(4 years, 8 months ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
John McDonnell (Hayes and Harlington) (Lab)
As we face the coronavirus crisis, it is vital that we demonstrate to the people of our country that we are meeting it head-on and that we will defeat it—and we will. As I have said elsewhere, this is no time for partisan political knockabout or, for that matter, publicity stunts. We have lives to save, so we must all work together. We will work with the Government and parties across the House to protect our people and to contribute to the worldwide effort to overcome the outbreak of this virus.
We welcome the Government’s package of measures announced yesterday. We must ensure, though, that alongside the medical and scientific strategy to contain, mitigate and halt the spread of the virus, the economic strategy is equally comprehensive. We agree with the Government that the NHS must receive whatever resources it needs. I pay tribute to and thank our NHS staff, who, as always, are rising to this challenge with their usual professionalism and dedication. We acknowledge that they are doing so at a time when they are already under extreme pressures, but we offer them our thanks.
The other key service that we need to support in this emergency is social care. It is unclear from Government statements so far what additional support is being provided to social care. Social care is already in crisis in this country. Before this virus outbreak, 1.5 million people were not receiving the care they need. There are more than 120,000 staff vacancies, and many of the private providers have been on the financial edge for some time. The majority of those who receive social care are older, disabled and vulnerable people—the very people who are most at risk from coronavirus infection. We have an £8 billion funding gap in social care budgets as the result of 10 years of austerity. Providers and local authorities are already stretched to breaking point in many areas, so we need to know how much additional support is being provided specifically for social care and what contingency plans are in place if individual providers are unable to cope. Like our support with regard to NHS funding, the Government will have our support to bring forward the resources, whatever it takes.
A large section of our care workforce is now under threat from the Government’s recently announced immigration policy. Some Members may have seen the GMB union calculation that the Government’s immigration policy will cost the care sector up to 500,000 staff. Without foreign careworkers, our care system would collapse. The message to the Home Secretary is clear: do not put our social care system at risk. Pragmatism must override ideology and policy at this stage.
Social care in this country largely falls on the shoulders of family members, and in our culture it is still usually the older women in our families. The pension age for many of those women was increased without proper consultation or notification. They were effectively robbed of many years of their pension, and this Government—despite all the Prime Minister’s promises before the election —have refused to compensate them. I met the WASPI women last week, and it is no wonder they are still angry. We may well look at what support can be given to individual carers within families as they cope with this crisis.
If any good is to come out of this developing tragedy, it must be the lessons we learn from it. It is overwhelmingly clear now that no Government can inflict a decade of cuts and austerity on our public services, such as the NHS and care services, without impacting on their resilience in a time of crisis. Ten years of cuts and a failure to invest in services mean that we are extremely ill-prepared for dealing with this type of large-scale health risk to our community.
We know that the NHS is already under pressure—intense pressure—as a result of underfunding and understaffing. Some 17,000 beds have been cut. Bed occupancy levels were at 94% last week, and critical care bed occupancy was at 80%—those are the beds we rely upon in episodes like coronavirus. The NHS is short of 100,000 staff, including more than 40,000 nurses and thousands of doctors. We have to recognise that the NHS needs to be put on a longer-term stable footing, with secure financial backing for the long term. Just as we have over the coronavirus outbreak, we must listen to the clinicians and the experts when it comes to what is needed. It should not take a crisis to secure for the NHS the resources it needs.
I turn to support for individuals and businesses. We welcome many of the Government’s measures set out by the Chancellor yesterday. The Budget stated that statutory sick pay will be paid from the first day of sickness absence and that people will be compensated for self-isolation, but we need more clarity. The Government guidance appears to exclude workers on zero-hours contracts, part-time workers and people earning below the lower earnings limit of £118 per week, saying that they are ineligible for statutory sick pay and are advised to make a claim for universal credit. Can we be absolutely clear who will be covered by statutory sick pay and who will not?
Sick pay is currently set at the low rate of £94.25 a week—that is about £18 a day. Average pre-tax earnings are £511 per week in nominal terms. Without lifting statutory sick pay, the financially secure will err on the side of caution and self-isolate, and all but the most financially secure will be asked to take a significant pay cut in order to self-isolate. That leaves people inevitably choosing between health and hardship.
For those being directed by Government to universal credit, I ask: what, if anything, has been done to reduce the five-week delay in receiving universal credit and to ensure the staffing resources in the Department for Work and Pensions to cope with the volume of demand? The suggestion is that these low-paid workers apply for universal credit, which then becomes a loan. That will push many low-paid workers into debt, which will cause significant hardship for some.
The Chancellor announced yesterday a £500 million fund for councils to administer. Could the Secretary of State clarify how much that means for each local authority and how it will be distributed? Will hard-stretched local authorities receive support for delivering that scheme? Councils are also being asked to administer £2.2 billion of funding to support businesses in meeting their ongoing business costs. Could we be clear about what resourcing councils will be given as they are asked to take on these responsibilities, after 10 years—to be frank, as a result of the cuts that have taken place—of local authorities often being hollowed out of the staffing resources they need?
Stephen Timms (East Ham) (Lab)
My right hon. Friend is making some powerful points. Does he agree with me that the announcement of the £500 million fund is a recognition, belatedly, by the Government that we do need something to do the job that the social fund, funded by the Government, used to do?
John McDonnell
That is an extremely important point. For those of us who remember the social fund, it was a resource that many of our constituents fell back on in times of need. It did give them the support they needed, and in many ways it was administered relatively well. It got resources to the people with needs, and it did so with minimal costs.
The Government urgently need to provide the certainty that the public deserve on all these matters. Our worry is that, because this package does not at the moment appear to be comprehensive, it ultimately will not make us all safer, and it may put people at risk, as especially those in low-income groups may have to make the very difficult choice, as I have said, between health and hardship.
Although it has been reported that there has been some communication between Finance Ministers internationally, it is certainly not clear whether it is of the scale or depth of co-ordination in, for example, the crisis in 2007-08. As a result, whatever statements have been made have not had the effect of steadying markets or reassuring people more generally that, basically, there is an internationally agreed strategy to address the economic consequences of this emergency.
Bim Afolami (Hitchin and Harpenden) (Con)
Does the right hon. Gentleman agree that the co-ordinated action that has taken place between the Treasury and the Bank of England could now be used as a model to show our international friends and partners how to do it, so that we can build on what we have already done?
John McDonnell
That is an extremely valid point. The co-ordination between the Bank of England and the Treasury is an example of what could be followed elsewhere, and it is being followed in some areas. However, the issue for me is that we can develop a United Kingdom strategy or an individual country strategy, but we are dealing with a virus that respects no borders. It is a global contagion now—a pandemic—so there needs to be international co-operation. What demonstrated the lack of international co-operation was the Fed cutting rates one week and the Bank of England cutting rates the following week, and the Fed cut had no impact whatsoever.
Bim Afolami
I agree with much of what the right hon. Gentleman says, but does that not show—because this is such a new phenomenon and such a new difficulty, and every country is struggling to find a policy response to it—that we may not have used the right tools? What the Treasury, the Bank of England and all our international partners are now having to do is to figure out what the right tools are, and we have to work together to try to figure that out.
John McDonnell
The hon. Gentleman makes exactly the right point. Not everybody supported the cut in interest rates, but the most important statement from the Bank of England was about the mechanisms with regard to the banks and lending, and about making sure that liquidity continues.
The point I am making is that, when we are dealing with what is in effect a global crisis, individual solutions in individual countries are not as effective as global co-ordination. I will give an example. Whatever criticisms people may have had of Gordon Brown’s individual policies during the banking crisis—I was here then, and actually I was giving a running commentary from the Back Benches, which perhaps at times was not welcome—no one can question the international leadership that he showed. There was a focus on and determination in bringing people together, and he brought to this crisis a mechanism by which, through the different international bodies, world leaders met and agreed a global strategy. Whatever people think of the outcome or about the merits or demerits of quantitative easing and so on, it did send out a message, and the markets eventually stabilised. I regret that we have not seen such a political and diplomatic leadership commitment or, indeed, such managerial ability from the Prime Minister or the Chancellor as yet.
Mr Pat McFadden (Wolverhampton South East) (Lab)
Before my right hon. Friend moves on from his point about a co-ordinated international response, one of the things put in place at that time, about which there has been a lack of discussion this time, is what to do for those countries that have very basic healthcare systems. This virus respects no borders. Is there not a need for co-ordinated international action to get help to countries where testing and treatment may be much more rudimentary than they are here?
John McDonnell
To give the Government their due, the Chancellor did announce a £150 million contribution to the IMF, so there is an element of financial involvement and engagement. However, it requires the co-ordination of policy to ensure that those resources are directed effectively and successfully to tackle the very issue that my right hon. Friend raised. I hope that will be a model for the future when other global issues have to be confronted. As in the past—and this has happened under various Governments and political leaders—the UK should now be playing a critical role in mobilising the international bodies we have, in particular the UN, to agree a global response to deal not just with the current wave of this pandemic, but with the possibility of subsequent waves.
Sir John Hayes (South Holland and The Deepings) (Con)
The right hon. Gentleman is right about the need for collaboration, and he is also right about needing alacrity and the response to a dynamic set of circumstances requiring leadership. Can the Commonwealth play an active role here? He talked about an international body, and it is of course a body in which we play a pivotal part, and that would very much be in tune with what he has proposed.
John McDonnell
I fully concur with the right hon. Gentleman. The various international vehicles that we could mobilise are available to us, and we just need to do it now. It needs to be done at a senior level, in a way that sends out a message of determination across the globe to people and families, but also to the markets. We need to ensure that this medical crisis does not create the long-term recession that some are predicting as a result of its global implications. I will now move on from the coronavirus.
In addition to the coronavirus, we face other emergencies, and we must not lose sight of the two other crises that we face. One is the crisis in our public services—it is a social emergency—with the levels of poverty and inequality in our society. The other is of course the existential threat of climate change. I have to say that yesterday’s Budget failed to address the social emergency. We have discussed it on the Floor of this House before, but this social emergency sees 4.5 million of our children living in poverty, with 70% of those children living in households where an adult is in work. We have—I do not know how else to describe it—a crisis of in-work poverty that perhaps we have not seen for generations in this country.
I have to say that there was nothing in the Budget to relieve the hardships inflicted on our community by universal credit, the bedroom tax and, especially for disabled people, the brutality of the work capability assessments undertaken against them. In fact, the Government’s own table accompanying the Budget shows that the bottom 10% fare the worst as a result of tax decisions made in this Budget and the last spending round, which cannot be right. It cannot be right. It states that the bulk of the benefits are flowing to higher paid households. Yesterday some people were saying that this could have been a Labour Budget, but whoever said that was not looking hard enough at who wins and who loses in it. I believe that not one family will be lifted out of in-work poverty because of yesterday’s announcements. Yesterday we again heard the Government’s aspiration to get the national living wage to two thirds of median earnings, but that is not a real living wage; it is an aspiration for four or five years’ time. Some may also have seen the small print, which says, “if economic conditions allow”.
Worryingly, there is nothing of any substance in the Budget to tackle the long-term crises in our public services. Let us take the justice system, for example. In prisons there has been
“a sharp rise in deaths, violence, self-harm”
and suicides, which can all be
“linked to cuts”.
That is not my statement; it comes from the Institute for Government. The House of Commons Justice Committee has pointed to a £1.2 billion gap in justice funding, so the small sums in this Budget, such as £175 million for prison maintenance, just will not cut it. Not one prison officer will be safer on the landings because of this Budget, yet in some of our prisons, those people put their lives at risk on a daily basis.
On domestic violence, according to Women’s Aid, 10 domestic abuse victims are turned away from women’s refuges every day because of a lack of space. This Budget needed to commit £173 million to ensure that no survivor is turned away. It has not done that, and without that funding, the measures in the Domestic Abuse Bill simply cannot be delivered. Not one women’s refuge can feel assured that it will get the funding it needs from this Budget.
The National Education Union said that class sizes are rising, subjects are being dropped, and inadequate pay is making the education staffing crisis worse, but there will be few teachers from whom the pressure will be lifted as a result of this Budget.
On housing, the sums earmarked for rough sleeping are totally inadequate, and we know that at least £1 billion is needed to reverse cuts in homelessness services. Yesterday, the Chancellor said that he would end homelessness, but we heard that from the Prime Minister who, when he was Mayor of London, said that rough sleeping would be ended in London by the 2012 Olympics. Rough sleeping doubled during the Prime Minister’s second term as Mayor.
It goes on: not one library will be reopened as a result of yesterday’s Budget. Not one youth centre will reopen; not one Sure Start centre.
Bim Afolami
Forgive me if I have misunderstood the right hon. Gentleman, but I think that £13 million is going into community libraries across the country, and that will make a big difference. Will he address that point?
John McDonnell
I just say to the hon. Gentleman that that sum is minuscule in comparison with the cuts that have gone on. This will not be some immense revitalisation of our library services—far from it. Indeed, a lot of that will be swallowed up by the deficits that local authorities have developed by trying to maintain their existing services. I doubt there will be any new libraries; this might perhaps allow some existing libraries to keep their heads above water, but even that is difficult to envisage.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
May I take my right hon. Friend back to the issue of domestic abuse? We all welcome the abolition of the tampon tax, which was championed by the former Member for Dewsbury, Paula Sherriff, but the funding raised from that—£393 million—was put towards services combating violence against women and girls. Does my right hon. Friend have any indication of how that gap in funding will be met for those vital services?
John McDonnell
We have had no indication about that, but I am pleased that my hon. Friend raised the issue, and perhaps we will get a response from the Government in due course. I congratulate her and Paula Sherriff. That long campaign paid off, which shows what tenacity can do, even in this House.
Let us get this Budget into context. The Institute for Fiscal Studies stated that £54 billion of day-to-day spending was needed, outside health and social care, to return to levels of per head expenditure in 2010. Not only does the Budget not meet that target, it goes nowhere near it. Why have the Government not gone further?
People need to understand what Conservatism is in this country, and what it means. For me, it means that the Conservative party will say or do anything it can to gain and retain power—anything except shift real power and wealth to working people. Just look at what the Government did yesterday on taxation, by choosing to keep entrepreneurs’ relief largely intact. That is a tax relief for 5,000 individuals who make an average of £350,000 each. There was a U-turn on the tax for foreign buyers of UK property. The surcharge is reducing from 3% to 2%, which reduces the amount of money earmarked— what for? For rough sleeping. So much for “the people’s priorities”.
This social emergency has been created by a fundamental failure of economic policy. It was interesting to hear the Chancellor, and others, tell us time and again how this country’s economic fundamentals are currently so sound. We warned them that austerity would damage the economy, and 10 years later, the verdict is clear. The statistics speak for themselves. Yesterday, the Office for National Statistics reported that prior to the coronavirus outbreak, growth in the three months to January was 0.0%. Manufacturing output was down by 1.2% over the same period, because of what the ONS described as “widespread weakness”. Productivity growth over the last 10 years has been at a dismal 0.3% average, and on pay growth, the slowest economic recovery for a century has been described by the chief economist at the Bank of England as a “pay disaster”.
In the Budget, there is a 0.4% downgrade for gross domestic product this year, even before calculating the impact of coronavirus. We have the weakest official growth outlook on record, according to the Resolution Foundation, with pay growth weakening in every year of the forecast—an outlook that will hit every household by £600 a year. Of course the Conservatives have failed to tackle in this Budget any long-standing challenges at the heart of our tax system, such as how we treat capital alongside income fairly, how local councils can have stable funding, or how we rationalise the long list of tax reliefs that provide opportunities for tax avoidance and evasion.
The Tories have not scrambled together this Budget because good economic performance made it possible. Yes, they have plagiarised some of Labour’s ideas, from rewriting the Green Book to bringing some of the railways back into public ownership, but that was only because they were forced to do that as a result of their own economic failures.
This week’s Budget shows that Tory tendency again, this time on infrastructure. A gimmicky grab-bag of projects was announced, while yet again the Government put off publishing the national infrastructure strategy. Even those announcements are disappointing. There is no commitment to deliver funding for the full northern powerhouse rail project, and four fifths of the £500 million investment in electric vehicle charging infrastructure is a reannouncement from 2017. The pothole fund is a repeat of a policy that was announced at least twice by the right hon. Member for Maidenhead (Mrs May), and will be enough to repair about a quarter of the potholes.
There is an overall infrastructure pledge that goes only halfway to filling up the £192 billion infrastructure hole that the Tories created by underinvesting between 2010 and 2020. Again, the Tories have given us very little detail on who will build this infrastructure and who gains from this investment. On broadband, for example, their £5 billion investment will be a subsidy to private providers such as Virgin. There is no sense in this Budget that the Tories have any understanding of the skills investment that is needed to ensure that infrastructure can be delivered by those most in need of upgrading their skills and of being able to have a decent standard of living as a result.
Let us not forget the third emergency we are facing today. Future generations will never forgive this Government for their failure to address climate change in this Budget. Infrastructure investment, if properly planned, could have been an opportunity to shift the tracks on which this economy runs towards a zero-carbon future. The Government have missed that opportunity. The Institute for Public Policy Research’s environmental justice commission said that £33 billion a year in green investment was needed for the Government to achieve only their weak target of net zero emissions by 2050. The Chancellor has fallen woefully short of that target. Instead, the Chancellor has opted for £27 billion to be spent roads, which currently contribute 90% of the UK’s transport emissions. They have committed less than one fifth of that to buses and cycling. Fuel duty is still frozen, with no effective assistance to encourage the shift from cars dependent on fossil fuel to less polluting cars and public transport. There is no new support for renewable energy sources such as wind and solar. In the year when we host COP26, this Budget will be seen as a betrayal of future generations.
What are the lessons we must learn from this Budget? It should not take a medical crisis before a Government wake up to funding the NHS adequately. It should not take a collapse in the economy and the threat of recession to force a Government to invest. It should not take our children going on strike to force a Government to take climate change seriously. Our community has experienced 10 years of immense suffering under austerity for nothing—for the pursuit of ideology; a political and economic experiment that has failed. This Budget should have been the most significant since the second world war. It should have been a turning point. As time has allowed scrutiny of this Budget in the past 18 hours or so, it has become clear that it has failed. It does not come close to reversing the damage of the past 10 years of austerity.
I give this final warning to the Government and to all of us. If we sow the seeds of disappointment and disillusionment, it could stir up a form of politics that none of us wishes our country to experience. We need the Government to recognise that they have a responsibility to bring forward—it may now be in autumn—a Budget that tackles our social emergency, our crisis in public services, the levels of poverty and inequality in our society, and the existential threat of climate change. The Opposition will do everything we can to ensure that the Government listen and bring that Budget forward.
Several hon. Members rose—
Mr Deputy Speaker (Mr Nigel Evans)
Order. There is a lot of interest in this debate. After the two Front Benchers, contributors should be looking towards seven minutes for their contributions. I will show a little latitude for maiden speeches, but I am afraid that cannot last forever.
The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
I thank the right hon. Member for Hayes and Harlington (John McDonnell) for his opening remarks. I think we can all agree that we need to demonstrate a unity of purpose across the whole House, particularly at this time. As I go through my remarks, I will address some of the points he raised, but I will just say this in candour and with the hand of friendship. When I entered the House in 2010, he had already been here for a number of years. In 2010, the economy was absolutely on its knees. [Interruption.] We had the highest, biggest deficit in peacetime at over 10% of GDP. When George Osborne delivered an emergency Budget, there were siren voices on the Labour Benches—I do not know whether the right hon. Gentleman was one of them—who said that as a result of those policies we would lose 1 million jobs and the economy would be decimated. That is not what has happened. Ten years on, we have record levels of employment and we are able to make the investments the Chancellor set out yesterday precisely because we took the right decisions in terms of fixing the public finances.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Is the Secretary of State not prepared to concede that within a year of that emergency Budget George Osborne actually had to reverse many of the capital cuts he had made, because of the damage he was doing to the economy?
Alok Sharma
I do not have to look back. I can look at the present, which is record levels of employment. As I go through my speech, I will highlight some of the Government’s other achievements.
