John Healey
MP for Rawmarsh and Conisbrough · Labour · United Kingdom
“Mr Spock, I think some would say, Mr Speaker! My hon. Friend is right. Despite global conflicts, trade tensions and rising threats in the world, which are pushing up inflation, bearing down on growth and pushing up borrowing costs, the UK economy is demonstrating huge resilience.”
“The Prime Minister and I have been clear that we must cut the costs of welfare. On levels of taxation, we had a period of Conservative Government, with low growth and high debt. They crashed the economy with the mini-Budget, and we had levels of taxation that were putting pressure on business, adding to the cost of living.”
“The hon. Lady is talking to the person who led the work to establish a defence and security partnership with the European Union and bilateral agreements with other countries, on which we now build both our economic strength and our national security strength. On the question of the Budget, I ask the hon.”
“Since day one in the job, the Prime Minister and I have been in lockstep in our determination to meet Britain’s fiscal rules. This is the bedrock on which we build good growth and help give a bit of breathing space to families and businesses.”
“May I start by paying tribute to my predecessor, my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves)? I am proud to have been a member of a Government with the first female Chancellor in 700 years.”
“My hon. Friend speaks up very strongly for his local area. He is right about the importance of pubs, social clubs and live venues, and about the importance of the 20% cut that we announced in July. These are the things that make the places where we live the places that we also love.”
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“Again, today, we saw the Office for Budget Responsibility revising down this year’s growth forecasts and keeping next year’s stable at a time when GDP per person is still lower than it was before the 2008 global banking crisis and recession hit, with most people still feeling their household finances getting worse, not better. Why does that matter? Why is that our central problem? Weak growth means that there is less of our national income to go round, and productivity and wages are seriously depressed, which is why we have the worst and widest productivity gap in this country since 1992; the average earner is still £1,000 worse off in real terms than five years ago, and the minimum wage is worth less than it was in 2010.”
“Let me welcome also the new £9 national minimum wage for those over 25 in 2020, not least because I was on the National Minimum Wage Bill Committee and remember how hard it was fought and how strongly it was opposed by Conservative Members. I welcome their conversion to that cause. The Chancellor likes to talk about growth figures for 2014. He did so again today in his statement. But one good year of growth does not absolve him from a poor economic record over his five years. Of all the G20 advanced countries in the world, only France, Italy and Japan have grown more slowly than the UK since 2010. The Chancellor has led the slowest economic recovery in Britain for over 100 years.”
“They deny the truth that weak growth has been the central problem of the past five years, and they disguise the fact that there are economic choices that could give us a different debate and a different direction for the future. My right hon. and learned Friend, the Leader of the Opposition, said that there is always a temptation to oppose everything, and there is a lot to oppose in this Budget. Let me start by welcoming the action on the non-doms. Let me welcome the commitment fully to fund the Stevens plan for the NHS. Let me welcome the 2% commitment for defence spending; it matches what a Labour Government did in each and every one of our 13 years in power.”
“It is a real pleasure to follow the very accomplished maiden speech of the hon. Member for Louth and Horncastle (Victoria Atkins). It was a little light, lyrical relief after the Chancellor’s Budget statement. I am sure that the whole House wishes her well in following the many years of her predecessor and of her father in this House. This was a Budget that was trailed by both the Prime Minister and the Chancellor last week as offering economic stability for the country and security for working people. Today, it was trumpeted by the Chancellor as a big Budget and a new settlement from a one nation Government. But this is a full fat Tory Government. They launch a frontal assault on the finances of many low income families. They change nothing of the structural weaknesses in the British economy.”
“The OBR has today revised down the growth forecast for this year. It is not 3% but 2.4%. Over the five years—which is how we should judge the Chancellor, over his term—it has been one of the weakest growth rates in any of the major economies and the weakest recovery in over 100 years.”
“He could set strong but more balanced fiscal rules to govern the public finances, both to stamp out any deficit on current spending and to recognise that job-creating, growth-generating investment is vital. Figures from the Institute for Fiscal Studies show that over the next five years the Government could double investment spending while freezing rather than cutting departmental spending in real terms, making no further cuts to tax credits or social security payments, and raising no taxes, yet still eliminate the current budget deficit and have debt falling by the end of the Parliament. We should be debating that sort of reasonable settlement today, but this Budget, this Chancellor and this Government are denying the public that debate and those alternatives.”
