13 July 2015 : Column 612

Emma Reynolds: I will not take lectures from somebody who believes that 80% of market rent is affordable for people in London, or from somebody who calls in planning applications, such as the one for Mount Pleasant in the constituency of my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry), to drive down, not up, the number of affordable homes. That is not what I call a good record on affordable homes.

Lilian Greenwood (Nottingham South) (Lab): Having visited my constituency, my hon. Friend knows that one thing the local authorities are doing is investing in our social housing and ensuring that it is of a decent standard. Does she share the consternation of the chief executive of my local arm’s length management organisation, Nottingham City Homes, who notes that the reduction in social rents will lead to a reduction in investment and a failure to invest in the housing standards that tenants would like?

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. As we have so many Members who wish to speak, we need short interventions.

Emma Reynolds: We will look at those proposals in detail. As for what my hon. Friend has just said, we need to ensure that social housing providers are in a position to build more homes. We want housing associations and councils to build more homes, as there is, I think we can all agree, an acute shortage of affordable housing in this country. We also need to ensure that housing associations have the funding mechanisms in place to continue to invest in their stock. One of the proudest achievements of the previous Labour Government was the decent homes programme. Those homes were refurbished some 10 to 15 years ago, and there is a continual process of investing in the existing stock.

In conclusion, this Budget should have been about supporting working people and those who want to get on, rather than about punishing hard work. It should have been about tackling the long-term challenges facing our country—the productivity challenge, the balance of payments deficit, the housing crisis, the devolution agenda and so much more. Instead, this is a Budget that will hit hard-working people on low incomes, families with children, women and young people. It is a Budget that the OBR says will result in fewer homes, not more. It is a Budget that was more about politics than economics. It is more about the short-term needs of one man whose real mission is to move next door and take over the keys to No.10, rather than the long-term needs of the country.

4.42 pm

Robert Neill (Bromley and Chislehurst) (Con): I normally regard my right hon. Friend the Secretary of State as one of the most generous-hearted men in politics. When I listened to the opening of his speech, I thought he was being a bit harsh on the Opposition, but having heard their reaction, I think he was, if anything, over-generous. When one of the more thoughtful Members of the shadow Cabinet is reduced to tripping out every stereotypical canard in the socialist book and attempts to take refuge in the same view that was adopted by the last Bourbon King of France, Charles X, who was wholly and genuinely convinced that the French revolution

13 July 2015 : Column 613

was a terrible aberration, and that people would wake up one day and realise that they had got it wrong and that the divine right of kings was the only answer, I realised the difficulty that any Blairite on the Labour Front Bench faces. If it is any help for the historians here, Charles X lasted three and a half years before he was got rid of. I shall be interested to see how long the next leader of the Labour party lasts.

I also felt genuinely sorry for the current leader of the Labour party. After trying to inject a modicum of realism in relation to benefits and welfare reform, she was entirely disavowed by her own party. It is rather sad when the official Opposition of this country take as their role model the ostrich. They expose their thinking parts to us and bury the realities in the sand, and the country deserves better.

Kwasi Kwarteng (Spelthorne) (Con): Has my hon. Friend heard anything today about the Opposition’s current view on the welfare cap? Has he learned anything interesting about what their actual position is?

Robert Neill: Not at all. As there are probably something in the order of 230-plus different views, we could not cover them all in time. It is also rather remarkable that the Opposition have adopted an entirely different stance to elected mayors from that which I remember when I was the leader of the Conservative group on the London Assembly and facing the first ever elected mayor in this country—the first Mayor of London. I am glad to say that things have improved since then. As some may remember, the office of Mayor of London came into being as a result of legislation introduced by the Labour party. It comes back to the same trope. Why does the Labour party now regard any elected mayor as anathema? Because it was an idea of Tony Blair’s, and must therefore be cast into utter darkness.

I find it truly bizarre that a normally thoughtful party that wants to talk about devolution objects to the opportunity to take up city deal models with an elected mayor. The idea has not been forced upon Labour; it is Labour’s choice whether to have it or not. It was Labour that imposed more central control over local government, not just in planning, not just in terms of whether there could be a committee structure or not, not just in terms of whether a very strict and rigid standards regime was imposed, not just in terms of the comprehensive area assessment, not just in terms of planning policy, and not just in terms of financial policy and the cap. After all that, Labour had the gall to complain about an offer—take it or leave it—put forward by my right hon. Friend.

Emma Reynolds: I always enjoy debating with the hon. Gentleman. To clarify, we are not anti-mayor. We believe that local areas and local communities should have a say over whether they have a mayor or not. We are in favour of true localism, not imposing structures on people.

Robert Neill: That is useful and I regard it as a step forward. I hope the hon. Lady is able to remain in place after the leadership election. Let me explain why. With all respect to her, being on the campaign team of a

13 July 2015 : Column 614

Blairite in the Labour leadership election probably makes the prospects of the ostrich pretty good in terms of species survival, so I wish her well for the future.

The Labour party has ducked the real issue, which is that my right hon. Friend the Secretary of State and the Chancellor of the Exchequer have offered genuine devolution of power to local authorities. The issue is not so much about the badge on the top of the tin, although there is a good reason for a single focal point in city areas. It is hugely important to remember that we have offered that to Cornwall too, and we are starting to see the good work of city deals rolled out to the shire counties. That should be applauded. The ability to join up adult social care, one of the principal cost pressures on top tier authorities, with the health service should be applauded by everybody in the House, not greeted with the rather curmudgeonly response that has come from Opposition Members.

Jonathan Ashworth: The hon. Gentleman has moved on, but may I extend an invitation to him to come to Leicester where we have an elected mayor? The opponents of that are members of the Leicester Conservative association.

Robert Neill: I believe there is a Blairite in Leicester. It might be too difficult for me to go up there.

It is sad that the key issues are being missed. We ought to be prepared to work across the House on opportunities to improve the offer available to local government. Whether Opposition Members like it or not, a good deal of work was done under the coalition Government and more is being done now to hand power down to local communities. That is a good thing in itself. It must be right to give significant economic drivers—London and the other major cities—the power to raise revenue and invest it more for themselves. Could we go further? I think we should, but we should recognise this as a very important first start.

Bill Wiggin (North Herefordshire) (Con): Will my hon. Friend give way?

Robert Neill: I must be careful with the number of interventions I take, as other Members want to get in, but I shall give way to my hon. Friend.

Bill Wiggin: I am grateful to my hon. Friend. He referred to some excellent legislation introduced by the previous Government. There is no finer bit than the Localism Act 2011, but in Herefordshire we are seeing brakes put on the powers of local people by the local authority. Does he find that happening elsewhere?

Robert Neill: Sadly, it does happen. One of the disappointments I have had is, I am sorry to say, that local authorities have been slower than I would wish in putting in place up-to-date local plans. There is a good deal more movement on that than previously, and I hope that the political certainty we have since the general election will encourage local authorities to move forward on that. I hope we can do more to encourage the uptake of neighbourhood plans, which my right hon. Friend pioneered and which offer a chance to give granularity to local communities’ involvement.

13 July 2015 : Column 615

We should look again at the sort of fiscal incentives we can offer local authorities to support growth. The new homes bonus is important, as is the ability of cities like Manchester to retain 100% of the uplift in business rates. Personally, I think we should aim by the end of this Parliament to make that the norm across the country, rather than the exception. Those are the things that we ought to be talking about, rather than re-running history.

We need to offer other incentives in the housing field. A great deal more needs to be done. There is an issue with skills in the construction sector. When I talk to people in the sector, they tell me that as well as the planning side, which we can tackle, we need the skilled trades—the carpenters and the bricklayers, the supply systems. The Government are tackling that through their apprenticeship schemes, and we need to push that forward with great rigour. We need to ensure that the planning system deals not only with housing issues, but with the need to supply aggregates and other materials that are critical to the building trade. I hope we all recognise that we should be ruthless in prioritising building on publicly owned land. Today we had—I congratulate my hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) on this—the first meeting of the London Land Commission, which is bringing forward something that has been mooted for a very long time.

I shall say one more thing about London. Devolution to other cities is welcome, but I hope that the Government do not think that means London has had enough devolution. I say that not only as a London MP but as joint chair, alongside the hon. Member for Croydon North (Mr Reed), of the all-party group on London. The truth is that London, as a major powerhouse, can and should have further fiscal devolution. I commend to hon. Members a thoughtful piece in today’s Financial Times by Professor Vernon Bogdanor, in which he writes that it is important that our major cities and powerhouses have devolved powers. I am very happy for them to have elected mayors, but the developer will ask not only “Have you got a mayor?” but “Can you give me a tax incentive? What breaks can you give to make it attractive?” I hope that we can build on that, too.

The Budget presents great opportunities for local government. Let me end by pressing one final reform upon my right hon. Friend the Secretary of State. We have done a great deal to boost the structural arrangements and we have started on the right track in relation to fiscal devolution. I hope that we can do more to encourage the supply of housing through the various initiatives I have suggested. The final thing we need to do is deliver infrastructure planning more effectively. One thing we could do is have a serious reform of compulsory purchase legislation, which is overdue, and which I have talked about before. It will be the work of a Parliament, but it is worth starting now. I think we could achieve cross-party consensus on that, because delivering the underpinning roads, rail and other infrastructure will speed the sustainable delivery of housing, which is critical.

My constituency was once represented by Harold Macmillan. I can tell hon. Members that he would have been very proud of my right hon. Friend the Secretary of State and of this Budget.

Several hon. Members rose—

13 July 2015 : Column 616

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. Before I call the Scottish National party spokesperson, I warn Members that a six-minute time limit will apply after this speech.

4.53 pm

Alison Thewliss (Glasgow Central) (SNP): It is a dubious honour to be called to speak in this Budget debate—not because I am not keen to speak on behalf of my party and my constituents, but because so many things about it still upset me deeply. I raised the issue last week, but I have yet to receive an answer on the provision set out at the top of page 88 of the Red Book. Specifically, what kind of system will the Department for Work and Pensions and Her Majesty’s Revenue and Customs introduce to ask women who have been raped to prove it in order to qualify for child tax credits? I still seek clarification on that appalling clause, and I hope that the Secretary of State will eventually be able to give it. I know how hard my constituents and people across these islands will be hit by the Budget. I stand here on behalf of my party to do my best to represent them and fight their corner today. I will speak first about the impact on communities, and then I will discuss investment and city deals.

The Secretary of State for Work and Pensions once claimed he could live on £53 a week. I am not clear whether he tried, but I know that more than 480,000 people signed a petition asking him to do so. As Members of this House, we are comfortably off. Even if we were suddenly to lose our jobs, as so many hon. Members’ colleagues in Scotland did in May, I suspect that none of us would starve. That is not the daily reality of life for many people across the United Kingdom today. Even when people are in employment, they do not earn enough to live more than hand to mouth. We in this House do not have the right to pull up the ladder and leave them behind. Let us be in no doubt—this is not because our lowest-paid do not work hard enough. Many work extraordinarily hard for long hours doing difficult, dirty and dangerous work. They need our support and they need our respect. Most of all, they need fair pay— a real living wage, not some hastily badged imitation—and access to Government support mechanisms such as tax credits to help them live with dignity. This Government should apologise to the Living Wage Foundation for stealing the campaign it has worked so hard to build.

I was glad to hear of the shadow Secretary of State’s conversion, because an Opposition who oppose opposing are no good at all. I urge all Labour Members to remember the toil of many people in our country struggling to make ends meet when they consider backing the Tories’ Budget. Those people elected Labour Members to stand up for them, not for the Secretary of State.

This Tory Budget has been assessed by groups such as the Fawcett Society as being disproportionately hard on women. The Fawcett Society considers that this Budget gives with one hand and takes away with two, stating:

“Women are going to be pushed further into a poverty trap following a Budget that offers little to help them increase their income…We fear that many more will find themselves in a low benefit, low wage situation that is increasingly difficult to escape.”

The House of Commons Library says that, since 2010, 85% of the £26 billion-worth of cuts made to benefits, tax credits, pay and pensions has been taken from women’s incomes. That is unacceptable. I ask all feminists in this House to consider it very carefully.

13 July 2015 : Column 617

The communities I know best are resilient. They look out for one another and make sure their neighbours are okay. They collect for food banks. They donate what little they have to ensure that their vulnerable neighbours are looked after. The sharp increase in food banks in this country is a stark example of a community response to crisis. Visits to food banks increased from 25,899 in 2008-09 to 1,084,604 in 2014-15, according to the Trussell Trust’s figures. This speaks to a crisis in our policies in this nation and a very human response by ordinary people to that crisis. We should not have a requirement for food banks in a wealthy nation such as ours. Being ahead in our GDP and our status is not important when people are starving.

