(3 years, 9 months ago)
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Mr Deputy Speaker (Mr Nigel Evans)
Before I call Secretary Oliver Dowden, I would just like to indicate to those participating remotely that there is a clock on whichever device you are using to transmit. Please could you abide by that, because the time limit of three minutes will be introduced from the beginning of Back-Bench contributions? If you cannot see the clock, please have another device handy. For those who are participating in the Chamber, the usual monitors will be used for timing.
The Secretary of State for Digital, Culture, Media and Sport (Oliver Dowden)
This Budget represents a turning point in our fight against coronavirus. It is almost a year to the day since the Prime Minister, in a televised address to the nation, took one of the most dramatic steps of any peacetime Government in history and imposed a national lockdown. From that moment on, we were facing twin crises: not just a public health emergency, but an economic emergency too. The Government promised to do whatever it took to see the British people and British businesses through the crisis, and we did. A year on, thanks to one of the most comprehensive and generous Government support packages in the world, we are now in a position to begin rebuilding our economy. This Budget lays the first bricks in that process. It offers businesses protection to get through the next few months, but, with the road map as a guide, it also sets them on a course to stand on their own two feet once the country reopens, and, most importantly, it puts us in a position to build back better from the pandemic, leaving us a country that is stronger, safer and greener than the one upended by the coronavirus.
In a debate about supporting businesses during covid, it is worth taking stock of just how much was at stake when coronavirus brought our country to a standstill last March. On the day that national lockdown was imposed, all non-essential shops were forced to close their doors, alongside pubs, restaurants, museums, galleries, gyms, theatres and cinemas. In the space of a few short hours, millions of business owners across the country had their income wiped out. Their livelihoods were hanging in the balance, and nowhere was that more apparent than at DCMS. Arts, culture and tourism thrive on the walls of human interaction. Theatres, cinemas, live performance venues, museums and galleries simply cannot exist without an audience or visitors; with lights switched off, seats empty and stages bare, people genuinely worried that a century’s worth of culture and heritage was at risk.
In Germany, the arts have been described as Lebensmittel —that which sustains life. Our museums, our theatres and our artistic and creative life are not frivolous add-ons; they are essential to our economy and to our national sense of wellbeing, so we stepped up to the plate and protected them. We unveiled the biggest single intervention in the arts in the history of the United Kingdom: the culture recovery fund, an unprecedented £1.75 billion safety net that protected theatres, cinemas, museums, galleries and live performance venues across the country. It has supported every thread of our rich cultural tapestry, from national Crown jewels such as the Royal Albert Hall to regional gems such as the Wolverhampton Grand and Norwich theatre, and through that fund we have given £170 million to music, £21 million to independent cinemas, £60 million to museums, and £180 million to theatres. Surely we can finally put to bed the old lie that the Conservative party does not care about the arts. After protecting arts and culture through a long covid winter, we are now preparing them for the spring and summer of reopening, with another £390 million in this Budget to help museums, galleries and theatres open their doors when restrictions finally ease.
Likewise, the Budget extends our hugely successful film and TV restart scheme, which during the pandemic has supported more than 200 productions up and down the United Kingdom. It has kept cameras rolling on movies such as “Mothering Sunday” and shows including “Grantchester” and “Peaky Blinders”. Most importantly, it has protected more than 24,000 jobs and £800 million-worth of production spend here in the United Kingdom. As a result, studios including Pinewood are currently running at full capacity. In fact, the British film industry just celebrated one of its most productive quarters on record. I hope that Members on both sides of the House will applaud the Chancellor’s decision to extend the scheme.
Members on both sides of the House should also applaud our decision to make another £300 million available to sports clubs as fans begin returning to stadiums, and a new fund that gives local communities the power to take ownership of their local sports clubs. These clubs are not just businesses; many, particularly smaller clubs, are the hubs of their communities, bringing life to villages, towns and cities across the country. The Budget will help to ensure that they are still standing when the pandemic is over, ready and waiting to have their seats filled once more with spectators.
However, support to DCMS sectors is only one small part of the unprecedented offer of support by the Government during the crisis. Together, the safety net we have placed under the British people totals £407 billion —more than the GDP of Sweden—and the Budget builds on that support, adding extra security for businesses to make it through to the end of the road map and back into normality. We have also extended the furlough scheme, which has already supported 11.2 million jobs across the United Kingdom; to be clear, more than 11 million people and families have been given the stability and security of money coming in the door and being able to put food on the table for their children. These are not just statistics; they are real people who have been able to get through the last 12 months thanks to the furlough scheme. We have also extended support for the self-employed to include an additional 600,000 freelancers, making this one of the most generous programmes for self-employed people in the world.
While we continue to support the British people through the final stage of this crisis, we have also announced measures that will put businesses across the country on the footing to stand on their own once more. They will no longer have to subsist day to day off the state; instead, we will put them in a position to thrive on their own. We have therefore extended the VAT cut and the business rates holiday, we are offering new recovery loans, and we are offering new restart grants to help businesses of all shapes and sizes get going again.
If last year’s package was a package of support—the vaccine against economic ruin—this Budget is the booster shot. These measures allow us to put covid in the rear-view mirror and start looking forward to a brighter future.
Steve Double (St Austell and Newquay) (Con)
As chair of the all-party parliamentary group on hospitality and tourism, may I place on the record my thanks to the Government for the incredible support that they have given the sector to help it reopen? There is no doubt that the Government have done their bit. Does my right hon. Friend agree that what we now need, as soon as it is safe, is for the British people to do their bit—to take holidays in the UK, to go back to our pubs and restaurants, to go back to our theatres and cinemas, and to get our economy rolling?
Oliver Dowden
I of course agree with my hon. Friend. Indeed, I very much look forward to visiting Cornwall again myself. I spent many happy childhood summers on Crantock beach and have taken my own children there. That sits alongside other support we have provided for Cornwall and, indeed, my hon. Friend’s constituency, including, for example, the Lost Gardens of Heligan, which has had more than £600,000-worth of support. Under the culture recovery fund, a total of more than £1 million has been provided to his constituency alone.
Seven decades ago, when we were rebuilding from the rubble of the second world war, we looked to heavy industry—to coal and steel production—to power our recovery, but today our economy will be rebuilt on the back of cleaner, greener industries, and tech has the power to turbocharge all those other technologies. Science and tech now underpins our entire economy. Millions of businesses rely on the UK’s broadband networks to trade, to connect with customers and to advertise their goods, and in the year of pandemic, Zoom and Teams have temporarily replaced office spaces all over the world.
In building back better, tech will be at the heart of our recovery. We have set 10 clear tech priorities for this Government in the coming years—we will be setting those out later this week—but we also included a number of measures in this Budget to make the most of the digital revolution.
During this pandemic, millions of businesses were forced to move their operations online—to pivot to deliveries and to click and collect. This time it was a necessity, but we want to turn that into a long-term opportunity for British businesses. That is why we are launching a new UK-wide Help to Grow scheme to help 100,000 small and medium-sized businesses to get online or expand their digital businesses.
At the same time, we are cementing our position as the tech powerhouse of Europe. We have unveiled a new visa to attract the most exciting and talented tech brains in the world, alongside a new, improved visa process for scale-ups, entrepreneurs and disrupters. We have also launched a £375 million future tech fund. That is a breakthrough scheme for groundbreaking tech businesses. We have a plan to unlock billions from pension funds and funnel that money into new innovative ventures.
We also have ideas for a new listing regime that will make it easier for companies to raise money and list their businesses here in the United Kingdom, not on other markets. Some of the most successful and innovative businesses in the world have therefore chosen to make the UK their long-term home, as Deliveroo did just last week when it announced that it would be listing in London. This Budget paves the way for the next generation of tech entrepreneurs and disrupters to join them here in the United Kingdom.
Of course, the other great future-facing industry and powerhouse of DCMS and, indeed, the wider economy is the creative industries. We are genuinely a creative industries superpower. Our fashion and design businesses, those in film and TV, video games, architecture, advertising, publishing and beyond lead the world in every sector. They are a source of pride at home and envy abroad, and they now drive our economy. Film and TV alone are today worth more than the UK’s car industry. The sectors are not discrete—they are businesses that feed off one another and into this country’s wider, vibrant creative ecosystem.
When a UK business, for example, in the video games industry, designs a new game, they do not just support the video games industry. They boost tech, our artists and designers, the musicians who compose the game’s soundtrack and the animators who bring the characters to life. The furlough scheme, business grants and support for the self-employed have been a lifeline to all those businesses, which will continue to benefit from the schemes, as well as from the Budget’s new apprenticeship offer.
Those businesses have also benefited from our unprecedented, multi-billion-pound investment in the cultural and creative industries. That investment was made with our hearts, but also our heads. Cultural and creative businesses are vital to our economy, as they are vital to our national identity and, indeed, our very way of life. They will play a key role as we look to the country’s long-term recovery and renewal.
That recovery and renewal will also centre on the rehabilitation of the tourism industry, which, with planes grounded and airports closed, has been particularly hard hit by covid. Tourism is a major enabler in this country, supporting around 230,000 businesses in every part of our United Kingdom. Through the pandemic, including in the Budget, we have provided extensive support to those businesses, including through the cut in VAT. Our new levelling-up fund will invest in tourism infrastructure across the entire Union.
In spring, with my hon. Friend the Minister for Sport, Tourism and Heritage, we will go even further, publishing a comprehensive tourism recovery plan that sets out an ambitious vision for the sector to bounce back from the pandemic and drive that new era of growth. At that point, Britain will start reopening for business. Shops will be pulling up their shutters, people will be returning to pubs and restaurants or working out in gyms and leisure centres. Day trips and mini-breaks will be back on and eventually, overseas tourists will begin pouring back into our great country.
We want a decade of great British summers, culminating, we hope, with the football World cup back here in the United Kingdom in 2030. Much sooner—indeed, next year—that feeling of national recovery and renewal will find its outlet in three unifying show-stopper events: the Commonwealth games, Festival UK* 2022 and the platinum jubilee, when the nation will come together to give thanks to Her Majesty the Queen for seven decades of unwavering public service.
After such a difficult time for all of us, those events represent a much-longed-for return to normality: the return of packed stadiums, packed theatres and streets full of people celebrating. They are not just an opportunity for us to come together and remember what unites us. They are milestone moments, alongside the rugby league world cup, Coventry city of culture, the centenary of the BBC and the 75th anniversary of the Edinburgh festival. They will help drive our economic and social recovery from the pandemic. They will reboot our tourism industry, demonstrating that our doors are wide open. They will bolster our creative industries, with tens of millions of pounds being invested in our arts and creators from every nation of the UK, and they will showcase our remarkable and wonderful country to the rest of the world.
Of course, we are not there yet. Coronavirus has shaken our economic foundations like no other peacetime crisis in our history. I know that businesses up and down the country continue to face many challenges as a result of the pandemic. The road map back to full economic health is rightly cautious, but it is one-way. As normality gradually returns, we have so much to look forward to as a country and so many opportunities to revive our businesses and our economy.
This Budget allows us to make the most of those opportunities. We protected businesses when they could not trade as usual or at all. Now we are putting them in a position where they can finally unroll their awnings again and declare Britain back open for business. I commend the Budget to the House.
Alison McGovern (Wirral South) (Lab)
I draw the attention of the House to my entry in the Register of Members’ Financial Interests. We just heard from the Secretary of State how very well the Government have done through this crisis, and he said how much we could look forward to the Government—to the Tories—uniting the country in times ahead. To use an old-fashioned northern expression, “I’ve heard ducks quack before”. The Secretary of State joined this House in 2015, so while I think I am right in saying that he is two years older than me, I have been around this Budget roundabout 13 times to his seven. That is nothing that I am proud of—I have spent my time in opposition and he has not—but, that said, he did work for David Cameron during 2012, so I am sure that he has experience enough to know the golden rule of Budgets: never tax anyone’s pasties.
Despite the exceptional context that the Secretary of State talks of, despite the many Budgets that he and I have heard in this House, the question at every Budget is the same. It is the question at the heart of all economics—who has what and is it fair, and what will this Budget do to change the prospects for the people of the United Kingdom? Every time the Chancellor gets to the Dispatch Box, that question is the same. So when I look back over those 13 Budgets that I have seen, I think, “What have the Tories done to make our country fairer?” They removed regional development agencies and slashed local authority funding, and now they complain that the economy is unbalanced. They ran down social security only to realise that when people with higher incomes needed it at the last minute, they had brought it to breaking point. They wasted years spending money on a costly reorganisation of our health service that they now say they want to reverse. Child poverty is high and rising. Food bank use is through the roof and we are staring down the barrel of an unemployment crisis. Economically, it has been a decade of misrule and now this Budget is on top of all that. Despite all that the Secretary of State says, I suspect that in the long term it will be neither use nor ornament at this time of economic peril, because this is a diabolical record, and I regret very much the choices that the Conservative party has made over the past decade. There is only one thing I regret more than its choices, and that is the failure of my party so far to replace it.
I have said that the economic questions remain the same year after year, but the economy moves on and, therefore, so must the answers. To make our economy and our country fairer, we need to understand the situation that we face. It is dire, as a result of both the pandemic and the pre-existing flaws arising from a decade of Conservative Government. Unemployment for young people has increased by 13% and 1.7 million people are currently unemployed, and the Bank of England predicts that this will continue to rise throughout this year. The Office for Budget Responsibility has warned that the scarring effect of the virus a year from now will be that the pandemic lowers output in the medium term by 3% relative to its pre-pandemic path, and that is after the existing problems created by our exit from the European Union. This is the backdrop to my 13th Budget and the Secretary of State’s seventh—a lost decade of growth, with us now facing economic challenges that surpass even the crisis of a decade ago.
So what do the Government do? Well, finally, we have long overdue confirmation of the extension to furlough and vital business support, yet there is still a planned cut to universal credit, just at the very time that unemployment is predicted to spike. Also, less spoken of are the £14 billion cuts planned to public services for the rest of the Parliament and a 4% hit to our economy, as I said, due to our exit from the European Union. That is before we get to the things that they appear to have forgotten, including that missing pay rise for our nurses and cleaners in the NHS and the long-term plan for social care that the Chancellor remembered the day after. There was really very little help on the employment front either. As we know, just 2,000 young people have started their kickstart apprenticeship, when the Tories promised us 120,000.
Businesses in the UK have been challenged over the past 12 months in unimaginable ways, from total shutdown to recreating themselves overnight. UK business organisations, along with those in our social economy, have by and large proved themselves to be brilliantly creative and dynamic as well as having a keen interest in the public health imperative that we have all had to focus on. This Budget does far too little to support those businesses that really need it and too little to plan for the future. If a Government did get the framework right, the innovation and creativity of UK businesses would be able to thrive.
This poor lack of innovation is exemplified nowhere more clearly than in our brilliant creative industries. In this Budget, the Government have fallen well short of creating an environment for growth for creative and cultural businesses, which altogether contributed £225 billion to the UK in 2018, accounting for 12% of the economy. It is the part of the economy for which the Secretary of State is supposed to be responsible. The culture recovery fund, which he trumpets, saves buildings, but it does not do enough to save jobs and support the growth that is needed in creative industries across the whole country. The Secretary of State gave the game away when he said that the fund is there to protect the “Crown jewels”. There is no need for me to add to the extensive commentary on the royal family today. However, the Secretary of State’s comments reveal an obsession with that which we have inherited, rather than the demonstrable opportunities in the next generation.
The adjustments made to the self-employment income support scheme were not good enough either. Bringing newer entrants to the industry into the scheme was welcome, but analysis by the Musicians’ Union suggests that around 23% of its members are still left out in the cold. I understand from Prospect trade union that, while the fifth round of the scheme may run from May to September, it only provides three months’ worth of support, which means that the effect is identical to the scheme running out at the end of July. This will affect many industries, but it is particularly acute in the creative industries, in which it may take until much later in the year for normal work patterns to resume and in which two thirds of people are self-employed.
This is all a mistake because the creative industries deserve to be taken seriously. In growth terms, as we said the day before the Budget, the creative industries were up 7.5% in 2018 on the previous year, meaning that growth in the sector is five times larger than growth in the UK economy as a whole. That is a huge amount of potential that the Government simply have not met. Instead, they decided to spend £25 billion of taxpayers’ money on a tax incentive for businesses to invest in plant and machinery. It is pretty obvious that many of our newer businesses simply will not be helped by that. It is no bad thing at all to invest, but we are facing an unemployment crisis, and many small businesses are struggling to stay afloat. I think it is fair to ask the Government whether this tax cut will really get the money where it needs to be. How they will ensure that money is not spent on investments that were already planned?
If the Government do finally agree on a fundamental change to our tax system, undoing much of the direction of travel of previous Chancellors—and has anyone checked if George Osborne is okay?—where is the proper review that is needed? There appears to be a view across the House that the losses and gains from the pandemic have been hugely unequal, so what steps have the Government taken to ensure that billions of pounds are not handed over to global logistics companies whose profits have already soared during the pandemic? Whether it is the culture recovery fund or this tax relief, there seems to be a pattern: the Tories handing cash to the already lucrative.
Worse still, what if some of the most important structural changes needed in our economy, which this Budget should be an opportunity to address, cannot be sorted out by these sorts of tax incentive? In fact, on International Women’s Day, could somebody explain to me how this tax cut for plant and machinery will unleash all women’s entrepreneurship? How does focusing on tax breaks for big firms solve the underlying structural issue of poor childcare, which is one of the biggest drags on the well-documented productivity problem in the UK? I worry that the Help to Grow scheme will be about as successful as kickstart and restart have been in reality.
It is not just that. The Government seem to be missing the point of the pandemic entirely: that a strong economy requires a healthy workforce. The Secretary of State seems not to realise that we need a comprehensive plan for public wellbeing. That means supporting public services properly and giving every person in the UK a chance to improve their quality of life.
We know that a healthy population is an important input to a strong economy. Labour councils are already leading the way, with Coventry City Council giving residents free and discounted access to cultural and leisure facilities. The council specifically argued that it was vital for women’s participation, and particularly for those from lower-income backgrounds. In the local elections, councillors are putting health and wellbeing right at the centre of their manifestos. For example, the Labour party in Lancashire launched a manifesto that includes free swimming for residents over the age of 50 and under the age of 16. Given all that we have been through, Labour in Lancashire is putting health and wellbeing at the heart of future economic prospects. To make our economy work well, we need DCMS to focus on a big, bold plan for national wellbeing, which is something that the Government have either forgotten or just do not understand.
Something else that has been forgotten is the fact that our economy is inextricably linked to the global economy. Not only have our financial services led the world, for good or ill, but so have our music, fashion, art and publishing industries. Creative industries exported £36 billion worldwide in 2018 because they are part of the modern services economy that the UK brings to the world. When pandemics hit, our open economy is going to be affected long after everyone is vaccinated at home, which is why, if we really want to rescue our economy, we need a much better plan than cutting aid to some of the world’s most vulnerable people.
It gets worse. In addition to the year of hell that the pandemic has been for many businesses is the underlying cause of the disruption and damage to our economy that will last long after the pandemic: our exit from the European Union. As I said before, our country may be an island economy, but it is also an integral part of the continent of Europe. The project of those on the hard right and the far right—to blame European politicians for every ill that this country has ever faced, just as the Prime Minister did for years in his Telegraph column, with little connection to reality—is having a real impact on our economy across the board. Organisations such as the Federation of Small Businesses highlight its impact on small firms, whose profits are being wiped out as a result of post-Brexit costs.
The creative industries about which the Secretary of State and I have spoken have been hit hugely by Brexit, as well as by covid. The Government show no show sign at all that they will fix the problems. Those in the fashion industry warn that restructuring is necessary due to the industry’s European and global supply chains and the disruption that our leaving the EU has caused, but where is the help? Musicians and performers are unable to tour freely in Europe—a vital stepping-stone for many emerging artists and a key part of a crucial industry. All that because the many are having to pay the price for the ideological obsession of the few.
As the journalist Rafael Behr wrote recently, Brexit has been turned into a “perpetual grievance” machine. Let me give an example. The Secretary of State got himself into hot water by asking the fashion roundtable to use its star quality to influence our European partners—whom the Conservative party has so successfully hacked off. Was that an honest acknowledgment that there just is not anyone in his Department who has star quality of their own? Or was it, on this International Women’s Day, an admission that the Tories see the fashion and creative industry not as a serious, leading industry that puts clothes on the backs of millions around the world but rather as a flighty and insubstantial part of our economy in which women are too busy doing the stitching to be consulted about the future of our economy? Is that how the Tories see us?
It is not lost on me that here we are, on International Women’s Day, debating the Budget—the money in people’s pockets and whether our kids have a decent life or not— and many of the speakers are men, as is often the case in this House. Who can say why that is? I can certainly tell the Secretary of State that I am not the only woman in the country who is a little bit fed up of the Prime Minister’s male-dominated Cabinet. We are fed up with the Chancellor of the Exchequer who, in his Budget, forgot to mention social care, in which thousands of women work. The Budget also does little or nothing for the creative industries, in which thousands of women also work and which the Secretary of State dismissed in such pathetic terms.
The women of this country are not very enamoured of the Prime Minister, but that was true long before this Budget. We do not want his patronising arms around the nation. We want work that pays as much as men’s, we want to share the care of our children and older people so that we can have the same status as men at work, and we want people to listen when we speak. And before anyone says anything, yes I know that the Tory party has had two women Prime Ministers while the Labour party has had none, to which I would say yes, that is a serious criticism and it should be taken seriously. That is why Labour women will keep fighting, forever and a day, for women to be elected to the highest offices of state, not in order to get one woman on a pedestal but to achieve for all women the systematic undoing of the assumptions and strictures that make us less than we are.
In the context of this debate, the assumption consistently revealed by the Tories is that the work women do, from care to creativity and culture, is worth less than the work men do. That assumption—that revealed preference, as the economists would say—is wrong, and it will be the priority of Labour Governments to undo it, alongside the many other aspects of this Government’s economic policy, which, after a lost decade of growth, is nowhere near up to setting our country on the right path. The winners from this Budget will be those who are already comfortable enough. The losers will be the small businesses whose prospects have been shut down temporarily by the pandemic or permanently by Brexit, the children struggling after a decade of disaster for family benefits, and every woman, man and child whose ambitions are not well served by a Tory Chancellor more interested in his own.
Karen Bradley (Staffordshire Moorlands) (Con)
I am delighted, as a woman on the Conservative Benches, to be joining this debate. As I have only three minutes, I am unable to go through the many things in the Budget that I think are wonderful. It is a great Budget and there are many things to praise in it. The numbers that have been quoted by the Secretary of State for Digital, Culture, Media and Sport, my right hon. Friend the Member for Hertsmere (Oliver Dowden) are frankly eye-watering in terms of Government spending, but in the midst of those big numbers there are some losers and some areas of our economy that need focus. I would like to spend my three minutes—two and a half, as it is now—focusing on them.
