(5 years, 7 months ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
The measures taken in the Budget position Britain as one of the nations on earth that can take advantage of the extraordinary opportunities that are transforming every economy, every trade and every industry in the world. During the past few years, much of the economic debate has centred on two big subjects. The first is how to repair the economy from the ravages of the financial crisis and the previous Labour Government, when borrowing soared to 10% of national income and nearly one in every four pounds of what the Government spent was borrowed. Through eight years of fiscal discipline, involving sacrifice by the British people but backed in three general elections, the public finances have now been transformed so that this year borrowing will be not 10% but 1.9% of national income, and our national debt will fall in every year ahead, falling over the period of the forecast by over 10% of our national income. Sound money is the foundation of a sound economy, and the Conservative party has once again restored it to Britain.
Secondly, much of the recent debate has of course been about Brexit, and the Chancellor was clear that we are looking to secure a good deal with the European Union in the weeks ahead, and that achieving that will provide a further boost to the economy as growth will be revised upwards and, with it, revenues, jobs and wages. Our modern industrial strategy, reinforced by measures in the Budget, can see us enhance the prosperity of every part of the United Kingdom.
David Hanson (Delyn) (Lab)
The Secretary of State mentioned Brexit. Has he seen the Office for Budget Responsibility document that says that because of the uncertainty caused by his Government’s handling of Brexit, the economy was between 2% and 2.5% smaller by mid-2018 than it would have been otherwise?
Greg Clark
If, as I hope and expect, we secure a good deal, those figures will be revised upwards, with consequent benefits right across the economy.
This is one of the most exciting times in the history of business, technology, science and commerce. From farming to retail, from manufacturing to the creative industries, the analysis of previously unimaginable quantities of data is changing lives. Doctors can diagnose diseases and treat them successfully even before we display any symptoms. As Members with interests in the automotive sector will acknowledge, there will be more change in the cars we drive in the 10 years ahead than since the invention of the internal combustion engine, as electric motors replace engines and navigation by satellite and sensor replace human control.
Mr Jim Cunningham (Coventry South) (Lab)
As the Secretary of State knows, a lot of developments are taking place in the automobile industry, for example in Coventry on electric cars. He will also know that there are a lot of concerns in companies including Jaguar Land Rover in relation to the diesel tax on the one hand and Brexit on the other, and the Secretary of State has been very good in meeting us on those subjects.
Greg Clark
I am grateful to the hon. Gentleman for what he says. I am a regular visitor to the west midlands and to Coventry, and of course it is vital for one of our proudest and most successful industries that we should be able to build on that success by seizing the initiative in the years ahead. Every country in the world is moving to electric and autonomous vehicles and, including in the hon. Gentleman’s constituency, we have some of the best brains on the planet in developing that new technology. I am absolutely determined that we will not do what happened in the past—we invent the technologies yet see them deployed elsewhere—but that instead we will manufacture these batteries and these vehicles, and that we will do so in every part of the country.
Greg Clark
I will give way first to another west midlands MP, the hon. Member for Birmingham, Northfield (Richard Burden).
Richard Burden
Will the Secretary of State recognise the real concerns expressed to him by the automotive industry about the contradictory and confused signals coming out of Government in relation to fiscal policy and vehicle excise duty? Is there not something wrong when the system as it is at present penalises most the cars that are the cleanest and most CO2 efficient? In the next few months, as he and his colleagues consult the industry on the introduction of the worldwide light vehicle test procedure, will he ensure that such perverse incentives do not continue into the next financial year?
Greg Clark
The hon. Gentleman makes an important point. The next generation of diesel engines are much more environmentally friendly and fuel-efficient than their predecessors, so to replace an existing old-style engine with a new one is a step in the right direction, and I have been very clear, as I think he knows, that diesel will have a role to play as we transition to a 100% emissions-free world. That is captured in the “Road to Zero” strategy on which we consulted the industry, and I know that he was involved in those discussions.
Albert Owen
The Secretary of State talked about not losing our ideas. He will know that there are great ideas now in the marine energy technology sector, but they are at an early stage and companies need help and support before they can manufacture in this country. Will he have a word with the Chancellor so that we can have proper ring-fenced finance for this industry, as we had for wind energy under a Labour Government and for solar? Those sectors are now successful, but marine energy is lagging behind.
Greg Clark
We have an expanding innovation budget and we will have more to say about that in the weeks ahead, because our industrial strategy recognises the importance of seizing the opportunities that we have in clean growth, in which we are a world leader in many cases. I want to do with clean growth just what we are doing in the automotive sector, and marine and tidal energy is an important part of that.
Steve Double (St Austell and Newquay) (Con)
This is not just about manufacturing. If we are going to be successful, we are going to need the raw materials. As the Secretary of State will be aware, there is great potential in Cornwall for lithium mining, which will become ever more important with all the electric vehicles we are going to have. So does he share my enthusiasm for that potential, not just for the Cornish economy but in securing a domestic supply of this ever more important metal for the UK?
Greg Clark
My hon. Friend makes an excellent point, and it is his second chance in the space of an hour to talk about Cornwall’s place in our industrial future, whether through lithium for batteries or as a centre for the launch of satellites and space vehicles. He makes his case passionately, and of course we want to make sure we can source the materials for this new technology. Cornwall is a good place for that.
On clean growth, last year was the first time since the industrial revolution, forged in this country, in which a day passed in Britain with no coal being used to provide our power supply. This revolution is gathering pace, and the most exciting thing about these transformations is that Britain—British businesses, British scientists, British designers, British inventors, British workers—can lead the world in every one of them. Of the satellites that gather and transmit information for cars to navigate, a quarter—[Interruption.] I am surprised that the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), who I thought had an interest in science and technology, would not want to acknowledge the fact that a quarter of all the communications satellites orbiting the Earth today were built in Britain. We have over half the entire world market in the booming small satellite market. As my hon. Friend the Member for St Austell and Newquay (Steve Double) pointed out to the Prime Minister today, we will have the first satellite launch pad in Europe. We are not just manufacturing and inventing the technology, therefore; we will be the go-to place to launch it as well.
Chris Ruane (Vale of Clwyd) (Lab)
The Secretary of State mentioned satellites. May I point out that 100% of the glass used in space technology and satellites around the globe is built in my constituency by Qioptiq?
Greg Clark
I did not know that, but I will add it to my repertoire of boasts about our national capability, and I am very pleased to learn it.
We are now the leading country not just in Europe but in the world for deploying offshore wind energy. The cost of production has fallen by half since 2015, and factories and jobs are springing up all around our coasts, from Belfast to Hull, from Machrihanish to the Isle of Wight. I see that my right hon. Friend the Member for Sevenoaks (Sir Michael Fallon) is present; he played an important role in setting the strategy that has resulted in that investment.
Also, having been the place where the genome was sequenced, we are the place where the secrets that it unlocked are being discovered and applied to the benefit of patients.
Our modern industrial strategy reinforces Britain’s future as a place of competition, innovation and challenge where new ideas can take flight and where any incumbent can be challenged by the newest start-up. Monday’s Budget pressed home the advantages and continued the progress we are making, including in addressing areas in which we need to improve. We have the biggest increase in public investment in research and development that this country has had in its history, with £1 billion more for the industrial strategy challenge fund.
Vicky Ford (Chelmsford) (Con)
This morning, leaders in genomics met in the House of Commons. They are world leaders based in Britain, and they told us how cures and treatments are being delivered to patients in the NHS today. Does my right hon. Friend agree that it is this Government’s investment in science and research that has led to us being a world leader in this area?
Greg Clark
I agree with my hon. Friend. I had a good meeting with the global chief executives of some of the most important life sciences companies around the world, in which it was readily acknowledged that the strength of our science base, and the visibility of our commitment to reinforce it, to invest in it and to apply it in manufacturing, is causing investment to be made here. The global pharma and life sciences company MSD has announced that its new research centre is going to be here in the UK, and I had the pleasure of opening the Novo Nordisk facility just a few months ago. It is evident that there is more to come. One of the benefits of a long-term strategy and commitment is that it can have short-term results because people invest on the back of it.
Daniel Zeichner (Cambridge) (Lab)
The Secretary of State is talking positively about the future of the life sciences sector, but does he recall that just last week the head of the Association of the British Pharmaceutical Industry told the Select Committee on Exiting the European Union that without full membership of the European Medicines Agency, the future of the life sciences industry was not tenable in this country?
Greg Clark
I do not agree. I think that the future of the industry is strong in all scenarios. I regard our ability to participate in institutions and research networks as being of great importance, and that is why I hope that the deal that is being negotiated will succeed and that we will be able to move forward based on that confidence.
Kevin Hollinrake (Thirsk and Malton) (Con)
Does my right hon. Friend welcome our ranking in the climate change performance index? The UK is fifth in that index, ahead of Finland, France and Germany.
Greg Clark
I do recognise that. The combination of a rigorous commitment to emissions reduction targets and an industrial strategy that makes it possible for us to glean the benefits of that is being admired by many countries around the world.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
Does my right hon. Friend agree that carbon capture, utilisation and storage has enormous potential? I had a meeting with the Carbon Capture and Storage Association this morning, in which it emphasised clearly that a development pathway in 2019 would have enormous benefits for our ability to deliver a net zero target by mid-century.
Greg Clark
I agree with my hon. Friend. That is a good example of how a strategy to integrate different strands of policy and work can be of great benefit to many of the industries on Teesside that he represents so well. We will have more to say about that.
Building on the success of the Faraday challenge, which aims to make Britain a place for the design and manufacture of new battery technologies, the Stephenson challenge referred to in the Budget will support innovation in electric motors. We are emphasising the “D” side of R&D: development as well as research. The “Made Smarter” review, which was championed and led by Juergen Maier, the chief executive of Siemens in this country, is spreading the take-up of new manufacturing technologies to businesses small and large. A national quantum computing centre will scale up quantum systems into workable machines. An industrial energy transformation fund will help many energy-intensive businesses to reduce their energy costs as they transition to a low carbon future, at the same time as making them more competitive.
New fellowships in artificial intelligence will attract the world’s best research talent to our shores, building on our success with institutions such as the Turing Institute. On infrastructure, the Budget ensures that the digital revolution will extend to all parts of the country, through new funding for new ways of deploying full fibre broadband in rural locations.
John Howell (Henley) (Con)
The one thing that goes across all the areas that my right hon. Friend has been talking about is our investment in fusion technology. He might be about to say something about that, but I was really pleased to see £20 million being given to that area in the Budget. Will he confirm that the Euratom issue is now over, and that we can look forward to a successful fusion technology industry continuing in this country?
Greg Clark
I am grateful to my hon. Friend for his question, which gives me the chance to confirm that there will be £20 million of investment—and it is investment—in the centre of excellence in fusion research. It will pay dividends for many years to come. The discussions on the successor arrangements to Euratom have gone as I hoped they would—that is, cordially and expeditiously—and good progress has been made on all the issues under discussion. We have made the necessary agreements with most of our major counterparts.
On places, the Budget announced extra funding for the Strength in Places fund, supporting local collaborations between business and research across the UK. This was also an important Budget for Britain’s small businesses. Extending the start-up loans programme will help more aspiring entrepreneurs to take the plunge. Further funding for the knowledge transfer partnerships will place graduates in smaller firms across the United Kingdom. The fivefold increase in the annual investment allowance will help to support firms as they invest and grow, and the £1.5 billion boost to small high street retailers, including £900 million in business rates relief, will support small businesses right across the country.
Ellie Reeves (Lewisham West and Penge) (Lab)
The post office in our high street has been downgraded from a Crown post office and its services are being reduced. Our retailers in our high street are worried that this will mean fewer people coming into the community. What can the Minister say to reassure the retailers in our high street?
Greg Clark
One of our proudest achievements in Government has been to halt the destruction of the post office network—[Interruption.] It is substantially the same in numerical terms across the country as it was when we came into office. That is very important, for exactly the reason that the hon. Lady has set out. Post offices are crucial to many high streets and to the many small businesses that make use of their services.
We are in the early days of a period of spectacular opportunity for Britain. The truth is that none of the achievements that are within our grasp would be possible without the willingness of investors and entrepreneurs to take a risk in backing new ideas.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Notwithstanding the attractions of Cornwall, the vertical take-off site for the UK is going to be in my constituency, and I would be churlish if I did not express my thanks to Her Majesty’s Government for that decision. In Caithness, we have exactly the kind of skills and knowledge in Thurso and Dounreay that the Secretary of State is referring to. Will the Government ensure that those skills and that knowledge are transferred and used to boost the laudable scheme for the space launch in my constituency?
Greg Clark
I am glad to hear that from the hon. Gentleman. I had a great visit to his beautiful constituency and he is right to say that it has skills that can be deployed in the space industry now. It also has the opportunity, working with local colleges, to develop and grow the skills that the space industry will need if it is to create good, well-paid jobs there in the future. This decision is great news for the north of Scotland and for the whole of the United Kingdom.
Stephen Kerr (Stirling) (Con)
I welcome the £200 million more that is to be given to the British Business Bank as part of the Budget, and also the announcement that a team from the bank is to be based in Scotland. The Secretary of State knows that I have an ongoing concern about the availability of quality patient capital, especially for small and medium-sized enterprises. What is his assessment of the current availability of that kind of capital?
Greg Clark
My hon. Friend highlights a piece of advocacy that he has made personally and as a member of the Business, Energy and Industrial Strategy Committee to ensure that we give growing businesses the ability to expand. That investment by and through the British Business Bank, particularly through its regional focus on Scotland, Wales and Northern Ireland, is very important. It should be close to the people in whom it is investing.
By investing in new equipment and employing new people, it is businesses that create jobs, not the Government. Businesses provide people with the earnings they need to live good lives. After the family and education, it is businesses that provide most of us with the best opportunity to develop and make the most of our talents. It is businesses that pay for every single one of our public services, both directly and by employing people. Governments cannot do such things, but they can stand in the way. There is no successful society anywhere in the world that is not based on successful businesses.
However, at a time when we need national determination to invest in future business success through a long-term approach, we have an Opposition whose would-be Chancellor describes business as the “real enemy”. A month ago in Liverpool—a city that drove out business when the hard left last seized power, taking a generation to recover—a chilling warning was sounded to the world: “If you dare to invest in Britain, 10% of your value will be seized forever without compensation. You’ll be taxed at the highest level in the peacetime history of this country. You’ll be trapped in a nightmare economy where, at a stroke, the state goes a third of a trillion pounds more into debt. The would-be Government fully expect a run on the pound and capital flight.” Whatever uncertainty there is over Brexit, businesses tell me time and again that their biggest nightmare would be to have the Leader of the Opposition and the shadow Chancellor in Downing Street.
The choice could not be clearer. Britain has the chance to be in the vanguard of the most exciting developments in the history of global commerce and innovation, or to be shunned by investors as one of the most left-wing, anti-enterprise, ruinously indebted nations in the developed world. The aim of this project is to build a country in which our children and grandchildren can look forward with confidence to ever-stronger security and ever-growing opportunity. That choice has never been more vital for Britain, and I commend the Budget to the House.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
With the leave of the House, I shall speak instead of the shadow Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey), who has been taken ill and is disappointed not to be here today. We wish her a speedy recovery.
Every Opposition Member is disappointed by the Chancellor’s Budget, which can best be described as a “broken promises” Budget, despite the spin that the Secretary of State has tried to place on it. The Prime Minister promised the end of austerity, but the Chancellor was already backtracking within the first few minutes of his speech, simply saying that austerity is “coming to an end” and even that turned out not to be true. Austerity is certainly not over.
The truth is that the small giveaways in this Budget do not begin to even touch the sides of the cuts made since the Government took office. The £1.7 billion promised to universal credit is less than a third of the £7 billion of social security cuts still to come. School funding has been cut by 8%, but there was nothing to fill the gap, and the Chancellor’s idea that schools should be grateful for a one-off payment of £400 million for “little extras” is insulting. Local councils still face a funding gap of £7.8 billion by 2025, and budgets will be cut by a further £1.3 billion next year. How is that the end of austerity? In fact, the Resolution Foundation has predicted that the Department for Business, Energy and Industrial Strategy will have suffered a real-terms per capita cut of over 50% by 2024.
Dan Carden (Liverpool, Walton) (Lab)
The Secretary of State just mentioned Liverpool. Since 2010, Liverpool’s local authority budget has been cut by 64%. That is the problem that Liverpool is facing today.
Chi Onwurah
My hon. Friend makes an excellent point. All our constituents have had to suffer cuts to services, so for the Secretary of State to say that austerity is over is an insult to our intelligence.
Mr Kevan Jones (North Durham) (Lab)
Like Liverpool, Durham County Council has lost nearly half its budget since 2010, and the cuts are still going on. This Budget contained no change to next year’s cuts in revenue support grant, so another £40 million will be taken out of the council’s budget.
Chi Onwurah
My hon. Friend is absolutely right. The services that make such a difference to our constituents’ daily lives face increased cuts, which is why our constituents know that austerity is not ending under this Government.
Mr Simon Clarke
Do the hon. Lady’s constituents want to pay billions more in tax or to have the nation weighed down by billions or even trillions more in borrowing?
Chi Onwurah
Our manifesto commitments show that 95% of the people of this country would not suffer any tax increase under a Labour Government. The Conservatives have managed to double our debt, while preaching austerity—doubling the debt because the economy did not grow significantly under the austerity ideology.
The Secretary of State may point to the increased spend on the NHS as an example of austerity ending, but the Health Foundation has branded it as simply not enough. Paul Johnson of the Institute for Fiscal Studies said yesterday that if we look at total spending—[Interruption.] The Secretary of State seems to suggest that health spending is not relevant to the economy, but it is the wellbeing of all our constituents that enables us to deliver an economy that works for everyone. Paul Johnson of the IFS said:
“If you look at total spending beyond the NHS it’s not really going anywhere… If you look at total spending as a fraction of national income, it’s not really going anywhere... This is not a dramatic change in the sense of undoing much of the cuts we’ve had over the last eight years.”
The Chancellor has squandered an opportunity to repair the damage done to our public services and our economy by his predecessor’s pursuit of a failed economic ideology. That ideology has created many of the problems holding back our economy today, from chronically low productivity and business investment to eye-watering levels of inequality in terms of both income and geography.
Vicky Ford
What was eye watering was the debt under the previous Labour Government. Does the hon. Lady not agree that growth of over 1.5% going hand in hand with public spending is a phenomenal achievement and is thanks to a balanced economy?
Chi Onwurah
The hon. Lady should finally recognise that the economic crisis—the crash—was caused by casino capitalism and reckless bankers, and the Conservative party chose to make the poorest people pay for it, and they continue to pay, given the slowest recovery since the Napoleonic era.
Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)
Does my hon. Friend agree that the economy was growing and national debt was below 50% when Labour left Government? Debt has grown to 85% under this Government because of their failed austerity programme. Indeed, when we built the NHS in 1948, debt was 250% of GDP, but it dropped because we invested in the economy.
Chi Onwurah
My hon. Friend is absolutely right. He could give a lesson in basic economics to most Conservative Members.
Mr Kevan Jones
Is it not a fact that debt was 43% of GDP when Labour came to office in 1997 and went down to 40% by 2006? That was down to good management of the economy before the crash. Through those years, the Conservative party was not just agreeing to our spending commitments, but asking for more expenditure, so we will have no lessons from the Tory party about reckless spending.
Chi Onwurah
Absolutely. The Conservative party initiated and promoted the reckless deregulation of our financial sector, which contributed significantly to the financial crisis, and then failed to manage the economy in such a way as to ensure sustained, significant growth. Under this Government, we have had half the historical level of growth.
The prognosis for growth is reflected in business investment, which is the lowest in the G7. We are the only major economy in which investment is falling. Our productivity is 15% lower than in other major economies, and it has not grown this slowly since the Napoleonic wars—there is an achievement. The average real wage growth since the second world war is 2.4% a year, but under the Conservatives, pay has fallen by 3% and the UK remains the most regionally unequal country in Europe.
We needed a big Budget to rebalance our economy and to provide the industrial strategy with the backing it needs to address the serious problems, but the Budget is deeply disappointing. We got an arbitrary announcement of more funding for the national productivity investment fund, but that will be in 2023, with no information on where the money will be allocated.
On research and development, we had another repackaging of money that was announced last year dressed up as additional funding when, in fact, of the £1.6 billion cited by the Government only £180 million, barely 10%, is new. Although we are pleased that there has been a marked increase in R&D expenditure, there is still no overarching strategy for its direction or for how the Government intend to meet their target of spending 2.4% of GDP on R&D. We are a world leader in science, but, let us be clear, the Government’s 2.4% target is average when it comes to R&D spend. Labour’s target is 3% to become one of the leading nations in R&D spend.
What little information there was in the Budget again focused on sexy high-tech areas like nuclear fusion and quantum mechanics. As an engineer, I understand the desire of the Prime Minister and the Secretary of State to be associated with sexy technologies, and it is of course a vital part of our industrial strategy to support the industries of the future, but the Secretary of State has repeatedly failed to recognise that supporting our biggest sectors to improve their productivity through technology and investment is so important.
Retail is one of the biggest employers outside the public sector, and it is facing a unique crisis. Over 100,000 jobs have been lost in the past three years, and over 25,000 shops stand empty. High streets are the centre of communities, and they should and can continue to be vibrant spaces of which communities are proud, but to achieve that we need proactive policies from the Government, as Labour have been demanding for months.
The Secretary of State has been a bit cheeky and stolen a number of Labour’s policies in this area. A register of empty properties, an adjustment to business rates and a high street taskforce were just some of the policy proposals in the conference speech of my hon. Friend the shadow Secretary of State. It would be churlish of me to demand our policies back, but that is where the consensus ends.
The Government’s overall package, “Our Plan for the High Street,” simply does not do enough. Business rates relief would not have saved a single House of Fraser or Debenhams—the vast majority of retail workers are employed in such shops. The British Retail Consortium has said that the Government
“must engage in more extensive business rates reform to help all retailers and their employees through this period of transformation.”
The CBI responded:
“Smaller businesses will be relieved by the support on Business Rates… But larger retailers and manufactures—and the millions they employ across the UK—will continue to suffer needlessly until there is a full, in-depth review.”
Yet the Budget contained no commitment to a review of business rates.
The future high streets fund is yet another fund allocated out of the national productivity investment fund, and there are no details of where the money will be targeted, who will be responsible for administering it or how quickly funds will be made available. The proposals for planning reform have missed the point. It seems that the Government’s idea to save our high streets is to turn them into non-high streets. Frankly, much more work is needed if we are to protect our high streets and the millions of workers who rely on them.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
My hon. Friend is making an excellent point about the high street. Does she agree that it is ridiculous of the Chancellor to ask that local authorities develop a plan for their high streets, which is something we support, while he is taking away the means for them to be able to plan for their high streets by introducing yet more permitted development?
Chi Onwurah
My hon. Friend makes an excellent point. The attack on the capacity of local authorities, as well as on their powers, means that their ability to determine the future of our high streets is severely limited.
Retail is our biggest employment sector, and many of the job losses will be in towns and cities outside London and the south-east where good jobs are already hard to find. The precariousness of work in the retail sector is one symptom of the crisis blighting high streets across the UK.
There is very little in this Budget for workers, across all sectors, who after eight years of austerity are facing an uncertain future. Only yesterday, workers marched on Parliament to demand proper pay and terms and conditions. Many of those workers are outsourced to private providers and are on precarious, poorly paid contracts. Yet the Government continue to turn a blind eye, and there is absolutely nothing in the Budget to improve the lives of those marching.
Stewart Malcolm McDonald (Glasgow South) (SNP)
The hon. Lady is completely right on that point. Does she agree that it is a disgrace that, after Ministers from the Department for Business, Energy and Industrial Strategy talked out my private Member’s Bill to ban unpaid trial shifts, which are a blight on retail, the Government now refuse to meet anybody to talk about it, despite acknowledging that unpaid trial shifts are a major problem?
Chi Onwurah
The hon. Gentleman makes an excellent point, and I look forward to the Government’s response.
Chi Onwurah
I will now make some progress, as I am sure Mr Speaker will not indulge me much longer.
I am not sure what is needed for the Conservative Government to see that their economic policies are causing more harm than good. Rising prices and stagnating wages mean that people are now £800 a year worse off than they were a decade ago. Just under half a million young people are still unemployed, and one in nine are in insecure agency work, on a zero-hours contract or in low-paid self-employment. That is the everyday reality for millions of working people—the people behind the supposed record levels of employment bandied about by the Government as the marker of a successful labour market.
The truth is that there are real issues in our labour market—rising insecurity, stagnating wages and a productivity crisis—so it is disappointing to see so little to address them in the Budget. There are increases to the minimum wage or, as the Government have rebranded it, the national living wage, but it is still significantly below the rate set for the real living wage. One in five people earn less than the wage they need to get by, according to the Living Wage Foundation, and the increases will not change that. In addition, unlike the Government’s minimum wage, the real living wage is based on a review of the evidence on what is happening to people’s living standards right now.
The Government’s failure to immediately reform the IR35 rules, which govern how much tax those working as contractors pay, shows that they are refusing to take tax avoidance seriously. By pushing back those reforms to 2020, the Government are denying themselves much-needed revenue, which could be used to properly fund our schools and the NHS, or to pay workers a decent wage. How many more people need to take to the streets protesting about their precarious working conditions? How bad do things have to get before the Government finally take action?
We have heard lots of warm words about defence spending, but they are cold comfort to many of the workers in the shipbuilding industry, such as at Cammell Laird and Appledore, who are facing real uncertainty as to whether their jobs are safe. It is disappointing that the Government failed to announce any support for our manufacturing or shipbuilding industries, which are vital to our long-term economic success.
In the same month that the Intergovernmental Panel on Climate Change, the leading authority on climate change, set out the devastating consequences for human civilisation of a business-as-usual approach and the scale of ambition needed to avoid dangerous climate change, what did the Chancellor do? He did not even mention climate change, and the Red Book was little better. The Chancellor left the carbon price support unchanged and said that the Government would seek to reduce the rate if the total carbon price remains high—that is as clear as mud. The Chancellor tinkered at the edges of the climate change levy, a policy introduced by Labour but undermined by his predecessor, George Osborne, who removed exemptions for renewable energy. The Government did announce a £315 million industrial energy transformation fund to support businesses to increase their energy-efficiency. That sounds good, but when we realise that it will be paid for entirely by money saved from scrapping capital allowances for energy and water efficiency, which enabled businesses to claim back the costs of investments, we see that it is really just rearranging the furniture.
What else was there? As has been said, the Government announced £20 million for nuclear fusion. I do not know whether the Chancellor’s understanding of nuclear fusion is as limited as his understanding of blockchain, but these figures should illustrate the challenge here: £20 million is 330 times smaller than the €6.6 billion the EU will contribute to one nuclear fusion experimental facility in France—this is not even a drop in the nuclear ocean. Of renewable energy—wind, solar and tidal—not a single mention was made, at a time when electricity and gas wholesale prices are rising, and we enter another winter with household bills surging and millions facing fuel poverty. There was £10 million for urban tree planting and a commitment to purchase £50 million-worth of carbon credits from tree planting, although it is unclear whether that is new funding. The lack of action on climate mitigations is disappointing.
John Howell
I think the hon. Lady’s figures on fusion technology are completely wrong, as she is not comparing like with like. The project in the south of France is a commercial project to make fusion possible at a commercial scale. That means that the projects continuing in the UK do not have to be at that scale, and the £20 million is an enormous contribution to what they are trying to do.
Chi Onwurah
I thank the hon. Gentleman for his intervention, but in fact he illustrates the scale of the problem. Nuclear fusion requires significant investment in order to commercialise it, as he would agree. The level of investment that this Government are making in it is entirely inadequate to meet the challenge and in respect of the contribution fusion can make to our economic and climate future.
Labour is serious about achieving a net zero emissions economy before 2050. We are developing policies to dramatically decarbonise energy and insulate 4 million homes in our first term, as part of our green jobs revolution. We believe in the power of people, the power of leadership and the power of government to address what are frankly existential challenges. After eight years of austerity and counting, it is evident that the Tories have given up on this. This Budget shows the Tories giving up on the planet, too. They lack both ideas and the courage to do what is needed. They must step aside.
Mr David Davis (Haltemprice and Howden) (Con)
It is a pleasure to follow the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), a fellow scientist, albeit some of her evidence could have perhaps benefited from a peer review. May I ask her, on behalf of the whole House, to pass on our best wishes to the Secretary of State for a speedy recovery—
Mr Davis
Shadow Secretary of State, yes. I do not think my right hon. Friend the Secretary of State requires any help in recovery. He is a formidable champion for business, as I know, sometimes to my cost, from my old job. He has been a brilliant exponent and driver of the enabling of the modernisation of the British industrial estate. I wish to pick up on one point made by the hon. Lady. She talked about the treatment of employees, the so-called “gig economy” and so on. My right hon. Friend was the one who brought us the Matthew Taylor report, with all of its innovative ideas to improve the protection of employees in our country and at the same time not destroy the jobs that they enjoy. That is pretty formidable in its own right, so I commend my right hon. Friend for that, although I do not intend to take us down that route today.