Let me talk a little bit about the Budget. The Budget the Chancellor set out yesterday delivers security today and lays the foundation for prosperity tomorrow. The right hon. Gentleman said that all commentators were somehow against the Budget. That is not the case, as he knows full well. The Federation of Small Businesses called it a “pro-small business Budget”. The CBI said:
“It’s a bold Budget at scale…which will help people and business through tough times.”
The British Chambers of Commerce said:
“There’s much to welcome in this Budget for business communities across the UK.”
This is, of course, a Budget delivered in challenging times. I am grateful to the right hon. Gentleman for acknowledging that point and for supporting many of the measures the Chancellor put forward yesterday. I know that many people are concerned about the impact on investment, cashflow and the future of their businesses as a result of covid-19. The Government, as the House knows, announced a £12 billion package for public services, individuals and businesses whose finances are being affected. Support for businesses includes a £1 billion coronavirus business interruption loan scheme, delivered by the British Business Bank, which is already supporting over £7.2 billion of finance to over 93,000 SMEs.
Henry Smith (Crawley) (Con)
Does my right hon. Friend share my concern that there was nothing in the Budget to support our aviation industry? Indeed, air passenger duty was increased as a result of yesterday’s Budget. Many airlines face difficulty. A number have sadly gone out of business in recent weeks and other household names may well go out of business as a result of covid-19. Will he put in a request for air passenger duty to be waived for six months? Otherwise we could see a number of British airline brands go under as a result. They are deeply suffering.
Alok Sharma
I will talk about the discussions I have had with business groups and business representatives, including those from the aviation sector. The Chancellor was very clear yesterday that this is a start. We will keep the situation under constant review and where support is required, we will look to see what we are able to provide.
Returning to the business interruption loan scheme, this is a temporary scheme that will help small businesses to access much needed finance. Yesterday, the Chancellor also announced £2.2 billion of support for about 700,000 businesses which are in receipt of small business rate relief or rural business rate relief. We want to ensure that every single eligible business gets their £3,000 at the earliest opportunity. We will work with local authorities to make sure that that happens. We will also refund businesses with fewer than 250 employees which pay qualifying statutory sick pay to people who are absent from work due to self-isolating for up to two weeks. We are providing vital tax relief, temporarily abolishing business rates for retailers whose premises have a rateable value of less than £51,000 and expanding the discount to include leisure and hospitality businesses. From creating jobs to supporting communities, small businesses are absolutely the backbone of our economy and this Government will always stand by them.
Yesterday, my Ministry colleagues and I heard from the Bank of England’s chief economist, who stressed the vital action that the Bank is taking to help banks to provide additional credit to businesses. Banks must absolutely be part of the solution and we are already seeing signs of that. Earlier this week, NatWest and Lloyds launched funds of £5 billion and £2 billion respectively for small and medium-sized enterprises directly affected by the impact of covid-19. NatWest also pledged to defer customers’ mortgage and loan repayments for three months. I want to see more lenders stepping forward and supporting our businesses through these challenging times.
As Business Secretary, I regularly speak to the business community, and in the light of covid-19, I have ramped up that engagement. Last night, I spoke with business groups and trade associations, including those from the aviation sector, to discuss the measures in the Budget and to reassure them of the Government’s commitment to support them. As I said, we will keep our response under review as the situation develops, but let me be very clear: this Government will always be on the side of business, entrepreneurs and innovators, because they pay the taxes that fund our brilliant public services.
Although I started my remarks by discussing our short-term measures to fight covid-19, it is worth reflecting what Conservatives in Government have achieved with the economy since 2010—I know that the shadow Chancellor will want to hear this. Employment is at a record high. The unemployment rate is at its lowest since the 1970s. A record number of women and a record number of people from ethnic minority backgrounds are in work. Over 1 million more people with health conditions and disabilities are in work now than five years ago, and youth unemployment has almost halved since 2010. Employment is higher in every nation and region of the United Kingdom than in 2010.
Andrew Griffith (Arundel and South Downs) (Con)
Does my right hon. Friend agree that the acid test of how productive an economy is and how well it is doing is its ability to attract investment from global investors who could deploy capital anywhere in the world? In that context, does he agree that it is a sign of success that the United Kingdom attracts more direct investment than France and Germany combined?
Alok Sharma
My hon. Friend makes an incredibly important point. He has had a very successful business career and knows all about attracting inward investment, and he is absolutely right: the UK has been, and will continue to be, a beacon under this Government for foreign inward investment.
Stephen Timms (East Ham) (Lab)
The right hon. Gentleman mentioned 2010. I had a look back at the Red Book from 2010, which warned that if nothing had been done and the previous Government’s policies had carried on, then by 2014-15, we would get debt still rising up to 74.4% of GDP. What actually happened was that in 2014-15, debt carried on rising up to over 80% of GDP. Was the Chancellor not right yesterday to have completely repudiated previous Tory policy?
Alok Sharma
The right hon. Gentleman knows that I have a huge amount of respect for him—we have had very good discussions in other roles that I have had. He will know that in 2010, when the Conservatives took over in Government, we were on the brink—the economic precipice—and I do not think that, in private, he would disagree with that. We also had a record deficit, and that is now down to less than 2%. The shadow Chancellor talked about the impact on real people. What I am laying out is the precise impact that the Government’s policies have had on real people by improving their employment prospects and their earnings.
Stephen Timms
The absolute imperative was to eradicate the deficit by 2015. Today, the right hon. Gentleman is boasting that it is down to 2% five years after that.
Alok Sharma
I am a modest man. I do not like to boast—I just like to state facts, and the fact is that we have record levels of employment in our country.
Let us talk about what has happened for businesses. Since 2010, we have seen corporation tax come down by 9% to be the lowest in the G20. Business registrations are up by over 60%, with nearly 150,000 more firms registered in 2010. Wages growth has been outpacing inflation for 23 consecutive months. The UK is in the top 10 countries in the World Bank’s ranking for ease of doing business and in the top five of the Global Innovation Index. [Interruption.] I do not know—maybe the shadow Chancellor finds that funny, but I do not. I think it is something that we should be very proud of in this country.
I certainly am delighted to be part of the most business-friendly Government ever, and of course, we want to go even further. We are extending the British Business Bank’s start-up loan scheme for a further year, supporting up to 10,000 loans. We are providing another £200 million for life sciences and more funding for growth hubs. In short, we are on the way to making the United Kingdom the best place in the world to start and grow a business.
Of course, the best businesses need the best ideas. Research and development drives up productivity, which leads to high-value, high-wage employment and an increase in exports. That is why I am delighted, as I know Government Members are, that we are committing to spend £22 billion a year on research and development by 2024-25. This is the fastest and largest increase in Government R&D spend ever and there is a multiplier effect, for every pound of public R&D spend delivers around £7 of economic benefit for the country as a whole.
Britain is home to four of the world’s top 10 universities. We are a world-leading nation when it comes to winning Nobel prizes. The UK has produced around 14% of the world’s most impactful research. UK researchers and businesses are cutting carbon emissions, curing genetic diseases and pushing the frontiers of artificial intelligence. Ours is a country that gave the world penicillin, the steam railway and the worldwide web, and we are turbo-charging this tradition of invention and discovery by establishing a brand-new research funding agency, letting researchers pursue high-risk, high-reward projects. We are betting big on Britain’s pioneers and problem solvers as they seek to transform every aspect of our lives, from the journeys we make to the medicines we take.
We have already seen how public R&D funding can create centres of excellence right across the United Kingdom. In Coventry, the UK Battery Industrialisation Centre will soon be developing new ways of scaling up factory production for electric vehicles. In Manchester, the Graphene Engineering Innovation Centre is helping to make cutting-edge composites for affordable electric vehicles. In Harwell near Oxford, our Satellite Applications Catapult is working on applications to remove space debris from orbit. In Scotland, we are backing a world first medicines manufacturing innovation centre, which will help new drugs to reach patients faster. In Northern Ireland, our Digital Catapult is providing mentoring and advice to help cyber-security firms to scale up and succeed. In Wales, we are backing the first compound semiconductor cluster anywhere in the world—a technology that could underpin everything from wearable health sensors to autonomous vehicles in the years ahead.
I am determined that as the UK forges a path as a science superpower we use that opportunity to level up centres of excellence across our whole country. As part of that, my Department, with the Treasury, is committing to creating a northern campus, but I want to be clear that levelling up and having staff across the country has always been part of my Department’s agenda. Some 84% of its partner organisations are already based outside London, while BEIS itself already has sites across the UK, including in Aberdeen, Birmingham and Cardiff.
In the coming years, we will need to make the most of ideas, innovations and solutions from each and every corner of our United Kingdom. The shadow Chancellor will agree that nowhere is that more true than in tackling climate change. Part of my Department’s mission is to deliver clean energy and to lead on the path to net zero emissions by 2050. Since 2010, as a result of the actions we have taken, the United Kingdom has cut its carbon dioxide emissions by around 30%. Driven by investment in renewables, 99% of the UK’s solar photovoltaic capacity has been deployed since 2010. Today, the UK has more installed offshore wind capacity than any other country in the world.
Our contracts for difference auctions have helped to reduce the price of offshore wind by two thirds in the last five years. The UK already has more than 460,000 jobs in the low-carbon sector spread right across our country. From Siemens in Hull to MHI Vestas on the Isle of Wight, we have seen hundreds of new jobs making turbine blades, and last year Ørsted launched the world’s largest offshore wind operations and maintenance facility in Grimsby.
In yesterday’s Budget, the Chancellor announced that he would more than double R&D spend in the energy innovation programme. The Budget backed nuclear fusion to develop and build the world’s first commercially viable fusion power plant by 2040. It backed low-emission vehicles, including with funds to support the roll-out of a fast charging network for electric vehicles, and it will fund a new heat network scheme and put £800 million behind two or more carbon capture and storage clusters, one by the mid-2020s and a second by 2030. [Interruption.] I hear the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) chuntering, if I may call it that—I do not mean to be rude—from a sedentary position. I hope he will appreciate that carbon capture and storage will have to be part of the mix going forward, which is why we are investing almost £1 billion in it.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
The Humber is one of the areas that have been put forward for the carbon capture pilot. As the Humber is the highest emitter of carbon in the United Kingdom, we believe that we should be the first to enjoy some of that £800 million. I wonder if the Secretary of State might want to back the Humber in that proposal.
Alok Sharma
In the spirit of bipartisan friendship, I would be very happy to sit down and talk with the hon. Member about her proposals. I make no promises at that Dispatch Box, but, as I hope colleagues will know across the House, I am always happy to talk to colleagues and get their input.
Thanks to the industries I discussed earlier, we aim to have up to 2 million green jobs in our economy by 2030. The UK economy has grown by 75% since 1990. At the same time, we have cut emissions by 43%. We have demonstrated that green growth is possible. We have the opportunity to turn climate change into a green growth opportunity for the global economy. As the shadow Chancellor noted, this November, COP26, the UN climate conference, which will be the biggest summit ever organised by the UK, will take place here. Whether globally we live in the south or the north, the east or the west, we share one life-giving but fragile planet. All our futures are indeed intrinsically linked. COP26 can be where the world comes together to ramp up momentum towards a zero carbon economy. It can send out a message of ambition and hope that decarbonisation is the future, with huge opportunities for those who are willing to act now.
In conclusion, the Budget delivers for our businesses, innovators and entrepreneurs. It is a Budget to power pioneers and problem solvers right across our country. We are a one nation Government committed to levelling up investment, growth and opportunity across the whole of our United Kingdom, and I commend the Budget to the House.
Alison Thewliss (Glasgow Central) (SNP)
This is a Budget in two parts: the urgent response required on covid-19 and the other actions the Chancellor proposes. While the SNP supports many of the actions to mitigate that and to support the NHS and business through the measures announced, they come in the context of a decade of austerity—of cuts to budgets and services and of pain for many of our constituents. The latter part of the Budget does not do nearly enough to resolve the many concerns we have about the UK economy. Indeed, in the wider context of Brexit, there are many challenges yet to be dealt with. The Chancellor has kicked a range of significant policies and changes into the long grass of the comprehensive spending review to buy Dominic Cummings more time to come up with some ideas.
In terms of what was announced on covid-19, we need to know exactly how these measures will translate into Barnett consequentials. The Scottish Government stand ready to take further actions. The First Minister confirmed earlier that Barnett consequentials on non-domestic rates will be passed on in full, but we need to know the precise numbers from the UK Government and we need to know that soon, because without that it is incredibly difficult. Our business rates regime is already more generous than the UK business rates regime, but we need to know those figures, so that the Scottish Government can put those actions in place.
I support what has been talked about in terms of support from banks and lenders. My right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) wrote proactively to the banks to ask them to do that and I was glad that some have taken that up. I am glad also that there will be support from HMRC in terms of time to pay and other measures. I have had experience in my own constituency of HMRC being a wee bit too quick to move to close businesses down, so we welcome anything that can be done to reassure businesses, particularly those already in difficulty, that they will not be pushed out of business by these actions at this very vulnerable time.
The timing of the Budget further reveals the UK Government’s careless attitude to Scotland because the Scottish budget process has had to be carried out blindfold. The Scottish Government and our Cabinet Secretary for Finance, Kate Forbes, had to make their best guess going into the Scottish budget negotiations, which passed last week. It is wholly unacceptable that Scottish local authorities, which had a legal deadline of yesterday to set their budgets and council tax, had to do so without knowing precisely how much they would have to spend. Now that it has come, we find that Scotland’s budget next year will be lower in real terms than when the Tories first came to power. These proposals do nothing to redress the cumulative cuts or the short-changing of city and region deals, or to make available a proportionate share of the DUP’s bungs or the money owed to our police and fire and rescue services.
The Chancellor talked of change in his Budget yesterday and it is certainly change that we need. Economic growth in the UK is flat as a pancake. Yesterday’s ONS figures show that the UK’s economy has not grown at all in the last three months, while growth has been downgraded for three of the next four years, and that is before we even begin to account for coronavirus. The OBR suggests in its documents that a recession this year is quite possible, if the spread of coronavirus causes widespread economic disruption. Given how other countries are dealing with it just now, it is hard to disagree with that sentiment.
The Chancellor has made clear his intention to spend his way out of this crisis, which is very interesting. We have been told for years that there is no money, yet yesterday Sunak the Hedgefund sprang up, having found a magic bunch of gold rings. On these Benches, the SNP will not argue that the UK Government need to loosen their purse strings, but I am concerned that in practice it is simply not enough and not focused enough to counteract the last 10 years of austerity, which has ravaged our communities. It is a curious situation to find a Conservative Government, according to the Office for Budget Responsibility, in the position of setting out
“the largest sustained fiscal loosening since the pre-election Budget of March 1992”
and on course to add
“£125 billion (4.6 per cent of GDP) to public sector net debt by 2024-25.”
Interest rates are low at the moment, but this leaves the Government very vulnerable to future rises in the years ahead.
The UK’s resilience has been weakened under sustained Tory cuts. Wages have barely grown in the last decade. The welfare state safety nets have been torn to shreds. Public services have struggled through chronic underinvestment and asset stripping, and some parts of the UK that have still not fully recovered from the 2008 financial crisis are ill-equipped to cope with a further recession. Coronavirus has the potential to have a lasting impact. I welcome the Chancellor’s commitment to fighting the virus. All of us on the SNP Benches are keen to do whatever we can to facilitate joint working between the Scottish and UK Governments. I make these comments in the spirit of providing the appropriate scrutiny to allow the Government to control the spread of disease. For the Chancellor’s policies to work in the way that he intends, he needs to expand the number of workers entitled to statutory sick pay. As things stand, people need to be qualified workers earning more than £94.25 a week. That rules out the 300,000 people on zero-hours contracts, who are likely to be most at risk of not taking adequate time off work.
For those who are eligible for sick pay, the Budget has done nothing to bring the UK in line with other OECD nations. People will still be expected to survive on less than £100 a week. As my colleague the right hon. Member for Ross, Skye and Lochaber (Ian Blackford) highlighted yesterday, the contrast with what people are entitled to in other countries is stark. The Chancellor himself struggled to answer on the radio this morning whether that would be enough for him to live on, so we should not expect our constituents to live on it either. It will certainly not be enough for many people who find themselves suddenly unable to go out to work. Research by the Resolution Foundation shows that many workers face losing between 70% and 74% of their primary income. It is saying that this is a huge living standards shock.
The Chancellor has made temporary changes to the benefit regime to encourage those not eligible for sick pay to self-isolate, which is the right thing to do. However, I am concerned that the five-week wait for universal credit will still apply, potentially making the change functionally useless for that purpose. Claiming universal credit could also have the knock-on effect of making claimants lose entitlement to legacy benefits, such as tax credits. The minimum income floor is being removed temporarily, but that is cold comfort to someone stuck on UC permanently because they have already lost their entitlement to tax credits.
I am raising these issues today because my fundamental concern is that the UK benefit system is so broken and inadequate that people would rather go to work ill than try to negotiate it and risk pushing their families into poverty. I hope the Secretary of State will take on these comments seriously and reflect on how the UK Government strategy can be improved to effectively control the outbreak—he will know about that as a former Department for Work and Pensions Minister.
I also take this opportunity to raise the prospect of working across Governments to provide Scotland-specific solutions. My own constituency this week has already seen the cancellation of a 3,000-person conference. That means hotel stays cancelled and a knock-on effect on the Glasgow economy from people not eating out, using taxis or spending their money in shops locally. Bringing people to Scotland for business and pleasure is extremely valuable in both urban and rural areas. Coronavirus could have a devastating effect on many people’s livelihoods.
The Chancellor has full control over VAT powers. It would be possible to provide VAT relief for the hospitality sector, if he was minded to do so. We need to ensure that businesses are supported as much as possible and that plans are in place, post virus, to provide further expansionary measures. I understand that the UK currently has the second highest VAT rate for hotel accommodation in the EU, so it certainly makes some economic sense to drop the rate and support our tourism sector.
Coronavirus is certainly a factor in putting the UK’s economy in a perilous position, but we should be under no illusions: the conditions for a major recession were in place long before the virus began. The Prime Minister’s choice language on business has been well publicised, but the reality is that the UK has been an investment waste ground under the Tory party for some time. Firms have been holding off on investment since the Brexit vote in 2016 until they can be provided with some certainty about the future. The OBR said in its analysis that it would have expected investment to increase by 20% by now, but it remains stagnant. The chilling effect of trade barriers and a lingering threat of a no-deal cliff edge is unlikely to change that uncertainty, with the OBR factoring that into the next five years of its forecast and predicting that two thirds of the hit to productivity due to Brexit is still to hit. As the Red Book itself proclaims:
“The UK’s level of productivity has been lower than that of other advanced economies since the 1960s”,
and is
“20% lower than other major advanced economies such as the US, France and Germany”.
In Scotland, productivity has been on the rise since the SNP took office, growing at 0.9% a year, compared to 0.4% for the rest of the UK. We are already moving ahead in areas such as skills and developing the young workforce, tertiary education and attracting foreign direct investment. We have the highest proportion of employees —83%—paid at or above the real living wage, not this pretendy living wage, which embeds state-endorsed age discrimination. Universities are also collaborating to contribute to productivity, which is put at threat by ending Horizon 2020 funding and the collaboration and innovation that we have through the EU. I also ask about the future of Erasmus+, which brings so many people to this country and sends our people out into the world to experience the value that that can bring to their education, which they can bring back for productivity here in this country. We can do so much more with the full levers of a normal European nation state.
The Chancellor said yesterday that this is a Budget that “gets things done”, but with vital issues such as the shared prosperity fund being punted into the long grass, we still do not know exactly how he intends to get things done. European funding has been a steady source over many decades, with funds invested in our communities, building infrastructure and changing the lives of our people, yet we still do not know what will replace it. A vague paragraph on page 83 of the Red Book just will not cut it. We will not accept one penny less of the European funding that we had in the new shared prosperity fund.
There is a line in the Red Book that says:
“Funding will be realigned to match domestic priorities”.
I ask: whose domestic priorities? The Prime Minister’s? A man who thinks that we can build a bridge—or perhaps a tunnel, if we ask the Secretary of State for Scotland—through a 300-metre deep trench filled with dumped munitions? Or, rather, those of the democratically elected Government of Scotland, in partnership with Scottish local government? I certainly know who I would trust, and it is definitely not the blonde bombshell of Brexit.
