What does business need? Many of my constituents either run or work in small businesses. They need a level playing field, proper skills and decent quality apprenticeships for the under-25s, not the over-26s who have benefited

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from what has happened under this Government. Young people need a proper choice between vocational and academic study and preparation for the wider world. We need a return to work experience and proper careers guidance in schools, something that has been removed by this Government. We have a Chancellor who did not mention what is in store for those in education. The 10% cut to education is not a sign of a long-term plan; I am afraid it is a sign of further failure from the Government, if they get in again.

The Institute for Fiscal Studies has told us that the holes in the Tory plans, even with the revisions today, can only be covered by further deep cuts to public spending, not least in the NHS, or by the usual Tory remedy, a rise in VAT. “Colossal cuts” in services is a phrase that the IFS has used, and the effect on the economy, certainly in my part of the world, will be to remove further spending power, as well as having an impact on living standards. We will see further cuts in services, which all has an impact, along with the VAT rise, on businesses and their ability to grow and create the good-quality jobs we need.

The Chancellor really has failed the people of this country over the last five years. Our constituents can do so much better than this Tory, top-down approach—the top-down reorganisation of the NHS and the failure of trickle-down economics, which helps a few at the top while the rest see their living standards fall. That has been the reality. What we need is a change of Government, because that Government will deliver success for working people. As we know, Britain succeeds when working people succeed, so let us help the majority of people in this country to succeed. Let us end the exploitation of zero-hours contracts, encourage living wage employers and have a proper rise in the minimum wage, because 20p just does not make up for the years when there was no increase.

Where was the announcement in the Budget about the exploitation of those in the care sector, such as the two women who looked after my mum in her final weeks and months? They did 25 hours in a weekend and were paid for only 10 hours. Like so many people up and down this country, they are completely undervalued, exploited and ripped off, yet we rely on them to look after the most vulnerable in our society.

What of those out of work? Self-employment is one of the options that the Government promote. The new enterprise allowance is great for those who have a business plan and know what they are doing, but the danger, I am afraid, is that it is pushing people into debt. That is what I have seen, sadly, for too many people who have gone down that route, having seen no other option because of the way the Department for Work and Pensions’ benefits system operates.

We need a change of approach. We need to see a better plan—a plan for the many, not the few; a plan that raises living standards, looks after pensioners, makes sure that businesses of all sizes can thrive, and ensures a decent society for us all. That is why we need a Labour Government to be elected on 7 May.

4.39 pm

Sir Peter Bottomley (Worthing West) (Con): We have a national health service we can be proud of; we have a national health service that we have protected;

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and we have a national health service that will get proper funding.

Last evening, having done a fair day’s work, I found I had about 100 e-mails from 38 Degrees, which had saved them up from my constituents then dumped them in my inbox because of a technical problem. They all asked the same question. On behalf of hon. Members on both sides of the House, I should be grateful if 38 Degrees wrote to MPs and got us to reply. It could then circulate our answers to all on its mailing list.

I invite 38 Degrees to ask its members whether they would like to provide their e-mail addresses to MPs so we can do that. It would make life much easier for our staff, who, from within that blizzard of e-mails, have to find the individual requests from constituents who have heart-rending problems and who need instant attention. Too often they will be overlooked because we are dealing with the blizzard of e-mails that 38 Degrees and others send.

Incidentally, I challenge 38 Degrees to put back on its Wikipedia entry the Labour activism of some of its founders. Accurate information was wiped off pretty quickly.

Charlie Elphicke: Oh! Falsifying Wikipedia. Shameful.

Sir Peter Bottomley: It was not falsifying. It was just taking things out that ought to remain. There is a record in the trail.

There are many things in the Budget on which hon. Members on both sides of the House can agree. Some measures could go further in future Budgets. I welcome the suggestion that farmers should be able to average their income over a number of years, but the same problem applies to a number of people in small businesses. A lot of people in small businesses work very hard for very long hours for very many years. They often do not make many profits. Sometimes they have good years and sometimes their business becomes worth a bit and they can sell it. The taxation arrangements are not easy for all of them—they are better for those receiving entrepreneurial relief. For other businesses, if people get a lump sum in one year, they should be able to spread it across a number of years, as under the provision for farmers.

I spend much time serving with hon. Members from both sides of the House on the High Speed Rail (London - West Midlands) Bill Select Committee. A number of farmers, business people and local residents come to see us. My admiration for people in business, whether on the land or in offices or factories, has gone up a great deal. I am very impressed by the quiet way in which people get on with their lives and come to Parliament to petition when their interests are affected.

Some cannot easily come to Parliament. I say this to those on the Treasury Bench: whatever the reasons of money, I do not intend to tolerate for much longer the fact that half the pensioners in this country who retire overseas get inflation increases and the other half do not. The Government say that there is no money, but we are getting out of austerity and into prosperity. The background is chance. We did not have agreements with some of the Commonwealth countries—the old dominions —but we did with other foreign countries, and the EU requires us to treat EU citizens the same.

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It is frankly wrong that someone who has worked in this country and retires overseas should be treated differently on different islands in the Caribbean, in Canada, in the United States of America, in South Africa and other African countries and so on around the world. It is one of those things that is just wrong.

The Chancellor made a number of good jokes, some of which had tax prices attached to them. He said he wanted a review of the variation of wills. If that provision is taken away, a lot of ordinary people will find that they have to revise their wills several times over a decade. Most of us do not know when we are going to die. Being able to vary the beneficiaries of a will is important. People do it not just for tax reduction, but because it allows them to take account of changing circumstances. We have all heard examples of people who have made wills that were right 10 years ago, but that are not right 10 years later. If a variation can be agreed, it is a sensible way to do sensible things. It is not just about reducing tax.

Arguing that the lifetime pensions allowance should be reduced to £1 million is one thing. Someone who has a pension entitlement with a capital sum behind it of £1 million is lucky compared with many, but it begins to look a bit tight for those savers who are reasonably successful in their earnings. I remember once prison visiting with a retired newspaper editor. He said to me, “Tell me about MPs’ pensions.” I did, and said, “What about you?” He said: “When I retired as a newspaper editor, I had a pension pot of £10 million with a pension of £1 million a year.” I said: “Some people have all the luck. And you accuse us of having our noses in the trough.”

I say to the Government that there are some areas where money should not be restricted too much. On housing, we clearly have to improve leasehold, which requires civil servants in the Department for Communities and Local Government to watch what happens. We also need to bring in commonhold properly and make sure that resources are such that managing agents and freeholders do not get away with abusing leaseholders. I am not saying that they all do that, but it happens too often.

Finally, a number of people aged 19 are still doing A-level-type courses in further education and sixth-form colleges. The funding arrangements are becoming too tight for them, so I ask the relevant Departments—the Department for Business, Innovation and Skills and the Treasury—to ask themselves whether that is really their intention. They need to remember that they should not treat young people like racehorses by using their birthday as a rigid time to calculate how much money to spend on them. They all matter to us and I know that Members on both sides of the House care about that.

4.45 pm

Barry Gardiner (Brent North) (Lab): A Budget is not an exercise in economic theory; it is a practical attempt to manipulate the levers of the financial system, both fiscal and monetary, to maximise public goods and public benefit. It used to be assumed in British politics that uncertain inviolable public goods would always be defended by Government, but that assumption has fallen apart over the past five years. From the quality of our air and water to the threat of catastrophic flooding and climate change, many now see that the role of Government has been hopelessly diminished. Over the

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past five years, the Government have stepped back from so many of the key risks facing our country that in the eyes of many people they are no longer fit to govern.

I want to focus on climate change and resource insecurity—two issues on which the Government promised significant progress and on which the Chancellor himself once made significant promises, but which show the true face of this Government and their significant failure.

In 2013 the chief economists of the Department for Environment, Food and Rural Affairs, the Department of Energy and Climate Change, the Department for International Development and the Foreign and Commonwealth Office proposed a cross-departmental review of resource security, climate change and growth. They had been planning it for more than a year. The Chancellor, however, cancelled the review on the grounds that neither resource security nor climate change posed a threat to growth. One has to wonder whether he ever read those letters that the Governor of the Bank of England is obliged to send to him every time inflation misses its target, because all 14 of them specifically cited resource price spikes and resource insecurity as key factors in missing those economic targets.

One has to wonder whether the Chancellor ever listens to the speeches of the Governor of the Bank of England, because Mark Carney has spoken powerfully about a “tragedy of horizons”, whereby new challenges to our long-term prosperity and economic resilience, such as climate change, manifest themselves beyond the standard regulatory and market outlook, which is two to three years. Speaking only last year at the World Bank-International Monetary Fund meeting, Mr Carney highlighted the fact that the vast majority of fossil fuel reserves could become unburnable in the transition to a low-carbon economy, resulting in a problem of “stranded assets”.

Investment horizons, whether in terms of the maturity of debt, the scope of risk analysis or the focus of equity markets, are often much shorter than the lifetime of the underlying assets and the impacts they create. An extended time horizon, such as that advocated by the Governor of the Bank of England, is a critical yet poorly understood dimension of a sustainable financial system. What Carney is pointing out, and, sadly, what this Government and this Chancellor have ignored, is that standard investment practice underestimates the value of future threats, particularly for those that are poorly priced and build slowly over time.

Out of 2,868 companies surveyed about their approach to risk management, 72% identified a current or future risk related to climate. It is clear that businesses and investors agree with the Governor of the Bank of England and disagree with the Chancellor, but the situation is worse than that: businesses and investors are delaying investment because of the regulatory risks this Chancellor has created. Of those 72% of companies identifying climate-related risks, 90% cite regulatory risk as a key factor affecting their business. It is no wonder that Bloomberg screens now include a carbon risk valuation tool. The Chancellor should take a look at it.

One of the desperately short-sighted measures the Government took was to scrap the adaptation reporting power. That means that the companies that own and run our critical infrastructure no longer have an obligation to monitor and report but are free to ignore the risks of climate change, leaving us more exposed to the impacts

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of extreme weather events and flooding. Ironically, the Chancellor claims that that was done as part of reducing the burden on business of unnecessary regulation.

Another short-sighted but devastating decision that undermined the investment capacity and future productivity of UK business was the Government's decision to downgrade the UK climate change risk assessment. I say downgrade, but that is really a euphemism: the Government slashed the number of staff working on climate change impacts from 38 to six in 2012. I do not know how much those 32 officials were being paid, but I am absolutely confident that the cost to British business from the lack of capacity to make a proper future assessment of climate risks and how to adapt to them will be infinitely more.

The impact of climate risk on our economy has been made only too apparent by the devastation left by the floods in 2007 and in 2013-14. This is not an imagined threat of future danger but a proven disaster, so one might expect the Chancellor to abandon cynicism and make the necessary investment to protect the public good. In his autumn statement, the Chancellor announced funding for 1,400 flood defences. It has now been revealed that the lack of partnership funding means that only 93 are fully funded.

A proper Chancellor would understand that the value of the financial system lies in the power it has to catalyse and facilitate a dynamic and efficient real economy. The real economy is that part of the economy that is concerned with producing goods and services as opposed to the part that is concerned with buying and selling on the financial markets. The goal of the financial system should be only to deliver inclusive and sustainable development by facilitating transactions, intermediating capital, transferring risk, transforming maturity, providing liquidity and governing assets. In short, it should serve and support the real economy by enabling capital to be allocated efficiently where it can best be used.

This Chancellor has failed to understand that distinction. Under him, we have seen increasing financialisation of the economy and the increasing importance of financial markets. My point is that the local economy has abundant stocks of financial assets but insufficient flows of investment into the areas where they are required for long-term sustainable development. The World Economic Forum estimates that there is a $1 trillion gap in investment infrastructure each year, but why is that gap important and why is it so important this year? In September, Ban Ki-moon will convene the leaders of the world to agree the sustainable development goals and in December the world will look to Paris and the UN framework convention on climate change to deal definitively with the risks to all our economies posed by climate change.

We must ensure that the misalignment between the financial system and the real economy is addressed and ensure that the financial economy is properly aligned to deliver the investment flows into the productive economy that will supply the need for new energy infrastructure and new adaptive capacity; that will deliver the transforming power of education and public health objectives set out in the sustainable development goals; and that will make for a more, rather than less, inclusive society and end poverty.

