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Oral Answers to Questions
(2 months ago)
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Patricia Gibson (North Ayrshire and Arran) (SNP)
The Secretary of State for Scotland (Mr Alister Jack)
Last weekend Scotland once again showed the world that we can host fantastic sporting events, with the World Athletics Indoor Championships held in Glasgow. I offer my congratulations to everyone involved, and especially to medal winners Jemma Reekie from Ayrshire and Josh Kerr from Edinburgh, who was the first Scottish man to win a gold medal in those championships in over 30 years. I also congratulate the Scottish rugby team who, thanks to their recent victory over England, have now won the Calcutta cup four times in a row. It would have been five in a row, but covid got in the way. [Laughter.]
Contrary to what we hear from the Scottish National party, the Scottish Government are well-funded. This UK Government have provided a record block grant, averaging £41 billion a year, with an additional £2.4 billion across the last three fiscal events. Scotland also continues to benefit from the Barnett formula, under which the Scottish Government receive around 25% more funding per person than equivalent spending across the United Kingdom.
Patricia Gibson
Will the Secretary of State explain how his Government’s £1,600 million cut to Scotland’s capital budget over the next three years will impact the provision of infrastructure, including roads, hospitals, schools, new homes, digital connectivity, and the economic growth we need to escape the recession into which the Tories have dragged us?
Mr Jack
It is nice to see that the hon. Lady and her colleagues have turned up for work today, even if that is in defiance of the deputy Leader of the SNP, who thought they should not bother coming. Let me be clear on resource spending and the capital budget: the Scottish Government are able to divert their resource spending for capital infrastructure investments; and they can also borrow to enhance capital investments if they so choose.
Douglas Ross (Moray) (Con)
The Secretary of State is correct that the block grant from the UK Conservative Government to Scotland is the highest it has ever been. Despite that, just last week the SNP/Green Government pushed through their “tax and axe” budget in Scotland. Does my right hon. Friend agree that the nationalists have got the wrong priorities for Scotland by cutting services while increasing income tax rates for anyone earning more than £28,867?
Mr Jack
I agree with my hon. Friend, and I add further that the Scottish Government’s six tax bands, as opposed to the UK Government’s three tax bands, are really holding Scotland back.
Michael Shanks (Rutherglen and Hamilton West) (Lab)
While the SNP and the Tories argue about the financial settlement between the two Governments, they do agree on two things: first, that working people should pay the price of this economic mess, by raising tax to sky-high levels; and secondly, at least until today, that oil and gas giants earning record profits should not face a proper windfall tax, although it now seems as if the SNP might be the only people holding out on that position. Who does the Secretary of State support—the Scottish Tory leader who is standing up in Holyrood today attacking an extension of the windfall tax, or the Chancellor who we understand is about to announce exactly that?
Mr Jack
My position has always been clear: I believe that the energy profits levy on the excess profits caused by Putin’s illegal war in Ukraine was the right thing for the Government to do, to give support to people in the cost of living crisis.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
It started so well, and I agree with the Secretary of State about the Calcutta cup—I was there to witness an historic occasion—and about the World Athletics Indoor Championships in Glasgow. I played rugby with Jemma Reekie’s cousin for many years, and I send my congratulations to them. However, everything from that point on, from both sides of the House, has been absolute nonsense.
At a time when many Scots are struggling to pay their energy or shopping bills due to the rapid inflation that the Secretary of State’s Government have presided over, and with inflation in the public sector running even higher, his Government have cut the Scottish Government’s funding in real terms again. Commons Library research shows that the Scottish block grant will be at its lowest level of UK Government spending since the start of devolution. As the Secretary of State counts down the weeks to his departure, is he proud of his legacy?
Mr Jack
That is an easy one to answer, Mr Speaker, as I am very proud of my legacy. Rather like winning four Calcutta cups, I have won in court with the Scottish Government four times, and there are any number of things I would like to list for my legacy. Importantly, the Scottish Government receive a record block of £41 billion, and record Barnett consequentials on top of that. Spending in Scotland is 25% higher per person than the UK average, so that equates to an extra £8.5 billion.
Gavin Newlands
I had no idea we should all just be very grateful for the largesse of the Secretary of State, but does that largesse extend to capital funding? Capital funding to the Scottish Parliament has not just been cut, but slashed by 10% on his watch. That money could have been used to invest in hospitals, schools and infrastructure, and it is about to be frittered away by the Chancellor on a sickening pre-election bribe that precisely no one will buy. Will he finally accept that it is his Government’s “bust or bust” austerity that is driving public services to the edge, and does he support tax cuts at a time when even Tory voters know that increased public investment is required?
Mr Jack
This is nonsense. Austerity is not a thing under this Government—not a thing at all. [Laughter.] No, absolutely not. Departmental spending—this is the point that the SNP does not acknowledge—throughout this Parliament has grown by 3.2% on average. That is the simple truth.
Christine Jardine (Edinburgh West) (LD)
The Secretary of State for Scotland (Mr Alister Jack)
I have had frequent and recent discussions with the Foreign Secretary on the Scottish Government’s international relations policy. Foreign affairs are reserved to the United Kingdom Government. We have been clear to the Scottish Government that they must respect that.
Christine Jardine
First, may I associate myself with the Secretary of State’s comments about the Scottish victory in the Calcutta cup?
Does the right hon. Gentleman share my concern that these recent forays into international relations by the SNP are not only inappropriate, because it is a reserved matter, but potentially damaging, both to important relationships between Scotland’s two Governments and, critically, to UK foreign policy at a time when international tensions are at a height we have not seen since the cold war?
Mr Jack
I agree with the hon. Lady. It is important that the United Kingdom Government speak with one voice and the United Kingdom is seen to speak with one voice on foreign affairs. I note that Angus Robertson has produced another independence document this week on foreign affairs and defence, and there is a lot of nonsense in there. The Scottish Government want to join the NATO nuclear alliance, but they want to get rid of the nuclear deterrent. They want to join the EU, but not the euro. They want to have a Scottish spy agency—some are referring to it as the sleekit service, with agents heading across Europe in their bulletproof motorhomes. It is all nonsense, and a complete waste of taxpayers’ money.
Mr Gregory Campbell (East Londonderry) (DUP)
The Secretary of State for Scotland (Mr Alister Jack)
I am pleased to say that I have had discussions with the Secretary of State for Northern Ireland about maximising trade links, now that the Northern Ireland Executive have been restored. What is more, the UK Government have committed to establishing the East-West Council, which will identify opportunities for deepening connections between Northern Ireland and the rest of the United Kingdom, including the scope for extending the Northern Ireland investment zone benefits to Stranraer and Cairnryan.
Mr Campbell
Will the Minister ensure that business bodies in Scotland are fully aware of, for example, the new Intertrade UK body so that business can prosper between Northern Ireland and Scotland? Importantly, will he ensure that people can see the improvement in business trade flows between Scotland and Northern Ireland in six months’ time, as compared with six months ago?
Mr Jack
As set out in the Command Paper, the UK Government are working to establish Intertrade UK, which will fulfil our pledge to grow the economy by ensuring that businesses large and small can make the most of the east-west trading opportunities. Implementing the Windsor framework and the Command Paper are the Government’s priorities, and we will provide an update in close time.
Alex Cunningham (Stockton North) (Lab)
Rachel Hopkins (Luton South) (Lab)
Stephen Morgan (Portsmouth South) (Lab)
The Parliamentary Under-Secretary of State for Scotland (John Lamont)
We prioritised bringing inflation down, which is the key to reducing cost of living pressures. We delivered on the Prime Minister’s promise by more than halving it. In addition, the UK Government supported households with a package worth £104 billion—or, on average, £3,700 per household across the United Kingdom, including in Scotland.
Alex Cunningham
Families in my homeland are reeling from the cost of living crisis, as both the Tory UK Government and the SNP Scottish Government have jointly loaded them with the highest tax burden in 70 years. Does the Minister agree that it is time both Governments stopped going round in circles, left the dance and cleared the floor for Labour Governments to sort out their sorry mess?
John Lamont
I do not agree with the hon. Gentleman’s conclusions. Thanks to this Government, 2.4 million workers in Scotland benefited from £340 back in their pockets thanks to the national insurance cuts in January. However, I do agree with him in not agreeing with the SNP Government’s approach to tax, making Scotland the highest-taxed part of the United Kingdom.
Rachel Hopkins
Scottish rail fares are set to rise by 8.7% next month. This eye-watering fare hike will hit Scots hard during a cost of living crisis and push Scotland’s rail service into a spiral of decline. Does the Minister agree that we need affordable fares to help people through the cost of living crisis and encourage more people to travel by train?
John Lamont
I certainly agree that we should do all we can to encourage people to travel by train. The Scottish Government’s approach to ScotRail might discourage that. I am happy to meet the hon. Member to discuss that further.
Stephen Morgan
Recent findings from the Trussell Trust have revealed that 32% of people claiming universal credit in Scotland have fallen into debt because they could not pay essential bills. Does the Minister agree that the people of Scotland and the people of Britain should not be made to pay for SNP and Tory failures?
John Lamont
In 2021-22, there were 1.7 million fewer people in absolute poverty after housing costs than there were in 2009-10, including 400,000 fewer children. This Government are certainly taking lots of action to address poverty, and particularly in-work poverty. But I agree that making Scotland the highest-taxed part of the UK does not help with that.
John Stevenson (Carlisle) (Con)
Does the Minister agree that putting up taxes as the SNP is doing at present will do nothing to help with the cost of living? Does he further agree that if it continues on that trajectory, more and more Scots will want to leave and come to places such as Carlisle, where of course they will be very welcome?
John Lamont
Due to the SNP’s tax rises in Scotland, anyone earning more than £28,867 will pay more income tax than those living in England. From my own experience representing a Borders constituency, I see increasing evidence of people choosing to live south of the border rather than in the high-tax Scottish jurisdiction. In my discussions with science, technology, engineering and maths businesses, I find that they are finding it increasingly difficult to recruit in Scotland because of the aggressive high-tax policies of the SNP.
Ian Murray (Edinburgh South) (Lab)
Regardless of what the Chancellor announces today, we are in the highest tax-raising Parliament in history, which is a consequence of the Minister’s Government’s failure over 14 years. Ordinary hard-working Scots did not cause this economic crisis—the Government did—but they are being made to pay for it. There have been 25 Tory tax rises since the last election, and the average family is much worse off as a result. Does the Minister agree with the Institute for Fiscal Studies that even after today’s Budget the overall tax burden on working people will still reach record levels?
John Lamont
Clearly, I will not speculate on what the Chancellor will announce shortly. I remind the hon. Gentleman that 2.4 million workers in Scotland have benefited from £340 going back into their pockets thanks to the changes to national insurance that have already been announced.
In relation to the hon. Member’s wider points about the tax burden, we should not forget the huge interventions that the Government made to support workers, families, communities and businesses during the pandemic. As a consequence, we are having to repay that, but that saved jobs and many businesses from going under during the covid pandemic.
Ian Murray
Regardless of what the Chancellor says today, working people will still be paying a much higher tax burden at the end of this Parliament, and it will reach record levels. Shockingly, the tax burden in Scotland is even higher. Anyone in Scotland earning more than £29,000 a year will pay more income tax after the SNP voted for yet another tax rise on working people. That means we are in the absurd position in Scotland of the SNP raising taxes on nurses and teachers while opposing Labour’s plan for an extended windfall tax on the oil and gas giants. We even hear that the leader of the Scottish Conservatives threatened to resign last night on potentially another U-turn from the Chancellor on the windfall tax. Does the Minister accept that the best thing to happen now would be for this circus to be brought for an end and for the Prime Minister to call the election?
John Lamont
As I said, I will not speculate on the contents of the Budget. But when the election comes, Scotland’s voters will have a clear choice: a party who will stand up for Scotland’s place in a strong United Kingdom, or the Scottish National party, who wants another referendum. I am unclear what the Labour party has to offer.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The Parliamentary Under-Secretary of State for Scotland (John Lamont)
We want all farmers to get a fair price for their products. The Government have committed to tackling contractual unfairness in the agrifood supply chain. We will use the powers in the Agriculture Act 2020 whenever necessary. At the National Farmers Union conference, the Prime Minister announced that the UK Farm to Fork summit will be an annual event. That will help to strengthen joint working by Government and external partners to support a prosperous agrifood sector.
Mr Carmichael
The Minister should be aware that his colleagues in the Department for Environment, Food and Rural Affairs have recently concluded a consultation on contractual relationships in the fresh produce industry. At a time when 23% of dairy farmers doubt that they will continue in business into 2025, will he impress on his colleagues in DEFRA and the Department for Business and Trade that urgent action is needed in relation to that consultation?
John Lamont
As the son of a Borders farmer, I completely understand the invaluable work that farmers and crofters do to put food on tables across Scotland and the United Kingdom. This Government will continue to support the agriculture and food production sector. Scotland Office Ministers regularly attend the inter-ministerial group for environment, food and rural affairs, along with representatives from the devolved Administrations. This group oversees how changes to price, supply and trade affect our markets. We will continue to take whatever action is necessary support that important sector.
Cat Smith (Lancaster and Fleetwood) (Lab)
The Secretary of State for Scotland (Mr Alister Jack)
Our Union is strong. [Interruption.] Yes, it is. Scotland’s contribution to our United Kingdom is beyond doubt, and this Government’s commitment to Scotland is without question. From freeports and investment zones to the record block grant and £1.5 billion for the 12 city and region growth deals, we deliver for Scotland.
Cat Smith
SNP MPs have been disengaged from Westminster for years. Does the Secretary of State agree that it is a disgrace that its deputy leader has said that its MPs will not engage should the party win seats at the next general election? Does he also agree that Members elected to this House should turn up and do their job?
Sir David Davis (Haltemprice and Howden) (Con)
Three years ago, on 16 March 2021, we had a debate in this House on precisely the subject of this question. At the time, I was concerned that Nicola Sturgeon’s Government were covering up interference in the complaints process against the First Minister. Since then, in defiance of the Information Commissioner and of a court order, they have continued to cover up. Will the Cabinet Secretary look at whether the ministerial code and the civil service code have been broken?
Mr Jack
My right hon. Friend should write to the Cabinet Secretary and ask him to do that very thing.
Richard Graham (Gloucester) (Con)
The Parliamentary Under-Secretary of State for Scotland (John Lamont)
The Government are firmly committed to supporting Scotland’s marine energy sector to grow. Around 80% of tidal stream contracts awarded through contracts for difference in the last two rounds will be deployed in Scotland. In addition, Horizon Europe selected two Scottish-based UK tidal stream developers to deliver projects in Orkney. They will lead construction on two £17 million projects, funded by the UK Government’s financial guarantee.
Richard Graham
The Minister knows that successive Energy Ministers have hugely helped the development of the marine energy sector in Scotland, as elsewhere in the United Kingdom. Does my hon. Friend agree that there is an opportunity in the next round of the renewables auction to allow for wave technologies alongside tidal stream technologies? Will he encourage the Scottish Government to speed up approvals of sites to get great green energy projects started as soon as possible in Scotland, as elsewhere?
John Lamont
I am grateful for that important question. The Government are undertaking analysis of the technology pipeline available for contracts for difference auction round 6 against our legal obligation to ensure that the auction round is competitive. We are considering the appropriate parameters for all technologies, including tidal stream and wave energy. The final parameters will be published in the budget notice this month, ahead of the auction round opening.
Dave Doogan (Angus) (SNP)
The Seastar tidal farm off the coast of Orkney is set to be the largest tidal energy farm anywhere in the world, and it was supported by EU funding through the European Marine Energy Centre. This comes after Edinburgh University’s report found that the UK Government could save hundreds of millions of pounds by bringing forward the development of tidal by years, if it worked more closely with its EU partners. It is clear that the EU’s role in this in Europe and around Scotland is very important, so if Scotland is better together with anyone, is it not better together with the EU and its investment in tidal?
John Lamont
What a load of nonsense. Scotland is much better served by being part of the United Kingdom, and we will continue to support all renewable energy sectors, including tidal.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
The Parliamentary Under-Secretary of State for Scotland (John Lamont)
The Government recognise the invaluable job that all NHS workers do; I see that every day of the week in my constituency in the Scottish Borders. That is why the Secretary of State for Health and Social Care has written to the Scottish Government about working together to reduce patient waiting times. We continue to be open to exploring that further.
Jamie Stone
I have a lady constituent who suffers from a rare and dangerous condition called subglottic stenosis. Only one clinic has the expertise to treat the condition, and it is in London, yet our local health board is refusing to refer her. It says that it can offer another treatment, but it is thought to be less safe and possibly not very effective. What steps are the Government taking to ensure that patients, regardless of which side of the border they live on, get the best possible treatment?
John Lamont
I am regularly reminded, particularly as an MP for the Borders, of the need for healthcare to benefit people on either side of the border, particularly through cross-border working with the NHS. Local people in the Borders often get treatment faster and more easily because of that. Sadly, the hon. Member has highlighted a real problem with Scotland’s NHS, thanks to the mismanagement by the SNP Government in Edinburgh, particularly in rural health services. He has identified a very distressing case for his constituent and I am very happy to write to the Scottish Government, along with him, to raise the case with them.
Theresa Villiers (Chipping Barnet) (Con)
The Secretary of State for Scotland (Mr Alister Jack)
Scotland Office Ministers have banged the drum tirelessly to promote the Scottish food and drink industry overseas, including on trade missions in Europe, India, the United States of America and Vietnam. In Vietnam, sales of Scotch whisky have increased fourfold and are still growing. I was delighted to discuss what more can be done to improve trade links and market access with the Vietnamese Government during my recent visit.
Theresa Villiers
Scotland’s farming and fish sector produces some of the finest produce in the world. Will the Secretary of State do all he can to promote the sale of Scottish smoked salmon abroad as a premium product known the world over?
Mr Jack
I think I heard “smoked salmon”, but this is not just about smoked salmon. The most recent figures show that Scotland’s world-leading food and drink sector accounted for 29% of all UK food and drink exports. To help the sector to continue to flourish, the Government have secured trade agreements with 71 non-EU countries and the EU. Total UK trade with those partners is worth £808 billion.
Jim Shannon (Strangford) (DUP)
I thank the Minister for that answer. Scotland’s food export—[Interruption.]
Jim Shannon
Some of Scotland’s food export companies have been prevented from trading with Northern Ireland. The InterTrade UK body has been set up as a result of discussions that have taken place. What are the Minister and his Department doing to ensure that the companies that have stopped trading with Northern Ireland are encouraged to start doing so again?
Mr Jack
In the UK Command Paper, we said that we are setting up the East-West Council, which will work to bring about the solutions.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
The Secretary of State for Scotland (Mr Alister Jack)
The UK Government are working tirelessly to maximise opportunities following our departure from the European Union. Scotland continues to punch above its weight, both in exports of goods and services and in foreign direct investment, and I am delighted to be able to say that trade is now well above pre-Brexit levels.
Ian Blackford
Scotland has been hammered by Westminster’s imposition of a hard Brexit, with the Scottish salmon industry alone suffering an additional £12 million of Brexit red tape costs. Across every sector of Scotland’s economy, Brexit has added red tape costs, limited access to vital workers and limited markets. Is the Secretary of State proud of his legacy, which includes a deliberate and avoidable undermining of Scotland’s economy?
Mr Jack
As the right hon. Gentleman will appreciate, our departure from the EU has allowed us to forge new relationships. Consequently, Scotland’s exports are performing well—they are up by 13%.
David Duguid (Banff and Buchan) (Con)
Will my right hon. Friend join me in welcoming the completion of fisheries negotiations with the Faroe Islands, which have resulted in 2,200 tonnes of fishing quota, mostly for the Scottish fleet? Does he agree that since the UK became an independent coastal state, the Scottish fleet and those who negotiate on its behalf, including SNP Scottish Government Ministers and their officials, have a far stronger voice in these annual negotiations than if the SNP had its way and we went back into the EU common fisheries policy?
Mr Jack
My hon. Friend is a great champion of the fishing industry, and I completely agree with him.
Mr Speaker
We now come to Prime Minister’s questions. We are joined today in the Gallery by the Speaker of the Supreme Council of the Kyrgyz Republic.
Charlotte Nichols (Warrington North) (Lab)
The Prime Minister (Rishi Sunak)
This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House, including listening to the Chancellor’s Budget statement, I shall have further such meetings later today.
Charlotte Nichols
The UK used to be a world leader in psilocybin research but, despite the calls of the Home Affairs Committee, leading researchers, charities, veterans’ organisations and the Royal College of Psychiatrists, we have shamefully fallen behind on breakthrough treatments for conditions such as post-traumatic stress disorder and depression, causing misery to millions of people in our country. Can the Prime Minister explain why this policy remains the responsibility of a Home Office that cannot give it the attention it deserves, and why it is okay that American, Canadian and Australian patients can access treatment that British patients cannot?
The Prime Minister
I completely sympathise and understand why people suffering from distressing conditions will want to seek the best possible treatment available, and I thank the hon. Lady for raising the issue. We are committed to ensuring that the UK is a world-leading jurisdiction for pharmaceutical, clinical and other medical research, and we have asked the Advisory Council on the Misuse of Drugs to review barriers to legitimate medical research involving controlled drugs such as psilocybin. I am pleased to tell the hon. Lady that our response to the council’s recommendations will be published as soon as possible.
Dr Kieran Mullan (Crewe and Nantwich) (Con)
The Prime Minister
As I set out at the NFU conference just a couple of weeks ago, we will always back British farmers for continuing to produce fantastic food. We are accelerating that plan, with the largest package of grants ever. Indeed, one of the new schemes opens just today, supporting farmers with up to £125,000 towards the purchase of new equipment and technology. Our schemes in England are all about more choice, not less. Unlike Labour in Wales, we will never introduce top-down, arbitrary targets that damage farm incomes, damage our food security and take farmers back to square one.
Keir Starmer (Holborn and St Pancras) (Lab)
Three years ago, Sarah Everard was walking home when she was abducted and murdered by a serving police officer who should have been trusted to keep her safe. As a father, I cannot imagine the pain her parents, her family and her friends are going through in this difficult anniversary week. Lady Angiolini’s report exposes the appalling failure in police vetting and in misconduct processes, and I am very troubled by its conclusion that there is
“nothing to stop another Couzens operating in plain sight”.
How can that be the case, three years on from this horrendous crime?
The Prime Minister
Can I first say that I am sure all Members of the House will have been thinking about Sarah Everard in recent weeks? It was, as the right hon. and learned Gentleman said, an absolutely shocking case, and the abuse of power in particular was appalling. That is why we took action quickly to strengthen police vetting and strengthen the rules for rooting out officers who are not fit to serve, and conducted the largest ever screening of all serving officers and staff. We are now ensuring that any officer who has been charged with a crime will be suspended from duty automatically until their case is concluded, and we will thoroughly consider all the report’s recommendations and respond in full.
