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Oral Answers to Questions
Leaving the EU: Sectoral Impact Assessments
(7 years ago)
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Mr Speaker
Before I call Sir Keir Starmer to ask his urgent question, I would emphasise to the House that the purpose of my selecting this urgent question today is to give an opportunity to the Minister to explain to the House what action the Government have taken in response to the order of the House and an opportunity for other Members to question him on those matters. It is not an occasion for the House to debate whether or not a contempt of the House may have occurred. There may or may not be later occasions for that matter to be discussed. This is the correct procedure, and I know the House will trust me to know of what I speak.
Keir Starmer (Holborn and St Pancras) (Lab)
(Urgent Question): To ask the Secretary of State for Exiting the European Union if he will make a statement on the release of the impact assessments arising from sectoral analysis carried out by Her Majesty’s Ministers to the Select Committee on Exiting the European Union.
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
This House passed a motion on 1 November asking that impact assessments arising from sectoral analyses be provided to the Select Committee on Exiting the European Union. This Government take very seriously their parliamentary responsibilities, and have been clear that they would be providing information to the Committee.
In the past three weeks, Departments have worked to collate and bring together this information in a way that is accessible and informative. I am glad to be able to confirm that this information has been provided not only to the Select Committee on Exiting the European Union but to the House of Lords EU Select Committee and, indeed, to the devolved Administrations. I can also, Mr Speaker, with your permission, inform the House that we have initiated discussions with the parliamentary authorities to make this information available to all colleagues through a reading room.
We were clear from the start that we would respond to the motion, but also that the documents did not exist in the form requested. Indeed, I made it clear to the House during the debate on the day that
“there has been some misunderstanding about what this sectoral analysis actually is. It is not a series of 58…impact assessments.”—[Official Report, 1 November 2017; Vol. 630, c. 887.]
As I said, the sectoral analysis is a wide mix of qualitative and quantitative analysis contained in a range of documents developed at different times since the referendum. The House of Commons itself has recognised that, although Ministers should be as open as possible with Parliament, the Government also have an obligation to consider where it will be in the public interest for material to be published.
Furthermore, it is important to recognise that, in some cases, there is commercially confidential information in the analysis and that, in many cases, the analysis was developed to underpin advice to Ministers on negotiation options in various scenarios. It is well understood, as has been the case under successive Administrations, that such advice to Ministers must remain private.
In the light of all that, my right hon. Friend the Secretary of State for Exiting the European Union made a statement on 7 November in which he explained that, given the documents did not exist in the form requested, it would take
“some time to collate and bring together this information in a way that is accessible and informative to the Committee.”—[Official Report, 7 November 2017; Vol. 630, c. 1333.]
He committed that the reports would be provided within three weeks. In providing the information to the Committee yesterday, we have met that commitment. Parliament has endorsed the responsibility of Ministers not to release information that would undermine our negotiating position. Contrary to what has been asserted in some places, the Committee did not give any firm assurances that what was passed to it would not subsequently be published in full. Where there are precedents for Government agreeing to pass information to Select Committees in confidence, these have been on the basis of assurances received before material is shared or a clear set of rules, such as those governing intelligence material.
When he met the Secretary of State, the Chairman of the Select Committee did say that he was willing to enter into a dialogue—after the Select Committee had received documents from the Government. But that is not the same as an assurance that, if we provided confidential or sensitive material, it would not be published, and it is not in keeping with the usual practice of Committees on these sensitive issues. As such, the sectoral reports provided do not contain information that would undermine the UK’s hand in negotiations or material that is commercially or market sensitive. But the House should be in no doubt that this has been a very substantial undertaking. We have been as open as possible, subject to the overwhelming national interest of preserving our negotiating position. We have collated more than 800 pages of analysis for the Committees, less than a month from the motion being passed, and this covers all the 58 sectors. We now consider the motion of 1 November 2017 to have been satisfied.
Keir Starmer
“Transparency” and “accountability” are two words this Government do not understand. On 1 November, after a three-hour debate, this House voted in favour of a Humble Address requiring all 58 sectoral analyses to be passed to the Brexit Select Committee—not some of the reports, not redacted copies, but the full reports. The Government did not seek to amend the Humble Address, nor did they vote against the motion. After your advice to us, Mr. Speaker, the Government accepted that the motion was binding. It is simply not open to the Secretary of State to choose to ignore it and to pass to the Select Committee the documents he chooses. Whether he is in contempt of Parliament is a matter we will come to at some later date, but he is certainly treating Parliament with contempt.
The Secretary of State says, and the Minister has reported, that he did not get assurances from the Select Committee about how the documents would be used. The Minister therefore had better answer some pretty blunt questions this afternoon. What assurances were sought that were not given? He had better tread carefully, because there will be an audit trail here and if he cannot answer that question, if he did not pursue the assurances, if he did not suggest a course that was rejected, his cover for not disclosing these documents will be blown.
This is not a game. This is the most important set of decisions this country has taken for decades and they need to be subjected to proper scrutiny. In my experience, the biggest mistakes are made when decisions are not tested.
May I remind the Minister and the Secretary of State that, until this House passed the motion on 1 November, Ministers routinely claimed that these analyses were extensive and authoritative? They say that they have now put the documents together. In September, they answered a freedom of information request. The first question was, “Do you hold the material?” to which the answer was, “Yes.” That calls into serious question the explanation now being put before this House.
Finally, I am deeply concerned that the sum total of documents generated by the Government’s work on the impact on the economy of their approach to Brexit can be squeezed into two lever arch files. That is the volume of paperwork I would have expected for a pretty routine Crown court trial in my old world. If that is the case, we should all be worried. Is that the extent of the analysis? Either way, this a very sorry state of affairs.
Mr Walker
Let me address some of the misconceptions in the right hon. and learned Gentleman’s statement. We have not edited or redacted reports. At the time the motion was passed, and subsequently, we were clear that the documents did not exist in the form requested. We have collated information in a way that does not include some sensitive material, but the documents, which he freely admits he has not seen, do not contain redactions. It is noticeable that the original suggestion of redactions in the debate on 1 November came from him, speaking from the Front Bench for the Opposition. He also said in the debate that he had
“accepted all along that the Government should not put into the public domain any information that would undermine our negotiating position”—[Official Report, 1 November 2017; Vol. 630, c. 881.]
He accepted that there is a level of detail, and confidential issues and tactics, that should not be discussed. Those were statements he made in the debate itself.
Let me tell the right hon. and learned Gentleman the logical consequences of that position. He has suggested that mechanisms are available that allow for the sharing of material in advance for Select Committees, and he is of course right—I addressed that in my opening statement. My Secretary of State met the Chair of the Select Committee and discussed these terms. It was very clear that, as the Chair has himself said in Parliament, he wanted to receive all the documents first before he would give any assurances as to the way in which they would be treated. On that basis, we had to be clear that we had to protect commercially sensitive information.
In the absence of any restrictions on what the Select Committee might do with the documentation, the Government had to be mindful of their obligations not to allow sensitive information to be public, but let me be clear again: we have been as open as possible within those obligations. The material we have provided to the Select Committee is very substantial. It is bizarre for the right hon. and learned Gentleman to dismiss it without having yet seen it. When Committee members have had an opportunity to consider it fully and to reflect on it, I think they will reasonably conclude that the Government have fully discharged the terms of the motion.
We have shared more than 800 pages of analysis with the Select Committee. The analysis describes the activity in each sector and the current regulatory regime for the sector. The report set out existing frameworks from across the globe for how trade is facilitated between countries in the sectors, as well as sector views, which cover a range of representative cross-sector views from businesses and organisations throughout the UK. We have taken care to incorporate up-to-date views from stakeholders, such as views on the proposed implementation period.
The right hon. and learned Gentleman asked: does this represent the sum of the Government’s analysis? Of course it does not. The motion referred to sectoral analyses and we have responded to that motion by sharing those sectoral analyses. I note the Select Committee’s statement following its meeting this morning and I welcome the fact that arrangements will be made for Committee members to view documents in confidence. When they do, I think they will find that there is a great deal of useful and valuable information here. I assure the House and the Committee that the Secretary of State will also be accepting their request to discuss the content.
I assure the House that my Department takes its responsibilities to Parliament extremely seriously. We have provided a vast amount of factual information to help the Committees and this House in their scrutiny. I am confident that we have met the requirements of the motion, while respecting our overriding duty to the national interest.
Mr Kenneth Clarke (Rushcliffe) (Con)
If the Government wished to resist the publication of the papers that they had, they should have voted against the motion, and if they wished to qualify or edit the papers that they had, they should have sought to amend the motion. We cannot allow, post Brexit, the reduction of parliamentary sovereignty to a slightly ridiculous level. Will the Minister at least consider the possibility of sharing, at least with the Chairman of the Exiting the European Union Committee, the papers in the original form they were in when we voted on the motion, before this editing process started? The House would then no doubt be guided by the Chairman of the Select Committee on changes and omissions that are legitimately in the national interest and should be made.
Mr Walker
I share my right hon. and learned Friend’s commitment to ensuring that the House can scrutinise valuable information in this respect, but the problem with the motion that was passed is that it referred to sectoral impact analyses. We were clear from the start that the documents it referred to did not exist in the form that was required. We have therefore pulled together sectoral analysis for the scrutiny of the Select Committee. I think that that will prove valuable to the Committee.
Peter Grant (Glenrothes) (SNP)
On a day in June 2016, the people of the United Kingdom were asked one question on one day. As a result of the answer they gave to that one question, there is no going back on Brexit. On 1 November, Parliament was asked one question, but for the intervening 27 days the Government have done everything possible to deny and defy the instruction—it was not a request—that they were given by this Parliament, to which, we are told, sovereignty is being restored by the Brexit process.
I remind the Minister that the question of what the Government will provide to the Select Committee is not for the Government or, indeed, for the Select Committee to decide. This Parliament has decided, and there is no discussion, debate or negotiation as to the extent to which that decision will be complied with. It must be complied with in full; otherwise, as the letter published recently by the Chair of the Select Committee on Exiting the European Union makes clear, the Select Committee will have to consider whether to table a motion on contempt. How is that going to look to our European partners? What will it do to the credibility of the Government, and particularly of the Brexit team, if they end up being held in contempt by the Parliament to which they claim to be returning sovereignty?
Will the Minister confirm that the resolution of the House was about not what was made public but what was provided to the Select Committee? In those circumstances, does he not accept that what must be made available to the Select Committee is everything—absolutely everything? If the Government are not prepared to comply with that instruction, they should not be in government. Will he tell us categorically whether he accepts that a decision on what to publish, within the bounds of parliamentary privilege, is for the Select Committee alone, and will he confirm that he and his Government are prepared to trust the judgment of that Committee to exercise on behalf of the House responsible judgment about what the public are entitled to know?
Mr Walker
The hon. Gentleman asks a number of important questions. I would hope to hear some welcome from him for the fact that we have shared the information in these reports with the devolved Administrations. When I gave evidence to Select Committees recently in Scotland, we were pressed on whether we would do that. We do respect the fact that the Select Committee has the complete choice and discretion over what gets published of the information that is shared with it. That is why the Government have published the information to the Select Committee in the way that they have.
Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)
My hon. Friend has every right to ensure—as the EU has given out in its guidance—that not all confidential information is necessarily made available; otherwise, that might restrict our negotiating position. May I also urge him, however, to have that discussion with the Chairman of the Select Committee and ask him specifically what is it he was expecting that he has not got in terms of the documents?
Hilary Benn (Leeds Central) (Lab)
I welcome the willingness of the Secretary of State to appear before the Select Committee—a decision that we made this morning. May I ask the Minister to convey to him our wish that he should do so very speedily indeed?
Given that it is quite clear that the Select Committee has received edited documents—in other words, they do not contain everything that is in the possession of the Government—may I say to the Minister that that is not in keeping with the motion passed by the House of Commons? I also say to him that I made it very clear to the Secretary of State what procedure the Select Committee would use to consider the reports and, if I may put it like this, I do object to any suggestion that the Select Committee, or I as Chair, cannot be trusted to do our job.
Mr Walker
I have great respect for the right hon. Gentleman, and I will certainly communicate his message to the Secretary of State. On the point he makes about the information in the analyses, what the motion referred to was not what existed at the time. What we have tried to do is ensure that there is full information available to his Committee. When he has had the chance to scrutinise that and ask questions of Ministers about that, he will find that information very useful to his scrutiny.
Mr John Whittingdale (Maldon) (Con)
As my hon. Friend has said, there are 850 pages of these documents and so far the Chairman of the Select Committee is the only Member who has actually seen them. I understand that the documents have been sent to two Select Committees of Parliament and to the devolved Administrations. As a former Chairman of a Select Committee, I can say that leaks are not without precedent. I would not want the Government to make available any information that, if it became public, could undermine our negotiating position.
Tom Brake (Carshalton and Wallington) (LD)
Why, when the Bank of England has published the frankly chilling implications of no deal, do the Government insist on selectively editing the sectoral reports? Is it true, as I was told by a DExEU insider, that what the Government have done is release selective sensitive documentation, while withholding the bulk of that sensitive information?
Mr Peter Bone (Wellingborough) (Con)
I find that I agree with the comments of the Father of the House and the Chairman of the Select Committee, but I do understand that there is a dilemma for the Government. One recent motion clearly says that all documents should be delivered. A previous motion in this House says that the Government should not produce anything that damages our negotiations. Those motions are not clear, so would it not be an idea for the Government to come back with another motion clarifying the situation?
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
In June, the Secretary of State said on “The Andrew Marr Show” that
“We’ve got 50, nearly 60 sector analyses already done.”
In September, that was reiterated in response to my freedom of information request. In October, the Secretary of State confirmed that to our Committee and said that the reports were in “excruciating detail” and that the Prime Minister had seen the summaries. In November, we heard that they never existed. On what basis can completed reports be uncompleted, and on what basis is it right that the Government do anything other than give the reports in full to the Select Committee, in line with the resolution of this House?
Mr Walker
The Government have provided the reports covering the 58 sectors to the Select Committee, and I look forward to the Select Committee being able to scrutinise them in detail. The hon. Lady has been persistent in pressing for as much of this information as possible to be put in the public domain. Her Front-Bench team have also been persistent in recognising that that could not be done with all the information, subject to negotiations, without damaging our national interest.
Mr Jacob Rees-Mogg (North East Somerset) (Con)
The issue now is not whether it is in the Government’s interest to publish these documents. If the Government did not want to publish them, they should have voted down or amended the Humble Address. In all precedent, this is a binding motion, unlike the previous motion passed earlier in the year, which was not a Humble Address and not a binding motion. To meet this motion, it is not at the discretion of the Government to decide what to take out; it is at the discretion of the Select Committee. I therefore urge the Government either to meet the terms of the motion in full, or to seek to put down a new motion.
Mr Walker
I take my hon. Friend’s expertise in parliamentary procedure extremely seriously, and I recognise the point that he is making. We do feel that we have responded to the motion in full by preparing for the Select Committee sectoral analyses. The point that I make to him is that the sectoral analyses did not exist in the form that was requested in the motion at the time.
Mr Pat McFadden (Wolverhampton South East) (Lab)
This situation is entirely of the Government’s making. The motion passed by this House did not give the Government discretion to take this information and decide for themselves what to give to the Select Committee and what not to give to the Select Committee. The Government have not complied with the motion, which they did not resist. There is another underlying point here—apart from questions of parliamentary privilege and contempt—and it is this: do we believe that the public have a right to know the consequences of the options facing the country on Brexit? I believe that they do. Does the Minister agree?
Mr Walker
The right hon. Gentleman knows that we have responded to the motion. We accepted that it was binding. We have therefore brought forward information for the Select Committee. We have gone further than that by bringing forward information for the Lords Committee and for the devolved Administrations, and we are now in discussions to ensure that that information can be provided in confidential reading rooms for the whole House. Of course, what is not in the interests of the public of this country is to publish information to the other side that could be sensitive to our negotiating position; that is what this House has repeatedly voted for us not to do.
Mr Christopher Chope (Christchurch) (Con)
Most people would accept that it is perfectly reasonable to exclude commercial market and negotiation-sensitive information but, unfortunately, that was not expressly excluded in the terms of the Humble Address on 1 November. Will my hon. Friend look carefully at the option of the Government bringing forward a revised motion that expressly excludes that information from the material to be supplied to the Select Committee?
Mr Walker
My hon. Friend, like many of my hon. Friends, raises an interesting point. It is something that we will look into. What we have done is to ensure that the Select Committee has information on the sectoral analyses that the Government have conducted, which is an important step taken in response to a motion of the House.
Stephen Kinnock (Aberavon) (Lab)
In his letter of 2 November, my right hon. Friend the Member for Leeds Central (Hilary Benn), the Chair of the Select Committee, wrote:
“once the material has been provided to the committee, I would be very happy to discuss with you any particular concerns you may have about publication of parts of the material so that the committee can take these into account in making its decision on release.”
On 27 November, the Secretary of State wrote:
“we have received no assurances from the committee regarding how any information passed will be used.”
Does the Minister agree that that letter is a blatant misrepresentation of what was agreed and that the Secretary of State should withdraw that remark and apologise for it to my right hon. Friend?
Anna Soubry (Broxtowe) (Con)
It is extremely important that we understand exactly what was voted on and what the Select Committee seeks disclosure of. I am reminding myself of the motion, which was in two parts. It first referred to the list of sectoral analyses, and then went on to make it clear that it was
“the impact assessments arising from those analyses”
that should be provided to the Select Committee.
The hon. Member for Feltham and Heston (Seema Malhotra) referred to the evidence provided by the Secretary of State to the Select Committee back in October. I remind myself of his answers to questions 131 and 132 in that session, in which he made it clear that those impact assessments existed “in excruciating detail” and that the Prime Minister had been provided with a summary, which she had read. Will the Minister confirm that what this House now seeks the Government to disclose are the impact assessments?
Mr Walker
My right hon. Friend is, as always, forensic in her questioning. We were very clear when we were debating this motion that exactly what it referred to was not available at that time. Of course, there are various assessments and documents held by the Government that have been worked on over time, addressing the individual sectors. We have actually sought to provide the Select Committee with a great deal more information than existed at the time of the Secretary of State’s evidence to it, and I think that that will be valuable to the Committee in its scrutiny.
Mr Ben Bradshaw (Exeter) (Lab)
The main issues dividing the House at this stage in the Brexit negotiations are our continued membership of the customs union and of the single market. Ministers say constantly that they do not want to reveal anything that could weaken their negotiating hand, but the Government have made their position clear and the European Union has accepted that the Government want a hard Brexit, so why would it damage the Government’s negotiating position to put that information out? Can the Minister confirm that the information in the edited documents will help Members to reach a view on whether we should stay in the customs union and the single market?
Mr Walker
I can confirm to the right hon. Gentleman that the information in the edited documents will be valuable to the House, but it is wrong to describe them as “edited documents”. I would describe them as comprehensive sectoral analyses that the Government have provided for the Select Committee and will be providing, on a confidential basis, to the House.
In response to the right hon. Gentleman’s question about the customs union and the single market, I remind him that he, like I, stood on a manifesto that said that we will respect the referendum result and confirmed that the UK will be leaving the customs union and the single market.
Richard Graham (Gloucester) (Con)
The Minister is making a gallant and courteous defence of a situation that is unlikely to satisfy everybody in this House because of the terms of the Humble Address, but there are two aspects of this that need to be separated. The first is the requirement to provide everything to the Select Committee, which the Humble Address did call for. The second is the fact that surely no one in this House would want our country to go into the negotiating chamber in a weaker position as a result of decisions taken here. The shadow Secretary of State himself recognised that there is a way of dealing with these things, which is to redact what would be sensitive. Unfortunately, the Humble Address did not cover that, so I believe that it is now strongly in the Government’s interest to table a motion to amend the Humble Address, which many of us in the House would strongly support.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
The crucial issue is the Government’s failure to be open and transparent with the public and Parliament about the consequences of their approach to Brexit. They are not just doing that with regard to these papers, because they also refuse to give clear examples of the spending reprioritisation that is taking place in Departments as a result of the assessments in the papers and the Government’s policies on Brexit. Will the Government publish a breakdown of the funding that they are giving each Department to cope with their approach to Brexit?
Mr Walker
The hon. Gentleman’s question strays quite a long way beyond the matter that we are discussing at the moment. We will absolutely continue to engage with Parliament and its Select Committees to support their scrutiny. We will provide them with as much information as we can, consistent with the national interest.
Sir Desmond Swayne (New Forest West) (Con)
Just to rub it in: who was it who first suggested the use of redaction?
Joanna Cherry (Edinburgh South West) (SNP)
The Minister has mentioned the devolved Administrations on a number of occasions. I am advised by Scottish Government colleagues that the documents they have received contain nothing substantial at all about Scotland. On 24 and 25 October, the Secretary of State for Scotland and the Secretary of State for Existing the European Union gave evidence—to the Scottish Affairs Committee and the Exiting the European Union Committee respectively—that assessments of Brexit’s impact on the Scottish economy existed and would be shared with the Scottish Government. Will the Minister confirm that those unedited documents will now be shared without further delay?
Mr Walker
I can confirm that the documents that are being shared with the Select Committee are also being shared in the usual way, with permanent secretaries of the devolved Administrations, on the same basis as they have been shared with the Select Committee. The sectoral analyses do, in many cases, contain important analyses of Scottish issues.
Jeremy Lefroy (Stafford) (Con)
May I gently suggest to my hon. Friend, for whom I have the greatest of respect, that there should be a bit of a rethink on this matter before the Secretary of State appears before the Select Committee in the coming days? I also urge my hon. Friend to recognise that the really important thing at this stage is to get a move on with the negotiations and ensure that companies up and down the country, which are currently in limbo, know what we are going to do. We have to move forward in December; we cannot stand still.
Mr Walker
My hon. Friend makes a hugely important point. I think we all want to ensure that we have the most successful approach to the negotiations, that we move forward in December and that we talk about the implementation period, which is hugely important to companies, and the deep and special partnership that we want to form between the UK and the EU. I will certainly take his points on board.
Sammy Wilson (East Antrim) (DUP)
The Brexit Committee has made the rightful assertion that it will decide what information is published, but does the Minister accept that there is a real danger that the national interest could be put in jeopardy if more weight were given to transparency than to protecting our negotiating position? Does he therefore agree that the best way forward is to seek clarification from the House that it does not wish for information that could be sensitive to be placed in the Committee’s hands, and therefore to bring forward a motion to the House along those lines?
Mr Walker
The hon. Gentleman reinforces a point that has been made by many of my hon. Friends. As I said, we will give that due consideration. He is right that we need to ensure that we protect the absolute national interest in this process by ensuring that information that is sensitive in the negotiations remains confidential.
Mr David Jones (Clwyd West) (Con)
In all my hon. Friend’s dealings with his European Union counterparts, has he ever formed the view that they pay no heed to the proceedings of this House and, indeed, have no interest in the contents of any documents that may be produced for any of its Select Committees?
Stephen Timms (East Ham) (Lab)
The Department has handed over some 850 pages, but the Minister has made it clear that some information has been withheld. If that additional material had also been handed over, how many pages would that have been? Would it be another couple of hundred, more or less, or has the information not actually been compiled?
Mr Philip Hollobone (Kettering) (Con)
It was a mistake not to amend the Opposition’s motion. As a result, the Government are skating on very thin parliamentary ice. The issue could be solved next week if the Government were to come back with a sensible motion, which every Member of this House really ought to support.
Wera Hobhouse (Bath) (LD)
By not releasing the papers in their original form, is the Minister aware that the implication is that I and other members of the Select Committee cannot be trusted to act in the national interest?
Tim Loughton (East Worthing and Shoreham) (Con)
I would be rather more interested in seeing the impact assessments drawn up by the EU of the impact of Britain leaving the EU and how that is affecting the EU’s negotiating position. Does my hon. Friend share my curiosity that Opposition Members are not keen to scrutinise those documents?
Mr Speaker
Order. The trouble with the interest of the hon. Gentleman, which is of great fascination to Members of the House and many spectators beyond its environs, is that it is not even adjacent to the question before us, but I am sure the hon. Gentleman can entertain himself in the long winter evenings that lie ahead.
Ms Angela Eagle (Wallasey) (Lab)
This is not my definition of taking back control. This huge mess that the Government have got themselves into shows the limits of their clever-clever tactic of not engaging with Opposition motions by sitting on their hands. Despite what the Minister says, the fact is that a Humble Address, which it is compulsory for the Government to act on, has been carried. It calls not for the documents to be edited and not for them to be changed—that job now goes to the Select Committee. The Government have to get on and publish these documents, and they have to publish them now.
Mr Walker
As I made it very clear on the day we debated this issue, the documents did not exist in the form that was requested. We took the motion of the House extremely seriously, and that is why we have made sure that a great deal of information has been provided to the Select Committee.
Tom Pursglove (Corby) (Con)
Has any formal protocol been put down by the Committee and conveyed to Ministers about how it would handle this information, because that is pertinent in all this?
Hywel Williams (Arfon) (PC)
What—[Interruption.] If I could have the Minister’s attention, what guidelines were provided to the officials editing the documents as to what should be excluded?
Mr Walker
I have made it clear to the House that this information was pulled together from a range of documents. As I have also made clear, we have to ensure that commercially sensitive information, and information that would be prejudicial to the national interest, could not be at risk of being published. But this has been a process of ensuring that there is more information for the Committee, not less.
Suella Fernandes (Fareham) (Con)
Does the Minister share my concern about how a letter sent by the Secretary of State to the ExEU Committee managed to reach journalists at the Daily Mirror before it was considered by the Committee? Does that encourage or discourage him when it comes to sharing confidential information?
Mr David Lammy (Tottenham) (Lab)
The Minister will understand that it is important that the Executive get on with policy, but there is a fundamental role in our constitution for Parliament to hold the Executive to account and to scrutinise this hugely important decision. The Secretary of State said that the information existed “in excruciating detail” and that the Prime Minister had seen the summaries. For that reason, it is hard to understand why we cannot see the entirety of the information —if so, with redaction. Can the Minister explain why that is not the case?
Mr Walker
The right hon. Gentleman is absolutely right about the balance we need to strike. We do need to get on with this role, but we also absolutely respect the role of parliamentary scrutiny in this process, which is why the information that has been provided to the Committee is comprehensive and in great detail. It goes beyond the type of summaries that he refers to and, indeed, that the right hon. and learned Member for Holborn and St Pancras suggested might be an answer to this. We have actually provided much more information than just summarising reports could have done.
Several hon. Members rose—
Points of Order
Keir Starmer (Holborn and St Pancras) (Lab)
On a point of order, Mr Speaker. Further to the debates we have just had, it is clear there is a lot of concern from Members on both sides of the House that the Government have not satisfied the motion passed less than a month ago. You have been very clear in your advice that the motion passed was binding. After the debate on 1 November, you said that
“I would expect the Vice-Chamberlain of the Household to present the Humble Address in the usual way.”—[Official Report, 1 November 2017; Vol. 630, c. 931.]
The expectation of this House was that the papers would be handed over in full, unedited. Anything less than this would be, I believe, a contempt of Parliament. Can I seek your guidance on whether you believe the Government have adequately satisfied the motion and the expectations of the House? If not, would failure to comply be considered a contempt of the House? If so, what would be the best way for Members to proceed?
Pete Wishart (Perth and North Perthshire) (SNP)
Further to that point of order, Mr Speaker.
Mr Speaker
Is it very specifically further to, and therefore on the point raised by, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer)?
Pete Wishart
As you will know, Mr Speaker, I wrote to you on 7 November asking you to consider contempt proceedings against the Government for failing to provide these Brexit analysis papers in full, as mandated, as you said, by the fully binding motion agreed by the House. You very generously gave the Government three weeks to comply, and you said you were awaiting the outcome of the conversations between the Secretary of State and the Chairman of the Exiting the European Union Committee. We have now had those conversations, and we have now heard the response from the Chairman of the Committee, who stated in this very Chamber just a few moments ago that the Government do not meet the motion in full. I therefore ask you to reconsider my letter of 7 November and to consider bringing contempt motions, as detailed on page 273 of “Erskine May”. I am sure you are aware of the significance of this, and I know you will deal with this sensitively. This is contempt, and the Government must be held accountable for their failure to comply.
Mr Speaker
I am very grateful to the right hon. and learned Member for Holborn and St Pancras (Keir Starmer).
Mr Speaker
Order. I will come to the hon. Gentleman in due course, potentially.
Mr Fysh
On page 201 of “Erskine May”, the section on ministerial accountability quotes from a resolution that was passed by both Houses of Parliament in the 1996-97 Session, which makes it clear that Ministers do not have to disclose all information if it is not in the public interest to do so. Does that have any bearing on this?
Mr Speaker
I am extraordinarily grateful to the hon. Gentleman, and I say this in no spirit of discourtesy to him, but I am familiar with precedent in relation to these matters, and I did not particularly need to be advised of the presence of that material in “Erskine May”. He will not be surprised to know that I have attended to these matters recently and regularly.
What I would say in response to the hon. Member for Perth and North Perthshire (Pete Wishart) very specifically is that I can, of course, reconsider his letter, but I hope he will not mind my saying that I think it would be more orderly and courteous if he were to write to me again, if he is so minded, in the light of the developments that have ensued since his earlier letter. This is not being pedantic—it really is not. It is a question of procedural propriety. If I receive a letter from the hon. Gentleman, I will consider it and respond in a timely way.
Beyond that, what I want at this point to say is that I think it is well known to Members, and certainly to such legal luminaries as the former Director of Public Prosecutions, that a Member wishing to allege a contempt should, in the first instance, raise it not in a point of order, nor indeed in the media, but by writing to me as soon as practicable after the Member has notice of the alleged contempt or breach of privilege. I then decide whether or not the matter should have precedence. It is certainly also well known to the hon. Member for Perth and North Perthshire that this is the procedure, as he availed himself of it a few weeks ago. I am more than happy to confirm that my doors are always open for such written notices.
Beyond that formal statement, and in the hope that this is helpful to Members in all parts of the House, I would emphasise that we all heard what the Chair of the Brexit Select Committee had to say. He indicated that the Committee had made a public statement and requested an urgent audience with the Secretary of State, and that information from the right hon. Member for Leeds Central (Hilary Benn) was extremely important. The Minister responded, indicating a willingness on the part of the Secretary of State to meet, and to do so soon. May I very politely say to the Minister, who is always a most courteous fellow, that he was wise to make that statement? When it is suggested that that meeting should be soon, it means soon; it does not mean weeks hence. It means very soon indeed. Nothing—no commitment, no other diarised engagement—is more important than respecting the House, and in this case, the Committee of the House that has ownership of this matter, and to which the papers were to be provided. That is where the matter rests. As and when matters evolve, if a further representation alleging contempt is made to me, I will consider it very promptly and come back to the House. I hope that the House knows me well enough to know that I will do my duty.
Mr Peter Bone (Wellingborough) (Con)
On a point of order on a slightly separate issue, Mr Speaker. Some Government Members, and perhaps some Opposition Members, have asked the Government to come forward with a new motion to try to clarify the distinction between the two differing motions that have come before the House. Is there any technical reason why that motion could not be produced, our having just debated the Humble Address?
Mr Speaker
No; it is possible. We shall see what happens. [Interruption.] The hon. Member for Glenrothes (Peter Grant) should not chunter from a sedentary position in evident disapproval of the thrust of the opinion expressed by the hon. Member for Wellingborough (Mr Bone). If the hon. Member for Glenrothes wishes to raise a point of order, I am very happy to entertain it.
Peter Grant (Glenrothes) (SNP)
On a point of order, Mr Speaker. In answer to the urgent question, the Minister referred to the binding decision of the House on 1 November. He also referred to a non-binding decision that the House had taken on an earlier day. He appeared to seek to interpret the second decision in terms of the first. Could you advise the House? Where a binding subsequent resolution appears to be incompatible with an earlier non-binding resolution, which should take precedence?
Mr Speaker
The hon. Gentleman can always discuss these matters, if he wishes, over a cup of tea with the Minister, if the Minister can spare the time to do so. I do not want to get into a detailed examination of all past motions. Suffice it to say—this is important—that there is a very recent motion passed by this House. If I may very politely say so to the right hon. and learned Member for Holborn and St Pancras, I did not say that it was my advice that the motion was binding or effective; as Speaker, I ruled that it was binding or effective. That, I can say to the hon. Member for Glenrothes, irrespective of other motions, remains the fact.
Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)
Further to that point of order, Mr Speaker. I apologise for pressing you for a further clarification, but I do so simply because it may help the House. If a motion of contempt applies in respect of a motion, and a subsequent motion amends the original motion, does that negate any charge of contempt relating to the requirements made previously of the Secretary of State?
Mr Speaker
That is perfectly reasonable. I have known the right hon. Gentleman long enough to know that he has a fertile mind and likes to explore all possible avenues. I hope that he will forgive me for resorting to my usual response to what I regard as a hypothetical question, which is to pray in aid the wisdom of the late Lord Whitelaw, who was known to observe, on I think more than one occasion, “Personally, I prefer to cross bridges only when I come to them.” That is probably the safest course in virtually every sense.
Mr Sheerman
Further to that point of order, Mr Speaker. This discussion goes to the very heart of how Select Committees operate. May I say, as someone who chaired a Select Committee for 10 years, that there is long-established precedent for the Chair of a Select Committee being able to receive a highly sensitive document on their own, in private, and deal with it sensibly and in a public-spirited way? There is a long tradition of that, particularly in very sensitive inquiries concerning children and education. Why that cannot apply at some stage in this case, I do not know.
Mr Speaker
That is a very helpful piece of information from an extremely experienced former Select Committee Chair. I am grateful to the hon. Gentleman; the House will have heard what he had to say.
Mr Kenneth Clarke (Rushcliffe) (Con)
On a point of order, Mr Speaker. You are very generous; you did say “finally”, but I delayed, because this is related to what has gone on but is not on quite the same subject. One Member said, very pertinently, that this all arises from the curious practice, which started in this Parliament, of the Government not voting on Opposition motions, which has never happened in the history of the House, I think. The result is that the proceedings of the House are becoming littered with motions that are extremely critical of the Government and their policies, the vast majority of which motions I do not agree with. That reduces this House to a debating Chamber, and raises the question: what is parliamentary accountability in modern times? Could you perhaps initiate discussions with the usual channels to see how we can get back to the constitutional position that we should undoubtedly have, in which the Government are accountable for all their actions and policies to this House of Commons, and cannot simply ignore motions as though they were the resolutions of some local tea party?
Mr Speaker
I am not sure how grateful I am to the right hon. and learned Gentleman for his point of order, but my response is twofold. First, the Address is just that—the Address—whether an attempt was made to amend it or not, and its binding quality is just that. Irrespective of whether that attempt was made or not, it stands anyway. Secondly, how the Government deal with Opposition day debate motions is a matter for the Government. What the Government have done to date is not disorderly. If the right hon. and learned Gentleman has suggested, as I think he has, that at the very least it has not been helpful to the House, I certainly would not dissent from that. It would be helpful if people reflected on the wider implications or ramifications of their conduct on individual occasions. He has served in this House without interruption for 47 years, five months and 10 days, and I think he knows of what he speaks.
If there are no further points of order, I thank colleagues; that will do for now. We come now to the statement by the Secretary of State for Health, for which he has been most patiently waiting.
Maternity Safety Strategy
(7 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Health (Mr Jeremy Hunt)
With permission, I will make a statement about the Government’s new strategy to improve safety in NHS maternity services.
Giving birth is the most common reason for admission to hospital in England. Thanks to the dedication and skill of NHS maternity teams, the vast majority of the roughly 700,000 babies born each year are delivered safely, with high levels of satisfaction from parents. However, there is still too much avoidable harm and death. Every child lost is a heart-rending tragedy for families that will stay with them for the rest of their lives. It is also deeply traumatic for the NHS staff involved. Stillbirth rates are falling but still lag behind those in many developed countries in Europe. When it comes to injury, brain damage sustained at birth can often last a lifetime, with about two multi-million pound claims settled against the NHS every single week. The Royal College of Obstetricians and Gynaecologists said this year that 76% of the 1,000 cases of birth-related deaths or serious brain injuries that occurred in 2015 might have had a different outcome with different care. So, in 2015, I announced a plan to halve the rate of maternal deaths, neonatal deaths, brain injuries and stillbirths, and last October I set out a detailed strategy to support that ambition.