Carbon capture and storage is another project marched off to the comprehensive spending review, with the potential of maybe a project, maybe by the middle of this decade, or maybe the end, maybe on two sites, and maybe with a fund of £800 million. This is absolute nonsense and does nothing for the people of the north-east of Scotland, who were led to believe in the run-up to the independence referendum that they would receive £1 billion for a plant at Peterhead, before David Cameron promptly pulled the plug when Scotland voted no.
This Government’s commitments to achieving net zero remain to be seen, with a meagre £10 million for policy development towards net zero, but £27 billion being spent on roads, and tinkering round the edges of challenges such as domestic heating and making our homes climate ready, rather than incentivising investment by cutting VAT on products for repairs and improvements to aid energy efficiency. We are coming up to COP26, as the Minister said. We need big ideas and we need the money behind them, because if this work is truly to be a success, we need to see a transformation, and that is not what this Budget promises.
For my constituents and for people across Scotland, this has been a tale of two Governments. On one hand, the Scottish Government have been consistently the grown-ups in the room, with a clear policy direction. They have launched the national performance framework, receiving international acclaim for the inclusive growth strategy. They have prioritised tackling inequality at the same time as growing the economy. They have taken an evidence-based approach to developing policies and, against the backdrop of austerity, have still managed to take bold action to provide investment in innovation through projects such as the National Manufacturing Institute Scotland and the Scottish National Investment Bank. Innovation supported by universities means that Glasgow builds more satellites than any city outside the United States. That does not happen by accident. The Scottish Government have reached out across nations to build relationships and pursue an internationalist, open and welcoming Scotland.
By contrast, the UK Government have brought a new era of political and economic isolation to Scotland. For all the bluster of getting Brexit done, it is still nowhere near a done deal. We still do not know exactly what the future relationship will look like. We still do not know what European funding will be replaced with, but we do know that the absolute best-case scenario, where we get a basic trade deal, could remove £9 billion from Scotland’s economy, and that is without taking into account the effects of reduced migration. Scotland has an ageing population and areas that have historically been concerned more with emigration than immigration. Our economy has benefited from inward migration in a multitude of ways, from food to culture, and not least the vast economic benefits that immigrants have brought to Scotland in choosing us as their home.
I cannot stress enough how devastating the UK Government’s new migration scheme stands to be for certain sectors in Scotland. The forecasts in the OBR’s book estimate a loss of HMRC income and national insurance rising to £1.5 billion in 2024-25 as a result of those changes. It is a political choice for this UK Government to insist on a unified immigration system, when other countries successfully run differentiated systems. It is not an economic choice, it is a political choice, and one that does not serve Scotland’s best interests.
The Chancellor has also missed a huge opportunity to redress some of the injustices that austerity has already brought upon us. He failed to scrap the two-child limit and the brutal rape clause, on which I have one small correction for the Labour Front Bench, which said to the Prime Minister that the rape clause affected 200 women; actually, it affected 510 women—510 women had to fill in a form to prove they were raped, so that they could get entitlement to tax credits. Failing to scrap the two-child limit and the brutal rape clause—this Budget gets it done. Failing to restore the value lost from the benefits freeze of the last four years—this Budget gets it done. Failing to improve the prospects for a lost generation of children who have grown up in Tory austerity Britain—this Budget gets it done. What is done to people by this Tory Government causes so much distress to so many. What do the Government have in their Red Book about this? They have £2.5 million dedicated to research into how best to support vulnerable children. Well, Mr Deputy Speaker, I would suggest that they stop making those children so vulnerable in the first place by their own policies.
Five years, three elections and several Chancellors ago, I stood for election to this place for the first time, on a manifesto advocating the scrapping of the tampon tax. The SNP was the only mainstream party in that election to call for such a policy. I am very proud of how the agenda has changed since I stood in the Committee that considered the Finance Bill and nervously talked about periods in front of a bunch of very senior and crusty Members of the House. The claim has been made that Brexit has delivered this move, but I would contend that it has been a movement of many people across these islands, of brilliant former colleagues such as Paula Sherriff, and of allies around the world. I wonder, Mr Deputy Speaker, if there were more women rather than men around those tables of power, whether we might have gotten rid of the tampon tax a very long time ago. There is yet to be a female Chancellor, and that is telling.
Moves have been made in Scotland for the totally free provision of sanitary products for women and girls, and this is great news not just from a financial perspective but because it goes a long way towards lifting the stigma of periods and menstrual health. It would be remiss of me not to mention also that the tampon tax fund goes towards funding services that prevent violence against women and girls. The Women’s Budget Group estimates that those services need at least £393 million per year to carry out their very important work. So will the Government now provide a source of funding to make up that shortfall?
I want to talk briefly about a couple of other measures in the Red Book. I am glad to see the alcohol review, because the current alcohol taxation system frankly makes absolutely no sense at all. If you look at the graphs for those different alcohol taxes, there is no logic to them at all.
I am glad to see £14 million more for Companies House, but I want to know whether the Government intend to make Companies House a relevant body for anti-money laundering regulations. If they do not do that, they will be chucking more money away and leaving the door wide open to money laundering and false registering.
There seems to be money proposed in the form of VAT relief to S4C, which I do not begrudge the Welsh media at all, but where is the equivalent relief for MG ALBA, which also needs that support?
This is not a Government who make things happen; it is a Government who things happen to. In the three and a bit years since the Brexit vote they have lurched through reshuffles, leadership battles, meaningless buzzwords and constitutional shambles. They promise change and prosperity like jam tomorrow, but they deliver very little. Yesterday’s Budget laid bare that, when the Tories want to turn on the taps, spending can flow like a river bursting its banks. The OBR suggests that there is so much infrastructure money gushing through that the UK Government are actually going to struggle to spend it.
Austerity has been cruel, damaging and entirely unnecessary. Scotland did not vote for austerity. Scotland did not vote for Brexit. Scotland did not vote for this Prime Minister, the Chancellor or Dominic Cummings. We reserve the right to have another vote, in which we can vote to put Scotland’s future in Scotland’s hands for all of our people.
Harriett Baldwin (West Worcestershire) (Con)
It is, I think, a pleasure to follow the hon. Member for Glasgow Central (Alison Thewliss), who sits with me on the Treasury Select Committee, which has eight women members out of 11. I think I did detect one thing that she welcomed in the Budget, which was the end of the tampon tax. I was glad to hear one thing that she welcomed.
The Budget was delivered in truly exceptional circumstances, in the context of a coronavirus outbreak. As we sit here today, the US stock market opened down at its limit again and had to close for the second time this week. This is truly a difficult and challenging economic environment for the Chancellor as he delivers his Budget. I am sure that all colleagues were impressed with the way in which our new Chancellor delivered the Budget. He did so with the confidence that looked as though he had been working all his life to deliver it, whereas he had been in post for only four weeks. It was a remarkable performance that got an exceptional Budget done in exceptional times. It delivered on so many of the promises in our manifesto—promises that the British people voted for last December.
I have heard a number of people this afternoon reference the unprecedented nature of the coronavirus, and I think everyone has welcomed the measures that were taken in the Budget. They all reflect the fact that this is a temporary situation; we know that it will come to an end, but we do not know when. The measures were also timely, and they were very targeted at those who will be most adversely affected. I think there was a collective agreement in yesterday’s speeches and today’s that the measures were necessary and welcome. They also come against a backdrop that continues to be very distorted in certain fundamental ways in terms of the global economy and in terms of our own economy. It is quite remarkable that this week—on Monday—the two-year bond in the UK switched to a negative interest rate for the first time. Before I came into politics I was a portfolio manager for over two decades, and I never saw anything like this. What is happening on the markets is really quite unprecedented.
Similarly, since the financial crisis, when the Bank of England implemented quantitative easing and added Government bonds to its own balance sheet, it has not been able to unwind those holdings. It has actually had to increase them over the past decade, holding now some £425 billion-worth of bonds. There are some really fundamental and long-standing distortions on the Government’s own balance sheet. Twelve years on from the financial crisis, the Government still, on behalf of taxpayers, hold shares in RBS. I know that the Red Book says that the Government are planning to reduce those holdings by 2024, but I note that since January the value of those holdings has fallen by half. I would love to hear from the Minister what the plans are for the RBS shares.
There was also a lot in the Budget statement about the long-term plans for levelling up the British economy, and a lot that we can welcome across the House in terms of long-term infrastructure spending. We all recognise—certainly on the Government Benches—that Governments have no money of their own. They have only the money that they can borrow or the money that they can take in taxation from a productive economy. The growth in public spending that is in this Budget is much faster than the overall growth that is projected in the economy. Government Members all recognise that this is an exceptional response to exceptional circumstances, but we cannot carry on doing that. As the Institute for Fiscal Studies said today:
“Obviously, that is not sustainable for any prolonged length of time.”
Effectively, what the Chancellor did in the Budget was to say that the money that is going to be invested in the long-term plan—that levelling up, that infrastructure investment—is going to generate a greater rate of return for the economy than the OBR assumes in its forecasts. I can see that in my constituency, where I am campaigning for the redoubling of the Cotswold line, for example. There is a proposal on the table for nine miles of Cotswold line to be redoubled. That has a business case of a 4:1 ratio, so it is clearly something that would be really positive for the local economy. The Secretary of State spoke in his opening remarks about the research and development spending that is in the Budget, and he mentioned that there is a 7:1 ratio for spending on research and development. I can see it in terms of the spending for flood defences that is in the Budget. How valuable that will be for the communities in West Worcestershire that I hope will benefit from it. The same can be said for investment in superfast fibre and improving rural mobile phone signals. This money should receive a greater rate of return in economic growth than is currently forecast by the OBR.
I have three quick questions in the minute left to me. First, on the £22 billion of public R&D investment and the £800 million specifically for an advanced research projects agency, will it link with what we are doing on defence research budgets through the Defence Science and Technology Laboratory and taking some of those inventions to market through the Ploughshare scheme? What is the vision for those investments? In what sectors will they likely be invested, and how will we measure success over time? Secondly, are we extending the maturity of our debt and taking advantage of these low interest rates? Thirdly, as I mentioned before, what is the plan for RBS?
Finally, I recognise the exceptional conditions in which this Budget was delivered.
Mr Pat McFadden (Wolverhampton South East) (Lab)
It is a pleasure to follow the hon. Member for West Worcestershire (Harriett Baldwin).
This Budget is the Government’s attempt to make a turn in the road. Gone are the logic, the rhetoric and the assumptions that have driven UK spending policy for the past decade. If nothing else, it is testament to the Conservative party’s capacity for reinvention and its hunger for power. For the avoidance of doubt, that is not an insult.
In truth, the Chancellor had little choice but to change course, because the backdrop to the Budget was a flat economy and an anaemic forecast for future growth—that is even before the impact of the coronavirus. Growth estimates are down this year to just a little over 1%, and to around 7% over the next five years. Growth that weak is not levelling up but levelling down. Such weak economic growth leaves the Government no alternative but to fund their spending plans largely by borrowing money in a way that the Conservative party has for years derided as irresponsible and reckless.
Add to that the impact of the Brexit path the Government have chosen, which is the defining decision that now dare not speak its name. If the line has gone out from No. 10 not to talk about it, the OBR did not get the memo because it is there in black and white. The OBR estimates a potential loss of 4% of GDP over the next 15 years—lost output, lost income and lost tax revenue.
The Secretary of State for Business, Energy and Industrial Strategy claims this is the most business-friendly Government ever. In truth, this is the first Government in living memory to relegate economic prosperity to behind issues of sovereignty. That is not a claim from me; it is a policy set out by the Prime Minister and his chief Brexit negotiator.
In more ways than one, this Budget is just starting to fill a hole the Government have dug for themselves. If low interest rates allow them to borrow for investment, it was also true some years ago when they derided such suggestions. Of course, new investment in infrastructure is welcome and long overdue, certainly in places like the Black Country. We have too many derelict factory buildings, too much unused development land and too much unremediated land, all of it standing as a physical reminder of the lack of investment over the Tory years, but simply calling themselves a new Government cannot disguise the fact that they are amending an investment shortage that they decided on in the first place. As I said, they are just starting to fill a hole they dug themselves.
Carbon capture and storage has been announced and abandoned almost as many times as the A303 project at Stonehenge, but neither has been announced quite so often as the potholes fund—the Albert Hall should have been well and truly filled by now with those announcements.
We have heard a lot of this before, and it could and should have started years ago, but it would be complacent of my party to rest on those criticisms alone because this is a shift in fiscal strategy—there is no doubt about that—and responding to it will require more than reaching for the same slogans as before. There has been much talk in recent months about what constitutes a good Opposition. The first step is to oppose the Government and Conservative party we actually have in front of us, rather than the ones we wish were in front of us. When our opponent has adapted, we have to adapt, too. That is something we must do.
Infrastructure investment is definitely needed, but addressing regional inequality is about people and their life chances. Where they were born, where they live and what kind of family they come from, those things should not limit people’s opportunities and chances to make the most of their life.
Alongside the bricks and mortar, we need: a deep-seated effort to tackle educational inequality; good quality, affordable childcare to make sure parents can take up jobs; an early-years effort to tackle the appalling development gap that afflicts some children, even by the time they start school; second-chance skill training to equip people for a new labour market and to give them the tools they need to reach their full potential; and the support for social mobility needed to break through the charmed circles that still characterise too many of the professions and too many of the best jobs in this country. If there really is to be levelling up, it is about a lot more than tarmac and concrete; it is about people’s lives and the chances they have.
We are still in the early stages of the coronavirus response, and no one can be sure about its health and economic impacts. There is broad cross-party support for the measures announced by the Chancellor yesterday, although we will continue to press for there being no penalty for those who choose to do the right thing, whether they are self-employed, on a non-permanent contract or anything else of that nature.
That takes us so far, but this is a global pandemic and is now being defined as such. Where is the global leadership in tackling this? Where is the co-ordinated economic response? Where is the concerted effort from world leaders to act together to face a virus that respects no borders? It is hard to escape the conclusion that, had this virus erupted a decade ago, there would have been a will to have a much more international response. With this generation of leaders, with nationalism on the rise and with international institutions and actions having been so disparaged and derided, that will has so far not been there.
It is not too late. We could lead in calling for that effort. If we do not, we will have to hope that the retreat into national responses does not cost us dearly.
Several hon. Members rose—
Mr Deputy Speaker (Mr Nigel Evans)
I ask for the usual courtesies for maiden speeches, of which we have three this afternoon.
I call Sally-Ann Hart to make her maiden speech.
Sally-Ann Hart (Hastings and Rye) (Con)
Thank you, Mr Deputy Speaker, for calling me to give my maiden speech, which is something I have just got to get done.
I thank the residents of Hastings and Rye for putting their faith in me and the Conservative party by electing me as their representative in Parliament. It is an honour to represent them all, and I pledge to work hard and to serve them all.
Beautiful Hastings and Rye is a gem of a constituency that has a huge amount to offer residents, visitors and tourists alike. We own history. We have an abundance of natural attractions found in our beautiful beaches and glorious countryside. We have a wealth of historic towns, buildings and gardens, and we have world-renowned festivals—including our piano festival—art galleries, vineyards and attractions such as the Source skatepark, the biggest in Europe. We are proud to have hosted the world crazy golf championship since 2003. We have amazing communities of churches and volunteers, which reach out to help our most vulnerable and in need.
We have one of the oldest beach-launched fishing fleets in the country, dating back more than a thousand years, which must be preserved and, more importantly, allowed to flourish as we leave the EU. Regaining control of our waters will re-establish and strengthen the heart and soul of Hastings and Rye and all our fishing communities from John O’Groats to Land’s End.
Tourism plays a significant role in the local economy, supporting nearly 30% of local jobs. The local councils work hard together with local businesses and community groups to be innovative in boosting the tourist, arts and culture offer. There is huge potential for growth, and as we leave the European Union the Government must continue to focus on initiatives and measures that will maximise tourism’s contribution, not only for Hastings and Rye’s rural coastal economy, but for the UK as a whole.
We have a number of successful manufacturing businesses, particularly in the vacuum engineering and defence sector. Economic growth outside the tourism sector must be a priority, as the constituency continues to suffer from poverty. Hastings is failing to thrive, despite significant sums of money being invested. The constituency may be in the affluent south-east, but it is one of the most deprived in the country.
Yesterday, the Chancellor praised a Scot, John Logie Baird, for inventing the television, which he did—in Hastings, the birthplace of television. That sense of creativity, innovation and dynamism has never left the town. There is so much talent waiting to be unleashed, but there is a lack of investment, confidence, aspiration and hope—something that I am determined to change. We must develop opportunities for all to excel. As such, I was proud to stand on a manifesto commitment to level up.
When it comes to education, skills and qualifications, we are in the bottom five of the most unqualified, unskilled populations. We have a duty to improve the quality and breadth of education. Education is fundamental in unlocking the potential of Hastings and Rye, to support and encourage economic growth. Continued investment in primary school education is necessary to give our children the best start in life. Secondary education is not just about academics. We need to offer the best technical and vocational training to improve the chance and quality of employment for more of our young people, making them nationally and globally competitive.
We also need to provide better education and support for people with special educational needs and disabilities to enable them to access work experience and employment and to be properly paid for the jobs they do. Giving them the support they need must not be something their families have to fight for; it must be a given.
Family, however comprised, is the single most important influence in a child’s life. I say that as a wife of 27 years —I thank my lovely husband for coming to support me today—and as a mother of three adult children. All children thrive in loving, secure families, but some families need help, support and extra resources and we have to focus on early intervention and prevention. We have not placed enough value on the role of family life and I am determined that that will change.
Looking back at the maiden speeches of my last four predecessors in Hastings and Rye, I saw that they all highlight the necessity of improvements to the A21, known locally as the “snail trail” from London to Hastings, as an essential prerequisite to economic development in the constituency. Although I welcome the Chancellor’s announcement on investment in our roads, I am standing here nearly 50 years later, making the same point as my predecessors: to have any chance of levelling up opportunities in Hastings and Rye or of unleashing the potential of our residents and businesses, this Government need to invest in the A21 and in the local rail and bus transport infrastructure. A good transport infrastructure platform combined with a skilled local population will encourage existing businesses to grow and new businesses to start up, boosting economic growth in Hastings and Rye and combating poverty. As such, I will be raising this point at every possible opportunity until a solution is found.
I would like to pay tribute to my predecessor, Amber Rudd. Amber was elected in 2010 and built a reputation locally for being a hard-working MP. She secured improvements to rail times and progress on electrification. She is particularly proud of her ARSE—the Amber Rudd seaside express, the first ever almost-direct Hastings to London commuter train. She also secured the link road and investment in infrastructure and skills to help local people into work and better paid careers.
I am Geordie born, with Scots and a touch of Northern Irish blood coursing through my veins, representing the East Sussex constituency that I am proud to call my home and where I have raised my family. As such, I hope this blend can be the best of British. Our Union is precious, our one nation. Our freedom and independence come from our departure from the EU. This is our time; let us grab the opportunities together and make this kingdom united and our Britain great.
Steve Reed (Croydon North) (Lab/Co-op)
I congratulate the hon. Member for Hastings and Rye (Sally-Ann Hart) on a confident and optimistic maiden speech. She certainly has very big shoes to fill, but from what we have just heard I feel confident that she will do a fantastic job of representing her constituents. I had the pleasure of spending new year in Hastings and Rye a couple of years ago, and I now regret that I did not hitch a ride on the Amber Rudd seaside express. I could recognise in everything the hon. Lady said what a fantastic place it is, and they are lucky to have a fantastic new MP. I was particularly pleased to hear the hon. Lady refer to children with special educational needs, because they need everybody to give them the voice that they otherwise would not have. I look forward very much to the hon. Lady’s future contributions to debates in this Chamber.
I will move on to the matter at hand. My right hon. Friend the Member for Hayes and Harlington (John McDonnell) was right to focus on the social crisis we face in this country. In that light, I would like to take a moment to consider the impact of the Budget on people with mental ill health. This Government regularly talk about helping this group of highly vulnerable people, without following up on their words.
