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Oral Answers to Questions
(7 years, 8 months ago)
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Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
The Secretary of State for Exiting the European Union (Mr David Davis)
I will group this question with questions 11 and 16.
Mr Speaker
Order. I believe that the Secretary of State seeks to group it with questions 10 and 15.
Mr Speaker
It is now questions 10 and 15. That will assist the Secretary of State. We have to keep up with the development of events.
Mr Davis
When you get to my age, Mr Speaker, it is so difficult.
As the Prime Minister said in Glasgow last week, as we bring powers and control back to the United Kingdom we must ensure that they are the right powers, at the right level, so that the UK can operate effectively in the interests of all its citizens, including the people of Scotland. Where powers should best sit will be a matter for further consultation and discussion across the United Kingdom.
Drew Hendry
I remind the Secretary of State that on 27 November, in The Sunday Times, the Secretary of State for Scotland stated:
“Whatever the circumstances, no powers will be re-reserved to Westminster.”
In Scotland, we know that such vows are not worth the paper they are printed on. Will the Secretary of State give the House a guarantee that powers currently exercised by the European Union will be devolved to the Scottish Parliament?
Mr Davis
Those are two different questions, if I may say so. It is unfortunate that the right hon. Member for Gordon (Alex Salmond) is not present, because he would have been able to tell his colleagues in the Scottish National party that for many years I have been a strong advocate of devolution. Indeed, I was the first Conservative Member, and probably the only Member outside the SNP, to call for fiscal autonomy for Scotland back in the days of the first devolution Bill. I take this issue very seriously indeed, but there is a distinction between the current exercise of powers over matters such as agriculture, fisheries and the environment by the Scottish Parliament and matters that are dealt with by the United Kingdom Government in the EU on behalf of the whole United Kingdom, with heavy consultation.
Gavin Newlands
Talking of devolved powers, last month the Prime Minister ventured north to tell Scotland just how poor the Scottish NHS is, despite all evidence to the contrary, including information about public satisfaction and A&E waiting times. If the situation is so bad, will the Secretary of State tell us when we will receive our share of the £350 million a week so that we can fix it?
Mr Davis
I have generally exercised a self-denying ordinance about not attacking the domestic policies of the Scottish Government, because I think that those are matters for them to worry about, and their day job should be their main interest. The aim here will be to secure the best outcome for the whole United Kingdom, including Scotland, and for Scotland not to lose in any way.
Margaret Ferrier
Because we are so generous on these Benches, I shall give the Secretary of State another chance to answer the question. Notwithstanding the key principle of the Scotland Act 1998 and what he said that the Prime Minister had said at the Scottish Tory conference on 3 March, will he please assure us categorically that when non-reserved powers are repatriated from Brussels, they will come directly to Scotland?
Mr Davis
I think that the Scottish National party needs a bit more originality in its questions as well.
The simple fact is that no powers that are currently exercised by the Scottish Government will be removed from the Scottish Government. As for other powers coming back from the EU, we will consider—in conjunction with representatives of the Scottish Government, the Welsh Government and the Northern Ireland Executive, when they are back in place—what is best for the United Kingdom and the constituent nations thereof. It is very important for us to have as much devolution as possible, but it is also very important for us not to damage the United Kingdom single market, which is four times as valuable to the Scots as the EU single market.
Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)
I wonder whether, during the discussions and negotiations, my right hon. Friend raises an issue that the Scottish National party is constantly putting on the table, namely a special arrangement for being in the single market. Recently, the Partido Popular in Spain made it absolutely clear—I wonder whether my right hon. Friend has translated this for the Scottish National party and its leader in particular—that its policy, and that of the other parties in Spain, was that there would be no special arrangement for the SNP, and that, should the SNP seek to leave the United Kingdom and rejoin the European Union, it would be vetoed by Spain on both counts.
Mr Davis
My right hon. Friend has made his point as well as ever. I believe that this issue will arise again in a later question on the Order Paper. The simple truth is that it is not solely a technical matter within the United Kingdom; it is also something that we must deliver diplomatically.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
Is my right hon. Friend as puzzled as I am that the Scottish nationalists appear to oppose any devolution of powers from Europe back to the United Kingdom and Scotland? It seems that they would rather be governed entirely from Brussels than see some of those powers returned to this place, where they have a great influence, and others returned to Holyrood, where, temporarily, they have a near majority.
Sir Desmond Swayne (New Forest West) (Con)
Given the huge identity of mutual interests that Scotland shares with the rest of the United Kingdom, will not a good deal for the United Kingdom shower all sorts of benefits that can be devolved on Scotland?
Mr Davis
My right hon. Friend highlights an important point: what matters in this negotiation is the outcome, not the mechanism. The Scottish Government have laid a great deal of emphasis on their own preferred policy of separate membership of the single market, but the simple truth is that what we want is a good outcome in terms of access to the single market for everybody in the United Kingdom, and that will achieve exactly the same aim in a different way.
Stephen Gethins (North East Fife) (SNP)
In terms of powers for the Scottish Parliament, the people of Scotland were promised a week before the vote that Scotland would decide its own immigration policy in the event of Brexit. Next week we have a crucial vote on EU nationals—we have another opportunity. If this Government will not use their powers to give EU nationals the certainty they require, will they give those powers to the Scottish Parliament?
Mr Davis
Again, we are talking about aims, ends and means. On the Joint Ministerial Committee, the Scottish Government have raised the very important issue of the immigration needs of Scotland. I have relayed their questions to the Home Secretary and I expect that when we come to a UK immigration policy, it will reflect the needs of every part of the United Kingdom.
Stephen Gethins
I look forward to having the Secretary of State’s support for his leave campaign’s promises on immigration power being given to Scotland. As part of that and on the issue of EU nationals, will he consider the 2012 European Court of Justice judgment in the case of Zambrano v. Office national de l’emploi, which gave EU nationals with primary caring responsibilities the right to reside in the member state of which their dependent child or adult is a national?
Mr Davis
I am not familiar with the individual case the hon. Gentleman raises. I will look at it in detail and come back to him, as is my normal approach. I say this, however: the European Court of Justice will not rule over the United Kingdom after the date of Brexit. That does not mean that we will not have a very humane, sensible and straightforward policy with respect to things such as family relationships, which the hon. Gentleman talks about.
Daniel Zeichner (Cambridge) (Lab)
Nick Smith (Blaenau Gwent) (Lab)
The Secretary of State for Exiting the European Union (Mr David Davis)
We will want to have reached agreement on our future partnership within two years of the article 50 process. Article 50 is clear—we did not write it—that it should take two years to negotiate the withdrawal, and any deal must take into account the new relationship. We recognise that a cliff edge for business or a threat to stability would be in neither side’s interest. A phased process of implementation in which both Britain and the EU institutions and member states prepare for the new relationship is likely to be in our mutual interest, and that will be to everyone’s benefit if that is what we agree.
Daniel Zeichner
The tech sector is clear that the UK needs a watertight legal agreement on international data flows from the day we leave the EU; transitional arrangements just will not do. The best route will be an adequacy agreement, as other means are currently under legal challenge. As it took seven years to negotiate an adequacy agreement with Bermuda, what is the Secretary of State doing, with colleagues, to ensure that we avoid a cliff edge on data flows?
Mr Davis
The hon. Gentleman raises a very important point, because that is central not just to IT and database industries, but to every industry now. The difference with Bermuda is that it was not at a point of identity of data standards when it started its negotiations. We will be at a point of identity at the point of departure, and we will undoubtedly have to agree some regime whereby we maintain equivalence—not identity, but equivalence—thereafter. It is unlikely that we will need transitional arrangements on that; it is much more likely that we will need an ongoing relationship on it.
Nick Smith
Blaenau Gwent has relied on EU structural funding in recent years and, though we are leaving the EU, the need for infrastructure investment remains really high. Infrastructure has a long lead-in, so will the Secretary of State tell me what transitional arrangements will be in place to ensure that Blaenau Gwent gets the best deal to boost its economy after 2020?
Mr Davis
The Treasury made it clear, very rapidly at the beginning of this process, that it would underwrite agreements made with the European Union that carried on beyond the point of Brexit as long as they met value-for-money requirements. The responsibility for making that judgment in the case of the hon. Gentleman’s constituency will lie with the Welsh Government, so I do not see that there is a risk there. Beyond 2020, the EU will have its own budget arrangements anyway, and we will be in the same position.
Sir Oliver Letwin (West Dorset) (Con)
Will my right hon. Friend guarantee that the very last thing he is going to do is to accept any blandishments from those on the other side of the House, and that he is going to start discussing in detail—in this House or elsewhere—the transitional arrangements with the EU?
Mr Davis
Of course my right hon. Friend is right. This is not about some arrangement to extend the discussions or the negotiations; it is about practical implementation issues that may well turn out to be in the interests of both sides, and it is in those circumstances that we would achieve them.
Mrs Theresa Villiers (Chipping Barnet) (Con)
Does my right hon. Friend agree that it will be important to encourage co-operation between the regulators during any transition period for financial services, to ensure that we have an orderly transition to the new arrangements with Europe?
Mr Davis
My right hon. Friend is absolutely right. One of the ongoing streams of work in Whitehall involves arranging to talk to the regulators, and some of those discussions have already happened. The Governor of the Bank of England has commented on the need to maintain stability after Brexit, and that will be an important part of our negotiations.
Hilary Benn (Leeds Central) (Lab)
Because of the Government’s decision to leave the single market, lots of agreements will cease to have effect the day after we leave. One of those is the agreement that allows British airlines to fly to any airport in the European Union. Given that airlines sell tickets up to 11 months in advance, what assurance can the Secretary of State give to passengers that the tickets they buy before we leave the European Union will still be valid after we leave?
Mr Davis
The right hon. Gentleman is partly right. Many of the arrangements for European routes are partly dependent on the EU, but there are also bilateral and other arrangements. He is exactly right to suggest that we will be setting out to ensure that those forward contracts stand.
Jeremy Lefroy (Stafford) (Con)
Further to what the Chair of the Select Committee, the right hon. Member for Leeds Central (Hilary Benn), has just said, will the Secretary of State tell us whether the transitional arrangements will be discussed right from the beginning of the negotiations? Transitional arrangements cannot be left until the last moment; they need to be hard-wired into negotiations from the very beginning.
Mr Davis
They will undoubtedly be part of the early discussions, but the need for transitional arrangements will depend on what the final arrangements will be. If we do not know where we are going to end up, we cannot have a transitional arrangement. Also, our overarching offer of a comprehensive free trade arrangement will remove the need for transition in some areas, although not in the highly regulated ones. The Chairman of the Select Committee was exactly right to suggest that aviation is one of those areas, and it is not the only one. The original questioner, the hon. Member for Cambridge (Daniel Zeichner), mentioned data, which is another area in which regulation will matter. In many cases, however, such arrangements will not be necessary.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
Will the Secretary of State tell the House what he sees as the main differences between agreed interim arrangements as part of a phased process of implementing our future relationship with the EU, as sought by the Government, and a negotiated transitional deal?
Mr Davis
The reason that we have specified this in detail was that the term “transitional arrangements” meant several different things to different people. For example, some thought that it would be good to have a departure deal and then to spend years in a transitional arrangement carrying on the negotiations. We have specifically differentiated that from what we are talking about; that is not what we want. We want the decisions to be concluded within two years, but implementation might take longer in a whole series of areas, including customs and financial services regulations.
Nigel Mills (Amber Valley) (Con)
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
Robert Neill (Bromley and Chislehurst) (Con)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
One of the core principles guiding our approach to the exit negotiations is to protect our historic ties with Ireland and maintain the common travel area. There is a strong joint commitment from the Irish Government, the Northern Ireland Executive, and the UK Government to deliver a practical solution that allows for the maintenance of the common travel area. I welcome President Juncker’s recent statement that the EU does not want hard borders between Northern Ireland and the Republic.
Nigel Mills
I thank the Minister for that answer. Does he believe that the EU recognises the serious impact that trying to force Ireland to reimpose a hard border would have not only on the tens of thousands of people who cross the border every day for work or healthcare or to study, but on the peace process, in which the EU has been heavily involved?
Mr Walker
My hon. Friend is absolutely right, but we have seen some welcome comments from the other side in the negotiations. Following a recent meeting with the Taoiseach, President Juncker said:
“During the Brexit negotiations, the EU and Ireland must look to minimise the impact”.
Michel Barnier has also said that the EU must do its utmost to uphold the success of the Good Friday agreement. We remain fully committed to preserving and maintaining the Belfast agreement and its successors, and we will continue to work hard on that with our allies.
Daniel Kawczynski
I welcome the strong commitment to the CTA in the White Paper. Shrewsbury has benefited for many generations from Irish citizens coming to work in our community. Will the Minister give them an assurance that their rights will be protected in UK law, much of which predates our membership of the EU?
Mr Walker
Absolutely. I assure my hon. Friend that we remain committed to preserving the rights of Irish citizens within the UK. Irish citizens have had special status within the UK since well before the establishment of the EU, and that is rooted in the Ireland Act 1949 and reflected in British Nationality Acts. That status provides Irish citizens in the UK with additional rights beyond those associated with common membership of the EU. The family ties and bonds of affection that unite our two countries mean that there will be always be a special relationship between us.
Robert Neill
The Crown dependency of the Isle of Man has strong links with Northern Ireland, the Republic, and the rest of the United Kingdom, and when the Justice Committee met representatives of its Government, their No. 1 ask was to ensure that it remains a part of the common travel area between the three. Will the Minister reassure them and us on that point?
Mr Walker
Absolutely. We greatly value the work of my hon. Friend and his Committee on such issues and look forward to reading the report of his inquiry into the implications of Brexit for the Crown dependencies. The Crown dependencies, including the Isle of Man, have been part of the common travel area for nearly 100 years, and we are committed to preserving that arrangement. We set out in the White Paper that we will work with the Crown dependencies, as well as with Ireland, on improving the CTA.
Mr Pat McFadden (Wolverhampton South East) (Lab)
Do the Government appreciate that the Good Friday agreement was not a single event, signed, sealed and put on a shelf 20 years ago, but a process of normalisation of relations and of free movement of goods, people, and so on? If the Government do realise that, will they ensure that they respond to the real fears in Ireland that Brexit represents a turning back of the clock on the precious new normality that has developed over the last 20 years?
Mr Walker
The right hon. Gentleman is right about the importance of such issues and that the Good Friday agreement was certainly not just a moment in time—we talk about the Belfast agreement and its successors. We recognise the need to work continually on such issues and to work on them jointly with our friends and allies in the Republic and with the Northern Ireland Executive.
Joanna Cherry (Edinburgh South West) (SNP)
If the common travel area can continue to operate between the UK and the Republic of Ireland, which is a member of the EU and has its own rules on immigration, why could it not operate between Scotland and the rest of the UK if Scotland stays in the single market when the rest of the UK leaves?
Jenny Chapman (Darlington) (Lab)
It is reassuring to hear the Minister’s words on this issue. He will know the level of concern across this House and out there in the country. If he has not read it, I recommend to him the recent House of Lords report, page 63 in particular, which states that we cannot assume that this matter will become part of the article 50 negotiations. If that does not happen, he must act quickly to reassure the people of Ireland and the UK and ensure that it is done either as part of the article 50 negotiations, or that it happens in time, because certainty is needed more than anything in Northern Ireland.
Mr Walker
The hon. Lady is right that we need to do everything we can to provide certainty, and we will take on board the suggestions of the House of Lords report. However, I welcome the statements we have seen from the Commission showing that it is taking a strong interest in this subject.
Alistair Burt (North East Bedfordshire) (Con)
When the Brexit Select Committee visited Dublin recently, we were told that a United Kingdom default to World Trade Organisation rules would be catastrophic for the island of Ireland, with the re-imposition of a border. Can the Minister reassure the House that he will continue to resist siren calls to move towards WTO rules, if for no other reason than the effect on Ireland?
Jim Shannon (Strangford) (DUP)
Will the Minister further outline how the election of the Northern Ireland Assembly has affected firming up the common travel area? How does he intend to take that forward in the interim while waiting for the Assembly to reconvene? Further, what role does he envisage the reconvened Assembly having in that process?
Mr Walker
We are fully committed to ensuring that as we establish our negotiating position, the unique interests of Northern Ireland are protected and advanced. The UK Government have a clear role in providing political stability in Northern Ireland, and the Secretary of State for Northern Ireland is doing everything he can to secure the resumption of devolved government. It is important that everyone engages constructively to reach a positive conclusion as quickly as possible. We are not contemplating anything other than the return of devolved government.
Mark Durkan (Foyle) (SDLP)
Would it not help enormously if the UK Government made it clear that they want to make both the common travel area and the Good Friday agreement, and all its strands, explicitly named features of the framework for future relations between the UK and the EU?
Victoria Atkins (Louth and Horncastle) (Con)
Antoinette Sandbach (Eddisbury) (Con)
The Minister of State, Department for Exiting the European Union (Mr David Jones)
We are listening and speaking to as many farming organisations and institutions as possible as we develop our negotiating position. I have met a range of representatives of the agricultural sector, including all the UK farming unions, and have attended the stakeholder roundtables of the Department for Environment, Food and Rural Affairs, one of which focused on farming and horticulture.
Victoria Atkins
Louth and Horncastle boasts highly productive farms that produce excellent food. Will my right hon. Friend reassure our farmers that encouraging British food production and maintaining high-quality standards will be uppermost in his mind during the exit process?
Mr Jones
The British farming industry is noted throughout the world for the quality of its produce. Outside the European Union, we have an unprecedented opportunity to redesign our policies to make them work for us and to ensure that our agriculture industry is competitive, productive and profitable, and also that our environment continues to improve.
Antoinette Sandbach
Farmers in Eddisbury apply the highest standards of welfare to their livestock and the produce deriving from that livestock. What safeguards will be put in place to ensure that produce that does not meet those high standards does not affect the competitiveness of our farmers?
Mr Jones
Again, my hon. Friend makes an important point because animal welfare and traceability are important elements of British agricultural production. We are committed to high animal welfare standards and will continue to push for those standards to be maintained in international trade arrangements.
Mary Creagh (Wakefield) (Lab)
British farmers face a triple threat from the vote to leave the European Union: the loss of the common agricultural policy subsidy; cheap imports from countries with lower animal welfare and traceability standards; and potential tariffs on exports to the single market. What is the Minister doing in particular to mitigate that third threat, as we could see tariffs of up to 40% on lamb?
Mr Jones
The hon. Lady makes very important points, but this Government have already demonstrated their commitment to supporting the agriculture industry by supporting common agricultural policy pillar 1 until 2020 and giving support for pillar 2. On tariffs, as she will know, this Government aim to achieve the best possible free trade agreement with the continuing European Union and to ensure that whatever customs arrangements are put in place are frictionless and for the benefit of both Britain and the EU.
Dr Alasdair McDonnell (Belfast South) (SDLP)
Mr Jones
The hon. Gentleman raises an extremely important point that is at the forefront of the Government’s mind—in fact, the Prime Minister has discussed this very issue with the Taoiseach. Indeed, all the Ministers in the DEXEU team have had similar discussions, and I have had very recent discussions with representatives of the Irish Government too.
Mary Glindon (North Tyneside) (Lab)
Jo Stevens (Cardiff Central) (Lab)
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
The Minister of State, Department for Exiting the European Union (Mr David Jones)
The UK manufacturing sector is world leading, and we are determined to secure the best deal for it which enables it to go from strength to strength. We are aiming to agree a bold and ambitious free trade agreement with the EU, including zero tariffs, that is more ambitious than any other trade deal agreed with the EU to date.
Mary Glindon
In North Tyneside, Smulders, a Belgian company, has filled a void in the manufacturing market left when this Government failed to back OGN. The company hopes to create up to 400 new jobs and expand even further. What guarantees can the Minister give that will allow it the same benefits it currently gets with access to the single market and customs union after Brexit?
Mr Jones
I had a discussion just this week with the Flanders chamber of commerce, and it recognised the important issue of bilateral trade between Belgium and the UK. I am pleased to say that it fully realised the need for frictionless agreements once we leave the EU, and of course this Government are committed to that.
Jo Stevens
The Prime Minister has said that Britain will not remain a full member of the customs union, but this morning the Chancellor said it is
“clear that we can’t stay in the customs union”.
Which of them should we believe?
Mr Jones
It is clear that if we are to seek free trade agreements around the world, we will not be able to remain in the customs union as it currently stands. Having said that, we seek arrangements with our EU partners that will enable us to construct customs arrangements that are as frictionless as possible, for the benefit of both the EU and the UK.
Tom Blenkinsop
The post-Brexit fall in the pound has led to a boost in manufacturing exports, with 45% of north-east manufacturers expecting orders to rise over the coming year, but it has also led to an increase in import costs. These costs will only increase if customs checks are required at borders. What is the Secretary of State planning to do for north-east manufacturers to make sure that costs at borders are not being increased for products they are making?
Mr Jones
Of course, north-east manufacturing is at the forefront of the Government’s mind; the hon. Gentleman will know that with Nissan we arranged a state of affairs that will allow it to continue to manufacture in the north-east. He is right to say that we do not want to see customs arrangements that impede trade with the EU, and we are looking to agree arrangements, for our mutual benefit, that are as frictionless as possible.
Michael Fabricant (Lichfield) (Con)
But is it not the case that when the UK leaves the EU we will be its largest export market? Does the Minister not agree with my favourite politician at the moment, Wolfgang Schäuble, Germany’s Finance Minister, who says that if the Germans or the EU were to cause any damage to the UK, it would be increased tenfold for the EU?
Mr Speaker
I am sure the Finance Minister in question will be uncontrollably excited to discover that the hon. Gentleman is such a staunch fan.
Mr Jones
My hon. Friend makes an extremely good point: the UK market will be the biggest export market for the continuing European Union after we leave. I am glad to say that that is recognised not only by Herr Schäuble but by the Belgian chamber of commerce, with which I spoke earlier this week.
Mr Peter Bone (Wellingborough) (Con)
Does the excellent Minister agree that it is much more in the EU’s interest for it to do a deal with us than it is in ours, because it has a £60 billion trade surplus with us?
Charlie Elphicke (Dover) (Con)
Does the Minister agree that, although we hope for the best, the chaotic patchwork of EU institutions and election cycles may mean that a deal is not done in two years? If that is the case, will he consider the case for investing in the roads to the channel ports and, indeed, in frictionless and modern borders, to ensure that we have a seamless flow of trade in future?
Mr Jones
I agree with my hon. Friend about frictionless agreements. We have a huge advantage in that Britain is, of course, currently a member of the European Union, so our standards and regulations are in complete alignment. I was heartened to see that Michel Barnier, the chief negotiator for the European Union, has recognised that a deal is doable in two years.
Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)
Mr Jones
Although we will not continue to be a member of the single market, as I indicated previously we are looking to achieve a very good free trade agreement with the continuing European Union, which would be very much to the mutual benefit of the UK and the European Union.
Rishi Sunak (Richmond (Yorks)) (Con)
As my right hon. Friend considers the customs union, may I urge him to look at the experience of close trading partners around the world? The US and Canada trade half a trillion dollars of goods annually, Norway does 70% of its trade with the EU, and China buys 30% of Australia’s exports; none of them has seen fit to form customs unions with each other.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Mr Jones
The fact that the oil and gas industry is a high priority for the Government was shown by the Chancellor’s announcement yesterday. Frankly, rather than talking bleakly about the future of the industry, the hon. Gentleman should urge his colleagues in the Scottish Government to work strongly with the United Kingdom Government to ensure that arrangements can be made that are satisfactory for the industry.
Tom Pursglove (Corby) (Con)
One of the advantages of our leaving the European Union is that we will be in a position to design our own package of trade defence instruments, which I would think Opposition Members would welcome. Will my right hon. Friend update the House on the ongoing cross-Government work on that?
Mr Jones
Clearly, any arrangements we strike will have to be WTO-compliant, but my hon. Friend is entirely right. British industry has recently experienced many difficulties, not least in the steel industry, in which he has a particular interest. He will know about the support the Government have given to that industry.
Paul Blomfield (Sheffield Central) (Lab)
This week, a report by the American Chamber of Commerce to the European Union concluded that
“America’s significant commercial and financial presence in the UK has been premised in large part on UK membership in the European Union—the largest, wealthiest and most important foreign market in the world to U.S. companies.”
Do the Secretary of State and the Minister recognise the importance of our relationship with the single market to those non-EU countries with which the Government are keen to build trade and investment?
Paul Blomfield
Well, the significance of that and the “America First” policy is yet to be demonstrated.
On 24 January, the Secretary of State told the House that he is seeking
“a comprehensive free trade agreement and a comprehensive customs agreement that will deliver the exact same benefits as we have”.—[Official Report, 24 January 2017; Vol. 620, c. 169.]
Will the Minister confirm that that is still the Government’s aim?
Mr David Nuttall (Bury North) (Con)
Thanks to the new opportunities that will open up for the UK after we leave the EU, the accountancy firm PricewaterhouseCoopers has said that the UK will have the fastest growing economy in the G7 over the next 30 years. Does my right hon. Friend agree that that demonstrates that manufacturing has nothing to fear from our leaving the EU?
Mr Jim Cunningham (Coventry South) (Lab)
The Secretary of State for Exiting the European Union (Mr David Davis)
The UK has a long-standing tradition of ensuring that our rights and traditional liberties are protected domestically and of fulfilling our international human rights obligations. The decision to leave the European Union does not change any of that. That is the approach we will take as we enter negotiations, and I can confirm that the Government have no plans to withdraw from the European convention on human rights.
Mr Cunningham
Given that answer, will the Secretary of State set out a full and detailed list of all fundamental rights currently guaranteed under EU law and what approach the Government intend to take towards them?
Mr Davis
We will be putting the great repeal Bill in front of the House at some point in the near future. That will carry into British law the existing law of the European Union and the case law that goes with it. But British human rights have not depended on the European Union; they have been intrinsic to our history and our tradition, and we—I most of all—will continue to defend them.
Dame Rosie Winterton (Doncaster Central) (Lab)
I very much welcome what the Secretary of State said about the Council of Europe and the European Court of Human Rights. With that in mind, will he consider giving his support to a fourth summit of the Council of Europe to look at the way forward for the Council and how human rights could be strengthened through the European Court of Human Rights?
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Is it not a human right to have some certainty about the future? Is the Secretary of State not aware of how many talented, hard-working and entrepreneurial people who have come to this country have no idea whether they can stay here? The Government are now demanding that to be able to stay, people must have full health insurance for life.
Mr Speaker
Order. I am not sure whether we should have all these hairist remarks—they are rather unseemly. The hon. Member for Huddersfield (Mr Sheerman) is a distinguished senior statesman in the House.
Mr Davis
As I was saying, Mr Speaker, I am not sure whether certainty about the future is a human right, and I am certainly not sure whether the House would necessarily extend it to the hon. Gentleman. The simple truth is that we have a large group of people—some of them European citizens and some of them British citizens abroad—to whom we want to give certainty across the board about their right to remain, their right to healthcare, their right to welfare, and so on. I have now seen, one way or another, representatives of around half the member states, and it is plain to me that they all treat this issue seriously and want to see it dealt with early in the negotiations. That is the Government’s policy—to ensure certainty for everybody.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
Hannah Bardell (Livingston) (SNP)
The Secretary of State for Exiting the European Union (Mr David Davis)
I am going to get the hang of this, Mr Speaker. I ask to group questions 11 and 14. In a few years, I will get used to this place—then I will retire.
Mr Davis
I said retire, not resign.
We are working closely with the Scottish Government to ensure the best deal for Scotland and the rest of the UK as we leave the European Union. We share many objectives, including having an open and outward-looking country, ensuring access to labour, collaborating on science and research, protecting workers’ rights, having a smooth and orderly exit process, and guaranteeing the rights of EU nationals in the UK and of UK nationals in the European Union. We should also agree that there should be no new barriers to living and doing business within our own Union. They should not be created.
Roger Mullin
Who knows what the Scottish people will think of such an imprecise answer to a specific question? Let me try something else that may help the Secretary of State. How many trade negotiators have been recruited to deal with matters such as the very specific and unique needs of some sectors of the Scottish economy?
Mr Davis
Many trade negotiators have been recruited, particularly by the Department for International Trade. I recommend that the hon. Gentleman raises the question with that Department, because it has been very busy at that in recent months. The simple truth is that the British Government share the hon. Gentleman’s aims for his constituents and for the people of Scotland—namely, we want the best possible deal, which will be best for the Scottish economy, for Scottish business and, most of all, for Scottish people.
Hannah Bardell
Following on from the question of my hon. Friend the Member for Kirkcaldy and Cowdenbeath (Roger Mullin), I am glad to inform the Secretary of State and, indeed, the House that an STV poll shows that support for independence has gone up to 50:50. Given the Secretary of State’s intransigence and his Government’s determination for a hard right-wing Tory Brexit, which way does he think that poll will tip as he continues in his intransigence?
Mr Davis
First, I do not recognise the phrase “hard Brexit” or, for that matter, “right-wing Tory Brexit”. Secondly, I am not a great believer in polls when it comes to referendums; they do not exactly work very well. If the hon. Lady wants to go with polls, perhaps she should go with the poll of the Scottish people, who say they do not want another referendum.
Andrew Stephenson (Pendle) (Con)
I respect the desire of the Scottish Government to contribute to the Brexit process, and that of the Welsh, Northern Irish and some English regions. May I urge the Government to reflect on all representations made and proceed with a policy that works for the whole United Kingdom?
Mr Davis
My hon. Friend is exactly right, and that is the intention of the Government, which is why we are going for a comprehensive, overarching free trade agreement that will deliver extremely beneficial results for Britain and—I stress this point—for the European Union as well.
Patricia Gibson (North Ayrshire and Arran) (SNP)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
The Prime Minister, supported by my Department, will agree the format of negotiations with our counterparts once negotiations have begun. In the meantime, she will be informed by the Joint Ministerial Committee (EU Negotiations), which will ensure that we negotiate the best possible future for the United Kingdom, representing all its constituent parts.
Patricia Gibson
Regarding Scotland’s role in the article 50 process, Supreme Court president, David Neuberger, said on 24 January that it was a political decision whether formally to involve the devolved Administrations in the process of leaving the EU. Will the Minister tell us what role the devolved Parliaments will have in the passing of the great repeal Bill?
Mr Walker
Of course, we have formally involved the devolved Administrations in our preparations through the JMC process, and we continue to engage in that process. With regard to the great repeal Bill, a White Paper will be published and the devolved Administrations will have their opportunities to respond to that, as will hon. Members across the House.
Wayne David (Caerphilly) (Lab)
When the Government devolve powers that have been repatriated, will they consider allocating extra resources to ensure that those policies are implemented properly?
Mr Walker
As we have said, we have not made the final decisions about repatriation. That is something we will want to discuss with the devolved Administrations, as I think the Welsh Government have suggested. The Treasury has already made important guarantees that cover devolved Administrations as well as Government Departments.
Tom Brake (Carshalton and Wallington) (LD)
In devising plans for Brexit and involving the devolved Administrations, Ministers will have drawn on the advice of a large number of UK and foreign consultancy firms such as Accenture. The Press Association and others want to know how much this has cost. Will the Minister confirm the spend to date on the likes of Accenture, PwC, City legal firms and others in supporting the Government on Brexit?
Mr Philip Hollobone (Kettering) (Con)
The Minister of State, Department for Exiting the European Union (Mr David Jones)
Neither the United Kingdom, nor the European Union, publishes an aggregate audited figure representing the total net financial contribution since the UK joined the EEC, but details of annual UK public sector contributions to the EU are published in a document entitled “European Union Finances”, the latest edition of which was published in February in 2016.
Mr Hollobone
A one-word answer with a figure would have been more helpful than the answer the Minister has given me. I suspect that the answer is that a massive amount of money is being handed over by British taxpayers to the European Union. As in any good divorce, that will entitle us to a huge share of the EU’s assets or to massive financial compensation if we do not get that.
Mr Jones
My hon. Friend is right—it is rather a lot; but the issue is to what extent the United Kingdom is liable for payment of anything, and if so, how much. The point is this: the United Kingdom has always adhered to its international treaty obligations, and it will continue to do so. It will adhere to those obligations, but, similarly, it will insist on the rights it has pursuant to those treaties, and that is the basis on which it will approach these negotiations.
Kerry McCarthy (Bristol East) (Lab)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
As the Secretary of State has reiterated, and as we have repeatedly made clear, we want to secure the status of EU nationals in the UK, and UK nationals living in other member states, as early as we can. We know from my right hon. Friend’s visits around the EU that many member states agree with us on this, but we can protect the status of UK nationals in the EU only through formal negotiations.
Kerry McCarthy
I have had constituents come into my surgeries in tears because of the uncertainty about their future. They cannot apply for new jobs, they are worried that they do not know what their status will be if they apply for a university course, and they cannot apply for mortgages. These are not itinerant migrant workers—these are people who have made their homes and lives in Bristol—and they need assurances now from the Government.
Ben Howlett (Bath) (Con)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
I congratulate my hon. Friend, who is always a champion for the universities and students in his patch. The UK is already a leading destination for science and innovation, with some of the world’s best universities, three of which are in the world’s top 10. We intend to secure the best possible outcome for UK research and innovation as we exit the European Union.
Ben Howlett
I thank the Minister for his response. International collaboration and access to European research funding drive the efficiency, excellence and impact of UK research, and our country’s university sector is renowned for its high levels of international and European collaboration. Will he confirm that continued research collaboration will be a priority for the Government, particularly in relation to the Erasmus+ scheme, as we negotiate our exit from the European Union?
Mr Walker
The Prime Minister has been clear that Britain will remain truly global—a best friend and neighbour to our European partners—but reach beyond the borders of Europe as well. We recognise the value of international exchange and collaboration in education and training as part of our vision for the UK to be a truly global nation.
Several hon. Members rose—
Mr Speaker
Order. I remind colleagues that topical questions need to be extremely brief if I am to be able to maximise the number of contributors.
Nigel Mills (Amber Valley) (Con)
The Secretary of State for Exiting the European Union (Mr David Davis)
The Prime Minister is today meeting other EU leaders at the European Council in Brussels. They will be discussing issues such as migration, jobs and competitiveness. The Prime Minister will be telling them that we remain strong advocates for free trade, and I expect her also to take the opportunity to underline our desire to see a strong and stable European Union even after we leave. Indeed, that has been a centrepiece of my message during my recent trips to meet counterparts in Europe. We want to see a strong UK and a strong EU. Rather than aiming to divide and conquer, as some have suggested, we want the EU to be strong and successful. That is why we are aiming for a comprehensive new partnership between the UK and the EU, which we are clear will be beneficial to all.
Nigel Mills
Can the Secretary of State update the House on what response he has had from across Europe to the Government’s recent Brexit White Paper?
Mr Davis
Yes, I can. I went to—I think—nine of our fellow member states in three weeks, and others have come to see me. The overarching response has been a positive one; it has been one of support for the general approach, and it has been one that seeks a constructive outcome, not the penalty outcome that was talked about by some earlier. It is certainly true that they also think of our approach as very logical, so I think that gives us great cause for optimism in the negotiations.
Keir Starmer (Holborn and St Pancras) (Lab)
Clearly, the Government want to trigger article 50 next Wednesday or next Thursday. They will then have to set out their proposals in detail so that the EU can respond. For months, they have hidden behind the bland phrases “frictionless borders” and “frictionless trade”. This is the last opportunity before triggering for the Secretary of State to spell out what those phrases actually mean.
Keir Starmer
The Prime Minister has said that the approval of Parliament will be required for the final terms of our withdrawal agreement with the EU. She has also promised that that will occur before the withdrawal agreement is sent to the European Parliament for its consent. The House of Lords has now voted by a large majority to amend the article 50 Bill to reflect those commitments. All very straightforward. If the Prime Minister intends to keep to her commitments, why would the Government not support that amendment when it returns to this House on Monday?
Edward Argar (Charnwood) (Con)
Ruth Cadbury (Brentford and Isleworth) (Lab)
Mr Davis
It is pretty straightforward. If we have a comprehensive free trade agreement, then there will be no tariffs, one hopes, and very few non-tariff barriers, certainly no new ones. That makes it easier for the customs arrangements—the administrative arrangements —to be straightforward and simple.
Rebecca Pow (Taunton Deane) (Con)
I am sure that my right hon. Friend will agree that reform of the common agricultural policy represents a positive opportunity for the farming industry. Does he agree that, among other measures, rewarding farmers with payment for acting for the public good—for example, storing water on land as a flood resilience measure, which would be very beneficial in Somerset—would be very helpful?
The Minister of State, Department for Exiting the European Union (Mr David Jones)
My hon. Friend has highlighted how much of an advantage it will be to the UK to be in a position to design its own agricultural and environmental policies.
Dr Alasdair McDonnell (Belfast South) (SDLP)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
I thank the hon. Gentleman for inviting me to speak to the London Irish Construction Network, which is an opportunity to stand alongside a Republic of Ireland Minister and show the commitment from both sides to the Belfast agreement and the common travel area. We remain absolutely committed to the Belfast agreement and all its successors, including the principle of consent.
Tim Loughton (East Worthing and Shoreham) (Con)
The new owners of Vauxhall have suggested that the takeover will be good news for the UK motor parts supply chain post-Brexit. Is it not the case that far from multinationals being deterred from using the UK as a springboard into Europe within the EU, European multinationals will be using the UK as a springboard for exports to the rest of the world?
