Ways and Means — Budget Resolutions and Economic Situation — Amendment of the Law

Part of the debate – in the House of Commons at 9:59 am on 20th March 2015.

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Photo of Hilary Benn Hilary Benn Shadow Secretary of State for Communities and Local Government 9:59 am, 20th March 2015

May I apologise to you, Mr Deputy Speaker, and to the Secretary of State for the fact that I will not be able to be present for the close of the debate owing to a long-standing constituency commitment?

It is a pleasure to respond to the right hon. Gentleman—probably, I suspect, for the last time in this Parliament. If I may say so, his speech had more than a touch of a valedictory air about it. I join him in his congratulations tweeted yesterday to Lord Kerslake on his elevation to the other place. Lord Kerslake marked that occasion by telling the Local Government Chronicle that the current state of local government finance

“shouldn’t be confused with saying that therefore there’s another round of savings of equivalent size that can simply be taken out...I don’t believe that.”

More of that later.

I hope that someone is keeping score of the number of times we are going to have to hear the words “long-term economic plan” during the whole of this Budget debate. [Interruption.] Well, we did not hear it from Gregory Barker. By my reckoning, it took the Secretary of State 59 seconds to refer to it in his speech. I suspect that the repetition is a comfort blanket for Government Members who, given this wonderful success that we have heard about today, cannot understand why, so close to the general election, they are neck and neck in the opinion polls. The reason is that people know they are not better off under this Government and the Government have failed.

Let me say something about the attempt to rewrite economic history, because it is important to place this on the record. I have heard more than enough times from Government Members the charge that somehow the previous Labour Government brought about the global economic recession. It is not true: fact. Prior to the global economic crash, debt and borrowing were lower. Investment in public services was backed by the pledge of the then Leader of the Opposition, now the Prime Minister, to match Labour’s spending plans pound for pound. The action that we rightly took, against the advice of the then Opposition, kept people in their homes and kept them in their jobs, and not a single person lost a penny of their savings. I am still waiting, all these years after the event, for someone to explain to the House how the decisions taken by the previous Labour Government caused Lehman Brothers to collapse in New York. If anyone has an answer, I will readily give way. The truth is that the British economy was growing and unemployment was falling, and it does no credit to the Government to try to rewrite the past.

In 2010, the Chancellor of the Exchequer said:

“we are on track to have…a balanced structural current budget by the end of this Parliament.”—[Hansard, 22 June 2010; Vol. 512, c. 168.]

As we know, that has not happened, and people have paid the price. They are worse off, they have seen their living standards squeezed, many of the services they rely on have been cut, and the poorest people and the poorest communities have been hardest hit. In the words of the Institute for Fiscal Studies, UK households have experienced

“the slowest recovery in incomes in modern history”.

That is quite some record. Despite the Chancellor’s excuses, we now know that it will take twice as long to balance the books as he said it would, and his plans for the next five years will involve extreme cuts to public spending. Do not take my word for it—listen to what Paul Johnson at the IFS says:

“The cuts of more than 5% implied in each of 2016-17 and 2017-18 are twice the size of any year’s cuts in this parliament.”

No wonder the Liberal Democrats tried to distance themselves from all this in their rather unsuccessful yellow Budget yesterday, but the whole nation knows that they are up to their necks in it because they have been supporting the Tories over the past five years.

It is not only on the deficit that the Government have failed. What about housing, which the Secretary of State mentioned? Having enough homes is of course absolutely fundamental to the economic growth that Members in all parts of the House want to see. If businesses are looking to expand, they need workers to fill those jobs and those workers need somewhere to live. Yet homes are being built at half the rate we need, house prices are rising out of reach, one in four young people in their 20s and early 30s are still living with their parents, and more and more people are having to rent privately, with all the insecurity that that can bring.

Back in 2010, at least two of the Ministers who are present today sat behind their new desks and made a lot of promises about what was going to happen to housing.

Appearing before the Communities and Local Government Committee, the then Housing Minister was asked by the Chair:

“do we take it that success for this Government, when you are eventually judged on your record, will be building more homes per year than were being built prior to the recession, and that failure will be building less?”

The Housing Minister replied:

“Yes. Building more homes is the gold standard upon which we shall be judged.”

That was a pretty unequivocal answer.

We must make some allowance for the fact that the then Housing Minister—now the chairman of the Conservative party—does not always get things right, but what have the Government actually achieved? Fact: they have achieved a lower level of peacetime house building than any Government since the 1920s, and a failure to build, in any single year, more homes than the Labour Government built in every single year in which they were in office. The number of new homes for social rent is at its lowest level for 20 years. [Interruption.] Ministers can chunter as much as they like, but those are the facts.

Starts and completions of social homes have collapsed, which makes the Chief Secretary’s claim to the House last week all the more extraordinary. He said then:

“we have the highest annual rate of social house building than under the previous Government or for the past 20 years”.—[Hansard, 10 March 2015; Vol. 594, c. 145.]

If one of the first acts of a Government is to cut the affordable homes budget by 60%, they should not be entirely surprised if there is a collapse.

The Secretary of State talked about affordable homes. He made great play of the subject. I have the figures in front of me—the figures from his own Department, headed

“National trends in additional affordable housing… Trends in gross supply”.

In 2009-10, the supply of “All affordable housing” was 57,980. In 2013-14, the figure was 42,710. During the last full year for which figures are available, affordable house building under the present Government was at its lowest level for nine years. Those are the facts. Ministers have not even returned house building to its level before the global recession. They set a gold standard on which they said they wanted to be judged, and they have comprehensively failed to meet it.

One of the other consequences of the collapse in social house building is the rise in the housing benefit bill over the current Parliament. This year, it reached £24 billion. Half a million more people now rely on help from the Government to pay their rent than relied on it when the coalition came to power—many of them work, but do not earn enough money to pay their rent and other bills and look after their families—and 2.5 million more people live in the private rented sector. There are now 11 million people who rent privately, including a growing number of families with children, but nothing has been done to help generation rent.