The Economy

Tom Blenkinsop Excerpts

Wednesday 18th November 2015 Commons Chamber

[John McDonnell]

I would be happy to have that co-operation at any stage. What we said to the Chancellor five years ago was that he was going too fast and that he should have been investing in growth, which would have enabled us to reduce the deficit. He promised to reduce the deficit and debt in five years, but he is going to do it in 10. That is a doubling of the target.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Will my hon. Friend remind the House at what rate the Chancellor has accrued debt over the past five years? Has he not accrued approximately the same amount of debt over the past five years as the last Labour Government accrued in 13 years?

[John McDonnell]

The debt has increased by 55% in five years. That is a helpful record.

[Tom Blenkinsop]

So he has doubled the debt.

--- Later in debate ---

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

First, may I apologise to the House for having to leave the debate halfway through to attend a meeting, Madam Deputy Speaker?

I wish to use this debate to talk about my community. Teesside and East Cleveland have suffered huge economic challenges since mid-September. I have tried to use other tools within the House to raise this before, but the situation in Paris at the weekend meant that it was right and proper that that took precedence. This, however, still needs to be put on the record: 2,000 direct jobs have been lost at SSI-Teesside Cast Products in Redcar—a plant I know very well as a former trade union officer there—following its liquidation, with 900 jobs lost downstream; 700 jobs have been lost at Air Products; 70 jobs have been lost at Johnson Matthey; 200 jobs have been lost at Caparo, Hartlepool; 300 have gone at the Tees tax office; and last Thursday it was announced that 350 jobs are to go at Boulby potash in my constituency, with another 350 following that—that represents three quarters of the workforce there, and all of them are miners, so these are well-paid jobs. By any estimation, those statistics are truly dreadful. The direct impact on local people puts them in jeopardy, with their families and friends profoundly affected. It is hard to give proper representation to every single one of those people because of the massive effects on them. I know SSI steelworkers whose partners and sons worked at Boulby potash, and their ability to earn has been completely destroyed.

Those redundancies and potential redundancies are primarily in the private sector and are industrial. I cannot overstate the feeling of abandonment that my communities feel in the face of this onslaught. The all-party group on steel and metal related industry has for a long time made the five industrial asks, but they remain unanswered. I have written to the Chancellor demanding a response on those industrial asks in the affirmative to help not only the steel industry, but all energy-intensive industries. We know that the previous coalition Government reduced the carbon capture and storage programmes from four down to one. I have also written to the Chancellor about that in relation to the Teesside Collective, and my hon. Friend the Member for Middlesbrough (Andy McDonald) raised the issue in Prime Minister’s questions today. We are trying to turn this negative into an opportunity—to seize this bad publicity about industry in our area—and have a profound impact within the Tees economy by giving the Teesside Collective prime candidacy in terms of carbon capture and storage. I believe, and industrialists in the area know there is a means by which, we can not only revive steelmaking, but give a renaissance to process industries in the area if we have a state that is directly involved and provides a CCS scheme there. It has been four weeks since the steel summit and none of the asks by industry, the unions or MPs has been properly responded to.

One of those asks is about the profound issue of Chinese dumping. Some 94% of all Chinese steel that enters the EU enters the UK. There is something seriously wrong with that. We as an individual state can take action and there are lessons for us both within the European Union and with our partner nations and allies; we could act not only protectively together, but as an individual state. That means having a Government who are proactive about trade defence. I cannot go into that now because of time constraints, but the Government should take it far more seriously.

Another big issue is our need for cheaper energy, and we should be supporting coal gasification. The Tees area is right next to the Durham coalfields and there are years and years, if not decades, of coal still under there which can be gasified. That syngas is 50% cheaper than conventional gas. Make no mistake: the United States will turn off the tap of the current shale gas exports we receive at the moment. The only reason we get that gas is because the US does not have enough container vessels to contains its own shale gas. When it does, that tap will be turned off, which will have profound effects on our economy and our ability to keep the lights on. We should be using that syngas to prioritise the steel industry and other manufacturing.

We have also seen our economy exposed to the Chinese economy, with the relevant figure being $500 billion. In terms of steel, energy-intensive industries and manufacturing, China cannot, with its current subsidised practices, get market status from the EU. Ministers need to raise this issue over and over again: market status for China would end the conversation about whether we can maintain our manufacturing whatsoever.

