House of Commons
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Mr Speaker
The House will wish to know that the Secretary of State for Health and Social Care will make a statement at 7 pm today about the coronavirus. This will include the advice to the House on the situation as it affects Parliament following the announcement relating to the hon. Member for Mid Bedfordshire (Ms Dorries), to whom we all send our best wishes for a speedy recovery and return to the House.
Oral Answers to Questions
(4 years, 1 month ago)
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Sarah Atherton (Wrexham) (Con)
The Minister for Women and Equalities (Elizabeth Truss)
This House now has 220 women MPs, which is a record. I believe that it is through transparency and meritocracy that we bring more great people into the House. I congratulate my hon. Friend on being one of the first three Welsh female Conservative MPs.
Sarah Atherton
Eighty-one per cent. of Wrexham county councillors are male. I am the first female Conservative MP for Wales and one could ask why it has taken so long, although that is for a different debate. Does my right hon. Friend agree that organisations such as Women2Win Wales and the Women’s Equality Network of Cardiff are vital and essential when trying to equalise the gender balance in higher public office?
Elizabeth Truss
My hon. Friend is absolutely right. Anybody who has met Baroness Jenkin will know that she is a force of nature to be reckoned with. She does not just ask women to stand; she tells them to stand—and she has made it happen.
Anne McLaughlin (Glasgow North East) (SNP)
The Centenary Action Group reports that only some of the diversity data on candidates seeking parliamentary nomination is collected and published; that is because it is currently voluntary. I hope that the Minister agrees that that is simply not good enough, so today will she either commit to enacting section 106 of the 10-year-old Equality Act or at least explain why she refuses to do so?
Elizabeth Truss
I certainly agree with the hon. Lady that more transparency is always helpful in highlighting where we need better opportunities for people to get into public life and politics, but we have to recognise that it is partly down to political parties to show that leadership and make that happen within their own organisations.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Maria Caulfield (Lewes) (Con)
Last year, NHS England announced that it would offer period products to every hospital patient who needs them, and the Home Office announced plans to change the law to provide period products to those in police custody. In January this year, the Department for Education launched a scheme to provide access to free products in state-funded schools across England.
Mr Carmichael
That is welcome progress, although I would suggest that domestically there is still some work to do.
ActionAid tells us that one in 10 girls in Africa misses school because they do not have access to sanitary products or even private toilets. The Government have a target of eradicating period poverty in developing countries by 2030 and my hon. Friend the Member for North East Fife (Wendy Chamberlain) has introduced a Bill to improve transparency on that. Will the Minister meet me and my hon. Friend to discuss our Bill?
Maria Caulfield
I thank the right hon. Gentleman for his question, and I am sure that we welcome the Bill. In 2019, the Department for International Development announced a global campaign of action on this very issue—to end period poverty globally by 2030. The global campaign was kick-started with an allocation of up to £2 million for the small and medium-sized charities working on period poverty in DFID’s priority countries.
Carolyn Harris (Swansea East) (Lab)
A recent report by Women’s Aid shows that almost half of domestic abuse survivors living in refuges do not have enough money to pay for essentials. Schools, prisons and hospitals now provide free sanitary products for women and girls, so when can we expect victims of domestic abuse living in refuges, and their daughters, to be extended the same courtesy?
Maria Caulfield
The hon. Lady makes an absolutely essential point. The tampon tax fund has dealt with a number of these points; it was established in 2015 to allocate funds generated from VAT on period products to protect vulnerable women and girls on this very issue.
James Grundy (Leigh) (Con)
Theo Clarke (Stafford) (Con)
Simon Baynes (Clwyd South) (Con)
Vicky Ford (Chelmsford) (Con)
Over 1 million children are benefiting from the Government’s investment in early years entitlements, which can save their parents up to £5,000 every year. In the next financial year, we plan to spend £3.6 billion on this. Furthermore, our manifesto commits to another £1 billion for more wraparound and holiday childcare places from 2021. We have already started working on the details.
James Grundy
Further to my hon. Friend’s answer, what is being done to increase the availability of affordable childcare for parents with disabled children who may require more specialist provision?
Vicky Ford
Disabled children get an extra 15 hours of early years education from the age of two, and their parents can also receive extra support through tax-free childcare of up to £4,000 per child per year until the child is 17. The disability access fund also gives providers £615 per eligible child to support access to those early years settings.
Theo Clarke
I welcome the fact that, in their manifesto, this Conservative Government announced £1 billion for the flexible childcare fund, but, in light of the recent outbreak of coronavirus in Staffordshire, may I ask what extra provision the Government are providing for wraparound childcare while this epidemic continues?
Vicky Ford
Coronavirus is the top priority, and we must follow medical and scientific advice. Public Health England continues to advise schools and settings, and that includes early years settings, to remain open unless otherwise advised. We are aware of concerns from early years providers about potential closures and are working to minimise the impact. This is a top priority. In the meantime, there is a dedicated helpline for schools and their parents. Mr Speaker, the helpline number for schools and parents is 0800 0468687.
Simon Baynes
On a recent visit to the Overton Playcentre in my constituency of Clwyd South, the manager, Rachel Harris, described the childcare offer that they deliver to parents as “life-changing”. Does the Minister agree that the seamless transition that is offered by the Overton Playcentre between its childcare and the education at the nearby St Mary’s Church in Wales Primary School, with which they work very closely, offers an effective model for maximising the availability of affordable childcare?
Vicky Ford
May I pass on my congratulations to the Overton Playcentre? It is absolutely great when we see a pre-school and early years establishment work together with schools in the best interests of children. It really does make a difference. Last year, nearly three out of every four children were reaching a good level of development by the time they ended reception, and that is up from just one in two back in 2013. That is partly due to excellent playgroups and schools working together such as those in Clwyd South.
Kirsten Oswald (East Renfrewshire) (SNP)
The SNP is transforming childcare and the lives of parents in Scotland with our commitment to the most generous offer in the UK. Currently, 600 hours are provided per year to all three and four-year-olds and eligible two-year-olds. We are increasing that to 1,140 hours from August this year. Why have the UK Government not yet matched that offer?
Vicky Ford
This UK Government are the most generous provider of childcare. Early entitlements for children in England is up £3.6 billion this year for 30 hours of childcare for three and four-year-olds plus an extra 15 hours for disadvantaged two-year-olds. It saves up to £5,000 per child per year. Furthermore, tax-free childcare gives every parent a maximum of another £2,000 per annum for every child, which goes up to £4,000 for children with disabilities.
Caroline Nokes (Romsey and Southampton North) (Con)
I welcome the Minister’s comments about the helpline for early years providers worried about the corona- virus, but she will know that Lou Simmons, the owner of Abbottswood Day Nursery in my constituency, contacted me because the helpline was unable to give the answers that providers need. What assurance can my hon. Friend the Minister give that that helpline is now up to speed and that early years providers are getting the right information in a timely fashion?
Vicky Ford
I am aware of early years providers’ concerns about the potential impact of coronavirus. Early years providers give vital support to families and children, and it is important that they follow the advice to stay open. It is a top priority for me to give them the reassurance they need, and I will make that announcement as soon as possible.
Alison Thewliss (Glasgow Central) (SNP)
My constituent is studying to be a teacher, but has had to pull back from her course because of the way in which universal credit interacts with student finance. Will the Minister look at this issue urgently to ensure that women are not discouraged from bettering themselves and their own lives because of the way in which the universal credit system works?
Vicky Ford
The universal credit system can give up to 85% of childcare costs, and the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Colchester (Will Quince), is happy to meet the hon. Member to follow up on that point.
Jonathan Gullis (Stoke-on-Trent North) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
The Government are clear about the benefits of flexible working for employers and employees. Last year, we consulted on proposals to require large employers to publish flexible working policies and to advertise jobs as suitable for flexible working, and we will respond to that consultation in due course. Since then, we have committed in our manifesto to make flexible working the default. Subject to consultation, we will bring forward these new measures in our employment Bill.
Jonathan Gullis
The majority of unpaid carers in Stoke-on-Trent North, Kidsgrove and Talke are women caring for young children or elderly relatives. Does my hon. Friend agree that increasing opportunities to work flexibly will benefit women by sharing caring duties more equally, and will ultimately lead to more equality for women in work and more opportunities for women to get into work?
Paul Scully
My hon. Friend is working on a modern “silicon Stoke”, and to get that he needs modern working practices. Flexible working helps people with a range of needs to remain in and to access work, including mothers, carers and parents. We want to give everybody a choice to determine how best they can balance their home and work life, including fathers. Flexible working can give them that choice, which is why we are keen to do more.
Bill Esterson (Sefton Central) (Lab)
Maria Caulfield (Lewes) (Con)
Life expectancy at birth in England is the highest that it has ever been. Every single person deserves to lead a long, healthy life, no matter who they are or where they live. This Government have been clear that we will address the needs of all those who have been left behind.
Bill Esterson
Well, that is not true for women in the poorest communities in our country, is it? The Marmot review shows that life expectancy has fallen for women in the poorest communities. Frankly, that is what happens after 10 years of public service cuts and falling living standards. When are the Government going to take responsibility for the misery they have inflicted on the poorest women in the country?
Maria Caulfield
I thank the hon. Member for explaining women’s health inequalities to me, but I fully support the Government’s commitment to delivering £33.9 billion of investment in the NHS—the largest cash boost in its history—which will make reducing health inequalities for all possible.
Naz Shah (Bradford West) (Lab)
Will the Minister explain what action is being taken to support women—especially black and minority ethnic women, and single mothers—who have faced not only disproportionately more poverty under years of austerity, but also the greatest barriers to work? How are Ministers breaking down barriers to lift those women out of the poverty that this Government have put them in?
Maria Caulfield
The hon. Member specifically asks about women from the poorest backgrounds, and black, Asian and minority ethnic groups. I thank the Under-Secretary of State for Health and Social Care, my hon. Friend the Member for Mid Bedfordshire (Ms Dorries), for the work she is doing in this regard. Through the long-term plan, the NHS will accelerate action to achieve 50% reductions in stillbirths, maternal mortality, neonatal mortality and serious brain injury by 2025, which specifically affect those women the most.
Paul Maynard (Blackpool North and Cleveleys) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)
The Office for Disability Issues transferred to the Cabinet Office from the Department for Work and Pensions in November 2019. It joined the race disparity unit and the Government Equalities Office to be part of the new Equalities Hub in the Cabinet Office. The new cross-departmental disability unit will work closely with disabled people, and disabled people’s organisations and charities, to rightly bring disabled voices into the heart of Government.
Paul Maynard
Ministers will be aware that the DWP is currently preparing a cross-government national disability strategy. At the same time, the DWP has lost the cross-government Office for Disability Issues, as it has been subsumed into the Cabinet Office’s Equalities Hub. Do the Government believe that this will enhance or detract from the eventual national disability strategy? It must surely be to its detriment.
Mims Davies
I thank my hon. Friend for raising this issue and highlighting that it is part of the Cabinet Office’s Equalities Hub. In the meantime, the Department for Work and Pensions is bringing forward a Green Paper in the coming months to see how the welfare system can work with our claimants and people with health conditions. We have already done roundtables and workshops on this. This is a priority for this Government and my Department. Whether it sits in the Cabinet Office or not, it remains a priority that we will work together on.
Jessica Morden (Newport East) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)
Work offers the best opportunity to move out of poverty, irrespective of gender. We are proud that the female employment rate under this Government is at a record high of 72.4%, with nearly 2 million more women in work than back in 2010. Wages have outpaced inflation for 23 consecutive months. Shortly, from April, the national living wage will increase again, also benefiting women the most.
Jessica Morden
But a recent report by Welsh charity Chwarae Teg highlights the fact that 38% of women in Wales on universal credit are in work compared with 29% of men. What is the Minister doing to ensure that there is strong action in the Budget to tackle women’s in-work poverty?
Mims Davies
I thank the hon. Lady for raising this issue. Wales and opportunities for women is an issue close to my heart—she will know that. I had my best opportunities working in Wales, and I want that to extend to everyone. Universal credit will offer 85% of childcare costs. The flexible support fund also helps women into work. I would urge all women to take the opportunity to go into their jobcentre and ask about the mix of benefits and support they can get. But one particular issue always holds women back, and that is confidence. Women should feel confident that they can go for it under this Government and under universal credit.
Mike Wood (Dudley South) (Con)
I speak to many mothers in Dudley South who say that they want to return to work but the level of childcare costs means that it is not financially worthwhile. What action are the Government taking to help parents to return to work?
Mims Davies
I thank my hon. Friend for raising this issue. Under this Government, ensuring opportunities for women’s progression is an absolute priority for me, the Secretary of State and the Department for Work and Pensions. The fact that women get more childcare costs under universal credit is really important. Under the legacy system the figure was 70%, and under universal credit it is 85%. People should not forget the flexible support fund, which means that they can return to work at any time. If they talk to their jobcentre, it can help them with that.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
If work is the best route out of poverty, why are four out of five people still in low-paid jobs 10 years later?
Mims Davies
Ensuring opportunities for women’s progression absolutely is a priority, as I have already said at the Dispatch Box this morning. We need to see what the barriers are. Sometimes confidence about returning opportunities is minimal. We are using our fuller working lives policy and strategy. Tomorrow I will be in Newcastle talking to women returners to see what is holding them back. It is about time that women got the progression and the pay rises they deserve.
Sir David Evennett (Bexleyheath and Crayford) (Con)
The Secretary of State for International Trade (Elizabeth Truss)
Over the past week, we have been holding a number of brilliant International Women’s Day celebrations, including a lively debate here in the House, the launch of The House magazine’s list of the 100 most influential women in Westminster, and last night a fantastic event at the US embassy celebrating brilliant transatlantic women. I was hugely inspired by the year 9 girls looking at careers in science with the Prime Minister last week at No. 10. We have a brilliant generation of young women coming through.
Sir David Evennett
I thank my right hon. Friend for all the work she is doing to improve opportunities for women in this country and across the world. However, what steps are the Government taking to support and encourage disabled candidates seeking office in the forthcoming local and police and crime commissioner elections?
Elizabeth Truss
We want to encourage more people with disabilities to come forward. They often face extra challenges and costs. That is why we have extended the EnAble fund, to support disabled candidates in local elections and police and crime commissioner elections.
Dawn Butler (Brent Central) (Lab)
Can the Minister confirm that the disproportionate impact on women was specifically considered at the recent Cobra meeting dealing with the effects of coronavirus? Our country’s social infrastructure has been weakened by this Government’s cuts—86% of the cuts have fallen on women. The gig economy and zero-hours contracts have affected women more than any other group, hence the rise of in-work poverty. Caring responsibilities and volunteer work in our country are built on an army of women and grand- parents—the system is dependent on unpaid work by older women. What provisions have the Government made to address the adverse impact on women?
Elizabeth Truss
We have shown that we have delivered for women. We have a record number of women in work. We have more girls than ever studying science, technology, engineering and maths, with a 30% increase at A-level and an increase in the number of women studying STEM degrees. I suggest to the hon. Lady that her party should show a bit of leadership by enacting a female Labour leader.
Mrs Flick Drummond (Meon Valley) (Con)
The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Nigel Huddleston)
We want to get more women and girls embracing sport and physical activity. Sport England’s “This Girl Can” campaign has already inspired 3.9 million women to get active. Sport England is encouraging more women to work in sport, including coaching and volunteering. We are hosting the Euro women’s football championship next year and the Commonwealth games in 2022, which will no doubt encourage even more women and girls to take up sport.
Kate Osborne (Jarrow) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)
My Department is looking at everything to support people to stay in work. Our welfare system treats people as individuals and all genders equally. However, the upcoming legislation on this issue will be suitable for looking at everyone. For those on universal credit, that will be the right way to adjust for the money that they need. If people need any further help or support, they should contact their jobcentre. If they are unable to attend due to self-isolation, they should let their work coach know. We are prepared to support everyone through every eventuality, while protecting public health.
Sara Britcliffe (Hyndburn) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
Schools and nurseries need to take the latest scientific advice, which at the moment is to stay open. Employees are entitled to take time off work to help someone who depends on them in an emergency, and that would apply to situations to do with coronavirus—for example, if they have to look after their children because the school is closed. There is no statutory right to pay for that time off, but some enlightened employers will pay.
Jim Shannon (Strangford) (DUP)
Elizabeth Truss
We are determined to ensure that we protect our fantastic food safety standards in any trade deal that we do. The hon. Gentleman will welcome, as I do, the fact that the US has lifted its ban on British beef, benefiting British beef farmers—particularly the Ladies in Beef group, which represents women beef farmers.
Mrs Sheryll Murray (South East Cornwall) (Con)
Elizabeth Truss
My hon. Friend is absolutely right. There was a despicable cartoon about the Home Secretary in the weekend’s Guardian. She is doing a brilliant job—fighting crime, getting our new immigration system in place—and it is the hypocrisy of those on the left that, when it is not a woman they agree with, they do everything they can to undermine her.
Liz Twist (Blaydon) (Lab)
A consultation on accessible housing was announced in June 2019 by the Ministry of Housing, Communities and Local Government, but has not happened. Can the Minister say when the consultation will take place, and will he meet me and representatives of wheelchair users to discuss it?
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Luke Hall)
We have been working across Government on accessible housing provision, and will consult in a matter of weeks on options to raise the accessibility standards in new homes. The consultation will consider making high accessibility standards mandatory, recognising the importance of suitable homes for old and disabled people. I would be delighted to meet the hon. Member.
Gary Sambrook (Birmingham, Northfield) (Con)
The Prime Minister (Boris Johnson)
This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.
Gary Sambrook
We need to build more homes on brownfield sites, but we also need to make sure that the houses we have are of a decent standard. In estates across my Birmingham constituency—the Three Estates in Kings Norton, Weoley Castle and Frankley—we need investment to make sure that those estates have decent homes. Does the Prime Minister agree with me that improving homes will help level up our economy and deliver for working-class communities like mine?
The Prime Minister
My hon. Friend is spot-on, and he will be hearing more about that in just half an hour’s time. He is quite right that we should be building on brownfield sites, and building the beautiful homes that people actually want.
Jeremy Corbyn (Islington North) (Lab)
Our thoughts are with the loved ones of those who have sadly died after contracting the coronavirus, and those who are still suffering from the disease, including the hon. Member for Mid Bedfordshire (Ms Dorries). I want once again to pay tribute to our medical staff, who are working so hard to combat the spread of this disease and care for those affected. I think we should all express our gratitude to the chief medical officer and the chief scientific adviser, who have shown exceptional leadership throughout, and we will continue to follow their advice.
Sunday was International Women’s Day—a day when we celebrate the achievements of women around the world, recognise the advances made in working towards a goal of gender equality and, most importantly, reflect on how far we have to go to achieve that. A quarter of social care workers, who are overwhelmingly women, are on zero-hours contracts. It is essential that care workers self-isolate if they experience symptoms of coronavirus, but many may feel they have no choice but to continue working. Will the Prime Minister finally bring in emergency legislation to guarantee sick pay for zero-hours workers to help contain the spread of the virus?
The Prime Minister
I know the whole House will wish to join the right hon. Gentleman in wishing my hon. Friend the Mental Health Minister a speedy recovery; having talked to her, I know that she will make one. I know, Mr Speaker, that you have issued a letter to everybody across the parliamentary estate, and as you say in your letter, we will be
“guided by Public Health England…in our response to this situation”.
It is also providing guidance to hon. Members and to their offices.
As the right hon. Gentleman knows, in just a few minutes we will be hearing from my right hon. Friend the Chancellor about what measures we are taking to protect everybody. As he knows, we have already brought forward statutory sick pay from day 4 to day 1, but for those who are on all types of contracts, we will ensure that they get the protection that they need and nobody who does the right thing by staying at home is penalised.
Jeremy Corbyn
I hope that legislation comes rapidly, and that it does guarantee that people do not have to make a choice between spreading the virus because they have to go to work, and staying at home and self-isolating, as obviously they should do if they have the symptoms.
Can the Prime Minister explain why, according to a report by the Institute of Health Equity, life expectancy has gone down for the poorest women in our society?
The Prime Minister
Overall life expectancy stands at its highest level—the highest level ever—which is a tribute to the consistent work of this Government and others, but it is absolutely true that there are too many instances in too many parts of the country where we are seeing life expectancy not rise in the way that we would like. It is true that there are parts of this country where, for instance, only one in 50 pregnant women are smokers, and parts of the country where one in four pregnant women are smokers. What we want to see is a uniting and a levelling up across this whole country. That is why we are putting record sums—£12 billion—into public health, and that is why this is the Government and this is the party of the NHS, who are now putting record investment into our NHS, precisely for that purpose.
Jeremy Corbyn
I don’t think the Prime Minister answered my question. It is no surprise that life expectancy has gone down, when 86% of the cuts made by successive Tory Governments have landed disproportionately on the shoulders of women. We are one of the richest countries in the world, and it is mind-boggling that life expectancy should be falling in this country. [Hon. Members: “It’s not!] For the poorest people in our society, life expectancy is falling, and the Government should have an answer to that.
The Prime Minister supports the absolutely horrendous rape clause in the child tax credit rules. Why does he think it right that 200 mothers have to prove to the Government that their child was conceived as a result of being raped, so that they can keep their child tax credits?
The Prime Minister
I want to correct a point that the right hon. Gentleman made earlier: as has been revealed in the last few days, mortality is at its lowest level in this country since 2001. [Interruption.] Since 2001. On his point about the recipients of benefits, he draws attention to an injustice, and we will do everything we can to rectify it.
Jeremy Corbyn
Well, I would hope that means that the Prime Minister is going to introduce regulations to end the two-child policy in the benefits strategy, because that is exactly what happens—women who are victims of rape have to prove they have been raped in order to get benefits for their child.
Fifty years ago, the Labour Minister Barbara Castle introduced the Equal Pay Act, yet women are still paid 17% less than men. Under this Government, it is estimated that the gender pay gap will take another 60 years to close. Why has the Prime Minister not followed Labour’s lead and set a target for closing that gap by 2030?
The Prime Minister
Not only are there now record numbers of women in employment in this country, but the gender pay gap is at a record low. It was this Conservative Government who made sure that companies have to report on the gender pay gap.
Jeremy Corbyn
There is a still a 17% gap. It is too big, too wide, and should be closed, and the Government should do something about it.
Every fortnight, three women are killed by their partner or ex-partner, and domestic violence is likely only to increase if large numbers of people have to self-isolate. Ten years of austerity has denied councils the funding they need to support victims of domestic abuse. Will the Prime Minister commit to the extra £173 million that is needed every year to ensure that survivors get the support they so desperately need?
The Prime Minister
We have just put record funding back into councils to support them in all their responsibilities. The right hon. Gentleman talks about domestic abuse, and we are committed to bringing forward a victims’ law, to guarantee the rights of victims. The Government have an outstanding record in tackling violence against women and girls, and that is why we are taking forward in this Parliament our landmark Domestic Abuse Bill.
Jeremy Corbyn
Without funding, the Domestic Abuse Bill will simply be a piece of paper. There has to be funding to ensure that those who are victims of domestic violence get the support they need in the centres they need, which are underfunded by this Government.
The Prime Minister has made repeated offensive remarks against single mothers and their children. [Interruption.] Yes; he described them as
“ill-raised, ignorant, aggressive and illegitimate.”
He made remarks against Muslim women, saying that they look like “bank robbers”, and against working women, by suggesting that the best way of dealing with advice from a female colleague is to “just pat her on the bottom and send her on her way.” Words have consequences, and the Prime Minister’s offensive words are backed up with offensive and discriminatory policies, from the rape clause to dismantling local services on which women— particularly black, Asian and minority ethnic women, or disabled women—disproportionately rely. Will the Prime Minister apologise for his offensive comments, and ensure that those discriminatory policies are reversed by his Government?
The Prime Minister
I am proud of what the Government have done to promote the rights of women. I am proud that we have a record number of female MPs in our party today. I am proud that this is the only party that has produced not one, but two female Prime Ministers. Wouldn’t it be an extraordinary and amazing thing if the Labour party were to produce a female leader of its own? Don’t hold your breath, Mr Speaker. I will take no lessons on sexism from a party where good female MPs are bullied out of their party just because they have the guts to stand up against the climate of antisemitism in the Labour party.
Neil Parish (Tiverton and Honiton) (Con)
The Prime Minister
My hon. Friend is absolutely right. We will not compromise on animal welfare. We will not compromise on food standards and hygiene. I am only too happy to meet him and his fellow farmers to discuss the opportunities ahead.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
As the numbers infected by coronavirus grow, the level of public concern naturally grows with it. Last week, the Prime Minister gave me a firm reassurance that no one would be financially penalised for following health advice, yet still millions of self-employed workers have been left in deep uncertainty as to what financial help they will be given if they are forced to stop working. In this House, we are in a privileged position. We will not be financially worse off. Millions of workers are not in that privileged position. They may be forced to rely on social security for an extended period because of this virus. For the record, can the Prime Minister tell me what the statutory sick rate of Ireland is compared to his UK Government?
The Prime Minister
It is not my duty to comment on the pay rates of other countries. What I can tell the right hon. Gentleman, which he knows very well, is that the Government have already advanced statutory sick pay from day 4 to day 1. We will make sure that those on universal credit and other benefits get the help they need from day 1. If the right hon. Gentleman can contain his impatience for just a little bit, my right hon. Friend the Chancellor will be telling him more about what we will be doing to protect everyone in society to make sure that nobody is penalised for doing the right thing.
Ian Blackford
Let me try to help the Prime Minister and perhaps inform him of the detail. In Ireland, in response to the coronavirus, the Government have just raised their statutory sick rate to the equivalent of £266 per week. That covers those employed and those in self-employment. In Germany and Austria, it is £287. In Sweden it is £230. In the Netherlands, it is £201. In Spain, it is £121. In the UK, Prime Minister, it is a meagre £94.25 per week.
Prime Minister, up to 80% of people across the United Kingdom could face infection in the weeks and months ahead. Many of them will be forced to rely on statutory sick pay. If the Prime Minister is truly committed to levelling up, a good place to start must be statutory sick pay. Will he take the opportunity to stand up today and commit to raising the UK payment to the average EU level?
The Prime Minister
As I think most Members of the House understand, the UK is distinct from many other countries around the world, certainly in the EU, because we have a universal free health system, free at the point of delivery. We have an extensive benefits system, free for people across this country, and indeed, our health system is very well managed and very well prepared for this epidemic. I congratulate everybody in the NHS responsible on making the preparations that they have.
Antony Higginbotham (Burnley) (Con)
The Prime Minister
Yes, and that is why my right hon. Friend the Health Secretary and I are determined to advance robot technology—artificial intelligence—in the NHS. We have put in another £200 million. In my hon. Friend’s area, the NHS East Lancashire is receiving over £500 million more—a cash increase of nearly 5% on last year.
Alex Davies-Jones (Pontypridd) (Lab)
The Prime Minister
I cannot remember whether I said this to the hon. Member last time, but that is why we have introduced a fast-track NHS visa.
Dr Julian Lewis (New Forest East) (Con)
The Prime Minister
My right hon. Friend has made this point to me in person. I have heard from the war widows themselves about their own concerns. The Ministry of Defence is looking at what can be done to provide meaningful support to those who have lost their loved ones.
Dr Lewis
Given that the previous Defence Secretary sought and was refused permission from the Treasury to help the estimated 265 war widows whose pensions were cancelled when they remarried, and can be permanently restored only by their going through a divorce and remarriage to their second husbands, will the Prime Minister personally meet Moira Kane and Mary Moreland of the War Widows’ Association finally to put an end to this deplorable and dishonourable situation?
The Prime Minister
The Ministry of Defence is looking at this very problem, and I am conscious of the issue that my right hon. Friend raises—it has been raised with me. I have asked my right hon. Friend the Secretary of State for Defence to meet the chairman of the War Widows’ Association to discuss further what we can do.
Naz Shah (Bradford West) (Lab)
The Prime Minister
I can reassure the hon. Member that there is absolutely no room for hatred or racism in this party—in our Conservative party—and I wish I could say the same of her own party.
Nickie Aiken (Cities of London and Westminster) (Con)
The Prime Minister
My hon. Friend raises a very important point. I am glad that, starting this year, screening for babies with severe combined immunodeficiency will be evaluated for inclusion in the screening programme, but my right hon. Friend the Health Secretary says he is more than willing to meet her to discuss further how screening could be improved.
Hywel Williams (Arfon) (PC)
Further to the questions posed by my right hon. Friend the leader of the SNP, irrespective of what other countries are doing, policy in this country is the Prime Minister’s responsibility, so what will he do to help the self-employed during this coronavirus crisis?
The Prime Minister
What we are going to do, obviously, is ensure that nobody is penalised for doing the right thing and that everybody has access to the benefits and support they need. If the hon. Gentleman will contain himself, my right hon. Friend the Chancellor will set out more in just a minute.
Jane Hunt (Loughborough) (Con)
Will the Prime Minister join me in congratulating the mighty Loughborough swim team on their five gold medal haul at the McCullagh international open league last month? The swimmers involved were: Luke Greenbank, James Wilby, Abbie Wood, Max Litchfield and Molly Renshaw. Surely, this is the very epicentre of sporting excellence.
The Prime Minister
Having worked with Loughborough University on the Olympics at the fantastic site in east London, I know its formidable global reputation, and I have no hesitation in congratulating Loughborough swimming team on my hon. Friend’s behalf.
Pete Wishart (Perth and North Perthshire) (SNP)
The Prime Minister
I notice that support for breaking up the Union is actually declining in Scotland. Maybe that is because they have a Scottish nationalist party in charge that has the highest taxes anywhere in the United Kingdom, is failing Scottish children in their schools and is not running the Scottish health service in the way it should. Maybe the hon. Member’s bluff and bluster is covering up for the abject failures of the Scottish nationalist Government. Maybe the Scottish nationalists should stick to the day job.
Peter Gibson (Darlington) (Con)
As this is the country that brought railways to the world, what plans does my right hon. Friend have to celebrate their 200th anniversary in 2025? Does he stand with the people of Darlington to prevent the removal of Locomotion No. 1, the world’s first passenger steam engine, from Darlington, where she has resided for over 160 years?
The Prime Minister
I congratulate my hon. Friend and the people of Darlington on the historic role they played in our railway history and heritage, and I will do what they can to support his campaign to prevent Darlington from being despoiled of the iconic Locomotion No. 1.
Rachel Hopkins (Luton South) (Lab)
The Prime Minister
Not only are we cutting national insurance contributions for everybody, whatever their pay; we are also lifting up the national living wage by the biggest ever increase, which will benefit people across the country to the tune of £4,000 a year. This is a one nation Government looking first at the needs of the poorest families in this country.
Suzanne Webb (Stourbridge) (Con)
My hon. Friend the Member for Birmingham, Northfield (Gary Sambrook) makes the case for Birmingham, but in the west midlands, more than 31,000 new homes have been built since Andy Street became our Mayor—smashing his own target of 25,000 new homes. The vast majority have been built on derelict brownfield sites. Will the Prime Minister support me to ensure that we keep the focus on the regeneration and remediation of brownfield sites?
The Prime Minister
Yes. I congratulate Andy Street on what he is doing, and on his fantastic record on homes. It is always the Conservatives who build the homes. This House will hear more in just a few minutes about what we intend to do to give everybody, and every young person, in this country the chance to own their own home.
Allan Dorans (Ayr, Carrick and Cumnock) (SNP)
The Prime Minister
The hon. Gentleman is absolutely right to raise the issue of veterans and their needs, and that is why this Government appointed a Minister for Defence People and Veterans, and a veterans taskforce—a special unit in the Cabinet Office. He will hear a little more in just a few minutes about what further steps we intend to take to protect and promote the rights of veterans.
Jack Brereton (Stoke-on-Trent South) (Con)
Does my right hon. Friend agree that the Budget is a historic moment for levelling up our economy and ensuring that everyone has the opportunity to succeed, especially in Stoke-on-Trent?
The Prime Minister
Stoke-on-Trent is the crucible in which the future of this country will be forged, as it has been in the past. It could not have a more doughty or valiant advocate. I agree entirely with what my hon. Friend said.
Bill Esterson (Sefton Central) (Lab)
The Prime Minister
The hon. Gentleman raises an important point. He will have seen what the Governor of the Bank of England has done today to the cost of borrowing overall. My right hon. Friend the Chancellor will be meeting the banks continually to ensure that they look after the interests of all our people.
Fay Jones (Brecon and Radnorshire) (Con)
Rural areas such as my constituency are at the bottom of the pile when it comes to broadband connectivity and mobile phone signal. Will my right hon. Friend confirm that this Government’s £1 billion deal with mobile phone providers will boost 4G right across the country, and especially in mid-Wales?
The Prime Minister
Yes indeed, and my hon. Friend will hear something to her advantage in just a few minutes.
Neil Gray (Airdrie and Shotts) (SNP)
The Prime Minister
There are indeed some very hard cases, and some very tragic outcomes. I know that my right hon. Friend the Secretary of State for Work and Pensions is looking at that, and is very happy to work with the hon. Gentleman to make sure that in such tragic cases, the family’s needs are met.
Mike Wood (Dudley South) (Con)
According to The Economist, over the past five years, salaries in Dudley have risen faster than anywhere else in the country. As part of his levelling up agenda, will the Prime Minister work with Andy Street to ensure that the west midlands continues to get the investment in skills and infrastructure that it needs to power the midlands engine?
The Prime Minister
I do not think that I can be accused of anticipating the Budget excessively when I say that there is about to be an infrastructure revolution in this country, which will benefit, among other places, the west midlands, and Dudley in particular.
Zarah Sultana (Coventry South) (Lab)
The Prime Minister
I answered the right hon. Member for Ross, Skye and Lochaber (Ian Blackford) earlier. We will do everything we can to ensure that people get protected throughout this outbreak and nobody is penalised for doing the right thing.
Selaine Saxby (North Devon) (Con)
Does my right hon. Friend the Prime Minister agree that the great south-west has a fantastic opportunity to become the first region to become not just net zero but net negative? Will he assure me that that will be a top priority in the levelling-up agenda?
The Prime Minister
There are already more than 400,000 jobs in the low-carbon economy in this country, and the great south-west is going to play a leading role in the green revolution of the future.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The Prime Minister
We will of course be guided by the best scientific judgments in all these matters. I can certainly confirm that it is our firm determination to have a second spaceport in Scotland, and we are looking for candidates to send into orbit.
Andy Carter (Warrington South) (Con)
Today is the 15th annual day in memory of victims of terrorism throughout Europe. Next week, in my constituency of Warrington South we will commemorate the 27th anniversary of the IRA terrorist attack in my town, which killed two children. Over the past quarter of a century, the Peace Foundation, based in Warrington, has worked tirelessly to provide the national support service for victims of terrorism in Great Britain. Will the Prime Minister join me in commending its work, and agree to ensure that its funding continues?
The Prime Minister
I certainly commend the work of all those at the Warrington Peace Centre. We will do everything that we can to ensure that funding continues.
Sir Edward Davey (Kingston and Surbiton) (LD)
I associate my party with the good wishes sent to the hon. Member for Mid Bedfordshire (Ms Dorries) and, indeed, to anyone who has contracted coronavirus. I welcome the fact that the Government are listening to experts on coronavirus, but given that the NHS has to face the coronavirus challenge with a record shortage of nurses, and the care sector has more than 120,000 vacancies, does the Prime Minister not agree that the three Conservative Governments since 2015 should have fixed the roof when the sun was shining?
The Prime Minister
I seem to think that the right hon. Gentleman was in that Government, but leaving that point on one side, there is now a record number of doctors and nurses in our fantastic NHS. There are 8,700 more nurses this year than last year, and we are recruiting another 50,000 more. The right hon. Gentleman will be hearing more about what we are doing to support the NHS in just a minute.
Bill Presented
Protest (Abortion Clinics) Bill
Presentation and First Reading (Standing Order No. 57)
Sarah Olney, supported by Dr Rupa Huq, Sir Peter Bottomley, Caroline Lucas, Lisa Nandy, Liz Saville Roberts, Layla Moran, Munira Wilson and Daisy Cooper, presented a Bill to prohibit anti-abortion protests within 150 metres of abortion clinics; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 26 June, and to be printed (Bill 111).
Ways and Means
Financial Statement
(4 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Madam Deputy Speaker (Dame Eleanor Laing)
Before I call the Chancellor of the Exchequer, I must remind Members that copies of the Budget resolutions will be available in the Vote Office at the end of the Chancellor’s statement. I also remind Members that interventions are not going to be taken during the Chancellor’s statement or, indeed, during the reply by the Leader of the Opposition, or even during the reply by the Leader of the Scottish National party.
It gives me great pleasure to call, to deliver his Budget statement, Mr Chancellor of the Exchequer.
The Chancellor of the Exchequer (Rishi Sunak)
Madam Deputy Speaker, I want to get straight to the issue most on everyone’s mind: coronavirus covid-19. I know how worried people are—worried about their health, the health of their loved ones, their jobs, their income, their businesses, their financial security. And I know they get even more worried when they turn on their TVs and hear talk of markets collapsing and difficult times coming. People want to know what is happening and what can be done to fix it.
What everyone needs to know is that we are doing everything we can to keep this country, and our people, healthy and financially secure. We are clear that this is an issue above party. We will do right by you and your family, and I know I will have the support of the whole House as I say that. This House has always stood ready to come together, put aside party politics and act in the national interest. We have done so before, and I know we will do so again. My right hon. Friend the Prime Minister, alongside officials and scientists, is leading the work on the public health response. Today, I want to set out our economic response so we bring stability and security.
Let me say this: we will get through this—together. The British people may be worried, but they are not daunted. We will protect our country and our people. We will rise to this challenge. But let me also say, yes, this virus is the key challenge facing our country today, but it is not the only challenge. We have just had an election where people voted for change—change in our economy, change in our public services, change in the cost of living, change in our economic geography. This Budget delivers on that change. Yes, as we deal with coronavirus, it is a Budget that provides for security today, but it is also a plan for prosperity tomorrow. It is a Budget that delivers on our promises to the British people. It is the Budget of a Government that gets things done.
Madam Deputy Speaker, before I set out the details of our plan, let me first thank Members who have contributed to the discussions on how to respond to coronavirus—Members from both sides of this House. Our economy is robust, our public finances are sound, our public services are well prepared. My right hon. Friend the Health Secretary is working around the clock to protect the public’s health, and I will do whatever it takes to support the economy.
First, let me explain the nature of the economic challenge and my overall strategy. The challenge is this: there is likely to be a temporary disruption to our economy. On the supply side, up to a fifth of the working-age population could need to be off work at any one time, and business supply chains are being disrupted around the globe. This combination of people being unable to work and businesses being unable to access goods will mean that, for a period, our productive capacity will shrink. There will also be an impact on the demand side of the economy, through a reduction in consumer spending. The combination of those effects will have a significant impact on the UK economy, but it will be temporary. People will return to work. Supply chains will return to normal. Life will return to normal. For a period, it is going to be tough, but I am confident that our economic performance will recover.
So given this analysis of the situation, let me set out our strategy to deal with it. We cannot avoid a fall in demand, because the primary driver of that reduction in consumption—the primary reason people are not spending as normal—is that they are following doctors’ orders to stay at home. The right immediate policy response is to provide security and support for those who get sick or cannot work by funding our public services and a strengthened safety net.
On the supply side, the right response is to provide a bridge for businesses to ensure that what is a temporary impact on our productive capacity does not become permanent. In other words, our response will be temporary, timely and targeted. This is the right response, and at the right time.
That response is clearly and closely co-ordinated with the Bank of England. The Governor and I have been in constant communication about the evolving situation, and our responses have been carefully designed to be complementary and to have maximum impact, consistent with our independent responsibilities.
The Governor set out this morning the actions that the Bank will take to help UK businesses and households bridge across the likely economic disruption: a 50 basis point reduction to interest rates to support business and consumer confidence and cash flows; the introduction of an SME term funding scheme to help reinforce the transmission of the reduction in Bank rate to the real economy; and releasing the counter-cyclical buffer to further support the ability of banks to supply credit.
The Government’s response will use fiscal action to support public services, households and businesses. Together, we are taking action that is co-ordinated, coherent and comprehensive.
Let me now set out our three-point plan. First, whatever extra resources our NHS needs to cope with coronavirus, it will get. Whether it is research for a vaccine, recruiting thousands of returning staff or supporting our brilliant doctors and nurses—whether it is millions of pounds or billions of pounds—whatever it needs, whatever it costs, we stand behind our NHS.
Secondly, during this immediate crisis, if people fall ill or cannot work, we must support their finances. We will make sure our safety net remains strong enough to fall back on. My right hon. Friend the Prime Minister has already announced that statutory sick pay will be paid from day 1, rather than day 4.
Today, with the assistance of my right hon. Friend the Work and Pensions Secretary, we can go further. Statutory sick pay will also be available for all those who are advised to self-isolate, even if they have not yet presented with symptoms. And rather than having to go to the doctor, people will soon be able to obtain a sick note by contacting 111.
But of course not everyone is eligible for statutory sick pay. There are millions of people working hard who are self-employed or in the gig economy. They will need our help too. So to support them during this period, we will make it quicker and easier to access benefits. Those on contributory employment and support allowance will be able to claim from day 1, instead of day 8. To make sure that time spent off work due to sickness is reflected in people’s benefits, I am also temporarily removing the minimum income floor in universal credit. And I am relaxing the requirement for anyone to physically attend a jobcentre—everything can be done by phone or online. Taken together, these measures on ESA and universal credit provide a boost of almost £0.5 billion to our welfare system.
To further support our people, I am also creating a £500 million hardship fund, distributed to local authorities, which will be able to use that fund to directly support vulnerable people in their local area. In total, that is a £1 billion commitment to support the financial security of our people.
But the best way to support people is to protect their jobs, and we do that by supporting our businesses—the third part of our plan. The measures I have announced today on statutory sick pay are crucial to support those who need to take time off work, but that cost would be borne by business. If we expect 20% of the workforce to be unable to work at any one time, the cumulative cost would hit our small and medium-sized businesses hard. So, in recognition of these exceptional circumstances, today I am taking a significant step. For businesses with fewer than 250 employees, I have decided that the cost of providing statutory sick pay to any employee off work due to coronavirus will, for up to 14 days, be refunded by the Government in full. That could provide over £2 billion for up to 2 million businesses. This will significantly ease the burden on businesses, but we can do more. I have asked Her Majesty’s Revenue and Customs to scale up the time to pay service, allowing businesses and the self-employed to defer tax payments over an agreed period of time. Starting today, there will be a dedicated helpline, with 2,000 staff standing ready to help.
Although time to pay is important, it will still be the case that some good, well-run businesses will face problems with their cash flow. They may struggle to pay people’s salaries, pay their bills or buy new stock. They will need loans to get through this period. So, today, I am announcing a new, temporary coronavirus business interruption loan scheme. Banks will offer loans of up to £1.2 million to support small and medium-sized businesses. The Government will offer a generous guarantee on those loans, covering up to 80% of losses, with no fees, so that banks can lend with confidence. This will unlock up to £1 billion of attractive working capital loans to support small businesses, with more as needed.