Although it is right that the Chancellor has focused this week on tackling the immediate threat of coronavirus, the measures he has put in place are necessarily temporary. Many people with mental ill health face long-term challenges that temporary measures will not alleviate. The Government are speeding up the payment of benefits, including statutory sick pay, to people unable to work because of coronavirus, and that is the right thing to do, but for thousands of people with mental health problems, the benefits system pushes them further away from work. The roll-out of universal credit, ignoring the major failings during the pilot stages, has pushed many people with mental ill health into poverty and deeper mental health crises. A five-week wait for the first payment, and insensitive assessments, to put it mildly, in which people who are mentally vulnerable are forced to recount in detail examples of trauma and even attempted suicide, can easily worsen their health conditions and make them less capable of work. There is nothing in this Budget to tackle any of the root causes of that.
After years of NHS underfunding, mental health campaigners including Mind and Young Minds have been calling for greater levels of investment, but there was no mention in the Budget of investing in the wellbeing of NHS staff who are leaving in droves because of unimaginable stress and workloads. And there was no mention of investment in the crumbling and unsafe facilities people with mental health problems have to use. Indeed, two thirds of mental health trusts estimate that they need between £50 million and £150 million extra in capital investment over the coming years. How much longer can we go on putting people with mental ill health in mixed-sex wards that leave patients at risk of sexual assault, or leaving patients who are at risk of suicide where they cannot be properly supervised because the facilities are inappropriate?
In December 2018, Professor Sir Simon Wessely completed his independent review of the Mental Health Act 1983 and made recommendations for improving that legislation and the services that follow on from it. Fifteen months later, there has still been no response from the Government to that important review, despite a string of Ministers championing the review from the Dispatch Box. While we wait for a formal response, we also wait for the funding to match, but we heard nothing at all about any of that in the Budget. The Government must not forget people with mental ill health. They should be investing in staff recruitment and training, high-quality facilities, and the support people need to live the independent, fulfilling lives that they all deserve to lead.
I would like to take a moment to look at the continuing inappropriate use of violent restraint against patients with mental ill health. This House unanimously passed my private Member’s Bill, Seni’s law, in November 2018. The Bill establishes a new system aimed at reducing the use of restraint and eliminating deaths in mental health custody of the kind experienced by Seni Lewis and far too many others. Seni’s law won unanimous support, in all parts of the House, yet 16 months later the Government have still not announced a commencement date, despite originally promising that we would have it within six months of the legislation being enacted.
To people with mental ill health, it looks like the Government just do not consider them a priority. I am aware that the Under-Secretary of State for Health and Social Care, the hon. Member for Mid Bedfordshire (Ms Dorries), who is responsible for mental health, is self-isolating with coronavirus, and I wish her a speedy recovery, as I am sure we all do, but that does not excuse the months of dither and delay that have held up the important provisions of this Act coming into force. I hope that the first thing she will do when she has recovered and is back at her desk is give us a commencement date for Seni’s law. It will not even cost the Chancellor a penny to do it.
This Budget is a missed opportunity for people with mental ill health. The Government keep saying that mental health is a priority, but the funding does not follow the rhetoric. I hope the Chancellor will reflect on serious omission in the Budget and work with his colleagues across government to make mental health services, and the people who rely on them, the priority they need and deserve to be.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
I am very pleased to call Andy Carter to make his maiden speech.
Andy Carter (Warrington South) (Con)
We are, I think, drawing to the end of maiden speech season. Over the past few weeks, I have heard, and seen, many hon. Friends give very moving speeches, speaking with incredible passion for their constituencies. Indeed, I have learned much about the lives and places across these isles. I congratulate my hon. Friend the Member for Hastings and Rye (Sally-Ann Hart), who talked so warmly about her constituency.
I wish to begin by paying tribute to my predecessor, Faisal Rashid, who represented Warrington South for only a short period, arriving in this place in 2017. Before becoming a Member of Parliament, Faisal made history in Warrington by becoming the borough’s first Muslim mayor, and I thank him for the work he did to forge relationships between different communities in Warrington.
I am the third Member of Parliament since 2010 for Warrington South, and, if I may, I would also like to pay a brief tribute to David Mowat, who represented the area for seven years from 2010. David was an excellent constituency MP who did many things in this place to change the lives of Warringtonians. I really saw that when I was campaigning. During the election, I was knocking on people’s doors and they told me that they would like to vote for him. Fortunately, I was able to convince them that it was me they needed to vote for. David was also a very effective Health Minister, and I thank him for the advice and guidance he has offered. I also wish to express my thanks to the Warrington Conservative Association for all its support in getting me to this place.
Having thanked my political predecessors, I want to show my love and appreciation to my family for giving me the space and opportunity to turn a political interest into a fully-fledged obsession: to my wife Aggie, who keeps me grounded with questions as challenging as any I hear on the doorstep; to my son Harry, who this season gave me permission to miss the occasional Saturday morning under-12 Appleton boys football match so that I could go knocking on doors; and to my mum and my brother Richard—thank you for your love and support. By the way, I checked this morning and the Appleton FC U12 Pythons are at the top of their league. They are having a pretty impressive season and promotion beckons, and I thank the parent coaches for the work they do to support the boys and girls at Appleton football club.
I may not have been born there but I am really proud to say that Warrington is my hometown. We are at the very centre of the north-west, both geographically and economically. When I am describing where my constituency is, I say, “Well it is in the golden triangle of the M6, M60 and M56 motorways, equidistant between Manchester and Liverpool, on the route of the west coast main line.” We hope it will be on the route of the new Northern Powerhouse Rail line. Warrington Bank Quay station would be a fantastic hub for rail in the north-west—something that I look forward to discussing with the Minister of State, Department for Transport, my hon. Friend the Member for Pendle (Andrew Stephenson), in the coming weeks.
It is not just roads and rail in Warrington—we have got water too. We are on the banks of the Mersey and crossed by the country’s first canal, the Bridgewater, and we have the engineering miracle that is the Manchester ship canal. Anyone who lives in Stockton Heath, Walton or Latchford will tell you how gracefully, and slowly, a fully-loaded cargo ship passes through the swing bridges, as traffic comes to a halt and we all gaze at the ocean-bound vessel as it moves through the town centre, a good 20 miles from the sea.
We are incredibly lucky to have lovely Cheshire villages: Grappenhall, with its stone cobbled streets, and the original Cheshire cat carved into the stone on St Wilfrid’s church tower; and tranquil Lymm Dam, home of “The Bongs”—wooded banks, in Cheshire dialect—a favourite for dog walkers and nature lovers. We have our famous golden gates, recently given a new lease of life and looking splendid in front of the town hall. We have Great Sankey and Penketh, once part of Lancashire, to the west of the town, with the latter home to the dominating, but soon to be demolished, Fiddlers Ferry power station.
One thing people notice when they step off the train at Warrington Bank Quay is a smell; for 136 years, Warrington has been home to washing powder. We have produced the powder that keeps the country’s clothes clean. Soap-making history dates back to the 1750s, when Joseph Crossfield and Son opened a small works. Sadly, that is coming to an end, as Unilever has just announced the closure of its plant, bringing an end to manufacturing in the town, and I offer my thoughts and support to the 123 people who, this week, have found out that they are losing their jobs.
That said, Warrington South is seeing tremendous renewal. It is an area that has changed, in some cases beyond all recognition, with new homes built. We have Chapelford, a new urban village, which was once RAF Burtonwood. We have business parks such as Lingley Mere, home to big employers who are making the most of our fantastic location. For some, the prospect of too much change is a genuine concern, and I share the view of many of my constituents on the need to maintain the green space while taking every opportunity to regenerate areas of our town centre.
I have had a few weeks to think about what I might like to mention in my maiden speech, and being able to take this opportunity to do so during the Budget debate gives me great scope to talk about the role that small business plays in our economy and the impact that some of the decisions the Chancellor made yesterday will have on families in my constituency and across the country. Before I do that, I want to briefly mention an area in which I have been involved and that I hope I can champion here, too.
The UK needs advanced technical skills at all levels if we are to prosper in the 21st century. We need a workforce that can develop new products, stretch and reuse existing resources, and meet the challenges of the future. Through creativity and innovation, investing in our schools and developing better links with employers, we need to generate the skills for the future. That must be part of our thinking.
Let me turn to the Budget. As someone who was, until recently, running a small family business, many of the announcements made yesterday resonated with me greatly. My constituency has some of the highest levels of new start-ups anywhere in the UK—successful businessmen and women who are willing to go it alone, working to support not only their own family but the families of their employees.
Small and medium-sized enterprises account for three fifths of all employment and around half of turnover in the UK private sector, so getting the landscape right is vital. Increasing the business rate retail discount to 100% for the next year, and its expansion to the leisure and hospitality sectors, will benefit our town centres.
For many self-employed homeworkers, the delivery of the next generation of broadband cannot come soon enough. I welcome the record £5 billion funding commitment to support gigabit-capable broadband.
I conclude by mentioning an area that is on the fringes of Warrington but offers much employment to my constituents: Daresbury science park, which has developed into a brilliantly innovative campus with an incredibly bright future. As the Secretary of State said earlier, the Budget promises more investment into high-risk and high-reward science. At Daresbury, they are pioneering big-data analytics and artificial intelligence, with the potential to create a further 9,000 jobs over the next 15 years. I am particularly pleased to see the additional £400 million promised for the forthcoming year for research, infrastructure and equipment.
I urge Ministers to look at the golden triangle of Warrington as a place to invest. When Warrington wins, we all triumph. When our nation climbs, as it will with this Budget, we all soar.
Stephen Timms (East Ham) (Lab)
It is a privilege to follow the hon. Member for Warrington South (Andy Carter) and to congratulate him on a warm and confident maiden speech. I welcome his generous tribute to Faisal Rashid, not only for his brief period in the House but his work as mayor and local councillor before that. The hon. Gentleman is right to highlight the potential of Daresbury science park in particular. The House will look forward to hearing much more from him in the years ahead.
The Financial Times pointed out this morning that yesterday marked the end of the Tory promise to eliminate the deficit. For a large part of the past decade, ending the deficit appeared to be the Tories’ raison d’être, but we cannot blame the current Chancellor for concluding yesterday that his Tory predecessors’ policies on the deficit had comprehensively failed and that the result has been, to quote the Chancellor yesterday,
“a decade-long slowdown in productivity.”—[Official Report, 11 March 2020; Vol. 673, c. 282.]
In what was a remarkable phrase, the Chancellor told us yesterday that his was a plan to “fund…our future prosperity.” I have never heard any Chancellor previously claim that we could spend our way to prosperity, but that is precisely what many Members on the Conservative Benches used to accuse Members on the Labour Benches of believing. It is now apparently official Tory policy. Repudiating past Tory policy is no bad thing, though, and I wish to welcome a number of the measures in the policy area of the Work and Pensions Committee, which I chair.
I warmly welcome the wider availability of statutory sick pay; the faster access to employment and support allowance; and the £500 million hardship fund for disbursement by local authorities, which recognises, as I suggested in my intervention earlier during the excellent speech of my right hon. Friend the Member for Hayes and Harlington (John McDonnell), the need for central Government funding to replicate what the old social fund used to do until it was abolished by the coalition.
I welcome the changes on universal credit. The suspension of the minimum income floor means that self-employed people whose income takes a hit will get at least some extra help from universal credit. The truth is, though, that the minimum income floor should not be there, and there is a strong case for making its suspension permanent.
I also welcome the reduction in the maximum rate of repayment of advances, and the longer period of repayment, although those measure will take effect only from October next year.
As my hon. Friend the Member for Croydon North (Steve Reed) said, the Budget did not address the fundamental problems with universal credit. Research by the Trussell Trust has found that people on universal credit are two and a half times more likely to need help from a food bank than people in otherwise similar circumstances who are still on the legacy benefits. That is a remarkable statistic that underlines the scale of the problems that universal credit is causing.
Even more startling is the article this month in The Lancet. I do hope that Ministers will weigh very carefully the dry academic prose in that article, which concludes that up to the end of 2018:
“An additional 63,674 unemployed people will have experienced levels of psychological distress that are clinically significant due to the introduction of Universal Credit”.
It goes on to suggest that over one third of them
“might reach the diagnostic threshold for depression.”
About one quarter of those ultimately expected to be on universal credit are on it at the moment. The Government say that the rest will be on it by the end of 2024. The Office for Budget Responsibility yesterday expressed its traditional and well-founded scepticism about that timetable, and suggested it is likely to take two years longer than the Department for Work and Pensions says. Given that the harm being caused by universal credit is so well documented, I do not think it is viable for the Government simply to press on.
What is it about universal credit that is causing such hardship? I think it is the delay—never before a feature of the social security system—of five weeks between applying for benefit and being entitled to payment. That is why the Select Committee has made it the subject of our first major inquiry. We want to work closely and constructively with Ministers and the Department to identify workable and affordable solutions to what is, incontrovertibly, a very serious problem.
I want to make one final point. One of yesterday’s Budget’s few revenue-raising measures was the increase in the immigration health surcharge. One might think that this is about increasing the charge to tourists coming to the UK to take advantage of the NHS, but it is not. It is a major burden being imposed on a large number of modestly paid working families, a large number of them in my constituency, and I cannot see how it can be justified. These are families who are settled in the UK, often with children who have been born in the UK, and who are on the 10-year pathway to indefinite leave. They are given leave to remain for two and a half years at a time. They are paying their taxes, like everybody else who uses public services, but every two and a half years they have to pay thousands, on top of their taxes, in visa charges, and now they will have to pay even more through this immigration health surcharge. They have already paid tax and national insurance. How can these swingeing additional charges be justified?
Madam Deputy Speaker (Dame Eleanor Laing)
It is a great pleasure to call, to make his maiden speech, Mr James Grundy.
James Grundy (Leigh) (Con)
Thank you, Madam Deputy Speaker. It is a great pleasure to speak in this Budget debate, and I do so as the first Conservative MP representing Leigh since 1880—140 years ago. The last Conservative representing Leigh to speak in a Budget debate was Richard Assheton Cross, who was Benjamin Disraeli’s Home Secretary. I cannot promise to match during my time here his impressive achievements—or indeed his impressive beard.
To speak of a more recent incumbent, it is only right that I pay tribute to my predecessor, Jo Platt. I think I might have made history by being the first person to apologise to a defeated opponent in a victory speech, because Jo is genuinely lovely. I have known Jo since she was elected to Wigan Council in 2012, for the Astley Mosley Common ward, and I cannot ever recall a bad word passing between us. I am sure the whole House will join me in wishing her well.
I should also like to pay tribute to Andy Burnham, who did so much to help the families of the victims of Hillsborough. He also, much to his credit, spoke generously about the role the former Prime Minister, my right hon. Friend the Member for Maidenhead (Mrs May), played in resolving that matter.
Leigh is a proud northern town with a strong local identity, rooted originally in coalmining and textile manufacturing. Indeed, my own family worked in those mills and mines several generations ago, and I am proud to say so. Though the mines and mills are long gone, the proud identity remains, and it is my firm belief that we can again become a prosperous and wealthy town if this Government invest in and deliver for the north. And I believe they will—I intend to make sure of it.
I welcome the creation of the £4.2 billion local public transport fund, and I particularly welcome the commitment to improve transport links between Liverpool and Manchester, as my constituency lies almost exactly halfway between those two great cities. It is long overdue. On that note, I do hope that funding can be found to reconnect Leigh to the national rail network, with a new station at Kenyon Junction—the first railway junction to be constructed in the world. Furthermore, the good people of Golborne would dearly like to see their station reopened.
I welcome the commitment to spend £700 million on new strategic road schemes, and hope that money can be found to complete the Atherleigh Way bypass to ease the terrible congestion affecting the whole constituency, but in particular the town of Atherton and my home village of Lowton, where at Lane Head the poor air quality can at times reach levels worse than parts of central London. As the Prime Minister might say, we need to get bypass done.
I welcome the proposals to push for the development of brownfield sites. For too long, Wigan Council has sought to develop precious greenfield sites in the teeth of opposition from local residents. It is time to regenerate our town centres, and I think that the Chancellor’s decision to exempt businesses with a rateable value of £51,000 or less from business rates will be a massive boost towards reaching that objective. There is much more that needs to be done to bring Leigh town centre up to scratch, but this will be of great assistance.
Leigh is the town that invented the spinning jenny, helping to kick-start the industrial revolution. When people go shopping at Leigh market or go to the pub to celebrate the victories of the greatest rugby league team in the borough of Wigan—Leigh Centurions—they should be able to do so in a town centre they can be as proud of as any other in the north. I appreciate that I may have upset several Opposition Members with that comment, particularly the hon. Member for Makerfield (Yvonne Fovargue). She may be willing to intercede on behalf of a team that begins with a “W”, but I remind her that, while it is indeed an excellent team, Warrington does not lie within the confines of the borough.
When the Chancellor eventually visits for a drink to celebrate a victory by Leigh Centurions—made all the sweeter by the freeze on beer, wine and spirit duties—I do hope that he might visit via Tyldesley, which I hope, in years to come, will be the location of a line connecting Leigh to the excellent Metrolink system, which in due course would be a natural upgrade to the existing guided busway. While in Tyldesley, I hope that the Chancellor will visit neighbouring Astley, home to the Lancashire mining museum, which features the last standing pithead in all of Lancashire. I am sure that he agrees that such places are a vital part of our cultural heritage and must be preserved.
And now, I shall ask the Chancellor not to spend money on something: the Golborne spur of HS2, which affects thousands of people in my constituency, including my own family. As the Secretary of State said, it would cost between £2 billion and £3 billion, while delivering very little for that amount of money. There we go, I have just saved the taxpayer between £2 billion and £3 billion—not bad for my first speech.
I suppose I had better bring my speech to an end, for as I have set out my perfectly reasonable list of demands I have noticed the Treasury team turning an increasingly ashen hue. I reassure them that I am not an unreasonable individual. I do not expect everything I have asked for—not at once, anyway. To quote a former Chancellor, I have a “long-term economic plan” for my constituency of Leigh.
People across my constituency welcomed the Chancellor’s Budget yesterday. Let it be the first step towards restoring prosperity to towns such as Leigh, and delivering on the promises we made to those who voted for us—many for the first time in their lives. May the votes they have lent to us be treated with a lasting legacy—a legacy worthy of the name.
Kate Green (Stretford and Urmston) (Lab)
It is a great pleasure to follow a north-west colleague, the hon. Member for Leigh (James Grundy), who has given an excellent maiden speech; I hope his constituents enjoyed it as much as I did. I am also very pleased that we heard from another north-west colleague, the hon. Member for Warrington South (Andy Carter). It is always a pleasure to hear from more women in the House, and I congratulate the hon. Member for Hastings and Rye (Sally-Ann Hart) on her speech.
Yesterday’s borrow-and-spend Budget represents, as others have noticed, a major change in direction for this Conservative Government, but an understandable one against a worrying backdrop of the Brexit impact highlighted in the OBR’s “Economic and fiscal outlook”, which acknowledges the reduction in business investment since 2016, the reduction in output of 2%, and trade barriers that will continue to have an adverse effect throughout the forecast period and beyond. Of course, as the Chancellor himself noted yesterday, there is also the impact of coronavirus, for which he has rightly allocated an initial £5 billion emergency pot. That additional funding is absolutely vital for the NHS and social care services to cope with the pandemic, but funding will not, of course, mean that we can recruit the additional staff we need overnight.
I query, along with my right hon. Friend the Member for East Ham (Stephen Timms), the sense of the immigration health surcharge, which will affect workers in the NHS and social care sectors, including those who have been here for many years with leave to remain. I am surprised and concerned, too, that we still have no detail on public health budgets, which will be vital for local authorities to carry out their role in protecting the public.
I do of course welcome the hardship fund of £500 million for local authorities, which I note is intended largely for council tax relief, but local authorities will also need to fund support for the voluntary and community sector organisations in their communities, as they will be charged with meeting more need through the crisis. They will need to support local welfare schemes, as other colleagues have noted. That will also include, I suspect, a much greater drain on food banks.