Since then, local maternity systems have formed across England to work with the users of NHS maternity services to make them safer and more personal; more than 80% of trusts now have a named board-level maternity champion; 136 NHS trusts have received a share of an £8.1 million training fund; we are six months into a year-long training programme and, as of June, more than 12,000 additional staff have been trained; the maternal and neonatal health safety collaborative was launched on 28 February; 44 wave 1 trusts have attended intensive training on quality improvement science and are working on implementing local quality improvement projects with regular visits from a dedicated quality improvement manager; and 25 trusts were successful in their bids for a share of the £250,000 maternity safety innovation fund and have been progressing with their projects to drive improvements in safety.
However, the Government’s ambition is for the health service to give the safest, highest-quality care available anywhere in the world, so there is much more work that needs to be done. Today, I am therefore announcing a series of additional measures. First, we are still not good enough at sharing best practice. When someone flies to New York, their friends do not tell them to make sure that they get a good pilot. But if someone gets cancer, that is exactly what friends say about their doctor. We need to standardise best practice so that every NHS patient can be confident that they are getting the highest standards of care.
When it comes to maternity safety, we are going to try a completely different approach. From next year, every case of a stillbirth, neonatal death, suspected brain injury or maternal death that is notified to the Royal College of Obstetricians and Gynaecologists’ “Each Baby Counts” programme—that is about 1,000 incidents annually—will be investigated not by the trust at which the incident happened, but independently, with a thorough, learning-focused investigation conducted by the healthcare safety investigation branch. That new body started up this year, drawing on the approach taken to investigations in the airline industry, and it has successfully reduced fatalities with thorough, independent investigations, the lessons of which are rapidly disseminated around the whole system.
The new independent maternity safety investigations will involve families from the outset, and they will have an explicit remit not just to get to the bottom of what happened in an individual instance, but to spread knowledge around the system so that mistakes are not repeated. The first investigations will happen in April next year and they will be rolled out nationally throughout the year, meaning that we will have complied with recommendation 23 of the Kirkup report into Morecambe Bay.
Secondly, following concerns that some neonatal deaths are being wrongly classified as stillbirths, which means that a coroner’s inquest cannot take place, I will work with the Ministry of Justice to look closely into enabling, for the first time, full-term stillbirths to be covered by coronial law, giving due consideration to the impact on the devolved Administration in Wales. I would like to thank my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) for his campaigning on this issue.
Next, we will to do more to improve the training of maternity staff in best practice. Today, we are launching the Atain e-learning programme for healthcare professionals involved in the care of newborns to improve care for babies, mothers and families. The Atain programme works to reduce avoidable causes of harm that can lead to infants born at term being admitted to a neonatal unit. We will also increase training for consultants on the care of pregnant women with significant health conditions such as cardiovascular disease.
We know that smoking during pregnancy is closely correlated with neonatal harm. Our tobacco control plan commits the Government to reducing the prevalence of smoking in pregnancy from 10.7% to 6% or less by 2022. Today, we will provide new funding to train health practitioners, such as maternity support workers, to deliver evidence-based smoking cessation according to appropriate national standards.
The 1,000 new investigations into “Each Baby Counts” cases will help us to transform what can be a blame culture into the learning culture that is required, but one of the current barriers to learning is litigation. Earlier this year, I consulted on the rapid resolution and redress scheme, which offers families with brain-damaged children better access to support and compensation as an alternative to the court system. My intention is that in incidents of possibly avoidable serious brain injury at birth, successfully establishing the new independent HSIB investigations will be an important step on the road to introducing a full rapid resolution and redress scheme, to reduce delays in delivering support and compensation for families. Today, I am publishing a summary of responses to the consultation, which reflect strong support for the key aims of the scheme: to improve safety, to improve patients’ experience and to improve cost-effectiveness. I will look to launch the scheme, ideally, from 2019.
Finally, a word about the costs involved. NHS Resolution spent almost £500 million settling obstetric claims in 2016-17. For every £1 the NHS spends on delivering a baby, another 60p is spent by another part of the NHS on settling claims related to previous births. Trusts that improve their maternity safety are also saving the NHS money, allowing more funding to be made available for frontline care. To create a strong financial incentive to improve maternity safety, we will increase by 10% the maternity premium paid by every trust under the clinical negligence scheme for trusts, but we will refund the increase, possibly with an even greater discount, if a trust can demonstrate compliance with 10 criteria identified as best practice on maternity safety.
Taken together, these measures give me confidence that we can bring forward the date by which we achieve a halving of neonatal deaths, maternal deaths, injuries and stillbirths from 2030—the original planned date—to 2025. I am today setting that as the new target date for the “halve it” ambition. Our commitment to reduce the rate by 20% by 2020 remains and, following powerful representations made by voluntary sector organisations, I will also include in that ambition a reduction in the national rate of pre-term births from 8% to 6%. In particular, we need to build on the good evidence that women who have “continuity of carer” throughout their pregnancy are less likely to experience a pre-term delivery, with safer outcomes for themselves and their babies.
I would not be standing here today making this statement were it not for the campaigning of numerous parents who have been through the agony of losing a treasured child. Instead of moving on and trying to draw a line under their tragedy, they have chosen to relive it over and again. I have often mentioned members of the public such as James Titcombe and Carl Hendrickson, to whom I again pay tribute. But I also want to mention members of this House who have bravely spoken out about their own experiences, including my hon. Friends the Members for Colchester (Will Quince), for Eddisbury (Antoinette Sandbach) and for Banbury (Victoria Prentis), as well as the hon. Members for Lewisham, Deptford (Vicky Foxcroft), for Washington and Sunderland West (Mrs Hodgson) and for North Ayrshire and Arran (Patricia Gibson). Their passionate hope—and ours, as we stand shoulder to shoulder with them—is that drawing attention to what may have gone wrong in their own case will help to ensure that mistakes are not repeated and others are spared the terrible heartache that they and their families endured. We owe it to each and every one of them to make this new strategy work. I commend this statement to the House.
Jonathan Ashworth (Leicester South) (Lab/Co-op)
I am grateful to the Secretary of State for the advance copy of his statement. At the outset, may I pay tribute, as he has done, to the hon. Members who have spoken out so movingly in recent months about baby loss? They include, as he has said, the hon. Members for Colchester (Will Quince), for Eddisbury (Antoinette Sandbach), for Banbury (Victoria Prentis) and for North Ayrshire and Arran (Patricia Gibson), and my hon. Friends the Members for Lewisham, Deptford (Vicky Foxcroft) and for Washington and Sunderland West (Mrs Hodgson). They are all a credit to the House.
Our national health service offers some of the best neonatal care in the world, and the progress set out by the Secretary of State today is a tribute to the extraordinary work of midwives and maternity staff across the country. We welcome his announcement that all notifiable cases of stillbirth and neonatal death in England will now receive an independent investigation by the healthcare safety investigation branch. That is an important step, which will help to bring certainty and closure to hundreds of families every year.
We also welcome the move by the Secretary of State to allow coroners to investigate stillbirths. May I assure him that the Opposition stand ready to work constructively with him to ensure the smooth and timely passage of the relevant legislation, should he and the Government choose to bring any before the House? I also pay tribute to the work carried out by the team at the University of Leicester that leads on the perinatal aspects of the maternal, newborn and infant clinical outcome review programme, which provided the evidence for today’s announcement.
The number of deaths during childbirth has halved since 1993, saving about 220 lives a year, but we welcome the Secretary of State’s ambition to bring forward to 2025 the target date for halving the rate of stillbirths, neonatal deaths, maternal deaths and brain injuries that occur during or soon after birth. If that target is to be delivered, however, it is essential that NHS units providing these services are properly resourced and properly staffed. We welcome the launch of the Atain e-learning programme, as well as the increased training for consultants on the care of pregnant women with significant health conditions. We also welcome the emphasis on smoking cessation programmes, but we should remind the Secretary of State that public health budget cuts mean that many anti-smoking programmes have been cut back across the country.
The Secretary of State will know that the heavy workload in maternity units was among the main issues identified by today’s study, which found that “service capacity” issues in maternity units affected over a fifth of the deaths reviewed. Earlier this year, our research revealed that half of maternity units had closed their doors to mothers at some point in 2016, with staffing and capacity issues being the most common reasons for doing so. The Royal College of Midwives tells us that we are about 3,500 midwives short of the number needed. A survey published by the National Childbirth Trust this year showed that 50% of women having a baby experienced what the National Institute for Health and Care Excellence describes as a red flag event, which is an indicator of dangerously low staffing levels, such as a women not receiving one-to-one care during established labour.
We therefore believe that the NHS remains underfunded and understaffed. I would be grateful to the Secretary of State if he told us what further action he intends to take to ensure that maternity services are properly funded and to address the staffing shortages as part of a full strategy to improve safety across the board. The NHS has excellent psychological and bereavement support services for women affected by baby loss, but we all know that the quality of those services remains variable across the country. Indeed, we are still a long way from full parity of esteem for mental health in neonatal care. What action does the Secretary of State intend to take to plug these gaps?
Overall, this welcome set of announcements from the Secretary of State may help the NHS to provide the best quality of care for all mothers and their babies. The Opposition look forward to working constructively with the Secretary of State and the Government, but I hope he can reassure us that they will provide the resources that NHS midwives and their colleagues need to deliver on these ambitions.
Mr Hunt
I thank the shadow Health Secretary for the constructive tone of his response to the statement. I think he is right to point out both the achievements that have been made over many years, but also the challenges ahead. We have about 1,700 neonatal deaths every year—that has actually fallen by 10% since 2010—but behind that figure, there is variation across the country. For example, our best trust has about three deaths in 1,000, but in other trusts the figure can be 10 in 1,000, which is more than three times as many neonatal deaths. That shows we are not as good as we need to be at spreading best practice. Today’s announcement is really about ensuring that we can confidently look every expecting mum in the eye and say, “You are getting the very highest standards of care that we are able to deliver in the NHS.”
I thank the hon. Gentleman for his offer to co-operate on any legislation needed to expand the scope of inquests to full-term stillbirths, and we will get back to him on that. I also thank him for raising the issue of bereavement services. I spoke to a bereavement midwife this morning, and I think bereavement midwives are among the most extraordinary people working in the whole NHS. We do have a programme to improve the consistency of bereavement services and to roll out the use of bereavement suites across the NHS; our best trusts have such suites, but by no means all of them do.
The hon. Gentleman was absolutely correct to raise the issues of both funding and staffing. We have seen an increase of 1,600 in the number of midwives since 2010, which is a rise of 8%, and an increase of 600 in the number of obstetricians and doctors working in maternity departments, which is a rise of about 13%, but we need more. There are lots of pressures across the NHS, and we also have to fund the extra midwives and doctors that we need. There was a welcome boost for the NHS in the Budget, with an extra £1.6 billion available for the NHS next year. However, looking forward to the next 10 years and all the pressures coming down the track for the NHS—with a growing birth rate, but also with an ageing population—I do not pretend that we will not have to revisit the issue of NHS funding and find a long-term approach. Probably the most appropriate time to do that will be when we come to the end of the five year forward view and start to think about what happens following that. If we are to put more money into the NHS, we need to have the doctors, midwives and nurses to spend that money on, which is why, in the past year, the Government have committed to a 25% increase in the number of nurse training places and a 25% increase in the number of medical school training places.
My final point for the hon. Gentleman is that, although we have lots of debates in this House in which we take different positions in relation to the NHS, one thing we can be united on is our aspiration, which is shared across the House, that the NHS should be the safest healthcare system in the world, and I very much thank him for his support on that.
Several hon. Members rose—
Mr Speaker
Order. This is an extremely important and sensitive matter, and we appreciate the statement on it. However, the business to follow—the final day of debate on the Budget—is also extremely important, and no fewer than 67 right hon. and hon. Members have indicated a wish to speak. Exceptionally, therefore, I may not feel able to call everybody on this statement. In any event, there is a premium on brevity from Back Benchers and Front Benchers alike.
Dr Sarah Wollaston (Totnes) (Con)
I warmly welcome the Secretary of State’s announcements today, including the move to allow coroners to investigate full-term stillbirths. Will he set out the current waiting time for post-mortems for infants because, as he will be aware, there is a shortage of the very highly specialised pathologists who carry out this vital work?
Dr Philippa Whitford (Central Ayrshire) (SNP)
Last month’s debate on baby loss has been mentioned, and I too took part in it, although I have thankfully been spared the pain suffered by some Members of the House. Such a debate really helps to bring out for everyone on both sides of the House how important this issue is, and I do not think there will be anyone who does not welcome this statement and the ambition it shows.
In Scotland, we had a higher stillbirth, neonatal and perinatal death rate in 2012, but our new chief medical officer was actually an obstetrician, and that may have led to the change of focus in 2013, when she established the maternity and children quality improvement collaborative and the national stillbirth group—all as part of the Scottish patient safety initiative—as well as the neonatal managed clinical networks across Scotland. That has enabled us to drop our stillbirth rate by more than a quarter, and to drop our neonatal death rate by 50%.
This has been achieved despite the challenges we face of really difficult geography, including getting people off islands. It is easy to spot the woman who has a history of difficult births or to spot a woman with comorbidities, such as obesity or diabetes, but anyone who has been involved in birth knows that even the healthiest pregnancy can go wrong at the last minute. For us, as in rural parts of the north and west of England, there are transport issues in relation to how women with problems during labour are identified and transported if a higher specialism is required, and those issues must be looked at.
This is very much about the provision of neonatal services, including the movement of patients, and the availability of expertise and of neonatal intensive care units. However, as came out several times during the debate on baby loss, another issue is that of pre-term birth and stillbirth, so this is also about trying to change some of those things. After Scotland’s recent review in February, the focus will be on the consistent monitoring of growth, as a failure to thrive can identify a third of impending stillbirths; the continuity of care, which the Secretary of State has referenced; and especially smoking. Although the Secretary of State mentioned getting smoking rates down—and in Scotland, sadly, they are higher—the rate in the most deprived communities is more than four times that in the least deprived communities. That has an impact on every level of child loss.
Finally, on research, it is important that we learn, for example from the new information about women sleeping on their side in the last trimester. We need to fund the research to learn those things and then share the information—
Mr Speaker
Order. I have the highest regard for the hon. Lady, who is a considerable medical authority. I gave her a little leeway, but I say very gently that not only did she exceed her time by a minute, but she pursued her usual, rather discursive approach. In these situations, what is required is a question or a series of questions with a question mark or a series of question marks, rather than general analysis. We will leave it there for now. I say that in the most good-natured spirit to the hon. Lady.
I call Antoinette Sandbach.
Mr Speaker
I forgot that we had heard from the hon. Member for Central Ayrshire (Dr Whitford), but we had not yet heard from the Secretary of State. Apologies.
Mr Speaker
Order. As I have just been advised by the distinguished Clerk at the Table, who swivelled round so to advise me, there is really no need for a response, because there was no question. However, I will indulge the right hon. Gentleman to the point of a paragraph.
Mr Hunt
Let me simply say that there is an excellent Scottish patient safety programme. Given that one of the main objectives behind the statement is to share best practice, I would be very happy to talk to the chief medical officer in Scotland and to Jason Leitch about how we can exchange information and learn from each other’s systems.
Antoinette Sandbach (Eddisbury) (Con)
As every parent who has lost a child knows, what they want most is answers. I therefore congratulate the Secretary of State on bringing forward the healthcare safety investigation branch, because such independence will be crucial in gaining the buy-in of parents and in their knowing what has happened in their particular case. How will the learning from those investigations be shared?
Mr Hunt
I thank my hon. Friend for her extraordinary campaigning on this issue. Yes, we want parents to get the answer more quickly, but we also want to be able to answer the question that every parent asks: “Can you guarantee that this won’t happen again?” The investigators will have an explicit dual remit: to get to the bottom of what happened, but also to spread that message around the system so that the same mistake is not repeated. That is the objective of setting up a new team of people to do this.
Lilian Greenwood (Nottingham South) (Lab)
My constituents Jack and Sarah Hawkins have spoken bravely about the tragic death of their daughter Harriet due to failures of care. Members may have heard them this morning. I spoke to Jack earlier and am pleased to tell the Secretary of State that they feel listened to and heard. They and I very much welcome his statement and his support for extending the power of coroners. However, Jack and Sarah need to be able to stop fighting and to begin healing, so I ask the Secretary of State to urge his colleagues at the Ministry of Justice to support the Bill introduced by the hon. Member for East Worthing and Shoreham (Tim Loughton) to bring about that change as soon as possible.
Mr Hunt
Through the hon. Lady, I express my thanks to Jack and Sarah for bravely telling their story this morning in the media, which was incredibly moving and touched a lot of hearts. With respect to allowing inquests into full-term stillbirths, our objective is to move as quickly as any legislative vehicle allows. If I am able to work closely with my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) to do that, that is exactly what I want to do.
Will Quince (Colchester) (Con)
I very much welcome the Secretary of State’s statement and congratulate him on it. Does he agree that the vast majority of grieving parents, if not all, not only want to know why, but want to know that their child’s life, however short, will have had meaning by ensuring that we learn lessons from them not as a statistic, but as a baby? That is why the independent investigation unit is so important. We must learn the lessons not just in one trust, but across the whole NHS and spread that learning to ensure that as few people as possible go through this emotional personal tragedy.
Mr Hunt
My hon. Friend is absolutely right. As he knows, because he has spoken so movingly on this subject many times, there is absolutely nothing we can do to make up for the searing loss of losing a loved one—a baby. It is the worst thing any parent can go through. We can at least give them the commitment that we will learn. If we are honest, we do not do so at the moment, because we sometimes wait 10 years for a court case to be settled, and even then it is not always clear to me that the lessons of what happened are properly learned around the system. This statement is an attempt to change that.
Diana Johnson (Kingston upon Hull North) (Lab)
I very much welcome the Secretary of State’s approach to more openness and transparency in the NHS around baby deaths. However, he will remember signing a letter in May 2016, along with the then Secretary of State for Communities and Local Government and the then Secretary of State for Justice, on an independent inquiry into the baby ashes scandal in Hull. That inquiry has never happened and parents still do not have the answers about what happened in the NHS and Hull City Council in respect of their babies’ ashes. Will the Secretary of State recommit to that independent inquiry going ahead with his permission?
Tim Loughton (East Worthing and Shoreham) (Con)
The hon. Member for Nottingham South (Lilian Greenwood) pre-empted my question about my Bill and coroners. I make the offer to sit down with the Secretary of State and his draftsman to decide on the wording of my private Member’s Bill, which will be debated on 2 February, as the fastest way to achieve his goals and get the solution that all Members of the House want.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I am sure that the Secretary of State will realise that, even after all these years, when my wife and I hear news like what we heard this morning, it takes us back to our first baby daughter, who died at birth. After that, we had four healthy children and 10 grandchildren, but we still go back to that awful time. Our baby was sickly; it was not about poor care. We care very much about people who lose their children. As a constituency Member of Parliament, I am getting increasingly worried about rationalisations in which maternity units get further and further away from where the main population live. I also get very worried when we do not give our midwives and doctors our full support to give them the morale to do that difficult job.
Mr Hunt
We must give doctors, nurses and midwives our full support, because they do an extraordinary job. Sometimes there are difficult issues and the centralisation of certain maternity services can improve patient safety if it means that there is round-the-clock consultant cover and so on. In my experience, the most important thing is to spot the most risky births early in the process. I am not a doctor, but there is sometimes an assumption that it is all about what happens at the moment of labour when women go into hospital. Actually, a lot of this is about thinking earlier in the process about higher risk mums—mums who smoke and mums from lower socioeconomic backgrounds—and intervening earlier. That will be important for the hon. Gentleman’s constituents and for mine.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
Pregnancy and childbirth are a time of joy for most families, but during my professional career, I sadly had to look after a number of babies who died. I therefore welcome the Secretary of State’s commitment to halving the number of neonatal deaths by 2025. In my professional experience, many babies who are stillborn were already dead or in serious trouble inside the mother before they arrived at hospital. Will the Secretary of State therefore confirm that the investigations will look at pre-hospital care, as well as hospital care, including things such as the measurement of babies’ growth? Will he also encourage expectant mothers to monitor foetal movements, as we know that a reduction in those can be a sign of distress?
Mr Hunt
I can absolutely confirm that. This follows a very interesting discussion on that topic we both had at lunch. My hon. Friend is right that the key is early intervention. Also, we know that continuity of carer makes a very big difference. If, well ahead of labour, people can meet the midwives who will be delivering their child, that can help reassure people and lead to safer births.
Graham Stringer (Blackley and Broughton) (Lab)
This is a very welcome statement. The Secretary of State will know of the very disturbing cases over the past few years in the Pennine health trust. Will he make space within the legislation for retrospective investigations where there have been a number of cases, as in the Pennine trust?
Mr Hunt
I will look into that very carefully. I am satisfied that there is strong new leadership at the Pennine trust and that it is being turned around, but it has told me about some of the cases to which the hon. Gentleman refers. They are of very great concern, and we absolutely must do everything we can to give answers to bereaved families.
Victoria Prentis (Banbury) (Con)
As a bereaved parent, but also as a lawyer who has conducted many inquests, I ask the Secretary of State to consider two points. The first is the fact that not many families will need an inquest to determine what went wrong during the birth of their child. Secondly, will he commit to the training of special coroners, just as we have in military inquests, to ensure that those who deal with these very sad cases are the best equipped people to do so? Finally, on behalf of the all-party group on baby loss, may I thank him for today’s announcement and encourage him in his work to make maternity care kinder, safer and closer to home—and may I encourage him to save Horton General Hospital?
Mr Hunt
First, may I apologise to my hon. Friend, because I should have mentioned her in my statement as someone who has spoken very passionately and movingly on this topic in the House? I will take away her point about specialist coroners, because we are now going to have specialist investigators, which we have never had before. I would make one other point. I hope she does not think I am doing down her former profession, but really when people go to the law, we have failed. If we get this right—if we can be more open, honest and transparent with families earlier on—it will, I hope, mean many fewer legal cases, although I am sure that the lawyers will always find work elsewhere.
Stephen Lloyd (Eastbourne) (LD)
I welcome the Secretary of State’s statement, like many others in the Chamber. He talked several times about learning lessons. As he knows, a recent report has highlighted that in my own trust, the East Sussex Healthcare NHS Trust, there were 19 stillbirths last year, which is a far higher percentage than in the rest of the UK. In the spirit of learning lessons, will he agree to someone in the Department of Health examining why that is the case?
Mr Hunt
I absolutely undertake to look into that case and ensure a proper investigation into what is happening. The hon. Gentleman is right; in the end, we need to be much more open about this data, so I commend the trust for sharing the data publicly. Until we access such data, we will not know where the issues are that we need to solve.
Mims Davies (Eastleigh) (Con)
With this vital new focus on safer births, will there be an opportunity to look at group B strep and other issues that if undetected in the later stages of pregnancy can result in baby loss?
Tony Lloyd (Rochdale) (Lab)
I welcome the Secretary of State’s announcement, but will he reconfirm the advice from NICE that midwife-led birthing centres are safe under the appropriate circumstances? In areas such as Rochdale, where the birth rate has shot up dramatically following the closure of its maternity unit, the provision of something like a midwife-led centre would be the right approach.
Andrew Selous (South West Bedfordshire) (Con)
Will the Secretary of State do everything possible to spread across the country the excellent “dads to be” courses that are part of the antenatal provision at Chelsea and Westminster and Kingston Hospitals? We know that they help solidify relationships between parents at a moment of strain and reduce family breakdown.
Dr David Drew (Stroud) (Lab/Co-op)
May I concur with my hon. Friend the Member for Rochdale (Tony Lloyd) and say that, although safety must be paramount, it would be wrong to see this as a reason to shut midwife-led units and, in particular, discourage home births for women likely to have a safe birth who chose to have the baby at home? Will the Secretary of State say something to make sure that those units are safe?
Mr Hunt
I am very happy to do that. Midwife-led units and home birthing are both part of the NHS maternity offer, but it is wrong to suggest that there is a conflict between patient safety and the choice made by mothers. No mother would ever actively make a choice to do something that was not the safest option for her and her child.
John Howell (Henley) (Con)
I welcome the statement, and I am glad that the Secretary of State mentioned the role of tobacco. Has he also considered the role of alcohol?
Mr Hunt
My hon. Friend is absolutely right to say that. The evidence is very clear about the damage done to foetuses and babies if there is too much—or, indeed, any—drinking by a mother. I did not mention it in the statement because we are focusing on smoking cessation training, but he is right to mention the issue.
John Woodcock (Barrow and Furness) (Lab/Co-op)
The brand new maternity unit at Furness General Hospital will open shortly, thanks to the campaigning of the whole community, but it will be safer thanks to the Secretary of State’s personal commitment, thanks to the staff and thanks to the parents of Elleanor Bennett, Alex Brady, Chester Hendrickson, Joshua Titcombe and others who have campaigned tirelessly for local and national change. Will he join my calls for their struggle to be permanently commemorated within the new unit?
Mr Hunt
I am happy to do that. I think I have met most of those parents. The hon. Gentleman has been incredibly supportive to them locally—they have told me that. When Carl Hendrickson came to see me, he brought his 11-year-old son, and I offered for the son to wait outside, but he said no—he wanted his son to be with him. I think it was because he wanted his son to know that he had been to the top to try to understand why his child and his wife died because of mistakes in that maternity unit. The hospital has done an incredible turnaround job—we are all really proud of what it has done—and we are confident that it would not happen again, but that is not to say that there is not a huge amount more we all need to do.
Kevin Foster (Torbay) (Con)
I welcome the Secretary of State’s remarks and the overall tenor of the comments made so far. Does he agree that the most important thing for families who experience tragedy in childbirth is to receive the straight answers they deserve and to know that lessons will be learned where necessary?
Mr Hunt
I do agree. I have visited my hon. Friend’s trust in Torbay and have been very impressed with the learning I saw from the Sam Morrish case, which was a very sad story of where that did not happen initially. However, as I say, I think the trust has learned all those lessons extremely impressively.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State for his statement and personal commitment. It is much appreciated. Will he confirm that part of the safety strategy includes ensuring that midwives on labour wards can take their breaks and rest periods and that midwife staffing levels on labour wards and post-section wards are checked, monitored and increased?
Mr Hunt
I agree that that is extremely important. I also extend through the hon. Gentleman a similar offer to the one I made to the hon. Member for Central Ayrshire (Dr Whitford), who speaks for the SNP: I am happy to pursue any collaboration possible between the Northern Irish and English healthcare systems to share best practice.
Rebecca Pow (Taunton Deane) (Con)
I welcome the measures that the Secretary of State has announced today and commend him and other colleagues for their sympathetic work. Without them, we would not be here today. I also want to mention Musgrove Park Hospital in my constituency, which is already demonstrating how much good work can be done. It has cut the number of stillbirths by a third in 18 months and has won awards for it. It has introduced a special app that people can use when they are on maternity leave, and it has introduced much-improved special sepsis management. It also has a ground-breaking maternity apprenticeship scheme.
Does the Secretary of State agree that sharing such best practice is the best way to ensure that everyone else can do some great work and that we do not have to hear about these terrible examples again?
Mr Hunt
I really enjoyed visiting Musgrove Park hospital on Friday. I thought that what it was doing about stillbirths was incredibly impressive: I had not seen anything like it before. That is, indeed, an example of fantastic practice that I would like to spread everywhere.
Point of Order
Luke Graham (Ochil and South Perthshire) (Con)
On a point of order, Mr Speaker. Earlier today, during Treasury questions, the Scottish National party’s transport spokesperson, the hon. Member for Kilmarnock and Loudoun (Alan Brown), said that “the rail funding formula has been ignored and Scotland’s rail budget has been cut by £600 million over the next investment period”. That is not true. Investment in Scotland’s railway has risen from £3 billion to £3.6 billion, as confirmed by the Treasury and Her Majesty’s Government. What steps can be taken to rectify the record and ensure that the SNP spokesman gives the correct facts?
Mr Speaker
I hope that the hon. Gentleman notified the hon. Member for Kilmarnock and Loudoun of his intention to raise the point of order.
Mr Speaker
It is very much the expected practice, and it is normal, for a Member who is going to raise a point of order containing a criticism of another Member to notify that Member of the intention in advance. However, I will treat of what the hon. Gentleman has put to me. The matter concerned is a matter of debate, and the hon. Gentleman has put forward his understanding of the position very clearly. It is on the record, and it may well be the subject of further debate and even, conceivably, of publicity, not least in the Scottish media. We await that prospect with interest and anticipation.
Child Maintenance (Assessment of Parents’ Income)
Tuesday 28th November 2017
(7 years ago)
Commons ChamberRead Full debate Child Maintenance (Assessment of Parents' Income) Bill 2017-19 View all Child Maintenance (Assessment of Parents' Income) Bill 2017-19 Debates Read Hansard Text
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Heidi Allen (South Cambridgeshire) (Con)
I beg to move,
That leave be given to bring in a Bill to equalise the assessment and enforcement of child maintenance arrangements of children of self-employed parents with those of children of other employed parents; and for connected purposes.
In introducing the Bill, I am following in the steps of David Burrowes, who, until the recent general election, was the Member of Parliament for Enfield Southgate. Let me explain the Bill’s purpose in plain language.
One of the greatest privileges in my role as a Member of Parliament has been meeting and getting to know four brave mums in my constituency. I call Melissa, Sue, Kate and Jo-Anne my super-mums. As well as being fabulous women and wonderful mothers, they all have one thing in common: having split up from the fathers of their children, they have all had to fight, and are still fighting, for fair maintenance payments. The aim of the Bill is to ensure that the parents and children who find it hardest to be awarded a fair child maintenance arrangement are better supported by a system with proper teeth. Whether paying parents have complex finances, are hiding their true incomes to avoid tax or are simply determined not to pay maintenance, this Bill is for them.
When parents split up, the Child Maintenance Service can help them to work out a fair payment schedule for their children. When the split is amicable and sensible, the system works well, but if paying parents want to avoid paying, they can do so all too easily—and all too often—by hiding behind self-employed status. By hiding their income, they are not only denying their children the financial support that they deserve, but defrauding Her Majesty’s Revenue and Customs, and, in many cases, forcing the parents with care on to benefits. That is a double hit to the taxpayer. The country loses out on tax, and instead pays out to support the receiving parents. The purpose of the Bill is to ensure that the statutory child maintenance system works for as many families as possible by closing that loophole.
The Child Maintenance Service, which was introduced recently by the Department for Work and Pensions, replaced the old Child Support Agency. In straightforward cases involving a traditionally employed paying parent, it works well. A standard child maintenance calculation under the CMS is based on HMRC’s “gross taxable income” data. That usually means gross earnings from employment or self-employment, with pension contributions deducted. However, the system does not work when the paying parent takes income in other ways—unearned income from, for instance, trusts, dividends, rental income, individual savings accounts, assets, or capital gains from property sales: essentially, any income that does not show up on HMRC records.
I suspect that you are starting to get my drift, Mr Speaker. If it is not shown on HMRC’s records, it is not seen by the CMS. The current system does not work if paying parents are evading tax and not declaring their income to HMRC. In such cases, the amount of child maintenance that the CMS deems a paying parent to owe may be negligible. Receiving parents may be struggling to make ends meet while seeing their exes buy new cars, take holidays and lead luxurious lives with new families. The mum who brought the issue to David Burrowes’s attention was Elizabeth Green. In her case, her ex had organised his finances in such a way as to pay the minimum statutory sum—just £7 a week—but was found to be a multimillionaire and the owner of multiple properties. My super-mums have had similar experiences.
The old CSA system had a component entitled “lifestyle incompatible with earnings”, which allowed the CSA to challenge income if there was evidence of a more comfortable lifestyle than the declared income suggested. I do not understand why, but that feature has been removed in the new CMS system. The right hon. Member for Birkenhead (Frank Field), who is one of the Members who have kindly added their names to my Bill, told me recently about a constituent whose application for tax credits had been called into question by HMRC because it believed that her standard of living was too high for her to qualify. That ably demonstrates that HMRC has the capability to question income and allege fraud. It must therefore be able to extend that power to ensure that appropriate child support payments are made.
This simply cannot be right. I do not seek to demonise the self-employed or the wealthy—most parents living apart from their children do pay what they owe—but as the Government rightly turn their attention to the growth in self-employment and the new challenges that that brings in terms of systems, law and taxation, and as they also crack down on tax evasion, now is surely the time for the Child Maintenance Service’s rules of engagement and enforcement powers to change.
The Work and Pensions Committee, of which I am a member, has already looked into this issue. Much of what we found highlighted the challenges associated with the growth of self-employment and the potential that it creates to hide true earnings. As child maintenance evasion often goes hand in hand with tax evasion, it seems inefficient and ineffective not to combine forces with HMRC in a proactive way. The Government must surely consider that—especially given that the CMS’s financial investigations unit has so far conducted only four investigations, just two of which have resulted in action.
This is not a difficult concept to grasp. Parents can see with their own eyes when their exes are living beyond their declared income or assets. For example, a constituent of mine paid just a few pounds to access a public search facility at Companies House that showed as clear as day that the father had drastically under-declared his income through creative company and dividend manoeuvring.
We must act on this exploitable flaw in the system, or instead allow parents to take their cases to the family courts. My super-mums have all trodden that path, only to find that the CMS is not obliged to uphold the courts’ judgments. I know that the Government are serious about tax evasion, so the current loophole in the CMS process makes absolutely no sense. The CMS must either join up with HMRC, or let the courts do their job: it must be one or the other.
In response to our Committee, the Government have said that they will consider how they can include all sources of income in the CMS calculation. That sounds encouraging, but, in the absence of the promised new arrears and compliance strategy, the Bill can be the vehicle to effect the changes that are so desperately needed by introducing measures to help struggling parents and children to secure the maintenance that they deserve. Child maintenance lifts a fifth of single parents on the lowest incomes out of poverty. It provides a lifeline for parents and children, whether that means putting a roof over their heads, covering childcare costs, or enabling children to take part in school trips. It also saves taxpayers’ money.
A child maintenance system with teeth will also offer protection to parents and children when there has been a history of abuse and control. Some cases are high-conflict, involving parents who are determined to avoid their liabilities. That can be a means of continuing to exert control, just as they used to when the parents were still together. Coercion, domestic abuse and ongoing manipulation are the backdrop for the most vulnerable parents who turn to the CMS, and in those cases the state must step in. The fixes are obvious, and dovetail comfortably with the Government’s determination to crack down on tax evasion, while also getting a handle on our rapidly growing self-employed economy.
I urge Members to allow the Bill to be read a second time.
Question put and agreed to.
Ordered,
That Heidi Allen, Antoinette Sandbach, Mr Ranil Jayawardena, Stephen McPartland, Suella Fernandes, Frank Field, Layla Moran, Neil Gray, Kit Malthouse, Mrs Cheryl Gillan, Kevin Hollinrake and Mr Steve Reed present the Bill.
Heidi Allen accordingly presented the Bill.
Bill read the first time; to be read a second time on Friday 23 February 2018, and to be printed (Bill 133).
Ways and Means
Budget Resolutions
Tuesday 28th November 2017
(7 years ago)
Commons ChamberRead Full debate Finance Act 2018 View all Finance Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts
19:01 - The House divided: - Ayes: 316 / Noes: 293 - Question accordingly agreed to.
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
It is a great pleasure to open this final day of the Budget debate. In his Budget statement last week, the Chancellor described the choice before our country, standing as we do on the brink of a technological revolution—a choice between embracing the future, building on our strengths and taking our place as one of the nations at the forefront of the new world of innovation, or rejecting that, assuming a defensive posture and letting other countries seize the initiative. We choose emphatically the former. The Budget and the industrial strategy set out a long-term approach in which we can make our economy one that can prosper during the years ahead.