Taken together, I expect the combination of those measures to protect the vast majority of businesses through the worst of the crisis, but I have two other measures that will use the tax system to support businesses through this. Our manifesto promised that for shops, cinemas, restaurants, and music venues with a rateable value of less than £51,000, we would increase the business rates retail discount to 50%. Today I can go further, and take the exceptional step, for this coming year, of abolishing their business rates altogether. But there are tens of thousands of other businesses in the leisure and hospitality sectors currently not covered by this policy: museums, art galleries and theatres; caravan parks and gyms; small hotels and B&Bs; and sports clubs, night clubs, club houses and guest houses. They would not benefit from today’s measure, but they could be some of the hardest hit. So for this year I have decided to extend the 100% retail discount to them as well. That means that any eligible retail, leisure or hospitality business with a rateable value below £51,000 will, over the next financial year, pay no business rates whatsoever. That is a tax cut worth £1 billion, saving each business up to £25,000, and it means that, over the next 12 months, nearly half of all business properties in England will not pay a penny of business rates. I am also launching today a fundamental review, to be concluded at the autumn Budget, of the long-term future of business rates. But even with the temporary extension of the retail discount to the leisure and hospitality sectors, many of our smallest businesses already pay no business rates, so would not benefit from this policy. So to support them to manage their fixed costs, I am going to go a step further. I am providing, to any business currently eligible for the small business rates relief, a £3,000 cash grant per business. This is a £2 billion cash injection direct to 700,000 of our smallest businesses.
Let me summarise for the House the fiscal impact of our immediate response to coronavirus. Taken together, the extraordinary measures I have set out today represent £7 billion to support the self-employed, businesses and vulnerable people. To support the NHS and other public services, I am also setting aside today a £5 billion emergency response fund, and I will go further if necessary. Those measures are on top of plans that I will set out later in this Budget, which provide an additional fiscal loosening of £18 billion to support the economy this year. That means that I am announcing today, in total, a £30 billon fiscal stimulus to support British people, British jobs and British businesses through this moment. And of course, if further action is needed as the situation evolves, I hope the whole House knows that I will not hesitate to act.
I believe that this represents one of the most comprehensive economic responses of any Government anywhere in the world to date. The Governor of the Bank of England and I are in close contact with our counterparts around the world in the G7 and the G20, and to support the global response I am also making new funding of £150 million available for the International Monetary Fund’s relief efforts.
Madam Deputy Speaker, coronavirus will have a significant impact on our economy, but it will be temporary. I will do whatever it takes to get our nation through it. I am acting today with a multi-billion-pound commitment: more money for our NHS; more generous sick pay; faster access to benefits if you are self-employed; extra local support for the most vulnerable; tax cuts, loans and grants for businesses to protect people’s jobs—comprehensive action, and if more is needed I will take it. I know that all Members of this House will want to give this plan their full support.
Before I turn to the economic forecasts, I hope the House will join me in thanking the Office for Budget Responsibility, and Robert Chote in particular. After 10 years, this is his last Budget in charge. He has led the OBR with dedication and integrity, and established that institution as one that is respected around the world.
Madam Deputy Speaker, let me now turn to the growth forecasts. Since the OBR closed its forecast, it has become clear that the spread of coronavirus will have a significant impact on our economy in the coming quarters. But given that the nature of the shock is temporary, I still want to set out for the House the OBR’s judgment on the economy over the medium term. Even before coronavirus hit, we were facing a slowing world economy. There has been, across developed economies, including here in the UK, a decade-long slowdown in productivity. This, combined with the political uncertainty of the last three years, which affected business investment in particular, has led the OBR to downgrade our productivity over the forecast period and to slightly reduce GDP growth, compared with the March 2019 forecast.
But while the world may slow down, we will act here with a response that is brave and bold, taking decisions now for our future prosperity. We are investing in world-class infrastructure and to lead the world in the industries and technologies of the future. The central judgment that I am making today is to fund an additional £175 billion over the next five years for our future prosperity. The OBR has said that as a direct result of the plans that I am announcing, growth over the next two years will be half a percentage point higher than it otherwise would have been. For the benefit of the House, the GDP forecast, without fully accounting for the impact of coronavirus, would have led to growth of 1.1% in 2020, 1.8% in 2021, then 1.5%, 1.3% and 1.4% in the following years. And today the OBR has made an estimate it has never made before. It has said, in its words, that today’s
“large planned increase in public investment should boost potential output too”.
If future Governments have the same determination to continue our approach, the UK’s long-term productivity will increase by 2.5%.
The OBR has confidence in the long-term future of our economy, and so do I. More investment and higher growth mean more jobs and higher wages. We already have more people working in our economy than ever before, women’s employment is at a record high, and since 2010 full-time weekly wages have grown faster in every region and nation of the UK than they have in London. The OBR expects that half a million people more will be in work by 2025. Wages are expected to grow in real terms in every year of the forecast period. The story of this Government has been the story of a national jobs miracle—and given the last few weeks that I’ve had, I am all in favour of jobs miracles.
On inflation, the OBR forecasts 1.4% this year, increasing to 1.8% next year and then, for the rest of the forecast period, remaining on or around target. I am sure that the whole House will join me in taking the opportunity to thank Mark Carney, the Governor of the Bank of England, for his seven years of dedicated public service. We congratulate him on his new role as finance adviser for COP26 and welcome his successor Andrew Bailey, who takes up his post on Monday.
Let me turn now to the fiscal forecasts. The economic impacts of coronavirus remind us of the importance of fiscal responsibility. Our public finances are strong, with the deficit down from 10% in 2010 to less than 2% last year. Our economy is well-prepared for the future—and it is well-prepared because of 10 years of Conservative-led Governments and Conservative Chancellors.
I too will always act responsibly with the nation’s finances. But it is important that we update our fiscal framework to remain at the leading edge of international best practice. Our economic security depends on maintaining the following principles: low and stable inflation, delivering price stability; fiscal sustainability; and independent, effective institutions like the Bank of England and the OBR. These features of our framework will always be protected. But there is a live global debate about what our low interest rate environment means for fiscal strategy, about the case for fiscal policy to play a more active role in stabilising the economy, and about the best ways to measure productivity-enhancing investment in the economy, such as human capital or measuring value on the public balance sheet. So I want to take time to consider these questions over the coming months so that our fiscal framework allows us to make the right long-term decisions for our economic security and prosperity. I will review the fiscal framework, consulting widely with a range of experts, and will report back in the autumn if I conclude that any changes are necessary.
But at the same time, credibility comes as much from what we do as what we say. We were elected on a manifesto that promised to meet a specific set of fiscal rules. Today’s Budget is about delivering our promises. That is why, despite the speculation, today’s Budget is delivered not just within the fiscal rules in our manifesto, but with room to spare. I am setting the amount that the Government will spend for the rest of this Parliament within those rules as well. Today the OBR reports a current budget surplus in every one of the next five years, and in the target year of 2022-23 we have fiscal space of nearly £12 billion. The OBR forecasts that borrowing will increase slightly from 2.1% of GDP in 2019-20 to 2.4% in 2020-21 and 2.8% in 2021-22. It then falls to 2.5%, 2.4% and 2.2% in the following years. The OBR forecasts that headline debt will be lower at the end of the Parliament than it is today, falling from 79.5% this year to 75.2% in 2024-25.
I am sure the House will understand that, given how urgently we have developed our economic response to the coronavirus, that package of measures has not yet been captured in the fiscal forecasts, and nor have the fiscal impacts of the Bank’s actions. But the House will also note that the target year for our current budget fiscal rule is not until 2022-23. So even within our current framework, I have the flexibility to act as required over the next two years.
Madam Deputy Speaker, as we enter a period of challenge, we start from a position of strength: the economy growing, more jobs, higher wages, stable inflation and sound public finances. We promised to manage our economy responsibly, and we are getting it done. This Budget responds, at scale, to the immediate threat of coronavirus and it reports on an economy whose foundations are strong. It is a Budget that provides for security today, but let me now outline our plan for prosperity tomorrow. This is the first Budget of a new decade; the first in almost 50 years outside the European Union; and the first of this new Government. At the election, we said that we needed to be one nation. While talent is evenly spread, opportunity is not, and we need to fix that. This is a Budget that will deliver on our promises to the British people, and it is the Budget of a Government who get things done.
We promised to get Brexit done, and we got it done. We promised to let hard-working families keep more of what they earn. This Budget gets it done. We promised to back businesses, to innovate, to invest and to trade. This Budget gets it done. We promised to invest in science and research. This Budget gets it done. We promised to deliver green growth and protect our environment. This Budget gets it done. We promised to level up, with new roads, railways, broadband and homes. This Budget gets it done. And, yes, we promised record funding for our NHS and public services. This Budget gets it done. This Government deliver on their promises and get things done.
Our plan for prosperity starts immediately by putting more money in people’s pockets. It was a Conservative Government who in 2016 introduced the national living wage, giving Britain’s lowest-paid workers the biggest pay rise in 20 years. And in just three weeks’ time, around 2 million workers will see their wage rise again by 6.2%. For a full-time worker, that is a pay rise of almost £1,000. That is the biggest cash increase ever, but we have promised to go further.
Today we are publishing a new remit for the independent Low Pay Commission. It now has a formal target that means that as long as economic conditions allow, by 2024 the national living wage will reach two thirds of median earnings. On current forecasts, that means a living wage of over £10.50 an hour. We promised to end low pay. We are getting it done. As people earn more, we will also cut taxes on their wages. I am increasing, in just four weeks’ time, the national insurance threshold from £8,632 to £9,500. That is a tax cut for 31 million people, saving a typical employee over £100. Taken together, our changes to the national living wage, income tax, and now national insurance mean that someone working full time on the minimum wage will be more than £5,200 better off than in 2010. The Conservatives are the real workers’ party.
I can also confirm that now we have left the EU, I will abolish the tampon tax. From January next year, there will be no VAT whatsoever on women’s sanitary products. I congratulate all hon. and right hon. Members who campaigned for this, including the former Member for Dewsbury who led the charge.
Let me turn now to duties. Scotch whisky is a crucial industry and our largest food and drink export. My Scottish Conservative colleagues, including my hon. Friend the Member for Moray (Douglas Ross), have highlighted to me the impact that the recent US tariffs are having. We will continue to lobby the US Government to remove these harmful tariffs, but in the meantime I am announcing today £1 million of support to promote Scottish food and drink overseas and £10 million of new R&D funding to help distilleries go green. To further support the industry, I can also announce that this year the planned increase in spirits duty will be cancelled.
Pubs are at the centre of community life, but too many have closed over the past decade. We have already promised to introduce a business rates “pub discount” of £1,000 for small pubs, but I have heard calls from many hon. and right hon. Members, including my hon. Friend the Member for Dudley South (Mike Wood), that we need to do more, especially given the possible impact of coronavirus on our pubs. Today I can announce that, exceptionally for this year, the business rates discount for pubs will not be £1,000; it will be £5,000. I am also pleased to announce that the planned rise in beer duty will be cancelled, and because of decisions that I have taken elsewhere in this Budget I am also freezing duties for cider and wine drinkers as well. For only the second time in almost 20 years, that is every single one of our alcohol duties frozen.
I have heard representations that after nine years of being frozen, at a cost of £110 billion to the taxpayer, we can no longer afford to freeze fuel duty. I am certainly mindful of the fiscal cost and the environmental impacts, but I am taking considerable steps in this Budget to incentivise cleaner forms of transportation. Many people still rely on their cars, so I am pleased to announce today that for another year fuel duty will remain frozen. Compared with 2010 plans, that is a saving of £1,200.
Wages up; national insurance cut; the tampon tax abolished; spirits duty frozen; beer duty frozen; wine and cider duty frozen; fuel duty frozen. We promised to cut taxes and the cost of living and we got it done.
As Conservatives, we know that to put more money in people’s pockets we need a thriving private sector. That is what drives growth; that is what creates jobs; that is what lifts living standards. The second part of our plan for prosperity is to unleash the power of business. Businesses need support to start up, grow and export. Today I provide: £130 million of new funding to extend start-up loans; £200 million for the British Business Bank to invest in scale-ups; another £200 million for life sciences; more money for growth hubs; 21 cities with British Library business support; £5 billion of new export loans for businesses; and dedicated trade envoys representing the north, the midlands, Wales and the west of England in our embassies around the world.
Businesses also need a fair tax system. We were elected on a manifesto that promised to review and reform entrepreneurs’ relief. I have now completed that review, and here is what we are going to do. Entrepreneurs’ relief is: expensive, at a cost of over £2 billion a year; ineffective, with fewer than one in 10 claimants saying that the relief was an incentive to set up a business; and unfair, with nearly three quarters of the cost going to just 5,000 individuals. Just because it is called entrepreneurs’ relief does not mean that it is entrepreneurs who mainly benefit. For all these reasons, I have heard representations that I should completely abolish it. The Institute for Fiscal Studies has criticised it. The Resolution Foundation called it
“the UK’s worst tax break”.
I am sympathetic to that argument, but, at the same time, we should not discourage those genuine entrepreneurs who do rely on the relief. We need more risk-taking and creativity in this country, not less. So I have decided not to fully abolish entrepreneurs’ relief today. Instead, I will do what the Federation of Small Businesses called “a sensible reform” and reduce the lifetime limit from £10 million to £1 million. A total of 80% of small business owners are unaffected by today’s changes. Those reforms save £6 billion over the next five years, and I am giving almost all of that money straight back to business through three additional measures.
The research and development expenditure credit will be increased from 12% to 13%—a tax cut worth £2,400 on a typical R&D claim. The structures and buildings allowance will be increased from 2% to 3%, giving an extra £100,000 of relief if someone is investing in a building worth £10 million. And, to cut taxes on employment, I will deliver our promise to increase the employment allowance by a third to £4,000. That is a tax cut this April for nearly half a million small businesses. That is another step towards the dynamic, low-tax economy that we want to see. We promised to cut taxes on business. We are getting it done.
To help our businesses lead the next generation of high-productivity industries, we also need to invest now in the technologies of the future. We are the country of Newton, Hodgkin and Turing. Ours is a history filled with ideas, invention and discovery, and it is truly a national history. The first steam railway ran between Stockton and Darlington. The first television was invented by a Scot. A Welshman invented the first hydrogen fuel cell. Jocelyn Bell Burnell, born in Northern Ireland, discovered the first radio pulsars.
To compete and succeed, over the next decade and beyond, we need to recapture that spirit, so the third part of our plan for prosperity is to invest in ideas.
In our manifesto we made a promise to double investment in research and development to £18 billion. I will not be doing this today. Instead, I will increase investment in R&D to £22 billion a year. That is the fastest and largest increase in R&D spend ever. As a percentage of GDP, it will be the highest in nearly 40 years—higher than the US, China, France and Japan—and a major step towards our target of increasing public and private investment in R&D to 2.4% of GDP. And we won’t wait to get started. Next year, funding will increase by 15%, the fastest year-on-year growth on record. Detailed allocations of our new investment in ideas will be set out at the spending review, but I can make some announcements today.
I am investing £1.4 billion in our world-leading science institute at Weybridge, where, as we speak, they are working to analyse samples of coronavirus. To secure our leadership in the technologies of the future, I am investing over £900 million in nuclear fusion, space and electric vehicles. As we invest in ideas, we are also changing the way we fund science in this country. I can confirm that we will invest at least £800 million in a new blues-skies funding agency here in the UK, modelled on the extraordinary Advanced Research Projects Agency in the US.
As we invest in ideas, we are also changing where we fund science in this country. Today, half of R&D funding goes to London, the east and the south-east of England, so we are investing £400 million of new funding in high-quality research, with much of that incremental funding going to our brilliant universities around the country. We promised to make this country one of the scientific research centres of the world—we’re getting it done.
There can be no lasting prosperity for our people if we do not protect our planet, so the fourth part of our plan for prosperity is to create the high-skill, high-wage, low-carbon jobs of the future; to level up, with completely new industries in our regions and nations; and to raise our productivity and lift our quality of life even as we cut our emissions. The Treasury’s net zero review will set out the Government’s strategic choices ahead of COP26 later this year. Today’s Budget takes the first steps.
First, we will increase taxes on pollution. Electricity is now a cleaner energy form than gas, but our climate change levy, paid by companies, taxes electricity at a higher rate. As another step towards equalising the rates and encouraging energy efficiency, from April 2022 I am freezing the levy on electricity and raising it on gas. I will support the most energy-intensive industries to transition to net zero by extending the climate change agreements scheme for a further two years. To tackle the scourge of plastic waste, we will deliver our manifesto promise to introduce a new plastics packaging tax. From April 2022, we will charge manufacturers and importers £200 per tonne on packaging made of less than 30% recycled plastic. That will increase the use of recycled plastic in packaging by 40%—equal to carbon savings of nearly 200,000 tonnes.
Let me now turn to red diesel. The red diesel scheme allows selected users to pay duty of just over 11p per litre for diesel, compared to almost 58p per litre for everyone else. But the sectors using red diesel are some of the biggest contributors to our air quality problem, emitting nearly 10% of the noxious gases polluting the air of cities like London. This is a tax relief on nearly 14 million tonnes of carbon dioxide every year—the same as the entire population of London and Greater Manchester taking a return flight to New York. It has been a £2.4 billion tax break for pollution that has also hindered the development of cleaner alternatives, so I will abolish the tax relief for most sectors. That is the right thing to do, but I recognise that it will be a big change for some industries, so, firstly, this change will not take effect for two years, giving businesses time to prepare. Secondly, I have heard the concerns about agriculture, particularly from the National Farmers Union and rural colleagues—including, indeed, the Parliamentary Secretary to the Treasury, my right hon. Friend the Member for Sherwood (Mark Spencer)—so I have decided that agriculture will retain the relief. I will also keep the relief for rail and for domestic heating, and there will be no impact on fishing. We will consult over the summer with other sectors. Thirdly, to help develop cleaner alternatives to red diesel and other fossil fuels, we will more than double R&D investment in the energy innovation programme to £1 billion.
As well as taxing pollution, we will invest in and cut taxes on clean transport. We are introducing a comprehensive package of tax and spend reforms to make it cheaper to buy zero or low emission cars, vans, motorbikes and taxis; we are investing £300 million in tackling nitrogen dioxide emissions in towns and cities across England; and we are investing £500 million to support the roll-out of new rapid charging hubs, so that drivers are never more than 30 miles away from being able to charge up their car. Taken together, this Budget invests £1 billion in green transport solutions.
Many Members around this House will have seen the devastating impact of the recent floods on homes and businesses in their own constituencies, particularly the hon. Member for Barnsley East (Stephanie Peacock), my hon. Friends the Members for Calder Valley (Craig Whittaker) and for Telford (Lucy Allan), and my right hon. Friend the Member for Ludlow (Philip Dunne). I can announce today that I am making £120 million available immediately to repair all defences damaged in the winter floods. To support those areas that have been repeatedly flooded, I am also providing £200 million of funding directly to local communities to build their flood resilience. To protect people and over 300,000 properties, I am doubling our investment in flood defences over the next six years to £5.2 billion.
We are also supporting natural habitats such as woodlands and peat bogs. I can confirm today that to protect, restore and expand these wonderful habitats, and capture carbon, we will provide £640 million for a new nature for climate fund. Over the next five years, we will plant around 30,000 hectares of trees—that is a forest larger than Birmingham—and restore 35,000 hectares of peatland. This Government intend to be the first in history to leave our natural environment in a better state than we found it.
I can make one further announcement on green growth. Carbon capture and storage is precisely the kind of exciting technology where Britain can lead the world over the next decade. I can announce today that we will invest at least £800 million to establish two or more new carbon capture and storage clusters by 2030. Once up and running, these clusters will store millions of tonnes of carbon dioxide that would otherwise be released into the atmosphere. The new clusters will create up to 6,000 high-skill, high-wage, low-carbon jobs in areas like Teesside, Humberside, Merseyside or St Fergus in Scotland. It is levelling up in action.
Green jobs; better flood defences; cheaper electric vehicles; innovative new technologies. We promised to protect our environment—we’re getting it done.
As a party, we know that talent is evenly spread in our country, but that opportunity is not. We have to put that right. We need to build the infrastructure that will lay the foundations for a new century of prosperity. We need to grab the opportunity to upgrade, to improve, to enhance and to level up. That starts today with the next part of our plan, as we get Britain building.
Over the next five years, we will invest more than £600 billion in our future prosperity. Public net investment will, in real terms, be the highest it has been since 1955. Take the average amount we have invested over the last 40 years in real terms—we are tripling it. Capital budgets in 2024-25 alone will reach over £110 billion. I will set out the detailed capital allocations at the spending review, but I am taking three major steps today. First, we are going to change the whole mindset of Government. To make sure that economic decision making reflects the economic geography of the country, we are reviewing the Treasury’s Green Book. We will have Treasury offices in Scotland, Wales and Northern Ireland. I can announce today that we are also opening a new economic campus in the north, with over 750 staff from the Treasury and the Departments for Business, Local Government and Trade. And we will not stop there: our ultimate ambition is to move 22,000 civil servants outside central London.
Secondly, because of this changed mindset, we will invest more in our nations, cities and towns. Today’s Budget provides an extra £640 million for the Scottish Government, £360 million for the Welsh Government, and £210 million for the Northern Ireland Executive. I am announcing £242 million of funding for new city and growth deals, taking our investment in these deals to more than £2.7 billion. We have agreed today a new devolution deal in West Yorkshire, with a directly elected Mayor for the region. And to make sure that it is not just Londoners who benefit from the kind of long-term transport deal that helped Transport for London, I am announcing today that the new West Yorkshire Mayor will, along with the seven other metro Mayors, get new, London-style funding settlements worth £4.2 billion. These settlements are in addition to the transforming cities fund, which will invest over £1 billion in local transport in 12 further cities, including Stoke, Preston, Derby and Nottingham, and Southampton.
Thirdly, we are going to build broadband, railway, roads: if the country needs it, we will build it. Today’s Budget provides £5 billion to get gigabit-capable broadband into the hardest-to-reach places, and £510 million of new investment into the shared rural mobile phone network, which means that in the next five years 4G coverage will reach 95% of the country. Let me thank my right hon. Friend the Culture Secretary, who will get this done.
We are also going to build better railways, with spades going in the ground on HS2, our commitment to fund the Manchester-Leeds leg of Northern Powerhouse Rail, funding today for a new station at Cambridge South and the midlands rail hub, Darlington station moving to the next stage of development and approval, and funding to make a dozen train stations more accessible.
And there is more money for our roads too. Today I am announcing the biggest ever investment in strategic roads and motorway—over £27 billion of tarmac. That will pay for work on over 20 connections to ports and airports, over 100 junctions, and over 4,000 miles of road. I am also announcing new investment in local roads, alongside a new £2.5 billion pothole fund—that is £500 million every single year: enough to fill, by the end of the Parliament, 50 million potholes. The details of all the road schemes that I am funding will be published later today, and I thank my right hon. Friend the Transport Secretary for all his efforts.
Our ambition is truly national: the A417 in the south-west; the A428 in the east; the A46 in the midlands; unclogging Manchester’s arteries; freeing the traffic north of Newcastle; and—something my north and mid-Wales colleagues will be particularly pleased to hear—we are protecting beautiful villages in the Welsh borders as we finally build the Pant-Llanymynech bypass. We promised to get Britain moving, and we are getting it done.
There is one more road I would like to mention. It is one of our most important regional arteries. It is one of those totemic projects symbolising delay and obstruction. Governments have been trying to fix it since the 1980s. Every year, millions of cars crawl along it in traffic, ruining the backdrop to one of our most important historic landmarks. So to the many hon. and right hon. Members who have campaigned for this moment, I say this—the A303: this Government are going to get it done.
Today we have announced the biggest programme of public investment ever: £27 billion for strategic roads this Parliament, funding to fill 50 million potholes, new railways, new stations, £5 billion for broadband, a new Mayor for West Yorkshire— investment in every region and nation of our United Kingdom. We promised to get Britain building: this Budget is getting it done.
Only by having a plan for prosperity will we grow the economy. Only by having a growing economy can we invest in our public services. And only by investing in our public services, the people’s priority, can we send a clear message to those who rely on them: you are our priority. Our public services are one of the most important tools by which we, the Government, can level up and spread opportunity, so that no matter who you are or where you were born, you will have every chance to succeed in our modern, dynamic economy.
And that starts with education. We have already provided schools with a three-year settlement worth over £7 billion by 2022. My right hon. Friend the Education Secretary is taking forward our plans to increase per-pupil funding next year by an average of over 4%. Today I am providing every region in the country with funding for specialist 16-to-19 maths schools; £25,000 per year, on average, for each secondary school to invest in arts activities; £30 million a year to improve PE teaching; and £8 million for the Football Foundation’s scheme to build new pitches for around 300,000 people to play on. And to support families, I am providing £2.5 million to fund research into how best to integrate family services, including family hubs, championed by my hon. Friend the Member for Congleton (Fiona Bruce).
Next, I would like to take the opportunity to pay tribute to my predecessor and friend, my right hon. Friend the Member for Bromsgrove (Sajid Javid). One of the issues he is most passionate about is levelling up further education. At the spending round, he increased funding for 16-to-19 education by £400 million. Today I can secure his legacy, with £1.5 billion of new capital over five years to dramatically improve the condition of our entire FE college estate. My predecessor wanted to level up further education—Saj, we’re getting it done.
I have one final education announcement. I have talked today about Britain being the country of scientists, inventors and engineers, but we are also the country of Shakespeare, Austen and Dahl. Our greatest export to the world is our language, our greatest asset is the free exchange of ideas and debate, and our greatest responsibility is the education of our young people. A world-class education will help the next generation thrive, and nothing could be more fundamental to that than reading. And yet digital publications are subject to VAT. That cannot be right. So today I am abolishing the reading tax. From 1 December, just in time for Christmas, books, newspapers, magazines or academic journals, however they are read, will have no VAT charge whatsoever. There will be no VAT on historical fiction by Hilary Mantel, manuals and textbooks like “Gray’s Anatomy”, or, indeed, works of fantasy like John McDonnell’s “Economics for the Many”. The irony is, it sold so few, it is literally his own little-read book.
Our second priority is to make sure people have affordable and safe housing. Today I can make good our promise to extend the affordable homes programme, with a new multi-year settlement of £12 billion. This will be the largest cash investment in affordable housing in a decade. To support local authorities to invest in their communities, I am cutting interest rates on lending for social housing by 1 percentage point, making available more than £1 billion of discounted loans for local infrastructure, and consulting on the future of the Public Works Loan Board. I am confirming nearly £1.1 billion of allocations from the housing infrastructure fund to build nearly 70,000 new homes in areas of high demand across the country, and a new £400 million fund for ambitious Mayors, like Andy Street in the west midlands, to build on brownfield sites. And tomorrow my right hon. Friend the Housing Secretary will set out for the House comprehensive reforms to bring our planning system into the 21st century.
But the housing challenge is most acutely felt by those with no home at all. So today, I am confirming £650 million of funding to help rough sleepers into permanent accommodation. That will buy up to 6,000 new places for people to live, enable a step change in support services and help us meet our promise to end rough sleeping in this Parliament. To fund those rough sleeping measures, I am confirming today that our manifesto promise to introduce a new stamp duty surcharge for non-UK residents will be introduced at a rate of 2% from April 2021.
I have one further measure to announce on housing. Two and a half years on, we are still grappling with the tragic legacy of Grenfell. Last year, we allocated £600 million to remove unsafe aluminium composite material, or ACM, from high-rise residential buildings. Today, I go further. Expert advice is clear that new public funding must concentrate on removing unsafe materials from high-rise residential buildings. So today, I am creating a new building safety fund worth £1 billion. That is what the experts have called for. That is what the Select Committee has called for. That is even what the Opposition have called for. That new fund will go beyond dealing with ACM to make sure that all unsafe combustible cladding will be removed from every private and social residential building above 18 metres high. My right hon. Friend the Housing Secretary will spearhead our efforts to make sure that developers and building owners do their fair share as well.
There is no more cherished public service than our NHS. Whatever resources the NHS needs to deal with coronavirus, it will get. We all benefit from a thriving health service, so it is right that we ask everyone to contribute. Business benefits from our NHS. So, as promised in our manifesto, the corporation tax rate will not be cut this year but will remain at 19%—still the lowest rate in the G20. Migrants benefit from our NHS, and we all want them to do so, but it is right that what people get out, they also put in. There is a surcharge already, but it does not properly reflect the benefits that people receive. So, as we promised in our manifesto, we are increasing the immigration health surcharge to £624, with a discounted rate for children. To raise further funds for the NHS, I am announcing a package of measures today to clamp down on aggressive tax avoidance, evasion and non-compliance, including extra funding for HMRC to secure £4.4 billion of additional revenue.
Those extra contributions allow me to take three further steps to support our health services. First, mental health support can be critical for many people, and particularly for our veterans. Thanks to the campaigning of my hon. Friends the Members for Wolverhampton South West (Stuart Anderson) and for Harwich and North Essex (Sir Bernard Jenkin), I will be supporting veterans with mental health needs with a £10 million donation to the Armed Forces Covenant Fund Trust. I am also confirming today that, to encourage employers to provide veterans with job opportunities, we will introduce a new national insurance relief.
Secondly, I have listened to concerns from all sides of the House that the pensions tax system is preventing doctors from taking on more hours. To significantly reduce the number of people who the tapered annual allowance affects, I am increasing both taper thresholds by £90,000, removing anyone with income below £200,000. Based on their vital work for the NHS, that will take around 98% of consultants and 96% of GPs out of the taper altogether. At the same time, I am reducing the minimum annual allowance to £4,000, which will only impact those with incomes above £300,000. This is a £2 billion commitment that supports our hard-working doctors.
Let me turn now to the overall funding settlement for the NHS. We have already provided the NHS with a record funding increase of £34 billion over five years—the biggest cash increase in public services since the second world war. Today, I can go further. I can announce over £6 billion of new funding in this Parliament to support the NHS. That new money will deliver 50,000 more nurses, 50 million more GP surgery appointments and work starting on 40 new hospitals—you heard that right: 40 new hospitals. We promised to back the NHS, and this Budget gets it done.
I have one last point to make about public services. We have now left the EU. We promised to get Brexit done, and we got it done. We promised to regain control of the money we send to Brussels, and for the first time ever, today’s OBR forecast shows that the billions of pounds we would have sent to the EU can now be spent on our priorities. Today, I am launching the next spending review, to conclude in July, setting out detailed spending plans for the Parliament.
Let me set out for the House our new totals for spending on public services. The OBR has said that today’s Budget will be the largest sustained fiscal boost for nearly 30 years. Next year, day-to-day departmental spending will grow at the fastest rate in 15 years. Over the spending review period, it is set to grow at the fastest rate since 2004, with an average growth rate in real terms of 2.8%—twice as fast as the economy. That means that by the end of this Parliament, day-to-day spending on public services will be £100 billion higher in cash terms than it is today. More police—safer streets. More nurses—better healthcare. More teachers—better education. The House now knows what the electorate already know: the Conservatives are the party of public services.
We are at the beginning of a new era in this country. We have the freedom and the resources to decide our own future—a future where we unleash the energy, inventiveness and creativity of all the British people, and a future where we look outwards and are confident on the world stage. That starts right now with our world-leading response to the coronavirus. This is a Budget delivered in challenging times. We will rise to this moment. We will get through this together. This Budget delivers security today, but it also lays the foundations for prosperity tomorrow.
This is just the start. Over the next few months, we will tackle the big issues head-on. From our national infrastructure strategy to social care and further devolution, this is the Budget of a Government that get things done—creating jobs, cutting taxes, keeping the cost of living low, investing in our NHS, investing in our public services, investing in ideas, backing business, protecting our environment, building roads, building railways, building colleges, building houses and building our Union. This is a Budget that delivers on our promises—a people’s Budget from a people’s Government—and I commend it to the House.
Provisional Collection of Taxes
Motion made, and Question put forthwith (Standing Order No. 51(2)),
That, pursuant to section 5 of the Provisional Collection of Taxes Act 1968, provisional statutory effect shall be given to the following motions:—
(a) Rates of tobacco products duty (Motion No. 40);
(b) Vehicle excise duty (motor caravans) (Motion No. 44).—(Rishi Sunak.)
Question agreed to.
The Chairman of Ways and Means (Dame Eleanor Laing)
We now come to the motion entitled “Income Tax (Charge)”. It is on this motion that the debate will take place today and on the succeeding days. The Questions on this motion and the remaining motions will be put at the end of the Budget debate next Tuesday 17 March.
Budget Resolutions
(4 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Jeremy Corbyn (Islington North) (Lab)
The coronavirus outbreak is an emergency, so I want to make it clear that we will have to work together, all of us, to meet this head-on and to overcome it. However, we will only overcome this virus because of the dedication of our NHS staff, carers and public servants. The steps the Government have announced today to head off the economic impact of the coronavirus are obviously welcome, but I have some points I wish to raise. We have to be straight with people that it is going to be much tougher because of the last 10 years of deeply damaging and counterproductive cuts to all of our essential public services. We are going into this crisis with our public services on their knees, and as today’s figures confirm, with a fundamentally weak economy. It is now flatlining, with zero growth even before the impact of coronavirus.
Today’s Budget was billed as a turning point, a chance to deliver in particular on the promises made to working-class communities during the general election, but it does not come close. The Government’s boast of the biggest investment since the 1950s is, frankly, a sleight of hand. In fact, it is only the biggest since they began their slash-and-burn assault on our services, economic infrastructure and living standards in 2010. Having ruthlessly forced down the living standards and life chances of millions of our people for a decade, the talk of levelling up is a cruel joke. The reality is that this Budget is an admission of failure: an admission that austerity has been a failed experiment. It did not solve our economic problems, but made them worse. It held back our own recovery, and failed even in its own terms. Today’s measures go nowhere near reversing the damage that has been done to our country.
I am sure the whole House will wish the hon. Member for Mid Bedfordshire (Ms Dorries) well. Many people are understandably very worried about the impact of coronavirus on their own lives. The Government need to be very clear what they are announcing, and there are still questions to be answered about the Government’s response. What coverage is there for people on zero-hours contracts or those without a contract of employment beyond the reforms to benefits? Will statutory sick pay adjustments announced today be available to all workers from day one? What support will be made available for low-paid workers who do not meet the lower earnings limit for statutory sick pay? Are there any plans to increase the level of statutory sick pay, which itself is actually scandalously low? Will people who are doing the right thing by self-isolating continue to be punished with a five-week wait for universal credit payments? The benefits system cannot be the only support for the millions of workers not entitled to statutory sick pay.
The crisis is exposing the vulnerabilities in our economy and our public services. When 17,000 national health service beds have been cut, leaving 94% of the remaining beds full, and when 100,000 people were forced to wait more than four hours on trolleys in A&E departments in January, it is little wonder that people worry that the extra money for the health service is too little, too late. We have only a quarter of the intensive care beds per person that Germany has. We do not have enough ventilators to deal with a mass outbreak, or the people trained with the necessary skills to operate those ventilators. Across the national health service there are, at this moment, 100,000 staff vacancies.
Moreover, public health budgets have been slashed by £1 billion in recent years. What an irony! Public health is based on the principle that prevention is better than cure, but this Government are providing money only after a serious outbreak is under way. We know that the people most vulnerable to coronavirus are older people, and this is when we need a strong social care system, but social care is in crisis. There is an £8 billion funding gap since 2010. Instead of the Government presenting a social care plan, which the part-time Prime Minister told us was ready long ago, they are asking the rest of us to come up with ideas. Underpaid careworkers, a quarter of them on zero-hours contracts, travel from house to house to provide care to elderly and sick people. It is a model that could scarcely be better designed to encourage the spread of a virus, so it is vital that the Government do not wait a few months, but come up now with answers to ensure that careworkers do not lose out for staying away from work if they experience the symptoms.
The Chancellor shows not some but a lot of brass neck when he boasts that measures to deal with coronavirus are possible only because of his party’s management of the economy. Look outside: in the real world, we are still living through the slowest economic recovery in a century. Our economy is fundamentally weak. ONS figures out today show the economy is not growing: growth was 0.0% in the three months to January—0.0% in the three months to the end of January. [Laughter.] The Prime Minister might find this funny; those struggling do not.
Future growth has been downgraded yet again from 1.4% to 1.1% this year, and that is before coronavirus is taken into account. We have stalling productivity and flatlining business investment, and wages have only just scraped past pre-crisis levels. None of this can be blamed on coronavirus, and it is not all because of Brexit either. It is because the Government have failed on the economy. That failure has left us the most regionally unequal country in Europe. Investment spending per head in London is currently more than double that in the east midlands. Now they talk about levelling up, but who pushed huge swathes of our country so low in the first place? It is Conservative Governments who have starved the country of investment over the last 10 years, resulting in a £192 billion hole in infrastructure spending.
What has that meant for people? It has meant that bus services have been cut, there is patchy access to broadband, and homes and businesses have been ruined because of inadequate flood defences. The Chancellor expects plaudits for half-filling the investment hole his party created in the first place. Amid a blizzard of hype, he is claiming that today marks the biggest capital injection since the 1950s, but this is actually all smoke and mirrors. As a percentage of GDP, it only returns us to the levels we had before the Conservatives slashed investment so drastically in 2010. Given the challenge of the coronavirus crisis, we need far-reaching action to strengthen and stabilise our economy, and ensure we are in the strongest position possible to navigate the transition to new relationships with the EU and the post-Brexit economy, with the trade deals that will enable that to happen.
If the Government truly wanted to level up after Brexit, there is one thing they should be doing above all else: a green industrial revolution. They would have a plan to kick-start new green industries and create skilled jobs all across our country. The climate emergency threatens our very existence. It demands that we mobilise our resources on a massive scale. The environmental measures announced by the Chancellor today get nowhere near that. The Government have maintained the freeze on fuel duty without lowering bus and rail fares, showing complacency about the climate emergency. Young people especially will be dismayed by the lack of urgency to reduce our emissions, which they will rightly see as the Conservatives, once again, putting the profits of big polluters and oil companies above people’s safety and wellbeing. When the Chancellor announced, with such aplomb, a huge investment in road building across the country, where was the environmental impact assessment for that policy, or for the pollution that will come from that increased use of cars and traffic across the country?
Today’s Budget confirms that austerity has not worked, even under its own terms. We have had a decade of decline, and according to the New Economics Foundation, austerity has cost the UK economy almost £100 billion. The true cost, however, is incalculable, and I want to give the House an example to bring that home.
Errol Graham was an amateur footballer when he was young. By his mid-50s, and suffering from mental health issues, he had become reclusive, unable to leave his flat in Nottingham, and terrified of the world outside. He could not attend his fitness-for-work assessment, and because of the Government’s harsh and very uncaring attitude, his benefits were cut off. With no income for food, he obviously began to go hungry. He wrote a desperate letter to his Department for Work and Pensions assessor:
“Judge me fairly…It’s not nice living this way.”
Errol weighed four and a half stone when the bailiffs found his body inside his flat. He had starved to death in this, the fifth richest country in the world. When the Chancellor talks about the “difficult decisions” that the Government took in imposing austerity, is he thinking of the decision to deprive Errol, and people like him who are going through such trauma in their lives, of their income?
The worst thing is that austerity, and all that suffering, has been a political choice, not an economic necessity. The Conservative party continues to make the absurd claim that austerity was needed because spending on schools, hospitals and public services by Labour was somehow the cause of the worldwide financial crash in 2008. A US Senate report into the root causes of the crash singled out two investment banks for blame: Goldman Sachs and Deutsche Bank. A few weeks ago, the Prime Minister turfed out one Chancellor who had previously worked at Deutsche Bank, and replaced him with another one who worked at Goldman Sachs. Truly a Government of the people!
The Government want us to believe that austerity is over, but that is not true. According to the Institute for Fiscal Studies, it would take at least £54 billion of current spending this year, excluding health and social care, to get us back to 2010 levels. We have heard nothing even approaching that scale from the Chancellor today, but without it, the IFS says that austerity is “baked in” to our economy. Try telling local councils, which face a further £8 billion black hole over this Parliament, that austerity is over.
To end austerity truly and fund urgent action on the climate emergency and our public services, we need a fair taxation system, and that means making the richest pay their share. The Government’s changes to the national insurance threshold will mostly benefit higher earners, while those on lower incomes would be far better supported by boosting wages and real social security. The incomes of the poorest fifth of families have fallen by 7% in just two years. As the Resolution Foundation said,
“this has been driven by policy choices.”
How can it be right that 12 years after the bankers crashed the economy, the poorest 20% of the population are still being made to pay for it, while those at the top are rewarded yet again? Today we learn that the Government will not even scrap entrepreneurs’ relief—a huge subsidy that mainly benefits 5,000 people who make an average of £350,000 per year. I can assume only that those who fund the Conservative party have had a quiet word with the Chancellor, and told him to back off.
Creating a fair taxation system also means tackling tax avoidance and evasion. How can we have confidence that this Chancellor will clamp down on tax dodgers, when previously he worked for hedge funds that used the Cayman Islands, and he had a close business associate who engaged in a multi-million pound tax avoidance scheme? How can we have confidence when the Government’s big idea is apparently free ports—tax-free zones that allow the super-rich to dodge taxes and take away workers’ protections?
The last Chancellor resigned, saying that no self-respecting Minister could accept being controlled by advisers in No.10. The new Chancellor accepted that control, and has now presented a Budget just 27 days after taking the job. Through him, and the chuntering Prime Minister, may I pass on our congratulations to Dominic Cummings on writing a Budget so quickly?
But what a let-down it has been. When I first responded to a Budget, austerity was very much in vogue, and our demands for investment and spending were dismissed. The terrain of public debate has shifted dramatically in just a few years, but there is a gaping chasm between the rhetoric that the Conservative party has adopted, and the reality of what it delivers. Whatever it says, the Conservative party will never stand up for working class communities, and it will always, always, put the interests of its wealthy friends first.
The reality of today’s announcements will become clear. The hard sell and spin will fade away, and this Budget will be seen as a lost opportunity, a failure of ambition, and a bitter disappointment for all those people who have been promised so much but, from what we have heard today, will see very little.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. I call the Chair of the Treasury Committee.
Mel Stride (Central Devon) (Con)
There is no doubt that this Budget has been framed against one of the most challenging moments in this country’s economic history. As the Chancellor set out, many fundamentals of our economy are strong: record levels of employment; the lowest level of unemployment since 1974; low and stable inflation; and real wages that have risen over a two-year period. Nevertheless, the Chancellor was equally right to point to the huge challenges that lie ahead. He did not mention the trade deal that we are negotiating with the European Union, or—at least explicitly—the many accelerating challenges around climate change. Instead, he rightly and substantially focused on the challenge of coronavirus.
These challenges often emerge without much warning. In 2013, the then newly appointed Governor of the Bank of England, Mark Carney, was asked by the Treasury Committee about what he saw as the main challenges over the coming years, and he did not mention one of the three external challenges that I have just presented. These things come at us pretty fast and are sometimes very unexpected, and the Chancellor is to be congratulated on looking closely at those challenges, and coming up with robust responses.
None the less, at the heart of this Budget hangs an important question: are the fiscal rules to which we are working robust enough, and do the spending and taxation proposals in the Budget—we will, of course, pick over them in some detail over the coming hours and days— stack up in terms of maintaining the fiscal responsibility that the markets expect of us? I think the Chancellor said that he was fundamentally sticking to the rules in the Conservative party manifesto to ensure that day-to-day spending is in balance over a three-year horizon. I think the Chancellor also suggested that, given the OBR’s forecasts, in about 2022-23 the head- room around those rules would be something in the order of £12 billion. That is all well and good—that is a reasonable level of firepower—but he also pointed out that the impact of coronavirus will not, because the cycle of the Budget forecasting by the OBR will have had a cut-off about two weeks or more ago, have been taken fully into account. I suspect that one of the key questions we will be putting to the Chancellor of the Exchequer, when he appears before our Treasury Committee this time next week, will be to probe the figures around the headroom that is assumed in those particular numbers.
John Redwood (Wokingham) (Con)
Does my right hon. Friend not accept that in these very exceptional circumstances the rules have to be flexed for the temporary expenditure on the virus consequences, just as even the EU has said it to Italy, where Italy obviously has a very difficult problem?
Mel Stride
My right hon. Friend is absolutely right that we flex the rules to accommodate the circumstances. My point is that when we talk about headroom within our fiscal rules, we have to make sure that the number we are focused on is as accurate as possible. Given what is happening with coronavirus and the fact that the OBR struck its forecasts some time ago, the current forecasts are almost certainly already out of date.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Once again the OBR figures show a downgrade, so do today’s Budget announcements not mask a decade of failure of economic policy by the British Government?
