Rachel Reeves
MP for Leeds West and Pudsey · Labour · United Kingdom
“I thank my hon. Friend for his question and his work on the Treasury Committee. On pensions reform, through the Mansion House accord and Sterling 20, we have got pension funds to commit to investing more in British businesses, both through British venture schemes and in British infrastructure.”
“I thank my hon. Friend for her question. As Members will know, this Government are working on plans with our NATO allies for a multilateral defence mechanism. We have already signed a treaty agreement with Finland and the Netherlands, and we are working closely with Scandinavian, Baltic and eastern European countries.”
“At a time of great global uncertainty, it is more important than ever that we deepen ties with our closest allies and biggest trading partners, whose values we share, and whose interests are bound to ours.”
“Today the Government have responded to the covid counter-fraud commissioner’s recommendations in a report that I commissioned, which confirms that the Conservative Government left the door open to more than £10 billion of pandemic fraud.”
“As I just said, the DIP will be published before the summit. It will involve more money spent more effectively, and it will meet the scale of the challenges we face. Frankly, I will take no lectures from the Conservatives, who left our armed forces, in the words of their former Defence Secretary, “hollowed out”.”
“I thank my hon. Friend for bringing the story of Darren and Nicole to this House. I hope that they and their children will benefit from the change I made to the two-child limit for universal credit, as well as from the rolling out of free breakfast clubs to all primary schools, and the introduction of free school meals for all children wh…”
The complete record
Every one of 3,727 lines we hold for Rachel Reeves, in date order, each linked to its source. Free to read, in full, without an account. Page 74 of 75.
“To make the most of Britain’s potential requires a Government who support businesses. Instead, we had the tragedy of the cancellation of the loan to Sheffield Forgemasters. That company is a UK success story. It is British-owned, high tech and high skill. The owners built the company up from scratch and it has become a leader in its field. The loan—I emphasise that it was a loan and not a grant—was signed off by civil servants in the Treasury and was a product of two years of careful negotiation. Lord Digby Jones said that the loan would have been paid back 100 times over in benefits to the economy. Before the election, the Deputy Prime Minister described the loan as “just the sort of thing” we should be doing, and I have to admit that, on this occasion, I agree with Nick.”
“When the hon. Gentleman makes his speech, perhaps he will explain the exchange rate mechanism crisis. In 1990 Japan had a debt to GDP ratio of 50%. The Government failed to take the swift action necessary to help the economy recover from recession and the result is that, 20 years later, debt in Japan stands at 190% of GDP. Those are the facts. Concentrate too much on one economic variable and we have an unbalanced economy that fails to achieve our economic objectives. Despite these facts, the Government say again that there is no alternative. Let me offer an alternative programme for growth in which the Government act strategically on the side of business and industry. What would that mean in practice? First, there is a real and pressing need for the UK to be at the forefront of businesses for the future, especially low-carbon industries.”
“I thank my hon. Friend for securing the debate and I know that many of my constituents will be watching it closely. Does she agree that credit unions—including the Leeds City credit union, which has been operating for more than 20 years in my city, and the Bramley credit union—offer an excellent alternative to loan sharks? The Government could do more to support credit unions to grow, for example by enabling them to operate at all post offices and at local council facilities such as benefit offices and local libraries.”
“Armley jail in my constituency houses 1,128 prisoners, including 55 lifers. What assurance will the Minister give law-abiding citizens in Armley ward in Leeds West that their electorate will not increase by more than 1,000 and that their votes will not be diluted as a result of these changes?”
“The Leeds rail growth package included a new railway station at Kirkstall Forge. Half of the money was to come from the private sector and would have facilitated private sector housing and business development, bringing hundreds of jobs and homes to one of the most deprived parts of the city. Why has the scheme, which the right hon. Gentleman says is good value for money, been sent back to the drawing board, with devastating prospects for jobs and homes in my constituency?”
“The beauty of auto-enrolment, as set out by the Labour Government, was that it would benefit all workers. Will this Government honour that commitment, which will support those on low incomes most of all, as well as temporary and agency workers, who often have the worst pension provision? Or will the Government water down those plans, storing up problems of pensioner poverty for the future?”
“Does the Minister welcome the fact that the efforts of the Debt Management Office mean that the average duration of debt in the UK is around 13 years, several years longer than any other country in Europe? It is one of the many reasons why the UK is not in the position of Ireland or Greece.”
“Does the Chancellor agree that market interest rates were falling before the election? The fall is not due to the Government’s policies—they were falling before.”