I have only three quick points to make. I shall be brisk and I probably will not take any interventions. Traditionally, the Budget is dominated by the technical metrics of growth rates, inflation rates, taxation, deficits, debt levels and spending. All those things are incredibly important issues. Indeed, one reason why it would be a disaster to have a Labour Government is that they would ignore all those things and deliver us into national bankruptcy, with the economic crisis and the social crisis that would follow. What is important is to understand that a Conservative Government do take all those things seriously, as they are the box in which we deliver the Budget. The Budget is about improving people’s lives and delivering the best outcome for our nation. As Conservatives, we believe in a narrative of a property owning democracy encompassing opportunity, personal responsibility, economic freedom, fairness and social mobility. For most of my colleagues, our view of the right sort of society for us is one where there is no limit to which anyone might rise and a limit beneath which no person may fall.
With that, I want to measure this Budget against the aspirations of our citizens: does it meet their aspirations to have a good university education; to get a job and build a meaningful career; to buy a home and raise a family? Those are aspirations that everyone shares, across the House and across the nation—we share them with all our constituents. Everyone should have the opportunity to pursue them.
All political parties talk a good story when they are trying to persuade people that they are on their side, but it is what Governments do, not what they say, that matters to the people. Nowhere is that more true than in the Budget; the language of public finance is the language of priorities, which is why this is so important. Starting with the definition of a decent society, both the ladder of opportunity and the social safety net are determined for the least well-off by the benefits system—by the welfare system. That is the key that underpins the opportunities and security for all the least well-off.
For decades, the British welfare system has been a nightmare of complexity in which hard work was in effect penalised, sometimes to the point of it being not worth while at all from an economic point of view, although work is always worth while from a moral point of view. The coalition Government started the necessary reform by introducing the universal credit system. Much has been said about it—it has been controversial—but the whole system is a significant step in the right direction.
The tax credits and benefits system introduced by Gordon Brown all too often trapped people in a cycle of dependency, which was not unforeseeable. I was the Chairman of the Public Accounts Committee when he introduced that system, which he copied from a system in America that was already failing, and it was clear what was going to happen. Many people who made the effort to go out and find work faced an effective tax and withdrawal rate of up to 95%.
A benefit system should seek to aid people’s return to work, not trap them in unemployment. Universal credit seeks to correct that problem by helping more people into work and enabling them to keep more of what they earn, but it absolutely has to be properly funded. I therefore welcome the most important part of the Chancellor’s Budget: his announcement on universal credit. We must make sure that those in most need, including single parents—those who know me will know that single parents are of particular importance to me—couples without children, and those who should not be economically dependent on their partners, are not left wanting by subsequent changes. Universal credit will need further funding beyond what is promised in the Budget, and I shall certainly watch out for that. Nevertheless, the Chancellor has taken excellent action, for which I commend him.
The next most important way to help people make the most of their lives is through education and training, which the Secretary of State has been a great exponent of in his role. However, today, the cost of getting a university education, plus the confusion around financing, act as a disincentive to getting one. I am afraid the policy on student loans has failed. Almost half the loans will never be repaid. They are a falsehood in the national accounts. Crucially, the loans system has failed to deliver a market in university education—[Interruption.] The hon. Member for Stalybridge and Hyde (Jonathan Reynolds) should not be smiling: Labour basically invented the system and created the problems that I am about to talk about.
The loans system has failed to deliver a market in university education, with the least valuable courses at the worst universities costing precisely the same as the most valuable course at the most prestigious university. That is not a market. At least some of the money has gone not into world-class research but into overpaying some pretty second-rate vice-chancellors. The whole system needs to be revamped and turned into a proper graduate-contribution system with honest accounting, clear rules and no retrospective changes to the interest rates or other terms. In the long run, we should move away from loans all together; that would have a liberating psychological impact on young people.
Mr Davis
I will tell the right hon. Gentleman why I will not give way: because he was part of the Government who invented the system that created this crisis in the first place.
We need to do more on housing, which is an issue of utmost importance. Home ownership levels are plummeting, and many young people believe that they will never have a home to call their own. As a party of aspiration, we must do better. Help to Buy is failing: it is not increasing the supply of housing; rather, it is increasing the cost of new homes by 15% and inflating developers’ bonuses. It should be scrapped immediately. We need to increase the supply of new homes dramatically and to make those homes attractive and affordable. Perhaps the best idea that is being mooted—forgive me if I go off piste for a second, Mr Speaker—is that of garden towns, garden cities and garden villages. Garden villages of between 1,500 and 5,000 houses will be big enough to justify schools, shopping centres, buses and so on.
The landowners where such developments are created make spectacular windfall gains—in the south of England, they make as much as £1 million an acre—which is where the Treasury comes in. There is no reason why half of such gains should not be funnelled in a way that reduces the final price of the house. That way, when we create affordable housing, it will be proper affordable housing, of a decent size—it will not be a little box, a progressively shrinking option. That is how we will get the affordable houses that we need. However we do it, we in the Conservative party have to grasp this problem and solve it. This party has for more than 50 years been the party of the home owning democracy. We need once more to make home ownership available to a whole new generation.
Since the Gordon Brown crash—I was going to call it the 2008 crash—we have heard a lot about the threats to capitalism, which are of course real in, for example, the personality of the Leader of the Opposition. The simple truth is that free markets, free trade, property ownership and social mobility have delivered improvements to the lives of billions around the world. Capitalism has taken people not just in Britain but around the world out of poverty and given them a future. The best defence of capitalism in this country is to deliver those benefits to a new generation of young people. Britain is an aspirational country and we are an aspirational party; we need to deliver on that.
The first step is the economy’s fantastic jobs performance. The Opposition never like to speak about the fact that we have the lowest unemployment in my adult lifetime and the highest employment ever in this country. That is a remarkable achievement given the mess we were given when we came into office. The right hon. Member for North Durham (Mr Jones) intervened on the shadow Minister earlier to say that when Labour came into power in ’97, the debt was such and such, and so on. When Labour came into power in ’97, the chief economic adviser to the then Prime Minister Tony Blair said publicly, “This is the best economy any Government have ever inherited”—
Mr Speaker
I do not think the Chair is the arbiter of normality. Sometimes the Member on his or her feet gives way, and other times not. The right hon. Gentleman is experienced enough in this House to know that. He has registered his mild irritation, but the right hon. Member for Haltemprice and Howden (Mr Davis) has adhered to the rules today, as on previous occasions.
Mr Davis
Thank you, Mr Speaker. That attempt at an intervention came one sentence from the end of my speech, to which I shall simply add that it seems to me that some points of order are as bogus as the facts to which the right hon. Member for North Durham claims to aspire.
Throughout the past 50 years, Governments of all parties have made enormous claims for their intentions on social mobility, but in delivery they have fallen short on nearly all those claims. This shall be a Government who deliver on social mobility and on the real value of a capitalist economy. On that basis, I commend the Budget to the House.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
The Prime Minister promised to end austerity. The Chancellor said it is “coming to an end.” The Budget proved simply to be yet another rebranding exercise. The Tories are good at making promises, but they are bad at keeping them. The Resolution Foundation pointed out that, to end all spending cuts through all Departments by 2022-23, the Chancellor would need to spend £31 billion. Ten years after the financial crash, nothing has changed. The Chancellor continues to balance the books on the backs of the poorest in society. And that is before we even consider the impact of Brexit, which, incidentally, merited only a passing mention in the Chancellor’s speech.
Household budgets face tougher times as Brexit goes from holding the economy in its teeth to biting down and spitting out those who can afford it the least. That is not an outcome that we want to see for people in any of the UK’s nations, but Scotland actively voted to avoid it. That is why we in the Scottish National party believe that the power over the future of the people of Scotland should be in their hands, not in the hands of a Government who are wilfully ignoring the wishes of the Parliament in Scotland.
The way in which the Government are playing their hand is making the case for independence for Scotland for us, but let us see whether they can at least do a few small things to make life a bit more bearable. We welcome the freeze on whisky duty, a perennial call from those on the SNP Benches, but the Government must now commit to ruling out the use of geographical indicators as a bargaining chip with the EU. Scotch whisky must remain fully recognised everywhere.
With the costs of the movement of goods and people facing increases owing to Brexit, the UK Government must work with the Scottish Government to fix the issues over the highlands and islands exemption and allow the transfer of air passenger discount to Scotland in a workable format. Incidentally, the Chancellor’s Budget contained a veiled threat to allow for a dangerous increase in that tax, which would further hit Scottish travellers. The UK Government must also ensure that EU funding will continue until the end of the current multiannual financial framework and that Scotland must not be worse off in any respect of those funding allocations. Crucially, they must respect devolution.
Freezing fuel duty is also to be welcomed, but what is not welcome is the freezing endured, especially by those on low incomes in the highlands and islands, who still get a red raw deal through higher electricity unit charges and unregulated off-grid gas and heating oil. When will they get fairness? When will they see the change that they deserve and need?
Despite attempts to rebrand the message—the Chancellor now calls austerity “financial discipline”—after a decade, Tory austerity is far from over. Instead it continues to be more dogma and neglect. In contrast, the Scottish Government are using their limited powers to build an economy of the future with measures to unlock innovation and drive increased productivity, and they would do even more if they had the power to do so.
Scotland’s 2019-20 resource block grant is down nearly 7%, £2 billion in real terms, compared with the 2010-11 figure. That is even after the additional funding announced. Even the £602 million headline increase fails to mention the £53 million of existing budget.
Drew Hendry
I will allow an intervention in a while, but I must make some progress just now.
We have yet to see the refund of joint VAT due to the Scottish Fire and Rescue Service and Police Scotland. Where was the convergence uplift due to the Scottish farmers? Some £160 million that should be spent in Scotland was simply spirited away by Ministers for their own projects.
Douglas Ross
Could I go back to the hon. Gentleman’s point about the block grant? Does he agree that, between this year and next, the block grant for Scotland is up £866 million in cash terms and up £381 million in real terms? How is that a cut?
Drew Hendry
What the hon. Gentleman fails to understand is that, if you put £1 in but, because of the rising cost, take £2 out, that is a cut effectively. What we have seen is a real-terms cut—[Interruption.] I have to educate him. That is what a real-terms cut means. As he has raised that issue, let us highlight other real-term and actual cuts that Scotland has endured: £400 million, due through the previous regulatory agreement for railways; the city deals are £387 million short of the match funding that the Scottish Government put in; £53 million is missing for the NHS from this Budget; and the VAT for fire and rescue services and for Police Scotland, at £175 million.
Patricia Gibson (North Ayrshire and Arran) (SNP)
My hon. Friend has rightly pointed out that £175 million has not been refunded to Scotland’s emergency services through VAT. Does he agree that it is bewildering that this money has not been refunded given that—[Interruption.] The hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) is chuntering from a sedentary position, “You were told.” A special dispensation on paying VAT was given to academy schools in England, but not to Scotland’s emergency services.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
When the figures for what Scotland has lost are totalled up, agriculture VAT comes to £1.1 billion; and there is the £1.9 billion cut from 2010. That is £3 billion in total. When we look over the Irish sea, we see Ireland with its 7% growth in the last year alone. Ireland’s economy has grown by £18 billion. The Irish are getting £4 billion more in tax. What is the difference between Scotland and Ireland? Ireland, which is independent, is £7 billion ahead of Scotland with the Tories in Westminster. If that is not a wake-up call, what is?
Drew Hendry
I am grateful to my hon. Friend for making that point. He points out exactly where the powers lie to make a real difference for people.
Alison Thewliss
Is my hon. Friend as curious as I am about the political influence on this Budget? Belfast has received £2 million from this Government for a fire fund, whereas Sauchiehall Street, which has suffered two recent fires, has not had a single penny from this Chancellor.
Drew Hendry
My hon. Friend makes the point succinctly about the way Scotland is treated on these matters and I thank her for that intervention.
This Government’s negligent actions have already drained our economy of much-needed, vital investment. The Chancellor failed to take the steps to support the economy and businesses. The Fraser of Allander Institute estimates that a hard Brexit could cost 80,000 jobs in Scotland between 2020 and 2030. Mark Carney told MPs in this building that Brexit has already cost households—families—up to £900 each. Again, there was no mention of that in the Budget. And we know why. The UK Government’s own figures have shown that there simply is no good Brexit, with a substantial hit to the economy, as a best-case scenario, running to a whopping 8% reduction in GDP. In context, that is a cost of £2,300 per person, per year by 2030. Even if the UK signs a free trade deal with the EU, Scotland’s GDP will be hit to the tune of £1,610 per person every year until 2030.
There was also a failure to support the oil and gas sector in the Budget. The UK Government have now taken more than £350 billion-worth of North sea revenues, and that is excluding, by the way, the supply chain, corporation, employment or business taxes, and we are supposed to cheer when the UK Government do nothing in their Budget for that industry, other than to float the idea of a tax increase and then say they are not imposing it, along with some vague verbal support for decommissioning. Where is the funding from the Secretary of State? Why has he not been arguing for the sector deal for oil and gas?
The Office for Budget Responsibility is stating that the outlook for oil and gas is showing a rise from £1.2 billion to £2.2 billion per year on average. Production statistics are up on 2014-15 levels by more than 23% and oil and gas sales values are up by nearly 20%. New fields such as Capercaillie, Achmelvich and Nexen’s phase two in the Buzzard Field underline the remaining potential. A study at Aberdeen University suggests an extra 4 billion barrels of oil from offshore, on top of 2017 estimates, yet the sector is still ignored. [Interruption.] Some Conservative Members are chuntering that the Greens will not like that. Let me tell them that, unlike the Chancellor’s passing mention or the green UK statement that came out, I intend to mention climate change in my speech. That neatly leads me on to say that the Government, having ignored the oil and gas sector, a sector vital for the coming decades—[Interruption.] I am going to make some progress. The sector is vital in the coming decades while we transfer to low and zero carbon. It is an utter disgrace. A sector deal must be brought forward now. It should include national hubs for underwater innovation, transformational technology and decommissioning.
Where was the UK Government’s manifesto pledge that committed them to working collaboratively with the Scottish Government for an ultra-deep water port for decommissioning? Oil and gas has always been a poorly discharged duty by successive Westminster Governments, complete with ministerial pinball and 20 energy Ministers in 20 years. This Government, however, are also falling asleep over their duties to climate change—
Several hon. Members rose—
Drew Hendry
I shall let Members in, but I want to make some progress.
We need, and will need, oil and gas for our future heat while we transition to low and zero-carbon fuels, but meeting the Paris climate change targets means real investment in the technology to manage that switch. Anyone with an ounce of sense knows that carbon capture and storage is a vital component to achieve targets that are so important to us all.
The Secretary of State said earlier that he would not let the lead on technology slip, but where was that when the carbon capture and storage programme at Peterhead was abandoned? We had the opportunity to become world leaders, to demonstrate technological advancement and, crucially, to get a head start in the transition and to have marketable expertise and technology to export. Instead, three years ago, a £1 billion rug was pulled from underneath the industry, its companies and the people of Scotland. It was nothing short of betrayal.
Now the UK Government are back talking up carbon capture and storage, three years later. However, they say that they can catch up with only 10% of the original budget—which, incidentally, is the same amount that they squandered on the preparation work for Peterhead. You could not make this up. It is nothing more than lip service. With a will, however, the Government could sort this. There are still opportunities, including at Grangemouth, but the longer the wait, the more difficult and expensive it becomes, especially to man-made climate change. The Government must now fess up, about turn and push the pedal to the floor, properly fund the technology and at long last live up to the Paris commitments.
Angus Brendan MacNeil
Does my hon. Friend get as frustrated as I do when he listens to the litany of failures from Westminster and realises the sums of money involved? Compare that with the sums of money following the growth in the Irish economy in the last year—£4 billion in extra tax revenue. They can do so much more with the powers of independence. We are shackled by the crew down here in Westminster, whose vision and imagination are so limited. All that they can do is cut and continue austerity. It is the same record at the same time—[Interruption.] Conservative Members should behave themselves, please.
Drew Hendry
I thank my colleague for making that point.
On the subject of new technologies, where was the serious investment in renewables research and development? According to Government answers, that sits at a paltry £51 million, which is a failure to commit to evolving technologies such as tidal, in which Scotland is a global leader. The Scottish Government have led the way in supporting tidal, and now the UK Government must work with them to explore where differentiation from the CfD—contracts for difference—process could be achieved to support this through to commercialisation.
Several hon. Members rose—
Drew Hendry
I shall give way in a moment, because I did promise to, but it will have to be very brief. I want to come to a conclusion soon.
The solar industry has been battered by this Government, and now must be the time to reverse the plans to end the solar power export tariff for solar homes, small businesses and community energy projects. Ending that would be pernicious. The Government appear willing to pour unlimited amounts of public money into only one policy, however: they are obsessed with new nuclear.
Reports suggest that the Tory Government will pump £6 billion-worth of equity and about £9 billion of debt support into the failing Wyfla project, where project costs are trailed at about £20 billion. Both that and the huge white elephant that is Hinckley C have strike prices significantly higher than those for offshore wind. The National Audit Office and the Public Accounts Committee warnings about value for money must be acknowledged. The public will be paying for those projects for decades to come, through higher bills. There was nothing in this Budget for the victims of green deal mis-selling.
Kevin Hollinrake
The hon. Gentleman is keen to ask this Government what they are going to do, but what are his Government going to do about the historically slow growth rates in Scotland? Scotland is still growing 30% more slowly than the rest of the UK. Why is he not asking his own Government to deal with those issues?
Drew Hendry
The hon. Gentleman says nothing about productivity levels in Scotland, which continually outstrip those of the UK.
The Institute of Directors and the SNP made a demand for a small and medium-sized enterprises support line to help them deal with Brexit. The Chancellor also failed to deliver that. Meanwhile, in Scotland, the Scottish Government help business with a £96 million investment to deliver the most attractive business rates package throughout the nations of the UK. Already, more than 100,000 businesses in Scotland pay no rates at all through the small business bonus scheme. Significantly, the Scottish Government are setting aside resources of £340 million to provide capitalisation for the Scottish national investment bank.
I wanted to talk about much more, but I shall cut a lot out to aid the process today. Before I finish, however, I want to cover the fair treatment of workers. Westminster has failed to end wage discrimination and give young people the real living wage. Young people are used to being short-changed by this Tory Government, as are those whose rights are infringed by the gig economy and unpaid work trials. In the SNP, we believe that a fair day’s work should result in a fair day’s pay.
Contrast the Chancellor’s failure with the success of the Scottish Government’s real living wage accreditation scheme, which ensures that more than 1,000 employers now pay the real living wage and that, as a result, nearly 82% of workers in Scotland are earning it—the highest level in the nations of the UK. Imagine what more we could do if we had the power in Scotland to do so. In the meantime, the UK Government must stop ducking their responsibilities on pay. These measures are not only about doing the right and fair thing; they aid the economy by increasing productivity and boosting revenue through tax takes to spend on services. If the Government will not live up to their responsibilities for fair pay, fair conditions and young people, we should have the power in Scotland to do so ourselves.
I shall end on two things. First, in city deals around Scotland, the UK Government have fallen nearly £400 million short of the Scottish Government’s investment—so much for the 50:50 partnership. The Chancellor came up £50 million short on the Tay region deal and failed to confirm 100% coverage of Scotland, as promised by the Chief Secretary to the Treasury—good at making promises, bad at keeping them. But of course that is nothing new. We saw that in the highlands with the Inverness and Highland city region deal, where the UK Government put in only about 20% of the funding—their £53 million dwarfed by the Scottish Government’s £135 million.
Healthy economies need healthy communities. This week’s Budget had one massive failure. That was the failure to deal effectively with the problem that is universal credit. It should have been halted, fixed and properly funded. Instead, like everything else, it only got lip service. After five and a half years, since the pilot to full roll-out in the highlands, we have seen the misery that people have had to endure. Despite all the begging, cajoling, demanding and asking of Government to listen, they failed to do so. They have made promises to people that they were unwilling to keep. It is about time that the Government took responsibility and sorted that out.
Mr Speaker
I call Sir Michael Fallon, who is not subject to a formal time limit, but I know that his natural courtesy will make it quite inconceivable that he would wish to address the House for longer than seven minutes.
Sir Michael Fallon (Sevenoaks) (Con)
I am most grateful, Mr Speaker. I remind the House of the business interests declared in the register.
Unlike the previous speaker, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), I commend the Budget and I look forward to supporting it in the Lobby tomorrow. The Chancellor of course had the advantage of rising tax receipts and lower borrowing, and he has made his choices, but they have been good choices. I look forward to supporting them.
In the end, this Budget should be judged on how it meets some of the bigger challenges: on how it strengthens the resilience of our economy as quantative easing comes to an end and capital might seek a more profitable home in the United States; on how it helps to narrow our still substantial productivity gap with France and Germany, as well as the United States—I commend the Secretary of State for Business, Energy and Industrial Strategy in particular for securing a massive increase in the investment allowance, which really will help our firms to start to narrow that gap; and on how it makes us properly match-fit for Brexit. I applaud the additional resources being given to UK Export Finance and the very significant increase in expenditure on research and development. It is in those areas that we are going to have to grow our capability if we are to succeed as a first-class global economy.
I would like to pick out three particular areas that I think require more attention. The first is infrastructure. Again, I was delighted to see a really significant increase in the roads budget. However, the recent proposal to take an entire motorway in my constituency and turn it into a potential lorry park illustrates just how fragile our roads system is if it can choke up so easily.
It is noteworthy that the three most important wealth-creating regions of our country—the south-east, London and East Anglia—are divided by the Thames. There are 17 bridges in London west of Tower Bridge; there are only two road crossings east of it. Every day, my constituents and thousands of others in Kent and in Essex, on both sides of London, are queuing to get over the River Thames, at untold cost to our economy and our business. That is because successive Governments have been ludicrously slow in giving us the infrastructure we need. It took 70 years to add a second tunnel at Blackwall and 28 years to add a bridge to the Dartford tunnel, and it now looks like taking 18 years to build the third lower Thames crossing. I urge my right hon. Friends to look again at the infrastructure bureaucracy to see how we can speed up the development of the critical infrastructure that we are going to need in future—the airports, the ports and the river crossings that will enable us to make a success of Brexit.
Secondly, there is investment in our schools and skills. I fully understand that education spending for the next spending period will not be determined until the spring, but I think my right hon. Friends are already aware that school budgets are struggling to cope at the moment, with rising pupil numbers and the huge increase in the number of pupils with additional needs, meaning that education authorities such as Kent County Council are continuing to have to divert resources from the main schools funding block to deal with those particular pupils. I do not think I am alone in this House in urging my right hon. Friends to look again at the schools budget, not just for 2021 but for the new financial year for schools beginning in September.
My final point is on savings. The current savings ratio, at 4.9% of disposable income, is the lowest for 50 years. It has been falling year after year and is now the lowest since records began. Coupled with some of the steep recent increases in consumer debt, that should set alarm bells ringing. I am quite struck by the number of constituents I see in my surgeries who are living on the edge, if I can put it like that—who have nothing to fall back on when they hit harder times. We have to return to that in future Budgets.
One of the more painless ways of boosting savings, of course, is to encourage share ownership—not through the mandatory, confiscatory plan put forward by the shadow Chancellor, but by simplifying and incentivising the current share schemes. There are share incentive plans at the moment, but some of them are 40 pages long. There are employee ownership trusts, but they do not apply to companies owned by private equity. We need to look again at all this to simplify it so that it is easier for employees to have a genuine stake in their firms. We must reduce the holding period and improve the tax treatment so that we have genuine share ownership.
With Brexit looming, one might have expected a Budget that was a holding operation. This was much more than a holding operation; it was a very skilful set of choices. But outside the European Union, I believe, we are going to need even more ambition as a Government. We will need further, radical steps to improve our tax competitiveness, to improve our export record, to drive up our productivity, to modernise our infrastructure, and to improve the quality and quantity of our spending on skills and on schools. That said, I commend this Budget.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. As colleagues will see, a large number of Members want to contribute to this debate, so I am imposing a five-minute time limit on speeches.
David Hanson (Delyn) (Lab)
This Budget has shown that the Government’s contention that austerity is over is not correct. Austerity is not over, and it runs deep throughout this Budget.
I want to start in the local sense, for me, with the north Wales growth deal. For the past three years, the Government have promised a growth deal for north Wales, and that has been put in the Red Book, but no money has been delivered. This Budget has delivered a figure of £120 million for the north Wales growth deal. I give that a cautious welcome initially. It will help with the purchase of land and the development of business; with transport and with infrastructure; and with the digital activity—connectivity in terms of a range of issues—that we want to see in north Wales.
Despite that cautious welcome, there are still some challenges with the growth deal. North Wales remains underwhelmed at the amount of resource that is being put towards the deal. On receiving the announcement, the Assembly’s Finance Secretary, Mark Drakeford, said that it falls
“some way short of what we and the people of north Wales have been expecting and working hard towards”.
A business leader in north Wales, Askar Sheibani, who is the chairman of the Deeside business forum and the managing director of a major technical company, has said that this deal will leave the people of north Wales angry:
“We were expecting a lot more than that”.
The work that has been done by my hon. Friend the Member for Wrexham (Ian C. Lucas), by Assembly Members, by local government and by business means that we should have received, potentially, £340 million. There have been meetings with the Under-Secretary of State for Wales, the hon. Member for Eastleigh (Mims Davies); I can see Ministers on the Treasury Bench looking closely at what has been said.
We want to know, from a north Wales perspective, what deals have been done with local government to date, what assurances we have got for the National Assembly about match funding for this money, what support we have got for businesses, and what projects, and when, will be put on the ground in the near future with the £120 million. We have come a long way to date, and there has been a lot of co-operation, but we need more support for the future. The cautious welcome will have to remain cautious until we get answers to those questions.
I said that austerity is not over, and it is clear from the Red Book that it is not. Let us look at some of the figures in the Red Book. Let us take, for example, the Home Office. This year’s budget is £10.8 billion; the 2019-20 budget is £10.7 billion. This is at a time when police officer numbers have been cut by 21,000 from when I had the honour of being Policing Minister in 2010; when as my hon. Friend the Member for Sheffield, Heeley (Louise Haigh) has pointed out, only today the National Police Chiefs Council is potentially taking the Government to court over £165 million-worth of investment on pensions; and when shoplifting is up by 4%, robbery is up by 11%, theft is up by 6%, violence is up by 13%, and sexual offences are up by 46%. The Government are going to fall back on local taxpayers, yet again, to bail out the funding for policing. The Government themselves should be funding policing.
For the Ministry for Justice, this year’s figure is £6.3 billion and next year’s figure is £6 billion. That is a £300 million reduction in expenditure at a time when prison officers are under stress and attacks on prisoners are increasing—when there is a real challenge in the prison system. For the International Trade Department, at a time when we have the uncertainties that are facing us with Brexit, there is a cut of 25%—not much optimism about doing trade deals there.
Throughout the position set out in the Red Book, there are deep cuts in a range of key budget areas. This is at a time when the Government are also ensuring that almost half of the income tax cuts in the Budget are going to the top 10% of households, and when three quarters of the £12 billion welfare cuts—including the changes announced which are not really going to meet the problems of universal credit—remain Government policy from the 2015 election. Nobody begrudges a tax cut to middle-income doctors, nurses and police professionals, but yet again the Government have not raised the 40% tax rate to 45%. They have cut the bank levy from £2.6 billion to £1.1 billion. They are going to raise £32 billion from council tax this year but £40 billion in three years’ time. They are going to transfer the responsibility for funding to people on the ground rather than having central Government funding.
There are some things to welcome in this Budget, but austerity is still present, hurting my constituents’ incomes and the public services they depend on.
Priti Patel (Witham) (Con)
Budgets provide the Government of the day with the opportunity to demonstrate their vision and long-term ambitions and aspirations for the economy, the citizens of our country and our communities and businesses. As the noble Lord Lawson, the former Chancellor, frequently said in his time in government, to govern is to choose. Setting a Budget is about exactly that—making responsible choices and decisions in the long-term national economic interest. Several Members have touched on some of the commendable steps taken, so my remarks will focus on where we have more to do.
In particular, we need to focus on the strong and unyielding case, particularly given what we hear from the Opposition Benches, for economic liberalisation and long-term monetary and fiscal competence. That includes the promotion of economic freedoms, led by pioneering policies on tax reform and simplification of the tax system—for example, by integrating income tax and national insurance into a single tax, to reduce complexity and bring parity between the employed and the self-employed. That would enable the Government to lower the tax burden further, so that people can keep more of the money they earn.
We have heard about home ownership. We need reform of property taxes, including stamp duty, to promote and support home ownership. We need to provide tax freedoms for local councils, so that they can compete and become engines of regional economic growth and competition, rather than centralise regional and local spending decisions in Whitehall, as we have seen for decade after decade.