Mel Stride
Quite the reverse. I began by pointing out that the fundamentals of the economy are strong. They certainly were not strong in 2010. We inherited something of a mess from the Labour party.
Sir Desmond Swayne (New Forest West) (Con)
Will my right hon. Friend reflect on the significant temptation that the Government can now borrow for 10 years at 0%?
Mel Stride
My right hon. Friend intervenes exactly as I am about to move on to just that point. I assume that the Chancellor is adhering to the rules set out in the manifesto. In other words, we will borrow up to 3% of GDP, subject to a cap in the event that the interest on that borrowing meets or exceeds 6% of the Government’s revenues. It seems to me, from what I have quickly scribbled on the back of a piece of paper, that the kind of figures for public sector net investment he envisages rolling out—I think he gave a figure of £110 billion by 2024-25—probably pushes us right up against that 3% level. I am looking at the Chancellor and he is kind of nodding, slightly at least, so I am assuming that that is broadly correct. The Select Committee will want to probe how sustainable that is, particularly in light of possible recasting of forecasts going forward.
The Chancellor also raised a very interesting point about how to categorise human capital as between day-to-day spending and investment. I know he will be looking at that very closely. I can assure him that the Treasury Committee will be also be looking at that very carefully to make sure it is a rational and sensible thing to do, and not in any way shuffling the figures around to spend more and break existing arrangements. The announcements on greater spending on housing, green investment, flooding arrangements, roads, rail and the A303—thank you for what you are doing for the south-west, Chancellor—are all important, particularly given our historically low levels of productivity.
Caroline Lucas (Brighton, Pavilion) (Green)
There has been plenty of green rhetoric in the Budget for sure, but Treasury decisions continue to drive the climate emergency. There will be a freeze on fossil fuel duty, over £20 billion for new roads, compared to just £1 billion on green transport, and no commitment to removing the climate-destroying duty to maximise the economic recovery of fossil fuels. Does the right hon. Gentleman not agree that when it comes to showing how muddled he is on green issues, the Chancellor is absolutely getting it done?
Mel Stride
I am afraid I have to completely disagree. To give them credit, the Government were in the vanguard of making the commitment to net zero by 2050. Indeed, the Chancellor made a very important announcement just now about a huge investment in carbon capture and storage, which could be a part of further revolutionising the production of power and energy in our country, and making sure it is greener.
Turing briefly to the remarks the Chancellor made in respect of the Green Book and how investments are analysed, it is very important that we get that right, not least in encouraging green investment. The Chancellor might want to look at the kind of discount rates we apply to green investment propositions to make sure that the Government are encouraged to invest upfront rather than further back in time. On levelling up, the Green Book needs to accommodate the fact that we need to get away from the natural returns we get in London and the south-east, and get investment out into the regions, particularly the south-west of England. [Interruption.] I see the Chancellor nodding again. That all helps to meet our net zero quest.
Rushanara Ali (Bethnal Green and Bow) (Lab)
I am very grateful to the right hon. Gentleman, a fellow member and Chair of the Treasury Committee, for giving way. Does he agree that while there should be a rebalancing, it is important to recognise that inequality has to be tackled in cities like London as well as in towns and across the country? For instance, my constituency has the highest rate of child poverty in the country. We need a much more nuanced and granular response to inequality. Will he say something about the fact that the Chancellor has left out much-needed investment in local government? The investment in housing is welcome, but it needs to go a lot further to tackle the housing crisis.
Mel Stride
On where the investment is going, I have yet to pore over the granular detail, as the hon. Lady suggests, in the Red Book. What I do know, with regard to looking after the less advantaged and the lowest paid in our society, is that important reference was made by the Chancellor to the increase in the national living wage, worth £1,000 a year. Of course, this is a Government who increased the personal allowance, taking millions of people, particularly the lowest paid, out of tax altogether. The changes to the threshold of national insurance contributions to £9,500 will also serve that particular purpose.
Turning to the support that the Chancellor has identified for small and medium-sized enterprises, this is absolutely vital and lies at the core of how we will cope, or otherwise, with what is to follow over the coming weeks and months. We face both a supply and demand-side effect for SMEs. The Bank of England dropped the base rate by 0.5% today, which was clearly co-ordinated with the Budget, and made changes to the counter-cyclical buffers that banks have to hold. That is all well and good and will help banks to put more money into those businesses, but the real issue will be around the fiscal measures that the Chancellor has announced, particularly relating to business rates, time-to-pay arrangements and the deferral of taxation.
I will just say to the Chancellor that the Committee will look at three particular aspects, the first of which is how quickly help can be got out there and whether HMRC is spring-loaded to ensure that businesses are aware of what is available and how to take advantage of it as quickly as possible. I am encouraged by his comments about the helpline. Secondly, is it enough support? That needs to be monitored very carefully. Finally, there is the targeting aspect. Businesses in particular sectors are hurting more than others. We need to make sure that additional help is provided for them, just as we did in similar circumstances in the 2001 foot and mouth crisis, when the agricultural sector needed support. We need to recognise that there are particular types of businesses in that situation.
I am conscious of the time that I have taken and the fact that other Members will want to come in, so I will end by touching on a specific measure that the Chancellor raised: entrepreneurs’ relief. He has taken a brave step, and the right step, in that respect. He is absolutely right that making the changes that he suggested—a reduction from £10 million to £1 million—is not about beating up on the self-employed or entrepreneurs; it is about making sure that tax reliefs are fit for purpose. The changes that he has made, including the increase in R&D tax credits, the more generous treatment in the structures and building allowance and the changes in the employment allowance, will be much more meaningful and powerful in supporting small businesses than entrepreneurs’ relief ever was.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
Does the right hon. Gentleman share my concerns that the Chancellor is not doing enough to tackle the problem of the quality of social care, given that he barely mentioned it in the Budget statement and that 87 people a day die waiting for the care that they need?
Mel Stride
The Prime Minister has been consistently clear that we will engage with other parties over the issue of social care, and those discussions will occur. My plea to the House is that people do not seek to take political advantage of the situation and that they engage in a constructive manner.
Finally, the fundamental review of business rates is most welcome. We know why business rates have generally been there—they are easy to collect and it is difficult for tax avoidance and so on to occur—but they are a huge burden on many small and medium-sized enterprises up and down the country. There was no mention in the Chancellor’s remarks of the digital services tax, and I hope I can take that to mean that we are going ahead with that—he is nodding—in the matter of a short few weeks. It is right that we do that.
Google, Facebook and Amazon—those kinds of businesses—need to pay fair taxes in our country. It is not a case of tax avoidance, but of the international tax regime being unfit for the 21st century. We have to get away from attributing tax rights simply to where the bricks and mortar, the people and the intellectual property are, and where management decisions are taken, and look more at where value is created. In the case of those businesses, a huge amount of that value is created here and we must tax it appropriately. I know the Americans will apply quite a lot of pressure and have done so already, but I urge him to stand up to that. We have engaged multilaterally with the OECD and the European Union for the preferred outcome of a multilateral approach, which will avoid double taxation problems and issues associated with going unilaterally, but we have waited too long. We must not, like other countries, step back under pressure. We must go forward with that tax as of the start of the next tax year.
I say to the Chancellor that we in the Committee are his candid friends and we look forward to working with him. Given the kind of pressures and difficulties for our economy and our country at the moment, we are, right across the House, all in this together, and we look forward to him appearing before our Committee on Wednesday next week.
Several hon. Members rose—
The Chairman of Ways and Means (Dame Eleanor Laing)
Order. Just before I call the leader of the Scottish National party, who, I remind the House, will be heard without interruption, I warn Members who are seeking to catch my eye that there will be an immediate time limit of 10 minutes on speeches from Back Benchers. That is likely to be reduced later in the day, but it will start at 10 minutes.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
Before I begin, I pass on my best wishes and those of my colleagues to the hon. Members for Mid Bedfordshire (Ms Dorries) and for York Central (Rachael Maskell)—we are thinking of them and, indeed, all those who are caught up in this terrible virus.
The scale and seriousness of the coronavirus demand a collective response. As I said last week, this virus requires all of us to demonstrate calm and practical leadership. This is the very least the public deserve from us at a time of deep and natural worry. SNP Members are committed to that approach. That example of leadership has been clearly embodied by our First Minister of Scotland, and I welcome the close co-operation between the Scottish and UK Governments on this matter.
The first priority in dealing with the crisis has to be about maintaining the health of all our people. The scale of the coronavirus has and will put added pressures on the NHS in Scotland and across the United Kingdom. I take this opportunity to thank all our NHS staff for everything they do, but most especially now, as they deal with the outbreak of this virus.
I welcome the fact that the Chancellor has committed to providing additional funding, but I wonder whether he will take the opportunity to tell the House how much of that additional spending on the coronavirus will come to Scotland. I also urge him to go further—the SNP Scottish Government have ensured that frontline health spending in Scotland is £136 higher per person than it is in England. Social care funding is £130 per capita higher than it is in England. Matching Scottish per capita NHS spending would provide health services across the UK with the resources, equipment and staff that needed now during this crisis and in the longer term. It would also allow Holyrood to increase funding for NHS Scotland by over £4 billion by the end of this Parliament.
Catherine West (Hornsey and Wood Green) (Lab)
Will the right hon. Gentleman take an intervention?
Ian Blackford
I will not.
We believe that that is the only adequate and prudent response to this unprecedented health crisis. As part of the Budget package, we also need to recognise the deep worry that people are experiencing about the impact of its consequences on their incomes, employment, rights and benefits. Just as our health response must be led by the best scientific advice, our economic response must be guided by the need for an appropriate fiscal stimulus that ensures that the economy is not tipped into recession. The employed and the self-employed need to be aided through the crisis. I acknowledge many of the measures taken today by the Chancellor to do just that, but more urgent and more targeted action is also required.
In particular, urgent measures are needed to help the tourism and hospitality industry, above and beyond what has been offered today. Industry leaders are already warning of the consequences of the coronavirus, with a raft of booking cancellations and a significant drop in numbers. The SNP is advocating a package of measures, including a temporary drop in the VAT rate to 5% to help businesses to reduce their costs—[Interruption.] I can hear the Prime Minister saying, “We’ve cut interest rates,” but—[Interruption.] Business rates, rather, but the problem, Prime Minister, is that these businesses are facing a crisis not of their own making.
Many of the businesses in my part of the world, in the highlands of Scotland, come through a fallow period over the winter. It is not just an issue of their seeing a reduction in business; in some cases, they are going to be desperately short of cash coming in through the door. Let us not forget that many of these businesses have relied on an EU workforce over the last few years. In anticipation of what is happening with the migration proposals from the Government and of the difficulty of recruiting labour, they have had to staff up. They have additional costs, but their revenues are about to fall through the floor. That is why I have written to all the major UK banks to ask them to support businesses and households through this period to make sure that working capital is extended to all businesses, and that no business—no good business in the hospitality and tourism sector—should be pushed to the wall as a consequence of what is happening.
Chancellor, a temporary drop in VAT would allow business to weather the storm as people follow public health advice and tourist numbers drop, but let me say, on the basis of the scientific advice that we have today, that Scotland is well and truly open for business, and I encourage people to come and experience the breadth and depth of our tourism offering. VAT was reduced in Ireland and it helped to boost both employment and tourist numbers. I urge the Chancellor, in the strongest possible terms, to consider a similar policy to help our tourism and hospitality sectors to come through this crisis.
Let me turn to the other measures in the Budget. The Chancellor has just delivered his first Budget speech—I welcome him to his position—and I give him credit for one thing: he did really well in fluently reading out Dominic Cummings’ handwriting. It is a strange irony that those who were most obsessed with taking back control from Brussels are now at the heart of the unelected, centralised elite who have grabbed control, not just in Downing Street but in the Treasury. Today they have produced a half-baked Budget thrown together by a bunch of Vote Leave campaigners drowning in the responsibility of government. I am talking about a group of ideologically driven campaigners—let us be charitable—so distrustful of Europe and the benefits it might have brought, economically, socially and culturally, and so caught up in their own meaningless slogans that they are blinded by the damaging reality they have caused. People are not fooled. The slogan “take back control” does not work when you have been in power for the last decade. We have not forgotten that the Tories have been in control and that we are all the worse for it. If the Chancellor really thinks that this Budget levels up after a decade of austerity, he must have bought himself a wonky spirit level. After delivering a decade of cruel cuts, the Tories are now offering a new decade of political and economic isolation outside the European Union.
The Budget is a warning of what may be ahead of us and a reminder of Scotland’s need to choose a different future. It has never been more stark: Scotland’s economic interests are not served by being part of this UK union. Rather than the instability and limitations imposed by the UK, independence now offers the Scottish people the chance to build a better, more prosperous and safer future. The 2016 Brexit referendum was the moment when our political futures met a point of divergence, and we are now on the cusp of the moment of decision for Scotland’s people. The Conservatives may have delayed our democratic right, but they cannot indefinitely block the voices and votes of the Scottish people. Scotland’s future will be ours to choose, and we will very shortly make that choice. I am more confident than ever that the Scottish people will choose to be an independent, equal and European nation.
As I have said, this is a Budget produced by a group of people who are expert in fabricating slogans but amateurs in delivering competent government. The Tories have a new slogan about levelling up funding and living standards. Let us judge them on their record. A reasonable place to start is basic income. The Office for National Statistics recently confirmed that the median income for the poorest 20% fell by 4.3% per year between 2017 and 2019. Institute for Fiscal Studies analysis shows that since 2010 the poorest 10% of households have lost an average of 11% of their income. That is £1,200 per year. For those with children the average loss was up to 20%, or £4,000. That is the cost of Tory Government to people in Scotland and the United Kingdom. That is the true Tory record: falling wages and growing hardship. While the gap between rich and poor grows, last month the ONS revealed that income inequality was as much as 2.4% higher on average than official figures had suggested over the decade since the financial crisis in 2008, and this Budget does not help by failing to implement policies that deal with growing inequality. The Tories still refuse to raise their pretend living wage to the real living wage and refuse to end the age discrimination that penalises our young people.
Another reasonable place to judge their levelling up record is overall public spending. Let us not be fooled by some of the rhetoric in the statement today. Since 2010, aside from health spending, the Tories have cut per person spending on public services by a whopping 21%. This Budget comes nowhere near either closing or reversing that devastating legacy. By any standard, by any measure, by any objective acknowledgement of fact, this Tory Government have failed to level up for anyone anywhere. They cannot be allowed to hide from these facts, just as they cannot be allowed to hide from their legacy.
Let us be clear: the poor becoming poorer was a Tory political choice. The Resolution Foundation has said that the fall in income for the poorest
“has been driven by policy choices, with gains from higher employment more than wiped out by benefit cuts.”
Why did the Conservatives take these political choices? As ever, they were serving their own interests and the interests of those they serve. For them, it is a simple and cynical calculation. A Government who rob Peter to pay Paul can always depend on the support of Paul. As far as the Tories are concerned, everyone else can go whistle.
I suppose we should not be surprised. This is a Budget advocated by a Prime Minister who once eulogised:
“some measure of inequality is essential for the spirit of envy and…is, like greed, a valuable spur to economic activity.”
Greed—a valuable spur to economic opportunity! That is the reality of the vision of the Prime Minister. That does not sound like a man determined to level up. The honeyed words and new slogans in the Budget will not change the long and bitter experience of Tory economics. People in Scotland know that they cannot believe their words, they cannot believe their promises, and they cannot believe that they will ever change—not ever.
If this really was the great investment Budget the Chancellor heralds, he should have started by paying up the moneys the Tories have been holding back from Scotland for years. I am grateful to a Scottish Parliament Information Centre—[Interruption.] I hear the Prime Minister talking about grievance. This is not about grievance; this is about the facts of what a Conservative Government have done for the people of Scotland. The Scottish Parliament Information Centre has confirmed that Scotland would be owed about £5.8 billion if the proper Barnett consequentials were applied to the DUP Brexit bung and the additional moneys since. That is the reality. That is added, of course, to the £175 million still owed to the Scottish Police Authority and the Scottish Fire and Rescue Service—money that was stolen from our vital public services. [Interruption.] I hear the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) saying it was against all the advice. It was the vindictiveness of his Government that took these funds from the Scottish public services. That is the reality. Let us be crystal clear: the UK Government have chosen to rob Scotland’s public services of that money, and the silence from the Scottish Conservatives—their failure to stand up for our police and firemen—is audible to all.
The Budget also turns its back on the oil and gas sector in the north-east of Scotland. These industries face months of instability and uncertainty in the aftermath of the latest collapse of an OPEC deal to stabilise prices. The oil price has plunged, yet there was not a mention of it from the Chancellor. The impact of the global oil price slump will reverberate around the world, including hitting Scotland’s vital oil and gas sector. The oil and gas sector has generated £334 billion of net tax revenues for the UK Government since 1970. Having used the sector as a cash cow, the Treasury must support it in its time of need. The UK Government must deliver crucial support for the sector as part of a just transition to net zero emissions. Scotland still bears the scars from rapid de-industrialisation under previous Conservative Governments. That must never happen again, and it must not happen to north-east Scotland.
The failure of the Government’s investment strategy— the Chancellor admitted it today, and we see it in the productivity record—has unfortunately failed to diminish their arrogance in trying to dictate the investment needs of the devolved Administrations. We are told that the Treasury is considering an intra-UK connectivity study, which sounds suspiciously like another Tory power grab on the devolved Parliaments. Chancellor, how can people be expected to have faith in a Prime Minister who cannot build a bridge between London and London, and a Scottish Secretary who thinks a bridge is a euphemism for a tunnel? Having ripped up the Sewel convention, the Tories are on a mission to level down devolution. Chancellor, your Government are neither competent enough nor trusted enough to invest in infrastructure in Scotland. Go back and think again, and allow the Scottish Parliament to use extra capital resources to provide for Scotland’s infrastructure needs. We will deliver for the people of Scotland.
The Budget fails to attempt to fix, or even to acknowledge, the underlying fundamental problem of the economy. For the past decade, the Conservatives have presided over a crisis in productivity. Only last year, about 6,000 companies revealed that uncertainty over leaving the European Union had lowered capital spending by about 11% on average. That is what is really going on in the economy. According to the Bank of England, that has cut overall UK productivity by between 2% and 5%—a reduction in productivity created by the Conservative Government in power in Westminster. The overall perception of the UK’s productivity is not helped by the Prime Minister’s productivity levels; he downs tools and hides away whenever the going gets tough.
Static productivity is a direct consequence of choices made during the financial crisis. There was a massive quantitative easing splurge in the wake of the crash, but there has been no real return on that investment for ordinary workers. It did do one thing, though; a Bank of England analysis of the impact of quantitative easing showed that between 2006 to 2014, the 10% least wealthy households saw a marginal increase in wealth of around £3,000. The wealthiest 10% saw a £350,000 increase. In other words, printing money for the financial services industry ended up helping only those working in the financial services industry. Improved productivity, and capital investment for wider society, never got a look-in. I challenge the Chancellor: will he commit to a review of the impact of the bonus culture in financial services and its effect on general economic activity?
As I have said, the decade of Tory austerity and the inequality it inflicted has hit the poorest hardest. The brutal cuts have targeted children and the most disadvantaged. The benefits freeze, universal credit sanctions, disability assessments, the cruel two-child limit, the rape clause—the list of failed and punishing policies goes on and on. It is a legacy the Tories should be ashamed of, and should have the basic decency to apologise for.
If the Chancellor is serious about looking after those who have been left behind, he can begin to prove it by committing to four things. Will he increase the monthly allowance for universal credit and end the benefit cap; increase benefits above inflation and restore their value after the four-year freeze; scrap once and for all the two-child cap on tax credits and the rape clause; and follow the lead of the Scottish Government and bring in a child payment scheme similar to theirs, which has lifted 30,000 of our children out of poverty? If the Chancellor cannot commit to those four basic measures, which would reduce poverty and bring compassion into the social security system, his words and promises of levelling up will be shown to be hollow.
The devastating Tory legacy on social security has especially hit pensioners, who still receive the lowest state pension in the developed world, according to the OECD. They have also been denied their full rights. I am proud that the Scottish National party, with others, has stood shoulder to shoulder with 1950s-born women since the beginning of their campaign, and we stand with them still. They deserve justice, and it is disgraceful that their plight continues to be ignored in yet another Budget.
Another Tory attack on pensioners, and another broken promise, is of course the removal of free TV licences for the over-75s. This will hit 240,000 households in Scotland and 3 million across the United Kingdom. Chancellor, this is your Government’s responsibility, not the BBC’s. It is time to pay up. Stop punishing pensioners, and keep the free TV licence for all those over 75.
By far the biggest budgetary and economic decision that confronts these islands—[Interruption.] We are talking about some of the poorest in our society, and women who have been denied their pensions. I say to the Prime Minister that when I knocked on doors in the election campaign, I found that a great number of elderly people were alarmed by the loss of their TV licence. That is what we get from the Conservatives, but they sit laughing and scoffing. I find it remarkable. It is okay for them; the rest of the population can go hang.
By far the biggest budgetary and economic issue that confronts these islands remains our relationship with the European Union. We hope that the negotiations on our future relationship can be successfully concluded, but all the signs from this Tory Government are that instead of co-operation and close relationships, they are heading for divergence and deregulation. The UK Government’s negotiation mandate all but confirmed that choice. The consequences for workers’ rights, environmental protection, the shape of our economy and the nature of our society will be profound, and—this will be of little interest to this Tory Government—the impact will be felt most by those who already have the least: the vulnerable and the poor. Scotland will end up paying a heavy price for a future we did not back.
Our Government’s modelling shows that even if the UK Government secure a basic free trade agreement, Scottish GDP would be 6.1%, or £9 billion, lower by 2030 than if we had retained full EU membership. We heard from the Chancellor about the impact of a slowing global economy, and have heard about the impact that coronavirus may have on us, yet the Government are prepared to crash our economy and put Scottish workers on the dole. Not in our name! The harsh reality is that that lost GDP—let us put it in cash terms—amounts to £1,610 per person. A no-deal Brexit—heaven help us—will raise that figure to £12.7 billion, equivalent to £2,300 per person. This Tory Government will sacrifice our economic health. Why? For an ideology––the narrow ideology of the Brexit fanboys, led by Dominic Cummings, now running the Treasury. As the trade negotiations unfold in the coming months, the numbers are worth reflecting on, because it is worth reflecting on the fact that the Westminster Government are actively choosing to make Scotland’s people poorer. It is not an accident; it is by design.
On top of all that, the National Audit Office—[Interruption.] I find it remarkable to watch the reaction of the Prime Minister. I challenge the Prime Minister to tell me that the figures that I have just given on the impact of a free trade deal or a no-deal Brexit are wrong. The Prime Minister knows, just as I know—just as we know—that the Scottish economy is going to be harmed by what he wants to do in these trade negotiations.
The Prime Minister (Boris Johnson)
The only threat the Scottish people face is the SNP!
Ian Blackford
I remind the Prime Minister that we have just had an election. He went into that election with the slogan “Say no to indyref2”; how did that work out? You lost more than half your MPs, Prime Minister. [Interruption.]
Madam Deputy Speaker (Dame Eleanor Laing)
Order. Has the House forgotten that I said that the leader of the Scottish nationalists would be heard without interruption? It seems to me, though, that most of the interruption is coming from behind him. I am protecting the right hon. Gentleman.
Ian Blackford
Thank you for the advice, Madam Deputy Speaker, but I was simply responding to the chuntering by the Prime Minister.
Ian Blackford
Indeed, he did interrupt.
Despite all the money that has been spent, there is still not an ounce of clarity on the UK shared prosperity fund, which was supposed to be the great sweetener offered by the Brexiteers. There was nothing in the Budget from the Chancellor on that. There was no clarity, either, for young people in respect of their opportunities to enjoy the right to travel, work and education throughout Europe as part of the Erasmus scheme. We took those rights and benefits for granted. Around 15,000 people have been involved in the programme through nearly 500 Erasmus+ projects throughout Scotland. On Monday, Universities UK estimated that leaving Erasmus+ will cost around £243 million per year. So why do it? There was no clarity, either, for the vital research and development facilities in our world-leading universities, or on their ability to access the new multibillion-pound Horizon Europe project.
One of the biggest costs of the hard Tory Brexit will fall on rural Scotland. We know what the Government think of rural Scotland: their own adviser revealed that farming and fishing are not “critically important” to them. Farming and fishing are not critically important to the Government. In fairness, that was not really a revelation: rural Scotland has long since been wise to the Tory attitude of contempt, and more and more of our fishing communities are seeing it unfold before their eyes. With trade talks starting and the clock now ticking, we are now less than four months away from when the Tories repeat history and sell out on all their promises to Scotland’s fishing communities. The truth is that the Government will be able to secure a free trade deal with Europe only if they let EU fleets continue to access our waters on essentially the same terms as today.
I would like to think that Ted Heath felt some level of responsibility when he treated the Scottish fishing sector as expendable in the 1970s. It was expendable under Ted Heath in the 1970s and it is expendable under this Prime Minister in 2020. The sad truth about the Prime Minister is that he will not even bat an eyelid as he sells out on his promise to Scottish fishing communities. He simply does not care. The same is true for our farmers and crofters. In the Agriculture Bill Committee last week, SNP amendments—[Interruption.] The Prime Minister should calm down; I really worry about his blood pressure.
Madam Deputy Speaker (Dame Eleanor Laing)
Order. Do not worry; if the Prime Minister needs to be calmed down, I will calm him down. He seems to be sitting quite calmly right now. I am sure that the right hon. Gentleman is coming to his peroration.
Ian Blackford
I am nearly there, Madam Deputy Speaker, but I care for the health of everybody, and I certainly care for the health of the Prime Minister.
In the Agriculture Bill Committee last week, SNP amendments gave the UK Government the opportunity to ensure that food and welfare standards will not be diminished and will not be on the table in any future trade deal. It tells its own story that the Conservatives voted against all our amendments, threatening our farmers and crofters with crippling tariffs, reduced standards and costly customs bureaucracy. That has left many of them burdened with very uncertain futures. Will the Chancellor’s Government pick up the bill to compensate our farming and fishing communities if they lose revenue as a consequence of a botched Brexit?
Let me move on to immigration. In this Budget, the Chancellor has failed to give any reassurance on one of the biggest areas of concern for Scottish businesses. From our NHS to social care, to universities, agriculture, tourism and hospitality, EU citizens play a vital part in our economy and are a core part of our communities. Unlike the Secretary of State for Scotland, we do not define these people as “cheap migrant labour”; they are our friends and our neighbours. They have come to Scotland to build a home, and under the SNP they will always be welcome. Rather than heeding concerns or engaging with tailored immigration proposals—including plans put forward by the Scottish Government for a Scottish visa system—the Tories are ploughing on regardless. It is time that this Tory Government woke up to the reality and started to listen to Scottish businesses. The Tories’ immigration plans will devastate Scotland and the United Kingdom, and the Chancellor needs to understand that a partial fig leaf to spare Scottish Tory blushes on immigration will not be enough. I urge the Chancellor, instead of blindly ploughing on, to work constructively with the devolved Administrations and our business communities on a migration system that works.
It is genuinely concerning that this Budget falls so far short when it comes to tackling the climate emergency. It is clear that the Conservatives’ green rhetoric is merely the language of electoral convenience rather than a real priority. The Government have just sacked the president of the UN climate conference in Glasgow, and the sub-committee promised by the Prime Minister has not even met. I am glad to say that Scotland is already a world leader on tackling the climate crisis and delivering green energy. It is time for the Conservatives to get their act together.
The UK Government must now do their bit by ditching nuclear power and instead investing in renewables, making sure that we deliver on carbon capture and storage, and supporting the North sea sector to play its part in the transition. While they are at it, they should ditch the madness of spending £200 billion on Trident nuclear weapons that we do not need. Climate change is already threatening our world; we do not need weapons of mass destruction on the Clyde doing the same. Instead of paying lip service to climate change, the Chancellor should have set out a plan that matches Scotland’s green ambitions, matches the Government’s Paris climate agreement responsibilities, and sticks to future EU emissions standards. As Greta Thunberg has said, our house is on fire. The inaction of the Tories is the equivalent of ignoring not only the fire alarm but the flames that are swirling around our feet.
As I move towards a conclusion, Madam Deputy Speaker—[Hon. Members: “Hooray!”] Well, I can certainly give Members some more home truths if they want them. The decisions and priorities needed to meet the challenges of the climate emergency are but one example of where Scotland has walked a very different and more progressive path than successive Westminster Governments. Last week, in the week when International Women’s Day fell, my colleague Kate Forbes, the Scottish Finance Secretary, became the first woman to present and pass a budget in our Scottish Parliament. She did that despite dealing with the unprecedented delay in today’s UK Budget and the fact that the Tories made a £13.9 billion cumulative cut to Holyrood’s budget.
The Scottish budget was everything this UK Budget is not: ambitious, green, collaborative and compassionate, and delivering £1.8 billion of investment in low-carbon infrastructure, progressive income tax rates, free bus travel for our under-19s, record NHS spending, additional funding for Police Scotland and £800 million for 50,000 new homes. It is a budget that reflects the vision and the values of all our people. It is a budget that puts the building blocks in place for a fairer society and that makes further progress towards a new Scotland—an independent Scotland in the European Union.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. Before I call the Father of the House, I have to put on a time limit of 10 minutes, which is a generous time limit. As I said earlier, it is likely to be reduced later in the debate, but for now it is 10 minutes. I call the Father of the House, Sir Peter Bottomley.
Sir Peter Bottomley (Worthing West) (Con)
I think the most challenging speech after the Chancellor’s was the one by the Leader of the Opposition, and he discharged it well. The most challenging to listen to was the one by the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), the leader of the SNP, who seemed to put each page of his notes to the back of the pack and go through them twice. We were told not to interrupt him, but he interrupted himself about six times, so perhaps we could have a go instead next time. I think he was really saying that he welcomed the freeze on duty on whisky and the promotion of Scottish products overseas, and he will probably welcome the Barnett increase in spending available to the Scottish Government. Having said that, I would like to turn to the UK side of the Budget.
The Government will have to recognise that our pattern and levels of taxation will change dramatically over the next 10, 20 or 30 years, with climate change and adaptation to it. If we think of the amount of money that has come from the duties on tobacco, fuel and the like, that is all going to change. We have to be prepared for a proper debate on what we are going to tax, when we are going to tax people and what we are going to spend the money on. I prefer a life cycle approach; I prefer giving people generous help when they are dependent, encouraging independence and making sure that, when people come to later stages of life, they can get proper, full help without having to ask for it.
One initiative from the Chancellor that I particularly welcome is the extra £1 billion to help people affected by dangerous cladding on buildings. That is in addition to the £600 million announced by a previous Communities Secretary. I pay tribute to the all-party parliamentary group on leasehold and commonhold reform, which I help to lead, and which has managed to give a voice to the voiceless. I deeply regret that the Government’s advisory service, LEASE, did not immediately tell the Government that private leaseholders in big blocks were completely exposed as the only tenants who were expected to pay for the waking watch and for the remediation of dangerous cladding.
I pay tribute to former and present Ministers for getting a grip of this issue, and I hope they will find a way of getting together with the campaigning charity, the Leasehold Knowledge Partnership, and with the National Leasehold Campaign. I also invite the major media to appoint housing editors and housing correspondents who can follow the details of these debates, so that they do not turn up just occasionally on Victoria Derbyshire’s programme—I pay great tribute to her and her producers, and I also pay tribute to some of the money programmes. We need to have housing experts in the media who can help to get these stories into the public domain so that the Government respond faster and more fruitfully more often.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
I pay tribute to the Father of the House for his work. I want to raise a point that came through this week from a constituent who has been affected by the leasehold issues that the APPG has raised. In instances such as hers—she is in shared ownership—cladding is becoming an issue for those who wish to sell their homes. We need clarity about exactly who will be eligible, and any provisions need to be flexible enough to cater for all those who are affected.
Sir Peter Bottomley
I agree. I also think it would be a good idea in the medium term if the Government and the investment sector found ways of taking freeholds and landlordism away from some of the big, bad owners and giving them to a group of infrastructure holders who would actually treat leaseholders and shared ownership people fairly and properly.
I want to move on to a number of other issues, because of the time limits we are left with. In 2002, the Government gave up the Crown preference whereby a failing business had to find how to allocate the money that could be gathered in, especially where attempts were being made to reconstruct the business to keep it going. The Government gave up their priority, but they are now bringing it back. I hope they will meet UK Finance and recovery experts to go through the issues that were debated in the Committee on the Enterprise Bill—now the Enterprise Act 2002—on 9 May 2002. I hope they will ask whether it is necessary for them to try to take a small fiscal gain for themselves at the risk of a 10 times greater impact on our economy. We know that businesses fail, and it is important that they do, but it is also important that they can be brought back to function in our economy. I hope the Government will review the question of whether Crown preference should be brought back in the way it is being.
The Government have rightly paid attention to the pub sector, and I welcome the reliefs announced in the Budget today by the Chancellor. I would refer him to the worries of some family businesses in the brewery sector—I do not want to name any in particular. When a business has been in the same family for 200 years or more, and when the family invest five times their dividends in modernisation and pay a third of their revenue to the Government in taxation, the question of whether business relief on inheritance tax should be under threat is important. That is a separate point from the entrepreneurs’ relief the Chancellor spoke about, which could be a subject of debate now and in the future.
Business relief for inherited family businesses is important if we want to have middle-sized companies that invest for the future year after year, and if we want to have a way for them to pass down their assets to future generations. That does matter in this country. The gap has been identified almost since the Macmillan gap 50 years ago—when I was studying economics rather badly—and it needs attention now.
While I am talking about the pub sector, I should mention that there are many vacancies, especially in the south. The limit on people coming into this country with the £12.63 an hour rate of pay will leave a number of vacancies. I therefore hope the Government will talk to the family brewers, in particular, and work in detail through whether there can be transitional relief or arrangements that will allow our hospitality sector, employing two thirds of its people from this country, but requiring a fair number of cooks and others from overseas, to continue safely and securely.
I talked about the life cycle approach to things. I happen to believe that the change introduced by a previous Conservative or coalition Government to make child benefit ineffective for people on £60,000 a year or more was wrong. I believe that support for children should come automatically. In a couple in which both people may be earning £60,000 a year, the taxation they pay on their £120,000 combined earnings will easily outweigh the child benefit they receive. We do not need to have people declaring or opting out of child benefit, or discovering that some change in their pay during the year has put them in a tax trap. I would restore child benefit for all children and expect that the cost of that would come out in the wash for those who are very well off.
The leader of the SNP talked about the 1950s women and the WASPI campaign. Anyone who thinks we can rectify the whole issue of state retirement pension for women at 60 is wrong. That approach was put forward at the last election, and it was rejected. However, there should be some give. That might involve an actuarial calculation, which is something my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) and I put to a previous Secretary of State for Work and Pensions, although he would not let his officials do the calculations. Equally, we could have at least some give, and give the Freedom Pass to these women so that they get some recognition of the fact that they have been double-hit by the changes. That would be a welcome initiative, and one that I would put forward to the Government.
While I am talking about pensioners, the biggest stain on this Parliament is that overseas pensioners in dominion countries and some others do not get the increases in the state pension. The law, as judged by case judges, is that while what the Government are doing may be legal, it is quite clearly wrong. The fact that we had pension agreements with Canada, South Africa, Australia, New Zealand and some of the Caribbean countries from the 1950s, when inflation was not an issue, should not leave us going on defending the indefensible. Why do half of our overseas pensioners get the increase and the other half do not? The Government really must build in getting rid of that anomaly by the end of this Parliament. It is unfair and unjustified, and it should not continue.
If we take a long view of taxation, we can afford to pay for essential public services and the cost of borrowing for investment. I do not believe our taxation system should be unchanged forever. We may find that people are willing to pay more at certain stages of life or in certain circumstances, and less at other times.
It is crucial that we recognise the value of health and education, and the Government have been doing that. The campaign to get fairer funding for schools has been successful, and those who tried to make school funding party political have failed, and they will fail if they try again. Let us unite on fairer funding for schools, as we have on leasehold issues, and on getting our health services to adjust the best way they can.
As an overall judgment, no one can tell what effect this coronavirus will have on the economy as a whole, except that the economy will be challenged in some ways that can be foreseen and in some ways that cannot. I hope the Chancellor will take the opportunity in the coming nine months to keep the balance between opportunity and fairness, with consultation on major changes before they are suddenly thrown on to an unsuspecting public.
The Government should never fear to talk about their options in the open, as they do between Government Departments. I wish the Chancellor well, I hope the Government succeed in our adjustment to being outside the European Union, and I hope our partnerships within this country, across Europe and across the world will bring the kind of prosperity that makes a difference to us.
I have been around long enough to know that, between 1979 and 1985, Britain went from being the sick man of Europe to being one of the most prosperous and most go-ahead nations. Some of those changes were planned and some were forced on us, but the key point is that we took advantage of the opportunities, and that is what we need to do again now.
Ms Angela Eagle (Wallasey) (Lab)
It is a pleasure to follow the Father of the House. I agree with his view that we are on the cusp of a very major change in the tax base, and it is important that we debate what the nature of that change should be.
We are living in very uncertain times. We are on our third Conservative Prime Minister in four years, and this Budget was presented by the fourth Conservative Chancellor in as many years—a Chancellor who has been in place for barely a month and who had to agree to play second fiddle to Dominic Cummings as the price of his sudden elevation.
No Budget was delivered last year, and the Office for Budget Responsibility last published an official forecast nearly a year ago. To make up for that, we are now told to expect that 2020 will be a year of two Budgets and a spending review, so what the Chancellor announced today may be only the first in a trilogy of fiscal events this year.
This Government of Brexit obsessives have deliberately chosen to inflict a high level of uncertainty and disruption on our future trade arrangements. There is still the prospect of an effective no-deal cliff edge at the end of 2020 should the talks with the EU go badly. The Bank of England’s own assessment points to an 8.25% hit to GDP by 2024 in the event of a sudden, unmanaged WTO outcome to the talks, yet the Chancellor barely, if at all, mentioned Brexit in his hour-long speech.
If that were not enough, the country is now facing an immediate and massive threat caused by the rapid advance of coronavirus across the globe. In his evidence to the Treasury Committee last week, the outgoing Governor of the Bank of England said that coronavirus is likely to have a large but temporary effect on the global economy. Today, announcing an emergency interest rate cut of half a percentage point and an offer to banks of four years of cheap funding to ensure they continue to lend, the Bank of England noted a “marked deterioration” in the outcome of already weak economic growth in the coming months. With the persistence of historically low interest rates since 2008, the efficacy of monetary policy is now questionable. That makes the Chancellor’s fiscal adjustment and supply-side response in today’s Budget crucial in mitigating the coronavirus crisis.
Clearly, fiscal policy needed to be looser, temporarily at least, to protect otherwise viable businesses from being destroyed by the short-term abnormal supply and demand shock, so I welcome the Chancellor’s fiscal stimulus package, which he costs at £30 billion. We all hope he has done enough, and we all trust that he will return with more if the situation demands.
Jonathan Edwards
I echo the hon. Lady’s comments. The announcements on support for small businesses are welcome, but I have been contacted by many small businesses in my constituency that are worried about extra charges due to the new Financial Conduct Authority regime for overdrafts. The Treasury needs to look at this before the regime comes into force in May.
Ms Eagle
I certainly hope the banks will recognise the Government’s generosity to them on lending and buffers and will pass that on to the hon. Gentleman’s constituents, as well as mine.
Climate change and the commitment to reach net zero carbon by 2050 also pose a major challenge, and the effect of being unprepared has been tragically evident in the flooding experienced this winter. This Budget offered an opportunity to address the need to introduce transformative policies to get us on the path to net zero before it is too late, but I do not see an awful lot of detail. I welcome the increase in expenditure on flood defences, which would have been even better had it not been preceded by major cuts in expenditure on flood defences. I look forward to the Treasury’s net zero review, which needs to outline the path forward to net zero, but I am puzzled about agriculture being excluded from the announcement on red diesel. Agriculture is the major sector that uses red diesel, so that needs more detailed scrutiny.
The UK economy remains weak in the face of these formidable challenges. The Office for National Statistics has just revealed that the UK economy did not grow at all in the last quarter of 2019, and annual growth of 1.4% last year is one of the weakest on record. The OBR’s forecast for this year was put together before the larger effects of coronavirus were taken into account. Its forecast for expenditure, excluding those effects, is an anaemic 1.1%.
The OECD recently said it expects coronavirus to cut global growth in half. If that is true, it puts us down to about 0.6% for the year, which is one of the worst performances we could expect to see. Monday showed that, even now, the markets are pricing in a recession, so there are vulnerabilities in growth.
There are also vulnerabilities in the UK labour market, in which 3.7 million people are in insecure jobs and have not seen real wages rise in 12 years. Inequality is rising, and one in five workers are earning less than the real living wage. Child poverty is soaring and is set to reach 5 million by 2024 due to the ongoing cuts to benefits and family support, of which there was no mention whatsoever in the entirety of the Chancellor’s speech.
Nearly 1 million workers are on zero-hours contracts, and 2 million are not earning enough to qualify for statutory sick pay. Those in the gig economy and the self-employed are similarly vulnerable to a loss of income so, as far as they go, I welcome the Chancellor’s announcements on statutory sick pay and support for those who self-isolate, but I am extremely sceptical about his announcement that those who work on zero-hours contracts will apparently be expected to apply for employment and support allowance in order to be compensated for doing the right thing. That is likely to be highly inadequate, and we need to return to that issue. I suspect the answer will be statutory sick pay for all from day one.
The lack of rights at work is a barrier in the fight against coronavirus, and it prevents a desperately needed transformation in productivity and investment in skills. The fight against in-work poverty barely features in this Government’s thinking. Recent analysis by the Resolution Foundation has shown that the poorest fifth of the population have experienced a 7% fall in their disposable household income in the past two years, as a direct result of choices this Government have made, which were not reversed by the Chancellor. A decade of swingeing cuts has decimated public services. Public sector workers have had to do more with less, and be rewarded by suffering a real-terms fall in pay and conditions. The NHS has 17,000 fewer beds. There are 43,000 nursing vacancies and 10,000 doctor vacancies in the NHS that we are expecting to deal with the coronavirus crisis. There is a £6.3 billion shortfall in the resources needed for social care. We can welcome the first new investment in a decade, but we have to be clear that it barely begins to restore what has been taken away.
We also have to remember that infrastructure spending, although welcome, does not deal with the current expenditure squeeze, which is ongoing. My local authority, Wirral Council, has £635 less per household to spend than it did in 2010. Merseyside police has seen £136 million of cuts since 2010, so the £28 million extra pledged in the spending review is welcome, but £5 million of it has to come from council tax increases and it will not restore what has been lost. We see the same in area after area: the Government trying to take credit, as though they were a new Government entirely, and distancing themselves from the Governments of the right hon. Member for Maidenhead (Mrs May) and her predecessor, who did all this cutting in the first place.
They say that imitation is the sincerest form of flattery. Today’s overspun announcements of a £600 billion investment programme are welcomed in the self-same Tory tabloids that denounced Labour’s manifesto plans to invest £500 billion as “ruinous Marxist nonsense.” Apparently, £100 billion extra is acceptable if it is the Tories doing it. Let’s face it: we have heard it all before. Let us wait to see what they deliver before we pat them on the back. We must never forget that the Government would not have to allocate £2.5 billion to fix 50 million potholes had they not neglected our roads system with their ruinous austerity policies in the first place.
