Jenny Willott

Liberal Democrats | Cardiff Central

Budget Resolution and Economic Situation

Mr. Jim Cunningham (Coventry, South) (Lab): I was interested in the analysis made by the hon. Member for Witney (Mr. Cameron) of the past six or seven years, but he did not say how he would solve some of the problems that he outlined. It is worth recalling what happened when his party was in power. He talked about money being wasted on the public services, but I remember hospital closures. I remember people having to lie on trolleys because they could not get a bed. That is the Conservative legacy, and the hon. Gentleman seems to want to take us back to those days. We do not want to go back.

People still remember school closures under the previous Administration and cuts in teacher numbers. No new schools were built. The hon. Gentleman wants to take us back to those days, in the name of what he calls waste, but there will always be an element of waste, as he well knows. To use that to justify taking the country back six or seven years is disgraceful. The hon. Gentleman should be honest and open and say that that is what he intends.

I remember the years when waiting lists were long. We have reduced them. I remember when few new doctors were trained, but we are producing thousands of new doctors. In the Tory years, the number of nurses fell, but under us, it has increased. That is what we should be talking about, and I am glad that the Budget will continue those trends. The hon. Gentleman said that 1 million people are on the waiting list, but under this Government the number is falling. Under the Conservatives' policies, there would be 2 million, 3 million or 4 million people on the waiting list, and we would have hospital closures.

The hon. Gentleman also mentioned the PFI, but the benefits of that initiative are debatable. It is like the Bible: everyone has a different view of it. I remind the hon. Gentleman that it was his party that introduced the PFI, and that was when the problems started, not in 1997. The Conservatives did not even manage to build a new hospital under the PFI, but they want to take the credit for the good aspects and none of the blame for the bad. They cannot rewrite history, no matter how often they try.

I welcome the Pensions Bill. I am not ashamed to say that I have been a trade unionist for many years, and we have campaigned for the Bill, which is now in Committee. It will be amended, but it is a good Bill. In Coventry, we have suffered the closure of Massey Ferguson, which saw people put on the scrapheap, and they did not get a decent occupational pension. The issue is going to the House of Lords, so we cannot say too much about it, but it is worth reminding the Opposition that they introduced the Pensions Act 1995, which created many of the present problems with occupational schemes. We do not need any lessons from them.

Mr. Letwin: Does the hon. Gentleman agree with us that unclaimed assets should be available to help to resolve those problems?

Mr. Cunningham: Before I agreed with the right hon. Gentleman, I would want to know the value of the unclaimed assets and how long it would take to realise them because we could be buying a pig in a poke if we listened to him. I would want to know the answer to that, what sums are involved and a bit more about what he is proposing.

Rob Marris: On the sums involved, some schemes, notably that proposed by Professor Ros Altmann, have been touted as costing £100 million a year. I have corresponded with her by e-mail, and the total package that she proposes involves, on average, £100 million a year over 60 years—£6 billion of Government money.

Mr. Cunningham: I am glad that my hon. Friend has reminded me of that, and I am equally glad that I did not answer the right hon. Gentleman's question in the way that he wanted me to.

The increase in the minimum wage is another part of the Budget that I obviously welcome. Lots of my hon. Friends would like it to be a little higher; but, any increase is bound to be welcome.

Mr. Letwin: I am most grateful to the hon. Gentleman for giving way again, as we seem to be having an interesting trilateral discussion. To handle the point made by the hon. Member for Wolverhampton, South-West (Rob Marris), if there were £6 billion of proved, unclaimed assets, would the hon. Gentleman agree to using that money for this purpose?

Mr. Cunningham: I am not going to answer hypothetical questions; I repeat that I have not seen the figures, so it is pointless trying to push that argument.

The business rate change is something else that I certainly welcome in the Budget. For the first time in many years, local authorities will be able to share out the rate, and they are bound to see that as being just. We must remember that the Conservative Government used the business rate to justify introducing the poll tax in the first place, but the business rate accounted for only 1.5 per cent. of any company's turnover.

Mr. James Plaskitt (Warwick and Leamington) (Lab): My hon. Friend mentions the minimum wage. Does he recall the Conservative party's forecasts that the minimum wage would destroy jobs? Can he confirm that many jobs have been created in his constituency, as in mine, since the introduction of the minimum wage?

Mr. Cunningham: I can certainly confirm that. If my memory serves me correctly—I am sure that my hon. Friend would put me right if not—the Conservative party forecast that about 1 million jobs would be lost.

Mr. David Borrow (South Ribble) (Lab): Does my hon. Friend agree that the advantages of the minimum wage and good wages for workers are that they encourage employers to invest in their work force, so we get away from a low-wage, low-skill economy, which is the last place that Britain needs to be in the 21st century?

Mr. Cunningham: I am glad that my hon. Friend raises that issue. I work in industry, and from time to time the House debates the lack of skills and, in some instances, people's lack of ability to acquire skills. Decent wages encourage people to take jobs in, for example, manufacturing. In the past, young people have not always seen manufacturing as a way forward and a secure future because of upturns and downturns in the economy. Decent wages always act as an incentive, and we are looking for incentives to get young people back into industry and to acquire the necessary skills. Again, they can use decent wages, with further education and ultimately university, as a stepping stone, so that their knowledge and quality of life are increased. It is welcome that the Government have introduced the minimum wage.
 
