Mr Redwood (Wokingham) (Con): I would just like to point out that although we have cut the planned spending increases of the previous Government, public spending has actually been going up. As the Red Book confirms, Government spending went up by 1.5% in real terms in 2014, and by another 1% this year.
Mr Mark Hoban (Fareham) (Con): That demonstrates the challenges we face to get the pace right. One thing we should be absolutely clear about is the importance of sticking to the course.
My budget intervention and speech are available as text in the “Debates” section of this site. Videos of each are available below:
My intervention: https://www.youtube.com/watch?v=iaMHh8PYalc
My speech: https://www.youtube.com/watch?v=CAvGP_vdy0s
So the Chancellor shot a few of Labour’s foxes.
First to go was the idea that the Conservatives will take the UK back to 1930s levels of spending. This is Labour’s favourite lie, based on confusing spending as a percentage of the economy with real levels of spending, which are currently nine times the 1930s! As explaining all that is difficult, the Chancellor has raised planned spending for 2019-20 so the percentage of the economy will be 36%, the same level as Mr Brown and Mr Blair chose in 2000. No return to the 1930s guaranteed.
Second to go was the idea that a further raid on the pension funds of the better off, and an increase in taxes on banks would pay for Labour’s programme. The Chancellor has done both those things, and the money is absorbed into the budget figures to help pay for the tax cuts the government offered.
Third to go was the idea that living standards had fallen this Parliament. The Chancellor gave us numbers to show they have gone up modestly, and are now rising at a better rate. GDP per capita is 5% higher, and real household income per capita is also up over the Parliament.
Fourth to go was the idea that the new jobs are all part time, zero hours or low skilled. The Chancellor assured us 80% are full time, and most are skilled.
So what is the underlying strategy? Mr Osborne has set out five years spending and taxing plans, so all know what they will get from a Conservative government. Other parties in the election will have to work from those figures and explain how they will pay for extra spending or how much extra they will borrow.
His plans are to get the budget into balance by 2018-19. Debt as a percentage of GDP will be falling from next year, 2015-16. Public spending is forecast to go up by £60 bn in cash terms in 2019-20 compared to 2014-15, with the largest increase in the final year. In 2016-17 there is a planned small cut in cash public spending.
Savers will benefit from £1000 tax free savings income on standard rate tax, and from more flexible ISAs.
I have been pressing the case of first time homebuyers, who find our local house prices dear. The Conservatives promised a discount on homes for first time buyers under a new scheme which will cut the costs for developers as long as they pass on the advantage to the buyers.
Now the budget adds help with saving for a deposit. For every £200 of deposit saved the government will top it up with £50, up to a total of £3000 on £12000 saved. That should take some of the waiting out of wanting and help people to save more quickly for the deposit.
There are some who seem to think we are back in a new cold war. They highlight aggressive actions by Russia. They respond with aggressive words, and with some sanctions. They see NATO as able to limit Russia’s aggression.
They should remember how bad the Cold War was, and remember that in those days the West knew the limits to its power. NATO spent much more of its income on defence, had larger forces than today, but decided it could do nothing about Russian aggression in any part of Eastern Europe. We watched as Russia invaded and subjugated an unhappy Hungary, Poland and Czechoslovakia. The NATO defensive umbrella, backed by the formidable nuclear arsenal of the USA, ensured Russian expansion would stop at the East German border.
Today things are not as bad as in the Cold War days. The main countries that wished to leave Russian control have done so. There are many more free states and peoples in Eastern Europe. Russia herself has changed a bit, with more free enterprise. At times Russia wishes to be a more mature power in the world, but in other ways behaves badly towards neighbours. Russia understands the NATO pledge to support all its members, and has concentrated on gaining influence or control in non NATO members close to its borders.
The west rightly condemns aggression to take territory and control people who do not wish to be ruled under Russian influence. The West also rightly has not made the position of people in East Ukraine or Georgia worse by intervening in the local wars. The aim of Western policy should be by diplomacy and economic action to limit Russian expansion, without wanting to extend the EU and NATO in turn. I see no reason to extend a NATO guarantee wider than has already been granted, and no need to expand the EU ever eastwards.
All those who currently enjoy the NATO umbrella should also be expected to spend more of their money on maintaining good defences at home. The UK and US are the only two NATO countries to presently meet all the requirements on a NATO state. Those who want our protection should also spend 2% of national income on defence, and spend 20% of their defence budget on equipment.
As readers will know, I made strong representations about the trial of new routes for planes to and from Heathrow last autumn. There was more noise over Wokingham, and as a result of the pressure I and others applied they ceased the trials early on 12 November.
There still seemed to be more noise after the trials ended in some places. When I raised this with the airport they could only think that there were more easterly winds which can cause more noise for us. Following further complaints, I have now been told that NATS did make a further change to operations last year without consulting or telling us. It coincided with the trials of new routes, but has remained in place after the end of the trials.