Mr David Davis
My hon. Friend is exactly right. The comments from the head of Peugeot were fascinating in what they show about what a business that is seeking opportunity can do. We are seeking to create the maximum possible opportunities for our own companies domestically and European countries that want to come here.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Mr Davis
I certainly will do that. I have not read the report yet, but if the hon. Lady will send it to me or give me the contact details, I will read it. She is dead right; the departure from the European Union does open up opportunities for stronger relationships with Africa, both economic and otherwise.
James Berry (Kingston and Surbiton) (Con)
The EU Commissioner for Security and the head of Europol have both made it clear in evidence to the Select Committee on Home Affairs how important it is to maintain our current policing and security co-operation with Europe. I know that my right hon. Friend is committed to continuing that co-operation. Are his counterparts in Europe as committed as he is?
Mr Davis
After the issue of European migrants—European citizens—in the UK, that is the second issue that has come up among the Nordic and Baltic groups in particular, and with Germany and the eastern Europeans. It seems to me that we have a great deal to continue to offer the European Union, and we absolutely intend to do so, because we intend to meet our responsibilities as a global citizen and country.
Paula Sherriff (Dewsbury) (Lab)
Mr Davis
We have not yet seen an end to the tampon tax, but the moment we leave, I am sure it will be one of the first things I have on the agenda for talking to the Chancellor about. The hon. Lady should bear in mind that we are using the funding from the tampon tax for all sorts of incredibly important causes, which she will know better than I do. We will continue with that until the moment we can repeal it.
Sir Oliver Letwin (West Dorset) (Con)
Will my right hon. Friend ensure that the Government tread warily regarding the possibility of any resurrection of the merger between the London stock exchange and Deutsche Börse while we are engaged in complex negotiations about equivalence regimes in financial services?
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Mr David Jones
We have had such discussions. The right hon. Gentleman is right to say that we need an adequate supply of skilled labour in this country, and the Home Office is working on policies that will achieve just that.
Robert Neill (Bromley and Chislehurst) (Con)
The UK legal services sector is worth some £21 billion to our economy. A good percentage of that comes from legal services provided into the European Union. Will my right hon. Friend meet the Bar Council and the Law Society to discuss what they need to retain access to that key market?
Mr David Davis
The short answer is that the Under-Secretary of State for Exiting the European Union, my hon. Friend the Member for Worcester (Mr Walker), has already met them, but we will do so again. This is a very important sector. People sometimes underestimate the size of the general services sector, which is as big as the City. We have to keep that in mind.
Wes Streeting (Ilford North) (Lab)
Mr Davis
Not at all. I cannot see how one can make the economy more of a priority than to make it a centrepiece of the negotiation. We seek a comprehensive free trade agreement, and the purpose of that is nothing but economic. Of course, out of it will flow other things, but it is economic first and centre.
Mr Peter Bone (Wellingborough) (Con)
Following on from that question, is it not a fact that the Office for Budget Responsibility has increased the growth forecast for this year by nearly 50%? Surely, that is a vote in favour of coming out of the EU, and not what the hon. Member for Ilford North (Wes Streeting) said.
Mr Davis
I think, frankly, the whole economics profession is beginning to take a lesson in predictions about the effects of Brexit. My hon. Friend is right. There has been a dramatic uptick in the current year’s growth, and in the forecasts for ’19, ’20 and ’21, as it turns out. The simple point is that many companies are coming here now, such as McDonald’s, WhatsApp, Google—I could go through a whole list—[Interruption.] I will not do that, Mr Speaker. Those companies are showing what they believe by voting with their feet.
Mary Glindon (North Tyneside) (Lab)
Mr Davis
These concerns have been met pre-Brexit by the Treasury underwriting the commitments up to and through Brexit. Of course, the hon. Lady has to remember that the European Union will have a complete budgetary review in 2020. We will be giving clear attention to priorities such as this when we come to write our own budgets after 2019.
Jeremy Lefroy (Stafford) (Con)
While all EU regulation will be transferred into UK law at the outset, divergence will inevitably begin over the years. What is my right hon. Friend doing to prepare British businesses so that they are aware of all the changes that will be made and can continue to export to and trade with the European Union?
Mr Robin Walker
My hon. Friend is absolutely right about the approach of the great repeal Bill, which is to ensure stability and continuity. We are of course engaging with British business and we will continue to do so throughout the process across the country and in every sector.
Tommy Sheppard (Edinburgh East) (SNP)
Mr David Davis
I repeat to the hon. Gentleman what I said earlier: no powers exercised by the Scottish Parliament or the Scottish Government will be taken away. We will debate with all the devolved Administrations—not simply Scotland—the level at which it is appropriate to exercise these powers after exit.
Andrew Stephenson (Pendle) (Con)
What discussions has the Department had with representatives of the tourism sector on the implications of the UK leaving the EU?
Mr David Jones
We regularly engage with the tourism industry, and we will continue to do so. Tourism is an important part of the British economy, and we fully recognise its particular concerns.
Clive Efford (Eltham) (Lab)
The Government have said that they want to secure the rights of British nationals living in Europe, but what about British nationals living in this country who are married to European nationals whose futures have been thrown into doubt by the repugnant position that the Government have adopted? Is it not time to end the doubt for those people?
Mr David Davis
Of course we do not want any doubt on the part of any citizen in Europe, British or otherwise, in Britain or on the continent. The simple truth is that most of the people I have seen in the decision-making tier, as it were, of European Governments agree with us: the issue of British citizens and European citizens has to be dealt with together, and will be dealt with as a matter of priority.
Mr David Nuttall (Bury North) (Con)
Does my right hon. Friend agree that the huge investment by Dyson in research and development facilities in the UK is a sign of confidence in the UK economy outside the EU?
Mr David Jones
Yes, it certainly is. That is only the latest in a long line of new investments in the British economy, showing the huge confidence that the international business community has in our country.
Rachael Maskell (York Central) (Lab/Co-op)
May I push the Secretary of State further on the answer he gave my hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer) regarding frictionless trade? Is the Secretary of State saying that trade tariffs remain on the negotiating table?
Mr David Davis
No, what I am saying—or what I was saying to the hon. Lady’s hon. and learned Friend—is that plenty of countries around the world have very light-touch customs arrangements, which would be consistent with a comprehensive free trade agreement.
Several hon. Members rose—
Mr Speaker
I will take the two colleagues who have not spoken to date, if they are extremely brief.
Stephen Timms (East Ham) (Lab)
From my recent discussions with senior Members of the German Parliament, it is very clear that we are not going to get barrier-free access to the single market if we no longer operate free movement. Do Ministers yet recognise that reality?
Chris Bryant (Rhondda) (Lab)
Under the common agricultural policy, some of the richest people in this country get millions of pounds in handouts from the taxpayer, which must surely be wrong. When we are in charge of our own agricultural policy, would it not be a good idea to put a cap on how much people get, just as we have a benefits cap?
Mr Speaker
Before we come to the business question, I want to mention that today is the birthday of the hon. Member for Perth and North Perthshire (Pete Wishart). I am sure there will be veritable rejoicing in the streets on this happy occasion—at any rate, at least in Perth and North Perthshire. Happy birthday to the hon. Gentleman.
Business of the House
(7 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Valerie Vaz (Walsall South) (Lab)
Will the Leader of the House please give us the forthcoming business?
The Leader of the House of Commons (Mr David Lidington)
The business for next week is as follows:
Monday 13 March—Consideration of Lords amendments to the European Union (Notification of Withdrawal) Bill followed by continuation of the Budget debate.
Tuesday 14 March—If necessary, consideration of Lords amendments followed by conclusion of the Budget debate.
Wednesday 15 March—If necessary, consideration of Lords amendments, followed by consideration of Lords amendments to the Health Services Medical Supplies (Costs) Bill, followed by remaining stages of the National Citizen Service Bill [Lords], followed by motion relating the appointment of lay members to the Committee on Standards, followed by, if necessary, consideration of Lords amendments.
Thursday 16 March—Statement on the publication of the 10th report of the Public Administration and Constitutional Affairs Committee entitled “Lessons still to be learned from the Chilcot inquiry”, followed by a statement on the publication of the sixth report of the Health Committee on suicide prevention, followed by a debate on a motion relating to energy prices. The Select Committee statements and the subject for debate were determined by the Backbench Business Committee.
Friday 17 March—The House will not be sitting.
The provisional business for the week commencing 20 March will include:
Monday 20 March—Second Reading of the Prisons and Courts Bill.
I should also like to inform the House that the business in Westminster Hall for 20 and 23 March will be:
Monday 20 March—Debate on an e-petition relating to the cost of car insurance for young people.
Thursday 23 March—Debate on the first and second reports of the International Development Committee entitled “Syrian refugee crisis and DFID’s programme in Nigeria”.
Finally, I inform the House that, because of diary commitments on Monday, the Prime Minister expects to update the House on this week’s European Council on Tuesday next week.
Valerie Vaz
I thank the Leader of the House for the forthcoming business and add my congratulations to the hon. Member for Perth and North Perthshire (Pete Wishart). Perhaps it will be a case of him singing to us, rather than us singing to him.
Are we any nearer to having a date for the Queen’s Speech? I am sure that the person delivering it would like to know when it is.
I gave the inaugural Emily Wilding Davison memorial lecture at Bedford College and Royal Holloway yesterday. As you know, Mr Speaker, she broke into the House of Commons a few times, most memorably on census night. It was said that she knew the House’s maze of pipes and hidey-holes far better than all the other suffragettes. She therefore had a lot in common with my hon. Friend the Member for Rhondda (Chris Bryant).
May I press the Leader of the House on a date for the debate on restoration and renewal? Members need to know that and need to have their say. It might be helpful, at the time of the debate, to have a display so that Members can see what is at stake and have an informed debate, rather than one based on speculation. I know that a date has been mentioned, but perhaps that was just a gentleman’s agreement and ladies are not allowed to know.
I note that the European Union (Notification of Withdrawal) Bill is coming back to the Commons on Monday. Once the Bill goes through, it will truly be the end of the Thatcher legacy, because the former Prime Minister signed up in 1981 to EU enlargement through the accession of Greece, in 1983 to the declaration on more European integration, in 1986 to EU enlargement through the accession of Spain and Portugal, and in 1987 to the Single European Act to create a single internal market. Yet she was also able to say no: she renegotiated the EU budget in 1984, said no to the 1985 Schengen agreement, and said no to the 1989 social charter—wrongly, in my view. Margaret Thatcher was a remainer and a reformer; the same cannot be said of this Government.
And so to the Budget. It is not so much “Spreadsheet Phil” as Punxsutawney Phil from “Groundhog Day”. He is being chased back down his hole by the self-employed and the Brexiteers. There was no mention of the most challenging events that will happen to this country in the next few years. He did not use the word “Brexit” once—not verbally, not in his speech, not in the Official Report. What he did say was that he
“will not saddle our children with ever-increasing debts.”—[Official Report, 8 March 2017; Vol. 622, c. 811.]
Will the Leader of the House clarify whether that means tuition fees will be abolished? The Chancellor talks about Germany’s productivity being better than ours. Germany abolished tuition fees. Maybe that is something we can learn from Germany.
The Chancellor said that money was available for investment in school condition. Given that the right hon. Member for Surrey Heath (Michael Gove) said he regretted cancelling the Building Schools for the Future programme, will the Leader of the House make representations to the Chancellor to enable all schools allocated funds under the scheme to receive them without having to make bids that take money away from frontline services?
Will the Leader of the House confirm whether the money for research for 1,000 PhDs is a grant or a loan? I thought I heard the Chancellor say “loan”, but I cannot find it in the Official Report. [Interruption.] If hon. Members do not want to hear they should just leave the Chamber.
Valerie Vaz
You think it’s rubbish; we don’t think it’s rubbish.
Was the Leader of the House aware of the discussions around the gentleman's agreement in Surrey? Will he launch an inquiry or make a statement to the House? An MP was involved “who has worked really hard behind the scenes”, and there is a reference to a Member whom we both know very well. May we have a statement on what exactly is on offer under this deal? Step one: councils threaten to increase council tax. Step two: they make a phone call to the Communities Secretary, who then pops over to No. 11 in his car. Then, lo and behold, there is a deal—a gentleman’s agreement that is not transparent and is just for Tory councils.
Will the Leader of the House ensure a breakdown of all business rates goes to each council when the transition is made, so hon. Members do not have to make freedom of information requests of their councils? The council tax burden will now shift totally and utterly to local taxpayers. Oxford Street in my constituency does not have any businesses. This will have a direct effect on many of our constituencies.
The Prime Minister said, when she first stood in Downing Street:
“When it comes to opportunity, we won’t entrench the advantages of the fortunate few”.
Yet the Prime Minister made it clear the Government are promoting selective schools. Can the Leader of the House confirm that children who cannot afford tutors, who will enable them to get into selective schools, will be given help? Schools are good because of the hard work of the pupils and their teachers. The Government cannot take credit for that.
The Chancellor talked about the “last Labour Government” but we are thinking about the next Labour Government. It is the next Labour Government who will have the last laugh.
Finally, it was a male-dominated International Women’s Day. Maybe next year there will be no “Spreadsheet Phil”, but “Spreadsheet Justine”. I want to bring women back to the centre. Gandhi said that if you educate the mother you educate society. How can we forget what was said about Ginger Rogers: she did everything Fred Astaire did, but backwards and in high heels? There is the Chinese proverb that women hold up half the sky. Finally, there is the new hashtag: #neverthelessshepersisted. That is what we all have to do to get true equality. A belated happy International Women’s Day to everyone.
Mr Speaker
Colleagues, I am also advised that today is a significant birthday for the hon. Member for Lewisham, Deptford (Vicky Foxcroft), who I feel sure is celebrating suitably somewhere. We congratulate her on that milestone birthday.
Mr Lidington
May I first deal with the questions from the hon. Member for Walsall South (Valerie Vaz) about two items of business? I cannot yet give a date for the Queen’s Speech. As the House will know, this depends to some extent on the exchange of amendments between the two Houses. We are not in a position to make an announcement yet.
I cannot be specific about a date for a debate on restoration and renewal. However, the Government’s position remains that we intend to hold it before the Easter recess, as I said in answer to the business question a few weeks ago.
I disagree with the hon. Lady that we should get rid of tuition fees. It is not unreasonable to expect students to make a contribution towards the cost of that university education when their income in later working lives reaches above a certain threshold. I would have hoped that, rather than revisit the argument about tuition fees, she welcomes the Chancellor’s announcement yesterday of the Government’s drive to improve the opportunities provided by, and the quality of, technical and vocational education in this country. That is key to giving the maximum possible chance in life to those children who are unable to go to university or who choose not to do so. It is an absolutely essential part of tackling some of this country’s long-term structural economic problems to do with the lack of competitiveness in a very fast-changing international economy.
I do not know how many times Ministers will repeat from the Dispatch Box that there is no special sweetheart deal. I was astonished that the hon. Lady claimed that there is something available to Conservative councils that is not available to Labour councils. I was sitting on the Front Bench yesterday when I heard the Prime Minister say in terms that the local authorities that would be first in the pilots for 100% return of business rates in the 2017-18 financial year were Labour authorities. Those Labour authorities have welcomed that opportunity to be in the first set of pilots. We are saying to Surrey and every other council not included in that first round that, if they meet the criteria, they can apply for participation in the second round in 2019-20. That has always been and remains the position.
On grammar schools, the Government said in the Green Paper that was published shortly before Christmas that we would consider and consult on ways in which the admissions system to selective schools might be altered to try to give the maximum possible opportunity to children from poorer families and families that do not have a history of sending people on to further and higher education of getting those places at selective schools. The problem with the Labour party is that its views on education are stuck in the past. It seems extraordinary, and an increasing anomaly, that, at a time of great diversity in the provision of secondary schools of various types, including specialist schools of the type the Prime Minister described yesterday, there should be an arbitrary legal ban on the creation of new selective schools as part of that broader mix. That is the challenge the Government are seeking to address.
I am more than happy to join the hon. Lady in welcoming International Women’s Day in the way she described, and in paying tribute to all of those in this country who have played a part in advancing opportunities for women. Women and men from all political traditions in this country have supported them. We might also pause and reflect on the fact that women in some countries around the world can be put at great personal risk by standing up publicly and pressing for the type of civil rights and opportunities women have in this country. In celebrating what has been achieved here and in other countries, we should remember that the real heroines are those who fight for equal rights in those countries where there is real danger.
Bob Blackman (Harrow East) (Con)
Last week, I hosted a celebration on 25 years of Dr Sodha’s chiropractic—I understand that my right hon. Friend the Leader of the House piloted a private Member’s Bill through the House promoting chiropractic. May we have a debate in Government time on the use of chiropractic in the national health service as an alternative to giving people medicine?
While I am on my feet, Mr Speaker, may I gently remind my right hon. Friend that the House rose early again on Monday? The Backbench Business Committee has a queue of debates that could fill those slots were they made available by the Government.
Mr Lidington
We do try to ensure that the Backbench Business Committee has its full allocation of slots. It is not entirely for Ministers to determine how many Members participate in any debate, or for how long they speak. Sometimes Members in all parts of the House speak for far longer than their Whips may wish them to, and at other times the debate finishes early, but that is not entirely in the Government’s gift.
My hon. Friend’s point about chiropractic was well made. Looking back on the growth of the profession over the last 25 years, I think that the increasing availability of chiropractic treatment as a complement to traditional medicine has brought huge benefit to patients in all parts of the country, and I hope that my hon. Friend will be lucky enough to secure an Adjournment debate to celebrate that achievement further.
Pete Wishart (Perth and North Perthshire) (SNP)
I thank you for your birthday wishes, Mr Speaker. I shall always be a year older than you.
As well as being my birthday, today is Budget Boxing day, and, if anything, Budget Boxing day is more interesting and more revealing than Budget day itself. It is on Budget Boxing day that we start to hear the useful clarifications, the climbdowns and the justifications for broken manifesto promises, which usually involves the Chancellor of the Exchequer scurrying around the broadcasters and trying to do all those things at once. May I suggest that a statement on Budget Boxing day would be a way of resolving that? The Chancellor of the Exchequer could come to the House and provide all the useful clarifications, start all the climbdowns, and justify all the broken manifesto promises.
We in Scotland are grateful for the £350 million that we are to secure in Barnett consequentials as a result of the Budget, but we note that Scotland will receive exactly the same amount in a year as the NHS is supposed to receive in one week after Brexit. That is hardly going to offset the £4 billion-worth of cuts that we will face over the next 10 years.
I note that three days have been set aside for consideration of Lords amendments “if necessary”, as the Government attempt to ping that pong from the heroes in ermine who continue to stand up to them. What will happen if the paddles are still out on Wednesday, and we are still at the table? Will the Government enforce the Parliament Act? What impact will that have on the article 50 process? And may we encourage the people’s aristocrats to persist in the remain cause?
Lastly, may I ask whether the Leader of the House has any explanation for the behaviour of the Prime Minister on the Front Bench yesterday? She looked as though she was swallowing a fish. It was almost like Mike Yarwood doing an impersonation of Ted Heath. Will the Leader of the House go back to No. 10, and tell the Prime Minister that this is no “plaice” for such behaviour?
Mr Lidington
First, let me wholeheartedly wish the hon. Gentleman many happy returns of the day. It is obvious that the first thing he did this morning was unwrap his birthday socks and tie, and I am sure that they were just what he had always wanted.
The hon. Gentleman asks about the article 50 Bill. It is entirely routine for the Government to announce provisional business in case there is a need to debate Lords amendments. The House of Lords has a perfectly proper role as a revising Chamber, but it also knows that it is an unelected House. I hope that it will want to give very careful consideration to the views that this House takes on its amendments next week, and will accept that, ultimately, the view not just of the elected House but of the British people, expressed in a referendum, should prevail.
The hon. Gentleman also asked about the impact of yesterday’s Budget statement on Scotland. I would have thought, particularly on his birthday, that he might have had a cheery word for the fact that, because of my right hon. Friend the Chancellor’s announcement, the Scottish Government’s resource budget will increase by £260 million through to 2020 and its capital budget by almost £90 million through to 2021. This builds on the £800 million increase to the Scottish Government’s capital budget that was delivered via last year’s autumn statement. Scotland, like all parts of the United Kingdom, is benefiting because of the action that the United Kingdom Government are taking to ensure a stable economy, economic growth and sustainable public finances.
Several hon. Members rose—
Mr Speaker
Order. I gently point out that so far we have got through the three Front Benches and one Back Bencher, so progress is a little slow. If we could try to speed up a little bit, that would be much appreciated.
Mr Stewart Jackson (Peterborough) (Con)
As has been said, yesterday was International Women’s Day, yet my constituents were shocked to learn, via the National Society for the Prevention of Cruelty to Children this week, that no fewer than 55 cases of female genital mutilation took place in Peterborough in the final three months of 2016. May we have a debate on prosecutions of the perpetrators of this evil trade, so that we can protect our young girls and women? FGM is not culturally acceptable, and it is time that we tackled it and drove this abominable practice from our country forever.
Mr Lidington
I agree with my hon. Friend: FGM is a crime, and it is child abuse as well. There have been a number of changes to the law, including in particular the Serious Crime Act 2015, that have extended both powers and penalties to deal with FGM. As he knows, the majority of cases recorded by the NHS are crimes that were committed overseas on non-UK citizens, where probably the right priority is to give help and support to those women who have been abused. However, he is right that we must not hesitate to bring people before the court where there is evidence.
Dame Rosie Winterton (Doncaster Central) (Lab)
May we have a debate to update the House on the Government’s plans for the rail industry, especially in the light of Brexit, including plans for the rail freight sector, for ordering new rolling stock, and for refurbishing rolling stock, which is crucial to companies such as Wabtec in my constituency which specialises in the refurbishment of rolling stock?
Mr Lidington
The right hon. Lady makes a good point. It is important not just in the context of Brexit, but in terms of getting the right mix of transport services in this country, that we continue to modernise our rail system. The autumn statement’s focus on additional infrastructure spending will indeed deliver rail improvements in all parts of the country.
Mr Charles Walker (Broxbourne) (Con)
May we have an urgent debate on the conduct of Veolia, an organisation full of sharp suits and sharp practices? This company is promoting an incinerator in my constituency on a floodplain that just 18 months ago it was arguing before the planning inspector was unsuitable for such a site. This is disgraceful and, dare I say, dishonest behaviour on the part of this company.
Mr Lidington
My hon. Friend makes his points powerfully, and I am sure on behalf of his constituents. This is obviously a matter for the local planning authorities, and for the Environment Agency as the custodian of environmental regulations. He may wish to seek an Adjournment debate on it.
Alex Salmond (Gordon) (SNP)
Thinking about Monday’s business, two weeks ago at business questions the Leader of the House broke with his established procedure of a lifetime in politics by giving me what he described as a straight answer when I asked whether it was possible, roughly speaking, to say what the process of negotiation with Europe would yield. Amazingly, and by an extraordinary coincidence, it turns out that I was quoting the leader of the leave campaign, Dominic Cummings, when he said last year:
“No-one in their right mind would begin a legally defined two-year maximum period to conduct negotiations before they actually knew, roughly speaking, what this process was going to yield.”
Is the Prime Minister of sound mind? [Interruption.]
Mr Lidington
One of my hon. Friends says, “I don’t recall the Prime Minister leading the leave campaign.” Nor was she responsible for its statements. The Prime Minister’s view—and the view of the Government—was spelled out in detail in the recent White Paper, in which we describe our negotiating objectives of securing the best possible access to, and freedom to operate within, the single market for British business, a fair deal for our citizens in Europe and for European citizens here, and so on. However, this negotiation will involve 27 other countries as well, and they are clear that the process of negotiation can start only when article 50 has been triggered.
Amanda Milling (Cannock Chase) (Con)
Staffordshire fire and rescue service has been involved in two high-profile waste fires, including one on an illegal waste site near Rugeley. This has been a horrendous experience for local residents, and the fire service has faced significant costs in managing these incidents over the past six months. The dumping of illegal waste is a problem not just in Staffordshire. May we have a debate in Government time on this increasingly national issue?
Mr Lidington
My hon. Friend raises an important point on behalf of her constituents. I cannot offer an immediate debate in Government time, but she might find an opportunity through the Back-Bench business process or through an Adjournment debate.
Paul Flynn (Newport West) (Lab)
When can we debate the call made in the Daily Mirror yesterday by my hon. Friend the Member for Barnsley Central (Dan Jarvis) that we should learn the lessons of the Afghan war if we are to avoid any repetition of what happened? In 2006, after only six of our soldiers had died in Afghanistan, the decision was taken to go into Helmand province on the basis that not a shot would be fired. The result of that was that 450 more soldiers lost their lives. We cannot turn lies into the truth by carving them on war memorials or by putting them into the mouths of dignitaries. When can we face up to the truth about the Helmand disaster by having an inquiry?
Mr Lidington
It is right that we should have a public memorial to those, both military and civilian, who served so valiantly in Afghanistan and Iraq, and also that we should learn the lessons from both those conflicts. The forthcoming debate on the Select Committee report on the Chilcot inquiry will clearly relate primarily to Iraq, but I would have thought that the lessons to be learned from that conflict and the Afghanistan conflict could be debated during that time.
David T. C. Davies (Monmouth) (Con)
May we have a debate on the efficiency with which we prosecute white collar crime? We are very good at chasing benefit cheats, and rightly so, but I do not believe that we are doing enough to investigate what my hon. Friend the Member for Broxbourne (Mr Walker) calls the sharp-suited spivs who get away with misappropriating millions of pounds, sometimes involving public money.
Mr Lidington
I can assure my hon. Friend that Her Majesty’s Revenue and Customs, which is an independent prosecuting authority, takes this matter very seriously and has secured a big increase in the amount of money recovered for the Treasury through compliance activities, but I am sure that there is always more to be done.
Nick Smith (Blaenau Gwent) (Lab)
May we have a debate on helping people into work? Blaenau Gwent still has stubbornly high unemployment, yet the Department for Work and Pensions wants to shut the Tredegar jobcentre. If the Government truly want to support people, they must take on board the burden that this proposal will put on jobseekers by making them pay for expensive public transport or walk for miles over the mountain, whatever the weather.
Mr Lidington
After 20 years, the contract that covers many DWP offices is nearing an end. It expires on 31 March 2018. The DWP is redesigning its estate so that it delivers better value for taxpayers while also delivering support to people. This is not about reducing services; it is about trying to stop spending taxpayers’ money on renting empty space so that we can give more through counselling and support to those who need it to get back into employment.
Mark Pritchard (The Wrekin) (Con)
In his statement, the Leader of the House said that there would be a debate on the Department for International Development’s programme in Nigeria. He will know that there is an impending famine in eastern Nigeria. I wonder whether we could have a wider debate on the famines in Yemen and Somalia, and the famine in South Sudan that the World Food Programme has just announced, and on how DFID’s programme could do more to prevent conflict rather than just resolving it, given that conflict is a driver of those famines.
Mr Lidington
That sounds like an ideal subject for one of the longer debates in Westminster Hall. I am sure that my hon. Friend would be the first to agree that DFID is devoting a lot of resource to help bring relief to South Sudan.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
Yesterday, the Foreign Office updated its current foreign travel advice for Israel with the following information:
“The Israeli Parliament passed a law on 6 March 2017, which gives authority to deny entry to foreign nationals who have publicly called for a boycott of Israel and/or settlements, or who belong to an organisation which has called for a boycott.”
Given the impact that the new law will have on British passport holders, including Members of both Houses, and given that no other guidance has been issued by our Government beyond that information, may we have a statement from the Foreign Office on how the application of the law will affect UK passport holders and UK foreign policy?
Mr Lidington
At the risk of stating the obvious, Israel, like every other country, is ultimately responsible for determining its own rules on immigration and on visits, but we are seeking urgent clarification from the Israeli authorities as to what the application of the new policy might be. In the meantime, we have updated the travel advice in order to give people as much information as we have at present. If any British citizen feels uncertain about a possible visit to Israel, we suggest that they contact the embassy. We will give clearer advice as soon as we get it from the Israelis.
Steve Double (St Austell and Newquay) (Con)
Fowey community hospital in my constituency has been closed since last summer despite the fact that the Royal Cornwall hospital has been on black alert more often than not during that time. Yesterday, I received a letter from the senior emergency consultant in Cornwall, who said:
“It is, therefore, inexplicable and unjustifiable, that we continue to have closed community hospital beds whilst patients queue in corridors in ED.”
Will the Leader of the House arrange for a statement from the Health Secretary on the important role that community hospitals play, particularly in rural communities such as Cornwall?
Mr Lidington
My hon. Friend is right to stress the importance of community hospitals, particularly as a step when people no longer need intensive care in an acute facility. The exact configuration of local health services in Cornwall or anywhere else is a decision that needs to be taken by local health bosses, not imposed centrally from London.
Karl Turner (Kingston upon Hull East) (Lab)
Yesterday, I had the privilege of meeting the school council of Ings Primary School in my constituency. Young Charlie White, 10 years of age, raised the issue of the WASPI women after seeing them protesting outside the Palace. He asked me why the Chancellor had completely ignored them in his Budget and asked me to raise that at the earliest opportunity. On behalf of Charlie White, can we please have a debate in Government time on the WASPI women?
Mr Lidington
May I say that I am genuinely delighted that among the hon. Gentleman’s constituents, as among mine, there are school council members who are taking an active interest in politics? Whatever views we hold, we should welcome that. My answer to Charlie, through the hon. Gentleman, is that the Government have put in place transitional arrangements, costing taxpayers £1 billion, to cushion the impact of the change in the state pension age for women. To reverse the Pensions Act 2011 would cost more than £30 billion, which cannot be justified.
Antoinette Sandbach (Eddisbury) (Con)
Pupils in my constituency, including those from the community high school in Winsford who are visiting this place today, are deeply concerned about the impending cuts to school funding. May we timetable a debate in Government time to cover the changes to the formula after the consultation has closed on 22 March?
Mr Lidington
I stress that the consultation on the proposed new funding formula has not yet closed. When the results are in, my right hon. Friend the Secretary of State for Education will want to consider them before deciding on the way forward.
Tom Brake (Carshalton and Wallington) (LD)
Last week there was speculation about your showering habits, Mr Speaker. Today, I would like to query your shopping habits. I do not know whether you have been to the supermarket recently, but if you have, you will have noticed that food prices are rising sharply and that “buy one get one free” offers and own-brand products are disappearing from the shelves. Will the Leader of the House make time available for a debate on those price rises and their impact on low and middle-income families, many of whom have just been hard hit by the Government dumping their pledge not to increase national insurance?
Mr Lidington
On that last point, if the right hon. Gentleman looks at what the Chancellor actually announced, he will see that people on low incomes will not be affected at all. Sixty per cent. of self-employed people will be better off, taking account of the abolition of class 2 contributions and the changes to class 4 contributions that were announced in the Budget yesterday.
The prices in supermarkets clearly vary depending on market prices, which depend in part on things such as currency movements. The price of certain vegetables depends on the weather in vegetable-producing areas this winter. The most important thing for the Government is that we maintain an economy with low inflation, high employment and vigorous economic growth, which is the best way to ensure good living standards for the right hon. Gentleman’s constituents.
Martin Vickers (Cleethorpes) (Con)
I am doing what I can to help some constituents obtain a life-saving drug for their young son. Members on both sides of the House will have had similar cases over the years. These are difficult decisions for health trusts and the National Institute for Health and Care Excellence, but it would be helpful if we could have a debate on how they go about making those decisions. Will the Leader of the House find Government time for such a debate?
Mr Lidington
I cannot promise Government time, but there may be other opportunities. These are always very difficult decisions, and the right principle has to be that access to a drug is determined by clinical effectiveness, which has to be measured by doctors, not by politicians.
Clive Efford (Eltham) (Lab)
It is now clear that self-employed people were given a false promise at the last election. The Conservative manifesto said no less than four times that a Conservative Government would not increase national insurance. Can we have a statement from the Government going through the pledges they made in that manifesto line by line so that we have a fighting chance of knowing what we are holding them to account for?
Mr Lidington
When the National Insurance Contributions (Rate Ceilings) Bill was debated in November 2015, it was said that
“this Bill enacts the Conservatives’ manifesto pledge not to increase NICs in this Parliament. It is part of their wider pledge to cap income tax, VAT and national insurance contributions.”—[Official Report, 3 November 2015; Vol. 601, c. 914.]
That Bill delivered on the manifesto pledge, and those are not my words; they are the words of the hon. Member for Salford and Eccles (Rebecca Long Bailey), who was shadow Exchequer Secretary to the Treasury at the time.
Tim Loughton (East Worthing and Shoreham) (Con)
Last month, the Court of Appeal ruled in the case of Rebecca Steinfeld and Charles Keidan that the Government’s failure to extend civil partnerships to opposite-sex couples constituted a potential violation of human rights and that the “wait and see” policy of the Minister for Women and Equalities is unsustainable—the ruling also referred to my private Member’s Bill. Has the Leader of the House had any indication from the Minister for Women and Equalities about an impending announcement? If not, can we have a debate in Government time on equality of civil partnerships?
Mr Lidington
My hon. Friend has consistently championed that cause for quite a period of time. I am not aware of an imminent announcement, but I will remind the Minister for Women and Equalities of his persistence on the subject.
Jim Shannon (Strangford) (DUP)
Given the timely reminder of the plight of the Yazidis on the BBC News on Tuesday past—when Amal Clooney spoke at UN headquarters about how 1,200 Yazidi women and girls are still being held hostage by Islamic State in Mosul, in which Mr Speaker and everyone in this Chamber is particularly interested—will the Leader of the House agree to a debate or a statement on expanding the Syrian vulnerable persons relocation scheme to make the most vulnerable individuals from that Iraqi religious minority eligible for resettlement? They have been able to flee persecution but are unable to return home.
Mr Lidington
The hon. Gentleman is right to highlight this challenge and the appalling abuses of human rights that have been taking place in Iraq and Syria. Victims of abuse and religious minorities are among the categories that we have identified as the highest priorities under the scheme to admit 20,000 people to the UK, which the previous Prime Minister announced; that will also apply in respect of the 3,000 children we are taking in from the region, in addition to those 20,000.
Craig Tracey (North Warwickshire) (Con)
Following the point raised by my hon. Friend the Member for Cannock Chase (Amanda Milling), I wish to highlight the huge increase in fly-tipping across North Warwickshire and Bedworth in recent months. A recent episode near the village of Austrey led to an entire road being blocked by the rubbish deposited on it. The clear-up costs for just one council are estimated at £650,000, so may we have an urgent debate on this issue to see what more can be done to protect our countryside from this terrible scourge, which sadly seems to be on the increase across the country as a whole?
Mr Lidington
Many of us will have experience of what my hon. Friend rightly terms this “scourge” in our constituencies, and he is right to speak out today. Where fly-tipping involves hazardous waste or organised crime the Environment Agency has a role to play, so he might want to make representations to it. The Government last year gave councils the power to issue fixed penalty notices for small-scale fly-tipping incidents, and his local council might wish to explore that.
Alan Brown (Kilmarnock and Loudoun) (SNP)
In yesterday’s Budget, the Chancellor made a welcome move to clear up a VAT anomaly by pledging to collect VAT on telecoms abroad. As that is going to bring some money, is it not now time to clear up another VAT anomaly: VAT being applied to Police Scotland and to the Scottish Fire and Rescue Service? Will the Leader of the House make a statement confirming he agrees that that should be the case and committing the Government to agreeing to amendments to the Finance Bill?
Mr Lidington
I cannot make the commitment the hon. Gentleman wants me to make, but I will make sure the Chancellor is aware of the point he has just made.
Mark Menzies (Fylde) (Con)
In August 2015, 300,000 households in Lancashire were affected by the loss of drinking water as a result of the cryptosporidium outbreak, yet 18 months on the Drinking Water Inspectorate still refuses to publish the report or to say when it will be published. In fact, the response has been, “We will publish when we are good and ready.” Will the Leader of the House set aside time for a debate on the responsibility of organisations such as the DWI to the constituents I represent?
Mr Lidington
I have to say I am surprised that this report has not yet been published, and I shall draw my hon. Friend’s representations to the attention of the Secretary of State for Environment, Food and Rural Affairs.
Wes Streeting (Ilford North) (Lab)
Yesterday’s national insurance rise was not only a breach of the Conservative party manifesto, but an attack on small businesspeople, entrepreneurs, taxi drivers and others who take the risk to start a business and go it alone. Given the Leader of the House’s answer to my hon. Friend the Member for Eltham (Clive Efford), may I ask the right hon. Gentleman by which parliamentary mechanism this rise will be enacted? Will it be through a national insurance Bill, a statutory instrument or another measure?
Mr Lidington
Legislation will be brought forward at the appropriate time later this year. I simply say to the hon. Gentleman that he and others from right across the House have rightly been calling for more money to be spent on the NHS and on social care, and that money has to be raised in revenue. We have seen that the introduction of the new state pension system has removed the greater part of the disadvantage that previously applied to people who were self-employed rather than employed and which had justified the very significant difference between the national insurance contributions paid by self-employed people as against employees. The important narrowing of that difference in pension and other benefits, coupled with the Government’s further pledge to look at parental benefits, justifies the measure the Chancellor announced yesterday.
Mr David Burrowes (Enfield, Southgate) (Con)
Today, knife possession sentencing statistics have been published, and they reveal that in the last three months of 2016 around 300 repeat offenders were let off going to prison, despite Parliament’s introduction of mandatory sentencing following the campaign for what became known as Enfield’s law. May we have a statement to reaffirm that it was and still is Parliament’s clear will that persistent knife offenders should and must be locked up, because they cause carnage on our streets?
Mr Lidington
We certainly want to see people who are convicted of knife crimes being sentenced severely, because they not only cause actual harm to fellow citizens but breed a culture of fear that poisons whole neighbourhoods. Ultimately, though, it has to be for the judge in an individual case to hear all the evidence and decide the appropriate sentence.