“Public investment in the UK is lower than in the large majority of advanced economies—well below the OECD average and lower even than countries such as Estonia, Latvia and even Greece. At the same time, the cost of borrowing to invest is at a near-historic low, with the Government paying a yield of less than 2% on benchmark, or 10-year, gilts. Business gets it. Business organisations are crying out for the Government to lead an investment and infrastructure revolution. But just as the Chancellor halved infrastructure investment over the last Parliament, we learned today that public sector net investment this year will be lower than last year, and it will be lower at the end of this Parliament than it was at the end of the last Parliament. Yet there are choices for the Chancellor; there are choices for the country.”
“Those are vital for the opportunities that our children will have tomorrow. When the Chancellor fails on public investment, he is failing our children’s future. Just as his overall surplus rule would not work for a family looking for a mortgage to buy a home, a teenager looking to borrow to go to university or a business aiming to expand, it is counterproductive too for a country that needs to invest in its future. The Chancellor is no fool. The problem is not his intellect; it is his ideology. In this open, global, competitive economy, to get strong, broad-based growth the state needs to play its part. Government can be a force for good, not just in distributing national income, but in creating it too.”
“We know from the last Parliament that growth weakened as the coalition halved public investment in infrastructure, reduced Government investment in R and D, slashed vital capital investment in affordable homes and cut further education. What we have heard today risks reinforcing, not rectifying, those failings. Nothing that we have heard today will deal with the central growth challenge. Investment spending brings more benefit than just short-term economic stimulus. It is vital in the long run as a sure-fire way to lock in higher productivity and growth, which is imperative for good jobs for the future. Without investment in roads, in rail, in research, in science, in skills, in energy and in communications, we simply will not create and keep the well-paying jobs we need in Britain.”
“My hon. Friend is right. If the Chancellor had not choked off Labour’s recovery, and the economy had carried on growing for five years at the rate at which it was growing under the last six months of the Labour Government, we would have had £100 billion of extra national income. That is a chunk of the national economy the size of Yorkshire taken out of what we produce as a country, with all the good jobs that go with it. Weak growth means a double blow for the debt and deficit, with lower tax receipts and higher borrowing, which is why the Chancellor failed to deal with the deficit during the last Parliament. This year, we learn from the Red Book, in the year he promised to have removed the deficit, it stands at £69.5 billion, with borrowing revised up over the Parliament ahead.”
“We need a long-term plan now to control housing benefit costs, and we need to switch public spending from paying benefits to building homes on a big scale. In that way, we can build more affordable homes and make the Exchequer a profit in the long term through lower housing benefit bills. This is a Budget with no compassion and little credibility, a Budget that risks repeating many of the mistakes of the last five years. Over the next five years, it will be our Labour task to prove that there is an alternative, not just as a protest, but as a programme for a different Labour Government from 2020.”
“Many are only just coping now, and this is a Budget that will strike fear and desperation into their lives. I got an email yesterday from Mrs Smith—let us call her Mrs Smith—of Rawmarsh. She says that she is “very worried” about the cuts to tax credits going ahead: “I struggle as it is. I’m married with three children. I work long hours, and don’t see my family much as it is. I can’t afford to do my nursing as I can’t cut my hours down. I haven’t even taken my children on holiday in eight years”. This welfare policy fails the head test as well as the heart test. Many of the cuts will punish poor families but not bring down the benefits bill because the Government are not getting to grips with the root causes of those welfare costs.”
“My hon. Friend is absolutely right and anticipates my point. What he says signals serious trouble for many people resulting from this Budget. Just as there are alternatives at the macro level, there are alternatives at the policy level. The Chancellor wants £12 billion in social security cuts. It is the Tories’ choice to hit working and low-income families, when the Chancellor could have cut back even further on the tax reliefs for buy-to-let landlords, which at present cost the taxpayer about £11 billion a year. He could have chosen not to sell the public’s interest in RBS while it still means a £13 billion loss to the taxpayer. The Budget promises pain for many people who can do little to deal with the financial shortfall they will suffer. They are trapped by low wages and high rents.”