First, the self-employed who are employed through a limited company have not had any support at all. I cannot be the only Member in this House who has constant emails from such constituents asking for support. I am not saying that this is easy, but perhaps the Treasury could see whether there is a way to help the self-employed. Many of those who are self-employed through limited companies are in the creative industries, and it would be great if we could find some way of helping them.
The wedding sector has also been particularly hard hit. Wedding venues are too large to qualify for business rates relief. They have no turnover, so the VAT reductions do not help them, and they do not serve food, so eat out to help out could not help them. I know that support has been given to the wedding industry, but these venues want to get back open and to hold weddings. They can do that in a covid-safe way, and they were doing so before this lockdown. I ask the Government to bring forward support for that sector.
I also want to touch on pubs, and I declare my interest in that my family run pubs and it is the industry in which I grew up. While great support has been given, wet pubs in particular have suffered. Support such as eat out to help out has been available, as well as the VAT reduction to 5%, which is very welcome and I am pleased that it has been extended—as is Alton Towers, one of the biggest employers in my constituency. However, if a pub does not sell food, it does not qualify for the 5% reduction. Would the Government consider finding some way to help those wet pubs? They will be reopening just as the football season comes to an end and will therefore not have the benefit of people coming in to watch the football, and they do not serve food and therefore cannot benefit from many of the Government’s incentive schemes. Just a suggestion: maybe there could be a way to allow those businesses to continue furloughing staff but let the staff come back in to work to help them to reopen. There are great costs involved in reopening that they need to think about.
My final point is about getting people back into town centres and spending money in the hospitality businesses. We need a whole-of-Government effort to ensure that not just the great events that my right hon. Friend mentioned but local events are held. I spoke to the leader of my district council today, and we are looking to see what we can do because we want those businesses to be able to stand on their own two feet, as the Secretary of State said.
Richard Thomson (Gordon) (SNP) [V]
Let me join other Members in marking today as International Women’s Day. It is certainly a day for us to reflect on the contribution of women, and on how we ensure that everyone is able to make their fullest possible contribution and how we advance the cause of equality. It is also important for law makers to be considering the impact of the choices that are made all year round. With last week’s Budget, it is particularly important to ensure that the decisions as far as possible enhance equality and opportunity rather than diminish them.
Siren voices have been calling for action to be taken on the deficit that has resulted from the economic responses to covid, by which they inevitably mean the Government taking steps to cut public spending. Unfortunately, the Chancellor shows every sign of wishing to heed that. The only comparable economic event to the covid crisis in its impact on national debt was world war two. Most of us would find it hard to imagine the political voices that prevailed after world war two saying that a national health service was unaffordable, that public services were unaffordable or that it simply was not feasible for the Government to play a leading role in rebuilding housing and industry.
The important figure, of course, is not the debt in itself, but the debt as a share of gross domestic product. Economic demand will return as vaccinations start to take effect and more of life can begin to return to normal. If the Government continue to support that economic demand, the economy will return to trend growth and overall government debt will begin to shrink proportionately, exactly as it did after world war two. However, if the brakes are to be put on spending in the future, demand will assuredly fall and people will have less money to spend and growth in employment will be stifled. Inevitably, the impact will then fall most heavily on all those who have least, such as families that have one or more adult out of work and in receipt of benefits.
There are many actions, both big and small, that the Chancellor could have chosen to take in this Budget which could help or hinder the recovery, but one of the most significant choices would have been to make permanent the £20 uplift in universal credit. It is no exaggeration to say that for many families that £20 has made the difference between bills being paid or not, and food being on the table or not. It is a comparatively modest financial commitment, but one whose impact for the good has far outweighed the resources it has required. Extending it for six months falls well short of doing “whatever it takes” to ensure the financial security of the least well-off. Governments all over the world have increased their support for their economies throughout this crisis, many with interventions that are proportionately far larger than we have seen from the UK Government. Having rightly carried the economy this far, it would make no sense for the Chancellor to drop that commitment now. It is a real disappointment that he is not doing more to do “whatever it takes” and provide the 5% of GDP stimulus that the Scottish National party has called for repeatedly.
There are of course things that can be welcomed. We certainly welcome the excellent progress being made on vaccinations and on reducing infection levels of the virus, which gives us ever more hope that when restrictions start to be lifted they might be able to stay lifted. We can also welcome the extension of the furlough and the self-employment income support scheme. Obviously, the furlough is not without its cost to employers, and together with the SEISS it still fails to reach too many people, but both have been lifelines for those they benefit. To help fill in some of those gaps, the Scottish Government have provided nearly £30 million for newly self-employed people to mitigate the financial challenges for those who have been unable to access the UK Government’s SEISS. It is past time for the Chancellor to recognise the shortcomings of his support mechanisms, understand those they have left behind, recognise the hurt caused and undertake to do “whatever it takes” from this point onwards to support those people who have been left behind.
Although everyone recognises that those schemes cannot continue forever, the threat to end both in September is not at all helpful for those who are trying to plan how to trade out of their present difficulties. The repeated short-term extensions that we have seen over the past 12 months are obviously better than the alternative of not extending. However, it creates an image not so much of a Chancellor carefully planning a route back to recovery, but almost of a Wallace and Gromit Chancellor, desperately laying the rails in front of the train just before it runs out of track.
Ahead of the Budget the British Chambers of Commerce warned that a quarter of British businesses would fire staff immediately if the Chancellor failed to extend the scheme. The Institute for Fiscal Studies urged the Chancellor to recognise and address the multiple inequalities exacerbated by the crisis, saying that emergency support should be extended and that the furlough scheme
“should not be cut completely in one go.”
Placing a full stop date on furlough, rather than having an open-ended promise of continuing it until it is no longer needed, risks pushing businesses to lay off their workers while they are still in recovery. The resulting loss of skills and experience can only hinder the recovery of individual businesses and the economy, so we urge the Chancellor to reconsider the date. No business is or will be furloughing staff unnecessarily, and a Chancellor truly committed to doing “whatever it takes” would surely agree to maintain both schemes for so long as is required while restrictions remain in place.
Turning to the tourism and hospital sector, the best way to help it right now would be to allow it to trade out of its difficulties by getting money across the counter just as soon as it is safe once again to do so. The VAT reduction will be crucial. My party welcomed the VAT reduction to 5% for the sector, but to stop that on 30 September will not be helpful. It should continue for the full year.
Business rates relief will also be crucial and has been a lifeline for leisure, retail and hospitality businesses, helping them to strip out fixed costs and stay alive. It is a matter of regret that the Chancellor has not committed the same level of resource as the Scottish Government, who have announced a £1 billion package that not only cuts the poundage rate, but offers 100% relief not just until June, but for the next 12 months for retail, tourism, hospitality, newspapers and the vital aviation sector.
As a Member of Parliament representing the north-east of Scotland, I am only too aware of the importance of the energy economy and the criticality of ensuring a just transition to net zero. While I acknowledge the £27 million that has been announced for the energy transition zone in Aberdeen, it still falls well short of the wider £62 million transition fund committed last year by the Scottish Government.
Listening to the Scottish Tories would lead someone to think that the levelling-up fund will leave not a single pothole unfilled, not a bridge unrepaired and not a project unfunded in north-east Scotland. Instead, now that the detail has been revealed, we see that Aberdeenshire has been placed in the lowest category and Aberdeen city in the second tier. We are essentially being left empty handed, and it is hard to avoid the conclusion that the UK Government are so far falling far short of the necessary response to help secure the economic future of north-east Scotland. We can only hope that there is better news to come in the sector deal that we have been promised in the first quarter.
As I have said, there is also essentially nothing for the 3 million who have been excluded. If she has spent years of practice and study in pursuit of her dream to perform, Fatima’s next job should not have to be in cyber. She should have a fighting chance to get her next job in the area that she has worked so hard to be in. Our arts and cultural sector would be vital to our sense of who we are even without its economic contribution, but this is not just about the performer we see and admire, because there are so many other parts of the pyramid that helps to put that performer on the stage. Those people have been left behind without the ability to earn. If we impoverish them, we impoverish us all.
There has also been no additional funding to support musicians and touring artists who have suffered the double whammy of coronavirus and an end to visa-free touring in Europe and no provision for live events insurance, without which the industry will be reliant on support for much longer than necessary. The Scottish Government have stepped in with funds for the performing arts venue relief, for cultural organisations and the venues recovery fund, which has supported theatres and other performing arts venues across Scotland. That provision is supporting grassroots music venues and providing a stabilisation fund, furlough top-up payments and one-off grants for nightclubs and soft play centres. The UK Government can and should follow suit. Interventions have also been made in tourism and hospitality with no UK equivalent: in the wedding industry fund, the bed-and-breakfast hardship fund, the tour operators’ fund, and the events industry support fund. These tourism and hospitality businesses have lengthy supply chains, reaching all parts of the economy. It is not just the accommodation provider, but the butcher, the baker, and the candlestick maker as well. The recovery from the pandemic will not begin when covid recedes, as businesses will simply move on to dealing with the Brexit crisis. We need to offer wide-ranging support for businesses in this regard. Instead of offering loans, it would be better to convert loans to grants.
In conclusion, let me just make this observation: through the Barnett formula, Scotland is still dependent on problems being felt and choices being made in Whitehall in order to release the resources that we would wish to have in order to act in all the ways that we need. Scotland desperately needs borrowing powers, but as the UK Government take back control from the Scottish Parliament, they are also taking away resource and with it any reason for many to support the current constitutional and fiscal settlement. I am certain that that will not go unnoticed as we approach May’s election in Scotland.
George Freeman (Mid Norfolk) (Con)
It is a pleasure both to follow the hon. Member for Gordon (Richard Thomson) and to be back in this Chamber to support the Chancellor on this Budget for recovery and renewal. In particular, I support his commitment to continue the unprecedented level of support: the extension of furlough relief, which will have given huge reassurance to many families around the country—£280 billion already spent on covid relief in the past 11 months; his help for the self-employed; his extraordinary commitment to freeports to drive transformational growth, investment and innovation in some of the most left-behind communities; his support for business-led investment, which is the key to growth and job creation; and, in particular, his support for green growth to drive a sustainable economic recovery.
I do not know about you, Mr Deputy Speaker, but after a Budget, I look for a judgment not from the Opposition Front Bench but from the business community of this country as they are the people who drive the investment that creates prosperity. This Budget has been welcomed by the CBI, the FSB, the Institute of Directors and all the key trade bodies, which speaks volumes for the confidence of boardrooms in this country in this Chancellor and in this Budget.
As former Minister for life science, agri-tech and transport technology, I can say that the Chancellor is absolutely right to back the businesses of tomorrow—the highest growth sectors, which produce not just the odd single digit growth in jobs, employment and prosperity, but double digit and, in some cases, triple digit growth. Those new sectors of the economy are the best for getting us out of debt and releasing a generation from what could otherwise be a decade of decline after this covid disaster.
Let us be in no doubt about the scale of the economic disaster of covid as well as the healthcare impact. A total of £280 billion has been spent in 11 months, which is an unprecedented level of debt in peacetime. This is also the biggest recession that we have experienced in peacetime. This is a trauma on the public finances on a scale we have literally never seen in this country, and it takes us back to a debt-to-GDP ratio that has not been seen since 1760. This is an extraordinary moment. It is even worse than the economic legacy that we inherited in 2010.
How will we avoid a decade of decline and the next generation paying for it? The Chancellor is right about two things. First, we have to reassure the markets that we are the party still committed to returning our public finances to a sensible and balanced state. Let us not forget that a 1% rise in interest rates, if markets lost confidence in us, would lead to an extra £25 billion a year in interest payments. The Chancellor has taken some tough decisions and he is right to have done so, but, crucially, it is growth that we need and that commitment to those new sectors. Nine years ago, we set out an industrial strategy for life sciences, which has paid dividends this year in our ability to deliver a vaccine more quickly than anywhere else in the world, and if we do the same now in bioeconomy, artificial intelligence and robotics, we can do the same again, and the Chancellor has laid the foundations for a decade of growth.
Tony Lloyd (Rochdale) (Lab)
Let me begin by agreeing with my hon. Friend the Member for Wirral South (Alison McGovern) that the measure of a Budget is not the Pollyanna-ish speeches of the Culture Secretary but the slow peeling away of the unpleasant and unfair political choices that the Chancellor made last week. I lay on a ventilator while medical and non-medical staff were saving my life, as they did the Prime Minister’s, and I did not come out of hospital to clap those NHS workers and then say to them, “But you will have a real-terms pay cut.” It would have been hypocritical of me to do that, as it would for anyone else.
One of the crises we face in this country is the crisis in social care. We know that the sector is dominated by low-paid women workers—indeed, far too low-paid. We have to do something about that, yet we saw nothing in the Budget to relieve those problems.
Rochdale is a town in a borough that has seen £170 million taken away by successive Conservative Governments since 2010. We have very high unemployment among our young people—probably 50% higher than in the country as a whole—and 17,000 universal credit claimants. With that kind of background, it makes no sense to say that universal credit will be cut by £20. That will take £17 million a year out of the Rochdale economy, and stopping furlough in September will do equal damage.
If this is a jobs-first Budget, what about the missing millions—those who got no help, such as Sarah Graham, who runs a business in Rochdale as part of the Travel Counsellors franchise? She has had almost no financial support for the last 12 months and will probably have no income for another 12 months, because that is the nature of her work. It makes no sense for businesses such as that to be put at risk. Where is the ambition in the Budget? Where is the hope for the future? Where is the plan for investment in education for our young people or jobs skills training for the future? It is not there. Where is the commitment to Northern Powerhouse Rail? We have heard it promised so many times, but not a spade has yet hit the ground.
This is a Government that talk the talk on greening our economy, but nothing in the Budget will address the urgency of the climate crisis. This Government have failed, this Budget has failed, and the Chancellor has failed the nation. [Interruption.]
Mr Deputy Speaker (Mr Nigel Evans)
That is what I like, a timer. Well done, Tony.
Philip Dunne (Ludlow) (Con)
It is a pleasure to follow the hon. Member for Rochdale (Tony Lloyd).
I would like to make three brief points in this important debate on the Chancellor’s Budget statement. First, I applaud the priority to help to protect jobs and support businesses as we emerge cautiously from the restrictions imposed to combat the covid pandemic. I therefore welcome the extension of the furlough scheme to September and the increased support for the self-employed, in particular those who started a new business during the year before covid struck. I am grateful to my right hon Friend the Secretary of State for Digital, Culture, Media and Sport, who opened the debate, for the work he has done to secure survival funding for the sports, arts, culture and heritage sectors. These groups have been a lifeline for cultural venues like the Ludlow Assembly Rooms and the Majestic cinema in Bridgnorth in my constituency, with major support going to the Ironbridge Gorge Museum Trust, to ensure that these will all soon be able to reopen. The continued business rates holiday and the VAT cut for hospitality and tourism businesses will also be a huge help in south Shropshire when they are able to reopen.
Secondly, I welcome the green finance measures, extending the Bank of England’s remit to reflect the transition to net zero Britain, which the Environmental Audit Committee had specifically called for. The confirmation of the £15 billion green gilts issuance, the launch of environmental retail savings products and the review of carbon offset market trading will all help to cement the City of London’s leadership in green finance. The City and its regulators should lead the way in developing global standards of taxonomy to monitor and rate company performance and investment products and portfolios, as part of our contribution in hosting both the G7 and COP26 this year.
The Budget had some encouraging pointers to help the UK to meet its environmental obligations. The major boost to business investment through the super deduction capital allowance will help business to invest in newer, cleaner technology. It was also good to see the £12 billion investment in the new UK infrastructure bank, with a remit to help to drive green growth and create green jobs, as will the development of freeports and growth hubs, and the hydrogen projects, unlimited investment in offshore wind and the port infrastructure that were announced.
But despite these promising moves, covid has delayed many of the detailed environmental policies needed to deliver net zero Britain. The private sector is poised to invest in projects contributing to the economic recovery and to net zero Britain, but they need the demand signals and policy structures in place from Government to do so. The Chancellor missed this opportunity and made little further progress in aligning recovery measures to the overarching Government ambition to achieve net zero Britain. Last summer, the Chancellor launched the green homes grant—an excellent initiative to help the 19 million homes that need energy efficiency measures to cut carbon emissions, but unfortunately he did not choose the Budget to overhaul and extend this scheme so that it would live up to his ambitious targets.
John McDonnell (Hayes and Harlington) (Lab) [V]
This is a shameful Budget. On International Women’s Day, whether you are a mother in a food bank queue in Britain struggling to feed your children or a mother of a child in Yemen, this heartless Chancellor is turning his back on your suffering. It is shameful because of the hypocrisy of standing on doorsteps clapping nurses and now slapping them in the face by cutting the pay of our NHS heroes and heroines. It is especially shameful because at the head of this Government who are insulting our NHS workers is a Prime Minister whose life they saved. The ultimate irony is that the Prime Minister is riding high in the polls on the backs of the hard work and dedication of the NHS staff who are rolling out the vaccination programme so successfully.
Anyone voting for this Budget will bear a mark of shame for throwing another 500,000 people into poverty when the Government cut the £20 a week in universal credit from the poorest families in our community, a mark of shame for yet again failing to provide even that meagre uplift to disabled people living in poverty on legacy benefits, and a mark of shame for failing to tackle the low level of sick pay that is forcing many workers to put their health at risk by returning to work. I have tabled an amendment to the Budget resolutions calling for a distributional analysis of the Chancellor’s proposals to freeze the tax thresholds. The Chancellor said:
“Nobody’s take-home pay will be less than it is now as a result of this policy”.—[Official Report, 3 March 2021; Vol. 690, c. 256.]
The tax threshold freeze is a real-terms pay cut for millions of workers. The OBR estimates that this will mean 1.3 million more people paying income tax. Their take-home pay will be less. In 2019 the Conservative manifesto, like the Labour manifesto, pledged no rises in income tax, VAT or national insurance for basic rate taxpayers. This Budget breaks the pledge on which over 550 Members of this House were elected. Many low-paid workers are in rent arrears, in household debt or taking mortgage holidays, accruing more debt interest. We should not be legislating to cut their take-home pay.
I have seen it reported that in this Budget the Chancellor is stealing my policies. No, he is not. His Budget plagiarises the rhetoric but not the substance, with promises of corporation tax rises, but delayed and overridden by tax giveaways—tokenistic gestures to levelling up but contaminated by pork barrel politics. Taken alongside the fast-track award of crony contracts to Tory friends and donors, it is hardly surprising that many now refer to this Government as corrupt. The decisions to freeze fuel duties and to dig a new coal mine, and the pathetic scale of environmental policies, do not just pay lip service to the climate crisis we face but put future generations at risk. By any measure, this is a Budget to be ashamed of.
David Morris (Morecambe and Lunesdale) (Con) [V]
We all understand the maelstrom in which the Chancellor is operating and must congratulate him on his efforts to deal with the immediacy of the crisis. Despite this, I was somewhat disappointed that there was no reference to Morecambe’s Eden Project North.
Eden Project North meets all the Prime Minister’s policy priorities: it can be an exemplar project in terms of levelling up. As the project is shovel-ready, it is now possible that workers can be on-site this year, with immediate gains, demonstrating the green shoots of recovery from covid-19 and being a showcase for the Government’s commitments to COP26 in Glasgow in November. Eden Project North is precisely the type of project that the Government should be backing. Three Prime Ministers and four Chancellors have agreed with this, as did the Minister in my recent Adjournment debate.
The benefits and employment opportunities are obvious. Morecambe has a vibrant creative arts and tourism sector, and Eden will complement that as it has a proven track record of hosting arts and tourism events at its Cornwall site. I have submitted to the Treasury a private letter signed by 46 MPs from all areas of the UK, not just the north-west, to back Eden Project North, and almost 100 businesses in the wider Morecambe area have also signed a petition to Parliament. It seems that if there is any project to change lives, this is one that should be endorsed. I urge the Government to back this project as we emerge out of the pandemic crisis.
The levelling-up fund is good but is capped at £20 million per district, not per seat, with multiple restrictions on use and existing funding streams now seemingly being redirected through a levelling-up bank in Leeds yet to be implemented. How can Eden Project North access this scheme, especially as it has already been endorsed by the Government and can only apply in two years’ time through a council that will be abolished in the next 12 months? The levelling-up funds are not enough for Eden Project North unless they can be applied through an infrastructure scheme for £30 million to £50 million, seemingly only for roads. There needs to be more clarity on the levelling-up prospectus and I call on the Government to match-fund the £55 million Eden has on the table to get the bulldozers and builders to work on Eden Project North in Morecambe sooner rather than later.
Ian Lavery (Wansbeck) (Lab) [V]
There is nothing in this Budget for Northumberland. There is nothing in this Budget for my constituency of Wansbeck. It is typical of what has happened in the north. We have seen decades of decline and decay since the social and economic fabric of whole communities was torn apart and left unreplaced. The decline has accelerated in recent years as a brutal regime of austerity and cuts has taken its toll on already abandoned communities. Last week’s Budget was a kick in the teeth for my constituents and many more in the surrounding area, who, despite years of being left behind, could see no sign of any attempt to level up in the region.
Despite that, the exciting proposal of a new state-of-the-art electric battery manufacturing gigafactory in Cambois in my constituency presents an opportunity that our communities can be rebuilt around—a new industrial power in the north that centres on green energy, upon which we must and will become increasingly reliant. This will only be possible with the firm support of this Government, and the question from my constituents to the Government is simple: “Will you support us this time round or cast us aside once again? Will you deliver, or will you boot us into touch once again?”
Climate change is a real and dangerous threat, yet there was little mention of it in the Budget last week. But, believe me, there is no get-out-of-jail card with climate change; there is no vaccine for climate change. It is crucial that the Government do what they can to support the development of this gigafactory in my region. It is an opportunity for the people to get just employment—to get fair wages, and terms and conditions.
The Britishvolt gigafactory is only the first step in what has the potential to be a revival for the north, which has been given so little to cheer about in recent decades. We need this; we need and deserve this chance and opportunity. I urge the Chancellor, the Business Secretary and the Prime Minister to do whatever they can and whatever is in their power to ensure that this proposal is successful. It will transform the lives of thousands of families in my constituency. I urge them and their teams to work closely alongside those who understand our region. We are a proud region and a proud people; give us the respect we deserve and deliver.
Duncan Baker (North Norfolk) (Con) [V]
This was a Budget that had a clear direction. Whether we like it or not, if we do not continue to protect the jobs and livelihoods of the country, particularly in the private sector, we will not have an economy to return to that does any of the things that we take for granted, such as providing stability, growth or the tax receipts to fund the public sector. The Chancellor focused on that No. 1 priority. That is of the moment, and I commend him for it.
I have listened to the speeches by Opposition Members over the last few days bemoaning what was not in the Budget rather than acknowledging the sheer depth of support that this Conservative Government continue to offer. It is astonishing. Wake up! The answer to the biggest economic shock in history is not like a vaccine. We cannot fix where we are overnight; this situation will take years and years to recover from. It is a question of priorities—and where do we even begin to start? We do what this Government have done since the start of the pandemic—we protect people. We protect people’s jobs and livelihoods with support that is still needed now.