The Conservative manifesto promised no increases to income tax, which was not mentioned today, national insurance or VAT, and the Chancellor’s fiscal rules, which he is apparently reviewing, give him only minimum headroom for any non-investment spending. His choice, therefore, is to find tax increases elsewhere or increase borrowing, which proves that the extreme cuts that have been inflicted on our society were not necessary in the first place and that the misery they have unleashed has been needlessly cruel. Starting to put right some of the damage they have done is welcome, but we will not forget the suffering and hardship they have caused, especially to the poorest in society. We will not forget the soaring levels of child poverty the Government have chosen to inflict, and the waste of potential and life opportunities that this indifference implies. We will not forget the attacks on the most vulnerable and the Government’s neglect of social care. We will continue to hold them to account for it at this and future Budgets.
Mrs Theresa May (Maidenhead) (Con)
There is no doubt that, as my right hon. Friend the Chancellor and other speakers have acknowledged, this Budget has had to be delivered against the very difficult background of the coronavirus. We had already seen a slowing in world growth and expectations of that in the coming months, and we have now also seen the negative impacts for economies around the world of the coronavirus. These are not theoretical impacts; we have already seen, through things such as what happened to Flybe, that this is a real, day-to-day issue that has an effect on people’s lives and livelihoods.
Against that background, it must have been difficult to have crafted a Budget, and made the predictions for future Government spending and revenue, let alone dealt with the challenges of preparing and ensuring that we had the best possible background for a post-Brexit Britain, in order to establish that global Britain that we all want to see. Having said that, the Chancellor was absolutely right to deal with coronavirus, to set aside the sums of money as he has suggested and, in particular, to recognise the impact on not only individuals but on businesses and on particular sectors of the business community, such as the hospitality sector.
Mrs Heather Wheeler (South Derbyshire) (Con)
I wonder whether, like me, my right hon. Friend would like to congratulate the Chancellor, particularly on highlighting the hospitality sector—our fantastic pubs, B&Bs and leisure areas—where all this money will help the continuity of business, particularly in our semi-rural areas. South Derbyshire will benefit enormously from that.
Mrs May
I thank my hon. Friend for her intervention. She is right to refer to the hospitality sector and the various elements of business within it, and the impact that the positive measures that the Chancellor has introduced will have on South Derbyshire, as they will on my constituency and constituencies across the country.
This was a difficult Budget to deliver, but I commend the Chancellor for his determination to deliver on our manifesto commitments in it. I trust that in the discussions that were held prior to the delivery of the Budget, there was the necessary tension between No. 10 and the Treasury in developing it. Generally speaking, Prime Ministers want to spend money and Chancellors want to manage the public finances prudently—at least Conservative Chancellors want to do that, because that sound management of the public finances has always been one of the unique selling points of the Conservative party. In my time in politics, I have seen, more than once, a Labour Government come in, trash the economy and leave office with more people unemployed than when they came into office and then a Conservative Government having to come in, restore the economy, restore the public finances and save the day. Although spending a lot of money may be popular and may seem the natural thing to do, there is of course that necessity to have a realistic assessment of the longer-term impact of those decisions and of the longer-term consequences. It is also necessary to ensure that we have that restraint and caution that enables us to make the public finances continue to be strong into the future.
In talking about the public finances, I note that of course the only reason we are able to take the measures we are on coronavirus and the measures my hon. Friend the Member for South Derbyshire (Mrs Wheeler) has mentioned is the sound management of the public finances by the Conservative Governments, so that those finances are in a good position at the moment. We have fiscal rules so that we exercise that restraint on the temptation to take reckless decisions on public spending and borrowing. Every Conservative Member stood on a manifesto of certain fiscal rules, and as was mentioned by my right hon. Friend the Member for Central Devon (Mel Stride), the Treasury Committee Chairman, the Chancellor said that this Budget was being delivered within those fiscal rules.
The Chancellor also said that it was a Budget where the predictions and forecasts that have been put forward did not yet fully take account of the impact of coronavirus, and I noted that he said he was going to be reviewing the fiscal framework in which we operated. I merely say, as I have said, that prudent management of the public finances is one of the USPs—unique selling points— of the Conservative party, and it is essential that any Conservative Government maintain that prudent management, because there are two things that we, as Conservatives, know that the Labour party and others never accept. The first is that the Government do not have any money of their own; they are spending other people’s money, and we owe it to them to take only as much as we need and to spend it wisely. The second point is that it is not about the amount of money we spend; it is about how we spend the money available to us.
I would like to welcome some specific issues in the Budget. On climate change, the money put into carbon capture and storage is important. The technology will be important for our future and delivering on climate change, but it has all too often been swept to one side and not been given the attention it deserves.
In the details, I note that there is welcome funding for the prevention of domestic abuse, particularly to enable police and crime commissioners and others to support perpetrator programmes such as Drive, which from all accounts is having some success. There is also the money for domestic abuse courts, which will be an important development in helping to address something that people across the House want to be eradicated. I welcome, too, the specific sums for counter-terrorism and intelligence services.
Underpinning the Budget has been the concept of levelling up—what I describe as “a country that works for everyone”. I want to focus particularly on two aspects of that. First, I welcome the emphasis on science and R&D, which is important for our future. I would say this to the Treasury, though: although I am pleased that the increase in the R&D tax credit will take us further down the road to the 2.4% of GDP target, it needs to consider the definition of research and development spending. There is some evidence that the Treasury’s rules are currently too narrow to enable certain expenditure that could genuinely be described as research and development to be incorporated.
The Budget also puts significant emphasis on infra- structure spending. I welcome the money that will be made available for Bisham junction on the A404; I would like to have seen funding for a third bridge across the Thames as well, but that may be for another time. However, important though infrastructure is, it is not the only thing that delivers a country that works for everyone. What underpins delivering that and levelling up across the country is the industrial strategy. I noted that the Chancellor did not actually mention the words “industrial strategy” in his Budget; he is not the first Chancellor to have found it difficult to use them in a Budget speech, but the industrial strategy sets how we can ensure prosperity across the whole country.
Some would identify infrastructure spend as saying, “We are now spending as much money in this part of the country as we are in another part.” It is not about that; it is about ensuring that the environment is there to deliver the dynamic economy and prosperity that every part of our country deserves. What the industrial strategy does is focus on the other issues that matter—the importance of place, people and ideas. On place, the issue is about working at a local level, with local leaders and others, on delivering the increases in productivity. The city deals and growth deals have been an important element of all that, but that partnership working is very important.
Aaron Bell (Newcastle-under-Lyme) (Con)
Will my right hon. Friend join me in welcoming the Chancellor of the Exchequer’s announcement about investing £800 million into a model based on the US Advanced Research Projects Agency? That will make a huge difference to research and development.
Mrs May
I thank my hon. Friend for intervening. That is important—one of the interesting and exciting aspects of where we are going as a Government is the emphasis on science and on recognising that, if we are to have the economy of the future, we have to generate and develop ideas that will deliver prosperity for the future.
On the subject of ideas, I should say that people are very important. The Augar review, published about a year ago, set out very clearly the need to invest in further education, so I welcome the investment in further education in the Budget.
I also want to touch on something referenced by the right hon. Member for Ross, Skye and Lochaber (Ian Blackford) in his rather lengthy speech; he spoke for longer than the Leader of the Opposition. He mentioned the shared prosperity fund, which is another part of ensuring that our country works for everyone. This is particularly important: the purpose of the shared prosperity fund is to reduce disparities between and within regions. That will not be done if the Government adopt a “devolve and forget” approach to the fund.
We must recognise the importance of the fund in maintaining the health of the UK economy as a whole. Yes, we need to work in partnership with the Northern Ireland Executive, the Scottish Government and the Welsh Government, but our approach needs to be holistic to ensure that the fund is indeed delivering on the need to reduce disparities within and between regions. I was sorry that the leader of the Scottish nationalists failed to welcome the £640 million extra going to the Scottish Government.
Colum Eastwood (Foyle) (SDLP)
I thank the right hon. Member for giving way. She spent an awful lot of time working to get the Northern Ireland Executive back up and running. The deal that was crafted by the British Government to do that contained many, many promises and many, many commitments. The Barnett consequential payment of £210 million that has been announced by the Chancellor today will go nowhere near dealing with the commitments contained in that agreement. That needs to be thought about, and we need some clarity from the Chancellor. Does she agree that it is just not enough to say that we will have all these commitments but we have no money to pay for them?
Mrs May
Obviously, the hon. Gentleman is absolutely right that commitments were made in that agreement. I am sure the Government will look very closely at how they can deliver on those commitments. The figures that have been announced in the Budget are the Barnett consequentials of the decisions that the Government have taken, but I am sure that he will have an opportunity to raise that matter further. None the less, the Government will be looking closely at how to deliver on those commitments, because they were made in good faith and were about bringing the Northern Ireland Executive together.
Mrs May
I will not give way. If I allow the right hon. Gentleman to intervene, the time will be taken out of my time, so I apologise for not doing so.
I simply want to make this point: it is important that we take a holistic approach to the use of funds from the shared prosperity fund, so that we genuinely deliver that country that works for everyone. To conclude, I simply say that a country that works for everyone is within our grasp, so let us get on with it.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
It is a pleasure to call Kim Johnson to make her maiden speech.
Kim Johnson (Liverpool, Riverside) (Lab)
Thank you, Madam Deputy Speaker, for giving me the opportunity to make my maiden speech during this Budget debate. I am honoured and privileged to have been elected as the MP for Liverpool, Riverside, and to represent the constituency in which I was born, grew up and still live. My roots go very deep and long in the community. I am immensely proud to have been elected as the first black MP for Liverpool. My proudest moment, though, is giving birth to my amazing twins, Kyle and Layla.
I take this opportunity to thank my constituents and the Riverside constituency Labour party for putting their faith and trust in me and working tirelessly throughout my campaign. My predecessor, Dame Louise Ellman, held the seat for 22 years. She was a hard-working constituency MP, who supported many constituents with immigration cases and prevented deportations, and she was a long-serving member of the Transport Committee. I wish her well in her retirement.
My fellow Scouse MPs—Paula, Ian and Mickey—provide daily support and lots of laughs, and without them this would be a very lonely place. Being a politician was never on my bucket list. I grew up in an ordinary working-class family, the granddaughter of immigrants from West Africa and Dublin. I am the eldest of five. My mum and dad both worked—my dad in construction, my mum in factories and latterly as a cleaner. We did not go away on holiday or have a car. I lived in a terraced house with an outside toilet. Sadly, my dad, Joseph Johnson, died in 1981 when he was 51, leaving my mum, Kathy, widowed at 41 with five kids.
I attended an all-girls school in a working-class area where aspiration was in short supply and teachers had very few expectations of us. We were not encouraged to consider university or a professional career, and yet here I am, a working-class black woman in this House, which was never created for people like me, the Member of Parliament for Liverpool, Riverside.
I know that I am biased, but Liverpool is the best city in the world, and known to many globally. The history of Liverpool can be traced back to 1190. The city was created in 1207, when King John granted a Royal Charter. Liverpool was once the Second City of Empire, eclipsing even London for commerce. Its growth as a major port was paralleled by the expansion of the city throughout the industrial revolution. Liverpool’s wealth was built on the back of the slave trade, with thousands of slave ships leaving the port over many years. The city has a shameful history of slavery and exploitation. The trading in human lives made Liverpool rich and powerful, leaving a permanent mark for generations to come. In 1999, the city council made an unreserved apology for the city’s role in the slave trade. Liverpool is a port city and has a long-established diverse population, with the oldest black community in the UK and the oldest Chinese community in Europe. Black people continue to be significantly under-represented across the public and private sectors—in education, health, housing, and at all levels of political and civic engagement.
Liverpool, Riverside is a very diverse constituency with some quite affluent wards, and others with high levels of multi-deprivation—some of the poorest wards in the country. It covers the city centre and the waterfront. There are two cathedrals, three universities, the major arts and cultural organisations, and three hospitals—one yet to be completed due to the collapse of Carillion, with patients cared for in a building that is not fit for purpose. Liverpool’s waterfront was designated a world heritage site by UNESCO in July 2004 as a result of the city’s significance as a commercial port at the time of Britain’s greatest global influence. With the most listed building outside London, the city’s heritage is clearly visible, but our achievements go much further than bricks and mortar. In 2008 Liverpool was declared European capital of culture, which has contributed to a major renaissance in the city.
I cannot talk about Liverpool without mentioning football. Liverpool is the most successful footballing city in England, home to both Liverpool and Everton football clubs, and I do not need to say how fabulously well Liverpool have been doing this season. Although most people will know that The Beatles came from Liverpool, what most people will not know is that Liverpool is a very unique city that does things very differently. We are a city of many firsts, and I will name just a few. We had the first subscription library in England. In 1842, Kitty Wilkinson founded the world’s first public baths and wash houses. Football nets were used for the first time in 1890, after being invented by Liverpool city engineer John Brodie. Liverpool School of Tropical Medicine was the first in Britain when it opened in 1899. The first school for the blind was established in Liverpool, and the RSPCA, NSPCC and Age Concern all evolved from the city.
Liverpool is now the seventh most visited city in the UK, with tourists bringing £3.6 billion of revenue to the city every year. Our tourism industry currently employs about 50,000 people. However, despite all of this, the city has the highest unemployment rate of any British city when hidden unemployment is taken into account. We have suffered as a result of managed decline during the Thatcher years. The city has been ravaged by 10 years of draconian austerity measures; we have had 64% of our budget stolen from us, equating to a loss of £450 million, with more people now reliant on food banks, greater levels of in-work poverty and children going hungry during school holidays. Last summer, the city council fed 30,000 kids in its summer lunch scheme. We are the fifth richest country in the world. We should not be in this position.
While the most vulnerable have been penalised with pernicious welfare benefits changes, the rich have been rewarded with tax breaks, but we are a resilient city and we will always fight back. Before I was elected as an MP, I worked for social services at Liverpool City Council, and I saw on a daily basis the impact that these harsh cuts had on the city. What we needed from the Budget today was greater provision for local government and adult social care, but I did not hear anything about levelling up for my constituents in Riverside.
I am a very proud Scouser and a socialist, and I intend to spend my time in this House holding the Government to account and being the voice of my constituency, challenging social injustice and inequality at every turn. The constituents of Liverpool, Riverside, particularly young people, need the hope of a better future.
Sajid Javid (Bromsgrove) (Con)
It is a pleasure to follow the hon. Member for Liverpool, Riverside (Kim Johnson). I congratulate her on her maiden speech. I cannot say I agree with everything she said, but we do have something in common as the children of working-class migrants. I very much welcome her to the House.
I want to begin by warmly congratulating my right hon. Friend the Chancellor on his first Budget. He had only four weeks to write this Budget, and he has risen to the challenge. Although I do recognise much of it, it is different in one significant respect—there has been a dramatic change, as he set out, in the global economy. This means that we must of course face these challenges as a nation. Therefore, he has been absolutely right to focus his attention on the threat posed by coronavirus, so before I turn to a few other measures in the Budget, let me say a few words about that. First, on the economic context, back in October, the IMF downgraded global economic growth forecasts, including, of course, those for the UK. The UK also faces a trio of other structural changes over the coming years: our new trading relationship with our European friends, a new immigration system, and the transition to carbon neutrality by 2050. All three of those are absolutely the right things to do, but they will mean adjustments for business.
Now we have a new challenge to contend with. We must do all we reasonably can to delay the spread of coronavirus and to care for the sick, so my right hon. Friend has been absolutely right today to pledge that every resource necessary will be made available for the NHS, for the DWP and for local authorities. While our No. 1 priority must of course be public health, we are facing the most severe threat to our economy since the global financial crisis. As the Chancellor said, it is first and foremost a supply-side challenge, but it is also a demand-side problem. We must also get on to the front foot to support the financially vulnerable, who will be as fearful for their economic security as they are for their health. Likewise, a number of otherwise viable companies may be unable to withstand the downturn, so while I welcome the actions that my right hon. Friend has set out today, he must stand ready to do more as the situation demands, and not necessarily wait for the comprehensive spending review or the next Budget.
John Redwood
There is a £6.6 billion saving this year on interest on Government debt anyway, but of course there has been another major collapse of interest rates since those figures were put together, so there is something on the other side of the account. I would therefore urge my right hon. Friend indeed to say that we need to spend what it takes.
Sajid Javid
My right hon. Friend is, characteristically, absolutely right to make that observation. I think he will also agree that while this is welcome, and will, absolutely, cut the cost of interest, it also reminds us that interest rates are incredibly volatile, and no Government should rely on interest rates remaining low for an incredibly long time.
I have often said that small and medium-sized businesses are the beating heart of the economy, and rightly where our focus should be. If SMEs are the heart, then cash flow is their lifeblood, and that is where we must focus our help most, so I very much welcome the emergency support package for SMEs that my right hon. Friend the Chancellor set out today. If I may, I will make three quick observations about what more can be done. First, on time to pay, I strongly welcome the announcement today to extend the existing HMRC scheme. While it is absolutely right that we carry out the fundamental business rates review that we set out in our manifesto, this will not happen overnight, as the Chancellor recognised, so we need to act now. I do welcome the announcements on business rates that he made today, but may I also suggest that the time-to-pay arrangement is extended to business rates too? Although they are collected by local authorities, not HMRC, it is possible to delay collection while making sure that no local authority loses out in terms of cash flow.
Secondly, on support for workers, firms should not have to shed workers because of temporary cash-flow problems. That is why I would like to keep open the option of a temporary cut in employers’ national insurance —perhaps over a three-month period—thereby relieving the cost of labour.
Thirdly, since the financial crisis, it is true that monetary policy has lost some of its potency. A decade ago, central banks were the star turn; now they are more like the supporting act, but they can help. That is why I strongly welcome the action by the Bank of England that was announced this morning, and I am pleased to see the co-ordination that has taken place with the Treasury. I am particularly encouraged by the restart of the term funding scheme, especially how the incentives have been set out to encourage an increase in lending to SMEs.
While the coronavirus has captured the attention of the front pages, my right hon. Friend the Chancellor is right not to lose sight of the long-term failures of UK economic policy under successive Governments—failures that have caused profound regional inequalities and a sense of anger and betrayal in many of our communities. We need to put people and place back at the heart of a more human capitalism. I therefore welcome the investment in skills and education, especially the £1.5 billion for FE capital. We should think about not only the flow of students but the stock of skills that we have in our country. There are talented individuals who have left full-time education and would benefit from retraining. That is why I am unapologetically keen on a long-term plan for skills, including the right to retrain for all working adults.
It is clear from today’s Budget that my right hon. Friend shares my enthusiasm for the infrastructure revolution and my conviction that, with the right scale and the right mix of investment in roads, rail, digital, decarbonisation and flood defences, we can tackle our most significant economic challenges: low productivity and regional inequality. As I have long said, we should take advantage of record low interest rates to invest properly in our economic future.
I welcome the Chancellor’s indication that he will continue the work that was begun to rewrite the Green Book, so that we can better allocate investment across the nations. I hope that he will look carefully at what else we can do to help the infrastructure revolution, including looking at planning, especially reform of the compulsory purchase order regime; the infrastructure delivery model, so that we do not have a repeat of the overspending on HS2; and labour market requirements at a time of record employment.
I urge the Chancellor to consider in his next fiscal statement 100% capital allowances—in other words, full expensing for businesses, to encourage them to invest more in capital. I want to end by underlining the importance of fiscal responsibility.
Sir Desmond Swayne
As someone who longs for lower taxes and smaller government, what assessment has my right hon. Friend made of the Chancellor’s ability to remain within the existing fiscal rules?
Sajid Javid
I was pleased to hear the Chancellor say that this Budget is within the fiscal rules, but as my right hon. Friend the Member for Maidenhead (Mrs May) said, we do not yet know the impact of these emergency measures. We also do not know the impact of the term funding scheme announced today by the Bank of England. A lot of the fall in debt over the next few years is because of the term funding scheme coming to an end, but that might now change, so it is worth keeping that in mind.
The British economy is in a strong position to weather the current storm, but we must not forget that my right hon. Friend the Chancellor is only able to deploy the firepower that he has today because of the choices that consecutive Conservative Chancellors have made—choices to control spending, to control borrowing and to control debt. That is why the fiscal rules that we set out in our manifesto are important. Sticking to those rules in normal times is what separates us from Opposition parties. They help us to keep our economy strong and to keep taxes low, and they preserve our flexibility for when we need it most. It is not always possible to forecast when the next threat will emerge, nor what form it will take, but it is possible to prepare, and I know that the Chancellor and I are grateful that our predecessors had the foresight to do so.
Sajid Javid
I will not give way.
The British people have responded to the coronavirus crisis with stoicism and selflessness, as well as a distinct sense of humour—especially when it comes to toilet rolls. The British people are following the lead that has been set by right hon. Friends the Prime Minister and the Chancellor who, in the most challenging of circumstances, have resolved to act prudently on the basis of evidence and to act in the national interest. I have every faith that in the coming months they will do the right thing and that, whatever happens, as a country we will emerge stronger on the other side.
Madam Deputy Speaker (Dame Rosie Winterton)
It is a pleasure to call Sam Tarry to make his maiden speech.
Sam Tarry (Ilford South) (Lab)
Thank you, Madam Deputy Speaker. If that is okay, I would just like to pay tribute to my hon. Friend the Member for Liverpool, Riverside (Kim Johnson) for that inspiring and passionate speech.
It is a great honour to have this opportunity to deliver my maiden speech in this place. It was in 1992 that a maiden speech was last given by a Member for Ilford South: the year of the Barcelona Olympics, the year of Norway and Finland applying to join the European Community and the year my dad finally purchased a colour TV, which he lugged through Valentines park in Ilford, to watch England crash out of Euro ’92. It was also of course the year that a young and fresh-faced MP entered Parliament for the very first time—my predecessor, Mike Gapes.
I would like to pay tribute to Mike not just because, like me, he is a West Ham fan, but because he served our community so diligently. He was hard working and strove every day to assist the wonderful people of Ilford South, running his advice surgery and helping tens of thousands of residents during his time in office. I also have to thank my predecessor for getting me into politics in the first place. It was his exuberant support for a certain foreign policy misadventure that led to me being regularly and vocally outside his office with friends from Ilford’s mosques, churches, temples, Quakers and trade unions, campaigning to stop the Iraq war.
It was Ilford where I was first handed a Labour party membership form by a stalwart Labour councillor knocking on my door in Seven Kings, where I grew up. It is the community in which I first joined a trade union, and later where I became active in campaigning for peace and justice across the globe. I went to Highlands Primary School, just off The Drive in central Ilford, a school that recently fought off academisation and is now, thankfully, rated as outstanding. I had my first job as a cleaner in Redbridge College, as a 15-year-old, before securing a regular contract at Ilford Sainsbury’s.
I am proud to come from Ilford because it has defined who I am and my politics. It is a community that is proud of its diversity, and where going to school locally meant that you would visit one friend’s house to celebrate Hanukkah, another for Diwali and another for Eid before having friends to our home to celebrate Christmas. It is a truly global community in which faith is a mainstay in many people’s lives, driving the compassion and unity all of us have for one another and that comes together always in the face of adversity or crisis.
For most of my life, I have taken a train from Seven Kings or Goodmayes stations in Ilford South to Liverpool Street on the way to work—coming “up town”, as we say—as I did this morning. It is a journey that has seen an ever changing view from the windows of the train, soon to be Crossrail—from the springing up of a thicket of skyscrapers clustered around Canary Wharf to, more recently, the Olympic stadium that is now home to West Ham football club and even Pioneer Point in central Ilford, towering above what once housed Pioneer market. However, it is a skyline that tells only half the story, for beneath the majesty and the gleaming pinnacles lie the destitute, the homeless and the drug addicts—and, sadly, in far greater numbers than when I was a young man watching the world out of the 364 bus window. There are so many more people lying there desperate for help.
For many, Ilford has always been considered Essex—the first outpost of Essex in London—although, for fear of the wrath of certain generations of Ilford South residents, it is now perhaps the last outpost of London in Essex. I like to think we have the best of both worlds: the hard work, determination and flair so often associated with Essex, but the diversity of London—imaginative in its solutions to the problems we face and fierce in its rejection of racism.
Some of my friends from Second Seven Kings Scout Troop followed the classic path of heading to work in the Dagenham Ford plant, and to this day they have good and well-paid work. However, with those jobs mostly gone, and manufacturers such as Plessey a long and distant memory, young people in Ilford now have to work even harder to achieve success.
Ilford is, and always has been, a truly aspirational community which, despite some of the worst rates of child poverty in Essex, and even after a decade of austerity, has many brilliant schools, a thriving business community, and residents who are hungry for real change and serious investment. Seven Kings School is a beacon of inclusivity, where pupils with physical disabilities are treated equally with able-bodied pupils in every aspect of the school’s work, supported by a community of teachers and families, who recently defended the school from the threat of cuts. At Frenford—friends of Ilford—youth club, for only £1 per day young people can play sport, study, use music facilities, or get support, coaching and mentoring to push their lives forward. Singh Sabha London East runs kabaddi clubs and boxing training, to give discipline and goals to young people. That is the lived solidarity of communities and volunteers who are prepared to believe that things can always get better.
My predecessor was the first Labour Member of Parliament for Ilford South to have to serve under a Conservative Government, and, sadly, I will be the second. I do not want to be a Labour MP in opposition, because I know, and people in Ilford know, about the opportunities that opened up for our communities under the last Labour Government: Sure Start, the national minimum wage, the Building Schools for the Future programme, and an NHS that was rescued and restored to a world-class health service that is the envy of the world. And after 10 years of Conservative rule, every day when I walk through Ilford, I see the poverty, the ranks of homeless on the streets, and too many young people who, despite studying hard, face precarious work and low wages. Too often in the past few months I have had to answer the phone to our borough commander to learn about yet another death from knife crime—a modern day scourge that devastates lives and families far too often.
As a new MP, my surgery is already full of people facing a housing crisis, and a lack of affordable homes and proper council houses. Sadly, it is always the developers and property speculators who win, pushing up rents and house prices further. Every day over the past 10 years, people’s stake in the economy, and their power to have a say over their own destiny, has diminished under this Government, and I have seen nothing in today’s Budget that changes that. When we have a Government and Conservative Members who talk openly about going after the Human Rights Act and the Supreme Court, and of cracking down on freedom of speech and even the BBC, and measures to suppress voters at the ballot box, I will be here to hold them to account. We need to build a democracy that is fit for the 21st century, not one designed to keep the rich and powerful in perpetual rule.
In Ilford, the climate crisis takes on a new dimension, because the catastrophe of climate change is already impacting on the families and relatives of Ilford’s peoples across the world. I cannot help but think of my son’s future, and whether he will one day ask us all what we have done to halt the devastation of our planet, including those communities that have faced floods in the past few months, and whether any of us have the guts to stand up, put greed and profit aside, to take the bold measures needed to give future generations a chance of survival.
For me politics is and always has been a moral crusade. Perhaps that is because my heroes include Keir Hardie, or because my father served for more than 30 years as a parish priest at St John’s church, Seven Kings church, and St Andrew’s church on The Drive in Ilford, as well as at nearby St Margaret’s in Barking. He always taught me, in the cause of social justice, never to walk by on the other side of the road. I will therefore always strive to hold this Government to account, and to work with my Labour colleagues so that not only do we rebuild the red walls in the north, but we extend the red citadels in the towns and hinterlands of Essex, Kent, and beyond, and restore our party in Scotland. We must return to government and shape our country to become once again a beacon of hope, dignity, and equality across the world.
Serving Ilford South, my community, and the place my friends live, will be the honour of my life.
John Redwood (Wokingham) (Con)
I have declared my business interests in the Register of Members’ Financial Interests, although I am of course not speaking for them.
I congratulate the hon. Member for Ilford South (Sam Tarry) on an excellent maiden speech. He was warm and informative about his predecessor, who was much respected on both sides of the House. He rightly drew attention to injustices and problems which he has a passion to solve. I would just like to reassure him that there is no monopoly on wishing to solve those problems on his side of the House. That is what we are all here to do.
It is a great pleasure, for the first time in about five years, for me to be able to welcome the actions of the Bank of England today. It is a pleasure to see the Bank of England and the Treasury co-ordinating their work, and doing things that are massively in the public interest. For the past five years, it has been my miserable task to be the one voice in this House pointing out that the Bank of England has consistently got its economic forecasts wrong and that it had made a number of very bad decisions. I have been particularly critical of the way it decided to tighten monetary policy and slow the economy from spring 2017 onwards, culminating in the very ill-judged decision it made at the end of last year to increase the counter-cyclical capital buffers, which meant denying loans to businesses that wanted to expand or to solvent people who wanted to buy a new car or a new home. It was a very bad policy and it is wonderful news today that the Bank of England, with its new Governor, has started off on a much better basis and has cancelled those counter-cyclical buffers. It is the single biggest amount of money we are talking about in this debate. As the Bank of England itself calculates, it means up to £190 billion more is now available for good projects, for business requirements and for individuals who want to borrow for big ticket items. Of course, banks must still be prudent and sensible in the way they advance that money, but the previous controls were too tight. Against the background of world downturn, it is very important that that firepower is made available.
Just to reinforce the position and to deal with the special problems that the virus is now likely to create, the Bank of England also put forward a new medium-term lending scheme for the banks, so they can get access to large sums of money—up to £100 billion in total—at the new very low rate of 0.25% to lend on to medium and small-sized enterprises. Again, that was something I was very keen for it to put forward. I am delighted that it has returned to this idea. It is much needed, I fear, because we already see the virus having a very negative impact on certain businesses, most obviously in aviation and other transport, but now also in events and some other tourism-related activities where we see the pinch already being established by the virus. If, as we fear, it spreads more, that is going to get rather worse, so I welcome the double set of actions by the Bank of England. I am not sure that 50 basis points off the interest rate makes very much difference. It is not something I would have done myself, but I can see that it was well intentioned and it sends a very clear signal that borrowing should not only be available but cheap in these very extraordinary times.
I also welcome the fiscal stance the Government have adopted in the Budget. If anything, it is on the prudent side of what one might have expected in the current circumstances. Some of my colleagues will find that curious coming from me, a former hawk, on how much this country can afford to spend and borrow. However, in these circumstances, and against the massive monetary and fiscal tightening we have experienced for some three years and the very noticeable slowdown or faltering of the world economy, it is obviously sensible to have a fiscal stimulus. The £18 billion underlying stimulus is definitely at the bottom end of the kind of range that many people were thinking about.
On top of that, there is the £12 billion package which the Government have wisely put forward. They stated that if the virus problem gets worse there will be more. I hope it will be the case that the virus problem does not get that bad and we do not need to spend the £12 billion or anything like it, but I am pleased the £12 billion is there by way of additional resource for the health service should the need arise and as additional money available particularly for the business sector, which, in certain circumstances, if we have anything like the experiences of some other countries abroad have now had, would need cash injections. I am very pleased that thanks to the Bank of England it will not just be a question of lending at cheap rates through the commercial banks, but that in some cases, particularly in hospitality and tourism-related areas that are already being fairly badly hit, it will be a reduction in their bills.
I listened carefully to the very long address by the SNP spokesman, the right hon. Member for Ross, Skye and Lochaber (Ian Blackford). I cannot see how that party’s VAT proposal would help, because VAT is turnover-driven and we are talking about businesses that lose much or all of their turnover, so it would not deal with the problem. The Government have a much better answer: to take a cost that businesses cannot get out of quickly or avoid—their property cost—and say that the Government should not be charging them for using property when no money is coming in, because there is no turnover as they have lost their customers. I agree with the Government.
Sir Edward Leigh (Gainsborough) (Con)
I was not allowed to intervene on the leader of the SNP, but surely any sensible person would come to the conclusion that when faced with an existential threat to our country, such as the coronavirus, we are much better dealing with this together, as a United Kingdom, than as separate nations.
John Redwood
My right hon. Friend and I think that, but more importantly, that is what the Scottish people voted for just a few years ago, when we very wisely and democratically said, “Yes, let the Scottish people decide.” They did decide and I wish their elected representatives here would understand the result of the referendum and remember that their colleagues told us at the time, when asking for it, that it would be a once-in-a-generation matter. While I am a democrat who thinks that these things occasionally need exploring, we cannot explore them every five years. These are fundamental things that are very disruptive if we keep going into them. I had to wait many years to get an EU referendum—rather longer than I wanted—but I do not think we should have one every five years. That would be quite inappropriate.
To go back to the Budget judgment, I was interested to see that quite substantial increases in spending, which we need in health, education and police, for example, have been relatively easily accommodated. It is good to see already in the first-year figures—for 2020-21— £4.6 billion of Brexit savings coming through. It is very good to see that there will be another £10 billion on top of that by the end of the forecast period, so the Brexit bonus is available and is beginning to come into these figures.
It was also good to see the £6.6 billion of interest cost reduction, thanks to the quite substantial falls in interest rates that had occurred before this month. The point that I was making to my right hon. Friend the Member for Bromsgrove (Sajid Javid) is that those savings would be considerably bigger if we forecast them at today’s interest rates, because interest rates for Government borrowing have fallen even further. He countered and said, “Yes, but you still have to be very careful because you can’t necessarily assume that that will go on into the future.” The bad news is that interest rates are going to stay low for a bit, but the good news is that the Government can borrow for 30 years for practically nothing, so now is surely a very good time to lock those interest rates in so that the future interest rate programme is very cheap, as well as the present one. It is something the Government need to think about. I know they have issues about how long they fund, but this is surely a time to move in the direction of longer funding so that we lock the very low rates in.
Stephen Crabb (Preseli Pembrokeshire) (Con)
On the very low costs of borrowing, does my right hon. Friend recognise that there is enormous demand in the City of London for long-dated assets? There is a lot of money looking for long-term investments that will provide secure returns, which is ideal for long-term infrastructure spending.
John Redwood
Let us hope that that is right, yes. We hope that the City gets better at managing the gap between those who say they have all this long-term money and the projects that are available. We seem to need a bit more work on that. I am very keen that more of it is privately rather than publicly financed, so that we can get more investment for less strain on the public finances.
The Government, looking at their forward budgets, have rightly said that they wish to increase public sector infrastructure investment. In principle, I agree, but I urge one thing on the Government—I wish that they would look at a large number of smaller, quicker schemes, because what we need to deal with transport problems, in particular, is quicker-acting, smaller schemes that we can get up and running and that will have some tangible results. On the railways, we could have short sections of bypass track on existing main lines to get express trains past stopping trains when the timetable falls over, and digital signalling on a very widespread basis, which could give us something like a 25% capacity increase much more quickly and cheaply than some of the rather big schemes that we have been looking at in this place recently, but I will not be dragged down that particular avenue today.
On roads, the immediate priority is the digitalisation and rephasing of the many traffic signals in this country, because they are not optimised, meaning that junctions restrict traffic much more than they need to. Roundabout substitution, right filters with right lanes and junction remodelling are also possible. We need to get people on the move, and junctions are often a cause of tension and delay. Junctions would also be safer if we optimised them and had less frustration and conflict between vehicles at those junctions. I hope the Government will look at that. We also need lots of bypasses and other local roads to relieve the main motorway system, which is a fixed entity; nobody is suggesting building a new motorway any more, so we need to relieve the pressure on the motorway network with more local road projects. I want to see those projects going in and some concentration on that in the investments we will see in that programme.
I hope that we will look at water management on both sides: we probably need to store more water for water use—there is plenty of it around at the moment, and it will be galling if we have a long hot summer and then discover we are short of water, given what we have just been through—but we also need that accelerated development of drainage projects and probably more pumps, more dredging and more routes to take water safely away from areas of habitation. It is not good in a first-world country to see the kind of scenes we have seen this winter, with this prolonged period of excess rainfall.
The Budget is going in the right direction. The Bank of England has joined in and is doing the things it ought to be doing—we hope we will not need all that credit, but it is important that those facilities are available against a possible worsening of the virus situation—and I am glad we are making down payments on what we need to do on health and education spending. I have said how I would like the infrastructure money to be accelerated and developed into smaller projects that will really work. We also need more tax reform. My one worry about the Budget is that it does not cut taxes enough; I would like to see more tax cuts. We only have five years to show how fast this economy can grow before the electorate will judge us, and the more the Government cut taxes, the more the economy will grow, and the more we trust people with their own money, the better they will spend it and the better the economy will do. I say to the Government: trust the people and cut taxes more, and then it would be an even better Budget.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I should declare an interest in the Budget as a leaseholder in a block that needs cladding removing, although, happily, in my case, the developer is footing the total cost. Would that all were so responsible!
The Budget is optimistic—that is the polite way of describing it. It is a mix of old announcements repackaged and a very long wish list, and of course the devil will be in the detail of the delivery, which I and the Public Accounts Committee will be examining. It is a privilege to chair the Committee, although it also ruins me in terms of making cheap political promises, and it means I can spot a cheap political promise a mile off. There are missed opportunities in the Budget, on housing, education and social care, and it comes against the backdrop of a looming spending review—supposedly in July, though we understand that coronavirus could delay things—in preparation for which Departments are already facing 5% cuts on normal business.
Let’s not pretend, then, that a wave of a magic wand today and a flurry of promises means that what is being promised will be delivered. There are particular issues that may be quite problematic, which I will pick up on later, but I want to talk first about the proposals on statutory sick pay for coronavirus. I welcome the intent, of course, but so many people are on zero-hours contracts that this serious issue of coronavirus is underlining a systemic problem in our society. We have a two or even three-tier employment system, with too many people not even able to get statutory sick pay. In my constituency, we also have many self-employed people—a rising area of work—and the idea that a claim for benefits will be quick and easy is not realistic. I had the privilege of visiting my local jobcentre and meeting the fantastic team. They are working hard on a personal level to deliver for the people of Hackney on benefits. I did not get the chance to ask them about the Budget, but I think it will be quite hard to set up a scheme in which a load of checks would have to be waived, in which everything would have to be done over the phone, and in which a lot of the normal processes would have to be suspended. That will lead, I fear, to fraud, and particularly to the scourge of overpayment, because it will be difficult to do the necessary checks to make sure that people are getting what they should.
Zero-hours contracts are a growing issue. The Office for National Statistics labour force survey tells us that from October to December 2019, there were 974,000 workers on zero-hour contracts, which is 3% of the workforce. That is a record in both percentage and absolute terms. If we look at younger people, 9.1% of people aged 16 to 24 who are in employment—nearly one in 10—are on a zero-hours contract. The Government trumpet the new jobs that are being created, but we need to be mindful that many of them are part time, low paid and very insecure. It is not surprising that over a quarter of people on zero-hours contracts want an additional job, or a replacement job with additional hours. That is a big concern, particularly in the social care sector, where about a quarter of the workforce are recorded as being employed on zero-hours contracts.
We heard nothing, except in the Chancellor’s peroration, about social care—no solution for that sector. People in the national health service know that without investment in social care, any money thrown at the health service will have limited effect. Given the current situation with coronavirus, it is particularly vital that we protect social care.
Meg Hillier
I will not, I am afraid, because of the time.
Another issue that I am very concerned about is housing. Money for housing may be a start, but it depends exactly where it is going. According to the Red Book, the money is for an affordable housing fund, but my definition, and my constituents’ definition, of affordable housing is very different from the Prime Minister’s when he was Mayor of London. In high-cost areas such as Hackney, it is vital that housing be properly affordable. I have so many constituents living in really difficult circumstances. As of August last year, there were over 13,000 households on the housing register in Hackney. That is a 33% increase over the past five years, and responsibility for that lies firmly, squarely at the Government’s door. The wait for new housing is life-changing. The wait for a two-bedroom property for someone in the “urgent” band is seven years. For those in the “priority” band, it is three years, and it is six years for those in the “general” band. Madam Deputy Speaker, can you imagine waiting six or seven years to get your child and your family into stable accommodation? I have rafts of examples of people in temporary accommodation who are living in one room in a hostel with their children.
I absolutely welcome the money that the Chancellor has committed to removal of dangerous cladding. So many of my constituents are mortgage prisoners who face bankruptcy, and whose life is on hold, so that money is a welcome step, but—there is a “but”—it is probably not as much money as is needed. It may well be that £1 billion is a drop in the ocean of what is required, and the money is only for properties over 18 metres high, yet the latest Government guidance note includes buildings over 11 metres. The Chancellor spoke quite loosely about removing all dangerous cladding; that is a very wide promise, and in the Red Book, all I see is that detail will be laid out in the spending review that is expected in July, so there is a delay in getting more details, and a further delay before the promise is implemented. If the spending review is delayed because of coronavirus, or for any other reason, people in my constituency and across the country will remain in limbo, waiting to find out what will happen.
I was glad that the Chancellor, in an almost throwaway line, pledged that the Government would pursue building owners and developers to ensure that they paid their share. That is absolutely right. Some of the estimates are high because everything to do with fire safety that has gone wrong in a building is being added to the bill. Frankly, if a developer did not put a fire door in properly, it should not be down to the taxpayer or homeowner to backfill for that; that should be down to the people who made the mistake. The track record shows that for any Government, getting money back from the private sector once there has been a taxpayer-funded giveaway is challenging. I will look closely at the detail to make sure that those who were irresponsible do not get away with it.
An area that is missing from the Budget is Brexit preparations. We are due to leave the European Union on 31 December, yet there was nothing in the Budget about how we will pay for that. On two occasions in the past year, money has been spent like water to prepare for no deal. The Public Accounts Committee has been looking at that. It is very expensive to prepare when we do not yet know what is happening. Businesses up and down the country, among others, are living in uncertain times and will need information, so there will at the very least be an information campaign. Of course, a lot of other Government work is being done to prepare, but there is nothing in the Budget for that on top of what is in existing budgets.
The Chancellor talked about capital investment in further education; I only ask how much will be used to pay off the existing loans that the Government have had to bung to FE colleges because they are so cash-strapped that they were unable to pay back the grants they were given so those grants were turned into loans. That could absorb quite a chunk of money, so I wonder how much is actually for new capital investment that will be invested in vital technical and other education to make sure that we have a workforce fit for the future.
The Public Accounts Committee has looked into carbon capture and storage. There have been two attempts to deliver it and a third competition that delivered nothing. Millions of pounds have been wasted. An £800 million bung to a sector that has not managed it so far, when there is no capacity out there to deliver it, seems to me to be good money after bad. It is a great idea—I would love to see carbon capture and storage work to make sure that our energy-intensive industries can continue—but there is a long way between promising £800 million and getting it delivered. I really do hope that the Department for Business, Energy and Industrial Strategy is looking at the issue closely and actually has a plan behind the money. The worst thing is just to throw money at something for a cheap headline and not have a plan for delivery.
The health surcharge has a big impact. I have a constituency that is the world in one constituency—the world in one borough—and am proud of that. The many fees that are landing on migrants are having a huge impact on their ability to get on with their lives and become fully contributory members of our society. At £624 per annum—more than double the current rate—the health surcharge is going to mean a huge cost of more than £2,000 for a typical family. If a person applies for discretionary leave to remain, they now have to apply three times before they have the option of applying for citizenship. The fees rack up, at £800 a time for DLR and more than £1,000 for citizenship. It is no wonder that young people and older people are being deported from this country because the law currently says that if they do not have citizenship and commit a crime, they will be deported—many people would be citizens, if only they could afford the cost.
The issue with NHS pensions, which was first identified by the Public Accounts Committee in 2012, is now finally being tackled, eight years later, but at the huge cost of the loss of the experience of doctors that we now need in the NHS to deal with the coronavirus.
There are many promises, but little detail. I assure the Chancellor and the Treasury that there will be plenty of scrutiny from the Public Accounts Committee.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
It is a pleasure to call Matt Vickers to make his maiden speech.
Matt Vickers (Stockton South) (Con)
I am delighted to deliver my maiden speech on the day that my long-standing friend and constituency neighbour, my right hon. Friend the Member for Richmond (Yorks) (Rishi Sunak), delivered his maiden Budget. I first met the Chancellor when he was seeking the candidacy in Richmond. On his election, there was much debate about how he could ever hope to fill the huge boots left by his predecessor, the legend that is William Hague. It is a very high bar, but it looks like he is doing a very good job of it.