We need to support our communities through a devolution revolution, so that regional leaders and organisations—ranging from business organisations such as the Essex chambers of commerce in my constituency and restructured business-facing local enterprise partnerships with a remit more relevant to their geography—are empowered to do more on economic growth. We must empower our police, fire and crime commissioners and regional transport boards to deliver the lower Thames crossing and enhance road improvements across our constituencies and our region. We must give those regional leaders the ability to deliver for people, communities and businesses.
We need to focus on outcomes, such as more police through localised budgets and accountable local police leadership; support for new economic corridors, such as the A12 in my constituency and the A120—essential roads that need investment if we are going to continue to meet the growing demands of the regional and national economy; and localising skills provision, which we do not speak about enough, so that it is led by businesses and not bureaucratic local government schemes that often replicate some of the unproductive aspects of Whitehall government.
On top of that, we cannot be complacent with the economy, which means the public finances as well, either now or in the long term. We are still borrowing large amounts of money each year, and deficit reduction must remain a core part of sound financial management. National debt now exceeds £1.8 trillion, which is the equivalent of 83% of our GDP.
As we look to the future, alongside a long-term ambition for the British economy, we need a long-term plan which demonstrates that the UK will have many opportunities for economic growth and progress once we leave the European Union. That means Brexit being accompanied by radically pro-growth, pro-enterprise economic policies that liberalise and empower not only communities but businesses and new industries to flourish and grow in the United Kingdom. We are competing with some of the brightest and the best in the world, and we now see an emerging middle class in some of the fastest growing non-western economies supplanting the established western middle class as the engine of economic growth across the world.
We need to focus much more on not only the short-term but the long-term policies that unleash our potential to grow and thrive. As Conservatives, that means promoting economic liberty, trust in people and local decision makers, addressing gaps in prosperity by boosting economic freedoms and applying fiscal discipline, so that we can give Britain and the British people a fair chance, through their own efforts, of economic security for themselves and their families, which this Budget goes some way to doing.
Mr Kevan Jones (North Durham) (Lab)
The Prime Minister said in her conference speech that this was the end of austerity. The Chancellor had an opportunity on Monday to make that a reality, but it did not happen.
The Secretary of State for Business, Energy and Industrial Strategy relied on the usual Conservative mantra, which is that austerity is all Labour’s fault. I remind Conservative Members that up until 2007, they did not complain about our spending; they said that they would match it. In some areas, they wanted more expenditure. They wanted less regulation of banks, not more. If we had done what the Conservatives suggested we did with the banks when they crashed, we would be in a worse state now. My hon. Friend the Member for Glasgow North East (Mr Sweeney) is correct: the economy was growing in 2010. It was the reckless emergency Budget in 2010 by the incoming coalition Government that crashed the economy, and it is that austerity we are suffering from now.
The Secretary of State said that Labour is anti-business. I am not anti-business. Business is very important for my constituents and the health of the economy, but strong local government and strong communities are also important for that. The Government have a role in ensuring that we have economic prosperity.
As my right hon. Friend the Member for Delyn (David Hanson) said, austerity clearly has not finished in the Home Office, and it has not finished in local government. The one-off proposals show that Durham County Council, which has lost £200 million in grant over the past eight years, will lose another £14 million next year, because the revenue support grant has not been changed. There is no change—communities and councils up and down the country will still face austerity, so the idea that austerity has somehow finished in this country is complete nonsense.
On strong local communities, I welcome the commitment in the Budget to £2 billion for mental health, but the Government have got it wrong, because the investment needs to go into local community services. We do not want people to get to A&E. It is great having a psychiatric nurse or professional in A&E, but we have failed if people get there in the first place. Likewise, I welcome the proposal to put mental health workers in schools, but many of the young people we are talking about do not attend school. We need investment in local communities’ support network.
We must also ensure that we have the mental health professionals in place, because there is a crisis with them that we need to address. That is where the money needs to go. We need to hardwire mental health into Government policy making and not have this ridiculous situation where policies such as cuts to local authorities and universal credit lead to a mental health crisis. We need to address the core problem, and this Budget is not doing it.
I want to briefly touch on defence, which Members will know is another one of my interests. Great play has been made of the extra £1 billion for defence, but we must remember that in the past eight years, the coalition and Conservative Governments have cut 16% of the defence budget. I asked yesterday what the extra £1 billion will be spent on, but the Government cannot say. I suspect that it is not new money, but rather drawdown from the money already committed for the nuclear deterrent, so this will not be a bonanza for defence and will not meet the £20 billion black hole in the defence budget.
Likewise, I welcome the fact that the Chancellor announced £10 million for the Armed Forces Covenant Fund Trust to support veterans’ mental health, but is that new money or existing money? If we look at the covenant report, there is already £10 million in that budget annually. If there is an extra £10 million, that is good, but we do not need a sticking plaster. We need to mainstream veterans’ mental health in the health service and do what I suggested in 2010, which is to ensure that we have veterans’ tracking in the health service. We announced that in 2010, and the first thing the coalition Government did was to stop it and not replace it.
This Budget is a missed opportunity. Communities are going to suffer, and if we get what we have had from this Conservative Government in the past few years, even where there is extra money, it will be doled out like a pork barrel to areas that support the Conservatives. Other areas that they do not really care about will get nothing. We only need to look at the north-east to see that that strategy is continuing with this Budget, and it is an absolute disgrace.
Nigel Huddleston (Mid Worcestershire) (Con)
There is a lot to praise in this Budget. I and my constituents particularly welcome the confirmation of the additional funding for the NHS and the additional money for social care, infrastructure, broadband, schools and defence, as well as of course the changes to business rates. I appreciate the fact that the Chancellor acknowledged my own representations on VAT, and given that I have 107 pubs in my constituency—about 35 more than the average—I particularly welcome the freeze on beer and spirits duty, as do my constituents.
The fact that the Chancellor was able to do all these things, announcing about £100 billion of additional spending over a five-year period, without increasing taxes—in fact, reducing them—is a remarkable achievement, and he deserves considerable praise. Although my constituents have been telling me for months—in fact, for years—that if it was necessary to increase tax, they would be willing for that to happen, I am glad that it has not happened.
This is not just about the total amount of money being spent; it is about where and how it is spent. I believe we have considerable further work to do on this, because if the money is not spent in a balanced way, areas of the country suffer. My area of the country is not getting its fair share of public expenditure. We are now seeing this in the fact that my constituency was ranked 522nd out of 533 in the latest social mobility index by constituency.
One key is education and education funding. There are few more important things in politics than enabling our children to reach their full potential, and education is the key route to doing so. It is my personal ambition to focus on that in Parliament. I am from a relatively modest background. My dad—my Labour-voting, trade unionist dad, by the way—worked in a factory and my Mum was on the tills at Asda, and I went to a comprehensive school. I was the first person from my school to go to Oxford, and the first person in my family to go to university. Social mobility is therefore key for me, and it is very important.
We know that education is not all about money, but it plays such an important role. It is no accident that the top-funded places in the country—they are mainly in London—also have the highest social mobility and, conversely, that the lowest funded areas are the lowest for social mobility. There is clearly a strong link. In my constituency, average funding for secondary schools is £4,875. It is one of the lowest figures in the country, and it is £500 below the average school. It is also £3,000 per pupil per year less than in Hackney and £2,000 per pupil per year less than in Islington. Yet average incomes in my constituency, at £404, are £39 below the national average. That is also £150 less than in the shadow Home Secretary’s constituency of Hackney North and Stoke Newington, so this is not just related to income.
This is unfair, and I am glad that the Government are taking action and, with the fairer funding formula, ensuring that we will make changes. I applaud the fact that we will do so as fast and in as easy a way as we can, and like my right hon. Friend the Member for Sevenoaks (Sir Michael Fallon), who is no longer in his place, I support significant increases in education funding. If that means increases in tax, I will support that and my constituents will support it. It is that important.
My area of Worcestershire is also suffering in other ways, such as in clinical commissioning group spending.
Alex Chalk (Cheltenham) (Con)
Before my hon. Friend moves away from education, does he agree that one of the key pressures on mainstream schools is that local authorities are seeking to take from mainstream schools to fund high needs, because of the burgeoning complexities in such areas? That is a very important pressure on our schools.
Nigel Huddleston
I agree completely. In fact, one of the main reasons why social mobility is such a challenge in my constituency is that there are a disproportionately high special needs. There is also a disproportionately high number of children with English as a second language. All these things require more attention, and they are causing genuine pressure on budgets.
I was mentioning NHS spending. The average CCG spending is £1,254, but the figure in Worcestershire is £1,138. There are areas of the country where average spending per person is up to £1,670. Again, my constituents are losing out to the tune of £500 per person per year vis-à-vis other areas. I do not resent the fact that other areas of the country are getting considerably more public expenditure than my constituents; I am just very jealous, and I want to make sure that my constituents get their fair share.
On infrastructure, whether broadband or road building, the midlands in particular—the area I represent—is underfunded compared with London and the south-east, which get so much funding. I am glad to see that that will change. There are announcements in the Budget for considerable increases in transport infrastructure spend. For example, I hope that the A46 will benefit.
I do not want to give the impression that it is all doom and gloom in my constituency, because it is frequently mentioned, after all, as one of the most desirable places in the country in which to live. It is obviously not because we are overfunded through public expenditure, but because the people in my constituency work hard. They are self-reliant, and if there is a problem, they look first in the mirror and try to resolve it themselves. It is unfair if my constituents have to delve into their own pockets to pay for things that are provided in other parts of the country through public expenditure. We need a balance, and a rebalancing, in where public money goes. In conclusion, I am arguing today not for special treatment for my constituents, but for fair and equal treatment, which I will do everything I can to deliver.
Rachael Maskell (York Central) (Lab/Co-op)
The Prime Minister declared austerity to be over and the Chancellor downgraded the prediction to say that it is coming to an end, but the reality is that each Department is having to make 3% cuts, which hardly backs up those statements. Of course, the corporate giants will still enjoy their £110 billion corporate tax giveaway, while 1,000 people have seen their personal wealth increase by £274 billion over the past five years. For my constituents and many like them up and down the country, the harsh reality of services slashed and under increasing pressure and the daily experience of living in poverty or just scraping by was not addressed by this Budget. We all know that the money is going to the wrong places, and it will take a radical Labour Government to restructure and transform our economy to make sure that we invest in people’s future.
I want to turn to the high streets. On 8 March 2017, resulting from the valuation process and the sharp rises in business rates, we were promised a full business rates review, but it has not happened. Instead, temporary relief schemes have been provided to local authorities, badly managed by local authorities and then withdrawn. We did not hear on Monday about how all the temporary relief has been withdrawn from small businesses. That has had an impact on pubs, which are losing £1,000, and on other small businesses, as well as medium-sized businesses—the anchors of our high streets—which will not be eligible for the one third reduction in their business rates. Again, this will have a massive impact on our high streets, but we did not hear about that from the Chancellor on Monday.
The announcement on business rates was again a short-term one—just two years. All such funding is so short-term; it is about the crisis management of our high streets, although businesses have to sign long— 10-year—leases. They cannot make such long-term investments if the Government do not back them up. We are still seeing the inequality between our high streets and the out-of-town retail sector and between our high streets and online shopping, and they were not properly addressed either. Plasters were thrown out last year and bandages this year, but what we need is surgery—with real reform taking place—on our business rates system. I will not give up until we get real reform.
We need to address the causation of this problem, about which I have yet to hear from this Government. We have investors—mainly offshore investors—owning properties on our high streets, and while the revenue they get from tenants is helpful, it is pocket money compared with the scale of their investments in pension schemes and other investments. That has not been tackled, and until it is, we will continue to have a crisis on our high streets. The escalation in rental values in places such as York is extortionate. The Government are providing relief for such corporate greed, but we need to address the greed where it sits. We are seeing the creation of a bubble on our high streets, and when it bursts, there will be a real collapse. I therefore urge the Chancellor to address the real problem of business rates.
I want to highlight the suggestions that have been made about a turnover or profit-based tax, which is far fairer and will create the greater equality that we need. I want to mention one of my streets, Coney Street, in York. We have about 50 empty properties in York, and footfall in Coney Street fell by 9.3% on the previous year and by 15% in the past two years. That is just short of 27,000 fewer shoppers.
Rachael Maskell
I am sorry, but I do not have time to give way. The hon. Gentleman had the opportunity to put in to speak in the debate.
Since September 2016, there has been real decline on Coney Street: this year alone, 12 stores have closed. Unbelievably, that—a place where there is no traffic—is where the WH Smith that is meant to be hosting the new post office is based. The current post office, on a prime site in Lendal—the busiest thoroughfare of our city—is to close. It has been there since 1884. That is the most perverse decision, and I urge the Business Secretary, who is listening, to consider the case of York and reverse that decision so that we can have a vibrant post office, rather than losing that public service in a good place on our high streets. Yet another year passes. The Government are ducking the real challenges on our high streets. We need a Labour Government to revive our high streets and communities.
James Morris (Halesowen and Rowley Regis) (Con)
I rise to support the Budget, which comes at an important time in the history of our country, when we need to develop policies fit to face future challenges. I agree with my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), who is no longer in his place, that we should judge the Budget on whether it delivers practically for people, businesses and families across the country, including in my community. That is how we should judge what the Chancellor brought forward.
I want to highlight three areas on which the Budget delivers for my communities. In the end, individuals, businesses and communities are there to look for solutions, and the Government are there to help. In the Budget, the Chancellor announced significant help on business rates for high streets. In Halesowen and in the Rowley Regis area of my constituency—Blackheath, Cradley Heath and Old Hill—people are very attached to their local high streets. People in Halesowen’s business improvement district are working very hard to make it a more attractive place to do business and to encourage footfall. Those people working hard in my community have the real solutions. The Government can help, as the Chancellor has through his announcement of the measures on business rates. That is a positive measure for people in my community.
The second aspect that I wanted to highlight was the new investment in the national health service, in particular around mental health. I have been campaigning about the issue for many years. It is important because it is not just a philosophical principle—that there should be parity of esteem between mental and physical health in the national health service—but it actually helps people in my community lead more resilient lives and makes their lives more fulfilling. That is why we need to invest more money in mental health.
We have the opportunity to find community solutions to the increased prevalence of mental health issues. We must find ways for schools, local authorities and people in my community to collaborate and come up with solutions and help for people suffering from mental health problems, so that they can recover and lead fulfilling lives. That is why the issue is important—it is one of the biggest health challenges we will face over the next 20 or 30 years.
Economies grow only because of the work of people who want to start and develop businesses. Those people create jobs. One of the great success stories of the last few years has been the number of businesses that have started in this country. They are creating jobs in my constituency—people who get up in the morning, improve their lives and provide jobs and opportunities for people. The Budget is there to help people achieve those goals.
The increase in the annual capital allowance—encouraging investment, encouraging people to plan for the long term—helps those people. However, in the end it is the business people—the individuals, the entrepreneurs—who will drive our economy forward as we look to the future post Brexit. They will be the lifeblood of our economy. The Government can play a role, but they do not have all the solutions. The solutions are in the hands of ordinary people. But the Government, through some of the measures in the Budget, can help by providing practical solutions.
The Budget was a series of practical measures that will help people in my constituency and around the country by investing in our health service and helping the high street, which is facing real challenges. It is individuals and communities, working with the Government, who will solve some of those problems. The Government are encouraging business investment, investing in research and development for the future and supporting our businesses so that we can start to think of the future and build on the foundations that we have developed in government. In that way, we will build a country that can face up to the challenges and really take advantage of the opportunities out there in the world.
Conor McGinn (St Helens North) (Lab)
After eight years of austerity, people in St Helens are today, more than ever, feeling the effects of the swingeing cuts to our schools, our police, our NHS and our local government services. I am afraid to say that nothing announced in this Budget by the Chancellor can undo the impact that those cuts have had on our community and families right across the borough that I represent.
St Helens Council will have lost 71% of its central Government funding by 2020—the equivalent of over £500 for every man, woman and child in our borough. It is just short of two years’ worth of the entire social care budget at a time when almost 5,000 adults in the borough are in need of long-term care and almost 2,000 vulnerable children are in care or need some form of long-term protection. Meanwhile, the number of residents over the age of 90 is set to triple in the next 20 years and the number of those with dementia is set to increase by almost 60% in the next decade.
Unbelievably, the Chancellor said that he was announcing a “funding bonus” for schools to help with the “little extras”. Does he think that teachers and books are “little extras”? Those are what local schools tell me they cannot afford. There have been funding reductions of nearly £400 per pupil in my constituency, equivalent to over 200 teaching posts gone. This Friday, I am attending an emergency meeting at an outstanding primary school to see how we are going to address its deficit of £90,000 this year and £200,000 next year. Listening to those on the Government Benches, it seems that pupils, parents and teachers should be grateful for the £10,000 for the “little extras”.
Although I welcome the Government’s new found interest in renewing our high streets, I will be seeking clarity about how much of that is new money, and how much will be allocated to towns like St Helens and Newton-le-Willows. There must also be clarity from the Government about who is going to pay—it should be Whitehall, not the town hall.
Over the past eight years, the Government have taken billions of pounds from our public services and from the pockets of working people. St Helens and places like it have been disproportionately burdened with those cuts and a reduction in wages and living standards. If the Budget means that even the smallest fraction of some of the money taken is being returned, the Government can rest assured that I will be holding them to account and fighting to make sure that my community gets its fair share.
It is a tough time. There is a lot of uncertainty around Brexit: funding from the European Union has driven regeneration in some of the most deprived communities in Merseyside, but now we face the prospect of north-west economic growth slowing by 12%. In any scenario, my community will be poorer. I want to be clear: I did not come into politics to do anything that would make my constituents poorer, and I am not going to do it now. I accept that we are leaving the European Union, but I do not accept that in doing so we wilfully cause an economic catastrophe that will have a devastating impact on communities and business in the constituency that I represent and cause people who live there untold hardship.
Despite the challenges, we are ambitious. We are home to one of the best and largest chambers of commerce in the country. Our Ambassador programme brings together business leaders from right across the borough. The company Communications Plus in Rainford has won a Queen’s Award for Enterprise. ATG Access, its products made in St Helens, is at this very moment protecting us in this building and protecting many iconic buildings across the world. We have just had an international pharmaceutical company relocate, creating 200 jobs. The Liverpool city region, under Metro Mayor Steve Rotheram, is investing in our infrastructure, with a new station at Newton-le-Willows and new road improvements at Windle Island. In sport, we will be a host venue for the Rugby League world cup. Most excitingly, 25 years after a Tory Government closed Parkside colliery in my constituency, we are on the shortlist to be the UK centre for a world-leading train manufacturer and for it to locate its business here. We are also achieving investment and working hard to be a nationally recognised centre for arts and culture. We have a music board, created by UK Music, to help to enhance the £135 million that music already contributes to our regional economy.
To conclude, the community I represent is resilient. It got through the ravages of deindustrialisation under a previous Tory Government. It will survive austerity and it will get through Brexit. Its civic, community and business leaders are proud of its past and ambitious for its future, but we need and we demand the tools from Government. If we have them, there is no limit to what we can achieve.
Scott Mann (North Cornwall) (Con)
It is a pleasure to be called in the Budget debate and to follow the hon. Member for St Helens North (Conor McGinn).
This was a good Budget for my constituents in North Cornwall. It brings investment and empowerment to our local communities and businesses, while maintaining the financial discipline that we on the Conservative Benches pride ourselves in. I welcome the big announcements on defence, broadband, the NHS and mental health, but in the time that I have I would like to focus on some of the micro-elements in the Budget that will really help some of my constituents.
First, I would like to mention the mandatory rate relief on public loos. My hon. Friend the Member for St Austell and Newquay (Steve Double) and I have been campaigning on this issue for quite some time. It seemed quite ridiculous that local authorities had to charge themselves for public toilets. We are delighted that the Treasury has now excluded them and provided mandatory rate relief. What does this mean for some of my communities? Many public loos have been closed under Cornwall Council. This morning, the mayor of Bude wrote to me to say that he is absolutely delighted with this new policy and that it will assist him in being able to reopen some of the closed sites in Poughill and Stratton. I have also had representations from Wadebridge Town Council and Bodmin Town Council showing their support for this policy. This issue might be a bit of a joke to some people, but being on a beach with a two or three-year-old child is no joke if the public toilet is three or four miles away. I can assure the House that in terms of tourism for North Cornwall, this is a really big deal.
Richard Drax (South Dorset) (Con)
Charities tell me that 2 million people cannot be more than 10 minutes from a loo. If we do not have public loos, they are in effect stuck in their houses.
Scott Mann
My hon. Friend makes a very good point. Bladders are not seasonal, Madam Deputy Speaker. You cannot tell a two or three year old to hold their bladder while they are on the beach—that is impossible. We pride ourselves on our blue flag beaches. It is important to us that we recognise how good they are. We do not want people discharging themselves in the sea; we would much rather they discharged themselves in public loos. So we are delighted about this measure, Madam Deputy Speaker.
I look around my high street and I see that the majority of businesses are small businesses. They are the lifeblood of the North Cornwall economy. Some 90% of those businesses will benefit from the reductions in small business taxation. One business wrote to me today: Lindsay from Linterior Design in Wadebridge told me that she has just expanded her business. The extra money from the rates cut will enable her to refurbish her business, putting some of her hard-earned money back into it. Real people with real businesses on the high street are saying that these are the real issues that affect them. The reform of the business rate shows how the Government have found a way to support enterprise and individuals in a fair way. Coupled with the tax on internet giants who gross £500 billion a year globally, this shows that the Chancellor has the best interests of small and independent stores at the heart of government. I am very pleased about that.
It was not mentioned at the Dispatch Box, but my colleagues and I in Cornwall care passionately about fairness on the second homes issue. We have been campaigning on this issue with Ministry of Housing, Communities and Local Government Ministers. It appears that some people soft let their second homes, paying neither council tax nor business rates. I was pleased to see in the Red Book that this is being reviewed. I represent an area with a number of second homes and I receive a lot of correspondence about it. It is important that everybody pays their fair share, so I am pleased that the Government are reviewing that particular policy. We have been lobbying on it for quite some time.
I was delighted by the announcement on single-use plastics. I represent a coastal constituency. Several groups, including the Polzeath Marine Conservation Society, Surfers against Sewage and the Bude Cleaner Seas project, have written to me about single-use plastics. The announcement was good, but I think we can go further on some environmental measures. I will mention my Bathing Waters Bill here, because the Government should consider the issue of sewage going into the sea. I understand that this is a matter not for the Treasury, but the Department for Environment, Food and Rural Affairs. We find ourselves in a position where water companies are polluting the sea and that is just not right. I hope we can give further consideration to this issue at a later date.
On fisheries, I am delighted that £12 million will be dedicated to the fisheries industry. My hon. Friend the Member for South East Cornwall (Mrs Murray) has campaigned tirelessly to get transponders on smaller vessels, so I am delighted that £2 million of the fund will go to that. There will be £10 million for tech and innovation in the fisheries industry. We have not seen tech innovation in the industry for quite some time. It will enable us to fish in a more environmentally sustainable way.
On manifesto commitments, I am delighted that we are bringing forward big, macro policies on lifting thresholds. I represent an area where many people have modest incomes. They will see that money reinvested back into society. I am delighted with the Budget and will be supporting it in the coming days.
Mr Jim Cunningham (Coventry South) (Lab)
I will start by setting the record straight: the economic crisis happened in the United States. It started with Lehman Brothers and the US housing market. For the information of those on the Government Benches, George Osborne only a couple of months ago said it was not Gordon Brown’s fault. If the Labour Government had not taken the measures they did, most of those on the Government Benches would be sleeping rough tonight because their pensions and incomes would have all gone. They may want to ponder that when they make all sorts of allegations about the previous Labour Government.
I note that there has been no reference, certainly from the Secretary of State for Business, Energy and Industrial Strategy, to any discussions he may have had about fracking. People are concerned about the consequences of fracking, so I hope that when the Minister winds up he will tell us where the Government actually stand on it. To say the least, there has been quite a lot of public disquiet. I also note that, as far as I could see, there was no reference in the Budget to a social housing programme. What I mean by that is council housing. The only way we can deal with the housing crisis is through proper social housing at affordable rents. In my experience, only local authorities can do that. I spent 22 years on a local authority, so I do have some experience of that.
Since their party conference, the Government have repeatedly said that the end of austerity is coming. I did not see that in the Budget. As expected, the Government have failed to live up to that promise. The end of austerity will come only when the Government increase funding across the board. This Budget does not give the police, schools, hospitals or local councils the money they badly need and for years have been denuded of.
Another issue I did not hear mentioned in the Budget was that of WASPI women and women born in the 1950s. WASPI women took the chance to express their disappointment a couple of days ago in the Public Gallery, so we have a good idea what they are feeling. These women have had sharp rises in income poverty, with their average weekly income falling by £32. The IFS put the gain to the Treasury from the rise in pension age at £5.1 billion per year since 2010, saving it £40 billion. Frankly, the Treasury can afford to pay them. Despite that, the Government have offered nothing to the 5 million people waiting longer for their pensions. It is no wonder then that the WASPI women are angry and are demonstrating on the streets.
The Chancellor was forced to increase universal credit funding amid Department for Work and Pensions mismanagement. We still do not know what the Government are going to do about that. Providing £1 billion of extra money over five years will make a difference, but not much to those losing out. Some 3.2 million families will lose £48 a week on average; the new funding means an extra £1.20 a week. Higher work allowances reduce losses for some, but the Government must fund universal credit properly or abandon it. As the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) said, the Government are still not adequately funding universal credit. They cannot keep delaying its roll-out forever.
The Budget gives schools a one-off bonus of £400 million to help to buy the “little extras” that the Chancellor referred to.
Faisal Rashid (Warrington South) (Lab)
Does my hon. Friend agree that it is utterly shameful that the Budget aims to claw back £700 million from the self-employed by reforming off-payroll working, yet only £400 million from the tech giants, which have avoided an astonishing £5 billion-worth of tax over the last five years?
Mr Cunningham
I agree, but I point out to my hon. Friend that between 4 million and 5 million people earn poverty wages in this country, which demonstrates that work does not pay under this Government.
To turn back to education, the bonus averages out at £10,000 per primary school and £50,000 per secondary school—around £50 per pupil. If we think about that, the Government took £4.5 billion out of education, then put £1.5 billion back, so they still owe over £3 billion. Analysis suggests that schools in Coventry have faced almost a £300 cut to funding per pupil since 2014, so a £50 one-off payment per pupil is a drop in the ocean—barely enough to buy two new textbooks. Schools do not need small change or “little extras”; they need funding to rehire special educational needs senior assistants, to re-offer dropped subjects and to fund teacher pay increases fully.
As hon. Members all know, Coventry will be the city of culture and while I welcome the £8.5 million for that, the Government still have not given us the same amount of money that they gave Hull—in fact, it is nearly half. The city centre will benefit hugely, and it will also benefit from cuts to business rates for smaller businesses. However, as I said, the £8.5 million is below the £14 million that was given to Hull for 2017. I will work closely with my colleagues in Coventry City Council. Coventry must receive its fair share of funding to help to make the most of the city of culture opportunity.
Stephen Hammond (Wimbledon) (Con)
It is a pleasure to follow the hon. Member for Coventry South (Mr Cunningham) and to make a short contribution to the debate. I was very lucky to attend one of the best state secondary schools in the country. I was taught by inspirational teachers, and I remember two in particular today. My history teacher said, “Remember that there are myths and rewriting of history.” As I listen to Labour Front Benchers today, I note that their economic history is certainly being rewritten.
I was also reminded of my English teacher, who taught us that the great Shakespearean themes are appearance and reality. For many, the appearance of Wimbledon is that it is a leafy suburb where we play a bit of tennis and not much else happens, but the reality is rather different. Like so many places up and down the country, there will be rejoicing on the high streets of Wimbledon Park, Raynes Park and Motspur Park at the news on business rates. High streets and local high streets are at the heart of our community, whether people live in a suburb such as Wimbledon, a smaller town or a rural area, and this is to be welcomed.
Faisal Rashid
Will the hon. Gentleman join me in welcoming the Chancellor’s decision to use the Budget to show his support for Labour’s plan for Government by taking on board our long-standing policy to take action to support ailing high streets?
Stephen Hammond
The Labour party had 13 years to enact support for the high streets; this Government and this Chancellor are doing it. Therefore, I will concentrate on what is happening here and now and not on something that will not happen. Labour has not been elected to Government.
The reality of Wimbledon is also that we are a high-performing, small, high-tech, entrepreneurial, start-up suburb, and there is much in this Budget that will be extraordinarily helpful to those firms. The annual increase in the investment allowance will undoubtedly start to provide the certainty and encouragement that businesses need. The commitment to reviewing the taxation of intangible fixed assets and the reduction in the capital allowances special rate are going to start to stimulate the investment that this economy needs, has seen and will continue to see.
Many high-tech businesses are mobile. This means that for many, the choice of where people are located is not just between Wimbledon and anywhere in the UK, but between the UK and anywhere else in the world. A Budget that supports digital infrastructure and high-tech companies is to be welcomed. If a modern industrial strategy is to mean anything, it needs to mean that we support the industries of the future as well as the industries of the past. This is what the Budget does.