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We know that a Budget is not an exercise in economic theory but a practical attempt to manipulate the levers of the financial system, both fiscal and monetary, to maximise public goods and the public benefit. If we want peace in the world, we must create economic justice, and if we want justice we must live sustainably.

4.52 pm

Jackie Doyle-Price (Thurrock) (Con): The hon. Member for Taunton Deane (Mr Browne) is no longer in his place, but I cannot speak without referring to his parting comments, which were characteristically wise. We would all do well to remember his observation that it is our job in this place to inspire, to bring out ideas, to bring beliefs and to bring ambition. It is not the job of people in this place just to do what is politically expedient. We should always strive to do what is right and everyone in this House would do well to reflect on that observation.

I want to share with the House the experience of my constituents in Thurrock over the past five years. It is true that the future for Thurrock is looking much brighter than it did five years ago when I was first elected. Unemployment is falling and has fallen by two thirds in that period. We have more people in work than ever before, and new jobs are being created. The port of Tilbury, which is the primary business in the constituency, is expanding with a new distribution park, and at Purfleet, at my ferry port, three ships a day are exporting cars to Europe—an indication of the renaissance in car manufacturing over the past five years. Our young people also have access to many more opportunities through apprenticeships.

The Government can be very proud of the conditions they have created in Thurrock to enable growth against the odds. We need to make it easy for businesses to expand and grow and create jobs and we can do that by getting out of their way and by having a competitive tax system.

Infrastructure is important in facilitating growth, and I thank the Government for the introduction of free-flow tolling at the Dartford crossing and for the improvements to the A13 and to junction 30 of the M25, despite the fiscal challenges that we face. All those improvements are getting the traffic moving and enabling the creation of more jobs and growth—so a big thank you to the coalition Government for everything they have done for Thurrock.

I thank the Chancellor for what he has done in the Budget today to reduce the tax burden on working people. Lower taxes are in my DNA as a Conservative. I believe that we should all strive to ensure that people keep as much of their earnings as possible. By doing so, we reward them for their hard work and efforts and give them every incentive to succeed. For low-paid workers, the impact of benefit reduction combined with taxation kicking in can mean that they are effectively working for nothing. There can be no greater disincentive to join the world of work than that, and we cannot blame people for making a rational economic choice in those circumstances. The morally bankrupt thing for the Government to do would be to leave that be, but by putting an emphasis on increasing the personal allowance we have taken millions of people—the very people who can least afford to pay it—out of income tax altogether. We can be proud of that.

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I encourage the Chancellor to continue with that policy and I hope that, when the Conservatives are returned with a majority, he will strive to make the living wage the point at which income tax kicks in. I also commend the Chancellor for increasing the allowance for those on higher rate taxes, because the previous rate has not been hitting the most well off. It is important that people who work hard and do the right thing are reassured that the Government are on their side and want them to keep as much of what they earn as possible.

I welcome the fact that the Chancellor has frozen the duty on wine and reduced the duty on spirits, but I want to make an observation about tobacco taxation. The duty on cigarettes is due to go up by 2% plus RPI later this afternoon. A week after the House voted to introduce standardised packaging for cigarettes, I would like to put the Exchequer on notice that it will take a big hit as a result of that measure. I represent a number of ports in my constituency, and I have seen at first hand the challenge that Border Force, HMRC and the port security authorities face in tackling the growing menace of tobacco smuggling. It is estimated that about a third of the cigarettes sold in the London area are contraband, in one way or another. Anyone who visits a car boot sale or market will be able to buy contraband cigarettes for a couple of pounds a packet.

As we move towards a standardised packaging regime in which much of the price of the product will be accounted for by taxation, I am afraid that we will have created a massive opportunity for organised criminal activity. I ask the Treasury to bear that in mind, and I hope that the proposed legal action in relation to standardised packaging does not cost the Exchequer even more billions of pounds. Whatever the good intentions behind the measure, I fear the consequences for the Exchequer. That lost revenue will of course have to be recovered from elsewhere. Apart from that, I wholeheartedly welcome the Budget. Let us continue the good progress that we have made into the next Parliament.

4.59 pm

Ian Lucas (Wrexham) (Lab): I want to start by quoting a Conservative, which is not something that I generally do. The commentator Tim Montgomerie has said of the Chancellor of the Exchequer:

“He promised austerity but repeatedly missed deficit targets and has presided over a massive increase in government indebtedness. He defended Plan A against all comers but pursued a semi-Keynesian Plan B.”

I have been here throughout the debate, and it never ceases to amaze me that Conservative Back Benchers repeat their mantra of the “long-term economic plan”, which of course has failed completely. As we have heard from a number of Opposition Members, in the emergency Budget the Chancellor stood at the Dispatch Box and said that there would be no deficit by now. He has failed in the target he set himself and he has done so because of his own poor policy choices. He inherited economic growth and falling unemployment, but in 2010, following his Budget, he introduced a number of specific policies that strangled growth. First, he increased VAT, the tax the Conservatives never mention. They talk about being a tax-cutting party, but they always increase VAT. It is a tax that takes money out of the pockets of consumers and channels it directly into the Treasury in Whitehall.

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It takes money away from high streets and presents it to central Government. If we look at high streets in the UK today, we see how much pressure is on them, and one reason for that is the choices this Government made on VAT.

In my constituency, the median wage has fallen by 7.4% in the past year alone. That is the reality of what life is like for my constituents today. To hear some of these speeches by Government Members is to hear about a complete fantasy world; that view is reinforced whenever my constituents see this Chamber and hear what Government Members are saying. The lack of demand is having an enormous impact on local businesses and our local economy, and it has all been presided over by this Chancellor, who decided to raise £14 billion from increasing VAT. His decision was so bad that he had to change policy. As Tim Montgomerie said, the Chancellor had to move to plan B. Plan B was a policy he pursued from 2012-13, because he had strangled growth in the two years from 2010 to 2012.

The Chancellor has introduced some public sector projects. It is extraordinary that the Minister responsible for prisons, the hon. Member for South West Bedfordshire (Andrew Selous), has just arrived, because I am about to refer to the proposal to build a prison in north Wales, which I welcome. It is a public sector project, investing public sector finance in the local economy. It is the first prison for a quarter of a century that is going to be run by the public sector and a Conservative Government introduced it. It will bring jobs and money to the local area, so I am puzzled about why a similar project was cancelled by the incoming Government in 2010.

Unfortunately, according to press reports, Her Majesty’s Revenue and Customs office in Wrexham is now to be closed. It is the last such office in north Wales, where a number of specialist tax public employees work. There has been no discussion with me about this and it has become known only because of newspaper articles in the past week. That move will take away 383 jobs, which is more than will be brought in by the new prison, so the picture is mixed.

We are approaching an election again and we have a budget deficit of £75 billion, which the Chancellor has failed to eliminate in the way he promised he would. The IFS tells us:

“Debt is set to peak at over 80% of national income. The deficit is still more than 5% of national income….Difficult choices lie ahead.”

What will this Chancellor do after the election? We recall that both the Conservatives and the Liberal Democrats said before the 2010 election that they had “no plans” to increase VAT. When I pressed the Chancellor on his plans for VAT when he delivered his autumn statement, he said:

“The plans that I have set out involve spending reductions and welfare reductions…We will go on reducing spending and reducing welfare, and we do not need tax increases.”—[Official Report, 3 December 2014; Vol. 589, c. 331.]

The Office for Budget Responsibility tells us today in its report that, if the next Government are to stick to the Conservative and Liberal Democrat spending plans, the budget cuts that will have to be made will be bigger than those implemented by the current Government, and we all know what those have meant.

What do the Conservatives do after elections when they want to raise money? They increase VAT. They did it in 1979, 1991 and 2010. They never say before an

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election that that is what they will do, but when they come in and raise VAT it has a devastating effect on economies and on people on low incomes. I have absolutely no doubt that the spending that the OBR is talking about cannot be done without tax rises. This Government are a tax-raising Government. They put up taxes and VAT in 2010, and raised £14 billion. As night follows day, if a Conservative Government are re-elected, they will increase VAT, and they will use the money raised to fund the positions set out in the OBR report.

5.6 pm

Mark Garnier (Wyre Forest) (Con): It is a great pleasure to follow the hon. Member for Wrexham (Ian Lucas). He made a passionate speech—the one thing I have learned is that Opposition Members feel very passionately about everything they talk about—but it does not mean that he was right. I wish to pick up on two issues, one of which is his reference to Conservatives being a high-tax party and the second is his reference to the fact that the promise to reduce the budget deficit by now has not been met. I look back to 2010 when I and many other Members were first elected to this place. We were listening to the Chancellor, who said that the budget deficit would be reduced to nothing by 2015 and that we would start to see the net debt reducing as a percentage of GDP. We cannot turn away from the fact that, although we were expecting a zero budget deficit by next year, that will not happen. But every single prediction that was made in 2010 was based on what was known at the time, on what was going on in the global economy and in our own economy and on a whole number of other different factors, all of which contribute to the great melting pot that is fiscal and economic forecasting.

What nobody could have understood at the time was the absolutely colossal problems that we would have in the eurozone and in Europe. When a country’s biggest trading partner has massive economic problems—we are seeing economic decline in Europe at the moment—it is inevitable that it will not reach its economic and fiscal targets. What is an extraordinary achievement is that, despite the fact that we are still seeing Government net borrowing going up, we have got to the stage where the economy is growing at such a rate, according to the OBR, that net borrowing as a percentage of GDP will peak this year at 80.4% and decline by 2020 to 71.4%. Finally, we are in a position in which we are reducing public sector net debt as a percentage of GDP. That is incredibly important because at the moment this Government—and the next Government and many Governments after that—are spending revenues not raised in this Parliament but that will have to be raised in 20, 30, 40 and 50 years’ time. It is our children, grandchildren and our great grandchildren who will have to pay down that debt.

I did not get elected to spend the money of future generations. I want to spend this generation’s money—this set of taxpayers’ money. However, when this Government came to power, there were a huge number of problems. There was a fragmented banking system. I am not somebody who will necessarily say that the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) was wrong to bail out the banks. I know that many people say that it was a rash thing to do—I said that at

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the time—but in retrospect, I can see that it was the right thing to do. We could not allow our banking system to collapse, so the decision was right. However, it was also necessary to reform the banking system completely, and this Government have done an enormous amount of work to do that. Credit conditions are improving and we have seen a big change in the financial regulatory system. That is all about ensuring that we remain one of the world’s pre-eminent banking centres and, much more importantly, that we get finance to the small and medium-sized enterprises, businesses and households that need it.

Ultimately, the Chancellor has achieved an extraordinary level of economic success over the past five years, and that is the result of a number of different factors. One of those factors, of course, is the reduction in corporation tax, which will fall to 20% next year. As a result, many companies around the world now view the UK as a tax haven, as evidenced by Pfizer’s AstraZeneca bid, and that is attracting a huge amount of inward investment. The net result has been over 750,000 new businesses created in the UK and 2.2 million new private sector jobs.

However, there are a number of issues that we have to be incredibly careful about. One of the most pernicious problems built up in the bubble years before the financial crisis—I bang on about this—was the colossal increase in household debt, which went from about £400 billion in 1997 to about £1.45 trillion in 2008. That was a huge increase of household gearing from around 100% to 170%. It has since come down to about 140%, and I am pleased that the OBR has predicted that the increase, which will happen, will not take it to the same level.

What does that mean for our constituents? Over the next few weeks we will all be knocking on our constituents’ doors ahead of the general election. They will open their doors and show us a glimmer of their lives. We will see the television flickering in the background, and there will probably be a couple of kids not doing their homework when they should be. What we know is that as a result of those bubble years the average household can rely on only six days of savings should one or both of those people lose their jobs.

The economy is still incredibly fragile. It is in a really dangerous place. If we do not stick to our plans and try to continue to grow jobs, we will end up jeopardising the jobs that we have grown. It is so important to get this absolutely right. When we look at our constituencies, as we will all be doing, particularly after this Budget, we will see that in the vast majority of cases unemployment has dropped. Unemployment in my patch has dropped from 2,300 to 999 today, which is a good thing, but we still have below-average wages and a higher than average number of part-time jobs.

That is why now is not the time to get the bunting out, although an enormous amount had been achieved. Now is absolutely the time to make sure that we do not deviate from the plan that has been proved right in the vast majority of cases over the past five years and that can finally finish the process of restoring this country to economic soundness and fiscal probity.