“The Minister for Housing, the right hon. Member for Welwyn Hatfield (Grant Shapps), made substantial policy announcements on Friday that could just as easily have been made on Thursday or today. What assurances can the Leader of the House give us that until Parliament returns in September there will be no announcements that can wait, especially given that it is returning early in September? The House needs to be able to scrutinise legislation properly.”
“Mums, children, and women in retirement will contribute twice as much to bringing down the Budget deficit as the predominantly suited men in the square mile will pay through the banking levy. Given that the Government are so keen to stress their family-friendly credentials, does the right hon. Lady feel that that balance is fair?”
“Unlike Government Members, I plan to ask about the amendment, rather than talking about reports in The Times today. Will my right hon. Friend confirm that the measures proposed by the former Chancellor of the Exchequer in the Budget in March would have reduced the incomes of the top 10% of earners by 7% and those of the bottom 10% of earners by 0%, compared with the Budget proposed by the current Chancellor that reduces the income of the top 10% by 0.7% but the bottom 10% by 2.6%? So the work that—”
“Does the hon. Gentleman agree that the reduction in VAT under the Labour Government reduced revenues by just over £12 billion, so we do have quite a good idea of how much money it will bring in? Does he also agree that my constituents, who earn £16,000 on average, did notice the reduction in VAT, and that they will certainly notice the increase in VAT?”
“There is more than one type of interest rate. The hon. Gentleman is correct that the overnight rate has stayed at 0.5% for some time now, but I think that my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) is referring to the long-term interest rates, which were falling for at least a month before the election.”
“In March, the then Chancellor of the Exchequer introduced a Budget that included £19 billion-worth of tax increases and £38 billion-worth of spending cuts. With those tax increases, those in the bottom 10% of income distribution experienced not the 2.6% reduction in their incomes that will be the effect of this Government’s Budget, but a 0% reduction. In contrast, those in the top 10% experienced not a 0.7% reduction in their incomes, as they will under this Budget, but a 6.8% reduction. Instead of following the choices taken by the previous Labour Government, this Government have chosen measures that will hit the poorest in society the hardest.”
“I know that I need not spell all this out to the Government, because just a year ago, the Prime Minister said that VAT changes would hit “the poorest hardest”, and it is no secret that the Deputy Prime Minister is well aware of just how regressive VAT changes can be. A few months ago, he described what the Government are planning now as a “VAT bombshell”. The Government had a choice about how to reduce the Budget deficit and they chose a package of measures that included the VAT rise, which will make it even harder for low-income families to keep their heads above water. Let me remind the Government that they did have a choice. There is another way of achieving a reduction in the Budget deficit without threatening economic growth and without the unfairness of the most vulnerable in society being hit the hardest.”
“Independent estimates from the Institute for Fiscal Studies show that because of this Budget, by 2014-15, the incomes of the bottom 10% of the population will fall by 2.6%, which is equivalent to £5 a week. Given that those in the bottom 10% of income distribution earn on average £190 a week and already struggle to make ends meet, that £5 a week reduction in their incomes will inevitably hit families and pensioners, plunging more of them into poverty. In contrast, those who are fortunate enough to be in the top 10% of income distribution will experience a mere 0.7% fall in their weekly incomes. As their average income is about £1,600 a week, I suspect that a reduction of £11 will be somewhat more manageable to them than the reduction in weekly income will be to those in the poorest decile of income distribution.”
“That is okay, Mr Hancock; people often cannot tell us apart. I rise to support amendments 25 and 43. The impact that the VAT increases in the Bill will have on the most vulnerable in our society—those who are least responsible for the global financial crisis—has been ignored and avoided by the Government, and I wholeheartedly agree that there should be a full analysis of and subsequent report on the extent to which the increase will affect low-income households in particular. The Government’s plans to raise VAT from 17.5% to 20% are highly regressive and entirely unfair. We know that the poorest fifth of Britons pay twice as much of their disposable income in VAT—at 12.1%—as the richest, who pay just 5.9%.”
“I think it is reasonable to look at them separately; one was introduced by a Labour Chancellor and the other by a Conservative Chancellor, and the difference between them is stark, as I hope other hon. Members will agree.”
“How ironic that the Government are making the banks and those at the top of the financial institutions, which are largely responsible for the recession, pay just a fraction of what those at the bottom are being made to pay.”