What shocks me most is the role of our social security system in forcing people to use food banks. The Trussell Trust’s figures show that just shy of 30% of people are using food banks because of benefit delays: families cannot feed themselves because of an administrative problem. That is absolutely unacceptable and shameful. Twenty-two per cent. of people use food banks due to low income. These people have jobs, but because of their pay and the uncertainty around zero-hours contracts they do not earn enough to eat. This is not right. We must act and not accept the Tory narrative, shake our heads, and throw up our hands.

The benefits statistics from advice agencies such as the citizens advice bureaux show further evidence of an unfair system that exacerbates the poverty in our communities. In the category of benefits, tax credits and national insurance advice, one single citizens advice bureau in the Bridgeton area of my constituency saw an increase in its caseload from 4,092 in 2011-12 to 7,266 in 2014-15. Its evidence shows that delays are built into the social security system at every stage, through application, mandatory reconsideration, and appeals. When people are supported by agencies such as the CAB, they are far more likely to be successful in those appeals. That clearly speaks to a system that is off-putting and difficult to navigate; it is not people-friendly. On Friday I learned of a person who waited over a year for his personal independence payment case to be processed—a whole year, for someone who needed support more than most. Who picks up the pieces? Neighbours, friends, churches, and community organisations filled the gaps when this Government forced citizens to the brink. The Government’s Budget undermines people’s sense of community and puts unsustainable strain on the vital services so many rely on.

I have seen the impact of cuts to local government over the past few years. During that time, the Scottish Government have done their utmost to protect local government from the worst of the cuts it has faced, but decisions have already resulted in significant detriment to services. Cuts were made to the flesh, with efficiency savings, reductions in office costs, and the need to work smarter. Cuts were then made to the muscle—to the staff—

David Rutley (Macclesfield) (Con): I am listening to the hon. Lady with interest. Does she believe that there is any room at all for reform of the benefits system or the welfare approach to encourage more people to get into work, or support them into work, or is everything perfect in Scotland?

13 July 2015 : Column 618

Alison Thewliss: When the powers this Government have force people into poverty and do not help to support them at their time of need, I say that that is a crisis and that we are hamstrung in our ability to help people. This Government expect the Scottish Government to mitigate the worst of their policies, but we should not exist to do so. Give us the powers, and we will do what we can.

Cuts have now come to the bone. Service provision has been removed, including things that make no logical sense to cut because such low-level interventions save money down the line. Sheltered housing services, which keep the elderly active, and services such as the Glasgow Association for Mental Health, which prevents those with mental health problems from slipping into crisis, have had their funding removed. This makes no sense: we can spend to save by investing at a certain level, but the cuts now mean that local government has to make such choices.

I do not know what the full impact will be of cuts that are starting to amputate huge chunks of our local bodies, but I very much worry that they will threaten the life of the patient. Local government serves both a social and an economic purpose, and the shrinking of public services takes well-paid and useful jobs out of areas and damages small business. In the past few days, the Local Government Association analysis has suggested that a £3.3 billion cut in 2016-17, or some 12%, will mean potentially devastating choices in many areas. These are not arbitrary cuts or figures on a balance sheet; they affect lives.

The proposed housing changes will have a significant impact. In Scotland, we take the attitude that a house is a home. That does not vary depending on whether someone’s house is a bought house or a rented one. I know from my case load that a social rented home in Glasgow is very desirable indeed. The huge numbers on housing waiting lists highlighted by organisations such as Shelter certainly seem to bear that out.

A lot of what has been said in the Budget seems to assume that markets will take care of the housing crisis in this country, but I would turn that contention on its head. The commercial rental market has driven up rents to the point at which people on average or even generous wages cannot afford to live, particularly in this city.

Richard Fuller: The acting leader of the official Opposition has said that their goal is not to oppose just for the sake of doing so. The hon. Lady has not mentioned anything in the Budget with which she agrees. Does she disagree with the acting leader of the Opposition?

Alison Thewliss: The hon. Gentleman will find that the Scottish National party takes its own stance on many issues and does not follow the Labour party.

The problem with market rents is not, as the Red Book implies at paragraph 1.154, with social rents. I believe that, by and large, council and housing association rents are fair, not subsidised. I was glad that the shadow Secretary of State mentioned the proposed pay-to-stay policy, and I agree with a lot of what she said on that. The policy will drive people out of the communities they call home, push out key workers on modest salaries and all but ghettoise swathes of our towns and cities. The proposals are unfair in that local authorities will not see the benefit of the policy, because their share

13 July 2015 : Column 619

from increased rents will go back to the Exchequer, while local housing associations get to keep the funds. If the Government insist on pursuing this daft policy, they should at least give an even playing field to all housing providers to allow them to invest in new housing.

I note that there is a proposal to end so-called lifetime tenancies. Long tenancies can contribute positively to the fabric of our communities by ensuring that people stay and make their lives in an area and that they belong to it. They are part of what makes renting with a housing association or a local council attractive, as opposed to the uncertainty of the private sector, where people have to move all the time.

Andrew Bridgen: The hon. Lady is making her case, but is there anything in the Budget with which she agrees? Does she support the new national living wage and the cut in rents for housing association tenants?

Alison Thewliss: I have made it abundantly clear that it is not a living wage; it is a rebadging of the national minimum wage, and it is not good enough. [Interruption.] Would Government Members give me a break?

Long tenancies give a degree of certainty and reduce costs to housing providers, who know that a tenant is there for the long term and do not constantly have to manage the turnover of stock. That is costly for housing associations and local councils to manage, so knowing that a tenant will stay reduces their costs. The Government should think very carefully about this policy’s impact on well-established and strong communities.

This Government seem to be making a further attack on the social rented sector and its tenants, following the distress caused by the bedroom tax. The Joseph Rowntree Foundation has found that only 6% of affected tenants were actually able to move, and that 50% of those who did not move fell into arrears. I am glad that the Scottish Government were able to mitigate that, but it is another example of a policy built to deal with a London problem that did not exist in Scotland, and which simply punishes people for their circumstances. The Scottish Government should not exist simply to mitigate the policies of another Government. That is unfair and unsustainable.

The Government are also in real danger of undermining their own work on city deals. One of the intended outcomes of the Glasgow and Clyde Valley city deal is to help long-term unemployed people back to work, and if the actions of this Tory Government undermine that by slashing benefits and making life harder for people who are looking to work, that will undermine the potential success of the deal. We must co-ordinate and work together. We need job-creating powers in Scotland and more than the simple power to mitigate the wrongheaded approach of this Government.

Although I say that, the hon. Members for North West Leicestershire (Andrew Bridgen) and for Bedford (Richard Fuller) will be glad to find that I welcome the further development of city deals in the Budget. They will go some way to redressing the imbalance in the UK economy, and not before time. Looking at the rhetoric about the northern powerhouse, I would suggest that it is perhaps a final admission of the fundamental failure of the UK economy. London is indeed the giant suction machine that the former Business Secretary spoke of, and the map on page 67 illustrates that investment

13 July 2015 : Column 620

in the south and east of England is focused through the prism of how best to serve London rather than to build up those areas in their own right and advance the economy.

I have attended Adjournment and Westminster Hall debates on city deals for Aberdeen and Cardiff and I listened with great interest to the debate on elected mayors. I have also followed discussions on the Cities and Local Government Devolution Bill in the other place. I am keen to see the development of deals that meet local needs and have been disappointed in some of those debates to find that the wishes of local people seemed to rank behind the pet project of some local authorities and the requirements of business. If more powers come to cities, it should be to serve the ambitions and priorities of local people to raise their opportunities in life and to make things better according to local demands. They must also be the devolution of funding to match those powers, as devolution and the reform of local government cannot be a cover for passing on cuts.

I am of course delighted to see continued commitment to the city deal for Glasgow and Clyde Valley, which the UK Government established in partnership with the Scottish Government, each putting in £500 million, with £130 million coming from the eight local authorities involved. I hope, too, that the deal will involve listening to local people. It is early days and the work of the joint board is just getting under way. I commend the fledgling city deals for Aberdeen and Inverness, which are mentioned in the Red Book, and ask that attention be paid to potential deals in Scotland’s other cities.

In considering city deals, we must also consider how we support areas outwith large conurbations. Rural areas should not be left behind, and if they are it will only exacerbate the difficulties of rurality. The approach in Scotland has been about collaboration through the Scottish Cities Alliance rather than cutthroat competition, and I believe that that is more productive. Setting regions against one another and failing to seize the opportunities to make links will only waste money in the long run. I note with interest that an Oyster-type system is being considered for Manchester. That is of course welcome, but it should not operate in a way that builds barriers between different regions. There is much opportunity for interoperability rather than running in entirely different directions and I note with some concern the comments made by the hon. Member for Bromley and Chislehurst (Robert Neill) about incentives for businesses. If we are not careful, that could lead to a race to the bottom on standards in different areas.

I would also guard against the temptation to reach for shiny prestige projects at the expense of more sustainable projects that benefit local communities and urge that further attention is paid to the importance of community benefit policies within public contracts. They were used effectively in Glasgow during the Commonwealth games and on other projects and are a simple way to ensure that local people get jobs, training and investment in every large or small infrastructure project that comes along.

A Westminster Hall debate last week touched on the fact that elected mayors had been rejected in some areas in local referendums. It would seem to me to be unwise to overrule that democratic right, but the Under-Secretary of State for Communities and Local Government, the hon. Member for Nuneaton (Mr Jones), said:

“I reiterate that where there is a request for the ambitious devolution of a suite of powers to a combined authority, there must

13 July 2015 : Column 621

be a metro mayor, but no city will be forced to take on those powers or to have a metro mayor, just as no county will be forced to make any governance changes.”—[

Official Report,

9 July 2015; Vol. 598, c. 187WH.]

That seems to make no sense and to disrespect local democracy. People can have the funding, but only if they have the mayor. If people do not want a local mayor and think that the power is better vested in their local authority and local democracy, the Government should respect that. Members might also like to note that there is no such obligation for the Glasgow and Clyde Valley plan to come with an elected mayor.

Robert Neill: The hon. Lady is making an interesting point, but if she trusts local authorities in that regard it is legitimate to trust them to vary certain levels of taxation within an area and to increase their prudential borrowing against a revenue stream. Would she support us on such measures?

Alison Thewliss: Having come from local government, of course I trust it to do those things, but it should not be forced with a gun put to its head.

I will close by asking the Secretary of State to reflect on the purposes of power being devolved, and on how best we support local communities. People will be unsurprised that we in the SNP reject the austerity agenda, and the people who voted for us support our policy. That austerity agenda has already led to so much damage to the fabric of our communities, and there is only so much that people can take.

Several hon. Members rose—

Mr Deputy Speaker: Order. I remind Members that there is a six-minute limit on speeches.

5.10 pm

Oliver Colvile (Plymouth, Sutton and Devonport) (Con): Thank you, Mr Deputy Speaker, for calling me to speak. It is a pleasure to serve under you for the first time in this Parliament.

This Budget debate is on local growth. It is a real delight to be able to continue to speak up for my Plymouth, Sutton and Devonport constituency as its MP after a hard-fought campaign. I am also delighted that my hon. Friend the Member for Plymouth, Moor View (Johnny Mercer) won the neighbouring seat and that he will join me in speaking up for Plymouth in this House. He, my hon. Friend the Member for South West Devon (Mr Streeter) and I will be a formidable force, speaking up for our great city.

Plymouth has a global reputation for marine science engineering research. Yesterday, I was delighted to be able to go to St Andrew’s church to commemorate sea Sunday, which is an incredibly important part of our heritage.

Plymouth is a significant home for the Royal Navy. It includes Devonport dockyard, which is the base for the refitting and refuelling of the UK’s nuclear submarine fleet, and the deep maintenance of our surface ships. It is also home to 3 Commando Brigade at Stonehouse; Royal Marines Tamar, which hosts the amphibious capability and the Royal Marines; HMS Drake, which

13 July 2015 : Column 622

base ports seven Type-23s; HMS Ocean; HMS Bulwark, which I was on last Thursday to welcome the crew back from their activities in the Mediterranean and dealing with Ebola; HMS Albion; and HMS Protector, which is the Antarctic survey ship. In addition, 29 Commando Regiment Royal Artillery is based at the Royal Citadel, in which both my hon. and gallant Friends the Members for Plymouth, Moor View and for Filton and Bradley Stoke (Jack Lopresti) served before going out to Afghanistan to support our country.

