(3 years, 9 months ago)
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19:01 - The House divided: - Ayes: 360 / Noes: 274 - Question accordingly agreed to.
Mr Deputy Speaker (Mr Nigel Evans)
I inform the House that I have not selected the amendments in the names of the Leader of the Opposition or John McDonnell.
Before I call the Minister to open the debate, I have had notice of a point of order. I call Mr David Davis.
Mr David Davis (Haltemprice and Howden) (Con)
On a point of order, Mr Deputy Speaker. Budgets and Finance Bills were the first reason for having a Parliament —to approve the expenditures of the Executive. For more than a century, the first resolution for a Finance Bill has been what is known as the general amendment of the law resolution. The resolution allows Members to table amendments that deal with tax administration and relief provisions not otherwise provided for by the specific Ways and Means resolution.
However, since Philip Hammond’s Finance Bill 2017, the Government have not included such a resolution. The effect is that any amendments tabled by Members to the Finance Bill must be tied to one of the specific resolutions already agreed by the House. In effect, by not including the amendment of the law resolution, the Government have shut down the rights that the House has enjoyed for more than 100 years. The result is that Members’ hands are tied when it comes to effectively amending the Finance Bill. Mr Deputy Speaker, can you give guidance as to how the House can recover those fundamental rights, which have been arrogated by the Government?
Mr Deputy Speaker
I thank the right hon. Gentleman for giving me notice of the point of order. There is no matter of order for the Chair arising from the absence of an amendment of the law motion. There was no such motion after the last three Budgets and I think I remember, during the last Budget, a very similar if not identical point of order from the right hon. Gentleman. There is a lot of tradition around Budgets, and it may well be that the David Davis point of order becomes part of that tradition. Anyway, it has no effect on the scope of debate—the reasons for and implications of the absence of an amendment of the law resolution are themselves a proper matter for debate. The right hon. Gentleman has put his point on the record.
Before I call the Minister, I point out that up until and including No. 6, Darren Jones, on the call list, Back-Bench contributions will have a five-minute time limit. Thereafter—No. 7 onwards—the limit will be reduced to three minutes. For those who are contributing remotely, please look at the timer on the bottom right-hand corner of the device that you are using. If, for whatever reason, you do not have sight of that, please use an alternative way of ensuring that you keep within the time limit that has been set. Please do not be tempted to try to extend it, because we have 101 contributions to this debate. For those who are taking part in the Chamber, the timer will be displayed as usual on the monitors in the Chamber.
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
It is a real pleasure for me to open today’s debate on the Budget that my right hon. Friend the Chancellor the Exchequer brought before the House last week. It is a Budget that meets the needs of the moment. It delivers support to all corners of our United Kingdom. It shores up our defences against the ravaging impact of the pandemic while laying a clear path for our journey out of the crisis and into a brighter future. As the Chancellor himself acknowledged last week, it is a path that we are only able to take because of the incredible efforts of our frontline health workers who have vaccinated more than 20 million people across the United Kingdom, and the researchers and manufacturers who have managed to produce effective vaccines in such a short space of time. I am sure I speak on behalf of the entire House when I express the deepest gratitude to everyone involved in this heroic national effort.
Mrs Theresa May (Maidenhead) (Con)
My right hon. Friend makes some very important points about our health staff and the vaccination programme, which has been absolutely superb in this country. Does he recognise that the creation of a new vaccine centre and medicines manufacturing centre were part of the life sciences deals that were enabled by the modern industrial strategy? Will he welcome the modern industrial strategy?
Kwasi Kwarteng
I have not come here to defend or rebut any of the wonderful measures that we took under my right hon. Friend’s leadership. I am very conscious of the fact that many people want to take part in this debate, and I am afraid that I have to press on.
The researchers and manufacturers have done an extremely good job, as my right hon. Friend says, in shoring up our response to the crisis. The Budget provides an additional £65 billion of measures in response to covid, designed to support the economy this year. It covers an extension of the furlough scheme, which has already supported 1.3 million employers and more than 11 million jobs, providing vital funds to households and communities throughout our country. It has added to the near £20 billion of support that the Treasury has paid out to support 2.7 million self-employed people.
The Budget presents a dynamic and generous plan to help businesses to get up to speed. We are providing restart grants of up to £18,000 to more than 680,000 business premises. We are also providing further support for hospitality and retail businesses who may be more affected by restrictions when they reopen. While our plan for jobs has been given a £126 million boost supporting 40,000 more traineeships and doubling the cash incentive for firms taking on new apprentices, the Budget ensures that more people are able to access secure, skilled work.
Of course, there can be no denial that the jobs market has changed profoundly over the past year.
Kwasi Kwarteng
I am very conscious, as I am sure my right hon. Friend I, that many, many Back Benchers want to take part in the debate. I understand that he is on the call list, so I am afraid I am going to have to make more progress.
It is no secret that over the years, and even in years of strong growth, prosperity has not been spread fairly between the regions and nations that make up our United Kingdom. That is an imbalance that this Budget seeks to correct, with the Department for Business, Energy and Industrial Strategy leading the charge. Where regions have been left behind by the decline of old industries, we will create new industries and support sectors as they transition to a low-carbon, sustainable and competitive future.
Kwasi Kwarteng
I must press on. Lots of Back Benchers want to speak. However eminent and distinguished my right hon. Friend is, there are lots of other people who want to speak.
We are backing the development of hydrogen hubs in the Tees Valley and Holyhead, to breathe new life into coastal and post-industrial communities while we drive a new clean energy transition. We are establishing four carbon capture and storage clusters across the next two decades, and we hope that they will play their part in decarbonising our industrial processes. We are investing tens of millions of pounds in the Aberdeen energy transition zone and the global underwater hub.
We are providing a support package of more than £2 billion to Britain’s incredible auto industry, with £500 million going towards the growth of our electric vehicle supply chain. That package will help to support and safeguard nearly 170,000 jobs in the UK auto sector, including in the north of England, the west midlands and Wales. We intend fully to deliver a boost to the ambition to build at least one UK gigafactory before the end of this Parliament, and we hope to secure investment for others in the longer term.
Greg Clark
I am grateful to my right hon. Friend and successor for giving way. Will he acknowledge that the battery manufacturing innovation centre and the Faraday challenge, which galvanised the move to providing batteries for electric vehicles, were part of the industrial strategy, as was vaccine manufacturing? Can he explain why it is thought appropriate to abolish that strategy? Is it not better to have a plan, rather than no plan?
Kwasi Kwarteng
I hear my right hon. Friend’s passionate defence of his own work, and I commend a lot of his work. I have read the industrial strategy comprehensively, and it was a pudding without a theme, in my view. I feel very strongly that the conditions of 2017 do not apply to 2021, and I am very pleased to announce to the House that we are morphing and changing the industrial strategy into the plan for growth. I am happy to take further interventions on that, should they arise.
What we have announced in these packages is levelling up in action. There will be new investment in new industries, creating new jobs and driving real change in communities across the UK. With these examples, we are talking about a vision for the future of the kind of country we want to be: a country that hosts good-quality, high-skilled, long-term jobs in every community and that takes its commitment to net zero extremely seriously. I would like to commend the work of my right hon. Friends the Members for Maidenhead (Mrs May) and for Tunbridge Wells (Greg Clark) in passing the net zero legislation in 2019. That was a signal piece of legislation for which I commend them heartily. As Secretary of State for Business, Energy and Industrial Strategy—which is still the name of the Department—I am very pleased that we are committed to net zero in the way that we are.
Because of all the profound changes that we have seen over the last three or four years, as well as our departure from the EU, our legislation to end our contribution to climate change by 2050 and the unprecedented impact of the coronavirus, I believe that we must take a fresh look at our plans for industrial policy and long-term economic growth. As a consequence of all this, alongside the Budget, we have published “Build Back Better: our plan for growth”. Our cross-government plan for growth signals a departure from the industrial strategy brand and details a renewed focus on infrastructure, skills and innovation. It reflects new opportunities available to us following our exit from the European Union, which was successfully achieved as a consequence of the deal that we struck at the end of last year. This opens up new ways to drive growth, build on our competitive advantage and support a vision for a truly global Britain. We will draw on the valuable lessons we have learnt from the 2017 industrial strategy as we transition to this new, more focused and more ambitious plan for growth.
I want to reassure the House that the energy of my Department is entirely focused on building back better after the coronavirus pandemic. It is leading the Government’s work on supporting British industry and priority sectors, and I am happy to acknowledge that we are building on the incredibly dynamic and good work that was pursued by my right hon. Friend the Member for Tunbridge Wells. We will publish our innovation strategy in the summer. We will set out details of our approach to supporting sectors, places and technologies in the innovation strategy. Those will give a clear indication and sense of purpose as we seek to shape the UK’s future. My Department is already leading on strategies with respect to net zero, hydrogen and, of course, innovation itself, as well as the space strategy. We are engaging on a comprehensive programme of work to protect and create jobs as we transition to net zero.
The principle underlying all this effort is, of course, the green recovery. We fully intend to end, and we will end, our contribution to climate change by 2050, and we will do so through investments and innovations such as the ones I have just mentioned. Last week’s Budget builds on the framework set out by the Prime Minister’s 10-point plan, as well as on the support announced at the spending review and in the national infrastructure strategy.
I am delighted that my right hon. Friend the Chancellor spoke fulsomely about the UK infrastructure bank. The bank will target investment in green projects, which will help us meet our net zero targets in the public and private sectors throughout the country. It will provide a global centre of excellence and advisory support for net zero projects across the country.
We have committed an initial £12 billion of capital and £10 billion of guarantees. By crowding in— attracting—private investment, we fully expect the bank to support at least £40 billion of investment in our precious infrastructure. This investment will help us to amplify success in decreasing emissions, which we have already reduced by 44% against 1990 levels. That is by far the best performance in the G7.
With our strengths in many sectors, from offshore wind to hydrogen, carbon capture technologies and zero-emission vehicles, we are well placed to seize the opportunity of the green transition and lead a global green industrial revolution. The 10-point plan, which the Budget expands on, puts us in a very good position to achieve that goal.
Backed by £12 billion of public investment, the 10-point plan will reinvigorate our industrial heartlands in the north-east, the north-west, Yorkshire, the Humber, the midlands, Scotland, Wales and elsewhere. It will support the creation of hundreds of thousands of green jobs across the UK by 2030. It represents a really exciting and dynamic vision for the development of economic opportunity throughout this country.
This is a Budget that is timely in its interventions, entirely realistic in its ambitions and, above all, remorselessly and unapologetically optimistic about the future of the United Kingdom. It outlines an investment-led recovery, with a targeted, laser-like approach to levelling up every nation and region.
Thanks to the actions of the Government, we will emerge from this virus sooner and stronger than many would have anticipated. Thanks to the Budget, we have the means and the tools necessary to continue our trajectory towards recovery in the next year. We will be embracing innovation, we will be creating green jobs and we will be rejuvenating our industrial heartlands and spreading opportunities. We look forward to building back better throughout the entirety of the United Kingdom.
Edward Miliband (Doncaster North) (Lab)
I want to start by quoting a speech given in this Chamber 77 years ago, in June 1944, by Ernest Bevin, who was then the Minister of Labour. He said:
“With my right hon. Friend the Prime Minister, I had an opportunity of visiting one of our ports and seeing the men, of the 50th Division among others, going aboard ship…The one question they put to me when I went through their ranks was, ‘Ernie, when we have done this job for you, are we going back to the dole?’…Both the Prime Minister and I answered, ‘No, you are not.’”—[Official Report, 21 June 1944; Vol. 401, c. 212-13.]
The circumstances of this Budget are, of course, very different, but the sentiment is just as relevant. As we come through a very different national crisis, how do we in our generation do right by the British people? Some 120,000 people have died from covid. Our way of life has been dramatically restricted. Our key workers have stepped up and put themselves in harm’s way for all of us. Businesses have shuttered to protect our health and have faced incredible strain. The British people have been nothing short of heroic.
While the crisis has revealed the best of our country, it has also laid bare the deep flaws in the way our institutions and economy are run. In the words of the OBR,
“the UK has experienced higher rates of infection, hospitalisations, and deaths from the virus than other countries.”
We know that is partly because of higher deprivation, inequality and poverty. We know we are deeply unequal, both within and between our regions. Even before this crisis, 2 million of our fellow citizens faced destitution. That means they lacked at least two of the following basic essentials: shelter, food, heating, lighting, clothing or basic toiletries. That should shame us all in one of the richest countries in the world. We know our public services are deeply underfunded, from health to social care. We know, too, that the world of work is characterised by deep divisions of power, which meant some workers were safe and some were not.
This chasm between the spirit of the British people and the reality of how our country works demands from us that we face the Bevin question once again, of how we transform our country not just on jobs, but on public services and on inequality, too. This challenges us all, whatever party, to think bigger and more boldly. Of course that is hard, in the dire circumstances we face coming out of this pandemic—the public finances are under strain and the economy will take time to recover—but they are far less dire than those Bevin and his colleagues faced after 1945, and they thought big about the kind of country we could be. They raised their sights in the face of adversity.
While I would praise some of the measures taken by the Chancellor, I do not believe that a fair-minded observer would say that the Budget passes the Bevin test. On jobs, according to the OBR, even by 2025 unemployment never even gets back to pre-crisis levels. On welfare, the Budget tells people on universal credit that they need to go back to living on £74 a week from September, just as unemployment starts to peak. On the next crisis—the climate emergency—the Budget rejects a green stimulus and cuts green spending, as I will explain.
On public services—I do not think the Business Secretary talked about public services—the Budget appears to draw the extraordinary lesson from the crisis that public services need less resources, not more. In total, £17 billion has been taken out of departmental spending since Budget 2020, which was before the crisis, despite the greater needs and despite all that has been revealed in the pandemic.
What does building back better mean when unemployment is higher as far as the eye can see, the welfare state goes back to the way it was, the green revolution is ducked and public service spending is cut? This Budget fails the Bevin test and the build back better test. Why? I think it is because the Government have not truly learned the lessons of the past decade.
To be fair, the Government have been remarkably open about the failure of the last decade. The Business Secretary referred to the “Build Back Better” document that they published. It is a very interesting document, perhaps not for the reasons intended. There is a striking chart that shows the long-standing productivity gap between ourselves and our competitors, but it shows something else. In the past decade, we have not addressed our long-standing weaknesses, but fallen further behind. The productivity gap has doubled with Germany and is up by three quarters with France and one quarter with the US. Government getting out of the way did not work. Markets left to their own devices did not work and austerity did not work, so the question for the Government is: what are they going to do differently in the coming years from the last 10?
We needed first of all—the right hon. Members for Maidenhead (Mrs May) and for Tunbridge Wells (Greg Clark) have made reference to it—an industrial policy that intervenes at scale to help growth sectors and industries to succeed. There is one pre-eminent test on that, which is the green stimulus. To give some context, President Biden has pledged a $1.7 trillion green plan over 10 years. Germany has committed €40 billion over two years and France €30 billion over two years. Even what the Business Secretary claims—I will come to that shortly—is a fraction of that amount over the decade.
Let us take the infrastructure bank, as the Secretary of State talked about that. The OBR is highly revealing on the infrastructure bank: the annual spending of the bank is going to be just a third of the amount of its predecessor, the European Investment Bank—£1.5 billion a year versus £5 billion a year. So, not more investment, but less. What is the OBR’s verdict on the infrastructure bank? It says that
“given the scale of its operations (at around 0.1 per cent of GDP a year) and the fact that it replaces only some European Investment Bank activity, we have not adjusted our economy forecast.”
In other words, the bank has absolutely zero effect on growth, from all of those green measures that the Business Secretary talked about.
One of the most interesting things about the Budget—but which has perhaps been less remarked on—is that the growth returns to trend is up just an anaemic 1.7%. That is incredibly low by historical standards. This is low growth and low ambition.
A green stimulus could have helped our crucial manufacturing sectors, but instead they were left out in the cold. On steel, where is the £250 million clean steel fund, which was promised two years ago? There is no mention of steel in this 110-page document. On offshore wind, we are way off the Government’s target of 60% domestic content, and the negligible resources in the Budget simply do not measure up. On the automotive sector, I want to say something positive: it is good that the Government have brought forward the date of the petrol and diesel phase-out to 2030, which is what we called for. But I say to the Business Secretary that the rhetoric of ambition is not matched by financial support for this crucial sector. The Society of Motor Manufacturers and Traders said in reaction to the Budget:
“This is an opportunity lost”.
Germany is investing a total of €7 billion for transformation; we are way off that. The Government seem almost allergic to support for these sectors.
Let us take another area that everybody agreed could create hundreds of thousands of jobs, and I do not think the Business Secretary mentioned this either. It could help people in every community in our country: home insulation and retrofitting. We need a transformation of our housing stock. People may forget that the flagship policy of the Prime Minister’s 10-point plan was the green homes grant. The Business Secretary was given personal responsibility, as the Minister of State, for the green homes grant. He told us the Government would learn the lessons of the green deal, which had been a complete disaster:
“We’re completely focused on trying to make this a much better roll-out, and we’ve learned our lessons…We need to make sure that the right projects are identified, and that we can get the money out”.
It would “pave the way”, he said,
“for the UK’s green homes revolution.”
What has happened? The project has been a complete fiasco on his watch: contractors not paid; installers forced to make lay-offs; homeowners unable to get the grants—not a long-term comprehensive plan, but a piecemeal, privatised approach characterised by shambolic delivery on his watch, and he said not a word about it. He would be welcome to come in and say something about it now; he obviously does not want to. And no wonder: now the Government are cutting more than £1 billion from the green homes grant scheme as it has been such a disaster.
Is this just an accident? No, it is not. The failure on the green homes grant and on green manufacturing is all part of the same problem. The Government are good at talking about a green revolution; they will the ends, but not the means—a proper, thought-through industrial strategy. Indeed, tragically, we now have a Secretary of State for Business, Energy and Industrial Strategy who does not believe in industrial strategy. If I can put it this way, he is half the Secretary of State he once was. Any self-respecting organisation would have asked him in the interview when he was applying for the post of Secretary of State for Business, Energy and Industrial Strategy—although Secretaries of State do not exactly apply, they are offered the job—“Do you believe in industrial strategy?”
We got suspicious when in one of his first acts he tore up plans for the industrial strategy White Paper, and we thought, “How curious.” Then on Thursday we found out he had abolished the Industrial Strategy Council set up by the right hon. Member for Maidenhead. I hope the right hon. Lady will not take it amiss if I say that I admired some of her work, and this is one of the things I admired. I pay tribute to her and the right hon. Member for Tunbridge Wells; they learned the lessons of our history and said, “We need Government, business and unions working together on this joint enterprise, coming together to address the challenges our country faces.” And, goodness me, do we need this now as we seek to recover from coronavirus.
I have to say to the Business Secretary, who is new to his job, that this decision has caused consternation—I do not think that is too strong a word for it—in businesses up and down the country. Make UK said that it causes
“significant concern and frustration within manufacturers of all sizes across the UK.”
The director general of the British Chambers of Commerce said that the strategy’s demise was a
“short-sighted step that ministers will come to regret”.
All around the country, thanks to the work that was done, local chambers of commerce and local enterprise partnerships have spent years working on local industrial strategies. Now they are wondering what they are supposed to do with them, because the strategy seems to have fallen out of favour.
People might think that is just an accident. It is not an accident. I know that the Business Secretary dismisses his past pamphlets as the work of a maverick Back Bencher, but it is not a coincidence, because this—it is very interesting—is what he wrote:
“The draining of effort from our psyche has been replaced by a sense of entitlement.”
I do not know quite what that means. He continued:
“It has also led to a false belief in the value of industrial policy.”
I thought he had put all that behind him, but clearly not. He is so ideological—so dogmatic—about the free market that he had to get rid of the industrial strategy, and therefore he cannot deliver the partnership between Government and business that the country needs.
Let us turn more generally to business support. Businesses have made huge sacrifices in this crisis, as I said, and they face huge challenges in recovering from the pandemic, added to which are the billions of pounds of red tape as a result of the implementation of the Brexit deal. Even when the health crisis is over, businesses will take a long time to recover. We welcome some of the measures talked about by the Business Secretary, but there are still important groups that I believe are left out: two thirds of the excluded self-employed are not helped by this Budget, including limited companies, many freelancers and others; supply chain businesses are still left out; and whole sectors, such as the wedding industry, are ignored. Their plight will hold back the recovery.
We know that business debt is one of the biggest threats not just to individual businesses but to the recovery as a whole. Some £70 billion of business debt has built up during the crisis. In December, the Federation of Small Businesses reported that the proportion of those businesses describing their debt as “unmanageable” was 40%. The OBR says that, on current plans, the Chancellor will have to write off £27 billion of those loans.
In these circumstances, a sensible Chancellor would have been creative, yet he still refuses to budge. We have a scheme from the Chancellor with no links to profits, no ability to restructure and no ability for management or workers to develop creative solutions. He is just leaving it to the banks. Well, even the banks are telling him that that is very risky. If we face a wave of insolvencies, it will be at the Chancellor’s door. The danger is that this holds back the recovery, and it certainly fails the Bevin test.
Many of the businesses facing those debts are on our high streets, in retail. What is the single biggest long-term change that those businesses require? It is to address the deep unfairness that high street shops face against online retailers. I am sure that the Business Secretary is familiar with that problem. The Government launched a review of business rates not in the last Budget, not in the Budget before, not in the one before that, but six years ago. In fact, they launched the review so long ago that I was Leader of the Opposition when they did so—it is that long ago! A long-term Budget would have finally taken action in this area, but instead we got more delay.
I turn to the measures that were taken. On the so-called super deduction, we will welcome any measure to help business, but I point out, as we think about our capital stock and investment, that the OBR says that that measure
“does not affect the long-run level of the…capital stock”.
In other words, it will make a difference to the timing of business investment, but in fact, according to the OBR, business investment is expected to fall significantly in 2023 and 2024, and there are real questions about why this measure is targeted just at plant and machinery, which is only one fifth of business investment. Then we have freeports, which have been tried for 30 years. I am afraid that all the evidence is that, at best, they may displace economic activity from one area left out of prosperity to another a few miles away.
The problem is that the Government simply do not get that we cannot build private sector success on the back of public sector austerity. The cuts of the last decade have made local services worse, squeezed demand and undermined the crucial infrastructure of business success. People might wonder, “Well maybe they’ve learned their lesson.” I fear they have not. Again, this was not very clear from the Budget on the day, six days ago, but in a year’s time, for many of our public services, it will be austerity all over again. Next year, for current services in transport, housing and local government, and other so-called unprotected areas, public spending will be cut in real terms by £2.6 billion. Let us be clear: growth is anaemic, because their measures are so weak, so they turn to a strategy they tried from 2010 of cutting current spending and raising taxes on ordinary families. I fear they have not learned the lessons. They cannot grow the economy if they are giving tax cuts with one hand, but cutting the services that communities and businesses rely on with the other.
The issue is not just about resources, but about who spends them and where they are spent. We are the most regionally unequal country of any major developed economy and the most centralised. The levelling-up fund is a centralised pot of money to be determined by Ministers, and we are starting to discover where the money is actually going.
Salford is the 18th most deprived area in the country, but it is placed not in the category of most need—category 1 —but in category 2. Barnsley is the 38th most deprived area and is also in category 2. Richmond is 256th out of 317 for deprivation, but it happens to cover the Chancellor’s constituency, so it has found its way into category 1. The Government have said this is based on objective criteria, so what are they? Again, I am very happy to give way to the Business Secretary if he wants to explain what these objective criteria are. If it is all above board, why have they not published the criteria? Of course, they have form on this—the towns fund, the crony outsourcing of contracts to donors. The British people have a right to expect that the money meant for the most deprived areas is spent in the most deprived areas.
Ministers do not get the role for Government, they leave it to the market; they cannot tackle the inequalities we face; and, far from leaving austerity behind, for many it will look like austerity, feel like austerity and it will be austerity.
Of course, we have the most egregious example of all in the decision to cut the pay of nurses and NHS staff. They more than anyone have been the heroes of this crisis: they have put themselves in harm’s way for all of us. The Government promised a pay rise in the NHS plan. They did not just promise it; they legislated for it and they walked through the Lobby a year ago to vote for it. The Business Secretary was put up on “Question Time” on Thursday, as this decision was breaking, to try to justify this broken promise, and this is what he said:
“When I look at people in the hospitality sector, in aviation, in retail, many of them are very…worried they won’t…be in a job in two or three months.”
Edward Miliband
He nods. As if that is somehow a justification for cutting the pay of nurses. What is the world in which their plight justifies cutting the pay of our nurses? I have never heard anyone, in a year of discussions, in any of those sectors say to me, “I’m finding it hard, so Government should cut nurses’ pay.” People would only say that if they believe in a race to the bottom or they believe in levelling down.
Before the Minister says everybody needs to tighten their belts, he should be careful, because it turns out there is plenty of cash to spend millions on a Downing Street makeover for a media briefing room that has not been used; to spend hundreds of thousands of pounds to pay off the man the Home Secretary was accused of bullying; and to give Dominic Cummings a 40% pay rise. The truth is it is one rule for them and another rule for everyone else. Let them not ever try again to tell people in this country that we are in this together.
Beneath the rhetoric, the Government cannot be the answer to the problems of the country. They may have produced a document charting 10 years of failure on productivity, but they have not changed their view. The answer to 10 years of failure cannot be more of the same. This should have been a Budget with a plan to respond to the climate emergency by creating the jobs of the future; and a Budget with a plan to help business through the crisis and beyond with debt restructuring, providing a decent pay rise for our key workers and dignity in the social security system, rather than plunging the most vulnerable into deeper poverty. This is a Budget of low ambition for Britain. The post-war generation would never have accepted such a meagre vision as that presented by the Chancellor and the Government. They never would have, and neither should we, and that is why we will vote against the Budget tonight.
Mrs Theresa May (Maidenhead) (Con)
I refer the House to my entry in the Register of Members’ Financial Interests.
In unprecedented times, I commend my right hon. Friend the Chancellor for recognising the need to combine continued support for people in jobs, even as we see the light at the end of the tunnel of this pandemic, with the need to restore our public finances and to set us on the path of growth for recovery in the future. I will not dwell on the first of those, but I welcome specifically the funding for tackling domestic abuse, focused as it will be on the perpetrator programmes often overlooked in the past. However, I continue to fail to understand why the Treasury, and, I fear, the Department for Business, Energy and Industrial Strategy, seem institutionally incapable of understanding the significance of the aviation sector for jobs and for our economy.
On other specific issues, I wish to refer to one group who are badly affected by the impact of dealing with the pandemic: women. There is evidence to show that lockdown measures have been particularly difficult for women, and that there are women who have abandoned their careers because they have found it impossible to juggle the requirements of lockdown, with home schooling and so forth, with their careers. We need those women in the workplace. We need those female entrepreneurs for our future. I urge the Government to look actively at what they can do to deal with that issue and to encourage women entrepreneurs.
Another group badly affected by the pandemic is young people, with the hospitality sector being a case in point. The intergenerational divide between young and old has been exacerbated by the measures taken to deal with the pandemic, so it is absolutely right that we take measures to restore our public finances and do not simply land the bill on young people and future generations. I know there are those, including some of my colleagues, who will say, “You don’t need to do anything to taxes. You just need to have growth”, but one worry from this Budget must be the OBR forecast for growth. It is forecast in the medium term not to return to the pre-financial crisis level of an average annual rate of 2.5%, but to be around the pre-covid rate of 1.5%. There is no doubt that the pandemic has had an impact, but pre-covid the uncertainty around Brexit was also having an impact on our economy. Of course there is every prospect that Brexit will have a continued impact in reducing the size of our economy into the future. So we need to focus on growth, and I will say a little more specifically about that in a moment.
