I am pleased to follow the right hon. Member for Knowsley (Mr Howarth). I tried to follow his argument, but felt some confusion, because his constituency, notwithstanding the barriers there, has seen a drop in youth unemployment from a terrible high of 17% to 10%, so clearly some progress is being made. [Hon. Members: “Well, that is all right then.”] Before he attempts to misinterpret my words, he should read Hansard to see exactly how I phrased my thoughts.
In the Budget, the Chancellor demonstrated that he has the ideas to continue his drive to rebalance and rebuild the economy on a sustainable platform, rather than on the platform we inherited after 13 years of the previous Government, where our over-dependency on one sector and a bloated welfare state led to many of the problems we are dealing with today.
I talk about ideas. Opposition Members would do well to remember—those who are old enough to remember—what James Callaghan said after the election defeat of 1979. He said that he knew he had lost the election because his Government had run out of ideas. Frankly, it seems that Labour has nothing new to offer judging by the responses of its leader and the shadow Work and Pensions Secretary. It has chosen to move off the historic centre ground of British politics. Nothing illustrates that more than the contemptible speech that we heard in response to the Budget. It was full of class war rhetoric and it lacked ideas. The intellectual pulse of the Labour party is not there; the party is flatlining and, as I have said, it would do well to remember the words of its former Prime Minister.
It seems that Labour, having nothing new to offer, have returned to the past. Yesterday, the right hon. Member for Tooting (Sadiq Khan) talked about returning to widespread union-brokered collective bargaining and direct action. Labour is now officially wedded to the unions. It also remains married to the discredited politics of borrow and spend and has no ideas for the future.
Unsurprisingly, the Chancellor and his team present a stark contrast to the Labour team. They understand not only the scale of the challenge but how to bring forward ideas to help sustain the economy. They have recognised that there is a massive transfer of economic power from the west to the east. Conservatives understand that nobody owes us a living. We have to create the conditions and the mentality to go out and earn our way.
The Budget is about developing building blocks to rebalance the economy and to sustain the growth that we need. Above all else, the Conservatives trust individuals to spend their money far better than the Government. Individuals recognise that tax is not the Government’s money but the taxpayer’s money, and that if they do the right thing this Government will be on their side.
The platform for growth may have been laid down in this and other Budgets, but it is the aspiration of the British people that will see us exporting more and getting on in life. It is they who will deliver the competitive business environment and stable public finances. However, to achieve that we must look beyond economics to education and the welfare system. There are people in this country who are trapped in worklessness. They leave school at the age of 16 ready to compete in the world. The shame of the Opposition was that they stifled ambition and strangled aspiration for so many people and trapped them on benefits. There were 1 million households in which people had not worked for more than 10 years. This Government are reducing the numbers of workless households. Fewer children are growing up in workless households, employment is increasing, youth unemployment is reducing—in my own constituency the number is down by 32% since the election. It is our deep understanding of making work pay that drives our reforms. We want to rid this nation of the appalling high marginal tax rates. The fact that someone could pay a 95% marginal tax rate if they came off benefits into work provided no incentive to work, which is why we inherited a legacy of high long-term unemployment and youth unemployment.
The Government have proved that financial measures alone are not enough. By tapping into the natural aspirational instincts of the British public we can change behaviour and improve lives for ever. Nothing illustrates that more than the measures we have taken to trust people with their own money—albeit in savings or in reducing the tax burden. We have shown trust in companies to invest in their people and their businesses by lowering corporation tax. That has been done within the difficult, demanding financial constraints that we inherited and are having to deal with. These are the issues that will drive greater growth and more employment and will change lives for the future. The tax-free allowance has gone up to £10,500. It represents a 66% rise in the amount that a person may earn before tax, which is a
good thing. The pensions policy, which allows a person to use their own money as they wish, is indicative of a Conservative Chancellor who uses Conservative values in a Conservative Budget and who trusts the people.
3.26 pm