I welcome the news that this Government are investing record amounts in infrastructure; bringing gigabit broad- band to the masses; committing yet more money for our NHS, police and schools; and backing our veterans. Importantly, I welcome the fact that my constituency will benefit from funding to improve disabled access at Eaglescliffe train station.
It is the biggest honour and privilege of my life to be here as the MP for Stockton South. Not only is it the greatest constituency on earth, but it is a place that I am extremely proud to call home. Born and bred in this amazing part of the world, when I stand here, I have the pleasure and the responsibility of speaking for the people I went to school with; my neighbours, family and friends; and the people I have worked alongside, pulling pints, laying bricks and stacking shelves.
I pay tribute to my immediate predecessor, Paul Williams. It is no secret that he and I had a difference of opinion—or two—on a few different issues, but he worked very hard to do what he thought was right for the people of my constituency. Before that, my constituency was represented by James Wharton, who, as Northern Powerhouse Minister, left his mark both here and in my region. His private Member’s Bill pushed forward the referendum that led us to shake off the shackles of EU control.
Perhaps the most notable parliamentarian to represent Stockton was Harold Macmillan, who served as Foreign Secretary, Chancellor and Prime Minister—the unflappable Supermac; a one nation conservative. I hope that by the end of this term, we will ensure that the people of Stockton South have never had it so good.
The royal charter town and former RAF base of Thornaby, the beautiful market town of Yarm, with its award winning high street, and Europe’s largest private housing estate, Ingleby Barwick, surround Stockton itself. My constituency has a rich culture and history. It is the birthplace of the passenger railway and the home of the friction match. More importantly, we are the home of the calorific regional delicacy that is the parmo. For those yet to try this wholesome dish, I am hoping to have it added to the menu in the parliamentary canteen very soon.
My constituency is a place of makers, doers and grafters—people who work hard and do the right thing—and this Government are on their side. As the northern powerhouse begins to motor, it is the industry leaders and global exporters of Stockton that will help to drive it forward. The list of leading businesses is vast, but to name a few, we have Carroll & Meynell, a specialist and unique company that ships electronic transformers across the globe. We have the headquarters of Ensus, bioethanol producers who are helping to lead the way in driving Britain’s green revolution. And we have Nifco, which develops, designs and manufactures high-quality components for the world’s automotive industry.
As any fellow Teessider will know, manufacturing is in our blood. Our creations are at the farthest reaches of the earth, and I am proud to represent so many respected and leading manufacturers. Of course, I could not forget the Tetley tea factory. I was honoured to welcome the Prime Minister to the factory at the beginning of the general election campaign. I could go on to say more about the amazing factory, which helps to produce our nation’s favourite beverage. However, as the Chancellor will be aware, the tea producers might prefer that I did not.
Stockton has a knack of producing the finest inventions and some of the finest minds. Brass Crosby, the stoical politician and former Lord Mayor of London, stood up passionately for what he believed in and was committed to the Tower of London for trying to install transparency in this place. This fellow Stocktonian was a titan of his time, and while I do not plan on spending a night in the Tower, I will be as bold as brass in standing up for Stockton South.
They say that if you give a man a fish, he will feed himself for a day; if you give him the means to fish, he will feed himself for a lifetime. Well, in Teesside, we don’t want no fish. We want improved infrastructure and investment in education. With it, we will whip up a lifelong feast of economic growth, business start-ups and great jobs, with a side dish of social mobility.
We are witnessing the beginning of a golden era of opportunity for our nation. We have a Government who are committed to allowing our nation to achieve its full potential, and a country where it is not about where you are from but where you are going, and if you work hard and do the right thing, we are on your side. I am honoured to play my part in delivering for my country, my home and, most importantly, my constituents. I am proud of Stockton’s past and ambitious for its future.
Rachel Reeves (Leeds West) (Lab)
It is a pleasure to follow the hon. Member for Stockton South (Matt Vickers). Like him, I want to see a levelling up of investment in the north of England to benefit places such as Stockton, but also places such as Leeds. He mentioned Tetley tea, but I think he knows that the Chancellor prefers Yorkshire Tea. However, apart from that, I am sure they will work together to achieve what we all want to achieve for our country.
Let me start by talking about the measures the Government have taken today to tackle the pandemic of coronavirus. I very much welcome additional support for the national health service, which is much needed. I also support the investment and support for businesses, which will be welcomed by small businesses in all our constituencies. However, I want to say something about the support that has been offered to workers. At Prime Minister’s questions today, the Prime Minister said no one will be penalised for doing the right thing, and I think we can all agree in the House that that must absolutely be the case if we are to protect the health of not only individuals but all of us in wider society.
However, I am afraid that today’s announcements on statutory sick pay and access to benefits for people who have to self-isolate do not rise to meet the mission set out by the Prime Minister. At £94.25 a week, statutory sick pay is about 40% of what someone would take home if they were earning the minimum wage. We all know that living on the minimum wage is hard enough, but living on £94.25 a week is almost impossible. If people are to be penalised for self-isolating, I am afraid that the number of people who self-isolate will not be as high as we need to see. If people are given the choice between self-isolating—protecting themselves—and putting food on the table, paying their rent and paying their mortgage, we have to worry about the choices they will make as they are put in an impossible situation for themselves and their family. I urge the Government to think again about the level of statutory sick pay if we want people to take it.
We know that 16 million people in this country have savings of less than £100, and we know that 60% of people on low and middle incomes have no savings whatsoever. How people will survive on such a meagre amount of money, I just do now know, but many people will not even be eligible for statutory sick pay—those who are self-employed or who earn less than £118 a week. The Government are telling them to draw on ESA or universal credit, but there is a waiting period and conditionality involved. People with even meagre savings or a partner who works may not be eligible for that support, so I urge the Government to think again about the support we give to people who are doing the right thing and protecting all of us by self-isolating if they feel the need to do so.
The coronavirus pandemic has thrown into sharp relief what is happening in our labour market today. We have 4.7 million people in self-employment—many of them by choice, but many of them have no option but to take that route—and 1 million people on zero-hours contracts, many of them not earning enough to make ends meet. They will also be caught out by the coronavirus. Ahead of the employment Bill, this is an opportunity for the Government to reflect on what sort of economy we are creating and on the conditions in which many working people in all our constituencies find themselves.
Beyond that, despite support for the national health service, there is nothing in the Budget about support for local councils, which are often on the frontline of public health and social care. I am sure this is not the last time we will hear from the Chancellor as the pandemic grows, as many expect, in the weeks and months to come, so I urge the Government to look again at support for local government to support our communities.
The Chancellor also announced an increase in the immigration surcharge for the national health service, which will also apply to EU citizens. He says it will raise £1.5 billion, but at what cost? We need people to access our national health service. It is in all our interests that people access the national health service to get the support and treatment they need. If they do not and they take decisions that put all our health and safety at risk, the Government will have to ask why they have taken this decision today.
I urge the Government to think again about support for workers, about support for local councils and about the immigration surcharge, which seems incredibly misjudged at this time. I also urge them to make more multinational efforts, particularly to help the poorest countries in the world that do not have the health service we are lucky to have in our country, to ensure that they, too, can deal with the coronavirus pandemic.
On the economic outlook, we have now had 10 years of Conservative government, and what do we have to show for it? The Office for Budget Responsibility predicts growth to be 1.1% this year, which is before taking the impact of the coronavirus into account. By 2024, the end of the forecast period, the OBR expects growth of 1.4%. At the same time, the national debt is forecast to be £2 trillion by the end of this Parliament. That is double what the Conservatives inherited from the last Labour Government in 2010, and the truth is that stunting growth, by cutting Government spending, by discouraging businesses to invest and by allowing productivity to stagnate, chokes off the growth we need to raise living standards, reduce our budget deficit and pay back the national debt. Ten years of austerity has been a failed experiment and, frankly, we are all paying the price.
Today’s Budget should have been a green Budget. It should have been the greenest Budget ever because, in eight months’ time, we have the privilege and responsibility of hosting COP26 in Glasgow. This is an opportunity for Britain to show global leadership and to show our children, grandchildren and great-grandchildren that have done all we can to tackle the climate emergency. Yet what have we had in the Budget today? We have had £27 billion to invest in 4,000 miles of roads, and the fuel duty freeze, which costs £2.7 billion, but just £6 billion for local transport and a mere £140 million for a one-year extension of the electric vehicle grants. Frankly, that does not speak of a Government who recognise the scale of the challenge we face, and I urge them to ensure that in the spending review and the national infrastructure plan we are much more ambitious in tackling the climate emergency.
The Government announced £800 million for carbon capture and storage today. Those of us who served on the Select Committee on Business, Energy and Industrial Strategy in the last Parliament will very much welcome that, but there is a lot of fanfare when the Government make these announcements and not so much when they cancel them. Just four years ago, the Government cancelled £1 billion of investment in CCS, yet they expect us to stand up and cheer when they announce £800 million today. We could be well on the way in delivering CCS, but instead we are four years behind, allowing other countries to steal a lead on us and take advantage in the global market for these new technologies.
I welcome the investment in flood defences that the Chancellor announced today, and well I might, as my constituency was badly affected by Storm Eva and the floods in 2015. We are spending £5.2 billion on flood defences and I am sure that we will be spending much more than that in years to come, because as the climate emergency worsens, we are going to be at greater risk of extreme weather events and flooding. It would be much better to be spending more to tackle the climate emergency, in order to ensure that we do not have these extreme weather events and flooding. So, again, I urge the Government, ahead of COP26, to ensure that we are doing everything we can to tackle the climate emergency that we face.
I shall end by saying that we have waited a long time for this Budget, but I expect we will be hearing a lot more from the Chancellor in the weeks and months ahead, as he has to come back to this House with a range of projects on national infrastructure, on the spending review and, possibly, on tackling the coronavirus as well. When he gets it right, he will get support from our side of the House, as he does on flood defences and the investment in the national health service today, but it is the Opposition’s role to scrutinise the Government and push them to go further to support all of our constituents, be it on coronavirus or the climate emergency.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. It is a pleasure to call Gareth Davies to make his maiden speech.
Gareth Davies (Grantham and Stamford) (Con)
Thank you, Madam Deputy Speaker, for allowing me to make my maiden speech as the new Member of Parliament for Grantham and Stamford. I, of course, follow my most immediate predecessor, Nick Boles, who served in this House for nine years and held two important ministerial positions. He had an office that I did not inherit—it was an office dubbed “the ballroom”, which had enough space for his lunchtime yoga sessions and a free-standing wardrobe. Now whether or not this was to accommodate his towering presence will be a matter for debate with the Whips, but it does make sense of why I am now living in a basement in this place. I of course send to him my very best wishes for a long, happy and healthy future.
I am fortunate to represent one of the most beautiful constituencies in the country. Stamford, in the very south of my constituency, is an ancient medieval town, with touches of modernity from the Georgian period; the 18th century is what counts as modern in Stamford, and that is exactly how we like it. The buildings are formed from beautiful sandstone that seems to shine spectacularly in the shimmering Stamford sun. This amazing settlement, which grows and creaks with an ever-increasing number of visitors, faces the challenge of accommodating so many within such little space.
In the heart of the constituency is Bourne, a fast-growing town known for its friendly people and amazing schools. As you travel between our towns, you pass some of the most wonderful countryside, passing farmland critical to our sustainable future and postcard picture villages, where the community spirit is strong, but public transportation is weak. These communities stick together, and I will stick by them and push for better connectivity.
As you travel up the A1, you reach the historic town of Grantham. Grantham is a wonderful place to live, with its brilliant shops, businesses and schools. But as its population grows, we also face our challenges—and centre stage is our hospital. We rely on hospitals in the best and worst times of our lives, yet three and a half years ago Grantham Hospital was closed overnight. Now, as the new MP, I am pushing hard to get those doors back open 24 hours a day.
I want Grantham’s future to be as significant as its past. In 1687, Sir Isaac Newton sat under an apple tree in the garden of Woolsthorpe Manor and discovered gravity. In 1925, a future Prime Minister was born in the upstairs room of a grocer’s shop on the corner of North Parade and Broad Street. Margaret Thatcher went from a Grantham grocer’s shop to the great halls of British power.
It is my great honour to represent the home of so many former servicemen and servicewomen. Lincolnshire is bomber country, and we have a proud military past. Seventy-six years ago, some of the first troops to land in France took off from North Witham in my constituency as part of the D-day landings. For as long as I am in this place, I will never forget the sacrifices that they made for our freedom. Nobody ever asked whether a fallen serviceman was Labour, Conservative or Liberal—they were simply British heroes.
There has been a lot of press speculation leading up to today, but it was not all about my maiden speech—shocking, I know. Some were interested in the words spoken earlier by my right hon. Friend the Member for Richmond (Yorks) (Rishi Sunak), and now I know why. Today’s Budget sets out a clear response to the coronavirus, but also sets a clear path for our country as the Government seek to level up and spread opportunity more widely. This agenda is close to my heart, as a northern, state school educated son of a state primary school teacher mum and small business owner dad. I was delighted to hear the support for small businesses announced today, because as a child I grew up seeing how hard it is to start a business and get it going. We have to remember that behind every business is someone who had an idea, saw it through, stuck it out and made it work. At the end of the day, businesses are people—they are the faces, the families and the stories that are the lifeblood of all our communities. That is why it is so important that this Budget today supports them.
I myself have just come out of a very happy and long career in business in the financial services sector. That sector is ripe for innovation as we seek to fund our future infrastructure and transition to a zero-carbon economy. I look forward to contributing in whatever way I can in the years to come in these areas. But I know that whatever I do in this place would not be possible if it were not for my incredibly supportive and very patient wife Laura, my parents and my brother, who, true to form, are all in the Gallery today. Whatever I achieve in this place, I hope I can make them proud.
Sammy Wilson (East Antrim) (DUP)
It is a joy to follow the hon. Member for Grantham and Stamford (Gareth Davies), who has reminded us that his constituency was the home of the man who discovered gravity and of the woman who discovered how to defy political gravity, to rise to the highest office of state in our country and become one of our best known and greatest Prime Ministers.
The Chancellor came to his position at a very difficult time. He had to bring forward a Budget today that would calm many of the concerns of businesses, workers and people across the United Kingdom because of the impact of the coronavirus. He has brought forward measures to make sure that businesses have sufficient cash flow at a time of disruption and to support workers who may well be asked to make a public sacrifice by staying away from work and should not be penalised for it. There is also, of course, the co-ordination with the Bank of England to try to stabilise the situation.
The Chancellor tried to give the impression that it was quite an expansionary Budget, but when we look at terms of it, we can see that it is not really expansionary at all. Much of it was made up of past announcements, and some of it of announcements for the next five years. It is about raising spending to a certain level, rather than by a certain level. When one looks at the overall increase in total managed expenditure of around 1.8%, one can see that, given some of the things that we are facing, it is actually quite a modest Budget, with modest expenditure.
However, I welcome a number of policies that have been introduced in the Budget. I will probably get a lot of criticism now from those who share the climate hysteria that seems to have gripped this House. The pressure was on the Chancellor to impose additional costs on ordinary people who drive their cars, on businesses that rely on fuel, and on consumers who require that their food be delivered to the shops in the cheapest way possible. I am glad that he did not increase fuel duty because, of course, that would have been an imposition on the very people whom some Members of this House today have said they want to defend. They have also said that they do not want to see their standard of living affected, but those kinds of taxes would have had an impact on those people.
I am also pleased that the Chancellor has not increased the tax on red diesel for farmers. I know that many farmers in East Antrim, for whom fuel is a substantial but inescapable cost, will welcome the fact that they will not now have an additional tax imposed on it.
Having said that, this Government will still be dipping into the pockets of the people of the United Kingdom to the tune of £18 billion next year in various green taxes. The carbon tax that the Chancellor proposes to impose on gas will impact severely on energy bills. We still produce a lot of our energy, and people still have to heat their homes using gas. That carbon tax will substantially increase those people’s bills, especially when one remembers that 20% of electricity bills at present are taken up with various green levies and green costs. On top of that, some of the bill is made up of infrastructure costs, which are incurred only because of the move towards more wind energy and so on. The tax on gas will have an impact on many people, especially in places such as Northern Ireland, where we rely heavily on gas for electricity generation.
My second point relates to the Government’s announcement that they want to disperse jobs outside London. We had asked the Government to consider that during the confidence and supply arrangement that we had during the previous Administration. Of course, there has been a degree of centralisation: we have lost jobs from HMRC and the Driver and Vehicle Licensing Agency. If the Government are sincere about levelling up the economic growth across the United Kingdom, it is important that jobs are dispersed from the south-east of England to other parts of the United Kingdom, including to places such as Northern Ireland.
There was no mention in the Budget of air passenger duty—at a time when connectivity is so important and when we had discussions following the Flybe episode. So many airports across the United Kingdom depend on connectivity. We know the cost of air passenger duty on internal connectivity across the United Kingdom. Although I understand that the Chancellor could not have made a decision in this Budget because the review of air passenger duty and aviation taxes is ongoing, I hope that there will be some announcement in the future, so that places such as Northern Ireland that are heavily reliant on air transport see that additional cost—about £4.8 billion a year—reduced and are given some reliefs.
The announcements on infrastructure spending are important. I welcome the expenditure on roads and infrastructure projects across the United Kingdom. The one thing that I have some concern about, though, is that the Government are proposing to spend £110 billion on infrastructure projects by the end of this Parliament, but—as we have seen with the Heathrow expansion decision—these projects are under threat from the challenges we face due to commitments made in the Paris agreement and the Climate Change Act 2008. I believe that those who are determined to prevent the infrastructure developments that are necessary to make this country work will use the courts to try to stop many infrastructure projects that the Government are proposing. That is because all of those projects—roads, housebuilding, airport expansion, railways—will have some impact on CO2 emissions, through concrete production, steelmaking, the building process and so on.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
The broad criticism that has been levelled at this Budget is that we surely needed a plan to decarbonise the transport system and it is not yet clear from today’s presentation whether we got that.
Sammy Wilson
The right hon. Gentleman has missed my point. All decarbonisation—whether we decarbonise energy, transport or what we eat—has an implication for people’s jobs, living costs and so on, and we have to ask what the country’s priority should be. Do we really want to impose the sort of burdens that those kinds of priorities put on the people of the United Kingdom? We cannot say that we want to protect jobs, to keep standards of living up and costs of living down, and to give people the freedom to go on their holidays and to eat what they want, and at the same time say, “But let’s absorb ourselves in this carbon obsession”, which affects all those things. Members cannot have it both ways. At some stage, we will need to have a discussion about where our priorities ought to lie.
I welcome the additional money for the Northern Ireland Executive, but I repeat that there has been an increase in expenditure in this Budget of 1.8%, which the Executive will find difficult to live with given the commitments that were made in the agreement that was put in place to get the Assembly back up and running. The Executive are going to have to set priorities.
I agree with the right hon. Member for Maidenhead (Mrs May) that if money is being given to devolved Parliaments to ensure the spread of prosperity across the United Kingdom, the approach has to be co-ordinated and there needs to be some oversight of how that money is spent. I was a Member of the Northern Ireland Assembly for a long time, and of course people jealously guard their freedom to make those kinds of choices, but it is important that the money is delivered not simply as part of a block grant for Administrations to spend on whatever happens to be the priority that week, rather than on the long-term prosperity of the country.
Overall, I welcome the Budget, although it is a modest one. It appears to spend an awful lot more money, but it represents only a 1.8% increase in overall Government expenditure. The Chancellor has made a decision to live within his resources, but there will be some consequences.
Andrea Leadsom (South Northamptonshire) (Con)
It is a great pleasure to follow the right hon. Member for East Antrim (Sammy Wilson), who has very strong views that I sometimes agree with. It is also a pleasure to follow my hon. Friend the Member for Grantham and Stamford (Gareth Davies), who clearly feels very passionately about his constituency. Having been to speak at an annual dinner for his predecessor, I agree that his constituents are a great bunch of people and it is a beautiful place. I congratulate him.
I think today is a day to be proud of. My right hon. Friend the Chancellor has really got the balance right between levelling up across the United Kingdom while protecting the public purse. I, for one, am delighted by the support that he is giving to businesses to get through the difficult period ahead: for science and innovation, where the UK really can lead the world in so many areas, but also, very importantly, for decarbonising our economy—something that is absolutely critical to the interests of the UK.
There is no doubt that the events of the past decade have changed just about everything, from the global financial crisis that still echoes around our economy to the existential threat from climate change, and now the new challenge of coronavirus. We are seeing every single day that the world is becoming, in many ways, like a village. What happens overseas impacts us here profoundly, and what we do in the UK has a powerful impact on the world around us.
When I was 13, I was so scared of a global nuclear war that I decided to become an MP when I grew up. That fear, and the determination to do something about it, shaped much of my earlier life. Today’s teenagers have cause to be equally fearful, from the existential threat to our planet to new threats like coronavirus—huge issues to deal with that need every single one of us to pull together if we are to deliver the bright future we want to see.
However, with every challenge there is opportunity. In doing the right thing for the planet, our net-zero ambition offers us the chance to enhance the global economy. The UK is already leading the world in tackling global climate change. Since 1990, we have reduced our carbon emissions by 43% while growing our economy by 73%. We are decarbonising faster than any other G20 economy, and we were the first major economy to legislate for net zero by 2050. Today there are more than 450,000 green-collar jobs, and this figure could reach more than 2 million by 2030. From wind turbine blade testing in Northumberland to electric car manufacturing in the midlands, the UK is spearheading the next generation of green technology, production and job creation. Every sector has a role to play, with the prospect of new skills, better-paid jobs, and the spread of growing prosperity across the country.
It is great that research shows that young people agree that the green economy is full of opportunity. In fact, two thirds of them—almost 3.7 million young people—say that they would rather work in the green economy than outside it. But they need to see our commitment. I was delighted today to hear my right hon. Friend the Chancellor setting out wide-ranging plans for new investment, including in green transportation, in tree planting and biodiversity improvements, and, vitally, in areas such as carbon capture, usage and storage—which, as the hon. Member for Leeds West (Rachel Reeves) mentioned, was postponed in 2015. Now we have the chance to bring it back and really motor on CCUS. That is not just a levelling-up story but a great UK decarbonisation and export potential story.
When the UK hosts COP26 later this year, we will have the chance to deliver game-changing agreements with international partners. I want to see UK leadership in action. Specifically, I want the UK to commit to establishing an international green finance organisation that will facilitate long-term investment in decarbonisation, and also finally resolve the complex rules by which individual countries can demonstrate their own climate action and carbon reduction.
Secondly, COP26 should launch an internationally recognised carbon offset licensing body. Thirdly, I want to see every nation represented at COP26 providing its own contribution to a yearbook of pledges and achievements, which can then be reported on and built upon at each future COP. The innovation is already under way to help the world decarbonise, from CCUS to nuclear fusion, battery storage and beyond, but it will take strong leadership to convince every nation to prioritise net zero. The UK can provide that leadership, and COP26 can be a turning point for global action.
If the world is a village when it comes to tackling climate change, each and every one of us must play our part too. I know that the Department for Business, Energy and Industrial Strategy is focused on providing practical advice on how individuals and families can reduce their carbon footprint, be greener and take action against climate change. I hope that an app commissioned when I was in BEIS will be launched in time for Green GB and NI Week in May. With support from schools and universities, it will provide practical advice to young people and their families on how to decarbonise their lives. If we all come together, we can turn the global challenge of climate change into an opportunity to be a cleaner, greener nation that is a role model for others around the world.
Right in front of us is yet more proof that the world is, in many ways, a village. It is only collectively that we can overcome the threat by not allowing our fears over coronavirus to undermine our lives and our economy. I welcome the Chancellor providing strong support to get through the difficult months ahead, while looking at the longer-term needs of our economy.
Each of us needs to do all we can to minimise the impact of coronavirus on our prospects. Taking sensible steps to avoid spreading the virus will mean many people working from home. While it might be tempting to stockpile loo rolls—why?—and switch on the TV and wait for the storm to pass, those of us who are not sick must keep going. That means students studying at home—I include my 16-year-old daughter studying for her GCSEs in this personal plea—and people working from home where they can, taking part in teleconferencing and Skype calls. It means buying groceries online. It means supporting local businesses, and it also means volunteering in the community where we can. All of us must come together to protect our future, with the collective spirit that the UK has always shown in times of trouble.
The existential challenge of climate change, and now the urgent issue of coronavirus, demonstrate more than ever the need for concerted effort around the world by Governments and individual citizens, working together for the common good. Each one of us has our part to play.
Sir Edward Davey (Kingston and Surbiton) (LD)
The World Health Organisation pronounced today that the coronavirus is now a pandemic, so it is not surprising that the Bank of England and the Government have together issued a big joint package of economic stimulus, which is to be welcomed. The question is: is it the right size? The truth is that we do not know. The levels of uncertainty are extremely high, and we will need to keep this under review. I hope that the Government stand ready to come back to the House if the economic downturn that will be caused by coronavirus spirals further.
I particularly hope that the Government will keep under review the support for people on low incomes who have to self-isolate. People working in the gig economy, people on zero-hours contracts and the self-employed are particularly vulnerable, and the Government need to ensure that the measures they have announced today go far enough. It would be completely wrong if we gave tens of billions of pounds to the banks during the 2008 financial crisis but were now not able to look after people working hard on low incomes. That has to be a priority.
When I look at this Budget today, I am deeply alarmed: I am alarmed by the growth figures. I have looked at Budgets over 30 years, and I have rarely seen a Budget where the growth forecast for the British economy for the whole forecasting period is less than 2%—and that is before coronavirus is taken into account. This year, with poor world economic growth, it is 1.1%, before coronavirus, but at the end of this forecasting period, in 2023 it is just 1.3%, and in 2024 it is just 1.4%. That is a disastrous performance.
These figures are from the independent Office for Budget Responsibility, and the of course the question is: what is lying behind those figures? If it is a forecast for four or five years’ time, it is not the coronavirus and it is not the world economy; it is something that is going wrong in our economy, and it is the Government who must take the blame. So what is it? When we read the OBR report, and I have been flicking through it, it suggests that—guess what?—it is the impact of Brexit and the Government’s new immigration system.
The Conservative party may not like the fact, but it is there in the OBR report. On page 8, it says that the UK’s output has already fallen by 2%, thanks to the Brexit uncertainty, and the future loss will be at least 4% of national income. This will hit the living standards of all our constituents. That is why productivity performance is down, and when our small companies are faced with a barrage of red tape at the borders, not surprisingly exports will go down and we will see small companies go to the wall. I do not see in these Budget proposals anything to help those small businesses.
Liam Byrne
The growth figures the right hon. Gentleman quite rightly draws the House’s attention to are after the Government have chucked in a £174 billion fiscal stimulus and the Bank of England has slashed interest rates to an all-time low. I would draw his attention to the fact that productivity in our economy is now absolutely broken, and that surely is a damning indictment of the economic strategy of the last few years.
Sir Edward Davey
The right hon. Gentleman is absolutely right. It is the failure to invest in skills and the failure to realise that Brexit is going to damage productivity, while the attack on immigration, which is important for so many parts of our economy, will hit that too.
I worry about the self-employed and small businesses. They are suffering from the unfair business rates and they are suffering from things such as IR35. The Government are completely silently on IR35 today. They promise a reform of business rates. Liberal Democrats have been arguing for that for several years, with a well-thought-through proposal using land value tax, but the Government seem to be going to kick this into the long grass. That is not good enough when our small businesses are under such pressure.
The other issue I find disappointing is climate change. The Government have been trying to pretend that this Budget is going to take action on climate change. Let us look at it. With a fuel duty freeze again and £27 billion on 4,000 miles of road, that does not sound like a green transport policy to me. Then they announce, as though it is going to make any difference, £1 billion on green transport measures. This is completely absurd. The transport sector is the biggest sector for our emissions, and we need a completely different green transport strategy if we are to be serious about the climate. We need to make sure that we are not expanding airports, but that we are really investing in the electric vehicle infrastructure and giving incentives for electric vehicles, and this Budget does nothing for that.
If there is a real area on which we need to see significant Government expenditure, it is refurbishing the housing stock. We all know that that is where a huge amount of the emissions come from, and we all know that that is where there are easy wins that will reduce our constituents’ fuel bills, tackle fuel poverty and create jobs in every community. Why are the Government not doing that? They should of course bring back the zero- carbon homes laws that we passed and the Conservatives abolished, but, no, they are not keen on real action on climate change.
Then there is the Government’s announcement on carbon capture and storage. I was the Secretary of State for Energy and Climate Change when we were pushing this, and there was a £1 billion set-up fund, with a competition with two projects, with several billions of pounds running forward. We were the world leaders because we have a comparative advantage with our amazing engineers, with the North sea in which to store a lot of the emissions, and with our oil and gas industry and the skills from it.
Instead of exploiting that, what happened in 2015, when the former Chancellor, George Osborne, had his way? He cut that project overnight, not even telling Shell, which had shelled out £30 million. It was a disgraceful act against climate action. We need CCS, not just to green our power sector, but to green our heat sector and our industry. We could be world leaders, but that was a disastrous policy. The idea that these projects, which the Red Book claims will take the next 10 years, are a replacement for the level of ambition that we once had, is frankly shocking. The Government have failed very badly on the green agenda.
Finally, I wish to talk about the care sector. We need a care revolution in this country, not just in care for the elderly, but in care for adults with learning disabilities, which makes up the biggest, and fastest rising part of local authority expenditure. I speak as a father of a disabled child who cannot walk or talk—he only said “daddy” two years ago, and he is 12—and I worry about what will happen to him when my wife and I are gone. Obviously, I am trying to ensure that I make provision for my son, but I am lucky enough to be able to do that. Hundreds of thousands of parents of special needs children will not be able to make such provision, and the state will have to work out how we care properly for those adults, who will be of working age for many years.
We have not even begun to debate that issue. Instead, we have a care sector on its knees. Care homes are closing and there are shortages of care staff. That is partly because of Brexit—I say that because it is true—partly because of immigration restrictions, and partly because of the Government’s failure to address issues of social care. The “Interim NHS People Plan” stated that dealing with the nursing shortage is the single biggest and most urgent need for us to address, yet the Government have not done that. Social care, whether directly in the NHS or through local authorities, is one of the massive issues facing our country. We must debate it and get a grip on it, but this Budget does not do anything. It is an astounding omission.
Claire Hanna (Belfast South) (SDLP)
I thank the right hon. Gentleman for his strong points about the economic forecast and the serious challenges ahead. Does he agree that the challenges that he outlined—coronavirus, the climate crisis, and workforce planning—mean that this is not the time to start looking in on ourselves or cut ourselves off from our nearest neighbours? Does he also agree that requesting an extension to the transition period would be the logical next step for the Government?
Sir Edward Davey
I agree with everything the hon. Lady said. Although the Government are trying to say that Brexit negotiations will continue, if coronavirus is a pandemic it is frankly only a matter of time, and unless they really want a no-deal Brexit, they will have to extend the transition period—watch this space.
I mention care because for me, it is a social justice issue. Because those who need care—people with mental health problems, physical disabilities or learning disabilities —cannot work, they do not have much money, and that hits the incomes of their families who, by and large, tend to do most of the caring. Many people who are vulnerable and have low incomes are disabled, ill, or looking after their loved ones, and as a civilised society we need to respond rather better than we have done hitherto. We need a full, comprehensive approach to caring, because we have kicked the issue into the grass for far too long.
Let me raise a couple of other social justice issues. I was deeply disappointed that the Government are not properly reforming universal credit, because the two-child limit for universal credit is extremely damaging to many families. The families who are really suffering are those with a number of children—what the Government have really cut back on is measures for children, and that is not a way to develop a decent society. Moreover, in terms of work incentives, the fact that there is no second earner work allowance is a major problem. The IFS calculate that since May 2015, the average family hit by freezing benefits lost £560 a year, with the 7 million poorest families losing nearly £600 a year. That is not the sort of society we should be building.
I and my party, the Liberal Democrats, want a fairer, greener economy. This Budget has not done that. We want a fairer, more caring society and this Budget has not got that done. I hope, if we have more fiscal events later this year, that the Government will think again, particularly on climate and caring, to make sure we have that fairer, greener, caring society that we ought to have.
George Freeman (Mid Norfolk) (Con)
It is a pleasure to follow the right hon. Member for Kingston and Surbiton (Sir Edward Davey). I have happy memories of being in government with him in the coalition Government 10 years ago. It is also a pleasure to speak from the Back Benches for the first time since the reshuffle.
I congratulate colleagues from both sides of the House on some outstanding maiden speeches and our new Chancellor on a dazzling debut. He takes office at a time of immense challenge: flooding here in the UK; the challenge of decarbonisation; coronavirus; a global economic slowdown; and a massive challenge of delivering the promise, and now expectation, of levelling up by so many communities across the country. I warmly welcome his announcements today, in particular his genuinely historic commitment to a once-in-a-generation science, innovation and infrastructure revolution to drive connectivity of opportunity for levelling up.
It is on that last theme that I want to concentrate this afternoon. I have argued for a decade that the challenge of renewal and regeneration is the key to a sustainable post-crash economics that is genuinely sustainable: investing in a more resilient economic model; better spreading opportunity out from the city; and tackling the deep grievances incubated through a decade of deepening public disillusionment, back to Iraq through expenses, the banking crash, the inevitable decade of austerity, globalisation, and the process itself of the EU referendum. As I have often argued elsewhere, in my constituency and in much of the country the rise of UKIP and the 2016 referendum result was as much a roar against domestic grievances of disconnection as it was about the obvious inadequacies of the EU. We have to make this a bold moment of economic, democratic, social and cultural renewal.
This belief in renewal and regeneration is not a new crusade for me; it has been the defining mission and idea at the heart of my career—indeed, my life. I believe there is no more noble mission—whether as an individual suffering a life collapse, as my late father did, as a child from a broken home, or as a family, community, charity, company or country—than to defy the challenges you face and win against the odds. It is the stuff of life. It is what drew me into a career in the exciting world of high-growth technology companies and venture finance: the chance to have a dream with a small team, raise some money and make a profound difference.
That belief that we can, in this place, make a difference runs through the heart of the best of our democracy. It is why, after the Iraq crisis of trust, I started Mind the Gap! and Positive Politics. It is why, post crash, I led the calls in the coalition for an active industrial strategy for life science, for agri-tech, for cleantech to grow the exciting sectors of our economy with the biggest global potential. It is why after the EU referendum I was clear, as a noisy former remainer, that I was absolutely committed, as we must be, to delivering Brexit as a moment of inspiring national renewal that could work for those, however they voted in that referendum. That is why I spent the past three years setting up the big tent to capitalise on a wider conversation with people beyond Westminster, especially the next generation, to produce a vision for Britain beyond Brexit with 45 fellow MPs in our 2020 Conservative group—I am delighted to be flanked by three contributors to it—convening the one nation caucus and insisting that the Conservative party needs to discover the one nation tradition that runs through our core. It is why I campaigned for, and continue to support, the Prime Minister in his electrifying crusade to shake up the failing silos, quangos and Whitehall structures, catalyse a new energy, and deliver for the people and places that have been left behind by globalisation and so much of modern economic growth. It is why I was relishing helping to shake up the Department for Transport to better adapt to the challenges of decarbonisation, digitalisation and disconnection.
I deeply believe that if we get this right, we can make Brexit a genuinely inspiring and transformational moment of national renewal, defining ourselves not as the service economy of the European Union, but as a global science and innovation superpower, exploiting our freedoms outside the restrictive EU regulations—which I described in the “Fresh Start” report five years ago—as a global hub of technology leadership in the exciting fields of life science and agritech, where we have the ability to develop transformational technologies such as the blight-resistant potato and the drought-resistant wheats for sustainably feeding, fuelling and healing the developing world. We can use a new aid, trade and security alignment to better export our technology to the fastest-emerging markets. Here at home we can embrace bold new devolution deals, unlocking new leadership and new models of city and personal financing of innovation. New northern powerhouses and eastern engines can unleash economic growth and renewal, one regional economy at a time, creating new opportunities for the people and places that have been left behind. It could be genuinely inspiring, taking back control to give opportunity to the British people the Conservative way, with Brexit as a moment that we deliver the promises of the referendum and tackle the grievances that so many people who voted the other way feared would be ignored.
Given all that, and the fact that I had just announced some major funding for cycling, it was a bit of a surprise to find myself on my bike back to the Back Benches, as part of a No. 10 masterplan for Treasury, science and transport infrastructure. But Ministers come and go—it is a tough business and a team sport—and I am not here to complain. I absolutely agree with the idea of using the commanding heights of Treasury, science and infrastructure to deliver the levelling-up agenda. Projects from No. 10 can make a difference and get things done. I was involved in one when we launched the 100,000 Genomes Project—a small group of us did it and it worked. I totally understand the instinct and mandate to take the election result as a moment of bold reform.
The truth is that across Whitehall our Government are struggling to keep up with the pace of technology and digitalisation, personalisation and accountability, and voter exhaustion with bureaucracy. We will never unlock a genuine innovation economy without real reform, but we need policies that are on a scale of, but very different from, the reforms of the 1980s—the right to buy, the privatisation of failing nationalised industries, the big bang and the enterprise revolution. We need big policies that deliver big change.
As history shows, we have a woeful record in this country of delivering successful infrastructure. The UK is already massively over-centralised. The Brexit vote showed that people have had enough of London bureaucracies taking control. Local and regional economies dying through marginalisation will not be revived by an all-mighty No. 10 Brexit bunker issuing diktats. Taking back control must mean by and for them—the people we are here to serve—not Whitehall. Real regeneration and empowerment comes from the empowerment of devolution to people and places.
If we are serious about the real and lasting regeneration of places left behind, we have to take some tough decisions now about how we are going to do it and learn the lessons of what has, and has not, worked in the past—why we have failed so spectacularly with projects such as Crossrail and the west coast main line, and even worse, locally, why cities such as Cambridge, Europe’s fastest-growing city region, is still running on 19th-century infrastructure. I warmly welcome the Chancellor’s announcement on Cambridge South station today. We need to learn from what has worked, such as the London Docklands, Liverpool, the County Durham development corporation and the Olympic park.
I pay tribute to a former Member of the House who has not only written the book but done a lot of the business on this, Michael Heseltine—that lion of regeneration. No one has done more on this than he, and I commend to those who have not read it his 2012 report “No Stone Unturned”. It is essential reading for all new MPs or special advisers.
The key lesson is that without real, investable, locally led, non-partisan engines of leadership and investment, this will not work. I am absolutely delighted and proud that we have invested £5 billion for towns, £5 billion for buses, £5 billion for stations and £5 billion for high streets—£5 billion seems to be the new chip in the Treasury strip. I warmly welcome the Chancellor’s announcement today of a £100 billion infrastructure revolution, but how is all this money going to be spent? What are the engines of renewal and regeneration that we are going to set up to be able to access that money, pull in private money and unlock local leadership? We should do that in the north, but let us not forget the coastal towns and the marginalised rural towns. How are those places, which have been left behind, going to access that money and make a difference? How does a town such as Grimsby, which has set out a brilliant strategy and has put together a little partnership board, going to access the money to do the local brownfield development, the transport links and the sustainable growth?
That applies equally to Stoke, Sunderland, Burnley, Bradford, Bassetlaw, Peterhead, Preston, Penzance. Around the country, we have promised these small cities and big towns that we will renew and regenerate. We have to have an answer to the question: how? The same is true for towns such as Watton, in my constituency, left behind even in its own county, left behind by its own local enterprise partnership, on the edge of nowhere, on the road to nowhere, but waiting, excited by this prospect. But who will make this money work for Watton ? We need a regeneration delivery policy to deliver this bold renewal: railway development companies, freeport enterprise corporations, regional infrastructure bonds. Around the country, we have to create the engines that can fund, invest and lead these projects and so drive regeneration.
Some leave Government to spend more time Parliament. Tony Benn famously said he was leaving Government to spend more time doing politics. I am leaving Government to do more of this work—to work around the country, in East Anglia and elsewhere, to help put together private-public partnerships to drive this regeneration. I am 100% committed to it, and I look forward to helping the Government make a success of this crucial mission.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
It is a pleasure to follow the hon. Member for Mid Norfolk (George Freeman) and to have spoken at one of his big tent events.
The Chancellor claimed in the Budget to have stuck to his fiscal rules. I look forward to seeing how long his rules last. Labour had two fiscal rules in 12 years; the Tories have had 16 in 10 years, and I am sure there are more to come. Politics aside, however, I want to recognise at the start that the Budget would have been difficult for any Chancellor and to congratulate him on delivering it today, given the speculation three weeks ago that it might be delayed. He was right to do so.
The Chancellor delivers his Budget to a nation deep in anxiety about our resilience and ability to cope with the challenges ahead. Internationally, we see a backdrop of stagnating growth and failing globalisation, which requires us as a nation to work with other nations more closely, not to retreat. Domestically, the coronavirus and the potential cliff edge of Brexit are serious challenges, but so, too, are our public services. Commentators note that the NHS has 43,000 fewer nurses than it needs, that over 15,000 beds have been lost since 2010 and that the UK now has second lowest number of beds per capita in the G7. His announcement of funding for 50,000 nurses will not deliver trained and experienced nurses overnight and is the starkest of admissions that the Tories cuts have gone way too far.
The Chancellor delivers his Budget to a nation that has watched, in every corner of our Union, its great public institutions weaken, its jobs become less secure, and its communities become less safe. Only last month, the Marmot review found that life expectancy among the poorest 10% of women in England had fallen over the previous 10 years for the first time in more than 100 years and linked austerity to this outcome.
The coronavirus measures announced today are essential and must be kept under review, but as well as the changes to universal credit the Chancellor announced, in practical terms the Government must go further to streamline applications for those in need and to reduce the time it will take to process them, to prevent a backlog and build-up of cases that will only cause further strain for families.
The OECD’s latest forecast projects that economic growth in the UK will slow from 1.4% in 2019 to 0.8% this year, even if the coronavirus is relatively contained. While the Government are supported across the House on their steps today, they must also invest quickly in the systems they need so that businesses, local authorities and public services in our communities can quickly access the support the Chancellor is making available and not be made to wait.
The Chancellor mentioned the welcome interest rate cut, but he must make sure that the rate cuts announced by the Bank of England are fairly passed on. Today, Rachel Neale, on behalf of mortgage prisoners, is writing to all active and inactive lenders and unregulated debt collectors to ascertain whether this base rate cut will be passed on to the tens of thousands of families trapped on high standard variable rates. She has spoken this morning to Heliodor and Landmark. Heliodor has, it seems, stated that it will only review rates on a quarterly basis, while Landmark has no intention of cutting the rate at present. This simply is not good enough. I would be grateful if the Treasury could act today and make its expectations on this matter heard.
On research and development, we have fallen woefully behind other developed nations. The support for electric vehicles, innovation and invention is right, if overdue, but missing today was any commitment to social care, which we know is at crisis point. It is also not clear what the compensating measures to local government will be with the cuts to business rates. Local authorities that have lost 60% of their income over the last 10 years, such as Hounslow Council, cannot afford to lose any more, because they, too, have a place in the prosperity and wellbeing of our local communities, and it is vital that they be supported.
The Leader of the Opposition was right to give the backdrop of where we are now after a decade of decline. In almost every year since 2010, the economy has grown by less than 2%, and the rate of growth has slowed since 2015. Productivity growth in the UK has flatlined. The Chancellor says that the Budget will result in a long-term productivity increase of 2.5%, but it is far from clear how. The Office for Budget Responsibility is lowering long-term, steady-rate productivity growth from 2% to 1.5%, and inequalities between regions of the United Kingdom have grown. Between 2010 and 2018, GDP per capita increased by a mere 2.4% in the north-east, but by 16.6% in London.
