Sharon Hodgson MP

Working hard for Washington and Sunderland West.

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  • Speeches / Budget 2011 debate on economic growth 24.03.11

Budget 2011 debate on economic growth 24.03.11

Sharon used the opportunity of a debate on the Budget to raise many concerns about the impact of the Government's policies on her constituency and constituents.


Mrs Sharon Hodgson (Washington and Sunderland West) (Lab): The Budget was billed as a Budget for growth, which my constituents wanted and the Sunderland economy needed, but it is not a Budget for growth. In fact, it is a Budget in which the Chancellor has had to admit that he is failing to create growth. What is growing after this Budget and the tax and spending announcements of the past 10 months? I will tell you, Madam Deputy Speaker, what is growing: the Chancellor's nose. It is the dole queues that will be growing, with all the projected job losses. The cost of living will be growing, with the Government's regressive VAT hike, which hits the poorest families hardest. The number of young people not in education, employment or training will be growing, due to the scrapping of the future jobs fund and the education maintenance allowance.

Martin Horwood: Will the hon. Lady give way?

Mrs Hodgson: Not at the moment.

John Campbell from Washington e-mailed me yesterday. He currently receives £30 a week in EMA to support his studies. He asked me what support he would now get. I cannot answer, because Ministers have not told us yet, despite repeated hints from the right hon. Member for Bermondsey and Old Southwark (Simon Hughes). I share the disappointment that he will no doubt have felt yesterday. Students are making choices about their future now. How can they do so while this silence persists?

We heard that the Chancellor will lift the tax-free allowance by £630 in 2012. I am sure that those of my constituents who will be lucky enough still to have a job this time next year will be very grateful for the extra 92p a week they will get. Perhaps they could use it towards the increased prices of their weekly shopping and energy bills, or to offset their loss in tax credits or frozen child benefit. What this Chancellor gives with one hand, he takes away many more times over with the other.

I remember, as I am sure do my hon. Friends, the furore in 1999 when the Government of the day announced an increase in the state pension of 75p a week, which was widely decried as an insult, despite being part of a wider package of measures that included the introduction of the winter fuel allowance and free TV licences. I checked with the Library this morning and found that 75p in 1999 is equivalent to around £1.05 today, which is 14% higher than 92p. Using that reasoning, the Budget's increase is an even bigger insult. The right hon. Member for Havant (Mr Willetts), who was shadow Minister for social security, asked my right hon. Friend the Member for Edinburgh South West (Mr Darling) at the time whether he felt guilty for cutting taxes for business at the same time as making such a derisory offer. I wonder whether the right hon. Member for Havant feels guilty today.

Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): I am grateful to my hon. Friend for giving way and for highlighting the effect of the proposals on her constituents, but she is perhaps being a little unfair to the Government on pensions. After all, they are solving some of the problems by bringing forward proposals that will eventually mean that some people might not be able to retire until they are 80. Is that not the kind of measure they should have highlighted more yesterday, rather than the ones they chose to highlight?

Mrs Hodgson: Although we all acknowledge that we will have to work longer because we are living longer, I do not think that anyone in this Chamber would want still to be working when they are 80.

At the Liberal Democrats' spring conference last week the Deputy Prime Minister referred to the 75p increase in 1999 as an indignity, so I wonder how he views the 92p increase announced yesterday. Family income is vital to our growth prospects, as squeezing household budgets means less consumer spending, which in turn means lost profits and jobs in the sectors that depend on it.

How will growth be encouraged in Sunderland and the north-east? We heard yesterday that 21 local enterprise zones will be created and that one of them will be in the north-east local enterprise partnership on Tyneside. Seeing as we have an LEP for the whole north-east, leaving aside Tees valley, which is being given its own LEP and enterprise zone, why can we not have an enterprise zone that covered a wider area or more areas within the north-east enterprise zone, such as Wearside, in which Sunderland sits, which has both the need and potential, which are two criteria?

I was interested to read today in my local paper, the Sunderland Echo, that the Chancellor may have made an error in announcing that the local enterprise zone was going to be in Tyneside, because the location of the zone has not yet been decided. The Energy Secretary spoke to the Echo on that point and said that there was going to be a zone in the north-east local enterprise partnership area, and that the north-east LEP would help to choose where it was. He may need to go back to school and re-take his English baccalaureate-perhaps he does not have one-in geography, however, because Tyneside and the north-east are two very different areas.

That aside, we all know that if the Government were serious about stimulating the private sector they would never have abolished One North East or slashed funding for regional development. The Chancellor said that he wanted his Government to be the greenest ever, and he told us that funding for the green investment bank would be increased, in turn increasing the amount that it could leverage from private sources. I will not complain about any measures to increase investment in the low-carbon sector, particularly when that investment is going to help companies to innovate and create jobs in the north-east, but the Government could and should be doing so much more. Germany and China are taking action right now to stimulate green growth, so surely it is in this country's economic interests to do the same and attract businesses before they locate to the countries that are taking action.

I also have concerns about the much heralded renewable heat incentive. A business man with a small to medium-sized enterprise in my constituency wrote to me to make the point that, had the scheme started next month, it had the potential to provide a big boost to the solar thermal sector. As it is, it will not start until October next year, and at a much reduced level to that which was expected. So, in effect, and even with the premium payment, the whole industry is on hold for 18 months, because who would invest now when they could get an incentive to do so in the next 18 months? That does not help the renewable energy sector; it puts the industry in limbo, and it puts jobs and innovation at risk.

My constituents may be pleased that the Chancellor has taken some action on fuel duty, however-an issue that many of them have contacted me about in the past few weeks. Cutting the duty on fuel by a penny will have made for some good headlines, and we all know that he needs those, but he failed to tell my constituents watching yesterday that a 1p cut in duty will not make up for the 3p VAT increase that he introduced at the beginning of the year. Again, he gives with one hand and takes much more away with the other.

There is so much more that I wanted to raise, but I will do so another time. Like so many of this Tory-led Government's policies, this Budget is for the few, not the many. The bottom line is that this so-called Budget for growth has caused the Office for Budget Responsibility to revise down growth predictions; it had failed before it was even printed. The Chancellor spoke for an hour yesterday, but he provided almost nothing from which my constituents could draw any comfort. So, on behalf of those constituents, in particular the young and the struggling families, I urge him and his ministerial colleagues to listen seriously to the concerns that hon. Members have raised today.

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