5.13 pm

Mr David Lammy (Tottenham) (Lab): As a former Universities Minister, may I begin by welcoming the decision on support for PhD students, which obviously

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builds on the progress previously made for masters students? That is hugely important to our economy. I also think that it is fantastic that the Mayor of London has been given greater powers in relation to skills and planning. The move on the London Land Commission is vital if we are to bring forward land for housing here in London.

I would like to have seen something in the Budget on Crossrail 2. It is hugely important that we build on the developments of Crossrail 1 and do not lose the expertise, so we must move on to Crossrail 2. The Chancellor was previously able to find £2 million to see the concept of that scheme move forward, and it would have been nice to see some determination at the Dispatch Box today, but it was not mentioned. There are also vital infrastructure developments here in London, including a bridge in the south-east and the Bakerloo line extension, but those, too, did not feature in the Budget statement.

The major issue facing London and the south-east is housing. Although the Chancellor set out his plans for a new ISA for first-time buyers, when one looks closely at the figures, it does not look as though that will go very far. The average London house is now being bought for £470,000. The average London earner is making £36,000. On any analysis, despite the ISA, which can be topped up to £15,000, a buyer would need a deposit of £75,000. It is going to take a lot of ISAs and a long time to get to that deposit. The Chancellor gives the impression that the Government support home ownership. My guess is that someone on average earnings might be able to find £1,500 to stick into an ISA, but it is unlikely that they will find £15,000, and if prices continue to rise, getting to that deposit might well take a decade or more.

Most people moving into housing in London this year are moving into private rented accommodation. We have heard nada—zero—from the Government about that lion’s share of our population who are in private rented accommodation. Here it is important to say that I am not talking about students or young professionals, often living in overcrowded circumstances. I am thinking of London’s working families, moving every six months because of shorthold tenancies with dodgy landlords. We heard nothing from the Government in relation to rent caps, the lettings crisis and that important group of Londoners—nothing on rents, nothing meaningful on house building and nothing for those who want to get on the housing ladder.

The real sadness is the travesty of social housing in this country. How many council homes did we build in London last year? Forty. Forty council homes were built in London last year. Because of the lack of grant to housing associations, the number of properties that they brought on to the market is also very low, relative to the need out there. At the same time, with right to buy and the huge discounts that exist, thousands of council houses are coming off the market. Of course, there is a discount. The discount available on council houses is £100,000. What happens? Someone buys their council house, gets the £100,000, and then sells it. In what other area of public policy can anyone get £100,000, handed across from the taxpayer? This Government took the bonds that we introduced for young children so that they would have assets, and they are prepared to give £100,000 to those who want to buy their own home and then sell it off.

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So on housing, the biggest crisis facing our country, we have heard nothing. I said that I welcomed the handing over of greater powers in relation to skills to the Mayor, but that is handed over with one hand and taken with the other. It has not gone unnoticed that this Government have plans for a 24% cut in our further education budgets across the country—24%. How does someone get up the ladder if they are stuck in one of those poorly paid jobs in retail in this city and beyond? They often do it by going to night school. I say to the Minister, “Find me a college that’s open past 8 pm for an adult—not a young person—who is available to skill up, and I’ll give you a beer.” There are hardly any such colleges left in the country. The opportunity does not exist. If the Government were serious about vocational skills, they would attend to adults in adult learning who want to move up. Despite all the plaudits on apprenticeships, let us remember that the growth in apprenticeships in London is in customer services and hairdressing. I rest my case.

5.19 pm

Julie Hilling (Bolton West) (Lab): In his autumn statement, the Chancellor said:

“We have shown in this Parliament that we can deliver spending reductions without damaging front-line public services if we are prepared to undertake reform.”—[Official Report, 3 December 2014; Vol. 589, c. 309.]

Today, in two short phrases, he said that to achieve his £30 billion-worth of savings he would cut £13 billion from Government Departments and £12 billion in welfare savings: no more details and no discussion of the misery that this means for many of my most vulnerable constituents. His cuts to front-line services have damaged residents in Bolton West and will continue to do so. People used to say that when the tide rose it lifted all the boats, but this Government have proved that now it only lifts the yachts. Constituents in Bolton West will be £1,600 worse off at the end of this Parliament than they were at the start. On top of the £100 million cut in its budget, Bolton council now has to find a further £43 million in the next two years. Social care is harder to get, youth provision is down, roads are full of holes, and the voluntary sector is cut.

The Chancellor talks about £12 billion savings in welfare. A consortium of northern housing providers, including Wigan and Leigh Housing and Bolton At Home, has undertaken a survey of the impact of welfare reform on their tenants since 2012. Its latest report makes frightening reading. Average debt has tripled in two years and now stands at £3,500. One in two households is regularly unable to meet its weekly debt repayments, which are averaging just under £35 a week—88% higher than at the start of the study just two years ago. People in 23.5% of households are unemployed—the highest level of unemployment since the start of the study—and fewer than one in five is in full-time work, while 69% of those in part-time work want more hours. After their bills are paid, they have just £2.53 left per day. After bills, more than six in 10 households have less than £10 for the week’s spending money. One in five households has used a food bank. Although £3.63 per person is the average spend on food, three out of 10 families have less than £2.86 per day to spend on their food. A total of 53.8% of people say that they cannot heat their homes to the level they need, and 44% have said that their health has deteriorated since the start of the study just

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two short years ago. Tell those people that we are all in it together; tell them that Britain is walking tall again; tell them that the plan is working. Britain needs a better plan. The Tories will never understand that Britain only succeeds when working families succeed.

Young people have borne the brunt of many of this Government’s decisions, with tuition fees trebled, the education maintenance allowance abolished, Connexions got rid of—so they cannot now get the careers advice they need—and youth services about to become the first statutory public service to disappear altogether. The most vulnerable young people are being hit hardest, with 1,000 sanctioned every day. The YMCA has reported on many of the young people that it works with. Those who have been sanctioned say, for example:

“I was unable to eat and it was lucky that the YMCA could help.”

A young woman said:

“It’s how long they left me with no money for food knowing I was pregnant and had to buy my own food.”

Another young person said:

“I went 3 months living on food parcels which is really degrading because you lose all your dignity. It’s not just physically hard, it’s mentally hard.”

Sanctions are supposed to help young people into work, but one young person said:

“My focus turned to survival rather than gaining employment.”

Yesterday evening, Liam Preston from the YMCA told me of its serious concerns about the rise in poor mental health among young people, compounded by the cuts to child and adolescent mental health services and to youth services and other support services. Unless we look after the most vulnerable and make sure that ordinary families succeed, we will never succeed as a country.

A couple of weeks ago, at an event to encourage people to vote, one young woman spoke very eloquently about her life. She said that when someone has to worry every day about putting food on the table, paying their bills and clothing their children, they cannot worry about voting. Another young woman from Foxes of the Fold women’s group in Johnson Fold told me that she now has permanent asthma, because paying the bedroom tax meant that she could not afford to put her heating on all winter. Those are real lives.

This Government have targeted the weak and given tax breaks to the rich, and there have been tragic consequences, such as a rise in suicides. Let me tell hon. Members about one young woman whom I have known for many years; I used to be her youth worker. She has suffered from poor mental health ever since her terrible childhood, and she now lives in supported housing. She is waiting for an appointment at a pain clinic, which has been cancelled four times, and for a procedure to stop her pain, which has been cancelled twice. She was told that, owing to the cuts, her housing project would close. Unsurprisingly, she is now in hospital—she is very poorly—having tried to die. She is a victim of the cuts and of this Government’s policies. It need not be this way.

I presented apprenticeship awards at Forrest construction company in my constituency last week. The chief executive officer told me his story: from apprentice to CEO and

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from poverty to millionaire in 25 years. He recognises the need to put something back into the community, having benefited from careers advice and from people taking a chance on him. His company puts £1 million a year into the communities where it works. He believes that resources, play spaces, facilities and voluntary organisations make a difference to people. He says that if people’s horizons are raised, their lives will improve.

This Government offer not support but simply more cuts. Zero-hours contracts and food banks are not a legacy to be proud of. They do not understand the lives of working families, and they do not have the answers. Britain truly can do better than this, and under Labour it will.

5.26 pm

Mr Iain McKenzie (Inverclyde) (Lab): Members from across the Chamber would probably describe the Chancellor’s statement as quite unbelievable, but for very different reasons. My constituents would certainly describe it as unbelievable because they have again listened to a Budget that is unable to hide the fact that, after five years of this Government, working families are worse off. The Chancellor claimed otherwise, but we know that the real truth is that people in this country are still struggling.

As we know, we have a Chancellor who gives with one hand and takes much away with the other. His tax and benefit changes since 2010, including that big VAT rise, have cost families dearly year after year, and no pre-election tax cut can make up for that. Worse still, we know the Tories are planning more extreme cuts after the election, which will go way beyond balancing the books.

We need a better plan—a Labour Budget that puts working families first. That is why this Budget will not be welcomed by the majority of people in my constituency of Inverclyde, or indeed in Scotland. Labour’s plan for creating wealth does not just target a few at the very top, but, unlike this Government’s plan, aims to help hard-working families across the country. We need something better, recognising that Britain only does well when we all do well and prosper. The gap between rich and poor is still too wide, and history tells us that our society does not fare well when that gap is so wide. We need support for and investment in business; and, as has been said, we need investment in our young people too, to create not just jobs for them, but careers.

The Chancellor claims that the economy is a success, but the reality is failure on every measure which the Government have set themselves to achieve. They have borrowed more, debt is up, low-paying jobs are up and tax receipts are down. All those are connected, for people cannot expect to deliver an economic recovery solely through the millionaires at the top. The squeeze on living standards during the past five years means that the Chancellor has failed to bring in the tax revenues necessary to balance the books. Indeed, the Government have broken their promise to balance the books by 2015. Low and stagnant pay means that tax receipts have been £68 billion lower than expected and national insurance contributions £28 billion lower than expected.

The Government have failed to tackle the cost of living crisis. Wages continue to stagnate, and too many jobs have been created in low-paid, insecure work, rather than in high-paid, high-skill sectors. So what is

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the Government’s solution to fix their mess? As we have heard, it is to take Britain back to spending levels last seen in the 1930s, with further planned cuts of £50 billion. We have already had five years of that and it has not worked. The Government want to run the state, but they do not believe it should exist. The Government’s plan has clearly failed, and we need a different approach. We need a Government with new ideas on how to support business, to create jobs, especially for our young people, and to improve living conditions for hard-working families.

Labour’s Budget would have seen support for working families not simply through tax-and-spend redistribution but by building a more inclusive recovery. Wealth does not flow from the top down: it is created from the bottom up, by working people and families. Every person in every sector of the economy is a wealth creator.

My constituents in Inverclyde will not be fooled by the small rise in the minimum wage announced by the Chancellor to take effect in October. It falls far short of the £7 minimum wage that he promised over a year ago. Under this Chancellor, we have seen the value of the minimum wage eroded and working people’s living standards fall. The hard-working families I represent in Inverclyde are on average at least £1,600 a year worse off under the Chancellor. Without doubt, Labour has set a more ambitious target for the minimum wage, which would see it rise to £8 an hour. We will also act to make sure the national minimum wage is properly enforced, unlike this Government who have failed to get to grips with non-payment, and named and shamed but a handful of companies.

Labour will take action to help to make work pay with an economic plan that works for all, not just a few at the top. We will tackle low pay and address insecurity in the workplace. My constituents tell me on the doorstep that they are struggling to make ends meet as the cost of living crisis bites deep; they need a pay rise and fairness in their contracts at work. Increasing the minimum wage to £8 an hour would instantly benefit more than 6,000 people in my constituency, but we need to go further and encourage more employers to pay a living wage by establishing “make work pay” contracts.

My constituents would also benefit from our compulsory jobs guarantee to provide a job for every young person unemployed for more than a year. The Government sorely lack any plan to give those young people an opportunity in life. The jobs of tomorrow will come from a large number of small businesses, not simply a number of large ones. That is why we also need to look at how overheads can be cut for businesses, but the Chancellor has given us nothing like Labour’s promise to lower energy bills through a price cap or to reform the energy market. Cutting costs for businesses means they have more scope to hire, contributing to the recovery and creating more jobs.

