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Mr Temporary Deputy Speaker, it is a pleasure to follow two totally different maiden speeches, one from the hon. Member for Worcester (Mr Walker) and the other from the hon. Member for Bethnal Green and
Bow (Rushanara Ali). They are different people from different constituencies and different backgrounds, but they have a shared determination to see an end to the blockade of Gaza. Many in the House share that determination, and I hope that we will see proper progress in the middle east during this Parliament.
Today's debate is fundamentally about the economy and I am delighted to take part in the debate on the Gracious Speech today. I should like to comment on much of what the Chancellor said. His description of the economy left to the new coalition Government is well known and the numbers that back it up are equally well known. The deficit was forecast last year to be £173 billion, but this year it is forecast to be £156 billion-still 11%-plus of gross domestic product. UK national debt is sitting at £1.2 trillion on the treaty calculation and is forecast to rise to £1.6 trillion, approaching 90% of GDP by 2014-15.
We know the last Labour Government's response to this recession-to make real-terms cuts of £500 million for this year to the Scottish budget, before recovery was secured. Against everything that they professed in public, they began cutting the budgets early and weakening the ability of the Scottish Government and others to secure the recovery.
Stewart Hosie: I am delighted to confirm to the right hon. Lady that she seems again to fail to understand what real-terms increases and real-terms inflationary costs mean over the period of the Scottish Parliament. There have been real-terms cuts to the Scottish budget this year.
The Chancellor also confirmed that tackling the deficit and debt was the most urgent issue facing this Government, and they have started with £6 billion of in-year cuts. I am delighted that the Scottish Government have taken the opportunity to defer those cuts this year to avoid in-year cuts, which are extraordinarily damaging as they require budgets to be ripped up and jobs to be shed. What have worried me, however, are the comments and criticisms from Labour's Scottish Parliament finance spokesman, who criticised the decision to postpone the cuts. Clearly, Labour will condemn the Tory Government here while its finance spokesman in the Scottish Parliament seems to want the Tory cuts this year in Scotland. That is wholly wrong.
"significantly accelerate the reduction of the structural deficit"
in this Parliament and that the main burden of deficit reduction will be borne by reduced spending rather than increased taxes. I question the logic of that whole approach. The previous Government promised cuts that were deeper and tougher than Margaret Thatcher's. They promised to take £57 billion out of the economy in a single year-2013-14. They also promised £20 billion or so of tax rises and £40 billion or so of cuts. The accelerated attack on the structural deficit and the
smaller contribution made by tax increases clearly indicate further public sector cuts-cuts well in excess of the £40 billion that the Labour Government planned to take out by the time we reached 2013-14.
Labour's plans for taking £57 billion out of the economy represented approximately 3% of GDP, but this Government's plans are likely to go very much further. I was concerned that reducing consumption in the economy in a single year to the tune of 3% of GDP would tip the economy back into recession, but I am more concerned that stripping yet more consumption out of the economy and doing it more quickly-before we have properly secured the recovery-would be even more damaging than Labour's plans.
Remember that at the time of the last Budget, it was only Government consumption, up 2% on the year, that kept the economy afloat. Household consumption was down by 1.9%, business investment was down by 24% and gross fixed capital formation was down by 14%. Even now, following the statement today, we know that household consumption is down by only 0.5% on the year, but business investment is still down by 11% and gross fixed capital formation is down by half that, at 5.7%. This is not the time to cut Government consumption, given that it was up by 3% over the last 12 months and kept the economy afloat.
I do not want anyone to misunderstand me. I was a critic of the deficit and the debt before the recession. I am arguing about how we tackle it now and I believe that we should not go down the route of the Canadian model, which involved 20% cuts in public services over three years. We should look again at the New Zealand model, which gave the flexibility to tackle the deficit and the debt over the medium term. That way we could at least benefit from the huge £50 billion-plus medium-term savings from scrapping Trident and its replacement. I am delighted that Mr Speaker has allowed our amendment covering that matter to be put to a vote later today.
There were, of course, a number of other matters economic in the Gracious Speech-the financial services regulation Bill and the plan to introduce a bank levy, for example. Although it is self-evident that there must be depositor protection and that we must protect against systemic risk from bank failure, not least through the application of proper capital ratios, that is what pillar 1 of the Basel II accord was meant to do. Given that the banking crisis commenced in summer 2007 and that Basel II is not meant to be fully implemented until October-November 2012, I would have thought that it would have made more sense for the incoming Government to push for the early international implementation of Basel II rather than unilaterally implementing a domestic banking levy now. The consequences of such a levy are not at all clear.
The coalition's programme also said that they would reform the regulatory system and give the Bank of England control over macro-prudential regulation. But that would leave the Financial Services Authority fundamentally in place, and I remember many criticisms from Conservative and Liberal Democrat Front Benchers about the FSA. Surely the Government will continue to recognise that failure of supervision by the FSA was as important as the weakness of the underlying regulation.