I am concerned that the Government have simply adopted the Treasury orthodoxy that if we wish to encourage investment by business, all we do are capital allowances. I can tell my right hon. Friend the Business Secretary that year after year that is the answer the Treasury comes up with. If we want an innovation economy, we need to invest and support investment in areas that encourage growth and innovation, and that means research and development. We are to see another consultation on R&D tax credits—I believe it is the third in three years. I have to say to him: stop consulting, just get on and do something. We could extend the definition of R&D expenditure or increase the rate, but we must act. We need investment in innovation, not in chief executives’ Jacuzzis.
Another area I want to emphasise for my right hon. Friend is that there is a lot of talk from Government—we all do it and we have done it in the past—about capital spending, and infrastructure is always what we reach for. We must never forget, however, that human capital is increasingly what we must be investing in. We should be ensuring that there is effort and funding available for the skills White Paper and for the response to the Augar review. What we need to build back better is a plan that transforms the economy: ideas and an innovation economy; people investing in skills; upgrading infrastructure; and making this the best place to grow and start a business. That was the modern industrial strategy.
The Government say they need a new framework. My right hon. Friend has said that that framework builds on the industrial strategy, but it does not. There are two reasons this is the wrong approach. First, we need a long-term strategy. We cannot just magic a plan out of thin air and expect it to work in a year or so—we need something that will work longer term. We should make changes where necessary, not just for the sake of making a change.
Secondly, a huge amount of effort went in, with Government working with the private sector, to develop that modern industrial strategy. The private sector welcomed it, because it was not about picking winners. This is where I depart from the former Leader of the Opposition, the right hon. Member for Doncaster North (Edward Miliband), because Labour’s answer was always to pick winners; we agreed with business the sectors that needed to be strengthened and in which we were strong, and let the market decide the companies that were going to be the winners. We need to continue with that effort. The industrial strategy was welcomed by the private sector and it was recognised internationally. Do not abandon it. Build on it, for the sake of all our futures.
Mr Deputy Speaker (Mr Nigel Evans)
It was like a blast from the past there, momentarily.
Peter Grant (Glenrothes) (SNP) [V]
It is always a privilege to speak on behalf of the Scottish National party in a debate such as this. I say to the former Prime Minister, the right hon. Member for Maidenhead (Mrs May), that I do not think I have ever agreed so much with anything that she has said in her life, but I assure her that it is not a habit that I intend to continue for too long.
I commend the Minister on at least having the courage to mention Brexit in his opening remarks, because the Chancellor did not mention it once in his entire speech, despite the fact that the economic damage of Brexit is likely to be worse than that of the covid pandemic. I am puzzled as to how the Minister was able to describe that as a successful Brexit. If 4% off GDP was a successful result, I shudder to think what a bad Brexit would have been like in the Government’s eyes.
The Chancellor’s Budget speech contained all the usual words, all the usual platitudes and all the usual elements. There was a lot of bluster about how wonderful the Government are and obligatory name drops for some hand-picked Tory MPs, interspersed here and there with bits of substance, most of which we had already read in the previous weekend’s newspapers.
Perhaps unusually, I would not take immediate issue with a great deal of what the Chancellor announced. I want to see the details, obviously, because I know from experience that the reality can be very different from what is announced at the Dispatch Box, but in principle I would support a lot of what was announced. The problem is what was not announced and what the Chancellor did not say. He did not say nearly enough about permanent support for the millions of families who are living in poverty. He did not say enough about supporting millions of small businesses and self-employed people who continue to be excluded. He did not say enough about several key sectors of the economy that still face an existential threat as a result of the covid pandemic, in some cases combined with other factors. He certainly did not say enough about investing in our public services and in the people who have served them with such dedication and professionalism during the last dreadful 12 months.
The former Prime Minister, who just finished speaking, mentioned the importance of our aviation industry. Even without the pandemic, we knew that that industry needed to change radically because of climate change. Even a year ago, none of us would have predicted the almost total closure of an entire industry, so what is the Chancellor’s vision for how the aviation industry will look five to 10 years from now? How big will it be? Will air traffic be back to pre-pandemic numbers? Will aviation still directly provide 470,000 jobs and still support around 650,000 other jobs in the UK, as it did before the pandemic? If it does not, what will happen to all the people whose jobs disappear? If the Chancellor’s speech is anything to go by, the answer to all those questions is that he does not know and probably has not even thought about it, because he never mentioned aviation during his speech. In almost 6,500 words, the industry that has perhaps been the worst affected of all industries during covid was literally never mentioned.
When we look at the crisis facing our retail industry, we see, again, that changes were happening anyway because of the growth in online shopping. There were around 143,000 job losses in retail the year before the pandemic and there are likely to be a further 380,000 between 2020 and 2021. Where is the recovery plan? Do the Government even have a vision of what the recovered retail industry will look like? Yes, there is a partial continuation of short-term survival rations and, of course, there is always the towns fund if someone happens to live in a marginal constituency, but otherwise, there is no indication that the Government have any clue how they intend to help our local shops and shopping centres to recover, or even if they care whether or not they recover.
Retail, aviation and, I could mention, oil and gas are all industries where the effects of wholesale change have been greatly accelerated and magnified by the covid pandemic. While those changes may have been inevitable, the Government’s continued failure to support the people who will be affected is anything but inevitable. We cannot allow this Tory Government to turn their back on hundreds of thousands of retail workers and aviation workers in the same way that they abandoned hundreds of thousands of miners in my constituency and others across these islands.
In addition to the lack of any clear vision for key sectors in the economy, there is a continued refusal to acknowledge the desperate plight of millions of self-employed people and small business owners. Of course, I welcome the fact that the Chancellor was eventually dragged kicking and screaming to announce an overdue and humiliating U-turn on support for about 600,000 self-employed people, but we in the SNP are not going to forget the 2.4 million others—the creators, freelancers and small business owner-director—who are still being deliberately abandoned. Last year, I warned that many of these people stand to lose their houses and everything they own if their businesses go under. Last week, the Chancellor had a choice: give them the support they need and deserve, or ignore them. He chose to ignore them yet again. Before the Budget, the Prospect trade union found that 46% of all self-employed people are less likely to stay in self-employment as a result of their experiences during the pandemic and 18% are unsure. That means barely a third of people in self-employment were sure they intended to stay there, and that was before the non-support that most of them got in last week’s Budget. These are the people we rely on to drive the recovery as we come out of the covid emergency. They are not asking for charity; they are asking for a fair deal. They deserve that. It is all they want.
As well as those 3 million people, perhaps falling to 2.4 million this year, there are now millions who have had to fall back on a benefit system that was never designed to support so many people for so long and was never fit for the purpose for which it was supposed to have been designed in the first place. The continuation of the £20 uplift is welcome, but it should be continued permanently. The cliff edge the Government are talking about threatens to plunge 60,000 people, including 20,000 children, into poverty in Scotland alone. The Government claimed that the response to covid would be driven by data not dates, so why is the universal credit cliff edge being set by a date regardless of what the data might say? I submit that an economic recovery in which the poorest get left behind is no economic recovery at all. We can judge how much this Chancellor and this Government care about the eradication of poverty from the fact that the Chancellor did not mention the word “poverty” even once in his entire speech.
The Budget fails to address the economic challenges that will impact on all our living standards for decades to come. It fails adequately to support the businesses on which our economic recovery depends. It fails to provide a decent income for millions of our citizens. The people of Scotland can have no confidence in this Budget. For the last 60 years, the people of Scotland have declared they have no confidence in the Government behind the present Budget. It is now clear that most people in Scotland no longer have any confidence in a constitutional Union that allows such a Government to continue to ride roughshod over the ancient rights of the people of Scotland.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I draw the attention of the House to my entry in the Register of Members’ Financial Interests.
No Chancellor has faced this kind of crisis in living memory and, by and large, I think the Chancellor has navigated through it with some skill over the last year, supporting those who need support as much as he can. The Bill, as a result, underpins all of this particular Budget: some £407 billion will be spent by the end of next year, with an eye-watering deficit of over £250 billion, as set out in the Budget he has just produced. That clouds every single judgment.
The key point I want to make, and I agree with my right hon. Friend the Member for Maidenhead (Mrs May), is that we must not lose sight of the reality of the need for growth. If we forget that, then we fall back on the idea that we will somehow get through this. The OBR’s forecasts for growth should make us sit up and look very carefully at that. I worry that the level of growth beyond the year after next is really very low in relation to where we start from now. If we cannot grow faster than that, it says a huge amount about some of our policies. I therefore remind my right hon. Friends on the Treasury Bench that growth is the No. 1 reality for us now.
That is why I was somewhat concerned about some issues, and I want to come back to them, but one thing I did like, which feeds towards the idea of growth, is the super deduction tax relief to kickstart business investment. That is the right kind of thing to do: encourage businesses to bring their money back in to invest in the UK. The news about freeports is also very good indeed. I hope the Government will have time to review the corporation tax rate and be very careful about the effect of that further down the road. I note that the Chancellor has given himself some time to look at that very carefully.
The issue here is that sometimes we compare productivity across countries. I give a warning about that. I do not know why the Treasury has not done more work on this. No two countries compile productivity rates at the same level. For example, France does not have the public sector in its productivity rates; it has only the private sector. That means that comparisons are often between apples and pears. Our problem in the UK is not productivity, because the London and the south-east have the highest productivity in the whole of Europe. Our problem is regional productivity. No other region of the UK meets the average for the UK in productivity. That single fact should tell us more than anything else why it is critical to put stuff and build things in the north, the midlands and places such as Wales. Our productivity around the country does not match that average level of productivity, as we are far too concentrated in London and the south-east.
I agree with those who have said that R&D tax credits are really important. I would stress that that is a good idea and a policy that the Government have to push forward on, because it encourages greater growth. We must remember that many of our technology advancements are made in universities these days, and we have to maximise that. On deregulation, I am going to come forward with plans shortly; there is huge scope for us to release some businesses through deregulation.
I want to draw to a close by making a couple of points. First, I want to make the case for the Government to review the universal credit money. The reason for that is that universal credit is not a flat payment; it is a dynamic process, and it is aimed at helping people back to work. So in truth, even if we invest the £6 billion in universal credit, as we get more people back to work, the cost of that falls because they are back at work and paying taxes. This is the critical bit: I do not want it to be compared with the furlough scheme, which is a very different item. Universal credit is about getting people back to work, and therefore they pay more. I recommend that the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Sutton and Cheam (Paul Scully), and his colleagues think carefully about that, because money was taken out of it some years before, and it needs that investment back in it. That was how it was intended.
My last point relates to the 0.7% on overseas aid. I understand the Government’s issue on this and I recognise their problem, but I hope they will keep this under review. As we move away from certain countries, places such as China will move in, and their money will come with serious problems. They will demand more dictatorial government. We need only to look at Burma to see what is going on when China supports countries. I just raise that as a policy point that the Government may want to think about.
Overall, I say to the Government that this has been a good Budget, but it is a Budget that needs to buy a bit of time, and we must think carefully: growth, growth, growth is the most important thing in front of us now.
Darren Jones (Bristol North West) (Lab)
The reality of this Budget is that the Government have no credible plan for long-term economic growth that will meet the required scale of ambition for the net zero transition, that will mean real change for workers in every community across the country or that will really help businesses to grow and make a profit. There is no denying that the extension of covid support was welcome, and I am pleased that the Chancellor agreed with my Committee’s assessment that premature end dates had caused unnecessary redundancies and harm to business, but that was the least that we could have expected. On a longer-term vision for our country, I cannot find very much at all. The OBR has concluded that Brexit will shrink our economy by 4% and covid by an additional 3%. After the initial year of reopening post-lockdown, our expectations for growth still hover around only 1.5% a year, and in the face of a decade of failed austerity, the Chancellor has still cut billions from day-to-day spending.
There is a reason that Labour in government was able to invest in our nurses and teachers—something this Government are not willing to do. There is a reason that Labour in government was able to take millions of pensioners and children out of poverty. This Government did not mention child poverty once in the Budget. That reason was sustainable, long-term economic growth. The one major piece of Government policy that attempted to take a longer-term view of the economy was the industrial strategy—a strategy that after only four years was cancelled via a footnote in the Budget and a leaked letter sacking the national Industrial Strategy Council. That is not how you announce major changes to Britain’s industrial policy. The Secretary of State said today that the industrial strategy was a “pudding without a theme”. With respect, he has not just withdrawn the pudding; he has failed to serve the starters and the main course as well.
The so-called plan for growth generates more questions than answers; it is essentially of no use to business. The national infrastructure bank was also supposed to be about long-term growth, but it has been given public funding of only £12 billion, which is £8 billion less than the amount recommended by the National Infrastructure Commission and a whopping £23 billion less than the European Investment Bank used to invest in the UK alone, when the UK was a member of the European Union.
The Budget also fell short of the required ambition to deliver on our net zero commitments, with no real increase in infrastructure spending and the Chancellor sticking to his previous position of only 3% of GDP. That is, I am afraid, a continuation of Ministers announcing targets with no plan or finance to allow them to happen. The Government cannot just announce a green industrial revolution and hope for the best. A failure to stimulate the growth of the green economy is just part of their failure in the Budget to meet the scale of the unemployment challenge. According to HMRC data, 782,000 fewer people are on company payrolls since October 2020, yet does the Government’s job and skills programme meet the scale of the challenge? No, it does not.
For all the failures by the Government in the Budget, I want to end on a positive note. Throughout the pandemic, both as a constituency MP and Chair of the Business Committee, I have seen the remarkable abilities of the British people to adapt to the challenges that we face: the researchers and innovators that led the world in genomic sequencing in vaccine development; the engineers who pivoted from aircraft wings to ventilators; and the small businesses that transformed themselves by moving online. Our key workers—carers, nurses, shopworkers, truck drivers, teachers, police officers and many more—kept our country moving when we all had to stop, reminding us of our sense of national duty, and the volunteers, churches, food banks and resident groups renewed our sense of community. Behind every business and public service is a worker, a business owner, a leader, an innovator, a public servant, a citizen of our United Kingdom. Brexit, technology, climate change and the legacy of covid are all like tectonic plates, slowly reshaping the British economy.
We need every person who can to roll up their sleeves and contribute to the national effort of recovery and change, where each country in our Union depends on each of the others for our collective national success. However, we also need a Prime Minister who has a bolder vision for modernising Britain in the post-covid world—a vision of a modern Britain that not only meets our ambitions as a country, but recognises and rewards the enormous potential of the British people.
Last week’s Budget could have been something special. It could have been the start of a new chapter for a more sustainable, inclusive and successful Britain, meeting the challenges of reshaping the British economy and providing work for people in every community; a Budget that showed the British people that we could be excited by the future and proud of our country once again. Instead, it had no credible long-term plan for growth and no credible long-term plan for the future. It was, unfortunately, a return to the failures of the past.
Mark Menzies (Fylde) (Con) [V]
Greetings from Lancashire, Mr Deputy Speaker.
May I begin by welcoming the Budget delivered by my right hon. Friend the Chancellor of the Exchequer last week? I also particularly thank him for the support that he has given to the tourism and leisure sector throughout the pandemic.
In the three minutes that I have I shall first acknowledge the importance of infrastructure and the considerable investment that this Government and, indeed, the Government led by my right hon. Friend the Member for Maidenhead (Mrs May), have made in the north-west of England, and my constituency in particular. The M55 link road, the A585 Singleton bypass, the Preston western distributor road, the South Fylde line passing loop, £10 million for Kirkham town centre, a new school at Lytham St Annes High School—and the list goes on. So, to pretend that the Government and their predecessor did not invest in the north-west, were not committed to levelling up and did not have a plan for the future is, I am afraid, the result of reading Labour party press releases.
I shall focus attention on three things, briefly—first, the importance of enterprise zones in generating jobs and investment locally. Blackpool enterprise zone has been a huge success and we have about 1,200 jobs in the process of being created in what was an area of incredibly high unemployment and some of the most deprived communities anywhere in the United Kingdom; so those jobs are incredibly welcome. However, I would just encourage the Minister on the Front Bench, the Under-Secretary of State for Education, my hon. Friend the Member for Chichester (Gillian Keegan), who I believe also has responsibility for Lancashire, to make sure that enterprise zones do not, as a consequence of the development of freeports and some of the other strategies unveiled in the Budget, become the poor relation.
I would like to make sure, as the UK Government host COP 26, that nuclear fuel is front and centre, because in order for the United Kingdom to develop a radical decarbonisation strategy, it is very important not only that we are investing in small modular reactors and advanced modular reactors—documents for which are currently sat with the Treasury—but that we have the means to manufacture all the aspects within that, and in my constituency nuclear fuel is responsible for 900 jobs.
Finally, when it comes to aerospace, I have the head- quarters of BAE Systems in my constituency, employing just over 6,000 people. Team Tempest and the integrated review are incredibly important to us. They are the jobs of the future. It is the technology that has been referred to today. I encourage the Treasury to look to the future, invest in technology and continue to support the Fylde and the north-west.
Ed Davey (Kingston and Surbiton) (LD)
This Budget fails millions of people across the UK. It fails tens of thousands of small businesses and millions of self-employed people. It fails millions of NHS staff and carers, and it fails future generations with its lack of ambition for action on climate change. The Liberal Democrats argued for a Budget for small businesses, which would protect shops, restaurants, pubs, cafés, beauticians and barbers, all of which make up our local high streets, and create jobs in our communities. The Liberal Democrats wanted a Budget to make our country fairer, greener and more caring. We got the reverse.
There is no doubt that our economy and our national finances are both in a terrible state, so I welcome the sharp U-turn that the Chancellor has made on corporation tax. Large and profitable businesses must pay their fair share, but other choices that the Chancellor has made are clearly wrong. By freezing the personal income tax allowance for years, the Conservatives are targeting tax rises on the lowest paid. In Government, the Liberal Democrats championed and won the case for higher income tax allowance because it meant lower taxes for the lowest paid. By contrast, what the Chancellor has announced will hit the lowest paid with higher taxes. We will oppose this deeply unfair move.
Tax hikes are not the only way that this Government will punish hard-working families. Given that the NHS has performed so brilliantly during the pandemic, why are Ministers offering nurses, doctors and health workers an insulting 1% pay rise? What world does the Prime Minister live in if he thinks that a 1% pay rise is acceptable for Britain’s NHS heroes? When this Government doled out billions of pounds in contracts to private companies, many of which had close links with the Conservative party, how can Ministers say that they cannot afford a better pay deal for our nurses and doctors? Conservative MPs who back this shameful decision on NHS pay will have to answer for it.
Finally, I want to come to the other disastrous move that this Government have made: the EU trade deal, the albatross around the neck of British businesses. Whether it is the Office for Budget Responsibility report of this Budget or other analysis, the evidence so far shows that the UK’s recovery will be weaker than that of other countries, because this Government chose to erect new barriers to trade and hit our exporters with the biggest rise in red tape ever, just as British businesses are struggling with the deepest recession for 300 years.
This Budget does nothing to make our country fairer, greener, or more caring. It fails those who most need our support right now—those who have been working tirelessly to keep us safe during the coronavirus crisis and the businesses fighting desperately to stay afloat. The country deserves so much better. The Liberal Democrats will oppose this Budget.
Liz Kendall (Leicester West) (Lab)
Today, I want to talk about the Budget and social care, or rather the lack of anything in the Budget on social care. The case that I want to make is not that the Government should have brought forward their long-promised reforms because the pandemic has exposed fundamental flaws that we must address if we want dignity and security for elderly and disabled people; it is not that these reforms are desperately needed because families have been pushed to their limits helping to care for loved ones; it is not even that our frontline care workers deserve a decent pay rise after everything that they have been through—although all these points are clearly true. The argument that I want to make today is not the moral case for social care reform, but the economic case. The Government’s failure to grasp the role that social care plays in our wider economy is undermining growth, productivity and the need to get value for taxpayers’ money, all of which are essential with both family finances and the public finances under such strain.
Much of the debate about how we build back better or level up has focused on investing in our physical infrastructure, but investing in our social infrastructure is equally important. Put simply, in today’s world childcare and social care are as much a part of our economic infrastructure as the roads and railways. First, that is because of the basics of demographic change; our population is ageing, and we need more than half a million more care workers just to keep pace with the growing demand. The Resolution Foundation has rightly argued that if the Government prioritised investment in social care, that would quickly boost jobs in every part of the country. The Women’s Budget Group has shown that investing in care would ultimately generate even more employment, because of the multiplier effects.
The second argument for investing in social care is to help improve our low productivity rates. Too many workers—predominantly women—have to take jobs below their true skill level, reduce their hours or leave the labour market because they cannot get the help they need to balance work and family life. With our ageing population, that is as much about the lack of social care as it is about the availability of affordable childcare. We have to change this. Finally, we need to invest in prioritising social care to stop costs being shifted to other more expensive parts of the public sector. Just look at delayed discharges from hospital; it makes no sense to have elderly people stuck in more expensive, acute care, when they could be cared for at home.
We have to do more to boost jobs and growth. Reform of social care is vital to achieving those goals. It is a matter of social justice and an economic necessity. The Government must bring forward their plans for reform; there is not a moment to waste.
Damien Moore (Southport) (Con)
The Chancellor’s Budget last week comes against the backdrop of the country facing the biggest peacetime crisis in modern times—not just a health crisis, but a financial one as well. Throughout the pandemic, the Chancellor, under this Conservative Government, has ensured that most people have been provided for in a variety of different ways, balancing support for individuals and the businesses to which they hope to return with the overall health of our public finances. We would not be able to supercharge our economy after this Budget without the support we have received through the pandemic.
My constituency of Southport has already seen much support from this Government; 13,000 local jobs have been protected through furlough and other support schemes, and around 1,600 businesses have been supported with grants and business loans totalling £7.8 million. There has been a huge impact on our retailers. In addition, a third of businesses in my constituency are in the hospitality and tourism sector, so the support has been vital, and the Budget for after lockdown will provide for more.
In the Budget, the Chancellor extended the business rates holiday, which has been widely welcomed. Tapering the support will mean that businesses face no cliff edge, and, as we unlock, footfall and revenue will rise, allowing for a more gradual move back to normality. The 100% rates relief until June, which moves to two thirds for the rest of the year, provides not only support, but certainty. I hope that this will continue into the future, until we reform business rates in line with the challenges faced by online competition.
I also welcome the extension of the VAT cut, which will help to protect almost 7,000 jobs in hospitality and tourism in my constituency—an industry that has been the hardest hit. Extending the 5% reduced rate of VAT for a further six months until the end of September and then tapering from October, will not only mean that there is also no cliff edge here; it will allow the sector rapidly to recover. Of course, the most important point about the reduced rate of VAT is that if people pay for their hotel room in Southport before October, they will get the 5% rate, not the rate when it goes back up; that is something to remember.
The most important announcement by far for my constituency was the town deal worth £37.5 million. It is the biggest direct investment in a generation, and will be transformational. We have already had £1 million of accelerated funding, which has seen the main street in my town, Lord Street—as you know, Mr Deputy Speaker—become a boulevard of light. We have also seen some revitalisation of our market. Our existing tourism and hospitality sectors will be enhanced with a range of projects, including a theatre and convention centre; this will be truly spectacular, bringing an extra £25 million to the local economy. We believe that further business and innovation projects will bring another £400 million of private sector investment.
In short, after hearing his Budget, I think that my constituents are protected, our town is supported and our future is more secure.
Mr Virendra Sharma (Ealing, Southall) (Lab) [V]
Thank you, Mr Deputy Speaker, for giving me the opportunity to speak in this vital Budget debate. This Government are endangering our NHS through their lacklustre approach to the coronavirus pandemic, hospital services and the social care crisis. Last Wednesday, it was clear that there is no plan for a recovery in NHS finances. In fact, the NHS was only mentioned once during the Chancellor’s entire speech.
During the pandemic, nurses and NHS workers have gone above and beyond to contain this hideous disease. Their sacrifice has been immense, which makes the 1% pay increase offered by the Chancellor all the more insulting.
Like the PM, I suffered and was saved by brave frontline staff. Having received world-class care himself, the PM and his Government cannot be so miserly and must reward our NHS heroes with a substantial pay rise.
In my own constituency, after years of dedicated campaigning by local Members of Parliament such as myself, we saw off the “Shaping a Healthier Future” programme. However, its toxic legacy lives on. Ealing Hospital has lost full A&E services, which we badly need. We have lost our maternity ward and we have lost in-patient paediatric care. The closure of the maternity unit in particular—where my own grandchildren were born—has been very harmful to my community. The Government must put their money where their mouth is and properly fund our NHS, and level up areas such as mine, with a densely populated and fast-growing population.
Finally, I want to speak about social care services, which at present are in the midst of a severe crisis. Some 40,000 older people have tragically died in care homes since the beginning of the pandemic, yet, in the Chancellor’s speech last week, there was no mention of social care. The Government have nothing to say to the hundreds of thousands of older people, neglected by a broken system that denies them the care that they so desperately need.
Instead of papering over the cracks, as this Budget does, I urge the Government to tackle these inequalities head on, properly fund social care and give NHS staff the pay rise they truly deserve. Only then will the Government be able to say that they are truly committed to levelling up our society, ensuring that no one, regardless of their wealth and background, is left behind.
Siobhan Baillie (Stroud) (Con)
Balancing people’s health, saving lives and supporting the economy is an unenviable and complex task. While there are certainly a few areas that still need attention, I believe the Chancellor produced a Budget that supports people, begins to fix the public finances and looks to the future.
I am regularly told in Stroud that furlough has saved businesses. In the first lockdown, Stroud District Council gave out £26 million of Government money in grants. There are more than 4,000 businesses in Stroud. Additional funds have been paid out since.
Skills, reskilling, further education and colleges are going to be integral to the future of our country—I am pleased to see the Chief Secretary to the Treasury in the Chamber today. I would like to see green apprenticeships and green-collared work and all of that worked through. We have a White Paper and I am so pleased that the Budget recognised the importance of this area.
I have already been speaking to community groups about the £150 million community ownership fund. I hope we can use funds such as that to support Rush skate park and other sports clubs, and really think about how to use those Government funds and the Government desire for communities to thrive. I know that Stroud communities will be there with their hands up.
The investment in our future through the environment cannot be understated. Stroud will be putting a bid into the fusion STEP programme—the Spherical Tokamak for Energy Production programme. There is a chance to be the world’s first fusion power plant; Berkeley and Oldbury and the south-west want to be first in line.
We also need to look to the wetlands—Slimbridge wetlands. We have put together a blue recovery plan for carbon storage and for wellbeing and for everything that we already have on our shores. I say again: please, green investment and private investment for the green stimulus.
It is important to learn from the devastating impact of covid. Businesses have come to me and said that they did not feel heard and understood. They feel that they were shouting into the vacuum. We have to learn from that. I will give a few headlines. The leisure, gyms and heath sector has skilled experts who are going to look after our health, mental health and wellbeing, yet there was no VAT reduction for them and grants were refused. Classes were banned. Some of the road map does not allow them to thrive. These people can help our minds and our health.
I have met many businesses in the wedding sector that have struggled. They are predominantly female-led. Again, the road map does not allow them to step up and work, and there are arbitrary figures for guests—five, six, 15 and 30 people. They can actually go back to work. Let them work. Let them pay back into the economy.
Marion Fellows (Motherwell and Wishaw) (SNP) [V]
I am in no doubt that the Chancellor’s Budget will result in the continuation of Tory austerity for those on the lowest incomes, especially disabled people and children. During the global pandemic and health crisis, people have been denied vital support to ensure a dignified standard of living. Like successive Tory Governments, this Tory Government are entrenching class inequalities, which weigh heavily on people’s lives.