Scotland needs more than low-paid, low-skilled jobs. In Scotland, 82% of the jobs created since 2010 fall into that category. Those jobs fall way short of allowing families to make ends meet from week to week, and we have seen in-work poverty increasing and zero-hours contracts flourish. If we do not get to grips with low pay, low skills and poor contracts, we simply cannot expect Britain to lead the way in existing markets or in developing new markets.

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Labour’s agenda is about fairness and opportunity for all. I hope that this will be the last Budget from a Government focused on millionaires rather than the millions who need help.

5.33 pm

Michael Connarty (Linlithgow and East Falkirk) (Lab): The Budget statement was very interesting, because it was an attempt to rewrite the Chancellor’s last five years. It is strange that the Chancellor forgets where he started, what he promised, and what he tried to do. He came into office five years ago with austerity max. That was his solution. He was going to drive out the deficit by slashing public sector expenditure—and he was applauded to the rooftops by Conservative Back Benchers. Within a year, the economy had stalled, we lost our triple A credit rating and the Chancellor panicked. What did he do? Strangely, he stole Labour’s plan B. He realised that he had to bring something other than austerity and cuts into the economy, because of the damage that they were doing. That is a lesson that the eurozone could learn, because it is doing the same thing across Europe now, with its obsession with austerity and cuts.

The Chancellor brought in some other measures. For example, he started to tax. For the past five-year period, 18% of his deficit cutting has been done by raising taxation and 82% by cuts. That is still the wrong balance, but at least it gave him some income with which to start to give incentives to the business community and to consumers to try to raise the economy.

The Chancellor got to a position where he had halfway run his race. If someone said to me, “I’m going to run a mile,” but then wanted a medal because they had run half a mile, I do not think they would get a medal. Yet he stood up today wanting applause from everyone on the Back Benches—he got it from his own side—for having failed to reach his own target! It is an amazing situation in politics, where someone sets out to do something, fails to do it and then tells us what a wonderful job he has done. The reason, of course, is that he is trying to put a gloss on his failure. A lot of the things that have happened in the economy have not been because of the Government; they have been despite the Government.

It is very important to look at where the Chancellor got his money from. He got it by taxing the low and middle-income people in this country. How can anyone expect the people of the UK to applaud the Government when it is the people who have felt the pain? The Government will never be able to justify to the vast majority of my constituents—and, I think, the people of the UK—cutting tax by 5% for those earning more than £150,000 a year. We get people saying that that is worth £40,000 to a millionaire, but the main thing is that it was unfair, it was unnecessary and it was playing to an ideology, not to practical economics. Why the Chancellor should think for a minute that he should get any applause for that, I do not know. He will get none in my constituency, even from the very hard-working people earning decent wages, for example in the oil and gas industry.

The Government have been telling us a mythology today. They expect people to believe it, but I have been listening to the commentators outside the Chamber and they are not buying it. This has been a feeble Budget,

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with little bits here and little bits there. How does one spend £6 billion, yet do very little to incentivise the people of this country? Just follow the Chancellor’s words. There is nothing there, as far as I can see, to help people.

The Budget, as far as I am concerned, is based on another mythology: the mythology of the unemployment level. They keep saying, “The unemployment level in your constituency, or in this constituency, has fallen.” If that was true, it would be fine. But it is not true. The unemployment claimant level has fallen. What has happened is that large numbers of people in the support system have been put on employment and support allowance and are not counted towards the claimant count. Massive numbers of my constituents tell me about the sanctioned people in my constituency. My hon. Friend the Member for Bolton West (Julie Hilling) elucidated that so well, with the number of examples she gave.

The example that struck me most was the person who, in the past couple of months, died of starvation. He was a person with a mental health problem, who had been sanctioned because he had not turned up for various signing on regimes. He had £3.66 in his pocket. The care worker who found him said that even murderers do not starve to death in this country, but people who cannot help themselves are sanctioned for three months. That is three months without any form of income. There are no other places to go. The supply of loans that used to exist have dried up. People live in absolute dire poverty.

I found a woman with three children who, because of a break-up in her relationship, went from summer to Christmas without any money from the local Department for Work and Pensions. She lived on her family allowance and by borrowing from everyone she could find to keep her alive. Eventually, she came to my surgery in tears, absolutely howling, looking at a Christmas with no money in her pocket and no one else to borrow from. That is the reality of this so-called unemployment fall. A massive number of people—the figure I have heard is as many as 1 million—have been sanctioned off benefits and are living below the breadline. That is not because they are not seeking employment, but because they despair. They give up. They try again, they try again. They are told, “That is not enough, fill your book in.” They keep trying, but are always told, “That is not enough.” That is not the economy that I particularly want to see.

The Chancellor said that he is going to do something for people on low wages. That is another joke. Government Members sneer and laugh when people talk and shout about zero-hours contracts or part-time employment, but that is the reality. I watch and wonder sometimes if they have any moral fibre in them. The reality for my constituents—I have taken up these cases—is exemplified by Burton’s Biscuits, which said, “We don’t have zero-hours contracts. We guarantee 150 hours a year.” No one can live on that.

The problem with what the Chancellor is trying to sell is that we are not buying it. It is a hard life out there for ordinary families, and what we need is a Budget from a Labour Government that says, “You build the economy up from below. You do not trickle down from above.” Every statistic shows that we have failed to grow

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because we still rely on trickle-down economics. We need a Labour Government with a better plan for our people—one that puts the people and my constituents at the bottom level first, so that they can work their way up, not a plan that gives to millionaires in the hope that they will trickle it down.

5.40 pm

Geraint Davies (Swansea West) (Lab/Co-op): It is a pleasure to follow my hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty), who sits on the European Scrutiny Committee with me.

First of all, I should welcome a couple of things in the Budget. One, of course, is the Swansea Bay lagoon. If that is going ahead—I assume that the Planning Inspectorate has suggested it supports it—it will be more than a small step for green energy and a giant leap for the Swansea economy. Secondly, I welcome the VAT withdrawal from tolls on the Severn bridge, which will loosen the noose around the neck of the south Wales economy, although I think the toll should be reduced down to the maintenance and operations level—about £1.50 a car—to encourage inward investment, tourism and trade, particularly with the south-west.

In general, however, I think this is a candy-floss Budget—it looks bigger than it is and seems to taste nice, but afterwards we are left feeling hungry, and it is not particularly good for us. Prior to the Budget, we heard from the OBR that the previous plan was to reduce spending to 1930s levels. It is as if the Chancellor is operating a time machine. He has moved the switches, and he can move around the numbers, because the oil prices are down, so now apparently we are only going back to the year 2000. However, the executive summary from the OBR mentions that the cuts, increased for 2016-17 and 2017-18, are much harsher and sharper than in the previous five years, but then he plans the biggest increase in real spending for a decade in 2019-20, which of course is election year. In other words, this is cynical electioneering, rather than a long-term economic plan.

On the long-term plan, the two variables people talk about are the deficit and jobs. It is hardly a success to see debt as a share of GDP move from 55%, where Labour left it, to where it is now, hovering around 80%. It is hardly a success that the Conservatives and the coalition Government have borrowed more in five years than Labour did in 13 years, during which time we bailed out the banks. The reason for that is the failure to generate growth. It is claimed that there is lots of growth, because there is 2.6% growth at last, but annualised growth over the past five years has been about 1.7%. Under Labour, growth was 40% over the 10 years prior to the banking crisis in 2008. Again, this is not a great success. We have lost our triple A rating.

There is talk about jobs. There are more jobs, but productivity is down and overall production is being spread among more people. There are 800,000 fewer people in jobs earning more than £20,000, and more people than that are earning less than £20,000. Through the economics of austerity and low wages, we are generating less tax revenue, we cannot balance the books and debt is going up. That is hardly great news. Meanwhile, there is talk of people literally dying on sanctions. In Swansea, 65% of people on jobseeker’s allowance, surviving on £72 a week, have been put on sanctions. Why are the

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Government not focusing on the 10% of wealth held in offshore accounts where it is evading or avoiding tax? We have heard something about that, but it is more talk than action and recovery.

The big choice is not about how much we spend versus tax and comparing the different numbers; it is about how growth can help to generate revenue and get the deficit and debt down. Anyone who, like me, has run a business knows that if they make a loss there are two ways forward: one is to make savings and the other is to grow the business. How are we going to do that? In fact, we are doing the opposite. We have the austerity of cuts. With the police, we have seen 26% cuts and another 20% of cuts are still to come through. The president of the Association of Chief Police Officers, Sir Hugh Orde, has said that we are at a tipping point and there might be greater risks from disorganised terrorism. It is the same with defence, with massive cuts to the budget, while Russia is spending £50 billion or 3.3 trillion roubles on defence. There are threats out there in the world; are we rising to them? No, we are not. Why not? Because we are not generating growth.

Growth incorporates the three elements of consumption, investment and net exports. Consumption confidence was dashed in 2010 when the Chancellor said he would sack half a million people and people stopped spending money. Investment was undermined when the funding for lending scheme of the Bank of England was focused on mortgages, not businesses, so that lending to business went down by 40%. There was no growth in net exports in 2013 in terms of the balance of trade, with no net contribution. Last year was even worse, as we lost £8 billion. Firing up exports has been a complete failure.

So we need a plan for growth, which includes things such as tuition fee reductions. What that does is increase productivity and the size of the cake. Whatever the Business Secretary says, the reality is that people are being deterred because of the prospect of having these massive debts. People’s credit ratings are being reduced; people cannot buy a house. At some point, if their incomes go up, they hit higher payback thresholds, and they want to avoid paying it all. It does not make sense; we need to invest in productivity. Tuition fees are relevant.

We need to say clearly that we want to be part of the EU because we need inward investment from China or India, platforming into the biggest economy in the world—it is the EU economy—from an English-speaking place, namely Britain. Those thinking of making such investment do not want to worry about a referendum and the possibility of our coming out of the EU. We want city regions and we want them supported by money from regional banks. We want a house building programme and we want a procurement strategy through which small businesses, which pay British tax, are encouraged and not discouraged by the bigger players.

We also want fairer taxes, whether it be a 50p top rate or getting rid of the bedroom tax. The reality is that poor people spend all their money, and rich people hide it away. If we want growth through consumption, we need a better way forward with a fairer balance of incomes. The truth is that we have a Chancellor who is looking to the future walking backwards. He is taking us back to an age in which the poor get poorer and the rich get richer. We all want a fair share, and we all want to be productive to help make Britain succeed together. That will only occur with a Labour Government.

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5.47 pm

Jack Dromey (Birmingham, Erdington) (Lab): “No more top-down reorganisations”; “no plans to raise VAT”; “We back Sure Start”—these are all broken pledges from a Government and a Chancellor who cannot be trusted. Had I shaken the Chancellor’s hand last Sunday, I would have counted my fingers afterwards.

The pledge on no cuts to front-line services rings particularly hollow in the Home Office. Some 17,000 police officers have gone, 8,500 of them from the front line; 4,000 police and community support officers and 15,000 members of police staff have gone, too. These are the biggest cuts in Europe, and there is worse to come, with the Association of Chief Police Officers predicting 30,000 more losses in the next Parliament.

All of this is happening at the worst possible time. The threat from terrorism has been elevated to “severe”, yet we are seeing the systematic undermining of a vital tool in combating terrorism—neighbourhood policing, described by Peter Clarke, the former head of the counter-terrorism command, as the “golden thread” that runs through the police effort in combating it. The number of rapes is up by 31% and violent crime by 16%. As more cases of child sex exploitation and abuse come to light, so, too, are the pressures growing on police time and resources. We have heard of revelations in the midlands today of 500 vulnerable individuals, 70 separate investigations and a police service now devoting 10% and rising of its resources to combating child abuse.

As for the claim that crime is falling, crime is changing. It is true that traditional forms of volume crimes such as burglary and car theft are down, but other forms of crime—fraud, cybercrime, online crime—are increasing at a massive rate. The Office for National Statistics has said that if these were fully reflected in the annual crime survey for England and Wales, we would see an increase in crime of 50%. Many police forces are on the brink. In the words of Neil Rhodes, the chief constable of Lincolnshire, forces are

“on the edge of viability.”