Not just in Britain but across the world, this is a time of change and opportunity. Artificial intelligence and the analysis of big data will transform the way in which we live and work, from the way in which we diagnose and treat cancer to the security of online transactions. The whole world is moving from being powered principally by fossil fuels towards energy sources that are clean, with enormous impacts not just in the energy sector but in the products and services that make use of it.
One such area is transport, where extraordinary innovation is changing how we move people and goods around our towns, cities and countryside. As a result of medical advances and rising prosperity, people across the world are living longer than ever before. One stunning statistic illustrates that transformation. In the United Kingdom today, 15,000 centenarians are alive, but of the people who are alive in Britain today, 10 million can expect to live to their 100th birthday—a transformation in our generation. An ageing population creates new demands in care to maintain their health so that they can make the most of their longer lives.
In all these areas, Britain is extraordinarily well placed to lead. We are an open, enterprising economy built on invention, innovation and competition. Our universities and research institutions are hotbeds of discovery, among the very best in the world. In a world where many of tomorrow’s businesses have not yet been founded, our powerful reputation for being a dependable and confident place to do business, with high standards, respected institutions and the reliable rule of law, is an enormous asset.
John Woodcock (Barrow and Furness) (Lab/Co-op)
Given that, will the Secretary of State back our local campaign to find a new buyer for the business manufacturing cephalosporins in Ulverston and Barnard Castle, given the highly unwelcome and damaging decision by GSK to review that landmark investment, which was announced by the Chancellor and Prime Minister after the 2011 Budget?
Greg Clark
I am happy to talk to the hon. Gentleman. He will know that we work closely with the life sciences sector. The industrial strategy published yesterday included an important life sciences sector deal in which all the companies are working closely with each other, local institutions, local leaders and the Government. I am happy in that context to meet him and have those discussions.
Sir Edward Davey (Kingston and Surbiton) (LD)
The Secretary of State talks about giving certainty to businesses and investors. Does he agree that the contracts for difference regime can be used to bring in zero-subsidy CfDs to give real certainty to people wanting to invest in our renewable energy? Will he commit to considering the case for zero-subsidy CfDs?
Greg Clark
Contracts for difference have brought down the price of renewable energy substantially. We have commissioned a review from Professor Dieter Helm—I know that the right hon. Gentleman knows him well—which has reported, and we will make our response to it. It would be wrong to pre-empt our consideration of that, but I hope that the right hon. Gentleman and others will give their thoughts on the Helm review. We have launched a consultation on that, as he knows.
Alan Brown (Kilmarnock and Loudoun) (SNP)
I note the Secretary of State’s comments about the Dieter Helm review, but will the Government commit to moving away from their nuclear obsession, given—as he acknowledged—CfD has brought down the cost of renewable energy?
Greg Clark
It is my view that we need to have a broad base of power supplies for our security in the future. We are now the world leader in offshore wind, which demonstrates that one comes not at the expense of the other, and that is the right and prudent way to proceed.
We have many world-leading industries, from financial services to advanced manufacturing, from the life sciences to the creative industries. In many cases, they are at the forefront of the technological revolution that is sweeping the world.
Damian Collins (Folkestone and Hythe) (Con)
What further assistance are the Government planning to give to research and development for small modular reactors as part of the nuclear sector, potentially a very important and useful source of energy? What consideration has the Secretary of State given to the suitability of existing nuclear sites, such as Dungeness in my constituency, as locations for SMRs?
Greg Clark
I know that my hon. Friend takes a great interest in this. We have an energy innovation programme, about which we will make some announcements before long. That will address the question of what types of technologies should be moved along from research to development and implementation. He will have an interest in that and I will make sure that he is given the details.
To capitalise on our strengths, we need to reinforce them and project them into the future. We also need to address our weaknesses. We are proud of the fact that more people are employed in this country than ever before—an extraordinary achievement, with 3 million extra jobs created in a time when the Labour party predicted that millions of jobs would be lost. But compared to some of our competitors, on average, we work harder and longer to produce at the same level as they do. We need to raise our productivity, as the Chancellor made clear in his Budget statement.
As the House knows, to a large extent, it is a problem of disparities, rather than a uniform picture. We have industries, companies, people and places that are among the most highly productive on the planet, but we have what the Bank of England has called an unusually long tail of companies and places whose level of productivity is below that of the top performers. The challenge is clear: to reinforce the performance of the top and build on those strengths, while spreading that excellence throughout the economy and the country. That is exactly what the Budget and our industrial strategy White Paper will do, by reinforcing strengths and addressing weaknesses in areas across the board. We talk about innovation, skills, infrastructure, the business environment and local economies.
Heidi Allen (South Cambridgeshire) (Con)
I wish to put on record my thanks to the Government for finding funding for the initial cost analysis for a station at Addenbrookes. Connecting that science and those brains with the wider country is exactly what we need to do. It is a vital piece of infrastructure and I am very grateful for it.
Greg Clark
I am grateful to my hon. Friend. That is a good illustration of how a strategy can bring forces together. That £5 million investment means that the infrastructure in and around Cambridge can be improved, and that will make the area even more attractive for companies and researchers to locate there, and it builds on the area’s strengths. The part of the world that she and the Economic Secretary to the Treasury, my hon. Friend the Member for North East Cambridgeshire (Stephen Barclay)—one of her close neighbours—represent has enjoyed great success, but I think they would both recognise the opportunity to extend that success to a larger area. That is exactly what we have in mind.
Vernon Coaker (Gedling) (Lab)
I agree with the Secretary of State about regional disparities and the way in which the industrial strategy tries to tackle them. The east midlands needs investment in capital to raise productivity, so I ask him to look into that. Will he also speak to the Transport Secretary and others about the Government’s failure to electrify the midland main line? As he knows, many of us have campaigned for that over a number of years, but the Government have now rowed back on it.
Greg Clark
I absolutely recognise that one of the big strengths of the east midlands is that it is connected to the rest of the country, and it is essential that those connections continue to improve. The hon. Gentleman will know that a fund was established in the Budget for cities and city regions to improve the connections in and around those cities. That is important, but it is in addition to the importance of connections to the rest of the country, so I will raise his point with the Transport Secretary.
Let me say something about ideas and the importance of innovation to our economy. We can be the world’s most innovative economy, given the strength of our science base and our researchers. Throughout our industries, we have some of the most creative people in the world.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
I just want to probe the Secretary of State about what thinking has been going on in government following Bill Gates’s speech in the spring about taxing robots. We only have to go into a high street shop to see that many jobs have been displaced by machines, which are not taxed. If a person was still working there, they would be paying tax to the Exchequer, and that money could help future innovation. Have the Government given any thought to all these labour-saving devices and to getting some revenue from the way in which robots are doing many of the jobs that people used to do?
Greg Clark
We need to embrace the technologies of the future. If we are in the lead, we can benefit from being the place that develops, applies and manufactures many of these products. Whenever we have taken the lead in this country, we have reaped the benefits. It is in those areas where we have lost our advantage that we have ended up importing goods and services from around the world. We need to lean into the future and ensure that we are the place in the world where the firms of the future locate to develop and manufacture their products.
Tony Lloyd (Rochdale) (Lab)
The Secretary of State will probably not agree with this, but I believe that we still have a financial gap in this country, particularly when it comes to science and technology, because venture capitalists simply do not know how to make assessments on such things. Those people are also disproportionately located in this city region rather than other parts of the country. Will the right hon. Gentleman look seriously at the capacity of those industries to see whether we could make some structural changes that would benefit the whole nation?
Greg Clark
I will indeed. I am coming on to precisely that point. The hon. Gentleman has a distinguished record of leading Greater Manchester—with some success—in promoting the vitality and attractiveness of that important part of the economy.
John Howell (Henley) (Con)
Surely one of the ways in which we can improve innovation and productivity is by having better broadband and telephony. I heard what the Secretary of State said yesterday, but in my area we have zero G, not 5G. Would he like to encourage my area by saying that the strategy is meant for the whole country, not just towns and cities?
Greg Clark
It certainly is. There are significant opportunities in many of our rural areas, and it is essential that the progress we make in our towns and cities is shared with our rural areas, of which my hon. Friend’s constituency is a particularly attractive and productive example.
Several hon. Members rose—
Greg Clark
Let me make some progress now, because I am about to come on to the points that hon. Members are raising.
Last week’s Budget outlined the biggest increase in public research and development investment for 40 years. It is growing as a share of GDP and contributing to our commitment to invest 2.4% of GDP in research and development by 2027, rising to 3% in the long term. One aspect of this increased funding is a strength in places fund, which will grow our research and innovation strengths in every part of the United Kingdom, recognising that there are strengths in all parts of the country, not just in London and the south-east.
Kevin Hollinrake (Thirsk and Malton) (Con)
Rebalancing the economy is a key part of the industrial strategy, and one of the reasons why London gets a much better deal on investment is its ability to attract private sector investment, which the north has very little capability to do. Has my right hon. Friend any plans to try to resolve that issue, so that we can attract more private sector funding for infrastructure investment in the north?
Greg Clark
I have indeed, and I will come on to that in a moment, if my hon. Friend will bear with me.
Let me say something about skills. We are creating new job opportunities, but I say to the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), who raised a point about robots, that if jobs change, we need to ensure that people have the ability to train and develop the skills they will need for the jobs that are being created. The consultation on the industrial strategy established what every Member knows: job opportunities, especially in companies in the technical sectors, require education and training, particularly in maths, digital skills and other aspects of our technical education. There are skills shortages around the country, and great careers would be available to young people and to those who are changing career if only they had that educational base. The significant investment in maths, digital and technical education that was announced in the Budget is therefore important, as is the national retraining scheme, which will work with employers and trade unions, beginning with digital and construction training.
On infrastructure, I can tell the hon. Member for Gedling (Vernon Coaker) that the Chancellor has announced an £8 billion increase in the national productivity investment fund, taking it to £31 billion, and extended it to 2022-23. That will enable us to invest in our physical infrastructure and also, as my hon. Friend the Member for Henley (John Howell) said, in our digital infrastructure as we develop the next generation of full-fibre networks, trial the use of 5G and boost mobile communication on our railways. That, too, is important right across the country. We will also support electric vehicles through the charging infrastructure fund. If we are going to manufacture those new vehicles, we have to be the place in the world in which they can be deployed most effectively.
Antoinette Sandbach (Eddisbury) (Con)
Green growth is clearly part of our future as we move forward in the economy. Does my right hon. Friend agree that hydrogen batteries are as important as electric vehicles?
Greg Clark
My hon. Friend is absolutely right to say that hydrogen offers big advantages. It is a clean fuel, and this country has great expertise in developing and applying it.
Let me say something about business finance, which has already come up in the debate. In a strategy that connects our areas of strength, it is essential that we allow the businesses that are growing across our country to benefit much more than previously from our financial services sector, which is one of the most significant in the world. The deep pool of capital that we have should be available to growing companies up and down the country. The Budget therefore includes a new £2.5 billion investment fund, incubated in the British Business Bank, to drive forward more investment into growing companies across the country. The British Business Bank will establish a network of regional managers by autumn next year, ensuring that it is not just in London and the south-east that these sources of finance and advice are available, as it is essential that they are in place right across the UK.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
The reality is that the Office for Budget Responsibility downgraded forecasts for business investment, productivity and growth in the economy for the entire forecasting period, so what the Chancellor announced in last week’s Budget clearly does not go far enough.
Greg Clark
I think the hon. Gentleman misunderstands what was said. The OBR recognised that its forecast that the productivity rate would recover after the financial crisis, which it has been making for many years, has not been realised. There has been no new event; it has just recognised what has happened, which has had consequences for the financial forecasts. Faced with that, the right thing to do is to look seriously for the long term—I do not think that this matter divides Members—at how we can act on the foundations of productivity. Talking about investment in research and development, the infrastructure that we depend on and sources of finance for growing businesses in every part of the country is a serious response to the OBR’s revised productivity forecast.
Mims Davies (Eastleigh) (Con)
As 100 new jobs come to Hedge End and 500 to Chandler’s Ford, productivity and accessibility are really important to the Solent area. Will the Secretary of State work with local enterprise partnerships to ensure that infrastructure and the need for local investment feed into the industrial strategy?
Greg Clark
I will indeed. Throughout my time in this House and in this Government, I have promoted the importance of places and local leadership and of ensuring that investment decisions benefit from local knowledge and local decisions. The Budget and the industrial strategy reinforce that. To have a prosperous United Kingdom, every part of it needs to be maximising its potential, so the strategy very much works with cities, towns and regions across the UK. We are inviting areas to promote local industrial strategies that state what needs to be done locally to make a particular town, city or county fit for the future and able to attract new business investment.
Andrew Bridgen (North West Leicestershire) (Con)
Following the Secretary of State’s announcement of the industrial strategy, we had a meeting in Leicester just yesterday to discuss the infrastructure needs of the east midlands. The east midlands has traditionally been at the bottom of the Government funding league for infrastructure, but it is delivering the highest economic growth and the fastest wage growth in the UK outside London and the south-east. Think what we could do if we had our fair share of infrastructure spending.
Greg Clark
I will take that representation. My hon. Friend is right that the performance of the east midlands has been extremely positive. Some of its institutions—I think of universities in Leicester and Loughborough—are having a huge impact on the local economy. I look forward to visiting Leicestershire again soon to have discussions as part of the plan for local industrial strategies. I mentioned the fund for improving transport connections between city centres and the towns around them, and that is essential investment in the future competitiveness of our economy.
Angus Brendan MacNeil
The Secretary of State is being generous in giving way. How might the industrial strategy develop if we find ourselves with open borders and no border checks, which was talked about as recently as yesterday? If we are to have an open border with the Republic of Ireland, the UK will need an open border with everywhere else, meaning that the UK will not be running any tariffs at all. How will that affect the industrial strategy? Under most favoured nation status, if we have an open border with Ireland, we will have an open border with everywhere else.
Greg Clark
I am conscious that many Members want to speak and the hon. Gentleman is tempting me into a discussion that would take more time than I have. However, our future as a successful economy is about trading more with Europe and the rest of the world. That should be free of tariffs and free of friction, and that is what we want to achieve through our negotiations.
None of the investment in and improvement to the productive capacity of the economy would be possible without a fundamentally strong economy. The essential foundation of future prosperity is to be a place in which global investors can have confidence. It is sometimes easy to take for granted the progress that was made by my right hon. Friend the Chancellor and his predecessor in rescuing the economy from the catastrophic situation in which we found it when the Labour party left office. Britain had its largest deficit as a share of GDP since the second world war. So reckless had the Labour Government been with the public finances that in their last year in office—almost unbelievably—for every £5 of Government spending, £1 had to be borrowed. Unemployment rose by nearly half a million, the welfare bill ballooned and the number of households who had never worked had doubled. If we had continued on that course, Britain’s reputation as a dependable place for global investors to entrust their assets would have been lost, and it would have taken many generations to recover.
As a result of the steady and painstaking work of the British people, however, backed by the leadership of Conservative Members, we have cut the deficit by three quarters at the same time as cutting income tax for 30 million people. Britain has been one of the job creation hotspots of the world, with employment up by 3 million in just seven years and unemployment lower than at any point since 1975. However, just when the deficit is being tamed and we can look forward to falling national debt, which has to be repaid by future generations, the Labour party—I hope it will contradict me—has adopted a platform that is even more extreme than the policies that produced the previous situation. Labour’s proposal is to borrow an extra quarter of a trillion pounds. As if that were not enough, it also wants to increase taxation to what the Institute for Fiscal Studies has called the highest peacetime level in the history of this country. That would, as the IFS also said, make the UK a
“less attractive place to invest”.
It is no wonder that the reaction of employers the length and breadth of Britain has been one of alarm. The chief executive of the EEF said that those policies are from a bygone era. Do they have credibility? The answer is clearly no.
Greg Clark
I am about to conclude.
If we want a strong, competitive economy that is fit for the future, we need to live within our means, create good jobs and pay people well. We need to be a beacon of free trade and internationalism. That is what our industrial strategy and this Budget are about. Prosperity for all is the best alternative to the high-tax, anti-enterprise, job-destroying ideology that has taken over the Opposition Front Bench. Our Budget takes us into the future; the Labour party takes us into the past. I commend the Budget to the House.
Rebecca Long Bailey (Salford and Eccles) (Lab)
I am surprised by the Secretary of State’s comments, which are usually quite measured, and he seems to be struggling with reality today. However, let us talk about the Budget. A substantial section of the Chancellor’s speech on Wednesday focused on the productivity crisis, and rightly so. Labour analysis has shown that we have to go back to 1820, when George IV ascended the throne just after the Napoleonic wars, before we can find a time when productivity increased by less than this over a 10-year period. The result has been catastrophic. People are earning less now than they were 10 years ago and, as the Institute for Fiscal Studies states, average earnings look set to be nearly £1,400 lower by 2021 than was forecast last year. The Chancellor and the Secretary of State have tried to paint that as a phenomenon that is quite separate from the Government—like a sort of freak accident that is nothing to do with them—but that could not be further from the truth. To help the Secretary of State with his recollection of history and reality itself, I will take him on a little trip down memory lane.
By late 2008, it was clear that monetary policy alone was not working in the traditional way—people were not spending and the economy was not recovering. To quote economist Paul Krugman,
“the truth is that mainstream, textbook economics not only justified the initial round of post-crisis stimulus, but said that this stimulus should continue until economies had recovered.”
But what did the Conservatives do? The polar opposite: slashing Government spending and investment, and essentially pulling the rug out from under the UK economy.
Not only that, but the financial crash had shown clearly that our economy was becoming dangerously over-reliant, both regionally and sectorally, on financial services in the south-east of Britain.
Antoinette Sandbach
Does the hon. Lady accept that, in effect, 12 previous years of Labour Government had left the economy in that state?
Rebecca Long Bailey
Frankly, I expect better from the hon. Lady; she usually makes very measured contributions. If she lets me continue, I will explain a little about what happened. Perhaps she will make different comments if she asks another question later.
It made perfect sense to use that economic turning point as an opportunity to invest in the development of our industrial base and to address the deep structural problems that had been emerging in our economy since the early 1980s. However, what happened was the scaling back of investment and funding in the tools that business needs to grow and succeed, such as skills, infrastructure, research and development, and access to long-term patient capital.
Oliver Dowden (Hertsmere) (Con)
As the hon. Lady is taking a trip down memory lane, does she recall the Labour party’s repeated predictions when we embarked on this necessary course of public spending restraint that it would lead to 1 million jobs being lost? In fact, 3 million jobs have been created.
Rebecca Long Bailey
Again, we have a Conservative Member who struggles with reality. I urge him to speak to workers in his constituency and ask them about the quality of said employment. I speak to workers in my constituency, and they are struggling in an era of casualised, low-paid, insecure work.
Our productivity was certainly impeded, but the picture worsens still when we focus on the recent productivity and investment figures of many British regions and nations. Stark research recently published by the Centre for Cities shows that London and the south-east are up to 44% more productive than many other British regions, and the Institute for Public Policy Research’s commission on economic justice has found that Britain is the most regionally imbalanced country in the whole of Europe.
What have we seen after seven years of this Government’s single-minded obsession with cutting the national debt? Higher debt and unprecedented downward revisions of GDP growth. As every economist knows, the only way substantially to manage the national debt is by growing the economy, but this Government have simply tried to deflect attention away from their miserable performance on GDP.
Alex Chalk (Cheltenham) (Con)
Will the hon. Lady assist the House by saying how much extra it would cost in annual interest payments if she led a Government that borrowed an additional £500 billion?
Rebecca Long Bailey
The hon. Gentleman should refer to comments made by the shadow Chancellor. It is not as straightforward as putting a figure on interest repayments. Each investment is dealt with on the basis of the level of return to the Government, so each infrastructure project, for example, needs to be assessed on its own merits. The hon. Gentleman should know that. He is a clever young man, and I would have expected him to know a little more about this subject.
Alison McGovern (Wirral South) (Lab)
I have been in this House slightly longer than my hon. Friend, so I saw the former Chancellor, George Osborne, having to U-turn on his deficit reduction plan. He failed to meet every one of his debt targets. Labour kept debt at 40% of GDP, and now it is 80% of GDP. Does my hon. Friend agree that the carping from Conservative Members is in total ignorance of the facts?
Rebecca Long Bailey
I could not agree more. That is very articulately put.
It is not as if the Government were not warned of the problems of austerity by my right hon. Friend the shadow Chancellor. Indeed, the International Monetary Fund warned the Government that
“episodes of fiscal consolidation have been followed, on average, by drops rather than by expansions in output… The increase in inequality engendered by financial openness and austerity might itself undercut growth, the very thing that the neoliberal agenda is intent on boosting.
Refusing to heed that advice was a deeply reckless act.
The current Chancellor may well turn around and lament post-crisis productivity, but let us remember that he was in the Cabinet while this economic mess was being created. He is not absolved of responsibility, but he has the opportunity to admit that that approach was wrong and to change course.
Unfortunately, although the Chancellor admitted in his Budget speech last week that there is a big productivity problem—a big gold star for Phil there—there was very little to give our economy the upgrade it desperately needs, nor was there any attempt meaningfully to level up regional investment spend.
Indeed, despite the Chancellor’s jovial attempts at talking up our ability to harness the fourth industrial revolution, the Office for Budget Responsibility looked at his future investment plans and cut its forecast for growth in productivity, but he still had one last chance—the industrial strategy. I waited with bated breath yesterday, desperately hoping that the action would match the rhetoric. It started well enough with the strategy’s stated goal to create an economy that boosts productivity and earning power throughout the UK. “That’s spot on,” I thought. But sadly, having looked into the strategy in a little more detail, it seems little more than a repackaging of existing policies.
Unfortunately, the Conservatives have form on this. There has been a long line of PR gimmicks that simply do not deliver. Members may recall that, back in 2011, the previous Chancellor announced a march of the makers, but UK manufacturing has since grown at less than half the European average. Similarly, much was made of the northern powerhouse, which sounds great, but only two of the top 20 infrastructure and construction projects in the Government’s pipeline are in the north-east, north-west or Yorkshire and the Humber, leading my hon. Friend the Member for Bolsover (Mr Skinner) to call it the “northern poorhouse.”
No one can argue with the core principles outlined in the 255-page document we saw yesterday but, as the Financial Times summarised today,
“the judgment being passed…is that it amounts to a good start—but much still remains to be done to ensure success.”
Although the strategy certainly acknowledges many of the fundamental problems our economy faces, I fear that the level of detail and proposed investment simply do not match the surrounding rhetoric, falling far short of what is needed.
The White Paper gives us a handy one-page summary of the strategy’s key policies to strengthen the “foundations of productivity.” It is perhaps poignant to point out that even the previous Chancellor was trying to fix our foundations and outlined a productivity plan called “Fixing the foundations” two years ago. What happened to that? I digress slightly.
Let us look at the first foundation: ideas. The key policies are raising total R and D investment to 2.4% of GDP by 2027, increasing the R and D tax credit and allocating some of the increased spend to a second wave of the industrial strategy challenge fund. Although increasing R and D spend is, of course, a step in the right direction, it is an unambitious target.
Vicky Ford (Chelmsford) (Con)
Given that this is the largest increase in research and development and innovation funding in more than 40 years, what part of it is unambitious?
Rebecca Long Bailey
The hon. Lady misses the point. The UK has been below the OECD average of 2.4% of GDP for years, and we are way behind global leaders such as South Korea, Japan, Finland and Sweden, which all spend at least 3% of GDP on R and D. If we are to be in any way capable of competing on a world stage, we have to up our game. If the Government really want us to be at the forefront of the fourth industrial revolution, they should be aiming above the average, rather than just trying to catch up.
Furthermore, not reforming where and how it is spent risks widening regional divides, as almost half of all research funding currently goes to the south-east. To quote a Conservative Member:
“If we just put more money into the same funding streams we will have the same outcomes and continue to spend half the science budget in just three cities.”
Angus Brendan MacNeil
The hon. Lady is talking about competing with our international competitors. Where will her industrial strategy be on trade defence? We know the Conservative Government do not seem to have trade defence, but she supports them on the UK being out of the customs union, and I presume she has the same view of not wanting to partition Ireland with a customs union. Therefore she would be running no tariffs on the Irish border and there would be no trade defence. Where would that leave her industrial strategy, given that, we must remember, there was not a hair’s breadth between the Tories and Labour on austerity? Labour was going to do £7 billion-worth of cuts and, with students, it is responsible for £6,000 of the £9,000. Where is Labour different from the Conservatives on trade defence and industrial strategy, particularly with reference to the Irish border?
Rebecca Long Bailey
I thank the hon. Gentleman for his extremely long comment. He made some valid and interesting points, and we can all agree that the Government’s shambolic handling of Brexit undermines our industrial strategy going forward. Labour’s industrial strategy, however, is committed to achieving 3% of GDP spent on research and development by 2030 and reviewing Government channels for disbursing public R and D funding, with a view to encouraging greater regional equality.
Lucy Powell (Manchester Central) (Lab/Co-op)
My hon. Friend and neighbour is making an excellent speech. On research funding, is she aware that more than two thirds of health innovation research money goes to the “golden triangle”, despite the fact that Greater Manchester has a cutting edge in life sciences? Would that not be a good place to start?
Rebecca Long Bailey
I thank my hon. Friend and neighbour for her contribution, and she is correct in what she says. I do not think we saw anything in the industrial strategy that goes any way towards rebalancing the regional divides in investment spending in R and D. Critically, a Labour Government would also ensure that the UK maintains our leading research role by seeking to stay part of Horizon 2020 and its successor programmes after we leave the EU. As with so many areas outlined in the White Paper, the UK’s research role is compromised by the Government’s reckless and cliff-edge approach to Brexit.
Let me turn to the second foundation: people. Key policies include establishing a technical education system, investing £406 million in maths, digital and technical education, and creating a national retraining scheme with an investment of £64 million. Again, the intent is good, but let us remember that the Government cut £1.15 billion from the adult skills budget from 2010 to 2015. Similarly, on first analysis the £406 million appears to be the sum of the amounts the Government have already spent on maths, computing and digital skills. The reality is that the Chancellor has overseen the steepest cuts to school funding in a generation, at £2.7 billion since 2015, according to the National Audit Office, and a cap on public sector pay that has seen the average teacher lose £5,000 since 2010. [Interruption.] Unfortunately, the long term results of that are clear, and I do not know why Government Members are protesting. The Government have missed their recruitment targets five years running, and for two years in a row more teachers have left the profession than joined. The policies contained in the White Paper are a start, but they are not even enough to undo the damage since 2010, let alone form part of a decent industrial strategy.
Rebecca Long Bailey
I am going to make some progress.
The strategy identifies infrastructure as the third foundation of productivity and outlines £31 billion of investment through the national productivity investment fund, with some ring-fenced for the necessary infrastructure for electric vehicles and boosting digital infrastructure. As I outlined yesterday, TUC analysis shows that that £31 billion increases investment to just 2.9% of GDP, whereas the average spent on investment by leading industrial nations in the OECD is at least 3.5%. In addition, it is unclear whether the extra £7 billion announced in last week’s Budget is new money at all, rather than a re-allocation from other areas of capital spend which was previously budgeted—it would help if those on the Government Front Bench listened to this question, as it is important. Perhaps the Secretary of State can confirm the meaning of footnote 3 in table 2.1 of the Budget Red Book, because it does not appear to be very clear.
Key policies to improve the business environment are sector deals; a £2.5 billion investment fund incubated in the British Business Bank, as announced in the Budget; and yet another review of encouraging growth in small and medium-sized enterprises. That is, sadly, another case of lacking ambition—
Andrew Bridgen
Can the hon. Lady explain how the Labour party’s declared policy of huge increases in corporation tax is going to encourage companies to invest in R and D, and become more competitive and productive? Is she not part of a party that still believes it can tax the country to prosperity?
Rebecca Long Bailey
I applaud the hon. Gentleman’s attempts at crowbarring that in there. I was talking about access to SME finance, so I will carry on.
Ruth George
As there is tax relief for R and D, the higher the rate of corporation tax, the greater the incentive for companies to invest in R and D, as the hon. Member for North West Leicestershire (Andrew Bridgen) would do well to learn.
Rebecca Long Bailey
I thank my hon. Friend for her comments. The Government’s proposals on unlocking access to finance for business lack ambition and fail to recognise the impediments many businesses face when attempting to access finance. Indeed, Craig Berry, a member of the Industrial Strategy Commission, has said:
“the plan for unlocking private investment is under-cooked and, frankly, pitiful.”
Furthermore, the proposed sector deals appear very narrow and the strategy as a whole will do nothing to help the millions who work in retail, hospitality, care and other large low-wage, low-productivity sectors. A large proportion of those people are women, but, as we know, the Government do not have the best record when it comes to supporting women in the economy. [Interruption.] If I were a Conservative Member, I would listen to this, because these are the stark statistics: men are expected to receive 46% more of the funding from this Budget than women; and the Budget made no impact on the shocking fact that 86% of tax and benefit changes since 2010 have come at the expense of women, according to Labour and House of Commons Library research. That is scandalous.
Rebecca Long Bailey
I will make some progress. Key to improving productivity and living standards is not just supporting those sectors we know we have strengths in and the ability to generate high returns, but using our endeavours to transform what have been traditionally viewed as low productivity sectors and make sure that they become the leading sectors of the future.
Briefly, while we are on employment, let me say that I am shocked to see the Government lauding the fact that some workers do not have adequate employment or trade union rights as some kind of competitive advantage. Celebrating the flexibility of our labour force when their recent Taylor review clearly highlighted the imbalance of flexibility between employer and employee in many workplaces seemed a little bizarre when I came across it in the White Paper. True two-way flexibility, where employees can indeed choose it to improve their lifestyle, rather than have flexibility imposed upon them because there is no choice, should be celebrated, but we cannot celebrate these rare examples at the expense of providing workplace security and enabling workers to make a valuable contribution to the running of a firm, which in turn helps improve productivity. This is why strengthening trade union rights and the ability of people to join trade unions is an important way to boost productivity, and it should be central to any industrial strategy. The White Paper does not even mention trade unions—why is that?
I turn now to the final foundation: places. The Government will agree local strategies, create a transforming cities fund and pilot a teacher development premium
“for teachers working in areas that have fallen behind”.
I am afraid we have heard all this before. The northern powerhouse, one of the Chancellor’s flagship policies to transform northern cities, is not delivering, as I outlined earlier. Without a substantial increase to level up regional investment, as Labour called on the Chancellor to do in the Budget, the local industrial strategies will simply fail. I am afraid the policies that the Government have identified as key to the industrial strategy are simply not going to deliver the scale of change needed to turn the economy around.
I am coming to the end of my remarks, but I wish briefly to say something about the Government’s grand challenges. I am pleased that they have chosen to talk about grand challenges, as that mirrors the Labour party policy of advocating missions to deal with the big issues of our time. One of the Government’s four grand challenges is to
“maximise the advantages for UK industry of the global shift to clean growth”.
That is simply laughable in the context of their track record on supporting green energy, and especially so given that last week’s Budget essentially closed down support for much low-carbon development in the UK. There will be no new low-carbon electricity levies until 2025, with no alternative funding outlined. Nor was there any support for, or indeed any mention of, specific renewable projects such as the Swansea tidal lagoon. There is a huge contradiction between the Government’s rhetoric on clean growth and the reality of their policies.
There are some moments in history that can have a lasting impact for years and decades to come. What we do at such moments will determine not only our future but the future of our children. The 2008 recession and its aftermath was one of those moments, but the Government’s austerity policies and the reduction of investment have done lasting damage to the UK economy. Today, we are again at one of those critical moments. We are about to leave the European Union—a critical point in this country’s history that will shape our economy long into the future. Although this week’s industrial strategy might have contained the right rhetoric, without the investment and detail to match, prospects for productivity growth are considerably bleak.
A few weeks ago, I opened a food bank in my constituency. I usually love going to ribbon-cutting opportunities, as they are a chance to celebrate the great things that happen in my city, but on that day I felt nothing but shame—shame that in one of the world’s richest economies in the world, one of the world’s leading industrial nations, with the greatest minds and businesses of our time, we have built an economy that has simply squandered that greatness and that forces even those in work to rely on charity just to get by. This is not the Britain of the future and it is not the Britain that I want to create, so it is time the Government woke up and halted the greatest act of recklessness in a generation.
Mr Kenneth Clarke (Rushcliffe) (Con)
I am afraid that time will prevent me from following the hon. Member for Salford and Eccles (Rebecca Long Bailey) too far in some of her analyses. I shall certainly resist the temptation to go into her rewriting of history, in which she glossed over a Government who carried on borrowing money during an entirely artificial boost in tax revenues, at a time of an artificial credit boom, and then found themselves hopelessly in debt at the time of the crash, leaving the 2010 Government with a colossal deficit and a huge burden of rapidly mounting debt, which they have managed strongly so far. I wish to look at where we are now and to look ahead. I should certainly resist the temptation to start re-fighting the battles on how the Labour party ruined the economy of the 2000s.
Ruth George
In spite of what the right hon. and learned Gentleman just said, I wonder whether he agrees with the organisation Full Fact, which says that for most of Labour’s last term in office public sector national debt was down and that it was 36% in 2008-09. Yes, it then went up to 65% in 2009-10, but that was as a result of the global economic crash and the subsequent recession, which happened globally.
Mr Clarke
In its period of office, the Labour party was so out of control and so wrong in its reaction to events that early on it almost started to repay the national debt at the time of the dotcom boom, which boosted tax revenues to an extraordinary extent. The Labour Government found that their tax revenues had been boosted for reasons that they did not properly analyse, and they just carried on borrowing on top of that. The figures looked quite respectable until suddenly the floor fell away. There was the credit crunch. Down went the tax revenues. They were left exposed, with an accumulation of errors that led to the soaring deficit and the soaring debt that are a burden on us now and will be a burden for our children.
Mr Clarke
No. I said that I am not going to re-fight the politics of the 2000s and I am not.
This was a strong and sober Budget that I am glad to welcome, just as I welcome the industrial strategy of my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy. It was not dramatic. Some Budgets have plenty of glittering prizes and dramatic changes. This was not exactly a non-event, but it contained quiet, small and valuable measures. That was what we needed. Indeed, it was a sign that the Chancellor of the Exchequer resisted some of the ridiculous lobbying he faced from all sides of the public sector and some of the ridiculous advice he was getting from those who wanted him to buy political popularity or to believe that reckless spending can solve all economic problems. This was the Budget of a competent Chancellor of the kind that this country very much needs at this difficult time.
Luckily for the Chancellor, the background to the Budget was made a little more gloomy by the OBR’s choosing this Budget to change the forecasts that it had, unfortunately, got wrong, and most people did not realise it. There were not many people who pointed out at the time that the OBR was going to be wrong, but the OBR took on a more sensible productivity projection, which gives us considerable problems for the years ahead. The Chancellor has also delivered a Budget at a time when growth has slowed because of the initial impact of the Brexit vote: devaluation and the effect of that on consumer demand.
The background is also one in which monetary policy is not of much assistance. Because of the actions the independent Bank of England had to take after the crisis, we are still being sustained by the aftermath of quantitative easing and quite artificially low interest rates, with the Governor having little opportunity to move rapidly to get back to something like normality. Those interest rates are actually having a distorting effect on some aspects of the markets inside this country. Consumer borrowing is rising to worrying levels and we are now beginning to see demand ease because of the effect of inflation on prices and on the ordinary customer, so it was hardly the kind of Budget that one would envy the Chancellor’s being faced with giving. He faces a lot of problems, and he had also to deal with the uncertainty over the next two or three years.
Uncertainty extends beyond our domestic obsessions: there is great uncertainty globally. We could be threatened if oil prices continue to rise—that has had a dramatic effect on our economy in the past. We are currently being helped by rapid growth in some of our most important markets. The US and eurozone economies are growing at strong rates, and they are important markets to us, particularly the second. Both look fragile, though, and I do not think anybody would guarantee that that growth is going to be sustained for the next two or three years.