I want to say something about the announcements in the Budget in relation to skills. The capital budget announcement is welcome, but it is still set at less than half the level in the Budget of 2010. We need much more information on the national skills fund, because there are still significant problems and gaps in reaching those who should benefit most from adult skills funding. The number of intermediate-level apprenticeships in Greater Manchester has more than halved since 2015-16, and that clearly has the biggest impact on those residents who are furthest from the labour market. We need to ensure that this new funding pot secures access to level 2 apprenticeships and to other routes. I suggest that the way in which the unused apprenticeship levy disappears back into the Treasury pot needs to be addressed. It would be extremely helpful to us in Greater Manchester if those levy moneys could be returned to the city region for us to make further investment in adult skills.
There is still no information about the national retraining scheme for adults looking to retrain. We have had two years of consultation on this already, and it is disappointing that, while the Red Book acknowledges the importance of a cultural change in relation to adult retraining, there are still no specifics before the House.
As others have noted, we are also still waiting for detail on the replacement for the shared prosperity fund, which is worth £59 million per annum to Greater Manchester, is of vital importance in supporting deprived communities and individuals and supports some excellent work, including in the not-for-profit sector through organisations such as the St Antony’s Centre in my community.
While the funding announcements in relation to skills are welcome, I would like to urge greater devolution overall of adult skills funding to Greater Manchester, building on the £92 million adult education budget that has already been devolved to us.
I share with other colleagues disappointment in relation to the announcements that affect family budgets—or the lack of announcements, particularly following a long legacy of social security freezes and cuts. As we heard, the Treasury’s own distributional analysis shows that those in the eighth and ninth income deciles are gaining most from tax and benefits changes, while the lowest income decile loses in cash terms.
I am really disappointed to see no action on the two-child policy, the five-week wait, aligning local housing allowance with market rents, lifting the benefit cap and increasing payments for children through child benefit. For all the fanfare around universal credit over the last 10 years, our social security system remains punitive, complex and as mean as it has ever been. As our economy faces particularly choppy times, investment in family incomes should be a priority.
I also want to press the Government on the need for much greater ambition on climate change. There was very little that was new or radical in the announcements yesterday, and I hope we will see much greater ambition when the comprehensive spending review is presented later this year.
I conclude by repeating a plea that I have made again and again in recent months for details on when the funding for the clean bus and clean freight funds for Greater Manchester will be provided. We desperately need that funding to bring in measures that will enable us to replace our dirty buses and support small businesses to replace the freight fleet that will otherwise damage our climate plans. I hope the Economic Secretary to the Treasury will pursue that with his colleagues in the Department for Environment, Food and Rural Affairs and the Department for Transport. We desperately need that funding. It is holding us back in Greater Manchester, and I hope that this is the last time I have to ask.
Sir John Hayes (South Holland and The Deepings) (Con)
Budgets must take account of immediate circumstances, but they must also address the pattern of trends that shape our economy and fashion our society. Given what we know now, few will argue with the Chancellor’s bold action, in an attempt to stabilise an economy rocked with the uncertainty of the coronavirus. His comprehensive, generous and tailored stimulus, totalling £30 billion, will strengthen the safety net that our welfare system needs and bolster our precious health service. Businesses, too, will receive the support they need to get through these difficult times. The instability and uncertainty that fear spawns is bound to create an economic shock, and it is right that the Chancellor has responded to it.
The Chancellor’s commitment to support workers, including the self-employed and those on zero-hours contracts, is welcome and virtuous, and I want to say a bit more about that later. The creation of a hardship fund, coupled with his pledge to refund statutory sick pay for small firms, will enable ordinary businesses to prevail and flourish in the face of this uncertainty. This pragmatic, sensible and ambitious Budget should embolden us, confident that, as he said, he will take whatever steps necessary to guarantee our national interest and the common good.
This is a time, by nature, for leadership and unity, for let there be no doubt that there will be foreign powers who can—and, because they can, will—leverage instability caused by the virus to their own advantage. As the President of the United States has made clear, it is pivotal to examine further the behaviour of the Chinese state—whom the western economies are not only affected by but, to some degree, dependent upon—regarding their transparency throughout this crisis. The Chancellor is right: this Budget provides security and lays the foundations for prosperity in the future.
While it is laudable to be responsive, beyond the immediate circumstances we face, we must address some of the suffocating facts in our society. There is too much societal emphasis in our time on the immediate and the trivial—at worst, the facile and the brutal. In happy contrast, it is good to see a Budget that is holistic, measured, serious and sustainable. First and foremost, it is strategic. One of the problems in democratic polities is that Governments are, by the nature of the five-year terms they serve, often tempted to do things that deliver a short-term payback and thereby neglect those things that are strategic and infrastructural. That cannot be said of this Government and this Budget—rather, the opposite. The Government have taken a long-term strategic view, and that is certainly to be welcomed.
The investment in road and rail is, of course, welcome. It builds on the road investment strategy, which I was happy to launch when I was Minister for Transport. It is vital because the connectivity of our country is the lifeblood of local economies as the way that people get to work and the way they move goods are critical.
It is also important to note that the Chancellor is investing in skills, as the hon. Member for Stretford and Urmston (Kate Green) said, although there are question marks about intermediate level skills. I would simply amplify the remarks she made. There are also issues about the effect of the apprenticeship levy and its unintended consequences. However, the investment in skills, through the extra support for further education, will allow us to build a workforce fit for the future.
A lot is said about capital, but too little is said about human capital. Unless we invest in the human infrastructure necessary to deliver those ambitious plans, they will not work. We need people to engineer, to design, to project manage and to deliver those big infrastructure projects, and further education and skills lie at the heart of all that.
Research and development funding is also welcome. However, I have three words of warning about research and investment for the Financial Secretary, which I know he will address with his usual diligence when he sums up. The first is that risky development is all very well, but what we actually want is bold investment that is mindful of risk. Secondly, we need to avoid the bureaucracy that is often associated with Government funding. Finally, that kind of investment also has to be long term, because the sort of projects that innovate require people to commit to them—and, by the way, to be attracted to the relevant science and innovation—over an extended period. So, long-term funding, funding that is tailored and measured, and funding that is not bound up with bureaucracy all become critical.
Furthermore, we have to address the issue of job insecurity and the character of the employment we are creating. It is really important to grasp that societal solidarity is framed by people having a sense of self-worth that comes from having a sense of purpose. It is not enough just to have jobs; we have to have jobs that are meaningful. We have to believe again in the nobility of labour. We have to understand that people’s wellbeing is in part fuelled by their sense that they are making a difference over the long term by employing their skills in a virtuous purpose. That may sound rather like an emulation of the sentiments of William Morris, but I make no apologies for emulating that great man because I have reservations about the gig economy and some of the job insecurity to which it has given rise.
Finally, let me say a word about globalisation. A few years ago, it was heralded as a great virtue, but now the support we have given for small business could and can be the beginning of a reappraisal of what really matters in the economy. I believe it is the particular and the local—shorter supply chains and facing up to the downsides of globalisation—that lies at the heart of protecting the national interest and delivering the common good. That is precisely what this Budget begins and what the Government should do.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
It has been a great pleasure to hear the maiden speeches of three new hon. Members this afternoon, and particularly to hear about Appleton. I grew up in Cheshire and I know Appleton very well, so it brought back some very nice memories. I wish all those new hon. Members the very best with their parliamentary careers.
It is absolutely right that the tone of the debate this afternoon has been to accept that this Budget has been hijacked, as it were, by the coronavirus and the need for action to be taken. I want to commend the Government for the financial support they are putting in, with the £12 billion to provide support for public services, businesses and individuals whose finances will be affected, and the £5 billion for the NHS and other public services. I think that that is absolutely right, as is the extension of statutory sick pay. However, I hope that, in the emergency legislation that will be brought before the House in the next few days and weeks, we will see something for the people who are not covered by statutory sick pay.
The NHS will be under huge pressures in the coming weeks and months. While it is very welcome to see this additional emergency funding going in, this will shine a light on capacity in the NHS after many years of not being funded as adequately as we would like. I pay tribute to the wonderful staff of the NHS, who are working around the clock to treat patients and contain the disease.
Social care was not mentioned in the Budget—it remained untouched—and like my right hon. Friend the shadow Chancellor, I remain concerned about the ability of that sector to cope with coronavirus. I was also concerned that local authority funding was untouched by the Budget. By 2022, local authorities will have lost 60p in every pound due to cuts, and cuts to the public health budget will also come home to roost. No allocations have been made to public health directors for the coming financial year, which starts in just a few weeks. The Treasury has made no assessment of the impact of this Budget on women, and it is down to organisations such as the Women’s Budget Group to tell us that 14% of workers will not benefit from the increase to the national insurance threshold, and 60% of those are women, because they are in the lowest paid jobs.
Earlier I mentioned the tampon tax. When the Minister responds to the debate, will he say something about where the estimated £393 million a year, which was raised from the tampon tax, will be found, so as to continue funding projects that combat violence against women and girls? Levelling up does not just mean cash injections into threadbare public services, or an infrastructure revolution; it also means a system of social security that will protect women and their families, and lift them out of poverty. That is particularly important after the recent Marmot review, which showed that for the first time, life expectancy for women in the most disadvantaged communities is going down. Working families in Hull have been hit hard by the benefits freeze, the two-child limit for child tax credits, and the baked-in five-week wait for universal credit, but there was no announcement in the Budget to support families who are struggling to make ends meet.
Let me mention some of the announcements that were made about Hull and the Humber. I and six of my Humber colleagues wrote to the Chancellor a fortnight ago, to ask him to invest in building the first fully deployed carbon capture and storage cluster in the UK, in our most carbon-intensive region. I was pleased that the Secretary of State has agreed to meet me, because I think the Humber has a compelling case to be one of two pilots for that scheme. I am pleased that the Government have decided not to introduce the rise in vehicle excise duty for new motorhomes. The caravan and motorhome sector is a big employer for local businesses in the region, and such a step would have caused it major problems.
On transport, I am all for the Chancellor’s plans for levelling up and investing in the north, but in the Budget I heard reference only to the railway line between Manchester and Leeds, and not to the larger plan for a northern powerhouse rail link between Liverpool and Hull. I hope the Government will make further announcements about that. I was pleased with the additional funding for flooding and flood resilience, and I hope the Government will support the plan brought forward by the previous Member for Scunthorpe, which was to have the National Flood Resilience Centre based there. I know that the Secretary of State for Environment, Food and Rural Affairs has assured the new hon. Member for Scunthorpe (Holly Mumby-Croft) that the Government are looking seriously at the funding bid that was submitted jointly by Humberside Fire and Rescue Service, and the University of Hull, and in light of what has happened in recent months, that would provide welcome resilience training to the whole United Kingdom.
Finally, the devolution deal for West Yorkshire was announced yesterday, with a mayoral combined authority from May 2021. With the South Yorkshire deal already done, the new deal means that the Yorkshire-wide devolution deal is dead. For the Humber, what happened yesterday in Committee Room 16 was probably more important, because it was sadly agreed that rather than having a Humber devolution deal, we are now going to move to a north-bank deal and a south-bank deal. From what was said yesterday—the Minister was there—I hope that we might be able to get to the point where we agree on a development corporation around the Humber, which is an economic entity and area that has the capacity to really power the northern powerhouse if we get agreement on both the north and south bank of the Humber. I hope that will come to fruition in any mayoral combined authority on the north and south bank.
Tom Tugendhat (Tonbridge and Malling) (Con)
It is an absolute privilege to see you in the Chair, Madam Deputy Speaker, and to be called to speak. You are the first woman to Chair a Budget statement, which is fantastic. You may have heard that, way back in the long distant past, there was another woman who spoke during a Budget statement. The last woman who did so was Margaret Thatcher, who led for the Opposition way back in the 1970s. You are in good company.
What a fantastic Budget! I welcome it enormously. This was in many ways a pragmatic Budget, with the 25 basis points offered by the Bank of England for us to refinance ourselves and ensure that the debt works for the future.
The Budget was also in many ways designed for Tonbridge and west Kent. On flooding, it will make sure that the Medway is properly protected and that we can get the money into Leigh, East Peckham, Hildenborough, and up around Penshurst and Edenbridge.
This was also a Budget that finally listened to me. I know this will surprise many in the House, but having asked three Chancellors for business rates to be reduced, third time lucky, we have got it. I am absolutely delighted that Tonbridge high street will see the benefits, as of course will Edenbridge and West Malling. For those of us who have been driving around west Kent lately, the issue of potholes keeps coming up. Tyre makers may regret the announcement, but almost everyone else will celebrate it, so I thank the Government for focusing on potholes.
On further education, in the past we have had a bit of trouble locally with some further education colleges, so I am delighted that the investment into Hadlow and west Kent will really make a difference to people’s lives. It is fantastic news and I welcome all of it.
One thing was very noticeable in the Budget: we are dealing with a global emergency that is very unpredictable. We do not know how the virus will affect us. We do not know the full effect it will have on every society and community. It is therefore absolutely right that the Chancellor has pulled together a war chest of £30 billion and not said exactly where it is going to go, because we do not know. The right thing to do is to build up reserves and to prepare to deploy them when we need them. We are in the moment of the phony war. We do not know quite how things will emerge. I hope the Minister will take the message back to other Departments that, on equipping, we need to think in terms of a wartime analogy. We need to consider what urgent operational requirements to bring forward. What shortcuts should we take in normal procedure to ensure that we are as ready as we can be in our hospitals, homes and communities? What are the experimental technologies that we perhaps would not have rolled out this early, and now have no choice but to roll out? Where are the areas of investment which, if we make them now rather than waiting until they are fully tested, will actually save lives?
This is one of those moments where we remember stories like the boy who cried wolf. We remember that it is right to prevent panic and right to make sure that people think about what we are doing. It is right to follow the ordinary advice, but it is also right to remember that in the story there was a wolf and the wolf did eventually come. What we are preparing for, as we are seeing in Italy, China and around the world, is the reality of a human threat, predominantly to the lives, sadly, of many of the older members of our community. There is also a huge economic threat. However this plays out in our community, the concern and fear will have affected investment decisions in our community, in our country and around the world, so the reserves that the Chancellor has wisely built up will be needed in some way in the months and, sadly, probably even years to come.
That means working together, and here I just want to pick up a point on globalisation that my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) touched on. Globalisation has, in many ways, been a fantastic success. It has seen us prosper and trade around the world. It has seen liberty and opportunity spread across the globe, but not all globalisation has been good. Some globalisation has brought practices, ideas and concepts that fundamentally threaten the liberties that have enabled people—these islands—to prosper and shape the world around us. Sadly, we are now seeing some of that through the competitive practices that we are enabling, allowing or tolerating some companies to bring into our markets. Here, of course, I am referring to some companies in our telecoms market.
I urge the Government, with all respect, to think again about the decisions that they are taking, when those may not actually enable competition, but close it down, and when they may not enable communication and prosperity, but in the long term, reverse it. These are really hard and expensive decisions but we must look at how we do it, because power in our community starts from the bottom. That is why the decision to invest in devolution was so important. I look forward to devo-Kent. Kent is one of the oldest kingdoms of our country—at the time when Scotland was the kingdom of Fife and others, Kent was a kingdom in her own right.
I look forward to power coming back to the people, to devolution going to the whole United Kingdom and to our Government looking hard at globalisation and the competitive practices that are being brought to these islands, remembering that there is no point in taking back control from Brussels only to hand it over to Beijing.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. After the next speaker, I will reduce the time limit to six minutes.
Yvonne Fovargue (Makerfield) (Lab)
I congratulate all Members who made their maiden speeches today, but particularly the hon. Member for Leigh (James Grundy) on his generous tribute to his predecessor. He has been an assiduous local councillor and I am sure that he will bring that experience to his new role.
I am pleased that statutory sick pay will be extended to all employees from day one, although I need more detail about what will happen to people who are not eligible for statutory sick pay. We need to remember that there will be a big drop in income for many people and that their outgoings will still be the same. If we combine that with the fact that substantial numbers of people have savings of less than £100, it begins to become a pretty big issue, and it will certainly increase the need for debt advice.
The crisis also brings into focus the need to look at why people are not saving. In many cases, this will be because of a negative income, but in others, it may be the lack of an affordable, easily accessed and flexible product available to those on a low or fluctuating income and with a poor credit history. I would really like some more information on the no-interest loan scheme, which was suggested last year as a way to help people on the lowest incomes. It is disappointing that that was not detailed in the Budget.
I also want to know what is being done to ensure that there is sufficient free debt advice both in the long term and the short term. People have to be helped not to take short-term action because of a crisis that has a negative long-term effect. I am thinking particularly of individual voluntary arrangements, which have increased, mostly for young people. We have to have debt solutions that are tailored to the individual, not what is profitable for the company.
Have the Government looked at implementing the breathing space scheme earlier? More money is being given for implementation, but people need forbearance now from all creditors if they are affected. I know that some banks are looking at a mortgage break, but what help is there for renters, particularly private renters? Could the situation of those imprisoned in high-interest mortgages due to the failure of Northern Rock be urgently reviewed?
I would also like to see key performance indicators addressed so that local authorities are rewarded for sustaining long-term affordable repayment plans with council tax payers who get into difficulty, instead of prioritising in-year collections, which lead to the use of bailiffs, which in many cases exacerbates the situation. More people may be forced to claim universal credit for the first time. I agree with my hon. Friend the Member for Stretford and Urmston (Kate Green) that the five-week wait should go. It is no use giving people a loan and pushing them further into debt. Pushing people who are already struggling into further debt is incredibly unhelpful. The stress it adds to individuals already concerned about the health of their families and themselves is incalculable.
I would also like to see more detail on the hardship fund to be given to local authorities. How will it be distributed, what are the guidelines, and how much local discretion will there be? It is surely time to reinvigorate the local welfare provision. One in seven councils no longer operate such schemes, which are relied upon by the most vulnerable when they experience sudden financial shocks—and it has to be monetary help. Many councils just point people in the direction of advice, but when someone needs to buy a washing machine or a new bed, or simply new school shoes, advice is not much use.
This might be a tangential issue, but I would like more detail of what the Treasury is doing to guarantee access to cash. There should be a strategy for long-term access to cash that looks at the current trends and which involves the banks, the card issuers and the note machine operators and, crucially, is linked to the high street strategy. In my constituency, we have lost 16% of our free-to-use ATMs. There are 900 ATMs in the borough of Kensington. The average across the country is approximately 50. This is not sustainable and does not help struggling high streets. We need to make sure cash is available and that cash machines are free.
It is good news that the Access to All scheme will receive more cash. Perhaps at last Hindley station, the most used station on the Manchester line and the best kept, will be successful in its bid. I also welcome the fact that the Chancellor has axed the reading tax, but I hope this can be extended to audiobooks, which are a lifeline to people who have impaired vision.
Despite the big announcements regarding infrastructure, connectivity and levelling up, it is disappointing that the housing infrastructure bid to open up brownfield land in my constituency failed. Without this, any new housing will severely impact on gridlocked roads. I will continue to maintain that there should be no development before infrastructure.
I will conclude by mentioning a couple of omissions. While the Chancellor is looking at helping the vulnerable, perhaps he should meet the 1950s-born women to understand the effect of the pension changes on their lives. I recently met a woman working three jobs, all low paid, to make ends meet after the death of her husband and a delay in receiving her pension. She is in poor health and works with elderly and vulnerable people. Catching coronavirus would push her over the edge, both financially and mentally. We also need to look at how social care is funded. It is deeply unfair to make councils split any allocation between their two biggest priorities of supporting the elderly and supporting children.
In short, the Budget attempts to plug holes caused by 10 years of austerity. Let us remember that interest rates have been at an historic low for all of that period. I hope there will be a review of the strategy now to ensure that more individuals and families do not become financially vulnerable and to provide more help to those who do.
Richard Fuller (North East Bedfordshire) (Con)
It is helpful to break this Budget down into three separate Budgets: the coronavirus emergency Budget, the current expenditure Budget and the strategic investment Budget.
On the first of those Budgets, for me the test is: did the Chancellor announce a sufficient range of measures and investment? He started, quite rightly, by saying that the NHS will get all the money it deserves and needs, and that was on top of confirming in the Budget the commitments that the Government have already made about providing finance to the NHS and his later statement in the Budget suggesting additional funding for the NHS. “NHS, NHS, NHS” was a core message of this Budget, and I am sure it will be a core message of all Conservative Budgets over the next four or five years.