On top of all that, our police forces are stretched to breaking point, and are taking up to 30% longer to respond to 999 calls. Nearly 14,000 more crimes have been unsolved since the Government came to power. The victims of crime are being let down as too many criminals get away scot free. Under this Government, 7,000 fewer crimes of violence have been solved, and, although domestic violence is on the rise, the number of cases passed for prosecution has fallen by 13%. The first duty of any Government is to provide for the safety and security of their citizens, and it will fall to us, as the party of neighbourhood policing, to rebuild it when we are in government. Neighbourhood policing is the bedrock of policing: it means local policing, local roots and a local say.

A more general choice now confronts the people of our country. Labour is, and always has been, the party of working people. The contrast with the Tories could not be more stark. They are the party of low wages and insecurity. One in five people in my constituency earns less than the living wage, and hundreds are on zero-hours contracts. The Tories are the party of high rents and high house prices, of high energy bills and high child

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care costs. They are pushing up the benefits bill with one hand, and borrowing £200 billion more than planned with the other.

The Tories are failing their own test, but they are also failing the big tests that my constituents apply to their own lives: “Am I better off? No, I am not”, I am told time and again on the doorstep. “What planet does the Chancellor live on?” asked someone in Kingstanding last week. The average family is £1,600 a year worse off. The other test is “Do my kids have real prospects for the future?” The answer to that question is that this is the first generation since the war who are growing up with less good prospects than their mums and dads and grandmums and granddads.

Labour, in contrast, is the party that believes in making work pay. Labour believes that it is wrong for people to go to work and live in poverty. It is the party of the much higher minimum wage—the £8 minimum wage. It is the party of the living wage. It is the party of security at work, which will tackle the exploitation of workers through zero-hours contracts. It is the party that will build the homes that Birmingham, and Britain, need, and will act to ensure security at home for those who live in the private rented sector. It is the party that will tackle the energy giants and bring down energy bills. It is the party that will provide affordable child care—25 hours free of charge—for all families. It is the party of equal pay and opportunity. It is the party that will tackle the abuse of power, and the abuse of workers by the rich or those who seek to take advantage.

There is but one alternative to this Government, and that is a Labour Government. UKIP? UKIP is not so much the party of the flat cap as the party of the flat-rate tax. It would privatise the national health service, drive women back into the home and gays back into the closet, and divide our country once again. My dad described to me the humiliation that he experienced when he came from County Cork to dig roads in London and saw signs reading “No dogs, no Irish.” As for Nigel Farage, boasting, vainglorious, saloon bar Nigel—a man of the people? In the immortal words of Ricky Tomlinson, my arse, or if that is not parliamentary language, Mr Speaker, my posterior.

What kind of society do we live in? This is a Government who are strong with the weak and weak with the strong. In the words of one former Tory voter in my constituency, an ex-policeman, they are a Government of the rich, for the rich, making the rich richer. What says it all is that they introduced the bedroom tax on the very day that they gave 13,000 millionaires a £100,000 tax cut—a grotesque combination. There are heartbreaking cases in my constituency of people who have been hit hard by the bedroom tax.

This is a Government whose days are numbered. Their end cannot come soon enough.

5.54 pm

Helen Goodman (Bishop Auckland) (Lab): We heard a characteristically self-congratulatory speech from the Chancellor earlier today. According to him, his strategy is working and his early austerity is paying off, with a growing economy, rising employment, a falling deficit and even enough room for manoeuvre for a few more tax cuts. Let us take each claim in turn.

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This has been the slowest recovery from a recession ever recorded. The economy was growing when Labour left office in 2010. The Chancellor slammed on the brakes. The OBR estimates that the economic loss was 2% of GDP in the first two years; a professor of economics at Oxford university estimates it at 5%. That is £1,500 for every man, woman and child.

It is true, of course, that employment is now rising, but not as much as Government Members claim. The JSA claimant count is down to 800,000 but the figure on the International Labour Organisation’s unemployment measure is 1.8 million and the rate varies among particular groups. In the north-east it is 8%, while for young people it is 16%, and, as other colleagues have said, many jobs are zero hours and low paid. Average earnings have fallen. They are not forecast to reach pre-recession levels until 2020, fully 12 years later.

Poverty is up and earnings are down, the consequence of which is that tax revenues have been weak, so the Chancellor of the Exchequer’s deficit and debt reduction targets have both been missed. The deficit is down by a third, not eradicated as planned. Debt is up by a third and £200 billion more has been borrowed than was planned. Living standards have fallen and inflation is below target, verging on the negative, while interest rates have never been lower and are negative in real terms.

None of that suggests that the economy needs to be reined in or that there is spare capacity, yet the Chancellor is planning to go into the next general election with a plan to cut both tax and spending. The Red Book shows a 5% reduction in GDP—between £60 billion and £70 billion of cuts. The OBR analysis also shows huge reductions in the first two years—indeed, bigger than those we have seen in the last five. Obviously that will further deflate the economy. Even the Financial Times this week was describing it as “unnecessarily extreme”.

What the economy needs is continued growth and measures to boost productivity, which fell last year and has stalled in the last six. Productivity in Britain is now lower than it is in the United States, Germany, France and Italy. Higher productivity would mean higher wages and make our exports more competitive, which would be especially useful at the moment, when the pound is rising against the euro. According to the OBR, higher productivity would also mean higher growth and lower debt. Indeed, the OBR’s scenarios show a massive difference in the debt-to-GDP ratio, of 50% to 57%, compared with 87%. The OBR describes the productivity performance in this country over the last five years as disappointing.

In other words, what this Budget should have contained was measures to boost productivity, which would have improved the public finances—measures such as better access to finance for SMEs, through a British investment bank; maintaining and improving the skills of the labour force, through a young person’s job guarantee, better vocational education and cuts to tuition fees; substantial improvements to the nation’s infrastructure; and devolving economic power and funding to city and county regions.

Mr Newmark: I will buy the hon. Lady an extra minute, because I can see that she has got a thick wodge. She is one of the more economically literate Members on the Opposition Benches and she has made a number

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of proposals, so I wonder how she proposes to pay for all those things. Is it more tax, more borrowing or a higher deficit?

Helen Goodman: The whole point about the plans that we are putting to the British people is that we think it is reasonable to borrow for investment, in the same way that people borrow to buy a house. We think that is a sensible proposal for the nation as a whole. It would build capacity and mean that everybody had a higher standard of living, that we had faster growth and that revenues were higher, and in the end the deficit would come down.

Today, there is no new money for infrastructure. The Chancellor spoke about it a lot, but he was simply elaborating on the plans he put before the House in the autumn statement. There is no new money for science, for SMEs, for transport or for broadband.

The Chancellor proposed changes to personal tax allowances that will benefit people on higher incomes far more substantially than they will benefit those on lower incomes. A person earning under £10,000 a year will get no benefit. A person earning between £11,000 and £43,000 will benefit to the tune of £80, or by as little as £20 if they are on housing benefit or tax credits, because those benefits will be withdrawn. The biggest benefit of the increased tax allowance will go to people earning between £43,000 and £100,000. They will get £160 in their back pockets.

The Government propose significant changes to the savings and pensions tax regimes that will cost £1.7 billion. I put it to hon. Members that it might be nice for people to save and nice to have a better tax regime for a small number of people, but when our economy is in such a weak state, they can hardly be a priority on which it is appropriate to spend £1.7 billion. That will obviously benefit the better-off people in this country as opposed to the vast majority of people.

My right hon. Friend the Member for Tottenham (Mr Lammy) comprehensively demolished the Government’s help-to-buy proposals. It is absolutely absurd to keep pumping money into the housing bubble in the south-east and not to do something about the underlying problem. Building homes would tackle the housing crisis, create jobs and boost the economy. In my constituency last year, not a single property was exchanged for £600,000, which is the Government’s limit in their Help to Buy scheme. That epitomises all that is wrong with the Government and how totally out of touch they are.

Furthermore, I believe that the Budget is dishonest. It tells only half the story. It does not set out where a further £9 billion cuts in welfare would be found; it does not say what the rate of VAT will be after the election; it does not say how big cuts would be to defence, police and local government; and it does not say whether charges will be needed in the NHS.

I do not believe that the British people want a fundamental re-imagining of the state. They want something simple: a better future with a Labour Government.

6.2 pm

Nia Griffith (Llanelli) (Lab): I should like to set the record straight. People will see through the Budget very quickly. They know that a few gestures from the Chancellor and the recent lull in inflation will not

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make up for the loss of purchasing power that households up and down the country have suffered over the past five years.

Let us set the record straight on the Labour Government. There was a financial crisis in 2007-08. It was a worldwide banking crisis. At that time, Conservative Members agreed that we had to back the banks and bail them out to protect people’s savings and homes. The Labour Government understood that the only way to get the deficit down was to ensure that we got the economy growing first. By the time we left office in 2010, there was an annual growth rate of 4%. The first thing the Conservative-Lib Dem Government did was to choke off that growth. By the end of 2010, growth was down to 0%. As a result, the recovery has been much slower and demand has remained low, which has hit our manufacturing industry, and therefore tax receipts have been low, which has made it difficult to reduce the deficit.

The Government’s priorities have exacerbated the problem, because capital expenditure has the greatest impact on growth in an economic crisis. Money that is spent to improve our infrastructure and attract investment—capital expenditure—provides jobs in the UK and puts money in the pockets of local people, who spend it in our local economy. Capital expenditure also helps us to keep the skills base. For example, in construction, public capital expenditure has provided work and kept the skills base when there has been no work in the private sector. The Labour Welsh Government have tried to keep capital expenditure going in Wales. The Government parties have done nothing except cut back on that type of expenditure and then try to rewrite history.

For example, we had already agreed that the main line from London to Swansea would be electrified, but then the Government parties cut the funding before pretending to give it back, first to Cardiff and then, after a long struggle, to Swansea. They tried to take credit for that, but, to be frank, they should not have cut it in the first place.

The choices the Government parties have made on taxation are not only morally wrong, but economically unwise. Those on low and middle incomes, of necessity, spend their income back into the local economy much more quickly than those on the highest incomes. There is not a trickle-down effect, as the Tories seem to believe, and much of the tax cut for millionaires has probably gone on expenditure overseas. Those on low and middle incomes—the working poor—have been particularly badly hit. VAT is a very regressive tax that is levied on all sorts of things that are not luxuries, such as bathroom items, including toilet paper. Such items add up in household shopping baskets. In fact, families find themselves £1,000 a year worse off under this Government. That has been fuelling household debt and driving people to food banks. In Wales alone, which has 5% of the UK population, 79,000 people have visited a food bank in the past year.

I want to address some specific issues mentioned by the Chancellor. The first is his announcement about the Severn bridge toll rates for 2018. I remind the House that it was a Tory Government who set up the private finance initiative scheme for the Severn bridge in the first place and landed us with all the payments we have to make. It is also reasonable to say that prices will come down in 2018 anyway, because that is when the

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concession will end and we will finish paying for the building of the bridge, and VAT will be removed because it will return to being a publicly owned asset rather than a privately owned company. That will happen anyway, so it is not good enough simply to say that prices for white vans will be reduced. Haulier companies such as Owens in my constituency, which employs 500 people, pay a massive amount in Severn bridge tolls every year. Obviously, they find it difficult to compete against companies based in England, so we expect much more than the little reduction in 2018.

The rise in the tax threshold is welcome, but, as my hon. Friend the Member for Bishop Auckland (Helen Goodman) has said, too many people do not earn enough and will not benefit very much because of cuts to housing benefit and tax credits. Those who will benefit are much further up the tax scale, so the policy is not going to help half as much as it ought to and the people affected are still being hit by the increase in VAT.

On the issue of greater freedom for pensioners to use their money in different ways rather than purchase annuities, it is absolutely vital that stringent regulation is established straight away to ensure pensioners are not ripped off by the unscrupulous, who are, doubtless, rubbing their hands with glee and hoping to cash in on the unsuspecting.

I certainly welcome any measures that ensure that tax owed is tax paid, but tax avoidance measures taken by the Labour Government are now bringing in 10 times as much revenue as any measures taken by this Government. I draw the House’s attention to one problem in particular. January saw the introduction of new EU rules on the collection of VAT from companies that operate in more than one country. Clearly, the rules are necessary and were designed to stop big companies wriggling out of their moral tax responsibilities, but the practical procedures required by Her Majesty’s Revenue and Customs are threatening to put small digital businesses out of business. Such businesses sell knowledge-based products online; they may be very small domestic businesses selling recipes or knitting patterns that involve a small transaction. If sales are carried out in many different countries over the internet, those tiny transactions have to be logged in great detail, so I ask that HMRC takes another look at what it can do to ease the burden on those small businesses.