The Chancellor and the Government must be careful because, quite plainly and indisputably, the reality is that we do not yet know what form our exit from the European Union will take—this is not the day for debating that—and we do not know what kind of trading deal we will have in a couple of years. As the Governor of the Bank of England confirmed yesterday, if, by mistake, we have a hard Brexit, or a deal-free Brexit—I am talking about mistakes on both sides of the channel because no sensible person would want that —it will be quite a serious shock to the economy of the western world and to this country in particular. Therefore, a prudent Budget was what was required.
Nevertheless, the Chancellor was able to relax fiscal discipline a little—it was rather more than one expected, but he did not lose control. He resisted all the lobbies that were piling in from every public service, with some really quite distinguished public servants giving dramatic descriptions, as they quite often do before a Budget, of the effect on their services. Tens, if not hundreds, of billions will be put in. He was able to ease some of the financial pressures on the national health service within a reasonable level. He rightly found some resources for housing, because we have a dysfunctional housing market. However, he would have been extremely reckless and irresponsible had he gone any further than the slight fiscal easing that he carried out.
How the Chancellor must have wished to give the traditional first Budget of a new Parliament. A Chancellor facing a new Parliament with a decent parliamentary majority does not set out to do a popular Budget— they do the tough and difficult things. One judges a Budget not by whether it makes good headlines the next week and whether everybody is getting very excited about it, but by its impact on the performance of the British economy and on the daily lives of its citizens in two or three years. Had we had a reasonable majority, the temptation would have been to take some tough and necessary decisions, which would have made it easier to shift into other areas. One day, we will stop a fuel tax freeze. One day, we will address the anomaly whereby self-employed people—if they can get themselves so categorised—pay far less in taxation than people in employment doing similar jobs. However, the idea that we can have a majority for either of those measures in this particular Parliament is, regrettably, an illusion.
Dare I say it, but one day, someone will address some of the happy gifts that I receive from the Government as a man past the ordinary retirement age still in full-time work, earning rather more than the national average income? I have just received my tax-free, cash present before Christmas, with which Mr Gordon Brown tried to buy my vote, and the winter fuel benefit. I get my free bus pass of course. I am receiving a retirement pension, which is protected by the triple lock, so that part of my income is rising much faster than that of most of the people I know. When it comes to paying taxation on my salary, which we all receive in this House, I pay less taxation than most people sitting in this Chamber because I pay absolutely no national insurance. Now that is very nice. If I could remember which party gave my generation all those bribes, I would probably vote for the one that gave me most of them, but I cannot for the life of me remember who put them in various Budgets over the years. I could go on.
There is a serious point. Before we all start making reckless promises for—dare I say it?—the next election that absolutely nothing of that kind will be touched by a future Government, we should remember that there are younger people who are in a less fortunate position than I am who are paying taxation to pay for all that and that there are constraints on the Government who would like to spend some more money—as we all would—on very important public services when the opportunity arises. The generational injustice—to use a rather corny phrase that is now very fashionable, but it sums up the problem—which exists in these affairs in this country will one day have to be addressed.
We are still able to do some adventurous things. The industrial strategy of the Secretary of State for Business, Energy and Industrial Strategy shows that, looking ahead, the right things are being addressed and the right priorities are being chosen. We are seeking to advance those changes that have to take place in our economy that will give the next generations the best prospect of making this country, once again, one of the most rapidly growing and prosperous nations in the world.
I applaud the priorities that have been chosen. Plainly, we must invest more in infrastructure. However, I add, as we all agree that we should spend more on infrastructure, that we should avoid believing that all infrastructure spending is automatically a good thing for the environment. Successive Governments of the past have gone in for prestige projects or politically useful ones in marginal seats and so on. All of them need to be appraised sensibly with the help of the private sector and a good business case, so that we prioritise in our infrastructure spending those things that actually boost the real economy and manufacturing and services in this country.
I welcome all that has been said about continuing to address the kind of education required for a modern economy and about dealing with the productivity problem, which has baffled most people. We are not the only country that has found that productivity—for some unforeseen and, actually, not totally understood reason—has failed to rise in the aftermath of the crash. I think that the two things to concentrate on are education and skills training. We have to be sure, and I am not sure myself, that we are going to have the right human capital for the kind of economy that we wish to develop. I represent an east midlands seat, and it has to be conceded that it is particularly in the midlands and in the north of the country that we need to get our schools’ education standards up to the norm in the more prosperous areas. We also need to get skills training of the quality required to provide attractive employees in the kind of sectors of the economy that the Business Secretary described.
Skills training is probably the biggest problem facing the country, except perhaps housing. I have been here for a long time—as I am occasionally reminded by Mr Speaker when he is in the Chair—and we have known for decades that this country has a skills problem. Successive attempts have been made to tackle it, and we are still talking about the same things. It is the quality of the skills training and the relevance of the skills training to the local employment market that we still have to get right.
Finally, a big gap that we still have to address is retraining. Most people will not have one career for their whole life. Even people in work will want to improve their skills or their education to prepare themselves for the next step.
Mr Stephen Hepburn (Jarrow) (Lab)
Will the right hon. and learned Gentleman give way?
Mr Clarke
I am running out of time; I do apologise.
We are still extremely weak in this country in providing the opportunities for reskilling and midlife training that future workforces will require.
I conclude as I started. This was the right kind of Budget. It shows that we have a competent Government. The Chancellor is the nearest one gets to the strong and stable Government that we promised before we started. He keeps his head, and that is what we require. He has a view to the national interest and a very considerable resilience to the short-term, silly pressures to which he is subjected, particularly by an Opposition who, as never before, go through every problem that is mentioned by saying that the only thing we need to debate is the quantity of money being spent on it. They promise untold billions of unfunded spending in an apparent belief that there is no question in the whole field of government that is not soluble by a little more borrowing and a little more printing of money. That just makes it more important that this side of the House gets it right. The Chancellor and the Business Secretary are getting it right, and I hope that they stay steady on the course they have set for the country.
Stewart Hosie (Dundee East) (SNP)
It is always a pleasure to follow the right hon. and learned Member for Rushcliffe (Mr Clarke). I was struck by his discussion of his bus pass, state pension and winter heating allowance. It might be that the right hon. and learned Gentleman does not need these things, but if we begin to erode them and means test them, the problem is that those who do need them will not claim, and—I suppose this is an ideological position from the Scottish National party—we would then begin to erode social cohesion on other important matters.
I welcome much of what the Business Secretary says about the future economy, including on tackling long-term underinvestment in research and development, addressing the long tail of underproductive companies, recognising the importance of innovation, big data, the life sciences and the other sectoral areas he mentioned, and the absolute imperative for UK businesses to export more. However, the future economy cannot simply be about supporting new businesses with new products selling into new markets; it must also be about supporting businesses that are already here delivering for their customers, their shareholders and the economy, and particularly, as the right hon. and learned Member for Rushcliffe said, into the EU, which is a substantial market for the UK. So while I certainly welcome many of the specifics in the White Paper and what was said today, I make no apologies at all for talking about the impact of Brexit, which has the very real potential to undermine the good intentions of the plan.
I say that because the uncertainty created by the hard Tory Brexit plans is already harming the economy. The UK Government’s failure so far to secure a transitional deal is pushing many banks, in particular, and other companies to start looking to relocate to other parts of the EU for fear of being unable to trade freely there in April 2019. Indeed, the Bank of England has warned that 75,000 jobs might be at risk in the banking sector alone, and many of those may well move to the EU. It is vital that we remedy that, and do so quickly, as FinTech, which is mentioned in the White Paper, is undoubtedly one of the areas that ought to be able to make a positive contribution to the future economy of the UK. However, if we do not resolve this issue, meaning that banks’ head offices and decision-making functions go, I fear that FinTech and the ability to fund it will be subsequently reduced.
I also make no apology for saying that Brexit has the capacity to undermine the Chancellor’s plans for raising productivity, which we all agree will be vital if our future economy is to deliver success and prosperity for everyone across these islands. The UK is now at the bottom of the G7 for economic growth. The eurozone and other advanced economies are enjoying higher growth, as well as higher levels of consumer and business confidence. These plans and the money to be spent on them—some of the cash is substantial—might barely mitigate the damage of Brexit, rather than kick-starting the economy to power ahead, which we all hope they will do.
Let me put some flesh on the bones of that, because it is important. The OBR has slashed its forecasts for productivity, economic growth and pay growth. The new forecasts show that the economy is expected to grow at below its long-term trend of around 2% until well into the next decade. The downgraded OBR expectations lower significantly the predicted level of growth. Although the OBR previously said that growth would proceed at much the same pace as before the crisis, it has turned out to be much lower.
This goes back to something the Minister said as a throwaway. Borrowing will still be at £26 billion a year in 2022-23, but he said we want to live within our means. We all want to live within our means, but when we see a national debt of 87% on the treaty calculation, and when we see borrowing of £26 billion by 2022-23—the current account was supposed to be in balance or in surplus in 2015—I think we can say with some certainty that the Government have failed to deliver every single one of the targets they have set since they came to power, with a Tory Chancellor, in 2010.
Sir Edward Davey
Does the hon. Gentleman agree that the real story behind this Budget was the growth forecast, which will impact not only the borrowing he is talking about, but public spending and, frankly, the whole shape of the British economy and British society in the years ahead? Do we not need an urgent debate on how we really raise that growth rate? The industrial strategy was simply not up to that job, which is so tricky.
Stewart Hosie
I agree with the first part of that intervention entirely. The big story from the Budget was that the growth figures were marked down over the entire forecast period that productivity per head was almost halved for that period and that pay growth was marked down, which has an impact on real people. As for a debate, we have been having debates about the productivity conundrum and growth since before I was an MP, and given that I am now about 110, that was some time ago. I suspect that we need to look at the work that has gone into the White Paper. Let us get behind the things we can support and make suggestions when we can improve things—my goodness, there are some we can most certainly improve—but we do not need to go back to the drawing board again.
I think that each and every one of us, if given a blank piece of paper, would come up with broadly the same plan with regard to fairness about investment, infrastructure, education, and supporting R and D and exports. I do not think that there is anything particularly new there. The question for me is: can we deliver that this time, or will this be to no avail if Brexit undermines the potential of any of these plans?
Angus Brendan MacNeil
Both Labour and the Conservatives recently voted in this House to come out of the customs union. That will increase trade barriers with 27 countries, as well as another 67 countries that rely on 38 to 40 other deals with the European Union, so we stand a very real risk of increasing trade barriers with up to 94 countries. Surely to goodness that is putting an already perilously placed UK in an even more perilous position? That was supported by the Labour and Conservative parties, hand in hand, damaging together.
Stewart Hosie
My hon. Friend is right. Every single assessment that we have seen, starting with the leaked Treasury document of a couple of years ago, says that the worst-case scenario—if there are tariffs, other regulatory barriers and an immediate reversion to World Trade Organisation rules—is a 10% hit on GDP, full stop, before we start. I do not understand why anyone—even Tories, and certainly the bulk of the Labour party—voted to come out of the customs union. That was an idiotic thing to do. If we must leave at all, we should look to have the closest possible formal links, so that we maintain as much trade as possible on current terms.
Stewart Hosie
I will in a little while.
The Resolution Foundation has reported that productivity growth in the 10 years to 2020 will be the lowest for 200 years. As a result, we have the worst economic growth forecasts that the OBR has ever delivered. Equally importantly, the forecast for the UK’s balance of payments current account as a share of GDP has also been downgraded significantly due to a slowdown in business investment and the deterioration of the UK’s net trade balance. That is expected to be a whole 1% deeper in deficit this year and next, and for the following year a 2% fall is predicted compared with the spring forecast.
We know that this is not a new problem. The Tory plans for post-Brexit policy—trade is vital if the future economy plan is to work—are delusional. The Tories aim to leave the single market, but apparently want to keep all the benefits of the club, while creating this preposterous “Empire 2.0” nonsense and signing trade deals across the globe. However, as my hon. Friend the Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) pointed out, the UK already has trade deals with almost 90 non-EU countries, besides the 31 other members of the European economic area, thanks to our membership of the single market and the customs union.
Stewart Hosie
In one second. These existing trade agreements will be vital if our economy is to thrive. I give way one more time.
Sir Edward Davey
I am very grateful to the hon. Gentleman. I was trying to tee him up before. Given the growth forecast and the shocking impact that the situation will have on people’s incomes and the public finances, is not now the worst possible time to be leaving the European Union, the customs union and the single market? Is this not the most disastrous economic decision, given the economic forecasts?
Stewart Hosie
Of course, leaving the world’s most successful trade body and access to half a billion customers, tariff-free, would be an idiotic thing to do at any point. The fact that we are doing it now—and, more importantly, unprepared—is key. I will say a little more about that.
The existing trade agreements that are being discussed are vital if our economy is to thrive. The Government have suggested more support for exporters to new markets, but that seems to be at the expense of the trade routes that companies already have. To put some flesh on the bones of the last intervention, the EU accounts for 43% of the UK’s goods and services exports, and 54% of imports. The UK Government have failed in their intention of starting to negotiate the future economic relationship with the EU at the same time as negotiating the divorce settlement. The delays in the first phase of the negotiations are deeply worrying and undermine the plan. We risk approaching a Brexit deadline without having concluded negotiations, and without a transitional arrangement.
In case anyone is in any doubt about how our friends in the EU view this, Federica Mogherini has said:
“It is absolutely clear on the EU side that as long as a country is a member state of the EU, which is something that the UK is at the moment…there are no negotiations bilaterally on any trade agreement with third parties. This is in the treaties and this is valid for all member states as long as they remain member states until the very last day.”
We have heard all the rhetoric from the Trade Secretary, who has conceded that his staff do not have the ability to cut the deals. At the same time, the EU is continuing talks with multiple countries across the globe, including Australia and New Zealand, which many Members point to as post-Brexit allies. That means that we will be playing catch-up with the EU’s trade policy, and it will take years—possibly decades—simply to replicate the arrangements we already have, if we can even do that. Doing so is vital to the trading future of Scotland and the UK and to our future economy.
Another point to make about the EU concerns the free movement of people. Part of the plan is to attract the best and brightest. In my view, we must not just continue to attract them, but keep the ones we have. The 128,500 EU citizens employed in Scotland contribute some £4.2 billion to the Scottish economy. We must not send a signal to people—to those who are here, to those from the EU or around the world who want to come here, or to those who seek the collaborative partnerships in research and development contained in the plan—that the door is now closed. That would be catastrophic, whether it is said officially or that impression is given. It would add to the potential loss of 7% of gross value added to Aberdeen, of 6% to Edinburgh and of 5.5% to Glasgow—a £30 billion loss of GVA to the cities of the UK alone. We will therefore continue to defend Scotland’s economic interests now and in the future, and we will prioritise maintaining membership of the single market and the customs union for Scotland—and, so far as I am concerned, the free movement of people, on which this plan, to a large measure, is predicated.
I do, however, welcome much of what the Secretary of State has said alongside the publication of the industrial strategy, which aims to tackle the productivity slowdown and address the challenges and opportunities brought about by technological advance. We agree with many of the five foundations of productivity that he has laid out and many of the key policy areas that he has suggested, including raising R and D investment to 2.4% of GDP by 2027 and the increase in R and D tax credits rate to 12%, as well as the £725 million industrial strategy challenge fund.
We also welcome some of the smaller things, because although many of them are England-only or England and Wales-only, they are still good for the Secretary of State to do. They include the introduction of the T-levels, the additional money for maths, technical and digital education, and the £64 million for retraining. We welcome many investment announcements, including for infra- structure, broadband, energy and transport.
We would not disagree with the four main challenges—artificial intelligence and the data revolution; clean growth; mobility; and an ageing society—although I am rather at a loss to see how the Government can trumpet clean growth when they have refused for a decade or more to address the challenge of the imbalance in connectivity to the grid, which damages the potential of offshore wind in the north-west of Scotland. If the Government could finally resolve the imbalance, which means that a charge is paid by the Western Isles whereas central London receives a subsidy, there might be unequivocal support for the policy of clean growth.
Angus Brendan MacNeil
My hon. Friend brings up a fantastic point, on which his view is shared by the SNP and the Scottish Government. The UK Government choose to penalise the place where the wind resource is, but unfortunately the wind just will not blow at the whim of the bureaucratic pen of the UK Government. I would have thought that they would have realised that after all these years.
Stewart Hosie
One would have thought so, given the number of times the Government have been told that this is an ongoing problem. I could almost repeat it verbatim: there is £23 per kWh charge in the north-west of Scotland and a £7 per kWh subsidy down in the south of England. At some point soon, now that the Government have a clean energy strategy as part of the future economy, I hope that even they might think to address that fundamental inequity.
I want some real joined-up thinking. I know that the industrial strategy recognises, as the Secretary of State said in his statement yesterday, the contribution of the Scottish Government and the other devolved institutions. It is worth putting on record that the Scottish Government already have an economic strategy, with strategic plans for trade, investment, manufacturing, innovation and employment. Following the recent enterprise and skills review, they are aligning their agencies and resources behind those plans. The UK Government should have such a joined-up approach.
The Scottish Government are taking action to support the economy and to counter some of the uncertainty brought about by Brexit, despite the real-terms Budget cuts. This includes the £500 million Scottish growth scheme to target high-growth, innovative and export-focused small and medium-sized enterprises. The first tranche of that money was delivered in June, and a further tranche will be made with an expansion of the SME holding fund, along with the leveraging in of private capital. The Scottish Government are also taking forward infrastructure investment plans, with projects valued at more than £6.5 billion either in construction or starting this year.
In addition to the innovation and investment hubs in London and Dublin, the Scottish Government have established hubs in Berlin and Paris. They are maximising the opportunities there while also developing our existing presence in Brussels into a hub. That is important because there is no point in just supporting big businesses that already export. If we are ever to mitigate the potential loss of export trade with the EU, we need to have the people and resources in place to hold the hands of businesses and ensure that more of them start to export. The Scottish Government are establishing a new south of Scotland enterprise agency.
The Scottish Government are implementing a number of other measures, the most important of which is the roll-out of digital connectivity. Had the roll-out of 4G been left to the market and the UK Government, I understand that we would be about 60% of the way there. However, because of the additional hundreds of millions put in by the Scottish Government, we are at 95%, and we are driving forward the “Reaching 100%” project to deliver superfast broadband access to all residential and business premises by 2021.
Angus Brendan MacNeil
My hon. Friend is giving a long list of impressive boasts by the SNP Government, but he may not know that people on the west side of one of the smallest islands in the Outer Hebrides can get 48 megabits per second. I believe that central London and many other places cannot match what the SNP Government have achieved in the west of the highlands and islands of Scotland.
Stewart Hosie
That sounds to me like a pitch for inward investment for Barra, given what my hon. Friend says about 48 megabits per second. The whole point is that it is possible to deliver to some of the most remote communities the kind of access to technology that every business and individual needs.
We welcome the fact that the UK Government have published their industrial strategy, and we are committed to working with them to ensure that the strategy delivers the maximum benefits for Scotland. However, as my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) said yesterday, we are disappointed that the Scottish Government were not formally consulted ahead of the publication of the strategy, even though the White Paper recognises the critical role that the Scottish Government have to play. That is a worry in areas such as life sciences, in which Scotland is a world leader, because a sectoral deal seems to have been agreed without any consultation with the Government in Scotland.
We have set out our programme for government in Scotland, which includes a commitment to create a Scottish national investment bank to deliver infrastructure development, finance for high-growth businesses and strategic investments in innovation. That mirrors much of what the UK Government have said—[Interruption.] I am conscious of the time. I have had 20 minutes, but I will finish soon; I am sure there will be plenty of time for Labour Back Benchers. We are also committed to a transition to a low-carbon economy, as this is an important economic opportunity for Scotland.
Finally, let me make a point that my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey also made yesterday. We welcome the plan and the substantial sums that are being invested, but we note that the £7 billion for the extension of the innovation fund will not to be spent until 2022-23. If it is important to spend that money, and it is, and if it is important to mitigate the damage that Brexit might do, and it is, I simply say to the Secretary of State that he should perhaps bring forward that spending.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. The House is obviously aware that a great many people wish to speak and there is limited time, so we will begin with a time limit of seven minutes.
Damian Collins (Folkestone and Hythe) (Con)
I rise to speak in support of the Budget and, in particular, the key strategic priority it places on the housing market and increasing housing supply. The Chancellor was right to say that we should have a national target for new home completions of 300,000 a year, but that number should not be a mere aspiration; it is an absolute necessity.
For many people in this country, getting on the housing ladder is becoming increasingly difficult. The prices of new homes to buy are rising much faster than people’s earnings. That has been the case for a long time. It is therefore no surprise that the percentage of people who are able to own their own home has declined. We are not looking at investment in the housing market just for homes to purchase. We need to build a lot more units that are affordable to buy and to rent, and we need a much more active strategy to do that. I was pleased that the Government announced that as part of the Budget.
I have supported the proposed development of the Otterpool Park garden town in my constituency, which would create up to 12,000 new homes. Any planning decision involves a degree of difficulty and it is important that we get the local consultation right, but we do need to prioritise building a lot more homes.
Building creates not only new places for people to live, but a considerable number of jobs in the construction sector. Many people who work in construction say that even now, it is difficult to find the people to do the work that is available. Therefore, it was right that a strong priority was placed on training people to work in the construction sector.
I welcome the Chancellor’s announcement of the £3 billion resilience fund to be spent over the next two years on preparations for Britain leaving the European Union. My constituency of Folkestone and Hythe contains the channel tunnel. Investing in preparedness to manage cross-border trade is a necessity. Anything that, for whatever reason, slows the progress of road freight in and out of the country will cause congestion and delay. That is bad for the economy and has a detrimental impact on people’s quality of life and the businesses in my constituency and elsewhere in Kent.
For me, a key priority in building the physical resilience we will need is not only to manage the electronic processing of freight as it passes in and out of the country, but to ensure that we have the physical infrastructure to hold lorries if they have to queue before leaving the country or if there is any requirement for customs checks as they arrive. The delivery of the lorry park on the M20 at Stanford West that was envisaged and proposed two years ago as a relief for Operation Stack is a vital piece of national infrastructure. I was disappointed that the Government had to withdraw their planning application to build it because of a judicial review, but I know that it is being looked at again. I see that the Financial Secretary is in his place. I raised this matter with him last week and welcome the letter he sent me to confirm that the ring-fenced budget of £250 million that the Government allocated for the delivery of that lorry park is still there. It is a vital piece of infrastructure and we need to ensure that it is delivered.
On the other spending commitments in the Budget, I welcome the additional £2 billion this year and into next year for the national health service. It is important that that reaches the places that need it most. The Health Secretary is not here, but I believe that greater consideration needs to be given to GP services and primary care in coastal communities, where the often complex, unique and challenging requirements have led to the average number of patients per GP being much higher than the national average. We are struggling to recruit GPs in such areas. I have spoken to the Health Secretary about that issue on numerous occasions and know that it is a priority for him. However, we need to ensure that the extra money for the health service goes to the parts of the country where it will make the biggest difference.
There has been a lot of talk about increasing investment in research and development and about increasing the research and development credit. That is incredibly important for the future of the economy, and I want to touch on artificial intelligence, which will be an important driver of growth in the future, as the Secretary of State set out in his remarks. Effectively, artificial intelligence is the robotic harvesting of the data footprint that we leave as we increasingly conduct our lives online and the designing of new products and technologies around that to meet people’s needs. That throws up a number of ethical issues.
Algorithms that run programmes are private property—they are copyrighted; they are not shared, and many platforms, such as Google and Facebook, fiercely guard the information—but we need to make sure that, when new services are designed based on our data footprint, companies behave ethically and responsibly and that we are able to check they are safeguarding the interests of the people they seek to serve through that technology. That is why the announcement of the creation of the centre for data ethics and innovation is incredibly important. The Digital, Culture, Media and Sport Select Committee, which I chair, will be looking at the distribution of disinformation and how companies’ algorithms either support or could act against it. There is, however, an important ethical question about the right of third-party organisations to check the work being done. Innovation through AI can, then, transform the economy, but it throws up some ethical issues that we have to get right.
The Government have taken an interest in driverless cars, but driverless cars, though an exciting technology, do not work without a signal to allow them to receive the information they need, which is why the creation of the national 5G network is so important. Without a signal, a driverless car would suddenly stop in the middle of the road. The investment in the 5G network requires investment not just in poles and masts but in fibre infrastructure. A key part of the industrial strategy has to be the move to a full fibre economy as quickly as possible. We simply cannot deliver on massively important new technologies such as 5G for the whole nation without that infrastructure to support it.
As an adjunct to that, I know that my right hon. Friend the Minister for Digital has talked about whether there should be a universal service obligation for 3G mobile signal. In many parts of the country, including Elham valley in my constituency, the 3G signal is weak. Ofcom will shortly be publishing a study on the real level of service delivery by mobile phone operators and whether it falls below the requirement stated in their licences. If it does, there will have to be some further inducement to act to make sure that basic coverage is better than it is. In the longer term, however, we need investment in a 5G network.
Finally, the joint working between the Government, the CBI and the TUC on retraining is crucial. Technology means that people’s jobs will change faster and faster throughout their lives, and people need the ability to retrain throughout their working careers to take advantage of this.
Edward Miliband (Doncaster North) (Lab)
It is a pleasure to follow the hon. Member for Folkestone and Hythe (Damian Collins), who made some important remarks about Brexit and the risks we face.
I want to start my remarks about the Budget with the words of the Prime Minister at the Conservative party conference in 2016. She said this about the EU referendum:
“It was about a sense – deep, profound and let’s face it often justified – that many people have today that the world works well for a privileged few, but not for them. It was a vote not just to change Britain’s relationship with the European Union, but to call for a change in the way our country works – and the people for whom it works – forever.”
I agree. The referendum told us that the status quo was not good enough—in fact, was not nearly good enough. Surely, then, the test of the Budget is whether someone listening to it and seeing its contents would conclude that this was a Government determined to live up to her words.
One or two policies in the Budget look somewhat familiar. The energy price cap used to be part of a Marxist universe; now it is Government policy. The “use it or lose it” policy on land banking was described by the Foreign Secretary—an eminent person—as “Mugabe-style” land expropriation; now it is on the way to becoming Government policy under the wise counsel of the right hon. Member for West Dorset (Sir Oliver Letwin)—an unlikely authoritarian Marxist.
On the fundamentals, however, on the underlying economic strategy, I am afraid it is not change, but more of the same. I want to highlight two issues: the refusal to address deep inequality in our country and the continuation of austerity. We all know about the cost-of-living crisis—it is not contested any more, although the Secretary of State did not really talk about it. I will give people just one fact: on the path suggested by the OBR, the average worker will not get back to 2008 earnings until 2025. That is the scale of the challenge we face. Are the Government making things better or worse when it comes to this and the gulf in living standards between the top and bottom? I am afraid they are making it worse. According to the Resolution Foundation, tax and benefit changes since 2015, including those in the pipeline, mean:
“The poorest third of households will lose an average of £715 a year compared to average gains among the richest third of households of £185 a year.”
The Prime Minister apparently believes that the message from the Brexit result was that people felt that the country worked for a privileged few but not for most. The Budget, however, makes the position worse rather than better.
I should love to hear from whoever winds up the debate what Ministers’ defence of these distributional figures is, because this is discretionary Government policy. It is a political choice, not an economic necessity. We need only look at what is happening to corporation tax to understand that. Corporation tax has been cut by more than £10 billion since 2010—and, by the way, businesses have not even been asking for those cuts. The Chancellor could have pointed out that the current rate of 19% was the lowest in the G7 by some distance, and that there were other priorities, but no: he is going to spend billions more pounds on cutting corporation tax to 17%. It seems that he can afford to spend those billions, but he cannot afford to keep benefits at the same level and has to cut them. That is the political choice of this Budget.
Let me turn from the issue of distribution to the issue of debt and the deficit, which the Secretary of State talked about. I am old enough to remember when the Government said that they would balance the budget by 2015. In fact, that was not so long ago: it was in 2010. I am also old enough to remember the 2015 election campaign, when I was told that if we did not balance the budget by 2018, catastrophe would follow. What does Robert Chote, the director of the Office for Budget Responsibility, say? He says:
“If the deficit is to continue falling at the average rate expected beyond the end of this spending review, then it won’t reach balance until 2030-31.”
What an extraordinary failure! A deficit promise is to be kept not five years late, not 10 years late, but 16 years late, and the Government have the cheek to go on about the deficit. They have failed to deliver on the promises that they made, but they are pulling off a remarkable feat: they are both failing on those deficit promises and cutting spending. The Secretary of State did not mention that. According to the Institute for Fiscal Studies, there will be day-to-day departmental cuts of £10 billion per capita by 2022, with welfare cuts on top. If ever we needed proof that austerity had failed, that would be it. The Government are not meeting their deficit promises, and they are carrying on with the cuts.
There is a deeper point, however. The Prime Minister’s words were right. People were not just voting on immigration in Europe, although of course they were doing that; they were also voting for a big change of direction. Continued austerity, continued spending cuts and worsening inequality constitute not a change in direction, but more of the same. We know what the Government should have done. They should have realised that cutting taxes for the richest, and the largest corporations, is not the way to ensure that a country succeeds. They should have put an end to austerity and cuts in public spending, and they should have recognised, more than they did, the cruelty and pain caused by welfare cuts that we all see, as constituency Members—including what is happening with universal credit.
I do not know what the precise Brexit settlement will be, but it is already clear from last year’s autumn statement that the impact on the economy and public finances will make it harder—let us be frank about this—to deliver the fairer society that was one important part of the mandate of the referendum, which makes it all the more important for us to have a Government who are committed to action to bring that about. On that score, and by the standards that the Prime Minister set herself, the Budget fails. It proves to me, yet again, that this Government cannot bring the change for which the people voted in the referendum.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I must now reduce the speaking limit to four minutes.
Andrew Bridgen (North West Leicestershire) (Con)
It is a pleasure to follow the right hon. Member for Doncaster North (Edward Miliband). I may not agree with his message, but I admire the passion with which he delivers it.
Let me, in the time available to me, welcome the Budget and, in particular, the proposals for infrastructure, business and the housing market. In my constituency, we are certainly doing our bit for the housing market. We have completed more than 600 new homes in each of the last three years, and this year we expect to complete more than 700. It is worth bearing in mind that if every constituency were building new homes at the same rate as mine, well over 400,000 new homes would be available this year.
I welcome what the Chancellor said about supporting the building industry, SME builders and releasing public land for building, but I hope that Ministers will bear in mind the need to ensure that the bidding process for the purchase of public sector land as it comes available—regulated by the Homes and Communities Agency—is not so onerous that it deters SMEs from taking part. Otherwise we will miss out on a valuable aspect of that policy.
My constituency is home to some of the UK’s major house builders, and the major brick and aggregate producers. In recent years, one of the biggest deterrents to investing in building materials and energy-intensive industries is uncertainty about climate change-related policy costs, with potential threats including EU emissions trading reforms that would put many firms out of business, even state of the art brick factories. The last two brick factories built in the UK are in my constituency. One was built in 2008, at the end of the economic crash, and one will come on stream in the next few months. They involve considerable investment—about £55 million—and each plant can produce 100 million bricks a year, but even with a target of 200,000 new houses a year, we import 300 million bricks. If we want to build 300,000 houses, we need to build new brick factories or we will have to import bricks from all over the world, and that is not efficient. The uncertainty for energy-intensive users needs to be removed as soon as possible, so that investment can go in and we can be self-sufficient in bricks and tiles.
I welcome the national productivity investment fund of £30 billion. Some of that money is already supporting the 6 million square feet SEGRO warehousing development in the north of my constituency. That will create 11,000 jobs. Unemployment in my constituency has fallen since 2010 by 70%, youth unemployment is down by 80% and only 470 people are on the unemployment register. Those jobs need to go out to the cities of Derby, Nottingham and Leicester, and we need better public transport to give people access to the jobs that we are creating. The continued cuts in corporation tax will ensure that businesses in my constituency and across the country continue to create the jobs and the wealth we need in the future.
Hilary Benn (Leeds Central) (Lab)
When the British people voted to leave the European Union, they did not vote to damage the Good Friday agreement, they did not vote to undermine the public finances, they did not vote to run the risk of falling off the edge of a cliff without a deal, and they certainly did not vote to end the benefits to Britain of the customs union and the single market. None of those things are inevitable consequences of the vote in June 2016: they are the result of political choices, made by the Government, that will have profound consequences for the future of our economy, our public services and the people we represent. Those choices and consequences dwarf this Budget and will determine the shape of just about every Budget in the years ahead.
The truth is that the Government have been far from transparent and open about those consequences. The simple question for the House is “Why not?” Why have the Government been so unwilling to acknowledge that the decisions that they have made will produce that result, and why have they been so reluctant to share that analysis? We know what the benefits of the customs union are: it gives us frictionless trade. The Government say they want frictionless trade, but we have it now through the customs union. We know it gives us access to a load of agreements with other countries in the world negotiated by the EU. We know—referring to the point made by the hon. Member for Folkestone and Hythe (Damian Collins)—that it enables the lorries that come off the ferries at Dover to move out seamlessly to help to turn the wheels of industry and stock our supermarket shelves.
Some 60% of our exports go to Europe and those markets we access through the trade deals. Is it possible to imagine any business saying to its biggest customers, “Well, we’ll try and keep on doing what we are doing with you at the moment, but actually we’re more interested in trying to sell stuff to other people around the rest of the world.”?
The place where this falls into the starkest relief is in Northern Ireland. The Government say that they do not want a border, yet they also say that they want to leave the customs union and the single market. When it is pointed out to Ministers that that could be a bit of a problem, they say that technology will come to their rescue, even though their ideas are untested. One organisation has even suggested that airships and drones could hover above a non-existent border. I hate to say this, but I do not think that tethered Zeppelins or other airships are going to deal with the problem in Northern Ireland. The truth is that, whatever the weather and no matter how radical the technology is or how much the Government spend, it is hard, if not impossible, to see how this problem can be reconciled if we are to avoid a return to a hard border. That is why there is a crisis in the negotiations with the EU, and why the Irish Government are pushing so hard.
This is what lies behind the argument we are having about the impact assessments that apparently never existed. That is what this debate is about. It is not about process, or about what has been released to the Select Committee. We know that what we have been given has been edited, filleted and sanitised. What this is really about is the process by which the Government took the decision to leave the single market and the customs union. Did they consider the fiscal, economic and employment consequences of the two most important decisions that have been taken since the vote in June 2016? If they did not consider them, why not? And if they did, when are we going to see them? None of us knows how this is going to turn out, but frankly, the Government owe it to the House and to the people of Britain to come clean about how they reached that decision.
Oliver Dowden (Hertsmere) (Con)
It is a pleasure to follow the eloquent remarks of the right hon. Member for Leeds Central (Hilary Benn). I am conscious that we are on a tight time limit, so I shall confine my remarks to the question of productivity and its implications for public spending. By the OBR’s own recognition, many of the numbers that it has produced are speculative, but it is clear that we have a long-term productivity challenge, as the Chancellor has rightly recognised in his Budget. This challenge has been disguised in recent years by our membership of the European Union, in that we have had large-scale migration of highly skilled migrants from eastern Europe, and we have principally had to compete only with European markets. Both of those factors are rightly going to change as a result of the vote, and we consequently need to raise our sights and think about the public spending choices made by this country relative to those of other countries, such as South Korea, which are likely to be our competitors in the years to come. When we look at that, we see that we have some difficult questions to answer.
The amount that this country spends on welfare includes almost £100 billion on in-work welfare and more than £100 billion on retirement welfare. In comparison, South Korea spends but 2% of its national income on welfare, so we have some choices to make, and we must be clear about those choices. Every £1 that we choose to spend on welfare is £1 that we cannot spend on our education system, on our research and development or on our infrastructure. All that money could be used to increase the long-term productive capacity of our economy, and a failure to spend in those areas reduces that capacity and reduces our potential output. We therefore have to look at each of those areas and ask what more we can do.