Keir Starmer
The Prime Minister mentions vetting and I just want to press him on that, because serious failures in police vetting were raised in independent reports as long ago as 2012, 2019, 2022 and 2023. That is why Labour has been arguing for mandatory national vetting standards that would stop anybody with a history of domestic abuse or sexual offending being allowed to join the police in the first place. Why are mandatory national vetting standards not already in place?
The Prime Minister
It is vital for public confidence that those who are not fit to wear the badge are rooted out of the police and not able to join in the first place. That is why the College of Policing updated its statutory code on vetting, and that happened quickly. In addition, the policing inspectorate carried out a rapid inspection of all forces’ progress against the previous findings and, in addition to that, an entire check against the national police database was carried out for all serving officers and staff.
Keir Starmer
I am obviously very familiar with codes in criminal justice systems, but—[Interruption.] This is too serious for that. There is a world of difference between a code and binding mandatory standards which do not have legal effect, and that should trouble Members across the House.
Couzens’ history of sexual offending stretched back many years. On four occasions, despite allegations of indecent exposure, he was not sacked. We know that indecent exposure is a gateway to more horrific crimes, as was tragically shown to be the case not only in Sarah Everard’s case but in that of Libby Squire, but it is not treated with the seriousness required. The Angiolini report recommends reviewing all indecent exposure allegations against serving officers in order to identify, investigate and remove those officers from service. Given the obvious urgency of this recommendation, can the Prime Minister give a categorical assurance that it will be implemented immediately?
The Prime Minister
The Home Secretary addressed this specifically when he made his statement. Indecent exposure, just like any other kind of sexually motivated crime, is abhorrent and we expect police chiefs to take it extremely seriously. We fully expect police chiefs to suspend an officer charged with any kind of sexually motivated crime. It is worth pointing out that, in addition to the new powers that the Home Secretary outlined about automatic suspension, chief constables have existing powers to suspend any officer in their force when allegations are made, and we fully expect them to use those powers.
Keir Starmer
I do think the recommendation that I referred to should be implemented urgently and I ask the Prime Minister to look again at that, because every day that goes past when it is not implemented carries risk for victims in these cases.
Sarah Everard’s murder should have been a watershed moment for policing reform, for the criminal justice system and for violence against women and girls, but the sad reality is that victims of rape who have the courage and bravery to come forward have just a 2.4% chance of their perpetrator being caught and charged within the year. How does the Prime Minister expect women to have confidence in the criminal justice system when almost all rapists do not see the inside of a courtroom?
The Prime Minister
As we acknowledged a couple of years ago, of course we need to do more to improve rape outcomes in the criminal justice system, and the rape review action plan is showing considerable progress. We have already increased the average sentence for rape by a third since Labour was last in office—by the way, using a power that the Labour party voted against in this House. Thanks to our action plan, we have seen police referrals double and charges double, and last year there was a 50% increase in rape convictions—and now rapists will serve every single day of their sentence behind bars.
The right hon. and learned Gentleman raises his time at the Crown Prosecution Service, but he has not acknowledged that, under his tenure, rape convictions actually dropped.
Keir Starmer
The Prime Minister knows that is going to be fact checked. He also knows that I support tough sentences. I really think that victims of violence against women and girls deserve better than this nonsense from the Prime Minister. It needs to be taken seriously. It is not a game.
We all want more victims to come forward, but we have to be honest that, unless things change, the criminal justice system will continue to fail them. That is why we are committed to introducing specialist rape and sexual offences teams in every force to give victims specialist support and confidence that their experience will be investigated properly. When will the Prime Minister commit to doing the same?
The Prime Minister
We have already implemented the rape review action plan. The Leader of the Opposition says that we need to take this seriously, and here are the things that we have done: we have ended the appalling digital strip search of victims’ mobile phones; we have ensured that there is better use of pre-recorded cross examination; we have rolled out Operation Soteria, with incredible success, across all the nation’s police forces; we have significantly increased the number of independent sexual and domestic violence and abuse advisers to up to 1,000; and there is more specialist training in all police forces for these prosecutions. That is the plan we have already put in place, and it is a plan that is working to ensure that we keep the women and girls of this country safe.
Keir Starmer
The problem is that the rosy picture the Prime Minister tries to paint of the current criminal justice system is completely at odds with the confidence that many women currently have in it. With the publication of the Angiolini report, the country deserves to know that we are doing all we can to make our country safe for women. That starts with what should be the most basic task: creating a safe workplace here in Westminster. At the moment, as everyone in this House knows, we are failing in that endeavour, and we all have a duty to change that. When will the Prime Minister make time for the vote on banning from Parliament those MPs who face allegations of sex offences?
The Prime Minister
It is absolutely right that we ensure our communities are safe for women and girls, which is why we passed the landmark Domestic Abuse Act 2021, why we set up a new 24/7 victim support line, why we quadrupled funding for victim support and why we are investing in practical things like CCTV and better streetlighting for safer communities up and down the country. Of course, there is always more we can do, but this Government have a strong track record on ensuring that women across this country feel safe.
Andrew Rosindell (Romford) (Con)
The Prime Minister
My hon. Friend is right to highlight the challenge that high energy bills have posed not just to his constituents in Romford but to constituents across the country. That is why we stepped in with a significant package of support that paid around half of a typical household energy bill when prices were at their highest.
I know my hon. Friend will join me in welcoming the fact that the energy price cap is set to fall by almost £250 in April, which will bring relief to many families, but we must hold companies to account. That is why we introduced the energy profits levy on the windfall profits caused by an unexpected increase in energy prices. We are going further to cut people’s costs by cutting their taxes and putting more money into their family bank accounts.
Stephen Flynn (Aberdeen South) (SNP)
Much to my surprise, this morning it has been widely reported that the Conservative party in Scotland is absolutely furious that Westminster is about to tax Scotland’s natural resources in order to pay for a tax cut in England. Is the Prime Minister in danger of turning his colleagues into nationalists?
The Prime Minister
Obviously, I would not comment on the Budget, but I will say that when I was in Scotland last week it was crystal clear that there has only ever been one party consistently standing up for the North sea energy industry, and it is the Scottish Conservatives.
Stephen Flynn
The Prime Minister knows that not to be the case. But there is a serious point to be made here: the Conservative party wants to use Scotland’s natural resources to pay for tax cuts in England, and the Labour party wants to use Scotland’s natural resources to pay for nuclear power stations in England—the cost of that is up to 100,000 jobs. Scotland’s wealth, resources and jobs are all a game to Westminster. With the Tories on just 15% in the polls in Scotland now, will the Prime Minister do us all a favour and call a general election?
The Prime Minister
The hon. Gentleman claims to be supportive of the North sea energy industry, but why has he opposed all the measures that we have taken to protect those jobs in Scotland over the past couple of years? He talks about tax in Scotland and England. I gently point out to him that, thanks to the actions of the Chancellor and this UK Government, everyone in Scotland has received a significant tax cut from January this year. In contrast to the Chancellor’s last Budget, the SNP’s budget put taxes up for working Scots. Scotland is now the high-tax capital of the UK, but this Conservative Government are going to keep cutting taxes for hard-working Scots.
Sir David Davis (Haltemprice and Howden) (Con)
The Prime Minister
My right hon. Friend is absolutely right to highlight the appalling impact that this miscarriage of justice has had on people’s mental health. As he acknowledged, our focus is on delivering justice for the postmasters, and that is why we will introduce legislation to overturn convictions and pave the way for the swift payment of compensation. I thank him for his long-standing campaign on mental health on this issue, and I assure him that the postal Minister is closely examining the issues he raises, is considering next steps and will keep my right hon. Friend closely informed.
Sir Jeffrey M. Donaldson (Lagan Valley) (DUP)
The Prime Minister will be aware that the Government’s proposals to deal with the legacy of our troubled past in Northern Ireland continue to be the subject of scrutiny, most recently in the High Court ruling in relation to compatibility with our human rights obligations. Many families of victims in Northern Ireland are deeply disappointed with the lack of co-operation by the Irish Government in relation to murders committed in their jurisdiction or from their jurisdiction. In relation to the Omagh bomb inquiry, for example, the Irish Government have declined to conduct a public inquiry on this worst atrocity in our troubled past, despite the courts urging them to do so. Will the Prime Minister continue to press the Irish Government on the need for them to make available facilities to enable the families of innocent victims, including in Omagh, to pursue justice for their loved ones?
The Prime Minister
I thank my right hon. Friend for his question on this important topic, which I know will be of great interest, not only to his constituents, but to many others across Northern Ireland. The Government have set forward their plans to deal with the legacy of the past and will continue to engage with everyone in Northern Ireland, whatever their views, to set out the best way forward. I can confirm to him that the Secretary of State for Northern Ireland has raised these specific issues directly with the Irish Government and will continue to do so. I, too, spoke to the Taoiseach about this very matter. We would hope to see further co-operation on Omagh and many other outstanding cases that involve Irish jurisdiction, because, like my right hon. Friend, I want to give families as much information as possible.
Jack Lopresti (Filton and Bradley Stoke) (Con)
The Prime Minister
I reassure my hon. Friend that we remain steadfast in our support for Ukraine and we will not allow Putin to achieve his aim of eradicating Ukrainian freedom and democracy. Our cross-Government taskforce is working diligently to support the armed forces of Ukraine and lead UK and Ukrainian defence industrial co-operation. I am pleased to say that in December last year, we conducted our first successful trade mission to Ukraine, alongside the UK defence industry. The Government and UK industry will continue to work hand in glove with our Ukrainian allies, seizing the opportunity for collaboration and bolstering our joint defence industries.
Graham Stringer (Blackley and Broughton) (Lab)
The Prime Minister
On the contrary, inequality in our country has actually declined under this Conservative Government. When it comes to levelling up in the north, the north has received some of the highest amounts of per capita levelling-up funding of any region in the country. After the hon. Gentleman last popped up to ask me a question about our investment in the north, did he manage to get an answer about what exactly is the Labour party’s position on HS2? I would still like to know, because we are taking that money and reinvesting every penny of it across the north in forms of transportation that people use every day, delivering benefits to communities more quickly, not just in his constituency but across the entire north. That has been warmly welcomed everywhere that I have been.
Sir David Evennett (Bexleyheath and Crayford) (Con)
Does my right hon. Friend agree that the performance of the Labour party in voting down our Rwanda Bill in the House of Lords was a disgrace? It is only the Conservative Government and the Conservatives who have a plan for dealing with illegal immigration and the people smugglers. Action on illegal immigration is a top priority in my constituency, and Labour has no policy or plan on this at all.
The Prime Minister
My right hon. Friend makes an excellent point. He knows, as I know, that if we want fully to stop the boats, we need to have a working deterrent, so if someone comes here illegally, we must be able to remove them to a safe third country alternative. That is why the Rwanda scheme is so important, and why we are determined to see it through. Just in the past week, an independent report was published that talked about the Labour party’s policies in this area. It made it crystal clear that Labour does not have a plan to stop the boats. In fact, its idea would see the UK accept hundreds of thousands more migrants.
Dame Angela Eagle (Wallasey) (Lab)
The Prime Minister
Saving 10 million jobs in the pandemic with the furlough scheme.
Mark Pritchard (The Wrekin) (Con)
The Prime Minister will know that there is consensus across this House on the need to build new houses. Where that consensus breaks down is where those houses should be built. Does the Prime Minister agree with me that, wherever possible, new houses should be built on brownfield sites, not on green spaces, not on green fields, and certainly not on prime farmland?
The Prime Minister
My right hon. Friend is absolutely right: sustainable planning must be at the heart of our planning system. That is why we are committed to meeting the needs of communities by building homes in the right places and, as he says, making best use of brownfield land. We have made it clear that that is what the priority should be and we have put extra funding aside to unlock those sites. Our recent changes to the national planning policy framework provide clearer protection for the green belt, making it clear how future housing supply should be assessed. That is the clear difference between our two parties: the Conservatives will protect the green belt and Labour will concrete all over it.
Andrew Gwynne (Denton and Reddish) (Lab)
The Prime Minister
I do not think that would be proportionate or appropriate. [Hon. Members: “Oh!”] No, I do not think it would be proportionate for all Ministers to publish their tax returns. In keeping with long-standing tradition, I voluntarily published my tax returns, as did the Chancellor. That is the right balance and I have been completely transparent about that as I have done it.
Chris Grayling (Epsom and Ewell) (Con)
Last year, a number of us were on the first transatlantic flight powered by sustainable aviation fuel. This week, the International Airlines Group made its first major purchase of that fuel, but that fuel is coming from the United States and it is important that we have a SAF industry in this country. Will the Prime Minister tell the Treasury and the Department for Transport to accelerate the work that they are doing to put in place the right framework and the right support mechanisms to ensure that we have a SAF industry for our aviation sector for the future?
The Prime Minister
I thank my right hon. Friend for championing this cause, which is absolutely right, and reassure him that we are committed to ensuring that the SAF mandate is in place in 2025. That will require about 10% of jet fuel to be made from sustainable feedstock by 2030. I am pleased to tell him that, to get there, we have provided £135 million to 13 different UK sustainable aviation fuel projects to kickstart our domestic industry and, importantly, as he also knows, we have committed to introducing a revenue certainty mechanism to support SAF production in the UK as soon as practically possible.
Samantha Dixon (City of Chester) (Lab)
The Prime Minister
I join the hon. Lady in paying tribute to the history of her local community. I am pleased that the city of Chester is benefiting from so much investment from the Conservative Government, so that it can maintain its local infrastructure.
Mr Louie French (Old Bexley and Sidcup) (Con)
Five weeks ago, Conservative MPs from across south-east London and Kent wrote to Transport for London and the Labour Mayor of London to call on them to do the right thing following the botched implementation of a temporary 40 mph speed limit on the A20 near Sidcup, which has seen thousands of drivers unfairly issued with fines and points on their licence. It has left many drivers, including carers, emergency service workers and teachers, at risk of losing their licences and jobs, despite travelling less than 50 miles an hour in the zone. Does he agree that TfL, the Met police and Sadiq Khan must come clean about the number of fines, and cancel these issued points?
The Prime Minister
I thank my hon. Friend for the question. I understand the concerns that local drivers have over this ongoing TfL issue. Although, we are doing everything we can to back motorists across the country, it is disappointing that the Labour Mayor and, indeed, Labour-run Wales are hammering drivers at every opportunity, whether that is with temporary speed limits, blanket 20 mph zones, or the ultra low emission zone expansion. I will make sure my hon. Friend has a meeting with the responsible Minister to discuss his concerns.
Judith Cummins (Bradford South) (Lab)
The Prime Minister
I agree with the hon. Lady that spiking is an appalling, violating crime, which seriously undermines public safety, particularly the safety of women and girls, and we want to ensure that the existing laws recognise the threat that spiking poses. That is why at the end of last year we announced a raft of new measures to confront spiking and support victims, including changing the law to make it clear without any doubt that spiking is illegal, as well as other measures, such as an online reporting tool, investing in research and rapid testing kits, and training for bar staff. I will ensure that we look into the issue that she raises and write back to her.
Ben Bradley (Mansfield) (Con)
This winter, there has been significant flood and storm damage to the infrastructure in and around my constituency of Mansfield, including our roads, drains, and flood infrastructure. It is among the highest concerns that residents raise with me on a regular basis. I am really grateful that from next year in particular very significant infrastructure funding is coming our way, but what can my right hon. Friend do to help fix this for my constituents now?
The Prime Minister
I am pleased that in 2020 we announced that we would double our flood investment to a record £5.2 billion. In Nottinghamshire, since 2010 we have invested over £50 million to protect 15,000 properties. I know that currently there is a programme in Mansfield that is looking at surface water and drainage improvements, but I will ensure that I talk to the Chancellor, and that we have a strong economy to keep investing in local infrastructure in my hon. Friend’s area. That is exactly what we are about to hear from my right hon. Friend in just a second.
Ways and Means
Financial Statement and Budget Report
(2 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
13:41 - The House divided: - Ayes: 288 / Noes: 38 - Question accordingly agreed to.
Madam Deputy Speaker (Dame Eleanor Laing)
Before I call the Chancellor of the Exchequer, I remind hon. Members that copies of the Budget resolutions will be available to them from the Vote Office in Members’ Lobby and online at the end of the Chancellor’s statement. I also remind hon. Members that interventions are not taken during the Chancellor’s statement, or during the replies of the Leader of the Opposition and the spokesman for the Scottish National party. I hope that the hubbub on my right will die down, and some politeness will prevail before I call the Chancellor of the Exchequer.
The Chancellor of the Exchequer (Jeremy Hunt)
As we mourn the tragic loss of life in Israel and Gaza, the Prime Minister reminded us last week of the need to fight extremism and heal divisions, so I start today by remembering the Muslims who died in two world wars in the service of freedom and democracy. We need a memorial to honour them, so following representations from my right hon. Friend the Member for Bromsgrove (Sir Sajid Javid) and others, I have decided to allocate £1 million towards the cost of building one. Whatever your faith, colour or class, this country will never forget the sacrifices made for our future.
In recent times, the UK—and the UK economy—has dealt with a financial crisis, a pandemic and an energy shock caused by war in Europe, yet despite the most challenging economic headwinds in modern history, under Conservative Governments since 2010 growth has been higher than in every large European economy, unemployment has halved, absolute poverty has gone down, and there are 800 more people in jobs for every single day that we have been in office. [Interruption.] Of course, interest rates remain high as we bring down inflation, but because of the progress we have made, because we are delivering the Prime Minister’s economic priorities, we can now help families not just with temporary cost of living support, but with permanent cuts in taxation. We do that to give much needed help in challenging times, and because Conservatives know that lower tax means higher growth, and higher growth means more opportunity, more prosperity and more funding for our precious public services. [Interruption.]
Madam Deputy Speaker
Order. The Chancellor has hardly said anything—[Interruption.] Order. You cannot get excited yet. Other people want to hear what the Chancellor has to say. It matters, so we will have a bit of good behaviour, please.
Jeremy Hunt
Thank you, Madam Deputy Speaker.
If we want that growth to lead to higher wages and higher living standards for every family in every corner of the country, it cannot come from unlimited migration; it can only come by building a high-wage, high-skill economy—not just higher GDP, but higher GDP per head.
That is the difference. The Labour party’s plans would destroy jobs, reduce opportunities and risk family finances with spending that pushes up taxes. Instead of going back to square one, the policies I announce today mean more investment, more jobs, better public services and lower taxes in a Budget for long-term growth.
I start with the updated forecasts from the Office for Budget Responsibility, for which I thank Richard Hughes and his team. First, inflation. When the Prime Minister and I came into office, it was 11%. The latest figures show—[Interruption.]
Madam Deputy Speaker
Order. This is not amusing any more. We need to hear what the Chancellor has to say. I can tell who is making the noise, and you simply will not get a chance to speak later. That is the end of it.
Jeremy Hunt
When the Prime Minister and I came into office, inflation was 11%, but the latest figures show it is now 4%—more than meeting our pledge last year to halve it. Today’s forecasts from the OBR show it falling below the 2% target in just a few months’ time, nearly a whole year earlier than forecast in the autumn statement.
That did not happen by accident. Whatever the pressures, and whatever the politics, a Conservative Government, working with the Bank of England, will always put sound money first. We also understand that tackling inflation, while necessary, is painful. It means higher interest rates and a period of lower growth, so we have given the average household £3,400 in cost of living support over the past two years. Doing so makes economic as well as moral sense. The OBR predicted real household disposable income per person would fall by 2% in the past year; instead, after that support, it is on track to rise by 0.8%.
Today, I take further steps to help families with cost of living pressures, starting with measures to help the poorest families. We have already abolished higher charges for electricity paid by those on prepayment meters, increased the local housing allowance and raised benefits by double the expected inflation. Today, I focus on those falling into debt. Nearly 1 million households on universal credit take out budgeting advance loans to pay for more expensive emergencies such as boiler repairs or help getting a job. To help make such loans more affordable, I have decided to increase the repayment period for new loans from 12 months to 24 months.
For some people—[Interruption.] I thought Labour Members cared about people on the lowest incomes, but trust them not to want to hear about debt. For some people the best way to resolve debt is through a debt relief order, but getting one costs £90, which can deter the very people who need them most, so, having listened carefully to representations from Citizens Advice, I today relieve pressure on around 40,000 families every year by abolishing that £90 charge completely.
Next, the household support fund. It was set up on a temporary basis and due to conclude at the end of this month. Having listened carefully to representations from the Joseph Rowntree Foundation, the Trussell Trust, the right hon. Member for East Ham (Sir Stephen Timms), my right hon. Friend the Member for Suffolk Coastal (Dr Coffey) and my hon. Friends the Members for Colchester (Will Quince) and for Ruislip, Northwood and Pinner (David Simmonds) among others, I have decided that, with the battle against inflation still not over, now is not the time to stop the targeted help that it offers. We will therefore continue it at current levels for another six months.
Next, I turn to a measure that will help businesses and households more broadly. In the autumn statement I froze alcohol duty until August of this year. Without any action today, it would have been due to rise by 3%. However, I have listened carefully to my right hon. Friends for Altrincham and Sale West (Sir Graham Brady) and for Vale of Glamorgan (Alun Cairns), and to my hon. Friend the Member for Moray (Douglas Ross), who is a formidable champion of the Scottish whisky industry. I also listened to Councillor John Tonks from Ash—a strong supporter of the wonderful Admiral pub—who pointed out the pressures facing the industry. Today, I have decided to extend the alcohol duty freeze until February 2025. That will benefit 38,000 pubs across the UK, on top of the £13,000 saving that a typical pub will get from the 75% business rates discount that I announced in the autumn. We value our hospitality industry. We are backing the great British pub.
Another cost that families and businesses worry about is fuel. The shadow Chancellor complained about the freeze on fuel duty. Labour has opposed it at every opportunity. The Labour Mayor of London wants to punish motorists even more with his ultra low emission zone plans. However, lots of families and sole traders depend on their car. If I did nothing, fuel duty would increase by 13% this month, so instead I have listened to my right hon. Friend the Member for Witham (Priti Patel), my hon. Friends the Members for Stoke-on-Trent North (Jonathan Gullis) and for Dudley North (Marco Longhi) and others, as well as to The Sun newspaper’s “Keep it Down” campaign. I have as a result decided to maintain the 5p cut and freeze fuel duty for another 12 months. That will save the average car driver £50 next year and bring total savings since the 5p cut was introduced to around £250. Taken together with the alcohol duty freeze, that decision also reduces headline inflation by 0.2 percentage points in 2024-25, allowing us to make faster progress towards the Bank of England’s 2% target.