We heard it when the Chancellor said that the OBR now expects the UK economy to recover to its pre-crisis level six months earlier than originally thought. Unemployment is now expected to peak at 6.5%, instead of nearly 12% as feared last summer; 1.8 million fewer people are expected to be out of work than first forecast. That is not a bit of luck; that is a Government that have produced one of the best financial responses in the entire world to support their citizens.
We cannot fix the public finances in a single Budget when we are in the midst of spending £407 billion in total fiscal support, with our national debt reaching its highest level since the ’60s. The recovery from this economic shock will be long and prolonged, but like our exit from lockdown, the Chancellor’s plan is the right step. My right hon. Friend was honest: the steps will be steady, moving in the right direction and priority-driven. That is responsibility.
For my constituents in North Norfolk, the message has been heard. Tourism, leisure and hospitality, the dominant sectors for many rural areas, are on their knees, but we welcome the extension of the VAT rate cut and of business rates relief, and the restart grants to get our businesses back on their feet. No one, but no one, can question the commitment that the Government have given to this sector, and I am confident that we will see another year of safe domestic tourism into North Norfolk.
Tahir Ali (Birmingham, Hall Green) (Lab) [V]
The Budget announced on 3 March left a lot to be desired. While there were certainly some welcome measures, it is astounding that so little was said about the NHS and social care, public sector pay, legacy benefits, schools, or what those families relying on universal credit will do once the uplift is phased out in September. Yet those are the issues that so many of my constituents in Hall Green regularly contact me about.
At the front of people’s minds is the NHS, yet here we heard nothing of substance from the Government—no new funding announced for the NHS in the midst of one of the biggest public health crises we have ever faced. To add insult to injury, the Government are now saying that they can afford only the derisory sum of a 1% pay increase for nurses. I direct them to the Royal College of Nursing on this issue and recommended that nothing less than a 12.5% pay increase is satisfactory for our nurses, who have worked hard and risked their lives to keep us safe and healthy over the course of the pandemic.
Also notable by their absence from the Budget were children and parents. In my constituency, nearly half of all children live in poverty—twice the national average—which is completely unacceptable in a country as wealthy as ours. While the Budget gave sorely needed certainty to businesses, children and parents were given none whatsoever. As the Child Poverty Action Group has argued, the temporary uplift to universal credit only delays an inevitable and considerable fall in income for many families living in poverty. This is simply not good enough. The uplift should be permanent.
Finally, there was nothing on public sector pay. Many of our key workers in the public sector now face squeezed incomes as lockdown eases and the economy returns to normality. After all they have done for this country, to keep their pay frozen is a disgrace. This pay freeze must be abandoned, and decent pay rises must be granted to all public sector workers.
Chris Grayling (Epsom and Ewell) (Con) [V]
I do not think any reasonable person could have expected to see anything except a tough Budget this year. The measures taken by the Chancellor over the past year have been essential. We could not have stood by while so many fellow citizens saw their jobs and livelihoods disappear, so I pay tribute to the Chancellor for his speedy response and for the massive support packages he has put in place. Instinctively, I believe in low taxes and small government, but in a crisis like this, measures of this kind—unwelcome but necessary tax increases—are vital, as, I am afraid, are pay freezes, except in the NHS. I also very much agree with the Chancellor’s continuing focus on jobs. I say that as a former Minister for Employment who spent a long time trying to help people back into work a decade ago, when unemployment was 2.6 million. Getting people back into work has to be our priority.
However, there are a few areas where I would like the Treasury to have another look. The first is the situation facing people who have missed out on support over the past 12 months, and in particular those who pay themselves by dividend. I understand why the Treasury took the approach it did at the start of the pandemic, and I agreed with that approach then, but after 12 months and three lockdowns, the Treasury should be taking a different view. It should be offering support to those people, potentially as part of an expanded self-employment income support scheme. We have to do something for them now.
My second concern is the travel and tourism sector. The Secretary of State pointed out what a dreadful time this has been for businesses in that sector. From airlines to event managers, businesses across the sector have been crippled over the past year, and as of now, they have no certainty about when they can return to anything like normality. This sector is vital to our economy, and my constituency hosts a large number of small businesses that operate in it. I urge Ministers to make 17 May the start of an unlocking process. We cannot continue with borders shut to the degree that they are now. But if that is not going to happen and international travel cannot begin again without onerous restrictions, the Chancellor will need to return to the issue.
Finally, will Ministers look again at the conditions that apply to the rescue package put in place for zoos? The fund was welcome, but it is very difficult for zoos to apply for it. It makes no sense to have a rescue fund go unspent while the zoos go bust. Can Ministers look at this again and change the ways of applying for the fund?
This was a Budget that none of us would have wanted. I hate to see taxes rise, but a smart Budget deals with the challenges of the moment, and this Budget did that very well.
Jon Trickett (Hemsworth) (Lab)
I have three tests for this Budget. The first is: does it leave anybody behind? If someone works hard and plays by the rules, they should be able to expect to get on in society. People who are unable to work should be protected and expect to have benefits that secure a decent life, and public services should be universal, properly financed and available to all. By those standards, the Budget fails.
Government Members argue that there is not enough money in Britain. This is one of the richest countries in the world. The problem is that the wealth is located in a handful of large corporations and a few thousand very wealthy people. In the last six months, during the pandemic, the stock exchange increased in value by £630 billion. Since the banking crash, the 1,000 richest people in our country have increased their wealth by £400 billion. There is almost £1 trillion in unspent corporate liquidity in the banks. There is a large amount of wealth available in our country. The problem is that it is held in a very few hands, and the Chancellor failed to touch it. At the same time, working people, who have sustained our country through the pandemic, are facing a disgraceful situation. We have £8 million being taken by stealth because of the income tax changes. We have a third of key workers now paid less than the living wage. Ten million people are currently working in precarious employment and 14 million people are living in poverty in our country today, alongside the vast wealth I have just spoken about.
It is true that the Budget envisages expenditure on infrastructure, but it is £2.4 billion a year. That is a large amount of money, but it is 147 times less than the amount of money that Germany is spending on infrastructure and it is 15 times less than what the Government are spending with their Tory chums on the track and trace system, which is not working very well. All those things mean that one has to worry about the chronic nature of the problems facing working people in our country. A towns fund has been created, but it has already been cut, actually, through austerity and it is not going to the towns in most need. It is going to those that are most convenient to the Tory party. As for housing, of course they are giving more money to buy houses, but they have done nothing to build more houses, thereby contributing to the chronic problem of housing facing our country.
This is not a Budget to build back better. This is a Budget that sustains everything we have seen—unemployment, poor work, precarious employment, poverty, cuts to the public services and austerity. It should be rejected tomorrow night. The Chancellor needs to go back, with a new calculator, to bring a new Budget back in due course.
Jonathan Gullis (Stoke-on-Trent North) (Con)
The extension of the furlough scheme, the extension of the VAT reduction and the restart grants are all hugely welcomed by businesses and individuals across Stoke-on-Trent North, Kidsgrove and Talke, particularly ceramic manufacturers such as Churchill China and Steelite, which have been hugely reliant upon furlough, so they can bring back workers steadily as demand for their world-leading tableware increases.
If I can, however, make one further pitch for brewers, such as Burslem-based Titanic Brewery, I would argue that more must be done to help the on-trade. The new rate of duty for draught beer, defined as beer sold in containers of over 20 litres, could be set at a lower rate, reducing the price gap between cheap supermarket booze and a beer at the pub. This policy targets a sector that has suffered throughout the pandemic and is only possible now the UK has left the European Union.
I was astonished by the Leader of the Opposition’s sneering attitude over well-paid jobs moving to Darlington and money being invested in towns such as Kidsgrove. Instead of welcoming the investment, he showed how out of touch he is with the people of Stoke-on-Trent North, Kidsgrove and Talke by suggesting that Kidsgrove is not entitled to the £16.9 million awarded in this Budget.
The Leader of the Opposition said that such announcements were “giving up”, not levelling up. Let us look at how, from 2012 to 2018, the Labour-led Newcastle-under-Lyme Borough Council gave up on the borough’s second town. During that period, the spend on infrastructure projects in Kidsgrove was: in 2012-13 nil, 2013-14 nil, 2015-16 nil, 2016-17 £15,000, 2017-18 nil. The local Labour party gave up so much on Kidsgrove that, when it was offered a chance to buy Kidsgrove sports centre for £1, it said no. Thankfully, Newcastle-under-Lyme Borough Council is now Conservative-led, by Councillor Simon Tagg, who has worked tirelessly with the Kidsgrove sports centre community group and County Councillor Gill Burnett to develop plans for the sports centre’s big comeback—a comeback that would not be happening without the town deal money, demonstrating clearly to the people of Kidsgrove that, under this Chancellor and this Prime Minister, places such as Stoke-on-Trent North, Kidsgrove and Talke are forgotten no longer.
Christina Rees (Neath) (Lab/Co-op) [V]
The Chancellor’s Budget has created a new cliff edge at the end of September. The furlough scheme stops at the end of September. It should be extended and be flexible. The 5% VAT reduction for food and drink in pubs and restaurants stops at the end of September. It should be extended and include the close contact service industry. The universal credit £20 uplift stops at the end of September. It should be made permanent and include legacy benefits. The Office for Budget Responsibility forecasts peak UK unemployment of 6.5% at the end of September. That is 2.2 million people without jobs at a time when coronavirus and flu may be overwhelming.
The Chancellor’s Budget is rhetoric over substance, playing down his £4 billion of cuts. Austerity is not over in Wales. While we wait for his rhetoric to turn into substance, the Welsh Labour Government have stepped in again to protect public services, build a greener future and create positive change for a more equal Wales, filling in the Chancellor’s gaps in support to move Wales forward. The Welsh Labour Government’s £2 billion economic resilience fund is the most generous coronavirus support package in the UK, securing 141,000 jobs in Wales.
Hospitality, leisure and tourism businesses in Wales that are affected by ongoing coronavirus restrictions will have an extra £30 million. If restrictions are extended in next week’s Welsh Government review, an extra £150 million will be available through the non-domestic rates scheme, with each business receiving up to £5,000. The business rates holiday for retail, leisure and hospitality in Wales will be extended for 12 months, with a targeted, responsible £380 million for businesses with rateable value up to £500,000, plus charities. Together with the small business rates relief scheme, that ensures that more than 70,000 businesses will not pay rates in 2021-22. Kate Nicholls, chief executive of UKHospitality said:
“The Welsh Government has again listened directly to our constructive proposals for more vital support and the new money will play a leading part in continuing to save local jobs and local businesses”.
One potential investment for Neath is the Chancellor’s announcement of £30 billion for the global centre for rail excellence in Onllwyn. Since 2016, the Welsh Labour Government have partnered with current landowners Celtic Energy, the rail industry, academics and Neath Port Talbot and Powys local authorities, and had positive consultations with local communities. Let us hope that this announcement is substance, not rhetoric.
Dr Liam Fox (North Somerset) (Con)
I broadly welcome the Budget. It comes at an unprecedentedly difficult time for the public finances as a result of the pandemic and the Chancellor is indeed wise largely to leave the economy alone in the coming year. This is not, as we had in the financial crisis, a fundamental problem with the workings of the economy itself, but an external shock, and the economy will self-right if we allow it to do so.
It is not a surprise that there is a bigger drop in GDP in the United Kingdom than in some other countries. We have a much larger service sector economy, and service sectors require people to move for them to work, therefore it is not a surprise that, if people cannot move, we get a bigger shock than an economy that is largely manufacturing based.
However, I question some of the attitudes to the financial years ahead. We tend to get much of the same old, same old on tax and spend; that the way to balance the books is either to raise taxes or to reduce spending. No one looks at what a business would do, which is to ask how it can earn more money. This country could earn a lot more money.
British exports now count for under 30% of our GDP. That needs to improve—the figure for Germany, for example, is nearly 49%. We have identified 400,000 businesses that we know could be exporters because they have counterparts and peers that already export. Governments need to help companies into markets. The market will do the same.
The Government can also help by setting a wider and better international framework for business. We can liberalise global services post Brexit, with our freedom in world trade policy. We should do so. Britain, the United States and Japan, the world’s three biggest service economies, would benefit enormously from trade liberalisation.
We need more wealth creation in the country. Wealth creation is not the same as growth. Any idiot Government can spend tomorrow’s money today and call the result growth. Labour Governments have made careers of doing that since the first Labour Government. Wealth creation is taking someone’s unique intellectual property and turning it into a good or a service that does not exist today, or a better good or service than exists today. That is why I would like to see more creativity in what we do in the time ahead.
Are we really saying with a £39 billion tax rise that we can find no major efficiency savings in the years ahead? Are we really saying there are no supply-side changes in our economy that could make it work more effectively? Do we really have to be saddled in perpetuity with the balance of spending and the patterns that we see today? I hope not. I hope that, in the Budgets ahead, once we put the covid pandemic behind us, we can return to a Conservative tradition of not just tax reform, but tax simplification, because those are the things that will make a market economy work better. We cannot fund the public services we want to see unless we have an efficient capitalist economy working at its maximum level, and that is the duty of any Conservative Government.
Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP) [V]
The Chancellor’s announcement last week about an extension to the universal credit uplift is of course welcome. However, by not committing to a permanent extension or offering tapered support, too many families are facing a cliff edge in six months’ time. Furthermore, by not providing a corresponding uplift for those on legacy benefits, more than 2 million people have been left to face increased costs, with many of our most vulnerable having to choose between heating their homes and feeding their families.
It is evident that the enhanced conditionality of our hostile benefits system results only in a framework that is difficult to navigate, uncompassionate and penalises the most disadvantaged. The Institute for Fiscal Studies’ director Paul Johnson recently stated that the cliff edge reduction in universal credit will result in the income of some families in our communities falling by £80 from one month to the next. This drop in income will come at the same time as unemployment is expected to peak. The deepening impact of the austerity measures enacted by this UK Government will clearly result in a system that is unworkable and cruel.
Does the Chancellor really think it is acceptable to leave the millions receiving legacy benefits facing real hardship, just because they happen to be claiming the wrong kind of benefit? Does he really think it is acceptable to increase the income of these same individuals by a lousy 37p a week, while continuing to refuse them the vital £20 uplift? Why is their need any different?
With no immediate return to normality in sight, it is only fair and reasonable to provide the same level of support to those on legacy benefits as to those claiming universal credit. Many of my constituents in Coatbridge, Chryston and Bellshill have faced the full force of this incompetent system, yet it is not the UK Government who are stepping in to provide support, but our grassroots organisations acting once again as the lifeblood of our communities. Tannochside Information and Advice Centre supports more than 200 of my constituents every month with benefit-related issues. Surely, given the circumstances, the Government should have extended existing benefit claim forms, instead of powering ahead with a system of inherent prejudice. This is just another abject failure in an already unsecure social security system.
The Budget should have been a chance for the Government to think more ambitiously about the welfare system. Given this failure and many fundamental issues around payment levels, the system will continue to leave people struggling. This was the time to give people dignity. Instead the Government have offered nothing but further deprivation, desperation and destitution.
Dr Neil Hudson (Penrith and The Border) (Con) [V]
I very much welcome this Budget, which addresses current issues while also planning sensibly for future economic stability. The Government have put in place unprecedented support measures during a pandemic, which have provided a bridge to allow jobs and businesses to be there on the other side. I welcome that the Government are continuing the support with the extension of the furlough scheme and other support measures. I am so pleased that the Government have listened to our calls from both sides of the House for the uplift in universal credit to be extended, which will benefit around 635,000 households in the north-west of England alone. I hope it will be kept under review in case a further extension is required.
I am grateful to Treasury colleagues for responding positively to our calls for other additional support, and the inclusion of some of the newly self-employed in the self-employment income support scheme is very welcome indeed. However, I reiterate my calls for that to be expanded further to provide support for those who, sadly, are still missing out, including directors of companies and freelancers.
The tourism and hospitality sectors have been hit particularly hard during the crisis. Those sectors are vital in Penrith and The Border and across Cumbria, and they may be slower to recover than some other sectors. I am therefore delighted that the Chancellor has announced continued targeted support for those sectors, such as the extension of business rates relief, the extension of the VAT cut and additional recovery grants and loans being made available. The sector is there ready and waiting to welcome visitors back to beautiful Cumbria when it is safe to do so. This targeted support will make that wide welcome all the more possible.
The support for training and upskilling communities in the Budget will make a huge difference. The doubling of the financial incentive to take on new apprentices will allow more workplace training for folk of many ages. In Penrith, we have had the turmoil over the future of Newton Rigg College, and we now have a lifeline of land-based education provision through an innovative partnership between Myerscough College and Penrith’s Ullswater Community College. Investment in apprenticeships and further education training will bolster this lifeline as we work with local stakeholders to secure a future vision for a new Newton Rigg to re-emerge. I look forward to working with Government and local stakeholders in realising this vision.
Finally, I was saddened that Cumbria’s freeport application, involving Carlisle Airport, Barrow and Workington, was not chosen in the first round of freeports. I hope the Government will recognise the importance of Carlisle Lake District airport to our region’s economy and as a key part of the United Kingdom’s connectivity. I hope, therefore, that they will continue to look to support the airport with financial and policy interventions.
This is a Budget with strategic importance, both now and in the future, as we come through the pandemic. I am happy to give it my support.
Mike Kane (Wythenshawe and Sale East) (Lab) [V]
It is delightful to follow the hon. Member for Penrith and The Border (Dr Hudson). I look forward to visiting his beautiful bit of the north-west as soon as we are able to do so.
This Budget is probably the most critical of my time in this place. The crisis has pushed millions into financial difficulty. Following a decade of austerity combined with the economic shock of Brexit, this emergency has thoroughly gutted parts of my communities in Wythenshawe and Sale East. The Budget was an opportunity to heal our economy and help those worst affected by the pandemic. I welcome the extra measures announced last week aimed at filling in the gaps of support. However, many of my constituents have shouldered an unfair share of the pain in the last 12 months. The Budget does not go far enough.
I have seen the huge impact the pandemic has had on Manchester Airport in my constituency and the surrounding community. For example, Naeem Ahmed, the secretary of the airport taxi association, shared with me the tragic news that several of his members had died of covid, unable to stop working due to the lack of financial assistance. These self-employed drivers and their families need proper financial support. Teresa McGeough, a self-employed children’s dyslexic assessor, was unable to work for much of last year. Teresa has only had access to a small amount of financial support that is not meeting her family’s outgoings. The Government cannot leave those like Teresa without the help they need.
The restrictions on hospitality in the past 12 months have had an unequal effect on wet-led pubs, unfairly affecting those in working class communities like mine. In addition, my constituent Paul Naylor, landlord at the much-loved Legh Arms in Sale Moor, is left with less than £100 a month due to the complex retail partnership between landlords and breweries.
This should have been a Budget to put the country back on the road to recovery and right the wrongs of the last decade by rebuilding our economic foundations. Instead, it just papers over the cracks. The Office for Budget Responsibility confirmed that the Conservative Government’s mismanagement has left Britain with the worst economic crisis of any major economy. We need to learn the lessons of the pandemic, not go back to the insecurities of the past. The Chancellor has the wrong priorities and is out of touch with what the country needs today.
Chris Skidmore (Kingswood) (Con) [V]
I welcome this Budget, not only for its record levels of support in the present due to the pandemic, but for having an eye on the future. However, if we do not own our future, the future will own us. Although this Budget was delivered in a period of extreme economic uncertainty and gloom, the one shining shaft of light has been the UK’s leading role in the covid vaccination programme, which has been delivered solely due to the impact of research and development. Clearly, research and development not only changes lives, as we have always known, but saves them too. As the covid R number begins to fall rapidly due to vaccination, we need now to turn our attention to the other vital R number: the figure that we spend on R&D in the United Kingdom. We have set ourselves a target of spending 2.4% of GDP on research and development by 2027, yet we currently spend only 1.8%. Compared with other countries—China spends 2.1% of GDP, the US spends 2.8%, Germany spends 3.1%, South Korea spends 4.5% and Israel spends 4.9%—we are falling behind in the global race when it comes to R&D. There are now just 2,135 days until we reach that 2027 target date. If we are not careful, we will miss the target altogether.
The Government have already committed to increase the public spend on R&D from £12 billion a year to £24 billion by 2024-25, which is incredibly welcome, but we must now focus on leveraging in private R&D spend, which is currently around £30 billion a year and needs to rise to £70 billion by 2027. How are we going to achieve that? I was delighted that the Budget includes a consultation on R&D tax reliefs. Although tax reliefs follow the Frascati manual, they are currently limited to staffing costs, materials and software. We urgently need to include data, education and skills in that package.
The reliefs are part of a wider picture that must be addressed in the spending review. We need to look at our R&D commitment for the future—for 2027—and be bold, establishing new international research schemes to bring in the leverage and get private companies to come to this country and commit to R&D. After all, research and development is about to get us out of this pandemic. If we wish to invest in research and development now, it can point us in a fantastic direction for the future.
Stephen Morgan (Portsmouth South) (Lab) [V]
This Budget was a pivotal opportunity to deliver a stronger and fairer economic future, but instead the Chancellor has doubled down on the same economic illiteracy that left us so vulnerable to this crisis. The extension of wage and business support schemes was the right decision but was, as ever, taken needlessly late and came at the cost of businesses and jobs.
More needs to be done to tackle the looming cliff edge on rent and evictions, which puts hospitality businesses, including pubs, at risk. Many of those excluded remain without support and have received nothing during this pandemic. The impact will be felt disproportionately among the self-employed, freelancers and limited company directors who are the lifeblood of local economies such as Portsmouth’s. They will remember the Chancellor’s hollow promise to do “whatever it takes” to support them. The cultural and events sector, which is so vibrant in Portsmouth, will see the lack of Government-backed insurance schemes as a missed opportunity to help festivals such as Victorious to go ahead this summer.
This was a Budget that did not learn the hard lessons that the pandemic has taught us. There was nothing for schools, which are in dire need of investment if our children are to catch up and thrive. The Chancellor announced no support for job creation, yet the number of those under 25 and claiming out-of-work support in Portsmouth has increased by 135% in the past year. There was nothing for social care, which bore the brunt of the crisis and is in dire need of a sustainable funding settlement.
Most insultingly, the Budget confirmed a pay freeze for the public sector workers who have got us through this crisis, and concealed a cut in NHS spending in the fine print. Since then, we have heard that our NHS heroes have been offered a pay increase of just 1%, which is equivalent to a real-terms cuts. More than 11,000 public sector workers in my constituency will be worse off, as will more than 15,000 police officers and almost 40,000 members of our armed forces across the region. The Government cannot cynically clap our key workers one minute and then cut their pay the next.