Graham Jones (Hyndburn) (Lab)
The northern powerhouse is supposedly a cornerstone of Government policy, but it was not mentioned in yesterday’s Budget statement. When are the Government going to facilitate a debate on the northern powerhouse, so that we can talk about the most significant project that needs to be completed: the M65 east-west extension between Preston and Leeds?
Mr Lidington
I am glad the hon. Gentleman has raised the issue of the northern powerhouse, because the Government have set out a northern powerhouse strategy to boost productivity throughout the north of England. The next steps include moves on the northern powerhouse schools strategy; more than half a billion pounds of local growth fund allocation; the upgrading of transport infrastructure in the north; and further science and innovation audits. I thought the hon. Gentleman would have welcomed those steps.
Mr Peter Bone (Wellingborough) (Con)
Yesterday was International Women’s Day. One of the great disappointments on both sides of the House is the fact that we have never had a woman leader of the Labour party, although the shadow Leader of the House made a clear bid for the position today. I will do anything I can to help her in that regard, but can she please resist spreading fake news? The suggestion that Mrs Thatcher would have been a remainer is absolutely outrageous. May we have a debate next week on fake news?
Mr Speaker
No. Points of order come later; the hon. Gentleman can ventilate his thoughts at that time.
Mr Lidington
My hon. Friend the Member for Wellingborough (Mr Bone) was, uncharacteristically, slightly unfair, because we should pay tribute to what the right hon. Member for Derby South (Margaret Beckett) and the right hon. and learned Member for Camberwell and Peckham (Ms Harman) did when they were acting leaders of the Labour party. Government Members might hope that, one day, the Labour party will summon up the courage to allow a woman to take over full time.
Paula Sherriff (Dewsbury) (Lab)
In recent weeks I have been contacted by a number of distressed and vulnerable constituents who have been turned down for employment and support allowance. The clear injustice in some of the cases is stomach-churning, even by Tory standards. They have had their benefits stopped and are reliant on food banks and handouts. This issue is raised frequently in the House, but the recent increase is alarming. Will the Leader of the House allow a debate in Government time to revisit the issue?
Mr Lidington
I am sure the hon. Lady will be taking up any particular cases with Ministers from the Department for Work and Pensions. The principle has to be right that if somebody has a condition that means they are able to work, as so many disabled people and people living with long-term medical conditions wish and are able to do—3.5 million today, which is a record number—they should be given help and support to do so. They should not be written off and consigned to a lifetime on benefits.
Rebecca Pow (Taunton Deane) (Con)
I welcome the Government’s positive move to ban the use of plastic microbeads in cosmetics and care products by October. It will make a real difference to the cleaning up of our marine environment, but there is still so much more to be done on plastic pollution. Will my right hon. Friend find a time for the House to debate the issue? It really is critical if we are to leave the environment in a better state than we found it.
Mr Lidington
My hon. Friend is indefatigable in raising this subject. I cannot promise an immediate Government debate, but she will know that, from the Prime Minister downwards, the entire Government are committed to delivering on our promise.
Diana Johnson (Kingston upon Hull North) (Lab)
In a written statement on Monday, the Government announced that they are scaling back their financial support for people who received contaminated blood products. On the same day, the chief executive of the trust that administers the money that currently goes to that group of people refused to meet the all-party parliamentary group on haemophilia and contaminated blood to discuss what is happening. I am sure that the Leader of the House agrees that transparency and openness is very much the best policy, so may we please have a statement from a Minister about the Government’s intentions so that MPs can raise their constituents’ concerns about what the Government are doing?
Mr Lidington
The hon. Lady makes a perfectly serious point. I will ask the relevant Health Minister to write to her.
Chris Green (Bolton West) (Con)
Exercise, especially jogging, can be a lonely pursuit, so may we have a debate on the value of running clubs, such as the Atherton running club in my constituency, which provide a fun and motivating environment for that healthy activity?
Mr Lidington
I am delighted to be able to pay tribute to my hon. Friend’s local running club. I do not know whether he is a participant as well as a champion.
Mr Lidington
My hon. Friend nods—that is an even better sign. Perhaps another year he will join my hon. Friends the Members for Weaver Vale (Graham Evans) and for Crewe and Nantwich (Edward Timpson), who will take part in this year’s London marathon. We wish them well.
Mark Durkan (Foyle) (SDLP)
Will the Leader of the House tell us about the role and locus of his office in the preparation and passage of the great repeal Bill? Given that that office steered English votes for English laws, what assurance can he give us that that Bill will not be a vehicle for English votes over devolved competences?
Mr Lidington
My office will be involved, and I will be involved in the Cabinet Committee that reviews that legislation before its introduction in the same way as we review all legislation. I assure the hon. Gentleman that the impact of the whole Brexit process on devolved competences is one of the key issues we are considering. Many EU-level competences cut across devolved matters, although they also include some reserved matters—fisheries is one example—so we will continue to engage very closely with all three devolved Administrations to ensure that we get the right outcome and that there is no question at any stage of taking away powers that have been devolved under the three devolution Acts.
James Berry (Kingston and Surbiton) (Con)
In February 2014, 14-year-old Breck Bednar was brutally murdered by a man he met via an online video gaming platform. Breck’s mum, Lorin, who bravely came to talk to teachers and parents in Kingston, is calling for a law to tackle that kind of online grooming to be brought into force urgently. May we have a debate on how all stakeholders —the Government, police and, particularly, internet companies—deal with online grooming and abuse to avoid tragic cases like the murder of Breck?
Mr Lidington
The whole House will have been shocked by the account that my hon. Friend gave and will want to express condolences to Breck’s family. There are laws in place to enable us to take action against online grooming, as we can against other types of grooming and abuse. There is sometimes difficulty in assembling sufficient evidence to put before a court, and I am sure that the police and prosecuting authorities constantly review the adequacy of current arrangements and practices, but I will certainty draw his particular concern to the Home Secretary’s attention.
Mrs Madeleine Moon (Bridgend) (Lab)
Today is World Kidney Day. May I ask the Leader of the House to do two things? First, will he join me in commending all the kidney support groups that raise funds for research? Last week, my group in Porthcawl gave more than £2,000 for psychological support for children with kidney failure. Secondly, three people die every day because of the lack of available transplants, so may we have a debate on the need to increase their availability for people who otherwise would die?
Mr Lidington
Although I cannot offer the debate in Government time, at least in the short term, there may be other opportunities of which the hon. Lady will be well aware. I am happy to endorse her tribute to the Porthcawl group and to other kidney support groups throughout the country, and to emphasise, as she did, the importance of ensuring that more transplants are available, and that donors are available to help people in need.
Jeremy Lefroy (Stafford) (Con)
I chair the all-party parliamentary group on Tanzania. Last week, my hon. Friend the Member for Ribble Valley (Mr Evans) and I met Tanzanian business leaders in Dar es Salaam. One issue they raised was the length of time it takes them to get visas to come to the United Kingdom on business trips. By contrast, it takes us two or three days to get a visa from the Tanzanian high commission in London for a similar trip. May we have a debate on ensuring that the process is sped up for all those countries with which we will do increasing business over the coming years as we come out of the European Union?
Mr Lidington
When we are looking at visa policy, it is important that we get the balance right between giving potential visitors and business visitors the kind of swift service that my hon. Friend rightly wants to see and, at the same time, ensuring that we have an effective system of border control, including running the necessary background checks to guard against the risk of terrorism or other organised crime. I will draw my hon. Friend’s concerns about the Tanzanian experience in particular to the attention of the Immigration Minister.
Joanna Cherry (Edinburgh South West) (SNP)
On a connected matter, in preparation for Fairtrade fortnight, I have had to make representations to the Home Office to overturn arbitrary decisions refusing visas to Palestinians wishing to visit Fairtrade organisations in my constituency. Organisations such as Palcrafts, Hadeel, Zaytoun and the Scottish Fair Trade Forum have all invited Palestinians involved in the production of Fairtrade products to the UK for Fairtrade fortnight. Unfortunately, some—including representatives of Canaan Fair Trade, which I visited on the west bank last year—have had their visas refused. Given that the Government and the Department for International Development are eager to improve British-Palestinian trade links, may we have a debate about how the Home Office’s intransigence in dealing with visas is hampering fair trade with Palestine?
Mr Lidington
No one would want to see genuine business visitors delayed or having a visa application refused but, as I said in answer to my hon. Friend the Member for Stafford (Jeremy Lefroy), there are checks that we expect the immigration service to carry out to ensure that our immigration rules are properly observed and that we are protected against the real risk of terrorism. Potential visitors coming from an area where terrorism is rife will clearly be subjected to those checks. I do not know what happened in the individual cases described by the hon. and learned Member for Edinburgh South West (Joanna Cherry), but if she has concerns about them, she is right to take them up with the Immigration Minister directly.
Andrew Stephenson (Pendle) (Con)
The current political composition of Pendle Borough Council is 24 Conservatives, 15 Labour members, nine Liberal Democrats and one British National party member—the last BNP councillor in the country. That means that the Labour-Lib Dem coalition that runs the council currently has to rely on the support of that BNP councillor to get things through. Yesterday, the Lancashire Telegraph reported on the shabby deal done between the local Lib Dems and the Labour party, and the BNP for securing support for their budget. May we have a debate on racism, and how the Pendle Labour party and Liberal Democrats are happy to turn a blind eye to it in order to cling on to their position and expenses?
Mr Lidington
The one crumb of good news in what my hon. Friend said is that there is now only a solitary BNP councillor left in England. I would hope that all democratic political parties in Pendle and at national level would unite to say that doing deals with the BNP is utterly repugnant and unacceptable, whether at local council level or anywhere else.
Jeff Smith (Manchester, Withington) (Lab)
A recent study by Time to Change found that almost a third of men said that they would feel embarrassed to seek help for a mental health issue. Last week, it launched the “In Your Corner” campaign to encourage men to support one another’s mental health. Will the Leader of the House join me in welcoming the campaign, and may we have a statement or debate on how we can best improve men’s attitudes to mental health issues?
Mr Lidington
I strongly associate myself with what the hon. Gentleman has said. He is right to highlight the fact that men sometimes find it much more difficult to be open about mental health problems than do women. That is generalising, but I think that that generalisation is true, and I am delighted that work is going on in his constituency to try to change that.
Tom Pursglove (Corby) (Con)
The Chancellor’s announcement of £100 million for new NHS triaging projects is very welcome. In north Northamptonshire, there is a real desire to see a new urgent care hub open at Kettering general hospital, which fits perfectly with that agenda, and the Corby urgent care centre is a beacon of best practice. May we therefore have a statement next week on the Chancellor’s announcement?
Mr Lidington
My hon. Friend has the opportunity to raise that issue during the Budget debate, as this was a Budget announcement. We are looking at providing an additional £100 million to the NHS in 2017-18 for capital investment in A&E departments to help manage pressure on A&E services. Those localities that achieve some of the best results in A&E care are often those that have managed to get GPs and minor injuries units operating alongside A&Es, so I wish my hon. Friend’s health authorities in Northamptonshire well in trying to get access to this new fund.
Peter Grant (Glenrothes) (SNP)
Earlier this week, the Brexit Committee unanimously recommended that there should be an end to the practice whereby the Home Office sometimes writes to EU nationals who have established a legal right of permanent residence in the United Kingdom telling them to prepare to leave and threatening to deport them if they do not leave voluntarily. May we have an urgent statement from the Home Secretary confirming that she will act immediately to end this odious treatment of our residents?
Mr Lidington
The law is quite clear on this matter: we are still a full member of the European Union, and that means that all rights deriving from the free movement directive still apply in this country, and will do so until the date of exit. It is also the Government’s oft-repeated objective to ensure at the earliest possible stage of negotiations that we have a reciprocal agreement that guarantees the rights of EU citizens in this country and of British citizens in the other 27 member states.
Rachael Maskell (York Central) (Lab/Co-op)
May we have an urgent debate in Government time about the prospects of the 4.6 million people who are now self-employed and about those working in the gig economy? As we know, they have poor access to benefits, and they bounce along on very low incomes indeed.
Mr Lidington
All self-employed people who earn less than £16,250 will see a cut in their total national insurance contributions after the announcements made by the Chancellor yesterday. I would have thought that the hon. Lady would also welcome the fact that the new state pension will, for the first time, give self-employed people the right to accrue state pension rights that were denied to them previously.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
On 16 February, I wrote to the Secretary of State for Defence in relation to ammunition technicians and ammunition technical officers serving in Northern Ireland and assisting the Police Service of Northern Ireland, by dealing with bomb scares, for example. The Army wanted to award these soldiers—our troops—General Service Medals for their part in Operation Helvetic. May we have a statement from a Minister on whether armed forces personnel will receive GSMs for assisting civil authorities in Northern Ireland as part of Operation Helvetic?
Mr Lidington
As I am sure the hon. Gentleman will know, there are long-standing rules in place that govern the award of medals, but I will ask the Secretary of State to attend to his letter at the earliest possible opportunity.
Patricia Gibson (North Ayrshire and Arran) (SNP)
Workers in the nuclear decommissioning industry face a very real threat to their pensions, despite cast-iron guarantees provided by Mrs Thatcher following the privatisation of the nuclear estate. That is of great concern to the workers at the Hunterston A site in my constituency. May we have a debate to fully discuss those concerns and the broken promises that are causing so much distress and alarm to workers across the United Kingdom?
Mr Lidington
I suggest to the hon. Lady that she might wish to question the Secretary of State for Business, Energy and Industrial Strategy on that at the oral questions session coming up next week.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Following the unfortunate comments made by Peter Duthie, the chief executive of Scottish Events Campus, in which he appeared to defend ticket touts and said that any recent issues were down to just
“a bit of…bad press”,
can we have a debate on the secondary ticket market to ensure that our constituents do not continue to be ripped off?
Mr Lidington
I think we are all well aware of how aggrieved genuine fans of musicians and sports feel when they are denied the opportunity to get tickets to their chosen event because of the activities of touts. Passing a new Act of Parliament will not necessarily guarantee an answer of the type that the hon. Gentleman wants, but it is something that the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch), continues to keep under review.
Points of Order
Mr Charles Walker (Broxbourne) (Con)
On a point of order, Mr Speaker. How best can I advise colleagues to sup with a long spoon when dealing with a company called Veolia? Perhaps I could write to all colleagues setting out Veolia’s modus operandi, or do you have an even better suggestion?
Mr Speaker
I think the hon. Gentleman has found his own salvation. He has leapt to his feet and contrived to raise an entirely bogus point of order in order to register his concern about the company in question, of which, I confess, I know nothing, and in which dispute it would not be proper for me in any way to involve myself. I simply note, en passant, that the hon. Gentleman is indefatigable and remorseless in pursuit of his chosen campaigns and objectives.
Sir Desmond Swayne (New Forest West) (Con)
Further to that point of order, Mr Speaker.
Mr Speaker
I am not sure that it is, but we will indulge the right hon. Gentleman.
Sir Desmond Swayne
My hon. Friend cannot be allowed just to leave it like that, Mr Speaker, having whetted our appetite—we want to know what the complaint is.
Mr Speaker
May I very gently suggest, in the hope that such a practice has not been altogether discontinued in modern politics, that two hon. Members, especially when one hon. Member and the other right hon. Member are members of the same party, and obviously joined by an insatiable interest in this important matter, might consider partaking of a cup of tea in the Tea Room with each other in order courteously, and doubtless fully, to discuss it?
Sir Peter Bottomley (Worthing West) (Con)
Further to that point of order, Mr Speaker. Times have changed. If more than one person is talking to each other in this place, it is a conspiracy.
Mr Speaker
Why did I not appreciate that? I should have done and I now do so. We will leave it there for now. I am glad that colleagues are in such a good mood: at least, they are at 11.47 am; we do not know how long it will last.
Ways and Means
Budget Resolutions
(7 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
John McDonnell (Hayes and Harlington) (Lab)
I hope that the good humour continues, Mr Speaker, but we will see. I admire the hon. Member for Broxbourne (Mr Walker) for his creativity at all times in raising matters.
You and I, Mr Speaker, have watched Budget debates in this Chamber for more than 20 years now. As you probably know, I have referred to the iron law of Budgets: the louder the cheers for the Chancellor on Budget day, the greater the disappointment three days later at the weekend. I am revising that iron law—this Budget did not last three days; it lasted less than three hours.
I will address some of the main policy announcements in the Budget, but I believe that overall the Chancellor’s statement evidenced a fundamental difference between the values of our two parties. What we saw yesterday was a Conservative Chancellor boasting about tax cuts to corporations and the rich while refusing to effectively tackle the crisis in social care for the elderly, refusing to properly fund the NHS, and increasing the national insurance burden on many middle and low-income self-employed earners, while at the same time breaking a clear manifesto promise.
Our values are these: we believe in a fair taxation system, in which everybody, no matter how rich and powerful they may be, pays their way; and we believe that through a fair taxation system and collective endeavour, the elderly and the disabled should be cared for, the sick should be treated and children should be educated to develop their talents to the full. That was not what we saw in yesterday’s Budget statement. In addition, we adhere to manifesto promises.
On the state of the economy, I saw from the Chancellor’s press briefings that all the talk before the Budget was about the aim of providing a positive backdrop for Brexit. That is not the real-world experience of millions of people. Yesterday the Chancellor boasted about economic growth, but what is positive about Britain being the only large developed economy in which wages fell when economic growth returned? What is positive about rising GDP if most people are worse off? What is positive about the national living wage being revised down again? What is positive about yet more downward revisions to wage forecasts?
How can anyone describe an economy as “match fit”, as the Chancellor did, when people in that economy are seeing their standard of living fall and fall again? Wages are still worth less than they were nine years ago. The disposable incomes of non-retired households are less than they were before the financial crisis. The official forecasts are clear: working people, as a result of the Government’s choices and this year’s Budget, will be worse off. According to official forecasts, they will be £500 a year worse off in 2021 than was predicted in the autumn statement. Average earnings are expected to be £200 lower by 2022 than they were before yesterday’s Budget. According to the Resolution Foundation, average earnings are set to return to their pre-crisis peak only by 2022 at best.
The Chancellor claimed in one press release that ours is an economy built on resilience; it is, to be frank, an economy built on sand. The fact that unsecured borrowing by households has shot up to levels not seen since before the financial crisis should be a warning sign to us all. Office for Budget Responsibility forecasts show unsecured household lending rising to a shocking 47% of household income by the end of the decade. For many people, such extra borrowing will be done out of desperation—as prices rise but wages fail to keep up, many people dig themselves deeper into debt just to get by. The Chancellor says that he does not want to put the economy on a credit card, but that is exactly what he and his policies are doing—forcing ordinary people into dependence on their credit card.
There is no resilience in an economy that is failing in its fundamentals. Business investment fell over the past year for the first time since the depths of the last recession. Companies are cancelling planned investments because they are so terrified of what the future holds under this Government, particularly with the risk of Brexit. They have seen seven wasted years pass without the investment or industrial strategy that they need from the Government, and they are now fearful of the Government’s plans for Brexit.
Productivity growth—the engine of prosperity—has stagnated. We now lag far behind similar economies. A typical British worker takes five days to produce what their German or French counterpart produces in four. The Chancellor, in a moment of lucidity, recognised the scale of the problem, but he failed to provide any new funding to deal with it. Worse than that, public sector investment will be £2.3 billion less over the next five years than was planned in the autumn statement.
Yes, people celebrated International Women’s Day, but while there were calls for a Budget that works for women, they have been ignored. Women are still bearing the brunt of this Tory Government’s failed austerity agenda, with 86% of cuts falling on women—that figure is unchanged since last year—and the Government have yet again ignored the hundreds of WASPI women who turned up yesterday to lobby Parliament. Things are just as bad as ever for women under this Government. Labour calls on the Government to publish urgently an analysis of the true impact on women of their Budgets and spending announcements, and to explain how they intend to reverse this disproportionate impact. Under a Labour Government, all economic policies will be gender-audited to ensure that we have an economy that works for all.
Let me turn to some of the policy announcements in the Budget, such as on self-employment. The Chancellor’s decision to push a £2 billion tax rise on to low and middle earners who are self-employed makes little sense.
Sir Desmond Swayne (New Forest West) (Con)
I would be the first to say that we need to find new ways to reward entrepreneurs and risk takers in our tax system, but does the right hon. Gentleman accept that the difficulty is that at present there is no way of distinguishing between such a person and a professional such as a journalist who has sought an arrangement with their editor to be paid as self-employed? On the low-paid, 60% of people who are self-employed will see a reduction if we take into account the change in class 2 contributions.
John McDonnell
The right hon. Gentleman raises a valid point about bogus self-employment. We thought that the Chancellor might have mentioned that in his statement, but he never referred to it. That needs to be addressed, because many people are forced or manipulated into self-employment. Bogus self-employment needs to be tackled, and we have campaigned for that along with a number of organisations, including several trade unions and the Federation of Small Businesses.
We saw middle and low earners hit yesterday. Someone on £20,000 will lose about £250 a year, while someone on £40,000 will lose nearly £650 a year—those are the consequences. I do not think that those people are high earners; they are middle to low earners. They should be protected, particularly at a time when, to be honest, there is frailty in the economy, with consumer spending just dipping on the latest figures. Those at the forefront of the impact of the dip in consumer spending are largely existing sole traders and small traders—the window cleaners, drivers and others—and they will be hit. The policy is wrong, and this is also the wrong time to put their careers and jobs in jeopardy.
The justification for yesterday’s policy just does not stand up. The Government cannot demand more taxes from people without offering something in return. The Labour party are fully behind looking at how the labour market is changing—the right hon. Gentleman is right about that—and the shadow Secretary of State for Work and Pensions, my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), spoke last year about the principles that should guide such changes. We have regularly raised the problem of bogus self-employment.
Norman Lamb (North Norfolk) (LD)
Does the right hon. Gentleman share my view that a lot of the people on low pay in self-employment get no paid holiday and no paid sickness absence, and have no protection against termination of employment?
John McDonnell
I will tell a quick anecdote. I was on the tube a month ago when a worker got on and sat down next to me. He was in his overalls as he was on the night shift. He had worked for Tube Lines before the company went bust. He is a rail maintenance worker, which is a skilled job, but he is now employed by an agency and does not know whether he will have work tomorrow, the next day or whenever. He has no sick pay and no holiday pay, and if he does not turn up for work, he does not get paid. He has to pay an accountant to deal with the tax on his salary payments. At the same time, he can be exploited by being sold on from agency to agency. That is not real self-employment; that is the exploitation of someone who has been forced into self-employment. Such issues must be addressed. This insecurity is not just because of the gig economy, but because of what has happened in recent years, with people being forced into self-employment. Those issues were not even addressed yesterday. There is a problem of employers shirking their responsibilities by forcing staff into self-employment.
Yesterday, we got not a package of measures designed to address the problems of the modern world of work, but a single, unilateral tax hike for the self-employed. People earning over £8,000 will be hit. The Chancellor tried to disguise that by bundling the measure in with the re-announcement of abolishing class 2 national insurance payments, but yesterday’s Budget documents are clear that this is a tax hike of £2 billion, targeted at the self-employed. Increasing the taxes paid by self-employed people does not move them to parity with the employed, because they do not receive the same benefits as the employed. The Chancellor says that he is concerned about the gap between different contribution rates, but the Labour party does not believe that the burden of closing that gap should fall on some of the lowest paid workers who are also those in the most precarious position in our society.
Mr Steve Reed (Croydon North) (Lab)
Does my right hon. Friend agree with the Conservative Croydon councillor, James Thompson, who tweets:
“Disgusted by this so-called Conservative government hitting the self-employed”.
John McDonnell
I find it interesting that the response to yesterday’s statement has been anxiety right across the political spectrum. I hope that the Chancellor is listening. I hope that the Labour party and others in the House will combine with some Conservatives who are concerned and that we will force the Chancellor to think again.
The Chancellor says that he is concerned about the gap between different contribution rates. We do not believe that the burden of closing the gap should fall on some of the lowest paid workers, but that is the consequence of yesterday’s decision. The Government are making minicab drivers pay more. They are taxing Uber drivers while at the same time cutting the taxes of Uber itself. A hairdresser earning £15,000 a year will be £137 worse off as a result of yesterday’s measures. That cannot be fair—it just cannot be right.
And, yes, this is a manifesto betrayal. There was a promise in the manifesto and it read like this:
“This means that we can commit to no increases in VAT, Income Tax or National Insurance. Tax rises on working people would harm our economy, reduce living standards and cost jobs.”
That was not me or Labour MPs, but the Tory manifesto. The Government have been trying to muddy the waters by talking about a Bill they brought forward in 2015. That Bill sought to cap class 1 contributions—Labour supported it—but it did not even allude to the idea that any other classes would see increases. To quote the current Chief Secretary to the Treasury speaking in Committee:
“we do not have further proposals other than those that we previously set out”.––[Official Report, National Insurance Contributions (Rate Ceilings) Public Bill Committee, 27 October 2015; c. 16.]
Some have tried to portray yesterday’s announcement as progressive, but what is progressive about raising taxes for low-paid drivers while the Government go ahead with cuts to capital gains tax for a tiny few? What is progressive about raising taxes for low-paid self-employed cleaners while the wealthiest families in the country get an inheritance tax cut? What is progressive about raising taxes for plumbers while multinational corporations see their tax bills slashed year after year? What is not fair is £70 billion of tax giveaways for the wealthiest and the corporations while taxes are hiked for middle and low earners. Just because the higher paid will pay a bit more, that does not make it right for the Government to clobber those on low incomes to plug a gap in their finances.
Interestingly, the Government have promised a review, but the tax hike is already scheduled. It may be that there is jam tomorrow on benefits, if one chooses to believe the Government, but who would believe them after they have broken a clear manifesto promise? The Government could not have made their interests more clear in hiking taxes for the self-employed while slashing taxes for the corporations. I quote the Federation of Small Businesses:
“Increasing this tax burden, effectively funded by a reduction in corporation tax over the same period, is the wrong way to go”—
I agree.
Meanwhile, the Government’s small, incremental reforms to business rates fall far short of the radical long-term reform that is needed. They are just trying delaying tactics. Business rates are a ticking time bomb that threatens to destroy many of our town centres. To be frank, this is a Government of the giant corporations and tax avoiders. It is not a Government for workers, not a Government for the self-employed and not a Government for small businesses.
Let me turn to the social care system and yesterday’s announcements. Our social care system is in crisis. I have an anecdote about a constituent I visited last week. She is a young woman who looks after her father, who has had seven strokes, and a mother with dementia. She is trying to hold down a job, but cannot get the care. As a result, she has cut her hours, rendering the income into her family and for her own children extremely tight. It is a difficult situation. That one example from my constituency exemplifies what is happening right across the country. People are suffering in that way in virtually every constituency.
According to the King’s Fund, social care needs £2 billion now just to cope with the emergency. The Chancellor failed to grasp the scale of the crisis. The money announced yesterday amounts to less than a third of what is needed. What I resented yesterday was that it had been trailed in the media that £2 billion was coming, but we were not told until the last minute that it would be over three years. That is nowhere near enough to meet the crisis that people are enduring at the moment. There are now more than a million people, mainly older people and frail people, who are desperate for social care but still cannot get it as a result of the failure to address the emergency we are facing.
Mr Peter Bone (Wellingborough) (Con)
The right hon. Gentleman is, as usual, making a very clever speech. I understand that the Budget debate is a political moment, but does he think that at some time down the road both sides can work together, not on this model but on a new model for social care?
John McDonnell
I always respect the hon. Gentleman’s interventions because he seeks to find solutions.
John McDonnell
Exactly. It is exactly as my hon. Friend says from a sedentary position. The Labour party tried the bipartisan approach. Hon. Members worked in good faith to seek a long-term resolution to this matter. They looked at a range of options, but halfway through the discussions we were, to be frank, betrayed. Instead of a bipartisan approach, it became a political campaign of the worst order. That was a betrayal of confidence. It will take a lot, to be frank, to regain that confidence to enable us to take a bipartisan approach. We are willing to have discussions with anybody anywhere, but the treatment last time went beyond political knockabout. It was an undermining and a betrayal not just of the Labour party but of frail elderly people and their families who desperately need a solution.
Families are imploding as a result of the lack of social care, because of the burden they are suffering. The Women’s Budget Group conducted an analysis of the Budget last year and this year. It identified two groups of people who have been hit hardest by austerity measures: younger women with children, and older women. Initially, I could not understand why, but the WBG explained that unfortunately in our culture the burden of care still falls on women. Retired women fill the gap when social care is no longer provided. We are always willing to talk to anyone to find a practical solution, but it is against the backdrop of betrayal and bad faith in the past.
Norman Lamb
I welcome the right hon. Gentleman’s commitment to talk to anyone to try to find solutions. He may be aware that we have launched an initiative with Labour, Conservative and Liberal Democrat MPs to try to establish an NHS and care convention. Will he back that bid? It is essential that we set up a process to establish a long-term settlement.
John McDonnell
That is a process of bringing MPs together as individuals, not as party representatives—let us be absolutely clear about that. We look forward to any proposals that come forward for consideration from any source. If we can find a practical way forward, we certainly will.
The most important thing is that we have an emergency at the moment. We need £2 billion now, not over three years, because people are suffering now. Families are imploding. I felt a sense of relief when it was trailed that we were going to get £2 billion. I then felt extreme disappointment when we were then told it would be £2 billion over three years. That was never mentioned in the press releases before the announcement.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Does my right hon. Gentleman agree that the January figures for those waiting more than four hours for accident and emergency, which at 86% are the worst on record, are another example of how our health and social care systems are at crisis point?
John McDonnell
As always, my hon. Friend has pre-empted my remarks. Not only did the Government fail to address social care yesterday, but they failed to address in any way the crisis in our NHS. It was completely ignored.
Ahead of the autumn statement, Labour and others were warning that the NHS was in crisis. It was in crisis before the winter, but the Chancellor could not find a single penny for the NHS in the autumn statement. The Royal College of Nursing now says that the NHS is in its worst crisis ever. Ahead of the Budget, the British Medical Association called for another £10 billion for the NHS. As my hon. Friend has just said, A&E waiting times have today got worse again—more people are waiting longer. It is astonishing that there was a complete failure on the part of the Chancellor in the Budget to recognise the scale of the crisis that our hospitals and doctors face. It is a crisis that the Government created by cuts.
Instead, we have a £100 million fund to enable GPs to triage in accident and emergency. The capital spend will build rooms for GPs in hospitals with no GPs to staff them, because no revenue funding is associated with the proposal.
Keith Vaz (Leicester East) (Lab)
The issue is not just the immediate crisis in the NHS, but the preventable future crises that will come from long-term conditions such as diabetes. There seems to be no planning for the future. Does the shadow Chancellor agree that we have missed an opportunity to invest in prevention to save the taxpayer an enormous amount of money in future?
John McDonnell
I congratulate my right hon. Friend on his campaign, which he has stuck with for a number of years. I remember him saying that some years ago under a previous Secretary of State. Assurances were given about investment in preventive medicine and so on, but then what happened? We had an unnecessary £3 billion reorganisation imposed from the top and the money was lost. I regret that my right hon. Friend has had to continue his campaign. We need investment in preventive health, but we also need emergency funding now for the NHS.
This shows the difference in values. Labour says we need investment in the NHS, but the Government believe we need tax giveaways of £70 billion over the next five years to those who need it least. People are suffering in the NHS and they need social care. People are dying because of the Government’s decisions. They have failed to address them, but have also prioritised tax cuts for big corporations and the wealthiest few rather than investment in our NHS.
On education and skills, the Chancellor claimed in his speech that the Budget was for the young and for skills. He waxed lyrical about the need to provide decent chances in life for all. We share those sentiments—extra funding for training is welcome—but the £500 million of additional skills funding is nowhere near enough to undo the damage of seven years under this Government. Adult skills funding has fallen by 54% since 2010, which is a cut of £1.36 billion. That £500 million does not even come close to reversing the damage already done.
The Chancellor is providing £1 billion for the vanity project of free schools. That is more money for the ludicrous throwback of grammar schools. Thousands of Whitehall hours have been wasted on schemes for a tiny handful of privileged children, leaving the rest to fail. It is the same old Tories, isn’t it? There are real-terms funding cuts for the state schools that 95% of our children use. They are the first cuts since the last Conservative Government. Fifties throwbacks and fantasies are not how we should run a modern education system.
Finally, the Chancellor never spoke the word “Brexit” in his speech yesterday. Shocking. The Chancellor was silent on the greatest challenge facing this country. The word “Brexit” never passed his lips once during his speech. As Britain prepares to begin the process of leaving the European Union, the Chancellor had nothing to say on the matter. It should be clear why. I do not think he agrees with the position of his Government. The Prime Minister claims that no deal is better than a bad deal, which is absurd—no deal would be the worst possible deal. The Chancellor knows that very well. He knows it is a risk, because the warnings come not just from Labour but from manufacturers, business leaders, employers organisations, trade unions and a wide range of civil society organisations. They come from economists and international organisations as well. The Chancellor is being told from every part of our economy that to crash out of the European Union without a trade deal will be disastrous. We will be cut off from investment and our biggest trading partner. We will be cut off from the skills of EU nationals, who have made so much of a contribution to our economy and society. It is a disgrace that those EU nationals live with insecurity still because the Government will not give them the assurances they need, but that is where the Conservative party is setting its course.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
Given that Brexit is the greatest economic challenge facing the country, I agree that it was shocking that there was so little mention of it in the statement and the Red Book. Does my right hon. Friend agree that it was also shocking that there was a complete absence of any commitments on regional funding, which we are set to lose in places like Wales as a result of leaving the European Union? The Government have repeatedly failed to guarantee that we will not be a penny worse off as a result of leaving the EU.
John McDonnell
In a past life, as chief executive of the Association of London Government, I was responsible for managing European funds for London, including the European regional development fund, the European social fund and a range of other funds. I know what contribution those funds make. I also know how much investment they prise in from elsewhere, what match funding is required and how to build transnational partners into the creative development of ideas. All that will be lost to us because the Government will not give the assurances we need.
Ms Angela Eagle
In the Liverpool city region, we are meant to welcome £30 million a year over the next 30 years, which is £900 million. We have lost more than £1 billion in direct funding cuts to our five local authorities. Half a billion pounds in European funding has been granted for the last two rounds, but there is no guarantee of anything in future. Does my right hon. Friend agree that that is a problem for our regional development and funding in trying to grow our economies from the bottom up?
John McDonnell
I know how hard my hon. Friend has fought on these issues, and I congratulate her. She has a grassroots understanding of the consequences of that lack of funding, and of the implications for her region and city. The consequences of the lack of investment are staggering, but it also undermines confidence in the private sector to match fund and invest. That is what we are seeing, even at the first stage, and yet, as my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) said, we heard in the Chancellor’s statement not a word of assurance to anybody, whether council leaders, business investors or workers. I found that disgraceful.
It is interesting that, prior to the Budget, the Chancellor and allies floated the idea that he was garnering a £60 billion fighting fund to deal with Brexit. It is not a fighting fund; it is a failure fund. He is having to put aside cash to deal with the consequences of what he knows will be a Tory Brexit failure. That is what the failure fund is for.
Keith Vaz
On Brexit, I wonder whether my right hon. Friend shares my concern that no provision has been given to the Home Office for processing the applications of 3.2 million EU citizens. The Home Office has suffered enormous cuts over the past few years and will simply be unable to deal with the applications that will be made. Currently, there is a seven-month wait to get a certificate to remain. Does he believe that provision should have been made for that?
John McDonnell
It is not just that provision should be made, but that the cuts have established that situation. Whatever system is introduced, that organisation will not be fit for purpose because of a lack of investment over the recent period, which my right hon. Friend has consistently pointed out.
We understand the vote in the referendum. People voted to leave, but we repeat time and again that they did not vote to trash their jobs, their livelihoods or the economy. A responsible Government would ensure that jobs and the economy were protected. A responsible Budget ahead of article 50 would have shown how the Government would protect both. The Chancellor had a responsibility and failed to deliver on it.
The Chancellor has dared to talk elsewhere about the difficult decisions he had to make. It is not he who is making the difficult decisions; it is the NHS manager in a hospital deciding whether someone will have a bed or a trolley; a police commissioner deciding which streets will be patrolled; or a council leader deciding which children’s centre will be closed. They are the ones with difficult decisions, not the Chancellor. He is passing the buck to others for his cuts.
I think that the Chancellor lives in a world in which he is completely insulated from the consequences of his decisions. He can sit in No. 11 and delete lines from his spreadsheet without a thought for the consequences. For him, it is all in a day’s work, and it is the rest of our society who must deal with the results. We have had seven long years of austerity from this Conservative Government, and the spending cuts have dragged our economy and society to the brink.
The suffering has been immense, and it is not the Chancellor or his colleagues who have been on the receiving end. It is their victims: those parents who cannot get a school place at the moment, those young people who cannot get a decent home because of a housing shortage, those families who cannot get care for their parents. We have seen public services shredded and basic standards in public life torn up, and for what? So that this Government can add three quarters of a trillion pounds to the national debt. After seven years of austerity, and two years after it was supposed to have ended, what can we look forward to? Continual cuts in public services for the rest of the decade.
This was a Budget of complacency. We need a Government who will introduce a fair taxation system, who will use public resources for long-term, patient investment in our economy, who will tackle tax evasion and avoidance at the same time, and who will grow our economy but, as we build a prosperous economy, will ensure that that prosperity is shared by all rather than being given away in tax cuts for the rich and the corporations. Yesterday’s Budget was not just complacent; it was arrogant, and it was cruel.