It is equally invaluable that we have high-quality infrastructure, whether physical or virtual, and measures in the Budget show the Government’s ambition. The extension of the national productivity investment fund provides the bedrock for those improvements to 2023-24. That is combined with extra funding for broadband, the transforming cities fund and the industrial strategy fund, in which there is £100 million for Made Smarter. That is going to transform hugely manufacturing in digital technologies. I am delighted that that has happened, and I was fortunate recently to visit Print City at Manchester Metropolitan University. This will be one of the industries of the future.
The industrial strategy, however, is not just about physical infrastructure; it clearly has to be about building a workforce who are skilled to face that challenge. The Turing scholarships speak to that need, but we also need an economy that has skills for everyone, if we want everyone to benefit from it. Government Front Benchers will know that the revival of apprenticeships since 2010 has been a life-changing opportunity for so many. During Colleges Week two weeks ago, I was fortunate, like many, to visit young people at Merton College who want to participate in IT apprenticeships. Measures to extend incentives for apprenticeships, and to stimulate the opportunities for small companies to play a huge part—particularly those in the small, high-tech entrepreneurial sector, such as those that I mentioned in Wimbledon—and to take more people on and provide them with a quality life experience will transform the opportunities for many.
However, there are a couple of elements that I hope Government Front Benchers will consider in this Budget. Everyone supports extending choice and opportunity for tertiary education. Despite what my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) said, I believe that student loans have facilitated a huge extension of the numbers of people going to university, but can it really be fair to charge an interest rate of 6.1%? It could become a disincentive, notwithstanding the fact that many loans are not paid back, and I urge the Minister to discuss with the Chancellor whether it can be justified. It would send a huge statement to young people going to university.
No one will quibble either with the Chancellor’s claim that everybody should pay the tax they owe, but HMRC’s application of IR35 rules is often retrospective, unresponsive and unfair. Under modern working arrangements, contractors are often working and employed for longer than they used to be. I understand the need for the rules, but there is an issue with the certainty and consistency of their application. I hope that Ministers and HMRC will reconsider whether it is fair.
As the Chancellor and others have acknowledged, risks lie ahead. The OBR’s growth forecast today is 1 percentage point lower than it was in 2015. There can be no other explanation than the uncertainty surrounding Brexit. If we had continued with the level of growth projected in 2015, not only could we have undertaken the largest fiscal loosening in a generation, providing vital investment for public services, but fiscal Phil could have met his fiscal objectives and balanced the books.
I urge the Minister to bear it in mind that no deal means no transition, uncertainty for British business and trade on worse terms. It is crucial, as the OBR has said, that we see no further disruption from Brexit and get a negotiated settlement that allows British business to prosper and the benefits of the Budget to come through for everyone.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
As a west midlands Member of Parliament for a constituency that has a long manufacturing tradition but is still heavily dependent on the success of our motor industry in general and Jaguar Land Rover in particular, I want to add to the thrust of the questions put by my hon. Friends the Members for Birmingham, Northfield (Richard Burden) and for Coventry South (Mr Cunningham) and ask about the impact of taxation in the environmental programme in our motor industry.
I agree with the Minister. Our motor industry is a world leader and internationally recognised. It is at the cutting edge of research and development on current models and leading the way in developing new generations of electric and autonomous vehicles. It employs more than 1 million people, either directly or in the supply chain and related industries, and its exports amount to 12% of our total goods exports.
Notwithstanding this contribution, our motor industry is facing problems that unfortunately were not tackled in the Budget. Investment has dropped by a third in the past year, while new car sales have dropped by 20%—a reduction driven by a catastrophic drop of 40% in sales of diesel cars. This has particularly affected Jaguar Land Rover in the west midlands. Given this scenario, I would reasonably have expected a Chancellor of the Exchequer to consider measures to help an industry that is so important but in such a desperate situation.
Part of the problem is due to the chilling effect of Brexit, and I recognise that there is a limit to what the Chancellor can do about that, but the fact remains that consumer choice of new cars is heavily influenced by company car taxes and vehicle excise duty, and the current regime is both damaging to the industry and bad for the environment. The current messaging around diesel fails to recognise that new diesel engines have no more NOx emissions than petrol-driven cars and produce 20% less carbon dioxide. Perversely, the current move to petrol-driven cars is actually increasing carbon dioxide emissions.
This policy is being driven by our commitment to—I am sorry for the jargon—the new worldwide harmonised light vehicle test procedure. It is right that we have committed to this new testing procedure, which tries to demonstrate the real road experience of vehicle emissions, rather than just the laboratory testing, but it will have an unintended consequence, in that there will be an increase in the level of emissions demonstrated as a result of this taxation, and potentially millions of consumers will be driven into higher vehicle excise duty bands as a result. It will mean that the Government’s much-heralded cuts in income tax will be more than outweighed by their increase in vehicle excise duty.
The perverse outcome of the Government’s policy is, as the right hon. Member for Meriden (Dame Caroline Spelman) pointed out in her question to the Prime Minister last week, that people are holding on to their current, more heavily polluting diesel cars, rather than buying cleaner, new models. The Government’s policy is damaging to our motor industry, to our environment and to the consumer, and the Government have missed this opportunity do something about it. I urge the Minister, who I think understands the issue, and is committed to keeping our motor industry in the forefront of international development, to impress on the Treasury that if we have a new Budget next year—and even if we do not—action must be taken urgently to remedy this situation and save our motor industry.
Richard Drax (South Dorset) (Con)
There is much to welcome in the Budget for my constituents, not least the raising of tax thresholds, the freezing of fuel duty, the business rates announcement, the freezing of beer duty, and other announcements, all of which are to be welcomed and will help my constituents.
I wish to sound a note of caution to Ministers—that we should use the words “the end of austerity” with care. I am afraid I do not agree that austerity has ended in the technical sense, because we have a debt of £1.8 trillion, and we have debt interest to pay of nearly £50 billion per year—and all that before the country takes one pace forward. To say that austerity is ending could be slightly misleading, suggesting that we can turn on the taps and spray money around to all the many good causes when, in effect, we cannot. I think we must accept, in all parts of the House, that the United Kingdom has spent more money than she can afford for many years, under all Governments, and it is time now to live within our means. That is the way any household proceeds—it lives within its means.
To do that, and to raise the money that we need, there is only one source of income that we can generate. Here in the House, we cannot generate income. As MPs, we only create the infrastructure for the income to be generated. Who generates income? It is business: men and women, the entrepreneurs in all our constituencies. It is they who risk their home, their future, their livelihood, their children’s future, all to generate wealth and prosperity for this country, the taxes from which pay for all the public services into which everyone in this House, on whichever side we sit, wants to put more money. So to tax those business people heavily—to punish them—in an attempt to raise the money that we all need, will not succeed, and in the worst case we will end up in the position that the Leader of the Opposition exemplifies as his ideal—that of Venezuela. [Hon. Members: “Oh.”] It is a fact! The Opposition groan, but that is what happens if you follow Marxism and punish the wealth creators—people leave the country. [Interruption.] It is a fact.
We need to prioritise what money we have, and then decide how we spend it. Let us take overseas aid, for example—0.7% of GDP. Yes, we should help those who are not well-off around the world, but to have a target and to keep to it I think is wrong. We should give the developing world and those who need our help what we can afford to give them—just like any household budget. Then we would have more money for all the causes that we want to support. Charity starts at home.
In the short time that I have left, I shall touch on one or two items. I again advise Ministers that it is reform, reform, reform, not necessarily cash, that the NHS desperately needs. On the police, as I have said many times, there is no doubt that we want more officers on the beat. On welfare—[Interruption.] I entirely back my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) in his view on welfare. We need tax to be radically simplified; we need lower taxation. The corporation tax take has increased because the level has been lowered. That is a statistical fact.
On education, we do a lot of work with the f40 campaign group—all credit to them—and at a recent meeting we heard that there is a gap between education funding, which has risen in real terms, and what schools have to pay to teachers and pensions. That is where the gap is. I say to the Front Bench that more money is definitely needed for education, particularly in places such as South Dorset which have been at the bottom of the scale for far too long.
As a former soldier, I entirely concur with what an Opposition Member said about defence: £1 billion is welcome, but it is not enough. I accept that we spend the second largest amount on defence, but defence is an insurance policy we cannot afford to short-change.
Stewart Malcolm McDonald
The defence money is not new money; it comes from the money held at the Treasury for the Dreadnought programme. This fantasy new £1.8 billion is not new at all.
Richard Drax
I will leave the politics to the Scottish National party, but what I will say is that I agree that more money is needed for the defence of our country; there is no doubt about that. We need more sailors. We have two aircraft carriers, but can probably only afford to man one. Aircraft carriers need submarines underneath, aircraft on top, and ships beside; they are the biggest expense budget item we could possibly have. I ask the Treasury please not to forget our brave men and women of the armed services.
I have another minute—thanks very much to the SNP, and I am sorry that those on the Opposition Benches will regret it—so let me end on the topic of home affordability, as it is a key issue. We all talk about affordable homes, but they are not; 80% of market value is not affordable. I say to the Government that we must think about how we can provide homes that are truly affordable to those, particularly in my constituency, who simply cannot afford to buy them at current prices. Radical review of that is necessary, please.
Albert Owen (Ynys Môn) (Lab)
I agree with one point that the hon. Member for South Dorset (Richard Drax) made: it is very welcome that we have had extra expenditure on our armed forces. Of course the Chancellor of the Exchequer made that announcement with pride, but he was in the Government who took the money away in the first instance and made things very difficult for our armed forces over the last eight years.
The hon. Member for Wimbledon (Stephen Hammond) rightly highlighted his school, and said it was a very good comprehensive school. My school was the first comprehensive school in this country. Like many schools, it has suffered from cuts over the past few years, and it will, I think, be upset that not much money has gone into education. Certainly the Barnett formula will not help schools in Wales.
This was a political Budget and its main target audience was the different factions of the Conservative party. The slogan—and it is a slogan—that austerity has ended is cruel in many ways, because that is not the reality. Why should we believe this Government? It was a Conservative Government who told us they would end the deficit by 2015, yet under the figures given by the Chancellor on Monday the deficit will still be there in 2023-24. They have missed their target by a little over nine years, and even then the figure will be 0.8%.
There was a missed opportunity on low carbon and climate change. A decade after we in the House of Commons introduced the Climate Change Act, which I was very pleased to vote for, the Government had an opportunity to move forward. They have invested in some low carbon measures through the growth strategies, and I welcome the nuclear sector deal, but one area where investment is greatly lacking is marine and tidal technology. The Government are missing a trick there, because many companies now want to invest in this country, and are doing so in research and development, but the money simply is not there for them to go from prototypes to actual commercial delivery. The Government need to look at that, because many of these companies are international and they will go elsewhere and manufacture the prototypes in other countries, and Britain will lose out.
I urge the Minister to put pressure on this issue. I have discussed it with the Secretary of State for Business, Energy and Industrial Strategy, the right hon. Member for Tunbridge Wells (Greg Clark), and he does understand, but he needs to ring-fence a subsidy—and it is a subsidy—to help this new technology, as we did with wind. When Labour was in government the Conservatives criticised us for subsidising wind farms, yet they are now saying it is their flagship policy. That turnabout is most welcome, but we now need to concentrate on marine technology, because we have the resource, the research and development and the skills, and we need to develop them moving forward.
Finally, I want to talk about the north Wales growth bid announcement. Like my right hon. Friend the Member for Delyn (David Hanson), I cautiously welcome the £120 million for the 600,000-plus people of north Wales. It does not quite compare with the amount that appeared on the magic money tree for the Democratic Unionist party in Northern Ireland, which has half the population but got double the money. I wonder why that is, Madam Deputy Speaker. However, the money will be useful for the Welsh Government, for local government and for the business sector working with MPs to develop our economy, which has struggled over the past decade, and I very much welcome it.
Some of the bids involved include energy developments in north-west Wales, which is a good thing. We are building on the energy sector deals, which is good for the economy of north Wales, but we need to see the details. We need to see how much money is available now, so that the other areas of the Welsh Government can match-fund it to maximise the potential to make north Wales a centre of excellence in low carbon energy. That is something that I have campaigned for, alongside the Secretary of State for Business, Energy and Industrial Strategy. He was very good on this when he was in opposition.
We need to see more action from this Government, and I hope that the politics will be put to one side and that we will work together to develop low carbon energy so that we as a country can be a world leader. I hope that the region of north Wales can work with the regions of north-west England to develop and become more connected as a region of the United Kingdom, and that we can develop top-class jobs there, because that is what we need. We do not need slogans; we need real jobs. We do not want hollow remarks about ending austerity; we want actually to end it.
John Howell (Henley) (Con)
It is a pleasure to follow the hon. Member for Ynys Môn (Albert Owen). I spoke to him in the Tea Room about fusion, and I think we both remain very excited about the potential of that project. I want to start by looking at unemployment. There was a time when the Library produced monthly assessments of constituencies, and my own constituency was invariably either at the top or near it in terms of best performance in dealing with employment. It should therefore come as no surprise that less than 1% of the economically engaged population in my constituency is unemployed at the moment. The number of young unemployed people—those under the age of 24—across the whole constituency amounts to 50. It is often argued that I know them all. I do not, but I wish I did.
Those figures illustrate an interesting point, which is that there is not a sufficient population within the constituency to fill the jobs necessary for growth and expanding businesses there. Two things need to happen in that regard. First, we need innovative solutions to the transport issue. I am pleased that the county council has helped to engineer smaller buses and lots of local buses, but I would like to see a little more help for this in next year’s spending review. Secondly, we need to make houses really affordable. A number of speakers have already mentioned the fact that houses are not genuinely affordable. There is one policy in the Budget that will help in this regard, and it is interesting that no one has mentioned it so far. It relates to the Chancellor’s attempt to use the discount on houses to keep them for local people. I fully support that policy, and I do so in my role as a Government champion for neighbourhood planning.
John Howell
Thank you. The whole point is to ensure that this is done through the neighbourhood planning process. This will give people an enormous incentive to undertake a neighbourhood plan, because they know that it might give them the opportunity to say that the houses involved are genuinely to be allocated to local people.
Moving on, business rates reform will be a real help for businesses, and I do not know why the Opposition are downplaying it. In Henley—I think that the same is true in Thame—the problem is not so much about high rents, but business rates, and the local paper maintains an empty-shop watch to note any fluctuations. I sought some information before this debate, and the number of smaller properties in the Henley area that will benefit from this third reduction in business rates is something like 250,000—a phenomenal number.
I mentioned fusion in several interventions, and it is something that I have kept a close eye on not only because the JET Culham Centre for Fusion Energy is in my constituency, but because I am the chair of the all-party parliamentary group on nuclear fusion. I am therefore pleased that an additional £20 million will be spent on the fusion project, an element of which was recently opened by Prince William. As I pointed out in an earlier intervention, that is a useful sum of money because it is not the commercial project, which is being undertaken in France.
Jenny Chapman (Darlington) (Lab)
It is a pleasure to follow the hon. Member for Henley (John Howell). What has struck me about this Budget debate compared with others that I have taken part in is the number of Conservative MPs who have risen, yes, to welcome the Budget—of course they will do that—but also to point out that they need more resources in their constituencies, particularly for schools, but for other issues, too. Clearly, this desire for the end of austerity that the Prime Minister and the Chancellor have recognised is not confined to Labour areas; it has spread across the country. The population is tired and exhausted by the lack or erosion of important public services, and I will concentrate on further education, skills and mental health provision for young people. The nation clearly wants change, but the measures that we have seen so far will do little, if anything, to address the issue adequately.
Colleges in all our constituencies are the real engines of social mobility. They are places where people can get a second chance and be supported. Some young people mature a little later than others, and a college is where they get their inspiration. They are where people who want to change focus in their lives can get support. We have known for years that college funding for full-time 16 and 17-year-olds is 20% lower than in schools, which just is not right. If we want, as was said earlier, to be a place of high skills and high wages—the brightest and the best in the world—we have to enable adult learners to participate and retrain when necessary. The number of adult learners now is about half what it was some 10 years ago, and concern is widespread among employers, the Russell Group of universities, Ofsted’s chief inspector and the FE Commissioner. Thank goodness for the talented, dedicated teachers who make up for the lack of resources in our colleges and support students every day.
We can achieve little as a country, however, if we do not address the urgent but silent crisis of young people’s mental health. Too many of our children are being failed. A young woman who had been cutting her arm came to my surgery. She showed me her scars. She had been to her GP and had been referred to child and adolescent mental health services, but she and her family were told that the situation was not serious enough to warrant her being seen by a specialist practitioner. That is a disgrace. How are we to build the strong, robust, vibrant, creative, intelligent, talented, resilient workforce this country needs if we cannot care for our young people who are experiencing such a crisis?
I recently read the minutes of my local mental health trust, because I wanted to find out what was happening:
“The service has experienced an increase of 12% in referrals in the past six months and has struggled to meet demand.”
Yes, the service is struggling to meet demand. The minutes go on to say that the trust is considering ways to reduce referrals. My fear is that some of the additional investment, welcome though it is, will be used in A&E departments in crisis situations. The Government have reacted to strong campaigning from people such as my right hon. Friend the Member for North Durham (Mr Jones) and my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), but the money will not adequately address the need among young children for prevention, early intervention and upskilling the workforce. Those things need to happen if we are to build the workforce we need.
The greatest tragedy is that this is 100% preventable, and that is what the Government should be addressing, not throwing a little bit of money here and there to try to appease interest groups and strong campaigners—that will not do. We need to address the fundamental problems we are experiencing in our society, because the impact of the long period of austerity is now being felt by our children and by the most vulnerable people in our communities.
Steve Double (St Austell and Newquay) (Con)
I welcome this Budget. It is the positive Budget our country needs as we look to the future after leaving the EU.
The Budget sends a positive message to hard-working people by raising the living wage, raising the tax threshold and putting extra money into universal credit. We are putting extra money into people’s pockets every month, which will be welcomed across the country.
It is also a positive Budget for business. The Federation of Small Businesses said, rightly, that it is the most pro-small business Budget for many years. There are many measures to help businesses across the country, particularly small businesses. The measures to help with business rates on the high street are welcome. The two main towns of my constituency, St Austell and Newquay, have real challenges in filling units to achieve a thriving high street, so the measures to reduce the business rates burden on those shops are hugely welcome and will go a long way to starting to address some of the challenges we face.
I thank the Chancellor for his decision to exempt public toilets from business rates, on which I have personally campaigned for six years. Back in 2012, I was the cabinet member on Cornwall Council with responsibility for public toilets, and I spent a year travelling Cornwall to visit far too many of them. Back then it struck me as ridiculous that we were charging business rates on public toilets; it was a real barrier to many small parish councils being able to keep those toilets open. It is very welcome that, after six years of pressing the issue, we have the right decision. This measure will go a long way to support tourism in Cornwall.
I also welcome the commitment in the Red Book to improve and increase the resilience of the railway line at Dawlish. I am sure many Members will remember the awful scenes in 2014 when the line on the south coast of Devon was washed away. We have done a lot of work, and the Government have already spent a lot of money to improve resilience, but we need to do a proper job. It is a welcome commitment in the Red Book that the Government will move forward with that next year.
We need now to press Network Rail to come up with a deliverable plan, and ensure that it gets properly funded and is delivered as soon as possible, because that railway link is vital to the Cornish economy. A lot of positive things are going on in Cornwall right now, but we need to make sure our transport connectivity is resilient and sustainable and continues to operate properly.
I wish to mention a couple of things that are happening in Cornwall, or potentially happening there, and that I hope the Government will continue to take note of. I have mentioned the opportunity of the spaceport in Cornwall in this Chamber today, but I want to really make the case, as it will be a huge boost to the Cornish economy. We welcome the measures the Government are taking to support the space industry. I believe Cornwall is very well positioned to play a major part in achieving the Government’s space ambitions. Our recently confirmed partnership between Spaceport Cornwall and Virgin Orbit puts us in a good place to deliver the horizontal capability we need to see developed.
Large deposits of lithium have also been discovered in Cornwall. With the growing demand for that metal for batteries, it is very much not only in Cornwall’s interest to revive our mining industry, but in the national interest to secure a domestic supply of this very important metal. I urge the Government to continue to support these emerging industries in Cornwall so that we can make sure that the potential is realised.
I want to finish by mentioning one thing I was disappointed about in the Budget: the increase in air passenger duty. At a time when we should be giving a clear message to the rest of the world that Britain is competitive on the global stage, raising APD is a disappointing step. I plead with the Treasury to hold APD and not increase it any more in the future to make sure that we are competitive and that Britain is very much able to operate on the world stage.
Chris Ruane (Vale of Clwyd) (Lab)
One of the most eye-catching and long overdue announcements on Monday was the £420 million to tackle potholes. Although I welcome that, the reason we have so many unfilled potholes around the country is the total lack of funding for local government. My hon. Friend the Member for Liverpool, Walton (Dan Carden) reminded us that his local authority has had a 64% cut in funding. The Tory leader of the Local Government Association has said that he expects local government cuts of 80%. That is nothing more and nothing less than the dismantling of the state.
I was elected in 1997 on a platform of “Education, education, education”, but now we have £420 million for potholes and £400 million for education. That is a slap in the face for hard-working teachers, who are stressed and overworked, and who are leaving the profession in their thousands. There is a dire need for further investment in education.
The Secretary of State for Business, Energy and Industrial Strategy, the right hon. Member for Tunbridge Wells (Greg Clark), opened this afternoon’s debate by talking about marine technology. I speak as a North Walian MP who wishes to develop tidal power off the coast of north Wales, from Prestatyn all the way to Conwy, and I saw no encouragement—there was no funding—in this Budget for marine or tidal technology to help develop these new ideas. Wales and the UK have a chance to be world leaders in this technology, and there was nothing in the Budget.
I do not want to be seen as a curmudgeon. I do welcome the £2 billion for mental health. I ask whether it will be ring-fenced, because when extra money has been given in the past it has been spent on physical illness, and not on mental illness and human flourishing. As the Labour chair of the all-party group on mindfulness, I ask that a proportion of that funding be set aside to promote mindfulness in the NHS. It has been freely available since 2004 and the take-up has been minimal. I suggest that some of the £400 million the Government are going to raise from a digital tax—from Facebook and Google—should be ring-fenced for mental health. Facebook admitted in July that its product is having a detrimental impact on the mental health of children and young people all around the world, so this is a fair way of allocating that funding.
Several Members, especially on the Opposition Benches, have mentioned policing, because there is nothing for the police in the Budget. Since 2009, there has been a 90% increase in violent crime in north Wales, and 108 police officers have lost their jobs. Between 2017 and 2018 alone, there was a 28% increase in violent crime in north Wales. The police are trying hard. They have to deal with new issues, such as county lines. We have criminals from Liverpool and Manchester coming along the north Wales coast and into our market towns to sell their vile products and corrupt children and young people.
Many of my colleagues from north Wales have mentioned the north Wales growth fund. As my right hon. Friend the Member for Delyn (David Hanson) said, we were expecting £340 million but have been promised £120 million—far less than we expected. According to the Red Book, of that £120 million, the allocation for the next three years is respectively £5 million, £40 million and £40 million, not just for north Wales but for three other areas of the UK. Will the Minister say how much north Wales will actually get? I pursued the matter with staff in the Library, but even they are confused. I want some clarity on the funding for the north Wales growth fund. We want the specifics.
In conclusion, many Members present, especially on the Opposition Benches, have said that this is not the end of austerity. Let me misquote Churchill: now is not the end of austerity. It is not even the beginning of the end of austerity. But it is, perhaps, the end of the beginning of austerity. The only thing that will truly end these eight years of austerity is a Labour Government.
Maggie Throup (Erewash) (Con)
I am delighted to contribute to the debate and to add my voice of support to those who have already commended the Budget.
I applaud the measures brought forward by the Chancellor to support our high streets. As an MP who represents three towns—Long Eaton, Ilkeston and Sandiacre—and a few villages, all with their own independent shops, pub, cafes and restaurants, I know that the reduction in business rates from April next year and for the next two years will be a welcome boost to them all. With that measure, together with the £675 million set aside for the future high streets fund, the Chancellor recognises that we have reached a pivotal moment in our nation’s consumer history. He is quite right to recognise that we are no longer a nation of shopkeepers, but a nation of online shoppers.
As Ministers begin to establish the new high street taskforce, my plea is that they ensure that cities are not unfairly prioritised over towns. We need to make sure that towns are regenerated as much as city high streets. We also need to look forward and think about what else brings people to our historic market towns—the word is there: market—and support our street markets as well as high streets.
I welcome the plans to publish a refreshed midlands engine strategy next year. That will present us with a fantastic opportunity to cement the region as a hub of trade and commerce, as well as to capitalise on the benefits that High Speed 2 will bring to our region. I want to make sure that there is more emphasis on the east midlands, because I feel that, to date, a lot of the emphasis has been on the west midlands.
I have always been clear that once it is built, HS2 will undoubtedly unlock huge economic benefits for the east midlands in the form of new jobs, as well as providing much-needed capacity on an otherwise Victorian rail network. However, I am not afraid to be frank with Ministers: residents and businesses in my constituency must be compensated in full for the considerable disruption and displacement caused by the construction of the new line.
After my interventions, the Government have already made significant concessions on the extension of the compensation zones, and in some cases they have fast-tracked the process above and beyond what is required by law. We must go further still, and I will continue to make the case to Ministers and to HS2 Ltd for a bespoke compensation package for Long Eaton that takes into account the unique impact that the project will have on my town.
The £2 million of new seed capital to create a new development corporation, announced by the Chancellor in his conference speech at the beginning of October, is the first step to ensuring that we get the project right for local people. I look forward to playing an active role, along with Sir John Peace, chair of the midlands engine, who will lead this new corporation, so that, together we can deliver a financial package to mitigate the impact on my constituents and develop the case for wider infrastructure investment from Government to support the Toton hub, such as a new motorway junction at 25A to relieve traffic trying to head to the M1 and to relieve congestion through Sandiacre and Long Eaton.
Given the action that my right hon. Friend has taken, I am convinced that he shares my ambition for our great region and that he will have heard the case that I have made for further investment to support the communities affected by HS2 and will consider my proposals carefully. None the less, the fact remains that none of these proposals would be possible without a strong economy. Under the careful stewardship of my right hon. Friend the Chancellor and the Conservative Government, and after eight years of fixing the roof, what we see in this Budget is an optimism and a confidence for the future of our great nation.
It is a Budget that provides for lower taxes, higher wages, record employment, a growing economy and new investment in public services. That is what our party offers the British people, and that is what the Labour party would really put at risk.
I am proud to support this Budget on behalf of my constituents. I congratulate the Chancellor on the ambitious, yet pragmatic, approach that he has taken to our nation’s finances and I commend it to the House.
John Grogan (Keighley) (Lab)
It is a great pleasure to follow the hon. Member for Erewash (Maggie Throup) who spoke with great passion and knowledge about her constituency.
Madam Deputy Speaker, I do not know whether you watch Match of the Day 2 on a Sunday night, but the presenter always ends by saying, “2 Bad, 2 Good”, and they choose two bad incidents from that week’s football games and two good. I thought that I would adopt the same approach on the Budget—[Interruption.] No, I want to be generous and have the two good things.
Let me start with the two bad things. The first disappointment in the Budget is the lack of mention of Yorkshire devolution. Eighteen out of 20 councils, including many of the leading Tory councils in Yorkshire, God’s own county, have come out in favour of a One Yorkshire devolution deal. We desperately need it, and an economic case for it has been made to Government. We do not want to balkanise the county into four sub-regions. A lot can be gained in terms of skills, inward investment and exports if we can get a Yorkshire deal.
The Department for Business, Energy and Industrial Strategy and the Treasury have traditionally favoured this plan more than the Ministry of Housing, Communities and Local Government. However, I would like to pass on my congratulations to the Minister for the northern powerhouse. He is on paternity leave and I understand that his second child was born in the last 24 hours. Hopefully, like many new fathers, he will come back a more mellow man and he will begin negotiations on One Yorkshire.
There is good news for Yorkshire today: Leeds has been chosen as the national base for Channel Four. All Yorkshire MPs will be rejoicing in that. It will be a great boost for the creative industry not just in Leeds, but throughout Yorkshire, and there will be celebrations throughout the county tonight.
One bad piece of news has been mentioned. No fewer than five Conservative MPs have asked for more money for their schools. I do not know what bright spark thought up the term “a little extra”, but they will go to their graves with that phrase. As we approach the Christmas season, it is like one of our loved ones giving us a pair of socks for Christmas. We look at them, and even though we would not say it, we think, “Is that all?” That is what many schools are thinking today. I advise Government Back Benchers that, if they are to rebel on anything, rebel on this, because it was the issue that got me a 249 majority at the last election and, unless the Government change their mind on this issue, it will be at the top of any leaflets that I put out if there is a snap election.
