It is a pleasure to follow the Business Secretary. He is of course right that there is demand in the economy: it is demand for change. It is significant that last year we had the omnishambles Budget and this year we have had a Budget from a Chancellor imprisoned by his own rhetoric and his own record. What we needed this year was a bold Budget to break us free from the Chancellor’s record of nearly three years of a flatlining economy. We heard a lot about fuel yesterday, and slogans about driving the economy forward. In 2010, the Chancellor said that the economy would grow by more than 2% every year up to 2015, a steady drive on the road to recovery. Well, he has failed. He has not got the UK economy into gear. This debate is about growth. He has failed on growth, and the triple A rating fell off the roof rack on the way.
Budgets tend to unravel as the details are revealed, and we have seen that this afternoon. It is less than a day since the Chancellor sat down, and we have already seen cracks appearing in the second homes subsidy and the Budget as a whole, and I have no doubt that will continue in the coming days. He could have kept it simple. The fact is that for most people the standard of living is under severe pressure. Energy and other everyday household bills are rising, wages are stagnant, real wages have fallen since the Government came to power, and those on the lowest incomes and on benefits are seeing their incomes falling. That is bad for them, obviously, but it also sucks demand out of the economy and creates a crisis of confidence.
The priority of this Budget should have been a dash for growth to instil confidence in the UK economy. We have already heard the Business Secretary admit this afternoon that there was a split in the Government on this strategy; a split that still has not been resolved. The Chancellor has never admitted that he got his economic strategy wrong in the way that the Business Secretary did this afternoon. The problem is that the Chancellor is lashed to the mast of austerity. To break free would be a significant admission of his own failure, so the only cry we hear from the Chancellor is “O Canada!” He is hoping that the new Governor of the Bank of England will adopt a pro-growth strategy to dig him out of this hole with a new monetary approach, because the Chancellor cannot come to this Chamber and admit that he got it wrong.
We should dwell for a few moments on the geographical perspective to the health of the UK economy. Within the M25 ring, the London economy is the pretty successful. It is patchy in areas, but it is a major engine for our economy. Outside of the M25, the situation is particularly patchy. As a whole the economy is flatlining, but there are significant regional and sub-regional problems that the Budget did not address at all. Basically, the Government have binned their regional economic development strategy—a comprehensive approach to renewing our towns and cities and ensuring growth. Centre for Cities produced its “Cities Outlook 2013” report recently. It said:
“The 64 cities that Outlook assesses account for 53 per cent of businesses, 58 per cent of jobs and 60 per cent of UK economic output. As such, policy that can help to stimulate urban growth by making the most of cities’ distinctive strengths and weaknesses will help stimulate growth of the national economy.”
Telford is one of those 64 cities, and we need help. Unemployment in Telford is stubbornly high at 7%, and a large proportion of the unemployed are aged between 16 and 24. Median rates of gross weekly pay are lower than elsewhere in the west midlands and England. The Budget did nothing at all to help young people. I did not hear the Chancellor talk about the problems faced by young people; it certainly was not a major element of his Budget.
We are not sitting back and doing nothing in Telford. We are trying to make a difference. The Labour council is leading a major drive on apprenticeships, and Telford College of Arts and Technology is working hard to offer training and development in local companies. We are delivering new schools across the borough through the Building Schools for the Future programme—the last great legacy of the previous Labour Government—and providing new learning environments. We are regenerating estates such as Brookside, and are making a significant investment, in partnership with the private sector, in the town centre as part of the Southwater scheme.
What we need now is a Government who are as keen as our Labour council in Telford and Wrekin to make difference. We need a city deal for Telford. Twenty cities have been asked to bid in the second round of “city deal”, in addition to the major cities that have already secured it. We need the flexibility to work with Government to bring in investment. In Telford, Homes and Communities Agency land has been sitting idle since the new town corporation was wound down, and it is ready for development. We could be developing a profit-sharing deal with the Government for those land sites, working together to shift them off the Government ledger, getting investment for housing and infrastructure into our town, and profit-sharing with the Treasury. That would be good for the local community, good for the Treasury and would get the economy moving. I call on the Business Secretary to think about that. I hope he is willing to meet with representatives, along with the Secretary of State for Communities and Local Government.
We need a flexible approach to the regional strategy. The Government have totally destroyed their regional approach to economic development. They need to think again about the existence and structure of regional development agencies. I spoke to the business community in Telford after the Budget via a phone-in conference. They told me that they are extremely worried that the local enterprise partnerships are not dynamic or effective enough, and do not knit together different elements across the region.
Telford needs to be driving for growth. We have the capacity to do that, and the Government need to help us. I see nothing in yesterday’s Budget that will help us, and I hope they change course. They could have done a lot things, but a major measure would have been to cut VAT. VAT is sucking demand out of the economy, and they could have moved on that yesterday.