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The core purpose of the Treasury is to ensure the stability of the economy, promote business and employment, reform banking and manage the public finances so that Britain starts to live within her means. I can also tell the House today that the autumn statement will be on
No, I do not. I think it would cost jobs in the British economy and hit prosperity. I hope that all Members of this House, whether they are sponsored by trade unions or not, would condemn all calls on the trade unions to take up a general strike.
May I take this opportunity to welcome the Financial Secretary and the Economic Secretary to their new posts? I wish them good luck in their new positions. May I also congratulate the Chancellor on somehow managing to keep his job in the reshuffle? Clearly, performance-related management has not yet made it to the Cabinet.
Since our last Treasury questions, the Office for National Statistics has published new figures for Government borrowing. We did not get clarity earlier, so let me ask the Chancellor this. What is the total figure for borrowing for the first four months of this financial year? How does that compare with the same period last year, and how does he explain what has happened?
It is good to welcome the Member for “Unite West” back from the TUC conference. As the Chief Secretary explained to the House, borrowing in the short term has been higher this year than in the first four months of last year, but he pointed to particular one-off factors, such as the shutdown of the Elgin oilfield. That is why the increase in borrowing comes from weaker corporation tax receipts. I am glad to report to the House that VAT, national insurance and income tax receipts have broadly held up, despite the weaker economic conditions here and around the world. However, the right hon. Gentleman will have to wait until
I have to say, we are losing patience with the Chancellor’s schoolboy bluster. It is one thing to be heckled by a few trade union delegates at a conference this morning; it is another thing to be booed by 80,000 people—the whole of the Olympic stadium—when he only turned up to give out a medal.
Let me tell the Chancellor the answer. He is right that borrowing has gone up by a quarter compared with last year, but the reason is that our economy is in double-dip recession, tax revenues are down and spending on unemployment is going up. That is why borrowing is going up, on the watch of a Chancellor who said that he would secure the recovery and get borrowing down. So let me ask the Chancellor this. The International Monetary Fund, the British Chambers of Commerce, the TUC, the engineering employers and even Boris Johnson are now calling for action to kick-start the recovery. Is it not time the Chancellor did something the public might cheer: admit he has got it wrong, change course and finally get a plan for jobs and growth?
The right hon. Gentleman talks about unemployment; 900,000 private sector jobs have been created in this economy over the past two years, and we are rebalancing the economy away from the dependence on debt and the unaffordable public sector that he presided over when he was in the Treasury. [ Interruption. ] He says that borrowing has gone up, but we have cut the deficit by 25%. He has also said that Labour needs a credible deficit reduction plan. He has had all summer to think of one. Where is it?
Building our energy infrastructure is a key element of the national infrastructure plan. Preparations by EDF are already under way at Hinkley, and I hope that they will soon start at Sizewell in my constituency. Will my hon. Friend assure me that the Treasury will strain every sinew to ensure that EDF can make a positive investment decision later this year and build the power stations that that lot on the Labour Benches did not build?
My hon. Friend is passionate about this issue, and she will be pleased to hear that the Government are removing unnecessary obstacles to investment in nuclear power plants and that new power stations will come forward. For example, the Government are undertaking electricity market and planning reforms and introducing an energy Bill. As it happens, I am meeting representatives of EDF later this afternoon, and I would be happy to share her concerns with the company.
In case the right hon. Gentleman had not noticed, the eurozone is in recession. He talks about France and Germany, but the International Monetary Fund—[Hon. Members: “Answer!”] I am about to give him the answer. The IMF’s latest forecasts for growth next year show the UK growing at almost twice the speed of France, and the same with Germany. If the question is, “Why isn’t the British economy more like Germany’s?”, I will give him the answer. It is because we did not invest in skills over the past decade. We did not build our export links with China and India and the growing parts of the economy. We put all our bets on the City of London when Ed Balls was the City Minister and it all went spectacularly wrong. We are now clearing up the mess.