In addition, the Chancellor announced much needed support for our small businesses. I am delighted, having last week gone with the Federation of Small Businesses to meet a couple of businesses—including the Number One King Street café in Potton, who said, “We need help with our rates”—that the Chancellor focused on getting money directly into the hands of small businesses. Yes, we need banks to assist—it is right to do that—but one of the lessons from 2007 and 2008 was that we cannot rely on the banks alone to support the economy. My first challenge and question to my right hon. Friend the Financial Secretary to the Treasury is: will he make sure, over the next few weeks and months, that he looks at all the arteries in the financial system that can get money directly into the hands of our small businesses? In particular, will he look at one omission in the rates relief, which is that childminders and nurseries were not included in the list? Childminder nurseries, such as the one in my constituency run by Debbie Moliterno, need that relief because of the pressure of the coronavirus on our economy.
The second Budget is the current expenditure Budget, where one of the messages is: are we working in a way that is prudent? The Institute for Fiscal Studies says that there will be £12 billion of headroom in the current Budget. I am more conservative; I think there is too much uncertainty around. There were some taxation increases mentioned in the Budget, but we have to understand that there may well need to be additional taxes later this year. My point to my right hon. Friend is that we need in that effort to do all we can to support the wealth-creating part of our economy, which is the small businesses and entrepreneurs we have, who face certain issues.
As my right hon. Friend knows, next week we will have a debate on the loan charge. I met constituents affected by that last week. We also have issues with IR35, where the HMRC is acting according to the reverse of Jean-Baptiste Colbert’s principle of taxation, by getting as much hissing out of the goose for the lowest possible tax imaginable. Eighteen years of collective failure by HMRC—please, Financial Secretary, do not be the fall guy for HMRC’s blatantly poor execution of this policy on treating entrepreneurs.
The third part of the Budget is the strategic investment Budget. Hidden away in that is this Government’s ambition for raising the wages and incomes of the poorest paid workers. This Government should be proud of their record over the last few years in raising the living wage and raising wages for the poorest workers in our community. When the last Labour Government were in office, we were 17th in the OECD for the ratio of our minimum wage to median earnings. In 2018-19, we were ninth, and the Chancellor has indicated that we have further to go. This ambition is not matched by any other major economy in the OECD, and it is right for that to be part of the strategic ambitions of our Government.
However, we also need to recognise—I say this to my fiscally conservative colleagues—that this is a time for investment. Some other speakers have mentioned that it is unusual for us to have a debt-to-GDP ratio of 80%. That is true if the perspective is the last 20 or 30 years, but if we look back over these 20 years and the 100 years of the past century, from 1917 to 1966 this country managed and maintained a debt-to-GDP ratio of 80% or above. Therefore, although it is unusual in the near-term context, and in the lives of nearly all hon. Members here today, in the broader context it is something with the right principle and purposes, and something that even fiscally conservative Members of Parliament such as myself can sustain.
We need that because this is the first Budget since we left the European Union. We need to ensure that our scale of ambition meets the opportunities for our nation. We need to ensure that we get rid of all the obstacles in the way of the Government’s policies, to take hold of the opportunities that we have, so that this country can really generate momentum in the direction of change. That is important.
My final point to my right hon. Friend the Financial Secretary, in terms of how the return on investment will be judged, is that he should not get hooked on a single objective such as the increase in productivity rate for this country. We have other significant challenges. We have not only the challenge of productivity; we have the challenge of meeting the carbon ambitions of our economy. We are facing radical changes in the fundamental basis of our economy and the fundamental basis of our trade, so to tie ourselves to a single point of accountability would be incorrect.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
I congratulate all new hon. Members on their excellent maiden speeches.
This Budget is clearly set against the backdrop of the coronavirus crisis that we are facing, and I agree with the Chancellor on one thing. It is absolutely right that we work together across all nations on these islands to stop the spread of this virus. I hope that the Treasury will clarify how it intends to work with the Scottish Cabinet Secretary for Finance, Kate Forbes, on the details of the funding being made available for the response to coronavirus. However, on many other counts, this Budget has missed the mark for my constituents, and I will give some examples of where much more action is needed.
For the past decade, my constituents have seen the local banking services disappear one by one—RBS in Burnside gone, RBS in Blantyre gone, TSB, Clydesdale and RBS in Cambuslang gone. My constituents are paying the price for capricious and faceless commercial decision making, and for too long the big banks have been allowed to cut local services to the bone. Although digital payments and mobile apps are growing in usage and popularity, that should not come at the expense of elderly and vulnerable constituents’ ability to rely on face-to-face banking services and ATMs to manage their money. This is starkly illustrated by a shocking figure that Scots forked out more than £10 million on cash machine charges last year.
I urge the Chancellor to fully recognise the real financial hardships that come when the last bank in town shut its doors and the free-to-use cash machines disappear. I hope that he will consider supporting my cash machines Bill, which aims to end the practice once and for all of charging people for the privilege of accessing their own money. I will acknowledge the commitment in the Red Book on new legislation for access to cash, but there is not a lot of detail on exactly what aspects of cash use the new legislation will cover. I press Ministers to expand on the timescales for the introduction of this legislation, as it is vital for constituents and businesses who rely on cash for day-to-day transactions.
I would also stress that we need more than protection of access to cash. We need a raft of legislation which ensures that the banks deliver a minimum level of service for my constituents and for the constituents of many hon. Members across this House who have witnessed a decline in community banking.
I also want to refer to another measure that could level down opportunity for my constituents. The shows and fairgrounds industry makes a major contribution to the lifeblood of my constituency, yet it has faced significant financial pressures in recent years in providing entertainment to adults and children alike. The Showmen’s Guild of Great Britain has highlighted to me that the planned increase in fuel duty on red diesel will put many of their members out of business, with some reporting that it could increase their overheads by as much as £24,000 per annum. I stress that I am strongly supportive of measures that tackle the climate emergency, and it is right that we take the necessary steps to switch to cleaner forms of transport, but showpeople are less able to absorb the significant increase in fuel duty compared with other big businesses that use red diesel, and currently there are no alternative cleaner fuels that could wholly replace red diesel for the power-generating equipment for fairground rides.
Most fairgrounds sites in the UK do not have the same electric charging point infrastructure for their vehicles compared with their European counterparts. In its submission to the Government’s recent call for evidence on this issue, the Showmen’s Guild stated that their members reported using between 150 litres per month and 1,500 litres per fortnight of red diesel to run fairground attractions. We must ensure that the show can go on. I am urging Ministers to listen to the voices of showpeople in my constituency and across the UK, and extend the exemption on the increase in fuel duty on red diesel to the fairground and shows industry.
I turn to another industry that deserves the necessary support to level up Scotland’s economy. Thanks to the actions of our Scottish Government, the Clydebridge steelworks in Cambuslang was saved from closure, protecting a vital industry for my constituents. The Chancellor has committed to a big round of infrastructure projects, for which steel will be an essential component, yet he has missed the opportunity to create a competitive environment for the rejuvenation of the steel industry. In its response to the Budget, UK Steel highlighted the UK Government’s failure to deliver just £50 million to reduce electricity prices, which would give steelworks in Scotland a much-needed boost.
Over the long term, this Budget does not get things done for Rutherglen and Hamilton West. My constituents want a different approach from the failure of austerity and the insularity of Brexit. They want a brighter, better future, and I will do everything in my power to secure their democratic right to choose their own future for their country.
David Johnston (Wantage) (Con)
I start by congratulating my hon. Friends the Members for Hastings and Rye (Sally-Ann Hart), for Leigh (James Grundy) and for Warrington South (Andy Carter) on their maiden speeches. I already knew them to be good colleagues, but they have shown this afternoon what great advocates they will be for their constituents.
I will talk about the innovation aspects of this Budget, because there is a lot to welcome. The UK has a proud record of scientific and technological innovation, and the Budget alludes to various facts to back that up, such as being the country with the second largest number of Nobel laureates.
World-class science is happening across my constituency of Wantage and Didcot, so I welcome the Government’s commitment to 0.8% of GDP being put to research and development, and it is particularly welcome that that places us above countries such as the US, China and Japan as a proportion of GDP.
The Budget has a £180 million commitment for a new Natural History Museum centre at the Harwell campus. The Natural History Museum is not in my constituency, but it is a well-known and well-loved institution with 80 million specimens and 5 million visitors a year. I imagine that many hon. Members are among its regular visitors, and my hon. Friend the Member for Kensington (Felicity Buchan) has the privilege of having it in her constituency. If the museum ever wants to move, it can get me through the parliamentary switchboard.
The Harwell campus in my constituency is less well known, but it has £2 billion-worth of laboratories and 6,000 people working there from over 250 organisations. It does world-leading research in areas like space, energy and life sciences. It is less well known, partly because people cannot visit it in the same way as the Natural History Museum, but also because of its history. The UK did its atomic energy research there from the 1940s onwards, so it literally was not on the map at that time. Angus Horner, the entrepreneurial guy who runs the campus, has been working to get it on the map and is doing a great job.
The commitment to a new storage and research facility will move about 40% of the Natural History Museum’s collection to the Harwell campus, along with some of the scientists, so it can work on some of the biggest challenges we face today, such as climate change, the loss of biodiversity and emerging illnesses and diseases. The principle of Harwell is that if we bring people together on the same campus, they can work out the solutions to coming and developing problems.
The announcement is hugely welcome because it will help the UK to punch above its weight again in these areas, and it will have a number of other positive knock-on effects. For example, one problem with the Natural History Museum’s buildings is that the museum currently has to use galleries as storage facilities. Moving some of those items to Harwell will open up more of the galleries so that visitors, from here and elsewhere, can see more of the museum.
I also hope that it will play a key role in inspiring young people in Wantage, Didcot and beyond to get interested in science and be the scientists of the future. In that regard, it will show the benefit of Harwell to the constituency, to our country and to the global science and policy community. I very much welcome the Government’s commitment, and feel sure that the return on this investment in future years will be considerable.
Colleen Fletcher (Coventry North East) (Lab)
The announcement in the Budget of additional funds for the NHS is to be welcomed and will provide a much needed boost to the delivery of healthcare services across the country. However, I am concerned that the Government have not got to grips with the reality of what is happening to healthcare services and health outcomes on the ground.
The record of the Government on healthcare is not a good one. Last week, we heard how improvements to life expectancy have stalled for the first time in 100 years and that health inequalities have grown. This added to a long list of indicators that suggest that all is not well with our NHS and, perhaps more importantly, the health of the nation. It is a sad fact that investment seems to be made available only when the Government are reacting to a crisis—often of their own making, I have to add. If the Government are serious about improving the health of the nation, they need not only to deal with the day-to-day challenges that the NHS is facing and will face in the short to medium terms: they need a whole-of-Government approach that includes taking into account the role of the welfare system, local government and education. Indeed, it is worth reminding ourselves that, when local government was made responsible for public health, it was to recognise the role of different Government bodies in delivering health outcomes.
To continue on the Government’s current trajectory is to continue to lurch from one healthcare crisis to another. This is simply not sustainable, and a whole-of-Government approach must be adopted if we are truly to reverse the declines that we have seen over the past few years, particularly among poorer households.
Matt Rodda (Reading East) (Lab)
Does my hon. Friend agree that the very serious issue of health inequalities is intimately linked to inequalities across so many other aspects of life, such as in education and housing?
Colleen Fletcher
It is about all those things coming together, and about trying to understand what health inequalities actually mean. Some years ago, during a conversation when I was a councillor on Coventry City Council, it was described to me as being about what someone sees when they open the curtains in the morning or open the door and go out. Do they see a wonderful park, or do they see a brick wall with graffiti on it? That is also what health inequalities are about.
In Coventry, there are some excellent examples of local agencies working together to improve health outcomes, and this is continuing to develop through the Coventry and Warwickshire sustainability and transformation partnership. I hope that the Government provide the support and resources needed to embed best practice. However, given the underfunding of these health services, we need to deal with the major short-term risks to our local health economy.
One of the biggest challenges is dealing with the vast numbers of people who attend A&E at University Hospital Coventry and Warwickshire. To tackle that problem, I have worked closely with a number of health colleagues locally to develop plans to deliver a second walk-in centre situated in the hospital grounds. By providing a new walk-in centre, A&E staff could divert many patients with minor conditions to that new service, while ensuring that the specialist care and support that A&E provides is given to those who truly need it.
I hope that this Budget will provide funding for that proposal and I hope that the Government recognise the need for a more co-ordinated approach to ensure that we can continue to improve healthcare outcomes across all income levels and groups now and long into the future.
Scott Benton (Blackpool South) (Con)
It was a pleasure to listen to the three maiden speeches given by my new colleagues this afternoon. I know that my hon. Friends the Members for Warrington South (Andy Carter) and for Leigh (James Grundy) will be assiduous in joining my efforts to get investment into the north-west region, while my hon. Friend the Member for Hastings and Rye (Sally-Ann Hart) was fluent in articulating many of the challenges faced by seaside communities such as my own.
Over the past few weeks, I have spoken to many of the hoteliers, landlords and shop owners who are the backbone of my local economy in Blackpool. Many of these traders are deeply concerned about the potential impacts that coronavirus may have on their business. The tourism industry in Blackpool relies on a successful season. With the season due to begin shortly, the current uncertainty and possible impact of coronavirus could not have come at a worse time.
The measures announced yesterday will go a long way towards addressing the fears and concerns of many of my local small businesses. The 100% business rate relief for guesthouses and businesses in the leisure sector will provide breathing space for those traders who rely on a successful summer period and who struggle to keep their businesses afloat if the tourism industry is badly affected. To say that the announcement was greeted by a collective sigh of relief in Blackpool is an understatement.
I welcome the introduction of the £5,000 rates discount for pubs and the additional £2.2 billion support package for local authorities to assist those businesses that currently pay little or no business rates. The £3,000 grant that that will provide to hundreds of businesses in Blackpool is most welcome. For some, it will be the difference between surviving for another few years and closing altogether. I urge the Treasury and the Ministry of Housing, Communities and Local Government to work with local authorities so that they are in a position to distribute the funding as soon as possible. It is an unprecedented package of support for small businesses, and I commend the Treasury for putting it before the House.
Many of my constituents rely on seasonal work and are understandably apprehensive about taking time off during the holiday season. The measures in the Budget on statutory sick pay, and to make it easier for those who are not entitled to claim sick pay to claim universal credit, will assist many of my constituents. The measures announced will support the most vulnerable, who cannot always afford to take time off work when sick, and also help to contain the spread of the virus by ensuring that people follow the official medical advice, in the knowledge that they will not be financially worse off by doing so.
Under successive Prime Ministers, the Government have made assisting the least financially well-off an absolute priority, and I am delighted that the Budget continues in that vein. An increase in the national insurance threshold to £9,500 will give 31 million people an average tax cut of £100 per year, while the above-inflation increase that takes the national living wage up to £8.71 will benefit thousands of my hard-working constituents. The freeze on fuel duty over the past decade has helped working families to save around £1,200 compared with Labour’s spending plans. For many, the family car is a necessity, not a luxury, and continuing to freeze the duty will help millions of hard-pressed families with the cost of living.
I congratulate the Chancellor of the Exchequer on a fantastic Budget that delivers on many of our manifesto commitments. The British people are rightly concerned about the impact that coronavirus may have on their lives. Not only has the Chancellor reassured many people with his comprehensive package of support for those individuals and businesses who may be affected, but he has provided welcome support for hard-working families and has laid the foundation for future prosperity and economic growth. This is an optimistic Budget that looks ahead to the fantastic future we have outside European Union. I am pleased to support it.
Steve McCabe (Birmingham, Selly Oak) (Lab)
I want to begin by acknowledging the Chancellor’s response to the international crisis we now face. I welcome his measures to support business in these difficult times. It is the right thing to do and remarkably similar to the steps taken by Gordon Brown and Alistair Darling when we faced another crisis, in 2008. It was right then and it is right now. The only difference is that I am prepared to acknowledge that, while my opponents have spent the past 10 years condemning the action Gordon Brown took.
Like my right hon. Friend the Member for East Ham (Stephen Timms), I welcome the Chancellor’s decision to remove the minimum income floor for self-employed people attempting to access universal credit, but surely that is tantamount to admitting that the existing floor is an unfair barrier to the self-employed. I hope we will hear more about the impact of this change and why it should only be a temporary measure. The Chancellor should also have lift the five-week wait for universal credit, if he really wants to help people.
As I have said, I welcome the temporary support for business, but what we really need is long-term reform of business rates. The review announced by the Chancellor must complete its work urgently. Business rates are stifling small stores and innovation on our high streets. They are a key part of the problems faced by too many small businesses.
I hope that the Chancellor will carefully monitor the impact of his reduction in entrepreneurs’ relief. The last thing we need to do at a time when we are experiencing a significant restructuring of our economy is to take measures that discourage start-ups, entrepreneurs and innovation.
I appreciate that the pension tax relief taper has been prompted by the shortage of doctors and the hours that doctors are willing to work because of tax bills, but this is an expensive giveaway that will disproportionately help those with the highest salaries and biggest pension pots—not just doctors—at the very time when the people who really need our help with pensions are the young and the very poorly paid.
The Chancellor presents his red diesel provision as a green measure, while simultaneously announcing a huge road-building programme. None the less, he has announced a delay and has gone out of his way to placate the National Farmers Union—a special interest group. I simply remind him of the other sectors this will affect. Pumps all over the country are currently in action, pumping out floodwater, and most of them run on red diesel. Our construction industry, which most certainly does not need any further cost pressures, particularly if the Chancellor is to realise his infrastructure ambitions, makes extensive use of red diesel, as do fairgrounds. I am with the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier): I am sure the Chancellor does not want to go down in history as the man who did for the fairground ride.
I welcome the announcement of additional resources for the British Business Bank, but I wonder whether £200 million is really enough to support such a key sector as UK life sciences. None the less, I am anxious to get details of how we can secure part of that resource for the Birmingham life sciences park so that we can expand the pioneering life sciences work taking place in Birmingham and the west midlands.
I welcome the borrowing, at a time of low interest rates, to finance the infrastructure plans, but I have to say that I am amused at how a Tory Chancellor can say it with a straight face after the years of unnecessary cuts. Implicit in the comments made yesterday by the right hon. Member for Bromsgrove (Sajid Javid) was the question: how is the Chancellor going to pay for this? We know he is going to borrow, but he cannot rely on low interest rates forever. If he is going to change the fiscal rules that were in the Tory manifesto only three months ago, we have a right to ask what the Tory economic plan is now.
I welcome the small capital sum for further education, but in the west midlands we have two problems: an existing skills gap, which is a constraint on growth; and far too big a pool of unskilled labour, which can only grow with the shakeout from the fourth industrial revolution. We need a step change in our approach to reskilling and lifelong learning. Remember—adult skills expenditure was cut by 40%, so what we need is not rhetoric, but something that is going to make a real difference. My constituency has unemployment rates that are double the national average, so a change in our approach to lifelong learning is every bit as important for levelling up in my constituency as the offer of an infrastructure project.
Andrew Griffith (Arundel and South Downs) (Con)
May I congratulate all my hon. Friends who have made such excellent maiden speeches in this debate? I also wish to draw Members’ attention to my entry in the Register of Members’ Financial Interests, which relates to my former employment, before I joined this House.
This is an excellent Budget both for business and for my constituents in Arundel and South Downs. I commend my right hon. Friend the Chancellor’s delivery yesterday, but, more importantly, this is a Budget that will stand the test of time. Before the immediate events of the last week or so, this was an economy whose businesses had wind in their sails, straining at their moorings with a new captain at the helm—a Secretary of State who has personal roots that stretch beyond these shores, into the sort of overseas markets that represent an outsized opportunity to create growth and employment for generations to come. This is important; the only way we can truly level up the whole United Kingdom is with an enterprise and export-led renaissance. It is only business that creates the real jobs, opportunities and wealth that will make our school and university leavers of the future look askance at the idea of ever leaving our great northern cities to move south.
Our natural advantages as a location to start, grow and run a business are immense: a world-class legal system with a strong respect for the rule of law; our position between the Asian and American time zones; a flexible and educated workforce; and, of course, English as our own, but increasingly the world’s, language. This Budget sits alongside a world replete with opportunities.