Although the Royal Navy’s presence is the cornerstone for Plymouth’s global reputation, we are also delighted to host the national aquarium, Plymouth Marine Laboratory, the Marine Biological Association and, of course, Plymouth University, as well as Princess Yachts, all of which are key economic drivers and deliver not only growth but employment.

Before the election, the Government released land in the dockyard as part of the city deal, to create a maritime industrial production campus that will create at least 1,800 new jobs. I pay special tribute to my right hon. Friend the Secretary of State, who has worked so hard to make sure that we deliver that city deal. That has been a major assurance. In the March Budget, the Chancellor announced that this land would be given enterprise zone status subject to an acceptable business case being made. I hope my right hon. Friend the Secretary of State will tell us what progress is being made and that he has received the information required to press on with this project, which will deliver the city deal much quicker than might otherwise be the case.

As my right hon. Friend knows, Plymouth is a low-wage, low-skills economy. Some 38% of the people who work in the city are employed in the public sector. I understand that those public sector employees receive a 13% premium over their private sector equivalents. In the run-up to the 2010 election, Plymouth was considered to be one of the most vulnerable places and it was thought that the reductions in public expenditure would result in significant increases in unemployment. I thank my right hon. Friend the Secretary of State for Work and Pensions for ensuring that that situation was handled in a sensitive manner, which has resulted in a 42% reduction in the claimant count over the last five years.

I remain fully committed to making sure that we rebalance the Plymouth economy and that we never again find ourselves facing such a threat. Key to that is ensuring that we have more apprenticeships. We need more apprenticeships on top of the 5,000 that the coalition Government created, and the largest urban conurbation west of Bristol also requires better transport links to and from the rest of the country. The situation in February 2014—whereby storms led to us losing our railway line at Dawlish and being cut off—must never be allowed to happen again.

I therefore very much welcome the Government’s commitment to invest £7 billion in the south-west’s transport infrastructure, including in the dualling of the A303 and the A358. Unfortunately, the Labour party said in the course of the general election that it would not dual the A358. I found that disappointing and it demonstrated what that party is about. Progress is being made on improving our railway network. I would be most grateful if my right hon. Friend the Secretary of State for Transport made a statement to the House in the near future on the progress that is being made to

13 July 2015 : Column 623

ensure that our economy can flourish. It is only through investment in skills, training and transport infrastructure that we can deliver our promises and continue to rebalance our economy.

Finally, I remind SNP Members that the Conservatives now have more than 50 Members of Parliament in the south-west. They might like to note that we are on the Chancellor’s side, whereas they are interested in opposing his policies. That is why we need a Conservative Government who continue to deliver for the south-west and to deliver growth.

5.16 pm

Mr Pat McFadden (Wolverhampton South East) (Lab): Budgets, perhaps more than anywhere else, are where rhetoric meets policy. Rhetoric is an inescapable part of politics, but Budgets are the hard end of policy, where we decide our tax rates and revenues, decide on the benefit position and hear about the national accounts. I will spend the few minutes allocated to me discussing those two sides of the Budget.

First, when the Conservatives were elected in 2010 as the lead partner in the coalition, they pledged to get rid of the deficit in five years. We fought that election on a pledge to halve the deficit in five years. That policy was derided as the height of fiscal irresponsibility, but what the Chancellor announced in his Budget last week was that the Government had halved the deficit over one Parliament. They followed the Darling plan, rather than the Osborne plan when it came to the reality of deficit reduction in the last Parliament. They claimed success for their deficit reduction plan, but it was so successful that it now requires austerity for two Parliaments, rather than one.

Secondly, there is a clash between rhetoric and policy in respect of the next five years. The Conservatives fought the election just a couple of months ago on what the Office for Budget Responsibility described as a “rollercoaster” pattern of public expenditure cuts, with the deficit to be eliminated in 2018-19. Yet last week it was announced that the rollercoaster had been ditched, deficit elimination was to be put back a further year and there would be a smoother path of deficit reduction. Again, that is much closer to the plan on which Labour fought the election.

The third area is the mixture between taxes and cuts. The Conservatives fought the election saying that there was no need for tax increases at all and that the deficit would be dealt with entirely by expenditure cuts. Yet this Budget has been audited independently and it will result in a net increase in taxation of £6 billion a year—exactly the kind of plan that they would have denounced at the election.

Mr Robin Walker (Worcester) (Con): Does the right hon. Gentleman not welcome the fact that the Budget closes tax loopholes and helps to make our tax system fairer? Surely that is something that we can unite across the House in supporting.

Mr McFadden: I do welcome parts of the Budget, but I do not welcome a party fighting an election on a platform of denouncing one set of policies and then adopting them right after the election.

13 July 2015 : Column 624

To continue with my list, the Chancellor’s most blatant example of shopping around was lifting wholesale the plan to deal with the tax status of non-doms—something that was never mentioned by the Conservative party until we raised it in the election campaign. Fifthly, we fought the election on a plan for a staged increase in the national minimum wage over this Parliament—another policy that has been adopted by the Conservative party.

There are parts of the Budget that I welcome, particularly those that the Conservative party roundly denounced when they were being voiced by someone else before the election. However, it is not all agreement, because we have to consider the Budget in the round rather than just individual measures that we agree with. We cannot agree with a Budget that has been denounced as regressive because it attacks the incomes of the working poor, leading 3 million families to lose £1,000 a year. That will cause real hardship for families in my constituency and in many others like it. We cannot agree with priorities such as increasing the inheritance tax threshold for people who already have assets, while at the same time abolishing student grants, which are targeted at low-income families, making it harder for young people to pursue higher education and gain the opportunities that they deserve.

We also have to question the abolition of housing benefit for people under 21. I recently met the YMCA in Wolverhampton, and many similar charities deal with the most vulnerable young people. How will the Government ensure that those young people are not forced into destitution, and that the work of such excellent charities is not destroyed by the change?

Overall, the Budget is regressive. It is not just a march on to Labour territory, as we have read in recent weeks, but a plan that will attack the working poor and hurt incentives to work rather than increasing them. As we have heard, being in opposition is not just about blanket opposition. Shouting “Fight the cuts” is not enough. If we did not learn that over the past five years, we should certainly learn it now. Our attitude to the Budget should be to welcome the parts of it that are stolen from us and that we can agree with, but to oppose firmly the parts of it that are not in the interests of the country and our constituents.

Looking forward, the next few years will not just be about the fiscal path. They will be about equipping young people for the future, because too many of them are denied opportunities; about making sure that an economic recovery can be shared by every part of the country, not just based on a property-fuelled boom in one part of the country; and about our place in the world. On all those issues, we will be a sensible Opposition. We will not abandon the ground that we hold because the Conservative party walks on to it, but we will stick up for what we believe in and oppose firmly and with determination where it is deserved.

5.22 pm

Anne Marie Morris (Newton Abbot) (Con): The Prime Minister has a vision—a vision of one nation—but recognises that it must be built from the bottom up. I applaud the view that devolution is the way forward, and I very much look forward to the creation of the south-west powerhouse.

13 July 2015 : Column 625

Oliver Colvile: Does my hon. Friend agree that if Cornwall is to be given devolution, it should have to work with all of us in the south-west?

Anne Marie Morris: I have no doubt that it will.

Before the election, the Government set out a six-point plan for the south-west. They said that we needed to increase the long-term growth rate; sustain job creation and create 150,000 more jobs by 2020; transform connectivity, by which they meant transport and broadband; support the region’s key industries, defence and high technology; boost science and promote skills; and support tourism. That was a great agenda, but let us see how it has been delivered on.

The Government have a good record so far, and the measures in the Budget show a degree of promise. On growth, as my hon. Friend mentions, there is the prospect of devolution in Cornwall, and I am absolutely convinced that Devon and Somerset will be looking at exactly the same thing. We have a number of key enterprise zones—Plymouth has been a great success story, and my local enterprise partnership, the Heart of the South West LEP, had an incredible settlement under the local growth fund. We get £103 million in 2014, one of the top 10 awards, and £65 million in 2015, the top award. That is great news.

On job creation, the south Devon link road will produce 7,960 jobs, and the growth deal will deliver 13,000. The city deal in Plymouth will deliver 9,000 jobs, which is great. Unemployment has fallen. In the south-west in 2010 it stood at 83,769; in 2015 it is 38,410. There is the same good story for youth unemployment. In 2010 it was 22,525 in the south-west, and in 2015 it is 8,250. That is a great result.

On connectivity, rail is dear to my heart and the railway line at Dawlish has been preserved, and will be preserved for the future—good on the Government! They have also promised £4 billion on electrification and more frequent trains at 140 mph. There is a new stations fund of £20 million, which is definitely good news and—best of all—we look forward to a dedicated south-west rail franchise. Great!

On the roads, the story has also been good, and as has been mentioned, £7.2 billion has been spent on a number of projects such as the A30, A303, M5—the list goes on. We now have the road fund that was created from the excise duty changes. That will enable Devon, which has more roads than Denmark, to move forward and get some of those potholes filled. Pinch point funding has been increased by £3.5 million for local congestion. Newton Abbot welcomes that, and would love a chunk of it.

On broadband, yes there have been challenges but we got £32 million in phase 1 and £22.75 million in phase 2. Some of the highest settlements in the country were for Devon and Somerset—bring it on! Broadband Delivery UK is considering providing an extra £25 million, and in the Budget we were promised an extra £10 million for ultrafast broadband. Does that not sound great for those of us who live in those areas and are rather cut off? Mobile 4G connectivity is also promised, which is fantastic compared with the Labour promise of 2 megabits per second. We are doing very well. I will not say that there have been no problems, but the Government have taken some good steps forward and we will keep pushing them.

13 July 2015 : Column 626

On industry, defence is key for Plymouth—as my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) said—and with a 2% promise of GDP spend we are moving in the right direction. On high tech, we have Hinkley Point C nuclear power station, and South Yard in Plymouth has been redeveloped to improve marine businesses and advanced manufacturing. On science and skills, £23 million has been put aside for new digital economy centres, and Bath will be one of them. GCHQ has already recruited 150,000 new cyber-specialists, and 200,000 more are promised. We also have science parks: Exeter, Plymouth, Bridgwater—fantastic! Better still, there will be a network of national colleges to look at the skills gap, and I am pleased that some of that will be in the south-west. For tourism, the jewel in our crown, there will be an additional £90 million for the coastal communities fund, and we in the south-west will benefit from £10 million of that. I have already benefited in Teignmouth with my Carlton theatre—good on the Government!

In general, the Government have done a first-class job, but more could be done and I am sure that they will be listening to my request, alongside those of the other 50 south-west MPs. We have a challenge with underfunding. The Education Secretary recognised that and last year gave us an extra £16 million, but health and social care is a challenge. The south-west is a wonderful place to live. Lots of people come and retire there, and many are rather elderly and the costs are significant. I urge the Minister and his colleagues in the Departments for Education and of Health to consider reviewing the formula so that we get a fair share and can properly support individuals who live in our beautiful south-west.

This is a great Budget and I commend it to the House. It is excellent for local growth in the south-west.

Andrew Gwynne: On a point of order, Mr Deputy Speaker. I inform the House that today I have been contacted by a police officer from Greater Manchester police regarding correspondence between me and some of my constituents about Audenshaw school in my constituency. It is not my intention to release the information requested by the police because I consider letters between constituents and me as a Member of Parliament to be confidential unless I am instructed to release them by a court. May I place that on the record and ask you, Mr Deputy Speaker, whether that is also your understanding?

Mr Deputy Speaker (Mr Lindsay Hoyle): The hon. Gentleman is correct in what he has said, and whether or not to release those letters is a decision that he must take, based on the information that he holds. The point is certainly on the record because we are all aware of it and people will read about it tomorrow.

5.29 pm

Mr Iain Wright (Hartlepool) (Lab): Productivity is the pressing economic challenge of this Parliament. Unless the country addresses productivity, especially the widening gap in output per hour between ourselves and our main competitors, wage levels and living standards will not rise, and our competitiveness and position as a leading economic nation will be severely under threat. It is welcome that the Chancellor himself has now acknowledged the issue. In his Mansion House speech on 10 June he said:

“Britain must address its poor productivity.

13 July 2015 : Column 627

We don’t export enough; we don’t train enough; we don’t save enough; we don’t invest enough; we don’t manufacture enough; we certainly don’t build enough, and far too much of the economic activity in our nation is concentrated here in the centre of London.”