Finally, let me make a point about defence. Unless this country looks at renewing the four Trident boats, there will be no viable way of saving the Dalzell steel site.

[Several hon. Members rose—]

--- Later in debate ---

[Damian Hinds]

At the present time, I have no particular message for the former head of the Federal Reserve, except to say that we inherited the most enormous deficit. We will continue to bring it down, which the British people gave us a mandate to do, and we will pay down the debt, because if we do not do that in the good times, when will we ever?

My hon. Friend the Member for Cheltenham (Alex Chalk) reminded us that when the financial crisis hit, the cupboard was bare, because of the structural deficit the Labour Government allowed to build up. In 2010, we immediately began the programme to bring that down. Since then, despite the oil price spike and the eurozone crisis, we have made great progress and have halved the deficit, but much more remains to be done. We set out what that would entail before the election and in the summer Budget: a combination of departmental spending reductions, tax measures and reductions to the welfare bill. Importantly, however, we are maintaining our commitment to the institutions on which Britons most rely: our schools and our world-leading national health service.

Elsewhere, however, we need to make savings, and next week, my right hon. Friend the Chancellor will set out the remaining detail in the autumn statement, alongside an updated fiscal forecast from the Office for Budget Responsibility. I know that right hon. and hon. Members will not expect me to pre-empt what my right hon. Friend will say next week.

We have set out a new settlement for working Britain. My hon. Friend the Member for Eastleigh enumerated some of what we have been doing to help hard-working families, including the increase in the personal allowance. The introduction of the national living wage will directly benefit 2.7 million workers on low wages, and up to 7 million people in total, and it is a measure that will disproportionately benefit women. We are doubling the free childcare offered to working families with three and four-year-olds, we have frozen council tax and fuel duty and we have capped payday loans—all actions that the Government have taken to support working families.

In the little time available I want to respond to some of the important points that have been raised. The hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) spoke powerfully—as he always does—on behalf of his constituents. He reminded us, as we know all too well, that economic growth does not take place evenly everywhere, and that some places and sectors face significant difficulties. This is a difficult and uncertain time for many people who have been affected by the issues that he raised. As he knows, the Government cannot control the world price of steel, and we cannot cover that entire complex subject in this debate. It is right, however, that the multi-million pound package has been put in place for Redcar and Scunthorpe, and my right hon. Friend the Business Secretary is fully engaged on that issue.

[Tom Blenkinsop]

rose—

[Damian Hinds]

I am so sorry, but I cannot give way because of time.

Many other Members have made important and interesting speeches. My hon. Friend the Member for Horsham (Jeremy Quin) took us back to the golden legacy that the Labour Government inherited, and he reminded us of the key role of work in escaping poverty. My hon. Friend the Member for Monmouth (David T. C. Davies) reminded us that if we are not strong financially we cannot be strong militarily or in our national security.

The hon. Members for Sefton Central (Bill Esterson) and for East Antrim spoke correctly about the importance of investment in driving forward the next phases of our economic growth, and the Government have committed to spending £100 billion in this Parliament on economic and social infrastructure. With the reforms to vehicle excise duty, we will have the strategic roads fund for England. Despite fiscal consolidation, investment as a share of GDP will on average be higher this decade than under the last Labour Government. The hon. Member for Islwyn (Chris Evans) spoke about the importance of ensuring that we fully exploit in this country the innovations we make in this country. That is improving in some of the ways listed by my hon. Friend the Member for Horsham, but we must focus on it constantly.

Being in government brings with it responsibilities, but every difficult decision that we have taken to get this country back on track was opposed by the Labour party. Those decisions were right, and they have put us firmly on a path to a fundamental strengthening of our nation’s prospects. We have got to the stage where the economy is turning the corner. The deficit is down by more than a half, a record number of people are in work, living standards are rising, and low inflation is keeping household bills under control. But, of course, the job is not yet done. Complacency and losing focus and fiscal discipline almost led our country to disaster in 2008, and that would be the worst thing that we could do now for the economic security of Britain.

Balancing the books is not a question of dry economics; it is a moral imperative and vital to our long-term economic security. It is the foundation behind the security of every family in Britain. Only through this Government’s long-term economic plan can we deliver the continued prosperity that Britain deserves, and I urge the House to reject the motion.

Question put.