I welcome the extension of the universal credit £20 uplift. However, those receiving it face a sudden £1,000 cut to their incomes in six months’ time. The Chancellor must provide people with certainty and agree to make the uplift permanent. People claiming legacy benefits will not even see the £20 uplift; 60,000 Scots, including 20,000 children, will be left in poverty and forced to choose between heating and eating in a cynical attempt to force people on to universal credit, which could leave many worse off and facing a gruelling wait of weeks for their first payment. That means that 2.5 million people across the UK, 1.9 million of whom are disabled, are being denied that support.
Being disabled incurs ongoing costs. The disability price tag means that disabled people already pay a premium for normal living, but the UK Government have opted to deny them support to protect their standard of living and health at the time they need it most. Yesterday, I asked the Work and Pensions Secretary whether she had asked the Chancellor to consider extending the £20 uplift. Her answer was no. Refusing even to consider the £20 lifeline for those on legacy benefits is a complete dereliction of duty by this UK Government to the very people they are supposed to protect, particularly after anti-poverty organisations have been asking for the extension for 11 months. Instead, people claiming legacy benefits are being given a pathetic 37p a week extra. When the UK Government have stuffed billions into the pockets of their cronies for bungled contracts, it is clear whose side they are on.
The UK Budget was an all-round kick in the teeth for disabled people. There was no commitment to increasing statutory sick pay, no commitment to the real living wage and making it available for 52 weeks, no commitment to increasing funding for the Access to Work scheme to keep disabled people in work, and no commitment to a fair day’s pay for a fair day’s work with a real living wage. Whether people are working or seeking work, the UK Government have yet again failed to support them.
Coronavirus has exposed the deep inequalities that exist under this Westminster Government. People in Scotland—
Mr Deputy Speaker (Mr Nigel Evans)
Order. Marion, you are going to have to leave it there. I am terribly sorry, but we are out of time.
Damian Green (Ashford) (Con) [V]
I congratulate the Chancellor on passing the first test of a successful Budget: it is now the last day of the Budget debate and the Budget is still intact. I have seen Budgets hailed on Wednesday, doubted on Thursday, excoriated on Sunday and reversed by Tuesday, so the Chancellor has passed his first important test.
Longer term, what will make this Budget a success is a rise in productivity, so the most important of the Budget documents published alongside the statement is the plan for growth. That is starkly revealed by the GDP forecasts from the OBR. The forecast is 7.3% next year, which sounds extremely encouraging, but after that we go back to a procession of 1.6% or 1.7%. Straight- forwardly, if we do not improve productivity, we will not improve those figures to 2-point-something or even higher, which is what we need to achieve, because if we do not, we will permanently suffer from pressure on public finances and public services. We know that it is not impossible to achieve that because, in some parts of the UK, we do. Some areas in the UK are 9% more productive than Germany at the moment. Other parts, sadly, are less productive than some other former communist economies of eastern and central Europe.
Levelling up—the central purpose of this Government —is not just a political slogan; it is an economic necessity. We need to do what we already achieve in some places in all places in the UK. Some of that will involve traditional infrastructure spending, and at this point I welcome the continuing support for the lower Thames crossing, which is essential for not only spreading growth but spreading traffic heading towards the channel into both Kent’s motorways, not just one.
Apart from physical infrastructure such as roads, bridges and broadband, equally important is human capital. For 70 years, the biggest weakness in our education system has been the relative neglect of vocational and practical skills. I am delighted that the ministerial team at the Department for Education are trying to rectify that, but that much used phrase about “parity of esteem” between academic and vocational qualifications will just be lip service if we carry on making more careers graduate-only for entrants. Why on earth have we done that for the police?
We also need to level up on health because the disparity between healthy life expectancy is not just bad for those involved; it is a drag on our economic growth. Also, we need innovation, particularly in green products and sectors, which we will need to lead the world on. Overall, I congratulate the Chancellor on a balanced Budget that meets one nation ideals and purposes by aiming to bring the whole UK on to a higher growth path.
Holly Mumby-Croft (Scunthorpe) (Con) [V]
In 2019, this Government were elected to deliver on their promises to level up towns like Scunthorpe. We could not have imagined then the challenges that would befall the country. As we move towards what we all hope will be better days ahead, alongside that recovery and support, it is still the job of this Government to keep the promises they made to towns like Scunthorpe, where local people put their faith in MPs like me, knowing that we have a shared stake in our town’s future.
That is why last week’s Budget was so important to Scunthorpe. It is one thing to tell local people that we will keep our promises and that we will invest, improve and truly level up places like Scunthorpe; it is another to show them. In addition to over £10 million of Government investment in our high street, I particularly welcome the Chancellor’s Budget announcement committing a further £21 million of proper new money to Scunthorpe via the towns fund. I worked on our bid with our excellent board and my hon. Friend the Member for Brigg and Goole (Andrew Percy). We were ambitious to bring forward projects that would benefit local people in both Scunthorpe and surrounding towns and villages—projects that would raise our whole area, not just the town centre.
In addition, the Budget announced the exciting approval of our bid for a new Humber freeport, which will make a huge difference to North Lincolnshire and the whole Humber region. Along with Members on both sides of the House, I have seen the potential benefits of freeports and supported the project, which will create jobs and investment. The freeport will include a customs site at British Steel—further evidence of the Government’s support for the industry.
This Budget also recognises the many businesses in Scunthorpe and the incredibly tough time that they have had over the last year. I want to thank those businesses in my constituency that have worked with me and taken the time to talk to me about their views and give me their insights, which we have been able to feed back to Government. In these tough times, the Budget will give those businesses more certainty and not only protect jobs but create new jobs in our area. The excellent kickstart scheme has already attracted interest from over 100 local employers.
With the towns fund, the investments we have seen over the last year and a freeport agreed, the Government have finally aligned the stars and recognised Scunthorpe for what it actually is: the ideal place for businesses to invest and grow, a great place to live and an area of our country with fantastic potential. I look forward to seeing those promises for Scunthorpe delivered.
Mr Deputy Speaker (Mr Nigel Evans)
You are on mute, Giles. If you don’t mind, we will take Andrea Leadsom straightaway. We hope we will get back sequentially. We will be back with you, Giles, I promise.
Andrea Leadsom (South Northamptonshire) (Con)
I am full of praise for the Chancellor’s work to protect jobs and businesses as we emerge from lockdown, and I support the measures he announced in the Budget, but I also urge him to give even greater focus than he has done to the prospects for our green economy.
In my stint as Business Secretary, I rewrote the Department’s objectives, so that its top priority was for the UK to lead the world in tackling global climate change. On the one hand, there is no doubt that that is the right thing to do—the future of our planet keeps far too many people awake at night. However, on the other hand, building a green economy also makes superb business sense for the UK.
First, the UK is at the forefront of developing green technologies: from offshore wind to nuclear fusion and green hydrogen, we are leading the way. Secondly, the UK has more than 450,000 people in the green collar workforce already. In my time at BEIS, I was confident that a target of 2 million green jobs by 2030 was possible. The particular beauty of the green economy is the breadth of employment opportunities—from apprenticeships in solar power to decarbonisation of heavy industry to cutting- edge scientific discoveries, there is something for all talents. The UK’s green economy could become a bigger jewel in our crown than UK financial services is today, and I urge the Chancellor to share that vision.
COP26 is a great platform, and we need radical action with world-changing initiatives, so I want to put forward three specific ideas. The first is to announce at COP26 a yearbook in which the Paris agreement signatories can record their Government, state and business-level achievements—transparency so that all can see and challenge, while the discussion continues over the more formal measurements.
The second idea is to announce at COP26 three ambitious bilateral commitments to decarbonisation by 2030. The UK can be a key role model, and those pledges could include, for example, working with India on delivering 100 GW of battery storage around the world, with China to deliver 200 GW of offshore wind, and with Brazil, say, to deliver 0.5 billion hectares of new woodland around the world.
The third idea is to announce at COP26 a global green investment bank. Our former rock star central banker, Mark Carney, is now the Prime Minister’s green adviser, and he should be pulling together the global pensions industry, project financing and green investment expertise to work together on financing the decarbonisation of our planet.
As one of the great heroes, Sir David Attenborough, has said,
“real success can only come if there is a change in our societies and in our economics and in our politics.”
The UK has the chance post Brexit to lead that change.
Mr Deputy Speaker (Mr Nigel Evans)
Very professionally done, as we expected, Andrea. Thank you for helping us out. I think our comms are now back. Let us see if we have Barry Sheerman.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op) [V]
Thank you so much, Mr Deputy Speaker—I am, I think, unmuted.
First, I thank my constituents, not only for sending me back to Parliament yet again, but for being so forthright in what they want me to do when there is a Budget speech. I have been present at many Budgets and spoken in most of the Budget debates; I am a bit of permanent feature. I have seen a lot of aspirant merchant banker types—the George Osbornes who come and do their bit on the Front Bench and then go on their way to the next stage in their career. I just hope that this time, this merchant banker, who is the wealthiest Member of Parliament we have ever had, will stay the course. I do not usually trust merchant bankers because I trade as an economist and I would prefer an economist’s view of our country’s future.
My folk in Huddersfield tell me that what they want is pretty simple: good jobs on good pay, a good health service, a good education service, a clean environment, and a modernised welfare state that is up to date. One of the things this country can be proudest of is a welfare state that really looks after people when they are sick or out of work. The covid crisis has pointed out to us that there are some severe deficiencies in our welfare state. If someone is thrown out of a job and has no employment, the support and the income they get are dramatically lower than in most of our competing nations. This Budget should have addressed that, bringing the NHS up to date—I will not even go into the shameful 1% pay rise that is in fact not a pay rise—and looking thoroughly at equipping it for the future after it has been systematically cut and cut again since 2010, but also looking at the welfare state in its entirety.
Many people have talked about the green economy. Our good science, good technology and good manufacturing have meant that we have sorted covid and we are winning against this global pandemic. Now we have the science, the technology, the partnerships and the manufacturing capacity to set about saving our planet from climate change and global warming, so let us do that. This Budget should have taken a lead. It should have shown passion, partnership and a real ability to build relationships that work. I only hope that this Chancellor will stay on and do a proper job for a change.
Mr Deputy Speaker (Mr Nigel Evans)
We will now see if the technology and science are going to bring us Kate Osamor.
Kate Osamor (Edmonton) (Lab/Co-op) [V]
Thank you, Mr Deputy Speaker, for calling me in this really important debate.
The consequences of covid-19 have been disastrous for us, causing the worst recession of any major developed economy. The Budget was a missed opportunity to help to repair the damage caused by covid-19. This Government have used covid-19 and the Budget to hand out contracts to large corporations, funnel funds via the so-called towns fund towards the constituencies of Conservative Members, and cut public sector pay, universal credit and NHS funding. Meanwhile, in Edmonton, 5,000 of my constituents have lost their jobs in the past year alone, and the unemployment rate is now double the national average. Almost half the children in Edmonton live in poverty. Yet the Chancellor will cut the £20 universal credit uplift in September and continues to ignore the millions of disabled and sick people on legacy benefits who never received the so-called uplift. The UK welfare benefits system is one of the least generous in the developed world. This Government have torn holes in our welfare safety net. Sadly, too often, losing your job or falling ill means going hungry and losing your home.
Many leaseholders like those in Prowse Court in Edmonton listened to the Chancellor hoping that the Government would finally offer them the help they need to make their homes safe. There was not a single mention of cladding or building safety from the Chancellor last week. Instead, they are being left to foot bills they cannot afford while the property developers who profited from the Government’s unsafe cuts to building safety regulations walk away without paying a penny.
After more than a decade of austerity, my constituents in Edmonton needed a transformative Budget that would tackle inequality, rebuild the local economy, recover jobs, retrain unemployed workers and rebuild businesses to reflect a fairer society. We cannot go back to business as usual. This country and my constituents deserve better.
James Grundy (Leigh) (Con) [V]
I welcome this Budget, not least because of the Chancellor’s extension of the support packages to assist businesses as we begin the transition out of lockdown. The extended furlough scheme and self-employment income support scheme will continue to be a vital crutch for businesses in my constituency, and the restart grant and recovery loans will ensure that businesses are supported well beyond the current road map timetable, helping to smooth the shift back to normal trading.
Another measure that my constituents and I were pleased to hear will continue was the extension of the freeze in fuel duty. Many of my Back-Bench colleagues and I stressed the importance of that to the Chancellor earlier this year. It will prevent increased costs for struggling commuters and businesses in Leigh during this crucial time.
Ahead of the Budget, local businesses in the hospitality sector contacted me to express the need for further financial support. While there are many existing schemes in place for them, I know that they were concerned about the potential rise in beer duty. Working alongside the Long Live The Local campaign and local pubs in my constituency, I heard at first hand just how important it is for pubs and the wider hospitality sector to be able to offer a cheaper pint and get customers back through the door. That is why I know the Chancellor’s decision to extend the beer duty freeze will be strongly welcomed.
While I welcome the extension of the business rates holiday until June and the fact that the vast majority of local businesses will see a temporary 75% cut in their business rates, my constituents are concerned that those measures will provide only a temporary fix to a more deeply rooted problem. In some of the more deprived communities in the north, business rates are so high as a proportion of earnings that businesses pay an effective tax rate of up to 70%, compared with 20% for those in the south. Businesses in Leigh are some of the worst affected in the whole of England, paying twice the national average. If we are going to keep our promise to level up those areas most affected by the pandemic and in need of financial support to thrive, we must reform business rates and create a system fit for the future.
As we move out of this crisis, we have an opportunity to ensure that, through our national recovery programme, we build back better. Again, I welcome this Budget. Although there is more to do, it will benefit businesses, families and the high street in communities such as Leigh as we exit this crisis.
Stella Creasy (Walthamstow) (Lab/Co-op) [V]
A decade ago, we were told that austerity was a necessary response to borrowing £158 billion, and we have spent 10 years arguing about the damage done as a result: cost-cutting measures that cost us more than they saved—the bedroom tax springs to mind—the sluggish productivity that we have not dealt with, and the inequality that has grown worse as a result of focusing not on investing in people and their potential but on trying to pick winners and losers.
Now we are in a position where we are borrowing a figure double that and then some. The Chancellor tells us that he is being honest, but he is not being honest, and he is about to repeat the mistakes that were made in 2010. Austerity did not move our economy forward and it did not improve the lives of our local communities. We have the fourth highest death rate from covid-19 out of 132 countries. As Sir Michael Marmot has said, that is at least in part down to the pre-existing poor health in poorer sections of our local communities. What a damning indictment of austerity indeed.
Coming out of the pandemic, we cannot afford to make the same mistakes again, but that is exactly what is about to happen. The universal credit cut will see 500,000 children dragged into poverty. It is a 7% cut in incomes. Some people might say that 7% is not very much, but if that is the difference between waving and drowning, that is the impact this Chancellor is going to have.
The Government promised that nobody would lose their home as a result of covid, yet we know that half a million people are already in rent arrears, and the Prime Minister and the Chancellor have said nothing about that issue. We know that they plan to clobber nurses with a pay cut—because it is a pay cut when inflation is predicted to be 1.5%. It is going to cost us more, just as the bedroom tax did, because nurses are not daft. In London alone, we are paying £6 billion a year for agency staff, because we have NHS staff shortages. Nurses are going to work for agencies when they are not being paid properly. There is money there to be had.
It is right that we look at corporation tax rates. It is right that we do more on capital gains tax—after all, there are people trading shares in UK companies through tax havens who are not paying it. However, there is no point raising money if we are not going to invest in people, and the mums of this country know that most of all. Those who became a mum in the past year are one and a half times more likely to have lost their job than a dad. Our childcare sector is crumbling, with 58% of nurseries saying they cannot make it to the end of the term, but the Chancellor said nothing. We have spent the last 10 years dealing with the outcome of not investing in the people of this country. I urge the Chancellor to rethink and not do that again.
Jack Dromey (Birmingham, Erdington) (Lab) [V]
Erdington is rich in talent, but is one of the poorest constituencies in England. Levelling up matters, but it is not happening in Erdington. Our high streets fund bid was rejected. Services that have already been badly hit, from social care to street cleaning, are facing fresh austerity cuts. Twenty-seven nursery schools in the most deprived areas of the city now face closure.
We now have the proposed closure of the GKN factory in my constituency. GKN is one of the oldest engineering companies in Britain. It is 262 years old. It manufactured the cannonballs for the battle of Waterloo and helped build the Spitfires during the war. It was taken over three years ago by Melrose and now faces closure. There are 519 highly skilled workers who work in that plant.
What happened was utterly outrageous. Crucial now is what happens. If the company goes to the wall, 519 jobs go, but what also goes are many more jobs in the supply chain. That would be bad news for British workers and bad news for British manufacturing, because we would lose the capacity to make high-value components. Those jobs will be exported to continental Europe. That is why I welcome the constructive discussions that have taken place with the Secretary of State, and I say to him that the test of the Government in the next stages will be what they say and what they do, because the solution could be positive: avoiding the closure of that great historic marque with 50 years of manufacturing for the automotive industry.
In conclusion, on manufacturing more generally, we have 300,000 manufacturing jobs in the west midlands, which is the heart of England. There were some welcome moves in the Budget—of that there was no doubt—but they went nowhere near far enough, because if one looks at our continental competitors, their Governments are investing on a grand scale, far in excess of what is happening in our country. For example, the French Government are putting £15 billion of investment in aviation and automotive. That is four times more than what is happening in this country. Sixteen gigafactories are being established in continental Europe, but there is just one in our country, and we hope the second one will be at Coventry airport.
Much more needs to be done, because manufacturing is key to the recovery of our economy. It is key to the recovery of Britain. The Government have gone nowhere near far enough. What they need to do at the next stages is to back British manufacturing.
Dr James Davies (Vale of Clwyd) (Con) [V]
It is a pleasure to follow the hon. Member for Birmingham, Erdington (Jack Dromey). In what are extremely challenging circumstances, I commend this Budget for meeting so many of the immediate and longer-term needs of north Wales. The extension of furlough for the employed and self-employed, the continued VAT reduction for hospitality, holiday accommodation and attractions, and the freezing of alcohol duty are all welcome measures that provide security, particularly for the hospitality and tourism sectors during what we hope are the final stages of the pandemic.
Those sectors are extremely important in a constituency such as the Vale of Clwyd. In addition to the Chancellor’s Budget measures, there is a desperate need for the Welsh Government to publish a road map out of lockdown to align with the clear measures set out by the Prime Minister. The medium to long-term commitments that the Chancellor has made will provide the boost that is needed to address local pockets of deprivation and to ensure levelling up in more general regional economic performance.
The Budget included funding that will provide tangible benefits to my constituents. Denbighshire County Council is a direct beneficiary of the Budget, receiving £125,000 of capacity funding from the levelling up fund and an additional £20,000 for similar purposes from the community renewal fund. These programmes open up the possibility of many millions of pounds of support for the county within the next year or so to promote local regeneration. I look forward to working with the council to secure a turnaround in the fortunes of Rhyl high street, and with my right hon. Friend the Member for Clwyd West (Mr Jones) and my hon. Friend the Member for Clwyd South (Simon Baynes), to see investment in other town centres in the area. I also welcome the community ownership fund, which has the potential to be a major boost for all those who desperately want the Belle Vue ground to remain the home of football in Rhyl.
It was announced at the Budget that the north Wales growth deal will be reprofiled, with funding being brought forward from 15 years to 10 years. This will mean an extra £4.4 million per year from this April for nine years. It is hoped that this investment will create 3,800 new jobs and deliver a £2.2 billion boost to the local economy. This deal alone is set to help redevelop the former North Wales Hospital in Denbigh, support high-value manufacturing in St Asaph, and boost digital connectivity and green energy projects.
As we bounce back from the coronavirus, this transformation of our local communities and economy will be very welcome. I sincerely hope that, in the months ahead, these measures will be matched with further commitments to boost regional rail infrastructure, and I very much look forward to the findings of Sir Peter Hendy’s Union connectivity review. I am confident that this Budget puts north Wales and the whole of Britain in a strong position to recover and grow following a particularly challenging year for us all.
Kenny MacAskill (East Lothian) (SNP) [V]
Freezing alcohol duty rates is fine for alcohol producers, but not so good for Scottish publicans. Before covid, there was a drift from on-sale to off-sale consumption both north and south of the border. Something like 75% of sales were for the latter, predominantly in supermarkets, and now it will be even more.
Even once lockdown eases, will people return to their old local or to their pub, or will attitudes change further? Some might say it does not matter, but I actually think it does, and not just for publicans but for communities. It is a difficult time for the licensed trade, but it is also a difficult time for others in our communities. Pubs are community assets in towns as well as in rural parts. We have seen the demise of the country pub, but we now face that on the high street. Dealing with closed shops and what to do with them is difficult enough in towns and villages, but dealing with a pub that is even larger will be much harder, yet that is what we face unless action is taken.
Pubs are also places of supervised consumption. It is much better to have people drinking alcohol where there are ways of ensuring that their behaviour is monitored. Likewise, people’s measures are much more liberal when they are pouring for themselves, rather than having a publican pour them. Indeed, alcohol consumption health-wise, as well as justice-wise, is probably better done in supervised premises. That is why the failure to take any action in the Budget is rather shameful and will harm communities as well as the trade.
We have seen a proposal from the Social Market Foundation that would have allowed for a variation in alcohol duty rates, loading a modest increase on to the off-sale trade to ensure that there could be a reduction for the on-sale trade. That would help keep pubs alive, but it would not reduce the burden required for the Exchequer. Indeed, as I say, given the profits made by many supermarkets, it would probably be seen by most as legitimate and entirely acceptable.
Similarly, there are other attitudes that can be taken on VAT. Italy has reduced VAT on alcohol in pubs and restaurants. Again, that could be revenue-neutral by encouraging increased consumption, but consumption that is better done in a supervised manner, keeps a local asset and maintains a viable business, rather than having people buy tranches of alcohol from supermarkets at discounted prices. That is why, as I say, this has been a missed opportunity.
Pubs are vital for our communities. They are assets, and we have to take steps to support them with either a reduction in VAT, as in Italy, or indeed the more radical steps of the Social Market Foundation, which I would support, to try to secure alcohol being taken in supervised premises, as opposed to simply sold en masse by super- markets at discounted prices. Actions have to change, and this has been a missed opportunity for the pub trade.
Giles Watling [V]
I thank my right hon. Friend the Member for South Northamptonshire (Andrea Leadsom) for stepping in as my understudy earlier. Unsurprisingly, this Budget is all about holding the line and keeping things alive so that when we do emerge, blinking, into the sunshine of a bright new future, this nation is prepared to take its rightful place at the centre of the world’s stage. It is about keeping working people going so that we do not bleed talent away. It is about maintaining our structural heritage so that everything from the mightiest theatre to the smallest village hall is ready to throw open its doors to re-engage with our communities. It is about supporting businesses, large and small. It is also about delivering all this in a cost-effective way so that our children, and our children’s children’s children, are not lumbered with a totally unmanageable debt.
It is also worth remembering that it was only in 2015 that George Osborne announced that we were to make the final payment on the loans for the first world war. With the coronavirus outbreak, we have now entered similar unpleasant territory. With well over a third of a trillion pounds already thrown at the management of this terrible pandemic, we must tread cautiously. We must keep things going until our economy can stand on its own two feet once more. Then we must build that economy so that through the efforts of the people of these islands, this massive debt is reduced rapidly and is manageable for future generations.
With all that in mind, I am happy to support the Budget, as it delivers significant value to my constituents and helps our businesses through the end of lockdown. Importantly, to my mind, this Budget extends and ends the furlough scheme in a very sensible way. Many residents in Clacton will be dependent on furlough. The scheme currently supports 880,000 jobs in the east of England. The scheme is also protecting jobs: only 10% of local businesses have been forced to lay off someone because of the pandemic, according to the results of a covid recovery survey that I ran recently. That is why I have always believed that furlough needs to be in place until restrictions are fully lifted, and the tapered ending is the right approach, which will help businesses to manage costs after reopening. Alongside furlough, I am pleased that 600,000 new claimants are now eligible for self-employment income support schemes. It is right that we deliver these two new grants in this financial year.
One of my major concerns is the fate of the freelancers who have so far fallen through the cracks of the support schemes, unable to access them, so I hope that these changes will be of benefit to them. Many of those freelancers are of course involved in the arts, and I am sure that they will appreciate the additional £408 million to help that sector recover, but as I warned in my speech last week, we must ensure that that support remains in place even after restrictions are lifted. One note of warning: if we do not support the creative sector—the fastest-growing sector—we will have a hard job indeed getting out of this economic nightmare.
Chris Evans (Islwyn) (Lab/Co-op) [V]
During the run-up to any Budget, there is much chatter about the rate at which Government set taxes—too high and we run the risk of choking off growth; too low and the national debt will rise to unmanageable levels. What is very rarely asked, however, is how taxpayers’ money is spent. A taxpayer has a right, when they hand over a proportion of their hard-earned wages, for that money to be spent in a wise and prudent manner by the Government. However, the facts and evidence, as presented by the independent National Audit Office, show that this is simply not the case.
From April 2017 until the end of 2020, central Government Departments have recorded at least £5 billion in accounting losses. This is an incredibly high figure of wastage. For example, HMRC racked up over £470 million in departmental losses from 2017 to 2020. It gets worse: according to HMRC’s own planning assumption, total fraud and error arising from the coronavirus job retention scheme cost anything in the region of £2 billion to £3.9 billion. So far, only £10 million has been recovered and any more is unlikely to be claimed back.
To put that into perspective, Saffron Cordery, the NHS Providers deputy chief executive, said that building a new, average, mid-sized hospital costs around £500 million. This means that the £5 billion in accounting losses over three years could have built 10 new hospitals. Given the strain that we have seen on NHS resources this year, I am sure that an extra 10 hospitals would have been appreciated by many communities across the country.
The new Grange University Hospital has just been built near my constituency by a Welsh Labour Government. The hospital has a specialist critical care centre, a top-range cardiac suite and 30 individual intensive therapy unit rooms. It was even able to open four months early to relieve pressure on the NHS during the pandemic. All of that cost £350 million.
Let me tell the House what else was over £300 million: the total losses for the Department for Work and Pensions departmental group. That was in one year alone. I cannot speak for other Members in this House, but I certainly know what I would rather have taxpayers’ money spent on and it is certainly not fraud and error. All that money should be spent helping the people of the UK to recover from the effects of the pandemic and not wasted on departmental error. We owe that to the British people. It is their money. Let us spend it wisely.
Jane Stevenson (Wolverhampton North East) (Con) [V]
It is a great pleasure to speak in this debate and to respond to last week’s Budget. I certainly do not envy the Chancellor having to set the Budget during a global pandemic which has had such a devastating effect on our economy. This is a pragmatic, responsible Budget that maintains the commitment to levelling up and aims to speed up our economic recovery. There were undoubtedly some difficult choices to make, but they must be measured against the whole economic picture rather than as single issues. Small pay rises for some must be viewed against more than 1 million new jobseekers, those who have lost their businesses, and those surviving on reduced furlough wages.
Helping people back into work must be our first priority. That is why I applaud several measures in the Budget that highlight the Chancellor’s ongoing commitment to protecting and creating jobs: schemes like Help to Grow, which will offer MBA-style management training and also help businesses to develop digital skills; the creation of freeports, including two that will help to fire up our midlands engine; the extension of furlough; the VAT cut to the hospitality industry; and more money for apprenticeships.