Let me turn quickly to two good items. It would be churlish of me, as deputy chair of the all-party group for pubs, not to welcome the freeze on beer duty, and not to welcome the rates measures, which will bring £120 million to pubs. I have an invite for you, Madam Deputy Speaker, and for any Members of the House. By fortuitous chance, we have a reception in dining room A, which I am hosting tonight, to celebrate Yorkshire beers, particularly Timothy Taylor’s beers in Keighley. All Members of the House are most welcome to join that celebration. Seven o’clock is well timed for the close of this debate.
The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) made a scathing attack on the Government’s record on carbon capture and storage. In Yorkshire, as in Aberdeen, in 2015 we were looking forward to a substantial project when it was cut. There is good news, however, not in the Budget in particular, but announced just before it—the Government are again looking at carbon capture and storage, and at two clusters of it. The two obvious clusters would be the two areas that lost last time: Aberdeen and Yorkshire.
I want to give some support to the shadow Chancellor for his attitude to tax. We need to be pragmatic. Today, however, the one thing that I disagreed with in the excellent speech from our Front-Bench spokesperson was that the Government side had given up—they have not. They will have to be prised from power, and we have to be careful what we say. I look forward to similar pragmatism as we develop our policies on public ownership of water—we need to pay proper compensation and to have a proper regulator—and on employee ownership. I chaired an employee owned firm, and we need to do better as we develop our policy.
Finally, there could be a snap election. Our party will need a European policy if we defeat the deal that comes before the House. That policy should be to put back the Brexit date to allow the new Labour Government to negotiate a new deal aligning ourselves to the single market and the customs union, with a referendum to confirm that deal.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
Thank you for calling me to speak, Madam Deputy Speaker. I had been misled into thinking that my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) would be next, but I am delighted to be called.
I welcome the Budget and in particular the fact that over 70,000 more people are in work in the north-east than when Labour left office—the equivalent of every man and woman in my constituency. This Budget ensures that there will be more.
The £14 million of direct investment in the South Tees Development Corporation brings the total pledged to the site over the last year to £137 million. Tees Valley Mayor Ben Houchen will now be able to deliver two major new metals projects, which will create 1,500 high-quality jobs. Despite the worst efforts of the Labour party, people recognise that something special is stirring in my region and that new hope is being kindled on the banks of the Tees.
There is social justice, too. The hon. Member for Darlington (Jenny Chapman) mentioned mental health in her speech and I agree with her completely that it is a major crisis for many young people. I would add that £2 billion was committed to mental health in the Budget. That is an important investment, which it is important to note.
On universal credit, a fortnight ago, I visited my local jobcentre in Loftus. The team there were passionately committed to supporting people into work. The billions committed by the Chancellor means that Torsten Bell of the Resolution Foundation was able to state unequivocally that
“the Government’s flagship welfare reform is now more generous than the benefit system that it is replacing.”
On Hallowe’en, let us put an end to the scaremongering that we keep hearing about that vital programme. As a nation, let us embrace the principle that everyone will now be better off in work than on welfare.
We also need to look to the future in other ways. Boldness and bravery must be our watchwords. On housing, the fundamental problem is Government-induced restriction on supply. Delivering demand-side policies without addressing the artificial constraints on the availability of land will serve only to increase taxes and inflate housing costs still further. Last month, in my paper for Freer, I called for us to lift the restrictions on development within half a mile of stations in the green belt.
Norman Lamb (North Norfolk) (LD)
The hon. Gentleman mentioned the Resolution Foundation. Does he also recognise that it identified that better-off households, the top 10%, will be £410 a year better off, whereas the poorest households will only gain £30 a year? Does he support that?
Mr Clarke
I support tax cuts for hard-working people throughout our country. They had to put up with the highest burden of taxation in this country for generations.
To go back to housing—I am conscious of time—the small release of land that I am proposing would create enough land supply for at least 1.5 million new homes, while leaving 98% of all existing green belt land entirely untouched. Indeed, the remaining area of the green belt would still be over 115% larger than it was in 1979. There is growing cross-party consensus on this topic. I pay tribute to the campaigning work by the hon. Member for Mitcham and Morden (Siobhain McDonagh). We should also be looking at innovative proposals such as those from London YIMBY, which set out how we could empower individual streets to set their own design codes and build upwards rather than outwards.
We also need to look to Brexit. We must stop looking at our leaving a dysfunctional and anti-democratic EU as a problem to be mitigated, rather than as an opportunity to be seized. Trying to cling desperately to the skirts of the customs union is frankly unworthy of the world’s fifth-biggest economy. The announcement that there will be a special economic area in the Tees valley is genuinely welcome news. I hope that it will become the first free port in the UK after Brexit, and, indeed, the first of many. But if that free zone is to be a success, it will need meaningful powers. I refer Ministers to the speech I gave in Westminster Hall in the debate I secured with the right hon. Member for Birkenhead (Frank Field). As we sit here today, we do not know the precise nature of our future trading relationship with Europe. I can say with confidence, however, that half measures and a lack of national self-belief must be rejected utterly as we forge our new path in the world.
Marsha De Cordova (Battersea) (Lab)
Eight years of punishing austerity have had a devastating effect on people across the country, and I see it in my constituency surgeries every week. I see it in the parents who tell me that they fear for the safety of their children because violent crime is rising. For them, austerity for policing has seen nearly £1 billion cut from the Metropolitan police, with neighbourhood police officers disappearing from their streets. I see it in the families who are crammed into overcrowded homes. For them, austerity has meant no new council homes. I see it in the nurses who tell me they once really loved and enjoyed their job but are now brought to despair by being overworked. For them, austerity for the NHS has seen its slowest funding growth in its history. I see it in the disabled people who tell me that they have been driven to poverty and anguish, unable to afford basic necessities. For them, austerity for social security has seen support taken from them.
Those people are seeing some of the consequences of austerity. The Prime Minister promised that austerity was over, but this Budget breaks that promise—it is a broken promise Budget. The Government claim that this is an economy for everyone and that their cuts to social security are “fake news”. But is it fake news that almost 1 million disabled people will be worse off as a result of universal credit, according to the OBR; or that a single disabled person in work could be made £300 worse off a month; or that, despite the 12-month grace period, the minimum income floor will negatively affect some disabled people?
The Government claim that they are spending more than ever on disabled people, but we know that disability social security spending has shrunk by £5 billion over the past decade. The Chancellor has barely reversed half of the cuts to work allowances, and he has done nothing to mitigate the five-week wait facing disabled people claiming universal credit. His Budget does nothing to solve the burning injustices faced by so many disabled people—and there are £7 billion-worth of cuts to social security still to come. The Budget does nothing for families who need social security to get by, with no change to the social security freeze or the two-child limit.
Austerity is not over for social security, and austerity is not over for policing. There is not an extra penny for normal, everyday regular policing. Austerity is not over for education. There is not an extra pound for the day-to-day costs of schooling. Austerity is not over for local government. There is nothing to close the nearly £8 billion funding gap that will exist by 2025. The money promised for the NHS is “simply not enough”, according to the Health Foundation. Austerity is not over.
According to the Chancellor, even the sticking plasters in the Budget are dependent on the Government’s Brexit shambles not causing a disastrous no deal. The grim truth of austerity is that it fails by not only the standards of social justice, but its own narrow standards. The Chancellor now claims that getting the deficit down by 2024 is some sort of achievement, hoping we forget that it was meant to be eradicated by 2015. Let us remember that this Government have missed every fiscal target they have set themselves, with the slowest post-crisis economic recovery on record. The UK is now the only major global economy in which investment is falling. Low growth, low investment and low pay—that is the record of their austerity. What makes austerity all the more painful for so many of my constituents is that, while their public services and social security are cut, the super-rich and corporations have had a £110 billion handout in tax giveaways. It is austerity for the many and abundance for the few.
Ben Bradley (Mansfield) (Con)
It is a pleasure to follow the hon. Member for Battersea (Marsha De Cordova). I am pleased to have the opportunity to speak in today’s debate and to welcome this Budget, which is a positive one for my constituents in Mansfield and Warsop.
It was not a major headline, but I was especially pleased that the Government committed in the Red Book to support communities to make the most of their local assets, including village halls and miners’ welfare facilities, and that the Treasury has listened to my representations on that subject. Only last week in Westminster Hall, I asked the Government to support miners’ welfare facilities and boost funding for their upkeep, particularly for sports facilities. During the debate I spoke of the importance of those facilities for coalfield communities, especially in terms of sports provision, as they exist in areas that generally top the statistics in terms of poor health and inactivity. Help to manage and improve those facilities, which were once the heart of coalfield communities, can bring them back to life and get more people engaged in sport and physical activity, which will save money for our local services and the NHS.
The future high streets fund is a great initiative. Mansfield town centre is a huge local priority of mine, with some brilliant local shops on the high street. I hope that the availability of this funding to support positive and regenerative plans will add further pressure to my calls for Mansfield District Council to pull together a proper plan and vision to regenerate the town centre.
The Chancellor’s commitment to help small shops by cutting business rates by a third for small retailers is also great news for Mansfield. It will mean an annual saving of up to £8,000 for up to 90% of all independent shops, pubs, restaurants and cafés and can help us to fill high street lettings, to give much needed breathing room to small businesses and to assist in bringing people back to the high street. In next year’s comprehensive spending review, I would like to see the Treasury go further and undertake a fundamental reform of business rates. It is a 20th-century tax in the 21st century, and we need to look at it more closely. Those two announcements for town centres are very welcome and will no doubt receive widespread support from my constituents.
The other key issue addressed in the Budget is the cost of living. Thanks to careful management of the economy, we were able to announce that the personal tax allowance threshold will be raised a year early, letting people keep more of the money they earn and helping with the cost of living. Combined with the rise in the national living wage, that means that full-time workers in my Mansfield constituency, where so many people have low incomes, will see over £600 a year more in their pockets. That is so important for normal people who are trying to get by and do right by their families, and I am pleased that this Government have put them at the heart of this Budget.
Nobody should pretend that anything is perfect, so there has to be something that I would have liked to see in the Budget. If I have one criticism of the Budget, it is that, while I have seen examples of where the additional one-off support of £400 million for schools can be utilised in a positive way in my constituency—I can think of several primary schools I have visited that will relish the prospect of kitting out their library properly or investing in new IT for students—we need to focus more on what should always be the No. 1 priority, which is educating our young people for the future. I hope that the comprehensive spending review in the new year will seek to address that. However, it is not always about splashing the cash. There are a number of ways in which we could help. I have put forward proposals to the Treasury on helping schools to reduce their building and maintenance costs, for example.
Plans for investing in our mental health services and social care are good news. I particularly welcome the announcement that the use of PFI for future projects such as hospitals and schools will be abolished. The Labour party agreed nearly 90% of all PFI contracts. King’s Mill Hospital, near my constituency, is one of the most expensive examples in the country, frittering away taxpayers’ money and ultimately making it harder for the NHS trust to manage its budget. It is great news that that will not be allowed to happen again. That is part of Labour’s legacy, along with high unemployment and trapping people on benefits, and this Government are working to address those issues.
Universal credit is a key component of that change. It was positive to hear about the transitional funding to support the migration process and that working people on low wages will get an additional boost through the new money announced by the Chancellor. I thank him for that, as it will be a particular help to people in my constituency.
When we came into government, the country was borrowing over £150 billion a year and unemployment had increased by nearly 500,000. Britain had suffered the deepest recession since the war and we had the second biggest structural deficit of any advanced economy. Now, more people are in full-time work, unemployment is lower in every region of the UK, and wage growth is at its strongest for 10 years and is predicted to keep growing. As a party, we should be focused on cutting taxes, putting that money back in the pockets of hard-working people, and giving them the opportunity to succeed on the basis of their own talent and hard work.
As we leave the EU, we should grasp those opportunities, be proud of our businesses and industries, as the Secretary of State set out, and invest to secure our status as a world leader in so many areas. We must be able to export that leadership to the whole world to ensure the economic growth that Conservative Members know leads to jobs, wage growth and prosperity for the whole of the UK.
Anna Turley (Redcar) (Lab/Co-op)
Britain as a country is becoming more unequal and whole communities are being left behind. In the real lived economy as experienced by my constituents, there is a sense that things are getting harder, not better. Although we have heard all week from Ministers about the number of new jobs in the economy, if we listen to those in my community, they will tell us that work has become more insecure, more temporary and less well paid, with fewer rights and longer hours. For many people in Redcar and elsewhere, no matter how hard they work for how many hours and however many jobs they take on, work is not paying.
Eight years of austerity have ravaged communities such as mine. The Tories said that those with the broadest shoulders would bear the greatest burden of austerity. Well, that turned out to be a deceit, as it was communities such as Grangetown, South Bank, Redcar and Eston that bore the brunt of the bedroom tax, the welfare cuts, fewer police keeping our streets safe, NHS walk-in centre closures, fewer buses and, ultimately, the closure of our steelworks. With universal credit coming to Redcar and Cleveland for full roll-out on 28 November, the five food banks that have been established in my constituency under this Tory Government are preparing themselves for a surge in demand for food parcels.
The dire warning from history is that if people feel their political and economic system has broken its obligations to them, they will turn to extreme alternatives. The global financial crash has heralded a rise in populism across the globe—in the USA, across Europe, and in Brazil this week. I would put UKIP and the hard-core Brexiteers in the same boat. I represent a constituency that voted for leave in the EU referendum in 2016, and my firm conviction is that the underlying causes of that snapshot of opinion two years ago were economic. Many people felt then, and feel now, that the economy is not working for them and their families. There is a strong sense that London and the south-east is sailing ahead, while towns in the north get left behind.
The old industrial jobs on Teesside are disappearing—no more the scores of thousands of jobs for young people leaving school at ICI, at Tees dock or in the steelworks that lined the river. Those jobs are gone and that security has gone, and what new jobs have replaced them are low paid and unstable. Of course, the final blow for us was the closure of the SSI—Sahaviriya Steel Industries—steelworks in Redcar in 2015, ending 175 years of steel making. It was not just the loss of over 3,000 skilled jobs; it was the loss of pride, dignity and hope, and the sense that the Government just did not care. No wonder my constituents shouted out in rage in the 2016 referendum.
What is the answer? One thing is for sure: it is not simple enough to be written on the side of a bus. The solution is certainly not a hard Tory Brexit. Crashing out of the EU with our trade deals in tatters would be a disaster for the remaining industries and the small businesses in Redcar, and I will oppose it. A slump leading to a recession leading to misery is not what people voted for, and I will not enable it.
Is a continuation of austerity the answer? No. Cuts to public services have slowed down our recovery. Austerity has ruined lives, and made our society more divided and our communities more brittle. We need to invest in public services and to borrow the money to do that. We need a massive injection of investment: more teachers, doctors, nurses, mental health specialists, police officers, firefighters and social care providers. Redcar and Cleveland Council needs the money it has been denied since 2010 to deliver the services people deserve. Taking £90 million away from local services has consequences for people’s lives.
This Budget did not deliver on anything that is needed on the scale required. The solution we need to bring our country back together is for the Government to invest in and prioritise communities that have been left behind and that roared in anger two years ago. Teesside has so much potential, and it is ready to be at the forefront of a new modern industrial renaissance. This is where we really needed support in the Budget, but £14 million does not come close to the £200 million needed to clean up the whole former SSI site. Civil servants were very quick to email straight after the Budget to say that this £14 million has not even been confirmed and is subject to making a business case to the Government.
I welcome the new powers, but the question is this: what exactly is a special economic area and how does it differ from the existing enterprise zones, of which there are already plenty in Teesside? If its only powers are to allow the development corporation to keep business rates, then that is nothing new, as councils will be able to do that from next year anyway. Does that mean that rates on the site will now go to the development corporation and not to Redcar and Cleveland Council? If so, local people are paying once again to fill the gap because the Government will not pay to clean up the mess they have left on the site. I have no doubt that the Government should pay—they closed the site, they rejected offers to keep it going and three months later they stepped in and took a stake in Port Talbot.
I am deeply worried by how little we saw in the Budget for Teesside. We have the potential on the site not just to turn things around for the people of Redcar and Teesside but to show the way on the sort of economy we could have in this country: a leading hub for green industries, creating jobs and helping us meet our climate change targets, carbon capture and storage, hydrogen economy, recycling and energy generation. We have a great future in Teesside—the brains, the hearts and the hands. We can make it happen.
Douglas Ross (Moray) (Con)
I have sat through the entire debate and thoroughly enjoyed it. There is only one other place where I would like to be today: joining the pupils of Logie Primary School on their beach clean. On Friday, I visited the pupils and staff there, and along with questions about how old I was and whether we could buy some more helicopters, I was asked whether I would join them on that school visit. I had to say that unfortunately I could not, as I was speaking in the Budget debate, but that the least I could do was mention them and their school, which just yesterday received such a glowing Education Scotland report, in today’s Budget debate. I have now done that.
I want to raise a few issues, but before that I would like to mention some of the contributions from Scottish National Members since Monday. It all started with the boorish behaviour of the right hon. Member for Ross, Skye and Lochaber (Ian Blackford)—we had to endure his 30 minutes. I thought that was bad enough until I listened to the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry). The hon. Gentleman was not only boorish, but inaccurate: he said that Scotland’s block grant had been cut as a result of this Budget. Yet as I said in my intervention, between this year and next, the Scottish Government block grant will go up in both real and cash terms. That is what is happening to the Scottish Government block grant as a result of this Conservative Government—up £866 million in cash terms and up £381 million in real terms: that is this Westminster Government delivering for Scotland.
I want to focus on a couple of issues in the short time I have. The first for me, as the Member of Parliament for Moray, representing 40% of all Scotch whisky distilleries, is, of course, the freeze in spirits duty. I am delighted to see the Financial Secretary to the Treasury on the Front Bench. He gave me an extremely positive response during Scottish questions on how important it would be for the Government to deliver a positive Budget for Scotch whisky, and the Government have done that. Earlier, the Exchequer Secretary to the Treasury was on the Front Bench; I was delighted to host him in Moray—we went to visit a distillery. The Chief Secretary to the Treasury came to Moray and we visited another distillery. I have also raised the matter personally with the Chancellor of the Exchequer. The only one in the Treasury I did not raise it with was Gladstone the cat—everyone else has heard from me and my Scottish Conservative colleagues about how important freezing spirits duty is for the Scotch whisky industry. That industry has repaid our trust: in the past five years, there has been £500 million of capital investment in Scotch whisky distilleries—that is how the industry has reacted to positive announcements in this Budget and the freeze last year as well.
I also want to thank the Chancellor for the mention of the Moray growth deal in his Budget statement. I have campaigned for that since my election as Member of Parliament. Following the announcement on Monday, I was delighted to see apprentices from Moray unveil a plaque in Cooper park, made from materials from their various trades, saying “MGD”—Moray growth deal—“under construction”. The green light from the Chancellor at the Dispatch Box during his Budget statement has been really well received in my local area. I look forward to working with the Moray growth deal business assembly chair, Michael Urquhart, and all the people, across parties, involved in securing that deal. I have spoken to Treasury Ministers and others about it, and I am excited about the future.
I could talk about many other positive things in the Budget, particularly the increased investment in defence, given that my constituency is home to RAF Lossiemouth and 39 Engineer Regiment at Kinloss. That is extremely important for us in Moray.
I commend the Budget, because it delivers for Moray and it delivers for Scotland. I can only hope that the Scottish National party, when it comes to the Scottish Government’s budget later this year, can deliver in the same way. Sadly, previous experience does not bode well. They have made Scotland the highest taxed part of the United Kingdom. With almost £1 billion extra in this Budget going from Westminster to Holyrood, I hope they will deliver for their areas as this Government have delivered. Sadly, in the past they have decided to cut the amount of money going to Moray Council, and cut the amount of money going to health boards in the north of Scotland. That does not bode well. The ball is in their court to use the extra resources from the Westminster Government.
Phil Wilson (Sedgefield) (Lab)
I want to take this opportunity to raise three issues that are of particular importance to my constituents. First, however, we have a Budget that still predicts lower economic growth over the coming years and puts us near or at the bottom of the international growth leagues—and that is without the impact of Brexit. From a hard Brexit to a soft Brexit the economy will be hit, impacting on the UK’s ability to grow its economy. Even the Government’s own impact assessments show that under whatever deal the Prime Minister negotiates we will be worse off, especially in the north-east of England where almost two thirds of our trade is with the EU. According to the Office for Budget Responsibility, business investment is down since the referendum.
The Brexiteers’ chief economist, Sir Patrick Minford, has said that the car industry will need to be run down, impacting on the thousands of jobs in the north-east and around the country that are reliant on that industry, because, in his words, “these things happen”. In my view, the loss of thousands of jobs is not a price worth paying for Brexit. That is why, when we find out what the final deal is, it should be put to the people in a people’s vote, so they have the final say on this once-in-a-lifetime decision.
One local issue pertinent to my constituents and the Budget is the provision of GP services. The lack of GPs is a national concern that is now impacting on our local communities. Skerne Medical Group, which is currently consulting on the future of its provision in Sedgefield, Fishburn and Trimdon, is at the forefront of the crisis. It is putting in place a four-year review of its future services. Skerne Medical Group’s surgeries in Sedgefield, Fishburn, and Trimdon Colliery are part of that review. The Trimdon Village surgery is not and faces closure. I believe that it should be a part of the review, but I understand the challenges faced by the Skerne Medical Group. For all the increases in the NHS budget, we found out today that public health services and the education and training of nurses and doctors will be cut by £1 billion next year.
Professor Anita Charlesworth, director of economics and research at the Health Foundation, has said that although more money has been made available for the NHS
“there is a big risk that it won’t feel like that in hospitals and GP surgeries over the coming years”.
In 2015, the Government promised to recruit 5,000 additional GPs over five years up to 2020. Now that deadline has been changed to “as soon as possible”. In fact, it is worse than that. In 2015, there were 34,500 GPs, but the latest figures for June 2018 show that there are now 33,163—more than 1,400 fewer GPs than when the target was set. A medical school has been opened at Sunderland University. It is envisaged that 50 students will enrol next year, with an increase to 100 by 2020. That is good news, but how many will stay in the region once they have been trained? The crisis in GP provision in my constituency and elsewhere is now, and the Government need to address the problem now.
Universal credit continues to be a problem. The Children’s Society indicates that even after the additional funding announced in the Budget, the reduction in work allowances under universal credit, introduced in April 2016, will cost families about £2,460 a year. I am still concerned about the design of universal credit. It is causing many practical and frustrating problems for many of my constituents. For example, one constituent, a woman working 25 hours per week as a cleaner, is a single parent to a young child in primary school, so she needs to be around for childcare. She had a change in circumstances, so was moved on to universal credit. There was a delay in her first payment as her claim was not processed correctly, so she had to resort to visiting a food bank. She received an advance payment, but now her claim settlement leaves her with too little to live on after paying her rent. She is much worse off after moving from tax credits to universal credit. People will say that austerity has come to an end, but the examples of GP surgeries and what we face with Brexit and universal credit proves that it has not.
Finally, on town centres, Newton Aycliffe in my constituency is home to a small shopping centre. The owners have spent several million pounds on improving the environment and have won awards in doing so, but there are still empty shops, like in a lot of town centres around the country. A £675 million future high streets fund therefore seems like a good idea, but we need details of how that money will be spent. Are hard-pressed local councils expected to pick up the tab? If so, renewing our town centres will end up only competing with the other demands on shrinking local authority budgets. Not only has austerity not ended, but neither has the smoke and mirrors used in the Budget.
Jack Brereton (Stoke-on-Trent South) (Con)
As the subject of today’s debate indicates—business and the future economy—what is most striking about Monday’s Budget is how forward-looking it is. After eight years of hard work to get out of the mess that was left by Labour, Conservative Members can focus on measures that will take our economy forward—measures that will support working families in my constituency of Stoke-on-Trent South to have more money in their pockets, keeping more of what they earn and reducing the burdens of tax for businesses, especially on our high streets. Of course, predicting exactly what our future will look like is impossible, which is why the inflexible, restricted, centrally planned economies such as those of Corbynistas’ Venezuela completely fail, and responsive, dynamic, free enterprise economies are more resilient.
Investment in new technologies and innovation will build on the Government’s long-term commitment to R&D. The allocation of £1.6 billion in this Budget to strengthen the UK’s global leadership in science and innovation is hugely welcome. This ensures that we remain at the cutting edge to compete internationally, none more so than in the ceramics industry and, especially, in advanced high-tech ceramics products, where I am afraid that we are behind our competitors, including the US, Japan and other developed economies. We must invest in projects such as a UK research centre for ceramics to retain this international competitiveness and to help cities such as Stoke-on-Trent to embrace more of these new technologies.
Far from being industries of the past, modern advanced manufacturing is reviving so-called post-industrial localities. Since 2010, the ceramics industry’s economic contribution has increased in real terms by 44%, but this is not unique to ceramics. A whole range of industries in Stoke-on-Trent are doing exceptionally well. Whether in precision engineering, automotive supply or distribution, we are seeing companies succeeding and delivering for our communities. In a city where over 15% of employment is in manufacturing—nearly twice the national average—the success of these industries is critical to our future prosperity.
Investment must truly be investment, however, and not merely spending. It is certainly more important that public policy does not crowd out private investment or erect barriers to enterprise. It must help to catalyse further successes and strengthen the strong growth that we have seen in prosperity and jobs. Workers will share in the benefits of growth, whether through boosting the national living wage to £8.21 per hour or increasing the personal tax allowance to £12,500 a year early. This is about ensuring that families in cities such as Stoke-on-Trent have more money in their pockets.
In Stoke-on-Trent, the local partnership between public and private sectors has moved the city forward since the Conservatives took control of the local council, jointly with independents, in 2015. I was therefore pleased to see on page 66 of the Red Book an explicit reference to Stoke-on-Trent as a shortlisted city for the transforming cities fund, because fully realising the city’s ambition requires us to improve our transport infrastructure. This is a fundamental requirement for improving labour mobility in the city, increasing productivity and decreasing the time lost to and the misery of daily congestion. This funding will help to ensure that we are better connected as a city, making better use of our rail network and ensuring that our bus network improves significantly to connect all our communities. This comes alongside the £420 million pothole fund, which will build on the significant work the local council has already done.
On high streets, Stoke-on-Trent is unique in comprising six market towns and has a significant number of Victorian and Edwardian properties that are structurally sound but none the less in quite a poor state. Far too many are not suited to meet the demands of modern retail and the challenges of online and out-of-town shopping, so I have been pushing Ministers for a dedicated fund for regeneration, restoration and conversion, and I am delighted it has come about. As I have argued, measures to increase footfall in town centres such as Longton and Fenton in my constituency, including increasing the number of residents and new businesses, are critical. Some 25% of employment in Stoke-on-Trent South is in wholesale and retail, so the relief on business rates for small retailers and the fund for high streets will be especially welcome in Stoke-on-Trent.
Steve McCabe (Birmingham, Selly Oak) (Lab)
The Chancellor tried hard, but I have a feeling we will all be back here in the spring and that Monday’s event will look largely irrelevant. The mantra now is that the pain and suffering has been worth it, but according to a recent study, only 8% of my Selly Oak constituents share the Chancellor’s view that the years of austerity have been worth it, particularly when they reflect on the damage to infrastructure and public services. Eight years of austerity have not cleared the deficit and the Tories no longer promise a budget surplus. In fact, it seems the new Tory norm is to settle for a deficit of around £20 billion a year.
I welcome the review of the worldwide light vehicle test, but a bigger man might have acknowledged that it was his premature decision on vehicle excise duty that sent entirely the wrong signal about clean diesel engines and threatened the job prospects of thousands of Jaguar Land Rover workers in Birmingham and the west midlands. He might also have recognised the £110 million loss of revenue resulting from untaxed motor vehicles on our roads.
We could upgrade vehicle number plates so that they electronically reveal the tax and insurance status of all vehicles on our roads, and we could use automatic number plate recognition technology to maintain this, while reducing car crime and saving police time. With recorded crime at its highest level for 13 years and less than 9% of recorded offences resulting in someone being charged, there has never been a better time to be a criminal. Why is the Chancellor not interested in collecting revenue and cutting crime?
We are asked to welcome the Chancellor’s digital tax, but it will raise about £400 million a year, which is 0.7% of what corporation tax raises. If he had postponed the 2% cut in corporation tax, he would have had another £5 billion for policing, education or children. At 19%, our corporation tax rate is still the lowest in the G20, apart from Switzerland and Singapore. Almost half his tax cuts benefit the top 10% of households. It is true that 26 million basic rate taxpayers will gain an average £20, but 4 million higher rate taxpayers will gain 11 times that. While food bank use has doubled, he has added £l billion over five years to universal credit but seems to have forgotten that three quarters of the £12 billion of welfare cuts announced in 2015 remain Government policy. Among the cuts he has forgotten are next April’s £1.5 billion benefit freeze, which will cost a couple with children at the lower end of the income scale £200. Those are Conservative priorities.