There were many other matters economic in the Queen's Speech and the programme for government, and we will come back to them. I have one final question, and it is about the decision to scrap the child trust fund. Between 2004 and 2008, savings ratios were half those when Labour came to power in 1997. Why are this Government planning to scrap a savings scheme with a 71% voluntary take-up rate?
Mark Pawsey (Rugby) (Con): It gives me great pleasure to follow the hon. Member for Dundee East (Stewart Hosie) and to be able to speak for the first time in this Chamber as the Member for the new seat of Rugby. I often have to explain to people that I represent a town, rather than a sport. As an enthusiastic former player, it seems appropriate to have joined today the all-party rugby union group. Rugby is unique as the only place to have given its name to an international sport. It already receives many overseas visitors, particularly from rugby-playing countries, who make their way to the close at Rugby school, where William Webb Ellis picked up the ball and ran. Much work has already taken place in the town to capitalise on our association with the game, and I look forward to a new visitor attraction in time for the 2015 world cup.
The seat of Rugby includes villages to the north and west of the town, including Binley Woods, where I grew up and attended primary school. It has since become famous as the location of Hyacinth Bucket's bungalow in the sitcom "One Foot in the Grave". The constituency also includes the village of Bulkington, which was familiar to the author George Eliot, who referred to it as Raveloe in her book, "Silas Marner".
I should like to pay tribute to my hon. Friend the immediate past Member for Rugby, who is at my side and has been returned as the Member for Kenilworth and Southam (Jeremy Wright). Having made a very big impact here in his first term, he has now taken the sensible option of a safe seat.
Previous Members include Andy King and, before that, someone well known to me, since that person is my father-James Pawsey, who was first elected for Rugby in 1979. I know that it is not unusual for a son or a daughter to follow their father here, and there are many examples in the current intake. I join my hon. Friend the Member for Worcester (Mr Walker), who spoke just before me, as a son following a father into the same seat. My father still has an excellent reputation in Rugby as a hard-working constituency MP. Throughout the time that I was seeking to be elected, many potential constituents spoke to me about how much he has done for the people of Rugby. I have heard many similar tributes from people here since I arrived-colleagues and staff who remember his contributions, particularly in the field of education. Like my hon. Friend, I feel that I have a very tough act to follow.
I am a product of Rugby's grammar school, which was founded by a locally born grocer, Lawrence Sheriff, who, when he established Rugby school, set aside a sum of money for the education of boys from the town. From an intake of 90 boys at that school in 1968, two of us sit here today; my former school friend and now my hon. Friend the Member for Warrington South (David Mowat), was also elected in May.
Rugby changed significantly in the 19th century with the coming of the railways, and our station is familiar to many; it is on the west coast line, with a journey time to London Euston of just 50 minutes. In Rugby, we welcome the Government's commitment to new high-speed rail lines but are anxious to ensure that fast services will remain on the original network once the new lines are in use. Indeed, Rugby's transport links are the most important feature of our town. Rugby is at the heart of the UK's motorway network. That makes Rugby an attractive location for business in general, and for freight and logistics businesses in particular. Despite the current pressure on the public finances, we believe that it is vital to continue true investment in our network in order to continue to improve it.
Rugby has also had an impact in the field of communications through the Rugby radio site, the masts of which have for many years been visible from the M1. Almost all those masts have now been removed in preparation for a massive housing development, which will be the most important issue facing the town over the next 20 years.
Rugby has experienced major growth before. In the early 1900s, heavy engineering came into our town and Rugby became a major industrial centre. We have a history of producing gas and steam turbines at a company known as British Thomson-Houston, which went on to become GEC and AEI-now amalgamated to form Alstom, a leader in power generation. Rugby is also home to Converteam, a worldwide specialist in power conversion that is building electric engines for the new Queen Elizabeth class of aircraft carriers. Rugby had a pioneering role in other forms of propulsion. In 1937, Frank Whittle built the world's first prototype jet engine in Rugby. I have a personal connection with Whittle's work, because I established a small business in Rugby in a rented unit adjacent to where Whittle carried out his work.
I have spent 25 years starting, running, managing and building up a business, and I have a good understanding of the challenges that businesses face. We need to recognise more effectively those who create wealth and jobs. Small business is ready to make its contribution, but it needs a work force with the skills and the attitude to roll up their sleeves and play their part. Too often, regrettably, there is insufficient incentive for jobseekers to do that, and I welcome the changes in our welfare system that will put incentives to work firmly back in place. I make no apology for putting the case for manufacturing and for business, particularly small business, and I look forward to doing so in the House over the coming years, in addition to representing all the electors of Rugby, with whom I believe I have a special bond.
Rachel Reeves (Leeds West) (Lab): I would like to thank you, Mr Deputy Speaker, for giving me this opportunity to make my maiden speech. It is a pleasure to follow the hon. Member for Rugby (Mark Pawsey) and other new Members of this House, who have done their constituencies proud today.