There are many measures, but I especially want to mention something that will benefit my home city. This is where we see real change and a real plan. Without resorting to the school assembly stalwart of giving a man a fish or a fishing rod, the Government’s investment in Wolverhampton has given our city a clear plan to a better economic future. The Budget announced not only a successful £25 million towns fund bid, but we will benefit from £10 million of investment for a taskforce into modern methods of construction. This will be based at a new Ministry of Housing, Communities and Local Government headquarters in Wolverhampton. This all links to the £15 million the Government invested in our National Brownfield Institute, which sits next to our School of Architecture at Springfield brewery. The Government’s investment means Wolverhampton will be the home of the green home building industry and all the jobs and opportunities that that will bring in over the coming decades.
This vision for Wolverhampton is worth so much more than just the funds the Government have provided. Moving a Ministry away from London proves the commitment to levelling up. I would like to say this to the Leader of the Opposition: I know today’s Labour party is more Wandsworth than Wolverhampton, more Balham than Bilston and more Willesden than Wednesfield, but moving Government Departments away from London is not giving up, it is giving hope: hope to our local economy and hope to the thousands of people looking for work in my constituency.
I commend the Budget, and I commend the Chancellor and the Government, who are committed to changing life chances and giving better opportunities to people around the United Kingdom and in my wonderful home city of Wolverhampton.
Rosie Duffield (Canterbury) (Lab) [V]
For that last 10 years, we have been told that austerity was the only way: local governments operating on a shoestring budget, services cut to the bone, councils managing on the bare minimum, charities closing, no money available for specialist women’s refuges, and mental health provision at crisis point, with children waiting up to two years for even the most basic initial assessments. During that decade, child poverty soared, homelessness stopped being noticed, widening gaps just kept on widening, and public sector workers suffered from a pay freeze that never seemed to start to thaw.
We know that the majority of people using food banks are actually in work—the working poor. Many of those are the nurses who, by this Budget, have once again been insulted. When our frontline NHS workers urgently needed protective equipment, did the Government respond by quickly securing it from tried and tested suppliers, or did they award contracts to those with absolutely no previous experience, wasting huge amounts of taxpayers’ money and leaving those frontline workers without adequate protection? When hundreds of nurses and doctors lost their lives, and many thousands of lives had been saved by their colleagues, the Government made sure they were clapping. They said some nice words and thanked them, but as our nursing force start to emerge from the real trauma they have faced this year, where is the Government’s respect? The insulting offer of a 1% pay rise, said to be the equivalent of £3.50 per week, does not even honour the basic starting point, which is legislated for, of 2.1%. So those nurses, who are literally making the difference between life and death for so many people, will be going back to food banks in between their gruelling shifts.
Those of us with many local hospitality businesses welcome any help available, and those of us able to bid for the levelling-up funds urgently to support our high streets, creative sector and tourism industry will gladly do so. However, we also note the opportunities lost to level up for the self-employed, the millions excluded and the public sector workers, and, yet again, the social care sector and our unpaid carers are left out. Women are also, yet again, at the bottom of the pile. The Women’s Budget Group can advise the Chancellor on how to change that with its expert knowledge. Those glossy photos of swish new Downing Street makeovers are a kick in the teeth to those excluded—the wedding industry, unpaid carers, and the very people who put their lives at risk to save ours. I urge the Chancellor to listen to the public outrage and think again about the insulting 1% pay rise for nurses.
Paul Holmes (Eastleigh) (Con) [V]
This Budget delivers for all parts of the UK and it is the most important Budget for my constituency in years. The Secretary of State outlined the importance of levelling up and creating new industries, and that will certainly happen here in the Solent region, because levelling up is just not a tagline for one part of the country; as this Budget shows, it is for all parts of the UK. Levelling up and infrastructure improvements are about not just physical manifestations of infrastructure, but preparing the economy, and communities and industries that will prepare and propel Britain’s future.
The Solent region has pockets of deprivation left over by the old industries of the railways in Eastleigh town centre and the post-industrial past of Southampton’s docks. The announcement of the Solent freeport, which was opposed by the Lib Dem leader and pooh-poohed by the Labour party, will prepare our workforce for the future. We are talking about 52,000 jobs, the creation of decarbonisation industries, such as green maritime, green transport jobs and a world-leading sector in green energy. This will mean that £2 billion-worth of investment will be attracted to the Solent region and it will add £3.7 billion of gross value added uplift to the UK. This Budget is a shot in the arm for my region, which is often seen as economically developed, to ensure that the Solent region, my constituency and Southampton as a whole will have the world-leading recovery that we need.
The Government have recognised that need for my constituents, my region and the country, because not only does this Budget deliver the infrastructure needed to propel that future, but it puts in place some of the solutions to the problems that my region has had for decades. Such problems include three-generation unemployment, whereby people have not been able to get back into the workplace because the industrial heritage of areas such as Southampton and Eastleigh has not been worked on. This Budget does that, all delivered by a Conservative Government. The people of the Solent region have been given ambition and opportunity, and the Business Secretary, the Treasury and the Prime Minister should know that my constituents and I will grab that opportunity with relish.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC) [V]
Page 41 of the Conservative party’s 2019 manifesto in Wales guaranteed that Wales would
“receive at least the same level of financial support”—
from the UK—
“as it currently receives from the EU.”
That was a cast-iron, copper-bottomed manifesto promise. We also had endless levelling-up rhetoric and the UK Government singing the praises of the Union. What could possibly go wrong?
Fifteen months later, this Budget announced an array of competing, competitive and opaque Westminster-controlled funds, which undermine rather than enhance Wales’s economic strategy, and fail to honour this Government’s promises to Wales. The shared prosperity fund’s pilot, disingenuously named the community renewal fund, was allocated a mere £220 million to boost the entire UK, yet Wales alone received around £370 million a year in needs-based funding—I emphasis that it was needs-based funding—from Europe. This is not only a broken manifesto promise, but a broken promise to Wales.
Equally flawed is the levelling-up fund, which is being applied in the devolved nations in a way that is deliberately set out to undermine devolution. Both schemes entail UK-wide competition, rather than a needs-based system, which effectively and disinterestedly tackles the UK’s vast regional inequalities without fear or favour.
Welsh local authorities will now bid for funding from a smaller pot in direct competition with the entire UK. The consequences for economic planning are enormous. Instead of a Wales-wide economic development agenda, the UK Government have divided and, they hope, conquered Wales, by breaking our economy into 22 competing units. What makes that worse, of course, is that the UK Government have linked the success of these funds to representation by MPs. The Chancellor is therefore obviously not discomfited by whether Wales receives our fair share, since the Government are also cutting the number of Welsh MPs by a fifth.
It seems that this Conservative Government, not content with breaking promises and scorning need, are rigging the system to favour their own political interests, as both funds disproportionately benefit Conservative seats, including, appallingly, the Chancellor’s.
The Chancellor failed to present a coherent long-term strategy that complements Wales’s existing development agenda to improve the lives of Welsh people. Instead, he withdrew support, undermined our autonomy and prioritised his party’s interest. Wales does have a choice, though, and Plaid Cymru has a better plan—a strategic £6 billion recovery stimulus to make our economy fairer and greener. I urge the Chancellor to give us the tools to help ourselves and deliver a recovery that works for Wales.
Clive Efford (Eltham) (Lab)
I wish the Chancellor had sat down and asked himself when he was writing his Budget what he needed to do to reduce the social and economic divide in the UK and how he would stop those who have done well during the epidemic doing even better in the recovery, while millions more are on a downward slope—the K-shaped recovery that we all want to avoid. The K-shaped recovery will not be avoided by a Budget that increases poverty.
The Joseph Rowntree Foundation predicts that the cut in universal credit and tax credit will plunge a further 500,000 people into poverty, including 200,000 children. What we needed was a revision of the welfare state that will fit the needs of the gig economy and lift people out of poverty, not trap them in it.
During the recovery from the global banking crash, the Tories imposed 10 years of austerity on this country, cutting public services to the point where we struggled to respond to the covid crisis. The 120,000 deaths have not happened just by bad luck. The Tories changed, but their actions prove that their words are not what they intend to do. They claim to have found a Keynesian mojo, but if there is anything that exposes their façade and the same old Tory thinking, we need look no further than a derisory 1% pay increase offered to NHS staff.
A Government who were committed to renewing our NHS after the covid crisis would have made sure that we permanently filled the 100,000 vacancies that existed at its start. They would have made sure that we were recruiting the highest quality recruits into jobs in the NHS and retaining its highly qualified, dedicated staff. A 1% pay offer does none of those things. Instead, what we got from the Government were choreographed pledges for money to go to Tory seats and some rehashed policies on housing that will repeat the errors of austerity, fuelling another housing bubble, forcing first-time buyers out of the market.
The level of home ownership has gone down under the Tories at a time when borrowing is at an all-time consistent low. There are now 800,000 fewer people under the age of 45 who own their homes than in 2010. What we needed was a plan to decarbonise the existing housing stock. That would create jobs in every region. What we needed was a plan to build council housing and to upskill local workforces. Sadly, that requires thinking of which the Tories are simply not capable.
Nick Smith (Blaenau Gwent) (Lab) [V]
May I welcome the Chancellor’s long-overdue announcement of an extension to the furlough scheme? This will help to avoid an economic cliff edge this spring. However, much more is needed, and our alternative Labour Budget would address the deep inequalities and injustices in the UK and take us forward to a stronger, more prosperous future. After covid, we need to rebuild the foundations of our economy for the long term by supporting new jobs across the whole UK; backing businesses as they recover, and protecting family finances.
We need new jobs in emerging industries, and we need them quickly. Yet the Government’s flagship policy, the kickstart scheme, is proving to be a failure. A business in my constituency applied to the scheme last September. It was keen to start giving opportunities to young people, but, months later, the application is stalled. That is not good enough. The process needs to work much more efficiently. Kickstart also needs to be paired with extra investment for places such as Blaenau Gwent.
The hospitality sector in particular has suffered and many have lost their livelihoods. Our Tradeteam logistics depot took a hammering last summer and 50 jobs were lost, with 50 families left in the lurch. They were well-paid, unionised jobs and they will be missed. To build a new economy and support business, we need investment, yet we are still waiting for a well-funded shared prosperity fund. We need jobs, but we also need to help people get to jobs. I have written to the Chancellor previously about funding improvements to the Ebbw Vale to Cardiff trainline. Accessing the employment market, higher education and leisure is crucial to our valleys communities. Improvements such as this would be hugely beneficial to our economy. New train infrastructure and more frequent services need to be delivered in better time.
On protecting family finances, I will end on an issue that I have raised before in the House. In recent years, thousands of British Steel pensioners were ripped off by pension sharks and denied justice. I urge the Chancellor to look at the Financial Conduct Authority’s role in this crisis and to review its effectiveness in protecting consumers. After constant prodding, I think that it is time to reform this regulator so that it faces towards the whole of the UK, not just the City of London.
Ruth Edwards (Rushcliffe) (Con)
This virus has dealt our economy its worst blow in 300 years, but I am confident that we will rise phoenix-like from the ashes. I am confident because our support has already protected more than 11 million jobs. I am confident because our economy is now expected to recover to pre-crisis levels six months sooner than predicted. I am confident because of the speed of our vaccine roll-out and, above all, I am confident because I believe in the ingenuity and hard work of the British people. That is not to say that there has not been a great cost. On a tour of a local business last year, the scale of the harm was brought home to me. The silence of its almost empty offices spoke louder than any words. That is why I am so relieved that the Chancellor has put jobs, both protecting and creating them, at the heart of this Budget: extending furlough and support for the self-employed and providing restart grants and recovery loans, but also setting the stage for our future economy through investment in towns and communities across our country, helping businesses to invest through the new super-deduction, and turbo-charging whole regions through a new network of freeports.
I want to highlight what the East Midlands freeport based at East Midlands airport, the intermodal rail park in Derbyshire and the Ratcliffe on Soar power station site in my constituency will do for people in the east midlands and for my constituents in Rushcliffe, because I believe that in debates such as this about big infrastructure projects, the very real benefits they will have for local communities are often lost in the noise.
At its heart, a freeport attracts more businesses, and more businesses mean more jobs—60,000 more jobs, in the case of the East Midlands freeport. The site at Ratcliffe on Soar in Rushcliffe will be the heart of our shift to a green economy, encouraging employers in green energy generation to locate on the site. Proposals for a new zero carbon research centre there, backed by six universities across the region, will be accelerated. Creating attractive career paths in growing industries will encourage more university graduates to stay in the region; currently only 17% do so. It is also good news for local businesses, which will form part of the supply chain for the building and infrastructure associated with it.
Successive Governments of all political colours have underinvested in the east midlands. Today marks a change. The Budget represents the biggest Government investment in the east midlands for a generation, so I will be proud to vote for it tonight.
Kate Hollern (Blackburn) (Lab) [V]
After 10 years of Government cuts, Blackburn is one of the most deprived towns in the country. We have been under additional restrictions for longer than almost anywhere else. Our high street has been decimated, and going into the pandemic, Blackburn’s health outcomes were some of the worst in the country. So it is right that Blackburn has been identified as a high priority for the Government’s levelling up fund, and I look forward to working with the council on the further development of the exciting plans for the borough to recover and grow.
Having read the fine print of the Government’s self-styled levelling-up agenda, though, I must say I am disappointed. I am concerned that the money is not going to all the right places. Some is going to the Chancellor’s constituency, where multimillion-pound houses are on sale, yet deprived areas like Halton and Salford—both identified as being in the top 20 local authorities—are not so fortunate. There is clearly something wrong with that, so I ask the Minister what level of involvement Ministers have in choosing winners and losers, and whether the Department will share with the House the formula that the Government use to allocate funding.
My next issue is with the Government forcing regions to compete with one another. If the Government really want the regions to recover, all regions should get their fair share of investment. It must mean that the Government accept that places like Blackburn are starting from a lower base and will recover more slowly, and therefore the Government must put more into the most deprived regions to unleash their potential. The Government also need to recognise that the funding announced in the Budget does not come anywhere near the £15 billion that has been cut from council budgets over the past decade.
The hon. Member for Fylde (Mark Menzies) boasted about what successive Tory Governments had done for Lancashire. He failed to mention that Lancashire councils have faced, on average, 45% cuts in the last decade. That is not levelling up Lancashire—it is levelling down, particularly in public services.
Briefly, for the sake of time, my final issue is with the Government’s double counting and the smoke and mirrors strategy they deploy. Half of the £6 million being handed out to councils this coming financial year as part of the levelling-up fund has been reshuffled from towns fund funding. The £150 million budget of the pinch point fund announced in 2018 has now been assumed into the levelling-up fund, and £175 million for freeports has also been redistributed. So when the Government talk about a £4.8 billion levelling-up fund and a £3.6 billion towns fund, they need to be honest about the fact that they are playing musical chairs with old money in many cases.
Mrs Natalie Elphicke (Dover) (Con)
This Budget puts in place the framework for a steady economic revival, and provides a strong package for my constituents in Dover and Deal. The recent pandemic has seen thousands of jobs at risk in the ferry, port, retail, hospitality and tourism businesses on which my area depends, so I strongly welcome the range of continued support, including the extension of the self-employed income support scheme and the £5 billion in restart grants, which will help hard-hit businesses to get back on their feet.
The levelling-up fund provides an opportunity to strengthen and diversify. We are an area rich in advanced manufacturing and biotechnology, and we are ambitious to be strong in digital skills and the green economy. Priority 1 status and a £150,000 award in the levelling-up fund will ensure that we can put together the best bid possible for a further £20 million investment in our area. That is on top of the millions of pounds already earmarked for our future high streets fund bid and our proposed White Cliffs border control facility. These important investments will attract further opportunities for new jobs, businesses and prosperity.
As we look forward to making the most of these opportunities, there are also emerging economic risks that will fall hardest on less affluent areas, so we also need to look at a better deal for households and consumers. For example, Dover has the advantage of a high-speed rail train that connects to central London in an hour, but a season ticket costs over £7,000; that is around 25% of average earnings. To unleash the railway opportunity—whether that is high-speed Dover or the new HS2—rail tickets must be affordable within the context of the area and linked to average income. We should also introduce flexible tickets that are affordable for people who travel once, twice or three times a week. As we meet today, oil prices have surged recently and inflationary risks loom on the horizon. This risks consequent rises in energy, rents and other household and consumer bills. The Government’s commitment on fuel freezes is welcome, yet the transition to new fuel such as the electric car also needs to take place in rural and coastal areas.
In conclusion, this is a Budget that supports the areas hardest hit by the pandemic, and ensures a fairer share of investment and opportunity in the years to come.
Stephanie Peacock (Barnsley East) (Lab)
Ten harsh years of austerity have had a huge impact on areas like mine. Barnsley Council has faced some of the worst Government cuts in the country, losing 40% of its income since 2010, so the concept of levelling up could be a very welcome one. The Government have described levelling up as their intention to address inequality and “level up” underperforming and left-behind parts of the UK, but this is simply not what we have seen; it is six days after the Budget, and the Government are yet to publish the criteria for the £4.8 billion levelling-up fund. The Chancellor has previously stated that the fund would be allocated
“based on an index of economic need.”
That is curious when we consider that the Chancellor’s own constituency of Richmond in North Yorkshire is among the top fifth of the most prosperous places in the country, and currently the 251st most deprived place in Britain, and yet it is placed in the uppermost level for funding. Compare that to Barnsley, which is the 38th most deprived area in the country, but has been placed in level 2—behind Richmond—in the queue for funding.
Given that the Government are yet to publish the criteria, I would like to consider for a moment what those criteria could be. Let us begin with child poverty. In Barnsley East, 25% of nought to 15-year-olds live in poverty; that is double the figure of 12% in the Chancellor’s constituency of Richmond. Let us move on to free school meals. There are over 3,000 eligible children in Barnsley East—double the figure of 1,500 in the Chancellor’s constituency of Richmond. Let us look at unemployment, which in Barnsley is 6.6%; again, that is double the figure of 3.3% in the Chancellor’s constituency of Richmond. Child poverty, free school meals, unemployment claimants—the list goes on. The statistics will continue to prove that Barnsley is clearly in greater need than the Chancellor’s constituency, yet Richmond is in line to receive funding ahead of Barnsley.
The fact is that, despite the slogan “levelling up” and whatever the criteria the Government eventually publish, they have chosen to allocate funding in a way that favours affluent areas over those of greater need. That is the simple reality, and it is not the first time. The towns fund was the same: 60 out of 61 areas picked by Ministers for the new funds were Conservative-held or Tory election target seats. The Government are pretending to give money to the communities that need it most when they are actually doing the opposite.
Areas such as mine have suffered greatly through this pandemic. An increase in unemployment and in-work poverty has led to a sharp rise in food bank use. The Government should admit that levelling up is no more than an empty slogan, or change the criteria and put the money where the need is greatest.
Virginia Crosbie (Ynys Môn) (Con) [V]
The 2021 Budget is a Budget befitting a Government leading the way in building back better post-Brexit and post-covid. On behalf of my constituents on Ynys Môn, I particularly thank the Chancellor for the funding he announced for the Holyhead hydrogen hub. The investment of £4.8 million will have a significant impact on Ynys Môn and will provide a major stepping stone in the Government’s commitment to achieving net zero.
The hydrogen hub is a pioneering project based on a hub-and-spoke model. It will kickstart a local sustainable hydrogen supply chain, and will form part of a connected network all across the UK. It will help to decrease carbon emissions, air pollution and noise pollution, and will set the scene for growth and green regeneration on Anglesey. It will initially create between 20 and 30 jobs, help to support more than 500 jobs in local businesses, and offer valuable local training and skills development opportunities. It makes use of existing electricity and gas infrastructure, with a capacity to scale up to diversify into a range of hydrogen markets, including heat, power and agriculture. It brings with it opportunities for cutting-edge innovation, which will in turn elevate the research and development work already being undertaken by Bangor University.
The project is the culmination of work by a number of important local and national employers, including Menter Môn, Stena, M-SParc, the Isle of Anglesey County Council and Coleg Menai. They should be saluted for their initiative and drive. It is that type of project that will form the heart of Anglesey as the energy island, turning our local natural assets into green energy and once again crowning Anglesey as Môn Mam Cymru.
Ian Byrne (Liverpool, West Derby) (Lab) [V]
I listened to the Chancellor’s polished rhetoric last week and heard a man who knows nothing of and has never faced the dire circumstances that millions of people face in our nation today. This Budget offers nothing by way of a solution to the increasing levels of poverty and inequality in our communities.
The Independent Food Bank Network reported an increase of 88% in emergency food parcels between February and October 2020. Action for Children reported that 40% of families were struggling to feed their children. A Kellogg’s survey last week said that one in five schools now run food banks. In Liverpool, West Derby, we have seen a 100% increase in youth unemployment. Those are desperate, desperate statistics.
To combat that, we have a Government with a perverse interpretation of levelling up, and a Budget that shamefully denies a pay rise to public sector workers, cuts the pay in real terms of NHS staff, who are putting their lives on the line to protect ours, takes away the £20 uplift to universal credit from 6.5 million families in September, continues to deny an uplift in legacy benefits, and continues to deny justice to 4,889 of my constituents who have missed out on that vital extra support for the past year. It brings 1.3 million people into paying income tax for the first time, hits families with council tax rises of about 5%, and continues to exclude many from any Government support at all, including constituents of mine who have now gone without pay for 13 months. It also provides no support for the 700,000 households in rent arrears and those who face the threat of eviction.
Liverpool, West Derby and the nation need solutions to these grave issues. The images of hundreds of people queuing for food banks are now commonplace and they shame this Government. We need root-and-branch systemic change, but instead we have a Government tinkering round the edges of inequality with a garden strimmer.
Martin Vickers (Cleethorpes) (Con)
It is a pleasure to participate in this debate. My main reason for wanting to take part is to celebrate and praise the Government for this Budget. It has done a great deal to contribute to the levelling-up agenda and to overcome the north-south divide, which was a major plank of our 2019 election manifesto. In the past, cities and city regions have had much of the Government’s resources, and that policy was not necessarily wrong, but provincial towns such as Cleethorpes, neighbouring Grimsby and others in northern Lincolnshire could not benefit in the slightest from it because they have no immediate cities from which there could be a trickle-down effect. So it was right that we moved to focus on provincial towns.
I am delighted that the town deal, which has so far generated more than £100 million of investment into the area, has received another £21 million in the Budget. The town deal for greater Grimsby was actually the first; it was established in 2014 and involved a relationship between North East Lincolnshire Council and the private sector, led by local entrepreneur David Ross. That has moved forward, and it was acknowledged in the Government’s industrial strategy when it was published in, I think, 2017, when the then Secretary of State, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), used the greater Grimsby deal as a platform for others that have followed.
I am delighted that the Humber ports have been given freeport status. When my right hon. Friend the Chancellor published his report some years ago advocating freeports, I spoke to local businesses and to the port operator, Associated British Ports. I foresaw the advantages of freeports, so this is splendid. It is also important to acknowledge that the area is a major centre for the renewables sector, and I am delighted that the Government have invested more than £70 million in the Able marine energy park—something that the chairman of Able said would not have gone ahead without Government support. There has been criticism from the Opposition that the money is going to the wrong places. Take the Humber: I do not think there were any complaints from this side of the House when Hull got the Siemens investment. Now there has been an evening up. These are major moves forward, all of which I welcome. My thanks to the Chancellor.
Yasmin Qureshi (Bolton South East) (Lab) [V]
Last week, the headlines were screaming about levelling up, but nothing in this Budget helps my constituents. In the last 10 years, we have seen severe cuts that have caused child poverty of 40%, total unemployment of 10.5% and youth unemployment in parts of my constituency that stands at 30%. The recent cut of £20 in universal credit has caused more people to go into poverty. I think we all remember when the bus said £350 million for the NHS, but in reality its staff will get £3.50, which is an absolute insult. But it seems that the money tree has now been found, because £29 billion has just been given to test and trace, the discredited private scheme with links to Tory donors, and PPE contracts have been given by the Tory party to its friends. This Budget has done nothing to address what my constituency needs.
I want to talk specifically about housing. There was no real mention of housing in the Budget, apart from stamp duty and Help to Buy. My constituents need a house to live in. We need proper social housing. There are 9,000 people registered on the housing list to be accommodated, and everybody knows that decent homes help towards eliminating poverty and deprivation. Bolton at Home in my constituency does a tremendous job, but it needs support and assistance to be able to build more homes. The Leader of the Opposition said last week that this is a Beveridgean moment—a “fork in the road”. We face similar challenges to the ones we faced in the second world war, and we need a stimulus package similar to President Biden’s in the USA.
I welcome the extension of the furlough scheme to September. That is great, but there are 3.8 million self-employed people who have received no help at all through the pandemic. This Budget has failed to address the deep-rooted problems in our society such as deprivation and bad health indicators. My constituency is the 38th most deprived in the country. My constituency has been neglected over the last 10 years. I want proper funding to help the people of Bolton South East.
Simon Baynes (Clwyd South) (Con) [V]
This is a very strong Budget for the Union. We are stronger as one United Kingdom. As a Welsh MP, I am particularly pleased to see the extra £740 million for Wales in the Budget, and I only hope that the Welsh Government will spend that money in a timely fashion, rather than continuing their habit over the last year of holding back hundreds of millions of pounds of the UK Government’s support from those who need it most in Wales. This means that overall, the Welsh Government are receiving an additional £2.1 billion in the next financial year through the Barnett formula, on top of the baseline of £15 billion. There is also £300 million of funding outside the Barnett formula, in particular for farm support and fisheries.
Businesses in Clwyd South are very appreciative of the continued financial support outlined in the Budget, such as the extension of furlough and support for the self-employed, the recovery loan scheme and the extension of the reduced VAT rate of 5%. I am delighted that the Government are accelerating the three city and growth deals in Wales—in Swansea bay, mid-Wales and north Wales—by bringing £58.7 million forward in the investment programme. This means that the north Wales growth deal will get an extra £4.4 million per year from April for the remaining nine years of the deal, which will create up to 3,800 new jobs and support an uplift of £2.2 billion for the economy, as well as local regeneration projects—in the Wrexham area, for instance—amounting to £9.1 million.
That boost to the economy will be further strengthened by the newly announced levelling-up fund, which will be UK-wide and will bring at least £800 million for infrastructure projects in Wales, Scotland and Northern Ireland, and by the newly announced community renewal fund, which will provide £220 million of extra funding over and above the old EU structural funds to pilot programmes and new approaches in Wales and across the rest of the UK.
This Budget helps to cement the UK as a world leader in offshore wind, which is of great importance to north Wales. Following the measures included in the 10-point plan and the energy White Paper, the Government have shown that they are determined to deliver a green and cleaner economy. Many constituents in Clwyd South contacted me before the Budget about universal credit, so I was particularly pleased by the extension of the £20 per week uplift for a further six months. In conclusion, I strongly support this Budget, which shows that the UK Government have north Wales at the heart of their agenda and are leading the way in Wales on delivering for local communities.
Dame Diana Johnson (Kingston upon Hull North) (Lab) [V]
Last week, the Chancellor spoke a lot about fairness and levelling with the British public, but does the Budget actually pass the fairness test? Even before the challenges of covid and Brexit, Hull had been hit hard by a decade of austerity after the global banking crisis, and that is why it was disappointing to see no real green industrial strategy, where the Humber could be central, and that the universal credit uplift was not made permanent to help hard-pressed families as council tax and other bills soar. There was also another real-terms pay cut for NHS staff, a £30 billion cut in day-to-day NHS spending from April, and still no sign of the Prime Minister’s talked-about clear plan for social care.
Hull is the fourth-most deprived local authority area in the UK, always high in social and economic indices measuring disadvantage, so how is it fair, consistent or logical that Hull is excluded from the list of 100 priority places for the community renewal fund while it achieves priority 1 status for the levelling-up fund? The Government say that they look at measuring unemployment, household income, productivity, skills and population density, but the criteria have not been published, and perhaps are still being cobbled together in Whitehall.