In that context, I warmly welcome the proposal to increase the business rates discount to 100%, and to expand it to the leisure and hospitality sectors. But may I encourage the Chancellor to go just a little bit further? My constituent, Positive Images Design, is a world-leading supplier to the exhibition sector—which, as we might expect in the wake of the cancellation of events across the globe, is among the very hardest hit. As things stand, this sector and this thriving business in West Chiltington in my constituency would not benefit from the same relief, which I cannot believe was the intention. If it would help, I would be pleased to meet the relevant Minister and give him more details of the case.
I welcome the growing wide recognition that the current structure of business rates is a burden, particularly for small enterprises. These rates tax businesses before they have had the chance to make the first £1 of revenue, and unduly penalise those who remain anchored in their local communities, such as the high streets in the small towns of Arundel, Hurstpierpoint, Storrington and Petworth in my constituency. The measures announced in the Budget go a very long way to relieving the burden for the smallest businesses. I welcome the Chancellor’s commitment to a fundamental review and encourage the Business Secretary to be a strong and passionate voice for business in that review—as, indeed, shall I.
While we are on the subject of tax, I am on the record as having said that with the UK being such an attractive place to do business, we should be competitive but have the self-confidence not to compete on having the lowest rate of tax. I fully support the Chancellor’s proposal to maintain the rate of corporation tax at its current level of 19% rather than reduce it further. Indeed, I would go further on a future occasion and support an increase back to £1 in every £5 of profit as part of a fiscally neutral rebalancing of the business rates burden.
Business needs people and people need homes, so I particularly welcome the Chancellor’s announcement of a £400 million brownfield housing fund, and the renewed focus on creating more homes from the millions of acres of real brownfield land across the UK. This has to be the right way to proceed. We need the right homes in the right places, and for those homes to be sustainable. Absolutely the wrong way to proceed would be some of the unsustainable, large-scale housing development that is currently being advocated for my constituency and is blighting the lives and peace of mind of my constituents. Proposals such as those made by Mayfield Market Towns or at Buck Barn despoil some of our last remaining precious countryside, put native species at risk of extinction, and are fundamentally unsustainable due to the lack of supporting roads, rail, healthcare and social infrastructure. Local neighbourhood plans, democratically supported by residents, already contain provision for the sort of organic, sustainable housing growth that we need. Out of the EU, with a points-based immigration scheme, and with an ageing, if not actually shrinking, population, the types and locations of the dwellings our society will need in future are very different from those being proposed today.
This is a Budget for business, for growth, and for Britain. It seizes the opportunity and it gets it done. I believe we are at the start of a new renaissance of British businesses seizing and leading in all of the sectors that will define the economic winners of the future.
Sarah Olney (Richmond Park) (LD)
Of course the big topic of this Budget had to be the coronavirus. We are facing the gravest health crisis in a century, and the Government have no greater responsibility at this time than to plan their response. I am aware that at this very moment we could be standing on the edge of an escalation in our response to this crisis. I am conscious that some people think that even to address other topics at this time might be seen as an indulgence, so I welcome yesterday’s news that the Government have immediate and effective plans to re-fund the response to the coronavirus. I particularly welcome the news that statutory sick pay will be available to help people who would not otherwise be eligible. Supporting people who are required to self-isolate during this crisis is as essential to dealing with the social impacts of the virus as the additional funding available to the NHS will be to dealing with the health impacts.
However, while a short-term injection of funds to address the immediate crisis might be an appropriate response to the coronavirus, the Chancellor appears to have extended this approach to the whole of his Budget. It was a litany of short-term emergency measures. His speech yesterday left a whole wasteland of ungrasped nettles. If this Conservative Government, at the beginning of a five-year Parliament with a majority of 80, cannot bring themselves to make some tough choices to re-programme our economy to meet the challenges of climate change, and to reset the course of this nation’s economic journey as we leave the European Union, when on earth will they?
The impact of business rates on town centre businesses is a matter of enormous concern in my constituency. We are seeing increasing numbers of empty shops and shopping parades across Richmond and Kingston. Town-centre shops are not on a level playing field with online retailers, who are taking increasing market share with goods that are routinely sold at below cost price. Bricks-and-mortar retailers are further disadvantaged by having to pay punitive levels of business rates calculated on the value of property that they operate out of, with no regard to their level of turnover. Major reform of business rates to maintain our town centres at the heart of our communities is long overdue and has been called for on many occasions by Members from all parts of this House. In our 2019 manifesto, the Liberal Democrats called for a landlord tax to be paid by those who receive the proceeds from the underlying value of the property. This would relieve small businesses of the burden of taxation altogether. It is precisely the kind of radical reform that is urgently required to save our town centres. There was much press speculation that the Chancellor might announce a measure of that kind in the Budget. It is therefore a huge disappointment to find that he has once again ducked the issue.
While the scrapping of business rates for the coming year to mitigate the effects of the coronavirus is surely welcome, it does nothing to resolve the long-term problem. The bills will return again in 2021, when businesses will face not only the after-effects of the coronavirus but the expiry of the transition period in our exit from the European Union. A short-term crisis measure does nothing to help businesses plan for the long-term or to build up resilience for the mixture of unexpected and self-inflicted shocks to the economy. I welcome news of a review of business rates and look forward to hearing its outcome, but it is disappointing that more was not done to grasp this opportunity now.
I have read the forecasts from the Office for Budget Responsibility, and I note that its economic outlook is informed by the assumption that the UK will make an orderly transition to a new trading arrangement with the European Union. Its forecast under those conditions is for a 4% downturn in GDP over 15 years. I was therefore surprised to hear so little mention of Brexit in the Chancellor’s speech. I know that the Prime Minister’s éminence grise has banned the use of the word, but to have so little reference to the major economic upheaval of our time in the first Budget after our departure from the European Union is nothing short of astonishing.
I am more sceptical than most about the Conservative Government’s promises of a bright new rainbow-filled future, but I nevertheless thought that there would be some opportunity that they would wish to take advantage of. We have thrown off the shackles, we are free to determine our own future—and we are going to stop charging VAT on tampons! Grateful as I am—and I am sure I speak for the rest of the female population—to save on average about £1 every year on the cost of my sanitary protection, I am somewhat surprised to find that this is the limit of the Government’s plans for our post-Brexit future. Is that really it? If I sound incredulous, it is partly because legislation to cut VAT on sanitary products was agreed by the European Parliament in 2018 and would have come into effect in 2022.
I accept that negotiations are ongoing, but I would be grateful if the Government gave the House an update at the earliest opportunity of their plans for the talks next week in the light of the coronavirus and an estimate of how that will affect their plans to conclude the negotiations for the new free trade deal by the end of the year. I repeat the call that the Liberal Democrats have previously made: the negotiations should be halted and an extension to the transition period agreed, to account for the time that will surely be lost over the spring and into the summer in the efforts to manage the virus.
The OBR report references the fact that the major boost to Government income from this Budget is the reversal of the planned cut to corporation tax that was due to be implemented this year. The Liberal Democrats called for that reversal in their 2019 manifesto, and I am pleased to see that the Chancellor took up our suggestion. While we would not wish to see taxes on business set at a punitive or discouraging level, we believe that businesses should pay their fair share towards an equal society.
For the self-employed, the biggest missed opportunity of this Budget was the failure to address the enormous issues presented by the planned implementation of the IR35 legislation in the private sector. An uplift in the minimum income level for class 4 national insurance contributions is no consolation to those who face losing their livelihoods as organisations refuse to take on contractors or source their contracts from overseas, to avoid the unnecessary burden that the legislation will impose. It is not too late to halt the implementation and conduct a thorough review of the costs and benefits of this legislation.
For all of us, the largest nettle that goes ungrasped is our response to the climate emergency. The Chancellor announced funding for many new road schemes across the country but little for mitigating measures to reduce carbon emissions. The plans announced for carbon capture and storage are pitifully inadequate, and not enough is being done to invest in electrical vehicle charging infrastructure.
It is a particular shame that the issue of carbon emissions from domestic homes was not addressed, as the barrier to real change on that is the lack of funding. If we are to meet the Government’s net zero target by 2050, we need to start a comprehensive programme of retrofitting insulation to domestic homes and to install more efficient forms of domestic heating. Such a move would have a beneficial impact on domestic energy bills everywhere and, in particular, would alleviate fuel poverty in many homes. I want to reiterate the Liberal Democrats’ support for the Government in dealing with the coronavirus challenge in the months to come—[Interruption.]
Madam Deputy Speaker (Dame Eleanor Laing)
Order. The hon. Lady can finish her sentence.
Sarah Olney
Thank you. I appreciate that I have gone over my time, but I have waited a long time to speak.
In applying a crisis response to our longer-term issues, the Government are leaving a field of ungrasped nettles that will come back to sting us all when we are able, as we hope, to continue life as normal.
Madam Deputy Speaker
For the sake of clarity, all the Deputy Speakers have been very lenient with Members making maiden speeches. That leniency does not extend to others.
Bim Afolami (Hitchin and Harpenden) (Con)
I welcome this Budget, particularly the fiscal stance adopted by the Chancellor and the Treasury. It is a well-targeted fiscal stimulus for productive capacity in the British economy and for dealing with the demand and supply difficulties we have with coronavirus, and I welcome it. In particular, as I said in intervening during the shadow Chancellor’s speech, I welcome the careful co-ordination between the Bank of England and the Treasury. That should be happening across the world and other countries should follow this Government’s lead.
There has been significantly increased investment in this Budget. Many people are saying, “Gosh, we’re spending all this money—where has it come from?” It is a very clever Budget, in my judgment, because it is less profligate than it appears. Yes, borrowing has increased, but if we look at where the money comes from and at the debt interest payments that the Government will make over the next few years in servicing the debt, we see that the debt interest to revenue ratio is dropping from 4:1 to 3:1. We are leaving corporation tax at 19%, and that will also give the Government more money in the years to come. More importantly than any of that, our growth is holding up—it is one of the highest in the OECD—because of the careful management of the economy under this Government over the last few years. This is a prudent Budget, with prudent investment for the future.
This Budget deals with three big challenges: it starts to deal with our historical challenges, it deals with our present challenge of coronavirus and it starts to deal with our future challenges. On our historical challenges, I was reading—it is not common, always, in this House—Lord Hennessy’s book “Winds of Change”. In that book on the early 1960s, which I urge all Members to read, he quotes a Cabinet paper written by Harold Macmillan in December 1962. In it, the former Prime Minister said that the two biggest challenges for the British economy were productivity and the regional imbalance between north and south. I mention that because these are very difficult, long-term problems that this Government are determined to tackle, and I welcome the measures in this Budget to do so.
Those measures include, in the modern day—the Government did not do this in quite the same way in the ’60s—our investment in R&D, with the fastest growth that this country has ever seen, and our investment in infrastructure, which has already been well trailed by many Members. In particular—this has not been much talked about—there is our skills fund. Investing in human capital is just as important, if not more important, than investing in physical capital, and that is what this Budget does.
Those are our historical challenges—now on to the present challenges. Our most immediate present challenge is obviously the coronavirus pandemic. The Government have stood entirely behind this country, and they are leading the country through what is obviously a very difficult time. It is important for the House to appreciate how significant economically the coronavirus really could be. It means everything from reduced goods imports from China and reduced spending by Chinese visitors to other countries to damage to supply chains outside China and disruption to demand not just in the United Kingdom but in our other trading partners—whether Europe, the west, Asia, Africa and across the world. The impact of coronavirus economically could be quite significant, and this Government, with the big bold bazooka that the Treasury has wielded—I am sure I read that somewhere—have shown their absolute determination to make sure that this country is in the best possible position.
We also have future challenges that this Budget starts to deal with, particularly on business rates. The measures we have taken on business rates are partly temporary to deal with the immediate difficulties for small and medium-sized businesses in the retail sector. However, the review that we are going to have to complete by the end of this year is really the best opportunity this House and this country have had for a very long time finally to reform what I believe to be one of the worst taxes in our tax system. We have a chance to do that now, and we should grasp this nettle. If we can achieve that, I think that retailers, and indeed businesses all across this country, will thank us for generations.
An American psychologist called Joseph Luft invented the phrase that was popularised by Donald Rumsfeld during the Iraq war, when he spoke of “known knowns”, “known unknowns”, and “unknown unknowns”. In politics we often deal with known knowns, and known unknowns, but at the moment, with coronavirus and the difficulties across the globe, we are dealing with unknown unknowns. I am confident that the Budget sets us in the right place to deal with those as best we can.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. I am afraid I must reduce the time limit to five minutes.
Richard Thomson (Gordon) (SNP)
Listening to this debate, I am struck by the contrast from when I, like many other Members, campaigned to be elected to this place, and was told that there is no such thing as a magic money tree. I now find out, in my first Budget, that in fact there is—absolutely remarkable.
The Budget was clearly funded in large part by a cancelled reduction to corporation tax, and by an unprecedented upswing in planned borrowing. I welcome the response to the coronavirus epidemic, which is measured and timely. My plea is for the UK Government to continue to work closely with the Scottish Government, and to make clear the specifics of the funding that will come through, so that those Governments continue to work together in the best way.
It is one thing to respond to a big exogenous shock such as coronavirus; it is quite another to mitigate a self-inflicted wound such as Brexit. In the report by the Office for Budget Responsibility I found figures that we would not normally expect to find on the side of a bus. Page 27 states that trade with the EU is estimated to be 15% lower after 10 years, with productivity down by 4%. Further to that, a free trade agreement would reduce Scottish GDP by 6% by 2030, and by 8.5% in the case of no deal.
The UK Government say they are prepared to leave without a deal, but as the hon. Member for Richmond Park (Sarah Olney) pointed out, the OBR’s outlook is predicated on the assumption that the UK will move in an orderly fashion to a new trading arrangement with the EU. Page 30 of the Treasury Red Book states that the comprehensive spending review baseline scenario is that the UK will exit the implementation period without a future relationship being agreed, and no financial or fiscal provision has been made anywhere to seek to deal with that. Therefore, OBR forecasts depend on a deal that the CSR is about to discount. More significantly, those two documents make clear that the UK Government can either have their Budget and fiscal rules, or they can have their threat to walk away from negotiations, but they simply cannot have both.
I welcome the £800 million commitment to carbon capture, usage and storage, but I note that it is spread over four projects. In the second round of carbon capture and storage, which was pulled by the previous Government, the total was larger at £1 billion, but for fewer projects. We need clarity, and the Government must push on with this, because there is no route to net zero emissions that does not involve CCUS.
Similarly, for an oil and gas sector deal, we must decarbonise the extraction process. There is a proposal to connect Shetland to the main electricity grid on mainland Scotland, and if we did that, if would become possible to electrify the oil extraction processes west of Shetland and reduce emissions. That would allow for renewables to connect to the grid. There are a range of regulatory and technical stumbling blocks, but it is the sort of project that cries out for inclusion in an oil and gas sector deal, alongside promotion of the hydrogen economy, subsea, and decommissioning.
For me, the most worrying aspect of this Budget is the utterly insipid growth rate that has been forecast. After years of austerity, GDP growth has been reduced to 1.1%, which is 0.4% lower than was forecast last March. Even with an unprecedented level of borrowing, and the splurge we are about to see, the OBR is only able to estimate that GDP growth will be 0.5% higher than it would otherwise have been. That is a dismal and damning figure.
This Budget stands and falls on page 29 of the OBR report, and it is on that that I will conclude my remarks. Page 29 makes clear that fiscal loosening and its effectiveness depends entirely on the mix of projects shown. I am not sure that we have a bazooka; we have more of a blunderbuss, with a similar lack of focus and worry about where things land. If in that stimulus we end up with more proposals like the bridge to Northern Ireland, then heaven help us we will not see the impact there should be for that level of investment. That is the hallmark of the Budget: a lack of coherence and a lack of detail. With veiled threats to bypass the devolution settlement through the shared prosperity fund, there is a lack of respect, a lack of investment in social improvement, and a lack of compassion that is rapidly becoming the hallmark of this Government. That will not go unnoticed.
Mike Wood (Dudley South) (Con)
At Prime Minister’s questions, I called on the Prime Minister to deliver investment for skills and infrastructure in the west midlands. The Chancellor certainly delivered. There is investment in transport, with hundreds of millions of pounds for better bus and train services in the west midlands and £54 million to fix potholes. That investment will support our excellent Conservative Mayor Andy Street’s transport plan to transform local public transport into a comprehensive system serving the whole west midlands county. There is investment in housing, with the new £400 million brownfield housing fund, to build the houses we need without threatening our precious green spaces, and £9.5 billion for the affordable homes programme to help to prevent homelessness. There is also investment in skills, through the £3 billion skills fund, to help to gain the skills they need for highly paid jobs and to ensure our firms can have the workforce they need to compete.
Coronavirus poses an immediate economic challenge. I welcome the impressive package the Chancellor announced, as well as making sure that the NHS has all the resources it needs to deal with the consequences. The 12-month business rate holiday for firms in the retail, hospitality and leisure sectors with a rateable value of under £51,000 will for many make the difference between getting through this outbreak or going under. It will save jobs in the constituencies of every Member of this House. Larger businesses in those sectors also face massive challenges: sharp falls in business linked to the outbreak come on top of higher costs from spiralling business rates and pose an existential threat.
In the medium term, perhaps the most significant part of yesterday’s Budget is the fundamental review of business rates at a time when so many town centres are being squeezed. It makes little sense to base local business taxation on notional land values that assume high streets carry a premium. A system of taxation created in the 1960s and based on property taxes introduced by the first Queen Elizabeth is not fit for the needs and characteristics of the 21st century. In the meantime, I hope Treasury Ministers will consider extending support to larger operators in the hospitality sector, who, because they employ large numbers of people in a labour-intensive industry and by their nature need large properties to accommodate guests, fall outside most of the support measures announced yesterday. They will, however, be hit harder than anybody by any lockdown or other restrictions on tourism.
An important part of our local economies are our local pubs. I have spoken many times about the economic, social and cultural contributions of community pubs and British brewing. Ministers have heard that many more times than most, so I will not repeat all that now, but I thank the Chancellor for his generous mention yesterday and even more for the generous support he announced. Increasing the business rate discount for pubs with a rateable value of under £100,000 by 400% to £5,000 is great news. Cancelling the inflationary rise that was due on beer duty, the third freeze in a row, means that beer will be 11 pence per pint less expensive than it would have been had those three rises gone ahead.
The Chancellor also announced a review of the duty system, which is only possible now because we have got Brexit done and will be taking back control at the end of this year. I hope the Treasury will consider how a post-Brexit duty system could better support our community pubs, rather than those who pile the beer high to sell it cheap in our supermarkets or off-licences. Perhaps we could have a system like the one in Australia, where beer sold in large containers such as casks or kegs pay about a third less duty than beer sold in bottles and cans, which are more typically bought from supermarkets. Such a move would help to protect our remaining pubs, secure the jobs that they sustain and encourage people to drink sociably in well regulated, licensed premises rather than drinking alone at home, or elsewhere, where fewer safeguards exist.
Yesterday’s Budget addressed both the immediate challenges of a health crisis, with the coronavirus outbreak, and the longer-term needs of building a framework that will encourage growth and build prosperity in all our communities. That is certainly something to which we should all be able to raise a glass.
Thangam Debbonaire (Bristol West) (Lab)
It is a pleasure to follow the hon. Member for Dudley South (Mike Wood), and I share his commitments to and support for the revision of how we do business rates. However, my constituents will be concerned about all sorts of things in the Budget, so I will try to pull apart a few things in the time I have available.
Of course, we welcome the Chancellor’s commitment to making provision for covid-19 and for businesses, and I thank him for the relief of business rates. My constituents who work in the NHS are only frustrated that it takes a crisis for the Chancellor to say the important words that he will let the NHS have “whatever it needs”. I urge him to make that a motto for the future, because the NHS should genuinely always have what it needs.
My constituents will be concerned about school funding, and of course, I welcome any cash increase in that, but that is against the backdrop of sustained cuts over the last 10 years. There has been a lost generation of children and young people whose education has been damaged by having large classes or subjects cut, and particularly those with special educational needs. There was barely anything on social care, either for adults or children. Children with special educational needs and disabilities have paid a price for austerity, and that can never be recovered. Parents tell me of their sadness at what has been lost in delayed assessments and missing support.