The Secretary of State for Communities and Local Government (Sajid Javid)
Yesterday the Leader of the Opposition gave a response that sounded as though it had been written a week ago, regardless of what was actually in the Budget, and now the shadow Chancellor has just done the same. That shows us all, once again, that the Labour party never learns.
There has been no recognition of the state in which the right hon. Gentleman’s party left the country’s finances, no awareness of the millions of lives devastated by Labour’s record-breaking recession, and absolutely no understanding of the most basic rule of any responsible Government: if you want to spend money, you have to raise it. If the right hon. Gentleman had been standing on the steps of No. 11 yesterday, holding up his little red book—I mean box—he would have come here and announced half a trillion pounds of additional borrowing, and every last penny of that, every last penny, would have had to be serviced and paid off by our children and our children’s children for decades to come. [Interruption.]
Let me explain to the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), who is speaking from a sedentary position, how finance actually works. If you borrow money, you have to pay it back. Tens of millions of hard-working Britons know that. They do it every month, with their mortgages, their loans and their credit card bills. That concept, however, seems to elude the right hon. Gentleman. Well, let us hope that he learns something today: after all, I have always been a great believer in workplace learning.
Ms Angela Eagle
Obviously it is important to get the deficit down. The Government said that they would eliminate it by 2015, two years ago, and now the Budget document makes it clear that it may not be eliminated by 2025. Is that the Secretary of State’s definition of success—being 10 years late with a five-year plan?
Sajid Javid
We have heard no apology from the hon. Lady for the fact that during the 13 years in which Labour was in power, there was an almost threefold increase in the national debt and the country was left with a larger budget deficit than any other major advanced economy.
Seema Malhotra
Can the Secretary of State name a promise that the Government have actually kept in relation to the economy?
Sajid Javid
One kept promise on which the hon. Lady could have focused is the creation of 2.7 million jobs in our economy since 2010. They call themselves the Labour party, Madam Deputy Speaker, but they could not care less.
Oliver Dowden (Hertsmere) (Con)
Does my right hon. Friend think that the £500 billion-worth of additional spending proposed by the Labour party would do anything to increase or reduce the deficit?
Sajid Javid
As always, my hon. Friend makes a good point. Conservative Members know that, if implemented, Labour’s plans would result in not only more spending but more debt. Labour Members would increase the deficit and return us to another Labour record-breaking recession if they ever had the chance.
Several hon. Members rose—
Sajid Javid
I will plough on, but I will give way again shortly.
Figures released since the autumn statement have provided further evidence of the fundamental strength and resilience of the UK economy. Growth is forecast to hit 2% this year, the deficit is on course to reach its lowest level in two decades, and debt as a proportion of national income is forecast to begin falling in 2018-19 for the first time in more than 15 years.
Stephen Doughty
If we borrow money, of course we must pay it back. Why was there no mention of Brexit in the Budget, given that, according to the Office for Budget Responsibility, the cost of Brexit to the public finances could be an extra £58 billion? That is a huge sum, which we would have to repay.
Sajid Javid
My right hon. Friend the Chancellor talked about leaving the European Union. In fact, I think that that was one of the first things that he mentioned in his Budget statement. It is a shame that the hon. Gentleman was not listening.
Most important, the success that I have described is being felt in the pockets of ordinary working people, with real wages forecast to rise in every year up to 2020-21. Britain is home to more private sector businesses than ever before, and that is providing more jobs than ever before. We have gone from record-breaking recession to record levels of employment. But of course we are not complacent: there is much more to do. Going on a wild spending spree simply because of improved growth forecasts would be like going down the pub to celebrate the extension of an overdraft. Our focus on sustainable, stable public finances must continue, and the Budget provides for exactly that.
Mr Reed
The Secretary of State is lecturing the House on how finance works, but we would like to know more about how it works in his Department. He has denied offering Surrey County Council a sweetheart deal, but the BBC has now published a letter from officials in the Department for Communities and Local Government which shows that they did, in fact, offer Surrey more cash in a unique deal. Did the Secretary of State know about that letter when he issued his denial?
Sajid Javid
If the hon. Gentleman had cared to look at a written ministerial statement published on 9 February, he would have seen that it states very clearly that Surrey approached the Department, as do many other councils before a financial statement, asking for more money. It made a request for a business rates retention plan, which was firmly rejected.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. If Members want to intervene, they can stand up and intervene, but we must not have chuntering from a sedentary position; or rather—let us be honest about it—when you are sitting down, you do not speak in here. Otherwise, we cannot hear who is actually speaking. We must hear one person at a time, and now it is Mr Charles Walker.
Mr Walker
Thank you very much for that protection, Madam Deputy Speaker. It is much appreciated.
I thank my right hon. Friend the Secretary of State for visiting Broxbourne last week. May I divert him from Surrey to Hertfordshire, where a much bigger problem relates to an incinerator application? The awarding local authority, Hertfordshire, is also the planning authority in this instance, which strikes me as a conflict of interests. I suspect that my right hon. Friend cannot focus on that now, but will he take into consideration such conflicts of interest in local authorities?
Sajid Javid
I think my hon. Friend will understand that it would not be appropriate for me to comment on a particular planning application, but if he would care to furnish me with more information, I am sure that officials in the Department will take a look at it.
Sajid Javid
I will in a moment.
By maintaining a robust, growing economy, we will be well placed to make the most of the opportunities that Brexit will bring. The Budget also allows us to make additional commitments in a number of areas without putting our hard-won economic recovery at risk. The first of those areas is adult social care. The true measure of any society is how it cares for its most vulnerable citizens. Given advances in medical care and an ageing population, many councils have found it increasingly difficult to meet the costs of care in their communities.
Mr Reed
I am grateful, because social care was the subject of the correspondence with Surrey County Council. When the Secretary of State issued his denial, was he aware that his own director of local government finance, Matthew Style, had sent a letter to the council offering it a unique financial deal?
Sajid Javid
I think I have already answered that question for the hon. Gentleman: there was no deal available to Surrey that is not available to any other local authority.
I have been working on adult social care with my right hon. Friends the Secretary of State for Health and the Chancellor of the Exchequer. The result is a Budget that delivers £2 billion of additional funding for adult social care. Let me be very clear: every single council in England responsible for adult social care will benefit from this additional funding, rural or urban, north or south, Labour or Conservative. To allow councils to move fast so that they can put in place extra social care packages as soon as possible, we will publish the allocations later today. This additional money, front-loaded for 2017-18, will make an immediate difference to people in our communities who need care and support, and it will bring the total dedicated funding available for adult social care in England to £9.6 billion over the course of this Parliament.
I know that this is a novel concept for the Labour party, but more money is not the only answer. This Government are not just dedicated to sustainable economic growth; we also believe in sustainable public services. Demand for adult social care is not about to stop rising, and the challenge of paying for it is not going to go away. The £2 billion announced in this Budget will make a significant difference over the next three years, but the challenge will not suddenly vanish in 2020.
The funding model for the adult social care system is clearly in need of substantial reform and improvement; it has to be made fairer and more sustainable, and we are absolutely committed to doing just that. We are looking at all the options, and later this year we will be publishing a Green Paper setting out a long-term plan that will ensure that proper care is provided to everyone who needs it.
Bob Blackman (Harrow East) (Con)
The announcement of money now will be warmly welcomed across the country, but before my right hon. Friend announces the details of the long-term plan, which we welcome as well, the short-term issue is whether the money is new money or money being brought forward from later years, and whether it will be added to baseline budgets so that local authorities can expect to receive that funding each year, rather than being just one-off funding. Finally, the formula by which this is distributed is key, because different local authorities are under different levels of pressure.
Sajid Javid
I am pleased that my hon. Friend asks that question as it allows me to say more on this issue. First, I can confirm that the £2 billion is all new money; it is new grant from central Government. Secondly, I can confirm that it will be added to every local authority’s baseline over the next three years as that money is distributed. My hon. Friend also rightly asked about how it will be allocated. The vast majority of the money will be allocated using the improved better care formula that already exists and is transparent and open, which will mean that account can be taken of not just the needs of every local authority but of their ability to raise money through council taxes. A small portion—10%—will be allocated using the existing relative needs formula, and the purpose of that is to make sure that every local authority in the country that has responsibility for adult social care is able to access new funding.
Barbara Keeley (Worsley and Eccles South) (Lab)
The Secretary of State tells us that the vast majority of the money will be allocated via the better care fund. We know that the settlement before Christmas caused problems and that a third of councils lost out, including mine which lost out because of the adult social care bill. Will he say how the rest of the money will be allocated?
Sajid Javid
I thought I had just made that clear, but I will repeat it and be a little more specific: 90% will be allocated using the improved better care fund formula and 10% will be allocated using the relative needs formula. These are two existing formulae already in place and, as I said, further details will be published this afternoon, with the allocations and a description of those formulae. I hope that is helpful to the hon. Lady.
We also need to make sure that councils deliver the best possible local care services. There are many excellent examples of best practice around the country, but there is a big difference between the best-performing and worst-performing areas. There is clearly room for improvement across the sector, so alongside the additional funding announced in the Budget my right hon. Friend the Health Secretary and I will shortly announce measures to help ensure that those areas facing the greatest challenges can make rapid improvement.
Looking at health more widely, we are already committed to a £10 billion annual increase in NHS funding by 2020. This Budget goes further still: there is £325 million to allow the first NHS sustainability and transformation plans to go ahead, meaning more efficient and more effective healthcare for local people; and there is another £100 million to fund improvements in accident and emergency departments for next winter, including better on-site triage and GP facilities. That is enough to fund up to 100 new triage projects, taking some of the strain off our A&E departments.
Norman Lamb
The Secretary of State mentions the £325 million, but does he acknowledge that £1.2 billion was taken out of capital spending in the current financial year, and that this money will only go to about six STP areas, leaving the rest of the country without extra capital spending at all?
Sajid Javid
I know the right hon. Gentleman cares about this issue and was deeply involved in it when he was a Minister. I am sure he knows that when the Government set out their plans for the additional £10 billion per annum by 2020, the NHS five-year plan was calling for £8 billion. This goes over and above that. The announcement made in yesterday’s Budget of the additional £325 million plus the £100 million is on top of the £10 billion per annum.
Keith Vaz
Does the Secretary of State share my concern that there is not enough emphasis on prevention for long-term conditions such as diabetes? His ministerial colleague sitting on his left, the hon. Member for Battersea (Jane Ellison), was probably the best diabetes Minister we have ever had, and a lot of what she did was on prevention. Why has more money not been made available for investing in the future and cutting the taxpayers’ contribution in years to come by setting up prevention centres for conditions such as diabetes?
Sajid Javid
The right hon. Gentleman makes a good point about the importance of public health, and he is absolutely right to pay tribute to the former Health Minister, who is now the Financial Secretary to the Treasury, for the work she did. I hope he will agree with me that the work that my hon. Friend and others did shows that they have taken this issue seriously. Some of the measures that the Chancellor talked about in his Budget statement—the so-called sugar tax, for example—will help in the long term with prevention, especially in the case of diabetes.
Health and social care are not the only public services that we are investing in. The Budget funds a further 110 new free schools. It funds free school transport to include all children on free school meals who attend a selective school. It also provides an additional £216 million of investment in existing schools.
When I was a teenager, my comprehensive school refused to let me study the A-levels of my choice; the people there said that it would be a waste of time and that I should leave school and just go and get a job instead. What I did was get on the bus and go to the other side of Bristol to sign up at Filton Technical College. I am proud to call myself a graduate of FTC. The education I received there was second to none. Without Filton, I certainly would not be standing here today—so you can blame them if you wish I wasn’t.
Many opportunities were opened up by my time at Filton, but for years afterwards I would still see eyebrows raised and sneers barely supressed when I said that I had been to a technical college. For too long in this country there has simply not been parity of esteem between valuable technical education and more academic study. As Business Secretary, I began the process of changing that, including by creating the Institute of Apprenticeships. I am very pleased that the introduction of T-levels announced yesterday will continue that process.
We are following the work carried out by Lord Sainsbury, Baroness Wolf and other experts in this field to radically improve technical education, and in doing so we are investing an additional £500 million a year in our 16 to 19-year-olds. We will also be offering maintenance loans for those undertaking higher level technical qualifications at the new institutes of technology and national colleges.
Seema Malhotra
Notwithstanding the challenges Labour has posed on the Budget, I welcome the T-levels and the emphasis on technical education. I think the Secretary of State will acknowledge that Labour Members have also argued for an increase in vocational education. This sends a very important message to the young people in my constituency who I talked to yesterday that there is great value in having this alternative. The challenge will be to integrate it well enough in the workplace so that it leads to real, skilled jobs in the future.
Sajid Javid
The hon. Lady rightly points to the challenge of ensuring that employers recognise the changes. Initiatives such as the new Institute of Apprenticeships, which is employer-led, will help to set the standards for the technical training. That will make a difference in ensuring that employers welcome the new qualifications.
The measures I have talked about so far will improve lives right across the country, but we recognise that local areas across Britain want greater control of their own services and infrastructure. The Government, the Greater London Authority and London Councils have reached an agreement on further devolution for our great capital city. This includes exploring a pilot for a development rights auction model and joint work to identify what elements of the criminal justice services can be delivered locally. We will also be agreeing a second health and social care memorandum of understanding to support work on prevention, integration and estates reform.
However, there is more to this country than its capital city. I should know: I was born in the north, raised in the south-west and elected in the midlands. Today, the Chancellor is in Dudley, launching our midlands engine strategy. This follows the northern powerhouse strategy published after the autumn statement.
Richard Burden (Birmingham, Northfield) (Lab)
The Secretary of State and I are both midlands Members of Parliament. I welcome the focus on the midlands in the Budget. There are some useful initiatives in it. Would he care to comment on the strategy being brought forward today by Midlands Connect? It is charged with looking at the transport infrastructure side of delivering the midlands engine, and in particular at east-west connectivity, and it makes it clear that, for the midlands engine to work and deliver its potential, it will need a long-term perspective and investment of £1 billion per annum over a 30-year period. What confidence can we have that that long-term commitment will be given?
Sajid Javid
As a midlands MP, the hon. Gentleman will understand that the devolution deal for the region will lead to additional funding of more than £1 billion over the next 30 years, which can be invested in priorities such as transport infrastructure. I believe that the right leadership is in place, and that that is exactly what will happen. That is why I am supporting Andy Street to become the next Mayor, and I hope that the hon. Gentleman will join me in expressing his support for him. Perhaps that is what he was just doing.
The hon. Gentleman will also be pleased to hear that this morning we published details of £392 million of additional funding for the midlands, allocated through the third local growth fund. That money will further unlock the region’s potential, funding infrastructure and creating jobs. Much of it will go to Birmingham, for example. The Budget includes £90 million for the north and £23 million for the midlands from a £220 million fund that addresses pinch points on the national road network. The Chancellor has launched a £690 million competition for local authorities across England to tackle urban congestion and get local transport networks moving again. That is a serious investment in our communities that will make a real difference to the daily lives of millions of people and countless businesses. We can make that investment precisely because of the fair, progressive changes that we are making to the tax system. We are levelling the playing field between employees and the self-employed, and 60% of the self-employed—the lowest earners—will gain from these reforms. We are also continuing to reduce corporation tax on all profitable companies, large and small, so that hard-working entrepreneurs keep most of the fruits of their labours.
We are taking a number of steps to make business rates fairer. I have never made any secret of my support for business, and for small businesses in particular. Seeing my dad’s shop struggle was one of the reasons I came into politics in the first place. From the biggest cities to the smallest villages, the local high street and the local pub form the heart of countless communities across our country. That is why the Chancellor and I listened closely when concerns were raised over this year’s business rate revaluation, and why I was happy to work with colleagues across Government to secure action.
The majority of business will see no increase or even a fall in their business rates, but I know that if someone’s rates are going up, it is no consolation to hear that someone else’s will be going down. The bigger picture will not pay their bills, so the Budget introduces three new schemes that will help businesses facing steep rises. The first involves additional support aimed specifically at small and rural businesses that are losing some or all of their rate relief and are facing large percentage increases in their bills as a result. The additional relief will limit the annual increase in the bill for an eligible business to the greater of either £600 or the cap in increase for small properties in the existing transitional relief scheme. That is 5% in real terms in 2017-18. No small business losing some or all of its relief as a result of the revaluation should see its bills rise by more than £50 a month in 2017-18.
The second measure is the establishment of a £300 million discretionary fund for local authorities to use over the next four years. Each billing authority will receive a share of this funding and will be able to use it to deliver targeted support to the most hard-pressed ratepayers in its area. This will allow local authorities to more than double the amount they spend on discretionary relief in 2017-18. Finally, there is a new relief for pubs. This will provide a flat £1,000 discount in 2017-18 on bills for all pubs with a rateable value below £100,000. My Department will be publishing full details later, but up to 36,000 pubs—that is approximately 90% of them— could benefit from the relief. The cost of all three models will be met in full with new money allocated by central Government.
Recent consultations have shown little appetite for wholesale reform of the business rate system. However, there is scope to reform the revaluation process, making it smoother and more frequent to avoid the dramatic increases that the present system can deliver. We will set out our preferred approach to delivering this in due course, and will consult on it before the next revaluation is due. In the medium term, we need to find a better way of taxing the digital part of the economy so that online businesses do not enjoy an unfair advantage. This is another example of the way in which this Government deliver lasting reform alongside immediate investment. It is the difference between a sticking plaster and long-term cure.
Sir Peter Bottomley (Worthing West) (Con)
The Chancellor has announced that there is to be a Green Paper on dealing with unfair clauses and terms in consumer contracts. I do not know whether the Secretary of State has been paying attention to the difficulties that leaseholders are facing, but will he ensure that, one way or another—preferably one way and another—those are taken into account, if necessary through a super-complaint, so that unfair terms can be struck out and those who exploit leaseholders can be dealt with firmly?
Sajid Javid
I commend my hon. Friend on the work that he has done on leasehold abuses. That Green Paper is being led by my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy, and we are considering whether leasehold abuses could be included in it.
We are not just putting billions of pounds more into adult social care; we are developing a whole new strategy to safeguard it for the long term. We are not just tackling the short-term problems created by the business rates revaluation; we are looking at ways to improve the system for many years to come. We are not just continuing to invest in world-class public services; we have also asked Sir Michael Barber to look at ways of making government more efficient so that we get maximum value for taxpayers’ money.
As we debate the Budget, let us not forget that every last penny invested by any Government ultimately comes from taxpayers—from hard-working employees and fast-growing businesses—and they can succeed only if we have a strong, stable, sustainable economy. Without that, there would be no NHS, no outstanding schools, no social care for the vulnerable and no support for small businesses. We have all seen what it looks like when Governments forget that. After 13 years of Labour rule, their Chief Secretary to the Treasury said that there was no money left.
The Leader of the Opposition stood at the Dispatch Box yesterday and made promise after promise. It was fantasy economics, with billions upon billions of pounds in unfunded and unaffordable measures that would undo in an instant everything the people of this country have worked so hard to achieve over the past seven years. We are cutting the tax burden on businesses; he wants to increase it. We are reducing the deficit; he wants to raise it. We want to borrow less; he wants to saddle our children with the bill for another reckless spending spree. Government Budgets are big, complicated things, but they are simple at their heart: if we want to spend more, we have to borrow more, tax more, or cut spending elsewhere. Anyone who says otherwise is not being straight with the British people. There is no such thing as a magic money tree. Sustainable public services can be funded only by sustainable growth. This Budget delivers both. The Opposition would give us neither.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
During the heated interchanges that took place a short time ago, I was wondering whether this was merely a private fight or if anybody could join in—I will take this opportunity to join in. Let me declare first of all that my approach to understanding economics is different from that of the Front-Bench spokesmen, so if the House will forgive me, I will take a couple of minutes to set out why I see things slightly differently so that Members can better understand my critique of particular aspects of this Budget.
I am highly critical of an approach to economics that seeks to mimic the physical sciences and imagines that it can predict the future through statistical means. Great economists of the past of different traditions, ranging from Adam Smith to Karl Marx, would have rightly scoffed at that notion. When I picked up the Office for Budget Responsibility’s “Economic and fiscal outlook” yesterday, it fell open at page 45, which Members will recall contains chart 3.8, on effective exchange rate assumptions. If we look at that chart—some hon. Members are doing so—we can see that the OBR is able to accurately plot the past, which contains wild variations in the exchange rate, and that the biggest variations are often due to not economic decisions, but political ones, such as the EU referendum. The OBR’s prediction for the future, however, is a perfect straight line parallel to the horizontal. The only thing we know is that that is the least likely thing to happen to the exchange rate but, owing to that approach, built-in assumptions make us highly vulnerable to misreading the actions that need to be taken. Straight lines rarely predict human activity.
It was therefore with genuine concern that I heard the Chancellor deem it important in the opening section of yesterday’s statement to read out spreadsheets and forecasts as though they were going out of fashion while entirely failing to mention in any depth the key issues challenging the future economics of this country. As has been said, he failed adequately to address the challenges of Brexit, for example, but I will come to that in a moment.
Allow me to reflect a little on different ways of looking at the economy and to make three key observations. First, an economy is not a machine but a network of relationships among human beings. What do these networks do? They are built upon myriad individual and collective decisions that are affected by an almost infinite array of influences. Not only do we not know the future with any degree of precision, but we cannot know the future with any degree of precision, yet that is what such detailed forecasts pretend, and they are provided without even any margins of error.
We know that decisions are critical, so I thought about how I could highlight the importance of that and some of the things that the Government could do. The best example came to me yesterday when, along with many Members, I attended the WASPI women demonstration. Those people face having to make key decisions about their future, but this Government utterly disrupted the way in which they were able to make rational decisions, because they were given no proper notice about the huge changes being made to their pensions. Rather than helping to give some coherence to the economy to enable people to make as rational a decision as possible, the Government’s actions have caused disruption. The effective operation of the marketplace is being disrupted, not helped.
Secondly, we cannot ignore the influence of politics on economic activity and vice versa. By entirely ignoring the effect of Brexit in his speech, the Chancellor ignored the influence of such a political decision, but some of the effects of Brexit should have been tackled. The failure to guarantee the rights of EU citizens in this country will lead to disruption in the labour market. I am sure that I am not alone in knowing constituents who either have already left or are preparing to leave the country, including people who run small businesses, a German couple, someone in the creative sector, and one or two university researchers.
Keith Vaz
The hon. Gentleman and the SNP should be commended for raising this issue on so many occasions. It is the practicalities that worry me. EU citizens are extremely worried and distressed about their current position, so they need their applications to be processed, but there is no provision in the Budget to allow for those applications to be processed efficiently. Millions of people will have to go through the system.
Roger Mullin
I entirely agree with the right hon. Gentleman. Indeed, that is a great worry to me, as it is to him and to many others. It is about not only the system’s efficiency, but its effectiveness and ability to make the right kinds of decisions in complex individual cases. I have constituents who have been here for many years but are finding it difficult to get various applications through.
Mike Weir (Angus) (SNP)
My hon. Friend is making a good point, as did the right hon. Member for Leicester East (Keith Vaz). This is not just about individuals. There will be an impact on the local economy of areas such as mine that rely on migrant labour for fruit picking and will face great difficulties if that labour is not available. There are huge economic consequences in addition to the personal consequences.
Roger Mullin
That is precisely my point. What was seen as a political decision to exit the EU immediately has consequences for individuals whom we value in our communities. That has implications for the labour market, and the disruption of the labour market has economic consequences. We cannot get away from the fact that an array of influences are coming to bear due to Brexit, but the Chancellor thought that the sensible approach was to utterly ignore them. We also need to pay attention to other matters connected to Brexit. As far as I am aware, the Chancellor said absolutely nothing about how he was going to fill the funding gaps for rural communities, the agricultural sector or university research. Everybody is uncertain about those gaps. How will the Government address them in general? They have already said that they will fill the gap in one or two small instances, but there is no general response. That is another disruption that the Government are not addressing.
Thirdly, whereas the Treasury and the OBR can offer only snapshots of the economy at different times, people who may call themselves part of the classical economic tradition would say that an important feature of the real world is how the market economy operates, which is based on a process of incessant change and growth. Although the Government talk about some aspects of that, such as the importance of research and development and of stimulating innovation, not nearly enough regard has been paid to the importance of how we are to stimulate innovation and, through that process, stimulate growth in the economy.
There are practical implications of that view of looking at things. Policies in recent years—near-zero interest rates from central banks and austerity from Governments—have specifically protected one group of people while harming everyone else. They have boosted the asset prices of the wealthy while destroying the savings pool of those with modest amounts in the bank. The policies harm pensions and penalise savers. They represent everything that classical economists have opposed. Paradoxically, they are the antithesis of the free market and a further illustration of what David Stockman calls “crony capitalism”. It is not hard to find the human embodiment of crony capitalism in this House.
I will now comment on some of the measures. I read an article in the Financial Times by Sir Nicholas Macpherson a few days ago—[Interruption.] He is a friend of the hon. Member for Bootle (Peter Dowd). Sir Nicholas said that Budgets were supposed to be about tax. For perfectly reasonable historical reasons, the United Kingdom has developed an enormously complicated tax system over hundreds of years. When I talked to a Treasury official some weeks ago, he told me that, so far, he had found more than 1,100 tax reliefs in the system. Every tax relief provides an opportunity for a loophole, so it is perhaps not surprising that estimates of the tax gap vary between £36 billion and £70 billion.
Given the changing nature of society, should our tax system and some of our approaches to tax rely on what happened 150 years ago or more? Surely the time will soon come when we have to look systematically at the entire tax system with a view of not just simplifying it, but making it fit for purpose for the type of economy and labour market that we have today. I am therefore disappointed that there was no reference to that in the Budget.
We have already heard excellent points about the problem facing the self-employed, so I will not dwell too long on that, but there is one area in which the Government could help. For 30-odd years before I entered Parliament, I ran small research companies and the like. In the last few years before I entered Parliament, I decided that I was going to take life a bit easier—some chance—so I stopped running a limited company and simply proceeded, with associates and individuals, by picking the jobs that I found interesting and wanted to do. I applied for a job with the Government, but they said that I could not be considered for it unless I became a limited company. The UK Government’s procurement processes therefore encourage people to do what the Budget says the Government do not want them to do. If we are to move down the route of sorting out this part of the economy, as the Government would see it, might it be a good idea for them to practise what they preach by sorting out their own procurement policy?
Too often in this House we hear the Government making policy changes and announcements in which they almost assume that every labour market is like an inner city. When I heard what the Government were doing on self-employment, my thoughts did not immediately go to how labour markets operate in Glasgow or the City of London; I thought about my friend in Skye and some of my friends in the highlands who have no choice but to rely on self-employment. They cannot choose to work for corporations that do not exist. They are what might be called “necessity entrepreneurs”, and they do not work in just one sector. They have to job around and they undertake lengthy travel. They also have absolutely none of the security that people in employment have. The Government think it is a good idea to burden those people all of a sudden, but I cannot see how on earth their chosen proposal will give any support to local economies the length and breadth of this country. We need much more effective analysis of those matters.
Of course, being a Scot, I am particularly concerned about the duty on whisky. Given the state that the Government are in, and given what we face in the future, if there was ever a bad time to make it more expensive to buy whisky, this is it. Surely we do not want to start by penalising one of the most effective products produced in this land that is not only essential to the Scottish economy, but makes a massive contribution to the economy of the whole United Kingdom.
Many Members want to take part in this debate, so I will finish by returning to a group I mentioned earlier. At its heart, the economy is a collective human endeavour. We cannot understand economics abstractly; we have to understand it in terms of its effect on individuals, families and communities. If ever there was an example of how the Government have departed from the genuine concern for humanity that should be at the centre of our concerns about the economy, it is surely their malicious treatment of the WASPI women. We have a long way to go.
Rishi Sunak (Richmond (Yorks)) (Con)
It is a privilege to speak in this debate. In all the excitement from Fleet Street, it would be easy to forget who yesterday’s Budget is really about, so I will share with the House how many of my constituents will feel about it. Whether it is the schoolboy with a first-rate technical education who will now have the chance of a better job and a solid wage, the small business owner who knows that when she speaks up her Government listen, or the mother who knows there is a Conservative Chancellor at the helm making the difficult decisions so that her children have well-funded public services and a country that lives within its means, for the hard-working people of North Yorkshire this is a Budget that delivers where they need it most.
Norman Lamb
How does that schoolboy or schoolgirl feel about an 8% cut in funding per student by 2020 under this Government?
Rishi Sunak
I am not sure that I recognise the right hon. Gentleman’s figure. The schools budget has been protected, and the Government are rightly consulting on the iniquity in the current funding system which means that constituents in my rural area are worse off to the tune of hundreds of pounds per pupil compared with very similar pupils in other parts of the country. I am delighted that the Government are addressing those iniquities in their consultation.
Rishi Sunak
If the hon. Lady does not mind, I will make some progress and come back to her.
I begin with small businesses. My predecessor, Lord Hague, has a well-documented enthusiasm for beer, so it will come as no surprise to Members that pubs are a cornerstone of my rural constituency’s economy. Following in his footsteps is difficult enough, but it is impossible for me to visit a pub in my constituency without seeing a picture on the wall of William pulling a pint with the landlord. Not only is my constituency home to more than 200 pubs, but I am proud to say that it hosts the Campaign for Real Ale’s 2017 pub of the year: the community-owned George & Dragon in Hudswell. I was delighted to be in Hudswell just last Friday when the landlord Stu Miller, his family and team received their award in the loud company of everybody from the village.
In recent months I, like many other hon. Members, raised concerns that the revaluation of business rates risks penalising such small, enterprising businesses. I am delighted to say that this was the Budget of a Chancellor who, like any good barman, listens to our concerns. For the landlords who run them, the jobs that depend on them and the communities that enjoy them, this Budget’s £1,000 business rate discount will make a real difference to many pubs at a time when money is still tight.
But pubs are not the only rural businesses that the Budget will help. Auction marts and livery yards across North Yorkshire have seen particularly steep rises in their business rates because the idiosyncrasies of such companies are not well understood by officials and because the last revaluation coincided with the disastrous foot and mouth epidemic. Such idiosyncrasies are more than even the most ingenious civil servant could be expected to foresee. Auction marts, livery yards and riding schools are particularly important to the fabric of our rural community, so I thank the Chancellor for the extremely welcome creation of the new £300 million discretionary business rates fund, which will put decision making back in the hands of communities and allow businesses in constituencies such as mine to benefit from the local knowledge of councils in ensuring a smooth transition to the new schedule.
Stephen Doughty
The hon. Gentleman was talking about pubs, and he will know that I am a keen pub goer. Indeed, I was in a pub in his constituency the other day, enjoying a pint with my cousins. What does he have to say to customers in pubs, who are going to face a 3% increase in the price of a pint?
Rishi Sunak
What I say to customers and to the hon. Gentleman is that I am sure that the Minister doing the wind-up will be able to say how much better off customers are from having benefited from several years of freezes in beer duty that would otherwise have been put in place. I am sure they would also like to hear that this Government will be consulting on new duty rates for white cider and still wine to see what more could be done to help customers who drink those alcoholic beverages. Lastly, let me say that I would welcome him back to my constituency any time and will be happy to share a pint with him next time he is there.
Seema Malhotra
I have not yet been to a pub in the hon. Gentleman’s constituency, but I recognise the benefits for pubs in my constituency. May I extend the question about customers in pubs, many of whom may be self-employed? Have they reflected with him on their concerns about the proposed rise in national insurance?
Rishi Sunak
I thank the hon. Lady for raising that issue. If she will allow me, I will deal with that exact point later in my speech.
The last measure in support of local businesses that I wish to highlight is the £690 million fund available for local authorities to address urban congestion. Congestion is not something one would ordinarily associate with the rural idyll of North Yorkshire’s villages and market towns, but the residents and community of Northallerton are relentlessly frustrated by the level crossing near our vibrant and diverse high street, as its impact on local business is substantial. I have convened meetings of local authorities and Network Rail to discuss plans to alleviate the congestion, and I very much hope the Chancellor’s new fund can help us.
As the Chancellor so rightly pointed out in his Budget speech, supporting our businesses is a means to an end, not an end in itself. If our children are to benefit from the more than 2 million new jobs created since 2010, they will need the right skills. The 2.4 million apprenticeships created in the last Parliament are a momentous achievement, but we must also recognise that although most of us think of apprentices as young people, 16 to 19-year-olds—school leavers—account for less than 10% of the increase in new apprentices. That means that too many school leavers are still sticking with an inappropriate classroom education rather than a first-class technical one. The Chancellor’s announcement of new T-levels is a crucial step in redressing the balance and closing for good the gap between the classroom and the factory floor, for which our economy has paid a high price for too long. I therefore welcome the new half a billion pound investment in increasing training hours, the streamlining of technical qualifications, the provision of high-quality work placements and the introduction of maintenance loans. Taken together, that is a powerful package to help to ensure parity of esteem between technical and academic education.
Yet I also urge Ministers to continue to look carefully at my campaign, supported in the recent industrial strategy, to create a UCAS-style system for apprenticeships. This branded, one-stop-shop portal would not only end the classroom divide between those applying to university and those applying for apprenticeships, but, by bringing everything together in one place, help businesses to connect more easily with young apprentices in schools.
Turning to national insurance, I, like many Conservative Members, have always believed in low taxes as a spur to economic growth, but when a Government inherit a deficit of £100 billion the greatest priority must be returning to sound finances and doing so in a way that is fair. I believe it is right that those who benefit from public services make an appropriate contribution to paying for them, and that is what this Budget’s changes to national insurance will ensure. Sixty per cent. of self-employed workers—those earning less than £16,000—will see a decrease in their national insurance contributions as a result of the removal of the regressive class 2 band. Workers earning up to almost £33,000 will be no worse off when these changes are taken together with the increases to the personal allowance, and for those earning more the average increase in contributions will be a few hundred pounds. It is right to ask: is this fair? I believe that it is.
Historically, different rates of national insurance for the self-employed and the employed reflected significantly different benefits and access to public benefits, but that difference is no longer there. Indeed, changes to the state pension, which is partly funded by national insurance, mean that self-employed workers now benefit from an extra £1,800 annually in pension—this is something they would need to save up to £50,000 for to receive in the private sector. Similarly, self-employed couples starting a family can now benefit from almost £5,000 in tax-free childcare support.
In this House, I always hear calls for investment in public services, such as this Budget has provided for in social care, but those investments need to be paid for. Her Majesty’s Revenue and Customs has estimated that it is losing about £5 billion a year from the increasing trend of self-employment, so it is right that we make small changes to ensure that everybody contributes to the public services and benefits we value. It is important to recognise that even after these changes the tax system will still recognise the particular issues faced by self-employed workers and will favour them in its tax rates and treatment. They will benefit from a lower rate of national insurance than employees; they will still not bear the cost of employers’ national insurance, which is levied at a substantial 13.8%; they will still have the ability to offset losses and gains over years; and they will still benefit from a more generous treatment of tax-deductable expenses. I am also encouraged that in the longer term the Government are committed to looking at the whole issue of the increasing trend towards self-employment, and to ensuring that we reflect those changes in the economy in our tax system and ensure that everybody is treated fairly. This small change is thus necessary to protect the things we value, and it is fair and proportionate.
In conclusion, we have all learned to be a little cautious of economic forecasts, but if the Office for Budget Responsibility is right, the first students to sit their T-levels will do so in a country with 1 million new jobs, double today’s productivity growth and, for the first time in two decades, national debt falling as a percentage of GDP. This Budget, like the ones that came before it, is building a country where our businesses will not have to pay for the profligacy of the past and our children can look forward to a bright future. Nothing could be more important than that, so I commend this Budget to the House.
Graham Jones (Hyndburn) (Lab)
On a point of order, Madam Deputy Speaker. Yesterday in regional newspapers, there was a malicious and false report that the Labour party had somehow entered into an arrangement with the British National party in the seat of Pendle. This matter was raised in business questions by the hon. Member for Pendle (Andrew Stephenson). Having just spoken to the leader of the council in Pendle, I am absolutely assured that no such deal has taken place. In fact, the leader of the council has never spoken to the BNP in eight years, and the Labour party does not speak to the BNP in Pendle unless it is absolutely necessary to do so in committee. These reports should be corrected and I wondered how best to go about doing that, Madam Deputy Speaker.
Madam Deputy Speaker (Mrs Eleanor Laing)
I can quite understand why the hon. Gentleman wishes to make his point of order, but, as he knows and as the House appreciates, it is not a point that can be dealt with by the Chair. However, he asks how he can set the record straight, and my simple answer is: he has done so, and I am sure his setting straight of the record will be properly recorded in Hansard.
Ms Angela Eagle (Wallasey) (Lab)
It is a pleasure to follow the hon. Member for Richmond (Yorks) (Rishi Sunak), whose constituency is in my home county, Yorkshire. The last time I was in his neck of the woods, it was not to go to a pub—as many of my hon. Friends seem to have done—but to fight the by-election that his predecessor fought and won. I remember wandering forlornly through a village in the constituency, door-knocking with my much-missed colleague, Mo Mowlam. We did the entire village and found not a single Labour voter, so I think the hon. Gentleman is probably fairly safely ensconced in Richmond (Yorks), pending an electoral earthquake—although, of course, they do happen.
I was disappointed by the Chancellor’s statement yesterday. His first Budget did not rise nearly seriously enough to the challenges faced by our country in these times of great volatility and change, which we must now confront together. We needed a wider and bolder vision. We needed radical reform to rebuild our prosperity in a post-Brexit world and a sustainable plan to deal with our ageing population and all the pressure that that brings. We needed a recognition that we must recast our tax and benefit systems to deal with the world to come, rather than the world as it was when Beveridge produced his blueprint for a welfare state, 75 years ago.