This unfairness runs riot again with the towns fund. Of 45 towns and some cities chosen for funding, a disproportionate number—40—have a Tory MP. Hull was told that we are not eligible as we are a city. However, the city of Wolverhampton was awarded £25 million after electing two Conservative MPs, and last Thursday the Leader of the House confirmed that Hull, with three Labour MPs, will not be considered by Whitehall decision-makers even if we make a bid. That is not fairness. However, the winners from this gerrymandering should not celebrate too much as the towns fund is worth less than half the £2.4 billion that the Government had cut since 2010 from the funding of the 45 local authorities receiving it.
Even for the north’s favoured areas these pots of levelling-up funding will not be transformational. The infrastructure bank in Leeds will only provide loans and finance on a scale two-thirds smaller than the £5 billion per year from the European Investment Bank that it replaces, and there is growing doubt about whether Transport for the North will have the finance and clout to deliver on its promises.
There is just not enough pork in the barrel, and nothing like the sustained public and private investment that is needed for the real regeneration that we have seen over the last 40 years in places such as London docklands—all achieved without Whitehall insisting on permanent local government reorganisation. This was not a fair Budget for my constituents. Real investment in the Humber docklands seems no nearer.
Rob Roberts (Delyn) (Con)
It is a pleasure to follow the right hon. Member for Kingston upon Hull North (Dame Diana Johnson) and to talk about a Budget that works for everyone and that will bring real investment in every part of the United Kingdom and begin to build our future economy. However, from the poor picture the Opposition have painted we would not believe that that was the case. The Leader of the Opposition claimed that the Chancellor was raising taxes based on the electoral cycle rather than an economic cycle and that raising taxes now means he will just cut them before the next election. Speaking of electoral cycles, the cynic in me might point towards the Welsh Labour Government sitting on about £1.3 billion in unallocated funds and wonder when they might actually get around to using them to provide the support that businesses in Delyn and across north Wales are so desperately asking for. Far from being politically churlish, the Chancellor has based his decisions on sound economics and has left playing games with the electorate to the Leader of the Opposition and his party.
Personal tax allowance has been frozen over the remainder of this Parliament and until 2026, hardly a populist move. Corporation tax only rises in 2023, a whole year before the next general election. Delaying the corporation tax rise and implementing the excellent super deduction plan allows businesses to invest with confidence now, helping us build back better sooner and ensuring that we pay back the cost of the support schemes at a point when we have higher employment and a more stable economy.
A number of Opposition contributors have talked about the Chancellor’s brand, and I say to them that if they spent more time emulating the Chancellor’s brand, they might make for a more credible Opposition, because the only brand the Chancellor is cultivating is one of fiscal responsibility, backing business and supporting those most in need in our society.
Looking a little further along the shadow Front Bench, the shadow Chancellor claimed that only a Labour Budget would hand power to local communities. Again, I wonder whether she has read the Budget at all, as this is a programme that is clear on its commitment to levelling up every community, every town and every region, whether through the community ownership fund, which gives power to communities to buy much-loved local assets, or through the levelling-up fund, which will invest in vital local infrastructure projects. Every corner of the United Kingdom benefits, leaving no one behind.
This is a Budget that delivers for the whole Union, with Wales receiving an additional £740 million, and the north Wales growth deal being brought forward from 15 to 10 years, supporting that deal to create over 3,500 new jobs, with an uplift of 2.2 billion for the local economy in north Wales. It is a Budget that rightly has one eye on the present and one eye firmly on the future as we build back better.
Bell Ribeiro-Addy (Streatham) (Lab)
There are three aspects of this Budget that I want to address. The first is the short-term emergency measures to mitigate some of the economic effects of the pandemic, bearing in mind that the persistence of the virus is itself the fault of Government policy. Today Australia celebrates 10 straight days without a single domestic case of covid-19. All across the world, billions of people are living, effectively, without the virus. Cases and deaths have been reduced to a handful, or even zero, because they took effective measures to suppress it. This Government did not. So we have a public health disaster and an economic disaster. Countries that suppressed the virus have seen a relative hiccup in their economy and are now on their way to recovery. We, on the other hand, will suffer surging unemployment of up to 5.9%, according to the Office for Budget Responsibility. This Government deserve no plaudits for being obliged to spend hundreds of billions of pounds of taxpayers’ money on measures to address a crisis they caused. We do not praise an arsonist because they called the fire brigade. This Government were even worse. For example, the second wave is widely seen as being the impact of the misconceived and reckless Eat Out to Help Out policy.
The second aspect is the long-term or structural elements beyond the emergency payments. These structural elements can be summed up in two words: vicious austerity, from every angle, that reduces the living standards of ordinary people, deepens existing inequalities, and provides unnecessary subsidies to big business. It is Robin Hood in reverse. Consider these elements of the Budget: a £4 billion cut to public spending on services, following a 5.7% cut in last year’s Budget; a £2 billion hike in council tax payments; a freeze on income tax thresholds, which makes poor people pay more tax; and a public sector pay freeze, not to mention the exception of nurses’ pay—the insult of just 1%. Ministers tell nurses that there is no money left, but that is false. In the Budget there is a £27 billion tax giveaway to businesses, which the OBR says will have no lasting effect, and £37 billion spent on a useless private test and trace system.
The third and final insult is a Treasury Red Book that barely mentions inequality—in fact, just once. Yet again, no equality impact assessment was published alongside the resolutions, because even though equality is our law, to this Government it is expendable—an add-on—and policy after policy adversely impacts the most disadvantaged in our society. This Government are responsible for the scope of both the public health and the economic disasters, and this Budget widens both even further.
Elliot Colburn (Carshalton and Wallington) (Con) [V]
I warmly welcome the measures taken in this Budget. I particularly welcome the super deduction, especially as last month I wrote for The Times Red Box calling on the Government to break down barriers to a green industrial revolution through the tax system, including by cutting investment taxes to help businesses to buy new cleaner technologies. The super deduction, by reducing a tax bill by 130% for businesses that are investing, will indeed boost investment and help businesses to make the transition to cleaner technology. I thank the Chancellor for listening to those calls.
I want briefly to touch on the support for families and businesses in Carshalton and Wallington. Throughout this pandemic, I have had many discussions and roundtables with individuals and businesses in my constituency, including dealing with well over 12,000 pieces of casework. The immediate and short-term financial support measures have been welcome, but what I especially welcome in this Budget is the recognition that reopening and bouncing back will not happen overnight for many. Measures such as extending furlough to September, extending the 5% VAT cut for six months, extending universal credit and working tax credit for six months, two further grants for the self-employed, ongoing support for food and holiday activity programmes, providing food, essential goods and laptops to those in need, and new recovery loans, will help families and businesses through the final months of the pandemic and on the road to recovery.
I want to briefly mention three support measures. After leading a debate on behalf of the Petitions Committee, I warmly welcome the extension of the stamp duty relief, and I thank the Chancellor for listing to my calls to taper off the relief rather than stopping it overnight.
I also welcome the £700 million for arts, culture and sport. I hope that organisations in Carshalton and Wallington, such as CryerArts, Mitcham & Carshalton rugby club and Carshalton Athletic, will benefit.
Finally, I welcome the restart grants for hospitality, retail, leisure and personal care. Having held many meetings in Carshalton and Wallington with our independent stores, cafés, pubs, restaurants, hairdressers, salons and others, I knew the concerns they had about surviving to the point that they could reopen properly. I hope that this goes some way to alleviating those concerns. I would just add that I hope we can find a way of extending that support to the wedding sector—and I do not just say that as I am due to get married in July myself.
I thank the Chancellor for listening to many of the concerns that I have raised with him, and I welcome this Budget. I will continue to engage with families and businesses across Carshalton and Wallington to do whatever I can to help them through these last few months.
Andrew Gwynne (Denton and Reddish) (Lab) [V]
It is always good to be constructive, and there are certainly things to welcome in this Budget. The ongoing support for business and furlough is absolutely essential until the crisis is completely over. We heard this morning from the chief medical officer that we may face another surge, despite the amazing progress on vaccination. It is clear that we cannot take anything for granted, so it is right that that support is not ended prematurely.
I also welcome the fact that more people are now eligible for the self-employment income support scheme, but as I raised earlier today at Treasury questions, that still leaves millions without anything. That is an inconvenient truth that the Treasury has repeatedly failed to address, including through this Budget.
As with previous Budgets, a lot of the most significant bits are the parts that the Chancellor did not announce last week. He is forcing through a council tax hike—devolving blame seems to be the only devolution that the Government are interested in—and the decision on income tax allowances will hit the poorest hardest. That is a huge mistake, particularly as we emerge from the crisis.
There was also a missed opportunity to address the tax imbalance between online and high street retail. This is an accelerating trend that is destroying our town centres, and the pandemic has supercharged it. We may not have more opportunities to save the high street, so it is disappointing to see another one missed.
The Government talk a lot about building back better and meeting the productivity challenge, but I am not convinced at all that this Budget meets that challenge. Key to doing that will be rebalancing our economy, as imbalances between and inside regions are directly linked to productivity gaps. That is why tackling regional inequalities is so important. In theory, that is what levelling up is intended to do, but if this Budget is anything to go by, it is not clear that the Government have any real idea what they are doing with levelling up. Pork barrel politics, tokenistic moves and asking local areas to go to central Government cap in hand, rather than devolving power and decision making to regions and communities, is not levelling up.
Finally, our NHS staff deserve more than warm words and applause. The Government should put their money where their mouth is and give our fantastic NHS workers the kind of pay rise they deserve. The 1% on offer, a real-terms cut after the work that they have done throughout the pandemic, is an absolute insult. What the country needed was a bold Budget based on a credible strategy for economic recovery from the covid crisis, but unfortunately there does not seem to be a plan.
Neil Parish (Tiverton and Honiton) (Con) [V]
I start by thanking the Chancellor and the Treasury team for the support they have provided throughout the pandemic, which is rightly continuing this year as we look to recover from the pandemic. In particular, I am grateful for the new self-employment grant scheme, which will allow more than 600,000 people who became newly self-employed last year to access support, because they have really struggled. I have heard from hairdressers, driving instructors and tutors in my constituency who will benefit directly from that grant money. I also strongly welcome the restart grants of up to £18,000, which will help businesses to get going again, along with the 100% business rates holiday and the extension of the VAT cut to 5%. Cutting these taxes and providing cash boosts will help the many tourism and hospitality businesses, including hotels, pubs, caravan parks and wedding venues across my constituency, to recover.
In addition, I want to thank the Chancellor and the Work and Pensions Secretary for extending the universal credit uplift by six months. Although we have done so much to protect jobs throughout the crisis, there are still millions who will be relying on universal credit this year. We need to make sure we continue to properly support the vulnerable in our society. This pandemic has caused a lot of financial hardship too, and it is right that we reduce and spread the financial burden as much as possible.
As we build back better from the coronavirus, I, like the Prime Minister, want to see a green industrial revolution so that we use this opportunity to make positive changes to our economy. The new super deduction will allow companies to cut their tax bills by up to 25p for every £1 they invest in new machinery over the next two years, bringing forward capital investment and replacing older, dirtier machines with newer, more efficient ones. This is worth around £25 billion to UK companies and will kickstart an investment-led recovery.
I would be grateful, however, if the Minister on the Front Bench today could put forward my suggestion that new fishing boats qualify for that tax cut. Many of our fishing boats in the south-west are built in the north of England, so reducing taxation on new boats would help to create more jobs across the country, improving our fleets, saving on emissions and improving the safety of our fishermen at sea. This policy would be a win-win for our economy, much like the green homes grant that I believe will be extended and fully funded on a multiannual basis. If done properly, the green homes grant will deliver insulated homes, create skilled jobs, reduce heating emissions and save on household bills. So I urge the Minister to take that policy forward and create a green revolution not just for this year because we are hosting COP26, but for the next decade as we recover from covid-19 and work towards net zero.
Mrs Emma Lewell-Buck (South Shields) (Lab) [V]
Last week, the Chancellor spoke of being fair and honest with the public, yet 24 hours later it became very clear that he was doing neither. The worst example of that was the cowardly omission of the real-terms pay cut for our NHS heroes, people who have put their lives on the line day in and day out, who diligently turned up to save lives knowing that the Government had not provided them with PPE, and who have been the only comfort for strangers as they took their final breaths. They have been told that the public finances are under strain. This pitiful excuse might wash if they had not seen £37 billion wasted on failing test and trace, if they had not heard the Conservative head of that failed programme defending wasting tens of thousands of pounds per day on consultants to help run this shambles, if they had not seen nearly £2 billion given to Tory friends and donors for covid-related contracts, or the half a billion spent on the Nightingales that did little more than provide some good PR for a poorly performing Health Secretary.
The fact is that the Government do not value our NHS. Their Benches are filled with those who vote time and again to cut the NHS and its workforce to the bone, forcing local hospitals to downgrade and promoting a privatised system of health and social care. It is not just the NHS they show disdain for, however. It is also whole communities who do not vote for them or share their ethos. It was noticed by people in South Shields and our surrounding areas that last week’s Budget offered zero investment in our infrastructure, jobs, schools or high streets. Levelling up is already proving itself to be as vacuous as the northern powerhouse was.
We are smart enough to see through the soundbites, the slogans and the rhetoric. When it comes to the levelling up fund, typically there is a lack of clarity regarding the formula and criteria for making the awards. What is clear, however, is that these funds will pit communities and regions against each other. At a time when we should be coming together, the Tories are again sowing division and fostering competition for small pots of money that will see a piecemeal and unequal recovery across our country.
For our local economies to survive they need local people with money to spend, yet just as unemployment is due to peak later this year, the universal credit uplift will be scrapped. Legacy benefits remain static, the benefit cap and the two-child limit remain, council tax is rising and key worker pay is frozen.
Our communities will never forget that, in the middle of a pandemic, this Government presided over one of the highest death tolls in the world, led us to the worst economic crisis of any major economy and used it as an opportunity to make money for them, their friends and donors. We will all have to live with the scars of this Government’s recklessness for decades to come and I will never give them a minute’s peace over it.
Mrs Flick Drummond (Meon Valley) (Con) [V]
I am very pleased to be taking part in this debate today. This is a Budget that I believe will deliver security for my constituents in the short term, with the gradual lifting of restrictions, and in the long term, as our economy continues the steady growth and development it was experiencing before the outbreak began. I welcome the announcement of the Solent freeport, which will benefit constituents in the south of Meon Valley, many of whom work and live around Portsmouth and Southampton.
The Solent region, including parts of my constituency, contains some pockets of deprivation. While I accept the need to level up areas in the north and the midlands, there are definitely parts in the south that we must not leave behind. One of those areas is Waterlooville in my constituency, which is a good example of the hollowing out of town centres through changes in the way we live and shop creating a need for investment and redevelopment.
Waterlooville is a town that has vibrant growth around it, with new housing and more jobs coming. However, it has a struggling high street and the town centre is in need of redevelopment. That is not the fault of the businesses, which are trying their best, but the empty units now outnumber those that are occupied. The levelling up fund is exactly the sort of support many towns need, so I hope that Havant Borough Council will look at accessing national funds like the levelling up fund with me, so that we can drive real change. I also welcome the input by the Solent local enterprise partnership and Hampshire County Council, whose strategic view and input on transport will be important, since travel into and from the town centre is something that needs a rethink.
Reshaping the town centre can achieve a number of aims at the same time—economic development, of course, and a strong return on investment, alongside strengthening social cohesion and promoting green development in all aspects of urban design from transport to affordable housing. We can make Waterlooville in its totality a showcase for how a modern town centre can be redeveloped to meet the needs of people, where they can live, work and play without having to travel.
I will be asking all local stakeholders to contribute to this work and, as the MP, will do everything I can to support them. I will be asking the community what they want to see in their town centre and for ideas for regeneration. That includes our local schools, because projects like this take time and regeneration will shape the place where children grow up and live. They should have their say as well.
This is an excellent Budget, which offers potential for growth and regeneration. I hope it will bring greater prosperity to Waterlooville and all the communities that make up my Meon Valley constituency.
Ian Paisley (North Antrim) (DUP) [V]
Can I say at the outset that I was very disappointed that the Secretary of State could not bring himself to mention Northern Ireland in any detail at all during his opening comments? Yet the economy and recovery of Northern Ireland as a Province have kept pace with the rest of the United Kingdom during the entirety of the last 10 years.
Covid has had an impact and we welcome the measures that have been introduced by the Chancellor. Some 250,000 jobs have been protected through the jobs retention scheme here in Northern Ireland, 210,000 people have been assisted through the self-employment income grant and 39,000 businesses have been helped by the loan guarantee scheme. That is a practical outworking of being part of the Union and part of the fifth largest economy of the world. Northern Ireland wants to play its part and it is right that we should therefore be mentioned.
Northern Ireland has had the added nightmare, of course, of coping with the Northern Ireland protocol, which poses more of a long-term, systemic threat to the Northern Ireland economy than the short shock caused by the covid crisis. The protocol must go and we welcome the steps in that direction that are being taken.
However, the Budget will be measured on how it delivers on the economic promises that it makes, especially the green revolution promises. For me, the measurement will be investment in the green economy of hydrogen. The Prime Minister has set a target of 5 GW of hydrogen by 2030. I want to pose this question to the Front Bench: does the Secretary of State agree that the hydrogen strategy must marry supply with demand? The Government can kickstart this supply and demand approach by turbocharging their investment in 4,000 zero-emission buses and making at least half of these hydrogen buses. Combined with this, we must reform two things—the renewable transport fuel obligation and the bus service operators grant. These reforms will support bus operators to buy hydrogen buses made across the United Kingdom, and therefore unlock major investment and job creation schemes in green hydrogen production across all four parts of the United Kingdom.
In Northern Ireland, we would also of course welcome a cut in corporation tax, which would help us to outpace the tax haven that is the Republic of Ireland.
Sara Britcliffe (Hyndburn) (Con)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests.
In the most difficult economic circumstances we have faced for generations, the Chancellor has struck a careful balance between the difficult and necessary measures to recover our public finances from covid-19 and the need to protect the most vulnerable and the lowest-paid in society. From the support for businesses, the freezing of alcohol duty, the super deduction—my brilliant business of Emerson and Renwick told me this week that it was welcome news—to the continuation of the universal credit uplift, this Budget truly is a road map to recovery. This comes just after Hyndburn received £2.3 million from the Government from the public sector de- carbonisation scheme, which I called for very early on in my term, when we looked at our economic recovery and a green one to give Hyndburn and Haslingden the incentive to be at the heart of it—secured.
There is one aspect of the Budget I would particularly like to place a focus on today, and that is the levelling up fund. As many hon. and right hon. Members may know, my area has historically struggled to attract investment and has not been given the opportunities it has deserved. I was elected to change that. That is why the levelling up fund is so transformative for my area. I have spent a long time campaigning for the regeneration of my local high streets and for significant investment to be made in our town centres. The Prime Minister has supported my campaign and on a recent visit he reaffirmed that. The Budget begins to truly deliver on this not in the form of some temporary handout, as we have seen from previous Labour Governments, who have failed to invest in my area, but as an important part of building prosperity in our region.
With the whole of Hyndburn and Haslingden in the highest category for accessing the levelling up fund, we are now near the front of the queue for accessing this money. That means our chance to transform our area has now come. We need to work together to develop the bid and to ensure that the £125,000 is used most effectively. On top of this, Rossendale has been given extra funding from the community renewal fund. When I speak to residents in Haslingden, the same message is repeated, which is that they have been forgotten about and left behind. I want to change that and I urge Rossendale council to make sure that this is not the case any more.
I was sent to Westminster in December 2019 to make sure that our local voices were heard in Government. By lobbying the Chancellor and the Prime Minister, I have done all that I can to get our area into the priority group for investment and to get money to support it in putting forward a bid to the Government, which is what has been secured. Now it is time for our local councils to make sure that they truly take up this opportunity and develop a successful bid, so that we can make sure that our once forgotten towns truly are forgotten no more. I can certainly assure my residents that, while I am here, that certainly will not be done by me.
Sarah Owen (Luton North) (Lab) [V]
Healthcare for everyone, rich or poor, paid by us all through our taxes, not charity: 73 years on from Nye Bevan’s vision, our NHS workers are still breaking the mould and smashing records with the vaccine roll-out. The joy as people receive their vaccine—a step closer to hugging loved ones—should be a reminder of just how special our NHS is, but it was forgotten by the Chancellor. The NHS was missing from this Budget. It was a missed opportunity to rebuild our country into one that is not just wealthier, but healthier as we recover from this crisis.
If the last year has taught us anything, it is that levelling up our country cannot stop at Tory MPs in marginal seats pointing at a new train station platform or a motorway bypass. We need to wake up and realise that no country where life expectancy is eight years longer in parts of the Chancellor’s constituency than in parts of mine is one that is being levelled up.
The crisis has exposed yawning inequalities and the virus has exploited them, while 11 years of cuts to the NHS and the public sector have left us defending ourselves in a health war with shields made of bin bags. We all know that having a secure job makes someone less likely to get seriously ill, but while Luton has seen some of the highest job losses, we have thousands of businesses, self-employed people and entire industries, such as aviation and events, that have been completely forgotten by this Government.
Tory Chancellors tell us at every Budget, dewy-eyed, that these are tough and difficult decisions, but for over a decade their decisions have ended up costing our country so much more in the long run, not just financially but in terms of people’s health and wellbeing. These decisions have led to people in Luton enduring increased levels of in-work poverty and child poverty, to the extent that in this country one in five schools now needs its own food bank.
This Budget was missing so much, and it had all the depth of the Chancellor’s Instagram and all the sincerity of clapping nurses all the way to the food bank. This was the moment to finally invest in communities that had been forgotten—in our schools, in our NHS and in ending the inequalities that are holding our country back. It is time to prove that levelling up goes beyond posing in a high-vis jacket. After a year of sacrifice by people in Luton North, let us invest in areas based on need. Let us support businesses and high streets to recover. Let us bring more skilled jobs to Luton. Let us invest in making people healthier, and let us start by giving health and social care staff the pay they deserve. Our healthcare heroes deserved better than this Budget. The people of Luton North deserved better than this Budget.
Jack Brereton (Stoke-on-Trent South) (Con)
I want to focus on the importance of our delivering on the Prime Minister’s ambition to build back better. If levelling up relates to anywhere, it is Stoke-on-Trent. For decades we were ignored, but no longer. We now have a Government who, through this Budget, are focused on investing in areas that have seen little.
Whitehall is starting to wake up to the huge potential in places like Stoke-on-Trent, just waiting to be unleashed. With my Stoke-on-Trent colleagues and our fantastic council leader, Councillor Abi Brown, I was pleased to launch our “Powering Up Stoke-on-Trent” prospectus just over a week ago. It outlines our ambition for Stoke- on-Trent, an area that before covid had had been one of the fastest growing economically. As the 12th most deprived local authority area in the country, we must focus on addressing our challenges, but they will not hold us back. We are determined to overcome them for the benefit of everybody.
Our prospectus identifies four key high-growth sectors: digital, advanced manufacturing, especially in ceramics, green energy and creatives—decent jobs, proper skills and rewarding pay. Our prospectus outlines a range of projects we hope to deliver based around four priority areas: transport, economic development, education and skills, and health and productivity.
The Prime Minister and the Government are refocusing attention on areas like Stoke-on-Trent. Changes to the Treasury Green Book are especially welcome and will be vital to ensure a good slice of the levelling-up fund announced alongside the Budget. I am delighted that Stoke-on-Trent is identified as a top priority and will receive capacity funding.
In my constituency, the top priority must be securing additional investment for our main town of Longton. The town centre was struggling before covid, with double the national average of empty retail space, but the town still has huge potential. The focus for further investment should be supporting the conversion of empty space, improving public spaces, better stitching together the town and redeveloping key sites such as the former Tams works.
Clearly, levelling up is more than just one fund—it is for the entirety of Government—but the fund can stimulate wider change. With three wards in my constituency alone identified as left behind by the local trust and the all-party parliamentary group for left behind neighbourhoods, there is much to do to improve skills and opportunities. The kickstart scheme and the lifetime skills guarantee are vital parts of that, empowering people to access skilled and better-paid work.
We must also improve local public transport. In some wards in my constituency, more than 40% of households do not own a car, which severely limits life chances. I am delighted that my campaigns on transport are bearing fruit. We secured £36.4 million to improve local bus and rail through the transforming cities fund. Meir station is progressing well as part of the Government’s fantastic Restoring your Railway programme. Alongside my north Staffordshire colleagues, I was delighted to resubmit our bid last week for the reopening of the Stoke to Leek line, including a station at Fenton Manor in my constituency. I thank the Chief Secretary for all the support he has been giving so far, and I hope he will back our exciting opportunities to power up Stoke-on-Trent.
Sam Tarry (Ilford South) (Lab)
We have many important sectors in our country that will hopefully be the engine of growth in the future, but which need support in the short and medium term—not least public transport. Sadly, there was very little in this Budget on transport. What we did see were mostly drastic cuts, with transport funding slashed from £13 billion to just £2.1 billion for the current financial year at a time when ridership levels are at record lows and operators are struggling to balance the books. Furthermore, funding for transport capital projects was cut from a meagre £600 million to zero, while intra-city funding has been delayed until at least 2022.
The lack of pandemic support has already had a profound impact on those who work in the transport sector, with over 1,000 jobs lost in both the bus and coach manufacturing industries—mostly, unfortunately, again in the north of England. And all this is at a time when the fuel duty freeze is costing the Government the best part of £1 billion, sending a clear message about where their priorities lie in terms of their decarbonisation agenda.
What hope is there for the ordinary worker who wants to return to work but is faced with a rise in rail fares and cuts to bus routes, which, in recent years, have seen 134 million miles lost? Where is the Government’s much heralded bus strategy, which was supposed to have been published last year? There was not a word of this in the Chancellor’s statement or, indeed, any update on the commitment to unveil 4,000 zero-emission buses, which can only lead us to conclude that their decarbonisation agenda has missed the bus. As the MP for Ilford South, I watch in dismay as the Government continue to level down London’s transport network rather than truly levelling up the midlands and the north.
The Budget was a pivotal moment for the climate emergency and jobs crisis, but next to nothing was announced for a new economic green recovery. There is no new investment for green recoveries in key industries, including automotive, aerospace and steel. Just £20 million was announced for floating offshore wind technology. Labour has called for a £30 billion green economic recovery, which would create 400,000 secure jobs in clean industries.
Earlier this week, the Chancellor boasted about kick-starting a green industrial revolution, but in reality the Government have slashed climate spending in this Budget, including a devastating £1.1 billion reduction in the green homes grant. As my right hon. Friend the Member for Doncaster North (Edward Miliband) pointed out, we are lagging far behind our European and global partners, with the US’s recent $1.7 trillion green plan over the next decade, while Germany and France have pledged a combined total of €70 billion over the next two years. Mass unemployment should not be inevitable in this pandemic, but the way that the Government are carrying on, it unfortunately could be.
At a time of acute and prolonged national crisis, there is an opportunity for the Budget to be more than one that drives a new political economy—one of investment to create well-paid jobs, the renewal and expansion of infrastructure projects to fit out our country for the century ahead, and a world-leading acceleration of a green industrial revolution to lift our nation up through an active industrial strategy, not buzzwords, tax-evading freeports and pork barrel projects to shore up Tory ambitions.