The Government have today brought forward welcome plans for infrastructure spending, but their record is poor. Cuts have been deep, and overspending and delays in delivery are far too common. In the 10 years to 2018, Britain’s bus network shrank by a shocking 8%; that is 134 million fewer miles travelled. The World Economic Forum ranks the UK 11th of 141 countries for the overall quality of its infrastructure, behind France, which is seventh, Germany and the Netherlands. World Bank data ranks the UK 27th of 28 EU countries for investment.
I hope that as part of the important plans for rail and road, southern rail access to Heathrow gets the support it needs. That will give workers and passengers the opportunity to get to Heathrow from Waterloo, Surrey and the south, and will transform the prospects of three of the most deprived wards in my constituency.
The Government must also have an eye to the gender impact of their Budget. I hope there will be a serious equality impact assessment from the Government, because decisions affect men and women differently. The Women and Equalities Committee has described previous impact assessments as insubstantial and lacking in detail. As the Women’s Budget Group says, for women especially, levelling up means investment in people, not just road and rail. However, the Budget needs to do more than simply make funds available; it needs wraparound on how communities and local places will be engaged for the long term, and how decisions will be made.
The last Labour Government had at their core a commitment to ensuring that economic prosperity was spread. Nine regional development agencies were tasked through statute with driving economic development across the regions in a coherent and strategic way. There were also the Government offices for the regions, which had representatives from all the key Departments of Whitehall, because both economic and social wellbeing are needed for prosperity, and to generate the human flourishing that we need to see.
The regional development agencies, abolished by the coalition Government in 2012, took a wide-ranging and flexible approach to boosting economic growth across the country, and to the public and private sectors working together to invest in skills, infrastructure and regeneration. Between 2002 and 2007, they delivered over 500,000 jobs, created 56,000 new businesses and leveraged £5.7 billion in private sector funding. Indeed, independent PwC analysis of the impact of the RDAs found that for every £1 spent, 4.5% was added to regional gross value added. I say that because lessons can be learned from what happened with the RDAs to ensure that what the Government choose to invest in now and in the future is protected, and to ensure that money is spent in the best possible way.
The decade of decline has also brought growing inequality; children especially are being hit hard. In Feltham and Heston, on average a third of children are growing up in poverty after housing costs. Poverty has consequences: child obesity is high and on the rise in the wards with the greatest deprivation, and only 77% of our children achieve the required reading standard at key stage 2. We know how important early years education is to children’s life chances. The Budget was very light on detail on early years, but I welcome the cut in VAT on digital books. The Government should go further, however, and make much more assistive technology available in our schools. They should see the reading and writing skills of our children as a national mission for our prosperity, not just for today but for tomorrow.
On health and capital spending, as well as for hospitals, capital spending must be made available for the renewal of dilapidated primary care facilities—such as the Heston health centre—which are the frontline of public health demand and should be equipped to do much more in our communities to tackle heart disease, diabetes and childhood obesity.
The real test of this Budget will be measured against how it genuinely drives growth, shares prosperity and tackles growing inequality, all with the backdrop of the need to protect the economy from the current coronavirus shock and the challenges that Brexit will present—on the last, the Government and the Budget have been explicitly silent. No longer should we see the rich leaving behind the poor; young people struggling to break into the housing market; regions in desperate need of investment; and income and living standards too much based on where someone is and who they are, not on their talents.
Nigel Mills (Amber Valley) (Con)
As someone who likes to speak on the first day of the Budget debate, sometimes I have a bit of trepidation that I might listen to a long Budget statement and find that there are not many exciting measures, and then flick through the Red Book looking for things worth more than £1 billion and not find that much. This was not one of those Budgets.
If we look at the new spending totals, we see an increase in spending in the next financial year of £18 billion, and £26 billion in the year after—and that is not to count all the increase in capital spending over the forecast period—so by any measure it is an extensive Budget, especially this year. I would have thought that over the past couple of weeks we would have been hollowing out the Budget, taking out all the expensive things and trying to build in some coronavirus slack, because we just did not think we could afford all the other measures we wanted. We have, though, largely seen all the measures that we wanted, plus some much more extensive coronavirus mitigation measures than I thought we would choose or be able to see at this stage. A total package amounting to around £30 billion is a substantial effort to tackle what I fear will be significant disruption. Those measures will be warmly welcomed by people, and especially businesses, in Amber Valley. Those who fear that they may struggle for cash if their sales drop will be keen on the business rate relief, reduced national insurance payments, delayed tax payments and guaranteed loan scheme.
One measure that has not yet had much attention is the change to allow small and medium-sized businesses with fewer than 250 employees to reclaim from the Government the costs of paying the two weeks’ coronavirus sick pay. That will be a real help for small businesses that will otherwise struggle to stay open if they are paying staff to be off and having to find cover as well. That was a request from the Naughty But Nice café in Alfreton last week: when staff there first heard that we were extending sick pay to the first day, they wanted to know how they could afford to pay that. Hopefully, they will be happy that we have listened to them.
One thing that we can learn from this situation—I have raised this before with the Minister—is that it shows how important it is that when people are in all substance employed, they actually are employed and are not either forced into self-employment or choose, perhaps because they think they are being a bit clever and can reduce their tax rate, to pretend that they are contractors. There are all the risks of not being employed. People say, “I will never get ill and I can afford a holiday anyway,” but I am afraid people will now be finding out that if the economy contracts, not only will they perhaps be off sick or in isolation for a couple of weeks and not have sick pay if they are not employed, but they may find that as contractors their services will not be required for a substantial period and they really will have no protection. I hope this situation will give the Government even more impetus on that issue.
I welcome the fact that there is no sliding back in the Budget on the IR35 changes. There is now more impetus to put in place some measures to try to make sure that people who are really employed have a legal employment contract. We need to get the tax rules and the employment rules drawn up in the right way to get the substance right. That is in the interests of everybody in this situation. We can see today that it is much easier for the Government to direct help to employers through national insurance or through other tax measures, to help them to support their employees and the costs of employment, than it will be to try to get support to those who are not employed. The only way that we can do that is through more claims for welfare support, and we know that that will take time and be conditional. Everyone wins if we have people in employment.
There are many measures in the Budget that I wish to welcome. The increase in the national insurance threshold is worth £100 for every individual in my constituency. The various freezes to fuel duty, which everybody wanted; the freezes to all alcohol duties; the reduction in VAT on tampons and on newspapers and books online—all those things are greatly welcome, as are the increased spending measures. On the £161 million for the transforming cities fund for Derby and Nottingham, I am sure that my constituents will greatly welcome improved transport for them to get to work in those cities. The £56 million to fill more potholes across the east midlands will be incredibly popular. There is also more money for Access for All.
I hope we can finally get Alfreton station its new level access on both platforms. That has been promised for quite a few years, and it has been committed to. If that money gets the scheme over the line, all the better. There is also the £400 million for the brownfield housing fund for areas with a mayor—I would quite like the east midlands to get a Metro Mayor at some point—although it is also open to councils that are pro-development. There are at least two sites in my constituency—the old Butterley ironworks and Stephenson’s dyeworks—that desperately need to be developed. Hopefully, this money will finally enable those schemes to come forward.
Having welcomed the various freezes to exercise duty, I want to return to a theme I raised in the recent tax avoidance debate. The Government need to start looking carefully at where tax revenues will come from by at least the end of this forecast period. I think they are finding that a number of the taxes they currently raise money from are under severe pressure, including business rates, which raise £32 billion—we keep having to find ways of mitigating that for more and more businesses, and I absolutely welcome the fact that we have made things easier for shops and pubs and other entertainment venues.
We have also frozen nearly all excise duties, and we will be under real pressure to collect ever more money from fuel duty or alcohol duties. In fact, those might reduce as more people, and especially young people, do not drink or smoke, and as we move more towards electric cars. The Government have also rightly committed not to raise the rates of income tax, national insurance and VAT, but those three taxes alone raise 60% of the total tax take.
We have to take a long-term look at this issue and to be honest and transparent about it with the people of this country. We have to say that we need to raise a substantial amount of tax revenue to fund the public services they value. A lot of the taxes we currently use are under threat either because they are unpopular and or because the way we work or do business is changing and we are not sure how much more we can collect from corporation tax, business rates or employment taxes. Where should the money come from? Who is going to pay it and how much?
That is a debate we need to have. Otherwise, I fear we will get to future Budgets and see large and unpopular tax measures that target certain behaviours or certain people in a way that the country is not prepared for, because we have perhaps not entirely thought through what the impacts will be. While we have some time in a relatively—coronavirus notwithstanding—stable economic position, we can have that debate and find the long-term sustainable taxation plan that we need. I hope the Government will take the time over the next year to start thinking about that.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
It is a pleasure to speak in this Budget debate. I am only sorry that the former Chancellor and the former Prime Minister are not in their places, because I wanted to tell them how much I enjoyed the comedy of their remarks. I wanted to underline how extraordinary it sounded to Opposition Members that the Conservative party was now boasting about its credentials for fiscal management.
We have had a £174 billion fiscal loosening to deliver a rate of growth over the forecast period that is well below the trend rate of growth that we are used to in this country. As the OBR made crystal clear in its publications earlier today, the Chancellor was on course last year to achieve a balanced budget in the medium term. Now in the medium term, the deficit is forecast to stretch to £60 billion. We therefore have this massive, great fiscal loosening—before the impact of coronavirus is factored in—to deliver a trend rate of growth that is anaemic.
As the Government somehow managed to avoid saying, this Budget is also not only unsustainable but deeply unfair. That is not my analysis; that is the Treasury’s analysis. When we look at the decile analysis of how this Budget actually affects our constituents—surprise, surprise—the richest 10% are hit by about 150 quid a head, but the bottom deciles are hit by between £250 and £350 a head. Even as the Government give away £174 billion, they find a way to ensure that the bulk of the burdens, such as there are, is actually paid by the poorest in our society. What that means in constituencies like mine is that when I go into the Kingfisher food bank in Shard End or when I talk to the teams running the Aston and Nechells food bank, they tell me that demand is going through the roof yet again. Well before the summer holidays, we now have food banks running out of food once more. That is why it is so disappointing to see a Budget that not only punishes the poor but does nothing to remedy the terrible injustices of the universal credit regime that is greatly punishing the poorest people in our country. The Government really should have taken the time to address that.
I will speak briefly today, because there is so little in the Budget for the people of the west midlands. As you know, Mr Deputy Speaker, we have a Tory Mayor in our region who has boasted for some time of his special influence in No. 11 and No. 10 Downing Street. If only we saw any evidence for that. We already have the second- worst funding deal of any metro Mayor, and this is a Mayor who promised that we would be the fastest-growing region of the country. In fact, we are the slowest. He promised that youth unemployment would be wiped out. In fact, unemployment is going up. He promised that we would be building homes, which is something the Prime Minister celebrated today. In fact, the number of homes for social rent built last year fell by 19%, and is down by 80% since 2010. This is a Mayor who is not delivering for the people of the west midlands. We should have had a Budget that made good his failures, but we did not get the Budget we need.
Officials in my region tell me that our Mayor has made some £2 billion-worth of promises. The only problem is that there is a £1.2 billion black hole in his budget. On top of that, there is a £900 million hole in funding for the transport schemes we have been promised. There are also question marks about the £4.6 billion-worth of programmes and projects that are now rated by the combined authority as either amber or red. This is an absolute shambles. The Chancellor boasts of his intention to level up. We should have had a Budget from him that actually fills the black hole in the budget of our Tory Mayor in the west midlands, and we did not get it.
Let me give some simple examples. The levelling up fund promises £4.2 billion over five years, but it does not start until 2022 and it has to be shared by at least eight different mayoralties. That means our share may be, at best, something like £100 million, which comes nowhere near the £1.9 billion black hole that still exists in the budget of the west midlands after today’s transport announcements on new bus routes and, indeed, the metro line that I have campaigned for in my constituency for some years.
Only 20% of the tramline is funded. It is literally a tram to nowhere, because our Mayor failed to persuade his colleagues in No. 10 and No. 11 to sign the cheques that were promised.
Liam Byrne
I will in a moment.
We cannot build the new homes we need unless we start investing in remedial work on brownfield land, but the £400 million, at best, has to be spread between eight mayoralties. That means we might have about £50 million coming into the west midlands, but our brownfield fund is £100 million short. The money we may get tomorrow, the day after or in the coming years will not come close to remedying the budget gaps we have today.
This Government have sought today to persuade us of their fiscal credentials, while avoiding the blunt truth that, by the end of the forecast period, they will have doubled the national debt, failed to deliver the growth we had in the past and failed to deliver for regions like mine in the west midlands.
Mr Mark Harper (Forest of Dean) (Con)
It is a great pleasure to follow the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), because I did not spot in his remarks his declaration of interest as the opponent of the fantastic Andy Street in the west midlands mayoral contest, which coloured his remarks—
Mr Harper
I was teasing. It is also a great pleasure because one would not know from listening to the right hon. Gentleman’s remarks and criticism of our economic record that he was, of course, the outgoing Chief Secretary to the Treasury who had to write the note reminding us all that there was “no money”. [Interruption.] I hear the groans from Labour Members, but it is worth reminding them that the difficult decisions we had to take from 2010 onwards were all because we were left an unsustainable budget deficit, the highest in the developed world, and it had to be dealt with.
Liam Byrne
The right hon. Gentleman is a sophisticated thinker, so I will give him a sophisticated intervention. The judgment that had to be made in 2010 was how we closed the deficit. We said that one third of it should be closed by spending cuts and two thirds of it by taxes. The former Chancellor George Osborne changed that judgment, seeking to close 90% of the deficit with spending cuts. That slowed the economy and meant that instead of having falling debt by 2016 we still had rising debt. The judgments were wrong, which is why things went off track.
Mr Harper
I fundamentally do not agree with the right hon. Gentleman on that, and I will come on to say a little about tax in my remarks. I do not agree with him because the tax burden is very high and was then. I forget which Opposition Member alleged this, but we have never said that the financial policies of the Labour party in government caused the financial crisis, as that was a much more complicated problem. Our criticism of the Labour Government, particularly under Gordon Brown as Chancellor, was that they assumed when they made their spending judgments that there would be perpetual economic growth and that there would never be a downturn. The root problem is that they were spending too much money, assuming that the tax revenues would continue forever, and when the financial crisis happened and the tax revenues fell, we were spending too much money. That had to be dealt with and we had to make the necessary decisions.
Liam Byrne
I just want to say that the Conservative party backed our spending plans up until November 2009.
Mr Harper
I do not agree with that either. We had to make some difficult decisions when the crash happened and they were the right decisions. As the Chancellor set out today, because we made those difficult decisions and put the economy in good shape, we are well positioned to deal with the challenge facing the country and the challenge of tackling the coronavirus.
The Financial Secretary to the Treasury (Jesse Norman)
Might it be worth my reminding my right hon. Friend that bank leverage, which had been 20 times capital for 40 years between 1960 and 2000, on average, went from 20 times capital to 50 times capital in seven years under Labour? Therefore, when the bank crisis struck, it was all the worse because the whole sector was wildly over-leveraged.
Mr Harper
Following on from what the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) said, that was a very sophisticated intervention from my right hon. Friend, and I thank him for it.
The Chancellor rightly opened his Budget statement by setting out the challenge facing the economy from the coronavirus. The combination of what was set out this morning by the Bank of England was welcome—both the interest rate cut and, more importantly, the credit easing, enabling the financial sector to be able to support sound businesses that are fundamentally in good shape but that are going to have an economic shock caused by the coronavirus, both on the demand and supply sides. It was very encouraging to hear of the close co-operation between an independent central bank and the Treasury to make sure that both fiscal and monetary policy are being used to deal with the crisis.
Both individuals and businesses listening to the Budget will welcome the many changes that the Chancellor set out—the three big areas he set will be very welcome across the country, including in my constituency. One key issue that he set out, which I think is on the front page of the Red Book and which he referred to when he was doing some media interviews at the weekend, was trust. On Sunday, when he was interviewed on the BBC, the Chancellor said that the Budget
“is going to first and foremost deliver on our promises to the British people.”
That is the headline on the front of the Red Book. He went on:
“I think trust in politics has been undermined by the things that have happened over the past few years. I’m very keen to make sure that we rebuild that trust and that starts with doing the things that we said we would do.”
That means keeping our promises. As you will know, Mr Deputy Speaker, we made clear commitments in our manifesto: to keep costs down for small businesses by cutting their taxes; to borrow not to fund day-to-day spending but to invest in infrastructure—we saw that in the Budget; and to make sure that debt would be lower at the end of the Parliament. We see the percentage of debt to GDP—the measure that really matters—falling across the Budget period.
We also made it clear that we want to make sure that people get to keep more of the money that they earn and that we keep their bills low, whoever they are. We said that we would not raise the rates of income tax, national insurance or VAT. I welcome those promises and am pleased that we have kept them.
However, the issue is not just the letter of those promises, but their spirit. Any voter at the election in December had a clear choice: a party that promised to keep taxes low or the Labour party, which was clearly going to raise them. As the Institute for Fiscal Studies made clear, it was not credible for Labour to say that it would raise them only for the top 5% of earners if it was to spend what it was proposing.
We have to keep the spirit of our promises and not have any disguised tax rises later in the cycle. I mention that because I spotted a report in The Sun about how we might want to raise taxes to pay for social care. It talked about a 2.5% social care tax. I support increasing the resources going into social care, but I do not want us to increase taxes to pay for it. To voters, a tax of 2.5% on their income will be seen as an income tax. I have no idea whether the report is true or idle speculation, but I counsel Ministers that we need to keep our promises. We said we would not increase the rate of income tax, and we should stick to that approach. I also note that the Chancellor’s proposals—other than the coronavirus proposals, which obviously were introduced late in the day—meet the fiscal rules, with a current Budget surplus in each year of the forecast period. I welcome that.
I want to welcome a couple of the specific measures. The fuel duty freeze is important in a constituency such as mine, where people have to use a car to get around easily and there are not a lot of other choices. I also welcome the exemption in respect of keeping red diesel for farmers, for which the Chancellor particularly credited my right hon. Friend the Government Chief Whip—whose proper title is Parliamentary Secretary to the Treasury, demonstrating the value of that role. As a previous holder of it, I thank him for his efforts in ensuring that those who produce our food and drink are rewarded by having their costs kept under control.
In my response to the right hon. Member for Birmingham, Hodge Hill, I said that the tax burden remains at a 50-year high. That is why we need to make sure we keep spending under control. I am pleased that we are going to keep current spending under control, although it is very sensible to borrow for investment in infrastructure. For Conservatives, living within our means should not come to an end: we have to remember that we are spending not our money but taxpayers’, and we have to spend it wisely. Clearly, we need to make sure that we grow the economy faster. I welcome what the Chancellor said about how some of the long-term investment that we are introducing will improve the long-term productivity of the economy by 2.5%, which is what the OBR has said. That investment and the other Budget measures will add half a percentage point to our growth rate.
One way that we will grow the economy is by levelling up across the economy, getting all parts of the United Kingdom to be as productive as London. As a Unionist, I mean not only Wales, Northern Ireland and Scotland, but all parts of England from the south-west to the north-east, and from Cornwall to County Durham. I am very pleased to see that the Government have started to do that with the proposals that they have set out.
In the south-west, we have some important priorities. I was very pleased to see the investment in the A303, which was one of the key asks from my colleagues in the south-west, and in the A417 missing link in Gloucestershire. We also prioritised digital connectivity, and I was pleased to see the £5 billion to be invested in faster broadband through fibre to the premises and the measures to improve connectivity for mobile telephony with the shared rural network, which is very important in areas such as mine. Education funding is also absolutely critical if we are to improve skills. Moving to a national funding formula is incredibly valuable, as is the investment in our further education colleges.
Finally, we welcome the investment in flood defences. About 73 homes in my constituency and many more across the catchment area of the River Severn were affected by the recent floods, so that £5.2 billion investment is very welcome, as is the £2.5 billion for repairing the potholes in our roads, which will be incredibly important for motorists. Overall, I welcome this Budget. The Chancellor, as a new Chancellor facing some very difficult headwinds, put together a fantastic package. As such it should be welcomed by everyone not just on the Conservative Benches but from across the House, and by the British people.
Several hon. Members rose—
Mr Deputy Speaker (Mr Nigel Evans)
Order. Eight people are trying to catch my eye. I want to get everyone in, but, as Members can see, there is just over an hour left, so, although I am not altering the time limit at this moment, if we stick to about eight minutes, we can get everybody in with equal time.
Chris Evans (Islwyn) (Lab/Co-op)
Thank you, Mr Deputy Speaker. May I begin by welcoming you back to your rightful place in the Chair? It is the first time you have called me to speak, since you were re-elected. We have often disagreed politically, but when I was a new MP looking for guidance and advice, you were always there. Like many Members of this House, I am grateful to you for your various courtesies and kindnesses over the years.
I also thank the right hon. Member for Forest of Dean (Mr Harper) for, again, a very insightful speech, though I did not agree with much of it. I must take issue with him. After my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) spoke, I was expecting him to mention that infamous letter. I feel that I have to mention the infamous letter that Reggie Maudlin wrote to James Callaghan in 1964. He said, “Sorry, cock, for the mess I’ve left it in.”
What is important is that the Government have to strike the balance between the pandemic of coronavirus and not inciting mass hysteria. I hope that that has happened today with the tone of the debate in this House around coronavirus. It is a virus that we do not yet understand, and that we do not have an antidote for, but what we have seen today in our reaction is the House at its very best.
The major measure that was put in place by the Chancellor today was the freezing of business rates, which will come, I am sure, as a welcome relief to those who are struggling throughout the country. Small businesses, particularly shopkeepers, are the beating heart of our communities. We can often measure the temperature of our economy by how well our high street is doing.
I have heard so many great maiden speeches today from both sides of the House. Everybody said how fantastic their constituency was and to come along for a visit, but how much of that is simply about the shopping in town centres? What worries me is seeing some of those town centres. Recently, I went back to where I grew up to drop off my wife to have dinner with my mother. We drove through the town centre, which I had not seen for a long time. The thriving bingo hall that I remembered is now a dilapidated building. I remember seeing boarded-up shops like I had never seen before, and bricked-up ATMs where the banks had moved on. The place looked like a ghost town; it was not something to be proud of, and it concerned me.
It is 16 months since the last Budget, and this country has changed beyond all recognition in the last 16 months. We have had three Chancellors, two Prime Ministers, a general election and Brexit, but at the same time our high streets have been absolutely devastated. We have lost 180,000 retail jobs to businesses going bankrupt or financial distress. Household names like Debenhams, Mothercare and Beales are now resigned to a past of black and white photographs from the 1950s and ’60s, when they thrived. Yes, it is difficult for retailers. It is difficult for the high street with juggernauts such as Amazon and when other online retailers are emerging every single day. How can small businesses and shopkeepers compete with one hand tied behind their back?
I welcome the business rates holiday for so many shopkeepers, but it is only a sticking plaster on the real problem faced by our high streets. Business rates have been described as “lunacy” and “perverse”. The president of the CBI has called them “uneconomical, unsustainable, and…unintelligible.” This was brought home to me most recently when I visited Tidal’s Store in Blackwood—a retailer of high-quality furniture and homeware. If any new MPs who gave their maiden speech today are looking to furnish flats or new homes in their constituencies, I would highly recommend Tidal’s. However, the problem it faces is that its business rates are three times as high as the retail park at the bottom of the high street. Many companies on retail parks are large, multinational businesses, and other retailers are not in a position to compete. Tidal’s is also paying more for its position on the high street than if it was further down the street. How can these companies expect to compete when they are paying four or five times more than others?
When I ask the Valuation Office Agency about the issue, I am told that this is the law. The agency says that it calculates the rate by multiplying the rateable value of the property by the multiplier, which has increased since 2017. That is hardly a comfort to shopkeepers who are struggling with this regressive, outdated tax. Equally, the council has told me that it collects the tax but cannot readjust it according to market rates, so even though it is desperately trying to save the high street by introducing free car parking, and through events that will bring people into the high street and town centre, it is hamstrung by business rates.
Companies in financial distress are not helped by business rates. According to The Guardian, Tony Brown—the former chief executive of Beales—said that the group’s punitive annual £2.8 million business rate bill suppressed any attempts to rescue the 23-store chain, which is now closing with the loss of 1,000 jobs. He cites Beales as an example of what could come.
The Chancellor announced a review of business rates, but for the business community this is simply a case of kicking the can down the road, when many businesses are at breaking point. The issue was looked at in 2014 by the Department for Communities and Local Government, and again by the Treasury in 2015, and there was a non-committal response from the Government to the Treasury Committee’s report just last year. Simply put, what confidence can the business community have in this Government delivering a change in business rates if they do not take the action that is needed now? It can be argued that a review will not change much if the Government are insisting on raising the same amount of cash from the same companies.
Under the present system, business rates allow retailers to be put at a disadvantage compared to those operating from cheaper out-of-town warehouses. Just to put this in perspective, Amazon’s bill last year was £63.4 million, almost £40 million less than Next’s. In my view, the Government have to introduce a 2% online sales tax to level up the playing field. Equally, they need to bring in a tax collection mechanism, similar to the way that VAT is collected, with a levy of 1% to 2% as a retail sales tax. It is estimated that this would bring in between £4 billion and £8 billion.
If we do not save our high streets, we see the knock-on effect on tourism, on apprenticeships and on employment. It is terrible to see well-loved high streets and town centres go to rack and ruin and become ghost towns. But there has to be a political will to act. Reviews are all well and good, but now is the time for action.
Damian Hinds (East Hampshire) (Con)
It is always a pleasure to follow the hon. Member for Islwyn (Chris Evans), who made some very important points about our high streets. It has been a great privilege to witness this afternoon truly brilliant maiden speeches on both sides of the House from new Members who are going to be great assets to this House and to our democracy.
It has also been a pleasure to hear what the Government are doing in this Budget, which directly hits some of our most important objectives around climate change, levelling up and spreading opportunity, and driving productivity. I particularly want to talk about the last of those. Productivity can be boosted by a Budget, but productivity also boosts a Budget. All Chancellors need to find more cash—first, because in any year there are always some taxes that are in, or are going to be in, terminal decline, such as taxes on tobacco, on fuel and on hydrocarbons. Some taxes turn out to be more successful in their aims than anticipated, such as the sugar tax or soft drinks industry levy, and therefore take in less than first anticipated. There are always new priorities—for my right hon. Friend, they are in delivering on the key levelling-up and investment agenda. Then, of course, there is the unexpected. Nothing could be more devastating and more unexpected than a global pandemic. We must be ready to tackle these things when they come.
There are five different ways that we can find money. First, we can spend less on something else. Of course, that is always where we should start, prioritising and making the money go as far as it can. Sometimes we need to raise taxes. No one likes raising taxes, but sometimes it is necessary. We can borrow when it is to finance productive investment. A good way is to grow the economy. We can do that by growing the working-age population. A fair amount of that has been done in the past number of years, under various Governments. Growing the working-age population creates its own pressures on public services. On the other hand, we find ourselves in a better position in terms of the so-called dependency ratio than we would have been in otherwise, and in a better position, relatively speaking, than other countries such as France, Italy, or, especially, Japan. Best of all is to grow productivity per person. Higher productivity pays for all the public services that we so value, but it also means higher pay for people, and that is especially important to the very large numbers of people working in our largest-volume sectors such as hospitality and retail.
We talk about the productivity gap that we have against other countries. It is important to note that this is not new. I am 50 years old, and in the year I was born, our productivity gap against the United States was 37%. It is not quite so high today. It is true, however, that after the crash in the last years of the Labour Government, we, as a country, took a bigger dive than other countries in terms of our output, and we have had slower growth since. That has been partly to do with the fact that we have largely maintained high levels of employment. I would much rather have a productivity puzzle than the levels of mass youth unemployment that we saw in a number of other countries. We still have a large gap today, according to the OECD: 12% against Germany, 14% against France, and 18% against the United States. Of course, those are averages that conceal very large variations between different parts of the country.
There are many aspects to productivity, from the underlying shared infrastructure, to automation and technology, to the diffusion of new technologies, to process improvement and management. Then there is skills and human capital, which is what I want to speak about. I very much welcomed hearing the Chancellor talk about undertaking a review of the approach.
We have seen remarkable progress in this country on education. We not only have a reformed curriculum and are back in the international top 10 on primary reading. We have also narrowed the gap in attainment between the rich and poor—what we might call the original levelling up—since 2010 by 10% or more at every stage, from early years to primary school, GCSEs and university entry.
There is always further to go. There has long been a gap in attention paid in this country to vocational and technical education. We have many people in this country who are educated to degree level—so-called level 6. We have far fewer people than many other countries who are educated to intermediate-level technical qualifications —levels 4 and 5—and our vocational education is less intensive than in world leaders such as Germany.
We are in the midst of a major upgrade in our technical and vocational education and training. Alongside apprenticeships, the introduction of T-levels this September is at the heart of that upgrade. T-levels will be a more intense qualification—typically 900 hours rather than the 600 at present—and they will be designed by business, with a substantial industrial placement of 45 days or so. Everybody who comes through the T-level route will have studied English, maths and digital, as well as their core technical subject. It is important that the Government continue to learn from previous attempts to reform technical and vocational education, especially the need to stick with the programme and keep the integrity of the design. We also need business to very much be a partner, alongside the public sector.
I want us to go further on technical and vocational education and to knock down the wall that still exists between the academic and technical routes. In fact, that is happening anyway, with the changes we are seeing in the labour market and the structure of industry. These days, both need to prosper in many sectors. We need to reform higher technical qualifications at levels 4 and 5 and thin out the vast array of qualifications that young people can be presented with. We need to ensure that we match up the skills being taught in our system with what business needs. That happens semi-automatically with T-levels and apprenticeships, because of the availability of placements in firms, but we need to ensure that the numbers marry up for other qualifications.
We need to do more on adult skills and reskilling. The ongoing design of the national retraining scheme is timely. We need to clarify the link between that and the national skills fund, as well as the UK shared prosperity fund, which my right hon. Friend the Member for Maidenhead (Mrs May) mentioned.
Finally, in our focus on human capital, productivity, progression and pay, I would like us increasingly to link our approaches in employment public services and the health service and rethink how we can support people who are already in work to get on through the infrastructure we have, including the jobcentre network, the National Careers Service and our retraining facilities. Given the time constraints, all that is for another day. For now, I want to congratulate my right hon. Friend the Chancellor on his Budget and commend it.
Owen Thompson (Midlothian) (SNP)
I want to start by echoing a number of comments in commending the Chancellor on what was not an easy position to find himself in, only elevated to the role a couple of weeks ago and having to compose a Budget in the face of the coronavirus and the fast-moving changes coming off the back of it, topped off with the fact that it is debatable how much say he had in it—Dominic Cummings has done a grand job in pulling this together at such short notice.
There is a limit to the levers that can be pulled to prevent the economic damage that we are braced for from this viral outbreak. Preparations to save people’s lives must clearly be the first priority in any situation, but coronavirus is not the only crisis looming. There are many others of an entirely self-inflicted nature for which this Government are very poorly prepared. The good news is that they can be stopped by some simple changes of policy direction, and we on the SNP Benches are always happy to offer suggestions for a better way forward.
I want to begin with the areas that this Budget has been silent on or has missed. Certainly, the first and foremost of these for my constituents in Midlothian who have been in contact with me is this: what about the WASPI women? They are still waiting for justice, having lost years of expected pension without sufficient warning from the Government at the time. The SNP has previously demonstrated how the promise to the 1950s women could be honoured, and at a far lower price tag than pet projects such as HS2, where endless billions have been found to dig the Government deeper into the hole they have created. To borrow a phrase from the Chancellor, “Come on, Chancellor, just get it done!”
The Tories claim to be the party of business, but I suspect their interests lie more with the multi-millionaires and the multinationals, for this Budget does nothing for the small businesses that are the lifeblood of my constituency of Midlothian. Life is being made more and more difficult by ill thought out policies such as the IR35 reforms, which could badly damage or close down the businesses of contractors and freelancers.
While I welcome some of the steps outlined to tackle more of the promoters of tax schemes, as usual the little guys and gals are merely collateral damage. They are left out of pocket, while those who seek to avoid paying their dues will no doubt carry on with impunity. We do not even need to look for evidence of this, as we know that so far not one single promoter of a loan charge scheme has been prosecuted, while countless individuals, who were simply following the advice and guidance available at the time, are left ruined.
As if that was not enough, there is the ongoing drama of the blind Brexit alley the Government have led us down. We have had industry experts across a whole range of sectors in Scotland—hospitality, tourism, food and farming, health and social care, manufacturing—all lining up to say how devastating the new immigration plans will be. What sort of Government would deliberately and wilfully fly in the face of all the evidence, and take measures that will drive down economic growth? They are certainly not a Government I would vote for.
While some Conservative Members would describe the immigration proposals as their most popular policy, it is certainly not in my country. The Scottish Government have offered the sensible, evidence-based solution of a Scottish visa, which could protect the economy from this vandalism, while allowing the rest of the UK to continue to shoot itself in the foot if it so chooses. It is disappointing that the Government have refused even to give this plan respectful consideration. Scotland is fed up with having damaging Tory policies inflicted on it against our democratic will. Even Scottish Tories, by all accounts, are fed up with it.
We are also fed up with having promises made and promises swiftly dropped, the defence estate review being just another example. In 2013, we were told by Philip Hammond that we would get more than our fair share—that Scotland would get its fair share of military bases, with a promise of 12,500 personnel by 2020. Instead, the numbers have dropped from 10,600 in 2013 to 9,680 now. We also have no surface warships or bases in Scotland, despite 60% of maritime territory being in Scottish waters, and eight Scottish bases are confirmed for closure, including the Glencorse barracks at Penicuik in my constituency. It cannot be right that there is no money for the personnel and the bases that we need, while £2.26 billion is wasted annually on Trident—that immoral, useless virility symbol, which a majority of the Scottish people do not want on our shores. It is time the Government took the decision to rid us of these weapons of mass destruction and to scrap the £200 billion replacement plans, rather than the continued nuclear willy waving.
This Government had a real opportunity today to set out an agenda for change. This was an opportunity to look to support those who need a little extra help, to reach out and give a helping hand to the most vulnerable in our communities and to recognise that, after a decade of Tory austerity, we need to invest to grow the economy. But, sadly, as is too often the way with Tory Governments over the years, they look for a way to abandon the rest of us and look out for their own. Perhaps this explains why Scotland has resoundingly rejected their ideological position consistently, in election after election, for almost 70 years.
To conclude, while we must do all we can to prepare for coronavirus, there are many more threats to the wellbeing of the Scottish people and our economy, and they are coming from the skewed policy priorities of this UK Government. When a Government refuse to listen and impose policies that are against the best interests of the people they are supposed to serve, it is time for change, and it is time for Scotland to choose our own path.
Sir Edward Leigh (Gainsborough) (Con)
There have been some fine maiden speeches, and I particularly congratulate my hon. Friend the Member for Grantham and Stamford (Gareth Davies). He is a fellow Lincolnshire MP and he spoke without notes—a worthy successor to Mrs Thatcher from the birthplace of our great former leader.
Although we have had a fine victory, it is important that we maintain our sense of momentum as Conservatives, so I will now do what I usually do—I know this is deeply unfashionable in these debates—and give a Thatcherite speech, as I happen to believe that that is the best way of creating wealth in our country. I will start by drawing attention to three items of public expenditure, as examples of waste in public spending. I have just completed 18 years on the Public Accounts Commission and Committee, and I am convinced that we have a lot more to do to root out waste in public spending. Unless we do that, it is neither advisable nor prudent to go on increasing public spending at the current rate.
I will begin with one example that is close to home, because expenditure on decant from our own parliamentary building is now set to rise to more than £10 billion. The incompetence of that project does not bear any scrutiny whatsoever. First, the Joint Committee on the Draft Parliamentary Buildings Bill was told that Parliament could decant because there was room to build a temporary Chamber in a courtyard of Richmond House. Once it produced its report, however, it was told that the measurements were wrong, and that the Chamber could not fit in it. We are now told that we will have to demolish Richmond House, which will produce 25,000 tonnes of carbon. Costs are rising all the time—we have seen the exponential rise in the cost of refurbishing and renewing Elizabeth Tower. Where will it all end?
I have been working with SAVE Britain’s Heritage, the architectural heritage association, and we have proven that far from it being necessary to demolish Richmond House, we could build, at much cheaper cost, a perfectly satisfactory temporary Chamber in one of its courtyards. Even better, we could do what they did in the war—this House could decant to the House of Lords, and we could take services in from outside. That is one example. It is very close to home, and involves expenditure of up to £20 billion in London. We do not need to be spending that much money on ourselves in London; we should be a one-nation Government, and there is a much cheaper solution with which we can save public money.
Sir Edward Leigh
I cannot give way; I have less than eight minutes to speak.
Secondly, there is High Speed 2. I will not go through all the arguments, but I do not think anybody would begin that project now if they knew that costs would increase to at least £100 billion. Again, the incompetence of the project defies belief. As was said earlier, the original justification for HS2 was speed, but that has now been dropped and we are told that it is all about capacity. We could have solved so many of those problems with better digital signalling, or by laying down lines with existing technology, but instead we are now trapped in this project.
I have told the Government that I will support the project—it now costs £100 billion—if they will release just £1 million to persuade London North Eastern Railway to kickstart a through train to Cleethorpes and Grimsby, via Market Rasen. There are already many good, fast express trains to Birmingham and Manchester, yet a quarter of a million people living in north-east Lincolnshire do not have one through train to London. They have to take a slow service that lasts the best part of three hours, changing trains to get to London.
A third example—I see the Chair of the Defence Committee is in his place—is the farce of the procurement of aircraft carriers. Again, I will not go into all the arguments, but there was a change in specification, the stop-go, and the fact that the Labour Government delayed it for a year when I was Chair of the Public Accounts Committee, which costs us £100 million. There was a whole emphasis on a prestige project for the Royal Navy, rather than on building a smaller specification aircraft carrier, or concentrating on what we really needed the Royal Navy to do, which was to protect our fisheries, and protect our coasts from migrant incursions.
Those are three examples of wasteful public spending. I will not even talk about all the money wasted on huge IT projects, such as Tony Blair’s initiation of the new IT project for GPs that left us £12 billion in the red—we could go on and on. Promising to spend more public money is not the solution, and every Conservative MP should wake up every morning, come to the Chamber, and argue for a smaller state, and for reduced and simpler taxation. We still have, outside India, the longest tax code in the world. We still have a staggering number of tax reliefs. In October 2019, there were 1,190 reliefs, of which 362 were tax expenditures. The sum of the estimated cost of those tax expenditures, in tax that the Government have opted not to collect, was £155 billion. In 2018, the 23 largest tax expenditures had a forecast cost of £143 billion. Some 92% of forecast costs are tax expenditures. We still have a highly complex tax system. We have armies of accountants persuading businesses, large and small, to avoid taxes. If we could just begin to simplify taxes, we would make so much progress.
I have probably sat through 40 Budgets in this Chamber. I do not remember many of them. Once one has got past the next day’s headlines and read the Red Book, one realises that, really, the Government have probably taken back just about the same amount of money that they dished out. However, I do remember one Budget where Nigel Lawson set out to simplify taxation. If one reads Charles Moore’s biography of Margaret Thatcher, one can see that that was a popular Government. Nigel Lawson reduced the top rate of taxation from 60% to 40%. For all but a few months, the Labour Government were prepared to keep that top rate of 40%. That was a dynamic Budget and a Budget of simplification.
That is what I want this Conservative Government and this Chancellor to do as they gear up for the future. I want the Chancellor to look at the far horizon and say, “I am a Conservative. I believe in low taxes and simple taxes.” As Nigel Lawson said, if we reward entrepreneurs we get more entrepreneurship. Let us also learn the lesson of Wandsworth. I understand that a certain person who is now prominent in No. 10 was running Wandsworth Council for many years. Why have we been so successful in Wandsworth? Why do people queue up to vote Conservative in Wandsworth? Because the Conservatives deliver good governance and low taxation. That is what I will continue to argue for.
Matt Western (Warwick and Leamington) (Lab)
Whether or not Harold Macmillan actually said, “Events, dear boy,” it is events that define the times, and it is how Governments and politicians respond to them. We face huge uncertainty. Brexit is now being compounded by the coronavirus, the US-China trade war and the global economic headwinds. The growth forecasts do not look good. The Bank of England now predicts just 0.8% growth for this year and up to 1.4% for 2024. The impact of Brexit will be significant, particularly if we follow a Canada-style trade deal, which will, we are told, mean a fall of 8.6% in our GDP. Already, the OBR is quoting Brexit as having an impact of 2% on our economy. As Hillary Clinton said, it is the greatest act of self-harm.
Whether it is Brexit or the coronavirus, I appreciate that the Chancellor has had a tough challenge and I commend him for doing what he has done in such a short period of time. There has been much debate about what happened in 2008, but we can compare and contrast the reaction of the US Government under Obama, with the American Recovery and Reinvestment Act 2009, which pumped in $760 billion of fiscal support to the economy, to what we did here in the UK from 2010 onwards. We can see an uptick in the US economy almost immediately—within a couple of years—as it returned to pre-crisis growth. In the UK, it took four or five years to achieve the same level.
We have lived through a lost decade during which, as we heard earlier, we managed to double the national debt. This period of austerity—I always consider it to be a benign word—has been felt throughout our society, but particularly by the most vulnerable, with the closure of 500 Sure Start children’s centres, including 26 in Warwickshire, and our schools and colleges seeing a real-terms cut of £7.7 billion, equating to a 7.8% decrease in per pupil funding in my constituency. While I welcome what the Chancellor was saying about capital investment in further education, it is capital, and we need more investment and more revenue spending in this super-important sector, which is critical to our economic future.
Compare and contrast the impact of welfare cuts in this country—we have seen a £39 billion reduction in social security spending this year. The consequences of that have led not just to many people living in extreme hardship but, as was reported last week, to 69 people committing suicide in response to the circumstances that they faced. Errol Graham is the saddest case, dying from a lack of food.
By contrast, according to analysis by the Council of Economic Advisers, the American Recovery and Reinvestment Act, which I mentioned earlier, prevented millions of Americans from falling into poverty, and more than 5 million in just 2010 alone. Here, we have 14 million people living in poverty and record numbers of children in poverty, with 500,000 additional children in poverty since 2010.
Turning to health and social care, the Chancellor made only passing mention of social care, but it is critical to our national health service. A quarter of the workforce is on the minimum wage and there are 100,000 vacancies, but no promise to remove the restrictions on non-UK residents being able to work in that sector. Without them, the NHS is going to be under ever greater pressure. We have 44,000 vacancies for nurses and 100,000 other staff vacancies, and we have lost 17,000 beds, as we know.
I appreciate that the Chancellor is talking about a further 50,000 nurses, but as has been debated frequently, how many are actually new and how many are already within the system? The talk of refurbishing hospitals and of potentially new hospitals is very welcome, but this is absolutely about the revenues that we need to invest in that sector. If the frontline workers—health workers and social care workers—many of whom are on zero-hours contracts or the minimum wage, are eligible for the state sickness payment, they will receive only £94.25 a week. Whether they should go to work or stay at home is a choice for them in the circumstances surrounding coronavirus. This is a desperate situation and it is critical for the provision of our health service and social care.
Likewise, our local authorities are again at the coalface. I heard very little mention of the reality that we face in our local authorities, but much of the increase in council tax is being borne by our local residents, in terms of tax demand. There was no mention of the withdrawal of the central Government grant. Of course, local authorities are increasingly dependent on business rates. The Chancellor or the Government announced a 12-month holiday and I would like to know how local authorities will be compensated. Elsewhere, we are seeing a proposed increase in police numbers, but that will just replace what we had, and during the last 10 years, we have seen a 152% increase in violent crime.