There can be no solid growth without solid finances. An economy based on sound money does not pass its bills to the next generation. When it comes to borrowing, some believe that there is a trade-off between compassion and fiscal responsibility. They are wrong. It is only because we responsibly reduced the deficit by 80% between 2010 and 2019 that we could provide £370 billion to help businesses and families in the pandemic. Labour opposed our plans to reduce the deficit every single step of the way, but, to be fair, they were consistent. In coalition, the Lib Dems supported controlling spending, but now they say that they would prop up a party that will turn on the spending taps. It is the difference between no plan and no principles—and I am delighted that, for once, the right hon. Member for Kingston and Surbiton (Ed Davey) is here to hear that.
Today, we say something different: there is nothing compassionate about running out of money. With the pandemic behind us, we must once again be responsible and build up our resilience to future shocks. That means bringing down borrowing so we can start to reduce our debt, and today’s figures confirm that is happening. Ahead of my first autumn statement in 2022, the OBR forecast that headline debt would rise to above 100% of GDP. Today, it says that it will fall in every year, to just 94% by 2028-29. According to the OBR, underlying debt—which excludes Bank of England debt—will be 91.7% in 2024-25, then 92.8%, 93.2% and 93.2%, before falling to 92.9% in 2028-29, with final year headroom against debt falling of £8.9 billion. Our underlying debt is therefore on track to fall as a share of GDP, meeting our fiscal rule, and we continue to have the second lowest level of Government debt in the G7, lower than that of Japan, France or the United States.
We also meet our second fiscal rule—for public sector borrowing to be below 3% of GDP—three years early. Borrowing falls from 4.2% of GDP in 2023-24 to 3.1%, then 2.7%, 2.3%, 1.6%, and 1.2% in 2028-29. By the end of the forecast, borrowing is at its lowest level of GDP since 2001. None of that, of course, would be possible if Labour implemented its pledge to decarbonise the grid five years early, by 2030; by its own calculations, that costs £28 billion a year to do. Last month, after flip-flopping for months, Labour said that it is not going to spend the £28 billion after all, but will somehow meet its pledge. “Somehow” can only mean one thing: tax rises on working families. Same old Labour!
Today, in contrast, a Conservative Government bring down taxes with borrowing broadly unchanged—in fact, borrowing is slightly lower than in the autumn statement. The fact that we are bringing borrowing down is of particular importance to one very special person: Sir Robert Stheeman is the outgoing chief executive of the Government’s Debt Management Office, and after 20 years of exceptional public service, he is in the Gallery. Thank you, Sir Robert.
I now turn to growth. Just after I became Chancellor, the OBR expected GDP to fall by 1.4% in the following year; in fact it grew, albeit slowly. Now the OBR expects the economy to grow by 0.8% this year and 1.9% next year, which is 0.5% higher than its autumn forecast. After that, growth rises to 2.2%, 1.8%, and 1.7% in 2028. [Interruption.] Opposition Members do not want to hear this, but these are the facts. Since 2010, we have grown faster than Germany, France or Italy—the three largest European economies—and according to the International Monetary Fund, we will continue to grow faster than all three of them in the five years ahead. Surveys by Lloyds and Deloitte show that business confidence is returning. In other words, because we have turned the corner on inflation, we will soon turn the corner on growth.
Today’s OBR forecasts also show that we have made good progress on the Prime Minister’s three economic priorities. Compared to when the three pledges were made, inflation has halved, debt is falling in line with our fiscal rules, and growth is fully 1.5 percentage points higher than predicted. [Interruption.] Labour Members do not have a growth plan, so they might as well listen to ours. As growth returns, our plan is for economic growth, not growth sustained through migration, but growth that raises wages and living standards for families—not just higher GDP, but higher GDP per head. That means sticking to our plan, with a Budget for long-term growth: more investment, more jobs, better public services and lower taxes.
I start with investment. Economists say that stimulating investment is the most effective way to raise productivity, and therefore wages and living standards. Since 2010, we have been doing just that. Business—[Interruption.] Labour Members might want to listen to what I am about to say, because business investment has risen from an average of 9.3% of GDP under Labour to 9.9% under the Conservatives. This year, it will be 10.6% of GDP. That is £30 billion more business investment than if it had continued at Labour levels, and it is still going up.
In the short period since the autumn statement, Nissan has announced that it will build two new electric car models in the UK. Microsoft and Google have announced data centres worth over £3 billion. Thanks to my right hon. Friend the Business Secretary, the global investment summit unlocked £30 billion of investment. In fact, since 2010, greenfield foreign direct investment has been higher here than anywhere else in Europe, and for the last three years the UK has had the third highest levels in the world after the United States and China—and we are not stopping there.
In the autumn statement, I announced that we would introduce permanent full expensing, a £10 billion tax cut for businesses that gives the UK the most attractive investment tax regime of any large European or G7 country. It was welcomed by over 200 business leaders, with the CBI saying it was a game changer and the single most transformational thing we could do to fire up the British economy. Today, I take further steps to boost investment. Having listened to calls from the CBI, Make UK and the British Chambers of Commerce, we will shortly publish draft legislation for full expensing to apply to leased assets, a change I intend to bring in as soon as it is affordable.
We will also help small businesses, which is something close to my heart. As well as the business rates support, and the work on prompt payments that I announced in the autumn, I will provide £200 million of funding to extend the recovery loan scheme as it transitions to the growth guarantee scheme, helping 11,000 small and medium-sized enterprises access the finance they need. Following representations from the Federation of Small Businesses, as well as my hon. Friends the Members for Loughborough (Jane Hunt), for Southend West (Anna Firth), and for Rother Valley (Alexander Stafford), I will reduce the administrative and financial impact of VAT by increasing the VAT registration threshold from £85,000 to £90,000 from 1 April—the first increase in seven years. That will bring tens of thousands of businesses out of paying VAT altogether, and encourage many more to invest and grow.
I now move to measures to address historical under-investment in our nations and regions. Since we started levelling up in 2019, two thirds of all new salaried jobs created have been outside London and the south-east. We have announced 13 investment zones and 12 freeports, which continue to attract investment—including recently, thanks to the efforts of Mayor Ben Houchen, from the Pneuma Group, which is investing £15 million into the Tees Valley investment zone.
Today, working with the Levelling-Up Secretary, I devolve further power to local leaders, who are best placed to promote growth in their areas. I can announce the north-east trailblazer devolution deal, which provides a package of support for the region potentially worth over £100 million. I will devolve powers to Buckinghamshire, Warwickshire and the most beautiful county in England, Surrey. I see the Leader of the Opposition smiling because, like me, he is a Surrey boy. I know he has been taking advice from Lord Mandelson, who yesterday rather uncharitably said he needed to “shed a few pounds”. Ordinary families will shed more than a few pounds if that lot get in. If he wants to join me on my marathon training, he is most welcome.
Today, we continue to spread opportunity throughout the country by allocating £100 million of levelling-up funding to areas including High Peak, Dundee, Conwy, Erewash, Redditch and Coventry to support cultural projects in these communities. That is alongside support for capital projects across the country, including in Bingley. We are expanding the long-term plan for towns to 20 new places, including Darlington—home of the Treasury’s fantastic Darlington economic campus—Coleraine, Peterhead, Runcorn, Harlow, Eastbourne, Arbroath and Rhyl, providing each with £20 million of funding to invest in community regeneration over the next decade. We will provide £15 million in new funding to the West Midlands Combined Authority to support culture, heritage and investment projects, on the recommendation of our go-getting Mayor, Andy Street, and we will allocate £5 million to renovate hundreds of local village halls across England, so that they can remain at the heart of their communities.
Because this is a Conservative and Unionist Government, we will also set aside funding to support the SaxaVord spaceport in Shetland and an agrifood launchpad in mid-Wales, and funding to support Northern Ireland’s businesses in expanding their global trade and investment opportunities. As a result of the decisions we take today, the Scottish Government will receive nearly £300 million in Barnett consequentials; there will be nearly £170 million for the Welsh Government and £100 million for the Northern Ireland Executive. [Interruption.] I do appreciate that a tax-cutting Budget is very uncomfortable for the biggest tax-raisers in the United Kingdom. We also want to level up opportunity across the generations, including by building more houses for young people, and we are on track to deliver over 1 million homes in this Parliament.
Last week, the Levelling-Up Secretary allocated £188 million to supporting projects in Sheffield, Blackpool and Liverpool. Today I go further, allocating £242 million of investment to Barking Riverside and Canary Wharf, which together will build nearly 8,000 houses; Canary Wharf will also be transformed into a new hub for life science companies. We are launching a new £20 million community-led housing scheme that will support local communities in delivering the developments that they want and need. I am pleased to announce the next steps for Cambridge to reach its potential as the world’s leading scientific powerhouse. I confirm that there will be a long-term funding settlement for the future development corporation in Cambridge at the next spending review; there will be over £10 million invested in the coming year to unlock delivery of crucial local transport and health infrastructure.
The final levelling-up measures I announce today support north Wales, of which I have many happy childhood memories. In Mold, following representations from my hon. Friend the Member for Vale of Clwyd (Dr Davies), we will help fund the renovation of Theatr Clywd. I can announce that this week, the Government have reached agreement on a £160 million deal with Hitachi to purchase the Wylfa site in Ynys Môn and the Oldbury site in south Gloucestershire. Ynys Môn has a vital role in delivering our nuclear ambitions, and no one should take more credit for today’s announcement than my tireless, tenacious and turbocharged hon. Friend the Member for Ynys Môn (Virginia Crosbie). More investment by large businesses, more support for small businesses, promoting investment in our nations and regions—all part of a Budget for long-term growth that sticks to our plan to deliver more jobs, better public services and lower taxes.
I turn to one of the most powerful ways to attract investment: supporting our most innovative industries. Outside the US, we have the most respected universities, the biggest financial services sector and the largest tech ecosystem in Europe. We have double the artificial intelligence start-ups of anywhere else in Europe, double the venture capital investment, and a tech economy now double the size of Germany’s and three times the size of France’s. We are on track to become the world’s next silicon valley.
In today’s Budget for long-term growth, I take further steps to attract investment to our technology-related industries. I want our brilliant tech entrepreneurs to not just start here, but stay here, including when the time comes for a stock market listing, so we will build on the Edinburgh and Mansion House reforms to unlock more pension fund capital. We will give new powers to the Pensions Regulator and the Financial Conduct Authority to ensure better value from defined contribution schemes by judging performance on overall returns, not cost.
We will make sure that there are vehicles to make it easier for pension funds to invest in UK growth opportunities, so I am today publishing the names of the winners of the LIFTS—long-term investment for technology and science—competition. But I remain concerned that other markets, such as Australia, generate better returns for pension savers, with more effective investment strategies and more investment in high-quality domestic growth stocks. So I will introduce new requirements for defined-contribution and local government pension funds to disclose publicly their level of international and UK equity investments. I will then consider what further action should be taken if we are not on a positive trajectory towards international best practice.
I also want to create opportunities for a new generation of retail investors to engage with public markets, so we will proceed with a retail sale for part of the Government’s remaining NatWest shares this summer, at the earliest opportunity, subject to supportive market conditions and value for money. We will continue to explore how savers could be allowed to take their pension pots with them when they change job. We will make it easier for people to save for the long term with a new British savings bond, delivered through National Savings and Investments, offering savers a guaranteed rate, fixed for three years.
Today, following calls from over 200 representatives of the City and our high-growth sectors, I will reform the ISA system to encourage more people to invest in UK assets. After a consultation on its implementation, I will introduce a brand-new British ISA, which will allow an additional £5,000 annual investment for investments in UK equity, with all the tax advantages of other ISAs. That will be on top of existing ISA allowances and will ensure that British savers can benefit from the growth of the most promising UK businesses, as well as supporting those businesses with the capital to expand.
I now turn to our other growth industries, starting with clean energy. We want nuclear to provide up to a quarter of our electricity by 2050. As part of that, I want the UK to lead the global race in developing cutting-edge nuclear technologies. I can therefore announce that Great British Nuclear will begin the next phase of the small modular reactor selection process, with companies now having until June to submit their initial tender responses. Our brilliant Secretary of State for Energy Security and Net Zero will also allocate up to £120 million more to the green industries growth accelerator, to build supply chains for new technology, ranging from offshore wind to carbon capture and storage. By January next year, as promised in the autumn statement, we will have a new, faster connections process to the grid up and running. In advanced manufacturing we have announced a further £270 million of investment into innovative new automotive and aerospace research and development projects, building the UK’s capabilities in zero-emission vehicle and clean aviation technologies.
I now turn to our creative industries. We have become Europe’s largest film and TV production centre, with Idris Elba, Keira Knightley and Orlando Bloom all filming their latest productions here. Studio space in the UK has doubled over the last three years and, at the current rate of expansion, next year we will be second only to Hollywood globally. In the autumn statement I committed to providing more tax relief for visual effects in film and high-end TV. I can today confirm that we will increase the rate of tax credit by 5%, and remove the 80% cap for visual effects costs in the audio-visual expenditure credit. Having worked closely with the Secretary of State for Culture, Media and Sport, and listened carefully to representations from companies such as Pinewood, Warner Bros. and Sky Studios, we will provide eligible film studios in England with a 40% relief on their gross business rates until 2034. Having heard representations from the British film industry, Pact, and indeed the Prime Minister, we will introduce a new tax credit for UK independent films with a budget of less than £15 million. For our creative industries more broadly, we will provide £26 million of funding to our pre-eminent theatre, the National Theatre, to upgrade its stages.
I particularly want to recognise the contribution of our creative industries and the tourism that comes from orchestras, museums, galleries and theatres. In the pandemic, we introduced higher 45% and 50% levels of tax relief, which were due to end in March 2025. They have been a lifeline for performing arts across the country. Today, in recognition of their vital importance to our national life, I can announce that I am making those tax reliefs permanent at 45% for touring and orchestral productions, and 40% for non-touring productions. Lord Lloyd Webber says that this will be a once-in-a-generation transformational change that will ensure Britain remains the global capital of creativity.
I suspect that the new theatre reliefs may be of particular interest to the shadow Chancellor, who seems to fancy her thespian skills when it comes to acting like a Tory. The trouble is that we all know how her show ends: higher taxes, like every Labour Government in history—[Interruption.] I am delighted that Labour Members are cheering the fact that Labour Governments always put up taxes. They are right!
I want to mention our life sciences sector, where we will support research by medical charities into diseases such as cancer, dementia and epilepsy with an additional £45 million, including £3 million for Cancer Research UK. But I have long believed that we should be manufacturing medicines as well as developing them, so I can today also announce a brand-new investment by one of our greatest life science companies, AstraZeneca, led by mon ami the irrepressible Sir Pascal Soriot. AstraZeneca made its covid vaccine available to developing countries at cost, as a result saving over 6 million lives. Today, because of the Government’s support for the life sciences sector, it has announced plans to invest £650 million in the UK to expand its footprint on the Cambridge biomedical campus, and fund the building of a vaccine manufacturing hub in Speke in Liverpool. That is more investment and better jobs in every corner of the country in a long-term Budget for growth from a Conservative Government.
One of the biggest barriers to investment is businesses not being able to hire the staff they need. The economy today has around 900,000 vacancies. It would be easy to fill them with higher migration, but with over 10 million adults of working age who are not in work, that would be economically and morally wrong. Those who can work should work, and I have tackled that issue in every Budget and autumn statement I have delivered. A year ago, I abolished the pensions lifetime allowance, which had pushed doctors and others to take early retirement. Ask any doctor what they think about Labour’s plans to bring it back and they will say, “Don’t go back to square one.” In the autumn, with the help of our superb Secretary of State for Work and Pensions, we announced the back to work plan, which will support 1 million adults with medical conditions and reduce the number of people assessed as not needing to work by two thirds.
A year ago, I also announced the biggest ever expansion of childcare—[Interruption.] Just listen. Extending the 30-hour free childcare offer to all children of working parents from nine months. [Interruption.] We have not had a childcare plan from Labour, so Opposition Members might want to listen to ours. Our plan will mean an extra 60,000 parents enter the workforce in the next four years—a tremendous achievement for the Education Secretary, who I think is doing an effing good job. Today, following representations from many people, including the CBI, I announce measures to support the childcare sector to make the new investments it now needs to make. I am guaranteeing the rates that will be paid to childcare providers to deliver our landmark offer for children over nine months old for the next two years. That is more people in work and more jobs, sticking to our plan in a long-term Budget for growth.
I now turn to public services. [Interruption.] I thought they were supposed to be interested in public services—[Interruption.] I can wait.
Madam Deputy Speaker (Dame Eleanor Laing)
Order. A little bit of murmuring is normal, but I should not be able to hear what Members are saying over there. That is clearly out of order. Let us have some courtesy.
Jeremy Hunt
Thank you, Madam Deputy Speaker.
Good public services need a strong economy to pay for them, but a strong economy also needs good public services. In 2010, schools in the UK were behind Germany, France and Sweden in the OECD’s PISA—programme for international student assessment—education rankings for reading and maths. Now, after Conservative reforms, we are ahead of them. Burglaries and violent crime have halved in the last 14 years after we invested in 20,000 more police officers. Our armed forces remain the most professional and best-funded in Europe, with defence spending already more than 2% of GDP. We are providing more military support to Ukraine than nearly any other country, and our spending will rise to 2.5% as soon as economic conditions allow. The NHS is still recovering from the pandemic but has 42,000 more doctors and 71,000 more nurses than it did under Labour—that is 250 more doctors and 400 more nurses for every single month that we have been in office.
Resources matter, of course, which is why, despite all the economic shocks we have faced, overall spending on public services has gone up since 2010—in the case of the NHS, by more than a third in real terms. Although spending has continued to rise every year, public sector productivity still remains below pre-pandemic levels by nearly 6%. This demonstrates that the way to improve public services is not always more money or more people; we also need to run them more efficiently. We need a more productive state, not a bigger state.
In autumn 2022, I set day-to-day spending to increase by 1% a year in real terms over the next Parliament. Some say that is not enough and we should raise spending by more, and others say it is too much and we should cut it to improve efficiency—neither are right. It is not fair to ask taxpayers to pay for more when public service productivity has fallen; nor would it be wise to reduce that funding, given the pressures that public services face. So I am keeping the planned growth in day-to-day spending at 1% in real terms, but we are going to spend it better. [Interruption.] The Opposition do not have a plan for public services, as with everything else, so why not listen to ours?
Today I am announcing a landmark public sector productivity plan that restarts public service reform and changes the Treasury’s traditional approach to public spending. I start with our biggest and most important public service: the NHS. One of my greatest privileges was to be Health Secretary. Thanks to the NHS, I have three gorgeous children, the oldest of whom has been patiently listening in the Gallery. The NHS is, rightly, the biggest reason most of us are proud to be British, but the systems that support its staff are often antiquated. Doctors, nurses and ward staff spend hours every day filling out forms when they could be looking after patients. [Interruption.]
Madam Deputy Speaker (Dame Eleanor Laing)
Order. I do not like to interrupt the Chancellor, but Mr Streeting, you are too close to me to be shouting that loudly. If you want to shout that loudly, you should go away and sit up there. I apologise for interrupting the Chancellor.
Jeremy Hunt
When patients do not show up or one member of a team is ill, operating theatres are left empty despite long waiting lists. When we published the NHS long-term workforce plan, I asked the NHS to put together a plan to transform its efficiency and productivity. I wanted better care for patients, more job satisfaction for staff and better value for taxpayers. Making changes on the scale we need is not cheap. The investment needed to modernise NHS IT systems so they are as good as the best in the world costs £3.4 billion, but it helps unlock £35 billion of savings—ten times that amount—so in today’s Budget for long-term growth, I have decided to fund the NHS productivity plan in full.
With that new investment, we will slash the 13 million hours lost by doctors and nurses every year to outdated IT systems. We will cut down and potentially halve form filling by doctors by using artificial intelligence. We will digitise operating theatre processes, allowing the same number of consultants to do an extra 200,000 operations a year. We will fund improvements to help doctors read MRI and CT scans more accurately and quickly, speeding up results for 130,000 patients every year and saving thousands of lives, something that I know would have delighted my brother Charlie, who I recently lost to cancer.
We will improve the NHS app so that it can be used to confirm and modify all appointments, reducing up to half a million missed appointments annually and improving patient choice. We will set up a new NHS staff app to make it easier to roster electronically and end the use of expensive off-framework agencies. As a result of this funding, all hospitals will use electronic patient records, making the NHS the largest digitally integrated healthcare system in the world. Today’s announcement doubles the amount the NHS is investing on digital transformation over three years.
On top of this longer-term transformation, we will also help the NHS meet pressures in the coming year with an additional £2.5 billion. That will allow the NHS to continue its focus on reducing waiting times and brings the total increase in NHS funding since the start of the Parliament to 13% in real terms. The NHS was there for us in the pandemic, and today with nearly £6 billion of additional funding, a Conservative Government are there for the NHS.
The head of the NHS, Amanda Pritchard today said that this investment shows that
“the government continues to back the NHS”.
She said that, as a result of the investment, the NHS can commit to delivering 1.9% annual productivity growth over the next Parliament, more than double the average productivity growth in public services between 2010 and 2019.
But today is not just about the NHS. I want this groundbreaking agreement with the NHS to be a model for all our public services. Across education, the police, the courts and local government, I want to see more efficient, better-value and higher-quality public services, so today I can announce that in the next spending review, the Treasury will do things differently. We will prioritise proposals that deliver annual savings within five years equivalent to the total cost of the investment required, and today we make a start with some excellent proposals.
Violence reduction units and hotspot policing have prevented an estimated 136,000 knife crimes and other violent offences, as well as over 3,000 hospital admissions. Every crime costs money, so we will provide £75 million to roll that model out in England and Wales. Police officers waste around eight hours a week on unnecessary admin. With higher productivity, we could free the equivalent of 20,000 police officers over a year. We will spend £230 million rolling out time-saving and money-saving technology that speeds up police response times by allowing people to report crimes by video call and, where appropriate, use drones as first responders.
Too many legal cases, particularly in family law, should never go to court, and it would cost us less if they did not, so we will spend £170 million to fund non-court resolution, reduce reoffending and digitise the court process. Too many children in care end up being looked after by unregistered providers that are much more expensive, so we will invest £165 million over the next four years to reduce that cost by increasing the capacity of the children’s homes estate.
Special educational need provision can be excellent when outsourced to independent sector schools, but also expensive, so we will invest £105 million over the next four years to build 15 new special free schools to create additional high-quality places and increase choice for parents. We will also put in place a plan to realise the tens of billions of savings recommended in an excellent speech by the head of the National Audit Office.