Let us be absolutely clear: the Chancellor is proposing massive cuts over the next few years to public services and welfare, and he has not even hinted at how they will affect people. The key issue is that, by doing so, he will repeat the problem of choking off growth and we will be back to a state similar to that in which we found ourselves at the end of 2010. This Budget is going nowhere. If we want to get a better system, we need a Labour Government to make sure that we tackle the energy crisis, prices and the problems that people face so that they are then able to spend more and get the economy going again.

6.9 pm

Sheila Gilmore (Edinburgh East) (Lab): In June 2010, we were told that we had to have an emergency Budget. Even at that stage, one of the strange things about that

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was that many of the measures were so un-emergency that they did not have to come in until the following January. To a large extent, the emergency Budget was a political statement about where the incoming Government wanted to go. Today’s Budget is a political statement as well, from a Government who are trying to convey the impression that they have solved the country’s economic problems and that there will be no need for many more harsh decisions or much more austerity as they want people to think it is safe to vote for them. It is therefore a highly political Budget.

Not only is this a political Budget but the Chancellor, optimistically I would suggest, seems to be planning not just for the election that is about to happen but for 2020. His predictions for spending show severe cuts in the first part of the next Parliament then a sudden uplift towards the end, just before another general election. Even the OBR says that that is very strange and that this is a “rollercoaster” of spending. It is not justified, I would suggest, by anything other than its politics.

The people of this country deserve something better than a Budget that will, as the Chancellor hopes, make people feel good when a lot of the underlying issues have not been resolved. Some of those people were badly affected by some of the things we were told were absolutely essential back in 2010 and will find it pretty galling to be told now that things are perhaps better when they are still suffering. At that time, we were told that we would have to cut disability benefits by 20%—people wonder why the disabled in this country are so angry, so upset and so worried. That was the prospectus put before them then.

One of the main things the Chancellor wanted to talk about today was the tax threshold, but we have to ask over and over again what that means for the low-paid. Between 17% and 20% of people in employment are already earning below the tax threshold and further rises in it do absolutely nothing for them. What is the Government’s proposal to help those low-paid people? There does not appear to be anything and there is a considerable fear that those low-paid earners will end up paying for this constant increase in the tax threshold, perhaps through a VAT increase, which they will have to pay for even though they gain no benefit from it. Even if people fully endorse the argument about the tax threshold, there should be provision for the low-paid as well so that at the very least they are provided for.

That point and some of the speeches we have heard show the fundamental differences between the Government and the Labour Opposition. Members have said how important it is that people can keep hold of their own money. Tax is basically a bad word for them and they want as little of it as possible. The problem is that that has consequences that are felt in the real world. If taxation is reduced, spending must be reduced unless taxation is being increased somewhere else, which brings us back to the question of VAT. If we want a society in which we provide good quality services and in which people are not anxious about things such as how their parents will be cared for or how they will encounter the care system in their old age, it has to be paid for. If anyone believes that the answer is to cut taxes they should be open and honest and say what impact that will have on services.

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Adam Afriyie (Windsor) (Con): Does the hon. Lady not recognise that when certain taxes are cut, the overall take by the Exchequer increases, as has been demonstrated over the past five years?

Sheila Gilmore: We have heard the argument that if we reduce taxes, we get more revenue in. Of course, it is usually heard in relation to the 50p rate of tax, but that was a very poor example. It hardly had any effect, and so many people made their own arrangements before and after the announcement was made on reducing the rate again that we cannot tell what really happened.

It is important that we should have a discussion about the kind of values we want and the kind of society we want to live in. There has been a similar debate north of the border, where we have a Government who are trying to suggest that, although they do not necessarily want to cut taxes, it is possible to have fantastic services without ever putting up taxes. That will also leave the public confused about what can really be achieved.

Geraint Davies: Does my hon. Friend accept that if the Government consistently put up tax allowances while putting wages down, tax revenues are going to fall? Does she agree that that is why we are nearly bankrupt?

Sheila Gilmore: Tax revenues have been falling, and the whole issue about low wages is extremely important.

We have had discussions in the House about zero-hours contracts. I think it was the hon. Member for Dover (Charlie Elphicke) who said today that Labour had done nothing about them for 13 years. I was not a Member of this House at that time, but I was a local councillor for much of that period and I met people constantly in that role. In all honesty, I do not recall people raising the issue in the way that they have been doing more recently.

Zero-hours contracts are a growing phenomenon, and they are still under-reported. I mention them on some of the literature that I give out when I am door-knocking, and a couple of the people I have spoken to in the past few days have looked at that literature and said, “What are zero-hours contracts?” When I explained, they said, “Oh yes, that’s what my son had when he was working for a pizza house.” Another man said, “Oh yes, that’s what happened to my son. The other day, he called and asked me to pick him up from work because he had gone in, only to be told to go home again because there was not enough work for him. They could do that under the terms of his contract.” Those people might not have known the term “zero-hours contract”, but they certainly recognised the conditions involved.

These issues are a matter of concern for young people. Unemployment is not falling as it should be. It is still, in the words of most commentators, “stubbornly high”, and we need to do something to address the problem. Also, earnings for younger people have not risen. The Government are proud of saying that average household incomes are beginning to rise again. Those in the oldest age group have done the best, and people in the middle are beginning to do a bit better, but young people are still doing significantly less well. That is a serious matter and we should be giving it greater consideration.

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Many young people have a string of temporary jobs. They are in and out of jobs even when there is work available, which is very frustrating. One constituent told me that her son had worked for Royal Mail for three months at Christmas. He knew that it was a temporary job and he was told that there was no further work afterwards. He signed up with an agency that handled temping work, and he was phoned up a few weeks after Christmas and asked whether he was interested in a “call-on job”—a zero-hours contract, effectively—with Royal Mail, no less. So apparently there was no proper job on offer, but Royal Mail had none the less asked the agency to take on someone on those terms. How much better would it be for that young man if he could get a proper job that paid him a proper wage and in which he could learn a skill? We must do something for our young people. We must not sit back in apparent complacency and say that there is not a problem.

6.19 pm

Mr William Bain (Glasgow North East) (Lab): This was the Chancellor’s sixth Budget, and after a Parliament of unparalleled failure on living standards not seen in decades, today was his final chance to chart a fairer course for the British people. He failed that test. He failed it because the values by which he has conducted economic and fiscal policy for the past five years are not the values that build an economy where we have a dynamic industrial policy and public spending plans that generate more growth, decent jobs and rising living standards with higher productivity. He failed because, by his actions, he has shown that he does not believe in a society where opportunity and assets are more equally distributed to the benefit of all, and inequality is lower. He failed because time after time he has put short-term tactics before a long-term strategy for growth in our green industries. This is the Chancellor who told us he could balance the books without hurting the poor, yet young people have seen the biggest drop in incomes during this Parliament and all he has to offer now is a vision of a low-wage, lower-skill economy drifting out of the EU, thereby damaging our future prosperity even further.

Britain is a better country than this Chancellor gives it credit for. He said that his policies today will tackle waste and inefficiency, but what can be more inefficient than the waste of young talent or over-25s being idle? A Government with real ambitions for our country would be creating opportunities to give them hope with a decent job. He says his chancellorship has been about fairness, but what could be more inequitable than bonuses rocketing at the very top of society, while he has broken his promise on the minimum wage by raising it by a measly 70p, instead of to the £7 per hour by this autumn which he promised last year? He boasts of his record on growth, but the UK has had the slowest recovery from recession of any other developed country apart from Italy and Greece, with the IMF and other forecasters predicting that growth will be lower next year and the year after than this year.

According to the Fraser of Allander Institute’s most recent commentary on the Scottish economy, full-time employment is more than 4% below its pre-recession peak and the total numbers of hours worked in Scotland is still lower than it was before the recession. On this day, when unemployment has gone up in my constituency

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and risen across Scotland by 6,000, this Government should have had more measures in their Budget to deal with that.

We know that bank lending to small and medium-sized businesses has been falling and that exports are weak, with the OBR pointing out that net trade will make a negative contribution to growth all the way until 2019. Productivity is poor. People are having to take out credit and take on more personal debt to make ends meet. This was supposed to be a recovery based on the march of the makers, yet it has stretched households, who are taking on more debt and shouldering the burden of fuelling growth. This should have been the Budget that addressed structural problems in the British economy, because a Chancellor who wants a credible deficit reduction plan for the next Parliament has to have a plan for more balanced growth and prosperity. The rewards of that growth have to be more fairly shared among ordinary working people than this Chancellor has achieved. But he failed. He failed because not only does he have the wrong plan for Britain’s future, but he has the wrong values for our economy and our society, too.

Adam Afriyie: This is the 10th Budget that I have listened to in the House of Commons. The first five led to massive unemployment and a huge deficit, and really damaged the lives of the least well-off in this country. The five under the current Government seem to have led to greater levels of growth, lower youth unemployment, low unemployment overall and a lower deficit. Does the hon. Gentleman recognise that in any way, shape or form?

Mr Bain: I gently point out to the hon. Gentleman that the emergency Budget and the spending review adopted in autumn 2010 led to three years of hardly any growth at all in the economy, a dramatic fall in tax revenues, the deficit having not fallen or been wiped out as the Chancellor had promised, and debts doubling over the course of this Parliament. That was the reason the economy has underperformed and why this Government are going to leave to their successor the highest deficit in the developed western world. The fiscal policies that this Government have adopted could not have been more wrong.

We need a different plan for public spending and for more balanced economic growth, not the one the Chancellor has offered today. We need a plan for a fairer tax system, with tougher action against those who do not pay their fair share of tax or indeed do not pay any tax at all. It was very troubling to read in the OBR’s fiscal outlook this afternoon that it has doubts about the £5 billion that the Government have suggested they will pull in from the tax evasion measures set out today. For example, the OBR said that some of the specific measures were “unlikely” to generate the extra revenues that were scored in the Red Book.

The test for this Government in their Finance Bill next week is whether they will be prepared to bring in legal penalties for those who evade or avoid taxes so that we can fill the gap of £34 billion of tax that should be collected by the Exchequer and has been foregone under this Government. That is what hard-working taxpayers will want to see in the Finance Bill next week.

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Despite the Chancellor’s modest U-turn today, he still intends by 2018 to force through the biggest fall in core public service expenditure since 1938. The cynicism of this Budget is that, by bringing in deeper cuts between 2016 and 2018 and then partially reversing them in 2019 and 2020, we can see that it is the electoral cycle that has motivated the Chancellor more than the cycle of what is good for jobs and stable growth in this country.

Labour has a different and a better plan. It is one that does not jeopardise investment in infrastructure. If we balance the current budget in the next Parliament, then, as the National Institute of Economic and Social Research has said, we would have more growth, more jobs and faster rises in wages—a better plan for Britain.

I welcome what the Chancellor did for the oil industry. With receipts forecast to fall to £700 million in the next fiscal year, there is an even stronger case for an oil resilience fund, which would do a great deal to secure investment and jobs in the offshore sector in Scotland.

We should have had a Budget that raised the minimum wage to beyond £8 an hour. We should have taken steps to encourage the living wage to be paid to as many people as possible in this country. We should have had a higher rate of income tax for those earning more than £150,000 a year. We should have had the opportunity to begin the job of change, but change is coming. A Labour Government are coming, and I believe that the British people will begin that job of change by voting, in just seven weeks’ time, for a Labour Government and for a more equal and prosperous society.

6.27 pm

Diana Johnson (Kingston upon Hull North) (Lab): When the Chancellor stood up this afternoon, one of his opening remarks was that his Government chose the whole nation. He talked about us all being in this together, which he has said on many occasions. But he did not talk about the 1 million people who use food banks, the 1 million people on zero-hours contracts, or the tax breaks that he gave to millionaires. He did not really talk about the widening regional inequalities in this country, which we are seeing more starkly than for many, many decades.

For my constituents in Hull, there was no mention of the disproportionate cuts to local authority funding—25% of Hull city council’s budget has gone, although it is in the top 10 most disadvantaged communities in this country. The Chancellor did not talk about the Centre for Cities report, which said that 13,300 private sector jobs had been lost in my city over the past decade. I want to talk a little about the regional nature of the inequalities in this country; and how the Budget that has been set out today will not tackle those growing divides.