Bim Afolami (Hitchin and Harpenden) (Con)
I commend my hon. Friend on his speech. In relation to the more productive ways in which he thinks Government funds could be spent, will he elucidate further on what aspects of the Budget he feels could be upgraded or extended?
Oliver Dowden
We should consider whether we are able to release further resources for infrastructure spending. For example, the materials used for digging Crossrail 1 could be released straight into Crossrail 2, and we could look at HS2 and see whether we can release resources into HS3. It is those sort of long-term decisions that countries such as South Korea, China and India are making and that we are constrained from making due to excessive spending on current priorities.
I therefore urge the Government to continue with their agenda for in-work benefits, whereby we are increasing the personal allowance, so that people on the lowest incomes pay less tax, and increasing their income through the national living wage, so that they are less reliant on the state. We are also reforming welfare through universal credit to ensure that people keep more of what they earn and that they are constantly incentivised to move further away from reliance upon the state and towards self-reliance, and the case for doing so is both economic and moral. I urge the Government to ignore the Opposition Members who constantly harp on about universal credit. If they actually go to their local jobcentre, as I had the privilege of doing just last week, they will hear countless stories of how universal credit actually incentivises people to take on more hours of work and creates a smooth path out of welfare and into work.
My right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) eloquently made the case for looking at retirement benefits. It cannot be right that people who are perfectly capable of looking after themselves have access to universal benefits that they simply do not need. Equally, we need to look at the balance between the younger generation and the older generation. The previous Government rightly committed to a deal whereby we increased retirement benefits, so that people had dignity and security in retirement, but we need to consider the rate of increase and ask ourselves whether it is fair that the older generation’s benefits are increasing at a faster rate than those of people who are in work. Surely equality demands that such benefits should be increased only with increases in working-age benefits. If we do not embrace and make such choices, we will surely have them forced upon us as we fall poorer and experience lower living standards than those of our competitor nations.
Stella Creasy (Walthamstow) (Lab/Co-op)
It is always interesting to follow the hon. Member for Hertsmere (Oliver Dowden), who makes a wonderful case for why this country needs not just an Opposition, but an alternative. Let us give him that alternative today. It was a privilege to attend this morning’s commendation service for my local police. I heard extraordinary stories of police constables and their bravery, but those PCs are facing an uncertain future. That is the test for this Budget. How did we get to a place where people who have tackled rapists, run into burning buildings and taken countless criminals off our streets face potential redundancy, while the Government are throwing billions of pounds into the mess that Brexit is creating?
This Budget speaks volumes not only about this Government’s priorities, but their performance. After seven years, the Chancellor boasted of “peaking” the debt, when they said that they would balance the books. Another year or more has been added to the austerity timetable. Our constituents yet again face wage stagnation. Our public services have been cut to the bone. Universal credit has been made more complicated to administer and more difficult for people to understand. The stamp duty exemption will push up prices and do nothing for the millions of people with no deposit who are renting. Personal debt is at record levels. Home ownership is at a 30-year low, yet one in 10 people now have a second home—it is all right for some, but not enough. Growth has slowed. Inflation is rising. Our teachers are buying basic supplies for their schools. Our nurses cannot afford to feed themselves.
The most terrible travesty of this Budget is that there is money to be raised. Buried away is the Government’s agreement to close the tax loophole on commercial property sales for foreign companies. I welcome that U-turn. Britain desperately needs that magic money tree. However, it is indicative of this Government’s capability that they cannot even get that right. They think that they will raise only half a billion pounds a year, when they should be raising £6 billion a year.
This debate is about productivity. I am worried about the productivity of our Ministers. I was deeply disappointed by the Government’s response to my parliamentary questions and their belief that double taxation treaties mean that the tax would be paid. They do not seem to understand that the Luxembourg treaties will override that and that many real estate companies are based in Luxembourg, so will be exempt from this very tax and from our magic money tree, as will anybody who acquires new real estate and puts it in a Luxembourg holding company before the rule comes into force.
Those are not new problems, but I put them on the record because, clearly, the Ministers with responsibility for HMRC have not even bothered to read the Paradise papers, which set out such deals in great detail. It is little wonder that this Government do not really care about evidence or data and do not want to know the real impact of their policies on the people they represent.
There is clear and explicit evidence of the link between gender equality and global competitiveness. Productivity is a massive challenge in our economy, yet this Government have absolutely no interest in understanding the impact of their policies on addressing inequality.
In the time left to me, I put the Government on notice. As a country, we cannot afford for them to ignore these matters any more, just as they have failed to get to grips with Brexit, failed to deal properly with tax loopholes and failed to pay our public sector workers properly. The Opposition refuse to let the Government’s poor performance, poor priorities and, indeed, poor people skills condemn the future of this country. They say this Budget is about being fit for the future, but they are not fit for office and it is time they left.
Mrs Kemi Badenoch (Saffron Walden) (Con)
It is a pleasure to follow the hon. Member for Walthamstow (Stella Creasy), even though I disagree with almost everything she said.
There is much to welcome in the Budget, and I am grateful to the Chancellor for listening to concerns about tax increases and for accepting a request from me, my right hon. Friend the Member for Harlow (Robert Halfon) and others to freeze fuel duty. I represent a large rural community where almost everyone has to drive, and the freeze will help us to keep down the cost of living.
Fuel duty is not the only duty that was frozen. The freeze on air passenger duty was warmly received by many of my constituents and local businesses, especially Stansted airport. Aviation is a key growth industry for us, and the freeze will help to ensure that Britain’s skies remain open post Brexit and will promote the global Britain programme.
Every day I receive letters from residents who want to know what the Government are doing to ensure a smooth transition as we leave the EU. Businesses in my constituency are pioneering new types of British exports worldwide—the English Cream Tea Company in Dunmow has managed the phenomenal feat of selling tea to China, and the exceptional craftsmanship of luxury products by Geoffrey Parker games in Wimbish village is recognised as some of the very best British manufacturing. They will be reassured to hear of the further £3 billion of investment, on top of the £700 million already committed, to prepare effectively for EU exit.
As the Government continue to push to increase the supply of much-needed housing, I stress the need for accompanying transport infrastructure in our industrial strategy. A new station at Cambridge South will help my constituents with their daily commute, will make it easier to get to Addenbrooke’s Hospital and will improve tech corridor research and development links with Chesterfield research park and with companies around Stansted. However, we also want to see further improvements to the West Anglia main line soon, ideally four-tracking to keep up with increased demand.
We have heard a lot over the past few days about the need for improved productivity. The announcement of an additional £8 billion through the national productivity investment fund, taking the total to £30 billion, is by far the most exciting measure, not just because of the investment in rail, broadband, science and innovation but because of the investment in emerging technologies such as artificial intelligence and driverless cars.
I know that many in this House consider driving a recreational activity and see driverless cars as a threat to their hobby, but spare a thought for people like me who hate driving, a chore that eats into time better spent on other things. The productivity improvements from driverless cars will be immense. The average car is used just 10% of the time, and autonomous vehicles could increase that to 90%. Imagine a world that needs fewer cars. We could say goodbye to road rage, drink driving, texting at the wheel and unfit drivers ruining lives, and say hello to more free time, less congestion and cleaner air. It is a game changer for tackling rural isolation and geographical exclusion and, pardon the pun, will ensure that Britain remains in the driving seat in a competitive global market. The future is coming and I cannot wait, which is why I commend this Budget to the House.
Mr Jim Cunningham (Coventry South) (Lab)
This is a Budget from a Government who have run out of ideas and are lacking in imagination. They heralded it as a Budget that will help everyone, but nothing in this Budget will help ordinary working people. In seven years under this Government, we have seen wages fall, and they are now lower than they were in 2010. Personal debt levels are rising, and with interest rates starting to rise we are heading for a massive problem. There has not been nearly enough progress in closing the gender, race and disability pay gaps—that is simply unacceptable. Britain is meant to be the sixth largest economy, yet public and business investment is among some of the lowest in advanced countries. We are also seeing low productivity.
On Brexit, there is uncertainty in all sections of society because of the shambolic negotiations that we have seen so far. The OBR’s downgrading of economic growth and productivity make for bleak reading, and we seem to have a Government who have refused to learn from their mistakes. They cannot even hit targets they set for themselves; they promised to eradicate the deficit by 2015, 2016 and 2017, and now they have pushed it back to 2020 and probably beyond.
Coventry and the west midlands stand to lose out hundreds of millions of pounds in EU structural funding after Brexit. This Government’s policies and, in particular, this Budget do not do enough to stimulate investment and growth and to help replace the funding that will be lost. The Government are not building a strong economy and they certainly are not leading the way for Britain to remain a major world player.
The Budget does nothing to help ordinary people who are struggling up and down the country. The national living wage has been revised down, so it will not reach £9 by 2020, as previously promised, and the Government are persisting with the horrendous roll-out of universal credit, instead of pausing the roll-out to allow the system to be improved. The Chancellor’s offer of help will not help people enough, as it is only a fraction of the £3 billion a year cuts they have made to this scheme. Only £1 of every £10 cut has been put back, and that just is not enough to help vulnerable people. More than 100,000 people in Coventry have used a food bank in the past few years—that is unacceptable in 2017. These changes are made worse because they are being implemented alongside jobcentre closures, and the services on offer are also being privatised. The Government are removing jobs and services from parts of the country that need them the most, including Coventry. That will have long-lasting repercussions
The housing crisis has not been addressed either. Last year, fewer than 6,000 social houses were built, and that is simply unsustainably low. The Government pledged to build 300,000 homes by the mid-2020s, but houses are needed now—not just any houses, but affordable houses that help first-time buyers. The OBR said that the stamp duty cut would actually end up raising house prices, so this is yet another policy that has not been thought out.
Despite being a key issue during the recent general election, and despite it being a sector in desperate need of investment, there was, shockingly, absolutely no mention of social care in the Budget. Local government services in Coventry continue to have funding slashed, and there is no additional money for the police or fire services, making provision of vital services more and more impossible.
The NHS has again—[Interruption.]
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I was going to let the hon. Gentleman finish his sentence.
George Freeman (Mid Norfolk) (Con)
It is a privilege to rise on behalf of my constituents to welcome this Budget and the industrial strategy announced by the Business Secretary yesterday. In the past week, the Chancellor and the Business Secretary have sent a strong signal that this economy and this country are in the hands of safe grown-ups in the Treasury—[Laughter.] I would not laugh yet. This country knows that what we need is a sensible, one nation Conservative Administration, not a Marxist shadow Chancellor committed to the overthrow of capitalism. [Interruption.] The hon. Member for Stalybridge and Hyde (Jonathan Reynolds) thinks that is funny; I do not. We do not need Labour’s £500 billion spending spree, which would put more debt on to the backs of our young, and we do not need dangerous talk of requisitioning private property and exploiting the crisis we face to fulfil Labour’s Marxist fantasies.
I wish to highlight three particularly encouraging aspects of the Budget. First, on public sector pay, I welcome the fact that the Government have shown they are listening carefully to the concerns of those in the public sector who feel that, after seven years of the pay cap, we need a different model to inspire our best. I welcome the easing of the pay cap, so that those on the frontline of our public services—the heroes who run into burning buildings and take bullets for us—can get the pay rise that they deserve that is appropriate and affordable. I also welcome the signal that those in the public services who are responsible for management and delivering productivity are rewarded for, and on the basis of, that productivity.
I particularly welcome the announcement of a public sector leadership academy, which my right hon. Friend the Chief Secretary to the Treasury and others have been instrumental in pushing forward. In the next few years, we need to go further and signal an ambition for our public services to work in partnership with the private sector to drive a recovery. We want an innovation economy in which the public sector embraces innovation, and is a partner for innovation, to modernise our public services. I call that public sector enterprise. Let us be bold and unleash the power of the NHS to work with our life sciences sector to pull innovation through for modern healthcare. Let us be bold in procurement, so that the public sector drives innovation in our economy, and let us incentivise our best public sector leaders to be part of that.
Secondly, I warmly welcome the industrial strategy. I am proud to have done my bit over the past few years, working with the former Chancellor and Member for Tatton; Lord Willetts, who was in the Gallery earlier; Lord Heseltine; and my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy. Do not take it from me that a Conservative generation has led the way on industrial strategy; take it from Lord Mandelson, who said at Davos a few years ago that it was a new generation of Conservatives who were setting the pace on 21st-century industrial policy. Do not take it from me; take it from the life science sector, which yesterday announced £1 billion of inward investment to create new jobs in the economy. That is the vote that I care about—the vote of business and of the wealth and job creators, not the vote of the wealth and job destroyers on the Opposition Benches.
Thirdly, on skills and infrastructure, I strongly welcome the east-west rail announcement. For too long we have seen investment in our commuter lines, but not enough in the east-west lines. I relish the prospect of an innovation express from Norwich to Cambridge to Oxford to Reading to Southampton—an arc that links our east and west clusters. I also relish the announcement of a new Victorian-model rail company that undertakes development to fund rail infrastructure, allowing garden towns and villages to be built by a modern railway company—the first to be created in such a way for more than 150 years.
On skills, we need a response to the industrial strategy from each locality. That is why I have been working with Cambridge, Norwich and Ipswich to put together the “accelerate east” skills gateway. I would like us to offer every school and college leaver a skills passport into the 21st-century economy.
This was a Budget for business and for Britain, but the big B is Brexit. We need to make sure that in the next 18 months we negotiate and deliver a Brexit deal that supports our modern economy.
Lucy Powell (Manchester Central) (Lab/Co-op)
It is a pleasure to follow the hon. Member for Mid Norfolk (George Freeman). Perhaps he could take the Prime Minister to the public sector leadership academy now that he has a bit of time on his hands.
The key issue of the Budget is productivity, but that is nothing new at all. The productivity gap is now widening. An average worker in Germany produces the same output in four days as we produce in five. The issue is not how we can stretch those who are operating at the high end, although that is a good thing, but that we have an extremely long tail of low skills, with too many people working below their potential and, often, their skill set. That is set to get even worse with automation, with many more millions of low-skilled workers chasing fewer and fewer jobs. There is very little in the Budget to address this issue, which really does need to be the key driver of Government policy.
Lucy Frazer
The hon. Lady says that there is nothing in the Budget about that, but what about T-levels, maths and computer science training, and adult learning? There is a whole raft of measures to upskill our workers.
Lucy Powell
I will come back to those issues later in my speech. There are some advances, but they are not backed by resources. We have seen huge cuts in post-16 education over the past seven years, which has meant that the gap has widened further and further.
As the Social Mobility Commission again stated today, we do know how to pull up this long tail because we are doing so in London. It requires a pool of talented teachers, resources, and a clear local and national strategy. There was nothing in the Budget on the key issue of teacher retention and recruitment, which is now reaching a crisis point, and nothing on teacher pay or teacher workload. I could not believe it, but nothing was said on school budgets.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Everybody wishes to speak and that is not a problem, but the hon. and learned Member for South East Cambridgeshire (Lucy Frazer) must understand that this would be her second intervention. I will keep moving her down the list, because that is the way that we will move forward.
Lucy Powell
I will not take any more interventions, Mr Deputy Speaker.
There was nothing at all about school budgets, which was one of the key issues in the general election, and they are still falling in real terms. The Institute for Fiscal Studies said that, after the Secretary of State’s announcement in the summer, there was still a 5% cut in real terms, because the number of pupils is going up. We need a much bigger conversation about what education and skills are for in this country. They need to be about delivering for the economy and the society of the future.
Nearly 60% of graduates are working in non-graduate jobs. That is the third highest level among OECD countries, exceeded only by Greece and Estonia. I know that we have many debates in this place about tuition fees, but it is no wonder that they are not being repaid when so many people are not working at the level at which they are qualified to work.
We are in the bottom four of the OECD countries for literacy and numeracy to 18. T-levels are welcome, but with the huge cuts to further education, they will be difficult to deliver. Given that the maths GCSE contains more A-level content, we must ask about the desirability of prioritising compulsory and ongoing GCSE resits over looking at the curriculum and functional skills.
The Government are right to identify maths as the future. The future is about algorithms, matrices, digitisation and automation. Even for the most able, however, our curriculum is going in the wrong direction, which is why the OECD has said that it is
“a mile wide and an inch deep”.
By going down a route of rote learning rather than conceptual understanding, we are moving in the opposite direction to all our competitor countries.
There was absolutely nothing about social mobility in the Budget—in fact, the Chancellor did not even mention that in his statement. Social mobility is especially crucial in the early years if we are looking to close the productivity gap. Development at the age of five is still the biggest indicator of how a person will do in their GCSEs and beyond, yet we are also going in the wrong direction there. As others have said, these are political choices. Of the £9 billion the Government are spending over this Parliament on the early years, 75% will be for the top half of earners, with less than 3% going to the lowest. That is just wrong. This ticking time bomb entrenches social advantage.
Childcare is, yes, about increasing productivity, but the design of the current system under this Government means that we will fail to deliver some of the productivity gains that can come with childcare. We really need a social mobility strategy right across Government to tackle these issues.
Finally, let me talk about regional inequalities and disparities within regions, which are all connected to the points that I have raised. It is even more urgent that we get our fairer share of spending on infrastructure outside London and the south-east, and that we develop even stronger place-based solutions to deal with local job markets and skills. For example, if the Government wanted to be ambitious—this is not a difficult thing to do—they could devolve post-16 further education to places such as Greater Manchester. They could do a lot more to devolve early years solutions for transforming school readiness, as we are attempting to do in Greater Manchester. It is high time that places outside London got their fair share of transport infrastructure expenditure. We absolutely need to see the northern powerhouse rail connecting Liverpool to Hull via Leeds and Manchester. Critical to that is ensuring that we have a future-proofed Manchester Piccadilly station.
Victoria Prentis (Banbury) (Con)
It is always a pleasure to follow the hon. Member for Manchester Central (Lucy Powell) when she speaks so passionately about education. I must confess that her remarks about the Prime Minister have encouraged me to focus my speech on house building, which the Prime Minister and her Chancellor quite rightly view as the most important issue facing us.
For my constituency, the biggest excitement from the Budget is, of course, the funding to support Oxfordshire’s statutory spatial plan, which commits to 100,000 new homes by 2031. Cherwell District Council is the national leader in house building—an achievement only made possible by strong local leadership and the sheer hard work of the many volunteers who got our local plan adopted. I see a new finished house almost every day when I return home from Bicester North station, and three houses a day are currently finished locally. I built my own house; it is what we do in our area.
I hope that £30 million a year for five years will help to alleviate the pressure on our infrastructure by enabling us to move forward with larger projects such as the London Road crossing. When we talk about infrastructure, we so often mean roads and railways, but locally we are learning on the job that infrastructure means so much more than that. Those on the Treasury Bench will be pleased to learn that vast products and expenditure are not the only way forward when we look to build new communities. It is noticeable that the residents of well-built houses are happy, and more effort needs to be put into ensuring high standards in building across the board. This is a no-cost measure that the Government are working on.
Where we do need to invest for growth, it does not need to be in enormous, prestige products, as my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) outlined. House builders need to deliver on time. Even when they do, councils must be prepared to spend relatively small sums to alleviate the difficulties caused by enormous growth—for example, for around five years of stretched budgets while new schools are created. Children do not arrive in neatly packaged classes of 30 four or 11-year-olds, and existing schools also suffer while numbers are in flux.
I share the concern of my hon. Friend the Member for Folkestone and Hythe (Damian Collins) that GP services in high-growth areas need small amounts of additional funding to tide them over in times of enormous growth. My hon. Friend the Member for Bracknell (Dr Lee), who is on the Front Bench, will appreciate that people seem to need their GP more when they move to a new area, to sort out their existing medication and to deal with difficulties in changing specialists. We need to ensure that the infrastructure spending on such issues is readily available.
Mapping needs to be done before the build. Post boxes and street lamps should be provided without the intervention of an MP. Development can only be a positive experience if we bring hearts and minds along with us. I am afraid that closing maternity services at our local Horton General hospital at the same time as building 23,000 new houses does not sit well with us locally. Many new houses in our area have three or more bedrooms, and it would not come as a surprise to learn that some couples want to have babies to fill those new rooms.
Finally, and quite separately, a high point of the Budget for me was the announcement of a consultation into the horror of single use plastics. I encourage everybody in the Chamber to get out their phone, look at the App Store and add the Refill app; it tells users what to do and helps to get rid of single use plastics.
Mr Stephen Hepburn (Jarrow) (Lab)
We were told that this Budget was going to be a game-changer. We were informed that it would lead to a bright future. I would just like to know, for who? This Budget should have been about tackling the emergency crisis in our public services such as the NHS, where dissatisfaction is up, waiting lists are up and waiting times are up. In fact, the only thing that is down is staff morale, which is at rock bottom.
When we look at what is going in areas like mine, we find that, since 2010, we have had closures of successful NHS walk-in centres used by 26,000-plus people a year and closures of wards, with more to come, under an NHS plan called the “The Path to Excellence”. Local people, having come through cuts and closures throughout the years, call this NHS plan, which was brought up by local NHS management, “the road to ruin” because they have experienced the bogus consultation exercises, only for the result at the end to be that their valued local service was closed.
On pay, there might be a pay increase in the future if NHS staff increase productivity. What a disgrace! It is NHS staff who have kept the NHS going—whether the porters, the nurses or the ambulance drivers—during all the years since 2010 and during these Tory party cuts.
Let me go on to employment issues and social issues. The Chancellor said at the weekend that unemployment did not exist. Well, he wants to come to Jarrow, where unemployment is nearly 2,000—real people and individuals. Everybody on the Government Benches is talking about the jobs boost, but two out of three of those jobs in the north-east are on temporary contracts and that sort of thing. They are insecure jobs—they are not proper jobs.
Somebody should have tackled the right hon. and learned Member for Rushcliffe (Mr Clarke) when he criticised Labour for creating the crash. In the 1970s, the crash was caused by the tripling of the oil price by OPEC in the middle east. The right hon. and learned Gentleman said that Labour caused the crash in the 2000s, but it was an American crash, which George Osborne now acknowledges, caused by the banks.
The right hon. and learned Gentleman talked about the decades of skills we have lost, but that predominantly started in the ’80s, when he was a member of the Government and Thatcher was closing the shipyards, the pits and the steelworks. They were privatising all the utilities and taking out of Britain the skills that we need now. People would not have to be employing Polish plumbers now—they would have a plumber trained in England—if we had the services we had in the past.
As for what we have heard about housing, I laugh—I mean no disrespect—because the 2,000 people on the waiting list in my area cannot afford that sort of thing. They need council housing; they want housing that they can afford—that is what they need. They cannot afford stamp duty and these gimmicks such as Help to Buy, which are absolute rubbish. If that is an example for the northern powerhouse, heaven help us with where we are going.
To sum up, there is lots I would like to say on universal credit, the Women Against State Pension Inequality campaign, social care and education, all of which are so important to the productivity of this country. All I will say is that the Budget was a whitewash, and we cannot wait for a Labour Government to bring in our programme.
Gillian Keegan (Chichester) (Con)
It is a pleasure to follow the hon. Member for Jarrow (Mr Hepburn).
There is no doubt that we are living through a period of profound change created by the digital revolution. We should all, therefore, welcome the Chancellor’s announcements in the Budget about investing in the skills and technologies to equip our country and to give us the confidence to rise to this challenge. And we should feel confident: throughout our history, the UK has pioneered change that has rippled out across the world. From the advent of the steam engine to the invention of the internet, we are good at embracing change.
In the mid-1990s, at the start of the dotcom boom, I spent a few years working in Tokyo to develop chips with enough memory to enable digital cash on a bank card or in a phone. The new technology we were developing was a million times smaller than the chip in an iPhone today. The rate of progress in the digital age is phenomenal and will continue to be.
The UK is a global leader in tech, supported and driven by the finest academic institutions in the world and by bold businesses that challenge the norm. In Chichester, we are home to Rolls-Royce, which uses state-of-the-art technology to manufacture its engineering masterpieces, which even include an electric Rolls-Royce. My constituency is also home to a £1 billion fresh food industry, where I have seen at first-hand how robots ensure the perfect growing conditions for herbs and salads, as they move from potting, to germination, all the way through to packaging. Technology is already having a big impact on the way we do business in Chichester.
To achieve our full potential, we need an integrated plan that embraces education from primary, where eight-year-olds now learn basic coding, through to secondary and tertiary, and that includes maths and digital skills at all stages. To anybody sat in a local comprehensive school in Liverpool, as I was, I say: these are the keys to your social mobility. It is not just tech; Chichester University has a new STEAM—science, technology, engineering, arts, and mathematics—centre, adding art, design and creativity to technology, which is a winning combination.
The Government’s ambition is clear, with a further £2.3 billion being invested in science and innovation—the highest level in 30 years. The Chancellor is also investing in infrastructure to develop fast fibre broadband and 5G networks. That is important, as all this talk of advanced technology must be baffling to some of my constituents as they struggle to stream music or even download a film.
As we leave the EU, we must be more flexible and innovative. On our side are centuries of competitive advantage, thanks to our geography, language, time zone, common law and institutions, including the one that I am standing in. Having worked in tech for more than 20 years, I know that this makes us an attractive hub for business, trade and technology, and we have a head start. The UK is host to 18% of the world’s data flows, so we already have a well developed platform from which to grow—in all parts of the country, as we expand tech cities into a tech nation.
I welcome the Budget and the industrial strategy, and I am optimistic about the future of this country and the economy. The Government are investing for the long-term success of our nation, in industry, technology, houses, including council houses, construction, our NHS and, most importantly, people and the skills that they need to secure their future prosperity.
Mr Pat McFadden (Wolverhampton South East) (Lab)
It is a pleasure to follow the hon. Member for Chichester (Gillian Keegan). We began the debate talking about industrial strategy. I approve of the Government’s industrial strategy. The reason I like it so much is that I launched it eight years ago, and it is nice to see the Government picking up on some of our ideas. However, the big story in this Budget is the downgrade in our growth prospects—the biggest downgrade since the financial crisis and in the history of the OBR. It was described by the Resolution Foundation as
“the mother of all downgrades”.
The prediction is that the economy will, in a few years’ time, be 2%—or in financial terms, £42 billion—smaller than was thought only last year. That means borrowing £13 billion more in a few years, and £17 billion a year after that. It means austerity going on into the mid-2020s. For our constituents, it means lower than expected pay. Average income is expected to fall by £1,400 to £1,500 a year. Those are the real effects of the mother of all downgrades.
There is one area where the Government are setting aside huge sums of money, and that of course is Brexit—there is £3 billion for it in the Budget, on top of the £700 million already announced—and we are told that the Cabinet has agreed to pay a £40 billion divorce bill. In a few short weeks, we have gone from “go whistle”, to £20 billion in the Florence speech, to £40 billion now. There is a lot that we could do with £40 billion. We could build more than 70 new hospitals, or over 1,100 new schools. It is more than the total housing and environment budget. It is more than the total public order and safety budget.
In my constituency, the West Midlands police have lost 2,000 officers and £145 million from their budget in the last seven years. They could do with some of the £40 billion that will be spent on Brexit. We have almost 10,000 people on the local housing waiting list. I see these people in my constituency surgery, desperate for a home. They could do with some of the £40 billion set aside to pay for Brexit. The social mobility study out today describes the midlands as a coldspot where social mobility suffers. Nursery schools in my constituency facing cuts could do with some of the £40 billion set aside for Brexit.
There might be an argument for some of that expenditure if it was going to buy us a better deal, but the Government have said that they want to secure exactly the same benefits for goods and services as the ones we have now, not by staying in the single market and the customs union but by leaving them. Countries normally pay for access to the single market, but we have chosen to pay to leave it. The Government are not investing £40 billion in getting us a better deal than the one we currently enjoy; they are prepared to spend £40 billion, which could go towards public services in our constituencies, on a worse deal. That was not an inevitable result of the referendum. The Government could have chosen to stay in the single market and the customs union, but they did not, and that is a bad deal for Britain.
Alan Mak (Havant) (Con)
It is a pleasure to follow the right hon. Member for Wolverhampton South East (Mr McFadden).
The Red Book tells us:
“The Budget sets out a long term vision for an economy that is fit for the future—one that gives the next generation more opportunities.”
I speak in this Budget debate in support of the Chancellor and the industrial strategy, because I particularly welcome their emphases on upskilling our workforce and helping Britain to lead the fourth industrial revolution, as technology transforms the way we work and live.
Looking at the Budget more generally, I am pleased to see the Government devoting more funds to science and innovation and helping this country to meet the OECD average spend of 2.4% of GDP on R and D. I welcome our funding for upgraded broadband and 5G, putting digital connectivity at the heart of our productivity plan. Economic success is not built just on steel, concrete and fibre optic cables, however, and I welcome the investment in human capital most of all. The British people will help us to make a success of Brexit, and our engineers, scientists, inventors and entrepreneurs will help us to lead the fourth industrial revolution. It is right that the Budget invests in their skills, education and future.
Getting our workforce prepared for the challenges and opportunities of the new technological revolution is vital to boosting productivity, increasing economic growth and making sure that the whole country is prepared for the challenges ahead. As the Budget rightly notes, employers sometimes report that they struggle to recruit enough people with science, technology, engineering and maths skills to grow their business, and we know that STEM skills correlate to higher average earnings and greater productivity in our economy. That is why I am particularly pleased to see the measures in the Budget that focus on skills and education. From the significant package of support for maths in schools to further support for T-levels and computer science, the Government are equipping our young people—in Havant and across the whole United Kingdom—to succeed in the new economy.
I also welcome the measures on lifelong learning, including the commitment to establishing a national retraining partnership with the TUC and the CBI, the £30 million to help people to retrain in digital skills and the £8.5 million to support unionlearn. Those are all valuable initiatives. As the fourth industrial revolution gathers pace and technologies such as artificial intelligence and robotics become more widespread across all sectors of the economy, we will undoubtedly see an unprecedented level of restructuring in our labour market, including in many white-collar professions that have traditionally been resistant to such challenges. That is why I particularly welcome the Government’s laying of the groundwork for a modern skills system that will help us to tackle those challenges head-on.
In conclusion, I strongly support the Budget and the related industrial strategy, which came out yesterday. They help our country not only to get fit for the future, but to get ahead. They will allow us to reach the future first, ahead of our competitors, and secure our prosperity in the years ahead.
James Frith (Bury North) (Lab)
An assessment of this Budget is as easy as a, b, c—austerity, Brexit and calamity. We have had seven years of bad luck for Britain from austerity, the Tories’ self-inflicted Brexit wounds and a calamitous Government with no distinction or record of leadership. There has been reboot after reboot for the Prime Minister, who has no control of her Cabinet. This is a Budget for the driverless car from a driverless Government. Our economy is staring, and yet stalling, at a crossroads. Forecasts have been revised down for five more years. Productivity is down, and real wages are down. Employment is strong, but in-work poverty is the child of this Government’s failed economic approach. The Budget sees the deficit revised up, with no easing of austerity, and inflation picks the pockets of hard-working families. Seven years in, all the pain is for nothing, and into a second scorned decade we go.
There is nothing in the Budget for business concerned by the Government’s no-deal Brexit rhetoric; nothing for students plunged into debt; nothing for schools in the next two years, while they await the jam-tomorrow national funding formula; nothing for local authorities, such as mine in Bury, which has faced 70% cuts since 2010; nothing for social care or carers; nothing for the rise in crime or to cover for police pay rises; and nothing for mental health. Nothing has changed—nothing!
The bits the Chancellor did get right were the result of learned behaviour, although they were all nicked from the Labour party in a desperate attempt to pick the pieces out of their arrogant early election. To give some perspective, London’s Elizabeth line will cost £15 billion, but this Budget allocates just £1.7 billion to the English regions, including Greater Manchester.
We needed a Budget for Brexit, but this does not come close. The Chancellor shows no appreciation of the fact that the prism through which Brexit and this Budget play out for the rest of the country is increasing daily uncertainty, a thirst for vision and a practical guide to the future. We have a country mixed with impatience from leavers and anxiety from remainers, and the country is in need of unity. The Chancellor is not even out of first gear in demonstrating the threat that Brexit poses, and this Budget is insufficient in dealing with that task. On the referendum, this Government took a public result and shrouded their work to deliver it in secrecy, wasting all the time they have had since the result. We needed a Brexit Budget; instead, the Government published a UK industrial strategy yesterday, but they still refuse to publish in full their assessment of the UK sectors facing Brexit.
There is a promise to build infrastructure and to build 5G networks, but in some areas of Bury it is more Bee Gee than 3G. [Laughter.] I promised I would get that in.
The future of our economy relies not on Tory rhetoric from those on the Government Benches, but on brilliant businesses such as mine in Bury—for example, Milliken, which makes 80% of the airbags fitted to all cars in production; or Dream Agility, which is making possible Silicon Rammy in Ramsbottom. We have a Government who say little about what they want to achieve and who have a tin ear about life away from Westminster. At its heart, Brexit for many of those who voted for it was, from the start, about kicking the status quo and giving a voice to the people left behind. For too many, this Budget still says nothing of their experiences of life, work and business in Bury or across Britain.
Ben Bradley (Mansfield) (Con)
Frankly, before last Wednesday, I expected to be a bit grumpy about the Budget. I was concerned that there would be no offer for younger people and that my constituents would lose out again, as they have so many times in previous Budgets. Imagine my surprise, therefore, when I was greeted by the Chancellor’s fair, inclusive and progressive Budget last week.
As I have repeatedly said in this Chamber, the people of Mansfield have in the past felt ignored and neglected by Westminster, and successive Governments have not addressed the needs of that area in their Budgets, but I am optimistic that this Budget covers many of the challenges my constituents face, and there are a number of small steps in the right direction. Although the increase in the national living wage is welcome everywhere, nowhere is that more true than in Mansfield, where 38% of workers are in low-paid employment. That, coupled with the increase in the personal allowance announced by the Chancellor, means that more of my constituents can keep more of their hard-earned cash.
These changes are overwhelmingly welcome in my constituency, but the predominance of low-paid and low-skilled work is a cause for concern. That is why I am delighted to hear that the Government will be offering support for skills in maths and computing, as well as introducing T-levels. My belief is that it is only by diversifying education and offering more technical and vocational options to young people, as is being done with great success in Vision West Nottinghamshire College in my constituency, that we can generate the skilled workforce this country needs to thrive.
There is of course more to be done in creating quality qualifications that lead to long-term employment. I would like to see direct business involvement in education. For example, the University of Lincoln currently offers an engineering programme delivered directly by Siemens. Such involvement allows companies to shape their own highly skilled workforces and provides young people with an open door to quality, long-term employment.
Apprenticeships are also a challenge, particularly for smaller businesses, to manage and I look forward to continuing conversations with the Secretary of State for Education on that front. As MPs with small teams of staff, we know how challenging it can be to organise work experience for even one person, never mind an apprenticeship. We need to offer more support to SMEs.
In recent months, I have been working to highlight the challenge of engaging and inspiring young people—it is no secret that my party has struggled on that front—and I have been talking to younger colleagues in this place about the steps we can take to tip the balance back in favour of those who feel they are worse off than their parents. Housing was one of our primary asks when we visited the Chancellor before the Budget, and I am delighted to hear his announcement on stamp duty and the unprecedented spending on house building. The commitment to a council tax levy on empty homes, which are a huge problem in Mansfield, is welcome news. I hope that it will free up more homes for the private rented sector and for social housing.
That is a big step in the right direction, but I would like the Government to take a lead on the issue and invest in their own house building programme. If we want homes built, let us build the kind of houses we need and make sure that we meet the 300,000 a year target. I am sure that that discussion will continue to be at the top of the agenda.
Yesterday, we heard the announcements on our industrial strategy. I welcome the commitment to spread growth and wealth across the whole UK. In a modern, digital world, it is no longer the case that every business has to be based in a city centre or in London. There are huge opportunities for Mansfield and the east midlands more broadly. The investment in our digital infrastructure is welcome, as is the support for retraining in STEM subjects and the technical education commitments I have mentioned. I hope that those measures are rolled out not just in cities, but across the whole UK. Mansfield has a high proportion of SMEs. Supporting them to grow and employ more people in rewarding jobs is vital for the future and for raising aspiration in an area that is among the lowest in the UK for social mobility.