Small businesses in my constituency regularly raise with me the issue of the administration and service levels at Her Majesty’s Revenue and Customs. Those problems constantly add to the administrative burden of small businesses. What more can the Government do to make HMRC more efficient, in order to unburden our small businesses and let them get on with the day job?
My hon. Friend will be aware of the paper that HMRC produced at the time of the last Budget, in which it set out the ways in which we would reduce the administrative burden on small businesses, including cash accounting. He mentioned the difficulties in getting through to HMRC and the problems with the contact centres. HMRC is making further investments and employing an additional 1,000 people in order to improve the performance at its contact centres.
The Chief Secretary to the Treasury was asked earlier about the cost of living, but he said nothing in his reply about what the Government were doing about rising food, transport and energy prices. Have he and his colleagues had discussions with the Energy Secretary about getting a grip on the energy companies and sorting out the soaring energy prices and the profits that the companies are making as a result?
I have certainly had conversations with the Energy Secretary about initiatives such as the green deal, under which people’s energy costs will be brought down by insulating their homes. The hon. Gentleman mentioned fuel costs, but he must be aware that the price of a litre of fuel is 10p less than it would have been if we had stuck with the plans that the previous Government put in place. That was their approach to the cost of living, and this is ours.
Big increases in the funding of vital rail infrastructure projects in the north-west of England, such as the Todmorden curve, the northern hub and High Speed 2, are hugely welcome and will provide jobs and opportunities that would not have been available under the previous Government. Will my right hon. Friend confirm that, without his decisive action on the public finances, such high levels of spending on infrastructure would simply not have been possible?
My hon. Friend is right. It is precisely because we have taken difficult decisions—for example, to cut £18 billion from the welfare budget—that we are able to invest in rail and road improvements that will help to create jobs in Lancashire and across the north-west. The northern hub is a project that has been talked about for many years, but it is under this coalition Government that it is being delivered.
The short answer is yes, we are. It is not about legislation; it is about delivering the money. [Interruption.] Labour Members say “Ah”, but we can legislate as much as we like; the question is whether we are prepared to take the difficult decisions to deliver the money. [Interruption.] They say they do not trust us, but this is the Government who will deliver the 0.7% aid commitment that all parties signed up to.
I think it sends a terrible message to my hon. Friend’s constituents in Brighton and across the country. The last thing this country needs at the moment is a series of strikes. We have struck a good deal for the public sector on public sector pensions that will ensure that people continue to enjoy some of the best pensions in Britain, while at the same time reducing the cost to the taxpayer by 50% over the long term. We are also instituting public sector pay restraint so we do not have to make even more difficult decisions about job losses. That is because we are dealing with a very difficult economic situation with a very large deficit. I would hope that the trade unions would understand that rather than try to take their members out on strike.
This is, of course, the key challenge in these difficult financial conditions, which have endured for five years or so. I know that there is a particular challenge in Northern Ireland, where the collapse of the banking system in southern Ireland has had a real impact. The funding for lending scheme, launched last month, is an £80 billion Treasury/Bank of England scheme to reduce bank funding costs so that banks are able to lend to businesses and households. A number of banks, such as Barclays and Lloyds, have already launched products that will bring those lower interest rates to the hon. Gentleman’s constituents.
The fact that the deficit has come down by a quarter enables the British Government to borrow at roughly the equivalent rate of the United States Government—a rate lower than every EU member state apart from Germany. Does the Chief Secretary agree that this enables the Government to contemplate infrastructure investment and to use the strength of our balance sheet to facilitate and guarantee private sector infrastructure investment?
My hon. Friend is absolutely right. We can use the strength of the balance sheet that has been built up as a result of this Government’s fiscal credibility to provide, for example, £40 billion of guarantees to infrastructure investment and £10 billion of guarantees to registered social landlords. The Labour party may oppose these guarantees, but they have been widely welcomed by infrastructure providers, by the business community and, in the latter case, by housing associations. That shows precisely the benefit of the tough fiscal policy decisions this Government have taken.