The Chancellor talks a lot about the northern powerhouse. I had a look at page 43 of the Red Book to see what he was saying. I was very disappointed to find very little mention of great cities such as Hull. The little that there is is about the electrification of the rail line between Hull and Selby. Unfortunately, the Government and the civil servants forgot that the rail line across the Pennines stretches from Liverpool all the way to Hull. They decided, for reasons unknown to me or to many of my colleagues, that they were going to stop the electrification in this round at Selby.

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To put matters right, Hull Trains has put together an excellent package of private finance to complete the electrification all the way to Hull. In fact, a strong cross-party delegation went to meet the Secretary of State for Transport to press for that to be done as soon as possible, particularly given that Hull will be the city of culture in 2017 and is expecting many more visitors. However, the Red Book states that electrification of the line to Hull will go ahead in the period from 2019 to 2024. The impetus for doing something very positive, using private sector money and doing it quickly, seems to have been completely lost.

I stress that if electrification to Hull does not happen, that will put in doubt the direct train services that currently operate between Manchester and Hull, because of the new franchise going through at the moment and the new rolling stock that will be required for the electrified line. Again, it is pie in the sky when it comes to investing in local rail services. There is talk here of High Speed 3, but I would like to get High Speed 1 to Hull in the first instance. I am still very conscious that £22 billion was spent on transport infrastructure in London in 2013, but in Yorkshire the figure was £1.1 billion. There is real discrepancy.

I mentioned Hull being the city of culture in 2017 because I was looking out for additional support for the city, given that special status. I note that paragraph 1.148 of the Red Book, which relates to the northern powerhouse, states that

“the government is already… investing in the vibrant cultural life of the north, including £78 million for the Factory Manchester.”

Well, good luck to the Factory Manchester, but what about the 2017 city of culture? I also note—this is on page 73 of the Red Book—that money is being provided to the Muni theatre in Pendle, but again there is no mention of Hull.

I want to move on to businesses. Hull had one of the lowest rates of business start-ups in 2013, according to the Centre for Cities report, so I welcome the extension of the Humber enterprise zone. It is just a shame that the Humber local enterprise partnership has had much less to spend than Yorkshire Forward did.

On digital matters, unfortunately only 22% of postcodes in Hull currently have access to high-speed broadband, which is one of the lowest rates in the country, although KC Communications tells me that we are future-proofed because our high-speed broadband goes to the property and not the cabinet, which is what happens across the rest of the country. For reasons I do not understand, Hull was excluded from the first tranche of the SuperConnected Cities voucher scheme, which local businesses have been complaining about. We are told that there are 50 cities in the next tranche, but we do not know whether Hull will be included—I hope that it is.

The Red Book also refers to a northern hub within the northern powerhouse, with £11 million to develop the digital industries in Leeds, Sheffield and Manchester—the Deputy Prime Minister’s golden triangle—but again Hull seems to have been excluded from that. May we have some clarification on that?

On jobs and growth, of course it is good to see more people in work, but in Hull 1,000 people applied for the 14 Siemens jobs that were advertised, which shows the lack of good-quality, full-time, permanent, skilled jobs in the area and how there is much more to do.

We know from today’s Budget that there are cuts ahead if the Conservatives win the general election. We

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already know that there have been massive cuts to policing, to council services and to the local NHS. In Hull we know that Humberside already has the lowest police numbers since 1979, that a quarter of our council budget has gone—£278 per person—and that our local NHS is really suffering, with our A and E department in crisis. I shall wait to see whether the money that has been announced for mental health services for children and young people comes Hull’s way, because many of our young people are having to travel hundreds of miles to get treatment.

Hull people know from our experiences since 2010 that a Tory-led Government would certainly direct the deepest cuts identified in this Budget at our city. Hull needs a Government who really have chosen to stand up for the whole nation, are on our side in Hull and not on our back. We need the economics of hope and investment in all parts of all regions. We need a Government looking to the 2030s, not the 1930s. Hull desperately needs a Labour Government.

6.34 pm

Huw Irranca-Davies (Ogmore) (Lab): Five years ago when the so-called emergency Budget was announced, I remember twice intervening on the Chancellor and challenging his assertion that there would be an economic recovery and that his was a good long-term plan that would benefit everybody. Ultimately, he had to acknowledge that it would come down to his judgment. Five years on, I have to say that his judgment has failed. It has failed miserably for the people whom I represent. This has not been the so-called long-term economic plan that benefits everyone. It has not been an economic recovery that benefits everyone. It has not been an austerity programme that hits everyone. It has been balanced on the backs of those least able to afford it socially and economically all the way through.

I do not believe it was ever intended to be a fair plan under which everybody would shoulder their fair burden. The language of the so-called emergency Budget of 2010 made that clear. The recovery has been unbalanced, both sectorally and geographically; it has been delayed, because there was a period of two or three years when we flatlined as a result of the decisions of the coalition Government to cut off infrastructure spending; and it has left people behind. It has left behind a generation of young people and a generation of working poor. When did we see this last? We saw the same approach in the 1980s—“Don’t worry. We’ll do our very best. It will trickle down and the effects will be seen.” The recovery does not trickle down into my constituency.

Some people, I accept, have hardly seen the impact of this recession. They have done well. They have been in a secure job. Life has gone on almost as normal. We have a great manufacturing belt in my constituency. Many people there will not have seen the recession. They will have got through okay, but underneath that there is now a huge group of people—those who work part-time, those who wait for that call in the morning to see whether they are to be brought into work, those who have seen a drop in earnings of probably 6% to 10% if they are working, and those who balance two or three jobs to try to make ends meet.

What would it be like—this is the reality check that we need five years down the line—if the Chancellor had to wait for a text in the morning to say, “Take a rest day

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today. You’re entitled to it. We haven’t got any hours for you”? Could he work on that basis? What if the Chancellor did not have to put on his suit and head up to the Banqueting House for a nice gala dinner or a fundraiser, but had to walk 4 or 5 miles between food banks on different days of the week to collect sufficient food for a working family to get through that week? Five years ago, after the emergency Budget, there was one food bank in my constituency. There is now not one town, one village or one street that does not rely on food banks. The generosity of those who supply them is amazing, as we always say, but we should not be in this situation when we are still the sixth most prosperous country in the world.

What would the Chancellor do if he had not simply to be the Chancellor, but to do another job to make ends meet, or perhaps three jobs—and I am not talking about directorships, by the way. That is the reality for many people. I have spoken to those people, and when I hear the Chancellor speak I wonder if he ever has the same conversations. Does he have constituents who come in and say, “Even after running two or three jobs, some of them on night shifts, I still can’t make ends meet”? Does he ever have that conversation? I have never heard it from him. My constituency must be very different from his, yet mine is not a poor, poor constituency. There are some people who are doing quite well, yet from other constituents I hear about the problems all the time.

That is backed up by the statistics, which show that in the Bridgend county borough area, a prosperous manufacturing belt on the M4 corridor in commuting distance of Cardiff, there has been a tenfold increase in people who rely on payday loans. Some of them are piggybacking payday loans—not just one, but another one to get over the original payday loan. I have referred to the extent of the food banks and to the fact that, under this coalition Government, people at those food banks are in work as opposed to not working, and that for the first time in history, we now have more working households in poverty than non-working households in poverty. All this stacks up to a compelling argument.

Since the emergency Budget five years ago, when the Chancellor said to me in response to two interventions, “You’ll have to trust in my judgment. This will not fall on the working poor or on the young”, we have seen what has happened to youth unemployment levels. It is great to see claimant counts coming down. They have come down in my constituency, and that is fantastic. However, the last time I heard such praise for claimant figures was during the 1980s when everybody was moving out of the jobcentres and on to sickness benefit. We can cut these figures in any number of ways, but if the people who are coming off claimant counts are in self-employment, they are typically earning 40% below the average median earnings of somebody in a full-time-wage job. If those people are working two or three jobs in order to make the money up, and if there is, as there has been under this Government, a massive increase in housing benefit and in poverty pay subsidised by the taxpayer, I say to Government Members that something has gone seriously wrong, and it stems back to the point in time when a decision was made to say, “We have to go for this austerity; we must have this fetish about deficit reduction above and beyond everything else.” At that point—

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Adam Afriyie: Will the hon. Gentleman give way?

Huw Irranca-Davies: I have no time—I apologise. [Interruption.] Oh, I do have time, so I will give way. Perhaps the hon. Gentleman will explain why the Government chose at that time to do the complete polar opposite of what I did as Minister in the Department for Environment, Food and Rural Affairs, when we had capital spending on flooding and chose to keep people employed in their jobs.

Adam Afriyie: Of course we all agree that we want the least well-off in society to do well, and the measures that the Chancellor has taken over the years are beginning to show effect. Does the hon. Gentleman not remember that under Labour’s Budget proposals, the cutting of the deficit was at a steeper rate?

Huw Irranca-Davies: Nearly every party is agreed on this, apart from some who have said that there is no need to cut the deficit. We agreed that we had to cut the deficit, but we also made it clear that we had to keep people in jobs while doing so. That is why, when I was a DEFRA Minister, we brought the funding forward and made sure that people in the Environment Agency were employed building flood defences.

My argument to Government Members and to the Chancellor is that there seems to be a complete disconnect. Throwing around claimant counts stats and saying that everybody has had to shoulder the burden simply does not ring not true for my constituents. Over the years, there has been an honourable tradition among those on the Government Benches of arguing for the working poor as well as others, but that seems to have disappeared over this five-year cycle. I hope that next time we will have a Government who deal with zero-hours contracts and the exploitation of agency workers, give a jobs guarantee to young people, have the sorts of initiatives that are being carried out by Labour in Wales, and build an economic recovery that benefits everybody, not just those at the top.

6.43 pm

Kate Green (Stretford and Urmston) (Lab): I am sure that by now Government Members will recognise that the Chancellor’s Budget has not convinced my colleagues and has not convinced the country, and it will not convince my constituents. There is very little in it to return them to the confidence in the future that everyone I speak to on the doorstep tells me they desperately want. Whatever the Chancellor likes to say, low productivity, low pay, low tax receipts and high spending cuts have characterised his management of the economy until now. We heard this afternoon that such an approach is set to continue if his party returns to government in the next Parliament. Happily, we do not expect that to happen.

The Chancellor has taken a series of quite deliberate fiscal choices that have favoured the better-off, whether it is reducing the top rate of income tax or introducing the marriage tax allowance. The latter benefits only couples who are well off enough to be paying tax at all, and, what is more, only one in five of the couples who will benefit are raising children. Middle-income families have been squeezed repeatedly under this Government. My constituents report a pervasive feeling of insecurity and a deep concern for the future of young people.

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Most distressingly of all, the very poorest have been pushed to the very margins of our society. There was a shocking rise in food banks from 60,000 visits in 2010 to nearly 1 million in 2013-14, and there was a 55% rise in homelessness and people sleeping on the streets between 2010 and 2014. I am sure that hon. Members cannot have escaped noticing that, as I have, including on their way home from this place in the evening.

The Chancellor repeated this afternoon the claim, which Government Members often make, that child poverty has fallen under this Government. Let us put the record straight: it has fallen in only one year under this Government—2010-11—which was before a single coalition fiscal policy had taken effect. Since then, it has flatlined at 2.3 million children, and the IFS has predicted that, under the measures the Government have already announced, it will rise by 700,000 children during the next Parliament. The fall in the first year of this Parliament was wholly and solely the result of the 2010 Labour Budget, since when median incomes have stagnated. Government Members used not to like the relative poverty measure for exactly the reason that it was bound up with what happened to middle incomes. I notice that they are not so vocal against the relative poverty measure now. They may now want to look at other measures of poverty, but it is an absolute disgrace that absolute poverty has risen under this Government for the first time since measurement of that element of poverty began, while material deprivation has also risen.

Mr Bain: Does my hon. Friend share my astonishment, and that of other Labour colleagues and indeed the whole country, that to try to persuade us people were better off the Chancellor used a metric that deals only with mean incomes—skewed to people at the very top of the income scale—and includes universities, which are not of course households?

Kate Green: The use of statistics this afternoon bore absolutely no relationship to the lived experience of my constituents and those of many of my hon. Friends.

