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Long-term Economic Plan

Volume 604: debated on Tuesday 19 January 2016

Britain is in a much stronger economic position than five years ago, with employment up and the deficit down. However, as I set out in my speech to business leaders in Cardiff, we face a dangerous cocktail of economic risks from around the world this year. That situation is reflected in the International Monetary Fund forecasts that were published one hour ago, in which world growth is revised down but the positive forecast for the UK is unchanged. That shows that the best thing that we can do is to continue to fix our public finances, back business and deliver our long-term economic plan.

The Chancellor was very welcome when he visited Cardiff two weeks ago. He brought a sense of urgency to the Cardiff city deal process with the deadline of the Budget and a clear sense of direction with the compound semiconductor catapult. If we are to maximise the potential of Cardiff and the Welsh economy that our long-term economic plan presents, do we not need tangible partnership plans from the Labour Assembly Government? Is it not time that they came up with them, given that they have had 16 years to do so?

It was very good to meet my hon. Friend and business leaders in Cardiff; to back them and the brilliant work that is being done at the university there with the investment in the new semiconductor catapult; and to commit to additional capital investment. I hope that we can agree a Cardiff city deal with the Welsh Government and the authorities in Cardiff before the Budget. He poses the right question, which is if, after 16 years in power, the Labour party in Wales has not delivered a credible economic plan for Wales, is it not time for a change?

If the Chancellor keeps shrugging off the threat to the very existence of some of Britain’s core strategic industries, such as steel, is there not a danger that when our country really needs those resources and that extra capacity for our national security no less, they might not be there at all?

Of course the redundancies that have been announced at Tata Steel and elsewhere in the steel industry are a real matter of regret. We are providing all the support we can to the families who are affected and helping them to get into work. We are backing the steel industry by responding to its requests that we cut energy bill costs—that policy comes into effect today; that we change the rules around procurement so that companies and the Government buy British steel; and that we take action internationally against cheap imports from China. Not one of those things was done when there was a Labour Government, and during that period the number of steel jobs in this country fell by 50%. We will not take lectures from the Labour party, but we will back our steel industry.

Does the Chancellor think that the stamp duty surcharge that was announced in the autumn statement for the buy-to-let market will inhibit or advance labour mobility?

I think that it will help to promote home ownership, because it will mean that there is a more level playing field between an owner-occupier who wants to buy a house, a first-time buying family and a buy-to-let landlord. There is nothing wrong with people investing in property, but there should be a level playing field so that we reverse the decline in home ownership in our country.

A long-term economic plan means supporting small businesses across the country. On 26 December, 250 businesses in my constituency that employ 2,500 people were inundated by floodwater. Will the Chancellor take this opportunity to commit to a full flood defence scheme in Leeds so that this sort of disaster cannot happen to businesses in my constituency again?

I certainly commit to looking personally at what can be done to improve flood defences in Leeds. The Environment Agency and the Government are conducting a review after what was the highest level of rainfall in Yorkshire in modern history. Of course, having committed the additional £2 billion to flood investments, we are able to afford these things. We would not be able to afford any of this sort of thing if we had wrecked the economy like the last Government did.

17. Does my right hon. Friend agree that as part of his long-term economic plan, the Help to Buy ISA will help people in my constituency, where housing is priced at a premium, to own their own homes—a dream that the Labour party wishes to quash? (903116)

My hon. Friend is right, and the Help to Buy ISA has been a spectacular success. In the few weeks since its launch, 170,000 families have taken it up, and it is helping people to get on the property ladder and save for that deposit. We are doing everything that we can to support the aspirations of the families of Britain.

The Government’s plan requires the doubling of exports by 2020 to £1 trillion —a promise repeated in “Fixing the Foundations”, which was published in this Parliament. Does the Chancellor still hold to the intention and promise to see UK exports rise by £100 billion a year every year for the next five years?