Will Ministers look urgently at the length of time it is taking to process tax credit applications? My constituents are being declined their tax credits simply because they are on fixed-term contracts that come to an end before the tax credit application is considered.
The Government are to invest £17 billion in phase 1 of HS2, which will transport someone from London to Birmingham 20 minutes quicker, yet there are students in my constituency today who cannot accept their place in Bedford college because of the lack of a local transport network, and constituents who cannot accept offers of work because they cannot get to the train stations via a bus network. Would it not be a better use of that investment to put it into regional transport networks so that people can get to work and to college?
I think we can do both; we can invest in local and regional transport networks. If my hon. Friend has specific schemes in Bedfordshire that she wants to bring to my attention or that of the Department for Transport, we will look at them very carefully, but that does not preclude us as country from taking the big infrastructure decisions—as we did with the M25 and as our predecessors did with the railways centuries ago—to invest in a railway system for the future. High-speed rail will connect the north to the south of England.
I can write to the hon. Gentleman providing a specific jobs total for this year, but I can tell him now that the national infrastructure plan is already seeing the development of the trans-Pennine electrification, which we discussed earlier, the creation of 700 jobs in the north-east as we spend £600 million on new inter-city trains, and the huge Crossrail development across London, which, as I have seen, is employing many hundreds if not thousands of people. The plan is not just a plan for this year; it is also a plan for the future, and it shows that making difficult decisions about things such as welfare enables us to spend on things that will help the private sector to create jobs.
I congratulate the Financial Secretary on his new post. Would he be willing—when the dust settles, and in the wake of the LIBOR scandal—to look again with fresh eyes at the possibilities of full bank account portability, which could be a game-changer for British banking, and try to get our economy going again once and for all?
My hon. Friend is a distinguished member of the Treasury Committee. The Independent Commission on Banking has considered the matter, and has made some proposals for easier transfer between accounts. It has said that that should be under review, but I shall be happy to meet my hon. Friend, and I understand the case that she is making.
I thought that the hon. Lady might start by congratulating the Government on the fifth consecutive fall in unemployment. She will know that one of the key planks of the Government’s policy for dealing with youth employment is the provision of apprenticeships. She might also welcome the 68% increase in the number of apprenticeships in her constituency.
What are the Government’s intentions regarding transition regions in the next round of EU funding? I am told that four Departments are slightly at odds over that. May I surprise my hon. Friends by saying that in the south-west those in the Treasury are seen as the good guys, in this context at least? Will they impress on their Government colleagues the fact that if these schemes are to help areas such as North Devon and Torbay, which have been shown to be at more risk of going into poverty than Cornwall, they will need to operate bottom-up and not top-down?
My hon. Friend is right to say that transition status has benefited regions such as his—and, indeed, mine in the highlands and islands—during the current multiannual financial framework period. Our principal objective in relation to the budget negotiations is to bring down the total EU budget in recognition of what is going on around Europe, but we will happily discuss further with him his concerns about the issues that he has raised to ensure that we secure a fair deal for impoverished regions of this country as well.
Legislation for Government borrowing guarantees to help to fund infrastructure is due to be presented to the House next week. The Chancellor is right to try to use the power of government in this way, so why has it taken two and a half years, and nine months of double-dip recession, for him to decide to do it?
Let me say this as politely as I can to the shadow Chancellor and former Treasury Minister. Not once in the 13 years during which Labour was in office did it propose guaranteeing large-scale infrastructure projects, but that is precisely what we are doing. We are breaching decades of Treasury orthodoxy to support the private sector, investing for our country’s future, and I hope that that commands all-party support—in the politest possible way.
I am sorry to disappoint colleagues. Demand was extremely high on this occasion, and they could not all be satisfied.