“What a load of waffle. It is quite clear that the Minister has made no assessment at all of the costs of the policy. When he produces the impact assessment before the Bill is published and brought before the House, will he ensure that it shows that taxpayers will pay three times over: first, for the investment to build the homes; secondly, for the discount to sell them; and, thirdly, for the higher housing benefit bills that will result?”
“In his speech today, the Prime Minister talked about the causes of welfare spending. He had next to nothing to say about low pay, yet the financial modelling I conducted on Labour’s plans for raising the national minimum wage shows that we could save three quarters of a billion pounds on housing benefit and tax credit costs. Surely getting to grips with the root causes is a better way to control rising welfare costs than attacking the incomes of the poorest?”
“Among all 20 of the world’s most advanced economies, why have only France, Italy and Japan grown more slowly than the UK in the five years the Chancellor has been in the Treasury? Is not weak growth, not the deficit, the real problem for the UK economy?”
“Good value for public money is arguably as important as the funding formula. Does the Secretary of State accept that earlier this year the Public Accounts Committee produced a damning report on the deficiencies in the oversight and accountability system in our schools, made much worse by the headlong rush to academies? What steps are there in her Education and Adoption Bill to deal with the long list of flaws in the system?”
“This was a swansong statement, if I may say so, which largely looked backwards rather than forwards. Nevertheless, what the Minister has announced today about stronger central leadership within Whitehall, clearer professional standards right across the Departments and more power to the elbow of the new chief executive of the civil service are welcome on all sides. The right hon. Gentleman over five years has made something of a start in ensuring we get better and more for less, but his statement this afternoon is clearly passing the baton for the next five years to this side of the House and my hon. Friend the Member for Manchester Central (Lucy Powell) on our Front Bench.”
“The structural weaknesses are still there, despite the rhetoric from the Chancellor—the rabbits coming out of the hat—and the underlying failures of the long-term economic plan are unchanged by this Budget.”
“He said that living standards were higher than when they entered office and that our economy was fundamentally stronger than it was five years ago. The gap has never been greater between their rhetoric and the everyday reality of people’s lives. I want to pursue two arguments that expose some of the rhetoric we heard from the Chancellor and some of the reasons why their long-term economic plan is failing and why the structural and cyclical weakness of our economy remains five years after they entered office. There are two principal arguments. First, the Government’s economic policy directly choked off the recovery under way at the last election in May 2010, leading to the slowest economic recovery from recession in this country for 100 years. Secondly, the economic recovery is unbalanced, unequal and unsustainable.”
“It is a pleasure to follow the hon. Member for Fareham (Mr Hoban) in his last speech to the House. Like you, Madam Deputy Speaker, I faced him through the long hours of many long Finance Bills when he was on the shadow Treasury Front Bench. His reflective and loyal speech this afternoon was characteristic of the way he has served his party and Government. It is a shame he is not on the Front Bench this afternoon, because perhaps then he would not be leaving the House come Dissolution. However, the hon. Gentleman has a problem, because, as the Leader of the Opposition said, this is a Budget that cannot be believed. I shall pick just two things that the Chancellor said during his Budget statement.”
“There are not many Members opposite, as the hon. Gentleman says. [Interruption.] He will remember, however, that after 10 years of the last Labour Government, before the global financial crisis and recession hit, borrowing and debt were lower than when we entered office. We have a deficit to deal with because of how the Government intervened to pull the country through that deep recession, to keep people in their homes and jobs and to keep firms in business. Of course there is a deficit, and of course it needs to be dealt with. The difference between the parties is that we will deal with it in a more balanced way. There is a choice. We can do it with tax rises that are fair, spending cuts and efficiencies. We will do what we need to do in a more balanced way.”
“The intervention in the collapsed and failing banking system was a necessary step that the last Labour Government took with support from others, and most of the RBS and other bank intervention is dealt with differently in the national accounts. I would have thought that the right hon. Gentleman would have realised that.”