Nick Fletcher (Don Valley) (Con) [V]
It is a pleasure to make my first contribution to a Budget debate. Almost a year ago today, I made my maiden speech just as the pandemic was beginning to grip the globe. The year that has followed has been tragic in every sense of the word, yet it could have been much worse. In July, the Office for Budget Responsibility predicted that unemployment would peak at 11.9%. That figure now stands at 6.5%, yet this is not a meaningless statistic. It has made a real difference. Close to 2 million jobs have been saved through the furlough scheme, business loans and the plethora of Government initiatives that I have been proud to support, but, as I have said repeatedly in this Chamber, we must now focus our energies on making sure that we have a sufficient economic recovery that ensures that people get back into work and start reaping the rewards provided by our dynamic economy.
Although it comes as no surprise that I was disappointed that Doncaster Sheffield airport was not awarded freeport status, this innovative policy will help to unlock the enterprising spirit of British businesses. I am pleased that a freeport will soon open in the Humber, benefiting the entire region and furthering this Government’s levelling-up agenda—an agenda that we should turn our attention to right now. The promise of levelling up is, after all, the reason why many in Don Valley voted for me and for Conservative party candidates across the north of England, yet to truly level up a region, business needs to thrive. The extension of the business rates holiday, the introduction of the restart grants and the continued reduction in VAT for the hospitality sector provide the foundation for economic recovery. Furthermore, the renewal of the airport and ground operations support scheme for a further six months will ensure that our regional airports, such as Doncaster Sheffield airport, can continue to facilitate economic growth in all four corners of the UK. The £4.8 billion levelling-up fund and the super deductions for businesses will supercharge our recovery. For families, the freezing of fuel duty and the extension of the universal credit uplift will provide security for those who need it most. The Budget will make a long-lasting difference in the next couple of years.
For many people, politics can seem remote and irrelevant to their everyday lives, yet I know that people and businesses across Don Valley have been reassured and energised by the measures announced by the Chancellor last week. They know it will make a difference to their lives.
Tonia Antoniazzi (Gower) (Lab) [V]
Having heard the Chancellor’s speech last week and having listened to the Prime Minister since the start of the pandemic, I can understand how some people in this country have been fooled into believing that the Government have their best interests at heart. Today I heard colleagues on the Government Benches acknowledge the need to address the vast economic inequality in the UK—but that was caused by a decade of Conservative financial mismanagement, so I welcome their comments.
I am concerned that the rhetoric of levelling up is just that. We know that the devil is always in the detail. For all the fanfare around the Budget, the money pledged is a drop in the ocean next to the billions cut from local authorities and local services over the past decade. For all the talk of moving Government jobs out of London, 750 jobs on an economic campus do not make up for the loss of over 30,000 civil service jobs across the United Kingdom—civil servants with experience and institutional knowledge, leaving in droves as they are increasingly undervalued. How can we hope to fix regional inequality when the opaque, centralised approach employed by the Government to distribute those funds pits region against region? If levelling up means the Chancellor picking out his favourite blue pen and colouring in just Conservative-held areas, it smacks of the timocracy that has come to define this Government’s attitude. We are told that the Government are driven by a desire to level up, but their actions are led not by evidence, but by ideology.
We see that too with the freeports. English freeports are receiving £26 million each, whereas Wales has been offered only £8 million. That glaring disparity exposes the fact that levelling up is more of a slogan than a true ambition. On top of that, if Liverpool and Bristol become freeports, that will have a major impact on Holyhead and ports across south Wales. This myopic approach to spending, which seems to target positive headlines, not economic prosperity, puts jobs and industry at risk.
Will the Minister ensure that funding is distributed in a way that grows the economy, creating and preserving jobs throughout the United Kingdom, not just England, and ensure that freeports are not introduced at the expense of existing and successful places? It is a failing of this Tory Government not to understand and respect devolution. To move our countries forward, the Prime Minister and the Chancellor need to understand that and work collaboratively with our devolved Governments, not against them. We need the levelling up of the entire United Kingdom.
To conclude, will the Government rise above their petty, power-grab, bully-boy tactics and provide parity in their levelling-up agenda for the whole United Kingdom?
Conor McGinn (St Helens North) (Lab)
What a pleasure it is to follow my hon. Friend the Member for Gower (Tonia Antoniazzi).
There is much to say about the Budget—unfortunately, very little of it good. It fails on every count to address the fundamental weaknesses and unfairness in our economy and offers no coherent plan to rebuild our country, invest in our communities and allow our citizens to prosper. That is felt acutely in my community by my friends, neighbours and constituents, who faced huge challenges before the pandemic. When I talk about health, educational, social and economic inequalities in St Helens North, I am not talking about a place on a map or about statistics; I am talking about our people and their lives. We know privilege grants to its inheritors a head start—that has always been the way—but should it not be the job of Government to help the rest of us catch up? Why then does it feel as though communities such as mine are not only starting behind, but deliberately being hampered?
In the next two years, the Government are forcing cuts to our local health and social care services of more than £6 million and to our children and young people’s services of almost £8 million. This is happening in a borough where people die younger, leave school with fewer qualifications, are poorer and have worse health. That is not levelling up—it is doubling down. But we are used to it, and, despite it, the past year has shown again what a resilient, caring, innovative and determined community we are. We are ambitious too, for our families and our future.
Sometimes we are even optimistic. Our Labour-run council, under the leadership of David Baines, and alongside partners in business and in the community, has already started to deliver on ambitious plans to quite simply make St Helens borough the best place to live, work and visit in the north-west of England. We do not want the Government to do it for us; we know they cannot, but they can help us to do it for ourselves. We want to do it for ourselves, which is why we needed this Budget to give us a fighting chance to succeed and why it is so frustrating and disappointing that all it has done is give us an even harder race to run.
Julie Marson (Hertford and Stortford) (Con) [V]
I welcome this Budget, which is pragmatic and fair, and clearly responds to the extraordinary circumstances we find ourselves in. But it is much, much more than just short-term crisis management. In its ambitions for growth, it is an extraordinary Budget. It is a Budget that says to the world that this Government mean business when it comes to business. It announces that this Government want the UK to lead the world in innovative, high-potential, high-growth sectors of the future. I have been advocating something similar to the new “future fund: breakthrough” scheme for some time. It is a smart policy that helps to root innovation companies to the UK by getting more money into the venture capital ecosystem at early stages. With better access to capital at an early stage we will encourage cutting-edge businesses to grow and eventually list here. I also commend Ron Kalifa and Lord Hill’s work in this space.
I also welcome the review of the charge cap announced by the Chancellor and look forward to seeing more ideas in the coming months from the Treasury, Bank of England and Financial Conduct Authority’s industry working group. We have nearly £10 trillion-worth of assets under management in the UK, but only a tiny amount of that is ever directed at UK venture. Just 0.5% of UK defined-contribution pension investments were invested in unlisted equities in 2020. Too much capital is locked away in pension funds and hidden by a culture of avoiding any risk. In 2019, a mere 2% of the £48 billion raised by UK-based venture capital and private equity funds came from UK pension funds. I am delighted that this Government are beginning to grasp this nettle, and are prepared both to review the regulatory landscape and provide incentives.
Now is the time for a truly radical approach to this undertaking, and to lift the venture sector as an asset class, to be part of mainstream investing in its own right. That will be transformational. Venture capital has the power to propel us into the green and technology-led future to which we aspire. It has the power to lift our economy up, pay our debt down and provide skills, wealth and opportunities to our people and communities. We need to unleash the power of venture capital. This Budget sets us on that path, and I look forward to supporting the Government and being a part of this exciting journey.
Beth Winter (Cynon Valley) (Lab) [V]
The Chancellor has boasted that this Budget will create jobs, revive high streets, reinvigorate the economy and level up the regions and nations of the UK, but as the Counsel General for Wales, Jeremy Miles, has said,
“this UK Government has an appalling record on providing Wales with even a fair share of UK spending, let alone the kind of funding needed to ‘level up’.”
Rhondda Cynon Taf, the local authority within which my constituency of Cynon Valley is located, has the third-highest covid death rate in the UK. Poverty and ever-widening inequality are the root cause of the high death toll, and they have been made worse by the past 11 years of Tory Government austerity.
I am angry that the levelling-up fund will be centrally managed. That goes against the express position of the Welsh Government and is contrary to previous announcements by the UK Government. It is not new money, it is not ring-fenced to Wales, and it represents a fraction of the funding that we need. It bypasses the democratically elected structures in Wales, which are best placed to understand the issues facing our country.
I am pleased that the furlough scheme has been extended, even though it was a last-minute announcement. The Prime Minister said last week that 3,400 people in my constituency are reliant on the scheme, but due to the Government’s short-sightedness, they are now facing a cliff edge in six months’ time.
I have just returned from a meeting with the aerospace industry in my constituency. Those jobs should be supported by the Government, but instead the industry is on the brink of collapse. Since the pandemic started, GE Aviation has cut almost 500 jobs, and there is fear for the future. As Ross Williams, a constituent of mine and a senior shop steward, states,
“if the sector isn’t protected and a sector specific deal provided the impact will be devastating. These are one of the last highly skilled and well paid jobs in the south Wales valleys. There’ll be nothing left for my son and future generations if these jobs go”.
The Chancellor’s decisions surrounding benefit payments are damaging all round. The much-needed uplift to universal credit will only be a temporary measure. For thousands of my constituents, that uplift is the difference between feeding their families and going hungry. One of my constituents, Emma, told me:
“I didn’t ever expect to get sick but you know, I have. And I’m suffering. I’m living on the breadline, and my mental health is suffering. I feel like I’m being punished.”
If the Chancellor understood the hardship that so many endure, he would have made the uplift permanent and extended it to those on legacy benefits. How does he see my constituents managing in six months’ time when furlough ends and he proposes to end the £20 uplift to universal credit? How will that help to create demand in the economies of Mountain Ash or Aberdare in my constituency?
It does not have to be this way. We are the fifth richest nation in the world. There is a different way: introduce a wealth tax and a windfall tax, adopt a jobs guarantee scheme, properly invest in a green industrial revolution, increase statutory sick pay in line with the living wage and introduce a universal basic income. The new normal must incorporate a tax system that ensures that the wealthy pay their fair share and a welfare system that ensures that no one is left behind, but to level up in communities such as mine, Westminster must respect the democratic structures in Wales and ensure we get our fair share of funding. Diolch yn fawr.
Angela Richardson (Guildford) (Con) [V]
I welcome this pragmatic Budget, which recognises that flexibility, not ideology, is what is needed in responding to a global pandemic. It addresses the current needs that we have as a country by extending the furlough scheme to September and giving further grants to the self-employed, bringing an additional 600,000 taxpayers into one of the most generous schemes in the world. The measures not just in this Budget but over the past year are rightly lauded. They ensure that businesses can bring back as many employees as possible, and provide security for millions.
Guildford, Cranleigh and our villages are home to wonderful high streets. We are proud of them, and they draw visitors from near and far. I know that local businesses will join me in welcoming the restart grants package of £5 billion, which equates to up to £6,000 or £18,000, depending on when the business reopens. That measure, along with continuing the business rates holiday and extending the cut in VAT so that it remains at 5% for a further six months, is a genuine springboard.
It has been fantastic to see new businesses open in Guildford and Cranleigh, and existing businesses take up locations with a larger square footage, over the past year. That fantastic sign of confidence can be attributed to the Government’s commitment to business.
I want to take this opportunity to recognise the value of our local arts and culture to the economy in Guildford, which is often underestimated. The University of Surrey, in conjunction with the Yvonne Arnaud theatre and the Watts gallery in my constituency, and The Lightbox gallery and museum in nearby Woking, conducted a study last year on the economic and social impacts of the arts. It found that for every £10 spent at a venue, there was an additional spend of up to £13.28, the majority of which stays in the local economy. Over the course of a normal year, the Yvonne Arnaud theatre is calculated to bring an additional £1.5 million into the area simply with theatre attendances. Some 70% of visitors to the area would not have come had the venues been located elsewhere. It therefore strikes me as incredibly short-sighted of Guildford Borough Council to propose cutting funding to the Yvonne Arnaud, and, thankfully, sensible of the Chancellor of the Exchequer to extend the culture recovery fund by an additional £300 million, recognising not only the fiscal value of these institutions, but their value to the social fabric of our communities.
There is a clear plan of investment by this Government in business, high streets and our communities, supporting jobs and providing training and apprenticeships to help enable those who have sadly lost their jobs to get back into work. I will be voting for this Budget tonight.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
It is now one year since the first tragic deaths in the UK from covid-19 were reported, and the true scale of this crisis became clear. Thousands have lost their lives to this terrible virus, and, sadly, we now have the worst death toll in Europe. Our economy has been convulsed by a collapse in GDP, a spike in unemployment, and a crisis for businesses, especially in arts, aviation and hospitality, which have been made worse by Government inaction and blunders and billions being wasted on Tory crony covid contracts.
Shamefully, we are now facing the worst economic crisis of any major economy. Therefore we might have hoped for a bold Budget that recognised the scale of the challenge, equipping our economy for the future, but all the Chancellor has shown is that he is completely out of touch with what this country needs. What did this Budget promise? The centrepiece for long-term investment is a national infrastructure bank. It is almost 10 years since David Cameron launched the green investment bank, with all the same promises and rhetoric, and it is four years since the Conservatives privatised it. What we need is an investment bank capitalised at £20 billion over five years at least, with regional investment banks in every region to invest in green businesses throughout our country. We need an institutional champion for green businesses and jobs. Instead, we got a get-rich-quick scheme for investors. This Budget could have provided the platform for a green recovery, just as Slough is attempting to do in Berkshire.
We could have had a major national rail electrification programme to help decarbonise our transport, but, no. I welcome the £20 million for floating offshore wind technology, but that is paltry compared with the scale of the challenge. In reality, we need a £30 billion green economic recovery package to create 400,000 green secure jobs. That is how we would get a proper investment-led recovery to help us meet our carbon targets and help tackle the climate crisis.
This could have been a Budget for the next generation, creating jobs and housing, investing in education and safeguarding the climate for younger people, but they have all been overlooked yet again. A Budget is a statement of values and priorities, and the Chancellor’s priorities are transparent: no extra funding to fix fire-hazard cladding, but a tax break for second home owners; a mere 1% rise for the NHS workers who have given their all for us during the past year; no mention at all of the Government’s trade deal with the EU and the 4% reduction in GDP over 15 years caused by the thin, terrible, burned oven-ready Brexit deal. This is a Budget that stores up trouble for places such as Slough and hits the poorest hardest.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
I welcome this Budget, as it will protect the jobs and livelihoods of the people living in Runnymede and Weybridge, but it does so much more. In particular, I want to talk today about some of the core provisions that will benefit my constituents over the short, medium and long term. This is a Budget that meets our short-term and emergency needs while we still face the pandemic and restrictions remain in place, providing vital support for businesses and families to enable them to weather the covid storm.
Over the course of the past year, I have had many discussions with residents and I know what a lifeline the self-employment income support scheme and furlough have been, along with direct business support. My local businesses often tell me that they need certainty, and this Budget, and the extension of provisions alongside the road map for the lifting of restrictions, will give them the certainty they need to plan for the months ahead.
For the medium term, I welcome the support for investment and innovation, the incredible super deduction, Help to Grow and further support for enterprise management incentives. Those will all help companies in my constituency, particularly the many small and medium-sized enterprises that, I am sure all Members will agree, set up in Runnymede and Weybridge because of the excellent logistics benefits it offers. Those businesses are champing at the bit to get moving as restrictions lift and to grow and flourish, providing jobs and investment locally.
Finally, but most importantly, this is a Budget that tackles the long-term challenges we face. First, on sustainability and climate change, I particularly want to draw attention to energy innovation and support for the UK biomass feedstocks programme. That will be essential for the development of domestic biofuel supplies to support the sustainability of our aviation sector and jet zero, benefiting my constituents by securing the future of the aviation sector and those employed in it and reducing aircraft pollution and the harms that it causes.
Secondly, on national finances, we are in a hugely challenging economic situation as a result of the pandemic. While it is right to spend now, invest in infrastructure and projects that will drive growth and tackle the perennial regional inequalities that have plagued our country, we need to tackle the deficit. The tax policies set out in the Budget begin to address that without undermining the plan for economic growth. The Budget protects jobs and livelihoods now and lays the foundation for both the economic recovery ahead and a return to strong public finances. It is not us here who will be paying off our debt but our children, and we owe it to them to balance the books today, so that they inherit a flourishing economy unburdened by the debts of their parents.
Mike Hill (Hartlepool) (Lab) [V]
When it comes to the Government’s levelling-up agenda, this Budget leaves a great deal to be desired. I welcome the move to send Treasury North to the Tees Valley and the exploration of Teesside and locations in my constituency for the siting of a freeport, but I believe the Government could offer more for our communities.
While the exploration of potential new large-scale infrastructure projects is very welcome, there is already one large employer in my constituency in the form of Hartlepool nuclear power station, which is integral to our nation’s energy supply and needs guarantees about its future. The Budget was the perfect opportunity to cement the future of nuclear energy in Hartlepool, which contributes to the Government’s green energy commitments and our zero carbon future. The omission of the nuclear sector from the Budget is deeply concerning to the workers in that power station, as the clock ticks down to the decommissioning of the site without a renewal firmly on the table. Sites such as Hartlepool already have the infrastructure, the professional and skilled workforce and the desire to keep those generators spinning. We just need the Treasury to show that it is willing to support us, and I hope the Minister will respond to that. The Government must be serious about the future of the sector, as thousands of jobs nationwide and our national energy security depend on it.
On the same note, towns such as Hartlepool do not feel they got the recognition they deserve from this Budget. After a decade of cuts to funding for some of the poorest and smallest local authorities, including Hartlepool, we need funding available to kickstart our local economies and get money back into the community, where it can stimulate local business and revitalise our communities. As the towns fund makes its way to mostly Conservative seats, my constituents are right to wonder in whose interests this Budget is being made.
The Government will be aware that nothing comes from nothing, and after a decade of cuts and the biggest peacetime crisis in our history, they will also be aware that we cannot expect to bounce back without sufficient support. This Budget certainly has potential benefits to Hartlepool—no doubt—but until the gaps in the safety net are closed, our public services are properly funded and existing key industries such as Liberty Steel are supported with the means to survive long term, our recovery and the Government’s flagship levelling-up agenda will only ever fall short of what we need in a community that needs it more than most.
Dr Kieran Mullan (Crewe and Nantwich) (Con) [V]
Over the past 12 months, this country has faced its biggest challenge for a generation. Our constituents, our economy and our health service have all been tested. We have been asked to make enormous sacrifices of all different kinds: friends and family cut off from each other; some people not seeing loved ones at the end of their lives; hard-grown businesses ground to a halt; and young people missing out on their education at a key time in their lives and their growth. We have all, as taxpayers, paid an enormous financial price, and this comes on the back of a decade of everybody making sacrifices to help get the deficit under control. We can all be very glad that we achieved that, as it allowed us to spend quickly and to spend big at this crucial time.
We are now faced again with a difficult journey to get our economy back on track. I want to talk about three of the Government’s approaches that are vital, not just for driving our recovery now, but for ensuring that we continue to be a country that gives its citizens opportunities: first, the lifetime skills guarantee; secondly, the commitment to apprenticeships; and thirdly, the targeted approach to corporation tax and incentives for capital investment.
We know that there are employers out there who are growing their workforces and expanding their operations. We also know that, for years now, hundreds of thousands of jobs have gone unfilled. Whenever a skilled job goes unfilled or whenever an employer needs to look abroad to fill it, that is a missed opportunity for one of our constituents—an opportunity to get a better paid job, to earn enough to support their own families and to get on the housing ladder.
During National Apprenticeship Week, I had the opportunity to talk to apprentices working at Bentley and at Alstom in Crewe. Those young people were incredibly ambitious and determined, and were very clear about the course they wanted to chart in their lives. They knew that their future was going to be more secure in skilled work, using their hands and minds to apply themselves.
What we are doing with apprenticeships can be built on with the lifetime skills guarantee. Now more than ever, our workforce need to be able to gain new skills and be flexible. The challenge is not just about whether a course is available and free; it is about changing how we think and feel about our careers throughout our adult lives. Too many people will feel that they have failed or done something wrong if they need to change skills and careers. We have to change that mindset. I encourage the Government to ensure that we shout loudly about the lifetime skills offer, and keep shouting about it until everybody has heard the message loud and clear.
Our approach to tax will encourage businesses to keep creating jobs for our constituents to take up. Recovery is not going to be pain-free. I am a member of the Conservative party because we know that the Government cannot wipe out the pain and difficulty with a click of our fingers, or fix it all on the back of wealthy people. We are starting to get to grips with what this recovery needs to look like. I welcome the Government’s aims and ambitions as laid out in this Budget, and will be supporting it this evening.
Kerry McCarthy (Bristol East) (Lab) [V]
The shadow Business Secretary, my right hon. Friend the Member for Doncaster North (Edward Miliband), spoke earlier about the post-war years, Ernie Bevin and the need to build back better, then and now. In Bristol—where Bevin started work on the docks at the age of 11 and fought for workers’ rights as a trade unionist, before becoming one of the giants of the post-war Labour Government—we are hugely disappointed at the lack of any funding in the Budget for our biggest project, Temple quarter. The regeneration of the area around Brunel’s historic Temple Meads station would mean 22,000 new jobs, 10,000 new homes and an economic boost of £1.6 billion per annum for the city. That is exactly the sort of “shovel-ready” project that the Government were asking for. We have to ask why places such as Bristol are being overlooked for levelling-up funds in favour of far more affluent areas.
The Chancellor’s offer to extend support to the 600,000 newly self-employed is welcome, but that still leaves more than 2 million freelancers and limited company directors excluded—and that is a conscious decision by the Chancellor. People on legacy benefits are being treated as second-class citizens, and the freezing of income tax bands will hit those on modest incomes the hardest. Events supply chain companies in my constituency are desperate for targeted support. When I raised this issue recently with the Prime Minister, he assured me that we would be hearing more on this from the Chancellor in the Budget; we listened, but we heard very little.
We also heard nothing new on support for our failing social care system and nothing on child poverty. What was meant to be a 2.1% pay rise for nurses has been whittled down to 1%—a real-terms pay cut—in the interests of austerity; and we know how well austerity worked last time.
Finally, we were promised a green Budget, yet we got nothing of the sort. We needed to see measures that would kick-start a transformative green recovery, but what we got was a pitiful lack of ambition from the Chancellor. Although I welcome the £4.1 million allocated to reducing car usage in the west of England, this kind of piecemeal funding is no substitute for a national strategy for decarbonising transport and encouraging take-up of active travel. Ahead of hosting COP26, we should be leading the way on tackling climate change and biodiversity loss, yet the Chancellor is more concerned with boosting his own leadership prospects and “brand Rishi” than with showing the international leadership that we need from our senior politicians on this issue.
The UK is being eclipsed in green recovery spending at an international level. For instance, France and Germany have both delivered substantial green spending packages to decarbonise their economies. Labour has already set out its plan for a £30 billion green stimulus to support 400,000 new green jobs. I urge the Chancellor to read those plans, which might just help him to think bigger when it comes to protecting our planet.
Suzanne Webb (Stourbridge) (Con)
Covid-19 has had a catastrophic impact on our economy, but I truly believe that, despite that, it will provide the architecture for change and fertile ground for innovation. We have already seen the homeworking revolution, the pace of digitalisation ramping up, the incredible speed of vaccination—from creation to roll-out—and the seeds of transformation in our NHS, with new ways of working and the largest diagnostic network in British history. While we have had big collapses in sectors such as retail and hospitality, we have evolution and growth in others, including construction and social care. This is the fastest changing jobs market for a generation.
To ensure that this pandemic does not define a generation, we should look forward and look for new economic opportunities with confidence and optimism. This Budget helps us do just that. It sends a strong message of recovery, unveiling major tax incentives for businesses to invest. This is the Budget with the biggest business tax cut in modern British history, with the introduction of a super reduction in tax bills, which is particularly welcome in the manufacturing heartlands of the urban west midlands. This is a Budget that is investing in public and private projects to finance the green industrial revolution. I also loudly applaud the eight freeports, which will encourage free trade and bring investment to all regions of the country through lower taxes and cheaper customs.
We should not treat this Budget in isolation from other important investments. The Government had the foresight to invest in innovation, with the £800 million investment in the advanced research and innovation agency. The agency will be tasked with empowering some of the world’s most exceptional scientists and researchers to turn incredible ideas into new technologies, discoveries, products and services, and it is welcome to put its roots in my constituency. I also welcome the £500 million being pumped into the electric car revolution, which will benefit the west midlands enormously.
This Budget is the largest economic peacetime support package on record, and it fits with my agenda of jobs and investment in my constituency. As a result of the Government’s interventions, unemployment is now estimated to peak at far lower levels than previously expected. This Budget is providing a lifeline for my businesses in Stourbridge.
I welcome this Budget, which stands by the workers and businesses in my constituency and which stands by to protect people’s livelihoods. It is a Budget that encourages investment and innovation and that recognises the need for transformation. We have seen human tragedy in 2020. We must not let that be the prelude to an economic tragedy. This is a bold Budget, providing the architecture for a better future—a Budget that is taking unprecedented action to drive our economic recovery.
Claire Hanna (Belfast South) (SDLP)
The Budget represents interim measures, which may be understandable, given the economic climate, but it also represents missed opportunities, which are much less excusable—missed opportunities to have a genuine and meaningful green recovery, to invest in a resilient health service and the NHS workforce, or to support those who have lost jobs and income over the last year. It appears that the Government have not learned much from the last decade. Rather than injecting stimulus through people to tackle inequality, such as through a meaningful living wage or investing in child care, infrastructure or skills, they are choosing to leave it to the market to encourage growth and recovery.
Not only have businesses been dealing with pandemic, but many are seeking to survive and recover from the shock of Brexit, on which the Chancellor was suspiciously quiet. Northern Ireland finds itself in a unique position due to the Northern Ireland protocol, because we have access to both the UK and EU markets. This is not the best of both worlds—that was the EU or, at a push, the backstop. That is because both worlds—the EU and the UK—have been diminished by Brexit. Northern Ireland and its people opposed Brexit, but it has been imposed on us, so responsible political parties such as the Social Democratic and Labour party are working to make the best of the hand we have been dealt. I wish that those Northern Ireland MPs who campaigned relentlessly for Brexit would find it in themselves to be constructive now.
Making lemonade with the lemons we have been handed requires the Government to work with Northern Ireland Executive partners to develop an investment plan for Northern Ireland, based on promoting the business advantages of investing at this crossroads, including big opportunities in agrifoods, advanced manufacturing and green and low-carbon technology. There is now a chance for Northern Ireland to have its first ever unique selling point and to move towards climate-friendly production and a gear change in our historically poor productivity.
Overall, despite the Government’s chat on green recovery, this Budget does not do much to convince us of genuine ambition in this regard. The SDLP has spoken in the past 12 months about the opportunity for a generational rethink and a turning point, including on the climate. The year that we have had to reflect on what is really important in life, work and society has been a perfect opportunity to transition from obsessing exclusively about economic growth to a Budget that mainstreams the enhancement of the health and wellbeing of individuals, communities and the environment.
There has been insufficient focus on the environment and on those who are already living economically precarious and marginal lives. Yes, the Chancellor was dragged kicking and screaming to extend furlough and universal credit, but the poorest households will still see their income drop by 7% while unemployment benefits are at their lowest real level since the early 1990s. This is not levelling up; rather, it favours those who have been able to build up savings. This Budget does not allow the whole of society to recover. Finally, the lack of ambition and investment for the NHS workforce is bitterly disappointing, given what they have just gone through on our behalf, and the U-turn away from the derisory 1% pay increase needs to come fast.