The cut in the apprenticeship levy for smaller firms is welcome, although I would like to know when it will be introduced. Is it still April next year; is it being delayed; or will it only apply to new starters? And what has the Chancellor done to incentivise providers to engage with groups that are grossly under-represented in the apprenticeship figures?
I welcome the business rate rebate for small retailers, but how much of a boost will £30 to £100 a week be to a struggling newsagent or publican in Selly Oak, and who will really benefit from the future high streets fund? It is spread so thin that it will not reach most places. I doubt this Chancellor has ever even heard of Stirchley High Street. What we need is some action on the absent landlords, often London-based, who spend so little on the maintenance of these shops and charge exorbitant rents that go hand in hand with excessive business rates. Of course, all this needs to be viewed against the background of a situation where nothing has been done to combat retail crime, and even shoplifters are no longer even arrested. Retail crime is costing us at least £700 million a year. That is another consequence of reckless cuts to policing and the criminal justice system; it is just as big a problem as anything else.
I do not think that the Chancellor really wanted to deliver this Budget; he just got boxed in, just as he is boxed in when it comes to making the real decisions that would benefit the economy; but the ideologues do not care, and that is why we are ignoring our schools, dismissing crime, forgetting our children’s services and ignoring the WASPI women and everything that would make a difference to this economy.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
I rise to speak in this Budget debate, concerned about the unfairness that this Budget has created in this country—concerned that for one part of the country, there remains no tax cut for hard-working people; concerned that in one part of the country, the measures unveiled to support our high streets and SMEs are not being replicated, extra measures to help young people on to the housing ladder will not apply and the potholes will remain unfilled. I speak, of course, of the north-east of Scotland, which suffers under a central-belt-biased, economically illiterate, ideologically dogmatic, anti-aspirational, anti-wealth-creation, anti-business, distracted Administration, who punish the strivers and the grafters while we in the Conservative party reward them. Nurses, doctors, teachers, policemen, entrepreneurs, small business owners, the people that get up at the crack of dawn to open the shops in rural Deeside or Donside and the guys and girls who take off from Aberdeen airport to spend two weeks offshore doing hard, sometimes backbreaking work to maintain our energy supply are punished and taxed more, simply by virtue of living in Scotland. They are the people who this Government—this Conservative party—are committed to supporting.
The SNP’s decision not to match our plans to raise the threshold for the higher rate of income tax means that hard-working people in Scotland will be £1,000 worse off than their counterparts south of the border—£1,000 worse off for doing exactly the same job in the same country. Well, the Scottish Conservatives say, “Enough!” Today, we call on the SNP Administration to match this Government’s commitment to those who deserve a break and pass on this tax cut to the Scottish people.
It is safe to say that, in terms of totemic industries in Scotland, fishing and whisky are probably up there. Add to that brewing, and it makes for quite a good Friday night. All the above are reaping the benefits of decisions made by this Government and in this Budget: beer duty frozen, spirits duty frozen, and for the fishing industry, as we look towards that sea of opportunity that leaving the EU will bring—remembering, of course, that the SNP would have us back in the common fisheries policy—we welcome the £10 million of investment from UK Research and Innovation.
Of course, by far the biggest industry for the north-east of Scotland is the oil and gas industry, and far from the doom and gloom espoused by the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), the sector has made it clear to us that the UK Government’s support over the past four to five years has been crucial to ensuring its survival, as it was buffeted by the winds of dramatically fluctuating oil prices and the longest sustained downturn in the sector’s history. The £2.3 billion of support from this UK Government since 2014 has been welcomed—[Interruption.] I would love to hear it welcomed by the hon. Gentleman; perhaps that is what he is trying to say from a sedentary position. I am not sure. That support has been welcomed by an industry that has contributed over £330 billion to the British economy, that supports over 330,000 jobs across the United Kingdom and that has a supply chain worth nearly £30 billion, stretching into every nation and region across our islands—servicing domestic activities and exporting almost £12 billion of goods and services to other basins around the world. It is a shame that the Scottish National party does not support it as the Scottish Conservatives do. That is why I and the wider oil and gas industry and the subsidiary industry that I represent have welcomed this Government’s decision not to increase tax and welcomed its commitment to maintaining fiscal stability.
Andrew Bowie
Exactly; we have done nothing. That was what the oil and gas industry was asking us to do. They want stability. Indeed, Oil and Gas UK has stated that the fiscally stable regime implemented and overseen by this Government, combined with our support for the sector and the industry’s own huge strides forward in cost cutting, slashing waste and pooling resources, has made the UK continental shelf one of the most attractive basins in the world in which to do business—something that we would not know from listening to the hon. Gentleman earlier on.
This was a great Budget for the people and businesses of the north-east of Scotland. Oil and gas, spirits producers, brewers and the fishing industry have all benefited from this Government’s decisions.
In Scotland, we have two Governments, sadly, and the contrast could not be starker. [Interruption.] Well, it is sad in terms of who is in government in Edinburgh. One is a nationalist Government, governing for their own base, focused on the central belt, focused on raising taxes, punishing aspiration, creation division and fostering grievance. The other is a Unionist Government, governing for the whole United Kingdom, backing business, rewarding hard work and supporting growth and aspiration. One is focused on ripping up our country, the other on growing it and helping our people grow with it. That is what this Government do, and that is what this Budget does, and that is why I am pleased to back it today.
Dan Carden (Liverpool, Walton) (Lab)
It is a pleasure to speak in this debate on behalf of my constituents, and I am going to draw on some of the words of one of my greatest constituents, Robert Noonan, better known as Robert Tressell, buried in a pauper’s grave in Rice Lane City Farm in my constituency of Liverpool, Walton. He is the author of that great socialist manuscript “The Ragged Trousered Philanthropists”, which tells the story of a group of painters and decorators—as he was himself—struggling to make ends meet in a rigged system. His work has been credited with helping the Labour party win the 1945 post-war election.
This Budget is full of modern-day money tricks, which I will come on to, but the great money trick in “The Ragged Trousered Philanthropists” starts with the characters, painters and decorators working at the turn of the last century discussing the causes of poverty. The painter Frank Owen intervenes. “Money”, he says,
“is the cause of poverty”,
and what follows is a demonstration of “the money trick”, one of the finest passages of comic political prose in English literature.
Owen takes his slices of bread from his lunch basket and asks all the men for their bread, which he places in a heap, saying
“These…represent the raw materials which exist naturally”.
He pulls out some pocket-knives, and says that they are the means of production. Owen says:
“I represent the landlord and capitalist class. That is to say, all these raw materials belong to me... Now you”—
maybe the Members opposite—
“represent the working class: you have nothing.”
But, he goes on, in order to turn his raw materials into something of use, we need work:
“I have invented the Money Trick to make you work for me.”
Owen hands the bread and knives to the men. They cut the bread into blocks, and return them to Owen. The workers receive their wages—of £1. The money they earn is their own, to do with as they like, and the things they produce are now the property of the capitalist class. Owen says of his blocks of bread:
“These blocks represent the necessaries of life. You can’t live without some of these things, but as they belong to me, you will have to buy them from me: my price for these blocks is—one pound each.”
The cycle continues: Owen’s blocks of bread—his profits—pile up, the rich getting richer, while the poor exchange their wages for the necessities of life, all the time staying poor. In Tressell’s masterpiece, the workers are the “philanthropists,” giving the value of their work to the rich who benefit from a rigged system.
Since those words were first written more than 100 years ago, there have been huge steps forward for working-class people and their rights, hard-won by the struggle of trade unions and the Labour movement. But the truth is the same today as it was then, because working people are not responsible for poverty. This is a broken system, that inflicts poverty, inequality and human misery, and it needs reform. We have had the longest squeeze on wages since the Napoleonic wars. Today’s young people are set to be poorer than their parents for the first time in modern history.
This week, we heard the Chancellor come up with some of his own money tricks to mask this Government’s economic failure. He suggested that Labour had caused the global financial crisis. There have always been deficits and borrowing; the Tories ran them for 18 years when they were in government. The 2008 global financial crisis caused a global recession. It was not investment in schools and hospitals that crashed the economy; it was the greed and recklessness of a deregulated financial sector. Let us take another example: the so-called jobs miracle. This involved boasting of record levels of employment while saying nothing about the phenomenon of insecure, low-paid and bogus self-employment. Wages are lower today than they were 10 years ago, and some of my constituents are doing three, four or five of those jobs to make ends meet. Today, the majority of people in poverty in this country are also in work. What an absolute disgrace!
This Government cannot trick their way out of this crisis. Poverty and deprivation can be seen on the streets of Liverpool every single day. Robert Tressell’s novel is full of tragedy and despair, but it also offers a glimmer of hope. In a chapter entitled “The Great Oration”, Tressell describes the creation of a new kind of society: the co-operative commonwealth, based on shared ownership and worker self-management. I think that the shadow Chancellor has read it. That is called socialism, and it is about time we redoubled our efforts to attain it.
Kevin Hollinrake (Thirsk and Malton) (Con)
It is a pleasure to follow the hon. Member for Liverpool, Walton (Dan Carden). I look at self-management slightly differently, in that I have been in business for most of my life. I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I rise to commend many of the policies in the Budget, and particularly its support for small and medium-sized enterprises. For many years, I also played rugby union for the York Railway Institute, and I look back fondly on those times. However, there were one or two clubs at which I did not enjoy playing quite so much. One in particular was Halifax Vandals, where the ground sloped at what seemed like 45° from one set of posts to the other. Trying to get out of the low-end 22 seemed virtually impossible, particularly with the additional challenge of a head wind and ankle-deep mud. At least it was the same for both sides, but for many SMEs, there is no half-time turnaround. They seem to face a consistent uphill battle with head winds that many big businesses do not have to cope with.
An example of this involves some of the digital businesses, which spend an average of 0.6% of their turnover on business rates, compared with high street retailers that spend around 2.3%, according to the Centre for Retail Research. SMEs also compete with the likes of Amazon, Apple, Google and Facebook, which are able to shift either sales or profits to the lowest corporation tax jurisdiction to avoid paying their fair share of tax while still revelling in their claims to do no evil and in their corporate social responsibility credentials. I therefore welcome the Chancellor’s commitment to business rate reductions for smaller businesses and the introduction of a digital services tax. Our job here is to level the playing field—not to pick winners—and his actions are doing exactly that.
The other area in which SMEs are at a critical disadvantage is when they are in dispute with their bank. It is now abundantly evident—particularly since the Treasury Committee released the full report on the RBS global restructuring group scandal in February 2018—that banks took businesses apart and stripped them of their assets to replenish their own balance sheets. Thousands of viable, significant and substantial businesses were involved. There were similar occurrences at Lloyds and others, yet incredibly, we leave the victims at the mercy of these very banks when they claim for compensation and consequential loss.
The Financial Ombudsman Service has very limited jurisdiction, with a maximum compensation level of £150,000 and limited competence to adjudicate such claims, and the courts are simply out of reach. Lloyds bank, for example, has a £1 billion per annum budget for legal fees. It is impossible to get justice in court against a high street bank. The proposed extension of the Financial Ombudsman Service is to be welcomed, given the vital improvements to its level of competence, but all four of the major reviews of bank dispute resolution over the past year—from our all-party parliamentary group on fair business banking and finance, the Treasury Committee, the Financial Conduct Authority and the Walker review—have concluded that there will still be a gap in the access to justice. Around 86% of businesses will not have access to justice, even with the Financial Ombudsman Service’s extended jurisdiction, and the lack of confidence between banks and businesses will mean lost start-up and scale operations, which will damage our economic prospects.
Three of the four reviews support the establishment of a financial services tribunal that would work in a similar way to an employment tribunal in that the claimant would not suffer the costs of the defendant—the bank—should they lose. That simple but effective measure is supported by the all-party parliamentary group on fair business banking and finance, the Treasury Committee, the Financial Conduct Authority, the FSB, the Small Business Commissioner, several banks and just about every parliamentarian. We cannot have businesses playing uphill and downwind against a much stronger opponent, and it is our duty as legislators to level this most important of playing fields.
Daniel Zeichner (Cambridge) (Lab)
It is a pleasure to follow the hon. Member for Thirsk and Malton (Kevin Hollinrake). We are discussing the economy, growth and productivity. I have been saying for some time that growth cannot just mean “more”; it has to mean “better”—a point echoed in Dame Kate Barker’s excellent recent independent report on the Cambridgeshire economy, which was launched by the Secretary of State for Business, Energy and Industrial Strategy a few weeks ago. That means upskilling, reskilling and, most importantly, giving young people the best start in life, equipping them with the skills and tools that they need for the future. That is how we create not only a productive workforce, but happy, sustainable, resilient communities. Unfortunately, however, this Budget fails to achieve that. While the skilled workforce in Cambridge has been the driving force behind our economic success, uncertainty around our future relationship with the EU, coupled with the Government’s regressive immigration policies and a failure to make the right investment in skills and infrastructure, risks internationally focused businesses looking elsewhere—a point also echoed in Kate Barker’s report. We must do better.
This Budget failed on substance, but there was also the matter of its tone, as other hon. Members have pointed out. Promising a paltry £400 million for schools to
“buy the little extras they need”.—[Official Report, 29 October 2018; Vol. 648, c. 658.]
is an affront—a shameless insult. The Chancellor may say that school funding will be considered in the spending review, but teachers and parents in my constituency have a clear message for this Government: schools are stretched to breaking point. That line from the Chancellor, reminiscent of a 1950s patriarch to a subjugated wife—“Get yourself some little extras. Don’t step out of line. How dare you ask for more?”—shows this Government’s disrespect for not only our hard-working teachers and schools, but future generations, too.
Like many colleagues, I regularly visit schools and colleges. In recent weeks, I have been in nurseries, primaries, secondaries and colleges, and I have been told by two separate headteachers that if funding does not improve, their school will be making redundancies, despite staff already being overstretched. Staff are going off sick due to stress. Some staff recruited internationally have trouble getting visas. The number of children with complex and special educational needs has increased, but schools do not have the resources to provide the support that those children need.
I agree with Kevin Courtney, the joint general secretary of the National Education Union, when he says:
“The Chancellor has shown in this budget the depth of his ignorance on school funding. Schools have a £2 billion shortfall in funding a year—which is set to get worse. Capital funding has been cut by a third. A £400 million one off payment for ‘little extras’ will do nothing to address this. The Government has promised more money for potholes than schools”.
Let me briefly divert into those potholes, because £400 million may sound like a lot, but I hope that Members are aware that the backlog repair bill is £12 billion, meaning that just one in every 30 will be filled. That is a promise for our roads, and I doubt that even one school in 29 will find the “little extras” adequate. A little bit will help, but do not forget the Education Policy Institute’s recent report, which showed that just 60% of teachers continue to teach in state schools five years after qualifying and that applications for teacher training are falling. Despite pupil figures rising by 10% since 2010, teacher numbers have remained static, meaning pupil-to-teacher ratios have risen. Class sizes are bigger, and teachers are working harder and longer hours.
This is not just about schools. Nurseries will struggle to stay in business, according to the Department for Education’s own figures. When I visited a local maintained nursery recently, I was told that, without extra help, it will hit the buffers next April.
At the other end of the age range, sixth-form colleges, too, have been treated with disdain by the Chancellor and his team. Despite the call from the Sixth Form Colleges Association to increase the base rate for all 16 to 18-year-olds, it is currently frozen at £4,000 per student and £3,000 for 18-year-olds—it has been cut twice since 2010.
There is no mention of further education. The further education commissioner told the Select Committee on Education earlier this year that further education funding is “unfair” and “sparse.” I have seen that at first hand at Cambridge Regional College, which I visit regularly. The staff do excellent work with students and apprentices from across the east of England, but the college remains under-resourced and overstretched.
For a Government who claim to care about skills, this is a disgrace. They are failing to provide young people with the education they need to succeed by crippling education budgets. Time is spent on scrimping and organising substitute teachers to plug the gaps, rather than on educating future generations. I was a chair of school governors in the mid-1990s, and it felt just the same under a Tory Government then—what a change a Labour Government made. The current mean spending regime is not the way to create a workforce of creative, empowered and optimistic young people; it just tells them that the Government do not care.
Colin Clark (Gordon) (Con)
I commend this Budget, which stimulates business and puts money back in the pockets of hard-working families. I draw Members’ attention to my entry in the Register of Members’ Financial Interests. I am also a businessman.
I am known for my brevity—just ask my wife—and I do not intend to disappoint. I want to be a ray of sunshine by focusing on the annual investment allowance, which is moving from £200,000 to £1 million on 1 January 2019. This is transformative for the grafters, for the white van man and for SMEs the length and breadth of this country. This is not a fat-cat tax bonus; it will potentially unlock hundreds of millions of pounds.
There is pent-up investment in my constituency. Farmers want to buy combines and tractors, and food manufacturers want to buy labour-saving equipment—companies such as Dean’s shortbread in Huntly and Mackie’s ice cream in Inverurie. And, of course, there is the oil and gas sector. There are 233 service companies in my Gordon constituency, let alone in the neighbouring constituencies of my hon. Friends the Members for West Aberdeenshire and Kincardine (Andrew Bowie), for Banff and Buchan (David Duguid), who has now gone, and for Aberdeen South (Ross Thomson).
The oil and gas sector is the engine room of the Scottish economy, and I would be happy to show the Business Minister or any other Minister around next time they visit. The supply chain is worth a staggering £30 billion, and it supports the majority of the 300,000 oil and gas-related jobs.
Some 233 companies in Gordon will see a fivefold increase in annual investment allowance. If every one of them takes it up, it could release as much as £200 million of investment just in one part of Scotland: high-tech, serious investments by companies such as Hoover Ferguson of Kintore; STATS, the pipeline intervention company, also of Kintore; Hydro Group of Bridge of Don, which makes umbilicals for the oil and gas industry; Sparrows of Bridge of Don, which makes offshore cranes; Flowline of Oldmeldrum, a growing exporting business; and Aker Solutions, a Scandinavian company that has invested tens of millions of pounds in Aberdeen, confident in the future of the Scottish economy. I have visited each and every one of them. Ambitious, confident and positive—that is not just me; it is the companies.
The oil and gas industry is estimated to generate £920 billion over the next 30 to 40 years. If each and every one of those companies invests in the future of oil and gas, we could see that £920 billion flow into this economy. That is a positive message for business. This is a tangible investment in business to boost the UK and Scottish economy and a demonstration of Her Majesty’s Government’s support for small and medium-sized enterprises.
The north-east of Scotland had a deep turndown, even though unemployment in the area is only 1.2%—they are a hard-working crowd. The Chancellor has announced continued fiscal stability for the oil and gas industry. He has listened to his Scottish Conservative colleagues. I am grateful to my hon. Friend the Exchequer Secretary to the Treasury for filling the oil and gas industry with confidence. Last year’s transferable tax history incentive has been delivered by Her Majesty’s Government. Fiscal stability for oil and gas has been delivered by Her Majesty’s Government. Low corporation tax has been delivered by Her Majesty’s Government. And a fivefold increase in the annual investment allowance has been delivered by Her Majesty’s Government. Meanwhile, we have had punitive business rates from the SNP Government; the highest personal income tax in the country delivered by the SNP; and empty commercial properties being knocked down in the north-east of Scotland because of SNP policies. Her Majesty’s Government are delivering for business, growing the economy and stimulating jobs. This is a Budget for business.
Sandy Martin (Ipswich) (Lab)
We are here to debate not just the minutiae of the Chancellor’s figures, but the consequences that will flow from it. I want to draw the House’s attention to the fact that, although the Chancellor feels able to allow another £15 billion into the economy, with an £11 billion increase in spending and a £4 billion cut in the tax take, that represents just 1.8% of the £842 billion total managed expenditure estimate for next year, a smaller percentage than the rate of inflation. This is not a game-changing sum and it is easy to be bamboozled by all the mentions of “billions” in the discourse into thinking otherwise. The majority of my constituents will not notice any significant difference in their taxes from this Budget.
Like Robin Hood in reverse, the Chancellor is rewarding the wealthiest with the bulk of the £4 billion tax cuts, while reducing the amount available via universal credit for the worst-off. It is shameful that we will not be able to vote against the raising of the higher rate threshold on tax without also voting against the lower rate threshold. It is unjust and misleading to put us in that position of having to do both at the same time.
What my constituents will notice is the effect of all the things the Chancellor is not doing. Significantly, he is not deploying the significant capital investment in our economic capabilities that Labour promised in our 2017 manifesto and that we have reiterated at every opportunity since then. Conservative Members consider themselves to be the party of business and constantly call for tax cuts rather than spending increases. But in an economy that suffers from low productivity and a lack of demand, the sensible approach is to massively increase the Government’s capital expenditure. Where is the national transformation fund that Labour promised? Instead, we get a pathetic additional £200 million for the British Business Bank—that is about £2.50 per person. Where is the green investment bank? Where is the financial support for greening the economy through investment in renewable electricity generation, through zero emissions vehicles and through insulation grants?
This is what my constituents in Ipswich will notice. They will notice that, while we are getting new trains, we are not getting all the rail infrastructure investment that would make those trains run faster, run more reliably, or, judging by my experiences on Monday, run at all. They will notice that there was no additional funding to provide the north Ipswich bypass or to improve the junctions on the A14—that is vital not only for the economy of Ipswich, but for the smooth transport of goods to the UK’s premier port at Felixstowe. They will notice that the Crown post office has been franchised out, and that the number of post offices, their convenience and location, and the range of services they are able to deliver continues to deteriorate. They will also notice that, although Suffolk is lucky enough to have won first prize in the local full fibre networks challenge fund contest—about £9 per Suffolk person—that will provide full fibre connections only to key public buildings and comes nowhere near creating ultra-fast coverage for all.
My constituents will notice that, because Amazon and other online shopping giants continue to be able to get away with paying almost no tax, the shops they trust and rely on in what used to be called our “Golden mile” in Ipswich continue to close. They will notice that councils are not being enabled to support the bus services that people need to get to work. They will notice an almost total lack of council discretionary spend, leaving projects such as Ipswich’s creative computing club, which teaches coding to disaffected pupils and which has gained recognition from Google for its outstanding achievements, struggling to find the money to provide a premises for its classes.
My constituents will notice a lack of investment in small-scale capital highways projects. Instead of inadequate roads being rebuilt, all we get is a pothole grant to fill in the gaps temporarily. They will of course notice that, while Ipswich Borough Council will continue to build as many houses as it can afford, there will be no national fund to enable the far more rapid creation of the houses so desperately needed for current and future young families. If they run their own small business, they will notice that the Chancellor has done nothing to end the scourge of late payment, which so often brings otherwise perfectly sound businesses to, or over, the brink of bankruptcy.
I believe that Ipswich will thrive in the end—I believe in my town—but I know it would thrive a whole lot sooner if we had a Government who believed in this country.
Stephen Kerr (Stirling) (Con)
I rise to speak up for the Budget. It is a great pleasure to follow the hon. Member for Ipswich (Sandy Martin), who identified a number of important issues, which illustrates how there is always more to be done. There are some things in the Budget about which I am really enthusiastic, and there are some things about which I would like to ask Ministers questions.
I very warmly welcome the freeze on fuel duty. Private car use is not a “nice to have” in rural Stirlingshire; it is an absolute necessity. Will my hon. Friend the Minister look again at the extent of the rural fuel rebate scheme? There are some glaring anomalies in my part of the world, so I urge him to take another look at that.
I also warmly welcome the freeze on beer duty and spirits duty. That may sound strange coming from a teetotaller, but it is good news for Stirling, where there are more than 100 pubs and thousands of people are employed in the leisure sector. It is also good news for Stirling’s distillers and brewers.
I welcome the announcement of funding for universal credit, about which I have spoken several times in the House. Helping people to get into work and making sure that work always pays is something that we must get right. I also welcome the commitment to spend more on our defences. The Government recognise the changing landscape of threat to which we must respond as a nation.
I commend the Chancellor and his team for taking seriously the plight of the high street. As a Conservative I find it a strange sensation to welcome the very idea of a new tax, but the introduction of an online tax for internet giants will do something to level the playing field in respect of the massive online retailers and high street retailers. It is an essential and pragmatic approach that I hope will be part of an overarching modernisation of the business-tax regime.
I have mentioned before in the House King Street, one of Stirling’s main shopping thoroughfares that has many retail and leisure properties. Some of them, although not many, receive rates relief through the small business bonus scheme. However, they would all benefit from the one-third reduction in rates that we will see in England. That would save restaurants such as Monterey Jack’s or shops such as Contempo across the other side of King Street about £3,000 a year. Those are real numbers that could be to the advantage of retailers in Stirling, if the Scottish Government adopted the policy for England. It is time to take action on the high street. We need vision and imagination for the future of our high streets. I see so much going on in the Budget that Scotland will not benefit from unless the Scottish Government show some of the invention and imagination that we heard from the Chancellor on Monday.
I have three questions that I hope the Minister will consider. I welcome the £200 million for the British Business Bank and the setting up of a British Business Bank team in Scotland, but I remain concerned that we need to do more to create a bigger stream of high-quality patient capital. The British Business Bank is a good vehicle, but it needs a broader remit. There is yet more to be done to replace the European Investment Bank as a source of patient capital. What is the Minister’s assessment of the ready availability and quality of patient capital in our economy?
It is right that we have an industrial strategy for the whole UK and an industrial strategy challenge fund for the whole UK, but I seek the Minister’s assurance that the UK shared prosperity fund will be a UK-wide fund, unlike the national productivity investment fund. My heart skipped a beat when I heard about the £200 million to be invested in rural broadband—full fibre broadband; the real McCoy—but then I learned that it was to be funded by the national productivity investment fund, which means that Scotland will not get anything. I deeply regret that. I am looking for assurances from the Treasury Bench about what will be done to get rural broadband planted in rural Scotland. Currently, the Scottish Government are doing next to nothing. They are frustrating the work of connecting rural Scotland.
I will take this opportunity to mention a side issue, which is the misleading advertising that our consumers are subject to on “superfast fibre” broadband, when it is not fibre at all—it is copper. We should insist on these companies telling the truth, the whole truth and nothing but the truth to our consumers.
Tracy Brabin (Batley and Spen) (Lab/Co-op)
As we are discussing business today, it is worth mentioning the significant announcement just this afternoon that Channel Four Television has made the brilliant decision to move to the wonderful city of Leeds. I hope that this language is not too unparliamentary, but I am as chuffed as nuts about the news. I have supported this bid all the way through, and I pay tribute to the staff and the leadership that have made it a success. The bid was submitted by Leeds city region, and I am really looking forward to my constituents benefiting for decades to come and to West Yorkshire becoming an even greater bastion of creativity.
Let us return to the substantive subject before us: austerity and this Budget. After eight long years of constant cuts, austerity has not worked for Britain and it has not worked for my constituency. Our local hospital, Dewsbury and District, has had services removed and downgraded; our high streets are losing banks and post offices; our local authority, Kirklees, has been stripped back to the bone, with 50% cuts since 2010, and there are still millions of pounds worth of cuts to fight and who knows where they will come from in the coming years; and homelessness has doubled. I cannot forget the head teacher of one of our best schools in the constituency telling me that they have exhausted their ability to make savings around the edges. They have increased class sizes to such an extent that now all they can do is remove the whole German language department to balance the books. There seems to be something particularly cruel about allowing children to start educational discovery of another language only to have it whipped from underneath them owing to funding cuts from this Government.
The biggest immediate crisis facing my constituents is that of universal credit. The fact is that there is not enough money in the system and its harsh and failing structure is causing pain in communities such as mine. This is not just an academic exercise for accountants; it is about people like us—people like you, Madam Deputy Speaker, and those on the Conservative Benches. They are people with families, hopes and ambitions.
If the House will allow me, I would just like to share a couple of examples from my own constituency. One constituent was forced to sell off his white goods and furniture to pay rent and bills. Another constituent, a former carer, Carol, who recently retired on grounds of ill health, has had to wait eight weeks and counting with not a penny of income. We are trying our best to support her, but an eviction scare is on the horizon, which is absolutely impacting on her health. She has sold off all her jewellery and clothing; she has nothing left to sell. We must be able to do better than that. These cases are unfair and unjust.
I dread to think what people like Carol and the others would do if it were not for the food banks. I know that the people of Batley and Spen owe enormous gratitude to the volunteers at Batley food bank, who keep helping and keep supporting in the face of rising demand. Demand is up 50% on this time last year, and the volunteers are helping more than 100 adults and 40 children—let that land: 40 children. In the past two days alone, while we have been listening to and debating this Budget, the volunteers have helped 26 adults and 14 children. For some, going to the food bank is acute humiliation. One food bank volunteer told me of a middle-aged father of two who was out of work for the first time having been diagnosed with cancer. Waiting for his first welfare payment, he had nothing left for food for his family. He arrived at the food bank asking for help, but it was too much and he left saying, “I don’t want to be here. It’s embarrassing. I have worked all my life; I can’t do this.” The volunteer followed him, running into the street saying, “It’s society that should be ashamed, not you.” It is heartbreaking and it is unacceptable.
