 a year for one of our leading bankers. He is hardly on his uppers, so people will find that very difficult to understand.

If the central argument about the 50p tax rate is that it has not raised much, that is because people have been avoiding it. The decision to cut the rate amounts to rewarding and reinforcing tax avoidance behaviour. What will prevent the group of people involved from trying to avoid the next band of tax? That is the problem—the Government are saying, “Because they avoided it, we’re going to reward them.”

I now turn to something that the Chancellor did not address. One of the most pressing problems of this age is youth unemployment—all hon. Members share that concern—and I was surprised the Chancellor did not take advantage of the opportunity in the Budget to do a bit more. The Government like to tell us about the number of apprenticeships, but most of those are not for people in the 16 to 18 age range. The vast majority that have been created tend to be for older people. There was an opportunity in the Budget to offer more incentives to small businesses to take on young people, but it was missed. Successful manufacturing companies in my patch such as B.H. Leake, Birmingham Powder Coatings and Cameron Price have all told me that they would like to take on a young person or apprentice, but they find the system extremely complex and apprenticeships difficult to fund. Something to improve that would have been welcome indeed.

I welcome the news on the loan guarantee. I hope the initiative is more successful than others. Quantitative easing has given the banks plenty of money; the problem is that they are still not passing it on to small companies. In the same vein, I welcome the proposals to give support to the computer games and animation industries. That is a really good thing that the Chancellor has done. I hope we get the details of how it will work soon, and that it will not turn out to be mired in complexity and red tape, because that would be a tremendous setback.

There is another area in which the Chancellor could have helped young people. National Express is keen on a travel card for young people. It has been in talks with the Government and was directed to the National Apprenticeship Service, which directed it to learning providers, who said, “We don’t have the budget. Go back to the NAS.” There is quite a lot of evidence that the cost of travel inhibits young people from finding the jobs they are looking for. Anything we can do on that front, Minister, would be most welcome.

I shall conclude by mentioning one other thing. I was relieved that the Chancellor said there will be a White Paper on social care. We cannot afford for that issue to be kicked into the long grass. If it is not tackled in the next year or so, it will not happen in this Parliament, and we will not address the problem.