“My hon. Friend is correct. In addition, the reductions in spending are not included in the Red Book analysis, and they will hit people in poorer, low-income families more than those in the top income decile. I do not dispute the fact that tax increases and spending cuts were needed in this Parliament, but I know that the impact on the poorest in society could and should have been lessened. We need the amendment so that we can fully understand the extent of the impact. The Red Book shows exactly where the pain and the priority rests. Benefit cuts will reduce the income of the poor and vulnerable by £11 billion. The regressive VAT increase will cost families and pensioners £13 billion. The bank levy will yield £2.4 billion.”
“The hon. Gentleman might also be aware that the Labour Government introduced a tax on bankers’ bonuses, which brought in more than the bank levy will bring in. So while I accept what the hon. Gentleman says, Labour intended to tax the banks more than the hon. Gentleman’s Government propose to do.”
“I would like to make a little progress and then I will give way. It is doubly ironic that the banking analysts now suggest that the cuts in capital gains tax could cancel out the bank levy, leaving some banks better off. HSBC has said: “On our estimates, the corporation tax cut should neatly offset the levy over time. Put another way, net net the Treasury appears to have cut corporation taxes for UK industry, but not for the banks. Moreover, hedge funds and other financial institutions will not be even covered by the banking levy so they can go about their business as they did before paying no more tax under this Government.” My constituents in Leeds West have average incomes of £16,000 a year. They did not cause the recession; they do not have savings to draw on.”
“I have already given way to the right hon. Gentleman and I am just winding up now. My constituents are being asked to make sacrifices that they can ill afford, most especially through the increase in VAT, well beyond the sacrifices that those at the top are being asked to make. I therefore fully support the amendment and ask that the Government undertake a full analysis of the impact and extent that this regressive, unfair and unjust VAT rise will have on those groups who can least afford to pay and least deserve a tax hike.”
“In my constituency, a local charity called Healthy Living Network Leeds is commissioned by the PCT to provide health services in the most deprived areas, including among the Traveller community. What guarantee can the Secretary of State give to my constituents that those community-based health services will continue, and that they will be overseen to ensure that those treatments continue in the most deprived areas?”
“Does my hon. Friend agree that it is even more important to extend that entitlement during the recession? In my constituency, the average income is £16,000 a year, which means that the average family is living in poverty. However, if someone works and earns £16,000 a year, their children are not entitled to free school meals. It is harder for those families to go back to work because they lose the entitlement, which for many is equivalent to about £600 a year. If the coalition Government want to get more people back to work—although the forecast from the Office for Budget Responsibility showed that their Budget will put 100,000 more people on the dole—one important measure would be to extend the entitlement to free school meals so that parents who go back to work can claim it for their children.”
“My hon. Friend talks eloquently about the difference that free school meals have made in her constituency. Does she agree that as well as free school meals, which are important, breakfast clubs in schools are making a huge difference? However, certainly in my constituency, schools rely on support from the local education authority and the Department for Education to be able to continue those breakfast clubs. Does she share my fear that we are starting to descend a slippery slope and that the support for breakfast clubs, which also help children’s concentration and break down some of the barriers that she talked about, is likely to be at risk in future?”
“We need more clarity. The previous Labour Government said that the extension of the free school meals pilots next year would cost £85 million and the new Government say that it will cost £125 million. The gap is only £40 million. If the £85 million is there, what will it be spent on? I think that that is the point that my hon. Friend the Member for West Ham (Lyn Brown) was making. Will that money be used for something else? Will it be used to pay down the deficit? For what, precisely, will the money earmarked for the scheme—money that the Minister has said is available—be used?”
“The right hon. Gentleman talks about the IFS numbers on the distributional impact. Does he agree with the following numbers from the IFS? The impact of the measures announced on Tuesday on the incomes of the poorest—the bottom—decile will be minus 2.6%, whereas it will be minus 1.5% for the next two deciles, then minus 1.4%, minus 1.3%, minus 1.1%, minus 0.9%, minus 0.6%, minus 0.6% and minus 0.7%. So the bottom decile will see a reduction in their income of minus 2.6% and the top decile will see a reduction in their income of minus 0.7%. Is that regressive or progressive?”
“Can my right hon. Friend confirm that, in addition to what I said earlier about this Budget affecting the top decile by just 0.7% and the bottom decile by 2.6%, Labour’s March Budget had an impact on the top decile of 7% and absolutely no impact at all on the income of the poorest decile? There is a different way of doing a Budget, and that was a progressive Budget.”
“Does my right hon. Friend agree that it does not seem fair that the welfare bill will be cut by £11 billion, but we are asking the banks to contribute only an extra £2.4 billion?”