Although many of the announcements are not earth-shattering in isolation, they show that the Government have a vision. These small steps in the right direction, while limited by the clear economic and political realities, show a commitment to advances in housing, health reform and education that are incredibly positive. It is a vision that I am very happy to support.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
After the next speech, the time limit will go down to three minutes.
Alison McGovern (Wirral South) (Lab)
Apart from failing to address the inequality for the WASPI women, last week’s Budget failed the central test; it should have taken this on. Our economy faces the incredible challenge of Brexit and last week, the Chancellor should have come to the Dispatch Box, been honest with the country and said, “This isn’t working. Let’s stay in the single market. Let’s stay in the customs union. Let’s build up our economy from there, and then we will be able to afford truly to invest in our economy.” I will come back to that point, but first I want to turn to housing, which is what the Chancellor said his Budget was all about. He will say that his stamp duty cut is a headline winning move that shows his commitment to a homeowning democracy. Actually, the policy is a failure. It took my two excellent members of staff here, Tom Railton and Ella Crine, precisely 14 minutes from receiving the Budget Book at the Vote Office to send a message alerting me to the OBR’s judgment on the central policy in the Budget. The OBR states that
“the main gainers from the policy are people who already own property, not the FTBs”—
first-time buyers—
“themselves.”
I cannot imagine that it took the Treasury’s fine team of talented economists any longer to tell the Chancellor, than it took Tom and Ella to tell me, what the OBR would make of his policy. The question, therefore, must be: was he told? Did he ignore advice? What estimate was made of the impact of the policy before the Budget was completed?
This is no small measure. It will cost £125 million this year, £560 million next year and £600 million in every other year of the Budget period. That is money forgone that could have been used to secure the future of our health service or to get us one step closer to ending child poverty in our generation.
While I am on the subject of child poverty, this Budget does precisely nothing to address the growing number of kids in poverty in our country. The Tories on the Front Bench should realise that if they do nothing, they will see 400,000 extra children in poverty by the end of the Budget forecast period. If they think that this subject will go away, they can think again. It is not just people on this side of the House who will not forgive them; every single one of their constituents will be asking them about child poverty at the time of the next election. Either they do something about it or we will.
Finally, I come to Brexit. This may be my final point, but it is the most important of all. As a country, we now know that we have lost one decade of growth and that we face another. We are at a fork in the road and face the biggest choice in our generation. The referendum may have been won for Brexit, but we in this House have to decide what that means. We have to make a deal. We have to find a deal that suits us and our partners in Europe. The answer is not to kowtow to those who would dog whistle on immigration. Our borders must be secure, yes, but that does not mean that freedom of movement has no place. We have to accept the world as it is, not as we would wish it to be. We need to make a deal, stay in the single market and protect our country’s future.
Mike Wood (Dudley South) (Con)
Dudley South has one of the biggest shopping centres in the country, a new enterprise zone and one of the largest secure industrial parks in Europe, but it has no railway station and on a good day it is probably half an hour from the nearest motorway junction. Infrastructure is absolutely vital, therefore, if the potential of local people and businesses is to be realised, which is why, before I was elected, one of my first campaigns was for a new tram extension to join my constituency with the midland metro network and the main line rail network.
The extension has been on and off the agenda since the days of the old West Midlands County Council in the early 1980s. Understandably, when I knocked on doors, the most common response I got was, “Yes, we’ve been told this for 30 years. It’s never going to happen.” Along with West Midlands Mayor Andy Street, we have continued to make the argument, however, which is why we were absolutely delighted when the Chancellor and the Prime Minister announced at the start of last week £250 million for transport infrastructure in the west midlands, of which £200 million will be used to fund the tram extension out to my constituency, with a tramline to Brierley Hill.
Amanda Milling (Cannock Chase) (Con)
Does my hon. Friend agree that the Budget has been great for the west midlands? As he says, it is about transport infrastructure, which is so important for investment and business growth in our area.
Mike Wood
My hon. Friend hits the nail on the head. This has been a great Budget for the west midlands, but not only for the west midlands; it also builds on the Government’s commitment to rebalance the economy and deliver for every part of the country and every sector of the economy.
The £200 million being invested in the tramline to my constituency will have the transformative effect we need in the Black country in supporting our local economy. Independent analysis by Lichfields found that it would have a multiplier effect, increasing the benefits from other economic initiatives in the region. For example, it will increase the annual delivery of new homes by nearly 1,500—an increase of 250% against the baseline if the tramline were not going ahead; increase the number of direct and indirect permanent jobs by nearly 8,500; and almost double economic output from the 2 km corridor around the tramline from £14.4 billion to £28.6 billion, vastly increasing both council tax and business rates receipts by nearly £400 million.
This is only a snapshot of the economic activity that the metro will bring to my constituency and neighbouring constituencies. It will enable the Black country to capture more effectively the numerous growth opportunities presented by both HS2 and the DY5 enterprise zone in my constituency. It will increase the ability of businesses to attract investment, while the enhanced transport between the towns and cities of the west midlands will bring greater access to work and reduced journey times and offer better access to a wider labour market, to the benefit of both businesses and employees. With better transport comes better access to local shops and services, including a wide range of social and community networks. That is why the Budget delivers for my constituency and why I wholeheartedly support it this evening.
Marsha De Cordova (Battersea) (Lab)
Although expectations had been managed, many of us thought that the Chancellor’s Budget would mark a change in direction, given the overwhelming evidence that seven years of austerity have damaged our economy, lost a decade of growth and caused unnecessary harm and hardship to so many people. Instead, the Government have decided to tinker here and there, producing a Budget that lacks the vision and investment that are necessary to breathe new life into our economy. Productivity and growth have been downgraded, which means that people whose wages have stagnated for a decade are now set to lose out and to be £900 a year worse off. We have some of the lowest wages in Europe, along with higher levels of debt. We have a Government who use the deficit, rather than productivity, growth and living standards, as a marker for economic success.
It is remarkable that on so many of the key issues that my constituents raise with me, the Chancellor misses the mark, or simply does not even give them a mention. For instance, he had a real opportunity to tackle the seriousness of the housing crisis, yet the Government’s flagship policy is designed to increase demand. As the OBR says, the main gainers from the ending of stamp duty will be people who already own properties, not first-time buyers. The policy will also increase house prices. All that shows is just how ideologically driven the Government are.
Another glaring omission is social care, which is one of the biggest economic and social challenges that we face in the UK. The OBR has made it clear that local authorities are on their last legs, and that those with social care responsibilities have dwindling reserves. This “head in the sand” position has implications for the Government’s broader fiscal objectives. It is time for them to address the social care crisis and to build a social care system that is fit for disabled and older people—a system that is fit for purpose.
The Government also need to address the public sector pay cap. On Tuesday 10 October, I asked the Secretary of State for Health when he would scrap the pay cap. His response was
“the pay cap has been scrapped.”—[Official Report, 10 October 2017; Vol. 629, c. 154.]
I ask again: when will the Government take action and lift the public sector pay cap?
I could not complete my speech without touching on universal credit. While the package that was announced last week is welcome, it by no means goes far enough. The removal of the seven-day wait can be deemed nothing more than a gesture. On its current form, universal credit will push thousands of disabled people further into poverty and hardship owing to the Government’s decision to abolish the severe and enhanced disability premiums. There was no mention of disabled people in the Budget. There were no proposals to reduce the disability employment gap, or to increase the employability of disabled people. The country deserves better.
Robert Neill (Bromley and Chislehurst) (Con)
Nearly 36% of my constituents work in the financial and professional services sector, and most of them commute to London. This was a good and sensible Budget for them, because it was a good and sensible Budget for economic confidence in the City and financial services, in which Britain is a world leader. It is critical that we maintain that position, and that we do so during the process of leaving the European Union. Investing in and supporting financial services, like investing in and supporting London, is actually an investment for the whole country.
It is worth bearing in mind data released in a report published by the City of London corporation, according to which the total tax contribution from the financial services sector reached £72.1 billion in the year to 31 March 2017, which amounts to 11% of all Government tax revenues. The bulk comes from employment taxes and corporation tax, and also a bank levy—the banks are now paying a significant sum to support our public services. Maintaining London’s position in that regard will be critical as we leave the European Union. For banks, some 35% of the total tax take comes from employment taxes, but the proportion depends on where they are based. If we shed jobs as we leave the EU, the tax base will be diminished.
I do not believe that that is necessary. I believe that the Chancellor and the Prime Minister want a good deal that will protect our financial services sector, and I support them very much in that. What would damage the financial services sector would be a poor deal—I do not believe that that outcome is necessary or desirable, and I am sure that we can avoid it—and an anti-business, left-wing Labour Government who would scare away those jobs and that tax revenue and undermine that great driver of income for our public services. It is self-defeating for those who believe in public services to damage our tax revenue. It is worth bearing in mind that the amount of tax paid by that sector in one year comes to half the value of the NHS. I suggest to Labour Members that they should not put that at risk.
It is also worth bearing in mind that, because of our access to the European markets, the sector processes transactions worth £880 billion every day. That is 100 times our net annual contributions to the EU—
Bob Stewart (Beckenham) (Con)
The financial sector is crucial to our constituencies, and I very much applaud what my hon. Friend says.
Robert Neill
I am grateful to my hon. Friend.
That sum is also 15 times the highest amount that has been spoken of as a potential financial settlement. It therefore makes sense in terms of Brexit to support the financial sector and get a good deal, and it also makes sense in terms of the Budget to make sure that we have a favourable tax and regulatory regime in the UK that is attractive to financial services.
Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)
The King’s Fund, the Nuffield Trust and the Health Foundation estimate that the annual funding gap for social care will now reach £2.5 billion by 2019-20. That will have a crippling effect on the provision of social care, a sector that is already under severe strain and in desperate need of relief, but the Budget offered it nothing whatever.
The condemnation from social care professionals has been as universal as it has been damning. Margaret Wilcox, the president of the Association of Directors of Adult Social Services, said she was “extremely disappointed” by the lack of extra funding and:
“Adult social care needs to be tackled as urgently and at least as equally as the needs of the NHS, in a way which recognises the inter-dependency of these services and encourages a collaborative approach.”
After the Government’s calamitous manifesto U-turn on the dementia tax, the country needed strong leadership and an appreciation of the seriousness of the situation facing social care. That same manifesto described the social care system as not working and promised to fix it, but there was no mention of social care in the Budget, let alone any new funds to address the chronic shortfall—another Tory manifesto commitment broken.
Nearly 1.2 million older people are estimated to have unmet care needs. The figure is up 48% since 2010 and up 18% from last year alone. The Budget offers no solutions to address the forecasted 150,000 additional deaths associated with constraints on health and social care. This is an issue of not just numbers but the Government’s failure to get a grip on the social care crisis.
Having worked in the sector, I have seen at first hand the amazing and vital work dedicated staff carry out on a daily basis. Now those staff who are employed by local authorities will have to carry on with their jobs knowing that their hard work, the squeeze on their living standards and years of wage stagnation still do not qualify them for a pay rise. When will the Government accept that these people are already going above and beyond, and deserve to have their service recognised?
Labour committed in our manifesto that, as we moved towards a new national care service, we would invest £8 billion over the course of the Parliament to stabilise the care sector. It is Labour that recognises that the sector is in crisis; it is Labour that appreciates the hard work of those who work in social care and would treat them with the respect they deserve; and it is Labour that would commit to taking active measures to solve this crisis, not merely offering false platitudes. The Budget, like the Government, is failing those in the social care sector.
Bim Afolami (Hitchin and Harpenden) (Con)
I have been listening to the debate for some time, and it is worth reminding the House of the Treasury document published as a result of a report done by a senior civil servant, Sir Michael Barber, on the public value framework. It indicated that the way in which we get value in our public services is not simply the input of money, but what is delivered. As we talk about all these millions and billions of pounds that we will spend on this, that and the other, I urge the House to consider that output and delivery are more important that what we put in.
Owing to time constraints, I will not say all the wonderful things that I could say about the Budget. The hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) talked about certain areas of the public sector, and Conservative Members always need to remember the public sector as well as the private sector. In particular, however, I want to talk about my constituents in Hitchin and Harpenden, who are very dear to me. In their professional lives, they are overwhelmingly focused on financial services and small businesses, and there was one particular measure in the Budget that will really help them: the expansion of the enterprise investment scheme. I have done my homework on this, so I know that the EIS is critical and that the Government have doubled the annual allowance for investment in early-stage businesses and innovative growth capital.
Mrs Badenoch
I wanted to mention the enterprise investment scheme earlier, but I did not have time. Saffron Walden is right next to the Oxford-Cambridge corridor and houses many knowledge-intensive industries. Does my hon. Friend agree that increasing the allowance for the EIS will provide a boost to the small and medium-sized companies that are the backbone of this country—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The hon. Lady had a good go when she spoke earlier, and a lot of Members have been waiting a long time to speak. Interventions must be very short. I also ask Members to be restrained in giving way; otherwise, it is not fair to all those who are waiting.
Bim Afolami
Thank you, Mr Deputy Speaker. I thank my hon. Friend for her intervention. I would add to her point by saying that the EIS funnels private capital that might otherwise be sitting in housing assets or on a bank balance sheet into our most early-stage, innovative and risky creative businesses. That is the magic of the EIS. Such tax reliefs and allowances are beneficial to the country because they effectively mitigate the risk for private investors in risky, early-stage businesses. We need to recognise that fact and welcome the doubling of this investment allowance, alongside the addition of a new test to ensure that the money is going not into lazy, low-risk ventures, but into high-risk, creative businesses.
A point I often make about tax schemes such as the EIS and entrepreneurs relief, which this Government introduced to ensure that we remain one of the best places in the world to develop early-stage businesses, is that they ensure that we do not have to ask our banks to make risky investments. One of the reasons why we found ourselves in the financial crisis was that the banks were making very risky investments, as we discovered from their balance sheets. The EIS allows private capital to be used in productive ways. Many of my hon. Friends have already described the Budget as balanced and reasonable, and I hope that it is also the beginning of a long-term process of a radical entrepreneurial vision for the British economy.
Fiona Onasanya (Peterborough) (Lab)
I want to pay tribute to my hon. Friend the Member for Bury North (James Frith), who talked about this being an ABC Budget. I also want to mention my hon. Friend the Member for Birmingham, Edgbaston (Preet Kaur Gill), because my constituency has also seen a huge increase in demand for services. In particular, there has been a rise in the number of people who find themselves homeless and in the number of adults and elderly people who require care.
Apart from a small announcement on mathematics, there was no extra money in the Budget for the education system. This is not as simple as saying, “2 plus 2 is 4, minus 3 that’s 1—quick maths.” These announcements mean real-terms cuts and the potential continuation of the recruitment and retention crisis in our education system.
The right hon. and learned Member for Rushcliffe (Mr Clarke), who is unfortunately not in his place, said that he could not understand why the Opposition were saying that the Budget does not do all that it needs to do, but it fails to recognise the scale of the emergency in our public services. There is no point in burying our heads in the sand saying, “Things are absolutely fine,” because we know that they are absolutely not. While both sides of the House have acknowledged that universal credit needs amending, there was a real opportunity to pause and fix it, but it was not taken.
Austerity is hurting and not working, but instead of pausing and reflecting on that, we are continuing with business as usual. We are acting as though everything that is happening is par for the course and absolutely fine. People say, “Why do Opposition Members seem to think there is a problem?” There is a problem because our constituents come to us with their problems. There is a problem because we seem to be avoiding paying attention to their real needs. Instead of taking the opportunity provided by the Budget to assist them, we have decided just to carry on with things as they are. It is fantastic that we will have driverless cars, but we will have all the gear and no idea when people in our constituencies are suffering.
Lucy Frazer (South East Cambridgeshire) (Con)
I have been disappointed by Opposition Members, who have failed to recognise a number of facts. They have criticised the gender pay gap when it has actually narrowed. They have criticised school funding without recognising that the fairer funding deal puts an extra £1.3 billion into our schools. They have suggested more spending without being able to respond to an intervention asking what the interest payment bill would be on increased borrowing of a trillion pounds. The Opposition look only at spending; they do not see the optimistic opportunities presented by our future.
Our great country has been a leader on the world stage for decades. We have been the choice of location for foreign investment. We are a global economic power at the same time as being in the top 20 happiest places to live in the world. We are now at a crossroads, forging new relationships with the EU and the rest of the world while, as the Secretary of State for Business, Energy and Industrial Strategy pointed out, an industrial revolution sweeps across our globe, and we start from a good place. Out of 137 countries, we are ranked second for the quality of scientific research institutions, third for the capacity to attract talent, fourth for technological readiness and 12th for overall innovation. The measures set out in the Budget will ensure that we continue to be at the cutting edge of technology, innovation and business growth, with £31 billion for the national productivity investment fund, £2.3 billion for investing in R and D and £500 million for a range of initiatives from artificial intelligence to 5G and full-fibre broadband.
However, as we progress through the technological revolution, we must remember that it is equally as important to recognise and value the skills of those who serve us in our communities: those who teach us, nurse us and protect us. The Secretary of State rightly pointed out that we have an ageing population that we need to care for, and the answer is not just technological; we need more people in the caring professions. I therefore welcome the Chancellor’s announcement that he will put more money into the NHS and his offer to fund increased pay awards. We also need to ensure that we improve our skills base, and the Budget includes £40 million to train maths teachers across the country, tripling the number of trained computer science teachers. I welcome the Budget and the industrial strategy, but we must also remember to embrace the new world.
Yvonne Fovargue (Makerfield) (Lab)
This Budget leaves many with little to celebrate. There is nothing for the WASPI women, who kept their contract with the Government, and nothing for my sixth-form colleges, which work so hard to improve the life chances of children in my constituency. The right hon. and learned Member for Rushcliffe (Mr Clarke) said that a Budget’s purpose is to improve people’s future lives, but the Chancellor chose to freeze working-age benefits until 2020, most affecting those struggling with basic living costs now and doing nothing to provide a family with a Christmas dinner, the cost of which has risen 20% this year. The freeze, and the rise in food inflation, means that huge chunks of the population are unable to afford the weekly food shop or to pay the rent. People are making hard choices, like the mum I saw who regularly goes without her lunch three times a week to feed her family. Those are the people going to payday lenders; those are the people going to BrightHouse; those are the people who cannot afford to save every month—it is about time there were saving schemes designed around people’s lives, rather than expecting people’s lives to be designed around Government saving schemes—and those are the people who are likely to fall into debt.
Some 2.9 million individuals and households are currently struggling with severe problem debt. How many more will there be after this Budget? Demand for debt advice is at record levels. People helped by the debt charities are increasingly struggling to meet the bills. Addressing personal debt has to become a priority for this Government.
The basic cause of debt is lack of money. There has been a freeze on working-age benefits and a 1% cap on public sector pay rises while inflation, particularly food inflation, has risen. Low-income households spend more money on food and basic necessities than those on higher incomes. Household debt is already rising, and it is set to rise further. With more debt, more mental health issues, more strain on GPs, more strain on local services, less disposable income and less spending power—less spending power is bad for businesses as well as for individuals—this is a Budget that does not deliver for individuals or for businesses.
Antoinette Sandbach (Eddisbury) (Con)
It is a pleasure to follow the hon. Member for Makerfield (Yvonne Fovargue), who amply illustrates why we need a responsible and balanced Budget. When she describes her constituents’ debt, she needs to consider the situation in the country. We are spending £42 billion a year on interest payments. If Labour borrowed its £250 billion, those interest payments would be dramatically higher and would ultimately lead to a reduction in public services.
I welcome this balanced and responsible Budget that invests for the future. My constituency of Eddisbury has the Winsford industrial estate, which is the UK’s first green business park and first industrial business improvement district. Some 4,000 people work there in industries from food manufacturing to chemical supplies, packaging and engineering. I welcome the measures in the Budget, particularly those on R and D investment and on investment in artificial intelligence.
Technology is fundamentally changing the way that businesses operate, and it is changing the future landscape of the business world. By investing in this way, we can equip our companies to steal a march on international competitors and to ensure that British and Cheshire-based businesses are at the forefront of new global markets. PwC estimates that global GDP could be up to 14% higher in 2030 as a result of artificial intelligence, and it is therefore welcome to see artificial intelligence being backed in the Budget.
I welcome the Budget’s skills provision, particularly in STEM. Winsford—population, 30,000—currently has no sixth-form provision in the town. That will change in September 2018, with Mid Cheshire College planning to open a new STEM centre there. The measures on maths teaching will benefit my constituents. The fuel duty measures will help those in rural areas who have to drive long distances because they cannot access fuel locally.
This is a responsible and appropriate Budget for straitened circumstances. When Labour talks about austerity, let us remember it is really talking about spending within our means. This Budget is a good Budget, both for investing for our future and for spending within our means.
Jack Dromey (Birmingham, Erdington) (Lab)
The latest lame defence from this Government, as we stand up for the people of Britain, is that somehow we are talking Britain down—that is nonsense. This failing Government are letting the people of Britain down, driving it down the international league table. We have the worst record in the G7 on wages, productivity, skills and growth, and we are bottom bar one—Lithuania—in the EU on worker participation, and all this from a Prime Minister who promised workers on the board. Today’s Social Mobility Commission report has shown that the heart of England, the midlands, is the worst region for social mobility for those from poor backgrounds. The historical comparisons are staggering. This is the worst decade for productivity growth since Napoleon was retreating from Moscow, then to be defeated at the battle of Waterloo in 1815. The last time wages were stagnant for so long a royal prince was about to get married—Prince Arthur, Victoria’s son—Disraeli and Gladstone were in Downing Street, and trade unions were illegal. That was 150 years ago.
Over the past seven days, I have seen the consequences of this Budget. I have seen the consequences for schools and headteachers, with one in tears at the fact that there was not one penny more and at now being faced with having to lay off teachers and teaching assistants. I have seen the police despairing at 2,000 police officers having gone and at rapidly rising crime, with violent crime up 6%, gun crime up 15% and knife crime up 17%. At a packed meeting last Friday, local people were pouring out their hearts, with a woman who had been 60 years in Slade Road saying that she no longer goes out at night because she is afraid so to do. I have heard the concern expressed by carers on Carers Rights Day, when 200 of them gathered together. There are none so noble as those who care, but they are finding it increasingly difficult because of the lack of support for them directly and because of the crisis in social care. All that is allied to the disastrous mishandling of Brexit, the impact of which is increasingly being felt where I was on Friday, at the Jaguar factory in my constituency. This jewel in the crown of manufacturing excellence has transformed the lives of thousands, but it now faces an uncertain future.
The Chancellor cracked all sorts of jokes in his Budget—he has a new found sense of humour. As our Amy used to say, “Dad, you should be on the stage. There’s one leaving in half an hour.” There was a new found sense of humour, but the reality is that this was a bad joke Budget, because in terms of facing up to the challenges facing the people of Britain, it let the people of Britain down. It was the same old Tories; in the words of the Prime Minister herself, “Nothing has changed.”
Richard Drax (South Dorset) (Con)
It is a pleasure to take part in this debate and to listen to the hon. Member for Birmingham, Erdington (Jack Dromey). I do not agree with 99.9% of what he said but there was an element there with which I may have agreed. Steady as she goes is what the Government and the Budget have portrayed to the country, and in the circumstances that is eminently sensible. Sadly, we simply do not have the money, for the reasons many Conservative Members have explained, to splash out, as the Leader of the Opposition claims that he does.
Nobody has said that leaving the EU is going to be easy, but the people of this country voted to do so and that is what we must do. I have been longing to hear some cohesion in the House, with the majority of MPs, who voted to initiate article 50, getting behind the Prime Minister and our country to do all we can to get the best deal we can. Divided, we are not going to get the best deal because they see a divided country. The future for us when we leave the EU, particularly in business and other opportunities, is enormous.
I shall tell the House a little story. Lord Digby Jones came down to my constituency to attend the apprenticeship fair, which is now in its fifth year. I set it up with the help of the local college, for which I give many thanks. He gave a speech. For those who do not know, let me say that he was a trade ambassador—I think he still is, actually—and he had been to India to meet up-and- coming businesses over there, as that country is going to be a huge powerhouse in the years ahead. He sat in the back of a taxi and he noticed the taxi driver’s eyes staring at him in the mirror. The taxi driver asked who he was and he said, “I’m Lord Jones. I’m a trade ambassador. Who are you?” The taxi driver gave his name and said that he had two sons, and Lord Jones said, “And what are your two sons doing?” He said, “They are at university. And I’m spending every waking minute in my car earning every penny I can to support them in their futures.” Lord Jones, with the eyes still fixed on him—of course, the car was still going straight down the road, we hope—said, “Where do you see your children in the years to come?” Without pausing, the taxi driver said, “Where you’re sitting.” The point of my story is that there are tens of thousands of young people in the rising Asian economies who are so hungry, lean and mean—in the business sense—and they want a share of what we have had and of what we need to engender in this country. We have to get hungry, mean and lean again. Government Ministers can help enormously with that by following Conservative philosophy.
Anna McMorrin (Cardiff North) (Lab)
This was not a serious Budget—and I am not referring to the bad jokes that littered the Chancellor’s speech and which were as weak as the Tory Government of the man who delivered them. Last Wednesday, my Opposition colleagues and I waited desperately for an hour to hear something that would help the people we represent to live a decent life. Instead, we got a Budget that includes more spending on an ultra-hard Brexit to appease the Conservative party, which will harm the country, than there was spending on the NHS. The improvements to universal credit were welcome, but they are too little, too late. The relief from the reduction in the six-week wait is only minimal when compared with the thousands of pounds that many of the families dependent on benefits are set to lose.
The Government’s worst legacy by far must be the public sector pay cap. Cardiff North has 19,000 public sector workers—the highest proportion in Wales—and they really hoped that the Budget would end the disgraceful pay freeze that has seen nurses using food banks and care workers struggling to make ends meet. One thing we have learned to appreciate since the spring Budget is how desperately dependent we are on public services. The Chancellor’s Budget leaves public sector workers worse off than they were seven years ago. Austerity is not a policy choice: it is political.
Yesterday, the Secretary of State for Business, Energy and Industrial Strategy launched his industrial strategy to address weaknesses in the economy. The UK’s economy has been systematically underperforming on almost every key measure. Our productivity is down and we have the most geographically unbalanced economy in Europe. Part of the boost to productivity should be investment in renewables, which are set to be the backbone of our modern energy system. The plummeting cost of wind power means that onshore and offshore wind can help to improve the UK’s competitiveness and productivity. It is therefore hugely disappointing that the strategy does not set out how we can continue to support onshore wind, which is the cheapest of the new generation of energy production. We have yet to see an announcement on the Swansea tidal lagoon. That was a missed opportunity to invest in infrastructure for the future. With a cap on funding for renewables until 2025, the Government have shown they have a long way to go before they can deliver on clean growth.
Finally, I am frustrated about and fearful of the prospect of the financial impact of a shambolic Tory Brexit on the British and Welsh economy. The Budget includes £1 billion of additional capital funding for Wales, but more than half that must be repaid. The Budget is a missed opportunity. We needed to see one that truly transformed the economy, not more of the same.
Mims Davies (Eastleigh) (Con)
It is a pleasure to follow the hon. Member for Cardiff North (Anna McMorrin) and to speak briefly about the Budget and its focus on the future successful economy that we need. The Budget is one of fair taxes, improving productivity, tackling our housing issues, supporting public services and making sure that we build the homes the country needs.
It is this Government who are tackling the gender pay gap. They are bringing forward T-levels and maths training, and Barton Peveril College and Eastleigh College in my constituency will be helping with that. They are increasing the personal tax allowance to nearly £12,000. They are freezing fuel duty and duty on beer, wine and spirits. They are embracing technology and establishing a new national creative industries policy, while also focusing on improving our environment. What is not to like about that?
Let us move on to house prices. One of the concerns most regularly voiced by my constituents is not only that they cannot afford a house, but that their children and even their grandchildren cannot afford a house or imagine a future that their parents had. Work done by this Government has saved nearly £2,000 on stamp duty for first-time buyers in my constituency. That will help to get people on to the housing ladder, which, a couple of years ago, would have been deemed simply unachievable, so my message to the Chancellor is: thank you.
My other message to the Chancellor is: please can we have the Botley bypass and the Chickenhall link road? As long as we work with the Department for Business, Energy and Industrial Strategy and the new industrial strategy, those projects, dear Ministers, will not only help our productivity, but tackle local air pollution and the low productivity issue in the Solent. Those are real benefits for real people of all ages.
I must also thank the Chancellor for not raising air passenger duty, as that really matters to our regional airports. It is a testament to this Government that hard-working people are being supported to get on in life. My local paper highlights the fact that nearly 600 new jobs have been created in Hedge End and Chandlers Ford. This is a good Budget, which should be applauded and supported in this House. I look forward to walking through the Lobby in support of it and making sure that we deliver the technology, the productivity and the opportunities for Britain.
Kerry McCarthy (Bristol East) (Lab)
On a positive note, I welcome the proposed tax on single use plastic packaging. We know the huge environmental damage that is being done and, at the moment, there is little pressure on producers to reduce resource use and to make their packaging recyclable. It is left to local councils to clear up the mess and to local taxpayers to foot the bill.
I am afraid that that is about the only thing in the Budget that I feel inclined to welcome. Figures show that the public sector pay cap has reduced the disposable income of workers in my constituency by more than £45 million since 2010. Last week, I met representatives from the Royal College of Nursing to hear how low pay is causing a recruitment crisis: applications to study nursing have fallen by almost a quarter this year, at a time of acute staff shortages in the NHS. For nurses, who have seen a real-terms drop in their earnings of 14% since 2010, this Budget offered nothing.
What I am hearing from those charged with delivering essential public services in Bristol is that we simply cannot go on like this any longer. Bristol City Council is having to find more so-called savings worth £100 million over the next five years. Non-statutory services are being cut to the bone. What was particularly shameful was the complete failure by the Chancellor to mention social care, which accounts for close to a quarter of the council’s budget.
Avon and Somerset’s police and crime commissioner and chief constable were in Parliament last week. They did all they could when faced with Government demands for savings worth £66 million: modernising the way they conduct policing and streamlining their operations. They have been widely commended for the way in which they went about making those savings. Despite the loss of more than 600 officers since 2010, because of the cuts, neighbourhood policing was protected. The police and crime commissioner and chief constable said that the reward for all their work was to be told by the Government that they needed to come up with another £17 million of savings. They were here to tell Ministers that it simply cannot be done. They will not be able to provide the police service that the public expect and deserve if these cuts go ahead, but the Government are not listening to them, and there was not one mention of policing in England and Wales in the Chancellor’s speech.
Another example is St Brendan’s, a sixth-form college in my constituency, which was commended for its financial management by Ofsted in February. The principal is now telling me that he cannot go on like this. Sixth-form funding has been frozen at £4,000 per pupil since 2015—a real-term cut of more than £200. He is determined not to cut the curriculum, as many school sixth forms have been forced to do. This Government pay lip service to social mobility, but in truth they are squeezing young people’s life chances and denying them educational opportunities and the extra-curricular support they need.
The economic picture revealed by the Chancellor in his Budget shows us that austerity is not working. A braver Chancellor would have acknowledged that, put up his hand and admitted that he had got it wrong and chosen to invest in our councils, in our schools, in our colleges and in our nurses and police. The Budget was a failure.
Kevin Hollinrake (Thirsk and Malton) (Con)
I will focus my remarks on chapter 4 of the Budget, which is on productivity, because as it says in the Red Book, that is how we boost wages, improve living standards and improve overall prosperity across the nation. Incredibly, if we could close the productivity gap with Germany, we would increase our GDP by 33%. Competition is the key to improving productivity, and the Red Book states that boosting productivity makes businesses “more efficient”. I began my own experience in business at a time when most of my competitors were closing down. It was a few years later, when new competition came into the market, that we really raised our game and became more competitive, efficient and effective. The key to more competition is ensuring that we have a level playing field.
The first thing we need to deal with is access to finance, and the Budget deals with a number of different issues for people who cannot borrow from the high street lenders. Increasing productivity is about unlocking £20 billion of patient capital; doubling the enterprise investment scheme allowance, which certainly provides more capital for those early-stage and higher-risk businesses; and providing more support for challenger banks. Those measures tackle the issues of people who cannot borrow, but the reality is that many people in business will not borrow because they do not trust the high street banks.
We have seen some issues over the past few years, with scandals at the Royal Bank of Scotland Global Restructuring Group and other banks meaning that assets were often taken away from small businesses totally inappropriately, and those businesses have no recourse. We need an independent financial services tribunal, along the lines of employment tribunals. It is not just about the money; it is about the human cost of a life’s work being taken away. A tribunal would provide an independent means of redress for such businesses.
The Chancellor also mentioned the VAT threshold in his speech. He has not tackled that yet, but we do need to tackle it. Anecdotal evidence suggests that this is a barrier to productivity and expansion, and that has been supported by a report from the Office for Tax Simplification, which says that there is a bunching effect around the VAT threshold.
Finally, rebalancing the economy means more investment across the nation. There is too much focus on London. It is not just the Treasury doing this—in fact, it is not the Treasury. It is about access to private sector capital, and we need to find ways for the north also to access that private sector investment.
Sir Edward Davey (Kingston and Surbiton) (LD)
This Budget had one redeeming feature: it was honest. It was honest about the weak growth prospects and how weak our economy is. I hope that the whole House will reflect on these dismal forecasts, because they have dramatic implications for our economy, people’s livelihoods, public finances and services, and the way in which we debate the issue of the day—namely, Brexit.
Look at what the Office for Budget Responsibility’s growth figures really mean for ordinary people and their incomes. Compared to the Budget just a year ago, it means that people will be earning £687 less by 2021. Wages in 2021 will still be lower—still buying less—than they did in 2008. The IFS talks about the danger of losing two decades of earnings growth in the longest squeeze on living standards in more than 60 years. This is dramatic stuff. Guess who is going to have the worst of it? The poorest households—the Resolution Foundation says that the poorest 20% will be hit the hardest. That is just unacceptable.
Let us look at the implications for our public services. The details of the Budget show that public service spending will be 3.6% lower in 2022-23 than today. If we exclude the NHS, it will be more than 6% lower. What does that mean? It means that our schools, police services, councils and care services will face cuts not just this year, but next year and into the future. This is not about jam tomorrow. It is about maybe jam in six or seven years’ time.
That is something I am incredibly worried about in my constituency. Already our schools are under huge pressure. We are dealing with an £11 million deficit in our special needs budget alone, and when we see that this Budget had nothing for our schools, tackling that will be really difficult. In my constituency, and across London, we are also seeing crime up and police officer numbers down. The Budget will do nothing to tackle the criminals and to fight back against the big increase in crime.
What does the Budget mean for Brexit politics? It means that the Conservative Brexit is failing our economy and failing our country. People who voted leave thought they were voting for better wages because there would be less competition from immigrants. Their wages are going to be lower. They thought they were voting for more money for our public services, such as the NHS. They are going to get less. They thought they were voting for an economy that will be better than before. They were not—it will be worse.
I say to the right hon. and hon. Gentlemen on the Treasury Bench that it is time they thought again about Brexit. The OBR has told people the truth.
Vicky Ford (Chelmsford) (Con)
This is my first time taking part in a Budget debate, and I would like to say some thank yous.
Thank you to my Conservative colleagues for the work they have already done on controlling the deficit, restoring the public finances and rebuilding a strong economy, so that we can afford the many measures we take today.
Thank you on behalf of young people. I remember that, under Labour, nearly 1 million young people were not in employment, not in education and not in training. Today, youth unemployment is at all-time lows.
Thank you for investing in skills and especially in maths. When I went to university, I was a very rare breed: a girl who did maths. Today, that breed is still too small. So, girls, listen: if you do maths and a science at A-level, you will earn 30% more than your peers. The £600 per pupil taking A-level maths that will go to each school can be transformational for this country.