The OBR says that a 5% increase in public sector productivity would be the equivalent of about £20 billion in extra funding. With these plans, we can deliver that and more. If we ensure that they are cash-releasing savings, as we are committed to doing, it will be possible to live with more constrained spending growth without cutting services valued by the public. So with the energy and drive of my talented Chief Secretary to the Treasury, we launch our public sector productivity plan in today’s Budget for long-term growth: more investment, more jobs, better public services and—one more thing—lower taxes.
Keeping taxes down matters to Conservatives in a way that it never can for Labour. We believe that in a free society the money people earn does not belong to the Government; it belongs to them, and if we want to encourage hard work, we should let people keep as much of their own money as possible. Conservatives look around the world at economies in North America and Asia and notice that countries with lower taxes generally have higher growth. Economists argue about cause and correlation, but we know that lower-taxed economies have more energy, more dynamism and more innovation. We know that is Britain’s future, too.
Before I explain how we will bring down taxes, I will start with some measures to make our system simpler and fairer. To discourage non-smokers from taking up vaping, we are today confirming the introduction of an excise duty on vaping products from October 2026 and publishing a consultation on its design. Because vapes can also play a positive role in helping people quit smoking, we will introduce a one-off increase in tobacco duty at the same time to maintain the financial incentive to choose vaping over smoking. I will make a one-off adjustment to rates of air passenger duty on non-economy flights only to account for high inflation in recent years, and I will provide HMRC with the resources it needs to ensure that everyone pays the tax they owe, leading to an increase in revenue collected of over £4.5 billion across the forecast period.
Next, I turn to property taxation. In recent months, following tenacious representation from my hon. Friends the Members for St Austell and Newquay (Steve Double), for North Devon (Selaine Saxby), for Cities of London and Westminster (Nickie Aiken), for Torbay (Kevin Foster) and for Truro and Falmouth (Cherilyn Mackrory), I have been looking closely at our furnished holiday lettings tax regime. I am concerned that that regime is creating a distortion meaning that not enough properties are available for long-term rental by local people. So to make the tax system work better for local communities, I am going to abolish the furnished holiday lettings regime.
I have also been looking at the stamp duty relief for people who purchase more than one dwelling in a single transaction, known as multiple dwellings relief. I see the deputy leader of the Labour party, the right hon. Member for Ashton-under-Lyne (Angela Rayner), paying close attention, given her multiple dwellings—[Interruption.] She—[Interruption.]
Madam Deputy Speaker
Order. Too much excitement. We have not actually heard—because we cannot hear—what the Chancellor is trying to say. [Interruption.] Okay, I can hear who is shouting, and they will not get to speak later.
Jeremy Hunt
I am sorry to disappoint the right hon. Member, but multiple dwellings relief was not actually designed for her; it was intended—[Interruption.]. It was intended to support investment in the private rented sector, but an external evaluation found no strong evidence that it had done so, and that it was being regularly abused, so I am going to abolish it.
Finally, as part of our look at property taxation in this Budget, both the Treasury and the OBR have looked at the costs associated with our current levels of capital gains tax on property and concluded that if we reduced the higher 28% rate that exists for residential property, we would in fact increase revenues because there would be more transactions. For the first time in history, both the Treasury and the OBR have discovered their inner Laffer curve. So today I will reduce the higher rate of property capital gains tax from 28% to 24%—that really is for you, Angela. [Laughter.] I now—[Interruption.]
Madam Deputy Speaker
Order. I have had enough from Opposition Members and I am definitely not having it from Government Members.
Jeremy Hunt
I now turn to oil and gas. Unlike the Labour party, we want to encourage investment in the North sea, so we will retain generous investment allowances for the sector. Following representations from my hon. Friend the Member for Banff and Buchan (David Duguid), we will also legislate in the Finance Bill to abolish the energy profits levy should market prices fall to their historical norm for a sustained period of time. But because the increase in energy prices caused by the Ukraine war is expected to last longer, so too will the sector’s windfall profits, so I will extend the sunset on the energy profits levy for an additional year to 2029, raising £1.5 billion.
Next, I turn to the taxes paid by those who are resident in the UK but not domiciled here for tax purposes. [Hon. Members: “Ah!”] This is a category of people known as non-doms. Nigel Lawson wanted to end the non-dom regime in his great tax reforming Budget of 1988, which is where I suspect the Labour party got the idea from. I, too, have always believed that provided we protect the UK’s attractiveness to international investors, those with the broadest shoulders should pay their fair share. After looking at the issue over many months, I have concluded that we can indeed introduce a system that both is fairer and remains competitive with other countries, so the Government will abolish the current tax system for non-doms, get rid of the outdated concept of domicile—[Interruption.] I aim to please all parts of the House in all my Budgets. We will replace—[Interruption.]
Madam Deputy Speaker
Order. This is impossible. [Interruption.] Order. Could you please shout more quietly? [Laughter.]
Jeremy Hunt
We will replace the non-dom regime with a modern, simpler and fairer residency-based system. From April 2025, new arrivals to the UK will not be required to pay any tax on foreign income and gains for their first four years of UK residency: a more generous regime than at present, and one of the most attractive offers in Europe. But, after four years, those who continue to live in the UK will pay the same tax as other UK residents. Recognising the contribution of many of these individuals to our economy, we will put in place transitional arrangements for those benefiting from the current regime. That will include a two-year period in which individuals will be encouraged to bring wealth earned overseas to the UK, so it can be spent and invested here—a measure that will attract onshore an additional £15 billion of foreign income and generate more than £1 billion of extra tax.
Overall, abolishing non-dom status will raise £2.7 billion a year by the end of the forecast period. The Opposition planned to use that money for spending increases, but today a Conservative Government make a different choice. We use that revenue to help cut taxes on working families. Many of those families depend on child benefit, but the way that we treat child benefit in the tax system is confusing and unfair. It is a lifeline for many parents because it helps with the additional costs associated with having children. When it works, it is good for children, good for parents, and good for the economy because it helps people into work.
We currently withdraw child benefit when one parent earns over £50,000 a year. That means that two parents earning £49,000 a year receive the benefit in full, but a household earning a lot less than that does not if just one parent earns over £50,000. Today I set out plans to end that unfairness. Doing so requires significant reform to the tax system, including allowing HMRC to collect household-level information. We will therefore consult on moving the high-income child benefit charge to a household-based system, to be introduced by April 2026. But because that is not a quick fix, I make two changes today to make the current system fairer.
Following representations from my hon. Friends the Members for Penistone and Stocksbridge (Miriam Cates), for Carshalton and Wallington (Elliot Colburn), for Bassetlaw (Brendan Clarke-Smith) and for West Worcestershire (Harriett Baldwin), along with many others, I confirm that from this April, the high-income child benefit charge threshold will be raised from £50,000 to £60,000. We will raise the top of the taper at which it is withdrawn to £80,000. That means that no one earning under £60,000 will pay the charge, taking 170,000 families out of paying it altogether. Because of the higher taper and threshold, nearly half a million families with children will save an average of £1,300 next year. According to the OBR, this change will see an increase in hours among those already working to the equivalent of 10,000 more people entering the workforce. More investment, more jobs, better public services and lower tax.
There is one further set of changes that I want to make today. The way we tax people’s income is particularly unfair. Those who get their income from having a job pay two types of tax: national insurance contributions and income tax. Those who get it from other sources pay only one. This double taxation of work is unfair. The result is a complicated system that penalises work instead of encouraging it. If we are to build a high-wage, high-skill economy not dependent on migration and to encourage people not in work to come back to work, we need a simpler, fairer tax system that makes work pay. That is why I cut national insurance contributions in the autumn. By reducing the penalty on work, the OBR said that that tax cut would lead to the equivalent of 94,000 more people in work. In other words, it would fill more than one in 10 vacancies throughout the economy. Lower taxes, more jobs and higher growth.
Today, because of the progress that we have made in bringing down inflation, because of the additional investment flowing into the economy, because we have a plan for better and more efficient public services, and because we have asked those with the broadest shoulders to pay a bit more—[Interruption.]
Madam Deputy Speaker
Order. Mr Perkins—[Interruption.] I can manage, thank you very much. I have heard you five times. I have let you get away with it, but that is enough. One more strike and you’re out.
Jeremy Hunt
I know how hard it is for the Opposition to listen to arguments for lower taxes. That is the difference.
Because we have asked those with the broadest shoulders to pay a bit more, today I go further. From 6 April, employee national insurance will be cut by another 2p, from 10% to 8%, and self-employed national insurance will be cut from 8% to 6%. That means an additional £450 a year for the average employee, or £350 for someone who is self-employed. When combined with the autumn reductions, it means 27 million employees will get an average tax cut of £900 a year, and 2 million of the self-employed will get a tax cut averaging £650. Those changes will make our system simpler and fairer, and will grow our economy by rewarding work. The OBR says that, when combined with the autumn reduction, our national insurance cuts will mean the equivalent of 200,000 more people in work—filling one in five vacancies, and adding 0.4% to GDP and 0.4% to GDP per head.
This is the second fiscal event in which we have reduced employee and self-employed national insurance. We have cut it by one third in six months without increasing borrowing and without cutting spending on public services. That means that the average earner in the UK now has the lowest effective personal tax rate since 1975. Their effective taxes are now lower than in America, France, Germany or any G7 country. Because Conservatives believe that making work pay is of the most fundamental importance, and because we believe that the double taxation of work is unfair, our long-term ambition is to end this unfairness. When it is responsible, when it can be achieved without increasing borrowing and when it can be delivered without compromising high-quality public services, we will continue to cut national insurance as we have done today, so that we truly make work pay.
We stick to our plan with a Budget for long-term growth. It delivers more investment, more jobs, better public services and lower taxes. However, dynamism in an economy does not come from Ministers in Whitehall but from the grit and determination of people who take risks, work hard and innovate—not Government policies but people power. It is to unleash people power that today we put this country back on a path to lower taxes: a plan to grow the economy versus no plan; a plan for better public services versus no plan; a plan to make work pay versus no plan. Growth up, jobs up and taxes down. I commend this statement to the House.
Provisional Collection of Taxes
Motion made, and Question put forthwith (Standing Order No. 51(2)),
That, pursuant to section 5 of the Provisional Collection of Taxes Act 1968, provisional statutory effect shall be given to the following motions:—
(a) Stamp duty land tax (first-time buyers’ relief: new leases acquired on bare trust) (motion no. 8);
(b) Stamp duty land tax (registered providers of social housing) (motion no. 9);
(c) Stamp duty land tax (purchases by public bodies) (motion no. 10);
(d) Value added tax (late payment interest and repayment interest) (motion no. 22).—(Jeremy Hunt.)
Madam Deputy Speaker (Dame Eleanor Laing)
As many as are of that opinion say Aye—[Hon. Members: “Aye!”] Of the contrary, No—[Hon. Members: “No!”] [Interruption.] Order. Let me explain, for the clarification of the House, that the Question on the provisional collection of taxes is asked at this stage. All Members will have the opportunity, having heard the debate in detail, to vote on each of the motions on Tuesday 12 March, at the end of the Budget debate. I would hesitate to call a Division at this point, when the House and the world is awaiting the response from the Leader of the Opposition. [Interruption.]
I will put the Question again, and if it is very clear to me that there are more Ayes than Noes, I will take the decision on the voices. The Question is—
Sir Jacob Rees-Mogg (North East Somerset) (Con)
On a point of order, Madam Deputy Speaker.
Madam Deputy Speaker
No, I do not need a point of order, thank you. We are in the middle of putting the Question. As many as are of that opinion say Aye—[Hon. Members: “Aye!”] Of the contrary, No—[Hon. Members: “No!”]
Madam Deputy Speaker
We now come to the motion entitled Income Tax (Charge). It is on this motion that the debate will take place today and on succeeding days. The Questions on this motion and the remaining motions will be put at the end of the Budget debate on Tuesday 12 March.
Budget Resolutions
(2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Keir Starmer (Holborn and St Pancras) (Lab)
There we have it: the last desperate act of a party that has failed—Britain in recession, the national credit card maxed out and, despite the measures today, the highest tax burden for 70 years. This is the first Parliament since records began to see living standards fall, as confirmed by the Budget today. That is the Conservatives’ record, and it is still their record—give with one hand and take even more with the other. Nothing they do between now and the election will change that.
Over 14 years, we have seen our fair share of delusion from the Conservative party: a Prime Minister who thinks the cost of living crisis is “starting to ease”, an Education Secretary who thinks concrete crumbling on our children deserves our gratitude, and a former Prime Minister who still believes that crashing the pound was the right path for Britian. Today, we have a new entry into this hall of infamy: the Chancellor, who breezes into this Chamber—in a recession—and tells the working people of this country that everything is on track. Crisis? What crisis? Or, as the captain of the Titanic and the former Prime Minister herself might have said, “Iceberg? What iceberg?” Smiling as the ship goes down, the Chuckle Brothers of decline dream of Santa Monica—or maybe just a quiet life in Surrey, with the Chancellor not having to self-fund his election—while the crew behind them scramble around for a GB News lifeboat.
If only it were not so serious. The story of this Parliament is devastatingly simple: a Conservative party stubbornly clinging to the failed ideas of the past, completely unable to generate the growth that working people need, and forced by that failure to ask them to pay more and more for less and less. As the desperation grows, the Conservatives torch not only their reputation for fiscal responsibility, but any notion that they can serve the country, not themselves—party first, country second, while working people pay the price.
Food prices are still 25% higher than they were two years ago. Rents are up by 10%. It will cost an extra £240 a month for a typical family remortgaging this year, because the Conservatives lost control of the economy. They sent interest rates through the roof, and they made working people pay. They should be under no illusion: that record is how the British people will judge today’s cuts, because the whole country can see exactly what is happening here. They recognise a Tory con when they see it, just as they did in November—give with one hand and take even more with the other.
People have been living through this nonsense for 14 years. They know that the thresholds are still frozen, dragging more and more people into higher taxes. They know that a Tory stealth tax is coming their way in the shape of their next council tax bill. The Levelling Up Secretary has told not just this House but every house in the country that he is coming for their council tax—give with one hand, Gove with the other.
Most insultingly of all, the British people know the only cause that gets this lot out of bed is trying to save their own skin. Take the desperate move, after years of resistance, to finally accept Labour’s argument on the non-dom tax regime. Has there ever been a more obvious example of a Government who are totally bereft of ideas? If they are sincerely in support of that policy, the question they must answer is: why did they not do it earlier? Why did they not stand up to their friends, their funders and their family? If they had followed Labour’s example, 3.8 million extra operations and 1.3 million dental emergency appointments would have taken place by now, and there would have been free breakfast clubs for nearly 4.5 million children. If instead this is just another short-term cynical political gimmick, honestly, what is the point? What is the point of a party that is out of touch, out of ideas and nearly out of road?
We saw this last year as well, when only Labour’s policies on the cost of living made the difference. I say to those on the Conservative Benches who are now a little downbeat about another intellectual triumph for social democracy, I say, “Get used to it!” With this pair in charge, it will not be long before you are asked to defend the removal of private school tax relief as well. The harder they try with cynical games like that, the worse it will get for them, because the whole country can see exactly who they are. Fighting for themselves. Politics, not governing. Party first, country second.
Because we have campaigned to lower the tax burden on working people for the whole Parliament—and we will not stop now—we will support the cuts to national insurance. But I noticed that in 2022 when the Prime Minister was Chancellor, he made this promise:
“I can confirm that…in 2024, for the first time…the basic rate of income tax will be cut from 20p to 19p”.—[Official Report, 23 March 2022; Vol. 711, c. 342.]
Having briefed all week that an income tax cut was coming, that promise is in tatters. Of course we support the fresh investment in our NHS, although I have to note that the Chancellor, when he was Health Secretary 10 years ago, promised to make the NHS paperless by 2018. I know the Prime Minister’s fondness for Elon Musk extends to an enthusiastic embrace of his Community Notes on fact checking, so I will say this bit slowly: Labour supports the fuel duty freeze. That is our policy. I look forward to the Prime Minister’s acknowledgement of that in the coming days. We ask the Chancellor to set out how he will ensure that the policy gets passed on to hard-pressed families at the pump.
For all the fanfare around the tax measures today, this straightforward story remains true: taxes at a 70-year high; the British people paying more for less; and an unprecedented hit to the living standards of working people. This is the first time the Government have gone backwards over a Parliament, and they were cheering that. The reason is equally simple: there is no plan for growth. How can there be? The Chancellor can say “long-term plan” all he likes, but—[Interruption.] Last year he announced 110 growth measures. He said that we had “turned a corner”, but where are we now? Britain is in recession, with an economy smaller than when the Prime Minister entered Downing Street—the textbook definition of decline. That is their record. After 14 years, who do they think feels better off?
Productivity is flat, mortgages are through the roof, house building is off a cliff, worklessness is rising and rising, homelessness has never been higher, crime goes virtually unpunished, children cannot see a dentist and there is sewage in our rivers. Billions and billions of taxpayers’ money has been wasted, including £7 billion by the Prime Minister on covid fraud alone and £500 million on the Rwanda scheme that has achieved precisely nothing. I can keep going. We have a railway line that will never reach our great northern cities. In fact, it might not even reach central London. Billions upon billions for a white elephant without a trunk, while today we learn that taxpayers are picking up the bill for the Science Minister’s libel. And all the time, one thing is growing: the waiting lists in our NHS, now standing at nearly 8 million.
The Government have had 14 years. They are running out of road. This is what decline looks like, and the complacency they have shown today takes your breath away. Britain deserves better than this. Britain deserves a real plan for growth; an end to 14 years of stagnation; wealth creation across the whole of the country; and higher living standards for working people. This is the mission we need, but yet again, what we got was the same tired old formula, the sticking plasters, the chopping and changing, and the party-first, country-second politics with no repudiation of the utterly discredited idea that economic growth is something that the few gift to the many.
Even then, the Chancellor’s Back Benchers are owed an explanation. He says that Britain has grown more quickly than countries such as Germany over the last 14 years, but I am sure they will be shocked to learn that this is a statistical sleight of hand. When it comes to GDP per capita—the growth that makes the difference to the pockets of working people—the Government’s record is much worse. Indeed, in per capita terms our economy has not grown since the first quarter of 2022—the longest period of stagnation Britain has seen since 1955. In fact, the Chancellor invited us to look at those figures. The Office for Budget Responsibility has said that GDP per capita will be 0.75% lower in 2028 than was forecast in November last year. That was the number he said we should watch: 0.75% lower in 2028. The Government can call this a technical recession, but there is nothing technical about working people living in recession for every second the Prime Minister has been in power. This is a Rishi recession.
If Conservative Members really want to know what hides in the Chancellor’s spreadsheets, they will see that it is only the record levels of migration they have delivered that have prevented an even deeper decline. That is the record they must stand on at the election. While we on these Benches do not demean for a second the contribution that migrants make to a thriving economy, it is high time that the Government were honest with the British public about the role migration plays in their economic policy, because right now, in terms of growth, that is all they have. There is nothing else. No plan to get Britain building again with a reformed planning system. No ambition to invest in clean British power for cheaper bills and energy security. No inclination to move away from insecure low-paid jobs and strengthen employment rights so that we can finally make work pay.
Where is the urgency on affordable housing? How can the Government look at Britain now and not see that as a massive priority? Never again will they be allowed to pose as the party of home ownership and aspiration, although I have to say, given the disaster that has befallen their childcare plans, perhaps that is for the best. The cost of childcare is a huge challenge for millions. Parents need the Chancellor to deliver on his promise. It seems that he has been taking lessons on marketing from the Willy Wonka Experience in Glasgow: all is not as it seems. With just over three weeks to go, he has to come clean, because up and down the country parents need to know: will they get their entitlement in April, or is this just another of the Government’s reckless promises on governing? Headlines over delivery. Promises without plans. Policies that unravel at the first contact with reality. The lesson is crystal clear that those who broke our economy cannot be trusted to repair it. The Tory credit rating is zero. It is time for change with Labour.
That is what today’s Budget should have been about: a last chance for the Government to show that they understand the economic reality of our volatile world, that global supply chains can be weaponised by tyrants like Putin, that a sticking-plaster approach to public investment will cost Britain more in the long run, and that trickle-down nonsense means that working people pay the price. It could even have been a moment of contrition, a reflection on their fiscal recklessness or perhaps an apology for the ridiculous chaos that they have inflicted on businesses, communities and investors in this country. And yet there is still no stable industrial strategy, still no national wealth fund to crowd in private investment, still no urgency on speeding up critical infrastructure projects and no recognition that they have left in tatters our standing as a country that always keeps its promises.
And if they do not like that accusation, they should look no further than the grotesque spectacle of the Government ducking their responsibility to the victims of the infected blood and Horizon scandals.
“This is one of the greatest miscarriages of justice in our nation’s history.”—[Official Report, 10 January 2024; Vol. 743, c. 288.]
Those were the Prime Minister’s words just two months ago. Today, justice has been kicked beyond the general election. Britain can see exactly who they are, and the reality is that there is no path to economic stability and no way to a calmer, less chaotic politics with the Conservative party in power, because chaos is now their worldview.
It is a mindset that sees Britain’s problems as opportunities that the Conservative party can exploit, whether, like the Chancellor, it is out of desperation because they cannot solve them, or whether, like the right hon. and learned Member for Fareham (Suella Braverman) and the right hon. Member for South West Norfolk (Elizabeth Truss), it is because they have no intention of solving them. For a party this weak and divided, the end result is always the same: a vicious downward spiral with chaos feeding off decline and decline feeding off chaos, while working people pay the price.
The British people know that this will not stop. Five more years and it will only get worse. There will be no change of direction without a change of Government, and that leaves Britain as a nation in limbo, unable to shake off the Tory chaos that dragged us into recession, loaded the tax burden on to the backs of working people and maxed out the nation’s credit card.
Britain deserves a Government who are ready to take tough decisions, to give our public services an immediate cash injection, to stick to fiscal rules without complaint, to fight for the living standards of working people and to deliver a sustainable plan for growth. We say to the Chancellor and the Prime Minister that it is time to break the habit of 14 years, to stop the dithering, the delay and the uncertainty, and to confirm 2 May as the date of the next general election, because Britain deserves better and Labour is ready. [Interruption.]
Madam Deputy Speaker (Dame Eleanor Laing)
I will not demand silence now, as this is the moment for cheering.
I call the Chair of the Treasury Committee.