We hold to that target, but frankly it will be very challenging to meet. We have been improving exports, but many of our main export markets have been weak, and we would like further economic reform on the continent of Europe. Some of the big emerging markets are struggling at the moment, but a good economic dialogue is taking place today with India, and British exports to India are increasing. Only recently has the United States economy started to grow. There are many challenges, but I do not think we should duck those challenges or ditch the target. Increasing exports is a key priority for the UK.

I agree that we should set ambitious targets, but they must be credible. Given that the British Chambers of Commerce states that the export target will be undershot, and the Office for Budget Responsibility states that it will fail to be met by some £350 billion, is it better to set a realistic and achievable target, rather than risk losing credibility as the Chancellor did when he failed on debt, deficit and borrowing targets in the previous Parliament?

It is right to set and to try to meet a stretching target, even if that will be challenging. The hon. Gentleman talks about realistic and credible numbers. If Scotland had listened to the Scottish nationalists, it would be separating from the United Kingdom in two months’ time. The Scottish Government based their claim for independence on an oil price of $115. Scotland would now be heading for economic catastrophe if it had listened to the hon. Gentleman and Scottish National party members. Before they talk about credible and realistic economic policies anywhere else in the United Kingdom, they should get one themselves.

Motor manufacturing is crucial to our long-term economic plan and to exporting. The Land Rover Defender will soon stop production in Solihull. Will the Chancellor praise the workers of Solihull for producing that iconic brand and driving exports for the past 60 years?

My hon. Friend is right to pay tribute to workers at the Jaguar Land Rover plant in Solihull. The iconic Defender that they have produced over all those decades has been seen around the world and used in peacetime as well as during war. It is good news for Solihull, the west midlands and the whole country that Jaguar Land Rover will continue to produce brand-new models of great cars. It is one of the real success stories of the British economy. In general, while Conservatives have been in the Treasury and in Downing Street, car production in this country is up by 50%.

Only eight weeks ago the Chancellor promised

“an economic recovery for all, felt in all parts of our nation”—[Official Report, 25 November 2015; Vol. 602, c. 1358.]

On the day that the International Monetary Fund warned about the global economy and called on Government to increase their investment spending—something that Labour Members have consistently called for—will he now reconsider his economic plan, and particularly his investment plans?

The economic plan has seen employment rise and unemployment fall, and it has meant that for the IMF forecasts that the hon. Gentleman mentions, the UK’s forecast has not been changed and remains one of the strongest among all advanced economies in the world. Perhaps I may gently suggest that the hon. Gentleman might want to change his own economic policy, since in the last week he has called for the return of flying pickets, and said that he wants to ban companies from paying dividends and spend billions of pounds on nuclear submarines without any nuclear missiles. Today he said that he is going to tour the country with the former Greek Finance Minister, Mr Varoufakis, to educate us all about economics—the one thing they have in common is that they have both lost their marbles.

If the Chancellor will not reconsider his investment plans, can he at least appreciate how angry the families of steelworkers in south Wales are this morning? They know that when the bankers’ bonuses were threatened, he immediately shot across to Brussels with an army of lawyers to defend them and that he will jump into a helicopter for a Tory fundraiser. It has taken him four months to lift a finger to save steelworkers’ jobs. Does that not prove that he is actually the bankers’ Chancellor?

We want a successful financial services industry, because hundreds of thousands of people across the country work in it. We also want a successful manufacturing and steel industry, which is why we have taken action to reduce energy costs—something that had not happened previously and which comes into effect today—and why we are taking action to change procurement rules so that the British Government and others are encouraged to buy British steel. Again, that never happened when the Labour party was in office. We are acting internationally to deal with the dumping of Chinese steel. That is what we are doing. Of course it is an incredibly difficult situation, but as the hon. Gentleman knows, and everyone in this House knows, steel jobs are being lost in every single country in the world at the moment. The question is: what can we do nationally to defend and protect our steel industry? We are doing everything we can. If the hon. Gentleman has constructive suggestions, he should put them to me.