As colleagues have said, most recently my hon. Friend the Member for Ogmore (Huw Irranca-Davies), this Government’s total lack of attention to working poverty is crucial: it is right and welcome that more people have moved into work since 2010, but that is not sufficient if they do not earn enough to live on. The increase in the national minimum wage will help a little bit, but the increase is more modest than we were promised last year. Increases in the tax threshold will increasingly give diminishing returns—they omit the poorest, who pay no taxes or whose incomes are already below the tax threshold—and what is more, they help the better-off. I remind Government Members that the better-off include us. The fundamental problem is that people cannot find the hours they need at the pay they need, which not only puts families under pressure, but is a major contributor to the failure to bring down the deficit as planned. The TUC says that we are set to borrow £54 billion more than planned this year, of which two thirds is a direct result of poor wage growth.

As colleagues have said, young people have been especially hard hit, again as a result of conscious policy choices by this Government. Of course older people should never face retirement in poverty—I am proud

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that Labour Governments halved pensioner poverty—and an ageing population means increasing the spending on this group, but we are significantly under-investing in the next generation. My constituents repeatedly say that to me. Hourly wages and weekly earnings have fallen fastest among young workers. Research by the London School of Economics has shown that typical incomes for those in their 20s were nearly a fifth lower in 2013 than they were five years earlier, and even those in their 30s with good degrees have lost out on their incomes. That not only blights young people’s lives today, but damages their ability to plan, save and look forward to the future. A Government who have made much of rewarding saving and forward planning should be mindful that they are putting a whole generation in a position in which they are simply unable to do so.

Although there were announcements today about helping people who wish to buy a home, an aspiration shared by many of my constituents, it is noticeable that there was absolutely no help whatsoever for the many young families who rent a property and will continue to do so for many years to come. If it is right to provide financial support to young people to buy their first home, will Ministers explain why it is not right to offer the same kind of financial support to those of them who rent?

Nor was there anything to comfort families with children. As the Child Poverty Action Group has pointed out, the cost of raising a child has grown significantly faster than its parents’ incomes under this Government. We heard nothing to help people with the additional costs of raising children, simply a tax break for married couples, many of whom will not be raising kids at the moment.

Finally, we heard today of the truly shocking plans for further cuts if the Conservative party were to form the next Government. Those shocking cuts to public service spending have been accelerated into the early part of the Parliament, no doubt so that a future Conservative Chancellor would be able to say that he was increasing spending as an election approached. We have heard in the past about shocking cuts to social security spending, and those cuts will be even harder on working-age people and families with children because pensioner benefits will be protected.

The Budget has told half the story today, hidden the pain for tomorrow and done nothing to put the country and families in my constituency back on their feet. It is not a Budget about the future: it is the Budget of a failing Government.

6.51 pm

Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): I rise on behalf of my constituents to share my bitter disappointment about the Budget. It was out of touch and arrogant, and the Chancellor even had the gall to use the phrase—from which my constituents recoil when they hear it—“We’re all in this together”. He told people that they are better off now, when my constituents—I meet and engage with them every week—tell me that they are not. In fact, if we look at the evidence and what is actually happening, we see that there has never been a bigger gap between the rhetoric we heard today and the reality of people’s everyday lives. The Chancellor has presided over the slowest economic recovery in the

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UK’s history and has borrowed more in this Parliament than Labour did in 13 years. He has also broken his promise to eradicate the deficit by the end of this Parliament.

I have said it before and I will say it again: giving with one hand but taking more away with the other is nothing to celebrate. This has not been a recovery felt by millions of people across the country. Looking at the Tories’ tax and benefit changes, we know that families are on average £1,127 a year worse off; working people are £1,600 a year worse off; wages are down for the first time since the 1920s; and people are earning less at the end of a Government than they were at the beginning.

Despite what the Chancellor said in his speech, I found buried—on page 67 of the OBR document—the fact that the real consumption wage will not rise above its pre-crisis peak until the end of 2018. The Chancellor’s own documents, and the OBR’s documents, do not correlate with what we were told earlier.

We also know that the Government have raised taxes 24 times since 2010. I contrast that with the fact that people on the highest incomes have seen a tax cut, and hedge funds in particular have seen a tax giveaway of £145 million. This is not a recovery felt by the majority: it is a recovery felt by a very few people.

I am concerned that our NHS is in crisis. We know that one in four people cannot access a GP appointment, and we know that the Government did not met A and E targets for the whole of last year. Too many people have not received cancer treatment in good time. I hoped that the Chancellor might talk about what the Government would do about the NHS, and I was struck by his comments about child and adolescent mental health services and maternal mental illness. He said that the people affected had been forgotten for too long. I was surprised to hear him say that because it is on his watch that we have seen some clinical commissioning groups spend as little as 6% of their budget on mental health. Despite the campaign for parity of esteem for mental health services by Labour peers—they were successful, and it is one of the few things that the Opposition can be proud of in the Health and Social Care Act 2012—in practice we have seen the complete opposite.

It is on this Government’s watch that we have seen cuts to mental health trusts that are 20% higher than for other elements of our national health service. A response to a parliamentary question reveals that there have been real cuts of £50 million a year to child and adolescent mental health services. Just yesterday, the CAMHS taskforce released its report. It was interesting to see the sanitised version of the report, because we saw a leaked copy in The Times a couple of weeks ago. Across the country, we have seen a reduction in the number of specialist mental health nurses by 3,300, and a reduction in the number of beds by 1,500. Too many young people are having to travel hundreds of miles to access mental health services, if they are able to access any sort of treatment or support at all. I thought it showed some cheek for the Chancellor to say that these people had been forgotten, because it is on his watch, over the past five years, that we have seen this reduction in attention and support for mental health.

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There was nothing in the Budget to counter one of the biggest problems in our country: job insecurity. Many of my hon. Friends have raised the challenges of zero-hours contracts. I was very interested to hear the hon. Member for Dover (Charlie Elphicke), who is no longer in his place, call them flexible work contracts. According to the ONS, 1.8 million zero-hours contracts were used by firms in the UK last summer. I know, from a report I conducted with two of my hon. Friends on Merseyside, the impact faced by too many of our constituents every time they wait for that text message or that phone call to find out if they have work. I was struck by the experience of my constituents who said that they could not buy a belt because they were not able to plan their finances from week to week. This is not just about zero-hours contracts, however; there are low-hour contracts too, and the millions of people who are in part-time work who wish to be in full-time work. If I had been the Chancellor, I certainly would not have talked about the national minimum wage, given that he previously backed a minimum wage of £7 an hour but has failed to introduce that in this Parliament.

Other hon. Friends have pointed to the challenges relating to food banks. It is a disgrace that just under 1 million people have had to access emergency food aid.

Huw Irranca-Davies: My hon. Friend is making an eloquent speech. What does she make of the study by the Children’s Society and the StepChange charity, which points to 86,000 families in Wales—23% of the total number of families—who are failing to keep up with household bills and loan repayments, and the response of a Wales Office spokesman who said, “The UK Government’s long-term economic plan is working”? Where have we heard that before?

Luciana Berger: I thank my hon. Friend for that intervention. He and I have been campaigning on this issue for many years, because we do not believe that in the sixth-richest nation in the world we should have any food banks, let alone the number that we have across all four nations. The fact is that just under 1 million people have had to access emergency food aid for themselves and for their children—all too often it is children who are affected. It is not just people who are out of work, but people in work, often on zero-hours contracts, who are struggling from week to week. People deserve better. I reflect on the comments made by my hon. Friend the Member for Stretford and Urmston (Kate Green) on the increase in absolute poverty. I am ashamed to live in the sixth-richest nation in the world, when we have seen an increase in absolute poverty in 2015.

I represent Liverpool Wavertree in north-west England. We heard in the Budget that cuts to local authorities are coming down the line. I have very serious concerns about what will happen to local authorities, particularly in the north-west where already we have experienced cuts 75% higher than in other parts of the country. Yet another report came out last week, showing that Liverpool has seen a reduction of £390 a head in funding since 2011, while in the south Wokingham has seen a cut of just £2.29. Our budget in Liverpool has been cut by 58% in real terms since 2011. That is £329 million. Page 130 of the OBR report states that we should expect a much sharper squeeze on local authorities’ real spending in the next Parliament. I shudder at what that

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will mean for my constituents and residents across Liverpool and the north-west. I am concerned about what will happen to our libraries, our social care and our children’s centres.

Ordered, That the debate be now adjourned.—(Mark Lancaster.)

Debate to be resumed tomorrow.

Business without Debate

European Union Documents

Motion made, and Question put forthwith (Standing Order No. 119(11)),

The EU and the Post-2015 Development Agenda

That this House takes note of European Union Document No. 1412/14 and Addendum, a Commission Communication: A decent Life for all: from vision to collective action; welcomes the document as an important contribution to a debate that is central to both development and environment policy; and supports the Government’s efforts in taking forward the post-2015 development agenda.—(Mark Lancaster.)

Question agreed to.

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Constitutional Law

That the draft Scotland Act 1998 (Variation of Borrowing Power) Order 2015, which was laid before this House on 15 December 2014, be approved.—(Mark Lancaster.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

That the draft Scotland Act 1998 (Modification of Schedule 5) Order 2015, which was laid before this House on 29 January, be approved.—(Mark Lancaster.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

That the draft Children and Young People (Scotland) Act 2014 (Consequential and Saving Provisions) Order 2015, which was laid before this House on 23 February, be approved.—(Mark Lancaster.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

That the draft Human Transplantation (Wales) Act 2013 (Consequential Provision) Order 2015, which was laid before this House on 21 January, be approved.—(Mark Lancaster.)

Question agreed to.

Madam Deputy Speaker (Dame Dawn Primarolo): With the leave of the House, we shall take motions 7 and 8 together.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

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Financial Services and Markets

That the draft Electronic Commerce Directive (Financial Services and Markets) (Amendment) Order 2015, which was laid before this House on 17 December 2014, be approved.

That the draft Financial Services and Markets Act 2000 (Miscellaneous Provisions) Order 2015, which was laid before this House on 3 February, be approved.—(Mark Lancaster.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Income Tax

That the draft Income Tax (Construction Industry Scheme) (Amendment of Schedule 11 to the Finance Act 2004) Order 2015, which was laid before this House on 28 January, be approved.—(Mark Lancaster.)

Question agreed to.

Madam Deputy Speaker: With the leave of the House, we shall take motions 10 to 12 together.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Local Government

That the draft Greater Manchester Combined Authority (Amendment) Order 2015, which was laid before this House on 25 February, be approved.

Community Infrastructure Levy

That the draft Community Infrastructure Levy (Amendment) Regulations 2015, which were laid before this House on 2 February, be approved.

Environmental Protection

That the draft Single Use Carrier Bags Charges (England) Order 2015, which was laid before this House on 21 January, be approved.—(Mark Lancaster.)

Question agreed to.

Motion made,

Infrastructure Planning

That the draft Infrastructure Planning (Radioactive Waste Geological Disposal Facilities) Order 2015, which was laid before this House on 12 January, be approved.—(Mark Lancaster.)

The Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 25 March (Standing Order No.41A).

Madam Deputy Speaker: With the leave of the House, we shall take motions 14 to 17 together.

Motion made, and Question put forthwith (Standing Order No. 118(6)),


That the draft Electricity and Gas (Market Integrity and Transparency) (Criminal Sanctions) Regulations 2015, which were laid before this House on 22 January, be approved.

That the draft Renewables Obligation Closure (Amendment) Order 2015, which was laid before this House on 27 January, be approved.

That the draft Emissions Performance Standard Regulations 2015, which were laid before this House on 2 February, be approved.

That the draft Contracts for Difference (Allocation) (Amendment) Regulations 2015, which were laid before this House on 23 February, be approved.—(Mark Lancaster.)

Question agreed to.

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Madam Deputy Speaker: With the leave of the House, we shall take motions 18 and 19 together.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Health Care and Associated Professions

That the draft Health Care and Associated Professions (Knowledge of English) Order 2015, which was laid before this House on 23 February, be approved.

That the draft General Medical Council (Fitness to Practise and Over-arching Objective) and the Professional Standards Authority for Health and Social Care (References to Court) Order 2015, which was laid before this House on 23 February, be approved.—(Mark Lancaster.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

National Health Service