Finally, the Budget confirmed that Brexit will leave us worse off, with a permanent 4% hit to productivity. We will feel that acutely in Portsmouth: this short-change Government continue to withhold funds that the port needs to build vital post-Brexit infrastructure. The Budget showed us that the Government are intent on the same economic insecurity and inequality that the OBR has confirmed caused the worst recession of the major economies. The Chancellor has put his signature all over a Budget that fails Portsmouth’s families, young people and key workers. It lacks the ambition that my city and this country need for the future.
Mr Marcus Fysh (Yeovil) (Con) [V]
My constituents are most grateful for all the support that has been provided through the pandemic and towards the bounce back as we look forward, and for the success with the long-term project funding that has begun to come through. We are very grateful for the furlough and all the grant and support schemes. In particular, the business rates and VAT exemptions and the increase in capital allowances in this Budget will, I think, set us in very good stead to grow our way back into being able to have the revenue that we all want for our public services and to repair the public finances.
We have had some really big wins that are worth celebrating in Yeovil and district. In particular, there was £10 million in the Budget for the Octagon theatre, which is so important to creative industries locally. There was also some money for the Westlands Entertainment Venue to keep that going with revenue support. We have had, through the pandemic, support for the national league, which has been of great benefit to Yeovil Town and clubs like it. Outside the Budget, we also had some brilliant recent news with the final go-ahead—the final decision—on dualling the A303 section at Podimore, which kicks off a signature project that we as a Government have wanted to institute for the whole of the south-west. That will be of huge benefit to my constituents and everybody throughout the south-west peninsula.
However, huge challenges do remain. For example, our high street in Yeovil is definitely struggling. We have had success in being allocated £9.5 million from the future high streets fund, which is brilliant, but it is fair to say that the private sector involvement in that does need the high streets to be back on their feet, so it is a great credit to the Government that the vaccination programme has been going so well. I encourage everybody to get their vaccination as soon as they are offered it, because that gives us the best prospect of being able to stay open as an economy, stay open on our high streets, get our economy firing again and give people the jobs and opportunities that they need. Rapid tests are a fantastic thing that we have brought in. I think that that really gives us hope that we can get the economy back on track, repair the public finances and have a great future.
Stewart Malcolm McDonald (Glasgow South) (SNP) [V]
I am grateful that I can make some remarks in the proceedings this evening, Madam Deputy Speaker. The Budget was obviously in the worst and most hellish possible circumstances, but I am afraid that the Chancellor and, indeed, the wider Government have failed to meet the moment and really go big on the economic recovery and stimulus that so many people need and had hoped for.
There are two egregious elements that many people, including many of my constituents, have commented on. One is, of course, the fact that even still, a year into the pandemic, so many people who are self-employed are left behind. The other is the utterly egregious way in which the Government are using the levelling-up fund as some kind of party political slush fund aimed at their own constituencies. This is deeply egregious and needs to be fixed.
I want to raise two quick issues in the short time that I have. I have raised one previously, and it concerns hospitality staff in Glasgow at two venues, Blue Dog and AdLib. We are talking about a lot of people here. Because of a dispute between their employer and Her Majesty’s Revenue and Customs, all those members of staff have had no furlough since November last year—none, not a single penny. I raised this two weeks ago and, in fairness, the Paymaster General’s office contacted me and offered to set up some kind of meeting to try to resolve the fact that those members of staff are not only not getting furlough but not getting universal credit because their real-time information is being updated as though they were still being paid. However, I am afraid to say that I am still sat here waiting, and almost 200 people, many of whom are my constituents, are still without any support. I plead with those on the Treasury Bench tonight to get this resolved and to do so swiftly.
The last thing I will raise in the few seconds left to me is that it is three years ago this month—indeed, you were in the Chair, Madam Deputy Speaker—when I introduced a Bill to ban unpaid work trials, on that fateful Friday in March 2018. The then Minister talked the Bill out. Unpaid work trials are exploitative, they cost us around £3 billion per year and they unfairly target young people. As we go into the recovery, let us do something good, decent and right for people as they try to find work: let us ban the egregious use of unpaid work trials as we move into the recovery phase.
Theresa Villiers (Chipping Barnet) (Con)
The Government are delivering the biggest economic intervention in our country’s history, protecting the jobs, businesses and livelihoods of millions of people. It is one of the most comprehensive support schemes anywhere in the world, and of course I warmly welcome the help that it has given to so many of my constituents, but all this comes at a very high cost. The Budget confirms that the Government are due to spend £1,140 billion in this financial year. Borrowing will be £355 billion—some £300 billion more than was forecast in the March 2012 Budget. The perilous state of the economy means that it is not viable or sensible to start the task of repairing the public finances now, but inevitably there will be a day of reckoning—thankfully not today, but it will come. Right now, borrowing costs are at record low levels, but it is not sustainable just to continue to rely on an ever-expanding Bank of England balance sheet. As the economist Liam Halligan put it, this kind of funding is a stop-gap, not a “miracle cure”. We need strong economic growth to fix the nation’s finances and get us back on our feet, and that means supply-side reform and higher productivity as well as improving skills and infrastructure that requires smarter regulation.
Now that we have taken back control over making our laws in this country, we must do more to ensure that our rules and regulations are pro-competition. That does not mean a race to the bottom—of course we must maintain our high standards—but it does mean crafting our regulation so that it treats businesses equally, including start-ups and innovative disrupters, rather than entrenching advantage for market incumbents. We need a regulatory climate that encourages new entrants to markets rather than placing unnecessary barriers in their way. Regulatory rules are a core part of our economic ecosystem, and the OECD is clear that reforming them in a way that encourages innovation and competition can boost GDP and give consumers more choice and lower prices. Finally, if we are to have a truly roaring ’20s with the strong growth that we need, our regulatory system must keep up with new technology, enabling us to turn the scientific genius to which this country is home into the successful cutting-edge high-growth sectors of the future.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab) [V]
Treasury data shows that transport infrastructure spending in London is 2.5 times more per person than in the whole of the north of England. If the Chancellor is serious about levelling up, we need to see spending on our vital infrastructure in all parts of the north-east too. That is why, on Wednesday last week, I presented a petition to Parliament calling for the Leamside line to be reopened in full, and the Restoring Your Railway Fund bid calling for that was submitted on Friday. Reopening the line in full would bring rail back to Washington, which is the largest town in England without a rail link, but the line would also bring remarkable economic and connectivity benefits to the entire region. After more than a decade of neglect from Conservative Governments, with the added impact of the pandemic on top, the north-east needs that.
Some businesses in my constituency have had to close due to the coronavirus restrictions, without any access to financial support. They include driving instructors, mobile hairdressers and other businesses that do not have premises. The Government should not be putting local authorities on the line and making them the fall guys for a conscious decision that the national Government made. It is this Government who are hitting an estimated 6,500 key workers across my constituency with a real-terms pay cut. They include the NHS heroes we all clapped for, but clapping does not put food on their tables. This also hits our teachers, police officers and all public sector workers, who we all rely on day in, day out. After working on the frontline throughout the pandemic, our key workers really do deserve better.
My constituents all need assurances and certainty, but the Government have failed to do that in this Budget. The Government have made it clear that they are happy to stick to the status quo of the same unfair economy and unequal country that has been so cruelly exposed by this deadly virus.
Sir Paul Beresford (Mole Valley) (Con) [V]
Listening to some Opposition Members in this particular debate, I am reminded of when my daughter was a teenager and one of her telling phrases was, “Get real.” This is a “get real” Budget. The fact that the Government have been spending approximately 17% of GDP to protect lives and livelihoods at the same time as the biggest economic contraction since the early 1700s brings home the phrase, “Get real.”
This Budget recognises that we need to continue to protect lives and livelihoods for some time to come. In my constituency, it is particularly welcomed by the hospitality, leisure and events industry. For them, it is in addition to the most welcome news that they are going to be able to open their doors.
The other side of the “get real” approach is the need to face the debt. The two tax changes about which I anticipate my constituents could be negative are the freezing of tax thresholds from next year and the large but delayed increase in corporation tax. I have talked about this to many of my constituents, big businesses and the man in the street. Their reaction has generally been positive, with an understanding of the Chancellor’s difficult situation, and a pleased acceptance of the continuing help, but a reluctant acceptance that debt payment must commence.
In the debate over the past few days, there has been little mention of the new 95% mortgage guarantee scheme, which will enable lenders to provide mortgages to buyers with a deposit of just 5% to purchase properties worth up to £600,000. I believe that this is a new opportunity, parochially, to rebalance the age spectrum of my constituency. Some 22% of the population are under 20, and 60% are aged 40 and over, which leaves about 18% who are in the 20 to 40-year-old bracket. Quite simply, many people in that bracket who have left and would like to come back cannot do so. Commonly, they are young, single, young couples or young families, but they cannot afford to move to Mole Valley.
The two main towns of Leatherhead and Dorking need boosting: they need shops; shops need shoppers; and shoppers need homes. Those two towns have suitable brownfield sites that could be developed to provide homes costing less than £600,000. Unfortunately, Mole Valley has the dead hand of an incompetent Liberal Democrat group in power. They are doing nothing to help, but I am hopeful that after May there will be a new Conservative council that can move on the brownfield sites, sort out the planning, bring investment and homes, and enable the 20 to 40-year-old age group to use the mortgage opportunity and revive the two towns of Leatherhead and Dorking.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD) [V]
A very good evening to you, Madam Deputy Speaker. As Members are aware, I am a co-chair of the all-party parliamentary group on gaps in support. I want to talk about two issues that have arisen from my work on that front.
The first—ironically, almost, given that today is International Women’s Day, as others have pointed out—is maternity. Our APPG suggested certain policies to the Government that could be based on maternity, parental and adoption rights. I am not going to be churlish about this; there were some gives by the Government. They recognised some of our suggestions and have taken action as a result. I acknowledge that and give credit where it is due. Alas, what we suggested on the maternity front in particular, where a lot of people have lost out rather badly, was sadly not taken up by the Government.
It is only right that I should express my thanks at this stage to a number of organisations, including Maternity Action, Pregnant Then Screwed and ExcludedUK, as well as the campaigner Bethany Power, who did a great deal of work. But you know me well enough, Madam Deputy Speaker; I am ever an optimist. I therefore hope that perhaps, as the weeks and months go by, we can still fine-tune the package to try to recognise the sort of people I am talking about.
As the House is aware, I talk a great deal about the highlands. Therefore, I will go very local on my second point arising out of gaps in support. As has been said, the offer on the VAT front is welcome. However, while I recognise that that is helpful to hospitality and cultural businesses, I want to mention our highland games. I speak as a past chieftain of the Tain highland games, which is one of my proudest achievements and really puts being a Member of the House of Commons into the shade. The 5% help is of no use to highland games, because of course no tickets have been sold at all. These games are simply not happening, and this year we are already facing 13 highland games being cancelled. It is obvious to all that highlands games and events of this sort underpin the very fragile economy of parts of the UK such as the highlands of Scotland.
Finally, I say to those on the Treasury Bench that we really need a more finely tuned package to make these events happen in the future. If the Government could look at extending the VAT cut beyond September, that would be very helpful indeed.
Caroline Nokes (Romsey and Southampton North) (Con)
I pay tribute to the Chancellor for having listened to the repeated calls made over the last 12 months to do something to help the female entrepreneurs and businesswomen working in what we now call the personal care sector but 12 months ago was just known as hair and beauty.
We have to recognise this is a significant sector that contributes a great deal to the Exchequer and employs in the region of 300,000 employees, most of whom are women. Hon. Members might expect me, as Chair of the Women and Equalities Committee, to wish to focus on women and what was done for them in this Budget. I thank the Chancellor for the additional grant funding for the sector. However, I very carefully say to him that there was some consternation at the choice of words used, because some in the sector suddenly became very alarmed that they would not be opening at the same time as non-essential retail. I need some reassurance, and I hope that the Minister on the Treasury Bench will be able to provide absolute clarity that the sector will be in that step.
However, there was a measure of disappointment in the personal care sector that the VAT reduction, which we have seen so fantastically extended to hospitality, was not also extended to that sector. I think it only fair that I voice those concerns today, because that could have been a significant contribution to maintaining the viability of some of these important businesses. However, it is not just about jobs and the economy, because these are businesses that help to combat loneliness and help people to feel more confident in themselves, in turn giving them the enthusiasm and confidence to go and face those job interviews, which we know that many, many women will be facing.
I recognise that the retail sector may be changed irrevocably and would ask the Chancellor to consider how we can ensure that those women in the prime of their lives who may have worked in the retail sector for 20 years or so get access to the retraining opportunities that they will meet, because if the retail sector is changed forever, we will need them to move into new, sustainable sectors. Those jobs cannot simply be held for men. I am very conscious that, when we talk about “Build, build, build”, while construction is important, we also need to think about how we will move more women into that sector, and into STEM jobs and jobs in the green economy. It is so important that we make sure that none of them are left behind.
I would like to follow a Member who spoke previously and comment on the events sector. It is such an important part of our economy, but of course those businesses have not had the business rates break, because they might not have the premises that we see elsewhere in hospitality and in retail. It is a sector, particularly when it comes to weddings, that is crying out for assistance and, again, employs many women.
The Budget was a delicate balancing act, and I commend the Chancellor on his hard work, but I urge him never to forget that 51% of the population are women.
Madam Deputy Speaker (Dame Rosie Winterton)
The hon. Member for Halton (Derek Twigg) is having technical trouble, so we will come back to him.
Gareth Johnson (Dartford) (Con) [V]
I am pleased to be able to contribute to this debate in support of a good Budget that recognised the consequences of the huge amount of borrowing that has had to happen during this unprecedented time. Debt must be paid back and can never be ignored, and this Budget helps to ensure that that will happen.
After every Budget, whoever delivers it, that person is always criticised by the Opposition, but surprisingly with this Budget the Chancellor was criticised for a lack of openness, yet the converse is true. I recall Gordon Brown raising national insurance in one of his Budgets, and not even mentioning it in his speech. That is an example of a lack of openness, not what we heard last week from the current Chancellor.
This Chancellor delivered a Budget that will enable businesses to play their part in the bounce back the economy needs. A crucial part of that was the creation of eight freeports, the potential of which to boost our economy is huge. It is unsurprising that more than 40 ports applied for freeport status, such is their popularity in the sector, so the idea that freeports are not wanted just does not stand up to scrutiny. I am pleased that the freeport of Thames, covering Tilbury and London Gateway, is to be created adjacent to my Dartford constituency. It will create many local jobs and play its part in a global post-Brexit Britain.
However, freeports must be approached in the right way to ensure that we get them right. They are not without their challenges, but their potential is enormous. Freeports are at their best when they incorporate an element of manufacturing within the perimeter, rather than simply being an import/export location. If raw goods can be brought to the freeport, assembled and exported, that offers the best opportunity for job creation and for the port itself. The Thames freeport is expected to create up 25,000 new jobs, and it will help to keep freight off our roads and fully utilise our links to the sea.
Freeports are exactly what is needed to encourage international investment in the UK and to facilitate companies wishing to increase their UK operations. The Thames freeport alone is expected to attract over £400 million-worth of investment, which is why nearby Labour-run London Borough of Barking and Dagenham supports the creation of a freeport on the Thames. We should back the opportunities that freeports can bring to this country. Creating them is a bold, forward-looking step that will bring opportunities not just to my Dartford constituency, but around the whole of the UK and, indeed, the world.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab) [V]
In the 12 months since the previous Budget, we have had three difficult lockdowns, we have lost over 120,000 lives, with one of the worst death rates in the world, and our economy has been one of the hardest hit as a result, with difficult times for families, small businesses and people across the country. We look wistfully at some of the health decisions made in Australia, New Zealand and South Korea where so many fewer lives have been lost and where they have been able to keep their economy and schools open. We should recognise what went wrong last year, but also focus on what we need to get right as the vaccine is rolled out.
We need to rebuild our economy and services. However, the Budget fails to do that. The extension of short-term measures that many of us called for is right, but it is not a growth plan. Capital investment is being cut just when we need to be investing in sustainable growth. Skills and employment support is too weak, especially for the young, who need guarantees of jobs or training places to get them back on track. Kickstart is still too small and too slow, and key sectors such as pubs and the travel industry need more support. On International Women’s Day, we need urgent action on childcare and support for the often working mums who were more likely to end up giving up work while schools were out.
We need growth plans for all the towns that have been heavily hit by 10 years of austerity. We have worked very hard here in Castleford where I am sitting to get our fair share of investment from the towns fund, but after £200 million has been cut from Wakefield Council budgets over the past 10 years, too many other towns are not included. Across the north, we are still not getting our fair share of transport investment in our infrastructure for the future.
Crucially, we need to keep supporting our NHS. After the year that our NHS has had it is incomprehensible that the Government are proposing a real-terms cut in staff pay. Nurses have told me about the traumas they faced working on the covid wards, the long shifts and extra hours, how difficult it was nursing friends and colleagues who got sick, how fearful they were, and how burnt out they now feel, and yet they keep going. We need them to keep going, because it is our NHS staff who are rolling out the vaccine to get us through and it is our NHS staff who we need to catch up on all those lost operations and that vital cancer treatment. We already have 10% vacancies among nursing staff and the Mid Yorkshire Hospitals NHS Trust has struggled to get staff. Local health managers have told us already how worried they are that people are leaving nursing because they are burnt out. The Government have no idea what a kick in the teeth this 1%—below inflation—rise is to them. Health and the economy go hand in hand. Our NHS staff have been there for us this year; we need to be there for them and get them a proper pay rise now.
Madam Deputy Speaker (Dame Rosie Winterton)
We will now go back to Derek Twigg.
Derek Twigg (Halton) (Lab)
Let me first pay tribute to the NHS staff, especially the nurses and doctors, and also our carers who have worked so tirelessly and sacrificed so much in the past year. They have gone above and beyond what was asked of them. They are exhausted and stressed. Some have been traumatised by their experiences. It left a real sour taste when it became clear that, despite his claims of honesty, the Chancellor had not mentioned in his Budget speech the 1% that the Government are now proposing. Effectively, it is a pay cut. I want to see a pay rise that fully recognises the hard work and sacrifices of those who served the country on the frontline in its hour of need. I also do not believe the Chancellor’s self-proclaimed honesty when it comes to the resources that the NHS will need to deal with the huge backlog of non-covid patients waiting for treatment for things such as cancer. The Government have shown their lack of foresight throughout this pandemic, so it is time that they ensure that mental health support is there for frontline NHS and care staff who have served throughout this time.
Despite Halton being ranked the 13th most deprived area, it is not in the priority 1 group for the levelling-up fund and the UK community renewal fund. It beggars belief that Halton is not a priority 1 area. The list of areas included by the Chancellor suggests that ranking is more about who has a Tory MP than real need. His claims of honesty did not stretch to how the areas were chosen. The Chancellor must correct the situation so that the priority groups are based on areas in most need.
The Runcorn town deal will be an outstanding bid, with some fantastic projects such as the Unlock Runcorn project to restore the locks and links to the Manchester ship canal and provide much-needed jobs. I hope the fact that the town of Runcorn has a Labour MP will not count against it. I asked the Secretary of State for Housing, Communities and Local Government in November if Runcorn would be treated less favourably than other towns because it has a Labour MP. He said that it would not be and that it would be treated fairly. I hope that he keeps to his word. This is against a background of cuts to Halton Borough Council’s budget of £52 million since 2010. Halton expects to spend £2.2 million more on tackling the covid pandemic, despite promises by the Chancellor that that would be fully funded. The Chancellor must fully fund it.
The cladding scandal in this country has had a devastating effect, not least on my constituents in the Decks flats in Runcorn. Despite repeated representations, the Government are still ignoring those buildings that are under 18 metres tall. They must put this right.
Today we celebrate International Women’s Day. Again, we heard nothing about the pensions injustice faced by women born in the 1950s. The Government appear to be completely indifferent to their financial suffering. These women must be properly compensated, and I again call on the Government to right this injustice. This Budget failed to meet the scale of the task.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
Madam Deputy Speaker, it is a great pleasure to speak in support of this Budget and to wish you a happy International Women’s Day and the whole House a happy Commonwealth Day.
Before I explain why I very much support the Chancellor’s Budget, I want to address some of the comments made by my neighbour, the hon. Member for Gordon (Richard Thomson). He spoke about economic certainty and stability being key to economic growth and recovery from the current situation. Sadly, he was addressing us virtually, so I could not ask him whether putting the case for another independence referendum would add to certainty or add to instability and uncertainty, and whether that would be good for jobs and economic growth across the United Kingdom.
The hon. Gentleman spoke about schemes lasting until September and said that he would like to see them carried through, because otherwise that would add uncertainty and instability to the jobs market and business, and yet the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), the leader of the SNP in this place, claimed just as recently as the weekend that an independence referendum could happen by the end of this year. I wonder how many people in the business community feel that that would add to certainty and stability through the rest of this year.
The hon. Member for Gordon also poured cold water on the £33 million being invested in north-east Scotland, which we both represent, to support the oil and gas industry as we transition from fossil fuels to renewables. He says that it does not match the ambition of the Scottish Government. He did not mention the fact that since 2014, the UK Government have supported the industry to the value of £2.2 billion and have made the North sea the most attractive and fiscally stable basin in which to invest in the world, supporting thousands of jobs in my constituency, in his and across Scotland.
This was a very good Budget—a pro-business Budget; a Budget building the foundations to prepare to build back better and build back greener; and a Budget that delivered for the entire United Kingdom of England, Scotland, Northern Ireland and Wales, not that we would know it from listening to the Scottish Government last week. The furlough scheme, which protected nearly 1 million Scottish jobs at its height, was extended. The business interruption loan scheme, which supported 90,000 Scottish businesses to a value of £3.5 billion over the past year, is being followed up with the recovery loan scheme. The super deduction will foster innovation and investment across Scotland.
This was an upbeat, positive Budget that was required by the country to take us forward into the next steps as we recover from coronavirus. It was a Budget that spoke about building back better and investment in the future, not separation, division and distraction, which is all the SNP ever offers Scotland.
Afzal Khan (Manchester, Gorton) (Lab) [V]
The Office for Budget Responsibility was unequivocal in its analysis of our financial situation: it is the Government’s failure to control the spread of the virus that has dragged us into the worst recession of any major economy. Across the country, businesses are closing, unemployment is rising, jobs are insecure, food bank usage has soared and millions have fallen into poverty.
A recent survey of my constituents revealed a shocking threefold increase in people’s feeling of financial insecurity during the pandemic. At the most acute end of this insecurity, more than a quarter of constituents said that they were struggling to meet basic living costs. It is clear from speaking to my constituents that the distress and anxiety generated by this new financial insecurity is having a profound impact on their wellbeing and mental health. It is vital that we recognise the emotional toll of the last year and look to rebuild the country’s mental health alongside our economic recovery. With this in mind, it is unfathomable for the Chancellor to push ahead with the £30 billion cut in day-to-day health spending. If the last decade of austerity has taught us anything it is that public sector spending cuts disproportionately hurt those on low incomes.