I hope to address all those points in my speech, and ask how the Budget will address them.

Today is the first day in debate on the Budget that the House is able to consider the Government’s productivity plan, which was published on Friday. It is curious that the plan was not published alongside other documents at the time of the Budget statement, as is the norm. That suggests either that the Government fancied another hit in the 24-hour news cycle 48 hours after the Budget or that the productivity plan was not ready for publication on Budget day, and that Whitehall was trawled in a desperate attempt to scrabble together some half-baked measures in order to publish something—anything—in the immediate aftermath of the Budget. Indeed, the plan is littered far too much with phrases such as “will be published shortly”, or

“the government will set out more details of these reforms in the autumn.”

That suggests that the productivity plan has not been thought through as much as the Government would have liked.

On the question of exporting enough, it is a huge concern that there was nothing in the Budget to help to increase the number of firms exporting, or to address the persistent structural trade deficit. The Red Book shows that that is getting worse: in 2014, exports grew by 0.5% but imports grew by 2.4%. The Office for Budget Responsibility forecast that net trade this year is going to be more of a drag on GDP growth than it predicted even in the March Budget. The Red Book predicts a widening gulf between growth in world trade and growth in UK exports in every year of this Parliament. This country is not taking advantage of the growing opportunities throughout the world, and the Government should be helping to address that.

The productivity plan states:

“The government will remodel its delivery on trade, exports, investment and prosperity”,

but it does not give much else in the way of explanation. I hope that the Business, Innovation and Skills Committee can play a role in helping to shape that aim to ensure the Government meet their targets of £1 trillion by 2020 and 100,000 more companies exporting—an important aim that I am very keen to see the Government achieve, but I fear that it is looking increasingly unlikely.

Mr McFadden: While my hon. Friend is on the subject of exports, can he tell us how he thinks withdrawal from the European Union would help our export drive?

Mr Wright: I pay tribute to my right hon. Friend who speaks eloquently on these matters. With regard to our largest trading partner, I certainly think that withdrawal would not be conducive to hitting our export targets. I hope that the Select Committee will look at the costs and benefits to British businesses of EU membership, which will be important in the run-up to any referendum.

On the matter of there being enough training, the apprenticeship levy is a welcome step, although businesses, training providers and learners need more clarity. The

13 July 2015 : Column 628

Red Book says that the levy will support all post-16 apprenticeships in England and that

“firms that are committed to training will be able to get back more than they put in.”

What will that mean in practice? Given that the apprenticeship levy will be confined to large firms, will small and medium-sized businesses—which often find it difficult to train apprentices on the grounds of size, capacity and uncertainty over the order book—also benefit from the “get more out than you put in” principle? What happens to excellent large companies that are already exemplary when it comes to apprenticeship training, such as Nissan—in my region—Rolls-Royce and Airbus? Will the levy apply to them? I think it will and, if so, will the levy be used to cascade skills through prime companies’ supply chains, so that entire sectors are as competitive and productive as possible?

I mentioned Airbus a moment ago. The Red Book states that the apprenticeship levy applies in England, so how will it take into account large companies such as Airbus, which has a multinational operation throughout the UK, including at Filton in England and Broughton in north Wales? Will the levy apply to trainees in Filton in the south-west of England and in Broughton in north Wales? In addition, how does the levy link in with existing post-16 provision of education, skills and training, particularly in relation to further education cuts, which undermine colleges’ capacity to provide the training that firms want? Does the Minister anticipate that the levy will offset in full the proposed cuts to further education provision?

On the matter of investing enough, I really want to praise the Government on the measure to make the annual investment allowance permanent and at least £200,000. This is a very welcome step to encourage more firms to invest, with certainty in the long term. Hopefully, it will do much to boost productivity. However, more could be done to encourage innovation, product design, development and manufacture here in the UK. I would therefore have liked to have seen consideration of the expansion of the R and D tax credit, too.

To make us more competitive and productive, it is essential that we have a modern infrastructure. The Red Book and the productivity plan both prioritise road building. There is also mention of airport capacity and broadband connectivity, but for an island nation there was a striking omission. UK ports handle about 95% of all UK import and export tonnage, and 75% of all trade by value. Our ports are vital to our export capability, yet I find it odd that there was no mention of them in the Chancellor’s statement. Will the Minister explain how ports will play a part in boosting productivity? What do the Government intend to do to ensure our ports are as competitive as our rivals’ ports across the continent?

I am keen to see this country at the forefront of innovation, business creation and growth, and for the Government to provide a framework for competitive and productive firms employing highly skilled and well-paid employees. Where the Government have done the right thing to help to achieve that, such as with the annual investment allowance, I will say so, but I am afraid the Budget does not do enough of what is needed to address our massive productivity challenge.

13 July 2015 : Column 629

5.37 pm

David Warburton (Somerton and Frome) (Con): May I say what an extraordinary privilege it is not only to speak for the first time in this House, but to follow so many eloquent, lucid and persuasive maiden speeches over the past few weeks? They all make my job a lot more difficult.

My predecessor, David Heath, is a hard act to follow. He was a Member of Parliament for 18 years, and a Minister and Deputy Leader of the House in the previous Government. He served in this place with great experience and distinction and he served his constituents with great loyalty and care. I was delighted that I did not have to fight an election against him. It is not for me to say, but it may well have been because of that that we managed to turn what was a long-held Liberal Democrat seat into a Conservative seat with a majority of more than 20,000. It is also not for me to point out that, because of the far-sighted and very intelligent constituents of Somerton and Frome, that represents the largest Conservative swing in the country. I say Conservative swing, because I know there are Scottish Members for whom an 18% swing is pretty small beer.

This was an extraordinary election. It has thrown up an extraordinary opportunity for all of us, as we have been hearing during this Budget debate. It also presents a great opportunity for the west country. It was 1,066 years ago that an earlier form of Parliament, the Witan, sat at Somerton in my constituency, which proves that Somerset has a parliamentary tradition some three centuries older than the modern building that we find ourselves in today. I say that because if the unhappy occurrence of having to pack our toothbrushes and Order Papers and decant to the provinces arose, Somerton would be only too pleased to welcome us back. If that did happen, perhaps it would provide an opportunity for us to get the connectivity for which we have been waiting for so long in Somerset. My constituency is 640th out of 650 when it comes to broadband access, which means that about 140 towns and villages are all stumbling along on 1990 dial-up style retro-internet connections.

Let me take Members on a little tour of my constituency. It starts with the suburbial villages outside Bath, goes down past exciting Frome and the Mendip hills through burgeoning Bruton, racing Wincanton, ancient Somerton, blossoming Langport and on to the Somerset Levels and red-brick Martock—and, of course, the village of Muchelney, which became the island of Muchelney during the Somerset floods last year. That iconic view of the marooned village of Muchelney stands for much more than just the floods. Many people in my constituency in the past felt rather cut off and rather distant—set aside from the machinery of economic growth. That is something that I am glad that the Government are now beginning to address through the Budget.

A flurry, or perhaps more a flood, of activity has been aimed at the south-west, as my hon. Friend the Member for Newton Abbot (Anne Marie Morris) mentioned. We have the dualling of the A303, enormous amounts of investment and railways coming in, all of which will elicit huge yelps of excitement from my constituents—and perhaps reverse some of the exodus of youth that we have seen. About 75% of young people are running away and leaving Somerset, so I hope we can begin to bring them back.

13 July 2015 : Column 630

It starts with education. One of my predecessors as MP for Frome was Thomas Hughes, who hon. Members will know as the author of “Tom Brown’s Schooldays”. Although I hesitate to mention Flashman on the Conservative Benches, he was a strong advocate for universal education, and we cannot have universal education without fair funding for rural schools—so I will be fighting for that.

Let me finish by citing another former constituent, Walter Bagehot, who said:

“The great pleasure in life is doing what people say you cannot do.”

Those are the words that have led me here and are the words with which I hope we can lead the west country forward.

5.43 pm

Ian Paisley (North Antrim) (DUP): I commend the speech of the hon. Member for Somerton and Frome (David Warburton). I have spent a career doing what a lot of people told me I could not do, and I shall certainly continue to do so. I wish him well as he fills the big shoes of his predecessor. I hope things go well for him in this House.

I welcome the aspirations set out in the Budget statement. I believe that this Government are committed to balanced growth, to increased productivity and living standards and to making work pay. I welcome, too, the 2% commitment to defence spending. That is most welcome as something for which we campaigned strongly during the election campaign.

The Budget missed many points that the Government could have delivered, but I welcome the ongoing commitment to reduce corporation tax. That is a welcome stance, as I believe in a low-tax economy, which I believe drives jobs and employment. This also sends a powerful message to the Northern Ireland Executive—that as the Government here on the mainland continue to reduce corporation tax, Northern Ireland is missing the opportunity, every day that passes, to reduce its corporation tax. We have the right and the opportunity to control it completely—to reduce it to a very low level indeed or to remove it entirely. I think that the Northern Ireland Executive has been sent the message that they should get their skates on and reduce corporation tax as a matter of urgency. In my view, it should be lower than the 12.5% that is the current rate in the Republic of Ireland, our southern competitor, but we should certainly get our skates on, given what the national rate will be by 2020 if the Chancellor continues to have his way. The cost of reducing our corporation tax will be considerably less as a result of the Budget: Northern Ireland will be saved tens of millions of pounds a year, and that in itself is welcome.

I am, however, concerned about the high rate of personal income tax throughout the United Kingdom. According to statistics from Christian Action Research and Education, one-earner families pay a third more tax than families in all the other richest countries in the world, and the tax bill of United Kingdom households with full-time mums is the highest in the world.

Other taxation issues also need to be addressed. The Budget statement made no mention of the impact of high energy prices, which could potentially drive jobs out of Northern Ireland. They are being fuelled by an

13 July 2015 : Column 631

environmental tax which is set to increase from £5.6 billion to £16.1 billion. That will be very bad for Northern Ireland. My constituency contains one of the largest employers in the country, Michelin Tyres, which is a high energy user. Following the Budget, I received a letter from the company saying that energy pricing tariffs in Northern Ireland were the second most expensive in Europe, and that the cost was having a serious impact on Northern Ireland businesses. While the national Government here are holding off in regard to certain payments, I agree with the company that Northern Ireland’s renewables obligation certificate system for onshore wind could be seriously detrimental to our businesses.

The Government did not take the opportunity to reduce VAT on tourism, which is one of our key employers, and drives between £400 million and £500 million into the local economy. We currently pay 20%, while our neighbour pays only 9%.

As for the welfare reform changes, I welcome the reduced cap, but I am concerned about the different cap levels in different parts of the United Kingdom. The cap is being regionalised in favour of London, and I think that that is wrong. I believe that there should be a universal reduction.

The welfare changes must now be implemented at Stormont. We are currently experiencing considerable delays. As we discuss the impact of the Budget on a devolved part of the United Kingdom, we should recognise that the crisis that Northern Ireland is facing could cause that devolved institution to crumble. The Government should convey that message, and prepare themselves for the worst-case scenario of a collapse of devolution in Northern Ireland as a result of the inability of certain politicians to do their job, to count, and to secure a settlement on welfare reform.

5.49 pm

Mr Robin Walker (Worcester) (Con): This is a Budget that can make a step change in the British economy. It is a Budget that can step us up a gear in terms of work, productivity and pay.

It is a pleasure to follow an excellent maiden speech from my hon. Friend the Member for Somerton and Frome (David Warburton), and a very thoughtful speech from the new Chairman of the Business, Innovation and Skills Committee, the hon. Member for Hartlepool (Mr Wright), whom I congratulate on his election.

I am delighted to be called to speak in a debate on local growth, because I believe that the first objective of the Budget is to deliver growth and prosperity throughout the United Kingdom, and particularly in places such as Worcester. If growth is to reach every part of the UK, it must be sustainable, and if it is to benefit the whole population, it must be translated into sustainably higher pay. For that, the first requirement is fiscal credibility. We need only look at Greece to see the situation countries can get into when they lose control of their finances to know that the Chancellor is right to say that if we do not control our debt, our debt controls us. As my right hon. Friend the Secretary of State pointed out in his opening remarks, that was very much the situation in the UK in 2010, but through the gargantuan efforts of the British people, British businesses and the British Government we have reduced our deficit and set out on a path to begin to pay down our debts.

13 July 2015 : Column 632

The second requirement to deliver sustainable growth is security, and I am delighted that this Budget does what the coalition could never, and commits firmly to investing in our nation’s security and defence with that 2% of GDP commitment.