On the housing crisis, the Chancellor talked about a £12 billion multi-year investment in affordable housing, but there was no real mention of council housing, which we are desperate for. We have lost 200,000 council homes since 2010. In the past few years, we have seen only eight social-rented council homes built in my constituency of Warwick and Leamington, yet rough sleeping has doubled since 2010.
There was brief mention of the environment and energy generation, and I urge the Government to put more investment in and support for—through fiscal levers—the development of onshore energy generation. That is cheapest and it will help to drive down energy bills. We lack ambition and we need to see more emphasis on that—likewise in solar. In fact, the environment barely got a mention, despite the considerable floods that we have had in recent weeks. There is a huge opportunity to revisit the code for sustainable homes and what that can do not just for the environment, but for our house-building industry.
On business, I welcome many of the initiatives that the Chancellor introduced, particularly for small and medium-sized enterprises, including the business rates holiday. However, they face a huge Brexit challenge as well, and our high streets, shops and so on face a huge challenge because of the presence of the internet and the pressures of the coronavirus, as well as Brexit.
The past 10 years have been a lost decade. We have seen the debt double from £950 billion to £2 trillion and a reduction in the state, masquerading as austerity. At the same time, we have seen inequality rise, 500,000 more children in poverty and life expectancy fall for the first time. In my constituency, there is a gap in life expectancy of 18 years between the wealthiest and the most disadvantaged. While I welcome many of the proposals from the Chancellor, there is still much to do. I hope there will be more debate to come.
Mr Tobias Ellwood (Bournemouth East) (Con)
It is a pleasure to participate in this important debate. I congratulate the Chancellor on a formidable performance and the Treasury team on putting together an important Budget statement. The Chancellor was right to begin with the response to the coronavirus, given that the World Health Organisation has today declared that it is a global pandemic. The £30 billion stimulus is exactly what is required to make sure our country can continue. It sits next to the initiatives from the Health Secretary to make sure that our health service can cope with the challenge set in front of it. I am pleased to see that £40 million has been put towards vaccine research alone. I also welcome what the Chancellor said about ensuring that both the supply side and the demand side of the economy are looked after. We are obviously going to see disruption in our workforce and supply chains and, on the other side, in spending behaviour. Our spending patterns will understandably be affected by the coronavirus.
The Government’s response has been formidable: announcements on business rates, changes to statutory sick pay, funding schemes for small and medium-sized businesses, deferment payment initiatives and the provision of loans for those businesses. These initiatives will allow businesses to weather this storm. The coronavirus will put intense financial pressures on businesses up and down the country. It will be short lived, but we must make sure that these businesses get through this difficult period over the next couple of months and survive in the long term. I put this to the Minister: while we recognise that one fifth of the workforce might be affected and have to self-isolate, do we have the capability to test more individuals daily, particularly those in critical services? Surely that might actually be cheaper than the self-isolation of people who might not be ill. I am thinking of, among others, the armed forces on standby to provide support by way of military assistance to civil authorities in the next couple of weeks.
Despite this, and the global economic slowdown and the fact that we are just emerging from three years of Brexit discussions, the wider UK economic outlook is positive. The UK economy is predicted to grow, long-term productivity is increasing, unemployment remains historically low, wages continue to grow in real terms and inflation is on target. That is very different from the picture outlined by the hon. Member for Warwick and Leamington (Matt Western). The deficit is down from 10%, which it was when we came into office, to 2% today and the national debt has finally been brought under control.
My constituents in Bournemouth East will welcome much in the Budget: the £79 million in the transforming cities fund for the local council to improve cycleways and roads; the fuel duty freeze; the increase in start-up loans; the increase in the research and development budget, which will be welcomed by our universities in Bournemouth; and the important changes to infrastructure, including the £600 billion over the duration of this Parliament to improve road and rail infrastructure. I hope that some of this money finds its way to Boscombe railway station, which has been hoping to upgrade its lifts for the last decade. I hope the Minister, who used to have this portfolio, will help me make that case. Of course I very much appreciate the long overdue upgrade of the A303, which is a vital arterial route to the south-west.
Broadband investment is also critical. The roll-out of 5G is paramount if we are to remain ahead of the game in the new era of digital capability. The impact of 5G cannot be overstated, but Parliament gave a powerful message to Government yesterday. I will not revisit the arguments, but it is very clear that Chinese ownership of part of our critical national infrastructure is unacceptable, not just to Parliament but, I think, to the British people, and I look to the Government to find a way to wean us off Huawei and other Chinese companies, which have a very different outlook because they are state-owned and have to provide intelligence to the Chinese authorities.
Air passenger duty was not mentioned in the Budget. We saw what happened with Flybe last week. I ask the Minister and the Chancellor to reach the right conclusions in their air passenger duty study, which I understand will take place shortly. If airports such as Bournemouth and Southampton are to survive, it is critical that the right decision be made. It is simply wrong that when a person flies to Lanzarote, they pay half the air passenger duty that they would for a return flight to Glasgow. I ask the Minister to hear that plea.
I am pleased to see that there has been an emphasis on climate change, more funding for flooded areas, a plastic packaging tax, and changes relating to the use of red diesel. I am also pleased that there has been an announcement of funding for veterans’ mental health issues. Sadly, beyond that there was no mention of UK defence; I make no apologies, as Chair of the Defence Committee, for focusing on that in the remainder of the time available for my speech. Perhaps the Chancellor is setting himself up for the integrated defence, security and foreign policy review that is coming along, and for the spending review.
The Chancellor spoke of the importance of a growing economy for generating tax receipts, so that the Government can invest in Departments, and in health, education, infrastructure and so forth, but I put it to the Chancellor that our economic security is relevant to, and tied to, our national security. If we lose one, we do not have the other, so in this changing world it is important that we invest. We know that the threats are increasing, but we are ever more reluctant to stand up for our values. On the one hand, we see western nations becoming more isolationist, more risk-averse and more protectionist, and on the other we see nations being far more aggressive in pushing forward their own rules; China is one example of that.
UK defence can just about cope with today’s threats, but it is overstretched. I invite any hon. Member to visit their local garrison and base. They will find dedicated, professional armed forces—the best in the world—who are paid less than they deserve. Their buildings are in need of improvement, and in many other cases—certainly in the case of land forces—they are using outdated equipment. Our battle tank is 20 years old. Our Warrior tank is even older. It is important that we upgrade as soon as possible.
Potholes get a mention in the Budget. There is a lesson there for the Ministry of Defence—and, indeed, Parliament. An issue arises; noises are made; the public, MPs and indeed Departments then lobby; and funds are found. If the nation were better informed about the true state of our armed forces and the looming threats we face, man-made and natural, I am sure there would be equally loud calls to rectify our defence posture.
The character of conflict is changing around us very fast. We are moving away from conventional to economic and political interference, all of it beneath the threshold of war. If we want to defend our economy, we need to get better at understanding how it is being attacked. We need to modernise our capabilities, so that we can effectively defend our economy.
In conclusion, I very much welcome the important initiatives that will help us manage this difficult period in which we are threatened by coronavirus. I certainly welcome the ambitious plans to advance our economy right across the country, including in the south-west—and, indeed, in Bournemouth East. I look forward with optimism to the Government listening to the growing calls for Britain to play a more active role, with greater investment in our hard power, on the international stage as challenges grow.
Catherine West (Hornsey and Wood Green) (Lab)
I thank the right hon. Member for Bournemouth East (Mr Ellwood), with whom I agree on so many issues; although I perhaps disagree on others, it was good to hear his speech. He is right on transport for Bournemouth and some of our coastal areas: it is not good enough.
Let me set the scene by reading from the Haringey fairness commission report. The commission undertook a year-long listening exercise on what it is like to live in an inner-London borough with real inequality, listening to what some of our residents said. The commission heard about
“young people attending school in shoes lined with plastic bags to protect against water which might otherwise seep through the holes in their shoes, depriving them of dignity at a time when their sense of self is being formed.”
It also heard about
“physically disabled residents unable to leave their homes due to inaccessible housing and the inability to afford suitable equipment, meaning that they were left isolated and unable to participate in day-to-day activities. It heard about low-income…workers living in overcrowded, unsanitary accommodation with little chance of saving enough money to improve their situation.”
The reason why I began with that is because when I last spoke in the Chamber, I spoke about the health inequalities in Haringey borough highlighted by the fairness commission. If someone catches the 41 bus from Turnpike Lane to Highgate, each time they go west one stop, the people there live another year longer. That disparity between rich and poor within one constituency is very disconcerting, because in unequal communities we end up with some of the worst outcomes. My question is not necessarily about the elements of today’s almost emergency Budget, but about the long-term strategic view and how that might answer some of the questions raised by the fairness commission that the House heard in my introduction.
On the covid-19 emergency, I wish to take a moment in my speech to put on record our commitment as a House: the fact that covid-19 originated in China does not mean that Chinese people are in any way to blame for the disease. [Hon. Members: “Hear, hear!”] I know that everyone in the House will agree with me and will be worried about their constituents from the far east who are currently being very badly treated. Chinatown in central London has closed down completely, and a lot of Chinese takeaways are being discriminated against because they serve Chinese food. There is some of the most incredible ignorance. I know that each person in this House thinks that is deplorable and will agree that whether someone comes from China, Italy or somewhere else, this is not their fault. This is a terrible illness that afflicts each of us as human beings, and that is how we must address it, in a public health way.
The Bank of England has announced some measures to deal with the emergency caused by this terrible illness, and I wish to pick up on some of them. First, the 0.25% lending rate is a positive step. I am not sure how much it will help, because so much in respect of lending and business confidence comes from people’s confidence to be able to go out and purchase things and then take out loans. I am not sure that that is where people’s thoughts are at the moment—I am not sure that the confidence level is high enough.
Secondly, we hope that the cheap funding to the real economy will happen, but I have to say that 10, 11 years or 12 years on, the confidence in the banking sector, at least among a lot of my constituents, is not necessarily there yet.
Thirdly, even though there might be £100 billion for small businesses to borrow and so on, I worry about how people will know that those loans are available to them. I wonder whether Treasury Ministers could tell us about that challenge. How are they telling small businesses about the £100 billion that might be there to ease capital expenditure and to make changes?
Fourthly, the Bank of England announced today the dividend freeze, which is a positive step. It is about the first time that I have ever heard anything just a little bit hard for a sector of the economy that, over the 12-year period, got away with less harm than my constituents. I am pleased that the Bank of England has decided to freeze dividends.
On the question of the European Union and our membership thereof, The Guardian today cited the fact that since the referendum in 2016 we have lost £26 billion of GDP. I wonder whether we will reflect on that and on how we will make up for that in the medium to long term, because we have a lot of productivity challenges. I am not sure that just saying, “Well, we won’t have to pay as much into the pot,” does it. I am very worried about our medium to long-term relationship with Europe, particularly if the transition period is complicated by the covid virus and by the negotiating style of some of our Ministers.
The third and final thing I want to talk about is the defining challenge of our time—that is what António Guterres has called the climate change challenge, and I could not agree more with the head of the UN’s description. The measures announced today do not go far enough—they are very timid—particularly when we think how frightening the climate change challenge really is.
My hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) and the right hon. Member for Kingston and Surbiton (Sir Edward Davey) pointed out that the ambitious-sounding carbon capture and storage facilities suggestion, while it might sound good on paper, has been announced several times now and has not actually changed anything. The proof is in the pudding on that one.
There are also some real mixed messages. Freezing fuel duty is a mixed message, and new roads are a mixed message, when Parliament has decided that climate change is an emergency. What is the message? Is it that this is an emergency, or is it that we can just keep building more roads and freezing fuel duty forever?
There is a real missed opportunity in the Budget around the climate change agenda and the role of local government. If we give half of the money for the carbon capture experts to local government, they will insulate properties, prevent heat loss, ensure lower bills for millions of low-income people, introduce the proper cycle lanes the right hon. Member for Bournemouth East mentioned, and develop highly skilled green jobs in a micro way. A lot of the climate agenda and the climate challenge is very localised.
In conclusion, despite the Chancellor’s Panglossian tone when he delivered his Budget speech at lunch- time, I am worried about the mixed messages on the environment. I am also worried about the lack of measures to tackle inequality in a genuinely energetic way. When the comprehensive spending review comes up, I hope we will look at the role of local government and at the way local government can really take on the climate challenge.
Stephen Crabb (Preseli Pembrokeshire) (Con)
It is a privilege to conclude the first day of the debate on the Budget, and it is a pleasure to follow the hon. Member for Hornsey and Wood Green (Catherine West), who always makes thoughtful speeches.
I would like to start by putting on record my congratulations to my right hon. Friend the Chancellor, who presented a strong, future-facing Budget. Before I say more about that, I would like to put on record a tribute to my very good and right hon. Friend the Member for Bromsgrove (Sajid Javid), who was his predecessor. His tenure as Chancellor of the Exchequer might not have been long, but I believe he was part of the change of mindset at the Treasury that the Chancellor spoke about today. He said he recognised much of what was in the Chancellor’s Budget statement, and well he might, because he contributed to some of the new thinking. Indeed, back in the summer of 2016, he and I presented a plan for a growing Britain fund—a £100 billion fund to invest in long-term productive infrastructure, taking advantage of record low borrowing rates at the time. It is encouraging to see some of those ideas come to fruition in the Budget statement we heard earlier this afternoon.
If the Budget was about looking to the future, it was also about facing up to the very real challenges of the present. It was a Budget delivered in the shadow of the growing coronavirus crisis. All Governments around the world are trying to wrestle with this problem. All Governments are trying to work out the science and what the correct balance and trade-offs are between measures and tactics to contain and delay the virus and not imposing excessive economic cost on their citizens. Every Government is working out these decisions for themselves, but the challenge is considerable.
We should all be encouraged by what we saw today in response to the growing crisis. We saw the United Kingdom able to take a strong set of measures and communicate them to international and domestic markets through a strong set of co-ordinated messages from different branches of government, starting with the Bank of England this morning and followed up by the Chancellor of the Exchequer in his Budget this afternoon.
The platform for that strong, co-ordinated response to the coronavirus has come from two things: a broadly sound set of public finances after 10 years of responsible decision making by successive Conservative Administrations; and a banking system that is far safer than it was in the previous crisis of 2008. Together, this action has created a strong framework for protecting our economy, our businesses and our citizens from whatever the coronavirus may throw at us.
Like many hon. Members who have spoken this afternoon, I, too, strongly welcome the balanced, sophisticated package of measures to support business at this time of crisis. My constituency, as you know well, Mr Deputy Speaker, is a coastal, beautiful and peripheral constituency with a great many businesses in tourism, hospitality and leisure that are looking forward to the start of the new season in just three weeks’ time.
Like many hon. Members, I have spoken to a lot of businesses in recent days that have expressed a growing sense of concern and fear about their business prospects this year. Many of them lose money during the winter months and earn their money during the strong summer season, and they are already reporting to me that bookings are down. Where bookings have been made, they are secured only by 30% deposits. The fear is that this will prove to be a very challenging few months.
An idea put to me by one business is that the Government should delay implementing the increase in the national minimum wage. My view, which I communicated strongly to the business, is that that would be the wrong thing to do. We are proud of our track record of increasing the national minimum wage, putting more money back into the pockets of those on the lowest incomes, but it is a measure, a sign and a signal of just how fearful many small businesses are about their cash-flow prospects in the weeks and months ahead. The measures set out by the Bank of England and the Chancellor today provide a measure of resilience for many of our small businesses.
Several hon. Members rose—
Stephen Crabb
I will not give way.
I also strongly welcome the measures on statutory sick pay to protect family incomes. If I had a couple of concerns to put on record, one would be that we are placing an awful lot of faith in the banks to do a lot of the heavy lifting in providing support to small and medium-sized businesses. Most of us who have been in this place for the past 10 years will have seen constituency cases of small businesses not being treated well by the banks, being treated unfairly and, at times, being thrown under a bus. We are looking to the banking sector, especially in light of the measures taken by the Bank of England this morning to help the sector’s balance sheets, to make good on delivering support to small businesses at this time.
My second area of concern would be about the self-employed weathering the storm that coronavirus potentially places on them. As a number of hon. Members have already said, this crisis will highlight the vulnerability and fragility of some workers in our economy. We are proud of our labour market record, and the United Kingdom’s record of creating and sustaining jobs over the past 10 years is nothing short of remarkable. One of the keys to that has been flexibility, but we should not make a god of flexibility. One area we will need to look at in the weeks ahead is how we ensure that the self-employed, freelancers and people working in the gig economy can get better social protection at a moment of crisis.
I will wrap up there, other than simply to say that my right hon. Friend the Chancellor did a superb job of delivering a very good, strong first Budget.
Coronavirus
(4 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Speaker
Before I call the Secretary of State to make his statement, I would like to draw the attention of the House to the fact that this statement on coronavirus is being streamed live, with the accompanying British Sign Language interpretation, at parliamentlive.tv.
The Secretary of State for Health and Social Care (Matt Hancock)
This afternoon, the World Health Organisation declared coronavirus a global pandemic. I have spoken to the Leader of the House, and we have had discussions, Mr Speaker, and we have resolved that we will keep Parliament open. Of course, in some ways this House may have to function differently, but the ability to hold the Government to account and to legislate are as vital in a time of emergency as in normal times. Our democracy is the foundation of our way of life.
Turning to the advice that is being provided to Parliament, may I start by welcoming the way in which you are working with the Government, Mr Speaker? I know how seriously you take the wellbeing of all Members and staff in Parliament, and the Government will continue to work closely with you, the Lords Speaker and the authorities in both Houses in the coming days and weeks. As the Leader of the House said in business questions last week:
“The public will expect Parliament to sit, and to get on with its job...
Our approach will be guided by the best scientific evidence and medical advice, and we will take all necessary measures to deal with this outbreak.”—[Official Report, 5 March 2020; Vol. 672, c. 984.]
Mr Speaker, I know that you are committed to providing as much information to Members and staff as possible and to taking any action that is required. A cross-parliamentary group of senior managers meets daily to plan the response to covid-19 and ensure business continuity, with close input from the Government. It is essential that the parliamentary authorities continue to work closely with the Government and in line with medical advice, and I commit us to that endeavour. Both Houses are conscious of our national role at this time, and by basing decisions on the very best public health advice, we can be confident that we are doing the best we can to respond to this virus.
Around the world, the number infected is rising. As of today, here at home, 456 people have tested positive and eight people are, sadly, confirmed to have died. The positive cases of course include the Under-Secretary of State for Health and Social Care, my hon. Friend the Member for Mid Bedfordshire (Ms Dorries). She has done exactly the right thing in following the official advice to self-isolate, and I know the whole House will wish her well as she recovers. Public Health England has world-class expertise in contact tracing, which it initiated as soon as her case was confirmed. PHE will contact anyone whom it thinks may need testing. This will only include those who had close contact. The advice of the chief medical officer is that close contact is defined as being within two metres of someone who has active symptoms for more than 15 minutes. Those who have not been in close contact with my hon. Friend since Thursday have no cause for concern in this case, and anyone who has concerns should seek guidance from PHE. I also know my hon. Friend wants me to pass on her thanks to officials at PHE and to the NHS, who have been brilliant throughout.
Of course, a Member of this House and Health Minister testing positive has brought this issue home to us all, and I know that the public will be concerned that coronavirus has now been deemed a global pandemic. The official advice is clear: people should go to NHS 111 online or call NHS 111 if they think they have symptoms of coronavirus, notably a cough and fever. Of course, the best way to minimise the risk to themselves and others is regularly to wash their hands.
Earlier today I chaired a meeting of Cobra. Our response will be built on the bedrock of the science. It is clear that we will need legislation to ensure the best possible response, and I can tell the House that I have invited the Official Opposition to meet with me first thing tomorrow to discuss the proposed emergency Bill that we will set out before the House next week. In addition to the measures that my right hon. Friend the Chancellor set out in the Budget earlier, the Bill will include measures to help in the national effort to keep vital public services running, to support business and to help everyone play their part.
Adult social care will be at the frontline of our response, with social care providers looking after many of the most vulnerable in society. We are working closely with the sector to make sure that it is ready. Tomorrow, the Prime Minister will chair a further meeting of Cobra to decide what further measures may be necessary.
We will do the right thing at the right time. I know how worrying this is. I know that people have deep concerns. I know that everyone will play their part in this national effort to defeat the virus. The best way to beat it is for us to work together. We will do whatever it takes. We will give the NHS whatever it needs and we will do all that we can to keep people safe and get through this together, as a Parliament and a nation. I commend this statement to the House.
Jonathan Ashworth (Leicester South) (Lab/Co-op)
I thank the Secretary of State for advance sight of his statement and, as is entirely appropriate, for making arrangements to come to the House at this relatively late hour in these unusual circumstances. I thank you, Mr Speaker, for your constructive engagement with the Opposition on these matters. I know that you will continue that, and we welcome it.
I put on the record my sorrow that two more people have died, and I express our deepest condolences to their loved ones and family. Again, we thank the NHS and Public Health England staff for all they are doing. Will the Secretary of State convey our very best wishes to the Under-Secretary of State for Health and Social Care, the hon. Member for Mid Bedfordshire (Ms Dorries), who is in all our thoughts, as well as to her staff in both her departmental private office and her parliamentary office? I am sure they are all very worried, and I want them to know that they are in our thoughts as well at this time.
We welcome what the Secretary of State has said about Parliament and his advice to keep Parliament open. It is crucial that Members should be able to continue to raise issues on behalf of their constituents and hold Ministers to account. I note that he said that procedures or arrangements may need to be modified, and we look forward to continued engagement on that front.
I also welcome the advice that the right hon. Gentleman has given to people who have come into contact with the hon. Member for Mid Bedfordshire, but can he offer us some extra advice? I have heard about cases of this today. What is the advice for those who work on the estate who feel ill and appear to have symptoms but have not, as far as they are aware, been in contact with the hon. Lady? Should they now be tested as well as a matter of routine? The advice for them is just to self-isolate, but what is the latest guidance on that front?
We welcome the opportunity to discuss emergency legislation. The Secretary of State knows that we have concerns about statutory sick pay and other issues, but we will engage constructively on that front and seek to pass emergency legislation in a timely manner. He also knows that we support the action of the chief medical officer and we very strongly agree that we must at all times be guided by the science. However, may I press him a little further on the epidemiology, the latest medical advice and the appropriate moment when we should move into the so-called delay stage and start adopting some of the more stringent social distancing strategies?
The right hon. Gentleman will have seen that some in the science community—the editor-in-chief of The Lancet, for example—are suggesting that we are not following the epidemiology in the correct way and that we are perhaps placing too much emphasis on behavioural science. Other countries are taking different approaches. Tonight, for example, 3,000 Atlético Madrid fans are arriving in Liverpool to watch the champions league game. If that game was in Madrid, they would not be able to go to the stadium because of the Spanish social distancing measures. Will the Secretary of State explain the thinking in the United Kingdom and why it appears to differ from that of some of the other nations in Europe? Our constituents would welcome that.
I have just a couple of final points, Mr Speaker. On the Budget, it would be churlish of me not to recognise that extra funding was announced for the NHS and social care as part of the covid-19 response. It is something that we have long been calling for. Will the Secretary of State tell us how that money will be allocated, and what happens when that money is depleted? The NHS has said today that it is seeking to scale up intensive care beds sevenfold. That fund will run out at some point and it will need topping up. Do we have to wait for the spending review process in the summer, or will it be topped up over the coming weeks and months?
I am sorry to ask the Secretary of State this again, but when will we get the public health allocations? I would have thought that we would have had them today. Please, let us know when we are getting them. We must do all we can to support NHS staff at this time. The NHS has suggested suspending Care Quality Commission inspections for now. What is his view on that? As he says, this is now designated a pandemic by the World Health Organisation. We agree that we all have to do our bit. The Government have our continued co-operation, because public health and public safety must always come first.
Matt Hancock
I am grateful to the shadow Secretary of State for the tone that he has adopted and for his full support for keeping Parliament open. He raised the issue of statutory sick pay. Statutory sick pay and the measures that we are taking in the Bill are an example of why accountability helps to get the response right, especially when there is a constructive tone, as there is. He was the first person to raise the issue of statutory sick pay across these Dispatch Boxes, and it will now be in the Bill because the point that he raised was the correct one, and we therefore took action. Likewise, the Bill has been drafted alongside the Labour Welsh Government, the SNP Scottish Government and the multi-party Administration in Northern Ireland, and they have added contents to it. It is a true cross-party effort.
The hon. Gentleman asked about advice for those who are ill but cannot recall whether they came into close contact with my hon. Friend the Member for Mid Bedfordshire. The answer is to call 111 and ask the questions, and then get the clinical advice and follow that advice. The advice may be different for people in different circumstances. When people are recommended to follow certain advice by 111, they should follow that advice, because it takes into account a clinical judgment based on the information that is provided to a clinician.
We will, of course, as I have repeated many times, be guided by science. The hon. Gentleman mentioned that some voices are asking whether the appropriate moment for further action is now. Of course, we keep action under review all the time and, as I said, the Prime Minister is chairing a Cobra meeting tomorrow. There are some voices that are saying that we should not base our response entirely on the science, but I think that they are wrong. He asked about our differences with other countries and mentioned Spain in particular, but there are others. The truth is that different countries are at different stages of the virus. The point is that we will do the right thing at the right time. There are some countries that are not fully following the science. I am not going to criticise them, because I think that in responding to a pandemic such as this, everybody is doing their level best.
The hon. Gentleman asked about money. There was a very significant increase in funding—£6 billion for the whole NHS and social care system. It is important to stress that this is for social care, too. We want to make sure that the social care system has everything that it needs to respond to this crisis, because we entirely understand both the strains on the social care system should a large proportion of the population fall ill, but also the importance of the social care system, because that is where so many vulnerable people either reside, if they are in a care home, or are supported. He asked whether we will have to wait for the spending review for any top-up. The Chancellor made it quite clear in the Budget that we will not.
The hon. Gentleman asked about the CQC. The CQC has already published a statement today, saying that it is relaxing some of its requirements and taking into consideration the impact of coronavirus, and I welcome that. It is, of course, independent. He asked about the public health grant budgets. As I made clear yesterday, those budgets are going up in real terms in every single local authority area, and the precise details will be set out very shortly.
Jeremy Hunt (South West Surrey) (Con)
I thank both Front Benchers for the highly responsible way in which they are approaching this crisis, which shows Parliament at its best. I also thank the Health Secretary for his role in getting those very generous words for the NHS into the Chancellor’s speech this afternoon; they have been widely welcomed across the NHS and were much needed.
The chief medical officer says that we would have to be “pretty optimistic” to think we could contain the virus in this country. The deputy chief medical officer says that she thinks we may hit the peak in the next fortnight. We now have more reported cases in this country than there were in Wuhan when it went into lockdown. We know that the Secretary of State will rightly follow the science, but could I ask him to give his judgment to the House as to whether he thinks we still can contain the virus in this country and, if not, whether he expects to move to the delay phase very soon so that families up and down the country can start to prepare their loved ones for any precautions they might want to take?
Matt Hancock
I want to make two comments in response to my right hon. Friend. First, I want slightly to correct the point about the deputy chief medical officer, who said that in the next couple of weeks we may see the numbers starting to rise fast to their peak. We do not expect numbers to peak in the next fortnight. We expect them to continue to rise after that. The peak would be in a matter of a couple of months, rather than a couple of weeks. This is a marathon, not a sprint. Secondly, the World Health Organisation declaring this afternoon that the virus is globally now regarded as a pandemic indicates that the WHO thinks it will spread right across the world, and that will have a significant impact on the way in which countries around the world will now take forward their plans. Of course, the expectation that this may well happen was all within the plan that we set out. We will be discussing that at the Cobra meeting tomorrow.
Dr Philippa Whitford (Central Ayrshire) (SNP)
I echo the good wishes to the hon. Member for Mid Bedfordshire (Ms Dorries).
I welcome the declaration to keep Parliament open, but surely we should be looking at core functions, at who comes into the House and at what we do in the House. I have to say that I was a bit disappointed to have several hundred of us jammed into the voting Lobbies on Tuesday. That is just not a good idea. There are ways of working that would still allow Parliament to stay open.
With cases having increased by 13 times outside China in just two weeks, the virus has of course been declared a pandemic by the WHO, which describes its concerned at “levels of inaction”. It calls for quicker and wider testing so that milder cases are diagnosed quickly, isolated and the spread reduced. We have seen the speed of change in northern Italy over a matter of a couple of weeks, so should we not be thinking about the delay phase? Containment and delay are a continuum; it is not a switch between one and the other.
We see large leisure events still continuing. They are not critical, so should we not be decreasing them? Do we know yet whether children are spreaders? We know they do not catch the virus, but do they spread it? That would be central to any decision about closing schools, and obviously closing schools would have an impact on NHS and social care staff.
I welcome the announcement in the Budget of funding to support people on sick pay, but will the Secretary of State clarify whether this will be provided to people who do not have sick pay in their contract? That is exactly who we were concerned about when we raised this point.
How quickly will all three devolved Governments hear about the extra funding that they are going to get, since it is urgent for them to take action as well? There has been talk about bringing doctors back from retirement. Is there a discussion with the General Medical Council about relicensing doctors, and about providing Crown indemnity for doctors who may have retired within the last year or two? The UK is already outside the European Centre for Disease Prevention and Control, so will the Government now at least rethink leaving the pandemic early warning and response system?
Matt Hancock
The hon. Lady asked some important questions about how Parliament will function. Matters of how we work are of course for Parliament—for the Leader of the House, the Speaker and the Commission, all guided by the science. They are in constant contact with Public Health England to get the very best advice. As for when we are voting, this disease passes in very, very large part from people who have symptoms, and we may not have symptoms. What really matters is making sure that as soon as people have symptoms potentially of coronavirus, they get in contact with 111 or Public Health England.
The hon. Lady asked for more testing. We are absolutely ramping up the testing capabilities. We have been commended on the approach we are taking by international bodies; she mentioned the WHO. She asked about children. One of the good pieces of news about the virus is that it does appear to have a much, much less significant impact on children. On the GMC and indemnity, absolutely —both those issues will be addressed in the Bill, and we are working very closely with the GMC.
The hon. Lady asked about collaboration and work with the European Union. We still remain within the European Union data transfer capabilities. Most of this data is being transferred—frankly, it is being published. We are being as transparent as possible. This week, we brought out a new website in order to be as transparent as possible about all the cases in the UK. Most European nations are taking exactly that approach.
Several hon. Members rose—
Mr Speaker
Can I just say, to help Members, that I expect to run this for an hour from now? That should accommodate everybody.
Steve Brine (Winchester) (Con)
I would like to take the Secretary of State back to his point about a real national effort. Last week, he talked about the supermarkets helping to get supplies to elderly and vulnerable constituents, many of whom cannot get out—and right now we do not want them to do so. Will he join me in paying tribute to the army of volunteers across the country in community shops such as the Hursley community shop in my constituency? The shop told me today of the service that it is running for elderly parishioners in getting essential supplies to them and picking up prescriptions for them. That is a brilliant example of the big society—remember that?—doing its bit to help this country to get over this terrible time.
Matt Hancock
Gosh, that is a blast from the past—that phrase was invented almost exactly 10 years ago. My hon. Friend is quite right, though. This is a national effort, and community shops can play a huge role in helping people to get the groceries and other supplies that they need. There has been much discussion of supermarkets. I am glad to say that the vast majority of supermarkets are playing an absolutely incredible part in this national effort; we are working very closely with them and have been for some time. Our community shops will be really embedded in their communities; they often know which people are going to need the most support, and have those personal relationships. As long as they are following the public health advice to ensure that the people they are helping are also kept healthy, then they have an important role to play in our national effort.
Maria Eagle (Garston and Halewood) (Lab)
Can I press the right hon. Gentleman on the issue of the 3,000 or so Atlético Madrid fans who have travelled to Liverpool and are, at the moment, in a crowd of 54,000 at Anfield? Schools and colleges are closed in Madrid, and public gatherings of over 1,000 people are banned, because there is a cluster of 782 coronavirus cases and there have been 35 deaths. Now that we have a pandemic, is it really sensible for this to be allowed to continue? Both the Government and UEFA told the Liverpool Echo today that it is not up to them to take action—so who is it up to? Is it really sensible for fans who could not watch their team at home to be able to travel to Liverpool and watch their team play with 51,000 locals?
Matt Hancock
It is for Public Health England to make advice available and to give guidance. We will always follow the scientific advice on what makes the biggest impact. It is interesting, listening to the scientists, that sometimes the things that we, as lay people, may feel intuitively will have the biggest impact do not in fact have the biggest impact. The measures that we are taking and proposing to take include, for instance, looking at asking people who have symptoms, however mild, to stay at home. We are aiming to do the things that have the biggest impact. There are some things that feel right but do not have an impact at all. That is why it is so important to follow the science and what Public Health England says.
Dr Luke Evans (Bosworth) (Con)
Primary care clinicians are expected to collect quality and outcomes framework data, which can be-time consuming and take them away from their clinical work. Will the Secretary of State consider suspending QOF data?
Matt Hancock
We are looking to reduce bureaucratic burdens on primary care and GPs—we were looking at it anyway, but we have accelerated that work because of this outbreak. We have moved to a principle of “digital first” in primary care and with out-patients: unless there are clinical or practical reasons, all consultations should be done by telemedicine.
Dan Jarvis (Barnsley Central) (Lab)
I am grateful to the Secretary of State for his statement and for all the work being done to keep the public safe. In conversations with colleagues in South Yorkshire today, specific concerns were raised about the guidance for GPs on personal protective equipment and the resilience of the social care sector. May I gently push him on the public health grant allocation? I very much welcome the fact that there will be an increase, but I am sure he will acknowledge that it is in everybody’s interest for directors of public health to know precisely what their budgets will be sooner rather than later.
Mrs Pauline Latham (Mid Derbyshire) (Con)
I would like to associate myself with the Secretary of State’s remarks. I wish my hon. Friend the Member for Mid Bedfordshire the very best and hope that her family recover as quickly as possible if they succumb to the virus.
My constituents have developed a test for the virus. They are selling it all round the world, but we are not using it in this country. It costs £5. It is working, and it gives a result within 10 minutes—it is a quick, cheap way to do it. May I urge the Secretary of State to ask the Department to investigate that and ensure that we are using the most effective test possible?
Matt Hancock
Yes, absolutely. My hon. Friend has brought that to my attention before. We have done research into it, and we are working with over two dozen commercial companies that have tests of this kind. In fact, I had a meeting on this today.
Munira Wilson (Twickenham) (LD)
I welcome the Secretary of State’s focus on social care. Will he clarify how much of the additional spending in today’s Budget will go into social care? Will PHE issue protective equipment to careworkers? His statement referred to adult social care. There are many sick children in this country who are reliant on care. Will he ensure that children’s needs are not overlooked? I wrote to him about that earlier this week, and I would welcome clarification.
Matt Hancock
As the hon. Lady knows, guidance is coming out this week. She is right about the importance of protective equipment, and of course, we are taking that into account. The Chancellor set out that more money will be available in social care if it is needed—and I expect that it will be—and announced a total of up to £5 billion for the NHS and social care, while saying that his door is open should more be needed. These are all very important considerations, and the guidance will be out shortly.
Greg Clark (Tunbridge Wells) (Con)
I welcome my right hon. Friend’s determination to base his actions on what he calls the “bedrock” of the science. He will be aware that the World Health Organisation-China joint mission report drew particular attention to the importance of the rapid expansion of detection and diagnosis as a way to prevent illness and death. The daily number of tests in this country has been relatively stable over the last few days. In fact, it fell between 7 March and 10 March, while the number of cases increased. Can he assure the House that the right number of people are being tested? When will the expansion of testing that he announced yesterday translate from capacity into the actual number of people being tested?
Matt Hancock
That is a very important consideration. As I said, the number of labs doing testing has already gone from one to 12, and we are working with more than two dozen companies on further testing capability. We are rolling out a big expansion of testing. The critical thing is to ensure that it is not just about the testing. Getting the whole pathway right—from somebody feeling sick to calling 111, being tested and then getting the test result back—as the number of tests goes up is the critical thing we have to do.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Will the Secretary of State update us on the thinking about what will happen, if this does continue as is projected, for schools? If schools close, what in particular will happen to children on free school meals, whose parents massively rely on them to keep their children well fed?
Matt Hancock
The hon. Member sets out one of the many reasons why there are downsides to closing schools. There are significant downsides, especially because of the knock-on consequences it has on the number of staff available for critical public services, including the NHS and social care. There are many considerations we have to take into account if we close schools, and that is why we have no plans for a mass closure of schools. Of course, individual schools will sometimes be advised to be closed, but because one of the saving graces of this virus is that it does not have a big impact on children, there are fewer benefits to closing schools, and she sets out one of the downsides.
Mr Steve Baker (Wycombe) (Con)
Will the Secretary of State elaborate on social distancing? What would it entail, particularly for more vulnerable groups such as older people?
Matt Hancock
There are different types of social distancing. There is what is essentially case isolation, which is where somebody has symptoms and we are asking them to self-isolate. At the moment, if somebody has moderate or heavy symptoms, they should self-isolate, and we have talked about going, at the right time, to self-isolation—staying at home—for people with mild symptoms. There is also, of course, the need to ensure that older people and vulnerable people, for whom this virus has a bigger impact, can get the right advice on self-isolating, and that is something we are working on.
Here the timing really is critical, because the evidence of past epidemics and past crises of this nature shows that people do tire of these sorts of social distancing measures, so if we start them too early, they lose their effect and actually it is worse. The social science and the behavioural science are a very important part of the scientific advice that we rely on.
Mr Pat McFadden (Wolverhampton South East) (Lab)
One of the questions in the public’s mind is the degree of resistance acquired by those who have contracted the virus and then recovered. I appreciate that this is more a question for his medical and scientific advisers than directly for him, but could the Secretary of State give us any information on the degree of resistance acquired by those who have been through the virus and come out the other side?
Matt Hancock
I asked the chief medical officer this precise question this morning, so I can report to the right hon. Member what the chief medical officer says is the answer to this question. The degree of resistance is deemed to be very high, especially in the first year or more afterwards, for similar coronaviruses, and is therefore likely to be very high for this one. It is good news that it is highly likely that once people have got it and recovered, they are going to be okay. That is obviously good news for people who have had it, including our hon. Friend the Member for Mid Bedfordshire.
Sir Desmond Swayne (New Forest West) (Con)
I have received a large number of representations to pass on to the Secretary of State, but am I right in thinking that the one thing he is not short of at the moment is advice?
Matt Hancock
This is supposed to be an easy question, but actually my right hon. Friend is completely wrong. I would rather have the advice. I would rather go through 100 ideas, 99 of which we have already looked into, to find the one that we had not thought of than not be bombarded, so I ask him to send them on.
Hilary Benn (Leeds Central) (Lab)
Earlier this week, the Secretary of State told the House that the NHS requires more ventilators. He will be aware that two weeks ago today Italy had the same number of confirmed cases as we have, and he will also be aware of the great pressure that intensive care units and hospitals in Italy are under. Can he tell us whether the additional ventilators that he is seeking will arrive with the NHS in time to cope with any rapid increase in the number of critically ill patients who require breathing support?
Matt Hancock
I am afraid that is not how we are thinking about it, as that implies a perfect world in which things are available and not in demand around the world. Our approach to ventilators, and to staffing-up—obviously, we need trained staff to operate ventilators, or else they are dangerous—is to get our hands on as many as possible, and to train up as many people as possible. We think that we will need as many ventilators as we can get our hands on. There is no calculus of demand and availability; we are trying to buy as many as we can get hold of.
Tom Tugendhat (Tonbridge and Malling) (Con)
I pay tribute to the way that the Minister and his team, Public Health England, and the whole NHS are dealing with what is frankly an unprecedented situation. I am hugely grateful to them all. Is the Secretary of State working with our right hon. Friend the Foreign Secretary on keeping our diplomats and envoys safe abroad, and giving them the advice they require? What is he doing to work with the World Health Organisation to ensure that we limit spread as much as we possibly can around the world, so that we are not infected again afterwards?
Matt Hancock
My hon. Friend is right, and along with the International Development Secretary, my right hon. Friend the Foreign Secretary is working hard to ensure that through funds from the Department for International Development, and the judicious use of other British assets around the world, we can try to slow the spread elsewhere. Consular support for UK citizens and Government employees overseas is critical.
Afzal Khan (Manchester, Gorton) (Lab)
Today I was deeply concerned to learn that public health information is not being shared in any language other than English. Given that we live in a wonderfully multi-lingual society, in which 4 million people—including me and other hon. Members—are non-native English speakers, will the Secretary of State explain why information is not being provided in any other language? Does he agree that it is in all our interests for every person, no matter their language skills, to understand what they need to do to protect themselves, and others, from this virus?
Matt Hancock
Of course we will provide guidance in languages other than English. We are developing this guidance at speed, and I commit to making that available as soon as we practically can.
Dr Andrew Murrison (South West Wiltshire) (Con)
May I commend my right hon. Friend for the sure-footed way he has approached this, and the hon. Member for Leicester South (Jonathan Ashworth) for his balanced and measured response? The Health Secretary knows well that the problem with intensive treatment units and intensivism is not so much the kit, as the people. What is he doing to ensure that clinicians within the service who are in non-acute specialties are given the skills they need to deal with what may be coming?
Matt Hancock
As my right hon. Friend knows, we are inviting and encouraging recent retirees and health care leavers back in, and we will provide for some of that in the Bill. We are also ensuring that as we make what is effectively a big change to the NHS case mix, and do fewer elective operations and focus more on respiratory diseases and coronavirus, there will be a retraining exercise for people to go on.
Chris Bryant (Rhondda) (Lab)
I completely agree with the Secretary of State about keeping Parliament open, and I am grateful for the work that he, you, Mr Speaker, and the Leader of the House, have done to ensure that is the case. May I ask about something that I did not fully understand from what the Chancellor said this afternoon? As I understand it, if Wales wants and need extra money for the health service to deal with coronavirus, it will get it, whatever amount is needed. I presume that also applies to social care budgets in Wales, which my local authority is already worried about. Why does it not apply to all the other measures that are meant to support the economy through this difficult period? Why does it not apply to council tax and business rates?
Matt Hancock
The hon. Gentleman presses me on a question that is not in my departmental area. I apologise, but I would rather get him the right answer than give him the wrong answer now. I will make sure that we get back to him.
Mrs Natalie Elphicke (Dover) (Con)
My hon. Friend the Member for Mid Bedfordshire (Ms Dorries) has been playing a pivotal role in supporting our east Kent hospitals, and I would like to add my good wishes to her, her family and her staff.
Areas like mine in Dover and Deal are on the border with another country. With a global pandemic now announced, will my right hon. Friend update the House on any additional steps being taken internationally to manage transmission risk between countries, such as between our country and France?
Matt Hancock
Yes, we are increasing the support available at all ports, including airports and seaports such as Dover, and making sure that better information is available, including in multiple languages, to those who are arriving. Specifically and importantly, no matter who is here, we want to make sure that they know that if they are ill they should call 111, because this virus travels from human to human, not from people of one nationality to another. It does not see that distinction.
Bell Ribeiro-Addy (Streatham) (Lab)
Does the Secretary of State accept that keeping Parliament functioning as normal, with the public visiting, is simply irresponsible? As others are encouraged to cancel large meetings, events and unnecessary travel, we instigate large meetings, host events and receptions, and travel from all across the country—vectors, I heard an hon. Member call us last week. Festivals, concerts and football games have been postponed, but it is business as usual here. We are even holding our surgeries. As we continue to meet hundreds of people weekly, I am concerned that we are potentially spreading the virus. My biomedical training tells me that a number of Members in this House probably already have the virus. I am genuinely concerned about older Members, older constituents and those with underlying health conditions. Will he implement testing for all Members and staff of this House, not for reasons of special treatment but because of all the people we meet and have met in the past few weeks? Will he agree to having electronic voting or automatic pairing for any Member who may wish to self-isolate?