Harriett Baldwin (West Worcestershire) (Con)
I know it has not been long since the autumn statement, but we have heard today that the Leader of the Opposition has no plan. It has not been very long since the last forecast from the Office for Budget Responsibility, so it is interesting to read today that, in the just over 100 days since its last forecast, there has been a lot of change for the better in the UK economy. In particular, the OBR is expecting a better inflation outturn than it had expected just over three months ago. It is expecting and has noted the sharper fall in the interest rates that we all pay on the national mortgage, and it has said that it expects the British people’s living standards to recover more quickly than it previously forecast. That is information that we can all welcome.
There will be a range of views across the Chamber on the role of the Office for Budget Responsibility. We all know, of course, that all forecasts are likely to be wrong. The Treasury Committee will scrutinise the Office for Budget Responsibility next Tuesday morning, and we look forward to asking questions about its assumptions. My view is that it is a bit like that quote of Sir Winston Churchill about democracy being the worst form of government except for all the others that have been tried: although all economic forecasts are likely to be wrong in some way, and the Office for Budget Responsibility’s forecasts are often not the most accurate, they are a lot better than the alternatives of either the Treasury marking its own homework or having a Budget with no forecast from the Office for Budget Responsibility. I think the OBR’s forecasts reassure the markets on which we are so dependent for our borrowing.
There has obviously been good progress on inflation since the peak of over 11% after Putin’s evil invasion of Ukraine, and it is vital that all of today’s Budget measures are seen through the lens of inflation, because we do not want anything that could prevent that progress towards the 2% that the Bank of England expects by the middle of this year.
The Chancellor told us that he was looking through that lens in announcing today’s measures, which contain a range of things that will really help, including continuing the 5p off fuel duty at the pumps for another year, which will be very helpful to drivers in West Worcestershire and elsewhere in the country. The freeze on alcohol duty will be welcomed in pubs in West Worcestershire and across the country. The public sector productivity plan is crucial to ensuring that we get value for money from our public services.
On the second economic objective of growth, we can all welcome the fact that employment growth has been so strong. The economy has created more than 800 jobs a day over the past 14 years. We have seen steps taken in previous fiscal events to grow the size of the UK’s productive economy. Now that we are at full employment, productivity becomes incredibly important, because it helps to sustain non-inflationary growth.
To stimulate all-important investment in the economy, last year’s big announcement of full expensing was made permanent in the autumn statement. Today, we have heard that full expensing will be extended to leased assets. The BBC fact check noted that when the measure was first announced, it was expected that the economy would benefit greatly. The Chancellor said that its impact on the economy would be huge, and the Office for Budget Responsibility said that it would increase business investment by 3% a year. The policy came into force on 1 April, and in fact business investment for the whole of last year was 6.1% higher than in 2022.
Today we heard about further welcome steps to increase business investment and other investment in the UK economy—tax reliefs for some creative industries, British individual savings accounts to encourage more long-term investment in our economy, the back-to-work plan, the childcare plan, and many other measures that will unlock growth.
Caroline Lucas (Brighton, Pavilion) (Green)
Is the Chancellor, and indeed the hon. Lady, being a little complacent about investment? Although it is true that business investment is higher than it was in 2010, our business investment is still the lowest in the G7 and among the lowest in the OECD. Why did we not see more public investment from the Chancellor today? We know that public investment will crowd in private investment, so why have we not seen much bolder and more ambitious work on investment? That is what the economy is crying out for.
Harriett Baldwin
We heard the Chancellor talk about how strong the growth in UK investment has been. We heard about additional investment in the productivity of our national health service and, crucially, about measures that will increase the attractiveness of investing in some of the fastest growing sectors of the economy.
George Freeman (Mid Norfolk) (Con)
Does my hon. Friend agree that it is extraordinary that the hon. Member for Brighton, Pavilion (Caroline Lucas), representing the Green party, did not welcome the £270 million for advanced manufacturing in clean aviation and clean vehicles, and the £120 million for clean tech manufacturing? That is the UK investing in the technology of clean growth, is it not?
Harriett Baldwin
It is indeed, and I am glad that my hon. Friend welcomes that, even if it was not welcomed by the representative of the Green party.
Vicky Ford (Chelmsford) (Con)
I want to take my hon. Friend back to what she said about investment in childcare. I remind her that this week brings International Women’s Day, and the cost of childcare is such an important issue for so many mums in this country. Of course, it was the Conservatives who rolled out 30 hours of free childcare, and who are rolling out free childcare for two-year-olds and nine-month-olds. We absolutely must welcome that additional investment in childcare, and indeed the investment in families through support for child benefit, which will help mums get into well-paid jobs.
Harriett Baldwin
I wholeheartedly endorse what my right hon. Friend said. She is right to highlight the importance of investment in childcare in helping female employment growth, which has been remarkably strong in the past 14 years. I am confident that the measures announced will allow us to make further progress with the increasingly non-inflationary growth capacity of the UK economy.
Other measures announced today will help on the growth front. Cutting national insurance is also a smart way to help growth. It not only puts more money in working people’s pockets—27 million people across this country will see an extra £900 a year in their bank account—but will make work more attractive. We have heard from the Office for Budget Responsibility that cutting national insurance has the biggest marginal impact on bringing people back into work; the figure from the last cut was 94,000. It will be interesting to see whether the OBR continues to expect this to have a significant impact. It is a really smart way to cut taxes for working people—and the measure is UK-wide, so the effect will be felt in Scotland as well.
I turn to the issue of debt falling. We can see that the bond markets have stabilised, and OBR numbers confirm progress on debt. I draw the House’s attention to a report that our Committee recently published on the Bank of England and its quantitative tightening. It is selling £100 billion of gilts into the market this year, and it has acknowledged that that increases the cost to the Exchequer of borrowing by between a tenth and a quarter of a percentage point. Our Committee wanted to flag up the impact that that could have, and to send a message to the independent Bank of England about some of the ways in which quantitative tightening has an impact on the real economy. As a cross-party Committee, we were obviously never going to agree on the level or scope of taxes, but one thing we have unanimity—
Harriett Baldwin
Does the right hon. Gentleman wish to intervene on the fact that the rate of tax is higher in Scotland?
Ian Blackford
I wish to raise a point about quantitative easing, which the hon. Lady mentioned. Obviously, there will be a very significant supply of gilts in the coming period, which will have an impact on yields. That will influence what the Bank of England does on the interest rate cycle, and crucially, it will make it difficult to see any material growth in the money supply, particularly in M4, in the coming period. That will have an impact on growth, given where we are.
Harriett Baldwin
I am sorry that the right hon. Gentleman did not acknowledge that income tax is higher in Scotland, but he makes a good point about quantitative tightening and its impact on the real economy. It is potentially a factor that can have a real impact, and our Committee will watch it closely.
As I was saying, as a cross-party Committee, we were never going to agree on the level and scope of taxes, but we do agree that the tax system is too complicated. We have a very complicated tax system in this country, and well over 1,000 different tax reliefs. Despite the abolition of the Office of Tax Simplification, there have been some major tax simplifications under this Chancellor. We have heard about the way in which he eliminated, in the autumn statement, the national insurance class; about how he has simplified the lifetime allowance for pensions; and, today, about how he has started to tackle some of the perverse cliff edges, high marginal tax rates and disincentives to work in the tax system. By raising the VAT threshold, he has helped small businesses, which might otherwise have held back because they did not want to go through that threshold. On universal credit, we have done so much over the years to reduce high marginal tax rates and disincentives.
It was great to hear the Chancellor really focus today on addressing the high-income child benefit charge. When we introduced it—I voted for it at the time—£50,000 a year was a high rate of income. With the progress on higher incomes, the median income has increased from about £22,000 in those days to about £35,000 now. These days, £50,000 is not more than about 40% over the median income. It was right for the Chancellor to recognise that today in his Budget statement. He has made the taper that much less of a disincentive to taking on work above that income level. Of course, I would have loved him to have done even more, but I am very grateful for all that he has done.
Let me come to a rapid close by saying that it is clear that the Conservatives have a plan. It is clear that there is a plan to get inflation down; to increase the growth rate and the growth capacity of the UK economy, without sparking inflation again; and to get debt falling. I think we can all see that the plan is working. We should stick to that plan and not go back to square one.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. Before I call the spokesman for the Scottish National party, it might be helpful for hon. Members to know that I hope to be able to manage the debate, certainly at the beginning, without a formal time limit. If everybody speaks for about six to seven minutes, we will manage without a formal time limit. If they do not, we will set one. It will begin by being about seven minutes, but will reduce as the day goes on. I call Drew Hendry.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Traditionally, at this point I would thank the Chancellor for advance sight of his redacted statement, but having seen the statement, I realise that I was given an entirely different redacted document. Not to worry, as we have seen all the details in the press over the past day or so. Seeing the unredacted words would be nice, but it is not essential for this response.
I thank the Chancellor for his courtesy in staying in the Chamber, unlike some of his colleagues, to listen to the words of the third party. That does not happen all the time, but it is very good practice for those who might well be in the third party after the next election.
The Chancellor said that his autumn statement was a “statement for growth”, but what have we seen since then? Growth has gone down; it is has grown into recession. Today, the OBR says:
“Having steadily declined since early 2022, real GDP per person is forecast to trough at 1¼ per cent below its pre-pandemic peak in the first half of 2024.”
So that was not a statement for growth, and this is not a Budget for growth.
I start by welcoming some of the measures that the Chancellor has announced today. He at least addressed the non-dom status, which is a positive move forward, although he gave them the softest possible landing. He announced changes to child benefit that are very good. We must give credit to Paul Lewis for his campaigning on that issue. He tweeted today, as other members of the press have done, that he was tipped off by the Chancellor that the change was coming. The move on lifetime ISAs is welcome. The R&D support for the aerospace industry, although it is the smallest possible step that could have been taken, is welcome, as is any further investment in life sciences.
The Chancellor set a lot of store on productivity today—he is going to solve everything with productivity. Yet if we look back over the past 14 years, and indeed before that, we see that the UK has been exceptionally poor on productivity. The figures on productivity have not budged at all. [Interruption.] The Chancellor is saying, “What about Scotland?” He should look at the figures for Scotland over the past 14 years and then we can have that debate.
The Chancellor said that vacancies would be easy to fill through immigration, but his party, joined by the Labour party and now the Lib Dems, imposed Brexit and stopped free movement. Of course it would have been easy to fill vacancies with skilled people who want to do the jobs we have, including vital jobs in tourism, hospitality, the national health service, the care service and across many other sectors, if that possibility had not been taken away by decisions made in this place.
Economists who are looking at his national insurance cuts have said that the gains will be cancelled out, as they were last time, by the freeze on thresholds. There is very little for people on low incomes, and zero for 17.8 million people on less than £12,750 a year, so there is not a lot of sense in that measure. He boasted that he had taken over as Chancellor when inflation was at 11%, but we must remember that the Tory Government were in charge when inflation was at that level. The problem with inflation is their child. They also suggest that 4% is somehow a triumph, but 4% inflation means prices still go up. Let us face it, this is a last-ditch, tone-deaf approach to desperately try to recover in the polls. It is the embodiment of putting the Tory party before the people.
Where are the real measures that would have a real impact on the cost of living, which is what people need the most direct help with? For those living in fear of their energy bills, who are being told, once again, that their direct debits are increasing, slicing more off their take-home pay, none of this is more than cold comfort. For those staring in disbelief as they realise that their shopping bills are more than 25% higher than they were a couple of years ago, this will stick in their throats. For those trussed to their new, much higher mortgages and rents directly because of reckless decisions made in this place, the walls are closing in.
On public services, the Chancellor has failed people again. Paul Johnson of the Institute for Fiscal Studies has noted that the Chancellor would have to explain how public services, which are already on their knees, could possibly take more cuts. Let us not forget the £19 billion he slashed from public spending in the autumn statement. The IFS continued:
“The economic case for tax cuts is weak. The public finances remain in a poor position.”
The Chancellor today promoted a further £20 billion cut, according to the IFS. Public services have been left struggling after 14 years of underfunding, economic chaos and blunder, from mini-Budgets to Brexit, colossal wastes of hundreds of billions of pounds, fraud and cronyism. Public finances are now so pared to the bone that we can see the marrow. Is it any wonder that a growing number of English councils, whether run by the Tories, Labour or the Lib Dems, are now effectively bankrupt?
People in Scotland needed a Budget that delivered funding that would allow investment for our public services, including real investment in the NHS, that supports families with the cost of living, and that properly invests in green energy, not another austerity Chancellor taking an even bigger axe to investment than his predecessors.
When it comes to the election in Scotland, those people will have their say and make their choice. There is a clear choice between that and the SNP’s calls to invest in public services, the economy and our communities, in our town and city centres, in our manufacturing future and our rural areas, in our tourism industry, in our food and drink sector, and in the priorities and values they hold dear. Those will be the major dividing lines at the general election.
The Scottish Government are committed to protecting people from some of the worst Westminster policies and are making a real difference to the lives of people in Scotland, despite their limited powers. The Prime Minister may be under the impression that the cost of living crisis is easing, but that assessment will be a slap in the face for households across Scotland that are still facing the consequences of over a decade of Tory cuts and mismanagement of the economy. People will see straight through attempts by the Chancellor to make up for falling living standards, underfunded public services and wage stagnation with these poorly timed national insurance cuts, which will not improve overall standards of living for most households.
Leaving aside the Chancellor’s failure to deal with fiscal drag, which wipes out much of the benefit of the NI cuts, the vast inequality in benefits for the better-off and the geographical impact that means London benefits much more than anywhere else, he cannot escape the fact that the Government have now imposed the highest tax burden since the end of the second world war.
I want to tackle the issues of tax in Scotland. Our progressive moves in Scotland mean that not only do the majority of people pay less tax, but they also pay far lower council tax than in England. They are supported with free prescriptions, do not have to pay tuition fees and get the game-changing Scottish child payment and more. That is about doing what is right: investing in our people, not leaving them high and dry.
While the Tories cut public funding in England, the Scottish Government’s progressive approach to income tax has raised significant revenue to invest in public services in Scotland. The Scottish Government’s tax regime means that, on average, households in the lower half of the income distribution are £400 a year better off than they would be in the rest of the UK. Around 58% of households are better off under the Scottish tax and social security system than they would be in the rest of the UK. Taking a different, progressive course on income tax in Scotland means that the Scottish Fiscal Commission estimates that in 2024-25 the Scottish Government will have around £1.5 billion of additional revenues, compared to if they had followed UK Government tax policies.
The Scottish Government continue to reaffirm their social contract with the Scottish people, with people across Scotland reaping the benefits through free prescriptions, free university tuition, free school meals, free bus travel for under-22s and free dental care until 26, as well as publicly owned rail services, free childcare for two, three and four-year-olds, and seven additional welfare payments, including the revolutionary Scottish child payment.
Before I move on to other economic matters, the Chancellor mentioned freezing tax on Scotch whisky. As in the autumn statement, we say that is not enough. That industry is massive for Scotland. Scotch whisky is a massive export for both Scotland and the UK, yet it is still taxed at around 70%. We needed a cut in that tax today so that the industry could deliver its potential. The fact that that was not addressed in the Budget is a shame on the Government.
Austerity is an ever-decreasing circle. It is fiscal madness to pursue the same policies that have been failing so obviously for many years, yet none of the other parties can bear to face the truth: for an economy to grow, it needs proper investment; for public services to deliver, to free up the potential of our people, they need to be supported, not asset stripped and starved of resources.
The Chancellor mentioned £2.5 billion for digitisation of the NHS in order to get those so-called productivity gains. I wonder how much of that will go to private companies once the dust settles. He should have boosted NHS spending by £15 billion—to improve healthcare after the UK Government imposed real-terms cuts this year. He should have funded NHS pay properly so that it matched that of Scotland, where there have been no NHS strikes, and caught up with previous cuts. Where was the announcement on settling with the victims of the contaminated blood scandal? Missing!
Moving on to the economy, the Chancellor should have turbocharged investment in green energy, by investing at least £28 billion per year to compete in the global green energy goldrush and to secure sustained economic growth. Where else is the serious high-return growth supposed to come from? We have not heard it mentioned here today. We do not know where it is. That £28 billion is needed. Labour advisers have told the Labour party that that £28 billion is needed. Everybody knows that that £28 billion a year is needed, yet no one in the Labour party is willing to make the investment that is needed to protect it. This is the abandonment of the just transition. [Interruption.] We are hearing chuntering from the Labour Front Benchers. [Interruption.] Oh dear, imagine picking up on that one. Their big U-turn, their big abandonment of the just transition—[Interruption.] Well, it is a pretty big U-turn. I know that it is one of many, but it is also pretty big.
The fact that Labour Members are rattled shows how much they feel this. This abandonment of the just transition and the fantastic opportunity that it promises, by both the Tories and those in the shadows of the Labour party, is reckless and stupid. Not only will it be felt economically, but it ignores the desperate need to act on climate change. The failure to invest in this will hold Scotland back from reaching our green energy ambitions and will leave households vulnerable to future energy crises.
The Chancellor must finally match the level of ambition that we are seeing in other countries. The Government have been shown by the European Union, and by the United States with its Inflation Reduction Act 2022, that this issue needs to be taken seriously, yet they are sitting on their hands.
Scotland can be at the forefront of the green energy revolution thanks to our incredible natural resources in onshore and offshore wind, and in wave, tidal and hydro power. But with Labour and the Tories intent on pulling the rug from under industry’s feet, we risk seeing yet another generation of energy potential wasted by Westminster. The Chancellor must commit to investing properly in renewables and must decouple the price of gas from the price of electricity. We cannot ensure a just transition from oil and gas—for the people and communities who rely on them—if we squeeze the life out of the sector overnight.
We know that households across Scotland have been badly hit by the energy crisis, and that proper investment in renewables can reduce the bills for households. Citizens Advice Scotland has revealed that, in the past four years, it has seen the number of people requesting advice and support with energy bills increase by 14 times. Labour Members are again chuntering from a sedentary position, saying that I am going on for too long. I take that as a sign that they are not comfortable with what I am saying.
Drew Hendry
They are bored by the just transition! They are bored by the cost of energy that people have to pay. They are bored by all these things.
Madam Deputy Speaker (Dame Eleanor Laing)
Order. I was about to ask for order so that the hon. Gentleman could be heard, but I think that the noise is coming from immediately behind him. [Interruption.] The hon. Member for Coatbridge, Chryston and Bellshill (Steven Bonnar) must not shout at me. He can shout at other people, but not at me.
Drew Hendry
Thank you, Madam Deputy Speaker. I can make more progress if I am not interrupted, so I do appreciate your advice on that.
Talking about advice, I want to return to Citizens Advice Scotland. It revealed that, in the past four years, it has seen the number of people requesting advice and support on energy bills increase by 14 times. That is a shocking increase. Proper investment in green energy can make sure that people in Scotland never have to face an energy crisis of this scale again.
As I have said, the Chancellor could have helped families with the cost of living by scrapping grossly unfair and unequal energy bill standing charges and using a £12 billion wealth tax to fund a £400 annual energy discount for households; reintroducing mortgage interest tax relief; capping supermarket food prices; and matching the Scottish child payment UK-wide. He could have boosted UK finances, but he chose not to do so. He could have introduced the long-overdue essentials guarantee while scrapping callous policies such as the two-child limit and the benefit cap. One of the most game-changing things he could have done is to finally give up on the failed experiment that has been Brexit, rejoin the EU single market and deliver economic growth.
The Chancellor must help businesses and introduce measures to support the tourism and hospitality industries. We know that businesses have faced a very challenging period with covid, Brexit and the increased costs from all sides, making life more difficult for people across Scotland. That is why the SNP is calling on the Chancellor to reduce the rate of VAT for the tourism and hospitality sector—it is not too late for him to do that; reinstate VAT-free shopping for international visitors; and implement VAT-free streets to support struggling town centres and high streets. If nothing is done to halt their decline and they continue to be ignored, as they have been for too long, communities will suffer and far more tax will be lost in the longer term than it would cost to provide them with some support.
The Government could choose to construct mini enterprise zones, working with devolved Governments and local authorities to agree on which sectors and areas are most in need of support. These sectors could benefit from reductions in VAT or from no VAT at all if the need is great enough. That could be tied to businesses agreeing to pay the real living wage. The chief executive of Marks & Spencer yesterday described operating under the current Government as
“like running up a downwards escalator with a rucksack on your back.”
If the Government can roll out freeports, then why not freeports for people? They could reduce alcohol duty for whisky and other spirits to support Scotland’s thriving whisky sector that adds £7.1 billion to the UK economy. Businesses in Scotland can no longer afford to be held back by the UK’s low-growth economy. The Chancellor should bring in measures to support businesses that have been left paying the price for the UK Government’s disastrous Brexit. It is clear that the SNP is the only party committed to rejoining the EU and giving Scottish businesses the chance to access goods and talent from our 27 closest neighbours.
The Scottish Government are committed to protecting the people of Scotland from some of the worst Westminster policies and are making a real difference to the lives of people in Scotland, despite their limited powers. The cut to the Scottish Government’s capital budget and financial transactions have meant that they have had to take some difficult decisions in this year’s budget, but they are still committed to delivering for the people of Scotland. The SNP fully support the £3.3 billion package the UK Government have delivered for Northern Ireland, and urge the Chancellor to make similar funding available—in line with the Barnett formula—to help the Scottish Government deal with the budget pressures they face.
The Scottish Government are freezing council tax—except in Tory, Liberal Democrat and some Labour councils where those councils think that people should pay more. The Scottish Government are also lifting 100,000 children out of poverty with measures such as the Scottish child payment; providing child winter heating payments to help mitigate additional heating costs for households with the most severely disabled children; providing free school meals to all children in years 1 to 5 and to all eligible children throughout the school; providing all babies in Scotland with the essentials needed for the first six months of a child’s life through the baby box; introducing 1,140 hours of funded early learning and childcare to all three and four-year-olds and eligible two-year-olds; and making bus travel free for 2 million people in Scotland, including all children and young people under the age of 22, eligible disabled people, and anyone aged 60 or over.
That is just a snapshot of some of the landmark policies that the Scottish Government have brought in, and all of them have been achieved against the backdrop of limited powers and being tied to a Westminster system that, as we have seen from today’s Budget, continues to do nothing for the people of Scotland.
Madam Deputy Speaker (Dame Rosie Winterton)
Just to emphasise what the Chairman of Ways and Means said, it would be helpful if colleagues confined their remarks to about six minutes, so that we can get everybody in with equal time.
I call the Father of the House.
Sir Peter Bottomley (Worthing West) (Con)
It is interesting to follow the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry). I was waiting to hear how the experiment with higher taxation is going. I invite the SNP to publish the figures showing how many of the top 10 philanthropists in Scotland five years ago are still paying tax in Scotland, and how the top 10 individual taxpayers in Scotland five years ago are doing now. [Interruption.] It is an example. SNP Members do not like having questions put to them, but there we are.