Opposition Members have talked about homelessness. I do not know the current homelessness figures, but I certainly remember that, under the Conservative Government, hon. Members did not have to walk very far from the House to find a lot of homeless people living in cardboard boxes. We do not see so much of that today. However, we must be concerned if a homeless problem is building up. It is worth reminding ourselves that councils were not allowed to build council houses under the previous Government. Opposition spokesmen say that that problem could be solved by allowing more council house sales and using the proceeds, but I seem to remember that local authorities were not allowed to use the proceeds. Once again, the Conservative party is back to the policies that it had when it was in government, and we know where that took us. Unemployment is now the lowest in our country's history, which says a lot about how to tackle poverty. High unemployment makes more demands on the National Health Service, benefits and other public services.

Once again, the Chancellor's forecasts of growth have been correct. All the pundits admitted that they got it wrong and that my right hon. Friend got it right, but then they said he might be proved wrong nine month down the road. Anyone who can forecast growth nine months ahead must be good. I am sure that most companies would agree.

Mr. Borrow: Over the past five or six years, businesses large and small in my constituency have appreciated the economic stability provided by Labour Governments, which allows them to plan and invest for the future, in contrast with 18 years of Conservative Government, under various Chancellors.

Mr. Cunningham: In an interview on Budget day or not long after, Digby Jones, director general of the Confederation of British Industry, welcomed the fact that businesses could plan their costs and wages. Anything in the Budget that stabilises, reinforces and encourages businesses, large or small, must be a good thing.

This is the second Budget in which the Chancellor has given extra impetus to the development of brownfield sites. In many inner cities, particularly in parts of Coventry, many brownfield sites that have been derelict for many years are now being developed. Equally, though, we must achieve a balance. If every brownfield site is developed, factories might be built on greenfield sites.

As a movie fan, I also welcome the assistance to the film industry. Many of the special effects used in Hollywood movies have been developed by talents in the British industry.

Mr. Letwin: Does that mean that the hon. Gentleman regrets the passing of the film tax break, which threatened to cost the Treasury £1 billion a year, or does he welcome the Chancellor going back on his original scheme?

Mr. Cunningham: The right hon. Gentleman is entitled to his opinion but I welcome the Chancellor's measures. Given the pre-Budget predictions by some pundits that all was gloom and doom for the British film industry, I am glad that step was taken.

I welcome the Chancellor's steady-as-she-goes Budget, which maintains investment in health, education and other public services, and I welcome the measures proposed on occupational pensions.

Rob Marris: From his long history of trade union activities, my hon. Friend will be well aware of the manufacturing sector, and he, like me, represents a west midlands constituency—a key manufacturing area. Certain measures in this year's Budget, as in last year's, assist manufacturing, although there is more to do. Will my hon. Friend say more about manufacturing, particularly in the west midlands, and ways in which the Budget will assist venture capital, research and development, and so on?

Mr. Cunningham: Research and development was underfunded in the past. When Rolls-Royce needed R and D aid, it was provided in the form of a loan—not a tax concession—that created many difficulties. Research and development also keeps universities on their toes. The universities of Warwick and Coventry are among many that undertake R and D for companies. R and D support also brings comfort to small employers with 10 to 20 staff, who have families and mortgages to pay and who want to sustain the standard of living that they have achieved through steady employment.

Mr. Desmond Swayne (New Forest, West) (Con): Before the hon. Gentleman took the intervention, he mentioned the impact that the Budget would have on pensions. Can he see any impact that the Budget measures will have on the Government's declared target to have 60 per cent. of pensions fully funded by 2050?

Mr. Cunningham: I would not like to make any forecasts on the basis of that sort of question.

Mr. David Ruffley (Bury St. Edmunds) (Con): I am surprised that the hon. Gentleman has not said anything about the £28 billion savings gap. Can he explain what the Budget does to close it?

Mr. Cunningham: We are all aware of the £28 billion savings gap, and the Chancellor certainly looked at that when he considered the tax situation. Many companies, particularly public utilities, were not reinvesting in their industries; they were taking the profits. They were encouraged to reinvest, and the hon. Gentleman can get an independent report on that issue from the House of Commons Library.

Mr. Bercow: Will the hon. Gentleman give way?

Mr. Cunningham: I will give way for the last time, but I must then move on.

Mr. Bercow: I am extremely grateful to the hon. Gentleman. Given his long-standing interest in the manufacturing sector and the extreme importance that all of us should attach to small and medium-sized enterprises within that sector, will he tell the House what assessment he has made of the Regulatory Flexibility Act 1980 and the Small Business Regulatory Enforcement Fairness Act 1996 in the United States?

Mr. Cunningham: The hon. Gentleman can do his own analysis of that; I am certainly not going to.

I welcome the Budget. It should be supported as it covers many of our concerns.