The third requirement is productivity, and I particularly welcome the detailed productivity plan that was published on Friday. This is not before time. The UK lags behind other leading economies in productivity, and it was not a Labour spokesman but my hon. Friend the Minister for Skills who set out the scale of the challenge in his 2012 Macmillan lecture for the Tory Reform Group, when he said:

“we in the political pack must not duck the really hard economic question— which is, why have people in the low and middle-ranking jobs not been able to secure a real increase in their pay for nearly a decade? And we must not dodge the really hard answer—which is, that the productivity of people in those jobs is falling behind that of their competitors.”

He concluded:

“If we want our economy to grow again, if we want our national income to be honestly earned and fairly shared…if we want to benefit from healthcare that is high quality and free, if we want to live comfortably in retirement, if we want all these things, we need to ensure that we are all a lot more productive than our competitors.”

He was right to put productivity at the heart of our mission, and the Chancellor has been right to put productivity at the heart of this Budget. I welcome the plan that sets out to raise investment in skills, in research and development, in infrastructure and, most of all, in people, in order to achieve this.

We need to provide the right incentives to businesses to invest and that should become a core principle of the Government’s ongoing review of the business rates system. We need to remove the disincentives that penalise manufacturing businesses from investing in value-added plant and that create an artificial shelf on business expansion for businesses of all sorts when they move from smaller to larger premises that fall just above the small business rate threshold. We need to design the system so that it supports growth and helps scale-up businesses. We should consider discounts for businesses that invest more in training their staff, and tapers to support businesses that grow through the thresholds for small business rate relief. I look forward to further updates on that important review, promised by the end of this year. This must not be seen merely as an administrative review, but rather as an important tool in the drive to provide higher productivity.

To get there, we need to improve our skills base. It has long been a truism in the post-war period that Germany does skills and apprenticeships better than us. This Government’s commitment to driving up the quality and quantity of apprenticeships has begun to change that, and it is essential that this continues. I am pleased to see the drive to achieve 3 million apprenticeships by 2020 and the use of the German funding model, where large employers pay a levy towards the cost of training.

We also need to make sure that schools deliver the best possible education across the country, which means delivering on one of the key commitments of the Conservative manifesto: fairer funding for all our schools. In a time of overall budget constraint this has never been more urgent, and I look forward to seeing the detail for delivering that in the next spending review. I was pleased to see fairer funding highlighted up-front in the executive summary of the productivity plan.

13 July 2015 : Column 633

One of the most welcome changes in the Budget was the creation of the new roads fund predicating vehicle excise duty revenues to investment in our roads. I recently held a debate on the vital priority of upgrading Worcester’s southern link road, including the Carrington bridge, a key bottleneck in our area. Any Government committed to local growth will want to fund such projects.

We need to keep focusing on holding down the cost of travel. That is why I particularly welcome the extension of the fuel duty freeze that the Conservatives in government have now maintained over five years. So many of my constituents are concerned about this and so many businesses have told me what a massive issue it is for them that it has been something I have campaigned on in each year of my parliamentary career. Fuel costs contribute to the cost of living for everyone, whether or not they drive a car, and the price of food in our supermarkets is one of the things that would be higher and less affordable if Labour had had its way and fuel duty was higher. I also believe that the Treasury benefits from holding down fuel duty over the long term as economic activity increases.

Beyond transport, higher productivity will require businesses to have the confidence to keep investing, and the decisions to keep bringing down corporation tax and to maintain the UK’s world-beating research and development tax credit offer and extend capital allowances each have a vital role to play.

Richard Fuller: Does my hon. Friend agree that it is not just the specific measures that are valuable to the economy? The record over a number of years of setting a trajectory of lower taxation for businesses assists all of us, creating jobs and increasing the wealth of the country.

Mr Walker: My hon. Friend is absolutely right about the track record of delivery and the confidence that that gives business to invest over the long term.

The biggest change we can make to help people with the cost of living is to ensure they are paid better and keep more of what they earn. The Budget takes this further by delivering a national living wage. I welcome the fact that not only is this key social reform being delivered by a Conservative Government, but that the Government are taking steps to help to ensure that businesses, particularly small ones, have the help they need to deliver it. The extension of the employment allowance by a further £1,000 and the reduction in corporation tax will help to make sure that businesses can play their part. I hope the Chancellor will consider carefully how the charitable sector and the care system can be supported in adjusting to this change.

The Opposition have made much of the changes to tax credits. One would think from hearing some Opposition Members’ speeches that in altering this system we were taking on a core principle of the post-war consensus and the welfare state. In fact this invention of Gordon Brown has always been problematic. As the right hon. Member for Birkenhead (Frank Field) has pointed out repeatedly, the limited resources of Government can be better used in targeted support for early intervention and in helping troubled families than in a subsidy for employers to pay low wages. The growth of its cost from

13 July 2015 : Column 634

£1 billion when it was launched to £30 billion today is clearly unsustainable. The right hon. and learned Member for Camberwell and Peckham (Ms Harman), who is currently leading the Labour party, was right in thinking this is a change it should support, and it is a shame that the contenders for the leadership and those on the Labour Front Bench do not share her vision.

I welcome this Budget as a boost to local growth and look forward to supporting it in delivering a more prosperous, better paid and more productive Britain.

5.56 pm

Jonathan Ashworth (Leicester South) (Lab): Like my right hon. Friend the Member for Wolverhampton South East (Mr McFadden), I shall start by making a few observations about the state of the public finances.

When the Chancellor delivered his Budget speech last week it struck me that that was the fifth time he has had to come to this House and admit he has got his targets on balancing the books wrong. We all recall that in 2010 the Chancellor promised to balance the books by 2015; he failed. Just two months ago the Conservative party’s manifesto told us it would balance the books by 2018-19, yet just two months later the Chancellor came to the House and told us he is now going to balance the books by 2019-20. That effectively means that since the March Budget the Chancellor has pencilled in £18 billion more in borrowing, and he is balancing the books by 2020 by changing the profile of his public spending cuts and increasing taxes by £6.5 billion. These were not figures we heard much of in the general election campaign.

Although the Chancellor is smoothing out these public spending cuts, they are still deep. Public expenditure will have been cut by a third since 2010. By 2019-20 we will have seen £19 billion in cuts and we know that a large proportion of the cuts will fall on local government. Leicester city council is expected to find £54 million in savings per year over the next few years. It faces deep cuts but it will have to pick up the pieces of a deeply regressive Budget.

Andrew Bridgen: Would the hon. Gentleman support the Leicester and Leicestershire combined authority’s bid that is currently with the Secretary of State?

Jonathan Ashworth: Of course I would support Leicester and Leicestershire working together. We have a mayor in Leicester. I am sad that Leicester Conservatives oppose that. I hope the hon. Gentleman will support me in the campaign to get the Government to deliver on their promise on midland main line electrification, which they have broken, as he knows.

Lilian Greenwood: Given that Network Rail’s board minutes from March made reference to

“decisions required jointly with the DfT re enhancement deferrals from June”

does my hon. Friend agree that Ministers need to come clean about when they actually decided to shelve that vital investment in our region?

Jonathan Ashworth: I entirely agree with my hon. Friend. She will recall the Chancellor coming to Derby in February to launch his long-term economic plan for the midlands, one point of which was that the Tories

13 July 2015 : Column 635

would deliver electrification of the midland main line. The fact that they have now shelved it and there is nothing in the Red Book about when they are going to bring it back on track—excuse the pun—is an absolute disgrace and the Government are letting down the people of the east midlands.

I was talking about tax credits, and let me make it clear that I cannot support a Budget that spends £1 billion giving an inheritance tax cut to some of the richest estates in the country while cutting deeply into tax credits. In Leicester, the diverse city I represent, larger families are very typical and we are going to see further cuts to tax credits, which I fear will increase the already severe child poverty in our city.

A small change to tax credits that has not been remarked upon is the decrease in the income disregard, and I am worried about what it might mean. Conservative Members may recall that in 2002-03 this measure was brought in to deal with the overpayments that were plaguing the system. The problem might not now arise as the Government’s IT systems may have been updated, but I will be interested to know whether Ministers are confident that this small change to tax credits will not lead to the overpayment problems we had in 2002-03.

The increase in the national minimum wage—it is not a living wage, despite what the Chancellor told us at the Dispatch Box—was a bit of a conjuring trick. It was a bit of semantic prestidigitation from the Chancellor—[Laughter.] I say to my hon. Friend the Member for Hartlepool (Mr Wright) that we are intellectuals in Leicester—perhaps it is not the same in Hartlepool. He should just ask my right hon. Friend the Member for Leicester East (Keith Vaz). It was a conjuring trick by the Chancellor—I will stick to that terminology—because he said he was increasing the living wage. It was an increase in the national minimum wage for over-25s—that is a pay increase and of course we would welcome it—but it will be interesting to see what happens to the Chancellor’s gamble on whether the jobs market can withstand that increase and we will watch that carefully. That increase, however, is not going to make up for these tax credits cuts. The Institute for Fiscal Studies said that that is—

Alison Thewliss rose

Jonathan Ashworth: I hope the hon. Lady does not mind, but I am not going to give way. The IFS said that that is arithmetically impossible. So when the Chancellor tried to pretend that by increasing the minimum wage he is compensating for the loss of tax credits, it was a complete conjuring trick.

I wish to make a couple of final points about trade, which my hon. Friend the Member for Hartlepool talked about persuasively. I agree that we need to do more to increase trade. I am particularly concerned about our trade with India, because we now export less to India than we did in 2010, despite the Government’s rhetoric. I am particularly worried about the state of the global economy. Our current account deficit has widened to 5.9% of GDP, the OBR says that we have the largest annual peacetime deficit since at least the 1830s and we are £367 billion short of the £1 trillion goal on exports. Higher education is a great export of ours, which is why I am deeply disappointed, yet again, by the rhetoric from the Business Secretary telling international

13 July 2015 : Column 636

students that they should not come to this country to study. For a city such as Leicester, which has two universities and benefits from international students, that is very damaging.


The Chief Secretary to the Treasury is shaking his head, but those were the remarks of the Business Secretary so he should have a word with him.

We know that there is a hiatus in global trade, with commodity prices falling. In the foreign affairs debate during our consideration of the Gracious Speech, I spoke about the problems of China and warned of the frenzies on the Chinese stock market, with millions of Chinese borrowing money that they cannot repay to invest in what they think will be one-way bets. Last Thursday, the Chinese stock market came to a juddering halt. After just three weeks, investors have lost $3 trillion; there has been a 30% fall in China’s stock market, with a loss in value equivalent to the UK’s economic output in the last years. That could deter investor confidence across the Asian nations. We have also seen weakness in the US economy. Investing in China is not a one-way bet. Of course I support the Chancellor’s move to sign up Britain to the Asian Infrastructure Investment Bank, but we will be foolish if we think that investing in China is a one-way bet.

Given these global headwinds—not just in Greece but in China—the weakness in the American economy and falling commodity prices, this Budget was a missed opportunity. In this Budget we should have seen more investment in manufacturing, in higher education, and in science and research and development. Given what we are seeing on the world stage, this Budget may well be considered politically clever for a Chancellor trying to move into No. 10 Downing Street, but I fear it has left Britain ill-prepared in an increasingly uncertain world.

6.4 pm

Michelle Donelan (Chippenham) (Con): Thank you, Mr Deputy Speaker, for allowing me the privilege of making my maiden speech today. It is a pleasure to speak in the debate on a Budget that seeks to enable people to work hard, get on and aspire. That is what I want for the people of Chippenham, and I am honoured to be their MP.

My constituency of Chippenham, contrary to the name, contains four towns and lots of beautiful villages. It is quite something: a varied area dripping in history and charm. Our pocket of Wiltshire is a place that residents, including myself, do not just live in, but are proud to call home. Perhaps its greatest asset, however, is its residents, who are welcoming, generous and kind.

The gateway to the south-west, my constituency is home to Chippenham town, traditionally a cattle market town based around Westinghouse, now Siemens. It also contains Melksham, a market and manufacturing town where some of the largest companies remain: Avon Rubber and Cooper Tyres. Now, however, most residents in Melksham, Chippenham, Corsham and Bradford-on-Avon have to commute out of the area for work; we simply do not have enough local jobs for local people. I will not beat about the bush: my mission as their Member of Parliament is to help make our town centres hubs once again and to support local businesses, so that my constituents can live in their constituency and work there.