When the Leader of the Opposition started speaking, it sounded to begin with as though it was his Health spokesman who was speaking. I also reflected on the journey of the Leader of the Opposition over the last few years. In 2017 and 2019—within the memory of the House—he wanted his right hon. Friend the Member for Islington North (Jeremy Corbyn) to be Prime Minister. When there was a vacancy to succeed the right hon. Member for Islington North as the leader of the Labour party, the candidate who was closest to him was the person who is now the Leader of the Opposition. His journey over the last couple of years in changing his views, or his approach, is quite significant.
I think people can believe that the Labour party wants to change. For example, in the other Worthing constituency—I represent two thirds of the town—none of the local councillors was judged suitable to be put on the shortlist for selection as the parliamentary candidate. That shows central power in the hands of the Leader of the Opposition and his national executive. I think most people will have found that surprising. Had I been one of the Labour councillors told I could not apply, I would have been pretty upset.
The reaction I have received from my constituents to the financial statement and the Budget has come down to one particular point. Someone said, “Could there please be a change on the level of pension pot that requires financial advice?” When it was introduced in 2015, the level was £30,000. My constituent, who has a pension pot of £32,500, has been quoted £7,000 for advice on how to realise that relatively small pension pot. I ask Treasury Ministers to consider whether in the Finance Bill they could lift that figure to £40,000 or £50,000, so that people who want to gather up a small part of their defined-benefit pension can use it.
The second reaction that I had from a constituent was that, since Labour took control of Worthing Borough Council, two thirds of the reserves have gone within two years. People are worrying whether the council can remain solvent. If that is a test of what Labour might do in government, it is a pretty good reason to follow the Chancellor and the Prime Minister, and to re-elect us so that we can go on trying to raise the levels of productivity and growth, reform and develop public services, and get more people into work, with higher tax revenues and preferably lower rates of tax.
The Chancellor announced changes to the penalties on child benefit. I go back far enough to remember when most of the value of child benefit came in the child tax allowance. Children cannot work. If I had a dependent pensioner in my household, an income would come with them. Any family who have a child under working age ought to be able to get that kind of support, so that over a family’s lifecycle they receive support when they need it and pay back in when they are more able to work. I hope that we can move to a stage where the child benefit penalty goes completely. There is no philosophical or economic justification for it. It was an error, and I hope that I voted against it when it came in.
Sir Peter Bottomley
I probably did, you know. I am that sort of person.
There are many things on the environmental side that I will not go into due to the limitations on time. I hope that the proposed district heating scheme, which the Government want to be one of their flagship projects, supported by local authorities, can go ahead. There is a problem with the cost of lane rental to put hot pipes under our roads, but we need to give serious attention to how we get major investment so that nearly all our homes come off burning hydrocarbons, whether it is gas or the like, and get on to solar heating or heat pumps—either air or ground source heating. That will require major effort, especially for residential leasehold properties.
The Chancellor announced more money for more free schools. I hope that one of them will be the special educational needs and disabilities school proposed in Worthing, on the new Durrington estate. Nearly one child in five in West Sussex has some kind of statement or need They deserve specialist support. It is good for them, and good for the other children. I hope that we will get an announcement on that very soon. Having said that, I welcome the Government’s plans. Those who say that Labour would take us back to square one are exactly right.
Dame Angela Eagle (Wallasey) (Lab)
This was a Budget entirely focused on the electoral prospects of the Conservative party, not the needs of the country or our people. The Chancellor decided that his only chance to get his party through the election was to trumpet so-called tax cuts, but the tax burden is actually going up. He has made an incredible series of assumptions about departmental spending up to five years in the future, and then blown all the money that he saved by making those assumptions on pre-election giveaways. It was obvious from the moment he sat down last November that this early Budget would contain more so-called cuts to personal taxes, albeit against a background of rising taxes. As the OBR confirms in paragraph 1.21 on page 12 of its report, taxes will rise as a percentage of GDP all the way up to 2028-29.
The Chancellor said that he was seeking tax cuts before the OBR had even produced its current forecasts. He said it before the UK’s economic situation deteriorated, leaving our economy in a technical recession and wiping out his expected fiscal headroom, and he hinted at tax cuts before it emerged that our economy is now smaller than when the Prime Minister first walked into Downing Street. In recent days, we have observed the Chancellor and Prime Minister engaged in an unedifying, increasingly frantic search for tax rises and future spending cuts to top up the kitty for personal tax giveaways. They have come up with a vape tax and changes to non-dom status that were proposed by Labour and long ridiculed by the Chancellor himself. Perhaps a Minister will indicate whether those who no longer have non-dom status will pay inheritance tax. We have also had changes to the tax treatment of the holiday lets regime.
While the Conservative party cheered the tax cuts sleight of hand, let us bear in mind some facts. Despite all the Chancellor’s smoke and mirrors, the tax burden at the end of this Parliament will be higher than it has been since the second world war, yet our public services are crumbling around us, with one in 10 local authorities on the verge of bankruptcy, and our infrastructure and public realm falling apart. The cost of living crisis persists, with the UK’s real wage growth the slowest it has been since the Napoleonic wars. No wonder we have a flatlining economy.
The freeze to income tax and national insurance thresholds is due to raise £44 billion in the next five years, as millions of people are dragged into higher-rate tax. The personal tax cuts that the Chancellor is brandishing today are, in other words, completely drowned out by the other huge increases in tax—and the Chancellor and his predecessor have announced even more. The Chancellor has claimed that it is his moral duty to cut taxes, but in reality he has put them up, and just hopes that nobody will notice.
Caroline Lucas
The hon. Lady is making a powerful case for the need for investment in public services, but in that context, I wonder why the Labour party appears to be supporting the freezing of fuel duty. We know that the cost of freezing fuel duty since 2010 is a staggering £90 billion and that climate emissions since 2010 are 7% higher than they would have been had that policy not been in effect. Precisely because she wants more money to go into public services, can she explain why Labour is supporting this extraordinary policy?
Dame Angela Eagle
I think that the costing of the policy in the forecast ought to be more honest and it should be taken out of the scorecard if it is not to be put into effect.
Taxes are still higher than they have been since the second world war, and the Government have continued to fritter billions on fraud and waste. Only today, we learned that taxpayers have had to pick up the bill for the legal costs of the Secretary of State for Science, Innovation and Technology and for the damages in a libel case. How much has that debacle cost us?
First, the Conservatives gave us the catastrophic mini-Budget with its unfunded tax cuts, which spooked the markets and sent mortgage costs and rents soaring for millions; and now the current Chancellor has decided to fund his election giveaways with the fiscal fiction of huge cuts in planned departmental spending scheduled to last the whole of the next Parliament. There are no detailed plans for how those cuts in spending can be safely delivered, because we are not to have a spending review. Today, the Chancellor confirmed that there will not be a spending review until after the next general election. He pencilled in a so-called increase of nearly 1% for departmental budget spending, but has not compensated for higher than expected inflation or population growth, or any extra cost pressures.
Mr Kevan Jones
Departmental spending is not just flatlining at 1%; if my hon. Friend looks at capital on page 27 of the Red Book, she will see that most Departments are staying still or, in some cases—such as the Home Office, Education and Defence—having their budgets cut by 2024-25.
Dame Angela Eagle
My right hon. Friend must be able to read my mind, because that was exactly the point I was coming on to make: in real terms, there are cuts of up to 18% in unprotected Departments, going all the way through to the end of the next Parliament. That has been described by David Gauke, the Tory ex-Treasury Minister as the height of “fiscal irresponsibility”.
The legacy of this Government is burgeoning Government debt, up from 64.7% of GDP when Labour left office in 2010 to 95% now. The Chancellor will barely meet his own self-imposed fiscal rules by the tiniest of margins. Meanwhile, his neglect means that NHS waiting lists have soared, with 7.8 million treatments outstanding, and despite publishing 11 plans for growth since 2010, the trend growth rate is down from 2.3% in the 2000s to 0.8% this year. There is no regional plan, no working industrial strategy and no sign of levelling up—regional disparities are widening, not closing—and GDP is now £400 billion less than expected from the 2010 OBR growth rate forecast. Wages have stagnated, and the Government have delivered deepening levels of poverty, caused by low wages and real-terms benefits cuts, which have reduced the incomes of the poorest 20% and seen the number of people relying on food banks go from 60,000 to nearly 3 million. We have seen the last desperate throw of the dice from a failing, discredited Government, who have long since run out of ideas and are finally running out of road.
John Redwood (Wokingham) (Con)
I have declared my business interests in the Register of Members’ Financial Interests.
I am pleased that the Chancellor started by reminding the nation that, under Conservative leadership, Governments since 2010 have presided over the creation of 800 new jobs every day, every week, every month and every year, and have halved unemployment. The scourge of worklessness, which was inherited, has been banished. We now have the less worrying problem that we cannot get enough people to fill all the jobs, rather than the other way around of not having enough jobs for the people.
I am pleased that the Chancellor reminded the House that, in growth, we have outperformed all the major European nations, although I am sure he would agree with me that that is a feeble target to set ourselves; we are now free to do so much better. The question we need to ask is: why has the United States of America outperformed Europe so comprehensively for so long, and what can we learn?
The first thing we can learn from the United States is a better system of economic policy guidance and control. The requirements on the Federal Reserve Board, the US central bank, are a balanced mandate: not just 2% inflation, which is a necessary target that we share, but the promotion of growth and of growth in employment, so the board understands the trade-offs and can adjust policy accordingly. As our way of steering the economy, I would love us to get rid of fanciful, made-up figures by the OBR for five years’ time, which are always wrong, and to have two main aims: that 2% inflation target binding not merely on the Bank but on the whole Government, because Government have a big impact on prices and wages; and a 2% growth rate target, or a considerably higher growth rate than European countries have been achieving in the past decade. That is achievable if we take the right actions.
To do that, we need the Bank of England to work in sympathy with the Government’s policy. I remind the House that there is a dual mandate on the bond portfolio, the so-called APF or asset purchase facility. The Bank of England, having bought far too many bonds at ridiculously high prices on very low yields and run a very loose policy that gave us inflation, has now lurched too far the other way and is running too tight a policy, selling far too many bonds at much lower prices—prices it deliberately lowered in the market—and saddling us with losses. The Budget documents confirm that the accumulated losses paid so far, which taxpayers and the Treasury have to pay, amount to £49 billion since the thing flipped over in 2022. The last figure I saw was £34 billion, year to date—unaffordable and unnecessary, quite the wrong policy, meaning that we have less growth and a far bigger bill.
I am glad that the Government have decided to major on productivity in general, and in particular on public sector productivity. Some months ago, I stumbled across a well-concealed Office for National Statistics figure saying that in the three years since covid, we had lost 7.5% productivity in our public services. I did a quick back-of-the-envelope calculation, and that is roughly £30 billion, which means that it costs £30 billion more today to produce the same level and range of public service as it did before covid, as well as the many tens of billions more on top of that we had to pay because of all the inflation. It was a £30 billion hit.
The Government now more or less agree. The Chancellor has costed the loss in his figures at 6% rather than 7.5%, but he has said that he wants to eliminate a 5% productivity shortfall out of the 6%, and he costs that at £20 billion, which is exactly the same as my £30 billion for 7.5%. That is felicitous indeed. The issue is, how will they go about doing that?
I hear that the scheme for the NHS is elaborate expenditure on wide-ranging centralised computerisation—good luck with that—but I would not rely on that alone for my productivity package for the public services. We do not actually need new investment to get ourselves back to the productivity level we were at in 2019. We do not need to use all today’s wonderful artificial intelligence; we just need to use what we already had, which we had in 2019. It is about management, personnel and giving the personnel the right tasks. We have seen a huge increase in managerial and administrative positions, but far from managing things better, they are being managed less well.
We had a shocking case in the press recently, where an awful lot of managers were presiding over a prison that had gone wrong. They were not able to do the more important day-by-day things that were needed in order to resolve the problem. If we look at the huge expansion in the civil service and other public administration during the covid period, we will see a big increase not only in numbers, but in those who have been promoted up the grades for whatever reason. We need enough people for someone to supervise, however, and we do not need all supervisors, because they are often too posh to do the work. We need to manage things better, and that is the productivity challenge before us.
I also urge the Government to abolish UK Government Investments. It is a very expensive body that has a completely dreadful track record. It presided over the Post Office and did nothing to deal with the sub-postmasters; it presided over £1.4 billion-worth of accumulated losses, bankrupting the corporation; and it presides over Network Rail, and the whole rail industry, Network rail and High Speed 2 are absorbing £33 billion of public money this year. I do not think we are getting value for money for that.
My time is up. I urge the Government to redouble efforts on productivity, to understand that it is mainly about whom we hire and what we ask them to do, and to get rid of UKGI, and I ask Ministers to take responsibility for the dreadfully badly performing nationalised industries.
Ed Davey (Kingston and Surbiton) (LD)
What we heard from the Chancellor was a Budget that reeks of desperation and deceit from a Government who know that they have lost the trust of the British people. It is a bottom-of-the-barrel Budget, with nothing to make families truly better off after the catastrophic fall in living standards under the Conservatives, and no plan for long-term economic growth, no real extra support for the NHS and our public services, and no end in sight for the years of unfair tax hikes—just a last ditch attempt from the Conservative party to cling on to power.
People have had enough of this Government’s empty promises. What they want is a general election to get this out-of-touch Government out of Downing Street. They are sick and tired of a Government who promised in last year’s Budget to grow the economy only to plunge it into recession, who promised to bring down NHS waiting lists only to let them continue to go up and up, and who promised to cut tax but have instead hit families with years of unfair stealth tax rises.
Never before have I seen a Government deliver weaker public services, higher taxes and zero growth all at the same time, and all in the middle of a cost of living crisis. I fear that, by designing his economic policy to give a short-term sugar rush to Conservative Back Benchers, the Chancellor is condemning millions of families to high mortgage rates for much, much longer. The House need not take my word for it; just look at the OBR, which forecast mortgage rates staying at 4% or more for the next five years at least. That is a disaster for homeowners across the United Kingdom.
Let us look at taxes. The Chancellor seems desperate to convince people that he is letting them keep more of their own money, but he is fooling no one. Everyone can see his supposed tax cut for what it really is: a badly executed conjuring trick, giving with one hand but taking away twice as much with the other. Since last April, a typical household has already paid £1,500 extra because of his stealth tax on income tax thresholds. That is money that they are simply not going to get back. Even after today’s announcements, that same family will pay an additional £366 in tax next year because the Chancellor has frozen their tax-free allowance. On top of that, they have soaring mortgage payments, food prices and energy bills to worry about. This tax cut had already been wiped out by the time the ink dried on the Chancellor’s speech.
People were also looking for investment in our public services, especially our NHS. Across our country, I see more and more frustration that nothing seems to work anymore under this Government. People cannot get a hospital appointment in time, they cannot see their GP in time, and they cannot get an ambulance on time. In Hampshire, the local NHS is so stretched that there is a proposal to close the A&E at the Royal Hampshire County Hospital. In Manchester, Stepping Hill Hospital has had an entire out-patient ward closed for months because it is unsafe for patients and staff. In south London, St Helier Hospital has been left to crumble, with no sign of the investment promised by the Government, and A&E and maternity services are at risk of closure. When the Chancellor makes cruel cuts to vital services, it does not just affect numbers on a spreadsheet; it affects people’s lives. Either he does not get that, or he just does not care.
Mr Kevan Jones
I hear what the right hon. Gentleman says about investment, but from 2010 to 2015 he was part of the coalition that savagely cut services in the north-east, including expenditure in local government and health. The consequences are now having to be addressed because that austerity has continued. Does he take any responsibility for his role in our crumbling infrastructure?
Ed Davey
First, I say quite gently to the right hon. Gentleman that the spending plans proposed by the Labour party going into the 2010 election were worse than what actually happened. Moreover, when in government, we fought the Conservatives on maintaining education spending, which we did maintain. They then cut it after 2015.
Let us look now at the economy. Perhaps the most out-of-touch claim by the Chancellor is that the economy is “turning a corner.” The only corner the economy is turning under this Government is from stagnation to recession. They have left our economy smaller than it was in 2022, when the Prime Minister took office. The best growth rate they have achieved in the past three quarters of 2023 is 0%. GDP per capita—people’s share in our country’s wealth—has been falling for nearly two years in a row. That is the longest stretch on record, and it has left the average household £1,500 poorer. There is worse to come. Nearly 5 million mortgage holders will soon see their repayments skyrocket by an average of £240 a month because of the high interest rates.
That is the Government’s real track record: a recession made in Downing Street with no hint of a chance to turn things around. The Chancellor could have stood up today and given people a fair deal. He could have cancelled the unfair tax hike that he has planned for April, and raised the tax-free personal allowance. He could have properly funded the NHS, to bring down waiting lists and let more people return to work, helping to grow our economy. He could have championed unpaid carers and raised the carer’s allowance. He could have supported people with the cost of living and those struggling with their mortgage payments by reversing his tax cuts for the big banks. He could have presented a serious plan for economic growth by launching an industrial strategy, reforming business rates and standing up for our small businesses. Instead, he went for one last roll of the dice in a desperate attempt to cling on to power.
I think people have already made up their minds. The Government must do the right thing and call a general election right now before they do even more damage to our wonderful country.
Sir David Evennett (Bexleyheath and Crayford) (Con)
I obviously heard a different Budget from the one heard by the right hon. Member for Kingston and Surbiton (Ed Davey). I think that a lot in this Budget is very good and to be commended.
As someone who read economics at the London School of Economics many years ago, I understand and appreciate the economy and the challenges that my right hon. Friend the Chancellor had to confront. I welcome his announcements today, as well as the sensible and measured approach that he has taken. I commend him for his performance and his proposals. I will concentrate on a few key issues that are vital for my constituents.
Our country and the whole world have experienced unprecedented difficulties in recent years owing to matters out of our control: the covid-19 pandemic and the wars in Ukraine and the middle east. We are suffering the consequences, so it remains as important as ever to practise fiscal responsibility. As we continue to see the results of the Conservative Government’s efforts to bring inflation under control, grow the economy and reduce debt, I believe that our country is looking towards a better future.
I was at the Department for Education when the right hon. Member for Kingston and Surbiton was in the coalition Government. I would ask him to re-look at the record in relation to some of what he said.
Inflation has fallen from over 11% to 4%, the economy is now performing better than forecast, wages are increasing and we are seeing mortgage rates come down. As we heard from the Chancellor, our economy has outperformed those of European neighbours, and the OBR forecasts that we will meet our fiscal rule to have debt falling as a share of the economy. That is all positive news, and the measures in the Budget will enhance it, which is welcome. I very much look forward to seeing the benefits of today’s announcements for my Bexleyheath and Crayford constituents. High inflation is a bad thing for everybody; it affects and causes problems for individuals, businesses and communities everywhere. I was rather sorry that neither the Leader of the Opposition nor the SNP spokesperson could even praise the fact that inflation has fallen to 4%, which is a real achievement.
We will again cut taxes for 27 million working people from next month by cutting the main rate of employee national insurance contributions by 2p in the pound. Together with the cut announced at the autumn statement, that equates to a tax cut of over £900 for the average worker—that is really good news. Personally, I have always disliked national insurance: as the Chancellor said, it is an unfair double tax on work. Therefore, what he is doing through this Budget is creating a fairer system. It is the best way to incentivise work, which is something we have to do: we have to get more of the people who are not working active and into the labour force. In my opinion, that is the way to drive growth and get a fairer, simpler and more understandable tax system, which I think we would all welcome.
From April, a full-time national living wage worker’s take-home pay will be 35% greater in real terms than in 2010, due to the successive increases in the national living wage and the tax cuts we have delivered. I particularly welcome my right hon. Friend the Chancellor’s commitment to supporting parents; I have long campaigned for a change in the system to end the unfairness caused to single-income families by the high income child benefit charge. Families are the foundation of our society: we value them, and we need to support them as much as we possibly can. Almost half a million families will benefit from the increase in the threshold for the high income child benefit charge, with some 170,000 families no longer having to pay that charge. It is also right that we look to end the unfairness faced by single-earner families by moving towards a household system by April 2026. Many of my constituents have raised that issue in the past; I have raised it with this Chancellor and previous ones, so we are delighted that he has listened, taken it on board and acted. I commend him for that.
As my constituency and Bexley borough does not have an underground, people are dependent on either Southeastern—a mixed blessing, as it has been somewhat problematic; my right hon. Friend the Member for Witham (Priti Patel) is nodding in my direction—or their car. Maintaining the cut in fuel duty and freezing rates for the 14th consecutive year is, therefore, to be commended, as is the freeze on alcohol duty, which many of my Conservative colleagues have campaigned for vigorously and with justification. Every time I visit two of the excellent pubs in my constituency, the Penny Farthing, a micropub in Crayford, and the Kings Arms in Bexleyheath—I assure you that I do not do so too often, Madam Deputy Speaker—they are campaigning for a freeze. It is good news for everyone in the alcohol industry and for those who drink in our pubs. Pubs are social hubs in our area, offering good publicans and good company; unfortunately, we are too busy working to be able to go in too often. I know that those publicans will welcome these measures when they notice them on the news later.
The other thing I was particularly interested in was the new British ISA, which provides an extra £5,000 tax-free allowance. I see that Madam Deputy Speaker is nodding to indicate that I must stop, but I welcome that additional tax relief for savers and the increase in the VAT registration threshold for small businesses. There is so much in the Budget that is good—so much that will make a difference to our economy and our country—and I welcome it.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
The context in which I speak to today’s Budget is one of chaos and instability, following 14 years of Conservative failure on the economy. This Budget has not changed the dial; the reality is that people will still be worse off after the last 14 years. Sky’s Ed Conway has shared a graph that he says
“the Chancellor didn’t want to talk about”,
which shows that after the Budget, the UK tax burden will still be heading up to the highest level since the aftermath of the second world war. This is not a turning point: household mortgage costs are up, prices are still rising, and the tax burden is at a 70-year high. The Chancellor likes to speak of stability, but he seems to forget that he comes from the same party that gave us the former Prime Minister, the right hon. Member for South West Norfolk (Elizabeth Truss)—who was beaten by a lettuce—and her disastrous mini-Budget, with its impact on our national debt, our businesses, our local council finances and our family finances. Those consequences are still playing out, and will be for years to come.