Given that today marks International Women’s Day, it would be remiss of me not to touch on the particularly acute economic impact of the last year on women. Last month the Women and Equalities Committee concluded that the Government’s passive approach to gender equality was no longer good enough. It specifically called on the Government to undertake equality impact assessments, so the fact that not one of the many supporting documents to last week’s Budget statement was an equality impact assessment is utterly inexcusable. Continuing to ignore the fact that the economic impact of the crisis has not been felt equally risks turning the clock back on gender equality.
Missing from last week’s Budget was the ambition needed to tackle the deep crisis we are in. We needed a strong foundation to support businesses, to give security to families and households, and better economic resilience, and to ensure that no one and no community was left behind. Sadly, that is far from what we were offered.
Sir Robert Neill (Bromley and Chislehurst) (Con) [V]
The exceptional circumstances of the pandemic require exceptional budgetary and financial responses, and I congratulate the Chancellor on having broadly got a balanced and very valuable package together to get the economy back on track. Of course, the best way to get the economy back on track will be to work swiftly to reopen businesses as soon as it is safely possible to do so. Meanwhile the support being given is welcome and necessary.
I particularly want to welcome the support given to the cultural sector, both in previous rounds and in the current round in the Budget. That has helped theatres like the Churchill in Bromley in my constituency and many of our other key arts organisations. But if there is one thing I would urge the Chancellor and the Secretary of State to look at doing further it is to give support not just to institutions but to individuals, and that has already been referred to.
The vast bulk of performers in theatre and the creative sector are freelancers; most of them are self-employed, mainly through limited companies, and I endorse the comments made by other Members about the need to look again at the treatment they receive. Also, the continuation of self-employed support is welcome. Round 4 is very necessary, but I hope that Ministers can look at one practical issue. While it is good that new entrants will now be able to get involved with the 2019-20 tax return and get support, there is real concern that some applicants will have to wait until mid to late April before they can apply for the next, fourth, self-employment income support scheme round. Given that the last payment from round 3 was in December, people will have gone for some four months in effect without any income. I hope we can address that. This is particularly important for young performers and artists at the beginning of their careers; we need to nurture them and keep them in the sector so that we have the stars of the future.
The other area that needs continual attention is financial services. It is the jewel in the crown of our economy, and it did not get enough attention in the deal with the European Union. I hope we can return to that. We should address three areas in particular. First, we must stress the centrality of financial services to future trade deals and liberalisation in that sector. Secondly, we must make sure that our regulatory system is updated and fleet of foot to deal with emerging sectors and developments. I hope the Government will move swiftly to implement, for example, the recommendations of Lord Hill’s report on UK listings to capture firms in those emerging sectors on UK markets. And, finally, the Government must also consider the Kalifa review on FinTech. Both of those are important, indeed critical, for our long-term economic wellbeing.
Ms Marie Rimmer (St Helens South and Whiston) (Lab) [V]
The Office for National Statistics ranks St Helens and Knowsley as two of the top 10 unhealthiest places to live. Well, I have the honour of representing the people of these two historic towns. For our people, the past decade has been tough, with the decade of austerity still felt. The pandemic could not have come at a worse time. The existing deprivation caused even more suffering. Essential services that had been cut to the bare bones have been tested like never before. As we plan our economic recovery, the people of St Helens and Knowsley will live with the impact of the decisions taken, which will be felt for decades.
The Government have promised to take the levelling-up agenda seriously, but I am afraid that the evidence is to the contrary. My constituency is ranked as the 62nd most deprived, with the Chancellor’s being 450th. The child poverty rate in my constituency is close to double that in the Chancellor’s. The schools in my constituency have lost more funding per pupil than the Chancellor’s. Yet despite all this, the Chancellor’s constituency was given more money from the towns fund and St Helens was not. I understand why the Chancellor has done this—having the support of 39 Conservative MPs may come in handy for his brand—but this is not the time for political favours. The country agrees that this is the biggest economic crisis since the Great Depression. If the Chancellor intends to honour the Government’s promise to level up, why has the support not been provided based on needs? Towns like ours are looking for fairness and want the Government to provide a helping hand—to give towns the recovery funding they need to revitalise the town centres and rebuild public services. The Chancellor has a rare opportunity to make a real difference to the lives of millions. I hope he thinks again and decides to take it rather than trading it in for political favours.
Sir Robert Syms (Poole) (Con)
I welcome the Budget. The Treasury has had a particularly difficult time trying to do what it can to assist in this crisis, and I think it, and the British system of government, has done extremely well. Universal credit has worked well. Furlough has worked well. The self-employment income support scheme has worked well. There is some argument about where the boundaries are drawn, but from the point of view of the IT and getting the cheques out to people, it has worked pretty well. It is amazing that we have got through the crisis without the levels of unemployment that were once feared. One of the most pleasing things about the OBR forecast is that it looks as though although unemployment will go up in the next few months, it will peak at a lower rate and, towards the end of this Parliament, start to get back to where we were in the first place.
I am an optimist, and I am rather more optimistic than the OBR. I do not think we will have a budget deficit this year of £355 billion, which would require about £70 billion in the last two months. I do not think we will have a deficit of 10.4% next year and spend £250 billion. I think the economy, when the restrictions are lifted, will grow very rapidly indeed, because there is an awful lot of money sloshing around the economy. A lot of people I know want to go out to spend—to go to restaurants, buy a car or go on holiday. Once the restrictions are lifted and the degree of confidence from the vaccine goes through our country, things will move very rapidly. If there is a problem, it may be that there is so much money flowing through the system that it is chasing too few goods and we start to have inflation. Inflation has not been banished and we have to keep our eye on it. I think the deficits will be a little lower and the growth rates will be a little higher, and business will get back to growing rapidly when we lift all the restrictions.
My main plea to the Government is this: the data is going in the right direction more rapidly than people expected, and we have a pathway out of lockdown, so do not be afraid to bring it forward, as well as put it back if the data starts to turn bad. A lot of this debate has been about bailing people out, but what most people want is to get back to business, get back to work and get things running again. That has to be the key. We need to get back to normal as soon as possible, and vaccines and Government policy should do that.
Julie Elliott (Sunderland Central) (Lab) [V]
This Budget is taking place at a key time for the economy of this country. It is an economy coming out of a crisis that has caused businesses to shut and jobs to be lost, and that has harmed the prospects and potential of so many people across this country. The Budget was a chance to conduct a transformative change as we emerge from the crisis, to make the country fairer for all, to reward our key workers and to build a secure and prosperous future that ensures that any economic recovery from the pandemic is felt right across the country. It is clear, though, that the Budget failed to do that.
The Chancellor talks about support for the north-east, but travel any further north than Teesside and it is clear that the Government have forgotten us. The council in Sunderland, like many across the country, has done a brilliant job throughout the pandemic, working tirelessly to support businesses and providing vital services on a shoestring budget, but the Budget falls well short in helping it to do its job. Across the country, there are people who have had lifelong jobs suddenly finding themselves unemployed, and millions of children in this country are still living in poverty. What does this Budget do for them, and what does it do for the millions already excluded?
Then it emerged that our NHS workers, who have been working harder than ever over the last year, saving lives and taking care of our loved ones, will be given at best only a 1% pay rise, coming out of this year with a real-terms pay cut. Then there is our social care system, which was not mentioned once by the Chancellor—no funding lifeline for a system on its knees; no support for care homes or those who devote their lives to working in them. Our NHS and social care staff deserve much better.
Let me move on to the digital skills agenda and the proposals that the Chancellor outlined last week. I wrote to him on this subject, and while any investment in digital skills is welcome—from the boot camps announced last year to the announcement of help to fund software upgrades and training for SMEs—it seems that he is looking at sticking plasters rather than at solving the issue of digital inequality. That seems like the theme of this Budget.
Thanks to charities such as Laptops for Kids in the north-east and Rebuyer UK based in Sunderland, many more children and young people have had access to technology and connectivity. That is great for education—those new devices can be used both at home and in school—but it causes new issues too. It widens the gap. The Government need a comprehensive strategy for upskilling those who are out of work to provide support and devices to those who need them. The Budget was underwhelming, unequal and unsurprising.
Mark Pawsey (Rugby) (Con) [V]
Just two weeks ago, the Business, Energy and Industrial Strategy Committee published its report “The impact of Coronavirus on businesses and workers”, which acknowledges the pace and unprecedented scale of the measures that the Government have introduced and how
“this support has kept vast numbers of businesses and workers afloat during this exceptionally challenging time.”
Last week’s Budget continues that work.
The Chancellor has recognised the need for businesses to continue to have certainty and for jobs to continue to be protected. I welcome the decision to extend the furlough scheme for an additional six months. It has already protected 6,500 jobs in my Rugby and Bulkington constituency. I also welcome the further round of grants to help businesses as they reopen, and the extra support targeted at the leisure, hospitality, arts and culture sectors.
I was pleased to hear the Secretary of State refer to Coventry city of culture, which starts in May, and the rugby league world cup, with matches at the Ricoh stadium in Coventry—events close to my constituency that indicate that we are getting back to normal times. It is not just those sectors themselves that have gone through a tough time; the suppliers to them have, too. Those events coming forward will enable them to re-establish themselves and get the economy moving.
I want to focus on one key measure for business—Help to Grow, which will make a huge difference to the performance of small and medium-sized businesses up and down the country. The BEIS Committee in the last Parliament looked at this issue, and we concluded that the myriad sources of support for SMEs made it difficult to navigate. In particular, we were concerned that business owners and managers did not know where to go to improve their own skills. We noted that businesses grew faster when managers took time out to work on their business as well as in their business. Help to Grow will offer 30,000 leaders and managers a training programme over 12 weeks at a cost to attend of just £750 after Government support. As someone who ran a small business before arriving here and did not know where to go for personal development training, I can see immediately how valuable this scheme will be.
I hope that the scheme will cover the business skill of sales. It is not the most obvious issue to raise, but on a day when we learn that export sales fell last year by 14.7%, equivalent to £54 billion, we will need to make certain that, as a country, we get every single sale we can. The all-party parliamentary group for professional sales is launching a report tomorrow, which calls for a selling revolution to make sales a career aspiration for the brightest and best, and to ensure that first-class training in sales skills is available for both before and throughout a salesperson’s working life. Effective sales negotiations, with the measures that the Chancellor has given, will enable businesses to trade our way back to prosperity.
Dan Jarvis (Barnsley Central) (Lab) [V]
I want to focus on just one thing: what the Budget says about levelling up. The Government promised transformation, but amid all the announcements and reannouncements, the reality is a reduction in the key regional development funds this year, and probably for years to come. Even if we include the national infrastructure strategy spending, much of which is not levelling up, we are well short of the transformative investment that levelling up implies. The comparison is made harder by the Government’s unfortunate habit of shuffling money from one fund to let them announce another.
Levelling up demands detailed plans, patient investment and, above all, local leadership. Combined authorities, such as the one I lead, understand our regions, both the challenges and opportunities, much better than anyone in Whitehall ever could. We are doing amazing things. In South Yorkshire, we are investing in everything from skills to active travel. We must plan, not just to recover from covid, but to comprehensively renew our region. The Prime Minister said that he wants to work with us, but the Government’s default preference is to force local governments to compete among themselves for modest, restricted, short-term funding pots, with Whitehall picking the winners. It is the model chosen if the priority is maximising photo ops, not actual progress.
The clearest test is to follow the money. As the Government repeat the mantra of ending regional inequality, their levelling-up fund puts the Chancellor’s Richmondshire constituency, ranked 251 out of 317 in England’s deprivation index, in a higher category of need than Barnsley, ranked 38. Richmondshire has had 141 covid deaths per 100,000 people; Barnsley has had 311. The Government claim that they are following impartial criteria, but the Chancellor must publish the full data and the decision-making process for those funds.
In one sense, the answer is irrelevant. Whatever formula was used, it was the one the Government chose. If their formula gives a result that systematically favours areas that are already doing well over those that need levelling up, they have the wrong formula. They should not pretend that it is some unalterable truth, they should just change it. If they do not, we can be sure that it represents exactly who they are and what values they represent.
We need to level up every part of the United Kingdom. Across the country, families and businesses are desperate for support to recover from the covid pandemic and to end finally the squandered potential of our regions. I stand ready to work with the Government because, in this hour of need, there is so much that we can do together, but we must work not for political gain, but for a much greater good.
Paul Maynard (Blackpool North and Cleveleys) (Con)
I welcome the chance to speak in this debate in support of a Budget that is a delicate act to get the balance just right between not choking off the economic recovery fundamental to recouping our covid expenditure over the medium to long term, and ensuring that we live within our means for day-to-day spending from now on and future-proofing our debt repayments against the potential for interest rate rises.
To be a truly Conservative Government, we must go further by championing growth, promoting free enterprise —a concept rarely mentioned these days—but also improving financial resilience. We know that the economic harm done at an individual and family level during the pandemic has been aggravated by a lack of financial resilience. We should be accelerating the Government’s response to the Woolard review, tackling with vigour the disproportionate costs faced by those living in poverty and turbocharging schemes such as Help to Save.
Nowhere should that be more important right now than protecting access to cash. Important as it is to celebrate International Women’s Day, I note that the Fawcett Society is once more highlighting the lack of women on our banknotes. I do not disagree with that analysis, but what we should be debating is whether we will even have banknotes soon if we fast forward to a cashless economy without taking stock of how we get there. That is the debate we should be having. I declare an interest as a member of LINK’s Consumer Council, which seeks to safeguard access to cash machines.
As the Economic Secretary well knows, I am a little disappointed there is no commitment right now to an access to cash Bill, but I am in no way downhearted. I believe there is much that can still be done that is either regulatory or non-legislative. Any Bill would merely put in place a regulatory framework that would require steps that can be taken now without legislation to facilitate continued access to cash. Chief among those would be the rapid renewal of PSD2 regulations, which enable cashback without purchase. A number of pilot projects have demonstrated that it works well as an idea, but the commercial providers of the system will not invest without the confidence that the Government will renew the regulations. I urge the Minister to make it clear that the regulations are forthcoming soon.
All told, the hidden wiring that underpins our cash system costs some £5 billion per annum. The less cash in circulation, the higher the fixed costs for everyone who processes cash, right down to the smallest trader or shop owner. No wonder some have opted out of cash and might never return. There is much organisations, such as the Bank of England or the Financial Conduct Authority, can do in advance of legislation to consolidate and reduce those fixed costs. The Government should be not just pushing them in that direction, but shoving them forcefully towards the right agenda.
Anna McMorrin (Cardiff North) (Lab)
The Chancellor said that this was an honest Budget which meets the moment. Well, the Chancellor certainly met the moment for his mounting leadership bid, but it was nowhere near what was required to meet the tough realities of my constituents.
This Budget was a lost opportunity to provide security for those in hard-hit and precarious sectors, to provide economic justice to the excluded millions who have gone a year without support and to provide recognition for our protectors or stability for our businesses. There was no recognition for our public sector workers who are at the forefront of the crisis and who we depend on to get us through. It was a Budget with a thin green veneer, not one that will properly finance climate action to protect the health of people and planet, or demonstrate to the world the power of the UK’s example as a climate leader in the year of COP.
The Chancellor said this was a Budget to provide certainty. Well, he should tell that to my constituents who have already lost jobs because businesses had to make tough decisions because they were kept in the dark. The Chancellor chose to time the extension of furlough and business support when it was politically convenient, kicking the can down the road to this autumn for when the Office for Budget Responsibility predicts unemployment to hit a peak and when the universal credit uplift will be stripped away along with the furlough scheme—a frightening cliff edge looming this autumn, one of the Chancellor’s own making.
Today, on International Women’s Day, let us not forget that this pandemic has had a disproportionate impact on women, who are more likely to work in low pay and insecure positions. Unpaid carers hit 13 million last year, predominantly women. There was nothing in the Budget for them either. Thank God in Wales for a Welsh Labour Government, who have weaved a stronger safety net throughout the crisis. When the UK Government failed or dithered, they stood up.
This Chancellor is also slashing life-saving support around the world: the aid that builds resilience to the climate crisis and future health challenges. During a pandemic, the Government are pulling back our first response to future crises and hitting the vulnerable hardest, the consequences of which we will feel here at home. The Government are turning their backs. Overseas and here at home, the Government are recklessly playing with people’s lives, pushing people to the brink only to pull them back just a bit. That is not how responsible Governments behave. It is time to do the right thing.
Anne Marie Morris (Newton Abbot) (Con) [V]
This is a Budget of which I am proud. I think that the Chancellor has done an astoundingly good job. It is a responsible Budget. It has found that balance between helping businesses, helping people and giving them some certainty that, while we have this road map out of our current lockdown, the support will be there, and that is incredibly valuable.
I had one of my regular fortnightly meetings with my local businesses this morning, and I was interested to gauge their reaction. I have to say that it was overwhelmingly one of relief. They were delighted with what the Budget delivered, and they were particularly pleased with the extension of the business rates relief and, indeed, the extension of the VAT relief. I would like to take the opportunity to pay tribute to Teignbridge, my district council, and my local businesses for making the most of the opportunities to keep going and to survive—and that is what they have done.
However, there do remain some concerns. The first, which has already been rehearsed by a number of colleagues, is about those who have been excluded. For example, directors who have paid themselves historically by dividends have been totally left out of any support during the totality of this pandemic. It is not their fault—there was nothing wrong with being paid by that mechanism—and I would urge the Chancellor to look at that again.
My second concern is that the very smallest of businesses on the edge may or may not, by the time we come out this, just fall over that edge. For them, it seems to me that we need to look to the future. We need to look at how we can help them start again. We have a history of being very concerned about phoenix businesses, because too often unscrupulous businessmen or women have established businesses, made money on the back of others, and then folded them and taken away the profit. But going forward there will be some phoenixes, and we have to find a way of distinguishing good from bad. I would urge the Chancellor to look again at the credit record framework to find a mechanism to fairly support the truly deserving, but not those that are not.
A good Budget—well done to the Chancellor.
Maria Eagle (Garston and Halewood) (Lab) [V]
The Chancellor is by instinct a small state idealogue who slashes the public realm, but he prefers to claim to be a Keynesian spender who dispenses largesse to those affected by the covid crisis. But his treatment of the NHS shows us the true nature of the Chancellor’s Budget: it is sneaky. He said he wants to be honest with the public, but he substituted his previously promised 2.1% pay rise with a real-terms pay cut for our NHS heroes. He sneaked it out in the small print after he got his favourable headlines on Budget day—not exactly up front and honest.
The Chancellor said he would pay the NHS the extra costs of dealing with covid, but we read in The Times today that he is looking at ways of forcing them to pay those costs from existing budgets. NHS managers say they will have to start cutting services from 1 April to meet the £8 billion gap. There was nothing in his Budget to enable the NHS to start to treat the 4.5 million people now on waiting lists for treatment of non-covid illness; nothing to deal with the exhaustion and trauma that NHS staff, who have fought on the frontline of this pandemic, are dealing with, except a real-terms pay cut; and nothing to sort out the scandal of underfunded and unreformed social care. All this is part of the extra £4 billion in cuts in the Budget for public spending on vital services, over and above the £12 billion he had already pencilled in last November. Austerity is back for public services, not that it ever went away.
What about poorer households and low-paid workers, who are much more likely to be furloughed and much more likely to have lost their jobs or some of their income? There is not much in this Budget for them. This £30 billion fiscal tightening and the huge tax increases in this Budget hit the lower paid and poorest most. With incomes forecast to fall by 4.5% by 2025, the Chancellor has slashed help to those struggling. He is cutting the income of unemployed people by £20 a week—a 7% cut overnight, just as unemployment is forecast to reach 2.2 million when he ends furlough in September. It is a double whammy for those losing their jobs. He is forcing council tax up, hitting the poorest hardest. Many of my constituents are already finding it hard to feed themselves and their families. This Budget will make that even worse and it will remove support just when things are forecast to get even worse.
This Budget most certainly does not meet the moment. There is no plan for NHS recovery, just a plan for NHS cuts. There is no plan for helping poorer households, just a plan to impoverish them further. The covid crisis has exacerbated poverty and inequality. Far from setting the UK on a path to fix the damage, the Chancellor seems intent on making things worse.
Robert Largan (High Peak) (Con) [V]
During this moment of crisis and uncertainty, I believe this Budget strikes the right balance. It ensures that vital support continues for families and businesses, while being honest and fair about how we fix the public finances. Crucially, the Budget also sets out the next steps for levelling up. Getting back to normal must not mean failing to address the deep-rooted economic and political imbalances in our country, especially the north-south divide.
Last month, my colleagues and I in the levelling up taskforce joined the excellent think tank Onward to launch a report on levelling up the tax system. The analysis showed how capital allowance reform would overwhelmingly benefit the north and midlands, especially in places such as Derbyshire. So I was delighted to see the Chancellor announce the proposed super deduction, which will help businesses to expand and create new jobs. It is exactly what we need right now and it is a potential game changer for rebalancing the economy.
The Budget marks a real turning point for the north as a whole. For decades, Governments of all parties have focused far too much on London and the south-east, to the detriment of places such as High Peak. The Leader of the Opposition chose to pour scorn on the decision to relocate large parts of the Treasury to Darlington, which was announced alongside the establishment of the first infrastructure bank in Leeds. What the Labour leader fails to understand is that these moves represent an important shift in both power and the culture of the civil service. If senior civil servants all live in London and all commute into Whitehall, is it any surprise that the capital has done disproportionately well when it comes to Government investment? If senior civil servants were commuting into Manchester from, say, New Mills, I reckon that railway line would have been upgraded decades ago. I appreciate that that concept might be difficult to comprehend for a Labour party that seems to think that new leadership entails moving from one north London borough to another.
The Budget is a real statement of intent that this Government are going to invest in the north. The £4.8 billion levelling up fund is a key part of this. I was really pleased that High Peak has been identified as one of the top priority areas for the fund and will receive more than £100,000 to help develop a local bid—and with good reason. High Peak badly needs investment in our local infrastructure. On some measures, Gamesley is ranked among the top 1% most deprived areas in the country, which is largely down to very poor transport links. Gamesley has been waiting for more than 50 years for a railway station to properly connect it to both Glossop and Manchester. Politicians of all parties have been promising a bypass to the people of Glossop and Hadfield for well over 50 years as well, and in the second half of 2019 the Hope Valley line had some of the worst train punctuality figures anywhere in the country. The capacity on that line desperately needs to be upgraded. Our digital infrastructure also leaves much to be desired. Given our unique geography in the Peak district, we have some of the worst broadband blackspots anywhere.
However, there are reasons to be optimistic. Highways England and Balfour Beatty have signed a contract to build the Mottram bypass and Glossop spur road. Punctuality on the Hope Valley line has improved markedly since the Government stepped in to take over the Northern franchise and the ancient Pacers have finally been replaced with modern trains. And Openreach has recruited an additional 15 engineers to speed up the roll-out—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I thank the hon. Gentleman for his speech, but we need to move on now.