Peter Aldous (Waveney) (Con) [V]
From a Waveney and East Anglian perspective, the two main features of the Budget were the towns fund deal announcement for Lowestoft and the successful freeport bid for Felixstowe and Harwich. These two announcements are welcome and can play a key role in the covid recovery. Locally, the cornerstone of the Waveney recovery will be the £220 million public investment in the centre of Lowestoft in the next five years—not just for the towns fund deal but for the Gull Wing bridge and the Lowestoft flood defence scheme. We must ensure that these projects are built on time and on budget and that they act as catalysts for private sector investment and provide local people with the opportunity to work on them.
East Anglia has enormous potential to play a lead role in the emerging green economy. We can be a global leader and exemplar, and we must ensure that local people benefit from this. There are great opportunities in a wide variety of sectors: low carbon energy production, including offshore wind, nuclear and hydrogen; the storage of carbon in the gas fields of the southern North sea; sustainable, responsible custodianship of our marine and fishing resources, building on the work of the Centre for Environment, Fisheries and Aquaculture Science, which has been in Lowestoft for over a century; low-carbon shipping and maritime activities, not just in Felixstowe and Harwich but in Ipswich, Lowestoft, Great Yarmouth and King’s Lynn; and, finally, the emergence of net zero agriculture.
The policy framework that will enable us to make the most of these opportunities is emerging. The announcements in the Budget follow on from the publication in December of the energy White Paper and last month of the further education White Paper. Moving forward, we now need to put into practice the proposals in the further education White Paper so as to provide young and local people with the skills and expertise to take advantage of these exciting opportunities. We must move away from the low-wage economy that has been prevalent in East Anglia for too long.
The North sea transition deal that will be published in the next few weeks must properly recognise the full potential in the southern North sea. A lot of work is required, as well as investment, to rebuild a sustainable fishing industry on the East Anglian coast. The fishing aspect of the free trade agreement with the EU is not helpful and has set us back a few years, but with the right investment and responsible management, progress can be made. Finally, the arrangements and support provided for the Lowestoft and Great Yarmouth enterprise zone should be reviewed and properly aligned with these emerging and exciting opportunities.
Margaret Greenwood (Wirral West) (Lab) [V]
The Chancellor’s Budget was a disappointment, because it failed to grasp the enormity of the challenges facing our country: the challenges of poverty, inequality, low pay and unemployment; the erosion of our vital public services over the past 11 years; and the urgency of addressing the climate crisis. It also failed to take the opportunity to reward the public sector workers who have kept the country going throughout the pandemic. Instead, the Chancellor has shamefully decided to cut the pay of NHS staff and other public sector workers when he should be giving them a pay rise.
There were already 14 million people living in poverty in the UK before the pandemic and over 4 million of them were children. Despite all the evidence of the extreme hardship of those on low pay and those out of work, last week the Chancellor merely deferred his £20 a week cut to universal credit for another six months. We on these Benches have been calling on the Government to extend statutory sick pay to all workers and to increase it; instead, the Chancellor is cutting statutory sick pay in real terms, despite the fact that it was already at one of the lowest levels in Europe. He waited too long to extend furlough, causing uncertainty for businesses and workers, and newly announced support for the self-employed has been described by ExcludedUK as “too little too late” for the 3 million workers so far excluded from financial help during the pandemic.
There has been a large increase in the numbers of people who are unemployed during the pandemic, and young people have been particularly badly hit, with youth unemployment increasing by 13%. The Government response has been inadequate. Last July the Chancellor announced his kickstart scheme to get young people into work, saying that it was aimed at preventing an entire generation from being “left behind”, yet only about 4,000 young people have started new jobs through it.
The Chancellor has also failed to show ambition to tackle the climate emergency. Labour has repeatedly called for a £30 billion green economic recovery to secure 400,000 secure jobs in clean industries, but the Chancellor has failed to deliver. He announced just £20 million for floating offshore wind and has actually cut the green homes grant by more than £1 billion. The new national infrastructure bank offers a fraction of the funding recommended by the National Infrastructure Commission.
To conclude, the Government should cancel their plans to cut the pay of public sector workers and cancel once and for all the cut to UC; reinvest in our public services, which have been damaged by years of austerity; and heed Labour’s call for a £30 billion green economic recovery to create 400,000 secure jobs in clean industries to tackle the climate emergency.
Ben Everitt (Milton Keynes North) (Con)
Who would want to be the Chancellor putting forward a Budget during a global pandemic? But this is where we are and this is what has to be done.
This Budget walks a tightrope: it stimulates businesses; it provides certainty to markets and investors; it provides the foundations for rebooting our economy while supporting people, jobs, livelihoods and businesses as we look to climb down the mountain of covid; and it puts in place the opportunity to build back better. It is the Budget where we levelled with the people, but we level up next. This will turbocharge our levelling up.
The first job, however, is to get through the pandemic. A total of £407 billion has been put aside in support for this year and next; that is equivalent to 19% of GDP. Furlough has been extended again through until September, and it is to be hoped that that is it and that is all we need to save those jobs—11.2 million jobs secured. A further two self-employment grants have been brought in, bringing total support of £33 billion, and there are 100% business rate holidays in retail, hospitality and leisure, worth £10 billion. This is a Budget that looks after jobs, but that also looks to the future.
I am particularly pleased with the £22.7 million of investment in Milton Keynes through the towns fund. That will kickstart the development of a new tech campus at Milton Keynes College. It is a vote of confidence by this Government in the ambition and the skills of the next generation of pioneers who will take the ideas born in Milton Keynes and make them global.
Councillors in Milton Keynes have put forward a global MK idea, and I am right behind that; global MK should be at the heart of global Britain with all these trade deals we are doing around the world. MK is home to Bletchley—the codebreakers—and is home to robots that deliver our groceries, and high-tech businesses with data and space technology. We can be the centre of the recovery, and the inward investment we will get as a result of measures taken in this Budget will turbocharge that.
Only the United States ranks higher than the UK for foreign direct investment. The UK is open for business and this Budget will make sure that we are the most competitive, nimble and attractive destination for business in the world. This is a Budget that works for Britain and for Milton Keynes.
Alan Brown (Kilmarnock and Loudoun) (SNP) [V]
The idea that the Tories can level up broken Britain just defies logic. They have been the party of government for two thirds of the past century, they have been in power since 2010, and it was them who brought in austerity aligned with tax cuts for the richest. The PPE contracts awarded to friends and cronies say it all: the Tories create inequality.
The Tories’ concept of levelling up is that Westminster knows best, as demonstrated by the UK shared prosperity fund, which bypasses Scottish devolution. We know that the stronger towns fund was manipulated for political gain, so why will this agenda be any different? Even the handling of the furlough scheme and support measures showed the opposite of levelling up, with the refusal to listen to the devolved Administrations and regional Mayors about the need to extend the furlough and business support schemes; they were roundly ignored until London had covid spikes again. The Budget measures demonstrate the Tories’ view of levelling up too— £1.6 billion allocated for maintaining the stamp duty freeze, and the introduction of a mortgage guarantee scheme to the value of £600,000. That shows they are out of touch with reality.
When we have 3,000 people per year dying from fuel poverty, levelling up should involve cutting VAT on energy- efficiency measures and direct Government investment in them. As we transition to net zero, we must not create further fuel poverty. The contracts for difference process has been successful in bringing down the cost of renewables, but the overall project costs go on our electricity bills. It is unsustainable for the costs of decarbonising our heating systems to go directly on to energy bills. When will the Government address that?
The 10-point plan itself is useless without policies to back it up. For example, a target of 600,000 heat pump installations per year is useless without a credible, funded programme. That needs to go hand in hand with energy installation measures, starting with off-grid homes—a proper levelling-up opportunity that has been missed.
We need a pricing mechanism to be put in place to allow pumped-storage hydro in Scotland, in order to progress in rural areas that need economic stimulus. We must move quickly on carbon capture and storage schemes or we can forget the 2025 target. We need real investment in marine and tidal, reform of the CfD process to create further green jobs and a hydrogen strategy that matches the lead of the Scottish Government—and we really need to repurpose investment from the nuclear folly.
I welcome the Government’s plans to raise corporation tax, but they show that we have been fed lies that previous cuts in corporation tax increased revenue. About £50 billion has been lost in recent years that the Government could now be using for reinvestment. We needed additional investment, but worse, the Scottish Government’s capital budget was cut. That shows more than ever that Scotland needs the full powers of independence to implement its own green recovery and level up.
Christian Wakeford (Bury South) (Con)
This year’s Budget is like no other, not only coming at the height of a global economic crash brought on by covid but setting the terms of our recovery as we embark on the road map to freedom. This is all made possible by the amazing vaccine roll-out programme, which so far has delivered over 22 million vaccines across the UK.
The Budget delivered many of the changes that I have been lobbying for on behalf of the residents of Radcliffe, Whitefield and Prestwich. The cancellation of the planned increases in both alcohol and fuel duty means that an average driver in Bury will save £1,600 against Labour’s fuel duty escalator. For the brewing and distilling sectors, the freeze on alcohol duty is also very welcome news, as it is for those who, like me, are looking forward to visiting pubs such as the Sparking Clog when they reopen shortly.
For homebuyers in Bury, there was the heartening announcement that the stamp duty holiday will be extended by a further three months to ensure that those who are in the process of buying will get the benefit of the reduction. Young people trying to get on the property ladder will be freed from Generation Rent, with Government- backed 95% mortgages to ensure that everyone can have the security of owning their own home.
For businesses in Whitefield, Prestwich and Radcliffe, help continues; the business rates holiday has been extended to the end of June, with a reduced payment for the remainder of the financial year, while the VAT reduction holiday for hospitality and tourism businesses has also been extended, until October. We are helping businesses build back as they reopen following lockdown by offering business restart grants to allow them to hit the ground running.
It would be remiss of me to talk about investing in businesses without talking about the super deduction. For many people, super deduction sounds like something out of a sci-fi movie, but it is really not just a huge tax cut, but a tax stimulus to invest in our own economy, our own research and development, our own learning and our own people. It is truly to be recommended.
The Chancellor announced that the levelling up fund is now open for applications for all areas of the UK. Over the next few weeks and months that will be my focus, working with Bury Council to put in the best bid possible to regenerate our town centres and high streets, such as Radcliffe and Prestwich. Securing that funding will be central to my ambition to improve our towns, so that we can have an even better place to live, work and go to school, even more so on the back of delivering the new high school for Radcliffe, which we secured just a few weeks’ ago.
I conclude by saying that this Budget will ensure that we can recover from coronavirus by delivering for jobs, apprentices, business and homebuyers, and will help boost world-leading investment programmes. In driving forward these spending plans, we can really build back better for a stronger Bury.
Ms Lyn Brown (West Ham) (Lab) [V]
I have only got three minutes, so I have ditched most of my speech. I am going to talk about how this Budget frankly ain’t going to work for the children or people of West Ham.
Newham Council surveyed schools a month ago and found that 5,000 Newham children still do not have a laptop and around 2,000 are still without broadband. The Government have got through a whole year without delivering the basic resources needed by the children in Newham in this pandemic. Lack of access is a consequence of poverty and inequality, and it has increased terribly over the past 10 years. In Newham, more than half our children are living in poverty.
Most children lost 5% of their normal lifetime in school during the pandemic and they could not learn properly without digital resources. We need to recognise that inequality is not going away simply because schools have reopened. These children still need IT and access to broadband just to ensure a more level playing field for the rest of their education. In Newham, our schools do an amazing job seeking to ensure that all our children achieve their potential, but these children and teachers must have the resources they need to repair the damage of inequality and this pandemic. There must surely be a true guarantee, finally, that every young person who needs digital access to their education will actually get it.
Let me quickly talk about the damage that is being done to families. Unemployment in Newham has increased 240% since the start of the pandemic. There are an estimated 19,500 people furloughed in West Ham alone. I am afraid that huge numbers of those excluded from support over the past year are still going to be left without the income they deserve. The Government seem determined to cut vital social security support in October in one of the most expensive cities in the world just when many more constituents may be forced into unemployment and as furlough and other support schemes end. It is unreasonable, it is unfair.
This pandemic has not gone away, yet the Budget has not fixed statutory sick pay. We cannot ensure that no one will lose out from doing the right thing and self-isolating when sick. Instead of fixing it, sick pay is going to be cut in real terms from next month. We need to ensure our economic recovery can take place as safely, as fairly and as quickly as possible, but I just do not think this Budget is going to do that for the people Newham—and I don’t think it was intended to.
Nickie Aiken (Cities of London and Westminster) (Con) [V]
There is so much to welcome in this Budget that will benefit the businesses and individuals across the Cities of London and Westminster: the extension of the furlough until the end of September; a host of restart grants worth an extra £5 billion and the new recovery loans to replace our existing loan scheme; £700 million for arts, culture and sports to reopen safely; a further 600,000 self-employed people eligible for covid-related financial support; the extension of the 5% VAT cut for the hospitality industry for a further six months; and the extension of the 100% business rates holiday for a further three months until June. I would like to take this opportunity also to congratulate the Corporation of London on announcing its own £50 million covid business recovery fund, which will be made available to City-based small and independent businesses in certain sectors to support a return to work.
Central London is likely to see a very slow recovery that takes several years to reach pre-pandemic levels. Its economy depends on workers and international visitors, both of whom will be slow to be return to the capital. I hope the Government will consider launching a marketing campaign to encourage workers to return to their offices in the spring. From the conversations I have had with local employers, it seems that most do not expect to see their staff back until the autumn. This could be difficult for the hospitality and retail sectors as they begin to pay rates and rent from July. We also need a robust transport system that commuters are confident to use again, and I hope the Mayor of London will work constructively with the Government to ensure that this is the case.
I wholeheartedly welcome the Chancellor’s announcement to amend UK listing rules, making the UK a more attractive location for initial public offerings and introducing improvements to tech visas to attract global talent and boost the fintech workforce. Both of those were recommendations from the Kalifa review on the FinTech sector, which is worth £110 billion to the UK economy and is set to grow to £380 billion by 2030. We currently have 10% global market share, and with Government support we can build our technology talent. Covid has been a game changer for FinTech. Six million people— 10% of the population—downloaded a banking app for the first time last April, the first month of lockdown. We have seen digital transactions and interactions for both business and individuals grow hugely. I hope we will see more of Kalifa’s recommendations introduced, including a centre for finance, innovation and technology to strengthen our national FinTech co-ordination.
I thank the Chancellor for a long list of progressive and sensible policies announced in this investment recovery Budget, making the UK the best place in the world for high-growth, innovative companies bringing strong job growth across the country.
Grahame Morris (Easington) (Lab) [V]
I am grateful to be called in this debate.
I fear that the investment-led recovery and the levelling-up agenda referred to by the hon. Member for Cities of London and Westminster (Nickie Aiken) is set to fall at the first hurdle. The Minister will no doubt be aware of the plans by the notorious venture capitalists Melrose Industries to close the GKN Automotive factory in Birmingham. Indeed, hon. Members may remember the controversy that surrounded the hostile takeover of GKN by Melrose in 2018. Serious concerns were raised at the time by Unite the union and hon. and right hon. Members in this House about the implications of that takeover for national security and for the future of the GKN brand. In an attempt to allay these fears, Melrose promised to rebuild GKN into a British manufacturing powerhouse. It was a horrible promise. Five hundred highly skilled workers at the Chester Road site are now facing the sack.
The news of the planned closure has come as a shock to the workforce and to their union, which until recently had been in discussions with management about boosting investment into the site. Melrose maintains that the plant is unviable owing to the transition to vehicle electrification. Unite the union disputes this and is developing a rescue plan that will secure a bright future for the site. I want to place on record my concern that Melrose’s chief executive officer, Simon Peckham, misled MPs on the BEIS Committee last month about the kind of work that takes place on-site. With the Government bringing forward their ban on the sale of new petrol and diesel cars from 2040 to 2030, the shift to battery electric vehicle production is more urgent than ever, but it is vital that that transition to electric vehicles is investment-led and sustainable.
GKN can trace its origins back to the birth of the industrial revolution. It has more than 250 years of history. The Government owe it to British manufacturing and to this prestigious company, one of the largest UK industrial companies, to defend its future as we make a shift from the internal combustion engine to electric vehicles. I urge the Government to join Unite the union in urging Melrose to examine alternatives to the closure of the GKN automotive plant, and to prevent Melrose from asset-stripping and then disposing of this important British company.
Mr Clive Betts (Sheffield South East) (Lab) [V]
There are a lot of things missing from this Budget that I could comment on, but I will try to highlight some of the really important ones.
First, local government went into the covid crisis having had the biggest cuts of any part of the public sector since 2010. Some of the costs of covid and some of the loss of income have been covered by the Government, but local government went in with a £5 billion shortfall, and £2.6 billion of those extra costs and lost income have not been covered, so the crisis in funding for local government is all the greater. Croydon has put in a section 114 notice post covid, four other councils have had to have capitalisation plans accepted and we know that many others are on a financial lifeline. In the Budget, there was no mention of extra funding for local government, no mention of financial reform and no mention of reform to the business rates system, which has been promised over and over again.
The Chancellor could not even get the words “social care” out of his mouth when he spoke to the House about the Budget. There was no mention of social care at all, but we know that reform to social care funding is key to the whole reform of local authority funding. Indeed, two Select Committees—the Health and Social Care Committee and the Housing, Communities and Local Government Committee—did a joint report three years ago and gave the Chancellor an oven-ready scheme, to coin a phrase, which would have reformed social care funding with a social care premium. We are still waiting for a response to that report three years later.
There was no mention of the public health grant, despite the incredible work that public health inspectors and directors have done during the covid crisis. If only they had had a fraction of the money that has gone to the private contractors doing track and trace, I think we would all be in a much better position today. And, of course, what is the reward for all those people who have worked so hard in local government services—the social care workers, the public health workers, the environmental health workers and people like the refuse collectors who have kept our important regular services going during this crisis? What is their reward? A pay freeze. That is what their reward is. It is completely unacceptable that these hard-working people should be asked to bear a disproportionate share of trying to get the budget deficit back under control.
If we are going to build back better, then of course we need more social housing. The Select Committee did a report saying that to get to 300,000 homes in this country, 90,000 need to be in the social housing sector, built by councils and housing associations. There was not a penny in the Budget to enable that programme to be got under way, and we estimated that it would cost about £10 billion a year.
What we are seeing, unfortunately, is that for all these important public services and important public servants, the pre-covid austerity has now been translated into—guess what?—post-covid austerity, which is something we should all oppose.
Charlotte Nichols (Warrington North) (Lab)
The past decade has seen successive Conservative Governments fail every economic task they have set themselves. The Cameron Government came in, in 2010, claiming that our economy was under threat. They promptly lost our triple A rating, and have never got it back. They said we should have fixed the roof while the sun shone, and then underfunded our public services to already dangerous levels when the pandemic struck. They said they would address the deficit and the debt, and we are now forecast to borrow £355 billion this year, with a debt of over 100% of GDP. This simply cannot be due to covid because they rejected the circumstances of the last Labour Government spending to rescue us from a global recession. They said they wanted to make a bonfire of red tape, but they have made trade ever-more difficult for our businesses not just across the channel, but even over the Irish sea, and this low-tax Conservative Chancellor has raised taxes back to 1960s levels.
What have all these failures meant for this Budget? There are several sector-specific elements that I want to mention and a longer-term systemic issue. We have not yet seen the consequences of the neglect of the pub industry, but when we are free to a socialise again, we will mourn the carcases of what were once thriving businesses that were given expensive obligations and unscientific restrictions and had their custom eliminated. The industry welcomes the grants that are available, but they will not be enough to save many pubs, especially because they will not be able to open to full trade indoors for some time. I welcome financial support for rugby league and urge Ministers to continue to talk to the sport’s authorities to ensure the success of the world cup, women’s world cup and physical disability rugby league world cup in Warrington this year.
Offering our NHS and social care staff a below-inflation pay deal is an insult, but it is revealing of a hostility this Government have to the frontline heroes who have sacrificed and led us through this ghastly year. The Conservatives’ talk of thanks is now the definition of empty claptrap. The continued neglect of a comprehensive social care system guarantees our inequalities and vulnerabilities for years to come, with the proposed cuts to Transport for the North guaranteeing that regional inequality will be entrenched.
At a systemic level, and as a member of the Select Committee on Business, Energy and Industrial Strategy Committee, I am alarmed that the Chancellor has scrapped the Industrial Strategy Council without even consulting us. We require an industrial strategy now more than ever to rebuild our economy and take advantage of the green industrial revolution that we need, including new nuclear. That is a truly retrograde step and disturbing short-sightedness when we desperately need an ambitious and broader plan.
Aaron Bell (Newcastle-under-Lyme) (Con)
It is a pleasure to follow the hon. Member for Warrington North (Charlotte Nichols). It seems like only yesterday that she and I went on a tour with the Doorkeepers when we first arrived here.
It is a brilliant Budget by the Chancellor, but I know that my constituents will want to know exactly what’s in it for them, so let’s get quickly to the point there: furlough has been extended—it has supported more than 10,000 people in Newcastle-under-Lyme; the self-employed will have more grants and the net has been cast wider; there is a universal credit extension for a further six months and equivalent support of £500 for working tax credits; there are business restart grants and recovery loans; and, importantly for a red wall town such as mine, there are freezes to alcohol duty and fuel duty. The latter is particularly important as we lack public transport in Newcastle-under-Lyme; that is a very welcome thing for a town.
I want to talk about towns because there has been a lot of talk about them recently and I feel that the Labour party has missed the boat on towns. I wish to quote at some length:
“For far too long the ambitions, needs and values of nine million people in towns across Britain have not been heard.
Our economic model treats cities as engines of growth, which at best drag surrounding towns along in their wake, causing life to become harder, less secure and less hopeful for too many people in towns in recent decades.
Our political system is blind to the values and experiences of people who live in our towns, wrongly treating cities as a proxy for the national opinion.
After the EU Referendum starkly exposed the growing gulf between towns and cities, it is clear that this is no longer sustainable.”
Those are brilliant words. They are the words of the shadow Foreign Secretary, the hon. Member for Wigan (Lisa Nandy), when she launched the Centre For Towns in December 2017. I have read all that it had to say. It is a centre-left think tank, but I agree with an awful lot of what it said. I am really proud that the previous Government took that agenda into the general election and started thinking about how we can deliver for left-behind towns—communities such as Newcastle-under-Lyme and others in north Staffordshire.
Locally we have seen so much investment. We have had £11 million already through the future high streets fund, and we have a £25 million towns fund bid in with the Ministry at the moment. I congratulate my hon. Friend and neighbour the Member for Stoke-on-Trent North (Jonathan Gullis) on the £16.9 million success of Kidsgrove’s town deal bid, which will have knock-on effects for those living in the north of my constituency. I am pleased that even after all his largesse the Chancellor found that Newcastle-under-Lyme could also be a priority area for the UK community renewal fund, which will enable us to bid for a further £3 million, supporting skills, local businesses, communities and place—that is so important—and supporting people into employment. So I make no apology for what the Chancellor has done for the towns agenda. It is an agenda that has been neglected for far too long. The Labour party recognised that, through the hon. Member for Wigan, a few years ago. It is a shame it did not act on it, and that is why what happened in the 2019 election happened.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab) [V]
We have had the worst economic hit of any major economy and it is easy to see why. On 2 March 2020, the first death from covid—the death of a woman living in a care home—was recorded in the UK. On the same day, the Prime Minister finally attended a Cobra meeting, having skipped the first five. On 3 March 2020, the Prime Minister boasted about visiting a hospital and shaking hands with every covid patient. By contrast, on that day, the New Zealand Prime Minister brought in tough restrictions on inbound flights and told people not to go around shaking hands. On 10 March, the Cheltenham festival went ahead, with 250,000 people attending. One month later, 1,122 people had died from covid. These are not the actions of a Government doing everything they can; they are the actions of a Government slow to act, who allowed a crisis to become a catastrophe, not just for health but for our economy. The price paid by people in Hull West and Hessle has been high, partly caused by the repeated lockdowns and an inability to keep the virus under control: businesses struggling, people excluded from support and unemployment rising.
We needed a Budget to match the difficulties we are facing and we have been badly let down. Freezing of the personal allowance against inflation is a stealth tax increase that will hit workers on the lowest incomes the hardest. The increase in statutory sick pay by 50p is pathetic and shows that the Government have learned nothing from last year. If we want people to self-isolate to bring down the number of cases, we must make it affordable for them to do so.
This Budget just forces poorer councils such as Hull to increase local tax. That is a trick that Conservative Governments have repeated time and again. Hull has the third lowest average council tax income in the country: 67% of housing stock is in band A and only 4% in band D. Compare that with neighbouring East Riding, which has 26% in band A and 15% in band D. That means that a 1% rise in council tax would provide double the amount to East Riding as to Hull. So people with lower incomes are facing higher taxes to fund the services they need. That is not levelling up; that is failing families.
You can see why I become angry when I read of those with links to the Conservatives having won £2 billion of Government contracts. But I should not be surprised because, even when the NHS saves the Prime Minister’s life, its staff are only rewarded with a 1% pay increase. We need a fairer system, not a Budget that hits struggling families the hardest. As it stands right now this is not a Budget that I can support.
Mr Toby Perkins (Chesterfield) (Lab) [V]
It would be impossible not to recognise that the Chancellor, as he sat down to consider what was in his Budget, would have had the start of some very grey hairs in that carefully coiffured mop of his. It would be understood that the reason he was nervous doing that Budget was that he knew not only that he had presided over the worst recession of any major country, but that it had coincided with the period when we had entered the worst death rate of any major nation. He also knew that he was the Chancellor of a party that, after a previous global incident—the global banking crisis of 2008—blamed the Government for not cutting at a time of economic crisis, which everyone recognised to be entirely economically illiterate. So he was going to have to ignore the advice that his own party had been providing.
The hon. Member for Cities of London and Westminster (Nickie Aiken), a few moments ago—maybe accidentally —hit upon the point. She said that our economy would take many years possibly to recover to its previous position. Then she highlighted and welcomed a series of measures that were just a few months long. What we needed from the Budget was a long-term plan—a sense that the country had a plan for how we were going to make our economy work in future.
The right hon. Members for Tunbridge Wells (Greg Clark) and for Maidenhead (Mrs May) spoke powerfully about the apparent end of the industrial strategy, because more than ever before, what we needed from the Budget was a long-term plan. The Secretary of State for Education keeps looking at Germany and saying that we will have a skills environment that could match Germany, but in Germany not only do they have an engrained industrial strategy that all of the Government work collectively on— they also have individual Government Departments that work collectively together. Here, we have a skills approach that pays no attention to the economy or the industrial approach that the Treasury is taking and a confused picture for employers as to what is expected from them. We have a kickstart scheme that only 2,000 people have got jobs from, when we were promised 100,000. We have had a refusal to adopt the apprentice wage subsidy that the Labour party called for, which would have made a massive difference. We have an apprenticeship levy that is sending £330 million back every year. It is no wonder that the Government are painting such a gloomy economic picture.
Chris Stephens (Glasgow South West) (SNP) [V]
The key challenge the Government have is to use public money to help rebuild the economy. I want to use my time to discuss public sector pay, and in particular pay for civil servants.
The civil service has risen to the challenge, whether that is employees in Her Majesty’s Revenue and Customs who have processed furlough payments to ensure that money goes into workers’ pockets, or those in the Department for Work and Pensions who have processed millions of universal credit claims to ensure that the vulnerable and those who need help the most get it. It is frankly baffling, therefore, that the Chancellor intends a pay freeze in this Budget. This means that the Cabinet Office advice is for a 0% pay remit that will contain for the first time ever no additional funding to support the lowest paid. The House should be aware that 19 MPs from six political parties, representing constituencies across the whole United Kingdom, wrote to the Chancellor twice asking him to reconsider. It beggars belief that he has not responded to either of those letters.
