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Economic Affairs and Work and Pensions

I shall endeavour to adhere to what you have requested, Mr Deputy Speaker. I am standing to defend the record of my Government, not to traduce it. I am proud of those 13 years—proud of the new schools, the jobs that did not previously exist, the environment that has been improved, the houses that have been completely refurbished, and the complete transformation of Sheffield, Brightside and Hillsborough. I say that because I am little worried about people who are now looking over their shoulder, some of whom are competing for the leadership of my party, and who are in a 1930s denial situation whereby they have to pretend that they had nothing to do with the decisions that were taken. I did, and I am proud of the decisions that we made, some of which were about investing in communities that had been neglected for years. When I hear Conservative Members saying, as has the Chancellor of the Exchequer in the media and this afternoon in this House, that we are all in this together, it makes me want to be sick, because those Members across the aisle know, and we know, that we are not all in this together. It will be the people we on the Labour Benches represent, and some Liberal Democrats represent, who face the greatest difficulty, because they cannot buy their way out of deteriorating public services, and they do not have the alternatives that those with resources, including capital assets, have. That is why the decision to do away with the child trust fund is one of the most heinous things in this £6 billion package of cuts. It takes away the future assets of young people who would be able to stand on their own feet, and it reduces the propensity to save, which the Secretary of State for Work and Pensions has extolled over the past fortnight. He is right to do so. In the next breath, however, his Government are cutting at a time when the subsidy from the public purse for tax relief on individual savings accounts is twice as much as the amount that it would cost to maintain the child trust fund, which has a 100% take-up, involving 5 million children, compared with a 30% take-up for ISAs among the adult population. In the end, we have to ask ourselves three questions. First, who got us into this mess? Was it politicians and politics, or was it the international financiers and bankers, and international capital, that created the situation that the Chancellor of the Exchequer wants to place on the shoulders of the outgoing Government? Of course, it was not the Labour Government's doing but a result of the problems that we have had to deal with over the past three years in terms of saving ourselves from the banks and avoiding the collapse of our economy. That brings me to my second point. If we should be doing more, more quickly—cutting faster and more deeply—is it because we need to mirror what is taking place in the rest of Europe and the world, as the Chancellor of the Exchequer has enunciated? If that is true, how is it that all these other countries that we should be emulating came to be in the mire in the first place? I presume that it is the Labour Government in Britain who have brought Spain, Italy, Greece and the Republic of Ireland to their knees. That is why public sector workers are having their pay cut; that is why the Chancellor in Germany is cutting £65 billion; and that is why, across the world, we are seeing this retrenchment: it is all down to my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) and my right hon. Friend the shadow Chancellor. Everybody in this country who has a brain knows that that is nonsense. Thirdly, if we are not careful, we will exacerbate an existing problem. Of course we know that there are going to be public expenditure reductions. We do not need to be told that—we had agreed it before the general election—but we wanted growth, an increased tax yield and a reduction in outgoings on benefits and unemployment to help us to bridge that gap. If we are not careful, then Sir Alan Budd, with the difficult job that he has been given in the Office for Budget Responsibility, will predict lower growth to the point where the Chancellor then tells us that because lower growth is projected, we will need to cut services and investment still further to take account of that. If we do that, we reduce the likelihood of growth and of tax yield and redemption without having to cut the essential services of the people we represent. Fourthly, we need to think imaginatively about how we can combine services nationally and locally, so that we do not have to make draconian cuts. We can genuinely reduce the cost of providing the same services. Under the current shadow Chief Secretary to the Treasury, the Cabinet Office produced an excellent document that I recommend to the new Government. That document showed what is being done around the world and I wish we had given it greater publicity and made more of it at the time. We can use what is now called the Total Place initiative and engage local people. However, we cannot do that if massive draconian decisions to cut centrally are made and local government and local people are blamed for the cuts being made and the pain being inflicted. I shall give one example: aggregate external funding for local government. In the Prime Minister's Oxfordshire constituency, there is 1.7% of unrestricted expenditure, but that figure is 18.5% in my city. We know perfectly well that the cuts will fall on those who are least able to bear them, and that is why we should oppose them.