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I believe that the Chancellor's Budget is tough but fair. Responsible governance means taking tough decisions now to get our country back on its feet down the road. Fair governance means the better-off shouldering the biggest share of the burden, but most important, it means taking account of everyone in our society, ensuring that pensioners can enjoy dignity in retirement and that families in poverty receive the support they need. The long overdue restoration of the link between pensions and earnings and the triple lock is to be welcomed. The increase in child tax credits for the poorest families demonstrates that fairness is a priority for this Government. Raising the income tax threshold for those on lower incomes is a huge step forward. It means that 880,000 of the lowest taxpayers will be taken out of tax altogether.
I recognise that that was very much a Liberal Democrat manifesto pledge, but it is no less welcome in our coalition for that. It also resonates closely with Conservative values, and I hope that the Chancellor will be able to get even closer to the £10,000 threshold that we all want to see when we can afford it.
Kate Green (Stretford and Urmston) (Lab): It is all very well to say that this Budget will protect the poorest, but how can that possibly be reconciled with a long-term freeze or cut in benefits as a result of linking them to the consumer price index rather than the retail price index? That is to be compensated for only by the short-term measure of increasing the child tax credit. Surely this is not a Budget that is fair to the poorest but one that will leave people who rely on those state benefits in a much worse position.
Angie Bray: I have to say to the hon. Lady that needs must, to an extent, and we find ourselves in these problems thanks to the appalling governance of the Labour party. I also suggest that part of the problem, and the reason why I agree with her that many will feel the pain, is that the previous Government had a record of allowing a dependency culture to grow. Far too many people in this country depend on benefits, and we need to turn that around if we possibly can.
Matthew Hancock: Does my hon. Friend share my surprise that Opposition Members can possibly comment on the fairness of the Budget, given that under the Budget as a whole the richest will pay the most and the poorest will not, and that when they were in office, they doubled the tax of the lowest-paid in this country?
I believe that the measures I have outlined will help ease the unavoidable impact of the rise in VAT. I am well aware that that proposal is especially hard and will affect every single person in the country. Thankfully, food, children's clothing, books and newspapers are still exempted, but we will all undoubtedly be hit to some degree. My question, however, is this: if not a rise in VAT, which will bring in an estimated £13 billion, then what instead? If the Chancellor had not gone for VAT, he would inevitably have had to look elsewhere, including possibly at further curtailment of public spending.
Those on higher incomes will face the biggest share of the Budget burden. Tax credits will be limited to households earning less than £40,000, and the figure will go down. The 50% tax bracket introduced by the previous Government is being kept in place for those earning more than £150,000, and capital gains tax will rise from 18 to 28%. Fiscal drag will also mean more people paying higher-rate tax. I am not exactly thrilled by the prospect of any of those measures, but I accept that they play an important part in providing a fair Budget.
Prosperity for all is the long-term positive message to take from this week's Budget. To move forward and replenish the enormous hole in our finances, we must
support the people who can make that happen. Britain needs positive entrepreneurs, so a reduction in the tax on the profits that they make is welcome news. Allied with reductions in business taxes, it should kick-start our economy and be the decisive action that we need to lift us out of the mess that we are in-the mess created by 13 years of a Labour Government.
In my constituency, there are many fine examples of the type of people who will drive this country forward again through their own enterprise. They will certainly welcome the rise in the national insurance contribution threshold to ease costs for employers, and the cuts in taxes on businesses small and large. The regional growth fund is a great step forward in helping small businesses get off the ground. At the moment its remit excludes London constituencies such as mine. I know that it is only too easy to present an image of London as having streets paved with gold, but as we Londoners are well aware, our capital has many areas of serious deprivation that need supporting. I hope that, in due course, the Chancellor and his team will consider extending the scheme or taking other measures to help grow small businesses across Ealing Central and Acton.
I would also like to put in a plug for Crossrail. I am delighted that the Budget allows capital projects to proceed and I greatly hope that Crossrail will be one of them. It is essential to London and particularly important in my constituency of Ealing Central and Acton.
It is fitting that the Chancellor was allowed to bring out Gladstone's original Red Box to carry his Budget to the House. There can be no doubt that Gladstone, a Conservative before becoming a Liberal, would fully support the coalition and the Budget. He was passionate about free trade and lower taxes when possible, and was clear that borrowing was no way to cover over deficits.
The coalition's task is to turn around the biggest financial deficit that this country has faced since the second world war. The Chancellor and his team have taken courageous and difficult decisions, and provided us with a Budget that gives us every chance to turn the corner, get our country back on track and, most important, open Britain for business again.
Dr Alan Whitehead (Southampton, Test) (Lab): I must say that I felt that the previous speech was derived directly from a Conservative central office handout, which was unfortunately handed out before any proper examination of the Budget and its impact on those who benefit from it and those who do not. It is beyond doubt that the Budget is unfair, and harms those least able to defend and help themselves as well as future prospects for the recovery and development of the British economy. I want to consider that in the context of the energy and climate change theme of our debate.