Matt Hancock
As I said in my statement, I am delighted that Parliament is staying open. There are, of course, considerations around procedures and how the House operates. It is rightly a matter for the Leader, Mr Speaker, the House of Commons Commission and every single Member to express their view, and the hon. Lady rightly puts her view firmly on the record. As long as the public health advice is taken into account, and it is based on that advice, then, as far as I am concerned, I am sure the decisions will be got right, led by you, Mr Speaker.
The one point I will respond to is that calling for testing for everyone is not going to help, because the test is not reliable for people who are not symptomatic. That is why testing at the airport, for instance, which several people have called for, is not effective. Some of the countries that started it, stopped it. Temperature testing leads to a load of false positives, because you might be ill with something else, and that complicates the system—or it leads to lots of false negatives, with the test returning a negative even though somebody is ill, because they do not yet have enough virus in their system to be symptomatic and for the test to pick it up. Testing people who do not have symptoms is not reliable and is counterproductive, so we will not be doing it.
Mr Tobias Ellwood (Bournemouth East) (Con)
My right hon. Friend rightly talks about chronology: feeling ill, dialling 111 and then going to take the test itself. However, may I echo the concerns about the self-test capability? He points out the difficulties with accuracy. I am concerned that about one fifth of the UK workforce might be off ill, many of whom may not develop the full symptoms. Will he look at our ability to advance a capability to self-test in the near future? That would eliminate many of the workforce going off unnecessarily.
Matt Hancock
Absolutely—in fact, there was a very big conference in London today on precisely this issue. We are working with dozens of companies on it. We will work with anybody and scour the world for a solution, as my right hon. Friend describes. I just add one thing: he talked about how I had described what people should do if they feel ill—they should call 111—but also, going to the 111 website is really, really important, because that takes pressure off the call centres and many people can get the answers they need without talking to someone.
Chris Stephens (Glasgow South West) (SNP)
I bring the Secretary of State back to his discussions and liaison with supermarkets. I am aware of at least one supermarket chain that has already said to local food banks that they are cutting their orders and limiting what they provide to food banks. Will he raise this with supermarket chains to make sure that those who need food aid provision in the country—the most vulnerable and needy—get what they need?
Matt Hancock
The Department for Environment, Food and Rural Affairs is leading the work with the supermarkets now, so I will ensure that it gets that message and takes that up.
Bob Blackman (Harrow East) (Con)
The vast majority of people who contract the disease will be able to self- isolate and recover at home. A small number of cases will need hospitalisation, and as the number of people who are infected increases, so could serious cases. Would my right hon. Friend say that people who have to be hospitalised will have to be isolated, and what plans are there then to increase the number of beds that will be available in hospitals on isolation units?
Matt Hancock
We are increasing the number of beds, and, by moving away from some of the elective activity, making more beds available. However, I want to pick my hon. Friend up on one thing: as and when this virus becomes widespread, isolation becomes less important than ventilation. The normal flu procedures are that keeping several people who all have the same flu in one room—in one ward—is absolutely fine, because they cannot infect one another because they all have the same disease. Isolation is vital in the contain phase. It is still important in delay, but as we get through to mitigating the impact, the need for isolation facilities is less important.
Ms Angela Eagle (Wallasey) (Lab)
The Chancellor’s announcements earlier today were very welcome, but will the Secretary of State help to cast a bit more light on the announcement about employment and support allowance? There are millions of people, as he knows, who do not qualify for statutory sick pay. The effectiveness of self-isolation and doing the right thing relies absolutely on many people who do not have standard employment contracts being able to be confident that if they self-isolate, they will not lose out, yet the ESA system works in retrospect, with delays, and is quite bureaucratic. Will he say a bit to us tonight about how that is going to be mitigated so that those who are not on standard employment contracts will know that they can do the right thing and not suffer?
Matt Hancock
Yes, we will publish more on this in very short order. Some of the changes in this area will be in the Bill, but some will be in secondary legislation, so that they can go at a faster pace, potentially, than the Bill. The ESA (C), as it is known, comes in only after seven days and bringing that down is an important part of the reassurance that the hon. Member seeks.
Derek Thomas (St Ives) (Con)
I thank the Secretary of State and all his team for the way that they have handled this so far and for the statement this evening. I also thank him and others for the way in which they have continued to communicate in a clear and very accessible way. As the spread of the virus affects people’s lives in more and more ways, it is really critical that that continues to happen and that fake news cannot be given breathing space. Will he assure us that there is a clear plan about how to communicate so that the whole public know exactly where to go for information when they need it?
Matt Hancock
Absolutely. This is right at the top of the agenda; tackling fake news is incredibly important. The major social media platforms and search engines have already risen to this task and I pay tribute to them—in the past, I have been known not to pay tribute to them, and sometimes quite the reverse. They have absolutely risen to this task and we will keep on it, but, of course, the information that we provide to the public will have to evolve both as we learn more about the disease and as we move through the plan. For the moment, the absolute core message is that people should wash their hands.
Clive Efford (Eltham) (Lab)
Are we reaching the stage where people, if they have any form of cold, should be self-isolating? We all know people who have had colds, some of them more severe than others, but they have been able to be confident that it has not been coronavirus. Now it is becoming prevalent, how can they be sure? It is going to create a lot of confusion. Are we reaching the stage where, as the Prime Minister alluded to the other day, people may have to self-isolate if they have any symptoms?
Matt Hancock
We are not there yet, but we are moving towards it. That is what the chief medical officer set out in the press conference on Monday, in part for exactly the reasons the hon. Member sets out.
Aaron Bell (Newcastle-under-Lyme) (Con)
I hugely welcome the fact that we are following the science, including the behavioural science, and the cross-party approach we are taking. Does the Secretary of State share my concern, therefore, that celebrities, including some politicians on social media, are advocating a different approach? They are completely at liberty to do that, but does it risk undermining the national cohesion we need to rise to this challenge?
Matt Hancock
I have heard some of the noises off. I merely encourage everybody to base their decisions and judgments on science, rather than politics.
Janet Daby (Lewisham East) (Lab)
I thank the Health Secretary for his continued updates to the House. The partner of a constituent of mine suffers from cystic fibrosis and other related illnesses and requires daily treatment that includes cleansing—alcohol wipes, gels and so on—but because of the panic buying in some shops they have been unable to purchase these items, which could result in serious health issues for them. Are there any other measures the Government can put in place, working with supermarkets, to manage this?
Matt Hancock
Yes, absolutely; this is really important. We have some supplies of these sorts of things, in the supply chains and, in some cases, within the shops themselves, and we are working with the shops to ensure availability of things that can be critical to people’s care. We are working on that with DEFRA, the NHS and within the Department, particularly in relation to pharmacies, to make sure we get the right kit to the people who need it.
Mr Philip Hollobone (Kettering) (Con)
I commend the Health Secretary on doing a difficult job in trying circumstances extremely well. Likewise, I commend all the staff at Kettering General Hospital, who are working their socks off to ensure that the hospital is fully prepared. The only easily understandable benchmark our constituents have to judge the scale of this thing is seasonal flu, so can he tell the House, on average each year, how many people catch seasonal flu and how many people die from it?
Matt Hancock
That is a great question to which I do not have the answer in my head, but it is a matter of hundreds of thousands in the first instance and thousands in the second.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
We know that social care workers play a key role in supporting people to recovery and in alleviating pressure on clinical staff, yet today’s Budget offers no clarity on new money, and care providers are still awaiting a draft social care strategy. If the Secretary of State rightly seeks cross-party agreement, what steps have the Government taken to introduce a draft social care strategy for discussion, and what discussions is he having with the Welsh Government regarding social care capacity?
Matt Hancock
The delivery of social care is a devolved matter. We will publish guidance, and we will work with the devolved authorities to make that as consistent as possible, but social care policy is different in the four nations, so obviously we will have to take those differences into account.
Gary Sambrook (Birmingham, Northfield) (Con)
On Sunday, Birmingham will host one of the largest St Patrick’s Day parades in the world. Can the Health Secretary assure me and the people of Birmingham that he will do everything he can to issue the right guidance as quickly and effectively as possible so that people can make sensible decisions when it comes to their use of public transport and attending mass gatherings?
Matt Hancock
Yes, absolutely. I can assure my hon. Friend of that. For now, the guidance is to wash your hands and, if you sneeze or cough, to catch it in a tissue and throw the tissue away.
Chris Elmore (Ogmore) (Lab)
I thank the Secretary of State for keeping the House informed throughout this crisis. He is doing his job well, and it is good that the response is cross-party and has the support of people right across the United Kingdom.
Lecturers and schoolteachers in my constituency have contacted me to ask what discussions the Secretary of State is having with the Department for Education, exam boards and the devolved Administrations about what will happen as we approach the examination season. The point was made to me, particularly by further education lecturers, that it is not just children who face exams in the coming months.
Matt Hancock
This is an important consideration. I discuss it regularly with the Education Secretary and the Minister for School Standards. We are keeping the matter under review. Obviously, in the best possible world, we would want all exams to go ahead as always, but we also must keep people safe.
Mike Wood (Dudley South) (Con)
I pay tribute to the amazing work of NHS staff, who are working to support patients who have contracted covid-19, and to prevent others from catching it. What can be done to minimise the risk to those amazing NHS workers?
Matt Hancock
This is a really important part of our work. We are rolling out personal protective equipment to all primary care settings and GPs by the end of this week—we are on track to do that—and making sure that everybody in community settings in the NHS gets support. This will be a tough time for people who work in the NHS. The demands on them will be significant. Nurses, doctors and all the staff in the NHS do an extraordinary job all the time, but they will be called to be the frontline of our response in a way that many have not seen before. I thank them in advance—I think the whole House would want to do so—for the service that they will give.
Wayne David (Caerphilly) (Lab)
I note what the Secretary of State said about different approaches in different countries, but I was recently approached by the professor of visual neuroscience at Cardiff University, Professor Jonathan Erichsen. He says that there is a great deal that we can learn from South Korea in particular. Will the Secretary of State give a commitment that he will keep an open mind on how we approach this problem, in the light of lessons from other countries?
Matt Hancock
Absolutely. We are looking daily at how every country in the world is responding, to try to find the very best response. That is part of the science. The Scientific Advisory Group for Emergencies, the body that meets to bring that science together, is constantly reviewing that, simply because we want the very best response possible, and that is what we base judgments on.
Elliot Colburn (Carshalton and Wallington) (Con)
I welcome the measures taken in the Budget to fight this virus, and I pay tribute to the work of the Secretary of State and his team to tackle it; he is doing a fantastic job, and it is not going unnoticed. Sadly, a local resident who had coronavirus passed away at St Helier Hospital in my constituency on Monday. I am sure that my right hon. Friend will want to join me in giving our condolences to the friends and family. He will understand that a certain level of fear has arisen in my community as a result of that death. I hope that he will join me in urging calm among the local population, and assuring people that this is not time to panic-buy or listen to social media rumours; instead, they should take the advice of the chief medical officer and call NHS 111 if they need to.
Matt Hancock
Absolutely. I want to pass on my condolences to the family and loved ones of all those who have died, including my hon. Friend’s constituent. I know that the hospital, with which he works closely, is absolutely safe, and did exactly the right thing in this case. I reassure his constituents, and everybody else’s, that the best thing to do is follow the advice from the chief medical officer, who is doing a remarkable job, and either call 111 or go on NHS 111 online if they have a query.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
The Secretary of State said in his statement, “We are working closely” with the social care sector “to make sure that it is ready.” Could he say a little more about some of the stories circulating about the use of volunteers, and particularly students, to provide social care?
Matt Hancock
There will of course be a big voluntary effort should there be staff shortfalls right across public service. People who volunteer need to be asked to do tasks that fit their skillset. If people have medical qualifications and volunteer, that is fantastic—they can go and do that and potentially do clinical work, if that is right. Some volunteers will not have that sort of skillset, but there are still things that they can do, especially to make sure that people can get what they need if they are asked to self-isolate and not leave their homes. It is a matter of finding the right match for the skillset of the people who are going to help. In a scenario in which 20% of the public are off sick, volunteers will be able to help to alleviate some of the inevitable pressure that that brings.
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
Following today’s Budget, I have been contacted by a local authority in my constituency of Erith and Thamesmead that is seeking clarification on the urgent need for further funding for one of the local hospitals to deal with the immediate coronavirus crisis, and specifically for the social care sector. Will the Secretary of State explain and elaborate further on what he has said so far?
Matt Hancock
Yes, of course. The funding needs for social care, as for the NHS, over the weeks and months to come are not yet clear, so the Chancellor set out an envelope of up to £5 billion to make sure that we can now plan according to what we need to do, with the resources constrained by what the nation has, especially in terms of people and trained people, as opposed to being limited by the funding. He also said that if we need even more than that, his door is open. I do not have a specific answer as to where all the money is going to be spent—as would be normal in a Government announcement of this kind—because we are in unprecedented circumstances. We will of course be transparent and clear about how the money has been spent. No doubt afterwards there will be a huge amount of looking into what happened to try to learn lessons, and the financial part will be one strand of that work.
Kate Green (Stretford and Urmston) (Lab)
As more people become seriously unwell and need treatment in hospital, it will become very important that those who recover are discharged quickly back into the community. Will the Secretary of State say what work is being done to ensure smooth discharge pathways so that we do not get delayed discharges, which compound the problems for the NHS?
Matt Hancock
This is a really important point that I met the NHS to discuss specifically today. It is critical that we ensure that discharges are as fast as possible. That is important in normal times, but when large proportions of those in hospital could, with the right support, leave hospital and be in a setting that works for them in social care, we have to make sure that that happens. The extra funding will help with that, but it is not all about funding; a lot of it is about co-ordination, and people are working at their level best to try to make that happen.
Darren Jones (Bristol North West) (Lab)
Some parents are unsure whether to send their children to school when somebody in the family household is self-quarantined. Will the Secretary of State confirm what guidance has been given to schools to deal with what would normally be classed as unauthorised absences? Perhaps he will be able to alleviate some of the concerns from headteachers and indicate that Ofsted will take a lenient view of absence figures in later inspections.
Matt Hancock
Yes, Ofsted absolutely will take a lenient view of the impact of coronavirus on what happens in schools. When it comes to the broader point about what households should do when one person tests positive, that is of course something we are considering very closely. At the moment, the number of cases is at a level such that we can give individual advice to each household. It is likely that that will not be possible throughout this situation, so we will make sure that there is formal public guidance for everybody, so that everybody knows what to do.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Will the Secretary of State clarify a point that was made by the Secretary of State for Work and Pensions on Monday? She said that social security claimants who were due to take a work capability or work-related activity assessment would not have their social security support stopped, but those claimants were omitted from the group that the Chancellor talked about in the Budget statement, so will the Secretary of State clarify who is right? Will he also make sure that information is available for the deaf and the visually impaired? There is a gap in the information in that respect.
Matt Hancock
On the latter point, I entirely agree, and it goes with the earlier point about communications in foreign languages. On the first point, I will ensure that the Work and Pensions Secretary writes to the hon. Lady with the answer.
Mr Clive Betts (Sheffield South East) (Lab)
Local government will have an important role to play, beyond social care, in working with the Secretary of State’s Department to deal with this issue. When will local councils get an indication of the extra funds they may receive?
The Secretary of State said that the peak in cases may come in two months’ time. That is exactly the time of the local government elections. Will the Government now give some consideration to the desirability of postponing those elections, as happened in 2001 with foot and mouth epidemic?
Matt Hancock
We are not proposing to delay the local government elections and the other elections—for instance, for police and crime commissioners—that are happening in early May. That is not part of the proposal, and local authorities should plan as normal for those elections. If people think they may need a postal vote—they may want to have a postal vote just in case—I would always advise them to get a postal vote. I am very happy for that message to go out loud and clear.
Steve McCabe (Birmingham, Selly Oak) (Lab)
I also commend the Secretary of State’s measured approach. Are there any plans to offer specific guidance for dealing with rough sleepers and unaccompanied children—two quite vulnerable groups who, for different reasons, will pose a challenge to the authorities?
Matt Hancock
Yes. I entirely agree with the hon. Gentleman, and he is very wise to raise that point. That strand of work is being led by the Communities Secretary.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his dedication and for the vital role he has played in this House. History has taught us many lessons. In the pandemic of 1919, secondary schools stayed open, as did churches—it was normal life, with precautions in place for all. Is that the message the Health Minister is sending out to people tonight?
Matt Hancock
I hope that the decision to keep Parliament open makes it clear that the institutions that are fundamental to our way of life in this country will continue through this virus. We will get through it as a nation, and then we will take this nation forward. This is going to be a difficult and challenging time for many, many people. It will be a national effort, but that national effort will prevail, and we will get through.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I was pleased to hear what the Secretary of State had to say about the involvement of the devolved Administrations, including the Welsh Government, in the legislation that has been drawn up. It would be useful to have the clarification on funding that my hon. Friend the Member for Rhondda (Chris Bryant) asked about. However, can I ask about mutual aid between the four NHSs of the UK? For example, the Secretary of State talked about procuring ventilators. Is that being done on a UK-wide basis with the four NHSs, or are they competing against each other? What will be done in terms of cross-border needs—for example, Welsh patients travelling to English hospitals or vice versa—where the need is greatest?
Matt Hancock
The four NHSs are also working together. I discussed this with Simon Stevens, the chief executive of NHS England, today. That cross-border work is, of course, important, and it is something that my opposite number in the Welsh Government has raised. As a Chester boy, I get the point, and I will make sure that we keep that level of co-ordination, as well as the co-ordination at the point of the chief medical officer.
May I answer an earlier question better than I did before, Mr Deputy Speaker? My hon. Friend the Member for Dudley South (Mike Wood) asked whether GPs were getting their protective equipment. We have rolled out protective equipment to almost 100% of GP surgeries now.
Claudia Webbe (Leicester East) (Lab)
Earlier, the Government, through the Treasury, announced a package of support for local authorities to protect the vulnerable during the coronavirus outbreak. Does the Secretary of State agree that a proportion of this hardship fund should be allocated to local welfare provision so that support can be given to those who are most vulnerable and facing financial hardship?
Matt Hancock
Yes. That is a really important point, and that will be part of the provision.
Dean Russell (Watford) (Con)
I congratulate my right hon. Friend—[Interruption.]
Mr Deputy Speaker (Mr Nigel Evans)
Order. The hon. Gentleman has been here throughout, and it is up to hon. Members to decide if they wish to catch my eye.
Dean Russell
Thank you, Mr Deputy Speaker.
I congratulate my right hon. Friend the Secretary of State on this campaign, which has kept the level of conversation stable and consistent throughout. This week, sadly, we also had a constituent pass away at Watford General Hospital, and I pay tribute to the family and to the staff who work so hard.
My question is on the broader responsibility of this place, councils, local government and anybody in a public position. Does my right hon. Friend agree that the main message we need to get out is for people to remember that, on the frontline, the most important thing they can do is regularly wash their hands for 20 seconds? That is not much to ask of the general public, but it is the most frontline thing they can do to stop the spread.
Matt Hancock
That is incredibly important, and we have to keep reiterating it, even though we may have heard it a thousand times—I may have said it even more than that. Although there is a huge debate about coronavirus and what we can do as a country, there are some really simple things that are really effective.
Thangam Debbonaire (Bristol West) (Lab)
I have two questions for the Secretary of State. I thank him for his commitment to keeping this place open, which I agree is very important.
What guidance will the Secretary of State give to prepare us for what may be necessary, such as the possibility of having to cancel events, constituency surgeries and so on? I have staff, as I am sure most Members do, who are already concerned about how they should be protecting us and, most importantly, themselves and their family and friends.
Secondly, what is the Secretary of State doing, or talking to colleagues about doing, for those on very low incomes who have to self-isolate and are unable to order food through the internet because they have either no credit card or no internet?
Matt Hancock
First, the Leader of the House, Mr Speaker and the House of Commons Commission, advised by Public Health England, are best placed to come forward with guidance on the details of how this place can run should a significant number of colleagues and, potentially, staff be unwell or self-isolating.
Secondly, it is very hard, from central Government, to make sure we reach all the people who will need the sort of support the hon. Lady describes. This is best done through local authorities, which is why we have introduced a £0.5 billion fund for local authorities essentially to do whatever they think is necessary in these circumstances.
Robin Millar (Aberconwy) (Con)
I also thank my right hon. Friend for his conduct and his handling of this situation.
It is true that Wales has seen very few registered cases of coronavirus relative to other parts of the UK. Indeed, I believe we have no registered cases of coronavirus in north Wales. None the less, I welcome the installation of temporary testing sites by the Betsi Cadwaladr University Health Board. Will my right hon. Friend confirm that the Welsh Government have access to the same advice as he does, and that they are being fully included in the preparations he is making here in the UK?
Matt Hancock
Yes, absolutely. This is a four-nations approach, and the Welsh CMO is in daily contact with the English CMO, the Scottish CMO and the Northern Irish CMO. Indeed, they are also working with the chief medical officer of the Republic of Ireland. The basis of the scientific advice is the same across the four nations. Although, as my hon. Friend reports, there are no cases in north Wales, I am afraid this virus will continue to spread and we should expect there will be a case in north Wales before too long.
Peter Grant (Glenrothes) (SNP)
I certainly welcome the Government’s determination to keep Parliament open. What a U-turn from the situation not that long ago, when we had to take them to court to keep it open.
Does the Secretary of State accept that it does not have to be all or nothing? A lot of things happen in this place that are not essential to the functioning of our democracy and that, either in fact or certainly in perception, create a high risk of infection. For example, why do we still have functions at which food is left out on uncovered plates on a table at the end of the room without enough sets of tongs, meaning people have little choice but to help themselves using their hands? Why is it that, on the few occasions that we have to divide the House, we cannot use a deferred Division system so that people go through the Lobbies in dribs and drabs over a two or three-hour period, instead of being crammed in, 300 at a time, within a maximum time limit of eight minutes?
Will the Secretary of State and his colleagues in government look at some of the practices in this place, partly to minimise the chances of our carrying this infection back to our constituencies but also to send a message to the rest of the population that we have identified where our own practices fall short of the best standards of hygiene and that we are taking steps to correct it?
Matt Hancock
I understand where the hon. Gentleman is coming from. The issues he raises are matters for the House authorities, and I am sure they will have noted his comments.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Newcastle upon Tyne Hospitals NHS Foundation Trust welcomed the UK’s first coronavirus victims, six weeks ago. In the intervening time, the role of Newcastle City Council’s public health team has become increasingly important, as local cases are identified and local concerns raised, yet it does not know what its budget will from April. How can it plan an effective public health campaign? Will the Secretary of State at least confirm when it will be told what its budget is and that the increase—there will be one—will increase with the duration of the crisis?
Matt Hancock
Yes, of course, because I expect this crisis to last for less than a year. I have been absolutely clear that the allocations will increase in real terms, so everyone can plan on that basis, and we will get the details out as soon as we can.
Stephen Farry (North Down) (Alliance)
I thank the Secretary of State for his actions to date. What further consideration has been given to UK citizens overseas who find themselves, perhaps in greater numbers, being required to self-isolate for an extended period and thus find themselves in financial hardship? What consideration has been given to citizens of other countries who are visitors to our country and are required to self-isolate, but do not have the means for that extended stay?
Matt Hancock
This is really important and quite difficult. Our general approach is that people who become ill should stay where they are and be treated in the country in which they find themselves. This comes back to the previous question, because the first two victims of coronavirus in the UK were not British citizens, but they were treated brilliantly by the hospital in Newcastle. The treatment they received was fantastic, and rightly so. Of course there are cases and examples where we have to support people to come back to the UK. For instance, this afternoon a flight from California landed, bringing people from the cruise ship that had been off California. But the general principle should be that people are supported and treated where they are.
Andy Slaughter (Hammersmith) (Lab)
Will the Secretary of State review the criteria for testing? A constituent of mine has returned from the United States with symptoms of the virus but has been refused testing because she has not come into contact with a known case. Will he also say what the policy is on NHS staff wearing masks when on duty, primarily to avoid to the risk of the virus being spread by undiagnosed medical staff?
Matt Hancock
I am grateful for the constructive tone in which the hon. Gentleman asked the questions. This is an example of the House working well, because he and I have sometimes had cross words across this Chamber, but he has asked these two questions quite rightly. The advice given on 111 has to be dependent on the circumstances presented to the clinician giving that advice on the other end of the phone. It is really important that I do not fetter their discretion, but if he comes to me with details of the individual case and wants me to double-check that his constituent got the right advice, I am happy to do so.
On the second point, the deputy chief medical officer had a discussion with the Prime Minister today that was videoed and put on Facebook, and in that she was clear on this question about masks. There is not an advantage in wearing a mask if you are healthy—that is the advice from the medics here—but there is an advantage in respect of keeping others safe if someone who is ill wears a mask. There are also examples of when medical staff will need to wear the right type of mask to keep them safe. But the general advice is: don’t wear a mask unless you are advised to by PHE; or if you are ill, it is perfectly reasonable to wear a mask to stop infecting others—that is an act of generosity.
Liz Twist (Blaydon) (Lab)
First, I thank Mr Speaker, his team and the House authorities for ensuring that this statement is signed. A concern has been raised by Action on Hearing Loss and others about the lack of information in British sign language.
This afternoon, my office was contacted by a constituent whose mother is in a care home that has been closed to visitors for what is described as “the foreseeable future”. Will guidance be issued to residential care homes to ensure that the proper arrangements are made for access to residents?
Matt Hancock
Absolutely. I agree very much with the hon. Lady about the importance of sign language and the signing of this session. I thank the House authorities for arranging it.
Yes, new guidance on care homes will be put out this week. If the hon. Lady passes on the details of her individual case to the Minister for Care, I am sure that my hon. Friend will be happy to look at it.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
Earlier today, I was contacted by a constituent who flew back from northern Italy yesterday evening. He told me that, on landing, there was a complete lack of information and no staff were on hand to offer any guidance. He proceeded to watch most people from that flight spill on to public transport.
I fully agree with the Secretary of State’s advice that we should follow the medical science, but, whether they have symptoms or not, people arriving back on flights from category 1 countries should not be met with that situation.
Matt Hancock
Today we have upgraded the response to flights coming back from Italy. I understand some of the concerns raised earlier in the week. We have put an awful lot of effort in with the Department for Transport, the Border Force and the airports authorities themselves— I pay tribute to them all—to address exactly the concerns that the hon. Gentleman raises.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the Secretary of State for his statement today and I wish him and his wonderful NHS team well in their endeavours during this pandemic.
Electric Car Batteries: Disposal and Recycling
(4 years, 1 month ago)
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Chi Onwurah (Newcastle upon Tyne Central) (Lab)
It is a great pleasure to speak in this important debate. Although the Budget and, unfortunately, the coronavirus crisis will take the headlines today, the climate emergency and our transition to a net zero economy remain the greatest challenges facing humanity. We will have to change many aspects of our society to address them, and that includes what we drive.
Under the Government’s plans, 15 years from now internal combustion engines will no longer be sold new in this country. Moving away from petrol-based engines is a challenge, but also a huge opportunity for the UK automotive industry. Transport makes up 26% of emissions and the automotive sector can make a dramatic contribution to achieving a net zero economy and saving our planet. That will require a massive rise in the number of electric vehicles in the UK.
The Society of Motor Manufacturers & Traders expects registrations for electric vehicles to rise by 77% this year, and National Grid predicts that they will rise from 100,000 to 36 million by 2040—an increase of 36,000%. As part of that, the number of electric vehicle batteries will rise exponentially. There are a few hundred lithium cells in a Nissan Leaf and thousands in a Tesla—a second-hand market will undoubtedly develop. I want to emphasise what amazing technological innovation there has been in batteries in the last few decades.
Jim Shannon (Strangford) (DUP)
This is obviously an important issue. Does the hon. Lady agree that we need to be pre-emptively working rather than waiting until everyone owns an electric car? A massive environmental aspect has not been fully considered and planned for. The sheer volume of the cars that will be using these batteries demands better forward planning. We need that planning right now.
Chi Onwurah
The hon. Gentleman might well have read my speech, because those are exactly the points that I hope to make.
Returning now to innovation, when I studied electrical engineering at Imperial some decades ago, batteries were big, boring and messy. Now they are at the cutting edge of many exciting developments. We are getting down to the fundamentals of physics in the storage of energy and its applications everywhere from our smartphones to our national grid. Batteries are getting smaller, safer, more sustainable and more manageable, but we must also acknowledge that we are entering an era of battery reuse, recycling and transportation the like of which we have never before seen.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
I am sure that the hon. Lady knows that in the United States, Senator Angus King has just introduced a Bill this month calling for investment worth $150 million in lithium battery recycling and research over the next five years. Wales is home to key strategic industrial sites such as Vale Nickel in Clydach and Envirowales in Ebbw Vale. They could play a part in recycling the batteries of the future. Will the hon. Lady join me in pressing the Minister to explain how the Government will support Wales to ensure that our existing industrial base is able to make the transition to recycle future battery technologies, and whether the UK is investing enough in this area to remain internationally competitive?
Chi Onwurah
I am sure that the right hon. Lady will understand if I say that I shall be pressing the Minister to address how the investment will be coming to Newcastle and the north-east.
Through this debate, I hope we can gain a greater understanding of the significant opportunity for our recycling sector across the country, but particularly the contribution that the north-east can make.
The most common battery types in modern electric cars are lithium-ion. They hold a high-energy density, with up to 700 watt-hours per litre, which is seven times the density of traditional LED batteries. That means that lithium batteries are more suited for use in electric vehicles as they can hold charge for longer-distance journeys. The expanding electric vehicle market will mean many more lithium batteries, and the typical warranty period for these batteries is eight years or 100,000 miles. Legislation requires that manufacturers take back the batteries, but it does not say what they should do with them. It says:
“Producers of automotive batteries must collect waste automotive batteries for free from their final holders, such as garages and scrapyards.”
There is no mention of lithium batteries in the Batteries and Accumulators (Placing on the Market) Regulations 2008, nor in the amendments in 2015. The European directive 2013/56/EU and the Capacity Labelling of Portable Secondary (Rechargeable) and Automotive Batteries and Accumulators Regulations all admit the legal framework for recycling. I hope the Minister will address that. In the not-too-distant future, we are likely to be facing a large lithium-ion battery mountain with nowhere for it to go unless we put the processes in place now.
Lithium batteries are not considered suitable for electric vehicle applications when their cell capacity falls below 80% of its original value. Their reuse at this point is known as second-life application, and there is interest in, for example, securing supplies to recondition for energy grid value balancing, or for using again in electric vehicles, or other applications.
Indeed, I should say that I underwent a revelation when I realised that the increasing demand for electric storage caused by the unpredictable or cyclical nature of many renewable energy sources, such as wind and tide, could be balanced quite literally by the fact that every car owner in the future will have a significant battery storage capacity sitting on their drive. That is true during the lifetime of the battery, but it is also a factor afterwards.
For example, in China selling a reused end-of-life battery can raise up to 10 times more for the owner than recycling. However, second-life applications delay, rather than eliminate, the challenge of recycling. Research also suggests that safety issues increase with second-life applications, given the absence of a regulatory framework. Stockpiling is unsafe and environmentally undesirable, and it is illegal to send electric vehicle batteries to landfill, so if the direct reuse of a lithium battery is not possible, it must be recycled. There are further environmental considerations. Batteries are made with expensive and rare minerals, the mining of which raises environmental—and often human rights—concerns. Recycling helps to minimise the need for new mineral extraction and provides the UK with resilience in the light of supply chain risks. I hope the Minister will agree that we should be encouraging a significant recycling programme.
There is also the safety risk. Without the capacity to recycle a large number of batteries appropriately and affordably, we could see overuse, fly-tipping and unregulated reselling. In the short time that electric vehicles have been about, not many battery packs have reached the end of their eight-year life, and there were only 1,262 electric cars registered in the UK eight years ago. That is going to change.
Petrol cars have significant safety risks too. Two cars in every 1,000 registered in the UK catch fire each year, but these are known to our fire services, who can extinguish petrol or diesel vehicle fires within one hour. By contrast, lithium-ion battery fires can take up to eight hours, and require different skills and tools to extinguish. Research from Newcastle University found that a damaged battery ignited twice within 24 hours and then again six days afterwards, with violent explosions being a potential feature of electric vehicle and lithium-ion battery fires. Furthermore, electric vehicles are not legally required to be marked with information on the batteries they contain for the information of arriving emergency services.
Ongoing work by the UK health and safety of energy storage governance group—chaired by the Institution of Engineering and Technology, of which I am a member—raised concerns that the Home Office system used by the fire brigade to report incidents does not actually have a category for energy storage systems. The group is working on a code of practice to support professionals, and I hope the Minister will discuss this with her colleagues.
There continue to be advances in battery technology, and I pay tribute to the work of the Faraday Institution’s SOLBAT project in seeking to bring solid-state batteries to the market. They lack the flammable liquid electrolyte found in lithium-ion batteries, and are therefore safer. However, we must assume that lithium-ion batteries will continue to dominate for some years to come.
There are no facilities in the UK to recycle electric car batteries, so the small volume currently being created are exported to Europe, where they are destroyed in high temperature furnaces. This enables the recovery of valuable critical elements such as cobalt and nickel, but at least 50% of the battery materials are not recovered. Currently, the number of electric vehicle batteries being sent for recycling in this way is so low that the Environment Agency does not even record the figures. When UK firms export their batteries to Europe, they have to pay a gate fee of thousands of pounds. This is not feasible in the long term, given the expected increase in numbers. I understand that ECOBAT Logistics, the largest UK recycler of non-lithium-ion batteries, is looking seriously at initiating a lithium-ion battery recycling industry in the UK. Is the Minister in talks with that company?
There is also a Brexit question. Without a recycling facility of our own, we will be in a vulnerable position when the EU transition period ends. The Government have yet to set out the UK’s equivalent of the waste batteries and accumulators directive 2006. We may face export restrictions or duties, and we would have to accept external prices since these materials cannot be landfilled. Given that, as the hon. Member for Strangford (Jim Shannon) said, it will take planning and investment to develop the processes and permits for a battery processing factory in the United Kingdom, it is essential to get started now. We have to remember that it is not safe to stockpile these end-of-life batteries and let them accumulate in the UK.
I have talked a little bit about the challenges, because I want to emphasise to the Minister the importance of taking the right decisions now, but there are also opportunities that can help to level up our nation. The Faraday Institution-funded ReLiB project is researching ways to facilitate a circular economy in lithium-ion batteries, and Newcastle University has benefited from some of its work packages. Newcastle University is also proposing a battery safety health and environment hub on Tyneside. That is a fantastic idea. This hub would upskill and train those working with lithium batteries to safely manage and dispose of them, helping to address worker safety issues and some of the concerns I have raised. Would the Minister support such a hub?
Chi Onwurah
I am sorry, but I need to give the Minister some time to answer my questions.
At the moment, our fire services do not have the appropriate resources, training and personal protective equipment necessary to deal with these new challenges. It is estimated that up to 25% of the 510 fires in UK material recycling facilities in 2018 were caused by small lithium batteries. In 2019, one such fire in Dunbar, Scotland took over 40 firefighters to contain. A specialist training facility such as that proposed on Tyneside would have helped to reduce the pollution and damage. A recycling plant could have entirely avoided it.
Recycling plants, touching on the point made by the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts), do need to be regional. Electric vehicle batteries are classed as hazardous waste, and the further they are transported, the greater the risk. As we have the skills in the north-east to support such a plant, we would welcome one in our region. We are a global leader in electric vehicles. The Washington Nissan plant introduced electric cars to Europe in 2011, creating a brand-new lithium battery plant from scratch in 18 months. Washington’s Envision-AESC factory is the first of its kind in the UK and leads the world in battery technology. It is eager to expand and exploit the new market opportunities offered by the lithium-ion technology revolution, and it has the knowledge to do so. We are going to need at least five battery gigafactories across the country to meet our decarbonisation targets—let us have one in the north-east. I know that that is more a matter for the Department for Business, Energy and Industrial Strategy, but I hope the Minister will speak to BEIS about it.
Newcastle University is a centre of excellence in electric vehicles, leading a £300 million pound project entitled “Driving the Electric Revolution”. It has performed fascinating research on the systems integration of electric vehicle charging points. Northern Grid is actively looking at ways to integrate battery technology into the network. I am grateful for the Government’s commitment of £274 million between 2017 and 2021 to the Faraday Institution for research on the development and scale-up of world-leading battery technology in the UK. This has supported some of the research at Newcastle University. However, I am concerned that future funding remains unclear after this year. Will the Minister speak to her BEIS colleagues and meet me to discuss how Newcastle and the north-east can play a critical role in the safe storage, transportation and recycling of electric vehicle batteries?
We clearly need a circular economy for lithium batteries. Regulations, codes and standards are an important part of this, as are research and development to deliver at-scale recycling facilities, and safety guidance and training. I hope the Minister will welcome the opportunity to work with me to ensure that Newcastle can be a centre for all those things.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rebecca Pow)
I hope I am going to inject some electricity into this subject, which is very new. I congratulate the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) on securing the debate; I know that she has had training as an electrical engineer, so it did not surprise me at all that she secured it. The electric vehicle agenda is a rapidly changing horizon, and considering the treatment and recycling of electric batteries is crucial, given that we are moving towards a greener, cleaner future. The Government are committed to that, and I am proud to be part of a Government who have made this a focus of their agenda, but she is right that we have to seriously address this area.
I want to look at some of the things that are happening. There are already important protections in place applying to both electric vehicles and the batteries they contain. Under legislation applying to end-of-life vehicles, vehicles have to be treated at suitable facilities—that is, facilities with the required infrastructure in place and permitted by the environmental regulators. Those authorised treatment facilities must undertake certain de-pollution activities, which includes removal of the batteries. The legislation also requires dismantling information to be made available by vehicle manufacturers within six months of bringing a new type of vehicle to market.
Most vehicle manufacturers meet that obligation through the international dismantling information system. Government guidance on the de-pollution of vehicles stresses the additional hazards of dealing with electric vehicles, the need for de-pollution to be undertaken by appropriately qualified personnel and the need to refer to manufacturer-specific information, with IDIS identified as a relevant source. I had a look at the guidance yesterday, and it is extremely detailed.
In parallel with the end-of-life vehicles regulations, there are also regulations governing the disposal and recycling of batteries. In particular, the batteries regulations ban the disposal to landfill as well as the incineration of both automotive and industrial batteries. Under the regulations, electric vehicle batteries are classified as industrial batteries. The regulations require those placing electric vehicle batteries on the market for the first time, whether as batteries or as part of the vehicle, to register as a battery producer. Industrial battery producers are obligated to take back such batteries, including electric vehicle batteries, free of charge from end users. That provides a mechanism to ensure that, where there are costs for battery treatment and recycling, they can be met by the battery producer under the principle of producer responsibility.
As with vehicles, those who are able to treat and recycle electric vehicle batteries are carefully controlled. Electric vehicle batteries are required to be handled by approved battery treatment operators or approved battery exporters holding the requisite authorisations from the environment regulators. Treatment has to meet certain minimum recycling efficiencies, which for lithium-ion chemistry batteries is 50%. Together, the batteries and end-of-life vehicles regulations provide a framework for the sound management of electric vehicle batteries at end of life.
Rebecca Pow
I just want to give some details about numbers of batteries. Typically, between 1.3 million and 1.4 million cars and light vehicles are declared as treated in the UK each year, with an average age of around 14 years. The number of electric vehicle batteries that arise for treatment remains low—in fact, very low—and, in relative terms, it is likely to remain low for some time. By way of illustration, in 2019 the numbers of Teslas and Nissan Leafs presented for treatment were in the 20s, and the long-standing Toyota Prius hybrid was under 500.
Today’s electric vehicle batteries have performance guarantees of about eight years or 100,000 miles, but they can last up to 20 years. This is improving with the advance of battery pack management technologies. When electric vehicles reach end of life, remaining battery storage capacity is expected to be over 70%. To minimise environmental impacts and extract maximum economic value, these batteries can be reused, as the hon. Member mentioned, for second-life applications—that is probably what she was going to say if she had intervened—such as domestic and industrial energy storage, and these markets are being actively explored and developed.
The limited volumes of electric vehicle batteries currently received for treatment are, as the hon. Member said, exported to Europe for processing. Valuable materials such as cobalt and nickel are recovered, but the processes, as she said, are inefficient. There are presently—I am not going to disagree with her on this—no recycling facilities for end-of-life electric vehicle lithium-ion batteries in the UK, although we are aware of plans to bring forward such facilities, and she mentioned an example. There is definitely movement in the market in this area.
It is perhaps pertinent to highlight the continuing development of lithium-ion battery technology, with pressure both to reduce the volume of critical materials used in their manufacture and to increase the energy density of the battery packs. It is anticipated that this will lead to less cobalt—it is a finite, very valuable raw material—being required in these batteries, and less material overall for recycling by reprocessors.
The Government-funded Faraday battery challenge is playing a leading role in supporting the recycling and reuse of battery components in the UK. I am pleased that the hon. Member acknowledged this and referred to it several times. This will contribute to the development of a more circular economy and help to meet our net zero commitments. The Faraday Institution’s ReLiB—recycling of lithium-ion batteries—project is developing the technological, economic and legal infrastructure to allow close to 100% of the materials in lithium-ion batteries to be recycled. I want to mention—I think I have time—one focus of the Faraday project, which is to look specifically at the potential gains to be made from various second-life applications of electric vehicle batteries, and to determine when their useful life has expired and the material should be recycled.
Chi Onwurah
I thank the Minister for her comments, which have echoed much of my speech. Could she possibly focus on investment in Newcastle and the north-east, and specifically on the hub for recycling at scale?
Rebecca Pow
I will come to that right at the end, so I am going to keep the hon. Member waiting.
The hon. Member touched on second-life applications, and there is clearly a great deal of mileage there. This valuable project is, for example, specifically seeking to create a new and complete end-of-life supply chain network in the UK that includes second-life battery applications. There is an industry group, chaired by the Institution of Engineering and Technology, that is considering the safety aspects—[Interruption.] The hon. Member chairs it, so she is absolutely in the right place in this growing new area. As she said, it is considering the safety aspects attached to this developing market and to storage. Officials from both the Department for Business, Energy and Industrial Strategy and my Department are working closely with that group, so they are taking a great deal of interest in the work that the group is doing.
In December 2018, the Government published the resources and waste strategy. It is another interesting document, Mr Deputy Speaker, which I know you will be getting out of the Library. [Interruption.] It is really interesting. It sets an ambitious agenda, and we are committed to delivering it. That includes reviewing the existing producer responsibility schemes, such as those applying to batteries and end-of-life vehicles.
The review of end-of-life vehicles is scheduled for 2021. Reviews of batteries and waste electricals are under way, and are due to deliver proposals for change at the end of this year. We recognise that improvements to those regimes must be made, and my officials have been discussing areas of focus with industry and other interested parties. In particular, we are keen to consider whether the present framework covering the disposal and recycling of electric vehicle batteries will be fit for purpose in light of the changing nature and prevalence of such batteries—all points that the hon. Member touched on, and I hope that she welcomes this review. It is clear that battery issues will be a key consideration in the end-of-life vehicles review.
I thank the hon. Member for raising this important issue. The Government recognise the disposal and recycling challenge that has been presented, and this review is timely, as is engagement with industry and all the different bodies. We must take full advantage of the opportunities that could arise out of this situation—again, the hon. Member raised that point—including in Wales, as mentioned by the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts), in Northern Ireland, and indeed in all the devolved nations. This is a devolved issue, but officials are working closely on it, particularly with Newcastle, and we are particularly interested in the battery safety and environment hub, which sounds extremely interesting. I hope the hon. Lady will keep me posted, including on her wider ambitions for the area in this exciting and developing landscape.
Question put and agreed to.