13 July 2015 : Column 637

Corsham is famous for its idyllic high street, featured in BBC’s “Poldark”, but it is now an emerging digital hub, with the Corsham Institute. The town desperately needs the railway station to be re-opened, in order to support the high street and tourism, and to improve the quality of life of local residents, and I will continue to fight for that. It would be remiss of me not to stress the beauty and historic wonder one is filled with when visiting Bradford-on-Avon, a town buzzing with community spirit and passion. But our medieval town struggles from a severe traffic issue; it was built for the horse and cart and not the modern motor car. That is another issue that will remain at the top of my agenda. Our villages spread across the constituency, each with its own unique offering, with perhaps the most famous being the National Trust village of Lacock, home to Lacock abbey—or as people might know it, Harry Potter’s Hogwarts.

I am privileged to follow in the footsteps of Sir Robert Peel, the founder of the modern police force and, more recently, those of the irrepressible and impressive Sir Richard Needham, the longest serving Northern Ireland Minister. I plan to serve the constituency with the same determination and passion as he did. My most recent predecessor, Duncan Hames, focused his efforts on the environment and mental health services, an issue close to my own heart. I commend his support of the community-led projects that he backed.

I hope to add to the dynamic and representative nature of the House—after all, I do come from a career in wrestling, but as a marketer, I might add! So why am I actually here? I am here as a doorman, but not in the conventional sense—let me explain. My father and my grandfather taught me the values of hard work and ambition, and I believe in a Britain where everyone can achieve and get on in life. I really do not think it should matter where you began; it should matter where you are going. To me, therefore, the role of an MP is to open doors for others along the way. Hard work and ambition are vital for success, but a good education can make the real difference—perhaps it is the most important door of all. Excellent teachers make excellent schools and every child is different, but all need inspiration, encouragement and support. School funding is vital, though, and we must move to a national funding formula as soon as possible—Wiltshire is one of the lowest-funded authorities in the entire country. Now is also a time for stability in education, but we must ensure that our education system meets the needs of our economy, our pupils and our teachers, and of the future of this country.

Vocational training needs to be pushed and promoted, with the stigma challenged. We need to continue to work towards reforming our career education, so that we actually promote the jobs that the economy needs. Expansion of the apprenticeships programme is a good first step but, above all, we need to modernise our education system, incorporating more taster business skills. We just cannot wait any more for entrepreneurs to be born. We need to help foster and develop a “can do, will do” attitude. Education in the UK needs to be more proactive and we must further enhance the link between business and charities, creating the workforce, the entrepreneurs and the volunteers we need. The answer therefore lies in a long-term education plan.

13 July 2015 : Column 638

Creating opportunities covers many areas, and I will work hard during my time in this House to create a society in which everyone can achieve their dreams. As I have said, what matters is not where we come from, but where we are going. My dream was never just to get here, but to get others where they want to be. I hope that, through this role, I will open door after door for the residents of the Chippenham constituency.

6.10 pm

Heidi Alexander (Lewisham East) (Lab): I congratulate the hon. Member for Chippenham (Michelle Donelan) on an excellent and engaging maiden speech.

It will come as no surprise to you, Mr Deputy Speaker, that last week’s emergency Budget was not the one that I wanted to hear. It was not the one that many of my constituents wanted to hear either. Although I welcome plans to abolish permanent non-dom status, to fund the NHS and to expand apprenticeships, I cannot say the same for the Government’s rebranding exercise on the minimum wage, the ending of maintenance grants for less well-off students, and some of the changes to tax credits, which are a lifeline for many people in low-paid work.

I wish to focus my remarks on a subject that barely made it into the Chancellor’s speech last week: the supply of new, genuinely affordable homes. Access to affordable housing is the single biggest concern of my constituents. During the election campaign, I lost count of the number of people who spoke to me about their housing problems. There were the young mums outside primary schools in Catford who had been placed in temporary accommodation three hours away from their children’s school; the professional couple in Hither Green who had been renting for years and were simply unable to buy because of the soaring costs of London homes; and the nurse in Blackheath who rents a room in a flat because she cannot even afford a shared ownership property.

The housing market in my south-east London constituency is broken. It may not seem broken to the private landlords, the property developers or the rich overseas investors, but for the vast majority of Londoners, the capital is in the grip of an all-too-real housing crisis —and, let us be honest, it is a crisis. It is a crisis that has been long in the making, but one that deepened under the previous Government. Small changes to the tax relief on buy-to-let mortgages, while welcome, do not amount to the concerted action required from Government on land, on finance and on planning to solve this problem. I wish to speak about the first two of those.

In the past decade, London’s population has grown by 1 million. It will grow by another million over the next 10 years. If the country’s economy is to do well, London needs to do well, and for that to continue we urgently need to get to grips with the capital’s housing problems. The Government must wake up to the fact that homes need to be built where there is most demand for them and where genuinely mixed and sustainable communities can be created. Automatic planning permission on brownfield sites is not the answer. We want places where people will want to live, can afford to live and which will stand the test of time.

When the Chancellor spoke at the launch of the London Land Commission earlier this year, he said that there was nothing inevitable about London growing. He was right about that and he was right to set up the commission with the express purpose of identifying

13 July 2015 : Column 639

public land for housing development. But the commission cannot just be about high-rise designer apartments on the River Thames; it must be about homes for Londoners. Tackling the under-supply of genuinely affordable housing in London is not a regional priority; it is a national one. The London Land Commission should be identifying public land not so that it can be released to the highest bidder, but so that it can be used to build homes in which Londoners can afford to live.

The Government’s so-called affordable housing, which is let at 80% of market rent, is not affordable to anyone on near-average incomes. All those central London hospital sites, which the Government are so wrongly intent on flogging off, should not become a “reserve currency” for the rich and international jet set—somewhere safe to park their money. Public sites should be used to provide homes for people who keep our city running—our nurses, teachers, policemen and women, shop workers and office cleaners. London will always have hundreds of thousands of people doing those jobs. Many of those jobs will never be the best paid, but those who do them need somewhere secure, accessible and affordable to live. Half of all homes built in London over the next decade should be built by councils and housing associations and be let at 50% of market rent.

Hundreds of thousands of the lowest-paid workers currently live in private rented accommodation in London. Their wages are topped up by in-work housing benefit, which goes straight to the landlord. These people do not live a life of luxury. They often live in relatively poor-quality housing, and worry about the threat of eviction. We, the taxpayer, pay their landlords—via housing benefit—so that they can live in this state of uncertainty. It makes no short-term sense for the individual and their family, and it makes no long-term sense for the public purse either.

In Lewisham, the annual difference paid in housing benefit on a two-bedroom council flat and an equivalent flat in the private rented sector is nearly £9,000. If just one extra family in receipt of full housing benefit in a two-bedroom flat in Lewisham were rehoused in a council home, the revenue saving to the public purse would be £9,000 a year. That is a £9,000 saving for one household in one flat in one of London’s 32 boroughs. Housing benefit is paid on more than a quarter of a million private rented properties in London, costing the taxpayer £2.6 billion each year, up half a billion pounds since 2010.

Every single taxpayer in the country should be interested in the amount of social housing in London. When I came to this House five years ago, I said that one of my priorities would be tackling the chronic under-supply of affordable housing in London. It is clearly not a priority for the Government, but I will not rest until they make it so.

6.16 pm

Andrew Bridgen (North West Leicestershire) (Con): It is a pleasure to speak in a debate in which there have been two excellent maiden speeches by my hon. Friends the Members for Chippenham (Michelle Donelan) and for Somerton and Frome (David Warburton).

There has been much talk about the northern powerhouse, which is, quite rightly, a priority for this Government. I wish to talk about the midlands engine, another key priority, which is powering a significant proportion of the very welcome growth that is being

13 July 2015 : Column 640

recorded under the stewardship of my right hon. Friend the Chancellor of the Exchequer. The east midlands has a higher proportion of its regional GDP in manufacturing and a higher proportion of those in employment working in manufacturing industries than any other region of our great nation.

My constituency and those that surround it are achieving some of the highest growth rates in the country, which is due in part to infrastructure investments and decisions made by the previous Conservative Government back in the ’80s and ’90s. The instigation of the new national forest and the development of the M42/A42 corridor have allowed my area, and many of the surrounding constituencies, to move on from our coalmining past and build a new economic model, using the huge advantage of our geographic location—at the very centre of the country—our hard-working constituents, and our minerals and other natural resources. Such advantages have seen us become a hub for distribution, which has seen rapid growth over recent years as this Government’s long-term economic plan bears fruit.

This Government, in the great Conservative tradition, are laying the foundations for growth in constituencies of the east midlands. I welcome the Chancellor’s important announcement that fuel duty is to be frozen again. When Labour was in power, it saw fuel duty as nothing more than a cash cow in its war on the motorist. Thanks to the way in which this Government have brought the public finances under control, we have kept the price of fuel down, which benefits my semi-rural constituency. We have no railway stations, so a car is not a luxury, but a necessity. The freeze provides stability to the distribution firms in my constituency, many of which operate in a hub around East Midlands airport. It should be borne in mind that more than 80% of goods are transported by road. By keeping down the price of fuel, we are keeping down inflation and the cost of living across the country.

Thousands of jobs in my constituency are dependent on East Midlands airport, and I welcome the Government’s recognition that action may well be required when air passenger duty rates are devolved to the Scottish Parliament. I believe there is a case for going far further on air passenger duty. The UK has the highest air travel tax anywhere in the world, which puts the country at a disadvantage in the global race. If the Scottish Government were to cut the rate of APD by half, the rest of the UK would be left at a severe competitive disadvantage, with English companies and families paying more to do business or go on holiday than their Scottish counterparts. That would be fundamentally unfair.

Alison Thewliss: It will be a terrible shame if the UK Government have to mitigate the actions of another Government. Now the hon. Gentleman might know how that feels to the Scottish people.

Andrew Bridgen: If the Scottish Government decided to cut APD, that would be tax competition and it would behove the British Government to respond, or we would see airports such as Newcastle and possibly Manchester put under severe pressure. I will urge the Treasury to review APD rates and consider the effects that this could have on decisions made in Scotland. I will also ask the Treasury to look at the effect of reducing air passenger duty for the under-12s and under-16s next year, which has already gone through. When a tax seen as excessively

13 July 2015 : Column 641

high is reduced, that is often followed by an increase in activity. That reduction will not cost £70 million, because far more families with children will take holidays from the UK.

On the area around the airport, I welcome the fact that the Government are inviting bids for a new round of enterprise zones, as I believe a bid will be coming from my district and the local enterprise partnership to encourage growth and jobs in the area and to take advantage of infrastructure improvements, such as the dualling of the A453 from my constituency to Nottingham. This is a scheme that has been spoken about since before I had a driving licence—a long time ago—but has been delivered by a Conservative-led Government. I look forward to going, this time next week, to the opening of the new dual carriageway to Nottingham.

I welcome the progress being made on the devolution of powers, and the fact that Leicester and Leicestershire are one of the two east midlands combined authority proposal bids that the Government have received. From speaking to those involved, I know that there is great enthusiasm for and interest in this bid in both the county and the city, and I hope this can be translated into action, which will benefit all the people living in Leicester and Leicestershire.

We have a productivity gap in the UK. It should be noted that if the UK matched the productivity of the USA, GDP would be some 31% higher, equating to an extra £21,000 per annum per household. We therefore need investment in skills and infrastructure to narrow this gap, and I support the innovative move this Government are considering to deliver that. A combined authority in my county could contribute to that. Through devolution to such local bodies, we can respond to infrastructure issues and skills shortages far more rapidly and effectively than can officials in Whitehall. I look forward to funds flowing to the regions for such projects.

I welcome the Government’s actions on the development of brownfield sites and on road building, which will be of huge benefit to the building and mineral industries and the two large brick factories in my constituency.

Overall, the Budget moves us another step away from the centralised, welfare-dependent client state created by Labour Governments to a productive economy based on low taxes, high skills, high wages and devolved decision making, and it gives this Conservative Government the opportunity to institute long-term economic and infrastructure decisions in the same way as the previous Conservative Government did, which served my constituency so well and laid the economic foundations that are now being built on, ensuring that the midlands engine is firing on all cylinders.

6.23 pm

Derek Twigg (Halton) (Lab): The hon. Member for North West Leicestershire (Andrew Bridgen) spoke about productivity, as did a number of other Members in this afternoon’s interesting debate on the Budget. Productivity is a major challenge for this country, but that problem has not come about overnight. Up till now the Government have not had an answer.