We are discussing business and, briefly, I would like to mention the plight of our nurseries in Batley and Spen and across the country. The fate of many nurseries is set by the decisions of this Government. A rise in the minimum wage is of course very welcome, but common sense suggests that it should come at the same time as an uplift in funding for childcare. My real fear is that, with the extra pressure on budgets, many excellent nurseries will go out of business in the most deprived areas, where parents are unable to afford top-ups and where children benefit the most. Those businesses are calling out for support, and they are not alone. There might be fewer potholes, but the social injustice facing our country remains unanswered, and that is just not good enough.
Matt Western (Warwick and Leamington) (Lab)
Just over a month ago, in Birmingham, the Prime Minister trumpeted that austerity was finally over. On Monday, in his Budget statement, the Chancellor was more sanguine, claiming that austerity was not over but “coming to an end”. Perhaps most disappointing was the disingenuous claim that austerity had been a necessity, that there was no choice and, indeed, that austerity had not been driven by ideology.
Let us be clear, austerity is and was a choice. The path chosen by the Chancellor’s predecessor, George Osborne, was totally opposite to that chosen in the US, where Barack Obama introduced the American Recovery and Reinvestment Act in 2009, a Keynesian package of economic stimulus that has resulted in the highest and most sustained recovery of all G7 countries in the period since the global financial crash—and it was a global financial crash, irrespective of what the right hon. Member for Haltemprice and Howden (Mr Davis) may say.
Monday’s Budget announcement was particularly important, because we are at a pivotal point—a point at which the economy is faltering, and where we face huge uncertainty and, according to the Office for National Statistics, the most serious economic damage from Brexit of between a 2% and 8% drop in gross domestic product, depending on the deal. In fact, UK growth is the lowest of the G7 countries—almost half that of the EU composite and more than half that of the US and the OECD countries.
Our benign growth has been kept afloat these past years by consumers enjoying super-low interest rates and sizeable gains from windfall payments due to the banks and other financial institutions’ mis-selling of payment protection insurance—some £40 billion so far, and another £18 billion likely, according to recent reports. Even before the additional sum, that equates to between 1% and 2% of GDP, or an additional £1,000 for every adult in this country. That is a significant sum; a significant stimulus. I shall use two sectors to evidence the impact of such sums on the economy: record sales of cars and new kitchens in recent years, as consumers have cashed in on those payments to finance high-ticket items.
Now we face reality: consumer confidence is trending downwards and is not far off the level it was at in 2010. New car sales, generally a good proxy for consumer confidence, were down 20% in September and 8% year on year. Household debt is rising at an alarming rate, unsecured debt in particular—debt because people cannot afford to live. Universal credit is hurting, not helping, and with the rising use of food banks and the explosion in the use of payday lenders, the pressure on households is greater than ever as more and more people face the phenomenon of in-work poverty. Also, as the right hon. Member for Sevenoaks (Sir Michael Fallon) highlighted, savings have fallen dramatically in the past year or two.
The claim by the Chancellor that we are witnessing a jobs miracle is yet another line from the George Osborne songbook. This is no jobs miracle; it is a jobs mirage. How else do we account for underemployed, zero-houred and insecure employment? There is low capital investment because labour is so cheap and flexible in the UK—easy to hire, easy to fire, so why invest in machinery and plant that could improve productivity? It is not a productivity puzzle; it is simple.
Elsewhere, we are seeing lay-offs and shutdowns in the jewel of our manufacturing sector, the car industry. Production was down 17% in September, 7% in the year to date, and by 19% in our domestic market. Clearly, there are particular issues with testing regimes but, beyond doubt, the introduction in last November’s Budget statement of a hike in vehicle excise duty on diesel has been particularly damaging to the UK car industry, especially Jaguar Land Rover. Without the revenues and the profit, there can be no investment in the transition from the internal combustion engine to alternative fuels. That is what the industry sought from the Chancellor—support, not damage.
While I am disappointed by the lack of immediate support for the car industry—a sector so vital not only to the UK economy but to the people of Warwick and Leamington—the failure of this Budget to address the desperate needs of our schools, police and fire and rescue services is just as notable. Without the investment in our children’s education, our health service, our security and our infrastructure, we will fail tomorrow. Expenditure now—investment—is the lifeblood of our future. Giving £110 billion in corporate tax giveaways by the end of this Parliament denies us the means to do this. Somehow the Chancellor believes that £10,000 for a primary school to help with those “little extras” like books and pens is good governance: try telling that to the children who have lost their teaching assistant.
In years to come, economic historians will come to view this period as the UK’s lost decade—years when so much could have been achieved had the trajectory of growth of late 2009 and early 2010 been maintained. It was stifled by ideology; a Government in the spirit of 1945 would have secured it.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
As with previous Budgets from this Government, the measures outlined in this one will do nothing to reassure my constituents who are facing such financial difficulties. The cuts to local authority budgets, whether £169 million from Camden’s budget or £164 million from Brent’s budget, are resulting in the closure of police stations, fire stations and jobcentres in the most deprived parts of my constituency, as well as the closure of the children’s centres that are a lifeline for so many parents in my constituency. To top it all off, the roll-out of universal credit is coming. Of course, it would be remiss of me not to mention also the financial difficulties that Brexit will bring to my constituency—a constituency that so thoroughly rejected the idea that we have to leave the European Union: 75% of my constituents voted to remain in the EU.
These issues will dominate life in Hampstead and Kilburn for everyone, but the financial difficulties that I have outlined will have the most profound effect on the people in my constituency who are refugees, asylum seekers, and from migrant communities. As anyone who knows my constituency will probably acknowledge, there is a lot of divided opinion among lots of people, with differences of opinion that constituents like to email and write to me about—but one thing on which many of us are united is that the Government’s economic policy on migration should be underpinned by tolerance and open-mindedness, and that we should be helping new communities who are coming into our constituencies and our country to settle.
That is why I was so deeply disappointed that in his speech on Monday the Chancellor did not talk about reinstating the migration impacts fund. Conservative Members have said a lot about what the Labour Government did, no doubt as set out by the Whips. Let me tell them that the Labour Government introduced the migration impacts fund, in response to councils’ requests for relief from pressures on public services. Better yet, the fund was self-financing. It was financed by non-EEA migrants, with a compulsory £50 levy applied to application fees. For me, it was a statement of intent from the Labour Government that we wanted to express our values by welcoming migrant communities to come to this country. But the coalition Government decided to cut this fund because they wanted to take urgent action to cut the deficit, and because it was
“not a priority funding stream”.
That was typical of this Government, because they cut it first and then faced the expensive consequences later. Disgracefully, the fund was scrapped, but the financial levy remained on those seeking to make a life in Britain—again, very indicative of the punitive economic approach this Government take to migration.
Obviously, however, the needs of the new communities that were coming in remained, and the Government decided to bring in a new scheme, but it was wholly inadequate. Last year, the Home Affairs Committee said that this scheme—the controlling migration fund—suggested that the Government had lost the argument on this topic and that its scope was not
“sufficient to address the…pressures…on local public services”.
This should come as no surprise. The successor scheme that was brought in so hastily by the Government is barely more generous than the migration impacts fund introduced in 2008, and it cannot conceivably be expected to meet the much larger demands on public services a decade later.
The underfunding of the CMF is compounded by the fact that the scheme is split into two, with around £40 million being spent on immigration enforcement, rather than where it should be going, on projects to ease the process of integration across the country. It should come as no surprise that a More United survey of 17,000 people found that the restoration of the initial migration impacts fund would improve trust in our country’s approach to migration.
This is an historic time for our country, and we need a shake-up of our migration policy. We need a Government who think about building resilience in local communities, so that when there is an influx of new migrants and new communities, there are the financial resources to meet the challenges adequately. I represent 22,000 EU nationals in my constituency, and I want to welcome more. I expect the Government to be making provisions in the Budget to ensure that we have the resilience in our communities to handle the influx of migrants who will ultimately bring so many benefits to our country.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
The Budget, as we all know, delivered a pathetic £400 million for schools, which many professionals have said is an insult when they are facing staff redundancies and cuts to pastoral and special needs services. Indeed, Paul Johnson, director of the Institute for Fiscal Studies, said:
“Many public services are going to feel squeezed for some time to come. Cuts are not about to be reversed. If I were a prison governor, a local authority chief executive or a headteacher I would struggle to find much to celebrate. I would be preparing for more difficult years ahead.”
That needs to be seen against the backdrop of an 8% cut to school funding in real terms since 2010. As the National Audit Office has made clear, £6.7 billion is needed to bring English school buildings up to a satisfactory standard. That capital funding shortfall is made worse by the £3.7 billion cut from the capital budget since 2010. This has left three schools in my constituency—Belmont Community School, St Leonard’s and Framwellgate School—in urgent need of replacement, but the Government continually say that there is no money to pay for replacement.
This is not just about cuts in capital funding. In September this year, the cabinet member for children and young people’s services in Durham County Council wrote to the Secretary of State for Education. In a very detailed letter, she set out the impact in Durham of the cuts to education, estimating that the council had lost £46 million from the schools budget, which equates to a loss of 15 teaching staff in a secondary school. She pleaded with the Government to listen to authorities such as Durham and to provide more funding, so that young people in Durham can get the education they deserve.
We know that further education fares even worse from this Budget. There has been a 45% cut in real terms to adult education and apprenticeships and a 12% cut to student funding for 16 to 18-year-olds. The Government need to explain how much of the figure outlined for skilled jobs and apprenticeships will go to colleges to support them as they seek to do the important job of skilling and reskilling adults and young people, so that they add to a dynamic workforce for the future. Even if they get all the £125 million, FE colleges will still have lost £3 billion since 2010.
I am also concerned that the Chancellor has done nothing to reduce the burden of debt on university students, particularly to lower the crippling interest rates applied to student loans. Some of the money in the Budget for start-ups, research and development of technology might end up in universities; again, that is not clear. It would be good to know how much will go to the HE sector, and we especially expect more detail about university funding after the post-18 review has reported.
In the last minute or so of my speech, I want to say something about cuts to local government. We all know that local government has borne the brunt of cuts, losing 60% of its funding. It is absolutely outrageous that the Government did nothing in the Budget to try to bring about a fairer system of funding for local government. Councils such as Durham are dealing with increasing pressures on social care and on young people’s and children’s care services. There was hardly a mention of that in the Budget, despite the massive cuts to and the shortfall in local government funding, which is estimated to be £7.8 billion by 2024-25. The Exchequer Secretary is not listening at the moment, but I do hope that he will read this speech in Hansard and come back to the House with a commitment on how the Government will make up the shortfall to local government funding so my constituents can get the services they deserve and need.
Susan Elan Jones (Clwyd South) (Lab)
It is a great pleasure to follow my hon. Friend the Member for City of Durham (Dr Blackman-Woods) and to contribute to this Budget debate. I wish to focus my remarks on three main aspects: Brexit, the north Wales economy and the voluntary sector.
The Financial Times has already referred to the Budget as a general election Budget. I do not know whether that is true, but it is most certainly a Brexit Budget, and I am not thinking of the new 50p pieces. Quite frankly, if that were all the Prime Minister and the Chancellor had to do to keep their ideological, hard Brexiteers happy, most of us would not mind too much. We now see more than £4 billion—about £4.2 billion, I think—going towards Brexit preparations. This is from a Government who have categorically refused either to have a general election or to ask the British people in a referendum what we should do next vis-à-vis Brexit. One leading voluntary sector commentator offered a very sobering reflection when he wrote:
“The opportunity cost of spending that money is staggering. It’s equivalent to the total income of the UK’s 136,000 smallest charities for almost two years. Just think what they could do for communities with that.”
Indeed, let us just think about that.
On a more positive note, I welcome the fact that persistent local lobbying has led to the Chancellor announcing money for the north Wales growth deal. This, as I think they say in the wedding banns, is for the third time of asking: the deal has been mentioned twice, but this is the first time we have had any money for it. Members of Parliament from north Wales have worked across party and geography to fight for funding. I want to put on record my thanks for the part that local authority leaders and business people on the North Wales economic ambition board have played. I must, however, say of the funding that Belfast, which has a population of 333,000, has been pledged £350 million for its city deal, but north Wales, with a population of 687,000, has been pledged £120 million. I have nothing against the people of Belfast, but that does not seem to me to be very fair. We in north Wales will do everything we can to work with the Government and whoever else we need to work with to secure prosperity and wellbeing across our region. The North Wales economic ambition board has already stated, in the aftermath of the Budget, that our goal is to increase the value of the north Wales economy from £13.6 billion in 2016 to £26 billion by 2035, with a final deal in place later in 2019. It is an ambitious challenge, but one we are determined to meet.
I will now turn briefly to the voluntary sector. In advance of this year’s Budget, the all-party group on charities and volunteering, of which I am a co-chair, wrote to the Chancellor with some very helpful suggestions. I am pleased to see that our suggestion that the increase in the gift aid small donation scheme maximum from £20 to £30 has been taken up as a proposal. That is good, and it is a sensible measure. I think that all parliamentarians involved with the all-party group, as well as our several hundred affiliate members from the voluntary sector, will welcome the Chancellor’s words about reducing “administrative burdens on charities” by introducing a “package of measures” from April 2019. We await the details but welcome the principle. However, I am rather less enthused by the increasing tendency for Chancellors to pick specific charities and causes. When any charity gets funding in any Budget, I welcome it, but we know that, in all likelihood, such charities will not get this on a year-on-year basis. That approach can raise serious problems of financial stability for charities, and it goes against the Government’s own—largely, very thoughtful—civil society strategy.
If the Government are serious about the voluntary sector in the long term, we cannot have another Budget that does not seriously examine dormant assets. The voluntary sector has waited a long time to hear how the Government intend to further spend up to £2 billion in dormant assets. Voluntary sector leaders are absolutely right to call, as they did in a letter to the Chancellor, for that funding to be designated for the purposes of strategic long-term investment in civil society organisations. It is also time for the Government to add to that funding £500 million from the national fund, to be released for the purpose of investing in communities. There is no greater role, no higher calling, than for us to invest in our communities.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
I would say that it is a pleasure to speak in this debate, but it clearly is not. This is a horrendous time for many people in this country. They were told that the people with the broadest shoulders would bear the biggest burden of austerity, and that proved to be completely untrue. They were told that the situation would be temporary while the Tories rebuilt the economy and created the jobs of the future and that those jobs would be available to hard-working people. That turned out to be untrue, too. Then we were told that austerity was over. The Budget has shown in black and white that that is simply not true.
There is a human cost. It is natural in these situations to look at the facts, the figures and the data. But just think about the human, lived experience in every one of our communities—of people doing exactly what the Government have asked them to do. They are working hard, often in two or three jobs and often for more than 40 hours a week. They are struggling with childcare and to put food on the table. They do it because they have the pride of work.
We might say that, given the exploitation taking place in which people are not given full-time work, even though it is available from the employer, those people ought not have pride in their work—their terms and conditions have been eroded or they are being paid the minimum wage because employers know they will get away with it—but people do have pride. People in my town of Oldham came from all over the world to work hard and set up a new life for themselves and their families. They are industrious and take pride in their work and effort. But the promise of fair pay for a fair day’s work is just not true for too many people.
When the mills were thriving, we developed manufacturing and engineering. The jobs in aerospace, making high-end machinery that changed the face of the world, did not just provide quality goods that changed the world; they provided a sense of purpose. The things that people produced in towns such as Oldham helped set the industrial revolution off and set this country where it needed to be. But those very same communities have been left abandoned.
What has followed that industrialisation? The decent jobs have been replaced with warehousing and distribution jobs—the same jobs that Amazon and the like are replacing with automation. Take Shop Direct in my community: it employs 2,000 people in warehousing and distribution. Some of them have 40 years’ service; it used to be Littlewoods and Great Universal Stores. They had a long history in Greater Manchester: 40 years’ service—husbands and wives working together all their working lives. That operation is closing, to be relocated 80 miles away at an automated plant.
We know that progress is inevitable and that automation would make this country more productive, and the workforce know that, too. They do not have their heads in the sand—they work in the industry on a daily basis and know exactly what changes are taking place—but what they cannot understand is why their tax-haven owners are closing the local facility and not even giving the community the chance to put in an offer of a site in that community for a new facility. Where is the fairness in that?
We talk about fair taxation. This digital sales tax being proposed is an absolute con. For too long, the tech giants have got away with not paying their fair amount of tax, while our high streets, our city centres and our town centres have been left to go to their knees. In many regions, we have lost a quarter of our retail space. That has a real consequence for how people feel about their communities. When they look at their town, it is a test for what the future holds for their place and their community. When they see the shutters down and the boards on the windows, it says a lot about the faith the Government have in it. At the same time, where money is being generated in the economy, the Government are completely useless in capturing it to invest in decent public services.
The people in this country believe in fairness and fair play. They understand there are choices and they understand that sometimes they are difficult choices. What they will never understand is how they work hard, work long hours and work still with pride, yet the people taking money out of their community are not paying their fair share to pay for decent public services. That is not for themselves. People are not selfish. People look at their children and their grandchildren, and they look at the funding that has been taken away from our schools. That is when they question what the future is and whether it is all worth it. If the Government do not do something quick to give people back the hope they need, I really fear for the future of this country.
Matt Rodda (Reading East) (Lab)
It is a pleasure to follow my hon. Friend the Member for Oldham West and Royton (Jim McMahon).
I have to say that I am disappointed by the Budget, although I am not surprised by its failure to set out any meaningful change in policy. As other hon. Members have said, this is a broken promises Budget. Austerity is not over and there is no sign that it will be over any time soon. Cuts to social security will continue and there are no guarantees that other Government Departments will not face cuts as well. The Government have presided over eight years of economic failure. Their failed austerity agenda has deeply damaged our economy, delayed and weakened our recovery, and endlessly postponed fixing the deficit. It is important to see beyond the deliberate attempts to distract the media and voters with relatively small sums of money spent on one or two high-profile items. Frankly, I have to say that even many of those are derisory. Instead, I would like to focus on what is missing from the Budget.
First, it is significant that there are no guarantees that Departments will not face further cuts. That the Chancellor has raided capital budgets to fund day-to-day spending makes matters even worse. The £1.7 billion promised for universal credit is less than a third of the social security cuts still to come and the Chancellor’s announcement on work allowances reverses just over half the cuts made in 2015. The roll-out of universal credit has now been delayed for the seventh time. On this measure, universal credit is clearly failing. It is clear that it needs to be scrapped.
What about the NHS? Under the current Government, the NHS has experienced the slowest spending growth in its history. The £20 billion promised for the NHS is “simply not enough” according to the Health Foundation. It is clear that there is a real need for much greater spending just to keep pace with the needs of our ageing population.
What does the Budget have to say about schools? The Chancellor’s plans did not include a penny for the day-to-day costs for our schools, even though school funding has been cut by 8%. The “little extras” announced by the Chancellor will be seen as a drop in the ocean and something of an insult to many hardworking teachers, parents and children. It will not stop schools having to send begging letters to parents to cover basic expenses, which in my area includes paper and printing.
What about local government, policing and public sector pay? Local councils face a funding gap of £7.8 billion by 2025. There was not a penny for policing, even though 21,000 police officers have been cut and violent crime is on the rise. Police, teachers, nurses and doctors have had no reassurance that the public sector pay squeeze will end this year. Indeed, the Budget failed to address the very real needs of my constituency. My constituents will not be helped by this Budget. It is a budget that fails even on its own terms.
The Chancellor has tried to distract us with a shower of gimmicks. This failed and divided Government claim that austerity is ending when some of the deepest cuts are yet to come. The Government are failing to deliver a fair economy, failing to end austerity and failing to agree a Brexit deal. It is high time they made way for a party willing and able to address the very real problems facing our country today.
James Frith (Bury North) (Lab)
I draw hon. Members’ attention to my declaration in the Register of Members’ Financial Interests. The Government’s party conference this summer boasted of opportunity, but this week’s Budget smacks of a wasted opportunity. It is a wasted opportunity to present an economy that embraces the challenges and sees them as opportunities for all, and it fails to address the urgent threat of climate change or the chance to reskill for automation. It is a vision lacking in imagination on how to renew our towns beyond rate reductions. There is a much-needed and overdue injection of cash for our NHS, but the King’s Fund and the Health Foundation say that it is still not enough. The party that says “F— business” on Brexit still gives us FA for FE, with colleges not even mentioned. There is no intervention to move from low-skilled to high-skilled work and no plan for the rise of the robots and the promise of AI and automation. Wages and growth are not moving and public services continue to be ignored. Austerity continues—it does not end—and the Government have no vision for what is next.
There is more money for potholes than for schools—is there a better metaphor for what this Tory decade has become, plugging the holes after years of neglect and being run over? There is yet more evidence of the Government taking councils such as mine in Bury to breaking point, with £100 million ripped from Bury’s local services from 2010 to 2020. That is 80% of the council’s budget gone on their watch.
Just three weeks after the Intergovernmental Panel on Climate Change’s landmark report highlighting the grave threat of climate change, there was not a single reference to climate change in the Chancellor’s speech. There is nothing on investing in new national industries or renewable energy and the creation of new jobs, and there is nothing to tackle air pollution and the chaos facing commuters in Bury or on plans to switch polluting buses to new, clean-energy vehicles.
The Chancellor’s 1.5% average growth for the next five years will not stand a chance, with or without a Brexit deal. Talk of a Brexit dividend hits the pit of my stomach when I recall what the real job creators in Bury tell me. Of course, some certainty will bring economic relief, but to limit our ambitions for the economy to this is another wasted opportunity. I join local shopkeepers in welcoming the planned cut in business rates, but the Budget does not do enough to back entrepreneur centres such as Bury. Good economic growth needs these nimble-footed risk takers. We need emerging entrepreneurs getting access to finance so that they can grow with loans that do not put the family home on the line or cost the earth to take out. Many entrepreneurs come home after a day at work and log on to sell, serve or trade once the kids are in bed.
As a country, we have the lowest business investment in the G7, while public sector investment is now £18 billion lower than in 2010. The OBR says that we are facing the biggest wage slump in 200 years. Payday is ever further away for so many. Costs soar. Homelessness can now be found in towns as well as cities and baby banks for baby clothes are joining food banks.
This wasted opportunity Budget failed to address the urgent crisis facing education. The obnoxious phrase that defines the Budget was the “little extras”. There is nothing to plug a £2 billion-a-year funding shortfall and the 8% real-terms cut in per-pupil funding. Why have the Government got such a blind spot on further education and sixth-form colleges, with spending per student set to return next year to the level that it was 30 years ago?
We know this: we cannot expect a family that is just about managing to get to the end of the month to be served or understood by a Government trying to survive to the end of March. The challenges that we face as a country are imperative, but the answers that we get in this Budget are impotent. This is a wasted opportunity, from a wasted opportunity of a Government.
Darren Jones (Bristol North West) (Lab)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I also want to share with hon. Members the excitement in Bristol at the news today that one of Channel Four’s creative hubs will be relocating to our wonderful, creative and diverse city. We thank our Mayor, Marvin Rees, and his team for securing such a win for Bristol.
My reaction to the Budget is less positive, because it was a Budget of bad jokes and little else. It failed to recognise the biggest issues facing the economy—economic growth, Brexit, austerity and climate change—and then failed to set out what we were doing about them. On economic growth, it is a plain and simple fact that we have gone from being one of the fastest-growing major economies in the world to one of the slowest. We rely on economic growth to fund our public services, and many workers in Bristol are already taxed enough, at a time of stagnant or painfully growing salaries and a rising cost of living.
How do we grow investment in our economy and generate the growth to fund the public services that the British people expect? Private sector investment is significantly down, having been decoupled from the global investment cycle, whereas in the United States and Germany we are seeing much higher investment. In my constituency in the industrial zone of Avonmouth, I have businesses that are ready to invest in jobs and growth but unwilling to do so because of the risks facing the British economy. State-backed investment under this Government is a self-defeating spiral. They are borrowing more than £1 trillion—50% more than when Labour was in government—without having achieved any significant sustainable economic growth off the back of it.
That takes me to the next elephant in the room, which is Brexit. Never has a modern British Government implemented a strategy that has proactively sought to make us poorer and less powerful. The Treasury has already earmarked £4.2 billion to administer Brexit, and it has not secured agreement on our future relationship, which will create even more cost for businesses and workers. Our trajectory has proven the original forecasts from the Bank of England—that Brexit would make the economy 2% smaller and cost around £20 billion in available taxes to spend per year—absolutely right and nothing to do with “Project Fear” and has proven the promise of a Brexit dividend a fiction that many will not forget. That is why I and others have long supported a people’s vote. Now that the facts are becoming clear, it is right that the British people have their say on the incompetent Brexit the Government are bringing forward.
Finally, on austerity, the Prime Minister sold us a fiction, as we have heard time and again in this debate. The plain and simple truth is that austerity has not ended—it is not even on the path to ending. The Budget did nothing for police or fire services in Avon and Somerset, at a time of rising crime when many victims are being left entirely alone and without access to justice; it did nothing to help Bristol City Council to provide the statutory services that so many children, vulnerable people and older people rely on, in the face of £70 million of cuts since 2010; and it offended every single school up and down the country and in Bristol by giving them less money than they are giving for potholes so that they can buy the “extra things” they think might be nice, when we need teachers, teaching assistants and support for children with additional needs who are being failed. The NHS secured some additional funding, but it has already been shown to be a real-terms cut, funded on the punt that £13 billion of extra cash found down the back of the sofa this year will not be whipped away by the consequences of Brexit next year.
Fourteen neighbourhoods in my constituency are in the lowest 10% in the country for education, training and skills, and six of them are in the lowest 10% for employment. I come from those neighbourhoods. Week in, week out, constituents come to me facing the consequences of nearly a decade of austerity. Week in, week out, all I can say to them is that the Government are not good enough. That is why I say the Budget was a Budget of bad jokes and little else; that is why I say I am amazed at the Government’s incompetence in administering Brexit and their apparent lack of concern at its cost; that is why I say that the promise that austerity is over is a fiction that will not easily be forgotten by my constituents or the British people; and that is why I cannot support this short-sighted, incompetent, Brexit-driven, fictitious Budget that fails to recognise and deal with the challenges this country faces.
Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)
It is a pleasure to follow my hon. Friend the Member for Bristol North West (Darren Jones) and to share in his delight that Glasgow is to be the home of the other Channel Four creative hub—a great triumph for a city that has built an incredible reputation for communications and broadcasting over the past 50 years, as the home of BBC Scotland and STV. I am sure it will help to bring a far greater breadth of expression to public service broadcasting, particularly from working-class voices, which are too often shut out of mainstream media in this country. That is a great opportunity for us all.
I reflect on the past 10 years—I started university in 2008, the same year that Northern Rock collapsed and the banking crisis erupted on this country—and the impact that that had on my generation, in our formative years. I think of the efforts that the British Government made at that time to command the global response, to ensure that the G20 responded with a counter-cyclical growth strategy, and to introduce stimulus that returned the UK economy to growth in record time. That was the picture when the Labour Government left office in 2010, to be succeeded by a Tory-led coalition, which rapidly imposed a programme of austerity on this country, claiming that there was no alternative.
Well, the alternative has been proven to have failed, and this Budget is testimony to that failure. It has failed our public finances. The Tories have missed every target they set themselves for fiscal recovery. They were meant to eliminate the deficit by 2015, but the Office for Budget Responsibility described achieving that by 2025 as a “challenging” objective. If they succeed, it will be by shifting the deficit on to the balance sheets of our underfunded schools, hospitals, local councils, police forces and other public services across the country. The Tories will have handed out £110 billion in corporate tax giveaways by the end of this Parliament. Choosing tax giveaways for the few over public services for the many is unjust, and certainly irresponsible.
Austerity has failed our economy. Average growth between 1945 and 2009 was 2.4%; between 2010 and 2016 it was just 2% and it is not forecast to rise above 1.6% for any of the next five years. That is a failure in the growth opportunity of this country, and it is a failure of my generation, who have been betrayed by the economically illiterate policy of austerity that has been visited on this country.
Think of the lost opportunity, Mr Deputy Speaker. Millions of young people across this country have been betrayed by that lost opportunity. For the first time, we expect my generation to be poorer than our own parents. That is simply a shameful indictment of this Government’s failure to deliver investment in this country. Indeed, real wage growth between 1946 and 2010 was 2.4% every year, on average, but between 2010 and 2018 pay has actually fallen in this country, by 3%. That means that 6 million people earn less than the real living wage. When this Government boast of record employment levels in this country, we have to reflect that, actually, coming up to half of the workers in this country are on less than £13,000 a year. That is a low-wage economy of penury, imposed by this Government, who have utterly failed to deliver for working-class people. It is shameful.
The UK is the only major economy in which investment is falling. UK business investment is the lowest in the G7, and public sector investment is over £18 billion lower today than in 2010. That is the root cause of the problem. We are using low wages to subsidise industry, not investing in high productivity that will deliver the real economic benefits for everyone in this country. That is why British productivity remains 15% lower than that of the other major economies. There is a vicious cycle of economic decline under this Government. By contrast, our party’s policies propose a virtuous cycle of recovery that will improve lives for everyone. We were on that growth trajectory when we left office last time.