“The area of South Yorkshire that I represent has seen the average full-time worker take home £2,500 less than in 2010. Back in 2010, the Chancellor said he had a long-term economic plan. He said in that Budget statement: “Our policy is to raise from the ruins of an economy built on debt a new, balanced economy, where we save, invest and export”. —[ Official Report , 22 June 2010; Vol. 512, c. 167.]”
“When the Chancellor was faced with the choice either to spend money on, for example, short-term income tax cuts for millionaires or to invest in the infrastructure this country needs for the long-term future, he chose the tax cuts for the millionaires. The unprecedented wage squeeze has come partly from the cuts in services, tax credits and benefits. It has come, too, because of the inherently weak demand for labour in this country. Before a Government Member jumps to their feet and asks, “What about the headline unemployment rate?” I would say that it is good that it is down, but the weak demand for labour has meant that people cannot get the hours or the wages to meet the bills that they are struggling to pay. Weak growth has been reflected in real declining wages.”
“The point of balance is not next year; it is at least three years later than that. It is a comprehensive failure of long-term fiscal and economic planning. What has gone wrong? The OBR says that the severe cuts and the significant VAT hike—let us not forget that—resulted in a loss to GDP of 2% in those first two years. Other estimates put the figure at 3% to 5%, at least, over the Parliament. The most productive spending in a downturn is capital spending. That is why organisations from the International Monetary Fund to the OECD and the OBR itself have all said that reducing investment spending has the most serious effect on negative economic growth, yet that is exactly what the Chancellor did, as my hon. Friend the Member for Edmonton (Mr Love) has just said. Over the Parliament, public capital investment has almost halved.”
“This has been the slowest recovery from a recession in this country in 100 years. On public finances, I remind the Government Front-Bench team of that 2010 Budget speech. The Chancellor claimed that “fear about the sustainability of sovereign debt is the greatest risk to the recovery”. —[ Official Report , 22 June 2010; Vol. 512, c. 166.] National debt then stood at 62% of GDP. Today’s figures confirm that it will be about 80% next year. On the deficit, the Chancellor issued his binding formal mandate in 2010 that the books “should be in balance in the final year of the five-year forecast period, which is 2015-16”. —[ Official Report , 22 June 2010; Vol. 512, c. 167.] The failure here is astonishing. Far from balance, the Budget figures tell us that we will be in deficit by £75.3 billion.”
“My hon. Friend characteristically anticipates one of the points I was going to make. He will know, because he will have seen the papers published alongside the Budget, that those papers confirm that over this Parliament public sector capital investment has fallen by 44%. His point is spot on. I want to turn to some other facts. When the Government took office, the economy was growing quarter on quarter at a 4% annualised rate. The combination of policies introduced in the emergency Budget in 2010, which the Chancellor reminded us of, meant that by the end of 2010 growth was zero and that over the years 2011 to 2014 the annual rate was just 1.7%, not the 2.4% we were told we would get when he made his Budget statement. They choked off growth because of the policies and cuts they introduced.”
“This Budget provides a warning to people about what is to come in the next Parliament. This Budget tells us that if the Conservative party is re-elected on 7 May, we will have a continuation of an economy and country for the few from a Government of the few.”
“Let me remind my Front-Bench team of what the Chancellor tried to claim. He tried to claim that the north had grown faster than the south and he was talking about last year, but if we talk about the five-year period of the Parliament, the north has grown by 6% on his watch, while the south has grown by 10%. This is a Budget that cannot be believed. Finally, at the heart of the Government’s failure is the dogma of pursuing a small state. We have seen less investment despite the consequences for productivity and growth; cuts to benefits and tax credits to fund millionaires’ tax cuts, despite the consequences for living standards; no serious export or industrial strategy, despite the consequences for our balance of payments; and no serious plan for balanced regional growth, despite the consequences for the inequalities in our country.”
“The Minister says, “Hear, hear”, so let me tell her that household debts increased over this Parliament and are set to rocket over the next five years. Ministers have halved public investment over this Parliament, despite a pledge to protect it; and on exports, the balance of payments gap at the end of 2014 stood at 6% of GDP—the biggest since records began in 1955. At the same time, our country has grown further apart. After 10 years with Labour’s regional development agencies in England, when the poorer English regions were able to achieve almost the same rate of gross value added growth as the richest regions, the gap has grown every year since 2010. The income of the UK’s richest region is now over 10 times that of the poorest, and real output per head has shrunk since 2010 in the north-west, Yorkshire and the east of England.”