It is a huge privilege to have been elected as the Member of Parliament for Leeds West and to succeed John Battle, who represented us here for 23 years. John's
work for Leeds West touched the lives of so many people: fighting for, and getting, compensation for the victims of asbestos poisoning in Armley; supporting the Kirkstall festival in the grounds of our beautiful 12th-century abbey; and working with West Leeds debt forum and Bramley Credit Union to drive loan sharks out of our community. It is those, and John's many other achievements-I have mentioned only a handful-that are his legacy.
At a constituency surgery recently, a lady took my hand and said that as long as I was half as good as John Battle, she would be happy. I later received a letter from a constituent who asked that I only be a quarter as good. I hope to exceed both their expectations, but I know that in John Battle I have a fantastic role model and a very tough act to follow. I will fight tirelessly for my constituents to be the champion for local people that John was before me.
Most of all, I will fight for jobs, growth and prosperity-the subject of our debate today. Leeds has a proud economic heritage. Leeds West was built on engineering and on textiles. From my home in Hawksworth Wood, people used to be able to hear the hum of the Kirkstall Forge Engineering plant at work. The forge, originally set up by the monks of Kirkstall abbey, continued in operation until 2002. The industrial revolution transformed Leeds, as well. The Leeds-Liverpool canal brought to our city wool spun at the mills that still stand tall in Kirkstall, Armley, Bramley and Rodley. Of course, Leeds was the birthplace of Montague Burton and of Marks and Spencer-a proud industrial, and retail, heritage. The economy was transformed once again under the previous Labour Government. The city centre is now packed with new businesses, shops, museums and galleries.
More than all that, however, under Labour every single person-most of all, every young person-has been given opportunities to recognise and fulfil their potential. It was my own experience of education under the Conservative Governments of the 1980s and 1990s that motivated me to get involved in politics. When I was at school, there were never enough textbooks to go round. There was no money for new school buildings, so our sixth form was a prefab hut in the playground and our library was turned into a classroom. It is therefore with immense pride that I tell the House that my old secondary school is now a specialist college with two new, modern buildings.
Such investment has been seen up and down the country, in all our constituencies. In Leeds West, every single primary school has been rebuilt or refurbished since 1997. In September last year, the new Leeds West academy and Swallow Hill community college opened their doors-proud achievements, transforming lives and communities.
In his maiden speech in 1987, John Battle spoke of his visit to the Bramley jobcentre. Back then, there were just six jobs on offer in the window, with wages ranging from £2 to £2.28 an hour. No parents can bring up a family on £2-not in 1987 and not on today's equivalent-and no one should be made to work all hours of the day and night and yet remain in poverty. It was that belief and sense of justice and fairness that brought the national minimum wage-one of Labour's proudest achievements-to the statute book.
Throughout the recession, Labour has not abandoned its commitment to social justice. The future jobs fund helped more than 8,000 young people in Yorkshire to get back to work during these challenging economic times and, under Labour, a generation of young people were not condemned to the scrapheap as happened in the recessions of the 1980s and 1990s. However, the economic recovery is fragile and cannot be taken for granted. We need the passion, enterprise and determination that built the Leeds economy of the past to build the economy of the future. For that to happen, the people of Leeds will look to the Government to be on their side and build a future for Leeds based on high skills, new technologies and new industries, with better transport links-including high-speed rail-and a banking sector that supports industry and small businesses, rather than just being out to make a quick profit. The new Government are right to make the budget deficit a priority, but that must not be at the expense of the recovery that Labour has secured.
I started my career as an economist at the Bank of England and focused on Japan at a time when its economy had been in and out of recession for a decade. Today, debt in Japan is 190% of gross domestic product, which is 2.5 times the level in the UK. Japan's debt is so high precisely because its Government did not take swift action to ensure that its economy emerged from recession with strong growth. I urge this Government to learn those lessons from history, because the very worst thing for Leeds West and for Britain would be another recession caused by hasty and unfair spending cuts. I fear that the Government are making those mistakes and putting the recovery at risk. The Chancellor of the Exchequer is reducing industrial support for businesses and universities, watering down the regional development agencies and abolishing the support that Labour introduced to get young people back to work. If the Government really are serious about ensuring the recovery, they must put in place policies for jobs and growth.
We know that the causes of this crisis are global, but the pathways out must be local and regional, so I will fight for Leeds West with determination, and I will do so in a responsible way. It would not be responsible or sensible to oppose every spending cut or tax increase. I will encourage this Government when they get it right and acknowledge that, but when they get it wrong and put the economic future of my constituents and the country at risk, I will hold them to account. John Battle showed us that politics can make a difference and that the right values and policies can transform people's lives. Today more than ever, we need the ambition for justice, equality and fairness that drove John. It is a real honour to serve as the Member of Parliament for Leeds West and, in doing my duty to my constituents, I will act with the hopes, dreams and aspirations of Leeds West as my guide.
Gavin Williamson (South Staffordshire) (Con): It is a great honour to be called and to follow so many fantastic maiden speeches: when the bar is set so high, it is often easier to duck under it. It is a great honour to serve South Staffordshire. It is traditional for hon. Members to pay tribute to their predecessors, and that is easier for some than it is for others.
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