Deidre Brock (Edinburgh North and Leith) (SNP)
Missing from this Budget is any real effort towards addressing climate change and the environmental problems the world faces. This Government like to talk about climate change but they do not act on that chat. So we get a token commitment to a green economic recovery while they continue to crank up the pressure to carry on regardless. When France was creating the Paris agreement, it invested huge amounts of money, time and effort into global diplomacy to deliver it. We are months away from COP26 and the UK effort is nowhere near what is needed, with a delivery team that fails to inspire and with this Budget serving to remind us and the rest of the world that action on climate change is not a priority for the UK.
One could be forgiven for thinking that Brexiters would want to show that they can perform like a world Government, but instead we get announcements, 10-point plans, targets and wizard wheezes that lead to no action and that the Government seem to think are an end in themselves. The world will be watching while COP26 fails.
This Budget could have seen funding allocated to retrofit high-quality insulation and efficient heating or to get district heating systems up and running to help address the UK’s greenhouse emissions, but there is nothing practical, not even a bump for the existing green homes grants. There is nothing for a transition deal and a miserly £27 million for energy transition. There is nothing about recovery spending for nature and no mainstreaming of natural capital costs.
The Government have plenty to say about shiny competitions—there is a new one on energy storage—ignoring already successful and operational schemes such as Cruachan. There are competitions to create showcases, but no cash on offer to get on and deliver. There is net zero by 2050, but no practical strategy about how to get there. Should the VAT system not be altered to encourage green home upgrades? What about incentives for more efficient white goods or drivers of behavioural change to encourage action towards environmental sustainability?
The Chancellor has said his freeports will support green fast-growing industries, which is not something that anyone else thinks, but it is indicative of this Government’s attitude that someone else will sort things out. We need forward planning and anticipatory spend to upgrade the grid for the extra juice as we switch to electric vehicles and for domestic heating and cooking. That failure lays down problems for the future. In the same vein, we need to see the transmission charging scheme changed to ensure that renewable energy can be pumped into the grid wherever it is produced.
From an environmental and climate point of view, this UK Budget is empty, showing the lack of concern and ambition that the Government have for the issue. Perhaps it would better serve us all if they turned over responsibility and resources to the devolved Governments and Administrations, who are at least attempting to address these issues. The Government could even learn from their examples.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con) [V]
I commend my right hon. Friend the Chancellor for his Budget, which was strong on enterprise, innovation and recovery. The help announced last week for businesses has been particularly welcomed in the Cotswolds, where the local economy is built on small businesses, notably in hospitality, leisure and the tourism sectors. I have been calling for extra support for those businesses, as they are the backbone of our economy and deserve protection after being compelled to stop trading by the pandemic. The restart grant of up to £18,000 for hospitality and leisure businesses, including personal care, hairdressers and gyms, will help to reinvigorate them as we begin to open up the economy, in addition to the local council discretionary fund of another £425 million.
The road map has brought a great deal of reassurance for many business owners, with hospitality, leisure and personal care businesses starting to reopen on 12 April. They want to be able to reopen sooner and I have been making extensive representations to the Government on that point. Sadly, some are not scheduled to reopen until 21 June. I will continue to raise their plight. As the whole route map is driven by data, if it is safe to do so, we should accelerate the reopening of certain sectors, such as outdoor events.
Around 60,000 businesses in the UK are in the weddings sector. They usually thrive in the Cotswolds, but have been pushed to the brink by lockdown. I hope that many of those businesses will be supported by the restart grant, but they were not specifically mentioned in the Budget speech.
Debt and borrowing are at a peacetime high, so the fiscal challenge to reduce them is particularly challenging. No one wants to see taxes rise, but in these difficult circumstances it is right to even up the burden between individual and corporation tax.
Finally, it is important that G7 agreement is sought so that the digital tax is made effective. It would be totally unfair for those businesses on the high street that have suffered considerably due to the lockdown—and will have to start paying rates in June—if companies online that have made substantial windfall profits are not efficiently taxed.
Feryal Clark (Enfield North) (Lab) [V]
Last week’s Budget was the Government’s golden opportunity to step up and fix the endemic inequality that they have created throughout the country and in my own constituency of Enfield North. They failed in that task on every conceivable level. They failed nurses, who deserve better than the pitiful 1% pay increase they have been offered. They failed teachers, who have been given little support to plan a safe return to school for their students. They failed businesses and the self-employed, including White Photographic Ltd in my constituency, which is one of the 3 million businesses that have been excluded from the Government’s support over the past 12 months.
There are currently more than 19,000 people registered unemployed in Enfield and 28,000 on furlough who still do not know what the future holds for them. There are nearly 14,000 people who were punished by the Chancellor with a £500 cut to universal credit, which will see nearly £7 million taken out of our local economy this year. The Budget was bad for families, for small business, for frontline workers and for our communities.
Who was the Budget for? It turns out that it was a Budget to support the Government’s local campaigns for re-election, with more than £1 billon funnelled into their constituencies. This Government believe that they can help to level up the UK—[Inaudible.] London has some of the most deprived communities in the country—even more so after this pandemic. Analysis by the London Mayor shows that 14 boroughs should have been given the highest priority for funding, yet only two have. The politics are so obvious that I nearly took a drive to Barnard Castle to check whether my eyes were deceiving me.
Last week, the Mayor of London announced his vision for a 1945-style recovery for London, with “Jobs, jobs, jobs” as his mantra. The Chancellor must work with the Mayor to deliver this ambitious plan, instead of standing in his way, and to deliver a post-furlough jobs guarantee. Instead of a Budget to get our country working after covid, we saw the spectre of austerity return to the Dispatch Box. The Chancellor is more interested in his social media than in social justice. He found money for well-lit videos but nothing for NHS nurses. Tin-eared and cold-hearted, this Budget was a litany of opportunities missed and chances squandered. The Chancellor failed to meet the moment and his Budget failed to meet the needs of the most vulnerable.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con) [V]
I have given the Chancellor an enormous amount of praise during this crisis and for this Budget, but I offer him a few words of caution. He and I have crossed swords only once, and that was three years ago, when he was the Under-Secretary of State for Housing, Communities and Local Government with the task of forcing through a law to abolish my local council in West Somerset and create a new, bigger council with Taunton, which was a financial disaster. The idea was conceived by local Conservatives and sold to the Government even though it was widely unpopular. The public never got a proper say or a referendum.
I warned my right hon. Friend that the issue would rebound, and it jolly well did. As soon as the ballot boxes came out, people picked the Liberal Democrats, and the Conservatives were punished. I warn him that this could happen again, with a huge financial cost throughout Somerset. He must remember the summer of 2018, when the leader of the county council came to London with a pet plan to form a local government. He did not bother to consult party colleagues in Somerset first. I warned my right hon. Friend then to tread very carefully, because he had seen it once already. I think he listened, but the leader of the county council returned and attempted to talk to his counterparts. The district council was invited to look at all the options and produce a report, but when it reached no definite conclusion the leader of Somerset County Council branched out on his own again and, again, we had a financial mess.
That brings us to 2020 and the start of this frightful pandemic, when every single council faced a huge crisis, and not just financially. Surely it is a lousy time to chase dreams when you are meant to be looking after people, but our county council insisted, and here we are. The Chancellor’s old Department is behaving in the same way—the people’s voice is not being heard. Instead of another tacky online questionnaire that can be tweaked, leaked and interfered with by anybody anywhere in the world, let us have proper consultation.
The Chancellor has been extraordinarily generous to Somerset County Council, providing it with £80 million. The emergency funding runs into many millions. My right hon. Friend may be shocked to learn that, believe it or not, £13,550 has been squandered on a local TV love-in and regional treasure, with a glowing video to promote the council leader using covid money. That is the monthly equivalent of a Cabinet Minister’s salary for a couple of days’ work. It is a tacky saga that could all end in tears for our party.
I warn the Chancellor that this will be a financial disaster. The council has used the money that was meant for covid in the Budget to balance its books and put money into roads and car parks, and unfortunately, that continues. I hope that the Chancellor is listening before we have another problem on our hands.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind) [V]
I welcome some of the measures that the Chancellor has brought forward in the Budget. I am delighted that he listened to the concerns of the Showmen’s Guild in my constituency and across the UK by identifying that sector as having exceptional reasons to maintain entitlement to use red diesel beyond April 2022.
However, a sector that feels let down by this year’s Budget is the one represented by the Federation of Wholesale Distributors, having been excluded from business rates relief while hospitality, retail and leisure have all been included since the beginning of the policy. I urge the Chancellor to consider the merits of including this long-struggling sector in his plans for an extension of the business rates holiday. If the wholesale sector continues to suffer the stress it has under this pandemic, with minimal Government support, the disastrous knock-on effects on the hospitality and retail sectors will be dramatic and unparalleled.
It is vital to acknowledge the lack of clarity given to another essential sector, many of whose employees live in my constituency: the aviation sector. As John Holland-Kaye, CEO of Heathrow airport, recently noted,
“The Chancellor talks about protecting jobs and livelihoods, fixing the public finances and laying the foundations for the future economy, and yet he continues to ignore the UK’s aviation sector.”
The extension of the airport and ground operations support scheme for a further six months is welcome, but the failure to guarantee a full business rates holiday for airports across the UK will have dramatic repercussions for the aviation industry.
UK airports have had high fixed costs throughout this period to keep their operations running 24/7. The impact on the sector has been unprecedented, with passenger volumes down significantly and virtually no revenue for the past year. The industry is at a standstill. It is imperative that a clear road map out of the crisis is provided by Government, so that the industry has time to prepare, plan and open up the market safely. That cannot be done overnight. As Robert Sinclair, CEO of London City airport, recently said, this is not just an industry in its own right; it underpins the rest of the UK economy and is an enabler of trade, tourism, import, export, retail and hospitality, so getting aviation open sooner rather than later will aid recovery.
I share the Chancellor’s expressed belief that we must give every business an opportunity to grow, innovate and succeed in the post-pandemic world and play their part in the economic recovery, but the reality is that this Budget continues to fail many businesses in my constituency, in Scotland and across the other nations of the UK. I hope that the Chancellor is listening and will address these valid concerns.
Sarah Champion (Rotherham) (Lab) [V]
The economic impact of the coronavirus pandemic has been immediate and severe. While it is welcome that the Government have taken some steps to protect jobs in the short term, the reality for many is that they face losing jobs that were stable and secure prior to this crisis.
Sadly, that process has already begun in Rotherham. In my constituency, 75 workers at Rolls-Royce face imminent redundancy. Those are well-paid, highly-skilled jobs, and their loss will have a devastating impact on the town. Rolls-Royce’s Rotherham facility is based at the Advanced Manufacturing Park, which I know will be familiar to the Minister. The park is a world-class base for innovation, research and manufacturing and the jewel in the crown of our local economy. The Government are more than happy to use it as a backdrop for policy announcements. What they must do now, however, is defend its long-term future. The aerospace sector has been hit especially hard by the pandemic, and I appreciate the profound challenges that Rolls-Royce faces. The need for the Government to support this strategically important industry is self-evident. They must recognise the inextricable link between aerospace and the wider aviation sector. That is particularly true for businesses such as Rolls-Royce, which derives revenue from the flying hours of the engines it produces. The global travel taskforce is an important step, but the aviation and aerospace sectors need a clear exit strategy, and one that works internationally. These businesses are global and do not work just to a UK boundary.
The UK should use its chairing of the G7 this year to create a global plan to get aviation flying again. Aerospace and aviation are industries that may take considerably longer than others to recover once restrictions are lifted. The Government need to acknowledge that additional, long-term business support will be needed. This means also accepting that measures such as furlough may need to continue beyond September in certain sectors. The Government should view this as an investment for future prosperity. As the Chancellor himself acknowledged in the Budget:
“Business investment creates jobs, lifts growth, spurs innovation and drives productivity.”—[Official Report, 3 March 2021; Vol. 690, c. 527.]
I agree, but the Government’s rhetoric on levelling up the north will ring hollow if they stand idly by while dedicated, highly skilled workers lose their jobs.
While I am sympathetic to the challenges that the industry faces, Rolls-Royce is not without fault. I am concerned that despite the furlough scheme, it is pressing ahead with substantial job losses. Furlough’s very purpose is to prevent that from happening, so why is it not using it? These are skilled employees who will not easily be replaced as the industry recovers. To show them the door now is deeply short-sighted and will have wider implications for the supply chain and Rotherham’s economy. Taxpayer support for business to survive the current crisis must aim to protect jobs and not the bottom line of shareholders.
James Wild (North West Norfolk) (Con) [V]
I welcome this Budget and the continued support for families and jobs in North West Norfolk. The scale of the package is vast, and I particularly welcome extending the universal credit uplift, continuing the furlough scheme and widening access to self-employment support.
The Chancellor once again recognised the very challenging situation faced by tourism and hospitality businesses. This is a vital part of west Norfolk’s economy, worth about £500 million and making up one in every five jobs, so it is great news that the business rates holiday and the 5% VAT rate, which I campaigned for, have been extended. There is also a strong case to consider extending the lower 12.5% VAT rate, which applies from October, on an ongoing basis.
Longer term, we need further action to build a more resilient visitor economy. The 2019 sector deal pledged to create five tourism zones, increase visitor numbers, extend the season and invest in skills. Visit East of England and the New Anglia local enterprise partnership are developing a bid for Norfolk and Suffolk, focused on heritage, culture, sustainability, skills and accessibility. Digital is also an important part of that bid, through skills for small and medium-sized enterprises and access to full fibre. I would be grateful if the Minister could ensure that the tourism recovery strategy that my right hon. Friend the Secretary of State for Digital, Culture, Media and Sport mentioned will kick off that process. While some delay has been understandable, it is now important to get on with this initiative.
The Budget also shows the Government’s commitment to growth across the country. I am pleased that King’s Lynn and west Norfolk is in the priority group for the new levelling-up fund. After a very disappointing result in the Future High Streets bid, I know that Ministers will look closely at our town investment plan, which includes projects to maximise our historic riverfront and town centre, the creative hub and guildhall complex at the oldest working theatre in England, with strong Shakespeare links, the innovation incubator community hub and the sustainably connected town centre.
It is business investment that will help drive the recovery, so the super deduction is very welcome, but I urge the Treasury to look at the concerns of the National Farmers Union that many firms will not be able to benefit from investment in new farm technology. Measures to encourage apprentices and trainees are the right priorities, and, like businesses, I look forward to the interim business rates review. It is important that the timetable for creating a level playing field for our high streets does not slip.
In the face of an unprecedented pandemic, unprecedented economic support has been provided. The Budget was honest about the challenges, but it makes the right call to continue short-term support while setting out a path to fix the finances. While corporation taxes are unwelcome, they are necessary because as Conservatives we know, from clearing up the mess left by Labour Governments, that you cannot keep spending without one day having to settle the bill. I back the Budget to support the recovery as well as to lay the foundations for a strong economy.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab) [V]
Time does not permit me to cover all the issues that I would like to, but I shall start with the vital extension of the £20 universal credit uplift to September, which is, of course, welcome and is something that I and many other Opposition Members have been calling for. However, it does not go far enough.
Last Wednesday, the Chancellor had the opportunity to do the right thing and make the uplift permanent. It was disappointing, albeit not surprising, to see that he still intends to go ahead with cutting the uplift in September. This will mean a cut of £7.8 million to the local economy just in my Merthyr Tydfil and Rhymney constituency, leaving as many as 6,750 vulnerable families £1,000 a year worse off. We all know that the economic impact of the pandemic will be felt far beyond September this year, with some of the most vulnerable families in our communities set to be hit the hardest as a result of the measures confirmed by the Chancellor last week. Therefore, the Government’s decision to end this vital extra support in September is all the more callous.
Turning to Wales, the Budget provides additional revenue funding for Wales of £735 million, almost entirely as a result of covid measures in England. On a like-for-like basis, the Welsh Government’s core budget for day-to-day spending in 2021-22 is still 4% lower per head in real terms than it was in 2010-11—11 years on and it is still lower in real terms. In addition, despite the Chancellor’s intentions for an investment-led recovery, he failed to provide the additional capital stimulus needed to lay the foundations, with not a single extra penny for capital spend in Wales.
That leads me to the lack of support for those affected by flooding in my area. Just over a year ago, I asked the Prime Minister at Prime Minister’s questions for his commitment on this issue and, at the Dispatch Box, he promised, in his words, to passport the money through to Wales to help to deal with the floods. Only after 10 months was there a sign of the support, but it commits only to the current financial year and provides only a fraction of what is needed. In this Budget, there is no provision to meet this urgent need.
Finally, the approach to replacing EU structural funds by directly allocating funding in Wales on devolved matters through the UK community renewal fund and the levelling-up fund is just not acceptable. Clearly, the people of Wales will benefit from only a fraction of the funding that they would have received from EU funding, demonstrating again the Government’s failure to invest adequately in Wales. This is despite the promise made to deliver not a penny less for the people of Wales.
The community renewal fund is £220 million across the whole UK, so a population share for Wales would be only around £11 million. The levelling-up fund is £4.8 billion over four years, with £600 million in the Budget for 2021-22, so our population share is £30 million. Based on the very limited information that the Government have provided, a reasonable assumption of what Wales might get from these two funds next year is around £40 million to £45 million, compared with, on average, the £375 million each year that Wales received in recent years from European structural funds. Clearly this is just not good enough, and I hope that the Minister will provide some clarity on these issues as he closes today’s debate.
Mark Eastwood (Dewsbury) (Con) [V]
The Chancellor has delivered a fair and bold Budget in extremely difficult circumstances. He has rightly continued to provide support to those businesses and individuals that have been affected by the economic side-effects of the pandemic. At the same time, he has taken prudent decisions to ensure the health of the public finances and to incentivise investment.
I welcome the proactive engagement from Treasury colleagues ahead of this crucial Budget, and I am pleased that the Government have listened to concerns raised by myself and colleagues on a range of issues. I put my signature to a letter from the Northern Research Group urging the Chancellor to continue providing business rates relief to retail, hospitality and leisure venues. In continuing to give that support to high street businesses at 100% relief and then tapering it to 66%, the Chancellor is putting out a lifeline to affected businesses in our towns. The survival of these businesses will be important to the levelling-up agenda and in bringing new life to our high streets, which are the long-term goals of policies such as the towns fund, for which Dewsbury has submitted a bid. Similarly, I was pleased to see the retention of the stamp duty cut for the time being, before it tapers off over the course of the year. The furniture industry is a major employer in my constituency, and the cut was well received. I wrote to the Chancellor in my capacity as vice-chair of the all-party furniture industry group, laying out the link between house sales and furniture sales and the importance of a phased withdrawal.
Finally, it was encouraging to see that, despite the pandemic, this Budget recognised the importance of sports and culture. Our grassroots football facilities have long needed investment, and more than 150,000 games a year are cancelled due to poor pitch quality. There is a strong link between taking part in grassroots football and obesity reduction, meaning that, alongside funding for the World cup bid, this is a long-term investment that will pay dividends.
I hope that the Government will continue to engage on issues that did not fall under this Budget, which I commend to the House.
Alex Cunningham (Stockton North) (Lab)
The Tees valley needed a Budget to help replace the extra 12,500 jobs lost in the past 11 months. What we got was politically opportunistic short-termism with more promises of jobs for our area, but without the investment and detail needed to actually deliver them. I wholeheartedly welcome the 750 Treasury jobs for Darlington, but we cannot ignore the fact that Stockton lost 400 HMRC jobs six months ago and that the north-east has lost 6,680 civil service jobs since 2010.
The freeport presents an interesting opportunity, and it could play a part in our recovery, although many economists question what, if any, real benefit freeports bring. We urgently need to see the detail and an end to all the secrecy and announcements without substance. That is more important tonight, when we hear that jobs at LIBERTY Steel on Teesside and hundreds elsewhere could be in jeopardy as its lender has gone bust, and I understand that LIBERTY is part of the freeport bid. The Tories have let us down in steel on Teesside many a time; I do not want them to do it again.
If we are going to achieve the Chancellor’s vision for Teesside, he will have to address some of the fundamental issues driving regional inequality. The most recent figures from the North East Child Poverty Commission reveal that the north-east has experienced the steepest increase in child poverty levels of anywhere in the country, rising from 26% in 2014 to 35% in 2019. In my constituency of Stockton North, the rate is over 34%, with other areas in the Tees valley higher still. For under-fives, the rate is a heartbreaking 42%. Those figures should shock the Tory Government; they certainly shame them.
In Stockton North, more than 3,000 families with children are in receipt of universal credit, so I am pleased that the Chancellor finally agreed to extend the £20 uplift. However, he will now cut it at the same time bringing the furlough scheme to an end and when unemployment is expected to rocket again—the exact moment at which the OBR has expected that unemployment will peak at 2.2 million. A fortnight ago I asked the Prime Minister what action his Government would take to
“free our children from poverty”—[Official Report, 24 February 2021; Vol. 689, c. 913.]
He said that that was about jobs, and I agree, but he needs a reality check about the north-east of England. The region now finds itself with the highest unemployment rate, the lowest employment rate and the lowest average hours worked of all British regions. Workers in the north-east also have the lowest average full-time wages. We need bold action on jobs.
Stockton is often used as a case study to highlight health inequalities in the UK. Men in the town centre live 18 years less than people down the road. I have said time and again in this Chamber, and in every single Budget debate, that we need a new hospital in Stockton if we are to address the health inequalities in our area. It is time that the Government delivered it.
Carolyn Harris (Swansea East) (Lab) [V]
Nobody has been immune to the impact of covid, so nobody should be left out when it comes to recovery support. Unfortunately, however, so many have been, and last week’s Budget suggests that that is set to continue.
The Chancellor may think that he can roll out the big numbers and the sensational headlines and that the small print will go unnoticed, but that small print is people’s livelihoods, and one industry that has been overlooked yet again is the personal care sector. On average, these businesses were closed for 140 days in 2020 and will be closed for at least 101 days in 2021. We are talking about 50,000 businesses that employ around 560,000 people—mostly women. Despite the unnecessary and insulting snickering that a number of colleagues on the Government Benches, including the Prime Minister, previously felt that this industry warranted, it is an industry worth £30 billion to our economy, not something to be laughed at. I am pleased that the hair, beauty and wellbeing sector can think about reopening on 12 April, but while other industries have been granted a third VAT cut, this sector has, yet again, been left to fend for itself. These businesses are facing, on average, £40,000 in lost revenue, so even with business restart grants and, hopefully, a guaranteed date for reopening, their future survival is by no means certain. To recoup their losses, they need a VAT reduction to match that of other sectors. They are not asking for special treatment. They are asking to be included in those arms that the Prime Minister is so keen to tell everyone that he is wrapping around the whole country.