Instead, we got a Budget that made no mention of the greatest challenges facing us today. There was no mention whatsoever of climate change. There was no mention of rising poverty and inequality, or of public expenditure cuts stretching to the far horizon. Perhaps most surprisingly of all, there was no serious mention of Brexit. This was an occasion on which the Chancellor ought to have set out a bold reforming vision for the UK. But he did not. He left the grimmest news unspoken; perhaps he hoped that nobody would notice.
On living standards, the Office for Budget Responsibility revealed something that millions of people in this country already know: real pay levels have not yet returned to their pre-2008 peak. The autumn statement revised down the forecast for real earnings by £1,000 by 2020, and the Budget will do nothing to change that. That means that workers are facing 13 wasted years of lost earnings and stagnating pay under this Government. To make matters worse, the Government’s flagship promise of a £9 so-called living wage, which in itself was never going to be enough, has been revised down to £8.75.
The modest growth in our economy, which is at historic lows, has translated into real earnings stagnation for the vast majority of people. The fact that more than half the 13.5 million people in this country who are now living in poverty are in work is not a problem the Chancellor was troubled enough to mention in his speech, but it is an indictment of his Government’s record, and it is one of the most serious social problems facing Britain today.
The Budget papers reveal that consumer debt is once more exceeding its pre-crisis peak; it is this unsecured debt that is driving what modest growth there is in the economy. The Bank of England is right to be worried about it, but it did not trouble our Chancellor enough for him to refer to it at all in his Budget statement. These facts alone show just how much the Prime Minister’s just about managing families are being made to shoulder the burden of a painfully slow recovery from the financial crash, yet there was simply not enough help announced for them yesterday.
On infrastructure and investment, the perfunctory re-announcement of the £23 billion in the rather grandly named national productivity investment fund is to be welcomed, although it has been announced many times before. But, at 2.6% of GDP, it remains far lower than the levels of infrastructure investment achieved by the previous Labour Government, and well below the OECD average. That is going to put us at a continuing long-term disadvantage in a global race in which we are more isolated and at risk than ever before, after the Brexit vote.
On investment generally, the OBR forecasts that Brexit and the uncertainties surrounding it are likely to depress private investment going forward, and uncertainty about trade arrangements will hit exports and inward investment, too, offsetting any beneficial trading effect of the depreciation of sterling. This is not a credible platform from which to launch any serious attempt to prepare our economy for the challenges of a post-Brexit world and enable us to secure our prosperity for the future.
This is a Budget that continues to hit the poorest the hardest. The Red Book demonstrates that the cuts to public services just go on and on into the future. We are told that the target for eliminating the deficit, which was originally meant to be achieved in 2015, might now not be accomplished until 2025—a 10-year delay on the original five-year plan. The Budget documents reveal a massive 20% cut in the funding allocated to local government next year, down from £8.2 billion to £6.5 billion. That puts at risk services for the most vulnerable and threatens to rip our social fabric apart.
There is an 8% per-head cut in education funding, which will threaten to bankrupt some schools—certainly in my constituency—while the extra funds announced for education are ring-fenced for the Prime Minister’s grammar schools vanity project. Once again, some people are being left behind while a chosen few, in certain chosen areas, get all the advantages. Also unmentioned by the Chancellor in his statement yesterday was a 6% real-terms cut in non-pension-related spending on social security, which will hit the most vulnerable the hardest.
The pressures of our changing demography make it clear that there must be urgent and radical reform of our system of social care, and in social justice more broadly. The changes to our labour market, which are happening on a global, national and local level, along with the profound implications of rapid technological change, make it imperative that we reform our tax and benefit system to make it fit for the future. We must be willing to look again at the tax base in order to guarantee real security for everyone in our society.
In both those areas, though, the Government have been caught out by their cynical electioneering attacks on Labour and their even more cynical election promises to the people. After participating in cross-party talks following the Dilnot report on adult social care and agreeing a joint approach to the challenges we face, in 2010 the Tories cynically produced propaganda posters condemning what they called “Labour’s death tax”. Thus, for short-term, cynical electoral gain, they equally cynically ruled out the changes we need to make as a nation so that social care can be put on a sustainable footing for the future.
The Tories did the same with what they called “Labour’s tax on jobs”—proposed changes to national insurance contributions. In 2015, they even produced the Tory “tax lock”, a pledge that it has since emerged was manufactured to fill a hole in the general election grid. It was described by the No. 10 adviser who thought it up as
“the dumbest economic policy that anyone could make”.
Stephen Doughty
My hon. Friend mentioned previous claims by the Conservatives. I have the advert that they put out during the last election, which made clear that any rise in national insurance would be
“costing jobs and hitting hardworking taxpayers”.
What has changed?
Ms Eagle
Exactly. My hon. Friend will agree that, with their cynical use of short-term advantage and the way they have electioneered on it, their pledges and the way they have campaigned, the Conservatives have actually made it much harder for us to make the reforms that we as a society need to make to our tax and benefit system and our social care system. That is the ultimate in irresponsibility.
Yesterday, the Chancellor tore up the tax lock. He can dance on the head of a pin and claim that the lock did not apply to class 4 national insurance contributions all he likes, but that was not on the side of the bus and no one will believe a Tory election promise ever again. The Chancellor has learned a tough lesson: if he wants to be for the just about managing, he needs all the tools of government available to him. He cannot tax-lock himself out of all his options and end up having to plug the gap in social care by taxing the self-employed. The Government have been hoist by their own cynical petard.
We are willing to work with the Government on both the challenges that I have mentioned—social care and how to arrest the alarming rise in self-employment, which brings precariousness for far too many people. Self-employment is often just apparent self-employment, and it is quite often very low paid and precarious. We need to ensure that the self-employed are properly protected and have proper access to the protections that employees take for granted.
Seema Malhotra
As usual, my hon. Friend is holding us spellbound with an excellent speech. The former Secretary of State for Work and Pensions, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), in a sense blamed the Tory manifesto for being wrong more than he blamed the policy that the Government introduced yesterday and the way that they did so. Does she agree that those are both problems that the Government clearly need to learn from?
Ms Eagle
I agree. We saw a cynical dash from the Conservatives to make short-term promises to get elected, and we saw them campaign even more cynically on those promises in the hope that when they had to be broken nobody would notice. But the Government’s actions are making it much harder for us to have cross-party support on anything, and they have also made it very difficult for anyone to believe any single one of their manifesto pledges again. The Government have increased distrust of politics. That is the legacy of their behaviour on social reform and tax reform, which are vital if we are to prosper in the future.
Stephen Doughty
My hon. Friend is being generous in giving way. She talks about mistrust having been created. Does she agree that people out there often say to us that they do not feel that politicians in this place—the Government—actually understand the realities of life? Life for the self-employed, in particular, is often very difficult. They have many costs on top of those we would normally expect. They need increased insurance, find it difficult to get a mortgage and have to pay out for additional things. This Government simply do not understand the reality of life for self-employed people.
Ms Eagle
That may be the generous interpretation, but there are other interpretations that involve the cynicism I have talked about. This is the issue: if the Government really wanted to make a reasonable reform to the tax system and national insurance contributions to take away the current tax incentive for people to self-incorporate or real employers to force people into becoming apparently self-employed, they would not have made such a reform. They would have said, “We’re going to introduce these new benefits for the self-employed and take away the tax advantages and disadvantages of being self-employed, and finally we will bring forward a much more stable tax base and tax system.” That could be supported, but it looks like the Government have changed national insurance contributions to fill a fiscal hole in social policy. That is a grubby way to behave, and it is in breach of the Conservatives’ election manifesto. That is not the way in which the Chancellor should have made this change. He may learn, but in this Budget all we got was green Hammond rotten eggs.
Mr Dominic Raab (Esher and Walton) (Con)
It is a pleasure to follow other hon. Members. I hope that the hon. Member for Wallasey (Ms Eagle) will not be too offended if I say that I agree with more of what my hon. Friend the Member for Richmond (Yorks) (Rishi Sunak) said than what she said, but I find that the Budget debate always produces insightful contributions from both sides.
Ms Angela Eagle
Just to reassure the hon. Gentleman, I suspect that I would have been even more offended if he had agreed more with me than with his hon. Friend.
Mr Raab
It is good to at least start on a point of consensus.
When I hear the leader of the Labour party or the shadow Chancellor talking about the economy, I sometimes feel that there is a parallel universe. I listened carefully to the right hon. Member for Hayes and Harlington (John McDonnell) on “The Andrew Marr Show”. He explained that the economy was not growing fast enough. In fact, the British economy was the second fastest growing in the G7 last year, as it is this year, despite all the doom and gloom around Brexit. He needs to look at the economic facts.
The right hon. Gentleman went on to say that real wages are falling, which hon. Members have returned to on several occasions. I will talk about cost of living pressures, but the official figures are crystal clear. Real wages have been rising since September 2014 and, according to official data, are set to continue rising. [Interruption.] If the hon. Member for Heywood and Middleton (Liz McInnes) wants to intervene, I would welcome that, but otherwise she should go and check the facts. The raw truth is that employment is at a record level, real wages have been rising since 2014, income inequality—I know that she, like me, cares about that—is at its lowest in 30 years, the FTSE is at a record level, and there has been a fresh wave of investment since the referendum, including, most recently, the commitment by James Dyson.
Seema Malhotra
Does the hon. Gentleman agree that although he may be able selectively to cite headline statistics, there is a reality in our constituencies that comes through in our casework? Schools and parents tell me about people not being able to afford school uniforms, and people are relying on food banks. Does he acknowledge that we need to face that reality and that our economy and economic policy should deal with those things?
Mr Raab
I welcome the acceptance of the official figures at least, which was implicit in what the hon. Lady said. I accept that there are cost of living pressures, not least given that inflation is creeping up, but let us face it: inflation is still well below the Bank of England’s headline 2% target. I will address cost of living challenges and what we should do about them, but we live in the real world and we should not chase the Labour party leadership’s socialist pipe dreams, because they will do nothing to deal with cost of living pressures other than precipitate a lack of confidence and investment in the economy and falling living standards as a result of increasing unemployment.
I thought that the hon. Lady was going to intervene to welcome Dyson’s investment in a new 517-acre research facility in Wiltshire. Jaguar Land Rover is investing in creating the new Velar model, which will be exclusively manufactured in Solihull. The wave of investment is coming right across the country. There is a resilience and strength in the British economy, and fresh investment and enthusiasm about the opportunities that lie ahead. Having said that, I want to be careful not to allow any sense of complacency to creep in.
This Budget is all about the whole package. In what I like to think is my still relatively limited time in this place, I have never known a Budget that has not involved compromise. Trying to put together a package is the serious business of government. Hon. Members of all parties can be quite quick to allow the positive stuff that we like, whether that is taxation cuts or extra investment—I have been guilty of that in the past—but we also have to ’fess up and face up to the difficult decisions that have to be made. That is the serious business not just of politics, but of government. Look at what the leader of the Labour party said yesterday; he and his party are so unfit to govern because they are not willing to face up to those difficult decisions.
Stephen Doughty
The hon. Gentleman talks about not being positive enough about different things but, a moment ago, he tried to present quite a false impression of the inflation rate. The PriceStats indicator, which is actually a much more accurate indicator of the inflation rate, suggests that inflation has potentially risen to 3.3% in recent weeks. As my hon. Friend the Member for Wallasey (Ms Eagle) pointed out, that is certainly being reflected in the sorts of pressures that constituents come to us with. Does the hon. Gentleman not recognise that inflation is, in fact, potentially much higher than he suggests?
Mr Raab
I love to have a good haggle over stats, but the fact that the hon. Gentleman said that the situation is “potentially” worse than I indicated suggests that he does not have full confidence in his intervention. The raw truth is that I am citing the consumer prices index for inflation, which is the one that everyone uses, from economic forecasters to the Treasury and Ministers. If the hon. Gentleman wants to use a different one, it may, in fairness, be him who is trying to be selective.
Let us look at what the Government proposed and brought forward for the economy in this Budget. We continue to cut corporation tax, which is critical for encouraging businesses to come here and invest, and, from looking at the report from the Centre for Policy Studies, is also a good way of generating additional revenue because it is a dynamic tax cut. We want to create more revenue not just to spur business growth, but to pay for the precious things such as social care that we want in our society and in our public services. We need a strong economy to ensure that we remain at the most cutting edge of our competitiveness. I am afraid that the Achilles heel of the current Opposition is that they have no sense of what credible economics look like.
On top of corporation tax, I was delighted to see the Government address the issue of business rates, and to see the £400 million package to ease the transition towards reform of the wider business rates system particularly to ensure that smaller businesses on the high street are not unduly affected or penalised by the changes. I know from my own experience—particularly in a constituency such as Esher and Walton, which is really a constellation of towns and villages with a strong high street, but with a disproportionate number of smaller business—that the measures to ease the business rates transition will be well received. We want to ensure that the high street is able to compete with online businesses, and I was pleased that the Chancellor directly addressed that in the Budget yesterday.
As well as the measures to stimulate the economy and to ensure that we are at our most competitive, the Budget includes significant investment in skills. There has been a record level of investment in schools under this Government, and we have seen fresh money allocated to new schools and existing schools. I listened very carefully to the hon. Member for Wallasey. The truth is that 1.8 million more children are studying in state schools that are deemed good or outstanding than in 2010, when the last Labour Government were in office. That is probably the accomplishment of this Government of which I am most proud. The question now is not how we rest on our laurels, but how we build on that accomplishment.
Yes, we want to ensure that with a new wave of grammar schools the academically gifted—whether they come from the humble background of a council estate or a rural backwater—have the opportunity to make the very best of their talents. We also want to ensure that the bright but not necessarily bookish have a vocational route, through technical training or otherwise, so that every child who has talent, works hard, grafts and has something about them—no matter what their disposition—can make the very best of their individual abilities. That is what is so positive about the package brought forward by the Government yesterday, with T-levels as well as the new money going into grammar schools and existing schools.
Aside from schools and education, which are important for skilling up our economy, driving forward social mobility and ensuring that we build the vision of the meritocratic society as well as the enterprise economy, money has been allocated to social care because we have a Government who are willing and able to take difficult decisions. An extra £2 billion will go into social care on top of the £10 billion we will invest in the NHS by 2020. My constituency of Esher and Walton is a classic Surrey constituency in the sense that we have an ageing population, which is good news because people are living longer, but we need to ensure that we can cater for conditions and healthcare needs. Although there are many longer-term questions about financing and what model of social care we have, the extra money going into social care will be a crucial first step. I know, from looking around at the pockets of elderly poverty even in a relatively affluent constituency in Surrey, how important it is to ensure that we have that support, but that support is only there because we have a Government who are willing to make difficult decisions.
The hon. Member for Feltham and Heston (Seema Malhotra) made an intervention about the cost of living, which is a critical issue to address. The reality is that this Government are raising the national living wage to £7.50 an hour and have taken 3 million of the lowest paid out of income tax. Let us be very clear that for the average taxpayer, that is now the equivalent of £1,000 extra in their pockets each year as a result of the difficult decisions that a responsible Government are able and willing to make. Further measures in the Budget deal with tax-free childcare, and the doubling of free childcare for working parents with three and four-year-olds. I am not sure that I am eligible, but I do have a two-year-old and a four-year-old. As a member of a two-salary couple and team, I know the importance of such support, and I welcome it.
Difficult decisions are made in Budgets. There are issues and points in this Budget that I did not like much, but the truth is that we have to look at Budgets in the round and as packages. I will be honest that I struggle with the changes to national insurance for the self-employed. I am in the business of cutting taxes, not raising them, particularly for the entrepreneurial classes, but we need to know how we are going to fund everything we want to do in the Budget. That is the challenge that any responsible Government and, indeed, any credible Opposition, have to face. The advantage we have is that we will have a separate free-standing piece of national insurance legislation. The Minister, who is incredibly assiduous and very attentive to the concerns raised by hon. Members in this Chamber, will want to ensure that we get the package for national insurance right.
The Chancellor has raised the issue of the lack of parity between the way in which the employed and self-employed are treated. Of course, there are advantages and disadvantages to both statuses, and it is absolutely right to ensure the right, equitable treatment for both. I do not want us to penalise to entrepreneurial people in our society but, at the same time, I want to ensure that we have a system that is fair. Conservative Members must be extremely mindful that we satisfy not only the letter, but the spirit of our manifesto commitments. The advantage of having this free-standing legislation—I can see the Minister scribbling away—is to ensure that we get the right balance on this sensitive issue.
Mr Raab
I want to make one more point about the other aspect of the Budget that I struggled with a little bit—cutting the dividend-free income for savers. We have talked a lot in this Chamber and in the Government about the importance of encouraging people to save, given the challenges of debt, credit and household debt more generally. I want to ensure that we are not sending the wrong message with this change, when we actually want to incentivise and encourage savers.
I am therefore very honest and upfront about the challenges. The problem is that all the things we want—from the extra money for social care for the vulnerable, to the extra money for skills to drive forward social mobility, to extending the personal allowance to cut income tax—have to be paid for. I welcome, support and reinforce the Government’s inclination to face difficult decisions head-on and to make sure that we get the balance right, rather than just having a Budget that satisfies newspaper headlines but does not stand the test of time. The Government therefore have my support, and I know that they will want to look at the nuances of some of these measures.
In contrast, I was very struck by the speech from the leader of the Labour party yesterday, because it did not put forward any credible alternative. It rather felt like he was tilting at socialist windmills—like he was somehow lost in a field ranting at the wind. The tragedy for the Labour party is that, on some of these issues, where there are genuinely choices to be made, it has no credible alternative. That is what I think the public will see: a Government bracing themselves and taking difficult decisions, and a Labour party, under its current leadership, that has talked about £500 billion of extra spending that it cannot fund.
I pay tribute to the hon. Member for Nottingham East (Chris Leslie), the former shadow Chancellor, who rightly pointed out that satisfying those spending commitments would require us to double income tax, double national insurance—there was no mention of that from Labour Members—double council tax and double VAT as well. I am not sure, therefore, that Labour Members are really in a position, in the absence of a credible alternative, to start picking holes in one or another aspect of the Budget put forward by the Government.
Mr Raab
Let me give the hon. Gentleman my three points; I will look forward to hearing his intervention after that.
There is also the whole concept of people’s quantitative easing—the idea that the Bank of England should print more money to spend on some of these ivory-tower, socialist-pipedream projects. That is the Mugabe school of economics; it is deeply irresponsible. Again, if we are talking about difficult decisions, that would be far worse for savers than any of the difficult decisions that have had to be made in this Budget.
Finally on the alternatives put forward by the Labour party, the leader of the Labour party is actually on record as being amused about the possibility of raising the basic rate of income tax by 5%—I have the quote here, but I will not embarrass Labour Members by reading it. Honestly, of all the tax rises in the world to contemplate, a rise in the basic rate is deeply irresponsible, not just economically but socially.
Peter Dowd (Bootle) (Lab)
Why do you not talk about your manifesto instead of our manifesto? Why do you not talk about the promises in your manifesto that you have broken?
Madam Deputy Speaker (Natascha Engel)
Order. The hon. Gentleman should remember that he is speaking through the Chair. It is not my manifesto—it is the manifesto of the hon. Member for Esher and Walton (Mr Raab).
Mr Raab
Madam Deputy Speaker, I thought for a moment that you were going to adopt the Conservative manifesto. Fortunately, you have resisted that temptation.
The shadow Minister makes his point, but I have addressed in the round the Budget that the Government have put forward. I have explained the bits I enthusiastically embrace and talked about the difficult decisions we have had to make. However, the truth is that the Labour party is incapable of putting forward a credible package.
Several hon. Members rose—
Peter Dowd
I beg your pardon, Madam Deputy Speaker.
The bottom line is that we should be talking about the broken promises from the Conservative party manifesto. However, the national infrastructure plan involves £500 billion of expenditure—some public expenditure and some private—so I would ask how the Government are going to fund that.
Mr Raab
I am not sure that it is incumbent on me to fund the commitments that the Labour party may or may not be willing to make.
The truth is that we have a properly funded Budget in which difficult decisions have been made. Investment is being made in the right things, such as skills and social care, but—
Mr Raab
No, I will not. The hon. Gentleman has had plenty of opportunity. I have allowed him to intervene on me and I am looking forward to hearing his speech. However, the truth is that he is unable to answer the question of how it can possibly be right to raise the basic rate of income tax. I would just point out that, as a result of the extension of the personal allowance, the average taxpayer will receive £1,000 a year extra.
Mr Raab
No, these figures have been properly costed. From the Institute for Fiscal Studies to the official figures, it is clear that, by raising the personal allowance, we are putting £1,000 back into the average taxpayer’s pocket. At the same time, the Labour party—[Interruption.] Not just the uber-rich—we are used to hearing about that predictable bugbear from the Labour party.
Mr Raab
Having taken two interventions from the hon. Gentleman, I have to say that the suggestion that I am frit is a bit silly.
The truth is that the Labour party will want to put up taxes on not just the super-rich, but low and middle-income families. Frankly, that is fantasyland.
Mr Stewart Jackson (Peterborough) (Con)
Does my hon. Friend agree that the Budget statement is about not just arcane statistics and numbers, but societal change for the better? Did he notice, as I did last week, that the number of families in which no one works is at an all-time low under this Government? We have therefore delivered economic stability and positive societal change.
Mr Raab
My hon. Friend hits the nail on the head. The key thing the Government can do is to create the conditions for record levels of employment, with real wages rising, and with inflation—yes, it needs to be looked at—stable and under careful control. Even on the worst-case scenarios that have been forecast, inflation would rise above 2%, but come back down shortly thereafter.
The reality of this Budget is that we have a Chancellor and a team of Ministers grappling with difficult decisions at a sensitive time, when there is a degree of uncertainty because of the referendum result, and coming up with a sensible, measured package. We have the Labour party talking about printing money and £500 billion of spending commitments when it has no idea where it can fund them from, and we have a Government who are committed not to tilting at socialist windmills, unlike the leader of the Labour party, but to building a better Britain—not only an enterprise economy but a meritocratic society for our children—and to making sure that the most vulnerable, and particularly the elderly, have the social care they need. [Interruption.] If the hon. Member for Bootle (Peter Dowd) would like to intervene on me rather than chuntering in frustration—more in frustration at his own party, I suspect, than at me—I will give way.
Peter Dowd
The hon. Gentleman can make up as many false “facts” as he would like, but the fact of the matter is that he is making them up. He should concentrate on his own manifesto. He still has not answered the question about the £500 billion in the Government’s national infrastructure plan. Where are the Tories getting the money for that from?
Madam Deputy Speaker (Natascha Engel)
Order. We are mulling over making up false facts. I think we are starting to get quite close to language that is not really acceptable in Parliament. We should just be aware of it.
Mr Raab
As ever, Madam Deputy Speaker, I will be very mindful of your advice, and I will curtail my speech.
The truth is that Budget week is the week for difficult decisions. The Government set out their priorities—the media will always pick apart whichever bits they want to—but they have to put in place a package that strikes the right balance, and I commend them for doing so. I know the Minister will have taken on board the concerns that I and other hon. Members have raised. However, the contrast between a credible, serious Government and a leader of the Labour party and an Opposition who have abdicated responsibility for coming up with a credible alternative is palpable for all to see—everyone inside this House, but also the public at large.
Mr Steve Reed (Croydon North) (Lab)
We are here to consider the Budget that the Government have put forward for the country. I want to speak about its impact on my constituents.
Like the rest of the country, Croydon is experiencing a social care crisis. Older and disabled people regularly visit my office to say they cannot get home care and that they do not get adequate support when they leave hospital. Local charities are telling me that the funding that they need has dried up as well.
After the Chancellor ignored the social care crisis in his autumn statement, we were hoping for better this time. Although £2 billion extra over three years is a welcome start, it goes absolutely nowhere near resolving this crisis. These services have already been cut by £5 billion since 2010. Some 26% fewer people receive help today, even though there are more older people needing such help. The King’s Fund projects a £2.8 billion funding gap every year by the end of this decade, but only £2 billion is being made available over three years, so all I can say to my older constituents and the disabled people who come to ask me what the Government are doing to help them is that the Chancellor has responded to their plight by imposing yet more cuts.
It is galling to see the Department for Communities and Local Government offering Surrey County Council a sweetheart deal that is denied to Croydon and people living in every other part of the country. It is not only Surrey that has this problem to deal with, but every local authority. Every community is struggling with it. I regret immensely that the Secretary of State failed to answer my question about whether he knew in advance about the letter that was sent from his Department to Surrey County Council offering it a sweetheart deal. We need to know whether he knew about that in advance of its being withdrawn. If he was party to it, the House needs to know that that is how he is attempting to operate within his Department and, if he did not know about it, the House needs to know that he has no grip on what his officials are up to. His constant evasion of the question will not suffice. We need answers from the Secretary of State; I am sure that in time we will get them.
Particularly painful to my constituents will be the planned hike in national insurance contributions for the self-employed. Croydon North is one of the most ethnically diverse constituencies in the country. Unfortunately, unemployment is particularly high among many minority communities. Their desire to work and their strong enterprising spirit means that many people from these communities set up their own businesses. Self-employed people work as taxi drivers, van drivers, hairdressers, plumbers, decorators, childminders—all sorts of jobs. They work very long hours, often for very modest pay. In Croydon, well over one in 10 workers are self-employed. It makes no sense whatsoever to clobber them with new tax rises. They need help and support, not further barriers to work.
Mr Jackson
So what does the hon. Gentleman say to the respected Institute for Fiscal Studies and the much respected Resolution Foundation, which are today stating specifically that the measures that he identifies are progressive and ameliorate inequality in the tax system between people on pay-as-you-earn and those who are self-employed?
Mr Reed
Perhaps Conservative Members, including the hon. Gentleman himself, should have thought about that before they stood for election on a manifesto that said absolutely categorically that there would be
“no increases in...National Insurance contributions”.
It does nothing for trust in politics when politicians say one thing to persuade people to vote for them but then, once they are elected, do the polar opposite. They are helping to further break trust in this House and trust in politics. This is not down to the IFS; it is down to Tory Central Office, the Prime Minister, the Chancellor of the Exchequer and—dare I say it?—the hon. Gentleman himself, if he is going to vote for the proposal. Given all the uncertainty about Brexit—it is shocking that the Chancellor had so little to say about Brexit in his statement—small businesses and the self-employed need reassurances, not broken promises.
I now turn to those in employment, because this Budget has very little to offer them either. Low pay and stagnant wages have become endemic. Most people have seen no growth in household incomes in the 10 years since the global financial crash; indeed, many have seen a real-terms cut. The British economy might be getting richer, but British working people are getting poorer. Ours is the only advanced economy in which wages fell while the economy grew between 2007 and 2015. In Croydon, average earnings have fallen by 7.6% in real terms, and today more than one third of my constituents earn less than a real living wage. So where has the money gone? Who has taken the proceeds of that growth? It is not the vast majority of people in Croydon or across Britain who work around the clock to pay the bills and put food on the table, but the shrinkingly small number of the super-rich whose interests this Government really represent. Wages are stuck and household debt is soaring, but the Chancellor had absolutely nothing to say about any of it.
Peter Dowd
Is my hon. Friend aware of today’s Resolution Foundation report that says that the UK is set for the worst decade for pay growth in 200 years?
Mr Reed
That is absolutely shocking, but it reflects what we are seeing in our constituencies and what our constituents are telling us.
Once upon a time in this country, there was a covenant between people and Government. People gave their consent to the system in return for a fair reward for the work they put in. There was an understanding that if people worked hard, they would do well. They could expect a decent home, security for their family, and healthcare when they fell ill or grew old, and that if they could not work, they would be looked after with dignity and respect. But today that covenant is broken. The unfairness and inequality that this Government stoke has bred resentment that has catapulted us out of the European Union and over a cliff edge into uncertainty.
Mr Jackson
I cannot allow the hon. Gentleman to propagate this myth. The gap between the poorest and richest 10% of our population was the highest that it has ever been under a Labour Government. This Government, I am proud to say, have delivered something that was never delivered in 13 years of a Labour Government: a national living wage to assist the poorest members of our community who are in work.
Mr Reed
This Government have absolutely divided the country. They have divided different parts of the country and communities from each other. I will give a statistic that shows how they have done it. Since they came to power in 2010, the 10 poorest councils in the country have experienced cuts 17 times bigger than those faced by the 10 richest. If that is not divisive, I do not know what is. This is happening on top of the fact that jobs have been lost to automation, factories have moved abroad, British people are denied the investment, skills and training that they need to compete in a global economy, and wages are stagnating. The Tories have made all this worse by targeting the poorest communities for the biggest scale of cuts. They have put the greatest burden on the weakest shoulders, and they have done so as a deliberate political tactic.
Adam Afriyie (Windsor) (Con)
The picture of doom and gloom that the hon. Gentleman paints is completely disconnected from the reality for people overall. Will he at least acknowledge that those in the lowest quartile have had a bigger tax cut than those in the highest quartile?
Mr Reed
We do not need to hear anything about tax cuts from Conservative Members, given that they have just broken their solemn electoral promise not to raise taxes if elected back into government. Only yesterday we saw the Chancellor standing at the Dispatch Box proposing to raise taxes. Conservative Members will have to vote on that, and it will be very interesting to see how many follow it through and how many do not.
The truth is that the Government have divided our country. With this Budget, they are doing absolutely nothing to bring it back together again.
Bob Blackman (Harrow East) (Con)
It is a pleasure to follow the hon. Member for Croydon North (Mr Reed). First, I place on record my declaration in the Register of Members’ Financial Interests as a vice-president of the Local Government Association, given that many of my remarks will be about local government funding and the services provided.
When Chancellors stand up at the Dispatch Box, they have a real challenge on their hands to balance the books in terms of taxes to be raised and money to be spent. In looking forward to the year ahead, we must take into account not only the Budget announced yesterday but the autumn statement, which led to large elements of Government spending being brought forward. There is a Budget that is announced at the Dispatch Box, and then there is a Budget that appears in the newspapers in the days and weeks beyond.
The test of a Budget is often how long it lasts before people start to pick at the finer points. It cannot be said that the Chancellor did not address national insurance increases: he spent a large proportion of his statement speaking about national insurance and the importance of balancing the overall position. We need to look at the matter very carefully, however, because a solemn promise was made in the manifesto not to increase national insurance, and I worry that the Government could be accused of signing a contract and failing to look at the small print. Across the country, many people who have entered self-employment are on relatively low rates of pay. They are taking all the risks on themselves, and we want to encourage them to be entrepreneurs and to invest in their businesses and livelihoods.
There has been a dramatic reduction in national insurance for many low-paid people, but I think the point at which people will pay more is far too low. I trust that the Treasury will look at introducing appropriate tapers to ensure that those contributions fall on highly paid people who would appear to be abusing the opportunity to be self-employed, rather than on the lower paid.
Jim Shannon (Strangford) (DUP)
The hon. Gentleman has clearly outlined the issue concerning the Conservative party manifesto. The media—the radio, the TV and the papers—have today given many illustrations of why people are unhappy with the Government’s intention to raise national insurance contributions. It is an issue in my constituency, and many of my people are telling me that they do not want it to happen. Those people have operated under the existing system for several years, and they want it to continue. Does he feel that the Government should review their decision? I think that that is what he is saying, but will he confirm that?
Bob Blackman
The Government have to look at the matter very carefully and review the point at which someone will pay more national insurance as a result of the abolition of class 2 contributions and the increase in class 4 contributions. I do not think that the balance, as announced yesterday, is right.
Norman Lamb
The hon. Gentleman rightly highlighted the concern that this may be a case of having to look at the small print. Is the situation not worse than that, however? The small print actually came in the legislation that was introduced after the election; when the commitment was made in the manifesto, there was no small print. It was a very clear promise, which has been broken.
Bob Blackman
The right hon. Gentleman and his party are experts in broken promises. It is important that we are seen to be fair and reasonable in this process, and that we encourage people to become entrepreneurs. That is the key element.
I now move on to funding for social care. The Communities and Local Government Committee, on which I have the honour of serving, recommended that the Chancellor make available £1.5 billion to fund adult social care. I am delighted that the Chancellor announced an extra £1 billion for adult social care. I am also pleased that the Secretary of State for Communities and Local Government confirmed today at the Dispatch Box that that money will be added to local authorities’ baseline budgets, and that he confirmed the formula by which it will be distributed. I think that that will be warmly welcomed by local authorities up and down the country, and it is a continuation of much needed funding.
I hope that the Economic Secretary to the Treasury will be able to clarify in his winding-up speech one or two points in the Red Book that are slightly confusing for me and may be so for other Members, if they have looked at them. Line 9 of table 2.1 on page 26 mentions a spend of £1.2 billion on adult social care in 2017-18, which is more than the Chancellor announced yesterday in his speech. I hope that that can be clarified. However, the extra £1.2 billion does not appear to have been added to the CLG items in the table on page 21. It is not clear whether the money is ring-fenced for adult social care—I hope it is—and how the Government will ensure that it is spent in the intended manner. The funding was clearly needed, and I am delighted that it has been announced. It shows that the Chancellor and the Treasury are listening to concerns raised by hon. Members from right across the House.
I am equally pleased to see the additional funding that has been introduced for the national health service, particularly capital funding to provide much needed A&E improvements. Those improvements will take some pressure off A&E departments by allowing for the triaging of individuals who turn up at A&E when they should have gone to their GPs in the first place. That will clearly take the pressure off our health service, and it will be warmly welcomed across the country. I trust that we can get on with implementing those capital schemes as fast as possible, so that next winter A&E will not face the problems that it has experienced over the last couple of years.
I note that the Chancellor has allocated an extra £325 million of funding for sustainability and transformation plans. However, the estimated requirement is £9.5 billion. I just wonder where the extra money will come from to support that. The extra money for that in the Budget is welcome, but there seems to be rather a shortfall by comparison with the demand created by the various STPs.
On business rates, we all welcome the relief for pubs and the reinstatement of a three-year revaluation cycle. If we have learned nothing else from the process, we have learned that a seven-year revaluation period is ridiculous. Although many businesses across the country will be warmly happy about the fact that their business rates were effectively frozen for seven years, after the businesses are revalued they will almost face a cliff-edge. The implementation of a three-year revaluation period has to be the right approach.
I warmly welcome the £300 million given to local authorities to grant discretionary relief on business rates. My only concern is that we know that a large number of appeals will be lodged against the revaluations, and some local authorities may therefore be hesitant about granting relief while appeals are going on. In London and other parts of the country where 100% of business rates are devolved, that may have a huge impact on local authorities’ income. That is my one concern.
We need absolute clarity on what will happen about the billing of business rates and the reliefs that will be offered thereafter. Businesses up and down the country will receive their bills without necessarily knowing what reliefs they will get. In terms of cash flow, that will be a serious concern. The additional money to provide businesses with relief from the increase in business rates is extremely welcome, but the devil is in the detail, and we must resolve businesses’ uncertainty as quickly as possible.
Mr Jackson
My hon. Friend is, as I am, a vice-president of the Local Government Association. Does he agree that there is probably a case to be made for introducing a regional aspect to non-domestic or business rates? The potential difficulties in Greater London and the south-east are not replicated throughout the rest of the country, where bills are being reduced. That speaks to a need to look at London as a unique entity.
Bob Blackman
As we move forward, and before we get to 100% devolution of business rates across the country, we must resolve the conundrums that have arisen in relation to business rates. Equally, we have to recognise that business rates raise in the order of £25 billion a year as a tax, so changing its basis could be extremely cumbersome and might lead to hikes for some businesses, which would not be welcome, as well as reductions for others. We should look at that in the round and make sure, following the consultation that we are going to embark on, that the new policy works for all businesses and business people.
On education, the funding for the 500 free schools, including the new free schools, will be extremely welcome. Certainly in my constituency and across my borough, the reality is that we need an additional four new schools immediately. We have expanded every single primary school to its capacity and built on every piece of land available to provide new school places—all with Government funding, allocated under the coalition Government, which was extremely welcome—but we still need additional schools. I am delighted that a new faith school will be opening soon in my constituency, which will be the first state-sponsored all-through faith school in the country for the Hindu community. We will still need additional schools, however.
I have real concern about the principles of the fairer funding formula. The reality is that if the money coming into the formula is flat, then when some people are gaining, others will be losing. The current estimate is that 75% of the schools in my constituency will have not just a reduction in real terms, but a real cash-terms reduction in the funding available to them per pupil. They cannot increase the number of pupils, because the schools are full, so the only alternative is to cut staff and implement a worse service for the children in my constituency. I place it on the record right now that that is unacceptable.
I welcome the investment being made in skills and vocational studies. For far too long, academic skills have been recognised and applauded in this country, while vocational skills have not received the investment they deserve. I welcome what the Chancellor is doing to make that happen, using the funding to drive forward such a process, which must be the right way to encourage young people to develop their skills. If they have academic capabilities, that is wonderful, but if they have vocational skills, we desperately need them in the construction industry, our services industries and right across the board. This is one of the areas in which, for far too long, we have not had such investment, so I welcome the change that is taking place.
I also welcome the new deal on London devolution. I note that the Labour Mayor of London has welcomed the Chancellor’s decision to devolve such money. I have not heard that from Labour Front Benchers, but there is clearly always a disconnect between the Labour Mayor of London and his own Front Benchers in this House. We warmly welcome such a devolution. Local authorities in London, as well as in other parts of the country, will keep their business rates and have the opportunity to make local decisions for local people.