Thank you for removing stamp duty for first-time buyers. It is hard to get on the property ladder in my constituency, and that will make a difference.
Thank you for listening on universal credit. We must help those most in need. Thank you especially for making it easier for the housing element of the benefit to go straight to the landlord. That is an idea I pitched to the Chancellor, and he had no tin ear.
Thank you for funding the NHS, and especially for underwriting the pay increases for our nurses and for investing in the capital budgets. I am glad that south and mid-Essex will be among the first to benefit.
But most of all, thank you for the support for innovation. I am proud to live in a country where there are 40 start- up businesses every hour—that is three a day in my constituency. I am proud that there are 28 great British start-ups that are now billion-dollar businesses. I am proud that this Government are investing more money in science and research than any other Government for the past 40 years, because scientists are the people who find real solutions to real problems, and they will build us a better future.
Ms Nusrat Ghani (Wealden) (Con)
Will my hon. Friend give way? [Hon. Members: “ Oh.”] I will be very quick. Is my hon. Friend also thankful for the £21 million—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Two people cannot be stood at the same time.
Come on, Nusrat!
Vicky Ford
Absolutely, because we need to make sure that we invest in not only the ideas and the innovators but the skills, the people and the places.
Brexit is coming, and it does bring huge risks. Now, more than ever, is the time to back ideas, back the innovators, invest in our infrastructure and inspire our industry. I am very proud to be supporting this Budget.
Daniel Zeichner (Cambridge) (Lab)
It is a pleasure to follow my near neighbour, the hon. Member for Chelmsford (Vicky Ford), although I have to say that I do not find many people on the streets who echo her thanks to her colleagues quite so effusively.
Reading the comments of the OBR, it is hard to come to the conclusion that they are anything other than somewhat gloomy. I would suggest to Conservative Members that just one of the factors may have been the lack of an industrial strategy over the last seven years, so there is some welcome for the fact that we do now have an industrial strategy.
The city I represent has been mentioned many times, and I just want to make a couple of comments, particularly on life sciences. Cambridge has been tremendously successful. I am grateful to Savills for pointing out that, in terms of one measure—global bioscience venture capital funding per capita—Cambridge is streets ahead of all our international competitors and anywhere else in this country. But alongside the success stories that the Government trumpeted when they launched the strategy yesterday, I urge colleagues to look—I do not normally do this—at The Daily Telegraph; a couple of days ago it had a report that Johnson & Johnson, the major American healthcare giant, had pulled out of plans to build a new research and development facility in the UK, just outside Cambridge. It said those plans
“have been put on hold over concerns that the UK is both politically and economically weak while negotiations to leave the European Union are ongoing”,
so there is a mixed picture.
The missing element in all this is the people. The reason why these industries are successful in Cambridge is that people can come and go freely. In the context of Brexit, that will be a real challenge. In every lab I go to, I find people from other parts of the world, but they are leaving, and the next generation is not coming. The industrial strategy has to be seen in that context. What makes people come here? Good schools, but there is nothing in the Budget, as hon. Friends have pointed out, to improve schools, and most of all, there is nothing on housing.
Housing is complicated in Cambridge. The city council is doing a fantastic job; it is trying to build council housing, but it is dogged by Government policy changes. The council bravely bought itself out of the housing revenue account, only for the Government to change the strategy entirely a year later, completely undermining its policies. Yes, lifting the HRA cap would be good, but can we have any faith that that will continue over the next few months and years?
On the Oxford-Milton Keynes-Cambridge arc, it would be good to have more housing there, but look at the details in the Budget Book. There is talk about shifts from section 106 and the community infrastructure levy to a strategic infrastructure tariff. That is very complicated, detailed stuff, mirroring what happens in London. However, the governance arrangements on that arc are not one mayoralty; there is not one, unified structure there. This is complicated stuff, and it will not happen soon. The industrial strategy may be a very glossy, colourful document, but for most people, life is being lived in gritty black and white.
Tonia Antoniazzi (Gower) (Lab)
It is a great pleasure to follow my hon. Friend the Member for Cambridge (Daniel Zeichner).
The Budget is a prime example of the contempt that this Government continue to show towards the devolved nations. By holding the purse strings on infrastructure investment, the Government are sucking the hopes and dreams out of future Welsh generations. The announcement that electrification to Swansea was cancelled followed months of weasel words from the Tories. They professed that that was a crucial project and that it would happen, and it did not.
I now have the privilege of sitting on the Welsh Affairs Committee, which, only last week, listened to evidence from two experts. It was a revelation to hear evidence of fake news on electrification from those on the Government Benches. The Secretaries of State for Wales and for Transport have frequently told us that we would be welcoming bi-modal trains to Swansea. I do not share their enthusiasm for bi-modal trains in Swansea; I would prefer electric trains. If the Government’s target is to lower carbon emissions, here is an interesting fact for them: these wonderful bi-modal trains use the same dirty old diesel engines that are found in diesel high-speed trains. People welcome bi-modal trains because they are, allegedly, lighter and therefore more efficient than the current diesel high-speed trains. That claim too can be blown out of the water: whereas a nine-carriage diesel high-speed train weighs 408 tonnes, a bi-modal train weighs 432 tonnes, as it has 9 tonnes of diesel fuel under every coach—an interesting fact.
If only the Government would further devolve transport and give that power to Wales, so that we were in the same position as Scotland, we could successfully move ahead with electrification and increase the productivity of the Welsh economy. The whole of Wales has been let down by the refusal to electrify from Cardiff, let down by the refusal to sign off on the Swansea bay tidal lagoon and let down by the refusal further to devolve rail transport to Wales. Those constant refusals highlight that the Government are not interested in Wales, its future or, more importantly, the economy that is to provide the opportunities for young people in Wales to prosper.
Gerard Killen (Rutherglen and Hamilton West) (Lab/Co-op)
This is a “nothing has changed” Budget from an out-of-touch Government enabled by Conservative Members who have no idea of the reality of people’s lives. In the midst of it all has been a battle between the SNP and the Scottish Conservatives to claim credit for the Chancellor’s climbdown on the VAT charges imposed on Scotland’s emergency services. As ever, the reality has been lost in the performance that has played out between them. I thought for a moment earlier that the hon. Member for Dundee East (Stewart Hosie) might break into song in his praise of the Scottish Government, but of course he failed to mention that growth in Scotland is even lower than it is in the UK.
The whole VAT situation could have been avoided if the SNP had listened to Unison’s advice at the time, although that is not to let the UK Government off the hook on the matter. It was wrong to impose charges on Scotland’s emergency services, and the Chancellor has admitted that with the Budget. It says very little for the persuasive powers of the Secretary of State for Scotland that the election of 12 new Scottish Tory MPs was seemingly required to convince the Chancellor to introduce the exemption.
Perhaps the new intake will bend the Chancellor’s ear once more and use their new-found influence to get back the £140 million that Scotland’s police and fire services have already paid in VAT. Surely, if it is wrong to pay it in 2018, it has been wrong to pay it all along. If that money is refunded to the Scottish Government, I hope that it will be ring-fenced. I know that my constituents do not want to have to repeat the successful local campaigns that they had to launch to save police stations in Rutherglen, Cambuslang and Blantyre from the threat of closure. That additional funding for the emergency services is much needed.
The Budget also failed to address the misery that is being caused by the Government’s social security programme. The move from an initial six-week wait to a five-week wait for universal credit payment will be cold comfort to the people who contact my office in desperate need of help. Some of them tell my staff that they feel suicidal, because the Government are driving them into debt and they have nowhere else to turn. What must it be like for them to spend Christmas worrying about whether they will have a roof over their head or food to put on the table? Here is an opportunity for the Government to get two things right amid this woeful Budget: backdate the VAT refund for the Scottish emergency services and pause the roll-out, to fix universal credit.
Liz Twist (Blaydon) (Lab)
I declare an interest as an elected member of Gateshead Council.
I want to speak about what is not in this Budget, because those things are important to my constituents in Blaydon, many of whom are struggling to cope with daily life and supporting their families. First, I want to mention the absence of any reference to social care. We all know that the demand for social care is growing, and we know from experience that it is essential that people have access to high-quality social care when they need it, but the Government continue to cut the local authority budgets that go towards providing that support.
In my council of Gateshead, we spend more than half our budget on the most vulnerable adults and children. Our funding has been cut by 52% since 2010, and the number of people who use and need our services is rising. I checked the Tory manifesto earlier and found this on long-term care:
“Where others have failed to lead, we will act.”
But there is no action on social care in this Budget.
There is nothing in this Budget for education, other than for maths teaching. Maths teaching is, of course, hugely important, but many of our schools are struggling to balance their budget so that they can provide the best education possible for our young people, and despite changes to the schools funding formula over the summer, 91% of schools still face a real-terms reduction in their budgets as per pupil funding has reduced. We may have a commitment to maths funding, but increasing pupil numbers and increasing demands versus decreasing funding means that the sums do not add up for schools.
On housing, we had a raft of measures that the Chancellor says will increase house building, but the announcements fall far short of a proper plan to help to fix the housing crisis. We need all councils to build again to create the houses we need.
I heard the Chancellor repeat this morning that the public sector pay cap has gone. But NHS workers, who were specially mentioned by the Chancellor, will receive an increase only on condition that they increase productivity by renegotiating their terms and conditions under “Agenda for Change”. This does not just affect the NHS; for staff right across the public sector, work has increased and pay has fallen in real terms. The Government need not only to lift the cap that they imposed, but to fund the NHS, local government, fire and rescue services, the police, education, the delivery of universal credit and many other areas, to give those staff the rise that they need, without further reducing services.
Margaret Greenwood (Wirral West) (Lab)
This Budget has failed to deliver for our vital public services and our families, and it has failed to step up to the very serious challenge posed by climate change.
Pupils and teachers in our schools are feeling the squeeze of Tory austerity, with increased class sizes, a crisis in teacher retention and a reduced curriculum offer. Education is the key to our future, yet the Budget had nothing for school budgets. The Government announced extra funding for maths teaching, which is fine, but we will not be able to draw on all the talents of our young people unless we address the neglect of arts education under this Government. Arts subjects are important for the development of the individual, as well as for our cultural offer of film, television, theatre, music, art and dance, which are all significant for the economy. Labour would abolish university tuition fees, but there was no money in this Budget to do that. Individuals are leaving university with an average of £57,000 of debt, but there is no sense in leaving people to carry such a burden.
Our communities are feeling the impact of seven years of Tory austerity, with huge cuts to our police services. Merseyside police has lost 1,000 officers since 2010. My constituents are concerned about antisocial behaviour in areas where there have never previously been any problems. The first duty of any Government is to keep their people safe, yet under the Conservatives, we have lost 20,000 police officers from our streets. When we consider the fire service it is the same story. Funding for fire services up to 2019-20 was set in a four-year settlement announced in February 2016. It meant cuts each year for Merseyside Fire and Rescue Service, putting firefighters and the communities they serve at risk. It is very disappointing that the Government have failed to revisit the funding for those services. Both fire stations in my constituency are closing as a direct result of central Government cuts, which will mean longer waits at fires and road traffic accidents, and the loss of precious minutes in life and death situations.
There is also the Government’s failure to deliver on the NHS. The extra £1.6 billion of funding does not meet the £4 billion that the chief executive of NHS England has called for. The Health Foundation and the Nuffield Trust agree that that amount is needed to prevent patient care from deteriorating. It also does not match the £6 billion that Labour would commit. Providing more money for the NHS is only part of the answer to the problems in services. It was notable that the Chancellor failed to give any money to tackle the crisis in social care funding, despite the fact that Members on both sides of the House recognise that there is such a crisis, with 1 million people not having their needs met.
There was also precious little to address the very serious threat of climate change, so this Government are delivering a Budget that is a huge disappointment. They are in denial about the seriousness of the problems caused by austerity. The Government do not have the vision to understand the value of a broad educational offer, and they are failing to be ambitious in taking the action we need to address climate change.
Tony Lloyd (Rochdale) (Lab)
The huge gulf across the Chamber between Government Members’ world of disbelief and Opposition Members’ world of reality mirrors how modern Britain is divided. Ministers are looking astonished, but Britain is a very divided society. The rich are doing extraordinarily well, but many other people are struggling. Public sector workers will once again have another year of pay cuts, and there is no money to fund any realistic investment in our public services. The police in Greater Manchester have been cut by 2,000 officers. There is less money for our local authorities, and in Rochdale, where social care and children’s services have been decimated by this Government, there has been no relief whatsoever.
I want to concentrate on productivity, which this Government claim they intend to make the keynote of this Budget. Let us look at the reality of what is taking place for those with intermediate skills. Rochdale, like many other towns across the north of England, needs investment in education and training, but what have we seen? Let me take Meanwood Primary School. It is a great school with great teachers, but this Government are putting the “Mean” into Meanwood because the school, despite the rhetoric of Conservative Members, has faced cuts this year. It has lost a teacher and teaching assistant hours. In effect, the school has been made worse for children from some of the most deprived parts of my constituency, which cannot be right. The further education college has been damaged by cuts. The figure of £4,000 per pupil has been consistent over the years but, de facto, that means cut after cut, and the real number of hours per student is far less than in almost any other OECD country. Intermediate skills are simply not being invested in as they should be.
I challenge this Government. Rochdale needs a Rochdale education challenge, just as there was a London challenge under the previous Labour Government. It is now up to this Government to get real and to have the ambition to change this nation. Quite frankly, given the complacency of Conservative Members, it is hard to believe that this Government can have the ambition that the people of this country deserve, so it is about time that they went and we had a Labour Government to show such ambition.
John Woodcock (Barrow and Furness) (Lab/Co-op)
No party has a monopoly on damaging people’s faith in politics and in government, but I genuinely believe that the Budget could do significant further damage to people’s faith in the ability of the political process to deliver for them. That is not so much because of what is in the Budget, as because of the huge mismatch between the scale of the economic challenge facing the country and the behemoth of Brexit coming down the track, and the sense of a lack of grip and lack of ambition in the Budget to deal with any of those things. That is combined with some truly extraordinary contributions from Government Members, who talk about the Budget as if it is a genuinely transformative experience for the country. That is simply not the lived experience of many of our constituents. It does the Conservative party no favours to pretend that we are in that situation.
Briefly, given the time I have left, I will look at how my constituents will feel let down by the Budget. Once again, WASPI women get nothing and Cumbria’s infrastructure needs are ignored. For people in Furness and across the country, wage growth has not kept up with increases in living costs for years, and that will potentially be true for another decade. The public are sick to the back teeth of austerity measures being imposed with no end in sight.
The rest of my remarks will focus on the most ominous omission from the Budget speech and almost entirely from the Budget documents: defence. On the face of it, there are continuing increases in the defence budget, but it is no accident that the Chancellor—a former Secretary of State for Defence—chose to ignore defence completely. He knows and the Government know about the terrible crunch in the defence equipment programme and the amount of damage that may be done in the coming months, let alone years, by the way in which our nation’s resources are being starved. There may be no way back from that and the Government must pay heed.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
This Budget was guided by the political considerations of the Tory party, rather than the day-to-day reality faced by my constituents in Hampstead and Kilburn. It was well briefed before the Budget that the Chancellor’s hands would be tied, but I refuse to accept that Brexit allows for a total cop-out and a Budget that is so utterly feeble in confronting London’s problems.
In the short time I have, I will focus on education and policing. The Red Book reveals worrying cuts for school buildings and says next to nothing about concerning signs over the Government’s childcare promises. I want answers on why the Budget statement did not include a single mention of counter-terrorism in a year when we have seen five terrorist attacks, four of them in the capital. I want answers on the total failure to acknowledge the immense financial strain that our police are under. The omission of police funding is simply scandalous. Today, I want to provide a voice for those in my corner of north-west London who are concerned by rising crime on our streets, the continued terror threat and the Government’s utter failure to compromise with the Met commissioner and the Mayor of London.
Capital investment in schools is crucial, yet the small print of the Budget reveals that over the next four years, there will be £1 billion less in the Department for Education’s capital budget than was outlined in the Chancellor’s spring Budget. The Chancellor failed to announce that at the Dispatch Box, but local parents and pupils will lose out as a result. The verdict of headteachers in my constituency could not be clearer. My local paper, the Camden New Journal, published an open letter to the Chancellor signed by 41 school heads saying:
“We cannot see how we will be able to continue to provide our current level of provision in the future with such drastic cuts to our funding.”
The absence of early years funding from the Budget is similarly concerning. As the chair of the all-party parliamentary group on childcare and early education, it has been a privilege to hear from colleagues from across the House about their experiences of the roll-out of the 30 hours of childcare policy. In principle, getting parents back to work and ensuring that every child has the best start in life is something that unites us. However, as I wrote in my letter to the Minister for Children and Families last week, the policy is underfunded. As was revealed in the latest Ofsted figures, more than 1,000 nurseries and childminders have gone out of business since 2010.
On police funding, I will echo the Mayor of London’s response to the Budget last week in the short time I have left. Given the cuts of £600 million since 2010 and the fact that we are set to lose another £400 million before 2020, I wonder at what point the Government will stop compromising the safety of Londoners.
Alex Norris (Nottingham North) (Lab/Co-op)
This is my first Budget, so I was geared up for tweeting furiously, poring over Budget papers and analysing it in the local media, but it is striking how little of any of those things I have had to do, because the Budget represents an incredible lack of anything at all for my city of Nottingham and my constituency.
The right hon. and learned Member for Rushcliffe (Mr Clarke), who is no longer in the Chamber, termed the Budget as “not exactly a non-event”, and he meant that as a compliment: there was just above nothing in the Budget, and that for him was a good thing. For my constituency, only a grade above a non-event is not good enough. On the issues that really matter to us, such as decent wages, a fair benefits system, healthcare, schools, transport, community safety and so on; on the things that are making people’s everyday lives more difficult than they ought to be; and on the issues leaving children in working families in poverty with no way out —on all these things—we feel let down by the Government, and the Budget is emblematic of that failure.
Another incredible omission was the fact that the east midlands was not referenced at all. Treasury stats show that, whether it is transport investment or infrastructure investment in general, the east midlands will always come last, and once again the Budget and the industrial strategy do nothing to fix that. After the cancellation of the midland main line electrification, we are in desperate need of more money for our transport links, but that has not come. It is not just for getting to and from the capital that we need midland main line electrification; this is also about east-west connectivity. Both those things have excellent business cases and are crying out for a bit of vision to support them.
It is not a coincidence that today’s Social Mobility Commission report has the east midlands as the region with the worst outcomes for those from disadvantaged backgrounds, but we know that that is not inevitable. The poverty profile of my constituency is similar to a number in London, but while 17 out of 20 mobility hotspots are in London, none is in the east midlands. My area is one of the coldspots, and that is because of the level of investment into the community. I say that not because I want London’s investment for Nottingham; I want investment levelled up, because it works. It is good for society and for the Exchequer. That shows what we should expect from the Budget, but instead we have something that is not quite a non-event which, frankly, is not quite good enough. In fact, it is not good enough at all.
Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)
I am grateful for the opportunity to contribute to this important debate on the Chancellor’s autumn Budget, which has truly exposed the appalling reality of the Tory party’s failed austerity experiment. The UK economy is now forecast to be £72 billion smaller than under the spring 2016 forecast, and average earnings are not expected to recover to pre-crisis levels until 2025.
In a major shift in their assessment of the UK’s growth outlook, the OBR has forecast that growth will remain below trend until 2022. This is the first time in recorded economic history that growth projections have been so low. That in turn significantly weakens the UK’s fiscal position, because it reduces revenue forecasts, household incomes and therefore the ability to reduce the deficit, which let us not forget was the Tory party’s primary test of economic success on coming into government in 2010. That now will not happen until 2031.
The reality could not be more stark now: austerity is a vicious cycle of self-defeating decline. Real wages are lower than they were in 2010, and the Budget confirmed a further hit to living standards, with disposable income set to fall in 2017. Working age benefits have been frozen since 2015. Meanwhile, prices measured by CPI have risen by 6.9%. Under this Government, it is clear that the poor are getting ever poorer, while an increasing share of national wealth flows to the richest in our society. That is a betrayal of my generation, which is the first in recorded history in which people are seeing their living standards falling below those of their parents.
The key reason for this downward revision in growth was the major shift in the OBR’s outlook for productivity. In the past, its prediction was that productivity growth would return to pre-crisis rates, but it now believes that the slowdown is evidence of structural weakness. That structural weakness is a result of the Government’s self-defeating policies, which have created a cycle of weak earnings and cheap labour, with firms using low-cost labour rather than investing in more efficient processes and plant that would drive productivity growth.
The industrial strategy White Paper that was published yesterday demonstrates that the Conservatives have once again missed the opportunity to take the radical action that is needed to meet the UK’s productivity challenge. Raising research and development investment to 2.4% of GDP by 2027 will only bring the UK in line with the OECD average, after years of lagging behind, but we need to be above the average, not below it. World leaders such as South Korea and Japan spend over 3% of their GDP. That is why Labour is committed to that target.
There is the key question of ensuring that UK firms are leading this effort and that it is balanced across all UK regions. In Scotland, for example, 70% of R and D activity is undertaken by overseas-owned companies, but there is nothing in the industrial strategy to address that. The country stands on the cusp of a great disruptive opportunity as the fourth industrial revolution emerges, but this lacklustre Budget and industrial strategy prove beyond doubt that the Government are simply not up to the huge economic challenges facing the country. Only the Labour party has the true ambition and vision to harness our nation’s industrial potential.
Alex Sobel (Leeds North West) (Lab/Co-op)
As we have just heard from my hon. Friend the Member for Glasgow North East (Mr Sweeney), we are on the cusp of the fourth industrial revolution, but if we are to be ready for it, we must do more than this industrial strategy does. The Britain of five to 20 years from now will look very different from the country in which we live and work today. If we are to ensure that new technology does not lead to higher levels of underemployment and a workforce whose skills have become obsolete, we must first ensure that automation leads to innovation. If Britain is to be a world leader in new technology, as the Government contend, we must think bigger and be bolder.
Our economy has drifted from manufacturing to the financial and service sectors. Between 1978 and 2017, the number of service sector jobs rose by more than 20%. That shift was highlighted by representatives of a civil engineering firm in my constituency who told me that, although demand for their services was increasing, recruiting staff with relevant skills was becoming increasingly difficult. I welcome the £64 million investment in retraining that is mentioned in the White Paper, but, in the context of £1.5 billion worth of cuts in the adult skills budget, it hardly scratches the surface of the investment that is needed to end a skills shortage that will hamper any serious industrial strategy.
We should aim to create an energy revolution by taking steps such as reforming ownership of the grid, including common, state and mutual forms of ownership. That will open the energy market to smaller companies, and will create a more competitive market. We need look no further than Leeds, where we created White Rose Energy. We also need an insulation revolution that gives not just homeowners but landlords and housing associations incentives to insulate their houses, so that we can save energy, create jobs and provide warmer, safer houses.
I am pleased that there is to be some investment in infrastructure for electric vehicles, but the Government need to listen to the Industrial Strategy Commission’s recommendation that infrastructure investment should be universal. My constituency does not have a single public charge point. How shameful is that? We also need to take more urgent action to tackle climate change. I urge the Government to listen to Labour Members and to commit to themselves to ensuring that 60% of the UK’s energy comes from low-carbon or renewable sources by 2030.
We need a Government who will think bigger. We need a Government who show a commitment to our planet and the health of future generations. We need a Government who are not afraid to be bold and invest in this country and its people. As Britain looks to a future outside the European Union, it has never been more crucial to embrace change and lead the world, not only in producing and welcoming new technology, but in shaping our society to ensure that change works for the many, not the few.
Alan Brown (Kilmarnock and Loudoun) (SNP)
This is the Budget that was trailed as the “Ruth” Budget for Scotland, and it is the Budget that the Scottish Tories have apparently stepped up to the plate and delivered for Scotland, so let us look at what they have delivered. They claim credit for the VAT exemption for the police and fire services. The SNP raised that in the Chamber 63 times and forced a vote on it, so we have clearly led the way. The Scottish Tories do not even seem to care about the need for a refund of the £140 million that has already been stolen.
What else have the Scottish Tories delivered? Nothing. Not one original idea in the Budget can be credited to them. We are still left with a rail budget that has been cut by £600 million in real terms, and with no Ayrshire growth deal. There was nothing about the £200 million CAP convergence uplift that was meant for Scotland and nothing about renewable energy, and we are faced with a real-terms revenue budget cut of half a billion pounds over the next two years. The 10 Democratic Unionist Members who still sit on the Opposition Benches managed to get a £1.5 billion package for a couple of key votes, and we are meant to believe that they are a solid voting lobby.
There was one welcome measure for the oil and gas industry in relation to the transferable tax history, but, as is pointed out in paragraph 3.54 of the Red Book, the idea was first mooted in a Government paper in 2014, so it is certainly nothing to do with Scottish Tories. The fact that it is predicted to bring in £70 million makes it an easy decision for the Treasury anyway.
Today’s theme may be the future economy, but that future economy has already been curtailed by the £30 billion of tax giveaways in the last Budget—£30 billion that could have been spent more wisely. The incoherent policies continue with the flagship announcement of a £3.2 billion stamp duty giveaway that is now predicted to do no more than increase house prices and bring in nothing for the Treasury bung. While increasing the pay gap for the young, the Government think that they can woo young voters back with the promise of a railcard, but paragraph 4.46 suggests that it will be funded by other rail users rather than the Treasury. Tuition is free in Scotland, but the Tories think that freezing fees at £9,250 per annum will bring young voters flocking back to them. I say to them that they are aff their heids.
Justin Madders (Ellesmere Port and Neston) (Lab)
Three minutes to speak is not long, but it is about the same time as it normally takes a Tory Budget to unravel. I wish to focus first on the automotive sector. Ellesmere Port is home to Vauxhall Motors, and we had several requests for the Budget to improve the competitiveness of the plant, but I am sorry to say that none of them appears to have made it into the Budget. We have heard a lot of talk about how we are lagging behind in terms of productivity, and one of the asks I had was about changing the way that business rates operate and currently act as a disincentive to invest in certain types of plant and machinery.
On the housing announcements, expanding the ability of local authorities to borrow against housing revenue accounts is welcome, but it is far from clear who will be able to bid for that extra borrowing capacity, with it being apparently only available to areas with what are termed as “high affordability pressures”. I do not know of any local authority that does not have a significant waiting list, so rather than make councils jump through hoops, should not this facility be available to any council that thinks it can take on the extra borrowing?
The stamp duty offer for first-time buyers attracted a lot of attention on the day of the Budget, but its coverage was inversely proportionate to the impact it will actually have. As we know from the OBR, the concern is that it will do nothing more than increase upward pressure on house prices. Indeed, five years ago a stamp duty holiday for first-time buyers was abandoned by the coalition Government because it had been “ineffective”. We are already seeing developers take advantage—“You and Yours” reported yesterday that developers have pocketed the stamp duty savings where they had an agreement with purchasers to stand the cost of stamp duty.
Surely the best use of taxpayers’ money in housing is to increase supply. One way to increase supply would be to help all those people who have ended up with an unsellable house because they were duped into buying a leasehold property. Coming up with a scheme to release people from that trap might do much to increase housing supply, and it would also be the right thing to do.
Laura Pidcock (North West Durham) (Lab)
As a nation, we have been socialised to think of the economy in abstract terms. It is analysed as a distant entity that needs to be served, slavishly, to keep the big, scary beast from collapse. When we hear the Chancellor tell us that inequality has narrowed, that there are more people in work and that our public services are protected, we could almost believe him. That is, if we did not actually speak to any real people outside the Westminster bubble. We could suspend disbelief if we never spoke to any workers or reflected on what is happening in our communities.
Every time Government Members cheer about the new jobs on the Government’s watch without any critical analysis of the nature of those jobs —short-term, insecure and low-wage—they lose credibility. On behalf of my community in North West Durham, I must convey extreme disappointment and anger at the Budget. Aside from the pantomime proceedings, it offered nothing to my community.
I shall give one example in illustration—the stamp duty giveaway. In the north-east, average house prices for first-time buyers are £125,591. That would mean a tiny giveaway of £11.82. Please forgive those people who have endured seven years of pay freezes—a typical prison officer, for example, who is now only £30 better off now than seven years ago—if they do not jump with joy at those announcements.
We need something completely different. We must be brave enough to say that borrowing is necessary for investment and that people must have a wage that they can live on—it is not fine to pay them a minimum wage that keeps them in starvation. I have met people who have been broken by this system and it is not their fault. The global banking crisis was not their fault. The recession was not their fault. The rules and traps of the system were not of their making.
To see the tears of grown working women and men flow directly as a result of Government policy tells me that we need a complete overhaul of our economic system. If the Government are not brave enough to do that, they must move over. If the economy does not work for everyone, it is not worthy.
Helen Hayes (Dulwich and West Norwood) (Lab)
The measure of the Budget must surely be the promises that the Conservatives made to the British people over and again during the election campaign in June. They promised the British people a strong economy that would deliver investment in our public services. The Budget reveals just how badly the Government are letting down the British people and just how high the costs of the Government’s botched and divided process are proving to be. Instead of the strong economy that was promised, we see a forecast of poor productivity leading to exceptionally weak economic growth, wage stagnation and rising inflation. We were promised a strong economy, but instead, families up and down the country are facing an unprecedented further five years of falling living standards. They are running to stand still, but the best that the Chancellor can offer is that by 2025 average wages will have reached the same levels as in 2008. And instead of committing to the £350 million a week for the NHS promised by his colleagues in the Vote Leave campaign, the Chancellor is committing more taxpayers’ money to fund the cost of Brexit than he is to our NHS.
It is on the NHS that I wish to focus the remainder of my remarks today, as the scale of the financial challenges facing it makes the Budget look like a sticking plaster on a gaping wound. We are approaching the most pressured time of year for the NHS, and its hard-working staff are approaching the winter in fear and trepidation because the pressures under which they are already working absorb all the resilience and reserves they can muster. The local hospital in my constituency is King’s College Hospital. Prior to 2010, King’s was performing well and was financially stable, but when I contacted it recently on behalf of a constituent who had spent five days waiting on a trolley to be allocated a bed on a ward, I was told that the hospital was more than 100% full. King’s is an exceptional place full of exceptional people, but it is being asked by this Government to deliver the impossible.
The performance of our NHS is inextricably linked to the performance of social care services, yet the Budget made no mention at all of social care. Funding sufficient high-quality social care would be the single most transformative measure that the Government could introduce for our NHS. The failure of this Budget on social care is just one of the many ways in which the Government continue to disadvantage women, who make up the overwhelming majority of hard-pressed carers, both paid and unpaid. It is one of the many ways in which the Budget is failing people up and down the country.
Ruth George (High Peak) (Lab)
After seven years of Conservative-led Government and seven years of austerity, my constituents in rural Derbyshire will tell this House that austerity is not working. Both our hospitals are facing closure. Three nurseries have already closed, and more are saying that they cannot continue. Schools are being squeezed by 5% cuts and saying that they cannot continue and are having to lose teachers. We have lost more than 400 police officers in Derbyshire. There are not enough to respond to serious incidents; there are not even enough to police Buxton carnival. And our firefighters have been reduced to a retained service.
Austerity is hitting us hard—it is hitting every community hard—but it is not working. After seven years of telling us that we must not borrow to invest in public services, the Conservatives are borrowing up to the hilt. The national debt clock, which they were so keen to talk about at the time of the 2010 election, now stands at £1.95 trillion. They have almost doubled the national debt, and what have we got to show for it? We have public services that are on their knees. We have public servants who cannot afford a house. We have millions of people on benefits visiting food banks. That is an absolute disgrace.
We in the Labour party believe that we should borrow, but that we should borrow to invest. We should borrow to invest in our economy, in our public services, in our workers, in our jobs and in our communities. Then we would see an economy that could grow. People would be able to spend in their local businesses, and businesses would be able to thrive. Communities would be able to prosper once again. Instead, all that this Budget has offered us is more of the same—more of the same cuts and more of the same poverty—and we ain’t seen nothing yet. The little Red Book has shown that we are just at the start of those cuts. We have another four years of freezes to benefits and school budgets, and cuts to our police, to our hospitals and to the NHS communities. That is what is happening. This Budget was a chance for the Government to come up with big new ideas, but they did not. This Government need to make way for one that can.
Peter Dowd (Bootle) (Lab)
As the Chancellor gave his Budget speech last week, there was a collective groan across the country not just at the bad jokes, but at the content of the most uneventful Budget speech of recent times. There was no game-changing investment announcement and no lasting solutions for the growing difficulties facing our country. The Chancellor’s speech personified this Government: out of touch, inconsistent and directionless.
The Cabinet is morbidly and irrevocably split on Brexit and, rather than focusing on their individual briefs, Ministers now spend their days attempting to steal each others’. The International Trade Secretary wants to run Britain’s foreign policy. The Environment Secretary is learning all about hypothecation, apparently fancying himself as Chancellor, and The Times reported that he is busy researching the difference between a J curve and a J-cloth. Meanwhile, the Foreign Secretary continues to scheme for the top job. He is the first to praise the Prime Minister, while constantly plotting to undermine her—Iago on steroids. Ironically, the only person who does not want to be in No. 10 is its current occupant. She remains, as in the Monty Python parrot sketch, nailed to the perch and “off the twig”. The Prime Minister’s metabolic processes are, politically speaking, history.
The most important announcements made last week were not the Chancellor’s recycled policies, but those from the Office for Budget Responsibility. The OBR lowered UK growth forecasts, business investment, productivity rates and wage growth for the next five years, blowing a hole in the Government’s economic credibility. As for balancing the books, under the Government’s current projection, the UK budget will not be in surplus until 2030 at the earliest—a full 15 years after the former Chancellor said that the deficit would be eradicated. Workers who have already endured a decade of stagnant wages and lost earnings will not see their pay return to pre-crisis levels until 2025. And there is more. UK households face the biggest squeeze in disposable income since records began. The message from the OBR is clear: Britain under the Tories is now facing a record 17-year downturn in pay.
The Budget did nothing to eradicate the impact of austerity on women, who have disproportionately borne the brunt of it. The abolition of stamp duty for first-time buyers is of course welcome, but the OBR rightly points out that the move will increase house prices. Many Government Back-Benchers called for action to help the next generation, but the best the Chancellor could muster was a millennial railcard that young people cannot even use to commute to work and that will not even cover the cost of the 3.6% rail fare increase next year.
On universal credit, the Government finally listened to Labour and scrapped the seven-day waiting time, but they have done nothing about the roll-out.
The Government once again ensured that the NHS and its staff will remain underfunded and underpaid, and the extra money announced in the Budget does not even meet NHS England’s call for extra funding. Far from being dead and buried, the public sector pay cap remains alive and well. Public sector pay is now set to fall to its lowest level by comparison with the private sector, and the Chancellor is trying to divide public sector workers.
As I have said so many times at this Dispatch Box, the UK’s economic growth wholly depends on our ability to raise productivity rates, and there was nothing of any substance whatsoever in the Budget to help that. The Government continue to fail in delivering the infrastructure and investment that the regions so desperately need. Like so many of this Government’s policies, their industrial strategy White Paper released yesterday is thin on details and thinner on ideas—another damp squib. It is about time that this Government went. They should pack their bags, get the Prime Minister out of No. 10 and hand things over to the Labour party to do the job properly and get growth back for this country.
The Chief Secretary to the Treasury (Elizabeth Truss)
We have had an excellent debate this afternoon. We heard my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy lay out an optimistic vision for our industrial strategy. We heard my hon. Friends the Members for Banbury (Victoria Prentis), for Mansfield (Ben Bradley), for Dudley South (Mike Wood) and for Hitchin and Harpenden (Bim Afolami) and my hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer) talking about the positive measures in the Budget on skills, housing and tax. We also heard the usual fiction and portents of doom from the Opposition.