“I wholeheartedly agree that the deficit needs to be cut, but the issue is whether it should be cut this year or next year, and the method of making those cuts. The surest way to bring down the deficit is to embed strong and sustainable growth, but we heard nothing about that from the Chancellor today. The Office for Budget Responsibility’s forecasts have revised growth downwards—after those presented only a week ago—by 0.1% this year and 0.3% next year, and an additional 100,000 people are due to go on the dole.”
“I have great concerns about what the Government have outlined today. First, international evidence shows that hasty cuts will derail growth. Secondly, by failing to set out a vision for the future, the coalition destroys our chances of rebuilding a balanced economy. Thirdly, the Budget’s measures will hit the poorest in society—those who can least afford the pain—hardest. I fear for my constituents in Leeds West and am worried about how they will fare in the months and years ahead. On growth, it is clear from the Chancellor’s speech that he has chosen to ignore the harsh lessons of history—from Japan in the 1990s and the USA in the 1930s. Despite his talk of a plan for growth, as a result of today, we face the real prospect of a double-dip recession.”
“The Chancellor has today chosen the latter, and the result will be, as we have seen from those forecasts, weaker growth, higher unemployment, more business failures, more home repossessions and a less competitive British economy. Instead of a strategy for growth, we have been given a strategy for austerity, cuts and pain for working people—the people whom I have been sent to Parliament to represent.”
“I thank the hon. Gentleman for giving me the opportunity to address that issue. The debt-GDP ratio in Greece is two and half times that of the UK, and the maturity on UK debt is, on average, 13 years, compared with an OECD average of two to three years. In addition, the Greek economy remains in recession, while the UK is beginning to recover from a recession. We cannot take that recovery for granted, but our economy grew by 0.3% in the first quarter of this year, and we are beginning to emerge from recession. The downgrades from the OBR reflect the fact that the cuts will stall the recovery and throw more people into unemployment. There are two ways to reduce the deficit: strong growth, or wielding the axe.”
“I will give way less often if interventions last that long. The hon. Gentleman made a long intervention, but missed a couple of points on which I should like to fill him in. In its statement from South Korea a couple of the weeks ago, the G20, as well as calling for countries to address budget deficits, argued for growth-friendly deficit reduction strategies. Today we did not get that. Another of the hon. Gentleman’s omissions is President Barack Obama’s warning. In a letter ahead of the G20 meeting this weekend, he said that we should “learn from the consequential mistakes of the past, when stimulus was too quickly withdrawn and resulted in renewed economic hardships and recession”. The hon. Gentleman failed to mention those points, but they are extremely relevant to the debate.”
“The new Government are portraying their cuts as eliminating waste, when in fact they are risking our future economic prosperity. Eliminating the future jobs fund, which has got almost 200,000 people back to work through the recession, axing the loan to Sheffield Forgemasters—an absolute disgrace that has cost jobs and economic growth in my region—cutting funding to universities, and cutting hospitals, transport and school building programmes across the country, including in my city of Leeds, is certainly not my idea of eliminating waste. Rather, it is cutting the front-line services on which my constituents rely.”
“What I regret is that the current Government withdrew the future jobs fund and the extra 20,000 places that Labour introduced to universities, and cut the regional development agencies, which were doing fantastic work in my region of Yorkshire and Humberside. Those are my regrets. Frankly, there is no vision from the Chancellor and the Government of the sort of economy they want to emerge from the recession. What sort of society and economy do they want when they have reduced the budget deficit? Labour wants a sectorally and regionally diverse economy that is robust enough to face future shocks. None of that is on the Chancellor’s or the Government’s radar—let alone within their grasp—because they are cutting the very measures that would ensure not only growth in the short term but future economic security.”
“Yes, taxes need to increase and spending to decrease, but not at the expense of the economic future of this country or of a diverse, strong regional and national economy; and not in a way that will plunge more families and children, who played absolutely no role in causing this recession, into poverty, unemployment and despair.”
“The Government are trying to convince the public that there is only one way that Britain will bring down the deficit—pursuing hasty and unjust spending cuts—but that is simply not true. They are using the budget deficit as a cloak for fulfilling their overriding ideological desire for a smaller state. They are set on achieving that by doing the economy down—as the hon. Member for Spelthorne (Kwasi Kwarteng) did when he made the comparison with Greece, which was the most misleading comparison he could have made—and by panicking the public into thinking that there is no other option. However, there is another option. The surest way to reduce the budget deficit is to ensure strong and sustainable growth and a rebalanced economy.”