What Britain needs, first and foremost, is a serious plan for growth. We should be in no doubt that our low-growth, high-tax economy is the endgame of 14 years of Conservatism: the result of the hollowing out of our public sphere, the stripping back of businesses’ potential and the levelling down of hope. Official figures show that people are worse off at the end of this Parliament than they were at the start. The consumer prices index’s average hourly pay for residents of Feltham and Heston has fallen by 6% since 2019, when it was around £17 in today’s prices, and has fallen by 20% since 2010. The number of small businesses in Feltham and Heston has been falling for the past two years running, and is now lower than it was in 2019. Some 40% of children are in relative poverty after housing costs, and it is no surprise that the average family will be £1,200 worse off under the Conservatives’ tax plan, given the 25 Tory tax rises since the last election.
But it does not have to be this way—that is the point, is it not? There is an alternative to the choices that the Conservatives are making, which have left people in Britain worse off while friends and donors do well out of that VIP fast lane. Labour has a plan for growth—growth that leads to businesses thriving, stronger public services, more money in ordinary people’s pockets, good and secure jobs, and an end to people and businesses paying more and getting less. It is a plan for stability and growth that commands national and international confidence and makes Britain the best place to invest and to start and grow a business, where we become leaders in the green economy of the future, creating opportunity for all.
Under Labour, we will have stable and competent political leadership and stable and competent stewardship of the economy, and we will see the strengthening of our economic institutions, such as the Bank of England, the OBR and our new industrial strategy council. How we do politics and how we govern really matters, but under the Tories, business investment has been lagging for years. Today’s Budget brings more sticking-plaster politics, but nothing on support for the co-operative sector and growth.
Let me say a few words about skills, because we cannot grow our economy without investing in our people. The biggest opportunity we have for inclusion, productivity, economic growth and the competitiveness of our nations is a strategy for human talent. A few years ago, a Boston Consulting Group report highlighted how human capital is under intense pressure worldwide, as powerful forces—globalisation, demographic and regional shifts, and digitisation—gain momentum. As such, nation states need a national plan, but this Budget comes on the back of years of failure and gives no answers to the skills challenges that we face.
New official data from September shows worrying trends since 2017, when the last survey was done. The proportion of employers with a skills shortage vacancy has gone up from 6% to 10%; the proportion of the workforce with a skills gap, where an employee is judged by their employer to lack full proficiency, has gone up from 4.4% to 5.7%; and the proportion of employers that have provided training for their staff has fallen from 66% to 60%. Meanwhile, the number of apprenticeship starts has plummeted under the Tories by over 200,000 since 2017, with more than £3 billion of the apprenticeship levy unspent since 2019.
I recently visited South and City College Birmingham with our superb West Midlands mayoral candidate, Richard Parker. Apprenticeship starts in the west midlands have fallen by over 30% since 2010. Small business engagement with apprenticeships has dropped by a staggering 49% since 2016, which we must change. This decline has not been an equal one. In 2015, more apprenticeships were started by learners in the bottom 40% of the income distribution; now they are started by those in the top 40%.
The Chancellor rightly talked about the productivity challenge, with some improvement coming from digitisation and artificial intelligence, but over half of secondary schools in the UK were not even offering a computer science GCSE in 2021, and the number of 14 to 19-year-old students taking technical, IT or computing qualifications has fallen by a third since 2015. To tackle our productivity, we need a plan for our young people.
Under a Labour Government, Britain’s skills plans will be led by a new national skills taskforce, Skills England. That will go alongside our industrial strategy, and bring together businesses, training providers and unions to meet the skills needs of the next decade across all our regions. We will recruit over 1,000 new careers advisers for our schools and colleges, and deliver two weeks of work experience for every young person, so that young people know the pathways that are available to them.
We will better support our further education sector to meet local skills needs, where local skills improvement plans demand it, by putting in place new technical excellence colleges. We will transform the apprenticeship levy to bring more flexibility. Up to 50% of the levy will be spent more flexibly, on courses, which is what Tesco, the Co-op, the British Retail Consortium, techUK, City & Guilds, the British Chambers of Commerce, Superdrug, the Chartered Institute of Personnel and Development and many others have called for.
Britain needs a change, and only our changed Labour party will deliver it, with our costed plan for all our policies, which will drive the change that we need in our economy, our NHS, our public services and our communities. The Government are out of ideas and out of time. More than anything, this Budget has shown that what my constituents need, what our economy needs, and what our country needs is a Labour Government.
Priti Patel (Witham) (Con)
As a former Treasury Minister, I want to thank the Chancellor, but also other Treasury Ministers and Government Departments, because I know how hard it is to put a Budget together and the number of representations that are made. I must thank the Chancellor for the due consideration—that is a polite way to put it—that he has given to the representations that I have consistently made about supply-side reforms and lower taxes. He knows exactly what case I make on fiscal drag, in particular. I also thank him for delivering greater efficiencies in Government.
The Chancellor has put forward a clear plan for the economy, made targeted tax cuts, which I will come to in a moment, and provided support for businesses, and for efficiencies across the board, including in the public sector. On days like today, we never get the benefit of a discussion of the ins and outs of the Red Book and the OBR—I give the assurance that we would all love that, if we had much more time—but we must all recognise that our economy faces fundamental challenges that the Budget has sought to address.
The Chancellor understands that he is walking a tightrope, and that we should also tackle some of the big issues to do with the size of the state and public spending. When we look at the rate of public spending growth, we see that it has constantly exceeded the rate of inflation and economic growth. Public spending is now in excess of £1.2 trillion per year, which is approximately 44% of GDP. I am old enough to remember that back in 1997, public spending was around 35% to 36% of GDP. What a contrast that is. There are consequences to sustaining high levels of public spending.
Tax receipts have risen to over £1.1 trillion, and we know what that means for delivering a balance on taxation. I maintain that the situation is very burdensome. We have to get tax rates down. However, I very much pay tribute to the Chancellor for listening to comments about efficiencies. He spoke today about a public sector productivity plan. The details will be fundamental, and really important to hear.
I was really pleased to hear that the Chancellor is looking at cash savings in public spending across the economy, but will also grow aspects of Government spending—for example, there will be an expansion in violence reduction units. Pilots across certain Government Departments have worked well, and we now have to look at how we get better delivery from public spending, and how that can drive real outcomes in Government. I have spoken to the Chief Secretary to the Treasury about that in recent months, and I am pleased there are concrete proposals that will take us in the right direction, but of course we have a long way to go.
I come to the subject of people keeping more of what they earn, which is clearly a fundamental Conservative principle. This is where national insurance contributions come back into play. I have seen the numbers, and clearly we could move in the direction of lower rates of national insurance. Yet again, we have seen those rates go down, and the debate when the Bill comes forward will be very interesting. Back in the autumn, I was here when only about three people spoke in favour of national insurance coming down and in support of the legislation on that; we want much more support for this measure next week.
It is important that we get the balance right when it comes to incentivising work. Getting national insurance down is fundamental, but we must tackle fiscal drag, and the number of people who get caught up in higher rates of taxation. The figures given last autumn would bring 4 million more people into higher rates of tax by 2029. We will go through the OBR and see what the measures mean this time round, but the issue is still significant, and we know that more work is required in this area. It will be interesting to see whether the Government will bring national insurance down again in successive future autumn statements.
I welcome the decision to maintain the 5p reduction in fuel duty, and we have already heard what that means for working households. I have made representations on that issue, and will continue to do so. Fiscal events are huge for business taxation, and I welcome today’s announcements on increasing the registration threshold, freezing alcohol duty, tourism and lowering corporation tax, which I have spoken about many times. We are now tied into OECD rates of minimum corporation tax, and my views on that are known. I want greater changes, so that businesses can benefit from our Brexit freedoms.
I would like to speak about many issues today, but broadly speaking, the direction of travel is important. I heard Opposition Members speaking about local government finance; I welcome the announcement of £5 million that will be made available, through the levelling up fund, for cultural projects, as that will come to my area and to Maldon. Important measures have been announced today. It is a tough time, but the Chancellor has announced a plan. We must stick with that plan and make sure that it delivers for working families.
Stewart Hosie (Dundee East) (SNP)
In his statement, the Chancellor mentioned “not just higher GDP, but higher GDP per head.” There is just one slight snag: figures published today for GDP growth per capita from 2024 to 2027 are lower for every year than figures published only a year ago, so we are talking about not higher GDP per head, but lower GDP per head. I use that as an example; we hear the rhetoric and hyperbole of the Budget statement, but it rarely stands any scrutiny when one reads the Budget documentation. The Government can claim that they will meet both their fiscal targets at the end of a five-year rolling forecast period—indeed, every Government could say they will meet their targets at the end of a five-year rolling forecast period—but it is what happens in between those points that is important.
The Government told us a year ago that net debt would fall as a share of GDP in 2024-25, and that net borrowing would fall below 3% of GDP in 2025-26. However, by the autumn statement, only five months ago, we were told that debt would not fall until 2025-26, a year later—and they still forecast that the deficit would fall below 3% of GDP in the same year. We were also told in spring that GDP growth would exceed 2% in two of the next five years, and that productivity would sit between 1% and 1.3% every year across 2024 to 2027. By November, growth was not forecast to exceed 2% in any of the forecast years, and the productivity growth forecast was down for every single year. Today, the Chancellor announced that while the Government would still meet their primary debt target in 2025-26, the percentage of debt to GDP would be higher than it was only five months ago, so debt is not really falling; at best, it is stagnating. GDP growth would still not exceed 2% in any year to 2028, and that is important. That is another half-decade in which GDP growth will not even reach historical trend growth rates. That is absolutely shameful.
The figure for productivity per hour—a metric that the Government like—is lower cumulatively over today’s new forecast period than the figure was that they announced last November. The Chancellor said this was a Budget for growth, productivity and long-term investment, but debt is not really falling as a share of GDP. The deficit is not getting smaller—it is actually getting worse, compared with the forecast last year—and productivity growth, that perennial problem that we all recognise exists, is cumulatively lower over the entire forecast period than the Government announced last November.
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
Does the right hon. Gentleman agree that we have to increase growth? We all agree that we have to get all parts of the United Kingdom growing. If he looks at the figures from the Library, he will see that from 2011 to 2021, England grew cumulatively by 14.9%, Wales by 13.7%, and Scotland by 7.2%. Does he agree that the Scottish Government need to do more to stimulate growth in Scotland?
Stewart Hosie
I agree that we need growth across the piece. One of the tools to facilitate growth is tax credits, and I am sure the Minister recognises that tax credits are a function of corporation tax. If he is serious about encouraging growth in Scotland, the Government should devolve business taxation powers and power over the associated tax credits; we would then see how we got on.
Whatever was said at the start of the statement about growth and productivity, and despite the hyperbole, the big introduction and all the fanfare, this Budget delivers neither of those things, as evidenced by the numbers that the Government have published today.
Andrew Rosindell (Romford) (Con)
May I commend my right hon. Friend the Chancellor on his Budget statement today? He is, I believe, slowly but surely getting Britain’s economy back on the right track. However, we have much work to do. The United Kingdom has no business being a high-tax, low-growth and low-aspiration nation. That is not the Britain I recognise.
The people of Romford are feeling the pinch. The overall burden of tax is higher than it has been since the second world war. Council tax is rising in the London Borough of Havering yet again. Public services are not even meeting basic expectations, and local government is struggling to remain solvent. The cost of living is hitting my constituents hard in the pocket, with energy prices rocketing and the daily cost of food and essential shopping rising to unprecedented levels. Inflation remains acute, yet there is little economic growth. Financial prudence may be an important Conservative attribute—it is certainly absent from those on the Opposition Benches—but there is nothing less Conservative than a record high tax burden. We can and must do much better.
Hard-working families in Romford want lower taxes, higher economic growth and good public services. Those three aims can be achieved only if we adopt a robust, free enterprise agenda, reduce the size of the state at every level, and give the British people the incentive to work harder, be more productive and maximise our nation’s potential for economic growth. My Essex constituents are entrepreneurs, market traders, small businessmen, shopkeepers and City workers. They do not want an economic policy of managed decline, but one of heightened ambition and raised expectations. That is why I welcome many of the Chancellor’s tax announcements today.
The additional 2% cut to national insurance contributions means that the Conservative Government have delivered a £900 annual tax cut for the average worker. The extended cut to fuel duty will also help hard-working people mitigate the costs of the Mayor of London, who has imposed so many extra costs on my constituents. Child benefit reforms will help millions of hard-working families. The reforms to stamp duty and the reduction in capital gains will help millions of property owners. Nevertheless, the Chancellor has repeatedly recalled over recent days how the nations with the most economic growth, whether they be in North America or Asia, are those with even lower taxes. I encourage him to further emulate those countries’ success in the years to come. Low taxes will put money back in the pockets of the British people, leading to higher growth and more resources for public services.
My right hon. Friend the Chancellor clearly shares that outlook, with his announcements today of tax cuts, investment and reform to boost productivity in the public sector. However, I encourage him to go much further. We should follow in the footsteps of the Thatcher-Lawson Budget that led to unprecedented economic prosperity in the 1980s and 1990s. We can and must succeed, but Britain has to be much bolder if we are to reap the benefits by becoming a low-tax, high-growth economy once again.
But tax cuts and investment alone will not be enough. We need to adopt a radical plan to free our economy from the needless bureaucracy that is holding Britain back. The benefits of becoming a sovereign nation once again following Brexit give our nation exciting opportunities that we must seize to maximise our ability to generate the growth and prosperity that we so desperately need. Margaret Thatcher showed the world how it could be done 40 years ago, rescuing Britain from the perilous situation she inherited following decades of a failed post-war socialist consensus.
Today, we live in a post-pandemic world, but if we are to recover from the consequences of lockdowns, a radical approach is required to jump-start our economy and unshackle ourselves from red tape, over-regulation and Government waste. Britain today is over-governed, so reducing the size and role of the state must be an imperative for our Conservative Government. Regulation and public sector spending do not grow the economy, put cash into people’s pockets or improve public services. It is the small businessmen and shopkeepers in towns like Romford, along with our entrepreneurs and market traders, who will generate economic prosperity for the future.
I am disappointed that the unfairness in the local authority funding formula has not been addressed. Councils up and down the country, including my borough of Havering, are facing acute financial pressures. The funding formula is unfair and outdated, and it is discriminatory against boroughs such as Havering in outer London and Essex as it fails to address differences in demographics. Most importantly, it leaves hard-working, tax-paying Britons without the services they need and deserve. That, too, requires ambitious reform.
Ambition is key. Lower taxes, higher growth, reform and deregulation—exploiting all the advantages of Brexit—investment and reform of the public sector are the way forward for Britain. Our Government have been right to tread a prudent path back to economic growth, but now is the time to be bold and fearless in the pursuit of the greater ambitions we have for the British people.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
It is quite surreal to follow the hon. Member for Romford (Andrew Rosindell). Like him, I believe in small business, but small business growth will not solve the problems in the public sector, which has been squeezed during 14 years of this Tory Government until the pips squeak. However good it is, small business will not refill council coffers and ensure basic social services and special educational needs in schools. Small business will not solve the NHS waiting lists or bring schools off their knees.
This Government and the Government of the austerity years have caused all those problems, and crashed the economy in September 2022, leaving families and businesses crushed. Those who survived the pandemic have faced real hardship since. This is a Budget of a desperate Government—another slew of promises that will not be delivered on. That is what we focus on in the Public Accounts Committee: delivery. We look at optimistic, sometimes well-intentioned promises that fail because there is no plan for delivery.
In my own borough we see such poverty. Earlier today, in Prime Minister’s questions, the Prime Minister said that equality has increased and inequality has reduced under his Government. Not in my borough, as 48% of children in Hackney—nearly one in two—live in poverty after housing costs are taken into account. Even in inner London, we are the 22nd most deprived local authority in England. There is real, day-to-day poverty. I invite anyone to join me on my doorstep surgeries and see the reality.
Let me tell the House a story about that reality. I could choose many constituents, but I visited a particular lady just a few weeks ago, who lives in a two-bedroom council flat with her husband and four daughters. The flat is only marginally bigger than my office in this building, and only a bit smaller than a Committee Room. Three of her daughters share a very small bedroom with bunk beds. The toddler shares with her parents. The bathroom and kitchen are so tiny that two people at a time hardly fit. They share one living space.
Government failures over housing and Brexit mean that children are leaving London. For my constituent, that means that the local school is closing because rolls are dropping. The cost of housing means that they have no prospect of moving anywhere else, because of the shortage of properties in the social rented sector, where more than 8,000 households are on the waiting list. According to the most recent verified figures, only 671 homes became available during 2021-22, compared with more than 1,200 in 2016-17. Both of those figures are outstripped by demand.
The cost of housing means that many people are being shipped out to temporary homes, ripped from their schools, churches, mosques and communities. That means that my constituent’s local school is closing, as are others. On top of the overcrowding, her four daughters need to move schools. They are a working family who want to do well, but they have little opportunity. Down the road is the product of the Government’s free school policy: a school with 25 pupils per class. Members who know how schools funding works will know that that school will never be financially sustainable, because schools are funded on 30, 60 or 90 pupils per class. The trust that has taken it over from the one that failed is struggling with the finances. A brand-new building has been built, but it is unsustainable, while other schools are closing thanks to Government policies.
The housing costs across my borough are absolutely wretched. So many people are renting privately but unaffordably. More people rent socially than privately, but they live in overcrowded conditions. An average two-bed rent is just under £2,000 a month. There are 30% fewer privately rented properties available now on Rightmove compared with before the pandemic, and no properties available to those on low incomes at local housing allowance rates. This is the real, day-to-day impact of Government policy. So many people are housed outside the borough.
Chris Grayling (Epsom and Ewell) (Con)
Forgive me if I misunderstand how our system of government works, but social housing in the hon. Lady’s constituency is the responsibility of the Labour Mayor of London, is it not?
Dame Meg Hillier
I do not have time to explain, but no; it is the responsibility of the council. Many properties were sold off under right to buy, which means that fewer properties are available. People like my constituent are living cheek by jowl with people in private rented accommodation, often sold to cash buyers if it is above seven storeys, who pay private rents at the rate that I mentioned. The differential is extraordinary, and it means that no one can move from one to the other. The social rented housing that is so desperately needed because of the cost of buying or renting private housing is not available.
Under this Mayor and the previous Mayor, my borough has been building council housing for social rent, as have many housing association partners, but because there is no Government subsidy, every time they build a social rent they pretty much have to build another to sell at market rate in order to cross-subsidise. That is a quick lesson in social housing economics. That shows the detachment, because people in this Chamber do not realise the reality of life for so many in London.
Let us look at the real human impacts. There are 3,777 children in temporary accommodation in Hackney—enough to fill eight primary schools, and equivalent to 1% of the borough’s population. Those children want to live in London but cannot afford to do so. Not only that, but they are being passed from pillar to post, from temporary accommodation to temporary accommodation, and moving school regularly. This is a squeeze on opportunity.
For those at the higher end who might be able to get on to the housing ladder, the lifetime ISA is an opportunity missed in the Budget because it provides support only for a property purchase of up to £450,000 nationally. That rate is higher in London, but even that does not cover the cost, given that, typically, a brand-new two-bedroom property costs £750,000. Who is able to afford that?
On public spending, the Chancellor merrily talked about reductions in spending in most Departments. I have not had time to go through the Red Book in detail, but we see a huge drop. The Home Office budget alone is going down significantly, which is a concern considering all the challenges in policing, immigration and other security issues that it has to deal with, and we could look at education, too. All those budgets are reducing.
There are big nasties out there in every Department that will cost money for whoever is in power. There is the civil nuclear decommissioning and rebuilding of our nuclear power stations, the nuclear enterprise and the costs of decommissioning nuclear submarines. We have not even decommissioned one of those—the first will be done in 2026—and that is becoming an urgent crisis.
There are 700,000 pupils in crumbling schools. These are just some issues where input is needed. On the schools budget, the Department for Education wanted £4 billion a year to build the new schools that were necessary, but it was granted £2.7 billion. We have already seen its capital budget reducing.
The Chancellor talked about public sector productivity and reform. The Public Accounts Committee, which I am proud to chair, examines that endlessly, and too often we see optimistic plans that do not deliver, as I said. He is already spending what he is promising to deliver on that. Let me tell hon. Members that this takes a long time. We need reform and digital transformation, but we cannot deliver those changes and budget savings overnight. We need a long-term approach—slow politics, if you like—where both sides of the House, whoever is in government, agree that some things just have to happen and should not be at the whim of a Government who are on their last desperate stages to try to prove that they have something to offer the British public.
Wera Hobhouse (Bath) (LD)
The hon. Lady is making an excellent speech about all the things that were not in the Budget. Does she agree that the biggest missed opportunity is not investing in the green transition?
Dame Meg Hillier
There are so many missed opportunities. The child benefit issue was a mess of this Government’s making. They have now broken the independent taxation rule and that is a problem.
This Government have broken Britain. My constituents are worse off than they were 14 years ago, and worse still, they have no hope. We need to see a Government who will deliver hope, opportunity, housing and school improvements, and cut waiting lists. We need to mend broken Britain; we need a general election and a Labour Government now.
John Stevenson (Carlisle) (Con)
A single Budget rarely, in itself, makes a substantial difference or is remembered. However, a Budget that is part of a story and a sense of direction is important and can help to continue a narrative and build a vision. In my view, this Budget is one such occasion: a clear vision of where we want to go, particularly with regard to tax and growth. Last autumn, the Chancellor started this sense of purpose and set out a direction: first, supporting business with full expensing; and secondly, supporting those in work with a 2% reduction in national insurance.
This Budget continues that direction of travel and I fully support it. A further 2p reduction in national insurance will be welcomed, including by all those in work. It is the equivalent, as has been said, of £900 per annum, and there is the help for the self-employed. If I was to make one suggestion to my party as it continues this narrative, looking to its manifesto and a commitment at the next election, it would be to reduce national insurance further, and ultimately to abolish it. I fully agree with the Chancellor that simplifying the tax system, especially for those who are in work, should be a priority.
Some of the other Budget measures include the freeze on fuel duty, helping all motorists; the alcohol tax freeze; the expansion of childcare; and further support for business, with the VAT threshold rising and full expensing extended to leasing. Of course, there is also public sector support, with 40,000 new doctors, 71,000 additional nurses and 20,000 new police officers, which demonstrates our commitment to public services.
However, Budgets cannot be seen isolation, and there are plenty of other things going on. Unemployment remains historically low, which benefits families and individuals up and down the country. The living wage will rise by 11%—in real terms, 25% higher than it was in 2010. Inflation is at 4% and will fall further. It will probably be well below 2% by the summer, which will allow interest rates to start to fall. It is not all about work; pensions will rise by around 8%. That is a benefit of the triple lock, which has taken more than 200,000 pensioners out of poverty.
However, the ultimate goal is growth in the economy. We have fared better than many of our European partners, but clearly we want to see growth right across all regions of the United Kingdom. To achieve that, we need the correct ingredients at both the national and local levels. Investment, skills, lower taxes and less regulation all lead to higher productivity and, therefore, a wealthier society.