“It is possible to deal with a deficit simply by cutting, which is largely what the right hon. Gentleman’s party has done, but it is also possible to deal with it in a more balanced way by cutting where cutting is needed, raising revenue where it is right to do so, and ensuring that there is enough growth to bring in the revenue. That was the fundamental problem with the policies that existed at the beginning of the current Parliament.”
“When the hon. Gentleman intervened during my speech, I made it clear that the deficit was caused after the global financial crisis by the Government stepping in to help the country through. That is what Governments can do. I said clearly that that caused the deficit and we had to deal with it. Any Government would have done so. What counts is how they deal with it. Will he remind us what Labour’s plan in the 2010 election was, as set out by my right hon. Friend the Member for Edinburgh South West (Mr Darling), the Chancellor at the time? Our plan would have reduced the deficit faster and further than the Chancellor has managed in the past five years.”
“Last month, a couple of hundred senior business figures gave a very warm welcome to the second stage of the review that Sir John Armitt has done on infrastructure for the Labour party, including plans for a new independent national infrastructure commission to identify the country’s long-term needs and monitor Governments’ plans to meet them. Business backs Labour plans; business organisations back Labour’s plans; will the right hon. Gentleman back them?”
“I welcome the announcement of the future funding for this programme, but the Secretary of State failed to answer my right hon. Friend the Member for Leeds Central (Hilary Benn) and say whether the £200 million is for 2015-16 or the full five years of the next Parliament. On current funding, the Secretary of State has been withholding from Rotherham council about £750,000 in troubled families and transformation award funding. Given the special circumstances and the challenges we face, will he now release that funding to Rotherham?”
“This statement is called “Trade Union Reform (Civil Service)”, so will the Minister correct himself and the record and confirm that none of the civil service unions is affiliated to the Labour party or pays towards it? Rolls-Royce, Tesco, Virgin Media, Odeon Cinemas, Jaguar Land Rover —some of our biggest and best British companies—work with trade unions, recognise trade unions, and offer check- off to trade union members and facility time to their representatives. Why are the Government not dealing with their staff and unions in the same decent, modern way?”
“My hon. Friend is making a powerful case, so I hope the Minister is listening. To be fair, one small step has been taken today, linked to the announcement by the Secretary of State for Communities and Local Government of £250,000 for the commissioners for Rotherham council over two years, to reintroduce an outreach youth work project—a Risky Business-style project. Does she recognise, as I do, that that is merely 0.5% of the budget cut that the council must make in April, so it is simply not enough? Should not the Communities Secretary now release the troubled families and transformation award funds that have been withheld from Rotherham, because the council and other agencies need them to deal with the problems highlighted in the Jay and Casey reports?”
“My hon. Friend is making a very interesting and important argument to the House. Does he accept that our position in south Yorkshire is similar to his in the west midlands, with exactly the same financial bind? Since 2010 the South Yorkshire police have faced cuts in excess of £30 million. In south Yorkshire, as in the west midlands, we are seeing the hollowing out of neighbourhood policing and the closure of local police stations such as Rawmarsh and Wath, and this is setting back a generation of progress over the previous decade.”
“Does the Minister accept that spending power disguises the real pressure on many councils, and that the money allocated does matter? Barnsley, which covers part of my constituency, is facing eye-watering cuts: a 26.9% cut in the revenue support grant next year, it tells me, and an overall cut in its settlement of 13.6%. It is absolutely nothing like the smaller figures he is giving the House.”
“My right hon. Friend is making a powerful and principled point about the way that funding has moved against those areas with greatest need. He is making that case with great clarity, but does he accept that using spending power, as he just did, disguises the depth of the cuts that many councils face? It really cannot be the case that we can accept £1.8 billion of a better care fund in next year’s budget as an increase in councils’ spending power when the power to approve the spending decisions lies not with councils but with the health service in those areas?”