The Secretary of State, in introducing the theme, purported to defend the role of the Budget in the Department's proper ambitions for a green energy economy and a green recovery in the overall economy, with prospects for green jobs and a change-round so that we produce the goods and services that we need at a fraction of the carbon output. I have great respect for the Secretary of State's commitment to the environment, climate change and energy matters, so I am sad to say that I was reminded of the well known 18th century
ballad, "The Vicar of Bray", in which the vicar of Bray intoned against popery when it was out of fashion and greatly in its favour when it was again in fashion. I hope that the right hon. Gentleman's-and, indeed, the Liberal Democrats'-principles on climate change and a low-energy economy are not affected by the expediencies that the Budget outlines.
We must take action to change the way in which our economy works in the next few years. We must keep in place the goals to ensure that we reduce carbon outputs in our economy so that we reach our target by 2050 of no less than an 80% reduction in carbon output in our country and a 50% reduction throughout the world. I hope that the Government do not resile from that target, even though they have taken away targets for waiting lists in hospitals and for house building. If they do not resile from that target, there will still be a number of imperatives-a number of which the Secretary of State outlined-in terms of the investment needed in our economy over the next few years to turn around how much of it works, and in terms of energy supply and a range of other activities.
That is why I thought, among other things, that the recent Forgemasters decision, although not enormous relative to some of those other areas, was nevertheless totemic. It was a decision for apparently short-term and expedient reasons to take away a loan-not a grant-from a company that would have invested in the future of our economy and, in particular, our low-carbon economy. I hope that the decision is not a precursor to other things for our low-carbon economy, because the coalition document sets out a number of ambitions that will work only if the investment, underpinning and Government support for such changes are put in place. They include ambitions on carbon capture and storage, a green investment bank, a floor price for carbon and a new green deal for home energy efficiency, all of which are essential pillars of that new, green, low-carbon economy. However, the prospect of a 25% cut in the Department of Energy and Climate Change's budget over the next few years suggests, at the very least, that a number of those ambitions will not be supported and funded in the way that will be necessary.
I am concerned that the ambition for a green investment bank might turn out to be no more than a re-badging exercise, unless the Government are prepared to underpin the bank in a way that will secure those investments, which will go into new methods of production and new services that would not otherwise receive support from the traditional banking sector. If the Government have turned their face against loans that produce results far beyond the ambition of this loan, that would suggest that the green investment bank might just be the re-badging exercise that I have described. I would also be concerned if the green investment bank simply sought to replace money that is already in the system-for example, the £400 million for research and development in low-carbon technologies or the £120 million for the promotion and development of offshore wind-with other means, albeit perhaps with inferior outcomes.
As for a floor price for carbon, it is one thing to have an ambition for the future. Setting aside for a moment the fact that we operate in the context of a European Union with a single market and that if our country unilaterally set a floor price for carbon, others might free-ride on it, any floor will have to have intervention
to support it if it is breached. Do the Government intend to provide the assistance to ensure that a floor price can be sustained or do they think-as the Budget suggests-that these things can simply be left to the market?
The green deal has been put in place, through the carbon emissions reduction target and the community energy savings programme, while the Great British Refurb is coming up-we hope-in order to ensure that houses across the country have the energy efficiency that they will require to play their part in the new low-carbon economy. Considerable investment will be needed to underwrite efficient home insulation for social housing and homes that are without cavity wall insulation. That will require several million pounds of Government support. All that was in place prior to the general election. Is it the Government's intention to continue that underwriting or will that be left to the market as well?
A number of important aspects of the development of a low-carbon economy will require that intervention, support and underpinning. I am concerned that, instead of continuing to provide that underpinning, the intention might be to place increasing obligations on energy companies to undertake it instead. There are already obligations on energy companies concerning smart meter introduction, feed-in tariffs and the carbon emissions reduction target and, indeed, carbon capture and storage. As well as hearing about increased obligations on energy companies, we have heard that the introduction of smart meters will be rolled forward by a further three years, which will place a further obligation on energy companies to undertake the financing. Every obligation placed on an energy company increases the fuel price and puts more people in fuel poverty as a result. For every 1% increase in the fuel price, 40,000 people go into fuel poverty.
Is the Budget going to be fair when it increases VAT not necessarily on domestic fuel but on fuel across the board elsewhere, which also indirectly but eventually pushes up fuel prices, leading to more people living in fuel poverty in the future? Will the mechanisms ensure that fairness in fuel access and fuel price becomes a real part of the country's future energy economy?
The final important totem to watch carefully is whether the renewable heat incentive happens over the next year. Will the Government put in the underwriting to make that renewable heat incentive work? If they are not prepared to do that or to make a number of the other necessary underwritings to take us towards the green economy, they will have aspirations without means and the principles set out today will prove to be nothing more than hollow promises.
George Eustice (Camborne and Redruth) (Con): I am grateful for the opportunity to make my maiden speech. I start by congratulating my hon. Friends who have also made their maiden speeches today. I sympathise with my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley) in her frustrations over bureaucracy and her impatience at the way in which Whitehall sometimes adds additional layers to the laws that we in this House set out. I also congratulate my hon. Friend the Member for Hendon (Mr Offord) and I completely agree with him about the importance of building aspiration.