As the hon. Member for North West Leicestershire mentioned, if we compare the UK with America or in some respects France, it is clear that there is a massive

13 July 2015 : Column 642

difference in productivity. It is such a significant problem that it impacts on our ability to continue to grow as a country and to take the strides forward that are needed for us to become a high-skilled, high-income economy. That needs to be addressed, but I did not see it set out in the Budget or the later statement by the Chancellor. There is a gap in his proposals.

Manufacturing is one of our most important industries and could bring a lot of income to this country, but it has suffered greatly over the past 20 or 30 years. No solution seems to have been put forward to help our manufacturing base, although those who work in manufacturing and those who manage and lead manufacturing have some very good ideas and proposals, but for some reason the Government do not want to listen to them.

In an article last Wednesday the Financial Times stated:

“Manufacturing’s miserable start to the year shows little sign of ending, highlighting the chancellor’s lack of progress in rebalancing the economy as he delivers his Budget statement.”

I share that concern, as I still have a reasonable amount of manufacturing in my constituency. On Friday I visited Hutchinson Engineering, which is doing pretty well but could do a lot better. I saw for myself the work that that manufacturing company does and I was very impressed. The firm is an important part of our economy.

The other problem that we have had is investment. We know that companies have been sitting on a lot of cash, although there has been more investment recently in plant, machinery and IT. That has not happened quickly enough or in sufficient amounts, and I am not sure that companies have the confidence to continue to do that over the long term. We need that investment but the issue does not seem to have been addressed. It is very important to do so.

Investment in infrastructure has been mentioned by other hon. Members. Clearly, there is not enough investment in infrastructure. If one talks to business and companies, one finds that that is their view as well. We must up our game as a country, and I did not see that from the Chancellor. The Mersey Gateway in my constituency, for example, was started under the Labour Government with all-party support, and the present Government continue to support it. That is a fantastic scheme which will improve the area and ensure extra investment, but we need many more such infrastructure schemes around the country.

We have seen the Government backtracking on railway investment in schemes that were started under Labour. Investment in infrastructure is key. At a time when such low-cost borrowing is available to the Government, it beggars belief that they are not doing more to borrow in order to invest in our infrastructure and re-energise our economy.

In the time I have left, I want to touch on two other topics. The first is the Government’s insistence on cutting the public sector and stopping public sector workers having more than a 1% pay rise. This Government do not seem to realise how important our public sector is to us. I shall return to that important issue.

Secondly, on tax credits, as the Budget unravelled the following day, we saw that people on low and middle incomes will be hit badly, despite the so-called living wage, which we know is a minimum wage. Thousands of

13 July 2015 : Column 643

families in my constituency will suffer a loss of many hundreds of pounds, perhaps even £1,000, as a result, and that is not something they should have to bear. That is unacceptable and it is one of the reasons that I will vote against the Budget.

I mentioned the public sector. I cannot understand the Government’s insistence on slashing council budgets. Councils such as mine in Halton have been a major part of bringing in investment, leading to growth in our local economy over the past 20 or 30 years. It is a very important part of the regeneration that can take place in our economy, but the Government seem to want to continue to cut budgets, forcing councils into an extremely difficult position. In the not-too-distant future, councils will have real difficulty in providing even the basic services that they must provide. That will be a major problem for our country and our communities.

The Government must think again about their austerity plans and the cuts that they are forcing upon councils. It is the poorest communities, such as mine, in one of the most deprived boroughs in the country, that face some of the most difficult times because of the cuts that are taking place. The Government do not seem to care. They seem to want to write off a certain section of the population. The Budget did not have a strategic vision, it was not fair, and it did not have a plan to take this country forward. As the debate has shown, so many problems will result from the Budget that we must oppose it.

6.30 pm

Royston Smith (Southampton, Itchen) (Con): Thank you, Mr Deputy Speaker, for calling me to make my maiden speech. May I first congratulate you on your re-election as Deputy Speaker? I congratulate my hon. Friends the Members for Somerton and Frome (David Warburton) and for Chippenham (Michelle Donelan) on their thoughtful and eloquent maiden speeches.

It is customary for a new Member to pay tribute to his predecessor in a maiden speech, and I am not going to break that tradition today. However, rather than paying tribute to my predecessor because it is the custom and practice, I do so with genuine respect for a man who has served Southampton with distinction. The Southampton, Itchen constituency was in the capable hands of John Denham for 23 years. He has dedicated himself to Southampton residents for over 30 years, starting as a Hampshire county councillor and becoming a Southampton city councillor when Southampton gained unitary status.

John stood for the parliamentary seat in 1983 and 1987, losing to my hon. Friend the Member for Christchurch (Mr Chope) in both elections. Undeterred, he stood again in 1992, and on that, his third attempt, he managed to wrestle the seat from my hon. Friend, winning with a majority of around 500. He then held the seat in four successive elections, each time winning with a healthy majority, with the exception of 2010, when he hung on with a majority of just 192—the number will be for ever engraved on my mind, because he was standing against me.

John held many and varied offices in opposition and in government, becoming Secretary of State for Innovation, Universities and Skills and finally Secretary of State for Communities and Local Government. However, he will

13 July 2015 : Column 644

perhaps be remembered most for his principled resignation over the Iraq war. He was a Minister in the Home Office when he resigned from the Government because he felt that there was no international consensus on invading Iraq, and he was right. However, I do not think that even he could have predicted what happened subsequently. He finished his time in this place at a moment of his choosing, which very few of us will manage to do. He has my respect and gratitude, and I wish him well in his future endeavours.

Southampton is a medium-sized city with a population of around 245,000 multilingual, multicultural and multi-ethnic people who, for the most part, co-exist in perfect harmony. It is a port city, and it has been so since Roman times, when the first port was located in the ancient town of Clausentum, which is now called Bitterne Manor. The Pilgrim Fathers sailed from Southampton to the new world, and Henry V sailed from Southampton to defeat the French at Agincourt. It was a major embarkation port during the first and second world wars, and it was the port from which the Titanic set sail on its fateful maiden voyage.

Nearly 2,000 years after the Romans first set up a port on the River Itchen, our port continues to thrive. Last year it handled over 843,000 cars, 60% of which were exports. This year there will be visits from over 430 cruise ships handling 1.6 million passengers, and over 1 million containers will arrive or leave through our port.

Having listened to other hon. Members, I realise how lucky we are in Southampton to have a premier league football club, and a club that now holds the record for the fastest hat-trick in premier league history, scored against the Prime Minister’s team when we thrashed them 6-1 in the last home match of the season.

The world-famous Spitfire, like me, was made in Southampton. [Laughter.] It is true. A masterpiece of aerodynamic engineering, it was designed and built in Woolston by R. J. Mitchell and first flew from Southampton airport in 1936. Due to the sheer determination of one Southampton city councillor, John Hannides, it looks like, 75 years after the Spitfire saved this country in the battle of Britain, Southampton and the nation may at last have a memorial to R. J. Mitchell’s aircraft and the brave pilots who protected our freedom. For aircraft enthusiasts and historians, a trip to the city’s excellent Solent Sky Museum to see the Spitfire in its home town is a must.

Wherever we look in Southampton, we see a city that is growing and improving. During the great recession, Southampton continued to expand. We have new residential and commercial premises in Ocean Village, with a new luxury hotel and spa coming soon. We have a new restaurant and leisure quarter, plans for an exciting £400 million waterfront development and a brand-new arts complex that will complete our cultural quarter, which includes the largest theatre outside London and a nationally and internationally renowned art gallery. We have two excellent universities, with 40,000 students bringing extra vitality and energy to an already buzzing city.

Southampton is an ambitious city that knows where it wants to be. It already punches above its weight, but it can, and should, be so much more. It is geographically located in the south, but in many respects it is not unlike a city in the north. Successive Governments, and perhaps

13 July 2015 : Column 645

still this one, seem to overlook Southampton’s significant challenges. I see it as my job to ensure that we get our fair share of support and a more equitable local government settlement.

6.36 pm

Ms Margaret Ritchie (South Down) (SDLP): I congratulate the hon. Members for Southampton, Itchen (Royston Smith), for Chippenham (Michelle Donelan) and for Somerton and Frome (David Warburton) on making their maiden speeches.

The Secretary of State for Communities and Local Government said that this is a Budget for working people and families. From my perspective, and that of the constituents I represent, nothing could be further from the truth. The Budget is an assault on low-income families. It is unfair to welfare recipients, the young and low-paid workers, as my hon. Friend the Member for Wolverhampton North East (Emma Reynolds) and the hon. Member for Glasgow Central (Alison Thewliss) have stated quite clearly. That needs to be redressed, and pretty urgently.

The Budget is most unfair to the regions of the UK that are most dependent on social security, that have a youthful population and where there is a higher prevalence of low pay. Only this weekend The Observer referred on its front page to a report coming out later this week from the Intergenerational Foundation showing that the gap in pay, rewards and values between the young and the old is widening, and that young people and future generations will be at a considerable disadvantage.

I mentioned the regions of the UK that are most dependent on social security and that will be gravely disadvantaged as a result of the Budget. One such region is Northern Ireland, one of whose constituencies I represent. The Budget provides for an overall transfer of wealth from the less well-off to the more well-off; on the one hand we see a benefits freeze, withdrawal of tax credit and persecution of young claimants, and on the other hand we see significant breaks for inheritance tax and taxation of share dividend income for people who are already doing well. The Budget even has a substantial tax break for big cars.

The Government’s claim that “We’re all in this together” collapses both at the level of the individual and regionally within the UK. At the more macro-economic level, it represents a significant transfer of resources from the poorest regions of the UK to the wealthiest.

In relation to underpinning our local economies, the Government missed a trick. Only last week, colleagues and I formed the all-party parliamentary group on the visitors economy. Part of this is about pump-priming our local economies, but, in addition, the Chancellor should introduce fiscal incentives such as changes to air passenger duty, or devolve the power to do so to the devolved regions. He should also, on a UK-wide basis, reduce VAT on tourism, because evidence from internal modelling within the Treasury shows that this would be a revenue-neutral measure.

The other key measure that would help to pump-prime the economy is the reinstatement of the aggregates levy credit scheme, particularly in Northern Ireland. I would like the Treasury to push the European Commission on

13 July 2015 : Column 646

that. There is also a need for the Treasury to tell the Commission that the withdrawal of the scheme and the exemption for shale on which the construction and quarrying industry in my constituency is so dependent must be reversed. The request for the recovery of moneys from the past 12 years will place many companies and industries in my constituency at a severe disadvantage.

When we talk about this Budget, we talk about more people in poverty, more people dependent on food banks, and more people looking for other means in order to survive. Why are public sector workers facing another four years of a 1% pay increase? Why have they not been given a more significant increase? The public sector workers who give so much to our local economies are being severely disadvantaged.

The Government need to rethink this Budget. In the comprehensive spending review, they need to look at ways to prioritise spending which underpin our economy and take people out of poverty.

6.42 pm

Maggie Throup (Erewash) (Con): It is with immense pride that I stand before the House today as the new Conservative Member of Parliament for Erewash, working within a Conservative majority Government, making my maiden speech.

I would like to begin by putting on record my personal tribute to my predecessor, Jessica Lee, who served the residents of Erewash with great distinction. Although she served only one term, she achieved much, most notably securing the funding needed to build a new train station in Ilkeston and establishing an annual jobs fair that I now intend to build on.

When thinking about my constituency, we have to start with the question that I am sure is on the lips of all right hon. and hon. Members: where exactly is Erewash, a place that nobody can pronounce, let alone point to on a map? The answer to this conundrum is quite straightforward: it does not exist. In fact, my constituency is one of only three to be named after a river, and perhaps the only one to be named after both a river and a canal.

Like many Members whose constituencies cover more than one town, I have encountered the age-old problem of which place holds the coveted title of “top dog”. As anyone from Ilkeston, or Ilson as it is more commonly known, will tell you, despite the fact that it is the second largest town in Derbyshire, and notwithstanding the fact that it has one of the oldest working cinemas in the country, or has held a royal charter for a weekly market and an annual fair since 1252, it is the southern neighbour, Long Eaton, that gets—I quote many residents—“everything”. Down south, however, the residents of Long Eaton are all too quick to tell you a different but all-too-familiar story. Despite being a global leader in upholstery and furniture manufacture, and once leading the way in the production of Nottingham lace, and despite the fact that it is the birthplace of Dame Laura Knight, the famed war artist, and plays host to one of the finest silver prize bands in the midlands, it is really Ilkeston that gets all the care and attention.

Located between the diplomatic stand-off of those two towns, less than 10 miles apart, there is Erewash’s smallest town, Sandiacre, as well as the villages of Breaston, Draycott, Risley, Sawley and Stanton by Dale.