There is, however, a gap in that the Chancellor did not talk about the funding needed to replace the EU regional funding schemes. The schemes have been used for particular purposes right across the country. We clearly do not need to make such a decision now, but the Chancellor must consider this in the future, because these funds are vital right across our regions.
I welcome the provisions on alcohol duty in the main, but it would have been sensible for the Chancellor to maintain the policy of not increasing beer duty. [Interruption.] I am sure that is warmly welcomed among Conservative Members, and I declare an interest in that it is my favourite drink. The cuts in beer duty in previous Budgets have been an appropriate way to encourage people to drink lower-strength beers rather than higher-strength alcohols, which is important.
On tobacco duty, which is significant, I welcome the changes that the Chancellor has made, but I think he could have gone further. If he and my hon. Friend the Economic Secretary want to increase duties on something, let us increase them on tobacco. The fact is that there is a straightforward translation: the less people smoke, the less demand they will make on the national health service.
Adam Afriyie
My hon. Friend is making a very powerful speech, and I agree wholeheartedly with him on tobacco duty. In fact, I would go further and urge the Chancellor, as well as everyone in the House, not only to increase the duty on cigarettes significantly, but, conversely, to ensure that vaping and heat-not-burn devices get a better hearing, because switching to such devices will actually save lives and improve the health of so many millions of people.
Bob Blackman
Quite clearly, anything we can do to encourage people to give up smoking has to be good for their health and for the national health service overall.
Mr Jackson
Before my hon. Friend moves on from vices, does he agree that the Red Book shows that there is only a commitment to consult on white cider and other high-strength ciders? Given the argument that they cause disproportionate harm—with policing, health and so on—is there a case for increasing the duties on such high-strength alcoholic products?
Bob Blackman
The position is quite clear. In particular, I want the Treasury to look at the differential duties on licensed premises compared with those involving off-sales, because such an approach could make a quite massive difference.
My one concern about what is proposed for tobacco duty is the possibility of driving individuals away from normal standard cigarettes to hand-rolled tobacco. Young people might be encouraged to switch to hand-rolled tobacco, which is even more harmful to their health than smoking cigarettes. The duty on hand-rolled tobacco should be looked at, so that we can discourage that.
I was disappointed—my hon. Friend the Economic Secretary will know what I am about to say—not to see further compensation for the victims of the Equitable Life scandal. The Treasury believes that the scheme is closed. It is quite clearly closed to new applicants, but there is still the burning injustice that people who saved for their future and their future pensions have not received the full compensation due to them. I am very proud to say that the Government allocated funding in early 2010, which has helped to compensate some of the victims of the scandal, but a total of £2.8 billion or £2.5 billion—it depends which figures one looks at—is still owed to the victims of the scandal. Those individuals are getting older and more vulnerable, and if we give them any money, it will go straight into the economy because they desperately need it for their old age.
I hope my hon. Friend will look at that again in the round. I understand how difficult it is to balance the books, particularly at the moment, but this is clearly a debt of honour. As the economy recovers, we should look at increasing the compensation, not saying to individuals, “That’s it. That’s all you’re going to get.” If we do that, we will suffer the consequence of people’s mistrust.
The housing White Paper has demonstrated large elements of what we need to do to increase the volume of housing. There was a great deal of comment in the autumn statement on funds for housing, but there was no mention of that, or of the further measures we need to undertake, in the Budget yesterday.
As you will know, Madam Deputy Speaker, my private Member’s Bill is progressing through Parliament. It is in the other place at the moment and, I hope, will become law very soon. It aims to reduce homelessness in this country, but the most important impact we can have on homelessness is to build more homes. I trust that the Economic Secretary will consider measures to encourage local authorities, housing associations and private builders to build low-cost housing that is relatively easily affordable for the people of this country, so that we can combat homelessness once and for all in our civilised society.
The Budget must be looked at in the round. I have been critical of certain areas. It is our duty as Back Benchers to be critical friends of our Front Benchers to make sure that they keep abreast of what is going on, particularly when the Opposition do not seem able to critique the Budget. I welcome the overall thrust of the Budget and trust that we can look at ameliorating some of the areas I have mentioned. I commend it to the House.
Kerry McCarthy (Bristol East) (Lab)
I did not agree with everything the hon. Member for Harrow East (Bob Blackman) said, but he did make some very thoughtful points. I hope that the Economic Secretary was paying more attention than he appeared to be and has taken them on board.
I was disappointed by the lack of ambition in yesterday’s Budget. I suppose that we should take some consolation from the Chancellor’s acknowledgement that the Government still have a lot of work to do. Perhaps when we have the combined autumn statement and Budget we will see more ambition from him.
The Chancellor talked about improving productivity and ensuring that young people have the skills they need. I agree with that. He identified some of the challenges, but he singularly failed to address Brexit—the elephant in the room that is in danger of trampling everything else underfoot.
The Budget failed to offer any comfort for Bristol in terms of city governance or for my constituents. Bristol is a prosperous city with thriving industries. It is the only city outside London that makes a positive contribution to GDP. That sometimes means that we are seen as having everything sorted and having everything going for us, but not everyone in the city is able to share in its success. Our mayor, Marvin Rees, is working to make Bristol a more equal city and to share the prosperity beyond the wealthy and the recently gentrified parts of the city, so that it works for people who have lived in Bristol all their lives, as well as for people who have been attracted to move there because it is such a thriving place. I fear that yesterday’s Budget made his task that bit more difficult.
According to the Children’s Society, more than 5,000 children were living in poverty in my constituency of Bristol East last year. The Chancellor spoke yesterday of the “dignity of work”, but the majority of those children are in working families. The issue of in-work poverty has been raised frequently in this House and needs to be tackled. It is not enough simply to suggest that moving people into work from welfare is the only solution. Universal credit cuts will only make the situation worse.
There was nothing yesterday in response to the Resolution Foundation’s warning that incomes will rise for high-income households, stagnate for the middle and fall at the bottom. In my constituency of Bristol East, there are very few who fall into the high income category, but very many who fall into the middle or the bottom and who will not benefit. The Resolution Foundation said that the result will be
“the biggest rise in inequality since the late 1980s.”
I do not know how the Chancellor can lecture low-paid workers about the dignity of work, when he is watching their living standards fall.
The Chancellor is increasing the taxes of self-employed workers, despite the fact that they earn half as much as employees and have fewer rights. I grew up with a stepfather who was a self-employed demolition contractor. My sisters took over his business when he died. He was not quite a white van man—he had a lorry instead—but in all other respects he fitted that definition, as did virtually all the family friends who came round our house. They were all builders, electricians, plumbers or window cleaners. They did pretty well for themselves, but they did it by working incredibly hard.
My dad did not take a day off sick, not least because he would not have earned any money if he had done so. When we went on family holidays, he had to calculate not only the cost of taking a family of eight abroad, which was pretty extortionate, but how much he would lose in earnings and whether he would have to pay other people to keep his salvage yard open. Three of my five sisters are now self-employed. I know how they have to grapple with the fluctuations in income. It is not easy to plan, because they do not know from one moment to the next when the money will come in. They have additional burdens.
According to the FSB, 6,500 self-employed people in my constituency have to make the same calculations. They will now have the added responsibility of extra national insurance contributions, without the security of employment. I had an email from a constituent today, who wrote on behalf of her son who is a construction worker. She pointed out that he has to buy his own tools, his own work safety gear and his third-party liability insurance. He has to have something called a CSCS card and has to pay to travel to jobs. Quite often at the end of one job, there is a break when he does not know whether another job is in the pipeline. Clearly, some of that is tax deductible, but not all of it is. We have to acknowledge that self-employed people are not the same as employed workers, with the security that they have.
Stephen Doughty
My hon. Friend is making an excellent point. I, too, know many people in self-employment in the types of jobs she is talking about, including among my family and friends back home in Wales. She mentions insurance. Is it not the case that people find it difficult to get insurance against loss of earnings, as well as insurance for high-priced items such as tools? The Government have not dealt with all those additional costs that come with self-employment in this Budget.
Kerry McCarthy
As I said, we have to acknowledge that the self-employed are in a very different situation from people who have an employer who takes care of all their needs. The Chancellor has singularly failed to recognise that. He seems to be blaming the self-employed for not reading the non-existent small print in the Conservative manifesto. He cannot get away with saying that this is not a broken promise, given what the Conservatives said in 2015.
Seema Malhotra
My hon. Friend makes a point about her family. My father was self-employed when I grew up, also in a family of eight. I was in a similar situation. We never had a holiday when we grew up. Our summer holiday was a daytrip to the seaside with food that we took for ourselves. That is the reality of the struggle it can be to make ends meet when people take that risk. Does she agree that this added pressure, when there are already pressures on family budgets, could be what turns those who are just about managing into those who are no longer managing?
Kerry McCarthy
I very much agree with my hon. Friend and recognise the points she makes about the family she grew up in.
Surely we want to encourage more people to become entrepreneurs—to strike out on their own and create the thriving businesses of the future. Some of our most successful entrepreneurs started out as self-employed, then set up small and medium-sized enterprises, and went on from there. I think that this short-sighted tax grab by the Chancellor will deter people from doing that.
Bob Stewart (Beckenham) (Con)
Forgive me for not being here earlier, Madam Deputy Speaker. I thank the hon. Lady for letting me intervene on her. As I understand it, this measure will be tapered, so someone who is earning below £16,250 a year will be better off. It is only as people get to the top end of earnings that it will apply. Moreover, it will not come in until the summer, when we look at the national insurance Bill.
Kerry McCarthy
As the Bill goes through Parliament, we will have to scrutinise the detail. All I know at the moment is that I have constituents who are extremely worried about this proposal and it is making them think twice about whether they should continue as self-employed or look for jobs that are potentially less lucrative, but that have more security.
Peter Dowd
Does my hon. Friend agree that if the Government get away with this proposal, it will be a down payment on more NIC and tax increases?
Kerry McCarthy
That is certainly the concern. As has been said by several hon. Members, if people cannot trust the Government on this matter, they will think that they cannot trust the Government on anything in respect of their future economic security.
Mr Jackson
The hon. Lady is making typically lucid points, but is it not incumbent on her party, given that there is a broad consensus that we need to fund social care better—the Chancellor announced an extra £2 billion —to identify where that money would come from? If she does not want it to be raised through national insurance contributions, where else will it come from?
Kerry McCarthy
That leads me very nicely on to my next point, which is that the Chancellor claims the Government have no choice but to raise national insurance contributions. However, he has somehow managed to find £70 billion in tax cuts for the rich and for corporations, including £1 billion for the Government’s pet concern, inheritance tax. I pay tribute to my hon. Friend the Member for Leeds West (Rachel Reeves) for her work on this. From next month, the inheritance tax threshold for a couple will start to rise from the current £650,000 to £1 million. Over the past two years in my Bristol East constituency just 17 homes sold for more than £650,000, and not all of them would have been subject to inheritance tax. My constituents are paying the price for a tax cut that will benefit only 0.04% of the people, many of whom live in the far more affluent constituencies of Cabinet Ministers.
The Chancellor also managed to find funding for the Prime Minister’s grammar school project, despite a dearth of evidence to support the policy. It baffles me why he thinks this is more important than helping the schools we have at the moment, which face a £3 billion shortfall. What good will new grammar schools do for children and teachers at Bristol Met, where half of all pupils are on free school meals but their funding is being cut by 21%, or at Begbrook Primary, which has seen a 16% cut in per pupil funding between 2013-14 and 2019-20? West Town Lane academy has seen a 16% cut and Waycroft academy a 14% cut. I could go on. The Government’s chaotic approach to children’s education is emblematic of a Budget incapable of joined-up thinking or long-term planning. The funding is there when the Government want it to be, but not when people need it to be.
The Government seem incapable of looking beyond the short term and of recognising that cuts have consequences. Ministers are denying 18 to 21-year-olds housing benefit, but if just 140 young people are pushed on to the streets the policy will cost the Government more than it saves. Centrepoint estimates that about 9,000 young people will be put at risk of homelessness by the policy. That is not just short-sighted; it is—if you will permit me to say so, Madam Deputy Speaker—gross stupidity on the part of the Government. It is too high a cost for the sake of making very short-term savings.
I referred to the success of Bristol as a city, but that success comes at the price of a booming housing market that means homes are increasingly out of reach for Bristolians. On average, tenants are having to spend 64% of their disposable income on rent. Our Mayor has created a multi-disciplinary housing delivery team and a city office that has been working hard to try to get more affordable housing built and to find temporary beds for the homeless. They will not be helped by cuts to housing benefit and Ministers’ preoccupation with £1 million houses. I urge the Government to consider our Mayor’s request for the power and support necessary to tackle the housing crisis. It is not enough just to devolve the responsibility; the resources and the money have to go with that if he is to do what he is being asked to do.
On housing, just as on social care, public health, funding cuts and tax increases, the Government’s instinct is to pass the buck to local authorities. Bristol’s funding has fallen by £170 million over the past six years. Over the next five years, we face a £104 million funding gap as costs rise. The further 30% cut to the Department for Communities and Local Government’s budget suggests Ministers are oblivious to the difficult decisions councils are having to make. There is no recognition of the long-term costs of neglecting our infrastructure and key services. A temporary sticking plaster next year will not rescue our social care system or relieve the burden on council services.
The situation will only get worse with Brexit. Bristol City Council received £22 million of EU funding in the 10 years to 2015. The city’s two universities receive over £20 million a year from EU sources. I pay tribute to all the work my hon. Friend the Member for Bristol West (Thangam Debbonaire) is doing with universities on Brexit. The European Investment Bank facilitated initiatives such as Bristol Energy, the council’s energy company. Two thirds of exports from Bristol, Exeter and Plymouth go to the EU, which is far higher than the average for UK cities.
The Chancellor claimed there would be no complacency, but neither is there any strategy. The Government have no clue about what will replace that EU investment or how to guarantee our exports market. Blithely pretending everything will be fine and dandy is not a legitimate plan. Ministers are rushing headlong into a hard Brexit and abandoning the single market, ignoring how trade with the EU is a major driving force for our economy. Turning us into a bargain basement tax haven may be what some Ministers have always wanted, but it is not what Bristol or the country needs.
The Chancellor boasted of infrastructure projects, but my constituents are fed up with broken promises and bad management. We have endured disruption because of the electrification of the Great Western line and the taxpayer has had to cope with the spiralling cost. Now the programme has been delayed indefinitely—at a cost of £330 million. The people of Bristol do not know if they will ever see the benefit, but we have already paid the price.
Time and again, Ministers do not bother to consider the bigger picture. Environmental regulation, for example, is dismissed as red tape. I have given up hoping that some Conservative Members will see the environmental necessity of so-called green crap—apologies again, Madam Deputy Speaker—but I had hoped that some would see the economic potential. The Government have chosen not to engage, or to take a very half-hearted approach, with the EU’s circular economy work, despite its potential to create half a million jobs and support a genuinely forward-thinking industrial strategy that is fit for the future. The Chancellor promised us skilled jobs and meaningful training, so I hope he will go back to his colleagues at the Department for Environment, Food and Rural Affairs and look at how a genuine focus on the green economy can support that and ensure Britain really is world-leading. That would reassure me and my constituents that the Government are capable of working with cities like Bristol to help everyone to achieve their full potential.
Wes Streeting (Ilford North) (Lab)
It is a pleasure to follow my hon. Friend the Member for Bristol East (Kerry McCarthy). Given the remarks I am about to make I should declare that I am still an elected councillor in the London Borough of Redbridge, and, as seems to be the case with many other hon. Members in the Chamber, I am an honorary vice-president of the Local Government Association. Perhaps we should declare if we are not honorary vice-presidents of the LGA. I should also say that I am sorry I was not able to be here at the beginning to hear all of the speeches made by the shadow Chancellor and the Secretary of State for Business. Unfortunately, I had to attend an extraordinary meeting of the Treasury Committee. I am grateful to you, Madam Deputy Speaker, and to your predecessors in the Chair, for indulging me.
Yesterday we learned that the Chancellor has a sense of humour, but by the time he sat down my constituents and the country at large had very little to laugh about. In fact, I would wager that the Chancellor himself was not laughing when he read this morning’s newspapers. It is striking that there have been more Opposition Members than Government Members speaking in the Budget debate this afternoon. Presumably, this is because so few Tory MPs are willing to turn up to defend the Chancellor’s Budget: a Budget balanced on the backs of the self-employed; a Budget that failed to address the big challenges facing our schools and hospitals; and a Budget that failed to prepare Britain for Brexit.
This was a Budget that was bad for business: the high street business clobbered by a rise in business rates; the small businesses burdened by quarterly reporting to HMRC, even where they are not liable for VAT; and the self-employed saddled with higher national insurance, even where they earn as little as £16,250 a year. These are the people I was sent to Parliament to represent: the shopkeepers in Barkingside, Woodford, Hainault and Gants Hill who kept their businesses going even as other shops on the high streets were boarded up during the recession; and those who were brave enough to take the plunge and start a business even as the high street was still plagued by recession. I was sent to represent the family businesses wondering whether they will be able to pass on their firms to the next generation, because times are increasingly tough and they worry about the long-term future of the family trade; and the self-employed, who take the risk by taking the plunge and going it alone, taking an idea and turning it into a profit. This was a Budget that hit the traditional economy of the high street and the gig economy of the entrepreneurs. It was good for accountants and bad for small businesses. No wonder that, this morning, so many people woke to read the papers asking why on earth a Tory Chancellor would want to attack enterprise, entrepreneurialism and aspiration.
The Chancellor has said that this is an issue of fairness. Policy wonks in the Treasury and elsewhere in the world of think-tanks will argue that a class 4 national insurance increase is progressive. That is a powerful reminder of what happens when people who understand spreadsheets fail to understand the real economy.
The National Careers Service website suggests that London taxi drivers can earn between £14,000 and £20,000 a year. In a good year, if they are willing to put in excessive hours working the streets, as they often do these days, they may earn slightly more. A triple whammy of rising costs, increased congestion and unfair competition has driven down their wages. Is it progressive to ask taxi drivers, who are already struggling to pay the bills, to pay an extra £240 a year in national insurance? Is it progressive to ask the young tech entrepreneur starting out to find an extra £20, £30 or £45 a month in their early careers? Is it fair to ask people who receive no holiday pay, and who have little job security and the everyday pressures to bring home the bacon, to pay more to the Chancellor when it is small change for him and a big deal for them?
Jeremy Quin (Horsham) (Con)
Does the hon. Gentleman welcome, as I do, the improvement in the pension scenario for the people about whom he is speaking, which is worth about £1,800 a year, and which if bought could be worth about £50,000? It is not all one way.
Wes Streeting
There have been improvements at the margins, but that does not compensate for the loss of earnings that those on low to medium incomes will feel as a result of the decision taken by the Chancellor in the Budget.
Stephen Doughty
I wholeheartedly endorse my hon. Friend’s point about taxi drivers. I commend him for his work with the all-party parliamentary group on taxis and for standing up for his constituents. I have had similar experiences speaking to taxi drivers in my constituency. Does he agree that the problem is not only the costs he mentioned, but additional charges—they are often subject to differences in regulation—and the rise in the price at the pump?
Wes Streeting
I wholeheartedly agree with my hon. Friend. It is not just taxi drivers. More than 10,000 people in my constituency are self-employed. As my hon. Friend the Member for Bristol East rightly pointed out, those people do a range of trades with a range of challenges and additional costs, and very few employment rights and protections. Why have they been targeted by the Chancellor in this Budget?
While I am asking about priorities, why can a Tory Chancellor always find tax giveaways such as the cut to inheritance tax for the 26,000 wealthiest estates in the country, at the expense of the strivers, the makers, the builders and the creators, who account for Britain’s 5 million self-employed people?
Mr Jackson
While we are asking questions, is the hon. Gentleman embarrassed about the fact that a Conservative Government have brought about a situation in which 1% of taxpayers fund 27% of tax revenues? At the same time, £140 billion in uncollected taxes that the Labour Government did nothing about have been collected in the past seven years to fund our public services.
Mr Streeter
We are one of the richest economies in the world. The distributional analysis published alongside the Budget by the Treasury is embarrassing. The picture that plays out across this Parliament as a result of the tax, spending and welfare decisions made by the Chancellor and his predecessors is very clear. The poorest households and, on an unprogressive gradient, those from lower income households, are absolutely clobbered by this Government.
Only the very richest decile are worse affected than the very worst paid and the least well-off. Someone who is paying the very highest rate of tax will pay more than the very poorest as a percentage of their income, but for some of those people, a tax increase of thousands of pounds a year is relatively small change compared with a £20, £40 or £50 increase for the very poorest. What would be marginal increases for hon. Members are huge for people who are just about managing to pay the bills or, more likely, people who are among the millions turning to credit cards and fuelling a record boom in unsecured household debt. That is what Tory Chancellors always fail to understand. They have no understanding and no conception of what it is like to go without, or of having to cut corners between either heating or eating. That is why, for the past seven years of Tory Budgets, those are the people who have been most left behind.
Norman Lamb
Did the hon. Gentleman pick up the comments of Charlie Bean, formerly of the Bank of England and now of the Office for Budget Responsibility, who said that consumer spending is unsustainable and based on record debt that is going back to the levels we saw before the crash?
Wes Streeting
The right hon. Gentleman makes a powerful and important point. Unless we get to grips with that, not only will those people suffer as they fall below the line and can no longer keep their heads above water, but the economy itself will suffer. Even the sluggish growth over which the Government have presided since they took office has been driven by an increase in household debt. What happens to those families, and what happens to the economy, when the money dries up—when there can be no more lending, or when families can no longer service their debt? Of course, it is not just national insurance or, indeed, income tax that the poorest pay. Other forms of taxation have a disproportionate and regrettable impact on them: VAT, council tax, and other unprogressive tax measures are causing them to become the very worst off.
If that were not bad enough in itself, it was explicitly ruled out in the Conservative manifesto, not just once but four times. It is a bit rich for the Chancellor to come to the House and talk about the small print produced by companies, and for his Ministers to tidy up the mess the next day at the Dispatch Box by talking about the small print in the National Insurance Contributions Bill. This is a broken promise, plain and simple. Not only was it in the manifesto; it was a central line of Tory attack. The Tories were wrong to warn at the last election that a Labour Government would somehow cause chaos and instability. Look at the mess they are presiding over now, and look at what they have done to the country in the short time since that election!
Mike Gapes (Ilford South) (Lab/Co-op)
My hon. Friend has referred to the Conservative manifesto. That was the same manifesto that committed the Government to staying in the single market. The lesson, surely, is that Conservative manifestos are worth nothing, not even the paper they are written on.
Wes Streeting
I am grateful to my hon. Friend and parliamentary neighbour for making that point. He will be pleased to know that I shall return shortly to the issue of Europe and the future of our economy.
Wes Streeting
I shall return to the subject of Europe, and the hon. Gentleman may want to intervene later. I am conscious that other Members are waiting to speak. There are still a number of them on the Labour Benches, even if there are none on the other side of the House.
This is a case of all pain and no gain. If it were not bad enough that the Conservative Chancellor arrived yesterday to clobber the self-employed, he is also failing to put right the public services on which people depend. We were told that the crisis in the NHS and social care required an additional £6 billion by 2019. While the £2 billion announced yesterday may be welcome, it is wholly insufficient to meet the demands of our rising population, our ageing population, and the people who want to be able to rely on the NHS and social care when they need it most.
Having been a local councillor for nearly seven years—I will stand down next year—I have to say that the situation facing local authorities is dire. When faced with a choice between child protection and adult social care, councils will of course prioritise keeping children safe, along with keeping the elderly and disabled alive and well. However, such choices have consequences: increased council tax for people who can ill afford it, and cuts that affect the services on which people rely and for which they pay their council tax. I only wish that the Government would have the courage to accept, 75 years on from the Beveridge report, that the model for health and social care in this country is no longer fit for purpose and no longer sustainable unless it receives the funding that is so badly needed. I cannot understand why Ministers have not had the courage to ask Members on both sides of the House to help the Government come up with a plan to make the NHS sustainable for the 21st century.
Peter Dowd
Was my hon. Friend as shocked as I was to find that it was being trailed today by the Government that unless Tory MPs backed down, social care funding would be under threat?
Wes Streeting
I entirely agree. I am not sure how many experienced, wise leaders of the NHS and local councils could come forward and warn the Government about not just an impending crisis, but a crisis that is affecting hospitals and care services in each of our constituencies today. What more will it take for the Government to show the courage, and find the money, to fund social care? Imagine what a cross-party commission led by the likes of my hon. Friend the Member for Leicester West (Liz Kendall), the right hon. Member for North Norfolk (Norman Lamb) or the hon. Member for Totnes (Dr Wollaston) could do to build a health and social care model for the 21st century.
Was it not a travesty that, as schools in our constituencies faced cuts in their budgets, the Chancellor chose to arrive yesterday with a funding package that would benefit a small number of pupils at a few selective schools? What do Ministers have to say to headteachers and parents in my constituency, or to the pupils who attend the vast majority of schools in my constituency, about the fact that they face on average a funding cut of £188 per pupil per year? I do not need an opinion poll to tell me that there are a few things that people, whether they vote Labour or Conservative, expect the Government to do, and among them are to make sure that we have decent hospitals and well-funded schools. It is a scandal that so much of the educational progress made in my city and across the country, led by the last Labour Government and following on since then, is being put at risk because of swingeing budget cuts to schools. What sort of Government choose to cut education for the next generation while also cutting the tax bill for the very wealthiest?
The flimsiness of the Budget Red Book—for once it did not take long to get through—betrays the fragility of our economy. In the long list of supposed good news the Chancellor arrived with yesterday, a few facts were missing. This was the ninth Budget by a Conservative Chancellor since 2010, and what do we have to show for it? We have the only developed economy that has a growing economy but falling real wages; rising costs of living, but wages still at pre-crash levels; a widening productivity gap holding back growth and depressing wages; a weaker currency fuelling inflation that households and businesses can ill afford; a failure to meet the Tories’ own targets for debt and deficit reduction because they have never understood the need to balance spending cuts with investment for growth; and a failure to meet their own welfare cap because of their failure to tackle unemployment, under-employment, casualisation of the labour market and exploitation by unscrupulous employers, which leaves a welfare system that lacks the confidence of the majority of the public but also fails the people who need it most. That is the very worst of all worlds, and even now, in the wake of a Brexit vote driven in large part by the votes of people who have been left behind, we have a Government willing to preside over rising child poverty, public services at breaking point, and an economy ill equipped for the challenges that lie ahead.
It should not take dragging a former—Conservative—Prime Minister out of retirement to tell this Government that the way they are handling the single biggest issue facing our country, the departure from the EU, and the path they have set us on is putting the economy at risk. What John Major said was very straightforward:
“There is a choice to be made, a price to be paid; we cannot move to a radical enterprise economy without moving away from a welfare state. Such a direction of policy, once understood by the public, would never command support. It would make all previous rows over social policy seem a minor distraction.”
Sir John Major could have been reading from the Labour party script on this issue. There we have it: a former Conservative Prime Minister holding up the truth that we on the Labour Benches know, which is that unless the Government negotiate a smooth and sensible exit from the EU, they will consign this country to being a small tax haven off the north-west coast of Europe, unable to meet the needs of their people and unable to make sure that prosperity is shared.
Of course, it is not just John Major who has concerns: the former Chancellor, the right hon. Member for Tatton (Mr Osborne), told the House that this Government have chosen not to make the economy the priority. When so much of this country’s economic success relies on trade abroad, when we have the largest single market in the world on our doorstep, and when being a member of the customs union gives us access to more trade agreements than are enjoyed by any leading economy in the world, for a Government to decide not to make the economy the priority is reckless and irresponsible.
Mike Gapes
My hon. Friend is making a very powerful speech. He mentioned the former Chancellor’s remarks, and the Government’s position is clearly that immigration is the priority. The Government’s target of a reduction to 100,000 seems a bit strange, however, given that the forecasts in the Red Book are based on the assumption that 185,000 migrants will come into this country in 2021; that is the Office for Budget Responsibility statistic on which the forecasts are based. How can the Government reconcile the 100,000 and the 185,000 figures, and surely the economy will be in a worse position based on those facts?
Wes Streeting
I agree with my hon. Friend. I have lost count of the number of times I have heard calls for a real debate on immigration, but a real debate requires an argument. There are undoubtedly real sensitivities and concerns about immigration in communities across the country, not least when people feel that their own wages have been depressed because employers are able to bring in cheaper labour from abroad to undercut the pay, terms and conditions of local workers. For me, that is an issue of social injustice that Governments need to tackle. However, we have an ageing population and a shrinking working-age population, and we can barely afford the pensions bill. We need a greater working-age population to come to this country, do their work and pay their taxes. Any politician who says that immigration is a price that this country cannot afford must also come to the House and tell us how they plan to pay for the public services on which every citizen in this country relies.
We must grasp the reality of the immigration debate. If we continue to fail to address the genuine and well-founded concerns about immigration while pandering to the myths about it, we will set this country on a course that will make us poorer, and that would be the worst possible response to the EU referendum. If people went to the ballot box and voted to leave the European Union because they felt left behind by globalisation in a world that was changing around them, imagine the betrayal they would feel if, having been sold the promise of a brighter future, they found that jobs were drying up, the economy had been left behind and the public services on which they relied were being decimated. That is the real risk of a botched Brexit.
In the context of a rapidly changing global economy in which jobs are changing, huge digitalisation is taking place and a new industrial revolution is sweeping the country at a pace and scale that we have never seen before, the purpose of the Labour party has never been more relevant or more urgently needed. More than 100 years ago, the party was founded to champion the interests of labour over the interests of capital. In a future of deregulation and a loss of jobs because they no longer exist in huge sectors of the economy, it is the job of the Labour party to protect the interests of labour.
When we look at what this Budget does to the self-employed, the strivers and the people across the private sector who make up the backbone of the economy and at what it does to public services, and when we look at how the Government are botching Brexit, we can see that it is long past time for the Labour party to take this lot apart. People across the country are counting on us to be an effective Opposition and an alternative Government. That is the job that we must face up to, and we need to start doing it sooner rather than later.
Norman Lamb (North Norfolk) (LD)
Madam Deputy Speaker, I should like to make an apology straightaway. I alerted Mr Speaker earlier to the fact that I have a long-standing engagement at the University of East Anglia this evening, and I hope that it will be okay with the Front Benchers if I miss the end of the debate.
I agreed with an awful lot of what the hon. Member for Ilford North (Wes Streeting) said, other than his assertion that it was the role of the Labour party to confront the issues set out in the Budget. I shall focus on the aspects of the Budget that relate to social care and to the health service, and I want to make it clear that the £1 billion announced for social care for the next financial year is wholly inadequate to meet the needs of the social care system and the people who rely on it.
The Health Foundation has estimated that the gap in social care is in the region of £2 billion a year. That is partly due to the increase in the national minimum wage, which will cost the social care system about £900 million in the next financial year. That means that there will be no real-terms increase in the amount available to the system.
As the Care Quality Commission recently confirmed, the social care system is close to tipping point—that comes not from politicians, but from the regulator. Many providers are now considering whether to withdraw from this country’s publicly funded social care market, while other providers are at risk of going out of business. It is alarming that there is little investment, if any, in new social care facilities in the north of England because the finances simply do not stack up. The only parts of the country in which investment in new social care facilities makes sense is where providers can cross-subsidise from wealthy self-funders, who are paying for the provision of care to those who rely on the state.
We are witnessing an increasing and simply unacceptable divide across our country in the quality of social care. It is estimated that the care needs of more than a million older people are not being met, either wholly or in part, as a result of the reduction in the availability of publicly funded social care. That is disastrous for those people, but it is also stupid, because it inevitably means that in the next financial year—from April—more older people will end up in hospital unnecessarily because there is no care package available to keep them in good health at home. More people in hospital unnecessarily means more pressure on the NHS. We have seen considerable increases in the income of acute NHS hospitals over the past five or six years, but demand has increased even more due to the inadequacies of the social care system. We are lurching from one crisis to another, and there must be a better approach.
The Government say that there will be a Green Paper to address the funding of social care, but it was in 1999 that the previous Labour Government set up a royal commission to look into social care, so the issue has been pushed into the long grass for far too long. The coalition Government actually went out and sought the advice of a leading expert, Andrew Dilnot. We consulted on his advice, and then implemented through the Care Act 2014 a cap on care costs, which would have introduced greater fairness into the funding of social care. The Conservative party’s manifesto contained a commitment to introduce a cap on care costs, but it abandoned that commitment within weeks of its re-election, just as it is now abandoning the commitment not to increase tax. The Government said that the cap would be delayed until 2020, but no one believes that it will be introduced then and it has quite clearly been abandoned. A Green Paper—a discussion document—is not what is needed; we need a greater sense of urgency.
We were told about a £325 million boost for capital spending in the NHS, but capital spending has been cut in this financial year by £1.2 billion, which has been raided to fund the clearing of deficits. However, we were told that only between six and 10 pioneer sustainability and transformation plan areas will benefit from that £325 million, meaning that the rest of the country will see no increase at all in capital investment. The Health Service Journal indicates that there is likely to be another raid on capital budgets in the next financial year, making the situation even worse for the rest of the country. During the referendum campaign, those advocating Brexit argued that leaving would give this country £350 million a week to spend on the NHS. Instead of £350 million a week, the Budget offers this country £2.7 million a week in capital funding—a wholly inadequate figure. Provider deficits across the country stood at £886 million at the end of quarter 3, after the injection of £1.8 billion to clear the deficits from last year. The Institute for Government confirmed today that 90% of hospitals in this country face deficits, which are now endemic across the system.
The Budget is inadequate for social care and disastrous for the NHS. There will be a 1% increase in NHS funding in 2017-18, but that compares with an increase in demand of about 4%. In the next financial year, there will be a reduction in real-terms spend per head in the NHS. Wherever we are on the political spectrum, this makes absolutely no sense at all. At a time when demand is rising rapidly, it is nonsensical to reduce spending per head on healthcare in this country, and it amounts to a reduction in the proportion of national income that we are choosing to spend on health and social care.
James Berry (Kingston and Surbiton) (Con)
The right hon. Gentleman brings a lot of experience from his time in office. Before the Budget, his party was advocating £2 billion of immediate spending on adult social care and £2 billion of immediate spending on the NHS. The sum of £4 billion is a lot of money. I have no doubt that he has arguments for why that amount is needed, but will he enlighten the House as to how the money would be raised?
Norman Lamb
Our spring conference is approaching and we will be coming up with proposals.
Norman Lamb
I would be delighted to invite the hon. Member for Kingston and Surbiton (James Berry) to our conference—I am sure that he would have a wonderful time. He will find out more about our proposals very soon but, to take up his challenge, I share his view that we have to be responsible by arguing how spending should be paid for. We intend to be fully responsible, and I hope that that reassures him.
I will focus for a moment on the consequences for ordinary people of the state of our NHS and care system. The right hon. Member for Leicester East (Keith Vaz) has talked a lot about support for people with long-term conditions, and the NHS now has to cope with a dramatic increase in the number of people living with long-term chronic conditions. The NHS estimates that the number of people living with three or more conditions will increase by 50% over 10 years. What we are now witnessing is completely unprecedented, but failure to meet their care needs will have disastrous consequences for many of those individuals.
In the past few weeks I have taken up the case of an adult in my constituency who suffers from attention deficit hyperactivity disorder. He has been referred by his GP to an adult ADHD clinic, so I wrote to the mental health trust to ask what the waiting time for his treatment is. I was told that the current waiting time in Norfolk is two years. What on earth is that individual supposed to do in the meantime? I am afraid that there is still complete inequality between access to mental health treatment and access to physical health treatment. There is discrimination at the heart of the NHS, and we will never address it with the current inadequate levels of funding.
A nine-year-old boy in my constituency has been referred for a possible diagnosis of autism. His family was told that the waiting time for that diagnosis is up to three years. I just assumed that something appalling was happening in Norfolk, but when I asked the National Autistic Society for more information, I was told that such waiting times are very much the case across the entire country. What are we doing to our children? We know that with early help we can make a massive difference to their life chances, yet we are telling them that they are supposed to wait two to three years for a diagnosis, let alone treatment. This is scandalous. We are letting down some of the most vulnerable people in our country. The really awful thing is that people who have money can circumvent these awful waiting times—they can get a diagnosis for autism, and they can get help for their son or daughter—yet people who do not have money are just left waiting. That is unjust and unacceptable, but it is happening in this country.
Wes Streeting
Not only is this a grave injustice to young people, but it is hugely costly to the taxpayer. If we fail young people in their formative years and fail to break down the barriers that prevent them from getting a good education, we pay more in the longer term in terms of unemployment, further mental ill health and the breakdown of social life later on.
Norman Lamb
I totally agree with the hon. Gentleman—this is an absolute false economy. We know that 75% of mental ill health starts before the age of 18. In the coalition’s final Budget, we secured £1.25 billion over a five-year period for children’s and young people’s mental health, yet a YoungMinds survey from just before Christmas shows that in 50% of clinical commissioning group areas, not all that money is getting through to be spent on children’s mental health because it is being diverted to other parts of the NHS that are under impossible strain. That is scandalous. It is outrageous that children with mental ill health are being let down in this way.
Bob Stewart
I have some experience of autism in my family, and I have always thought it does not take much to diagnose autism—it is not a costly affair and it can be done quickly—so I do not understand why there is a three-year waiting list, but perhaps the right hon. Gentleman has more experience than me on this.