Closely linked to the hair and beauty sector is the wedding industry, with each relying on the other for a proportion of their income. Both are worth multi-billions of pounds to our economy, both support hundreds of thousands of jobs, both employ women, and both are at risk of collapse due to sustained lockdowns and insufficient Government support.
We all want our route out of lockdown to be safe and restrictions lifted cautiously, but permitting sporting events to go ahead with 1,000 people indoors or 10,000 people outdoors six weeks before allowing 30 people to attend a wedding is an incredible decision. It feels as though this Budget has a disproportionate impact on women. On this day of all days, International Women’s Day, it saddens me to say that this Government have let women down throughout the pandemic. They continue to do so, and yet it is women who have carried the heaviest burden.
John Howell (Henley) (Con)
There is much to welcome in this Budget, particularly the help that has been given to business. We have heard that this includes an extension to the furlough scheme, new grants and loans, as well as additional support to hospitality, cultural activities and leisure. There are two things that I want to concentrate on in particular. As the MP who helped to introduce the concept of assets of community value, which helped stop pubs being sold off and allowed them to become available to communities, I commend the £150 million community ownership fund, which provides grants of £250,000 to allow communities to have the money to buy them. The original scheme has saved many a pub and I have a number in my own constituency. They are doing rather well, providing good food and drink, and are owned widely by the community.
The second issue I wish to raise is the culture funds which are there to help in the cultural sphere. I hope that the funds will be adequate to support national museums—not just the British Museum, but museums throughout the land, which provide a valuable window on the history and culture of an individual area.
I also want to draw attention to the support for elite sports, as, of course, I have rowing in my constituency. The Henley regatta is intended, hopefully, to be run in August, but it is a sport that is much wider than the elite label that is often given to it. Along the banks of Henley itself, there is great support for rowing for children.
I also hope that the culture recovery fund will support the sector, but it is very sad that room was not found in the Budget to help out the courtyard societies in Burlington House, which are fighting to be allowed to stay, often after maintaining a presence there for several hundred years. I declare an interest in this as a fellow of the Society of Antiquaries, which is one of the learned societies there. They contribute so much to society, and the work that they do for society, teaching people about their cultural place in the world, is of enormous value. I hope that the Government will still do something positive for the antiquaries and the other learned societies.
Finally, I echo the comment that was made at the beginning of this debate about the directors of companies who take their income in dividends. We must do something for them. As an inspector of taxes, I fail to understand the arguments put forward by Her Majesty’s Revenue and Customs on this issue. It really is a question of fairness that we do something to help them.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
This is a Budget that sounds half-reasonable when we first hear it, and then even that half quickly unwinds as we delve deeper. The latest blow, of course, will in my view be to social care, one of the hardest-hit sectors in this pandemic and the one that desperately needs funding. I went to my local hospice—on a Zoom call, of course—straight after the Budget, and I can tell hon. Members that many of us were deeply disappointed. Social care costs Brighton—quite rightly—£30 million a year. We only get £40 million in council tax, and unfortunately it is unsustainable. We could have both addressed the council tax bombshell that the Chancellor is putting on home owners and residents, and solved the social care problem, whereby hundreds of people have died because of an ill-equipped, ill-prepared and under-resourced sector. Instead, the opportunity has again been missed, the buck has been passed and we do not know when, if ever, funding for our older and vulnerable people will come forward. It is such a shame.
And then, of course, there is the kick in the teeth for nurses. Ministers gave them the clap in the summer, and now they have given them only a 1% pay rise. What do they have to be thankful for? Nothing, really, from the Government this time round. While the Government have quite rightly taken on my suggestion that returns for the past tax year be taken into account, and those people can be included, many more are still excluded.
Brighton is a hospitality town, but many in our hospitality sector still say that they are vulnerable. The VAT rate has not been extended to all businesses that need it, including bowling alleys and some beauty salons, and it is still not right that too many of the loans will cripple businesses going forward.
Climate change was almost untouched in the Budget. We know that the warm homes grant is completely useless. We need a street-by-street strategy, but the Budget did nothing whatsoever on that. In terms of home building and home buying, it will help those with the money but push up house prices and make things worse for many millions; and, with the local housing allowance matching only the 30th percentile, not the 50th as it did in 2010, many renters are still worse off.
Derek Thomas (St Ives) (Con) [V]
This is a welcome Budget statement and offers much for Cornwall and the Isles of Scilly. For example, I welcome the commitments to apprenticeships. I have personally employed three apprentices under a Conservative Government. Getting the right match between apprentices and jobs will mean a great and much needed route to skilled, well-paid jobs in construction of new homes, which we badly need, in retrofitting existing homes, which will lead to healthier, greener, warmer and cheaper homes for many, in renewable energy and nature recovery—massive areas of growth, not just here in west Cornwall but across the country—and in engineering, food and farming: all areas that are essential to this green, resilient recovery from covid.
There are also welcome measures in the Budget for our high streets. The grants to get pubs, restaurants and tourism going again, business rate holidays, the tapered return and the 5% VAT rate—for which I have argued for many years, and which I hope the Treasury will see as critical and agree should remain for hospitality and tourism—are all critical for west Cornwall and Scilly and our recovery, as well as home buyers. I am personally sure that the stamp duty cut will have helped in many parts of the UK. However, will the Treasury consider the impact on areas such as Cornwall and Scilly, where the housing market was already strong, but where house prices have not helped many local families, despite the stamp duty cuts? The 95% mortgage guarantee is very helpful for these families, but it relies on house building to get closer to the demand for it to be a true success. Will the Government ensure that all unnecessary barriers to homes built for local needs housing are removed so that local families can benefit from a home and from the 95% mortgage guarantee?
The support for small and medium-sized enterprises in the Budget is also welcome, and it is critical for west Cornwall and the Isles of Scilly. Here across Cornwall and the Isles of Scilly, SMEs are where most of the jobs are—about 85% of people are employed in such businesses—and they are where the recovery will be if it is to be sustainable and lasting.
I welcome this Budget. There are many helpful things in it, and there are certainly areas that will help us to deliver a green, resilient recovery in a low-carbon economy. That is absolutely what our constituents want, and this Budget really gives us the tools and the springboard to allow that to happen. I will watch with close interest how effective it is on the ground in providing the well-paid jobs that all our constituents need.
Alex Norris (Nottingham North) (Lab/Co-op) [V]
I am grateful for the chance to contribute to this debate. We have heard a lot from the Government and their Back Benchers about their concerns regarding the Budget—concerning facts and figures relating to the nation’s finances, in particular the financial obligations that we have built up over the last year. I believe that they are looking in the wrong place.
What we should be focusing on in debating this Budget is what the Office for Budget Responsibility has said. The good news is that the economy will bounce back quickly—of course it will; there is so much latent demand ready to be released—but the bad news is that, after that rebound, growth will bump along at around 1.7% for the following three years. That is the sort of anaemic growth that we saw during the historically slow recovery from the 2008 crash, particularly in the last decade. It is a damning indictment that the Government’s spending plans are likely just to generate the same impact as the failed austerity model that we were promised was over.
That is particularly the case because the Government have not learned the lessons of repeated years of real-terms cuts to the pay of public sector workers. As we saw from Ministers trying to justify the miserly real-terms pay cut to staff in the NHS, they simply do not grasp the collective impact on our economy of such pay cuts. That cut is wrong because we ought to recognise those workers’ sacrifice over the last year beyond a hand clap, but it also wrong because it starves our economy. Where does the healthcare assistant or the porter spend their money? It is in the local economy.
Taking that further, freezing wages for council staff is wrong. They have done incredible work over the last year and should not be expected to keep going for less pay. And where does the care worker or the leisure centre cleaner spend their money? It is in our local economy. These wage cuts are wrong for the individual and devastating for our economy.
The Conservative party profits by pitting public sector worker against private sector worker, but the reality is that the private sector—and wages in the private sector—benefits massively from having public sector workers with money in their pocket and the confidence to spend it, just as public services benefit massively from having a thriving private sector and all that comes with it.
You do not have to take my word for that, Madam Deputy Speaker; just look at the lessons of the last decade. Squeezing the public sector did not help the private sector, but instead caused the slowest recovery from a recession in our nation’s history, which in turn meant that we could not invest in our public services, leaving us so weak when this pandemic came. I cannot quite believe that the Government are choosing to do the same thing again.
Finally, regarding our councils, Nottingham has lost £270 million of Government investment over the last decade. Vital services that affect our daily life have all been diminished in some way or removed entirely. Our council stepped up during covid; it is simply wrong that the promise even to meet its basic covid costs, never mind to fund it properly, has not been met. We needed a Budget for growth; instead, we have just got more of the same, and it will not do.
Matt Vickers (Stockton South) (Con)
In December 2019, the Prime Minister pledged to repay the trust placed in us by the people of Teesside. Despite fears that the economic pressures of the pandemic could blow that plan off course, they have not. This Budget delivered for Teesside. It was Teesside’s Budget—not only because we left more money in people’s pockets, freezing national insurance contributions, income tax, VAT, fuel duty and beer duty, but because we increased the national living wage and maintained the personal allowance so that those on the lowest incomes pay less tax. Not only are we backing individuals, we are backing business—extending the furlough, extending the business rates holiday, and introducing a super deduction to incentivise business investment and growth.
This Budget delivered amazing, life-changing investment specifically for Tees Valley. Since being elected, I have worked alongside the amazing Tees Valley Mayor, Ben Houchen, and my Tees Tory colleagues on a campaign to land a freeport for Teesside. It was incredible, therefore, to hear the news that Teesside would be home to the country’s biggest freeport, bringing £3.2 billion into our regional economy and creating 18,000 great jobs for local people. But the good news did not stop there. Our campaign to move the Treasury to Tees Valley has also won through, with incredible jobs that could be taken up by young people from my constituency. We will be moving decision makers up north to see what it means to live, work and play in Teesside—and, more importantly, how their policies impact on my constituents.
Then there was the incredible news that Thornaby was to benefit from a £23.9 million bucket of town deal funding. Thornaby is an incredible town, full of amazing people with bags and bags of untapped potential, skills and energy. They do not want a handout; they want a hand up. They want their fair share of opportunities that so many other towns have had—and with this money, they will get it. I have had the pleasure of sitting on a town deal board alongside local people, great independent councillors, business people, educational institutions, housing providers and others to look at how we can ensure that this money is spent to best effect and on the priorities of local people: tidying up our town centre, restoring pride in the heart of our community by getting rid of dilapidated and disused buildings like the Golden Eagle hotel and the old Npower office block; eliminating and improving substandard housing to make sure that every family can have a proper home; and developing a skills hub giving opportunities to people young and old to gain the skills they need to secure great jobs, and helping the people of Thornaby to unleash their full potential.
So yes, Wednesday’s Budget was Teesside’s Budget, and we are determined to make the most of the opportunities that this Government have presented us with.
Barbara Keeley (Worsley and Eccles South) (Lab) [V]
This Budget may come to be remembered for what it did not mention rather than for what it did contain. The health and care world was reported to be stunned that the NHS was mentioned only once and social care not at all in the Chancellor’s speech, and this despite the fact that we are still in the grip of a deep crisis in health and social care due to this Government’s failure to get covid-19 under control. The UK has experienced higher rates of infections, hospitalisations and deaths from the virus than other countries. The care sector was rocked by more than 30,000 deaths, and a fragile sector has now become even more fragile. Turnover in care staff is at 40% and there are still 100,000 care staff vacancies. The president of the Association of Directors of Adult Social Services has warned that the care system risks “catastrophic failure” without urgent changes. During the pandemic, the number of people with unmet need is likely to have risen to 1.9 million. The £1 billion extra to councils for social care and the reliance on councils raising the social care precept by 3% are both inadequate sticking plasters. We need a recovery plan that gets social care functioning properly by putting it on a par with the NHS.
After a year of incredibly hard work spent fighting this virus, there was no mention of a recovery plan for the NHS, and we learned just a few days ago of the proposal for only a 1% pay rise for NHS staff who have sacrificed so much during this pandemic. My constituents are angry and upset at this derisory pay proposal, because last year Conservative MPs promised, budgeted for and voted into law a 2.1% pay rise for NHS staff.
Many people around the country were excluded from support in this Budget. The 2.4 million people who have been excluded from financial support are not helped by Budget measures that apply to only some of the self-employed. The Chancellor failed again to put in the financial support needed to help people to self-isolate, meaning that they still have to choose between their job and their health. Our schools are left with nothing for additional spending related to covid. Our local councils are being forced into a 5% council tax increase after a decade of cuts that have seen £211 million cut from budgets in my local area of Salford.
To add insult to injury, the Chancellor and the Communities Secretary have come up with a priority list for the levelling-up fund that puts their constituencies into priority 1 for investment but leaves Salford and other more deprived areas lower down the queue. This was not the Budget the country needed, with its triple blow of tax rises, a pay freeze and a cut to universal credit later. Worst of all, while Government Ministers are happy to waste billions on test and trace that fails to deliver and to give contracts to their cronies, they are failing the key worker heroes of the NHS and social care.
Stephen Hammond (Wimbledon) (Con) [V]
It is a pleasure to speak in the debate this evening. This Budget was produced after a year of extraordinary economic challenges and an extraordinary economic response to give support to families and businesses. No Chancellor would want to raise taxes or increase Government borrowing to the current record levels, but in this Budget the Chancellor has rightly recognised the need to continue to support families and companies in the face of this extraordinary unforeseen economic shock.
Equally, the Chancellor is right to be honest. Modern monetary theory does not mean that a magic money tree has been found, and we cannot expand the Bank of England’s balance sheet forever, so rightly and probably unwelcomely, the plan to restore public finances understandably includes raising taxes.
A key imperative last week, alongside the need to restore the public finances in the medium term, was to encourage investment and enterprise and to embed recovery. So, alongside the planned corporate tax rises was a more generous treatment of tax losses and the announcement of the super deduction, which will inevitably help many companies to invest in exactly the capital formation that they will need for the future.
The Chancellor is also right to focus on infrastructure spending and investment. Infrastructure is not an end in itself; it is the driver of growth and productivity in economies. The policies announced last week will allow growth and investment in both physical and social infrastructure. I welcome the increase in departmental spending limits and the increase in transport spending. I also welcome the increase in skills investment, in kickstart and in the digital skills scheme. The establishment of the UK infrastructure bank is welcome, but it is the private sector that will drive investment. A green gilt is welcome, but I urge the Government to think about an infrastructure bond, which would open up the potential for private capital—individuals and pension funds—to invest in infrastructure. Equally, the announcement of the consultation on changes to the capital cap for pension funds will drive some of that investment.
Financial services are the jewel in the UK’s economic crown, so there is good news for many and I welcome some of the other measures, but I urge the Government to think about a review of the regulation of financial services, to ensure that we have competitiveness and also appropriateness in regard to capital and conduct. Financial services will allow the necessary investment to happen in the infrastructure of the United Kingdom. I welcome this Budget. It was the right Budget at this time, and the Chancellor is to be congratulated on it.
Bambos Charalambous (Enfield, Southgate) (Lab)
Austerity is back, not that it ever went away, and despite a chameleon-like effort to convince us otherwise, it did not take long for us to see through the Chancellor’s Budget, which is a continuation of the austerity that is now in its 11th year. We have the insulting 1% pay increase for nurses, which, when we factor in inflation at 1.7%, will actually be a pay cut. There is no increase in the pay of other public sector workers. There is a £30 billion cut to NHS funding, nothing for social care and nothing for local authorities, some of which are on the brink of collapse. This is the true face of the Chancellor’s Budget for 2021.
We clapped for the NHS throughout the pandemic and we felt devastated when we heard of the NHS staff who had lost their lives while caring for others. We still do not know the full extent of the trauma and emotional scars our NHS staff carry from performing their daily work caring for many thousands of covid patients in the most extremely challenging conditions in our hospitals. The nurses, the porters, the cleaners, the healthcare assistants, the theatre staff and the hospital pharmacists—if ever there was a time to reward them for their selfless work during the pandemic, that time is now. I urge the Chancellor to give the NHS workers the proper pay rise they deserve.
The challenges for the NHS are not over yet. There is a huge backlog of delayed operations, appointments and treatments in the pipeline. The very same staff, who are battleworn and weary from the fight against covid, will now be expected to tackle the tsunami of the backlog, with substantially less funding in the NHS. That is scandalous and will cost lives.
In the Conservative 2019 manifesto, the first item in “Boris Johnson’s Guarantee” was:
“Extra funding for the NHS”.
What happened to that manifesto pledge? What about social care? Where is the elusive plan for social care that we were promised? Social care is in crisis, and unless we develop a properly funded social care system, older and vulnerable people will be put at risk.
That leads me to local authorities, which have a statutory duty to fund social care, but council budgets have taken a huge hit while supporting local communities during the pandemic crisis. It is no surprise that some local authorities are on the brink of bankruptcy, having to go cap in hand to be bailed out just weeks before the Budget. That is what happens after 10 years of austerity.
The Chancellor is always bragging about the huge amounts he has borrowed and seems ideologically wedded to austerity and the demise of the public sector. When reflecting on the way NHS staff, social care workers and the public sector stepped up to the mark and went beyond the call of duty during the coronavirus crisis, protecting the most vulnerable, I think most rational people will agree that the Government not only owe them praise and support, but the fair funding they deserve.
Lee Rowley (North East Derbyshire) (Con)
I am pleased to have the opportunity to contribute to this important debate. I welcome the Chancellor’s Budget as a clear path, a demonstration of continued support in difficult times, and a way to rebuild from the challenges we are experiencing. There is the honesty of levelling with people about some of the challenges, which has been absent from parts of the debate, but also the fantastic news that we are laying the foundations for some extremely important successes, which we can plan for now and benefit from in the coming years, with, for example, the town deals.
I was pleased that two town deals were awarded to towns in my constituency, Clay Cross and Staveley. The Secretary of State for Digital, Culture, Media and Support said in his opening remarks that in a few weeks, businesses will reopen and hopefully not have to close again. In North East Derbyshire, when we reopen in a few weeks in Clay Cross and Staveley, we will do so with a spring in our step and the huge confidence that we have the tools to make things even better and the real opportunity to build on our successes in the coming years.
First, I thank the Government for supporting Clay Cross and Staveley in the past few months. I also thank everyone in both those towns who has worked so hard to put the town deals together. I thank Gary Golden, chairman of Clay Cross town board, on which I have the privilege to serve, and North East Derbyshire District Councillors Alex Dale, Carolyn Renwick and Charlotte Cupit. From the Staveley perspective, I thank Ivan Fomin from the Staveley town board, on which I also have the opportunity and privilege to sit. That collaboration and coming together has been successful for towns that have had challenges over many years.
Coming from North East Derbyshire and seeing how the industrial base changed in Clay Cross and Staveley over many years and the difficulties we had in the 1980s and 1990s, I know it is a huge vote of confidence that we now have the opportunity to make things better, and not just because money is coming. Money is important, but it is not about what you put in, but what is done with the money and how it is built on. We now have the opportunity to do that. That demonstrates that when we are constructive and work with and are in partnership with central Government, we can achieve so much more.
I thank the Government again. They are saying clearly to us that they believe in Clay Cross and Staveley and that we can succeed and get on. We will pay them back by doing so in the coming years.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
It is the greatest crisis that this country has faced since the second world war, and the Chancellor offers us a partisan and peripatetic Budget—partisan because it seeks to shore up the majorities of Conservative MPs, regardless of need or national benefit, and peripatetic as it jumps from area to area and sector to sector, giving and taking with no vision and little ambition, with nothing on social care, nothing for our key industries, nothing for Newcastle and almost nothing on climate change.
There is an infrastructure bank with one 20th of the funding for the failing test and trace system. This should have been the moment to light up the road to recovery; instead, it is a mean and limited mates’ rates economic sticking plaster. There is the super deduction capital allowance, which treats jacuzzis the same as manufacturing lines and rewards Amazon for investing in surveillance technology but not companies for investing in people.
After a decade of the Tories religiously repeating that cutting corporation tax increases the revenues brought in, apparently raising corporation tax now increases the revenues brought in. It really is the Tory magic money tree, is it not? It shows that all the years of austerity were driven by Tory ideological fantasy, even though they were a horror story for the communities that suffered, the public services that were cut and the jobs that were lost.
What about small businesses? For a year now I have heard from the wonderful, vibrant businesses in Newcastle Central that are trying so hard to keep going in this pandemic. They have shown amazing resilience and dedication to the protection of customers and jobs. They have invested thousands of pounds in making their premises covid-secure, in the technology to move online if they can, or in diversifying the services that they offer. Some are paying the costs of staff furlough from their own pockets and borrowing against their homes to do so. One pub owner told me that if he gets through this pandemic, he will be working for the bank for the rest of his life.
I wrote to the Chancellor about the town hall that I held last month for Newcastle Central businesses that have been excluded from covid-19 support because they were started a week too late, earned a few pounds too much or do not have business premises. There are thousands of them in Newcastle Central—what did the Budget do for them? There was the continuation of existing schemes, but nothing for those who fall through the existing gaps.
The Government say that local authorities have funds for discretionary grants—which is true, and Newcastle City Council has worked incredibly hard to distribute them—but it is a cowardly and base attempt to dodge responsibility. The Government know that they have not offered anything like the funding necessary to fill the gaps in support which they have created. If the Government allow our small businesses to go bankrupt, the demand we will see after this pandemic ends will be met by big national or international chains and fire-sale venture capitalists, not the local businesses that our economy and communities need.
Greg Smith (Buckingham) (Con)
I rise to speak in support of the Budget, which is a trifold balancing act in respect of continuing covid support, stimulus for recovery and fixing the public finances.
Faced with £335 billion in borrowing from the covid support schemes, the Chancellor has a difficult task, but I can help him immediately with in excess of £100 billion of that: I would not be true to myself or my constituents if I did not urge him once more to cancel HS2, a project that had a flimsy business case to start with that has now been blown apart by projections that rail demand is down for the long term.
Critically, we need stimulus for growth. The capital gains tax increases are uncomfortable, but I very much trust that the Treasury modelling will show the new rates to be on the right side of the Laffer curve. Fundamentally, the Budget has many measures that will stimulate growth. I particularly welcome the super deduction measures to unlock investments; fuel duty freezes for families and businesses alike; the restart grants, along with the extension of the 5% VAT rate, to give retail, hospitality and others a fighting chance; frozen alcohol duties; freeports and Help to Grow; and the extension of furlough and the self-employment grants, to give businesses, particularly those with long lead times for new contracts, certainty as they plan ahead.
It remains a mystery to me why some of those who are self-employed and earn more than £50,000 and owner-directors of limited companies who pay themselves through dividends have not enjoyed the same support as those on furlough or the SEISS. Such micro and small businesses, many in the creative, cultural, tourism, events and hospitality sectors—entrepreneurs to the core—are essential to our recovery. We must find a fiscal way to get them to the other side of this crisis. I am proud that my local council, Buckinghamshire Council, has been able to support many such businesses through the additional restrictions grants, but I have heard, with enormous sadness, of far too many businesses in my constituency simply giving up.