Yesterday was International Women’s Day—a chance to highlight the lack of pay coherence across the civil service, which creates huge inequality. The average pay for women in the civil service in 2020 was £28,650, whereas for men it was £30,880. That gap increases with part-time work, with women working part time at higher rates in all age bands. Delegated bargaining has been a disaster. It is wholly unacceptable that workers doing the same job at broadly the same grade suffer huge disparities in pay. The delegated system is costly, time-consuming and inefficient. It is simply unacceptable that there are 200 separate pay negotiations across UK Government Departments; that is a ludicrous situation.
There is a clear economic illiteracy to a public sector pay freeze. Public sector workers and civil servants spend their wages in the private sector economy. They do not hide their wages in a shoebox under the bed. They spend that money in the retail sector, the hospitality sector and the like. Civil servants should be given a proper reward, and we should end the pay disparities and reduce the number of pay negotiations. Public sector workers deserve better than this Budget from this Chancellor.
Apsana Begum (Poplar and Limehouse) (Lab) [V]
Before the pandemic, a decade of austerity left far too many trapped in low-paid, insecure work, consistently failed by the social security system. The brutality of this failing economic regime has been further exposed throughout the coronavirus pandemic, with at least 3 million people being left without economic support. The post-covid economic recovery needs to be built upon equitable distribution of income and wealth and new jobs. But beyond the rhetoric of levelling up, a redistributive economic vision that can deliver the future that people across the UK deserve was wholly missing from the Budget.
Despite finally listening to trade unions and campaigners with regard to the furlough scheme, there was not nearly enough to secure a recovery that puts people in a better position than when they entered the pandemic, never mind laying the foundations for the economy to meet the challenges of the future, including tackling climate change and mass unemployment. Yes, the main rate of corporation tax will increase from the present 19% to 25%, but not until 2023. At the same time, the rich and big business are being treated to mouth-watering tax giveaways and reliefs, despite unclear evidence about whether that will actually create the investment needed.
Beyond the limited extensions of job and business support schemes, there is very little about providing support for public services and public investment and a lasting boost to welfare for those hit hardest by the crisis. Not only was this Budget a missed opportunity for a care-led green recovery that creates decent, well-paid, unionised jobs and addresses our care crisis. It will create widespread inequality and precarity. It actually laid out significant cuts to public spending.
The lockdowns and an inadequate social security system have caused widespread financial hardship, unemployment and debt, and yet the Budget fell far short in tackling poverty, low pay and the deepening divisions in our society. It risks plunging more people into poverty and forcing them to queue outside food banks. The £20-per-week top-up of universal credit, which was introduced at the start of the pandemic, will be temporarily retained and will help some 6.5 million families, but only until September. At the same time, there is no increase in the statutory sick pay of £95.85 per week. Despite the ongoing performed gratitude towards those working on the frontline, the Government did not end the wage freeze for public sector workers. That is an absolute insult.
In the long run, we need an inclusive, intersectional recovery to rebuild our economy and recover from the pandemic and entrenched inequality. I am sick of looking around me and seeing the hard work and creativity of my local people often go unrewarded.
Ruth Jones (Newport West) (Lab)
I have listened with great interest to the many contributions to the debate so far, but it is clear to me that the economy is still fundamentally unfair, and that is made worse by a Government intent on giving favours to their friends, not providing fairness to those we have all relied on during the past 12 months. The Government are working hard for crony billionaires, but hardly working at all for those who have healed our sick and kept us safe during the pandemic. None of the measures that the Chancellor announced last week seeks to remedy the inherent injustice in our economy.
There are many in this House who believe that charity begins at home—none more so than the Prime Minister, who wants to establish a charitable fund for his own home decoration. A freedom of information request shows that £2.6 million has been spent in the past year refurbishing Downing Street to include a new media centre. That has drawn anger from a famous Jeremy—not the right hon. Member for Islington North (Jeremy Corbyn), but that well-known socialist Jeremy Clarkson.
We have all been working from home this year, but it is reasonable to ask why, if the Prime Minister can draw from the public funds to improve his place of work, has there been no public grant system to ease the pressures of working from home for my constituents in Newport West and millions of others around the UK? I am sure many others around the country share my frustration that that is where the Prime Minister’s focus has been in the past 12 months, instead of on saving lives and spending public funds wisely. There has been no public fund to allow people to make reasonable adjustments to their homes to make them safe, and no help to provide equipment that could have kept workers safe at home, rather than commuting to the office, but a scheme has been announced that will see businesses paid by the Government to buy swimming pools and jacuzzis.
The Government intend to increase the tax liabilities of ordinary working people before they ask the same of businesses. With the Government’s super deduction, they are in fact cutting taxes for businesses with no safeguards to ensure that corporation tax is still paid, but the state-sponsored saunas will be developed. Rather than austerity for Amazon, it is welfare for Walmart.
The real budget cuts are in the homes of our constituents. The Government can always guarantee contracts for Conservative party donors, but they refuse to guarantee support to thousands of self-employed contractors around the country. For a Government who purport to be run by the party of businesses, they have left many small and independent businesses to fight for themselves. For millions around this country, the Budget guarantees that it is not a fair fight at all. It is most definitely not about levelling up; rather, it is a divide-and-rule Budget.
Liz Twist (Blaydon) (Lab) [V]
I want to use my three minutes to touch briefly on the aspects of the Budget that most directly affect many of my constituents. First, I want to speak about all those constituents who have been excluded from help throughout the coronavirus pandemic—people who, through no fault of their own, have found themselves without income, work and the means to keep their homes and businesses together. I want to speak particularly about those people who do not qualify for the various business support schemes or the self-employed schemes—the hairdressers, the beauty salons, the home-based businesses such as driving instructors, and those working in the arts and entertainment industries whose work has completely fallen away. I know how desperate those people are. They are making their voices heard, and so they should. It was heartbreaking for them to hear nothing in this Budget to help them. They are an essential part of our local and national economy and need help. Too many of them have found out how hard it is to obtain universal credit and just how low the level of support is. I ask the Chancellor again to help these people, even now.
I want to talk about poverty among children and their families in my constituency. This issue is of particular concern in the north-east, where, according to the North East Child Poverty Commission, we were seeing the sharpest increase in child poverty even before the pandemic. The pandemic has only worsened what was an already unacceptable situation. I have spoken about this many times. Although I am happy to see the £20 uplift to universal credit being extended for the coming six months, this is not enough by any means, when more than half of the children living in poverty in the north-east are living in a home with at least one working adult. This is not a pandemic-only problem, and, despite what the Chancellor might want people to think, it is not a problem of worklessness either. Rather, it is an issue of insecure work and regional inequality of opportunity.
These problems will not go away in September, no matter how much the Chancellor may wish it so. For any talk about levelling up to be more than just talk, the Government must commit to tackling the underlying causes of child poverty in this country. We know that growing up in poverty can have lifelong consequences for children. Much more needs to be done to protect children and their future.
Finally, and briefly, I want to talk about the things that were left out. We face a huge climate change issue. We know this—we have declared a climate emergency. It is really disappointing to see no real significant measures to address that. Then there is social care. We all know there is a problem and that we need to improve the quality and availability of social care. The people doing it do a great job and we should pay them for it.
Naz Shah (Bradford West) (Lab) [V]
The covid-19 pandemic was unprecedented and it is true that none of us could have predicted what was going to happen, but the reality is that some areas of the country were merely surviving even before the pandemic. For those areas, the consequences have been more severe.
Work by the Office for National Statistics shows that those living in the most deprived neighbourhoods have been more than twice as likely to die from covid as those in the least deprived. We know that data on infections shows the same picture. Therefore, if we come out of this pandemic without truly levelling up and supporting the most deprived neighbourhoods, what we are really doing is putting those communities at further risk of deaths with future waves.
I am a Labour Member of Parliament, but I am here to represent my entire constituency of Bradford West, and, although party politics matter, nothing is more important than protecting our communities and our nation. When the risk is so severe, I say to the Government that this is not the time to be handing out contracts to their friends and funding towns based on party lines. Let us stop playing party politics and start supporting the poorest in society, who have already suffered enough.
The current unemployment rate in my constituency is 12.2%, which is ranked eighth highest in the entire country. Alongside years of austerity, job losses, economic uncertainty and long-term covid restrictions have had a significant impact in Bradford. While I state the hard facts about the challenges that Bradford is facing, I am not here to complain but to make the argument to the Government that, together, we can change this. To take a line from the recent Bradford Council economic recovery plan, we do not want to go back to normal, because normal was not ever good enough. That is why I ask the Minister to meet me and hear the case that Bradford has to make.
Bradford was at the heart of the industrial revolution and is now at the heart of the northern powerhouse. We have one of the youngest populations not just in the UK, but in Europe. We have been ranked as the second most entrepreneurial city in Britain, and the University of Bradford was recently ranked, in a new study, No. 1 for impact on social mobility. Bradford is aiming to become the UK’s leading growth city. I am really grateful for the £50 million that we have already got from central Government for air quality. That contributes to the wider ambition, but this is about more than net zero. It is about incorporating sustainable development goals, one of which is our ambition to be the city of culture in 2025.
Bradford can be the catalyst, not just for unlocking the potential of the northern powerhouse, but for defining what levelling up can be. Bradford has an ambitious plan to provide people with the skills and jobs to transform Bradford into the fastest growing economy. We are aiming to become the UK’s leading growth city. Now is not the time for the red wall politics; now is the time to boost Britain and cities such as Bradford. Let us work together to level up Britain, and not just our friends.
Mike Amesbury (Weaver Vale) (Lab)
Not a day goes by without the utterance of the phrase “levelling up”, whether it be here in the Chamber, in Committee Rooms or in virtual conference after conference. In the Prime Minister’s first speech some two years ago, he referred to “forgotten people” in “left-behind towns”. The very same Prime Minister has been part of a Tory Government who have inflicted the most horrendous ideologically driven cuts for our public services and our most vulnerable citizens over the past decade.
It now becomes apparent that when the Prime Minister talked about left-behind towns and forgotten people struggling to make ends meet, he was not talking about those who live in Halton Lea or the Windmill Hill area of Runcorn in my constituency. Is he talking about the affluent citizens of Richmond, which the Chancellor just so happens to represent? Or is he talking about Newark, where the constituency of the Secretary of State for Housing, Communities and Local Government is located? Both are placed in the highest priority category for levelling-up funding. Both are among the 40 out of 45 areas that just so happen to have Conservative MPs.
Let us do a quick comparison between Richmondshire and Halton. Halton is the 39th most deprived area in the UK, out of a total of 384. Richmondshire is 251st. The percentage of children living in low income families in Richmondshire was 11% in 2018-19. In Halton, it was more than double that. Unemployment is another comparison we could make. We could look at the proportion of the local population claiming universal credit. In Richmondshire, it is 2.9%. In Halton, it is nearly 7% and rising. A baby girl born in Richmondshire can expect to live three years longer than one born in Halton. A baby boy can expect to live four and a half years longer, simply because of their postcode.
Of course, there is one final difference between our two areas. Richmond has a Conservative MP. Halton has two Labour MPs and a Labour council.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
Last week’s Budget should have been the moment when our country was put back on the path to growth. It was an opportunity to put in place the building blocks of a recovery that benefits every part of our country. It was the chance to give people hope that, despite the challenges we faced over this last year, a better future lies ahead—a future in which all parts of the country share in our prosperity, where our economy is resilient so that everyone, no matter where they are and no matter where they live, can expect a good job, a reliable wage and a roof over their head.
We have heard from a great number of Members this afternoon and this evening—sadly too many for me to mention them all individually, and I hope they will forgive me— but the contributions from those on these Benches made it clear that we needed a Budget that not only addressed the devastating impact of the pandemic, but tackled the burning injustices that have built up over the past decade under successive Conservative Governments.
The sad reality is that the Budget does not even come close to resolving the problems our country faced going into the pandemic. There is no plan for jobs, no plan to rebuild our economy and no industrial strategy. Indeed, as my right hon. Friend the Member for Doncaster North (Edward Miliband) observed, we have a Secretary of State for industrial strategy who does not even believe in industrial strategy. That does not bode well for our recovery as we come out of the pandemic.
The Chair of the Business, Energy and Industrial Strategy Committee, my hon. Friend the Member for Bristol North West (Darren Jones), was right to emphasise that we need to see a focus on growth as part of a transition to net zero. We should have seen that joined-up approach to support growth in every part of our country, with decisions based on genuine need, not narrow, partisan advantage.
It is not even the simple cynicism of saying, “Vote Tory, see local investment.” It is starting to feel a lot like, “Vote Tory, see your money go to richer areas.” Let us take the levelling-up fund, which pits regions and nations against each other for vital funding. We want to see proper funding for every region, but it is crucial that it is done transparently, fairly and with a say for local communities, and this fund fails on all those counts.
In the powerful contributions of my hon. Friend the Member for Barnsley East (Stephanie Peacock) and my right hon. Friend the Member for Kingston upon Hull North (Dame Diana Johnson), they exposed the reality of this. Although a new economic campus for the Treasury in Darlington will bring 750 jobs, we should be clear that almost 7,000 civil service jobs have been lost in the north-east alone since 2010. Madam Deputy Speaker, you will not be surprised to hear that, as a north-east MP, I will always welcome jobs coming to our region, but how will it help with the much-needed task of delivering an investment-led recovery? How will it drive wider private sector growth? How will it rebalance our economy as we emerge from this crisis?
Madam Deputy Speaker, like me, you will have now listened to many Budget speeches from many different Chancellors, and we all know the structure of these things. We sit here expectantly, wondering what the centrepiece will be, wondering what the final flourish will be, waiting for the moment when the Chancellor makes it clear what he thinks is the biggest announcement of the day. Some of us were hoping that perhaps, at long last, the Chancellor would grasp the enormous challenge of social care, which touches on so many lives up and down the country, but, no, once again it was passed over in silence. The Chancellor could not even bring himself to say the words, and in so doing he ignored the economic as well as the moral case for social care reform, as was so eloquently set out this afternoon by my hon. Friend the Member for Leicester West (Liz Kendall).
That sense of disappointment was compounded when the Chancellor revealed that he has not had a new big idea in five years, and that he still believes that freeports will solve all our problems. I know that this is a hobby-horse of his; it has been for a while. In 2016, he claimed that they would deliver 80,000 new jobs in the UK. Those of us who have followed closely his approach to the pandemic have been unsurprised to learn of the rather simplistic economic modelling underpinning these claims, simply taking the total number of existing jobs in free zones in the US and scaling it down for our smaller population and for our smaller labour force.
The truth is that there is little evidence that freeports create new jobs. Instead, they simply risk moving them around, with the additional risk that deprivation is intensified in the areas just beyond the immediate vicinity of the freeport. They do not make companies more productive. They do not increase demand for the goods in the wider economy or increase the tax take for the Treasury. On the contrary, we know that there are real concerns about tax evasion and the risk of smuggling associated with freeports. With Her Majesty’s Revenue and Customs left increasingly overstretched over the past 10 years, I fear that our country is not well-placed to manage these new risks.
We can only build a strong economy if we secure the recovery, and that means action now to secure jobs and to support job creation in the future, and it means clear steps to help businesses through the worst of this crisis. It means ambitious measures that would help build a greener, fairer and more dynamic economy, and on every one of these measures, the Budget falls short.
For the half a million unemployed young people who desperately need hope for a better tomorrow, there is still nothing on offer but the Chancellor’s kickstart scheme, which has only created enough opportunities for just one in 49 eligible young people. Likewise, his much vaunted restart scheme has not even begun and will not begin to meet demand until March 2022, months after unemployment is estimated to peak at 2.2 million. It beggars belief that, in the grips of the worst economic crisis for a generation where our economy has taken the biggest hit of any major economy, this is the best that the Government can muster.
But it is worse than that. At the point at which the furlough scheme is due to end and joblessness peaks, what do the Government plan to do? They plan to cut social security at a time when families will need it the most, sucking demand out of our economy in the process. We can only support job creation if we ensure that businesses remain viable now and into the future. That means helping as many as possible survive through these incredibly challenging circumstances in which they find themselves, not looking on while many good businesses teeter on the edge, unable to deal with the mountain of debt that they have built up over the past year.
The incredible work of our NHS staff and volunteers gives us all hope that soon we will see a semblance of normality return, which is why businesses are so frustrated. They feel that the Government are simply not listening to the immediate pressures they face. While of course Labour wants to see business investing and driving job creation, we also want to see Government playing their full and proper role. That means providing much-needed investment to support our recovery and bringing forward £30 billion of capital spending, not cutting capital spending by £500 million in the next financial year and cutting the green homes grant by £1 billion.
The pattern is clear: on every measure, the Government have fallen short, with no coherent strategy to rebuild and rebalance our economy. Indeed, the only obvious factor linking these policies is a complete lack of ambition, other than to take us back to the failed policies of the last decade—the same approach that weakened the foundations of our economy and left us so exposed when the virus hit. We simply cannot afford another lost decade.
Our country should take a different path: a future in which Government forge a new partnership with businesses and trade unions to get Britain back to work and support the creation of good, secure, clean jobs; a future in which Government take a strategic and fair approach to ensuring opportunity and prosperity in every region and nation of the UK; a future in which our economy is strong and resilient, making our country the best place to grow up in and the best place to grow old in. This is the future that our country deserves, and it is the future for which Labour will fight.
The Chief Secretary to the Treasury (Steve Barclay)
It is a privilege to close this debate on behalf of the Government. In recent days, the House has debated the Budget through the lens of the Government’s response to the pandemic, including the comprehensive efforts we have made to protect jobs and businesses. Today, the focus of the debate has been on looking forward and discussing the ways in which last week’s Budget prepares the country for an investment-led recovery. I thank right hon. and hon. Members from across the House for the very constructive contributions that we have had throughout the debate.
This is a Budget in three parts: first, it protects jobs and livelihoods and provides additional support to get the British people and businesses through the crisis; secondly, it is clear and honest about the need to fix the public finances once we are on the way to recovery; and thirdly, it begins the essential work of building our future economy, including by providing the opportunity to level up across the country.
The Budget announced an additional £65 billion of measures over this year and next to support the economy in response to coronavirus. Taking into account the support in last November’s spending review, that figure for this year and next is £352 billion. Add in measures from the spring Budget last year and the figure rises to £407 billion. In other words, a comprehensive and sustained economic shock has been met with a comprehensive and sustained response.
In fact, thanks to the actions of my right hon. Friend the Chancellor, the Office for Budget Responsibility now expects the UK economy to recover to its pre-crisis level six months earlier than originally expected. That means the second rather than the fourth quarter of 2022. Unemployment, meanwhile, is expected to peak at around 6.5% instead of the nearly 12% that was feared last summer. As the Resolution Foundation has observed, this would be by far the lowest unemployment peak in any recent recession, despite this being the deepest downturn for 300 years.
The Budget maintains a number of essential further support measures, including the furlough scheme, which has been extended until the end of September, and support for the self-employed, which will also continue until September. Indeed, anyone who had filled in a tax return before last Wednesday will now be able to claim the fourth and fifth grants that have been made available for the self-employed, supporting more than 600,000 people on top of those already helped.
The Budget also maintains the universal credit uplift of £20 a week for a further six months, provides working tax credit claimants with equivalent support over the same timeframe and reaffirms our commitment to increase the national living wage to £8.91 from April. We announced a restart grant from April to help businesses to reopen and get going again and a new recovery loan scheme to replace our earlier bounce back loans and coronavirus interruption loans. We will continue to deliver a package that is unprecedented in its scope and scale and which reflects the wider strategy for cautiously reopening the economy, as set out in the Government’s road map. Above all, the distribution analysis shows that this is a package of measures that has supported those on the lowest incomes the most.
Over the course of the debate today, we have heard powerful contributions from a wide range of Members, and I want to draw attention to a number in particular. My right hon. Friend the Member for Maidenhead (Mrs May) spoke of the importance of skills, innovation and investing in human capital, which a number of Budget measures set out. My hon. Friend the Member for Fylde (Mark Menzies) recognised the importance of additional economic support, particularly in the hospitality, leisure and tourism industry.
My hon. Friend the Member for Stroud (Siobhan Baillie) reinforced the Government’s commitment to a green recovery and reskilling to take advantage of the investment set out in the Prime Minister’s 10-point plan. My right hon. Friend the Member for Ashford (Damian Green) also highlighted the importance of green innovation, which is reflected in the commitment to double the spending on energy innovation, with a new £1 billion net zero innovation portfolio.
My right hon. Friend the Member for South Northamptonshire (Andrea Leadsom) highlighted the key opportunity provided by our leadership of COP26. My hon. Friend the Member for Tiverton and Honiton (Neil Parish) highlighted the value of the super deduction policy. In answer to his question on fishing, I can confirm that fishing boats are within scope either for the super deduction or the related 50% first-year allowance.
My hon. Friend the Member for Southport (Damien Moore) praised my right hon. Friend the Chancellor for the vital support that businesses in his constituency, particularly in the hospitality sector, have received throughout the pandemic. My hon. Friend the Member for Milton Keynes North (Ben Everitt) praised the Budget as one that looks after jobs and looks after the future, including the new tech campus that will help the next generation in his area.
My hon. Friend the Member for Clwyd South (Simon Baynes) praised the additional funding for the Welsh Government and the investment through the accelerated city deals. My hon. Friend the Member for Waveney (Peter Aldous) praised the successful freeport bid for Felixstowe and the value of the towns fund, which will make such a difference to the regeneration of his local community.
My hon. Friend the Member for Guildford (Angela Richardson) praised the expansion of the self-employment income support scheme, which will support a further 600,000 people. My hon. Friend the Member for Carshalton and Wallington (Elliot Colburn) and many other Members praised the super deduction and the great benefits it will have for investment, as UK business leads that investment in our recovery.
My hon. Friend the Member for Crewe and Nantwich (Dr Mullan) welcomed the skills package, which will help to support our economic recovery from the pandemic. My hon. Friend the Member for Cities of London and Westminster (Nickie Aiken) welcomed the 5% VAT cut extension and rightly drew the House’s attention to the importance of Lord Hill’s listing review and the wider opportunities of the FinTech industry.
My hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell) praised the Budget’s focus on levelling up and the towns agenda, and we make no apology for the frequency with which we will talk about our commitment to levelling up. My hon. Friend the Member for Bury South (Christian Wakeford) recognised the package of business support and the stimulus for jobs in his constituency that is offered by the super deduction.
Given the time, I will not run through the wide range of measures that my right hon. Friend the Chancellor set out or how, in addressing some of the issues raised by those on the Opposition Front Bench, he will boost productivity through schemes such as Help to Grow and Help to Grow: Digital, the plans to ensure that the UK is a scientific superpower, the £400 million annual uplift in science spending, the “future fund: breakthrough” scheme, the lifetime skills guarantee, the kickstart scheme, the restart scheme, the £3,000 for apprenticeships, the tripling of traineeships and the Government’s commitment to skills and investment.
Over the last year, this country has experienced a 10% fall in GDP—the largest fall in 300 years. In response, the Chancellor has presented a plan that will continue to protect jobs and livelihoods, that supports the British people and businesses through this moment of crisis, and that begins to fix the public finances and build our future economy. This is a Budget that, as the Chancellor rightly said, “meets the moment”; I commend it to the House.
Question put and agreed to.
Resolved,
That income tax is charged for the tax year 2021-22.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
The Deputy Speaker put forthwith the Questions necessary to dispose of the motions made in the name of the Chancellor of the Exchequer (Standing Order No. 51(3)).
Madam Deputy Speaker (Dame Rosie Winterton)
I am now required under Standing Order No. 51(3) to put successively, without further debate, the Question on each of the Ways and Means motions numbered 2 to 80, on which the Bill is to be brought in. These motions are set out in a separate paper distributed with today’s Order Paper.
2. Income tax (main rates)
Resolved,
That for the tax year 2021-22 the main rates of income tax are as follows—
(a) the basic rate is 20%,
(b) the higher rate is 40%, and
(c) the additional rate is 45%.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
3. Income tax (default and savings rates)
Resolved,
That—
(1) For the tax year 2021-22 the default rates of income tax are as follows—
(a) the default basic rate is 20%,
(b) the default higher rate is 40%, and
(c) the default additional rate is 45%.
(2) For the tax year 2021-22 the savings rates of income tax are as follows—
(a) the savings basic rate is 20%,
(b) the savings higher rate is 40%, and
(c) the savings additional rate is 45%.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
4. Income tax (starting rate limit for savings)
Resolved,
That—
(1) For the tax year 2021-22, the amount specified in section 12(3) of the Income Tax Act 2007 (the starting rate limit for savings) is “£5,000”.
(2) Accordingly, section 21 of that Act (indexation) does not apply in relation to the starting rate limit for savings for that tax year.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
5. Basic rate limit and personal allowance (future years)
Question put,
That (notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills) provision may be made taking effect in a future year for each of the following amounts to remain at the amount specified for the tax year 2021-22—
(a) the amount specified in section 10(5) of the Income Tax Act 2007 (basic rate limit), and
(b) the amount specified in section 35(1) of that Act (personal allowance).
Part of relevant consideration | Percentage |
|---|---|
So much as does not exceed £250,000 | 0% |
So much as exceeds £250,000 but does not exceed £925,000 | 5% |
So much as exceeds £925,000 but does not exceed £1,500,000 | 10% |
The remainder (if any) | 12%”. |
Part of relevant consideration | Percentage |
|---|---|
So much as does not exceed £250,000 | 3% |
So much as exceeds £250,000 but does not exceed £925,000 | 8% |
So much as exceeds £925,000 but does not exceed £1,500,000 | 13% |
The remainder (if any) | 15%”. |
Rate bands | Percentage |
|---|---|
£0 to £250,000 | 0% |
Over £250,000 | 1% |
“non-resident transaction | Schedule 9A, paragraph 2” |
(1) | (2) | (3) | (4) |
|---|---|---|---|
Exceeding | Not exceeding | Reduced rate | Standard rate |
g/km | g/km | £ | £ |
100 | 110 | 10 | 20 |
110 | 120 | 20 | 30 |
120 | 130 | 120 | 130 |
130 | 140 | 145 | 155 |
140 | 150 | 160 | 170 |
150 | 165 | 200 | 210 |
165 | 175 | 240 | 250 |
175 | 185 | 265 | 275 |
185 | 200 | 305 | 315 |
200 | 225 | 330 | 340 |
225 | 255 | 575 | 585 |
255 | — | 590 | 600”. |
(1) | (2) | (3) | (4) |
|---|---|---|---|
Exceeding | Not exceeding | Reduced rate | Standard rate |
g/km | g/km | £ | £ |
0 | 50 | 0 | 10 |
50 | 75 | 15 | 25 |
75 | 90 | 105 | 115 |
90 | 100 | 130 | 140 |
100 | 110 | 150 | 160 |
110 | 130 | 170 | 180 |
130 | 150 | 210 | 220 |
150 | 170 | 545 | 555 |
170 | 190 | 885 | 895 |
190 | 225 | 1335 | 1345 |
225 | 255 | 1900 | 1910 |
255 | — | 2235 | 2245” |
(1) | (2) | (3) |
|---|---|---|
Exceeding | Not exceeding | Rate |
g/km | g/km | £ |
0 | 50 | 25 |
50 | 75 | 115 |
75 | 90 | 140 |
90 | 100 | 160 |
100 | 110 | 180 |
110 | 130 | 220 |
130 | 150 | 555 |
150 | 170 | 895 |
170 | 190 | 1345 |
190 | 225 | 1910 |
225 | 255 | 2245 |
255 | — | 2245”. |
Part of gross gaming yield | Rate |
|---|---|
The first £2,548,500 | 15% |
The next £1,757,000 | 20% |
The next £3,077,000 | 30% |
The next £6,494,500 | 40% |
The remainder | 50%”. |