Norman Lamb
I am grateful to the hon. Gentleman for that point. He rightly says that through better organisation, in part, we could help to sort out this problem. An 11-year-old girl in my constituency was referred to the mental health trust, but the mental health team is not trained in the diagnosis of autism and she has been referred to another trust to go on to a waiting list for diagnosis. That shows a hopeless silo mentality in the NHS. While this is in part about a failure to invest sufficiently in good diagnostic services, it is also about a failure of organisation.
Let me give further examples of the extent to which the system is now under impossible pressure. On delayed discharges, we had 197,100 delayed days this January, which is an increase of 23% on the previous January’s figure. The delays in mental health discharges are even worse, with the number of bed days lost through delayed discharges having increased by 56% in the year to October 2016. Ambulances have a target of responding to 75% of cases in which the person’s life is at risk within eight minutes, yet that target has been missed since May 2015—for 20 months. We all know that someone’s chances of surviving a stroke and avoiding long-term disability depend on their getting to a specialist unit within 60 minutes—the “golden hour”. In the past year, only 18% of stroke patients in my constituency got to the specialist unit within that golden hour. Again, that is a scandalous failure of a health system in this day and age. Some 85% of patients attending accident and emergency were seen within four hours in January, which is way below the standard national target of 95%. In cancer services, there is a target on starting treatment within 62 days of referral, but that is being missed in too many cases. Instead of 85% of patients starting treatment within this period, the figure has gone down to 79.7%.
All that leads to a concern that if someone, or their loved one, has suspected cancer, and they are worried about whether they are going to be seen on time and start their treatment on time, if they have money, they will choose to opt out of the waiting times by getting treatment privately. The debate about privatisation often takes us into a ridiculous cul-de-sac. The actual privatisation that is happening is that increasing numbers of people with money are choosing to opt out of long waiting times and are getting their treatment privately. I find that intolerable and insidious, because it means that people who have money will get access to treatment quickly and people who do not will be left waiting.
NHS England has established the sustainability and transformation plan process. The King’s Fund takes the view that without heroic assumptions about efficiency savings between now and 2020, each STP footprint is likely to be hundreds of millions of pounds short of the money required. STPs are a good and sensible process for bringing together health and social care, but they are sadly based on a fantasy, because insufficient resources are available.
From all the examples I have given, it seems to me that failures of care are becoming endemic throughout the system, in stark contrast to the Secretary of State for Health’s commitment to make the NHS the safest healthcare system in the world. It is impossible to achieve that, given the extent to which failures of care are becoming commonplace.
There is an alternative to this sense of a Government lurching from crisis to crisis and using sticking plasters to avert total collapse in the system. The approach the Government should take is to be prepared to work with others—as suggested by other Members, including the hon. Member for Ilford North—to come up with a long-term, sustainable settlement. The NHS and the care system were designed in the 1940s, when the needs of this country were wholly different from today. There is an overwhelming need for the whole approach to be refreshed.
I got together a group of Conservative, Labour and Liberal Democrat MPs to make the case to the Prime Minister for establishing an NHS and care convention to engage with the public and NHS and care staff, so that we can have a mature debate in this country about how we can achieve a sustainable, efficient and effective health and care system to meet the needs of our loved ones in their hour of need. The Prime Minister has met the group and sanctioned the start of a dialogue about our proposal. We are due to meet her health adviser, James Kent, and I welcome that, but the fact that the Government have announced a social care Green Paper, and will thereby continue the silo mentality of looking at one side of the divide or the other, leaves me with the sense that they do not appear to be wholly serious about engaging with our group on something that is absolutely necessary.
The truth is that partisan politics has failed to come up with a solution to the country’s health and care needs. That is in part because all the solutions are rather difficult. As the hon. Member for Kingston and Surbiton indicated, it probably involves us all being prepared to pay a bit more tax to ensure that we have a health and care system that we can rely on, and one that we can be confident will respond in our hour of need.
Bob Stewart
Is the right hon. Gentleman’s group of MPs from different parties looking at other models, such as how the Germans provide healthcare through their equivalent of the NHS via a combination of private and national means? It seems to me that we are going to have to consider that seriously if we are to get a really first-class national health service.
Norman Lamb
I thank the hon. Gentleman for that intervention. Interestingly, the Germans spend about a third more than us on their health and care system, and it is effective as a result. We all acknowledge that this is a difficult issue that involves acute politics, and there is an enormous risk of people just shouting at each other. Instead of that, our group has come together—I invite him to join us—to say that we should opt for a more rational approach and all agree that we should be bound into a process, perhaps lasting up to a year, of engaging with the public in the sort of debate that he raises. We have said, “Let’s have an open discussion about how to sustain the health and care system.” I want to ensure that what emerges from that is a system that is accessible to anyone in this country, irrespective of their ability to pay. That was the founding principle of the NHS, and it remains true to this day.
As well as advocating the case for parties to work together to resolve this intractable problem, my party, the Liberal Democrats, continues to develop its own ideas. Last autumn, I established an independent expert panel to look specifically at the case for a hypothecated NHS and care tax. I was fascinated that the leading Conservative thinker Lord Finkelstein advocated in yesterday’s Times exactly what I have proposed. It seems to me that there is growing interest in that sort of solution. If we had an OBR for health—a process of making an independent assessment of the health and care system’s funding needs over a given period—that informed the level of the dedicated health and care tax that people were expected to pay, and if that was shown in their pay packets, we could rebuild trust among the public and they would have confidence that the amount they were asked to pay was what was necessary.
It is interesting that the German system, with its social insurance premiums, has actually kept pace with demand better than our tax-funded system. Having a hypothecated tax to enable people to see exactly what was going into the health and care system would allow us to achieve the benefits of the German system but stay true to our idea of a tax-funded health and care system.
People are anxious and nervous about the Government misusing their hard-earned taxes, so having an independent assessment process would make an awful lot of sense. If the Government cannot rise to the challenge of reviewing a system that was designed in the 1940s, when needs were wholly different, we in this Parliament, collectively, will badly let down the people of this country. We are the sixth largest economy in the world, yet our health and care system is on its knees and is too often dysfunctional. We are capable of better than that.
People’s faith in the ability of politics to resolve the big challenges of our age has been undermined, and if the Government simply persist in going it alone without properly addressing this issue, they will increase people’s belief that they have a hidden agenda and want to run the NHS down in order to destroy it. My plea to the Government is this: do not allow that belief to grow; engage with us, have a mature discussion with the public and demonstrate a commitment to renewing that great institution, because the people of this country depend on us meeting this challenge.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order Believe it or not, although we started off with a lot of time for this debate, speeches tend to expand to fill the time available. Therefore, I now ask that colleagues—being honourable and decent to other colleagues—take no more than 12 minutes each. Twelve minutes is a very long time. I know that I can rely on Mr Keith Vaz, who can count and will know when 12 minutes have expired.
Keith Vaz (Leicester East) (Lab)
Thank you, Madam Deputy Speaker, for the endorsement that I can count; I am most grateful. It is a pleasure to follow the right hon. Member for North Norfolk (Norman Lamb), who is widely respected in the House as someone who knows a huge amount about social care and the health service. His project is, I think, welcomed by all parties. We do need an independent assessment of health spending.
The Times today contains a marvellous cartoon of the Chancellor dressed up as Marilyn Monroe, showing his NICs. I do not know whether Ms Monroe could sue for that cartoon, although she has been dead for some years. I want to take the debate away from national insurance contributions, which have dominated the discussion, to other areas. It is important to remember that the Budget is about funding the whole of Government, not just one aspect, although it is, of course, important to raise the money before spending it.
I begin with the Government’s international aid commitment, which was reiterated by the Prime Minister and confirmed by the Chancellor. I was pleased to note that 0.7% of gross national income for aid remains a strong commitment of this Government, even though less time in the Budget statement was spent on international development than the Chancellor spent praising his Parliamentary Private Secretary, the very worthy hon. Member for Salisbury (John Glen). The Chancellor went past the development commitment very quickly, and, rightly, lavished praised on the hon. Gentleman for all the work he has done. However, I shall talk about the importance of maintaining and increasing the aid budget, especially at a time when there is a great deal of media pressure and scrutiny over what we do with our aid. It is right that there should be that scrutiny, although some sections of the media have an obsession with challenging every single bit of expenditure as if it in some way undermines the important principle that our Government provide aid to countries in need.
In particular, I highlight the aid given by the Treasury to Yemen through the Department for International Development. We heard only today that there is now a famine warning in Yemen. Of the aid that we give in the overall DFID budget, £100 million has been committed to the people of Yemen. However, although contributions have been made at a local level, a lot of the money can sadly not be delivered because of the current situation. My message to Treasury Ministers is to keep up with the commitment to fund DFID and to ensure it delivers to countries in need, such as Yemen. The aid should not just sit in a bank, but actually be spent. Until there is a ceasefire in Yemen, we will not be able to spend that money and therefore will not be able to alleviate that poverty.
Stephen Doughty
I concur with my right hon. Friend’s comments about the importance of DFID’s work and the support that it is providing in Yemen. That work has been praised by the Select Committee on International Development, as he well knows. Does he share my concerns that while we are providing that aid, Amnesty International has today said that there is new evidence that the Saudi-led coalition is using cluster munitions?
Keith Vaz
My hon. Friend is an amazing campaigner on these matters and has worked hard on the Yemen issue. He is right to raise this point, which is part of the overall debate and discussion. We cannot get the aid through unless the bombing stops. We need the ceasefire so that the £100 million that has been committed is spent. I bumped into the Secretary of State for International Development in Central Lobby yesterday, and she said that she is focused on and committed to increasing the amount of aid to Yemen. I am grateful for that, but that aid cannot get through, as my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) says, unless the bombing stops.
Bob Stewart
The right hon. Gentleman and I have a great interest in Yemen, both of us having lived there. My concern is that if we do not keep the aid in the bank, it might end up on some quayside in some dodgy port, where we do not want it to be and where it can be rifled by the mafia. We have to find a balance when we talk about delivering aid, particularly to somewhere like Yemen, because although we may be able to put the aid into the country, there it will sit until someone steals it.
Keith Vaz
The hon. Gentleman has served in Yemen, so he knows how lovely that country is when it is fully functioning. He is absolutely right that the aid needs to get to the people who actually need it, if they are to avoid the famine that is coming their way very shortly.
The second point I want to make is about the midlands engine. We have heard a lot about Birmingham and the west midlands—I am sure that has nothing to do with the fact that there is an election for Mayor in the area—but the Government need to remember that there is more to the midlands than Birmingham and other parts of the west midlands. There is, of course, Leicester and the east midlands. There is also Sherwood, and I see the Government Whip, the hon. Member for Sherwood (Mark Spencer), sitting on the other side of the House. I received a letter from the Secretary of State for Communities and Local Government just now on my iPad, and Sherwood is not even mentioned—I hope the hon. Gentleman will make representations about that. If we talk about the midlands engine only in respect of Birmingham and the west midlands, we will lose out in terms of a part of the midlands that has been a driving force for business. There are huge amounts of talent, enterprise and expertise, and many small businesses, in places such as Leicester, so it is important that we spread the money evenly throughout the whole of the midlands.
Earlier, I mentioned that the Financial Secretary to the Treasury, who is sitting near the Dispatch Box, was my favourite diabetes Minister, and I pay tribute to all the work she did in the years she served in the Department of Health, along with the right hon. Member for North Norfolk. Last year’s Budget gave us the sugar tax, which was resisted by some in the Government. As a result of that tax, manufacturers are now changing their formulas to ensure, yes, that the tax yields less when it comes into effect, but also that our young people in particular will be able to eat products with less sugar in them.
The latest such product—commended by me in an early-day motion—is, of course, the breakfast cereal Honey Monster Puffs, whose sugar content has been reduced by 25%. Nestlé announced yesterday, just before the Budget, that it would reduce the sugar content of KitKats and other products by 10%. Those of us who frequently have to go to the Tea Room, and who are met by all the KitKats there—I am sure you are not seduced by those who run the Tea Room, Madam Deputy Speaker—will be pleased to know that we probably will not even taste the difference once 10% of the sugar is removed.
However, it remains the case that I would have liked to see more focus on prevention—prevention, prevention, prevention. If we spend money now, we will save money in the future. As we know, £10 billion was spent last year on dealing with diabetes and diabetes-related issues. Some 80% of complications are avoidable. The only people who appear to be benefiting from that expenditure are the drugs companies.
Only two weeks ago, on my way back from Yemen, I stopped in Doha. I was taken—the Financial Secretary will be fascinated by this, because she has always wanted to create something like it—to a wellness centre. It had not just a GP, a pharmacy, a podiatrist and an ophthalmologist, but a swimming pool and a gym. When people go to see their doctor and are diagnosed with diabetes, instead of having to have their Metformin, they are prescribed a session in the gym or, if they can swim—sadly, I cannot, but if I could, I would be prescribed one—a session in the swimming pool. That is how to deal with diabetes—through prevention expenditure. I would very much like to hear a commitment from the Minister that prevention will be at the top of the health agenda.
I was surprised that the Chancellor did not suggest an increase in Home Office funding, which faces two very difficult challenges. Last week, Her Majesty’s inspectorate of constabulary released a report on British policing, stating that it is in a “potentially perilous state” due to “dangerous” and “disturbing” practices. The report is pretty damning, but unfair in that it places the burden of blame on police forces themselves. They have sustained enormous cuts to their budgets over the past few years, with the result that we have 19,000 fewer police officers on our streets today. This, together with other cuts, means that the police cannot deliver on the kind of agenda that the Government, and certainly the Opposition, want them to deliver on. We are constantly told that crime is coming down. Well, it is, but the nature of crime has changed: it has gone from the high street into cyberspace. Hundreds of thousands of crimes are now being committed on the internet. Unless we give the police more money to fund training, we will not be able to deal with the crimes that will be inherent in our system over the next few years.
The second aspect of Home Office funding is that the Government will, in the end, have to give a guarantee about the right of EU citizens to remain in this country. Some 3.2 million people will have to be processed. Someone who has been here for five years has a right to remain and become a permanent citizen, but they still have to apply and to get their letter confirming it. The current waiting time is between four and seven months. People have to fill in a huge number of documents to confirm that they have been living in this country over the past five years and record every single absence. A unit needs to be set up in the Home Office, properly funded, to deal with the registration of EU citizens. Ministers may grimace at that prospect, but I am afraid that we are going to have to spend money to make sure that this happens.
We need to get the police funding formula in place. In Essex, Madam Deputy Speaker, which is run by your chief constable, Stephen Kavanagh, and in Leicestershire, which is run superbly by my chief constable, Simon Cole, we need a definitive statement on what the police funding formula is going to be. Without it, we simply do not know how much money is available at a local level to spend on local matters. It is therefore essential to make sure that this happens.
The great feature of the previous Chancellor’s Budgets was that he always had a surprise concerning culture. On the last occasion, he funded a commitment to Hull because it had become the city of culture. I hope that the Minister will look carefully at what can be done for Leicester. Given the incredible achievement of Leicester City football club in winning the English premier league and becoming the current holders of the premier league trophy, it would be nice to see some kind of commitment from the Government to cultural and sporting achievement. The previous Chancellor has done it before, and I hope that the Minister will consider doing something for Leicester in future.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
I think it is fair to comment that this Budget has not met with unalloyed joy and enthusiasm across the country and in the media. It may come as a surprise to the House that I am going to demonstrate a degree of enthusiasm for one piece of the Budget that I think is highly commendable.
I am, of course, talking about paragraph 5.10 on page 48 of the Red Book, in which the Chancellor commits himself to reducing the burden on small co-operatives. I am enthusiastic about it because I have been a lifelong supporter of co-operatives, but also, and very personally, because the proposal was in the ten-minute rule Bill that I introduced on 8 November. May I put on record my appreciation to the Economic Secretary to the Treasury, who is in his place, for discussing the implications of the proposal with me afterwards, and may I say how much I welcome and appreciate its incorporation into the Budget?
I gently remind the Economic Secretary that I made a couple of other recommendations in the same ten-minute rule Bill, which have yet to appear in the Budget. I hope that following further consultation I will be able to praise him in future Budget debates for implementing them as well. As a general point, I hope that this will set a precedent for the Government, and the Treasury in particular, listening to Opposition Members and implementing some of their recommendations. I am sure that doing so will benefit future Budgets greatly.
The second thing I want to do—again, I am not being totally critical of the Government—is to put on record my appreciation for the report on the so-called midlands engine, which has been published today. Not only does it recognise the role of the west midlands in the national economy—and our phenomenal, high-quality manufacturing base, which is driving the economy and above all driving our exports—but it identifies the long-standing issues prevalent in the economy that need to be addressed if we in the west midlands are to reach our potential. Those issues are low productivity, skills, and difficulties with connectivity and transport infrastructure.
Although I welcome the proposal and the money that is being invested, may I make a couple of qualifying points? I think there is a very real danger that the potential benefit that accrues from the project will be undermined by some of the proposals in the Budget. My first point is that skills in construction, in particular, must be sustained if we are to improve our transport infrastructure. At the moment, about 10% of the construction workforce consists of employees from outside the country. If the ensuing Brexit negotiations affect their position and construction firms’ ability to employ others to sustain the policies and extra investment in the west midlands, that could undermine the ability of the midlands engine to reach its full potential. I emphasise that provision must be made in the Brexit negotiations for the construction industry to recruit the appropriate level of skilled personnel to fulfil such projects.
My second point, about education and skills, is particularly relevant in my constituency and the Black country. On 24 March, I am due to meet local headteachers to discuss funding problems in their schools, notwith-standing all the fine words that have been spoken about the pupil premium and so on. While the midlands engine will make provision for promoting skills, vocational education and science-based education, there is absolutely no point in putting in that money if we are not providing adequate funding for the original primary and secondary school education to ensure that people have the literacy, numeracy and other qualifications necessary to make the most of such money. There is a grave question mark over that at the moment.
When I meet the headteachers, I guess that one of the things annoying them—this annoys me and a lot of people in the Black country—will be the Government’s preoccupation with investing in unloved, unwanted, selective schools while they neglect to invest appropriately in our existing school estate. I would point to a National Audit Office report saying that there is a £1 billion need for investment in our existing school estate to deal with the immediate problems. There are certainly schools in my constituency that need immediate investment. If such money is used to promote new selective schools, the Government will, quite frankly, be distorting the existing state school system and estate, and failing to realise the potential of the pupils attending such schools. This is totally unacceptable. It is unwanted, and it really sticks in the craw of the people who, day in and day out, try to give our children the best possible education within the existing system.
I have worked out, on the basis of the figures in the Budget, that the £320 million going into the 110 new schools means that there is an average of £3 million for each of them, while the £210 million for the 10,000 state schools in the existing estate means that each will get an extra £21,000 over the course of three years. That huge disparity is bound to prejudice the life opportunities of the many millions of students going to our existing state schools.
Whatever fine words the Chancellor used and however well he packaged the statistics on which the Budget is based—he can, shall we say, tell a good story—the reality is that the previous Tory-led Government and this Government have so far failed. The public sector deficit, which we must remember was supposed to be eliminated by 2015, will certainly not be eliminated by 2021 and may well still be with us in 2025. Whatever happened to the long-term plan that was the mantra of the Tory-led Government up to 2015 and was used in the carefully choreographed comments made by every supporter of that Government to demonstrate the effectiveness—or otherwise—of their economic policy? The fact is that I do not recall anybody saying that the long-term plan might actually last only until 2015. It has now disappeared, or evaporated, from the political lexicon of the House. It would be laughable were it not for the fact that so many millions of people have endured cuts in their wages, cuts in their public services and, in some cases, very real hardship indeed. As a result, we face the perfect storm: the cumulative failure of austerity policies that have failed to generate the necessary tax receipts to pay off an adequate amount of our public debt; the increased demand placed on our public services—particularly social services and health, but also education—that have to be met one way or another over the next few years; and, of course, the uncertainty generated by Brexit.
I could not help but be amazed by the phraseology used by the Chancellor over his decision to waive the fiscal targets in order to make available more money for what has loosely been called a “fighting fund” or “war chest” for Brexit. My understanding of a fighting fund or a war chest is that it is money that is put away out of existing consumption to be used for problems that arise in the future; it is not about heaping debts on future generations to pay for mistakes made in the present, such as the results of Brexit arising from this Government’s policy.
I would like to have gone on, but I will try to stick to the 12-minute limit. The Government are failing to address the big issues that have arisen from their failure to deal with public spending and the economy over the past seven years. I concur with the disappointment expressed by my hon. Friend the Member for Wallasey (Ms Eagle) at the Government’s failure to recognise that and to take the necessary big steps to address it. I think that the Budget is a major failure. It is a sticking-plaster Budget that spends money just to avert a crisis, without examining the underlying crises and the policies needed to address them for the benefit of everybody in the long run.
Madam Deputy Speaker (Mrs Eleanor Laing)
I appreciate that some hon. Members have been sitting here all afternoon. There is something a little unfair about this but, c’est la vie, I am afraid that I have to limit Members to 10 minutes.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Thank you for giving me the opportunity to contribute to today’s Budget debate, Madam Deputy Speaker.
It is fair to say that today’s headlines are not what the Chancellor might have planned: “Spite Van Man”, “Tories break tax vow”, “Phil Picks a Pocket or Two”, “Rob the Builder! White Van Man gets battered by Budget”, and that is just to name a few. It is a good example of how, when one does things in a hurry, one gets things wrong. The Chancellor got it wrong yesterday. If he takes anything away from the last 24 hours, it will be that he made the wrong choice at the wrong time and in the wrong way. That is why Labour, along with many Government Members, will oppose the increase in national insurance for the self-employed. It is a broken promise and the Chancellor is rightly in for a rocky ride.
The Chancellor has used his first Budget to continue with tax giveaways to those at the top, while hitting self-employed low and middle earners for £2 billion to fill his own black hole. The Association of Independent Professionals and the Self-Employed describes this tax hike as an additional burden upon individuals who are already subjected to costly excessive bureaucracy. Anyone who is self-employed and earns more than £16,250 a year will have to pay more tax. Under the proposals, a self-employed person earning £20,000 will pay almost £100 more in national insurance from next year and a self-employed person earning £30,000 will pay almost £300 more. Up to 8,000 self-employed small businesses in my constituency could be affected by the change. For a self-employed earner bringing up a family on about £25,000, that could be about £15 to £20 a month out of money used to pay for school trips, school uniforms or putting food on the table. At the same time as inflation is going up and average wage growth is being revised down, this measure, implemented in this way, will lead to yet another squeeze on household incomes. The last thing we want is for families to be borrowing more just to make ends meet. The just about managing could become the just about managing no longer.
The self-employed are the engine of the UK economy. I have twice had periods of self-employment and I know the challenges they face. There is not the back-up and security of an employer to fund their pension, pay for a training course, cover them with another member of staff if they are off sick, or provide statutory holiday pay. It is hard and it is stressful, alongside the rewards of being independent and entrepreneurial. Due to income fluctuations, it can be harder to get a mortgage or a rental agreement.
The Budget should have been a chance for the Government to show the self-employed that they are on their side. Indeed, the biggest difference in tax take between self-employment and employment lies in the 13.8% employer national insurance, not the national insurance paid by individuals. If the Government are serious about equalising tax treatment, they should focus on how to work in partnership with the self-employed to balance and share the risk for those who are doing the right thing. The small and medium enterprise community is the backbone of our economy, and the Government should bring forward such proposals only after proper dialogue and consultation with it.
I want to focus on a few other points. Productivity growth is set to be revised down again, even after the UK productivity gap widened last year to the worst levels since records began. After seven years of Tory Government, we still lag behind Germany and the US by more than 30%. As the Chancellor said at the time of the autumn statement, the productivity gap is well known, but it is shocking none the less. The downward revision of productivity is not just due to Brexit. It is a reflection of the Government’s strategy and investment record: their lack of achievement, rather than their recycled infrastructure plans. At some point, the Government will have to take responsibility for their poor record. They now have no one else to blame.
When the Government came to power, they stopped the Building Schools for the Future programme, and two schools in my constituency were affected. We can now see the outcome of the Government’s neglect in favour of a blind ideological pursuit of, and almost exclusive support for, free schools and grammar schools. The National Audit Office calculates that £6.7 billion is needed to bring existing school buildings in England and Wales to a satisfactory standard. Ministers are choosing to give billions of pounds to fund new free schools, while existing schools are crumbling into disrepair. That is not my view, but the conclusion of the Whitehall spending watchdog. The Chair of the Public Accounts Committee called for the money to be reassigned and diverted to existing buildings, arguing that taxpayers’ money could be used to fund much-needed improvements.
Another challenge is 4G coverage. The UK is 54th out of 80 countries surveyed for 4G coverage, with levels here lower than in Bulgaria, Albania and Romania. This is the fifth time the Government have announced this highly limited roll-out of fibre broadband. Once the roll-out is complete, only 7% of homes and businesses will have benefited.
This Budget and previous Budgets have cut corporation tax, which will be 19% this year, 18% next year and 17% the year after, removing £15 billion from public finances in this Parliament. This is a direct cost to the taxpayer. The irony is that not a single business, large or small, that I have talked to, and I talk to many, has put corporation tax levels at the top of their wish list. They have raised infrastructure; affordable housing, so that employees can live and work near where they work; education and skills; and public transport and its affordability. The decision to go ahead with those corporation tax cuts is a self-dug black hole that the Government need to fill. They are plugging the gap with the earnings of the self-employed and cutting the amount spent on children’s education.
In recent weeks and months, teachers have told me about growing parental poverty, and about kids coming to school hungry or without clean school uniforms. Parents are sometimes unable to afford school trips. Schools are having to cut teaching posts and non-teaching welfare and support staff, curriculum teaching time is being reduced and the school day is being shortened. As pupil numbers increase, teachers face increasing class sizes. Increasing numbers of children face mental health conditions but are unable to get the support they need. How can the Government be proud of that record, which is the reality of what our wonderful schools face—the worst they have known in a generation?
The Government should delay or abandon their corporation tax cuts and support schools, which work hard to ensure that the children of our country get the education they need. Indeed, at a minimum, they should delay the application of the apprenticeship levy to schools.
It is worth mentioning one other lost opportunity. In the 2015 Budget, the former Chancellor announced that he had hiked the tax take on dividend income by 7.5%. That change took effect only in April 2016, meaning that people could bring their dividends forward by a year to avoid it. The OBR estimates that, once other factors are taken into account, pre-announcing the policy cost the Treasury £800 million and handed shareholders that same amount; and that each of those individuals withdrew an average of £30 million in dividends and avoided £1.1 million in tax. That is a devastating conclusion and another example of how the Government continue to give to those who already have and take away from those who need the most.
We need better than this. We need a strategy that addresses the needs and challenges that businesses and families in our constituencies face. We need a proper plan for funding public services, an economic plan that suggests a clear sense of direction, an honest assessment of the risks of Brexit, and a sensible response to those risks. What was missing from the Budget was a proper vision of our future and a pathway to get there. It was an unfair Budget, it made the wrong choices and is set to leave us poorer and less prosperous as a nation.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
After the spin around the Budget, which has not exactly gone to plan, let us look at the actual facts. According to the Resolution Foundation, we have had the worst decade for pay growth in two centuries of earnings data. GDP growth is overplayed and inflation is underplayed. GDP growth is expected to flatten as increasing inflation, which has sped up in the past few weeks according to much of the data, squeezes living standards, and as consumer spending, which as we have heard has been largely driven by a credit card boom, dries up. Again, that creates a false impression. Borrowing continues to rise and is expected to rise further. The OBR has made it absolutely clear that the
“government does not appear to be on track…to return the public finances to balance at the earliest possible date in the next parliament”
as they had promised.
On productivity, the Chancellor did a very good job of outlining what a bad job the two successive Conservative-led Governments have done. He said:
“The stats are well known: we are 35% behind Germany and 18% behind the G7 average”.—[Official Report, 8 March 2017; Vol. 622, c. 818.]
What on earth have they been doing for the past seven years if we are in that position? Small businesses are hit not only by the NICs issue, which I will come to, but by the reduction in the dividend allowance, which we have heard about, and the additional red tape and burdens of things such as quarterly reporting.
We can talk about statistics and the real things going on in the economy, but the impact I am interested in is the impact on my constituents in Cardiff, Penarth and the Vale of Glamorgan. I am proud that the Welsh Labour Government are investing in our schools and hospitals. New schools and hospitals are being built in my constituency, and more is being spent on NHS and social care together than the average spent in England. Indeed, councils in Cardiff and the Vale of Glamorgan are doing their best to invest in local services and to protect people who are suffering as a result of the policies of the Tory Government in Westminster. The fact remains, however, that by 2020, according to the Joseph Rowntree Foundation, ordinary working families will be worse off than they were in 2015. The income of a couple with two children, working full time and receiving the so-called national living wage, will fall by £1,051, while that of a lone parent with two kids, working full time on the national living wage, will fall by £3,363. My constituents tell me about the real challenges and hardships that they face, as opposed to the spin that we get from the Government.
Let me say something about self-employment and the increase in national insurance contributions. I think that the Government’s approach has been a huge mistake. It is clear that those in the self-employed sector face huge additional fixed costs and risks. I speak to many self-employed people every week in my surgeries—for example, I have spoken to a number of taxi drivers recently; I shall say more about them shortly—and I know about their lack of benefits, their higher insurance premiums, and their difficulty in obtaining mortgages. There is clearly some abuse on the margins of self-employment, and we must address the issue of bogus self-employment, but hitting a whole swathe of self-employed people is a crude measure which can have hugely differential and damaging impacts on some sectors and groups.
Peter Dowd
My hon. Friend said that the Government’s approach had been a mistake. Today, on Radio Cymru, the Under-Secretary of State for Wales, the hon. Member for Aberconwy (Guto Bebb), said:
“I believe we should apologise. I will apologise to every voter in Wales that read the Conservative manifesto in the 2015 election.”
Well, he was the Minister, but I am not sure whether he still is. Does my hon. Friend know?
Stephen Doughty
I was not aware of those comments, but, as someone who listens to Radio Cymru occasionally, and to Newyddion, I shall listen carefully to what the Minister said, whether it was in Cymraeg or in English. I hope that his ministerial colleagues will listen as well, because it is clear that there is much disquiet on the Government Benches. Perhaps that is why so few Conservative Members are present today, and why those who have spoken have been quite critical of the decisions in the Budget.
There are 4.8 million self-employed people in the country, and nearly 5,000 in my constituency. It is all very well to say that this measure will not affect the very poorest, and, at the other end of the spectrum, that it will ensure that the very richest are brought into line. However, as we heard from my hon. Friend the Member for Ilford North (Wes Streeting), no amount of distributional analysis and charts can reflect the reality and the impact on those in the middle deciles: people who are just about managing, and the strivers who the Government were so keen to say that they were trying to support, but who have been shafted. The Government are not helping those people; they are doing exactly the opposite.
The Federation of Small Businesses has described the measure as
“a tax grab on middle-income self-employed people who are just about managing”.
The Musicians Union—I work closely with that union, and with many other unions representing the creative industries in my constituency—has said:
“This Conservative Government…have done nothing but cut funding for the arts and for music, and they are now penalising musicians further by increasing their tax contributions.”
Those are the real facts. The Federation of Small Businesses at one end of the spectrum, and representatives of those in the creative industries at the other, have decried this measure.
I want to say a little about the reality of life for one group of workers who are self-employed at present, although many of them would argue that they are actually employed, and, indeed, that is the subject of many current legal cases. I am talking about taxi drivers. As a member of the GMB, I am proud to have been working with its members locally, and hearing about the concerns of many taxi drivers in Cardiff, the Vale of Glamorgan and south Wales as a whole.
Taxi drivers are hard-working people. They work every hour that God sends. They are striving to make a difference for their families, but they are struggling with the costs that they face from the companies that engage them. There are the fines, the administration fees, the cost of fuel, and the cost of replacing windows when they do not accord with regulations which vary so much across the country. They are often trapped in low-paid account work, receiving wages that do not reflect the effort and time that they put in. They have differential insurance costs. Drivers from other local authorities, or indeed from London, where different rates are paid under different regulations, come to Cardiff and undercut the industry there. Antiquated legislation allows private hire licences to continue to rise without any cap; that is a simple matter of supply and demand. These national insurance rises will hit people who are striving on the margins. They can barely afford the additional £20, £30 or £40 that this measure is going to bring in. They are the ones who are going to be hardest hit, and they are already hit hard by many other measures.
This is just one measure hitting those in self-employment. I have been speaking to a number of companies in Cardiff that are using the self-employed in the ways I have mentioned. I am concerned that companies such as Dragon and Veezu, who operate taxi firms, are not willing to meet drivers to discuss their concerns or to meet the GMB. That is of great concern to me. Fundamentally, what are the Government doing to help such people who are striving and working hard, and who just want a level playing field and enough money to be able to support their families?
I mentioned the impact on the creative industries. We have lots of start-up creatives in my constituency, including small design, music, production and technology firms. They are also going to be hit badly by these changes. What are the Government doing to support them?
Finally, I will make a few further points. Where on earth was the mention of Brexit? That is the biggest economic challenge facing this country in generations, but it was not mentioned. There were no answers on the question of the additional debt that the OBR has predicted is going to be added to the national debt; no answers on whether Wales is going to be left a penny worse off as a result of the potential changes to regional finance and structural funds; no answers to the exchange rate volatility that is causing the prices at the pump to go up; and no answers on the single market, or the impact of tariffs if we end up in the “deal or no deal” situation that the Prime Minister seems to be leading us towards. Where was the mention of those things? That was utterly irresponsible.
We should consider what else was missing, too. Where was mention of climate change, or further support for the steel industry, or support for veterans—including younger veterans who are leaving but are struggling with their housing costs and are discriminated against in housing benefit? Where was action to right the injustices for women pensioners? The WASPI campaigners were here yesterday; thousands from across the country, including hundreds from Wales, were here speaking out. Where was the help for the Allied Steel and Wire pensioners who were let down in my constituency, and are still let down today? Where was the money to address the police cuts—the police are suffering huge pressures, as the former Chair of the Home Affairs Committee, my right hon. Friend the Member for Leicester East (Keith Vaz), pointed out? Where was the help on energy prices when people are seeing their bills go up?
This Red Book is one of the thinnest Budget books we have seen, certainly since I have been in this House. That is because there is a whole lot missing from it, and, frankly, the Chancellor is going to have to do a lot of rethinking on the bits that are in it.
Mr Stewart Jackson (Peterborough) (Con)
It is a pleasure to follow the hon. Member for Cardiff South and Penarth (Stephen Doughty).
The Labour party clearly has a rich vein of irony, as it is masquerading as the friend of the entrepreneur and the self-employed. Perhaps the white van man taskforce will be headed up by the right hon. Member for Islington South and Finsbury (Emily Thornberry), who has great affinity with white van man.
The fact of the matter is that Labour Members must be living on a different plant from the rest of us, because this Budget was actually a consolidation of seven years’ work to rescue this country’s fiscal credibility from the disastrous mess left by the Labour party, including the record peacetime debt that we had in 2010. I also have to say that in my 12 years in the House, I have rarely seen a poorer Budget response than that from the Leader of the Opposition—no wonder his own MPs had their heads in their hands.
Mr Jackson
I will not give way, if the hon. Gentleman will forgive me, as I have to make progress.
If we are talking about honesty and being upfront, even today the shadow Chancellor is quoted as saying that within 100 days of a Labour Government, we would see the end of nuclear power. That is rather different from what was being said two weeks ago in Copeland, when the Leader of the Opposition was saying that nuclear power was safe under Labour.
The Budget also consolidates this Government’s industrial strategy, which is a recognition that many people across our country, particularly outside London, felt that the benefits of globalisation were not flowing to them, and to their communities, infrastructure, towns and cities. It is right that we address that, and this Budget does so. Those people feel that some of the forces of globalisation had passed them by. That is a wider context of Brexit, but because of my departmental responsibilities, I will not go any further into that.
We have also witnessed a jobs miracle over the past seven years. In my constituency there has been record growth in private sector jobs, a drop in the number of NEETs—those not in education, employment or training—and youth unemployment, and an unemployment rate of 1.9% on the last figures, which is the lowest in eight years. We have also seen the highest increase in living standards in 14 years, and an increase in real wages over the last quarter or so. We have cut the deficit by two thirds—it was 10.1% of GDP under the previous Labour Government; it is now 4%. The Government have also tackled key issues relating to the skills agenda, with £500 million for skills. In my constituency, a university technical college is attracting new students. More money—£40 million—is being made available for reskilling and retraining the workforce. The Chancellor is also considering important issues such as infrastructure spending on roads and broadband.
Welfare is certainly an issue that transcends party politics, but I am proud that this Government have worked on the basis that the No. 1 priority for getting people out of the miserable cycle of poverty and welfare dependency is to get them into work. Taking people from workless households and giving them work is massively important if we are to change their lives. It does not help when Labour Members propagate the myth about zero-hours contracts. In any case, people who are on those contracts sometimes make the decision to work in that way themselves. That affects their lives, but it is their choice. In fact, 97.1% of people are not on zero-hours contracts, but we would not know that from listening to Labour Members.
I agree that the social care funding is vital. It builds on the precept that we have already put in place, and on the better care fund. However, in 13 years of benign economic circumstances, the Labour Government did nothing at all about social care. They sold the gold, they ruined our private pension schemes and they racked up record levels of debt.
We are spending serious money—£10 billion by the end of this Parliament—on schools improvement. Labour adopt a levelling-down approach, attacking people who are aspirational and ambitious for their children. They say that grammar schools are awful—that they are what the rich and the middle classes do. Actually, they are about equality, improving people’s lives and reducing those differences. It is about taking people from modest backgrounds and giving them a real stake in their future. Labour Members have always been against that. They have been against share ownership, against the right to buy and against grammar schools. For them, it is all about levelling down and sharing the misery among everyone. That is what socialism is all about.