What they have done is concentrated more flights within a 7 mile wide corridor instead of the 13 mile wide corridor they used to allow, increasing the number of flights over part of the Wokingham constituency including Wokingham town. Heathrow Airport have now apologised for not telling us about this change, but say they did not know this was happening, a statement confirmed by NATS.
The bad news is NATS have the power to make this change without consulting us, and are currently determined not to switch back to the previous pattern of flights. I will take this matter up directly with NATS, now that we know a change was made which has worsened the aircraft noise for some residents. NATs argue that overall fewer people are affected by aircraft noise, and argue their new routes are safer as well.
Copies of the Letters:
My latest discussion with the Highways Agency is to get them to extend the areas which will get some noise protection from the introduction of additional barriers along the M4. I have also asked the Council to reconsider the extent of barriers along the A329M.
On the recent maps I have been shown the additional barriers are limited to the M4 west of Winnersh, so I am asking for more protection.
As we await the final version of each party’s 2015 Manifesto, I thought it a good idea to re read the Conservative 2010 version.
That Manifesto placed most emphasis on the need for economic recovery. Most of the policy proposals for the economy were geared to helping generate many more jobs. Much of what was promised has been delivered, and much of that delivery has produced the desired results in terms of jobs.
The Manifesto promised keeping interest rates lower for longer, which has happened. It promised a reduction in youth unemployment which has occurred, and an improvement in UK competitiveness in world league tables, which has also been achieved. The pledge to cut Corporation tax has been met,the banks have been reformed and strengthened as proposed, the OBR was set up, and Ministers’ pay was cut. The new government did reduce the National Insurance bills it inherited, has ended the annuity rule for pensions and increased the focus on STEM subjects at school and university. The IHT promise has not been delivered, falling foul of coalition agreements. Council Tax was frozen for two years as promised and then kept down. We have discussed immigration before, where the target was not met.
On Europe the Manifesto said
“We believe Britain’s interests are best served by membership of an EU that is an association of its member states. We will never allow Britain to slide into a federal Europe. Labour’s ratification of the Lisbon treaty without the consent of the British people has been a betrayal of this country’s democratic traditions. In government we will put in place a number of measures to make sure this shameful episode cannot happen again”. The government did enact legislait5on requiring a referendum for a future transfer of power or if any government wished to join the Euro. Conservatives ruled out joining the Euro, then and now. As the Manifesto made clear there was no promise of a referendum on Treaties which had already been ratified, including Lisbon.
I have asked Wokingham Borough to have an other look at plans to improve flood defences. Now that the Council is pressing on with major new developments at Shinfield and in Wokingham there is more need to ensure better management of surface water and heavy rainfall. Run off will be speeded up by putting more of the area under concrete and tarmac.
The Council has promised plans to reduce flood risk on the A327 into Shinfield from Arborfield, and to look at ways o cutting flood risk at the Loddon roundabout. The extra homes in north and south Wokingham and in Shinfield also require better water management.
The IMF is busy lending to a European country in deep difficulties – and this time it is not Greece. It looks as if current IMF lending has just got more political, with the IMF acting as some banking arm of European Union expansionism and centralisation. It is lending to Ukraine.
The good news is that this lending, unlike the loans to Greece , is to a country with its own currency. It can devalue, and just has undergone a massive devaluation. The Hryvania has fallen from 23 to the £1 in November last, to 32 to £1 now.
The bad news is that the loans are to country which just like Greece has a government which wishes to write off or renegotiate its past debts. Lending to countries which say themselves they already have too much debt and need to cut them, if necessary without the agreement of creditors, is a very risky and arguably unhelpful thing to do.
On top of that bad news, just as Greece has experienced economic collapse with large falls in output thanks to the Euro scheme, so Ukraine has suffered a sharp fall in output owing to a civil war and to the loss of some of the industrial parts of the country’s economy.
In Ukraine national income and output fell 6.9% last year, and the IMF thinks it will fall another 5.5% this year. The Finance Minister is seeking $15 billion of debt relief, saying she intends to carry through a mixture of offering a lower interest rate on past debts, extending the date before the money is repaid, and simply cancelling some of the value of the debt owing.
Ukrainian debt currently trades at around 40 cents for each dollar owed. The country has very high inflation, weak banks, and a large shopping list for weapons.
All this bodes ill for the success of the debt programme. It also should raise questions in people’s minds about the kind of Europe which the EU is creating. The slaughter has been extreme, the country has failed to keep its people friendly to Russia onside, and it has been outwitted by Russia herself with the annexation of Crimea. I of course condemn any Russian military interference in Ukraine, and condemn the deaths of UKrainian citizens by the rebel forces. I also dislike some of the actions of the present Ukrainian government, which has not found a way to stabilise its country and protect its own citizens, and condemn violence by the Ukrainian state against its own people. The EU has had no answer to this. The Ukrainians that look to the EU for their future should ask why they are now so much worse off, and why their lives have been endangered by recent events.