On the creative industries, as we leave the EU, this country could have chosen to negotiate to stay in Creative Europe. Thirteen European states that are not members of the EU are in fact members of Creative Europe. This is about not just money, but the economic benefits of the non-cash elements of Creative Europe for our fantastic creative industries. That is missing, unfortunately, from the aims for negotiation with the EU, but the Chancellor could have made up for it. The cultural investment fund is welcome, but it is in no way an adequate replacement for the networking, exposure and sharing of our creative industries, and that is a lost decade to come.
On Brexit mitigation, there is the ridiculous but now trademark and rather dreary slogan about getting it done, which I am absolutely sure Ministers must know is complete rubbish, because we are still in negotiation about the future relationship, and that is massive. My constituents told me for much of the last three years about the consequences for them of this now rapid drift away from the original promise by the original Brexit Secretary of State, the right hon. Member for Haltemprice and Howden (Mr Davis), that we would get the “exact same benefits” in the future relationship. That aim has disappeared, never mind the reality. I am sure that we all really knew—and I am absolutely certain that the right hon. Gentleman knew—that this was going to be nonsense, and so it has proved. We have now seen successive Brexit Secretaries of State and two Prime Ministers downgrade that “exact same benefits” to a “best-in-class” trade deal, and now to a very slim volume of negotiating aims, with mean-spirited language about our nearest neighbours—in sharp contrast to rather thicker volume about the negotiating aims of the US.
We are now hurtling towards what I have to name as a no-deal Brexit, with all the tariff and non-tariff barriers that that will bring. That will hurt the exporters and importers in my constituency. We could choose to stick to our previous commitment as a country to some form of regulatory alignment and some form of level playing field, but without that, it is not surprising that we look likely to make any deal with the European Union virtually impossible.
Finally, and most importantly, I turn to climate change. The Committee on Climate Change—not me, the Committee—said that the best they could say about the Budget was that it was a “realistic start” but it was not close to what is really needed. The Chancellor kept saying that the Government were going to meet their environmental obligations, but environmental groups do not agree. The Government’s advisory group does not agree. I do not agree. My constituents definitely do not agree. This is an existential threat. It is a matter of urgency—it is an emergency. I salute the Chancellor for taking the coronavirus emergency seriously and I just want him to do the same, with the same level of urgency, with the climate change emergency.
In conclusion, this Budget fails to address my constituents’ concerns. While it contains many good things, especially on covid-19, it does not undo the economic and social damage of the past 10 years or the cuts to public services, and it fails to treat the climate emergency as an emergency. It is a Brexit Budget. The Chancellor used to be seen as the coming man, but I fear that he is now just seen as Cummings’ man, with an agenda of deregulation, downgrading of public services, and shrinking of the state. The Chancellor has a family, and one day they will ask him what he did about climate change, and I hope that he will be able, before the COP climate change conference this autumn, to tell them exactly what he did to protect the climate.
Theo Clarke (Stafford) (Con)
Let me begin by thanking my right hon. Friend the Member for Richmond (Yorks) (Rishi Sunak) for his excellent first Budget yesterday. He set out an ambitious economic agenda that backs business and innovation and invests in hospitals, schools and police, and I welcome the freezing of beer and fuel duty. It is a Budget that benefits everyone in Britain by levelling up the economy and delivering on our ambitious manifesto commitments to spread opportunity across every community. I agree with the many other hon. Members who welcome the Chancellor’s increased support for businesses in the light of the current coronavirus pandemic, and I also welcome the Government’s extra support at this difficult time.
To return to the economy in general, my constituents in Stafford have seen at first hand the economic advantages of having a Conservative Government. It is estimated that someone working full time on the minimum wage in the west midlands is over £5,200 better off than when Labour was in power a decade ago, which represents a real improvement in the lives of ordinary people. As a former entrepreneur who set up and sold my own small business prior to entering Parliament, I understand the importance of job creation, and we must continue to back wealth creators. Nationally, it is the Conservatives who have put employment at a record high, and I welcome the more than 3 million new jobs created since 2010. Over the past decade, the British economy has grown faster than those of France, Italy and Japan. I was particularly pleased that the Office for National Statistics recently announced that employment in the west midlands has risen by 0.7%—the highest employment rate across the whole country.
With its rich history of shoemaking to its role as a thriving engineering centre, my constituency of Stafford has long been a key region for British manufacturers. We have an ambitious local plan to increase tech start-ups in the region to create a “silicon Staffordshire”. A great example of that is the local employer Risual, which is one of the UK’s leading technology firms. I recently visited the company, and I congratulate it on its excellent work in championing apprenticeships and ensuring that local students have access to quality jobs. It is a great example of an internet business helping to create real jobs on the ground. I also recently met the local Staffordshire chamber of commerce and our excellent Mayor of Birmingham, Andy Street, and I agree with both that a skilled workforce is vital to securing our economic future. That is one of the reasons why I am such a big champion of apprenticeships, and I am pleased that the Government are continuing to promote them and T-levels. It is important that we continue to strive to plug any local skills gap.
Last Friday, I visited Stafford College, which has been rated outstanding by Ofsted, and met some of the students and apprentices who form part of our future workforce, learning about their specialist training with local employers across Staffordshire. I was therefore pleased to hear in the Budget that the Chancellor has committed an additional £3 billion to a skills fund to help ensure that young people are gaining the skills they need to get well-paid jobs. I look forward to working with employers to ensure that the west midlands continues to create a record number of jobs to be filled by local people. Young people are the future of our country, and it is vital that they are being trained to become employees with transferable skills who can contribute to the economy.
Stafford is open for business and the people of Stafford have always believed in getting stuff done, which I am sure our Chancellor will appreciate. My constituency also has General Electric, which employs 1,700 people and is a great example of a multinational company providing high-quality jobs for my constituents while also playing a major exporting role for the UK.
Finally, I would like to congratulate MOD Stafford in my constituency and pay a huge debt of gratitude to all our armed forces personnel for the vital contribution they make in serving our country. I was particularly pleased that the Chancellor announced yesterday that we will now have a national insurance holiday for employers of veterans in their first year of civilian employment, a much-needed step in encouraging companies to employ ex-servicemen and women. I encourage the Government to continue to maximise employment levels for those who have served in our armed forces.
Rebecca Long Bailey (Salford and Eccles) (Lab)
We have had some excellent speeches today. I do not have time to reference them all, but I pay particular tribute to the three Members who gave maiden speeches today. We heard first from the hon. Member for Hastings and Rye (Sally-Ann Hart). I was very impressed to hear that her constituency has the biggest skate park in Europe. Then we heard from the hon. Member for Warrington South (Andy Carter), a fellow neighbour along the Manchester ship canal. I share his excitement about Daresbury science park; I have been there numerous times and know the fantastic work that it is doing. Finally, we heard the maiden speech of the hon. Member for Leigh (James Grundy), who talked of his proud northern roots and stated that Leigh was a proud northern town. That is a sentiment that I certainly share. All three speeches were very passionate, and it was very clear that those Members will be passionate advocates for their communities over the coming years. I wish them the very best of times in this House.
We live in precarious times. The three crises we face, coronavirus virus, the social emergency and the climate emergency, demanded a brave Budget—a bold Budget—to tackle them head-on. It was welcome to see action to help businesses encountering cash-flow problems, zero rates for businesses that qualify for the retail discount, the loans available for those affected by the virus and the 14-day statutory sick pay rebate for small firms. Those measures will help, but there remain gaping holes in the Government’s response to the virus. Statutory sick pay is £94 a week, which is not enough for many people to live on and pay the bills. That means that people who fall ill will be forced to choose between hardship on the one hand and risking their health and those of their colleagues on the other. What of those not eligible to receive sick pay—the insecure workers created by a decade of Tory rule? For them, the choice is even starker. While extra funding for the NHS is welcome, we cannot overturn a decade of cuts and capacity shortages overnight with a quick cash injection.
On the social emergency, we live in a society in which life expectancy is actually falling for the poorest. We have rampant regional inequality, hunger in schools and public services pushed to breaking point by a policy that even the Chancellor now admits was a political choice all along—the choice of austerity. Is it not telling that this Budget was silent on social care and universal credit? Is it not telling that it backed away from the tax rises on the wealthiest floated by his predecessor, and that while the biggest firms will benefit from his spending plans, there will be little if any plans for truly redistributive spending that would benefit our society from the bottom up? The Government’s own analysis shows that the tax and benefit changes, excluding public service spending, make richer households better off and cut earnings for the poorest. As the Women’s Budget Group has stated:
“We may have more roads and fewer potholes as a result of this budget, but the prospects for investing in social care and tackling child poverty remain bleak.”
Turning to the emergency that will define our generation and those to come, the climate emergency, I would like to list those things on which this Budget was silent. On solar power, wind power and tidal power, there was nothing. On the Tory manifesto pledge to support hydrogen production—nothing. On the Tory manifesto pledge to spend £9.2 billion on energy efficiency and cut household bills—nothing. On the Tory manifesto pledge to support a gigafactory for electric vehicle batteries—nothing. On reducing emissions from agriculture—nothing. On making public transport more affordable—nothing. And on measures to support workers and communities to transition away from carbon-intensive industries—nothing.
That is quite a list, but if we look at what the Budget does contain, the picture gets even bleaker. The Chancellor boasts of the biggest ever investment in roads and motorways, but Madam Deputy Speaker, I have spoken with scores of climate strikers and let me tell you that not a single one asked for a new motorway. So how does the Chancellor expect to square that with the UK’s emissions targets? It is not likely to come through action on petrol and diesel cars, because we are stuck with a 2040 phase-out date, and it is not likely to come through support for electric vehicles, because the Chancellor announced only an additional £140 million for the plug-in car grants. Assuming that the grant stays at £3,500, that is enough for only 40,000 cars, compared with the 2.5 million that are sold every year. So what else have we got? There is a commitment to fund carbon capture and storage by loading the costs on to consumer bills—perhaps the most regressive funding mechanism available.
There is a commitment to delivering a more than 600% increase in current tree planting rates in England. That sounds impressive—until we realise that the increase is only so large because tree planting has collapsed in England under this Government. When we look at the actual commitment in detail—35,000 hectares over five years—we realise that it is five times lower than the UK-wide rate recommended by the Government’s own official advisers.
Then there is a commitment to consult on measures to support renewable heat. There is a commitment to consult on green gas. There is a commitment to publish a review—sorry, two reviews—on the cost and benefits of reaching net zero. I do not think I am alone in this House in saying that consultations and reviews are not quite what we had in mind when we declared a climate and environment emergency last year.
Public calls for a climate Budget have never been louder, but what does that mean in practice? There are three key tests. First, is the Budget adequate? Does it take its lead from science rather than political expediency, cutting emissions at the rate necessary to avoid dangerous heating? Secondly, is the Budget aspirational? Will it create hundreds of thousands of good green jobs, positioning the UK as a world leader in the green industrial revolution, bringing huge wealth to all regions and nations? Finally, is the Budget fair? Does it spread the costs of dealing with the climate emergency in a way that is progressive and just, at home and internationally?
This Budget does not meet any of these tests, so I conclude in sadness and anger that the Chancellor has blown the biggest opportunity for national renewal since the post-war era and betrayed current and future generations.
The Financial Secretary to the Treasury (Jesse Norman)
Madam Deputy Speaker, or may I say Chairman of Ways and Means? What a delight it is to see you in the Chair. It is an epochal moment—the beginning of a new decade, a new Government and a new Chairman of Ways and Means. How delightful is that.
I very much support what the hon. Member for Salford and Eccles (Rebecca Long Bailey) said about the quality of the maiden speeches in this debate. We have greatly enjoyed them. I was struck by the crazy golf. I was struck by the Amber seaside express, but what came through all the speeches—not just that from my hon. Friend the Member for Hastings and Rye (Sally-Ann Hart) but also those from my hon. Friends the Members for Warrington South (Andy Carter) and for Leigh (James Grundy)—was the tremendous sense of pride that they exhibited. They had pride in their community, pride in their history and pride in their own achievements in coming to this House. They also, I thought, showed a wonderful fair-mindedness about predecessors of both political parties and I very much associate myself with that spirit. I congratulate them on that.
I salute the men and women of the Treasury and HMRC who made this Budget possible. In fact, they did not just make one Budget possible; they made two Budgets possible, including the one that never got delivered. Their expertise, dedication, good humour and sheer hard work is something that I think everyone in this House should be aware of and thank them for.
I also pay tribute to my fellow Ministers for their contributions to the Budget and pay tribute especially to the Chancellor. A new Budget from nothing in weeks; a vast array of measures, including measures not taken up. A fully integrated cross-Government response to a national crisis of coronavirus, but which also lays the foundations for decades of higher investment in infrastructure. That, to me, speaks of a parliamentarian of enormous ability, mastery of detail, warmth and humanity, for which I salute him. A new Budget, leadership on coronavirus and new energy and direction on infrastructure—I hope my colleagues will agree that he got them done.
This Budget has been well received and well supported by many groups across the business sector. Today’s debate has been on business and innovation, and it is good to see the CBI acclaim it as
“a bold Budget at scale…which will help people and business through tough times.”
The Federation of Small Businesses calls it an
“excellent pro-small business budget”.
And the British Chambers of Commerce says:
“Much to welcome for UK business communities”.
How important is that?
I am particularly pleased that Make UK, or the Engineering Employers Federation as it used to be known, says:
“Today’s measures to boost R&D will be applauded by industry and will help the UK lead in the technologies”—
including, of course, the green technologies—
“of the future.”
The shadow Chancellor began his remarks by saying this is not a time for partisan politics and, of course, I agree. I was therefore slightly surprised when his first move was to descend into partisan politics, and I am sad that the shadow Business Secretary has done the same.
I am struck that one particular measure in the Budget has not received the attention that it perhaps should have done. Paragraph 2.77 on page 76 addresses the support we are giving to assist in opening up and reviewing private finance initiative projects across the public sector. We know that PFI has been a disaster for this country, and it was overwhelmingly initiated and carried out by the Labour party in the hospital sector. The idea that the NHS, in which virtually every PFI project was conceived and executed under a Labour Government, should be a topic of the Labour party’s criticism is astonishing. [Interruption.] I welcome you to the Chair, Mr Deputy Speaker.
PFI costs this country £10 billion a year, and any steps we can take to remove that burden on current expenditure—[Interruption.] I am sorry but, as I understand it, the shadow Business Secretary was intimately involved in PFI. I wonder whether, in her seven years in that area, she looked at the PFI project in Hereford, on which I had to run a process that saved £5 million for the taxpayer and greatly improved the delivery of hospital care to my constituents.
The fact of the matter is that this Government and their predecessors have had to deal with the terrible crisis of 2008, even now, and I remind the House that the tragedy—[Interruption.] Those are desperate attempts by the Opposition Front Bench to put me off.
The fact of the matter is that the banking sector in this country was at 20 times its capital leverage in 1960, at 20 times its capital leverage in 1970, at 20 times its capital leverage in 1980, at 20 times its capital leverage in 1990 and at 20 times its capital leverage in 2000. Between 2000 and 2007, that 20 times went up to 50 times—pin seven years. No further explanation need be given for why, when the crisis struck, it had a catastrophic effect, an effect that we are still seeking to remedy.
The United Kingdom has entered a new decade and a new era in which our prosperity as a nation will be shaped by the dynamism of our economy, the ingenuity of our entrepreneurs and the success of British businesses of all kinds. Yesterday’s Budget is emblematic of the sense of purpose and energy that defines this Government as we seek to chart a bold new path for this country in the global economy to ensure that we remain a competitive place to do business; that we deliver the infrastructure and investment necessary to spread jobs, growth and opportunity across this country; and that we build on our historical strengths, referenced on many occasions in this debate, in science, technology and innovation to position ourselves at the forefront of the industries of the future. Thanks to the decisions we have made, we are building on firm foundations. We have kept corporation tax at 19%, the lowest in the G20, so that businesses have more freedom to invest in their own priorities. We have cut business rates—referenced in speeches on several occasions and rightly so—for more than half a million of the smallest firms, which pay nothing at all a result.
We are delivering £20 billion of patient capital action—
Jesse Norman
There have been so many interventions and I simply cannot cover all the speeches if I take an intervention now. I know that the hon. Lady will excuse me. We gave the party opposite the chance to intervene.
We are delivering a £20 billion patient capital action plan to unlock private financing in high-growth innovative companies, and we have established a regulatory system that strikes the balance between responsibility and opportunity to allow us to embrace the most exciting ideas in technology.
Let me touch on many of the important speeches that have been made today. The hon. Member for Glasgow Central (Alison Thewliss) raised the question of Barnett consequentials and, if she looks at page 49 of the Red Book, she will find them in paragraph 1.159.
The right hon. Member for Wolverhampton South East (Mr McFadden) raised the question of human capital. I know that he will be thrilled that we have a £2.5 billion skills fund—
Jesse Norman
I will not give way, for the reasons I have already described. I can continue to waste the hon. Lady’s time and the House’s time responding to these interventions, but we need to press on.
I am sure that the right hon. Member for Wolverhampton South East will also enjoy the investment we have made in further education colleges—more than £1.5 billion for further education capex over the next few years.
The hon. Member for Kingston upon Hull North (Dame Diana Johnson) asked where the revenue from the tampon tax would go. The tampon tax fund supports women’s charities, as she knows, and I am happy to tell her that the revenue will go to that. The competition for the next round of funds will be launched by the Department for Digital, Culture, Media and Sport shortly for the 2019-20 VAT receipts.
My right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) rightly stressed the importance of long-term investment and as little bureaucracy as possible in making capital investment, and how right he was.
My hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) asked us to reach for wartime analogies in fighting coronavirus. He will have seen that the Chancellor made it perfectly clear that we are prepared to do whatever it takes to assist the British people in dealing with this temporary crisis. We will continue to do that.
The hon. Member for Makerfield (Yvonne Fovargue) asked about free debt advice. I think she knows that the Government are investing an initial £12.5 million in HMRC in 2020-21 to begin implementing the breathing space initiative. Those in problem debt will be able to get 60 days’ breathing space, including from HMRC, while they engage with debt advice, and I think that is a very important contribution.
What a delight it is to see my hon. Friend the Member for North East Bedfordshire (Richard Fuller) back in this Chamber. He rightly celebrates the small business focus of the Budget and asks us to consider business rates in relation to nurseries, and other petitions have been made in relation to that, including by my hon. Friend the Member for Arundel and South Downs (Andrew Griffith). Let me remind my hon. Friend the Member for North East Bedfordshire that most nurseries will pay no rates if their rateable value is under £12,000 because of the small business rate relief. They will now also get a £3,000 coronavirus cash grant, of course, if they are in receipt of small business rate relief. There should be some bounce already in there, but of course we continue to reflect on business rates. We have a business rates review coming up, and he and my hon. Friend the Member for Arundel and South Downs would be welcome to contribute to that.
The hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) raised the question of red diesel. As she will know, there is a consultation associated with the changes we are making and she is welcome to support it and to make a petition to it if she wishes.
The hon. Member for Birmingham, Selly Oak (Steve McCabe) raised a range of questions, some of which I have already touched on, such as business rates. He asked whether we would be monitoring the impact of the reduction in entrepreneurs’ relief. Let me tell him that of course we will. The problem with entrepreneurs’ relief is that it is not very well targeted on entrepreneurship. We wish to support entrepreneurship, small business growth and rapid innovation and that is what we are seeking to do.
The hon. Member for Richmond Park (Sarah Olney) raised the question of green packages and rightly stressed the tough choices involved in a Budget. Let me refer her to the national infrastructure strategy. We already have a green package in this Budget. It is quite wide-ranging, but we intend to do more on it. What will not be true of us is what was true of Lord Prescott when he was in this place, when he said, “The Labour party supports the green belt and we intend to build on it.” We will not be doing that.
My hon. Friend the Member for Hitchin and Harpenden (Bim Afolami) raised the question of the “Winds of Change” and gave us a historical dimension. I celebrate that, and I celebrate Lord Hennessy in his wisdom, because he is truly an ornament to the House of Lords.
Let me close by saying that this is a Budget for this country as a whole. It will make our economy and our country stronger still.