13 July 2015 : Column 647

Each one has its own quirks and charms. They could all quite rightly claim to be Erewash’s superior settlement, and I, for one, would be hard pushed to dispute their case. So I have come up with a simple solution to this very real problem—for the sake of my political career, I have to concede that every one of them is right.

Erewash is the land of opportunity and aspiration. We make practically anything that Members care to name, from textiles, pharmaceuticals and cosmetics to furniture, drainage pipes and even beer. In addition to supplying some of this country’s biggest names, including Rolls-Royce, Boots and John Lewis, Erewash is truly a global brand, with many of our engineering and manufacturing firms exporting their goods. We have even managed to design and manufacture our own unique dialect, helpfully recorded in the book “Ey Up Mi Duck!”, a copy of which is available to Members in my office.

My right hon. Friend the Chancellor often talks about the midlands as the country’s engine for growth. This is certainly true of Erewash, and I would go even further by saying that we are the fuel that powers that engine. However, like all constituencies, Erewash does have its challenges, and I take the line that these should not just be swept under the carpet. Ilkeston, Long Eaton and Sandiacre suffer from traffic gridlock throughout the day. The proximity to the M1 motorway and the midlands main line does not solve this problem but appears to cause even more congestion. This is bad for business and bad for Erewash. As the result of a proposed brownfield development of 2,000 houses and industrial units on the site of an old ironworks, thousands more cars will need to use our already heavily congested roads. I believe that without proper planning Erewash will become just one huge car park. We need to be bold with our vision, not just provide a piecemeal solution. That is why I welcome the announcement in the Budget to create a new roads fund, and I intend to be knocking on the Chancellor’s door to get my fair share for Erewash. The same brownfield development offers the ideal opportunity for a number of starter homes to be built, helping the aspiring local people who back our higher-wage, lower-tax, lower-welfare economy to get on the housing ladder.

I come to this House not with a lifelong desire to be a politician but as a result of a series of successful community campaigns. Through these campaigns, I realised I had a choice: just continue to get on with my life or put my head above the parapet. I shall continue to use all the skills gained through my community campaigning to benefit Erewash residents, as I already have done through my campaign to protect the green belt around Breaston from the HS2 hub. Throughout my time in this place, I shall continue to put my head above the parapet and fight for what is right for my constituents and what is right for Erewash.

6.48 pm

Steve McCabe (Birmingham, Selly Oak) (Lab): I congratulate the hon. Member for Erewash (Maggie Throup) on a witty, thoughtful and informed maiden speech.

There is a view that the Chancellor is riding high at present, and it is true that he has probably, for the time being, dished the ambitions of the Home Secretary and the hon. Member for Uxbridge and South Ruislip

13 July 2015 : Column 648

(Boris Johnson), but my advice to them is “Be patient.” Gordon Brown used to say there are only two kinds of Chancellor—those who fail and those who get out in time. This Chancellor has already failed. He has failed to eliminate the deficit on time, failed to maintain our triple A credit rating, despite his dire warnings of the consequences, and succeeded in reducing debt by virtually doubling it.

As the Institute for Fiscal Studies points out, the key feature of the Chancellor’s true blue Budget is that it will leave 3 million families £1,000 per year worse off, on average. The cuts to sickness benefit will mean that a party that has routinely seemed comfortable seeing cancer sufferers and others declared fit for work will now institutionalise that problem by having all those unfit for work reclassified as potentially fit and therefore eligible only for the lowest level of benefit. That is a blatant attack on the sick, not the workshy.

As with the bedroom tax, and the poll tax before it, no amount of double-speak will change the minimum wage into the living wage. Traducing the concept of a living wage by confusing it with a 50p rise and excluding the under-25s does not wash. It is merely a crude attempt to distract attention from the impact of the cuts to working tax credits. It is putting politics before people and before the country.

This Budget does not address the problems of skills and productivity, and it may in fact exacerbate existing problems in some sectors. In high-tech, science-based businesses, the issue is not wages but skills, access to capital and the capacity to grow. These are the knowledge businesses of which we have too few. We needed a Budget to help and encourage them.

Turning maintenance grants into loans will do nothing to encourage young people to develop the skills we really need, but may frighten off a generation from poorer backgrounds and simply turn Government debt into personal indebtedness. This is the Osborne legacy.

At the other end of the scale, what impact do hon. Members think the combination of tax credits cuts and minimum wage rises will have on the care sector? It is a sector of low wages and immigrant labour, with mostly small businesses or groups such as Southern Cross. We will see further cost cutting, scandals, inquiries and receiverships. Of course, higher wages mean higher fees, and therefore extra demands on already decimated local authority budgets.

My contention is that the short-term political cunning of this Budget will fail because the key decisions are wrong. Inheritance tax is not the priority in an economy that needs better productivity. We should be rewarding effort, not inheritance. The stark picture in the OBR report is the forecast decline in our share of exports at a time when we have the largest current account deficit since modern records began, and research and development spend is now below the European average. Where are the measures to address those problems? How will this Budget help to achieve the Chancellor’s target of doubling exports by 2020? Perhaps that is another target that will be kicked into the long grass as the long-term plan sounds more and more like the never-ending story.

The problem with the Chancellor’s putting all his eggs in a basket designed to win the Tory leadership is that his interests do not coincide with the real needs of our economy. Our problems are not solely to do with

13 July 2015 : Column 649

welfare, inheritance tax or the public sector. The Chancellor should be addressing private sector under-investment, the failure of companies to grow and the failure to protect small companies. Too many of our small businesses are starved of capital.

Instead of our ideas growing as good, sound British businesses, technological advancements are being snaffled up by foreign conglomerates. Let us look at the Smith and Wright report “Losing Control”, and what has happened to the British aerospace industry in the past few years—the majority of the companies have been taken over by foreign companies or private equity firms focused on short-term profit rather than medium-term growth. The lowering of corporation tax only makes the buying of ready-made UK technology even more attractive.

The Chancellor could have done a lot more, but he is too busy shoring up his friends and shoring up his leadership prospects. My advice is to beware the cheers now, because it could be a case of cheers today and gone tomorrow.

6.54 pm

Dr Andrew Murrison (South West Wiltshire) (Con): We have had a veritable constellation of maiden speeches today, but I am bound to observe that the contributions of my two parliamentary neighbours, my hon. Friends the Members for Chippenham (Michelle Donelan) and for Somerton and Frome (David Warburton), were excellent. I must say that, during the election campaign, I spent a great deal of time in their seats, one of which has a majority that is now significantly larger than mine.

We have heard a lot about the northern powerhouse and the midlands engine room, and I am left wondering where that leaves the west country and the south-west. During a debate last week on the south-west’s economy, my hon. Friend the Member for Tiverton and Honiton (Neil Parish) suggested that it was the land of milk and honey. I am more of a glass half-empty sort of bloke, and I think it is more the promised land—the land to which much is traditionally promised, but to which little is delivered.

I am delighted that the Budget was rather more positive than that for the west country. I am particularly delighted at the £7.2 billion for transport infrastructure. That will certainly help with the A391 and the north Devon link road. I hope that it will help dramatically with the A303, which is known as the highway to the sun. That route has a pretty bad accident record, and I must say that its inadequacies have acted to pressurise the economy in my constituency and further west. Its full dualling from top to tail is well overdue, and I look forward to that project’s completion over the next very few years.

As we get very excited about HS2, which I certainly support, we must also think about rail networks elsewhere in the country. In the south-west, we have traditionally come to see ourselves as the poor country cousins of the rail network. I hope very much that the new stations fund might look, for example, at Tisbury and its platform arrangements. It should eliminate once and for all the need for the Tisbury loop, which adds seven minutes to the journey to London Waterloo. That is quaint in the

13 July 2015 : Column 650

Victorian sense, but my constituents would rather like to see the end of it as we move towards a more efficient and effective rail transport network.

I am delighted to note that there is £10 million for broadband in the south-west. This rural part of the country very much depends on good connectivity. Rural businesses are suffering greatly because of our failure to communicate properly. It is all very well to say that 95% of the country will be connected to superfast broadband, but not if nearly 100% of urban areas being connected necessarily means that there is a problem in rural and more isolated areas. One has to accept that it is expensive to deliver broadband in more remote locations, but deliver it we must if we are serious about the rural economy.

I am delighted that the Budget statement made a commitment to 2% on defence. My area depends very heavily on defence and security. The £1.5 billion for our security and intelligence services is very welcome. A significant number of my constituents work in that sector, and it is clearly vital to invest properly in it.

I am also very pleased that the Army is continuing to move back from Germany. Wiltshire is the heart and soul of the British Army. It is its natural home, and we must ensure that the Army’s relocation from Germany, at the tail end of its operations there, is expedited and that the troops come home as soon as possible. It is good for our economy locally, and it is most certainly good for the units concerned.

In the few moments I have left, I want to mention paragraph 2.21 of the Red Book on health. Healthcare is clearly a big topic for all of us as constituency MPs. I am delighted that the Government have backed the NHS’s own Stevens report to the tune of £8 billion. Our health service is evolving rapidly: it will be and has to be more focused on primary care and to be more concentrated in large regional and sub-regional centres, and it is bound to be more professionally driven, with a remorseless focus on outcomes. Some of our healthcare outcomes are still lamentable. In this 21st century, we must ensure that the outcomes for constituents approximate to the very best in Europe, rather than be among some of the very worst. We must ensure that people are treated in the community, in parochial settings when appropriate, reserving care in hospitals for those who truly need it. In particular, we need to do away with the awful situation of elderly people and people with chronic long-term conditions ending up in large hospitals inappropriately, where they do badly and where it is expensive to treat them. They ought to be treated more locally by general practitioners and I am very pleased that the Red Book refers to that. I hope that that process will continue.

7 pm

Margaret Greenwood (Wirral West) (Lab): It is an honour and a privilege to represent the people of Wirral West and I thank my predecessor for the work she did for people in the constituency.

I want to take the opportunity to pay tribute to the communities of Wirral West, describe its landscapes and draw attention to some of the challenges that face it. Wirral West has areas of great prosperity, but it also has areas of deprivation where people have been forced out of their homes by the bedroom tax. It is nevertheless distinguished throughout by the strength and character

13 July 2015 : Column 651

of its varied communities. People come together to celebrate life and to support others, and there is a great deal of interest in the environment too.

Whether they tackle social inequality, provide support for those who are disadvantaged, take action on climate change, champion economic sustainability or celebrate creativity, groups across the constituency are working hard to improve quality of life for themselves and the people around them. The Festival of Firsts in Hoylake is a wonderful celebration of music, art and poetry, reflecting the laid-back atmosphere of an area characterised by charming architecture and sweeping sandy beaches. Hoylake Village Life works year-round to stimulate local economic activity, and Incredible Edible shares the fruits of the earth through the communal planting of food, free for the picking in public places. Hoylake is, of course, home to the Royal Liverpool golf club, host of the Open golf championship.

Nearby, West Kirby has a vibrant transition towns group that works to promote sustainable low-carbon lifestyles, celebrating the local environment through talks, public meetings, a monthly farmers market and the annual Earth Fest. In Pensby, people are campaigning hard to save their much-loved pub, the Pensby Hotel, and in Greasby, yarnbombers hit the streets to save the village centre, clothing trees and lamp posts in brightly coloured knitting. Upton retailers are working together to develop a local plan to enhance the local street scene.

Wirral West is blessed with beautiful natural landscapes too. The rural character of Frankby, Irby and Barnston and the National Trust areas of Caldy Hill, Thurstaston Common and Harrock Wood are all greatly prized. The beaches of the north and west of the constituency are internationally renowned for their birdlife, with merlins, hen harriers and flocks of dunlin, short-eared owls and little egrets, and the shore line flecked with curlew and oyster-catchers. At low tide, one can walk out across the beach to Hilbre Island and watch seals swimming around its northerly shore. This is a precious landscape, highly valued by visitors and locals alike, but in 2013 the previous Government granted a licence for underground coal gasification in the Dee estuary, putting at risk this rich natural environment. UCG brings with it risks of subsidence, the contamination of groundwater and damage to the marine environment.

There are impressive voluntary projects across the constituency working to tackle social deprivation, both in Wirral and internationally. In Woodchurch, the Hoole Road Hub is a community venture run by a family team providing welfare advice, training, support and internet access for local people. People drop in for help with problems with housing and benefits, and children come along with their parents after school to do homework together because they cannot afford internet access at home.