I particularly urge the Treasury to look once more at a sector I have spoken about before: the coach industry. One firm in my constituency is shouldering over £30,000 a month in losses, serving debts that have been caused because the state has asked it to meet PSVAR and Euro 6 standards. More debt simply cannot be the answer for such firms.
To conclude, this is a very strong Budget, a Budget that is honest about the level of national borrowing, but which understands that the path to recovery must come from growth. If we can close the gaps and open up as soon as possible, this Budget will stand us in good stead for growth and prosperity.
Sally-Ann Hart (Hastings and Rye) (Con) [V]
At this moment, nearly a year on since the first lockdown was brought about, I am reminded of the words of Lord Tennyson:
“Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.”
Over the last year, we have all grown tired of the slow passing of time as the covid pandemic has brought to a halt our lives as we once knew them. The daily confirmation of lives lost and loved ones around the country in mourning—the pandemic really has taken a toll on us all. But now is the time, as this Budget has sought to do, to strive for a better future: seeking to improve the life chances for all and finding solutions to turbocharge our economy, and not yielding to the cynicism and pessimism of some.
This is a good Budget and the Chancellor has got the balance right between supporting our economy and jobs right now as we continue through this pandemic, and laying out the necessary and proportionate measures to pay for that support in the future. Global Britain in a post-covid-19 world can be a beacon around the globe, a shining example of how to transform an economy into a high-skilled, high-waged green economy, offering opportunities for many and levelling up our left-behind communities. This Budget sets us on course for that.
First, as vice-chair of the all-party group on hospitality and tourism, I welcome the extensions of the VAT cut and the business rates holiday. Those measures have really helped the hospitality sector through the pandemic. It is welcome that they will be in place as they fully open this summer. I would have liked to see them extended for a further full year to really give our hospitality and tourism sectors a turbo-boost to their recovery, so I hope my right hon. Friend the Chancellor will review that when the schemes are due to come to an end.
Secondly, I welcome the levelling-up fund and the inclusion of both Hastings and Rother local authorities in priority group 1. This fund will really help areas that have been left behind for too long to get the vital investment in local projects that matter to local people. I welcome the funding support that both the local authorities I represent will get in putting their bids together. I look forward to working with them on that, along with my hon. Friend the Member for Bexhill and Battle (Huw Merriman).
Finally, I cannot conclude without raising the case for a High Speed 1 rail extension from Ashford International through to Hastings, Bexhill and Eastbourne. I know I have been banging on about it for a long time and it has been talked about for nearly 10 years, but we really need it to come through and get that train through there.
We may have grown tired and weakened by the pandemic in recent months, but now is the time to strive, to seek, to find and not to yield as we move our economy into a post-covid world, as this Budget does.
Navendu Mishra (Stockport) (Lab) [V]
On International Women’s Day, I would like to start by paying tribute to the achievements of women throughout history and put it on record that I stand in solidarity with all those who continue to champion equality. In my own constituency, I am proud that so many members of my community have put on events to mark the day and celebrate the role that women have played in our history, in particular Heaton Norris community centre for its work in creating an International Women’s Week activity workbook. I was delighted to receive a copy last week and I would like to say a special thanks to Nadia Ali and the youth group at the centre for all their hard work.
The 1% pay rise for NHS workers is shameful. It is insulting for more than 1 million staff who have put themselves in harm’s way on the frontline of the covid pandemic over the past 12 months to keep our population safe. We owe them a debt of gratitude and should be rewarding them for their efforts, not insulting them with a measly pay rise for staff who are already underpaid and overworked.
Statutory sick pay also remains shamefully low with a Unison North West survey revealing that 80% of care workers will continue to receive £95 per week statutory sick pay if they are ill or following the Government’s advice to self-isolate or shield themselves or loved ones. The right thing to do is give them full pay.
Furthermore, this should have been a Budget about investing in services given the record low borrowing costs for the Government and the chronic underfunding of the NHS over the past decade, which so cruelly exposed our country to this pandemic and resulted in the highest covid death toll in Europe. We need capital funding for urgently needed upgrades to my local hospital, Stepping Hill, which I raised with the Health Secretary directly in January, as well as additional funding in areas such as cancer services right across Greater Manchester. Furthermore, specific funding for areas such as dementia are incredibly important to my constituents. Indeed, according to the Alzheimer’s Society there are almost 4,500 people aged over 65 with dementia living in the local authority of Stockport. Despite that, services to tackle this degenerative condition remain significantly underfunded.
The Budget also fails yet again to go far enough for the 3 million people who are self-employed and have been excluded from financial help during the pandemic. ExcludedUK branded the Chancellor’s announcement “too little too late.”
There was also almost nothing in this Budget for maintained nursery schools such as Hollywood Park, Lark Hill and Freshfield in my constituency. This in an unsustainable position for these schools, with the National Education Union warning that many will struggle to survive year on year without a long-term funding settlement.
It is also high time that the national minimum wage be lifted to £10 per hour to reduce the level of in-work poverty. May I therefore ask the Minister when the Government will present their long overdue employment Bill to the House?
Recently, the House has been informed about civil service jobs moving to the north. I welcome that, but so much more needs to be done to level up this area of the country. My constituency has excellent transport links, the availability of high-quality workspaces and a thriving community; I therefore strongly encourage the Government to move their Departments to Stockport and other parts of the north-west.
Tom Randall (Gedling) (Con)
I read in the newspapers this morning that millions of people are going to sit in front of their television sets this evening, and as I cannot imagine they will be watching anything other than the Parliament channel I would like to take this opportunity to say that this is a good Budget that will help the economy in its long recovery from the strains of the last year.
The theme of this evening’s debate is supporting businesses through the crisis, and the scale of that support can be seen in the assistance given to businesses in Gedling over the last year: over £12 million in business interruption loans; over £44 million in bounce back loans; nearly £9.5 million under the self-employed income scheme; and 88,000 meals under eat out to help out. But Government support cannot be reduced to a list of statistics on a spreadsheet; behind every loan or grant there is a business and a family struggling to get by. That was brought home to me when a constituent, a small businessman, stopped me in the street and said, with tears in his eyes, “If you see Rishi, tell him thank you for the self-employed support scheme; it’s been a life saver.” The Chancellor’s interventions have helped to save jobs, and he and the Treasury should be commended on their work.
The Government schemes are among the most generous in Europe, but not all have benefited. I welcome the major improvement in access to the self-employed scheme now that the tax return deadline for this year has passed, enabling over 600,000 more people to claim the fourth and fifth grants. The all-party group on gaps in support has produced a report with further proposals, which I will read with interest.
No Government can create jobs, but they can create the conditions that encourage job creation, and I therefore welcome the creation of a new wave of freeports in the UK, particularly the fantastic news that one of them will be in the east midlands. Centred around East Midlands airport, the freeport will focus on innovation, low carbon and trade. I was disappointed to hear that the Leader of the Opposition disparaged this scheme by saying that the creation of freeports “isn’t levelling up” but is “giving up.” The east midlands freeport has the potential to create up to 60,000 new jobs in the region, and as I already have constituents who work in and around the East Midlands airport site, some of those jobs will go to Gedling residents. That is to be applauded, and I hope the Leader of the Opposition will reflect on his comments. I further applaud the launch of the levelling-up fund and look forward to working with colleagues in Gedling to put in what I hope will be an extremely successful bid.
These are difficult times and I appreciate that they will not get easier in the very short term, but I congratulate the Treasury and the Chancellor on setting us on the course to future prosperity.
Ruth Cadbury (Brentford and Isleworth) (Lab)
In three minutes, I can touch on only a handful of my serious concerns about this Budget. For NHS staff this year has been the toughest ever, yet the only reward and recognition in this Budget is a 1% pay rise, which is, in effect, a pay cut when inflation is accounted for. We now know that the Government are to cut health and social care by £30 billion, with yet another year of no plans to fix our social care crisis. There was nothing to help a couple in my constituency after she was discharged from hospital and they both now face astronomical costs to ensure she gets the care she deserves. What does this Budget offer them? It offers them nothing.
With the UK hosting COP26, we would have thought the Government would have a bold, ambitious and sustainable plan that both tackles the climate crisis and creates high-paid, secure green jobs, with the associated economic stimulus the UK economy so desperately needs, but they do not. They have just a green-focused investment bank, and the Chancellor did not mention that it fails even to plug the gap left behind by leaving the European Investment Bank, nor does it replace the green investment bank that the Conservative Government sold off. There was a £1 billion cut to the green homes grant, which was justified on that grounds that “too few applied”; it was not reformed so that it actually worked for homeowners needing to make their homes energy secure and efficient, while also ensuring there is work for small and local businesses in my constituency and across the country.
Again, there was nothing for aviation communities, which have been so badly hit and are dominated by a sector that will be the last to recover from the pandemic. This could have been an opportunity to make aviation more sustainable and more environmentally friendly, while sustaining jobs, skills and businesses, for example, in the areas around Heathrow and other airports. Unlike Governments in France, Germany, Spain and the US, our Government have chosen to do neither. Where is the promised sector-specific support for aviation? It should be led by a tripartite body of government, the unions and industry that could help shape the sector’s recovery. It is not there.
This is a Budget where the rhetoric simply does not match the reality. It fails to support the NHS staff and further extends the social care crisis. It is a Budget that bakes in the already huge inequalities in our society. It is a Budget that fails to invest in covid pandemic recovery and fails to address the economic hit we know our economy faces after Brexit. It is a Budget that neither meets the challenge of the moment we are in nor plans for the future, but it is a Budget that rewards political friends. This Budget is yet another missed opportunity.
Steve Double (St Austell and Newquay) (Con)
It is a delight to be here physically in the Chamber once again, rather than speaking to a screen. There is no doubt that the hospitality and tourism sector has been one of the most severely impacted through this pandemic. I know that the Economic Secretary to the Treasury, as a former tourism Minister, will know how important this is to Cornwall and to my constituency. A recent report highlighted that one in three households in Cornwall rely on tourism and hospitality for some of their income, and that my constituency is the most reliant on these businesses in the whole country. Therefore, it was vital that the Chancellor delivered further support for businesses in the sector so that they can not only survive through the coming weeks, but be ready to reopen and bounce back quickly, and the Chancellor did deliver on those things.
I am chairman of the all-party group on hospitality and tourism, and there were five things we were particularly asking the Chancellor. It is not often we get everything we ask for in a Budget, but this time the hospitality and tourism sector just about got everything we asked for. We asked for an extension of the VAT cut, and the Chancellor delivered it. We asked for a continuation of the business rate holiday, and the Chancellor delivered it. We asked for a continuation of the furlough scheme, and the Chancellor delivered it. We asked for further grants to give businesses the cash they need to be ready to reopen, and the Chancellor delivered it. We asked for a freeze in beer duty, and the Chancellor delivered it. So this was a Budget that delivered for businesses in my constituency and across Cornwall, and therefore it is very welcome.
There were, however, just two things I was particularly disappointed with in the Budget. Another sector that has been severely impacted by this pandemic is the aviation sector. While the further business rate grants to support airports through the coming months were very welcome, we were hoping for some good news on a cut on air passenger duty, and we did not quite get that. So I would encourage the Treasury to look further at what we could do to support aviation through cutting air passenger duty in the near future.
I was also disappointed about the removal of the relief on red diesel. This is particularly going to hit very hard the quarrying and mining sector, which is another very important sector for Cornwall. I understand what the Treasury is trying to do—to move people on to clean energy—but the fact is that for some of the heavy gear needed, particularly in mining and quarrying, there just are not alternative clean bits of machinery available on the market yet. So it will be relying on diesel, and this extra duty is going to hit that sector very hard. That is another thing I would ask the Treasury to look at once again: what can we do to help businesses in this sector while new technologies come on board?
Overall, however, it was a good Budget, and one I am happy to wholeheartedly support.
Mr Pat McFadden (Wolverhampton South East) (Lab)
It is a pleasure to wrap up this debate for the Opposition. Whatever is happening elsewhere on our television screens, I want to begin by thanking all the hon. and right hon. Members for contributing to this debate, whether they did so physically or virtually. We have had a very wide range of contributions over the past few hours, and hon. Members have raised a whole number of issues in relation to the Budget. These included the Government’s business support schemes, the importance of technology, the creative industries, tourism, International Women’s Day and the differential impact of the pandemic on women, green finance, the universal credit uplift and its impending cut-off, unemployment and youth unemployment, the 1% NHS pay offer, the levelling up funding and those still excluded from Government support.
The backdrop is of course one of the most difficult we have known. There is a pandemic that has killed over 120,000 people and given us a huge hit to our economy. I want to focus on the taxation aspects of the Budget, because on this particular issue this was no ordinary Budget. The Budget announced by the Chancellor last week marked a watershed in taxation policy on the part of the Conservative party. For years, we have heard the mantra that lower taxation rates would lead to increased revenue by stimulating more economic activity.
Indeed, that was the previous Chancellor’s justification for cutting corporation tax in the first place back in 2010. He partly funded it by cutting investment allowances for manufacturing businesses, and he continued to stick to that justification for years afterwards. In 2016, the then Chancellor, George Osborne, said:
“Not only have our corporation tax cuts given us the lowest corporation tax rate of all the advanced economies of the world, but we have seen a 20% increase in receipts from corporation tax”.—[Official Report, 4 July 2016; Vol. 612, c. 625.]
This was not just a single policy and not just a political argument; it was an article of faith. It was the core of the taxation ideology of the Conservative party. It goes way beyond the Osborne-Cameron years and right back to Thatcherism itself. This is a stance that has lasted not years, but decades. Its believers include the current Prime Minister himself who, when campaigning to be leader of his party, said that
“every time corporation tax has been cut in this country it has produced more revenue”.
With the changes announced in this Budget and the increase in rates, we do not just have a different policy; we have a different philosophy. It is all there in the Red Book, set out in table 2.1 on page 42, under the heading “Strengthening the public finances”. By raising corporation tax rates, the Government hope to bring in an extra £17.2 billion in a few years’ time. That is the claim; that is the estimate of the increased revenue that the increased rate will bring.
If there was any lingering doubt about the sea change that this represents in the thinking of the Conservative party, it was swept away by the Chancellor the day after the Budget. He used his post-Budget interview on the “Today” programme to bury the argument of his predecessors. He said:
“the vast majority, if not all, of that increase in corporate tax receipts is probably more likely due to the cyclical recovery in corporate profits, which took a real hammering in the last crisis”.
He went on to say:
“There was an idea that they”—
cuts in corporation tax—
“could help spur business investment. And what we’ve seen over the past few years is that we haven’t seen a step change in the level of capital investment that businesses are doing as a result of those corporation tax decreases.”
So there it is: Thatchernomics and Osbornenomics buried in full public view by Rishinomics—no more Laffer curves; no more pretending that tax cuts always magically lead to more revenues; no more tax bombshell posters; “Singapore-on-Sea” laid to rest by Budget 2021.
With a Budget set to bring the overall tax take back to levels not seen since the 1960s, the Conservatives have surrendered the mantle of claiming to be the party of low taxation. The old Conservative slogan was that it was the party of low taxation. The new slogan could be, “Tax on families up, tax on businesses up, but nurses’ pay down.” Let the Chancellor put his signature on that. This is the platform to which he has now signed up the whole Conservative party. This is the change that the Budget represents.
When we look at what the Budget predicts further ahead, UK economic growth after this year and next is projected to be just 1.6% or 1.7%. The Budget papers predict a long-term hit to growth of 3% from covid, on top of the 4% hit to growth as a result of the Prime Minister’s agreement with the European Union. The more that we can mitigate this damage to growth, the better it will be for prosperity, family finances and the public finances. That is the heart of the country’s challenge—how to get economic growth going. After the long, hard year that business has had, we need to let companies grow, breathe and get back on their feet, not weigh them down with ever growing debts, so why have the Government set their face so firmly against the proposals that came from business groups themselves to turn the covid debt burden into a contingent tax liability in the future, dependent on future performance?
Last week, the all-party parliamentary group on the Black Country economy heard alarming reports from manufacturing companies about the forest of red tape, cost increases and delays that they have faced in trying to export goods since the beginning of January. Those businesses represent the finest Black Country tradition of making things and selling them all over the world. There is an old saying in the Black Country: “If you can draw it, we can make it.” But those businesses now find themselves hobbled and hamstrung by the mountain of red tape involved in the Government’s Brexit arrangements.
I appreciate that some Government Members may not regret that—in fact, some of them may welcome it—but the hard-working businesses of this country deserve more than to be used as components in the Government’s ongoing grievance factory against the European Union. They deserve more than to be used as pawns in a battle of ill feeling that will not create a single job or export a single product. We know that the Prime Minister has dismissed business, but that attitude is no good to hard-working exporters and manufacturing companies. They deserve support for their efforts.
Covid has exposed deep inequalities in our country, from the pattern of those killed by it to the frontline workers who have kept the country going. It has imposed on us all a responsibility to build a better economy out of this: one that combines prosperity and security; and one that combines the wealth creation we need with a commitment to heal the divisions exposed by what we have been through. Under new leadership, that is exactly the approach that my party will support.
The Economic Secretary to the Treasury (John Glen)
Over the past four and a half hours we have had contributions from well over 75 right hon. and hon. Members from across the United Kingdom—from Blackpool to Buckingham, and from Stockton North and South to Somerset. There may be many geographical differences between us and differences of opinion, but I think all of us, no matter our political allegiance or the location of our constituencies, are united in our desire to safeguard businesses from the impact of covid-19. On this International Women’s Day, I take this opportunity to pay particular tribute to those businesses’ female employees, whose work helps to drive this country’s economic success.
Indeed, the desire to safeguard businesses has been this Government’s guiding mission since the first days of the pandemic. That is why, over the past year, we have rolled out a series of extraordinary, unprecedented interventions, including the furlough and self-employment income support schemes, billions of pounds of grants and loans, as well as VAT cuts and rate holidays for eligible firms. Those steps have worked. According to official statistics, insolvencies last year were ranked 25% below 2019 levels. However, while the pandemic continues, it is only morally right that we do all we can to support the hardest-hit firms. That is why in last week’s Budget the Chancellor built on our existing help for businesses as part of a total covid support package worth £352 billion this year and next.
Let me remind hon. and right hon. Members of the headline measures: extending the furlough scheme to the end of September, with firms required to make only a small contribution to wages as the economy reopens; more help for the self-employed with a fourth income support grant worth 80% of three months’ average trading profits and capped at £7,500; and a fifth grant, with its value determined by a turnover test, to target support at those who need it most. In addition, more than 600,000 extra people, many of whom became self-employed in 2019-20, will now be able to claim for the scheme. The CBI praised those steps and said it was right that businesses start to contribute a little more as revenues recover, while the Federation of Small Businesses declared that the Government’s interventions were the building blocks of a pro-business Budget.
We are also providing targeted support to the sectors that have found themselves at the sharp end of the pandemic. As my right hon. Friend the Culture Secretary outlined this afternoon when he opened this debate, that includes hundreds of millions of pounds to support our arts, culture and sporting institutions as they reopen and an extension of our hugely successful film and TV production restart scheme.
We are giving eligible properties in the retail, hospitality and leisure sectors a £6 billion tax cut by continuing the 100% business rates holiday for three months. We are extending the 5% reduced VAT rate for eligible hospitality and tourism businesses until the end of September. I listened carefully to the representations from my hon. Friends the Members for Hastings and Rye (Sally-Ann Hart) and for North West Norfolk (James Wild). We will continue to think carefully about what is required to support all aspects of our economy.
As we start to emerge from the pandemic, our new restart grants will help get shops bustling, hairdressers snipping and fitness centres buzzing again. I can confirm to my right hon. Friend and neighbour the Member for Romsey and Southampton North (Caroline Nokes) that personal care businesses will be included in stage 2, which will open from 12 April.
As many hon. Members have mentioned, the Government continue to take their world-leading environmental commitment seriously. They remain dedicated to meeting climate change and wider environmental targets, including improving the UK’s air quality.
The billions of pounds that we spend on such interventions are necessary and affordable in the short term but, as the Chancellor also said last week, we cannot allow debt to rise indefinitely, so let me touch on the role of businesses in rebuilding our nation’s finances, as mentioned by my hon. Friend the Member for Mid Norfolk (George Freeman). We are providing over £100 billion of support to firms throughout the pandemic, and it is only right that we ask businesses to help as they return to profit and the economy rebounds. That is why, in 2023, we are increasing the corporation tax rate to 25%. Even at that level, I say to the right hon. Member for Wolverhampton South East (Mr McFadden), the UK will still have the lowest corporation tax rate in the G7. Before that increase kicks in, we are making the tax treatment of losses more generous by allowing businesses to carry back losses of up to £2 million for three years, and we are reviewing the 8% surcharge levied on bank profits to ensure that the sector remains globally competitive.
However, that is far from the sum of business’s contribution to our economic renewal. Companies small and large have another important role: driving growth and spreading opportunity around the country. I strongly support the points made by my right hon. Friend the Member for Chipping Barnet (Theresa Villiers) on the role of changing regulations in growing growth and competition opportunities.
In our Budget plans, we are building an investment-led recovery and we have set out how to support the firms that are going to do it. First, we are increasing opportunities for young people while ensuring that firms benefit from a steady pipeline of talent, with £126 million to fund up to 43,000 high-quality traineeships. In addition, employers who hire a new apprentice will receive a £3,000 payment. We are also rolling out a new unsponsored points-based visa, so that high-growth firms in science, research and tech can attract the best global talent.
Secondly, we are helping firms turbocharge their growth by providing greater access to capital through a range of new schemes, as acknowledged by my hon. Friend the Member for Wimbledon (Stephen Hammond). They include giving the pension industry more flexibility to release investment into innovative ventures and helping firms scale up through a new £375 million “future fund: breakthrough” programme. The FCA will also consult on the IPO listings regime following Lord Hill’s excellent review, and I know that my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) will watch that with great interest.
Thirdly, we are closing the UK’s productivity gap. Our super deduction—the biggest two-year business tax cut in modern British history—will mean our business investment tax regime leads the world. As the Culture Secretary outlined earlier, our £520 million Help to Grow scheme will offer small businesses MBA-style management training, as well as help to embrace digital technology. I welcome the remarks of the hon. Member for Sunderland Central (Julie Elliott), who gave some begrudging support for Help to Grow and digital investment, and the remarks of my hon. Friend the Member for Rugby (Mark Pawsey), whose enthusiasm demonstrates his understanding of the sector.
I end my remarks by saying that UK businesses and the men and women at their helm are the backbone of our economy. We are committed to doing whatever it takes to support them through this crisis and to unleash their potential to drive our national recovery and renewal. This extraordinary Budget in extraordinary times sets out how we will achieve that and, in so doing, secure a stronger economy and a better future for the people of this country as we emerge from this pandemic.
Ordered, That the debate be now adjourned.—(David T.C. Davies.)
Debate to be resumed tomorrow.