“Will he start by releasing £750,000 of troubled families and transformation award funding withheld from Rotherham that the council and its agencies need to help to put right the problems set out in the Casey report?”
“As I said when the Jay report was released, our whole town was shocked and shamed by its findings. This report is also deeply and comprehensively critical of our council and our police. As my right hon. Friend the Member for Leeds Central (Hilary Benn) has said, Labour accepts Louise Casey’s findings and the actions the Secretary of State now plans to take. Locally, we will all work with the commissioners to put right in full the flaws set out in this report and to put in place in full the recommendations of the Jay report to help victims and bring perpetrators to justice. The Secretary of State has made a welcome promise to play his part.”
“In relation to the private rented sector and all other housing, the English housing survey “is used extensively across government and beyond and is a public good of national importance.” Those are not my words but those of the national statistician in reaction to the Minister’s plans to stop the survey next year and then do it only every other year subsequently. In the light of the national statistician’s concerns in urging a rethink, will the Minister confirm that he will take that advice and not scrap next year’s survey?”
“My right hon. Friend is giving the House a very good analysis of the social care system. He may have looked at the National Audit Office analysis published in March 2014, which said: “The intention in the 2010 spending review was to protect spending on adult social care”. Despite that, because Ministers cut central Government funding for local authorities by 26%, councils have cut nearly £1 in every £10 spent on adult social care in the past four years, leaving Age UK’s director to describe the system as being in calamitous decline. That is clearly a central cause of the current A and E crisis, exactly as my right hon. Friend is arguing.”
“Most grandparents who take on the formal responsibility of raising their grandkids just want to keep them in the family, but taking on full-time caring in their 50s or 60s can come at a high price, often without any proper recognition. Policy guidance is fine, but does the Minister agree that much of the same recognition and support that is available for foster carers and adopting parents really ought to be there for grandparents who take on this role?”
“The Business Secretary is urging a balanced approach. Is he aware that the shadow Business Secretary has said that trade unions at their best are wealth creators for this country? We never hear that from the Prime Minister or the Chancellor. Can we hear that, along with a tribute to trade unions, from the Business Secretary?”
“I am very short of time now. This is an internationally competitive but internationally exposed industry, clearly suffering the effects of weak eurozone demand, exchange rate changes and, above all, as a high-intensive energy user, very high comparative energy costs.”
“It is hampered by high energy costs and held back by the Government not doing all they can to back this great British industry. We have been making steel in Rotherham since the early 1800s, and Tata’s steel-making, re-melting and mill processing now supplies some of the world’s highest-quality, highest-performance metals to some of the world’s biggest and best known companies. We have come close to losing our Aldwarke plant before, and it was only because of the trade unions, working alongside the management—led by Stuart Sansome of Community union, alongside Mark Broxholme of what was then Corus Engineering Steels—that in 2009-09 we brought that company through that period. I pay tribute to them, and I was glad to hear the Business Secretary paying proper tribute to the trade unions’ role in the steel industry.”
“167.] He failed, and we now face a trade deficit of £110 billion a year and the biggest ever trade deficit in goods. The steel industry and our UK companies together are positive contributors in that disastrous trade balance, involving £5 billion a year of exports. In 2013, the steel industry made a positive trade contribution of £2.4 billion. Tata’s speciality steels manufacturing, which is largely based in South Yorkshire, now employs 2,250 people, 1,050 of whom are at the Rotherham site. That steel-making in South Yorkshire is innovative, internationally competitive and successful—27% of the sales are to the UK market, with 18% going to the US and fully half to other eurozone countries—but it is under great pressure.”
“After nearly five years of failing economic policies, Britain badly needs a successful steel industry, not only in its own right but as a foundation industry for the success of this country’s many other advanced manufacturing sectors, including the aerospace, automotive, oil and gas and renewables industries. The Secretary of State and other Ministers brag about their economic success but, in fact, we have seen a double deficit failure. We have seen failure on the fiscal deficit, with the Government promising to balance the books by this year but instead having to admit that they are borrowing £200 billion more than they planned over this Parliament. We have also seen failure on the trade deficit. Back in 2010, the Chancellor promised an “economy where we save, invest and export”. —[ Official Report , 22 June 2010; Vol. 512, c.”