I would like, too, to congratulate the hon. Member for Kingston upon Hull East (Karl Turner), who I believe has just left the Chamber, on a very articulate speech. That might be something that the constituents of Kingston upon Hull East take a while to get used to. I am grateful to the hon. Member for Eltham (Clive Efford)-he has also left the Chamber-for his colourful description of, and personal perspective on, the new coalition, although when I heard him discussing the Stockholm syndrome, I wondered whether he was talking about the process whereby Labour Members stuck with their former leader, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), for such a long time.
The seat that I represent is a three-way marginal, as was the former constituency of Camborne and Falmouth. The election left me with a majority of just 66 over my predecessor, so it has certainly lived up to its reputation again this time around.
It is a special honour for me to represent my home town. I was brought up between Camborne and Hayle, in Cornwall, and my family have lived and worked in the area for more than 400 years. When one has such deep roots in a constituency, one feels a special responsibility for its long-term future.
My predecessor, Julia Goldsworthy, was also local, and came from a well known Camborne family. I pay tribute to her work for the seat in her five years as a Member of the House. When she was elected she was the youngest MP in England and one of the youngest in the country. She was quickly promoted within the Lib Dems, and became first a health spokesman, later shadow Chief Secretary to the Treasury, and finally Communities and Local Government spokesman. She also campaigned locally, most notably on water charges and the injustice in the south-west whereby just 3% of the population are expected to carry the burden of maintaining 30% of our coastline. I, and many other Devon and Cornwall MPs, will be persistent in pushing that agenda forward and trying to find a policy solution that ends that injustice.
Camborne and Redruth is a diverse constituency. To the south is the peace and tranquillity of the Helford passage and some fantastic gardens such as Trebah and Glendurgan, with their collection of plants. To the north is the rugged splendour of the north cliffs and undoubtedly one of the best beaches in the country at Hayle, with three miles of golden sands. At its heart, however, are the three industrial towns of Camborne, Redruth and Hayle, which have made a remarkable contribution to the industrial revolution. The steam locomotive was invented there by Richard Trevithick, the famous Camborne engineer, and the first ever gas lamp was invented by William Murdoch in Redruth. Ever since, there has been a healthy rivalry and competition between those towns and not least their rugby clubs.
The loss of the mining industry and iconic engineering firms such as Holman Brothers in Camborne dealt a serious blow to the Camborne and Redruth area. I truly believe, however, that we can be pioneers again and become the international centre of excellence in renewable energy and, most importantly, wave power. Cornwall's coastline is second to none, and we have the engineering expertise to turn ideas into industry. The wave hub project, currently under construction near Hayle, will be the first of its type anywhere in the world-the first installation that can test commercial-scale wave devices.
The constituency also leads in much of the academic research work that will enable wave power to move forward, especially at the Camborne school of mines, now located at the combined universities for Cornwall at Tremough.
My No. 1 priority for the area will be economic regeneration. I was delighted to hear the Chancellor say in his Budget that he does not propose to make a further cut to total capital spending. If we want to improve our infrastructure and competitiveness and rebalance our economy, it is essential that we continue to invest in that infrastructure. He is also right, however, that we should switch the focus to creating new enterprises and businesses, and that in particular we should encourage the development of new enterprise in those regions such as mine that have perhaps been too dependent in the recent past on the public sector. There is only one way out of the current recession: through new businesses setting up and new industries being created. We need to harness a culture in which entrepreneurs are willing to get out there, take risks, have a go, and feel that they can make a difference.
Earlier, I mentioned Richard Trevithick, the most famous inventor from Cornwall. Like many pioneers, Richard Trevithick never actually made any money from his idea of building an engine, but the rest of the country did, and the world has benefited from that invention and everything that followed it. Trevithick had no regrets about what he had done. Recently, when conducting some research, I came across an interesting extract from a letter that he had written. I shall end with this quotation, because I think it makes a very valid point.
"I have been branded with folly and madness for attempting what the world calls impossibilities, and even from the great engineer, the late Mr. James Watt, who said to an eminent scientific character still living, that I deserved hanging for bringing into use the high-pressure engine. This so far has been my reward from the public; but should this be all, I shall be satisfied by the great secret pleasure and laudable pride that I feel in my own breast from having been the instrument of bringing forward and maturing new principles and new arrangements of boundless value to my country. However much I may be straitened in pecuniary circumstances, the great honour of being a useful subject can never be taken from me, which to me far exceeds riches."
I believe that as we face the present economic challenges and try to deal with the environmental challenge of climate change, we can learn a lot from pioneers such as Richard Trevithick. What we can learn is that Government cannot simply drop all the answers. I have heard a great deal in the debate today about how Government can do everything, but they cannot. In the final analysis, we need talented individuals to come up with the solutions. The role of Government is to enable those individuals, not to try to replace their role.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): I welcome you to your seat, Mr Deputy Speaker. I also congratulate the hon. Member for Camborne and Redruth (George Eustice) on his excellent maiden speech, and my hon. Friend the Member for Kingston upon Hull East (Karl Turner) on his.
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