I would particularly like to reflect on the impact in Scotland. We have heard about £959 million in Barnett consequentials, but that is a drop in the ocean relative to what is necessary to truly transform the Scottish economy. It is a drop in the ocean relative to the £33 billion budget that the Scottish Government manage. It also pales into insignificance beside the £70 billion programme of investment that Labour proposes to bring about in Scotland over the next 10 years. That would be the radical transformation that is really required in the Scottish economy. We have seen efforts to invest in Belfast, with attempts to regenerate the city in the wake of a devastating fire, yet nothing from this Government after the devastating Glasgow School of Art fire.
Universal credit is about to roll out in my constituency, where I will have the highest number of universal credit claimants in Scotland—over 16,000. We have seen no effort to address the huge shortfall of over £7 billion of welfare cuts that this Government have made. That is the reality of Tory austerity in this country.
Patricia Gibson (North Ayrshire and Arran) (SNP)
I have the dubious honour of being the final speaker in this debate. [Hon. Members: “No, you’re not.”] There is not much in this Budget to excite me or my constituents in North Ayrshire and Arran. We are no wiser as to when the Ayrshire growth deal will kick off. If warm words were investment we would have made huge progress with this deal, but we need more than warm words and good wishes to improve the lives of those living in the communities crying out for investment, like Saltcoats, Kilbirnie, Stevenston.
We have had some tinkering with universal credit, but nothing like what is needed, nor have any measures been taken, despite repeated demands, to pause and halt this benefit in order to make it fit for purpose. Nothing has been done to end the wage discrimination against young people, and the Government continue to perpetuate the myth of their national living wage when it is clear that the real living wage—the wage that takes into account the actual cost of living—is the right thing for workers. The Tories and the Labour party are still opposing the Scottish Parliament having this authority over wage levels, there is no commitment to end exploitative unpaid work trials and still no support for the Scottish Parliament to have any control over employment law. Such is the terror of Scotland being a beacon of progressive politics in this regard that presumably the logic is, “If we go down, we all go down together.”
We have had much talk today about welfare. The £30 billion of welfare cuts voted through in 2015 by both Labour and the Tories has exacerbated child poverty in my constituency, and yesterday’s Budget did nothing to target child poverty. We have been told by the Resolution Foundation that tax cuts overwhelmingly benefit richer households, with almost half of them set to go to the top 10% of households, yet, disappointingly, we hear that Labour will abstain on that—and that is particularly disappointing given that Labour in Scotland have been throwing up their hands in horror at the SNP Government not raising taxes to yet higher levels.
The Budget did nothing to address the £175 million paid by Police Scotland in VAT bills, coming straight out of frontline policing, at the same time as we have academy schools in England being given special dispensation from paying VAT. Perhaps someone on the Government Benches could explain that anomaly.
We have had nothing for the victims of the HELMS—Home Energy and Lifestyle Management Systems—green deal swindle, which left people with huge debts. We also have communities without their banks, like Kilwinning, Saltcoats and Kilbirnie. The Chancellor has given us no guarantees over the future sale of RBS shares to safeguard the interests of the taxpayer. We have had nothing for the WASPI women, who have been robbed—mugged—of thousands of pounds. We have had nothing on the civil nuclear police officers, who face dramatic and unsustainable changes to their pensions.
The decision in the Budget to press ahead with the pensions cold-calling ban is welcome. However, if the reason for this ban is to protect people from these calls—and I assume it is—I cannot help but wonder at the delay in implementing my own ten-minute rule Bill from 2016, which called for director-level responsibility for nuisance calls. The UK Government support this and have repeatedly said so. They even reprinted the Bill and put it in the name of one of their own Back-Bench MPs, which is ironic given that the Bill tries to deal with scamming, but still no date for implementation has been set.
The delay in reducing the stake for fixed odds betting terminals is appalling, because it is down to pressure exerted by Back-Bench Tory MPs who appear to be in thrall to the bookmaking industry. This is a pressing issue in my constituency because we have 135 of these machines, with local players losing an estimated £5 million on those terminals in 2016 alone, causing untold misery across our communities.
I could go on, but I will end by saying this: this Budget does almost nothing to improve the lives of my constituents and is a massive missed opportunity. I think so and I am sure the majority of my constituents will think so, too. The Chancellor needs to go back to the drawing board.
Vicky Ford (Chelmsford) (Con)
It is a pleasure to speak in favour of the Budget tonight. The decade since the financial crisis has been tough, and it is very good to know that the corner has been turned. The economy must come first, because without a strong economy we cannot afford other priorities such as healthcare, welfare, defence and education. Today in Chelmsford unemployment stands at 1.6%; we have record numbers of jobs and opportunities. We know that politicians do not make jobs—businesses do—but we can help. Businesses often tell me how low corporation taxes have helped them to invest here. Chelmsford businesses ask me for lower business rates, fixed VAT thresholds and a level playing field between online and offline trade, because tech giants should pay tax too. I am really glad that all three of those asks have been addressed in the Budget.
We know that innovation drives growth and keeps us ahead of the pack, and I am proud that this Government have increased investment in science and research by more than any Government in the past 40 years. We on this side do not underestimate the importance of collaboration in science, which is why our EU strategy keeps us in those European networks. I am glad that the Minister for Immigration is here. She knows that we need a fair and fast immigration system to enable scientists to continue to come here.
Fundamental research in science is key. Ideas involving liquid crystals, molecular machines and gas phase chemistry were once just intellectual curiosities, but they have now driven real transformational breakthroughs. We need to ensure that the ideas we have here are made into reality here. The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) dismissed quantum technology as a “sexy” sector, but my biggest employer in Chelmsford has embraced the quantum revolution. It has made the cold atom trap—
Chi Onwurah
I thank the hon. Lady for giving way in what is the final Back-Bench speech of the debate. I feel that it is wholly unjustified to say that I should not call technology sexy. One of the things I would like to do as an engineer is to show people how sexy and important technology and engineering are. Calling it sexy was not dismissing it. I was just saying that we need to celebrate all different types of technology, not just quantum technology.
Vicky Ford
Maybe it was the tone that felt dismissive. In my constituency, we have embraced quantum technology. We are making a cold atom trap and the oscillator for a quantum clock. There is nothing wrong with being in a “sexy” sector. Last week, that employer called in 120 of its lowest-paid workers and gave them a pay rise of between 8% and 18%. These are real products, real sales, real profits and real pay rises. That is what will drive our country’s future.
I thank the Treasury for the investment in infrastructure. People in my constituency spend too much time in traffic jams and on delayed trains. It is a waste of their personal time and it hits the country’s productivity. We are building tens of thousands of homes in my constituency, and we need the infrastructure too. We need the second railway station and the north-east bypass, and we have got our bids in to the housing infrastructure fund—it is great to see that fund being increased—and the local roads fund. We need money for main roads, cash for cycleways and pounds for our potholes, but in Chelmsford, my pinch point is the ancient Army and Navy flyover. I want our local roads fund to be Ford’s flyover fund, please.
There are three other things in the Budget that I would really like to praise. The first is the tax on virgin plastics. We need a game changer in the way we use plastics on this planet, and I am really glad that Britain is leading the way on this. The second is the improvement in universal credit. That is welcomed not only by us on this side of the Chamber but by the Joseph Rowntree Foundation, the Trussell Trust and the Resolution Foundation. All those organisations are real experts in fighting poverty. The third thing is the massive boost for the NHS in the form of £20 billion for health and mental health, which is not funded through hiking up taxes. We are putting more money into the pockets of our lowest-paid workers by freezing and raising their tax thresholds.
There is a great deal in this Budget to be proud of, and I am proud to be the last Back-Bencher to speak in favour of it tonight.
Anneliese Dodds (Oxford East) (Lab/Co-op)
It is a pleasure to follow the hon. Member for Chelmsford (Vicky Ford). I may not always agree with her—I do not agree with her assessment of the Budget—but I know that she is passionate about science. I fear she misunderstood: she has a shared passion for science with my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah), particularly for quantum physics. Indeed, my hon. Friend has visited physics facilities in my constituency, so she and the hon. Member for Chelmsford are perfectly in accord.
We have heard some excellent contributions today, with important points being made on both sides of the House, and I will refer to as many of them as I can in the time available. As many Members have suggested, this is sadly a complacent Budget, and that accusation came not only from the Opposition during this debate. That complacency was perhaps at its starkest in the Chancellor’s assessment of our country’s economic health, and I was surprised to hear that repeated by the Secretary of State for Business, Energy and Industrial Strategy. He is usually a stickler for detail, but he seemed to suggest this afternoon that the estimates underlying the Government’s plans could be revised upwards if a good deal was done with the EU. However, those estimates already presuppose that a deal along the lines advocated by his Prime Minister will be struck with the EU, a fact which is obviously being challenged by many Conservative Back Benchers. Such hubris is reckless in the extreme.
At the beginning of the Red Book, we see the claim that the Government’s approach has created a so-called “stronger and fairer economy”, but the statistics tell a different story, as we have heard throughout today’s debate. The one indicator that the Government frequently refer to is the employment rate. Now, of course it is positive to see an increase in the proportion of people working, but we must be careful because that has not happened everywhere. For example, IPPR North has shown that there are now 25,000 fewer jobs in the north-east than in the immediate aftermath of the financial crisis in 2008. We should have had a full recovery, but we have not.
It is deeply complacent of this Government continually to fail to acknowledge the burgeoning proportion of people who are now in insecure work—one in nine working people. My hon. Friend the Member for Oldham West and Royton (Jim McMahon) painted a disturbing picture of the reality of the workings lives of many of his constituents. If we MPs, as a body of people, were in the same position as our constituents, over a quarter of Government Members would not know from one week to the next how many hours they would be likely to work. That may come to pass anyway in the fullness of time but, to be serious, that high rate of insecurity—among one in nine people—is deeply damaging.
The problem has of course been exacerbated by low wages, and here I must point out the Government’s brass neck. They argue that wage growth is at its strongest in 10 years, omitting the fact that this welcome upturn has come after the longest period of wage stagnation since Napoleonic times, all of which—outside the immediate impact of the financial crisis—came on their watch. The increased so-called living wage proposed in this Budget falls short of the £10 an hour that is needed to lift people out of poverty pay.
Finally, as many colleagues have mentioned, the changes to universal credit only repair half the damage done to the system in 2015, and there is nothing in the Budget to repair the damage done to the incomes of disabled people, as was rightly referred to by my hon. Friend the Member for Battersea (Marsha De Cordova). Taken together, insecure work, low wages and cuts to social security have meant that, for the first time in many decades, getting into work no longer means leaving poverty behind. Two thirds of children living in poverty are now in working households.
It is little wonder then that personal debt is rising, as referred to by the right hon. Member for Sevenoaks (Sir Michael Fallon), who pointed out that current levels of saving are at their lowest for 50 years. While we have seen some change, there has been no adoption of the measures that Labour has advocated to combat out-of-control overdraft fees or credit card debt. It is perhaps no wonder in such circumstances that so many people now feel that the economy is simply no longer working for them, as shown clearly in polling undertaken in September for the IPPR.
The indicators for the future are deeply worrying. Yesterday my right hon. Friend the Member for Enfield North (Joan Ryan) rightly quoted extensively from the OBR’s commentary, and I will not repeat her words or the OBR’s at this point. Suffice it to say that surely there is little room for celebration when we learn that GDP growth in future years has had to be revised down, business investment is falling and our levels of productivity growth are so much lower than those in comparable countries.
My right hon. Friend the Member for North Durham (Mr Jones) and my hon. Friend the Member for Coventry South (Mr Cunningham) clearly set out how different the situation was under Labour, which indicates how short the memories are of some Conservative Members. I respectfully suggest to the hon. Member for Wimbledon (Stephen Hammond) that perhaps he needs to have a word with his former Chancellor, George Osborne, given the latter’s recent comments, as well as with the many economists and international leaders who praised Gordon Brown’s approach to dealing with the financial crisis.
Are the Government finally moving in the right direction to protect our economic future? The evidence of this Budget suggests otherwise. It proposes a temporary increase in the annual investment allowance to £1 million and a new allowance for investment in non-residential structures and buildings but, at the same time, it continues to choke off the nascent onshore wind and energy efficiency industries in this country with its frankly reactionary approach to regulation and support. Appallingly, investment in renewables is going down—it fell by 56% last year—bucking the trend in many comparable countries. My hon. Friends the Members for Ynys Môn (Albert Owen) and for Vale of Clwyd (Chris Ruane) spoke forcefully on that issue, as on others.
We also have worrying falls in investment in the motor industry. I pay tribute to the work of my hon. Friend the Member for West Bromwich West (Mr Bailey), and I thank him for his pertinent remarks in this debate. I also thank my hon. Friend the Member for Warwick and Leamington (Matt Western), who made similar points.
Today, as on Monday, we were told that this Government will facilitate a renaissance on our high streets. Well, let us look more closely at the current proposals. The suggested changes to business rates only make good on the damage due to the Government’s botched evaluation back in 2017.
The shadow Minister for industrial strategy, science and innovation, my hon. Friend the Member for Newcastle upon Tyne Central, rightly made it clear that we desperately need not these temporary measures but a proper root-and-branch review of the business rates system. That is particularly important as a growing number of local authorities are expected to rely solely on council tax and business rates to fund local services. In this debate we have heard about the human impact of the cuts to central funding for local government in both St Helens North and Vale of Clwyd. The impact is very worrying.
When local authorities complain about the situation, the Government tell them, “Well, you can just go and raise council tax.” That position was rightly critiqued by my hon. Friend the Member for York Central (Rachael Maskell), who also correctly pointed to the Government’s lack of grip on the speculative purchase of so many properties on our high streets by tax haven-based businesses—the Government are doing very little about that.
My right hon. Friend the Member for Delyn (David Hanson) and my hon. Friend the Member for Clwyd South (Susan Elan Jones) correctly referred to the need for investment in north Wales, an approach echoed for Yorkshire by my hon. Friend the Member for Keighley (John Grogan). They all pointed out the inadequacies of the Government’s current approach.
We need to be clear that this Government have chosen to continue placing the burden of cuts on the worst-off people, and they continue to expect a greater contribution from local council tax payers. It is important to note that, under this Government, a smaller and smaller proportion of councils are able to provide council tax relief to low-income people. In many of our areas that means that council tax increasingly resembles the cruel poll tax it was meant to replace.
Again in relation to our high streets, this Government’s proposals to promote further the conversion of commercial properties to residential use will starve many growing businesses of the space they need, at the same time as the Government condemn desperate householders to cramped living conditions. How many Members in this Chamber would be willing to live in a flat with a floor surface of 15 square metres? I do not see anyone putting their hand up, but such flats exist in Croydon because of this scheme. It is worth noting that that is half the recommended floor space for housing chimpanzees, and we are talking about people, not animals.
As well as dealing with that problem, we also need action from this Government to protect local amenities such as post offices. On the helpful point my hon. Friend the Member for Lewisham West and Penge (Ellie Reeves) made, the Secretary of State needs to be aware that 112 post offices closed last year.
On productivity, again we did not see the action we need to halt the relative stalling in productivity gains that we have seen in the UK compared with other nations. The £1.6 billion earmarked in the Budget for science and innovation, which the Red Book says was “announced” in this Budget, was nothing of the kind—only £56 million of it is new money. It was not announced in this Budget at all.
Sadly, we have seen minimal action from this Government to deal with the skills shortages in the UK. My hon. Friends the Members for Darlington (Jenny Chapman) and for City of Durham (Dr Blackman-Woods) both noted eloquently that widespread concerns exists about the plummeting by half in the number of adult learners since 2010 and the fact that further education funding has been slashed by a third. My hon. Friend the Member for Bury North (James Frith) also mentioned that issue, perhaps in slightly more explicit language. His anger about it reflects the frustration of many teachers and students in further education. The impact of cuts on young people was also rightly referred to by my hon. Friend the Member for Glasgow North East (Mr Sweeney), and I am grateful to him for his remarks.
During this debate, a number of Conservative Members rightly and properly represented their constituencies by voicing concerns about the lack of extra funding in this Budget for schools’ running costs. My hon. Friend the Member for Keighley suggested that the so-called “little extras” patronisingly provided for in this Budget were like a disappointing Christmas present, but I would go a little further. Where I am from, Santa can be nasty as well as nice; one year my little brother had said the “worst word” one too many times, so on Christmas morning he got a stocking that was filled not with presents, but with straw. I rather suspect that his reaction was similar to that of many teachers and parents on being told that they might perhaps be able to have a “little extra” such as a whiteboard or computer for their school, when they are struggling for teachers, for teaching assistants and for basic educational materials. As my hon. Friend the Member for Reading East (Matt Rodda) said, this was an insult.
On productivity, as on so much else, this was a short-term Budget, rather than the long-term programme we need. The Chancellor this time has benefited from an unexpected windfall due to higher than expected tax receipts and lower than expected Government spending, rather than carefully engineering a successful recovery. There is no guarantee that these conditions will persist. The Chancellor had the chance this year to put public finances on a more sustainable footing, by cancelling his planned cuts to corporation tax and adopting Labour’s more progressive approach to income tax, which would require the top 5% to contribute more, but he chose not to do so.
Again on the subject of revenue raising, this Budget contained a commitment to a new digital services tax. Although it was announced with much fanfare, the devil is in the detail. I will not go into detail now, because I want to hear the Minister’s response, but I would just say that the safe harbour principle within that proposal for a digital services tax and the double threshold rule seem to be subject to exactly the same problems that have beset this Government when they have tried and failed to raise corporation tax from many of these digital giants; this seems to be riddled with loopholes and inadequate. What we really need is a more thorough-going approach, of the type that Labour set out in our tax transparency and enforcement programme.
In conclusion, in his opening remarks the Secretary of State said—I hope I have remembered his words correctly—that he was confident that the life sciences in our country would continue to be strong under “all scenarios” of exit from the EU. That is not what I have heard from biosciences companies, nor from firms in many other sectors. My hon. Friend the Member for St Helens North spelled out very clearly how a chaotic, no-deal Brexit would cause “economic catastrophe” for areas such as the one he represents, and indeed many others, as was highlighted by my hon. Friends the Members for Hampstead and Kilburn (Tulip Siddiq) and for Bristol North West (Darren Jones).
This week started with the Prime Minister contradicting her Chancellor over whether a no-deal Brexit would require a new economic plan. This week surely has to end with our Government waking up to the reality that they must rule out a no-deal outcome to the Brexit negotiations, and start putting our country and the jobs of our people first.
The Exchequer Secretary to the Treasury (Robert Jenrick)
This Budget demonstrates yet again that careful stewardship of the economy and meeting serious challenges in a serious way, thereby creating an environment for wealth creators to succeed, is always the right course. Now, the hard work of the British people is paying off. We see that in the record numbers in employment, with 3 million more jobs since 2010. We see it in rising real wages, with the fastest rises in real pay among the lowest paid in society. Above all, we see it in our strengthening public finances.
We see in the Budget how a stronger economy enables us to support the NHS, which will receive, as my hon. Friend the Member for Chelmsford (Vicky Ford) said, that record-breaking £20.5 billion real-terms per-year increase. Furthermore, a stronger economy has enabled us to cut taxes and to freeze the important duties—whether on fuel, spirits or beer—so that millions of people throughout the country can enjoy more of the money that they have earned. Those achievements did not fall into the Government’s lap—apologies to the Chief Secretary—they were hard won by the people of this country, and we will not be complacent. This is an optimistic, future-facing Budget, and a Budget for economic growth.
Having listened to much of the past three days of Budget debate, I could summarise the contributions from Opposition Members as wanting more spending and higher taxes. With some notable exceptions, they have had very little to say about how we grow the economy and create wealth. When asked recently, the shadow Chancellor, the right hon. Member for Hayes and Harlington (John McDonnell), could not name a single businessperson whom he admired. We on the Government Benches understand that behind every business is a story worth knowing—that cafés and gyms and restaurants do not come out of nowhere. We respect and admire these people, and this Budget is for them.
The Federation of Small Businesses, the CBI, the retailers, the convenience stores, the pubs, the oil and gas industry that supports so many thousands of jobs in north-east Scotland, and the manufacturing groups such as the EEF all support the Budget. Of course there are challenges. Of course we are in a moment of high uncertainty as we enter a pivotal stage in the Brexit negotiations, but each of those groups—and more—that I have spoken to since the Chancellor sat down believed that we were listening to them and acting. We are delivering for businesses and job creation throughout the country.
As my right hon. Friend the Member for Sevenoaks (Sir Michael Fallon) argued at the beginning of the debate, the Budget recognises that the UK has to pay its way in the world. It must be an attractive place for people to invest. To ensure that it is, we have cut corporation tax from 28% to 19%, and receipts have risen by 55%. We have reaffirmed the incentives for entrepreneurs that are attractive for people—including those in the constituency of the hon. Member for Hampstead and Kilburn (Tulip Siddiq)—who come here from all over the world. They are attracted here because it is a great place to create businesses, and that is driving the unicorns and tech businesses of this country.
We are extending the start-up loan scheme, and as we have already heard, we have increased the annual investment allowance from £200,000 to £1 million. We have listened to manufacturing businesses, particularly in the midlands and the north, that want to invest in plant, machinery and digital technology. This is about not just the sexy technologies that we heard about earlier but ensuring that manufacturing in this country can continue to thrive.
For working people, we are increasing the national living wage from April and thereby contributing to rising real wages, and we are giving a tax cut to 32 million people throughout the country by increasing the personal allowance and the higher-rate threshold. As we heard at Prime Minister’s questions, it is still unclear whether the Labour party supports that tax cut. The shadow Chancellor reluctantly says he agrees with it, the shadow Foreign Secretary, the right hon. Member for Islington South and Finsbury (Emily Thornberry), says otherwise, and the Mayor of Greater Manchester says that shadow Chancellor’s views send a shiver down his spine—and that was before Halloween.
We believe that everyone in this country should pay their fair share of tax. There are measures, which we have heard about from right hon. and hon. Members in this Budget debate, to continue to close the tax gap. It is at a near record low, and lower than it was in any year of the previous Labour Government. This Budget does create the world’s first digital services tax.
Mr Kevan Jones
On a point of order, Mr Deputy Speaker. We have had a very good debate this afternoon, and there have been some great contributions from all parts of this House. Members can call me old-fashioned, but I thought that the role of the Minister replying to the debate was to address the issues that have been raised in this debate. He has now been on his feet for nearly six minutes, and apart from some reference to two Conservative Members, he is making just a general speech, which he could have done in an opening speech.
Mr Deputy Speaker (Sir Lindsay Hoyle)
The Minister has got time to address the issues, and I am sure that that is where he will take us now.
Robert Jenrick
That was unfair, because I am addressing the points that have been raised by Members from all parts of the House. [Interruption.] The right hon. Member for North Durham (Mr Jones) may not like the answers, but I am providing them. With respect to the digital services tax—it is a tax that has been mentioned by numerous Members across the House—we are the first major country to do this, and it will raise in excess of £1.5 billion, ensuring that, in our thriving economy, our tech-friendly economy, those who generate value from UK users will pay a fair contribution to tax. We look forward to publishing more information and to the consultation on that, which, clearly, hon. Members may wish to take part in.
We chose in this Budget to invest in the long-term economic infrastructure of the country—a subject that has been raised by a number of my colleagues—raising investment levels in this country to the highest sustained level in my lifetime. That is the mark of a mature economy, which is not just spending everything on immediate consumption, but spending money for long-term investment. Public capital investment in this country will be £460 million a week higher under this Government than it was under the previous Labour Government. We have heard some of the ways that we will spend that. We will spend it by increasing investment in our roads—in every type of road. A number of colleagues from across the House—
Robert Jenrick
Well, there was my hon. Friend the Member for Chelmsford (Vicky Ford), for example. She made a representation for the Chelmsford flyover, and we will deliver on that. Let me say one other thing in response to the right hon. Member for North Durham: we listened to those Labour Members who came to see us at the Treasury with genuine representations to grow the economy, but they were few and far between. There was the hon. Member for Bassetlaw (John Mann), for example, and we responded to his requests—[Interruption.]
Mr Deputy Speaker
Order. Mr Jones, you are testing my patience. You did say, “Call me old-fashioned”, well, old-fashioned usually has values with it, and you are not showing the best values right now. Come on, Minister.
Robert Jenrick
We are investing in a whole range of different infrastructure projects, which will make a huge difference to the future of this country, from the productivity pinchpoints to investing in potholes. We did hear from a number of Members today a slightly snobbish attitude to investing in potholes, but these things matter to ordinary people. They matter to people in my northern constituency of Newark. They matter to people in Walsall, in Halesowen, in Stoke-on-Trent, in Mansfield and in towns that we have heard about here and, in fact, in towns across the whole country, including in the right hon. Gentleman’s constituency.
Robert Jenrick
In North Durham. [Hon. Members: “Ah!”] Yes, there you go. Incidentally, the last time that the right hon. Gentleman and I sparred was over cleaning up illegal waste sites.
Robert Jenrick
Well, you have not read the Red Book, because we put £10 million—[Interruption.]
Mr Deputy Speaker
Order. It might be helpful if you both addressed the House without having a personal debate between the two of you. Come on, Minister.
Robert Jenrick
We have heard in this debate that this is a Budget for high streets and town centres. With great respect, the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) said that we had borrowed one point of the Labour party’s five-point plan for the high street, and that is true, we did—we are committing to pilot a register of empty shops—but we looked at the other four points in the plan and, frankly, they were thin gruel. We decided that we could do better, and we have.
We are providing a 30% discount to small businesses, affecting 90% of our retailers across the country, and we have created a £675 million future high streets fund—a competitive fund for people across the House and across the country to bid into to secure between £5 million and £25 million to transform their towns. I was surprised that Opposition Members repeatedly criticised the idea of having more homes in town centres, because that is not what the public say. We want vibrant communities in our town centres, and we want to make it cheaper and easier to create shops, workplaces and homes there.
We also heard about great ideas in the Budget. We have to grow the economy in all parts of the country. For example, we heard from my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) about the special economic area that we are creating in Teesside, working in partnership with the hon. Member for Redcar (Anna Turley). That has the potential to transform investment in that area.
Anna Turley
Will the Minister say a little more about what this economic area is? If it is just keeping business rates locally, local authorities will be able to do that next year anyway. Will he indicate a bit more what it will be exactly and what it will mean for the clear-up of the site?
Robert Jenrick
I am happy to give the hon. Lady further details. We shall provide business rates retention, and we promised that in the spending review we shall consider whether it is possible to enhance the capital allowances. We have provided £14 million up front to ensure that two plots of land on the site are remediated so that jobs and investment can come in as soon as possible.
We have also announced new university-linked enterprise zones and a competition for more development corporations, starting with one we announced a month ago at Toton in the east midlands. We made an announcement about realising the potential of the Oxford-to-Cambridge arc of opportunity, with a new expressway and railway linking Oxford and Cambridge, and I am sure that the constituency of the hon. Member for Cambridge (Daniel Zeichner), with whom I have spoken about it on a number of occasions, will benefit.
In Coventry, we will support the automotive sector. We are in regular conversation with JLR about the issues described by the hon. Member for Coventry South (Mr Cunningham). In the Budget, we announced funding not only for Coventry as city of culture but, at the request of Mayor Andy Street, for a centre for autonomous vehicles in the city, which I hope will build on the great reputation of the automotive sector.
Robert Jenrick
With great respect, I shall not give way. I apologise, but there is not enough time now.
The Secretary of State said in his opening remarks that this is a Budget for skills, innovation and progress. We believe that this is an exciting time to be alive. We want to support innovation to drive the economy forward. We are investing £1.6 billion—
Albert Owen
On a point of order, Mr Deputy Speaker. The Minister said that he was responding to the debate, but three Members from north Wales raised the bid for the north Wales growth deal. The Chancellor only mentioned Wales twice in his Budget, although the Minister said that it was for the whole United Kingdom. Will he address some of the points made by some of the Members from Wales?
Mr Deputy Speaker (Sir Lindsay Hoyle)
I can assure you that that is not a point of order, but you have got it on the record.
Robert Jenrick
I am happy to speak to the hon. Gentleman later, but time does not allow now. As he knows, the Budget does commit to a north Wales growth deal. I shall be happy to discuss that further with him.
To conclude, this is a Budget that looks to the future. It is optimistic about our economic potential. It invests in the science and innovation that will drive the economy forward in the years ahead. We have a choice: either we can follow the tired ideas of Opposition Front Benchers, pursuing policies that we know have failed in the past, a ship sailing on yesterday’s wind, or, like Conservative Members, we can look to the future with confidence, and we can champion entrepreneurship, innovation and the wealth creators in society. This is a Budget that seeks to inspire a new generation to succeed, to excel and to prosper, with policies that will make the economy and the country stronger. I urge Members in all parts of the House to support the Budget in the Lobby tomorrow.
Ordered, That the debate be now adjourned.—(Mike Freer.)
Debate to be resumed tomorrow.