“Given that UK interest rates are at 0.5%, that rates will be low in the long term, and that quantitative easing has already been undertaken, it is pretty much impossible to see how we can loosen monetary policy further—that is simply not at our discretion. I urge the Government not to manipulate the Canadian experience to justify today’s deep cuts. I do not dispute that we need a realistic and credible plan for reducing the deficit—[Hon. Members: “Hear, Hear!”] In response to those heckles, as far as I am aware, it is the Government’s responsibility to come up with the plans, but without a credible plan for growth, we risk a double-dip recession, or a British economy that splutters along in the slow lane of the global economic recovery.”
“Asking those who already struggle to make ends meet, such as those in Leeds West, to make the same sacrifices as, or more than, those at the top is plain unfair and socially divisive. I began by urging the Government not to forget the lessons from Japan in the 1990s and the United States in the 1930s. However, I am filled with fear that they want to learn a lesson from Canada, because we are in a totally different position from that of Canada when it approached its fiscal consolidation. At that time, Canada was a partner in the newly formed North American Free Trade Agreement, and was experiencing strong demand for its exports. It was also able to loosen monetary policy, which was integral to getting its economy back on track.”
“My hon. Friend is absolutely right, and we could think of countless examples of things that the Government have done today that will risk the future economic prosperity of this country. Worse than that, ordinary people—those least responsible for the recession—will be hardest hit. In Leeds West, average earnings are £16,000 and unemployment stands at 8.7%. Increasing VAT, reducing access to free school meals, abolishing the health in pregnancy grant, freezing child benefit and cutting tax credits will hurt my constituents. The people who bear no responsibility for the financial crisis and recession will be hardest hit. An extra £13 billion is to be paid in VAT, but there will be only £2 billion extra from the bankers. Is that fair? Is that the way to bring down a budget if we are “all in this together”? I think not.”
“The Chancellor talks about breaking up the retail and investment banks, but the immediate challenge for the Government is the future of the nationalised banks. Will he consider turning the failed banks into mutuals that focus on long-term returns and not on short-term profits?”
“The right hon. Gentleman also met the permanent secretary at the Treasury and the Governor of the Bank of England before the election, so I am still not clear how his mind was changed between the election campaign and when he became the Secretary of State. Can he clarify what it was between those dates that made him change his mind?”
“I thank the hon. Lady for giving way. I am surprised by what she says about apprenticeships, because in my constituency of Leeds West, the number of apprenticeships has gone up from 70 to 210 in the last decade. At Leeds college of building, 400 people started on apprenticeship programmes supported by businesses this year—more than they have ever had before. I am very surprised that she says that people are not taking up places.”
“Does the hon. Gentleman remember that the financial crisis happened across the whole world? Does he believe that the Labour Government are responsible for the budget deficits in all those countries?”
“I am sorry to correct the hon. Gentleman again. He is right to correct himself—the deficit, not the debt, ratio is 12%—but is he aware that the deficit figure in Greece stands at 14%? Greece is, I believe, in the western world. Is he also aware that we went into the crisis with the second lowest debt-to-GDP ratio in the G7?”
“The hon. Gentleman has quoted a fascinating statistic, but does it not fly in the face of what those on his Front Bench have been saying about how, because nobody wants to buy our debt—that is what one of his colleagues said earlier—we have to make cuts immediately? If interest rates are going down, surely there are lots of people who want to buy our debt.”
“We have heard lots of stories from Members on the Government Benches about the waste of RDAs. I can only tell them what Phil Thompson, managing director of Resource Print Solutions in my constituency, says. His business, like many in all our constituencies, was hit hard by the recession, but he got through it because of a grant from Yorkshire Forward, which enabled him to buy new machinery and equipment and to keep jobs in-house that he had previously had to contract out. During the recession, he did not lay off a single worker. Because of the support from Yorkshire Forward and changes to shift patterns, he managed to keep people in work. The company is now growing again as we recover from the recession. What Phil’s business needs now and what the British economy needs now is economic growth.”
“I welcome you to your position in the Chair today, Mr. Deputy Speaker. It is a pleasure to speak in the debate after so many excellent speeches, not least from the hon. Member for West Suffolk (Matthew Hancock). Ten years ago, he and I started work on the same day at the Bank of England. We had many good debates there and I am sure that they will continue in the House. It is also a pleasure to follow the maiden speeches of so many Members: the hon. Member for Bracknell (Dr Lee), and my hon. Friends the Members for Bolton West (Julie Hilling), for North West Durham (Pat Glass), for Middlesbrough South and East Cleveland (Tom Blenkinsop), for Wansbeck (Ian Lavery), and for Barnsley East (Michael Dugher). I know that my hon. Friend the Member for Barnsley East shares my concerns about the future of Yorkshire Forward, our RDA.”