We are dedicated to improving the living standards of all our people. As Disraeli said, the aim of the Conservative party is the enervation of the condition of the working class, and that is our watchword. This is about social progress. That is why 1 million people will get a £500 pay rise this year as the national living wage goes up to £7.50. The personal allowance has risen seven years in a row. We have frozen fuel duty for working people who need their cars to go to work. We have provided free childcare—[Interruption.] The hon. Member for Cardiff South and Penarth says that we have not, but we are also putting serious money into research and development, broadband and tackling traffic congestion at pinch points.
Of course we have had to make difficult choices. On the specific issue of national insurance contributions, this is about the regularisation and simplification of the tax system, but it is also about social equity and fairness. The hon. Member for Cardiff South and Penarth shakes his head, but the Resolution Foundation has not always supported a Conservative Government’s fiscal measures and yet it is doing so today, as is the Institute for Fiscal Studies. It is interesting that Labour Members should be against fiscal fairness. They are against us making the necessary changes to fund things like social care. I have asked questions to which I have not had an answer from their Front Bench, or from “continuity Blair” on the Back Benches. I like to see the dynamic duo from Ilford, the hon. Members for Ilford South (Mike Gapes) and for Ilford North (Wes Streeting). What we do not have from Labour is a coherent, comprehensive, plausible policy on tax or spending. It is just more tax, more borrowing, and more spending—more debt millstones for our children. That is the Labour party for you.
There are certain things that I would have liked to see in this Budget that I did not, such as more tax on high-strength cider and a higher tax on tobacco. I support the sugar tax. I am not a libertarian—I am a social conservative—and we should reflect the health impact caused by sugar in our diet. Like my hon. Friend the Member for Harrow East (Bob Blackman), I would like more help in the autumn statement on affordable housing to get younger people on the housing ladder. We need to do more on tax advantages for brownfield remediation. We need to put in place extra care facilities for older people, such as through real estate investment trusts. We need more smaller niche house builders to get back into the market and build more homes.
Some schools in my constituency are concerned about the impact of the new education funding formula on their baseline funding. It would be remiss of me not to say that the King’s School and Arthur Mellows Village College are worried about that, and I will be speaking quietly and privately to the Chancellor.
My party is proud of its achievements over the past seven years in turning this country around after we inherited the Labour party’s disastrous legacy. My party believes in social progress, prudent government and fiscal responsibility, and it falls to the Conservative party, as ever throughout history, to build a country that works for everyone.
Barbara Keeley (Worsley and Eccles South) (Lab)
We have heard a wide range of speeches this afternoon, including from the hon. Members for Kirkcaldy and Cowdenbeath (Roger Mullin), for Richmond (Yorks) (Rishi Sunak), for Esher and Walton (Mr Raab), for Harrow East (Bob Blackman) and for Peterborough (Mr Jackson), and from the right hon. Member for North Norfolk (Norman Lamb), who is no longer here. We also heard excellent speeches from my hon. Friends the Members for Wallasey (Ms Eagle), for Croydon North (Mr Reed), for Bristol East (Kerry McCarthy), for Ilford North (Wes Streeting), for West Bromwich West (Mr Bailey), for Feltham and Heston (Seema Malhotra) and for Cardiff South and Penarth (Stephen Doughty) and from my right hon. Friend the Member for Leicester East (Keith Vaz).
I shall mainly talk about social care, but I want to mention the absence of any Budget help for the 1950s-born women struggling without their state pensions owing to the 1995 and 2011 Pensions Acts. Their demonstration and lobbying here yesterday were wonderful. I am also sad that the Chancellor could not find £10 million for the children’s funeral fund, which was campaigned for so ably by my hon. Friend the Member for Swansea East (Carolyn Harris). Despite cuts from central Government, my local authority has recently announced that it will waive fees for child burials, but all the weight of that should not be put on councils.
I had hoped that this Budget would finally announce a Government funding commitment to start to put the social care sector on a stable footing. The Chancellor said that everyone should be able to
“enjoy security and dignity in old age.”—[Official Report, 8 March 2017; Vol. 622, c. 820.]
However, despite his rhetoric, it is clear that his Budget did not match up to that aim. As we have heard, the King’s Fund has put the current funding gap for social care at around £2 billion. Yesterday, the Chancellor announced additional funding of £2 billion over three years, of which only £1 billion will be available this year. That is half of what is needed to deal with the immediate crisis. The Care and Support Alliance commented that that the funding will
“keep the wolf from the door”
but no more. There has been much discussion about the future and what will happen to that extra funding, but we must bear it in mind that post-Budget figures for adult social care show a 2.1% cut between 2016-17 and 2019-20, showing that funding is still being cut in this Parliament.
Along with council leaders, social care providers and health leaders, the Opposition have been warning this Government for many months about the perilous state of the social care sector. Indeed, the King’s Fund recently said that adult social care is
“rapidly becoming little more than a threadbare safety net for the poorest and most needy older and disabled people.”
Last week, the care company Mitie offloaded its two homecare businesses for £2, which is a clear demonstration of the fragility of the current care market. That company, which had provided care and support to 10,000 people and employed 6,000 staff, was reduced to being worth only £2. It has taken until now for the Government to heed the many warnings, and they were wrong to wait so long to act, just as they were wrong to cut local government budgets by around 40% since 2010, which has led to cuts of £5.5 billion from adult social care budgets by the end of this financial year.
Ms Angela Eagle
Does my hon. Friend also recognise that the cuts to benefits, particularly to housing benefit, will have a huge effect on extra care? Large numbers of people are very happy, well looked after and protected in those arrangements, but they cannot pay for them if housing benefit goes. Moving those people into nursing care will cost far more a week. That is another ticking time bomb.
Barbara Keeley
My hon. Friend is right about extra care housing.
The Chancellor was wrong not to make any extra funding available for social care in the autumn statement. Instead, Ministers chose to continue putting the burden of funding social care on councils and council tax payers. The local government finance settlement compounded the mess by recycling money from the new homes bonus to create the adult social care grant. That rather inept settlement made a third of councils worse off, including my own Salford City Council, which loses an extra £2 million from budgets this year.
One council that did not lose out from the settlement was Surrey County Council, which will gain £9 million extra from the adult social care grant. Perhaps that should not surprise us, given that the settlement was made when Surrey was in the middle of a long, drawn out and clearly highly successful lobby of Ministers to get more funding for just that council’s social care.
Last night, Surrey County Council released many documents and texts revealing the extraordinary level of access that that one council enjoyed with Ministers and their advisers. My local authority recently asked for a meeting with the Secretary of State for Communities and Local Government to discuss our difficult financial situation and the loss of funding for social care. We were given a 30-minute meeting with one of the Under-Secretaries of State. However, the leader of Surrey County Council was given meetings with the Secretary of State on 12 October, 19 October and 9 January. There were a number of further meetings with the Secretary of State to discuss Surrey County Council’s funding situation involving the Chancellor, the Secretary of State for Health and other Surrey MPs. There was also a substantial stream of letters, emails and texts, some of which may make surprising reading. Some frustration was expressed about the Communities Secretary, with one Surrey MP saying:
“Sajid led me to understand before Christmas that he would be trying very hard…to help Surrey out with the worst of its (Government-dictated) financial dilemma.”
And he said that if the Secretary of State was
“imprudent enough not to have £40m hidden under the Department sofa for just this sort of emergency/problem”
and if all the Secretary of State’s local government money really is allocated, he
“still has the option of adjusting all other Council settlements down very slightly in order to accommodate the £31m needed for Surrey—and I think he should be encouraged to do this.”
In January that Surrey MP wrote that he was
“losing hope re getting help from Government this time, we still need to kick up such a fuss that Ministers and Civil Servants really do remember at the very least ‘they will need to treat us better next time.’”
I think that refers to the new funding formula. All this about a council that the Chancellor himself told in a letter in December:
“Surrey’s core spending power in 2016/17 decreased by 1% compared to an average reduction of 2% for shire counties as a whole”.
And the Chancellor said that over the lifetime of this Parliament
“Surrey’s spending power is forecast to increase by 1.5% compared to a flat cash settlement for local government as a whole”.
It seems that Ministers were not ready to listen to most council leaders, care providers, local authorities and their own regulator about the fragile state of social care funding, but it is clear from all the correspondence—I recommend that hon. Members read that correspondence, as it is very interesting—that relying on council tax and business rates to fund social care will never give us the fair and stable funding system that we need.
As I said earlier, there will still be cuts of 2.1% to social care up to 2019-20, so what we have in this Budget is a sticking plaster or a stopgap announcement that will not give older and vulnerable people the “security and dignity” in old age that the Chancellor claims. And it will not enable us to deal with the continuing demographic challenges that we face. The number of people aged 75 and over is projected to nearly double by 2039. That ought to be something to celebrate, but instead the Government have created fear and uncertainty for older people by failing to address the health and care challenges raised by those demographic changes. The Chancellor said that the Government intend to produce a Green Paper in the autumn on long-term funding options, and there has been some discussion of that in this debate, but given that we have already had the Barker review and the Dilnot commission, there are fears that the Government could be kicking this issue, once again, into the long grass.
I hope that the Government are not doing that, because cuts to social care budgets hit not only people who need care, but the 6.5 million unpaid family carers. Carers UK tells us that an estimated 1.6 million people currently provide 50 hours or more of care per week, which is an increase of a third since 2001. Some 2 million people have given up work at some point to care for loved ones, and 3 million carers have had to reduce their working hours. That is not good for their finances, with many falling into poverty as time goes on.
As people live longer with disabilities and long-term health conditions, more of us will find ourselves having to take on a caring role. Sadly, this Budget offered nothing to carers, just as it offered nothing to women born in the 1950s and nothing to families who were bereaved after losing children. There was nothing in it for carers, no extra support and no sign that this Government value the important work that they do. I say to the Minister that £120 million would deliver a three-hour respite break each week for 40,000 carers who are providing full-time care; instead, as we know, the Government have chosen to prioritise cuts to inheritance tax and corporation tax, and to ignore the increased burden on unpaid family carers.
The Government have also failed to recognise that the social care crisis is not just about older people. The Chancellor talked about the impact that the £2 billion over three years will have on delayed discharges, but, as councils have reminded us this week, other groups of people need social care, including those with learning disabilities. About a third of councils’ annual social care spending—some £5 billion—goes on supporting adults with learning disabilities. Surrey MPs must now understand that fact, after all the correspondence from their council leader, who spent a lot of time trying to make clear to them what an issue that was for councils.
We had an excellent debate in Westminster Hall earlier in the week on social care in Liverpool, when we heard that Liverpool had lost almost 60% of its grant since 2010 and that that will reach cuts of 68% by 2020. Cuts to social care there have meant that funding for care packages had to be cut, so whereas 14,000 people were receiving one now only 9,000 are—5,000 people are no longer getting a care package. Surrey, which has had so much attention, did not have cuts at that level; its cuts were only 28%. Indeed, social care spending in Surrey has increased from £273 million to £367 million.
I want to make an observation about the new allocations for the £2 billion that the Government have announced. I observe—that is all I can do, because the figures have only just arrived—that the allocations are £1 billion for year one, two thirds of a billion for year two, and one third of a billion for year three. In that, Surrey’s allocation goes up in year two; it is one of only six councils on the whole list that gets a bigger allocation out of a smaller amount of money. I do not know, and it is impossible to see here in the Chamber, what the formula is, but that position is very worrying.
Disturbingly, this important matter of funding social care has been tarnished by the offering of sweetheart deals and the making of gentlemen’s agreements. It seems, from reading the correspondence, that all of that was done to escape the political heat for some right hon. and hon. Members facing the reality of what cuts to council funding have done to social care in their local authority area. That is what this is all about: threats of what will happen to constituencies and areas if the cuts go on.
Social care should not ever be consigned to becoming a threadbare safety net. We also should not have a Communities Secretary who can hold more than seven meetings with Surrey County Council or Surrey MPs to discuss their funding, yet who will not meet a cross-party delegation from Salford City Council and has no time in his diary to meet the leader of Hull City Council. I hope the Communities Secretary will start to listen to councils other than Surrey County Council, whose leader emphasised in letters that we have seen that it has the largest Conservative group in the country. He should also listen to leaders from Hull, Croydon, Salford, Manchester, Liverpool, Durham and Newcastle. He needs to understand from them what is needed throughout the country to save social care from crisis.
The Financial Secretary to the Treasury (Jane Ellison)
We certainly have covered a lot of ground in today’s debate; indeed, we have strayed internationally, as well as covering an awful lot of domestic policy. Before I address some of the key themes, I wish to stress again the central point made by my right hon. Friend the Secretary of State for Communities and Local Government when he opened the debate. Our ability to provide public services is entirely dependent on our ability to pay for them. Indeed, the right hon. Member for Leicester East (Keith Vaz) said in his speech that before we talk about spending, it is important to talk about how we would raise the money. That is the last thing we have heard from the Opposition today.
Key to this debate is the fact that if we do not live within our means, deal with the deficit and get debt falling, we simply will not be able to continue to fund the public services that we all care about on both sides of the House; of course, the generations to follow will then suffer. We have seen how debt has been left for others to deal with, which is why at the heart of the Budget and our economic policy is our continued resolve to restore the public finances to health, increase our economic resilience and secure our public services for the future. At the heart of our aims is the work to bring down the deficit. We have made great strides, and in doing so we have been able to bring what we spend and what we raise further into line. That is how we can afford public services.
We have already cut the deficit by almost two thirds, but the work is not done. We are also on course to get debt falling as a share of GDP by 2018-19. We are, though, the first to acknowledge that there is no quick fix, no silver bullet and, contrary to assertions by Opposition Members, no magic money tree. That is why we are sticking to the spending plans we have set out and why we are taking a systematic look at how we can become ever smarter in how we spend taxpayers’ money, including by conducting an efficiency review that aims to get more value for money and to save £3.5 billion. As my right hon. Friend the Secretary of State said earlier, we are looking forward to benefiting from the insight and expertise that Sir Michael Barber can bring to bear on the process.
We all have to acknowledge that this work is part of a longer-term challenge. There are many pressures on services in advanced economies around the world, and if we do not grapple with the issue of how we pay for things, we just cannot tackle them. We heard quite a lot from the shadow Minister, the hon. Member for Worsley and Eccles South (Barbara Keeley), about social care. We made a significant announcement in the Budget statement about a £2 billion injection of extra cash—[Interruption.] Opposition Members say from a sedentary position that it is not enough; I return to my previous point: we have heard so much from them about where they would spend more, but we have heard absolutely nothing about how they would pay for it. They have a few gimmicky ideas, to which I shall come—I am going to address one of them head on—but their answer really is the magic money tree. We have made new money available, and further details have been announced today about how it will be allocated. That is real money made available very quickly—£1 billion is being made available for the new financial year starting in just a few weeks—and it is really important that we do that.
Nevertheless, we acknowledge that there is a longer-term challenge. As I said, all advanced economies face pressures as populations become older and the rise in complex and chronic conditions continues. As well as offering some kind words about me relating to my previous role, the right hon. Member for Leicester East rightly drew our attention to the Government’s work on prevention. I shall not be drawn into talking about that too much—as a former public health Minister, I could talk on that for some time—but I remind him of the national diabetes prevention fund and the related work, and the £16 billion a year from the public health budget that we give to local government.[Official Report, 13 March 2017, Vol. 623, c. 1-2MC.] All Members have acknowledged what the sugar levy and other work are doing to turn the sugar tide.
I also draw the right hon. Gentleman’s attention to page 35 of the Budget book—our consultation on the damage that white cider can do. We are consulting on the alcohol by volume duty rates because we have heard from many charities, particularly those working with the homeless, about the impact of the abuse of white cider, in particular, on the health of homeless people and many young drinkers and the increase that it provokes in the frequency of visits to A&E.
Barbara Keeley
Surely the key point is that we are almost abandoning prevention. Some 1.2 million older people live every single day with unmet care needs. There is no prevention when a frail older person who needs care does not get it, and this money goes nowhere to helping with that.
Jane Ellison
I disagree with the hon. Lady about prevention. We can do a lot on prevention, particularly with older people. With this new money, we can have more care packages. For example, falls prevention, which is delivered in the community or at home, is one of the most valuable ways to keep people out of accident and emergency. But we are not in any way downplaying the challenges of dealing with these pressures. We are not burying our heads in the sand. It is a matter not just of common sense but of responsible government that we must face up to the question of how to secure our social care system for the long term. He is not in his place, but the right hon. Member for North Norfolk (Norman Lamb), my former colleague in the Department of Health, talked about that, and there are areas of great agreement across the House about some of those challenges. That is why we announced that we will publish a Green Paper by the end of the year in which we will set out our proposals to put spending on a sustainable footing.
The hon. Member for Worsley and Eccles South said from the Opposition Front Bench that this was about the long grass. I will not embarrass her by reading out the very long list of times that the last Labour Government attempted to grapple with this issue over 13 years.
Jane Ellison
No, I am not going to take another intervention—I will take the same time that the hon. Lady took.
The list is very long. Labour said in its 1997 manifesto that it would tackle this issue; there was a royal commission in 1999, a Green Paper in 2005 and the Wanless review; it was said that the issue would be resolved by the 2007 comprehensive spending review, and there was another Green Paper in 2009—13 wasted years. I am afraid that Opposition Members provoked me to embarrass them. Their long grass was very long indeed.
We are injecting not just new money into social care but an extra £425 million into the NHS to help A&E departments triage patients more effectively and to support local NHS organisations as they reform and improve for the long term the way services are provided to patients. By putting more money into social care and those specific parts of the NHS—triage and capital for A&E—we are addressing some of the very issues that Simon Stevens has talked about recently as immediate challenges of dealing with pressures in the system.
My hon. Friend the Member for Harrow East (Bob Blackman) asked about STPs. The investment that we set out will make a real difference by supporting regions with the strongest plans that are ready now to deliver their long-term visions. We will revisit STPs in the autumn to see whether there are further areas with strong cases for investment, but the NHS obviously also has a part to play in looking at how it can, for example, dispose of unused land and reinvest that money. I give my hon. Friend that assurance.
Let me talk a little about education and skills. We have already taken action to fundamentally reform and improve school education, with the result—this is never acknowledged by the Opposition—that 1.8 million more children are in good and outstanding schools compared with 2010. The simple fact is that vastly more children are getting a good or outstanding education. In this Budget, we further galvanised our schools with £320 million of investment in new schools and £216 million for the maintenance of existing schools.
My right hon. Friend the Secretary of State for Communities and Local Government spoke compellingly about the sweeping reforms that we have introduced to put technical skills at the heart of our education system. I sense great cross-party consensus that that has been an undervalued part of our education system. That will give young adults a chance to develop new talents that will stand them and, of course, our country and economy in good stead as we work towards the high-skill, high-wage and hi-tech economy that will help us to be competitive in a global marketplace.
I have spoken about the importance of controlling our public finances, investing carefully in our public services and ensuring that our spending is sustainable. Alongside that, I want to make a few remarks about the importance of ensuring that our tax system is sustainable. We cannot talk about one side without talking about the other. The flipside of how we invest in public services is how we fund them. Let me address two issues.
First, a number of hon. Members have mentioned business rates. It is right that we update them to reflect today’s property values, but we recognise that this has meant a sudden jump for some. I thank my hon. Friend the Member for Richmond (Yorks) (Rishi Sunak) for his excellent speech. I am familiar with some of the pubs in his beautiful constituency. He mentioned the importance of supporting pubs. That was part of the £435 million package of support that the Chancellor outlined yesterday. He has been working on that with the Secretary of State for Communities and Local Government to help businesses manage the steepest increases following the business rates revaluation.
Secondly, there has been much discussion in this debate of the changes we have made to national insurance contributions, and I will respond directly to some of the points made. Let us be clear that the contributory benefits funded by national insurance contributions are very different from employment rights. Much of this debate and the public discourse has criss-crossed between those two important, but distinct, subjects. National insurance pays into a fund that pays out to the NHS and contributory benefits—principally the state pension, but also parental pay. We have announced that we are looking carefully at maternity and paternity rights.
Jane Ellison
No, we have said that it is 20% of the fund, but the vast majority of the national insurance fund pays towards the state pension, which, as has been made clear, is now available to the employed and the self-employed. That is part of an important and necessary step to level up what benefits people get. It is also important and necessary to level the playing field when it comes to what people pay in.
The Prime Minister has asked Matthew Taylor to look at the important issue of employment rights. We will get the Taylor review later this year and will return to look at those important issues. Whether people are self-employed or an employee, if they do a similar job, get a similar wage and receive similar benefits, they should pay a similar tax. That is actually recognised by Labour’s shadow Work and Pensions Secretary, the hon. Member for Oldham East and Saddleworth (Debbie Abrahams).
I really hope that the hon. Members for Ilford North (Wes Streeting), for Bristol East (Kerry McCarthy), for Bootle (Peter Dowd), for Cardiff South and Penarth (Stephen Doughty) and for Feltham and Heston (Seema Malhotra) are not disowning the self-employment review and commission that was launched last November by the hon. Member for Oldham East and Saddleworth, who said that one of the five principles of Labour’s self-employment commission was that self-employed NICs should rise towards employee levels. She went on to say:
“We cannot expect employees to continue to pay more into the system while offering equality of entitlements across employment status.”
I realise that Labour’s Front Bench rotates with dizzying speed—[Interruption.]
Jane Ellison
Thank you, Madam Deputy Speaker. They don’t like it up ’em!
I realise that the Labour Front Benchers rotate with dizzying speed, but I suggest that Labour Members look at the self-employment commission that they launched only last November. The majority of people who are affected by the change will be better off from the combined changes to national insurance contributions. Only someone with profits of more than £16,250 will have to pay more and, as some hon. Members have remarked, the new state pension is worth an extra £1,800 of pension entitlement to those who will now be on it. That is something that the Federation of Small Businesses, among others, has campaigned for.
It is obvious from the critique we have been offered by those on the Opposition Benches that, while they have a plethora of suggestions about how to raise taxes and raise spending, they have absolutely no coherent alternative economic policy. That was clearly in evidence yesterday, in the response we heard from the Leader of the Opposition, and the fact that there are so many former Front Benchers sat behind today’s Front Benchers is also testimony to it. We need to get spending and revenue-raising in balance; that is the mark of a responsible Government, and that balance is what allows us to safeguard the services we all value for the future.
Rothbury Community Hospital
(7 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mrs Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)
It is an honour to have finally been successful in the debate ballot and to bring the issue of the proposed closure of in-patient care beds at Rothbury community hospital to the House and to the Minister today.
Rothbury is a thriving small town at the heart of the Coquet valley community in my constituency, in Northumberland. The valley is a large, very rural and sparse community of over 5,000 people across hundreds of square miles, and it runs from the A697 at its eastern edge across to the Cheviot hills and the Scottish border to the west. Small villages and hamlets are dotted across traditional agricultural territory with mainly upland sheep farms, some of which are within the Northumberland national park and the Otterburn Ranges—the Army’s largest training base in England.
Families’ commitment to living in this idyllically beautiful but quite challenging day-to-day environment is vital to the land management necessary for our tourism, our farming and our military needs as a nation. Over 30% of those living in the valley are over the age of 65—a figure that will only grow, as Rothbury and the surrounding villages are wonderful places to retire to or for people to stay in long after their children have flown the nest. Therefore, we must plan for the right long-term, sustainable healthcare offer for this close-knit community of families and businesses and for the unique challenges they face.
The local community hospital has, until now, provided 12 in-patient beds, primarily for palliative, post-operative recovery and respite care. The clinical commissioning group reviewed activity data last year as it brought in a system-wide approach to discharging patients home, and average bed occupancy in Rothbury was 50% through 2015-16. The CCG declared that to be too low to be sustainable.
As a result of nursing workforce challenges across the Northumbria healthcare trust—albeit that we face fewer challenges than the rest of the UK, thanks to our excellent forward-thinking trust, doctors and managers—the reality is that we do not have the nursing capacity adequately to cover the 12 in-patient beds at Rothbury at present. A combination of those workforce challenges, and the under-occupancy concerns cited by the CCG, meant that the use of those in-patient beds was suspended temporarily in September 2016.
Where I part company from our hard-working CCG on this issue is that I believe that those beds have been empty not because of a lack of demand, but because decisions have been taken to send people home to receive community care, or to Alnwick infirmary to receive in-patient care. As a result, Alnwick infirmary has been running near to capacity for some time, and those in the north and east of my constituency who might otherwise have been sent there have been forced to remain in the urgent care beds at the UK’s first specialist emergency care hospital at Cramlington— our new specialist care hospital for the whole of Northumberland and north Tyneside—for longer, placing greater strain and expense on our healthcare system than necessary.
If this in-patient ward is permanently closed, that will have negative impacts on my Coquetdale community and greater financial implications for our NHS across Northumberland. In particular, the challenge is that we do not have anything like enough community nurses and carers adequately to support those older patients who are sent straight home with their transition back to independent living. It has always been a challenge for our community teams, working across rural Northumberland, to see anything like the number of patients in one day that they would see if they were based in a town or a city, because our CCG is not funded to commission enough community nurses to genuinely provide the amount of care to meet the extra challenges that this sparse and disparate community generates. If a community nurse needs to visit someone three times a day but her other patients are 30 miles away, she will make three or four visits a day rather than the 10 or so that an urban-based community nurse would be able to make. Many of our older people who have received medical interventions live alone or have elderly partners who are no longer able to be full-time carers themselves. The value of a step-down care transition provided by a few days of recuperation at Rothbury community hospital would have medical as well as psychological value for these communities.
Dr Andrew Murrison (South West Wiltshire) (Con)
I congratulate my hon. Friend on the powerful case she is making for her rural constituency. Has she been able to compare and contrast the cost of a community hospital bed with the cost of a bed in the district general hospital to which she referred? I suspect that she has done so and will have found that there is a yawning difference between the two—a very good argument for community hospital beds.
Mrs Trevelyan
I thank my hon. Friend for making that point. This issue is critical, and it has brought some confusion to the community, who felt that the financial model did not seem to make sense. Why keep someone in a very expensive acute bed for longer than necessary if there is the capacity to have a local relationship with nurses who know the community very well? This is part of the CCG’s work, obviously, but we need to be very clear about it to be sure that we are not making a bad financial decision in the longer term.
As a result of this consultation, residents across the Coquet valley who have needed admission to an acute ward may well now find themselves staying longer than necessary on that acute ward; being re-admitted to an acute ward for lack of adequate rehabilitation care at home; sent home with inadequate support from an over-stretched community nursing service; or, at best, sent to recuperate in a different community hospital much further from friends and family, placing extra pressure on alternative populations needing to use that provision.
When, back in September, the decision was taken to temporarily suspend admissions to Rothbury community hospital for a period of three months, I wrote to every household across the valley calling on them to share with me their own experiences and concerns about the proposed threatened closure of the in-patient beds. The message came back loud and clear that being near family and their own community while they recuperated, or ending their days with dignity and privacy in the valley they have lived and worked in rather than dying at home alone, is invaluable. I know that this Government want our world-class NHS to provide not only the best medical interventions but the respect and provision of dignity for every patient while they are under its care.
The Coquet valley is frequently cut off during winter months, making travel to Alnwick infirmary to see loved ones receiving care especially difficult and sometimes not possible at all. Even during the summer months, there is little public transport to connect the valley and Rothbury to Alnwick. The ability of loved ones to visit patients receiving care at Rothbury community hospital was cited time and again to me as one of the primary reasons the in-patient beds are so vital to my constituents. The value of our community hospitals is often overlooked and certainly cannot be quantified when, too often, consultants have not been made aware of their option to transfer patients to receive care in Rothbury.
My constituents have come together in an extraordinary show of unity to speak in one voice under the banner of the Save Rothbury Hospital Campaign—4,500 people have signed the petition calling for the reopening of the ward. Our CCG has worked closely with the campaign team, for which I thank them, particularly Dr Alistair Blair, who has so many pressures on him and his team at this challenging time, and has invited us to bring forward a proposal that would see the beds made available for step-down and end-of-life care. I am concerned, however, that the CCG is telling me that because it does not commission respite or palliative care services, these cannot be part of a sustainable solution, as the valley residents would hope.
Northumbria Healthcare NHS Foundation Trust is one of NHS England’s vanguard trusts with its sustainability and transformation plan, and it will be the first accountable care organisation in England in the coming months, so surely we should be able to ensure that integrated care can work in one of our most challenging geographical locations. The University of Leeds is currently conducting a study called, “Cost Structure and Efficiency in Community Hospitals in the NHS in England”. The Public Accounts Committee, of which I am a member, regularly challenges NHS England on how it spends taxpayers’ money to deliver the best integrated health and social care provision. I know that the Minister is working hard to drive this forward, and we encourage him to go further, but until the results from the University of Leeds are published, the Minister has little economic evidence of the value of the intermediate care provided by community hospitals with which to work on the sort of sustainable solution that I want to see for our community hospital in Rothbury.
Dr Murrison
My hon. Friend is being generous in taking interventions. I am interested in the study to which she refers. Does she agree that a likely outcome of the configuration of healthcare in the longer term will be increasing specialisation at really quite large district general hospitals? If that is the case, there will be an even greater need for community hospital beds—step-down, step-up care—otherwise people’s only access to in-patient care will be at one of the huge regional or sub-regional centres that I suspect our NHS will be developing in the years to come.
Mrs Trevelyan
I thank my hon. Friend for his comments. We are unwittingly seeing what he suggests already. In Northumberland, we have an extraordinary specialist A&E hospital, with which we have led the way in England. It has drawn much more attention and patient focus than perhaps any of us expected, because there in one place are all the specialisms, with the best maternity care. The result is that patient needs have migrated to it.
However, we now rely much more than we should on sending patients straight home, whereas we should be using community hospital beds to provide the best step-down care for our older people, in particular, who really need that support to get back home. Getting home, getting up and about, making their own cups of tea, moving around and avoiding the risk of muscle wastage caused by staying in a hospital bed are real issues for them. As medical science moves on and that becomes more and more clear, in-patient bed units in community hospitals should probably adapt to reflect that. Such units must help to preserve the mobility of people who are taking that step-down approach to going back home; the term “in-patient bed” should not mean that they are stuck in their beds. We understand that continued movement and redevelopment of muscle are important in rehabilitation, and we must absolutely make sure that patients are not left in the wrong part of the NHS when they are trying to get back home after extraordinary medical interventions. Those interventions are now developing very quickly and giving us the opportunity to live much longer.
I therefore call on the Minister to pause the CCG’s consultation and the plans to close permanently the in-patient beds until the results from the University of Leeds have been published. Northumbria Healthcare NHS Foundation Trust is leading the way in establishing an accountable care organisation—a model that many people buy into and understand the value of. We all instinctively assume that the NHS is one block, but of course it is not; it has always been made up of separate parts, which work better or less well depending on where they are. The accountable care organisation offers a real opportunity for streamlining and making the flows work much better. We will be the first to do that in Northumberland, so we should be the beacon for fully integrated community care—making the best use of our taxpayers’ money and ensuring that my constituents have the most appropriate and supportive care framework —rather than being a victim of the short-term workforce challenges with which the NHS is struggling.
The Minister of State, Department of Health (Mr Philip Dunne)
I congratulate my hon. Friend the Member for Berwick-upon-Tweed (Mrs Trevelyan) on securing the debate. She is a doughty champion of her constituents’ interests and, particularly in relation to Rothbury community hospital, she has played a leading role in championing their interests in achieving the best outcome for patient care in the valley of Coquet—this was the first time I have heard that pronounced properly and I am sure I have not done it justice. She gave a thoughtful and considered speech, to which I shall endeavour to respond.
I will first rehearse the facts that have led NHS Northumberland clinical commissioning group to undertake the current consultation. In July last year, it set up a steering group to consider the use and function of community hospital beds in Northumberland. That group studied activity data and considered a model of care that reflected a drive set out by the NHS chief executive Simon Stevens in the five year forward view, which my hon. Friend will be aware of, to encourage the delivery of as much care as possible as close to the patient as possible—preferably in their homes, or at least out of hospitals, where appropriate.
We have had a geography lesson, with an interesting description of some of the challenges of living in the part of Northumberland centred on Rothbury, including the fact that the valley gets cut off from other parts of the county from time to time during the winter. Local factors undoubtedly need to be taken into account by the local commissioning group both when it sets out a consultation and when it responds to the results, and I am sure it will do so. Frankly, that is why we think the people best placed to plan the patient experience of care for the future are those who have direct responsibility for that community. As my hon. Friend knows, that is very much the direction of travel of this Government in supporting the five year forward view and the move to more local determination.
The steering group agreed that any new model should avoid any unnecessary or avoidable hospital admissions, and ensure that patients are discharged home in a timely manner once medically fit. The challenge for the Rothbury community hospital has been the relatively low use of its in-patient beds. Having discussed the issue with the CCG, Northumbria Healthcare NHS Foundation Trust, which runs the hospital, decided for operational reasons to suspend in-patient admissions from 2 September 2016, initially on a temporary basis. The staff were redeployed to ensure that nursing skills were used to support other parts of the Northumberland healthcare system, in which nursing vacancies were running at a high level and there were difficulties with recruitment.
I understand that, following the announcement, a comprehensive review of activity was initiated last autumn and a series of local engagement sessions was arranged. The review looked at the activity rate of the 12 in-patient beds at the hospital. It found that there had been a steady reduction in the number of beds used from 2013 to 2016. The overall bed occupancy at the hospital fell from an average of some 66% of beds in 2014-15 to 53% in 2015-16 and 49% in 2016-17. I am told that, at times, the rate was closer to 35%, meaning that only three or four of the beds were used although the ward was staffed to cope with a higher occupancy rate.
During that time, the trust has provided an increasing level of care outside hospital and in people’s homes, for example through services provided by community nurses and the short-term support service. There has also been an increase in the number of people receiving long-term care packages in their own homes. The ambition to encourage people to lead independent lives as much as possible and to stay out of hospital when possible, because in that way they have a better prospect of maintaining independent living, is working in Northumberland. Regrettably from that perspective, the community hospital is seeing the consequence of such success: fewer patients need in-bed care in the community hospital.
The decision was subsequently taken to close the ward and to undertake a three-month public consultation, which began on 31 January. The consultation asked for views on whether to close the ward permanently, and on whether to change the services undertaken there, so that a health and wellbeing centre on the hospital site could offer a range of services in addition to those currently available and provide treatments for a wider range of patients than are presently served by the in-patient beds alone.
My hon. Friend asked whether the current consultation, which is running to 25 April, could be extended. It is not for me to direct the CCG how to undertake its consultation, but she referred to interest in the locality about the future of the hospital. That does not surprise me at all, although I am impressed that as many as 4,500 local people have signed the petition. I strongly encourage as many of them as possible to participate actively in the consultation so that the decision makers are aware of the views of the local people whom they serve.
I also encourage local people to suggest what other services they might find beneficial. My hon. Friend suggested palliative and respite care as possibilities. She is right to say that those services are not currently provided by the trust, as they are not within its mandate, but in the event that Northumberland becomes one of the pilot areas for the new type of accountable care organisation, it will be up to all the organisations that are providing care in the area to work together, and the existing palliative and respite care providers could work with the commissioners and other providers to look at all the options. I very much hope that she will encourage those organisations to participate in the consultation as well so that that is factored into the decision making.
At present, I can give my hon. Friend one piece of reassurance: we in the Department of Health have very high regard for Northumbria Healthcare NHS Foundation Trust. It is one of only six non-specialist acute trusts in England rated as outstanding. It has some of the best performance data on treating patients and local residents of anywhere in the UK. It is meeting all three of its key cancer targets and exceeding the 18-week waiting time targets. The numbers of operations and treatments provided are much higher than they were, and they are happening more or less within target. The number of operations at the trust has gone up from 71,000 to 80,000 in the past six years, and the number of diagnostic tests increased from 98,000 to 164,000 between 2009-10 and 2015-16. That all demonstrates that the trust is coping with increased demand remarkably well.
As my hon. Friend rightly said, the new hospital at Cramlington, which I have driven past in a former life but have yet to visit with my present responsibilities, is an exemplar of how concentrating specialist hospital services in one place can lead to better quality outcomes for patients. It is hard for me, at this distance, to judge what direct impact that is having on the community hospital, but it might be a contributory reason to why fewer in-patients need to go to the community hospital for their rehabilitation.
I encourage my hon. Friend to focus on the choices that are being considered across Northumberland, as they affect Rothbury, but also to look at the way in which Rothbury patients can help themselves by encouraging Northumberland’s highly regarded health leadership to reshape services to provide a facility that serves more of the local community than has been the case. Indeed, one reason why that leadership is highly regarded is that it has a reputation for listening to what local opinion formers are saying, as she pointed out. Whether or not those changes should include the continuing use of in-patient beds is something that will have to come out of the consultation.
My hon. Friend asked about the study by the University of Leeds. I will be very interested to see what that study reveals. Like my hon. Friend the Member for South West Wiltshire (Dr Murrison), I represent a rural area, so I know that these issues are not unique to Northumberland, as he rightly said.
The results of the consultation are expected in April. I cannot give my hon. Friend the undertaking on extending it that she is looking for, but there will be a period during which the CCG reviews its response. Hopefully the study to which she refers will have concluded and it will be possible to take it into account before the CCG responds formally. I am not familiar with the timetable, so I cannot make an absolute commitment on that, but it seems to me to be a relevant consideration. I shall encourage the CCG to at least investigate whether that would be possible.
I conclude my remarks by encouraging my hon. Friend to continue to engage with the CCG.
Question put and agreed to.