I repudiate the Opposition’s predictions. Our destiny is not preordained. We have the power to shape the future and to boost our growth and productivity. If we want to know what high productivity looks like, we need look no further than our high-growth companies. When it comes to start-ups, we are world leading, with more than 650,000 companies founded in 2016 alone. We have more than twice the number of $1 billion tech companies than anywhere else in Europe. By enabling companies to grow and, even more, to start, we can make sure all people in this country benefit from our world leadership in areas such as driverless cars and artificial intelligence.
The real revolutionaries in this country are not sitting on the Opposition Front Bench clutching their iPads and looking up debt numbers, while denouncing enterprise; the real revolutionaries are the businesses across Britain that take risks, create jobs and improve our lives. They are the people who are delivering day out, day in for our country. This Budget is about liberating those businesses to achieve their ambitions and to deliver for our future, and it is about making sure that they have the people, the capital and the space to succeed.
Of course we want to attract the brightest and best to our country, which is why we are doubling the number of high-skilled visas that can be granted each year, but we also need to unleash the talents of our own people, both to help power the economy and to make sure they can share in the opportunities that enterprise brings. The fact is that the previous Labour Government let down our children and young people. They left Britain short of skills; they dumbed down the curriculum; they created rampant grade inflation; they failed on technical education; and they left office with rising youth unemployment.
When Labour left office, youth unemployment was at 20%, which is why we brought in higher standards for English and maths, new academies and free schools, and new T-levels. Under this Government, we have seen more apprenticeships and the lowest level of youth unemployment for 13 years. I suggest the Opposition engage with the facts.
We are announcing even more in this Budget. We are tripling the number of computer science teachers and, as my hon. Friend the Member for Chelmsford (Vicky Ford) pointed out, we are giving schools £600 for every additional student studying maths A-level or core maths, the most valuable qualifications in the jobs market. We are learning from the best in the world, and I am delighted that my right hon. Friend the Minister for School Standards is here today because he championed the Shanghai and Singapore maths mastery programme that we are rolling out to a further 3,000 schools. We are also making sure that adults already in jobs have the opportunity to improve their skills through the national retraining scheme.
The Government know that private investment in high-growth businesses benefits us all through new technology, higher living standards and more jobs. This year, a record £2 billion was invested in FinTech alone. This Budget builds on that success by unlocking more than £20 billion of investment to finance growth in innovative firms. As my hon. Friend the Member for Mid Norfolk (George Freeman) said, £1 billion is also being invested in the life sciences sector.
We also want to make it easier for brilliant women founders to access capital. Research shows that, when making identical pitches, women are half as likely to secure early-stage investment, despite investors who invest in female-led businesses being, on average, more successful. We have asked the British Business Bank to look at that so we can see more brilliant women founders and start-ups getting that investment.
Finally, these high-potential businesses need space to grow and high-quality infrastructure. We are making it easier for businesses to expand their operations through new planning freedom and manufacturing zones. We are also investing a huge amount in infrastructure. As my hon. Friend the Member for Saffron Walden (Mrs Badenoch) pointed out, this Budget includes the highest amount any Government have spent as a proportion of GDP on economic infrastructure for 40 years. How can the Opposition talk about a lack of investment in infrastructure, given that this is the highest for 40 years? It is much higher than anything that happened under the previous Labour Government. This spending includes plans for the Oxford-Milton Keynes-Cambridge corridor and for the northern powerhouse. [Interruption.] Let me say to the Opposition that we are investing £337 million in a new fleet of trains for the Tyne and Wear Metro, and £300 million to ensure HS2 can accommodate future northern and midlands rail services. We are also creating a £1.7 billion transforming cities fund, which will give our great cities the investment they need, and they will be able to invest in local trams or light rail systems as they see fit.
Sir Edward Davey
Does the right hon. Lady agree that British companies—our new entrepreneurial companies —would like a nice big market to sell their goods to, on our doorstep?
Elizabeth Truss
Absolutely, which is why our focus is on getting the best possible deal in the Brexit negotiations. Maintaining a tight grip on Government finances is, as my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) pointed out, vital for any Government, and Opposition Front Benchers would do well to look at that when they are considering—[Interruption.] I see that the shadow Chancellor is on his iPad looking up what the—[Interruption.] I can help him out without an iPad. His plans would mean an additional half a trillion pounds-worth of debt. If hon. Members want to know how much extra interest the British public would have to pay every year, I can tell them that it is £7 billion. I do not need an iPad to know that.
This Government are prioritising our country’s long-term growth prospects. We are investing in the infrastructure and in the skills that our country needs to succeed. Whatever the Opposition say, it is not politicians or Whitehall that will turbo-charge our economy and bring the growth and improved living standards we all want; it is the enterprises up and down the country that are going to deliver that. The Opposition want to tax new industry to the hilt or, even worse, to run it themselves. I cannot think of a more scary prospect for businesses across Britain. We take the opposite view; we want to unleash enterprise and to make sure that businesses have the people, space and the conditions to succeed. This is a Budget that recognises where the true value of our economy is created. It is not through issuing blank cheques that we cannot afford, but by making sure that our enterprises have the skills, talent and space that they need to grow and to ensure that all our citizens benefit from our powerhouse future. That is why the House should support the Budget in the Lobby tonight.
Question put and agreed to.
Resolved,
That income tax is charged for the tax year 2018-19.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
Mr Speaker
I am now required under Standing Order No. 51(3) to put successively, without further debate, the Question on each of the Ways and Means motions numbered 2 to 44, on which the Bill is to be brought in. These motions are set out in a separate paper distributed with today’s Order Paper.
I must inform the House that, for the purposes of Standing Order No. 83U, with which I feel sure all colleagues are personally and closely familiar, and on the basis of material put before me, I have certified that in my opinion the following founding motions published on 22 November 2017 and to be moved by the Chancellor of the Exchequer relate exclusively to England, Wales and Northern Ireland and are within devolved legislative competence: motion 3, on income tax (main rates); motion 35, on stamp duty land tax (higher rates for additional dwellings); and motion 36, on stamp duty land tax (relief for first-time buyers). Should the House divide on any of these motions it will be subject to double-majority voting.
The Speaker put forthwith the Questions necessary to dispose of the motions made in the name of the Chancellor of the Exchequer (Standing Order No. 51(3)).
2. CORPORATION TAX (charge for financial year 2019)
Resolved,
That (notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills) provision may be made taking effect in a future year charging corporation tax for the financial year 2019.
3. Income tax (MAIN RATES)
Resolved,
That for the tax year 2018-19 the main rates of income tax are as follows—
(a) the basic rate is 20%,
(b) the higher rate is 40%;
(c) the additional rate is 45%.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
4. Income tax (Default and savings rates)
Resolved,
(1) That for the tax year 2018-19 the default rates of income tax are as follows—
(a) the basic rate is 20%,
(b) the higher rate is 40%;
(c) the additional rate is 45%.
(2) That for the tax year 2018-19 the savings rates of income tax are as follows—
(a) the basic rate is 20%,
(b) the higher rate is 40%;
(c) the additional rate is 45%.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
5. Income tax (starting rate limit for savings)
Resolved,
That section 21 of the Income Tax Act 2007 (indexation) does not apply in relation to the starting rate limit for savings for the tax year 2018-19 (so that, under section 12(3) of the Income Tax Act 2007 as amended by section 4 of the Finance Act 2017, that limit remains at £5000 for that tax year).
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
6. Transferable tax allowance
Resolved,
That—
(1) Chapter 3A of Part 3 of the Income Tax Act 2007 (transferable tax allowance) is amended as follows.
(2) Section 55B (tax reduction: entitlement) is amended in accordance with paragraphs (3) to (5).
(3) In subsection (2) (conditions for entitlement to tax reduction)—
(a) for paragraph (a) (individual is spouse or civil partner of maker of election in force under section 55C) substitute—
“(a) the individual is the gaining party (see section 55C(l)(a)) in the case of an election under section 55C which is in force for the tax year,”, and
(b) in paragraph (d), for “individual’s” substitute “relinquishing”.
(4) After subsection (5) insert—
“(5A) In this section “the relinquishing spouse or civil partner”, in relation to an election under section 55C, means the individual mentioned in section 55C(l)(a) by whom, or by whose personal representatives, the election is made.”
(5) In subsection (6) (reduced personal allowance for transferor)—
(a) after “under subsection (1)” insert “by reference to an election under section 55C”, and
(b) for “individual's” substitute “relinquishing”.
(6) Section 55C (elections to reduce personal allowance) is amended in accordance with paragraphs (7) and (8).
(7) In subsection (l)(a) (individual may make election if married or in civil partnership)—
(a) after “the same person” insert “(“the gaining party”)”, and
(b) in sub-paragraph (ii), after “when the election is made” insert “or, where the election is made after the death of one or each of them, when they were last both living”.
(8) After subsection (4) insert—
“(5) The personal representatives of an individual may make any election for the purposes of section 55B that the individual (if living) might make in relation to—
(a) the tax year in which the individual dies, or
(b) an earlier tax year.”
(9) Section 55D (procedure for elections under section 55C) is amended in accordance with paragraphs (10) and (11).
(10) In subsection (3) (elections which are not automatically continued in force for subsequent years), after “is made after the end of the tax year to which it relates” insert “or is made after the death of either of the spouses or civil partners”.
(11) In subsection (4) (election may be withdrawn only by individual who made it), after “by whom the election was made” insert an election made by an individual's personal representatives may not be withdrawn”.
(12) The amendments made by this Resolution—
(a) come into force on 29 November 2017,
(b) have effect in relation to elections made on or after that day, and
(c) so have effect even where a relevant death occurred before that day.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
7. Deduction for seafarers’ earnings for duties performed outside UK
Resolved,
That provision may be made in connection with the application of Chapter 6 of Part 5 of the Income Tax (Earnings and Pensions) Act 2003 in relation to employment in the Royal Fleet Auxiliary Service.
8. Exemption for armed forces’ accommodation allowances
Resolved,
That provision may be made exempting, from income tax, amounts paid as accommodation allowances to, or in respect of, members of the armed forces of the Crown.
9. Benefits in kind: cars
Resolved,
That provision (including provision having retrospective effect) may be made amending Chapter 6 of Part 3 of the Income Tax (Earnings and Pensions) Act 2003.
10. Foreign-service relief for benefits on termination of employment
Resolved,
That provision may be made amending Chapter 3 of Part 6 of the Income Tax (Earnings and Pensions) Act 2003 in connection with restricting, in relation to payments and other benefits received in connection with the termination of a person's employment, relief given by that Chapter by reference to service within the definition of “foreign service” given by section 413(2) of that Act.
11. Employment income provided through third parties
Resolved,
That provision may be made in connection with—
(a) the application and operation of Chapter 2 of Part 7 A of the Income Tax (Earnings and Pensions) Act 2003, and
(b) the operation of Part 11 of that Act in connection with Schedule 11 to the Finance (No. 2) Act 2017
12. Disguised remuneration schemes (earnings charged to tax)
Resolved,
That—
(1) In section 554A of the Income Tax (Earnings and Pensions) Act 2003 (employment income provided through third parties: application of Chapter 2 of Part 7A), after subsection (5) insert—
“(5A) Subsections (5B) and (5C) apply where—
(a) a payment to a person other than A, or to A as a trustee, is of earnings from A's employment with B, and
(b) the earnings are, in whole or part, charged to tax under the employment income Parts otherwise than by virtue of this Part,
and for this purpose it does not matter whether all or some only or none of the tax is paid (but see sections 554Z5 and 554Z11B).
(5B) For the purposes of subsection (5C), an arrangement is a “redirected- earnings arrangement” if it (wholly or partly) covers or relates to redirected earnings; and for the purposes of this subsection and subsection (5C) “redirected earnings” means—
(a) the payment mentioned in subsection (5A)(a), or
(b) any sum or other property which (directly or indirectly)—
(i) represents, or
(ii) is derived from,
that payment.
(5C) The circumstances mentioned in subsection (5A)—
(a) do not prevent a redirected-earnings arrangement being within subsection (l)(b), and
(b) do not prevent rewards or recognition or loans being in connection with A's employment with B for the purposes of subsection (l)(c) where there is use of redirected earnings for the provision of the whole, or part, of the rewards or recognition or loans.”
(2) The amendment made by paragraph (1)—
(a) come into force on 29 November 2017,
(b) has effect for the purposes of the operation of Part 7 A of the Income Tax (Earnings and Pensions) Act 2003 in relation to relevant steps taken on or after 22 November 2017, and
(c) so has effect in the case of payments within the new subsection (5A)(a) whenever made (including ones made before 6 April 2011).
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
13. Trading income provided through third parties
Resolved,
That provision may be made about information for the purposes of the operation of Schedule 12 to the Finance (No. 2) Act 2017.
14. Pensions
Resolved,
That provision (including provision having retrospective effect) may be made about the application of Part 4 of the Finance Act 2004 in relation to—
(a) pension schemes that are Master Trust schemes,
(b) pension schemes established under section 67 of the Pensions Act 2008,
(c) pension schemes that have a dormant sponsoring employer, and
(d) pension schemes treated as registered by virtue of paragraph 1(1) of Schedule 36 to the Finance Act 2004.
15. EIS, SEIS, SI and VCT reliefs
Resolved,
That provision may be made about reliefs under Parts 5, 5A, 5B and 6 of the Income Tax Act 2007, including—
(a) provision having retrospective effect, and
(b) (notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills) provision taking effect in a future year.
16. PARTNERSHIPS
Resolved,
That the following provision relating to partnerships may be made—
(a) provision as to how tax legislation applies where a partner is a bare trustee;
(b) provision for determining the income tax liability of indirect partners;
(c) provision about income tax returns for partnerships.
17. Research and development expenditure credits
Resolved,
That provision may be made amending section 104M(3) of the Corporation Tax Act 2009.
18. INTANGIBLE FIXED ASSETS
Resolved,
That provision may be made amending Part 8 of the Corporation Tax Act 2009.
19. Corporation tax treatment of oil activities: tariff receipts etc
Resolved,
That provision may be made about the meaning of “tariff receipt” for the purposes of Part 8 of the Corporation Tax Act 2010.
20. Hybrid and other mismatches
Resolved,
That provision (including provision having retrospective effect) may be made amending Part 6A of the Taxation (International and Other Provisions) Act 2010.
21. Corporate interest restriction
Resolved,
That provision (including provision having retrospective effect) may be made relating to Part 10 of the Taxation (International and Other Provisions) Act 2010.
22. Corporation tax: Education Authority of Northern Ireland
Resolved,
That provision (including provision having retrospective effect) may be made relieving the Education Authority of Northern Ireland of liability to corporation tax.
23. Chargeable gains (indexation allowance)
Resolved,
That provision may be made restricting indexation allowance for gains chargeable to corporation tax.
24. Chargeable gains (transfer of assets to non-resident company)
Resolved,
That provision may be made amending section 140 of the Taxation of Chargeable Gains Act 1992.
25. Chargeable gains (depreciatory transactions)
Resolved,
That provision may be made amending section 176 of the Taxation of Chargeable Gains Act 1992.
26. First-year tax credits
Resolved,
That (notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills) provision may be made about first-year tax credits paid in connection with relevant first-year expenditure under the Capital Allowances Act 2001.
27. DOUBLE TAXATION RELIEF
Resolved,
That the following provision relating to double taxation relief may be made——
(a) provision in relation to counteraction notices given under Part 2 of the Taxation (International and Other Provisions) Act 2010;
(b) provision restricting credit relief under that Part, or deductions for foreign tax paid, by reference to amounts attributable to an overseas permanent establishment of a company that are used to reduce a foreign tax;
(c) provision (including provision having retrospective effect) to secure that the double taxation arrangements to which effect may be given by Order in Council include arrangements modifying the effect of earlier such arrangements and arrangements conferring functions on public authorities within or outside the United Kingdom.
28. bANK LEVY
Question put,
That provision may be made amending Schedule 19 to the Finance Act 2011, including (notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills) provision taking effect in a future year.
Relevant consideration | Percentage |
So much as does not exceed £300,000 Any remainder (so far as not exceeding £500,000) | 0% 5%” |
1. Cigarettes | An amount equal to the higher of— (a) 16.5% of the retail price plus £217.23 per thousand cigarettes, or (b) £280.15 per thousand cigarettes. |
2. Cigars | £270.96 per kilogram |
3. Hand-rolling tobacco | £221.18 per kilogram |
4. Other smoking tobacco and chewing tobacco | £119.13 per kilogram”. |
Business without Debate
Mr Speaker
With the leave of the House, I propose taking motions 3 to 9 together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Defence
That the draft International Headquarters and Defence Organisations (Designation and Privileges) Order 2017, which was laid before this House on 21 June, be approved.
Electricity
That the draft Renewables Obligation (Amendment) (Energy Intensive Industries) Order 2017, which was laid before this House on 19 July, be approved.
Banks and Banking
That the draft Banking Act 2009 (Service Providers to Payment Systems) Order 2017, which was laid before this House on 19 July, be approved.
Local Government
That the draft Greater Manchester Combined Authority (Public Health Functions) Order 2017, which was laid before this House on 20 July, be approved.
Charities
That the draft Charitable Incorporated Organisations (Consequential Amendments) Order 2017, which was laid before this House on 7 September, be approved.
Telecommunications
That the draft Drug Dealing Telecommunications Restriction Orders Regulations 2017, which were laid before this House on 12 October, be approved.
Enterprise
That the draft Small Business Commissioner (Scope and Scheme) Regulations 2017, which were laid before this House on 19 July, be approved.—(Mike Freer.)
Question agreed to.
Petitions
Mr Speaker
I find it surprising, not to say shocking, that there should be a sudden exodus of right hon. and hon. Members from the Chamber at the point at which the right hon. Member for Broxtowe (Anna Soubry) is due to present her petition, in which I had hoped there would be a keen interest in all parts of the House. If Members unaccountably insist on departing the Chamber, I trust that they will do so quickly, quietly and without fuss, so that the rest of us, keenly interested in said petition, can listen to its eloquent presentation by the right hon. Lady.
Anna Soubry (Broxtowe) (Con)
Thank you, Mr Speaker; that is very kind of you. I rise to present two petitions relating to High Speed 2. The first has more than 1,200 signatures from residents of the village of Trowell, and it declares that they
“are opposed to the HS2 project in its entirety.”
They believe that HS2
“will provide no benefits to Trowell”,
and that the money would be better spent on
“existing railway routes and other transport networks.”
The second petition has been signed by 125 Trowell residents. They are opposed to a 60-foot viaduct through the village that would cause disruption during its construction and adversely impact the village.
Following is the full text of the petitions:
[The petition of residents of Trowell,
Declares that they are opposed to the HS2 project in its entirety. They believe that HS2 Phase Two will provide no benefits to Trowell and the financial cost of the project would be better spent elsewhere, including improving existing railway routes and other transport networks.
The petitioners therefore request that the House of Commons ask HS2 Ltd. to stop plans to build HS2 Phase Two and look at more reasonable alternatives.
And the petitioners remain, etc.]
[P002085]
[The petition of residents of Trowell,
Declares that they are opposed to the proposed viaduct through Trowell which is part of the HS2 Phase 2 project and will be 60 feet high in some places to cross over the M1 motorway, the A609 and an existing railway viaduct. The proposals will cause significant disruption to Trowell's residents during construction and the resulting viaduct would dominate over homes in the village, as well as being taller than the church spire.
The petitioners therefore request that the House of Commons urges HS2 Ltd. to dispense with proposals to build a viaduct in Trowell and come up with alternative solutions that will have less impact on residents.
And the petitioners remain, etc.]
[P002084]
Lower Thames Crossing
(7 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Adam Holloway (Gravesham) (Con)
Thank you, Mr Speaker, for selecting this matter for debate. I am very sorry that the Chamber has just cleared, because if Members had stayed, they would have heard how a historic opportunity to fix the M25 at Dartford—as we know, it is broken there—has been missed, therefore condemning our constituents to another two or three decades of gridlock at Dartford.
I guess that the Minister knows my views on this subject, so I will try to keep this short and sweet. Later, I will discuss our concerns about the new crossing, but before that, I think that I need again to go through the uncomfortable truths about what is behind this.
It is a fact that any crossing to the east of the existing crossing will do nothing to ease the long-standing congestion and pollution at Dartford. For many years, all of us have spent hours sitting in traffic there. The people of Dartford have experienced years of gridlock, pollution, lung disease and everything else. The crossing has been stretched beyond capacity for years, leading to an absolute nightmare for the people of Dartford. In my view, they have been let down by their elected representatives, who should have been begging for the crossing to be fixed.
What is the cause of the situation at Dartford? All of us have been on this road, most of us sat in traffic. Only at Dartford do a little local road, regional roads and the busiest motorway in Europe—the M25, which goes around London—collide. We have three types of traffic—local, regional and long-range national—and the gridlock is caused not by the crossing itself, but by the fact that one of the tunnels is unsuitable for vehicles such as fuel tankers. If a fuel tanker tries to go into the tunnel without an escort, all the traffic has to be stopped, so it builds up. Going from north to south, the M25 is just as good or bad as the rest of it, but that is the cause.
For the last 12 years or so, I have thought that because the M25 will always run through Dartford, the only answer to fixing the broken traffic at Dartford is to fix the M25 at Dartford, not seven miles down the road. I thought that the only solution would be a new bridge or, better, a very long seven-mile tunnel from north of the A13 to south of the A2. The fact that that is not going to happen is inexplicable, and all the more so because Highways England estimates that the new crossing will remove only 14% of the traffic from Dartford.
What needs to happen now? The new crossing to the east of Gravesend is being built, but, as I am sure my hon. Friend the Member for Dartford (Gareth Johnson) will agree, mitigation is urgently needed around the tunnel approaches. About 50 million journeys are made through the tunnel annually, and it is closed briefly more than 300 times a year. When that happens, it results in the gridlock that we have all experienced.
This decision has condemned millions to spending decades more in traffic jams. A project that was initially designed to fix the problem at Dartford has bizarrely morphed into an economic development project that will undoubtedly benefit the people of Kent and Essex, but will condemn the people of Dartford to decades of further ill health, pollution and gridlock. The constituents of everyone in this House, including hon. Members from north of the border, will, from time to time, spend huge amounts of time in that traffic. I once spent an hour and a half in it, but I have been visited by people who have been in it for two hours. A couple of years ago, there was a complete blockage and people waited there for 12 hours. Closer to home, thousands of my constituents’ homes will effectively be blighted over the years that it takes to build the crossing.
The decision comes at a time when we are thinking about the future. Autonomous vehicles are no longer the realm of science fiction, and some car manufacturers say that they will have autonomous cars on the road within the next decade. There will be an awful lot of growth in the movement of goods by autonomous vehicles. What does that mean? The big thing about autonomous vehicles is that they can travel much closer together and optimise the road system. If there is gridlock, all the other cars can be switched off and a road train can clear a whole area of traffic very quickly before another road train is released across it. That technology will, if anything, make our roads considerably easier to use.
It is possible to argue the other way. Autonomous vehicles will allow us to get in our car and trundle up to Scotland or travel to work without the stress of driving, allowing us to go to sleep, read a book or whatever. I accept that there is an argument that such vehicles may make more journeys likely, but I do not think that that is the case, given the internet and moves towards home working. I believe that autonomous vehicles will greatly optimise our existing road infrastructure.
If we look at the skyline of Dartford from the traffic jam, we see houses that have chimneys and plenty that do not. The reason why those houses do not have chimneys is that we no longer all heat our homes by burning coal or wood. As with many other areas of public spending, we must therefore look at the effects that a new disruptive technology will have on massive infrastructure projects such as this one, which will cost at least £6 billion. In mitigation of the terrible traffic, it really would not be rocket science to look at channel tunnel freight trains. Why do all the trucks have to unload at Folkestone? If they went on up north, it would make the south of England a rather better place to be.
Even if we accept that Highways England will ignore the irrational aspects of building a crossing east of Gravesend, which will not help Dartford, there are many problems with its latest plans for the lower Thames crossing that I and my constituents want addressed. The main purpose of this debate—I will end quite soon—is to outline my concerns and those of the Lower Thames Crossing Association. I and Mr Bob Lane from the association had an excellent meeting today with Tim Jones, the project director from Highways England, and we are very grateful to him for the intelligent and constructive way in which he is approaching this project. I hope that the Minister has a map of the crossing in front of him, but if not, I can provide one—[Interruption.] He does; excellent.
I will return to the crossing, but before I do so, let me quickly outline the concerns of my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe). He apologises for not being in the Chamber—it is my fault, because I did not inform him about this debate until yesterday—but he has four points, which I will read verbatim for the benefit of the Minister. The first is:
“Will not fix problem at existing crossing. Remain convinced that the current plans will do little or nothing to alleviate actual problem at existing crossing.”
Secondly, he wants more “Cut and cover” and says that
“wherever possible the route should be ‘cut in’ and below existing road, not above ground on stilts.”
Thirdly, he wants:
“Minimize footprint of”—
ugly—
“junctions wherever possible and put in place full mitigation.”
Finally, on “Air Quality”, he says:
“Demonstrate BEFORE construction how new LTC WILL improve already poor air quality experienced in Thurrock.”
I have three main requests. First, I want Highways England to remove the proposed junction on to the A226. On a positive note, I see that it has now removed that junction, which is extremely important for us if we are to avoid people using the rat runs through Gravesend and local villages when the Dartford crossing is gridlocked, as it will continue to be because building this crossing will not solve the problem at Dartford.
Secondly, given that there will not now be an exit at the A226—I apologise to people who do not have a map—I want Highways England to move the southern portal to the south of the A226. This would make a great difference to people living in the village of Chalk. It would also get my friend the rector of Chalk, Rev. Nigel Bourne, off my back, as the current proposals separates the village from his beautiful medieval church, so doing this would be a personal help to me.
Thirdly, I want to maximise the use of what Highways England calls green corridors. As much as possible should be done to reduce noise, pollution and environmental impact where the road will cross Thong Lane for the community at Thong and the community up at Riverview Park. This development will be 100 metres from those residents, and doing that, which we should consider in relation to the massive overall cost of the scheme, would generate enormous good will, which, frankly, is in short supply. I also hope that as much as possible of the spoil from the great big boring machine can be dumped so that people do not have to look at this eyesore.
What started as a roads project has, in my view, bizarrely morphed into an economic one. Of course it will bring wider economic benefits to Kent and Essex, but we are again at risk of having another big disconnect between the people who make decisions and those who suffer from them. I am not just concerned about several thousands of my local residents who will be very badly affected over the next 10 years or so while the crossing is being built, and some of them once it has been built, although they are obviously my main concern. This is a disaster for the people of Dartford, for every one of us in this Chamber and for every one of our constituents, because the traffic jams will go on and on, and we will be paying over £6 billion for that.
Even staff at Highways England admits that however many new crossings are put to the east of the existing crossing, at some stage they will have to come back to Dartford to fix the problem there. There is no getting away from the simple fact that the M25 runs through Dartford. We will fix the problem at Dartford only by separating the long-range national traffic from the local and regional traffic. To be frank, I fear that in 20 years’ time, when people wake up to this missed historic opportunity to fix Dartford, some of us will be seen as the guilty men and women.
The Parliamentary Under-Secretary of State for Transport (Paul Maynard)
I congratulate my hon. Friend on securing this debate on the lower Thames crossing. He raised his constituents’ concerns diligently, and I would expect no less from such an assiduous constituency MP. Before I respond to the detailed points he raised, I reassure all those who are impacted by congestion at Dartford that tackling congestion on the strategic road network has to be a priority for the Government and Highways England.
I beg my hon. Friend’s forgiveness for reflecting briefly on how we got to where we are. The idea of a tunnel crossing at Dartford was first proposed in the 1920s. Initially, a crossing between Tilbury and Gravesend was suggested to replace the ferry service, but that was rejected in favour of a route further upstream, nearer Dartford. Of course, the Tilbury to Gravesend ferry is still in operation today, providing a half-hourly service.
Meanwhile, the Dartford crossing has provided the only road crossing of the Thames east of London for over 50 years. It is now one of the busiest roads in the country, used 50 million times a year by commuters, business travellers, haulage companies, emergency services and holidaymakers alike, connecting communities and businesses; providing a vital link between the channel ports, London and the rest of the UK; enabling local businesses to operate effectively; and providing access for local residents to housing, jobs, leisure and retail facilities on both sides of the river. In summary, it is a critical part of our strategic road network.
The crossing opened in stages as traffic demand grew. The west tunnel opened in 1963, the east tunnel in 1980 and the bridge in 1991. The existing crossing, as my hon. Friend pointed out, is at capacity for much of the time and is one of the least reliable sections of our strategic road network of motorways and major trunk roads. As he well knows, congestion on and the closure of the existing crossing occur frequently. That creates significant disruption and pollution, which impacts on communities and visitors locally, regionally and, indeed, up and down the UK.
The Government recognise that a lower Thames crossing is needed to reduce congestion at the existing Dartford crossing and to support economic growth across the region. The objectives of the scheme include affordability for both the Government and users, value for money, improved resilience of the Thames crossings and the major road network, and minimising adverse impacts on health and the environment by improving safety.
In 2009, the Department examined five locations where an additional crossing could be built. The most easterly of those were found to be too far from the existing crossing to ease the problems at Dartford and were eliminated from further consideration. In 2012, the Department began to appraise the remaining three locations, leading to a public consultation the following year. Location A was at the existing crossing, location B would have connected the A2 and the Swanscombe peninsula with the A1089, and location C was to the east of Gravesend. Later that year, the Government announced a decision not to proceed with location B because of the impact on local development plans and the limited transport benefits.
The Government published their response to the consultation in July 2014, confirming the need for an additional crossing between Essex and Kent. It commissioned Highways England to carry out a more detailed assessment of the remaining two locations, A and C.
More than 47,000 people took part in the consultation, making it the largest-ever public consultation for a UK road project. Highways England analysed the consultation findings and reported back to the Department for Transport, and in April 2017 we announced that our preferred route for the crossing was at location C. The route comprises a bored tunnel under the Thames, a new road north of the river, joining the M25 between junctions 29 and 30, and a new road south of the river, joining the A2 east of Gravesend. The preferred route announcement allows for detailed design and assessment to be carried out on the route. Highways England has written to everyone within the development boundary and has contacted the 22,000 people who have registered for updates.
Having responded to the feedback received during the preferred route consultation, Highways England is now undertaking further work to understand the extent to which it might be appropriate to increase the tunnelled section of the route to reduce noise and other environmental impacts. Furthermore, in relation to some of the concerns my hon. Friend has just raised, Highways England is now putting forward some important changes to the project design in response to the feedback it received in the consultation.
The changes include a new design for the junction with the M25 to help it blend better with the local landscape; a new junction and link road at Tilbury to reduce the impact of HGVs on local roads; the removal of the proposed A226 junction at Gravesend Road to reduce the impact on local villages, as my hon. Friend mentioned; a new design for the junction with the A2 and a widening of the A2 through to junction 1 of the M2 to help improve traffic flow; and a proposal for three lanes in each direction between the A2 and A13, rather than just two, as this could provide greater benefits. In addition, Highways England will be assessing carefully the air quality and other environmental impacts of three lanes as it continues its design work. All the updates to the route design will be consulted on in 2018. This will allow all interested parties, including my hon. Friend, a further opportunity to give feedback on the latest version of the route.
An option to create a new crossing at Dartford was thoroughly assessed but rejected as it would not provide sufficient additional free-flowing capacity to the network. A new route at the existing crossing would not improve traffic resilience and would still cause severe congestion. The route would take at least six years to build and cause severe disruption affecting hundreds of millions of journeys while under construction. It would also worsen air quality and noise pollution in the immediate Dartford area.
The lower Thames crossing should not be seen as an isolated proposal. We have listened to concerns about the existing Dartford crossing.
Adam Holloway
I appreciate the constructive way in which my hon. Friend and the other Ministers have approached this since the decision was made, and, as I said, Highways England is being very decent, but I must return to my earlier point. How is a road that will reduce congestion at Dartford by only 14% still about traffic mitigation? It is not about sorting out Dartford; it has morphed into an issue of economic development, and we are kidding the public if we suggest otherwise.
Paul Maynard
I recognise the point my hon. Friend is trying to make. I have tried to make it clear that I am focusing on the traffic management aspects of the project, rather than the issue of wider economic benefits to which he refers.
I want to explain some of what we are seeking to do to improve matters at the Dartford crossing. Like many people, I recognise the concerns about the crossing. Anyone who has to drive through it will always bear in mind the possibility of severe delays. Highways England keeps the safety and performance of the crossing constantly under review to identify areas that can improve the crossing for all road users. The traffic safety system, introduced as part of the Dart charge, continues to be improved, together with the management of dangerous goods and abnormal loads.
Actions are being taken to improve the management of traffic during incidents and ensure the reopening of lanes as soon as possible afterwards. The road signing on the northbound Dartford crossing approaches is being reviewed, as is the movement of different types of vehicle as they approach the crossing, to see what improvements can be made.
Work continues with local authorities on both sides of the crossing to improve traffic flows between the local and strategic road networks, and I know that my hon. Friend the Member for Dartford (Gareth Johnson) is closely involved in those very discussions. That includes joint working by Highways England and Kent County Council on a number of improvement measures for the junctions used by traffic approaching the crossing directly from Dartford. Highways England will continue to monitor the conditions at the crossing to understand how various factors are contributing to its underlying performance. It will also evaluate the impact of the measures implemented, and the public will be kept informed of the findings.
Last but not least, as was announced alongside the preferred route for the lower Thames crossing, we are committed to delivering a £10 million package of measures over the next four years to improve traffic flow at and around the existing Dartford crossing. The roads Minister, my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), meets the chief executive of Highways England monthly, and I can assure my hon. Friend that the performance of the existing crossing is kept under regular review.
I heard very clearly my hon. Friend’s suggestions about connected and autonomous vehicles, and I assure him that they are a frequent topic of debate in the Department. We want to ensure that all road projects take account of the future use of technology, and of how that might change road use in particular.
We recognise that there is more to be done at the existing Dartford crossing, and I am sure that Highways England will keep my hon. Friend and neighbouring Members updated on its plans and future actions. I was pleased to hear that representatives of Highways England were able to meet my hon. Friend today, so that they could go through the plans in more detail, and I hope that that engagement will continue and deepen.
I trust that I have reassured my hon. Friend about some key facts. The Government understand the critical role played by the Dartford crossing and the M25 in our strategic road network, but we also understand its local significance for residents on both sides of the estuary, including those in my hon. Friend’s constituency. We take congestion at the Dartford crossing, and in the wider Dartford area, very seriously, which is why we are taking action to improve matters in both the wider strategy network and the Dartford area.
Adam Holloway
I greatly appreciate it.
Honestly, I love my constituents, but if I thought it was right to put the crossing there, I would man up, look them in the eye and say, “I am really sorry, but this is the correct decision.” Under any Government, including a Labour Government, I would say, “This is the right thing to do.” However, it is not about that. It is blindingly obvious to anyone that if we do not fix the M25 at Dartford, we will not fix the problem. What is the Department’s response to the fact that its own figures say that this new crossing will reduce congestion by only 14% at today’s rates, let alone by the time the thing is built? There is a desperate need for a new crossing at Dartford, and the Government will have to come back to it at some point.
Paul Maynard
I recognise the principal point that my hon. Friend is trying to make. The message that I am trying to communicate in return is that there are more ways than one of tackling the problem. I believe that substantial improvements can be made at the Dartford crossing in terms of ensuring its reliability and its stability, to ensure that when incidents do occur the road can be cleared as quickly as possible. I also think, however, that there is a wider strategic justification for the lower Thames crossing, which is why the Government made their announcement back in April.
We have to plan not just for the short term, but for the medium and the long term as well. We must develop the proposals for the lower Thames crossing as part of one of the biggest programmes of investment in the strategic road network in a generation. It supports motorists by investing in our motorways and our major A roads, which will boost economic growth, locally, regionally and nationally. That is why I think that we have made the right decision for the people of Kent, and for the people of Britain as a whole.
Question put and agreed to.