I give the local example of my constituency of Carlisle, which is extremely well placed to grow significantly through national and local support. There is more than half a billion pounds-worth of investment in place, progressing now or about to be undertaken. That is transformational investment: digital investment for a modern economy; a £220 million improvement to the link road, which will improve connectivity locally and right across the region; a railway station undergoing refurbishment, which will bring it into the modern age and make it the region’s gateway to everywhere; a university that will be located in the city centre, helping to regenerate the city centre and grow the local economy, as well as creating the skills of tomorrow; and a medical school, opening in 2025, which will improve the health economy. As for the talk about housing, I always tell people to remember that we do not have a national housing market. The market is regional, and we still have affordable housing in Carlisle, which is an attractive place in which to live and work. On the back of that, we have a garden village with 10,000 new homes, which will allow the city to expand in an appropriate way.
In my view, Carlisle demonstrates success at the local level: investment, skills development, better connectivity, low unemployment and room for growth. That is levelling up in action. The Budget is part of the equation that can help to achieve and support growth in Carlisle and across the country. I support it because it sets out that we are going in the right direction for both our country and, of course, my city of Carlisle.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
This was a Budget for job preservation—the preservation of the jobs of Conservative MPs in marginal seats. It is the epitome of short-termism and sticking-plaster politics. It was not what Britian needed, and I am afraid it may not be enough for the Conservatives to get themselves re-elected.
There are five areas on which I will briefly touch on behalf of the people I represent in Plymouth. The first is housing. I was disappointed that there was not more on housing to help people get on to the property ladder, especially in areas of acute housing stress. In the far south-west, there is real pressure on house prices, both for rent and for sale. The area has been decimated and hollowed out by second homes and Airbnbs. Although I welcome the changes to the furnished holiday lets regime, they will not deal with the scourge of second homes, which are hollowing out our communities and leaving them empty for much of the year.
Plymouth has a housing crisis, which is compounded by the fact that the rural and coastal communities around us are experiencing an even deeper housing crisis, with a lack of affordable housing. I would have liked to have seen more in the Budget to support councils such as Plymouth City Council, which wants to build, build, build. I want to see more density in our city centre, and I hope the Government can support councils such as Plymouth City Council—a Labour-run council—with a plan to build greater density and thousands of more homes next to transport hubs, places of work and our vibrant city centre. I want to see more from the Government, but there was not enough in the Budget.
The second area is nurseries. I welcome the possibly transformative change that a Government focus on childcare could bring about. Helping people back into the world of work is really significant, but I worry that not enough preparation has been done to get it right. In only a few weeks’ time, the new policy will be implemented, but there has not been enough effort on skills, on recruitment, on retention or on the viability of nurseries, especially small nurseries in poor communities. We are only weeks away, and I really hoped the Chancellor would have supported those nurseries that want to expand their provision but cannot afford to do so. That is especially true in communities such as mine where parents cannot afford the compulsory top-ups to give their kids a place in nursery care. That is simply not good enough.
Thirdly, on the Keyham bomb, Members will have seen the incredible efforts made over the past few weeks by our armed forces, the police, Plymouth City Council and others to support the community after the discovery of a world war two bomb. I want to thank everyone who put their life on the line, especially the Royal Navy and Army bomb disposal squads.
The incident highlighted a particular Treasury problem, however: the existence of an insurance loophole that insurers can use—and have used when a bomb was discovered in Exeter a few years ago—to claim that policies are not valid due to an “act of war”. That war was 80 years ago, and I would like to invite the Government to speak to me and my right hon. Friend the Member for Exeter (Mr Bradshaw) about how we can sunset that provision to ensure that anyone who buys an insurance policy for their household or their business knows that they are insured if the worst happens, because let’s face it, there are still thousands of undiscovered world war two bombs out there.
Fourthly, I want to see more support for care leavers. I think this matters to all of us in this House. There are opportunities to support care leavers which, frankly, do not cost much money, particularly getting their first home after they leave care on their 18th birthday. A national rental deposit guarantee scheme and a national rent guarantor scheme would fundamentally transform the life chances of young people leaving care, because they do not have access to a bank of mum and dad or someone to guarantee their rent in their first home in the private sector. Working with Barnardo’s, we estimate that this will cost £30 million to set up. That is a lot of money but in the big scheme of things, £30 million to change the life chances of all those thousands of young people in care would be money well spent and I would like to see the Government look at that.
Finally, I would like to see a greater fair share for the far south-west. Whichever Government sit on those Benches after the next election, they will be formed of MPs from the south-west of England, and I would like to see the regional variations in spending addressed. In Plymouth, we get above-average spending in one area of Government spending and one area alone, and that is defence. We have the largest naval base in western Europe in the constituency I represent, and I am proud to stand up for our armed forces, but on health, education, skills, transport and housing, we are below average. There is no reason why any child in Plymouth should be worth less than the national average, and we need more fairness in our system to let them achieve their true potential.
This is a pre-election Budget and I think the public will see through it. It is not the long-term plan that we were looking for. Mortgage payments are higher, the weekly shop is more expensive, food bank use is up, inequality is up, the tax burden is the highest in 70 years and our economy is in recession. This is giving with one hand and taking with the other. One thing is clear: it is time for a general election, and I look forward to the Prime Minister putting out his lectern—without the logo on—in the next two weeks and letting the people decide who they want to be in power. It is time for a fresh start.
Chris Grayling (Epsom and Ewell) (Con)
It is a pleasure to follow the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard), and I echo what he said about the emergency services. They did an extraordinary job removing that bomb in what could have been a horrible situation. However, I have listened to what the Opposition are saying and I have listened in vain for an actual plan. Instead, we seemed to be hearing a whole series of shopping-list items with no sense at all of the economic reality of the moment.
The economic reality is very straightforward. Over the past four years, we have dealt with the biggest public health crisis in a century, the biggest security crisis in Europe for 75 years and an international resurgence of inflation and rising interest rates, and still we have an economy that is doing far better than the Opposition said it would. We have an economy that still has some of the lowest levels of unemployment for decades, that is turning a corner, that is forecast to grow and that is attracting investment. We are No. 3 in the world for attracting inward investment. We have heard today about AstraZeneca’s plans in Cambridge and on Merseyside. Those are good-news stories, and they are happening because this country remains a good place to do business and a place that attracts international organisations to base themselves here.
None the less, we are a country like those in the whole of the western world. Other European countries face the same challenges, and the answers are not simple or straightforward. I have listened to the Opposition, and they seem to be suggesting that there is a magic solution and that the world would be fine if they somehow transformed themselves into the Government of the day. Well, I can assure them that, in the unlikely event of that happening, they would face all the same issues. The difference is that they would get the solutions wrong. Instead of bringing down taxes and taking steps to drive investment, as the Chancellor did in the autumn statement, they would do the opposite. They would put up taxes, put up public spending and stifle our economy, which is why they do not offer a solution for the future. It is why, actually, a Labour Government would be profoundly damaging to this country.
We need to remember that, back in 2010, we inherited 2.7 million unemployed people and rising, including 1 million unemployed young people. Here we are, 14 years later, with historically low levels of unemployment. Yes, there are challenges in the labour market—I will talk a little about those—but, of all the economic challenges that a nation can face, I have always believed that unemployment is the worst, because unemployment creates real human misery. The fact that we do not have the level of unemployment that we inherited 14 years ago is a huge plus for this country.
The reality is that we need to return to some of the principles that we put in place back in 2010, because we have too many people outside the workforce and too many people on long-term sickness benefits. At that time, we had some very proactive programmes to help those people back into work, and I think we need to recapture that in the aftermath of the pandemic.
One thing that is not a solution is a system without sanctions, as the Opposition propose. Ultimately, those who can work should not be sitting at home on benefits. Even the vast majority of those on sickness benefits have the potential to return to work, perhaps to do something different from what they did before. With the right help and support, they can get to a better place. Nobody benefits from sitting at home on benefits for the rest of their life. It destroys lives and destroys health.
If there is no stick to go with the carrot, we will achieve far less than we should. The idea that an alternative is providing support without consequences for those who do not take it is simply nonsense. We have to get back to a proactive carrot-and-stick approach. The welfare state is a ladder that people should climb; it is not a place in which they should live.
I am sorry to see that we are putting up taxes on air passengers, albeit in the higher classes. This will ultimately drive traffic out of the United Kingdom. People will interchange on the continent or in Dublin, because it is cheaper. I hope that the measures will be temporary, and I do not want to see further measures that drive down the UK sector’s competitiveness.
At the same time, I am very pleased to see the investment in helping the development of sustainable aviation fuels. The Chancellor’s announcement earlier this week is welcome and necessary because, as I said at Prime Minister’s questions, this is an essential area for the aviation sector, which can take serious steps towards net zero only if it transforms the fuels it uses. Both for long-haul flights and in the immediate future, sustainable synthetic aviation fuels are the only way in which it can take such steps towards net zero.
I do not want to see a situation in which our industry buys all of its fuel from other countries. As I said earlier, the United States is currently the source of sustainable fuels for UK airlines, which might be fine right now, but we have to take quick steps to ensure that we have an industry in this country. That requires, over the coming months, the Department for Transport and the Treasury to work together to accelerate the process of setting out plans for the SAF mandate and a price support mechanism so that, immediately after the election, whoever is in power can put the plans in place straightaway. That is essential for the future of the industry in this country—and it is not just about aviation; it is about jobs in parts of the country that need jobs.
I hope the Treasury will put its foot on the gas to make sure that sustainable fuels happen quickly. I hope the Department for Work and Pensions will be bold in stepping up its support, as well as stepping up the consequences for the long-term unemployed who refuse to accept that support. In difficult circumstances, I think those in the Treasury have produced a pretty good, balanced Budget, for which I commend them.
Julian Knight (Solihull) (Ind)
I am conscious of time, Madam Deputy Speaker, so I will not be giving way in this short speech. As someone who passionately believes in a free market and a small state, I find the national debt figures in this Budget truly appalling. Let us be clear: we have gone from a position where our national debt figure was 37% just prior to the financial crisis to one where it is close to 100% today. That is a two and a half times increase, most of which has come on a Conservative majority Government’s watch—of all things! There have been tribulations, but there have also been huge missteps since 2010. That means that we have seen an increase in national debt equivalent to that of the first two years of the second world war, when we were fighting for our very lives against the Nazis; no one can say that anything in this period remotely approaches that. In the 1960s and 1970s, Governments of the day had an excuse: they were still recovering from the economic dislocation of the second world war. We have no excuse for this appalling financial mismanagement, apart from our indolence and lack of political will.
What has gone wrong? I would set a lot of the blame at the door of George Osborne and the public school, dyed-in-the-wool establishment clique who run the modern-day Conservative party. In 2010 and 2015, we had huge opportunities to reset the relationship between the state, the individual and businesses, which are the only means of growing the tax base in this economy. So-called “austerity” was nothing more than a reduced increase in government expenditure. Government should have been made slimmer and fitter, and supply-side economics should have been the core of everything we did. Instead, we had George Osborne talking about parking the tanks on Labour's lawn—if we look at the Ipsos polling, we must ask: how has that worked out?
The second reason we are in the state we are in is that we have failed to grasp the opportunities of Brexit. It should have been an opportunity to deregulate en masse, to make our economy fitter and stronger and to out-compete the Europeans. Instead, our very first move post-Brexit was to impose VAT on tourists, which has been devastatingly counterproductive. It is just an example of the way in which we have failed on Brexit. We have lost and we have shown absolutely no will to grasp those opportunities. If we are going to support Brexit, we have to do it properly. That is the only way to have done it, if we believed in it; we have failed in our will.
As a nation, as the borrowing figures show—this is in addition to the fiscal and monetary policy—we are addicted to debt and printing money in order to not face the hard choices, which could be golden opportunities. As a result, this country’s finances are more vulnerable than they have ever been. We are no longer part of the European financial ecosystem—we are alone. All we are doing is borrowing more and paying ourselves more, for producing less. Unless the supply side is properly tackled by a bold Government, I can see this nation being back at the door of the International Monetary Fund, just like it was in 1976. Saying that we are not as bad as the Italians is a joke. This Budget was supposed to be, “Do or die”, but from looking at the documents and the wider polling, we see that it is more, “Not do and then, unfortunately, we die”. The crying shame is that at least Blair had to work for his landslide.
Finally, I reflect on my last words in this place before I chose to recuse myself voluntarily. They were:
“frankly…I have had enough.”—[Official Report, 5 December 2022; Vol. 724, c. 57.]
I have been speaking to the British people on the doorsteps and talking to my constituents, and I am sorry to say that that is precisely the verdict that will be delivered on the Government in the very near future.
Sir David Davis (Haltemprice and Howden) (Con)
It is rather sad to follow that speech from the hon. Gentleman. I remind him that a one-in-75-year financial crisis, a one-in-a-century health crisis and a one-in-75-year international crisis in Europe, all contributed dramatically to the problems he outlined. Although I may be on the same side as him when dealing with the public school tendency in my party, I do not blame them.
Sir Jacob Rees-Mogg (North East Somerset) (Con)
On that point, will my right hon. Friend give way?
Sir David Davis
I might return to that shortly.
The truth is, as my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) said, the Chancellor has done a skilful job in dealing with an extraordinarily difficult backdrop. I think there are more things he could do—I will talk about that in a second—although much of that is down to the structure of Government decision making, rather than his fault. For example, as the Leader of the Opposition said, we are dealing with a world in which Putin has weaponised supply chains and destroyed the economic basis of our anti-inflation policy that has worked for the previous 10 years.
I understand the Chancellor’s caution and his desire to retain the confidence of the markets. Against that, it is remarkable that he has taken £20 billion out of national insurance, at about £900 a head for 27 million people and for another 2 million self-employed people. Frankly, people are underestimating the success the Government have had with inflation reduction and employment. For most of my time in this House, the idea of 800 new jobs a day, every day, for an entire Government’s tenure, would be extraordinary—that certainly did not happen under the previous Labour Government—so we have quite a lot to be happy about.
That said, if I had my way, I would not have gone for national insurance; I would have reduced income tax. Why? A lot of assertions have been made in the public domain, probably in relation to the Treasury, that national insurance is less inflationary than income tax. That is bogus nonsense. The only argument to support that is that cutting national insurance will pull tens of thousands more people into the employment pool, but so will cutting income tax. Because income tax applies to people above the age of 65, cutting it would also keep highly skilled and capable people, who we do not want to retire, in the workforce. I would have preferred an income tax cut rather than a national insurance cut, but that is what we have got and it is probably much better than we would have got from the Opposition.
While I am talking about income tax, I want to make one point en passant. At every Budget, I have raised the question of IR35, which is oppressive on small businesses and the self-employed. It drives people out of the country; the Public Accounts Committee is looking into that issue and I hope it will come up with a conclusion some time soon. I will keep at the Government to deal with IR35 and the related issue of the loan charge. Frankly, His Majesty’s Revenue and Customs is behaving in a barbaric manner, reminiscent of the Post Office, so I will continue to raise that issue.
I want to raise a number of structural matters. My right hon. Friend the Member for Wokingham (John Redwood) made the point I was going to make about the Bank of England. The current structure of the Bank of England, its guidelines and its rules, are flawed in a big way. They handicap the way Government can operate on fiscal policy and on inflation. We need to address that and my right hon. Friend made a good point about that.
There is also the issue of the OBR. George Osborne created the circumstance under which the OBR almost sets the guidelines and the fiscal rules for the Government. The Government are then terrified of what the markets will do if they do not follow the OBR’s attitude. I understand the Prime Minister has a picture of Nigel Lawson in his study. He ought to read Lawson, because Lawson’s view on economic forecasts of any sort was that they are pseudo-technical nonsense. He did not believe in forecasts and we would do well to learn from him. The whole British establishment is suffering from a collective delusion about the amount of authority that rests with OBR forecasts—in fact, with all Government forecasts.
Let me give the House an example. The Bank of England’s forecasts failed to predict the worst inflation crisis in modern times. In 2022, the OBR’s UK borrowing forecast was more than £100 billion—I repeat £100 billion—off the mark. Last year, the Office for National Statistics—not in forecasting, but just in measuring—announced revisions that added £50 billion to the size of the British economy. Panmure Gordon turned round and said that it had completely rewritten the story of post-covid Britain, which it had. A new report on the OBR has suggested that, since 2010, the combined total of the OBR’s errors in growth forecasts aggregates to over £500 billion, and its errors in forecasting public sector debt accumulate to more than £600 billion: this is the mechanism that Chancellors are using to decide how much tax they can afford to cut. To remind people, the fiscal rule is that there should be a reduction in the percentage in 2029—that is the difference between two guesses. It is not a rational way to run an economy.
Chris Grayling
I was particularly struck by the change to capital gains tax and the reference to the Laffer curve. Does my right hon. Friend agree that it is disappointing that the OBR in particular still does not appear to look at dynamic impacts of tax changes in a way that is essential for the future?
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Interventions are absolutely marvellous, but can those who have already spoken be conscious that we are trying to get everybody in with equal time? My advice remains six minutes per speaker. Sir David Davis will notice that he is already slightly over that.
Sir David Davis
I have one last thing to say, as I will cut what I was going to say about productivity.
One rule that used to apply in this House was something called a general amendment arrangement, which came after the Budget. That disappeared in 2017, which means that we cannot change the Budget except in a very, very narrow way—this probably should be a point of order rather than part of a speech. I plead with Members on the Front Bench to ask the Chancellor whether we can have a general amendment arrangement at the end of this Budget.
Sammy Wilson (East Antrim) (DUP)
Having heard some of the speeches from Conservative Members, I suspect that, although they have given some welcome to this Budget, there is a great deal of disquiet about it. I am sure they were all hoping that the Chancellor would come out with a Conservative Budget that gave them a banner under which they could march towards a general election. Instead, we have what can only be described as an “Old Mother Hubbard” Budget. Although the Chancellor would have loved to have thrown bones to the electorate—nice juicy bones that they could bite on—so they would be happy to vote Conservative at the next election, in effect, the cupboard is bare. The cupboard is bare not because of the mismanagement of previous Governments, but because of the mismanagement of this Government, who have been in power for 14 years, from costly lockdowns that were badly thought out and whose economic consequences were never considered, to the ongoing billions being spent on net zero in the belief that, somehow or other, we can alter the world’s climate, to the failure to take up the opportunities of Brexit and the staggering tax burden under which the economy is now stumbling and failing to grow. All that is the result of decisions that were made by the Government, and this Budget is a manifestation of the consequences of that.
At first sight, it seems that perhaps there is much good in the Budget—the reduction in national insurance, for example—until we remember that the figures in the Red Book and the figures from the OBR show that the impact of that is wiped out by the stealth tax, which is imposed on the UK population as a result of not moving tax thresholds.
The VAT threshold lift for small businesses from £85,000 to £90,000 does not even begin to take into consideration inflation over the period in which the limit has been in place. Had inflation been accounted for, the child benefit threshold would have been lifted from £50,000 not to £60,000, but to £62,500, so stealth taxes are still being imposed, even though they are presented as improvements. I welcome the fact that some small businesses will be lifted out of VAT, that people will pay less in national insurance contributions, and that squeezed, middle-income families will have additional money, which will hopefully encourage them to go into work, but once the headline is stripped away, one sees that the Budget is not quite as generous, and the bones are not quite as juicy, as the Chancellor would have us believe.
I will mention a couple of things relating to Northern Ireland. I welcome the Barnett consequentials for Northern Ireland, and the fact that the towns fund has been extended to Coleraine. I will be interested to see how the global trade arrangements will help firms in my part of the United Kingdom to expand their export potential. The renewed Stormont Assembly, however, faces underlying difficulties. Past Assemblies can be criticised for not having taken tough decisions; successive Sinn Féin Ministers in the Department of Finance—we have had three of them—did not even bring forward a budget that could be agreed, and allowed spending to get out of control. However, the Treasury accepts that the funding formula that applies to Northern Ireland differs from the formula that applies to Scotland and Wales, which has led to a huge fiscal gap. I do not believe that one part of the United Kingdom should be treated differently in that way. It is disappointing that that was not addressed in the Budget.
I welcome the fact that we have not had an increase in fuel duty. As Northern Ireland is much more rural, and more reliant on lorries to bring goods in and out, a fuel duty increase would have added significantly to costs and to inflation. The Government make policy announcements, and talk in the Budget about new capital allowances, but when His Majesty’s Revenue and Customs implements them, they sometimes do not work as intended; the Chancellor should look at that. In the last Budget, research and development allowances were given. Hundreds of firms have been turned down for those allowances, on the basis that they did not comply with the criteria, or whatever. One wonders whether the Treasury takes a different view from the Government: “Let’s not lose too much revenue. Let’s make the process much more difficult.”
As a result of bad management, there has been little room for manoeuvre. Whether we are to have another Conservative Government or a Labour Government, the great concern is that the Budget stores up huge problems for the future: costs that will explode, and unresolved issues to do with compensation that will still have to be paid.
Sir Jacob Rees-Mogg (North East Somerset) (Con)
It is a pleasure to follow the right hon. Member for East Antrim (Sammy Wilson), and particularly my right hon. Friend the Member for Haltemprice and Howden (Sir David Davis), who made an important speech, particularly as regards the OBR. It was telling that the Chancellor started his speech by pointing out, at least inadvertently—it was not a deliberate attack—how many things the OBR has got wrong. That is a real problem for policymaking, because we treat the forecasts as if they were holy writ, authoritative and right. We make decisions on comparatively small amounts, assuming that the forecasts are fundamentally right, and that everything will add up—but of course it does not.
Let us look at the increase from £85,000 to £90,000 in the VAT threshold. That is an absolutely splendid and fundamentally good policy. It makes life easier for small businesses, is thoroughly welcome, and costs £150 million, or 0.01% of a Budget of £1.216 trillion. The cost is utterly trivial, yet the Government do not go further, saying that they cannot afford to. Of course they can. That amount is a rounding error, when we consider the total of what the Government do.
Unfortunately, that is the problem with the whole approach. As far as it goes, it is perfectly good. The economic circumstances have been tricky, and we spent £400 billion on support during covid, which was the right thing to do; but rather than nickel and diming, as is happening, we need to look at the fundamentals of our tax and spend policy. That £1.216 trillion is 44.5% of GDP that we are spending. That is too much. It is more than the country can afford; that is the starting point. It means that we are taxing too much.
A report in The Daily Telegraph states that we will not quite reach the figure for tax as a percentage of GDP that we did in 1948. We will just swerve having our highest level of tax in the post-war period, but that figure shows that we are spending too much. We need to get spending under control, so it was a pity that the Chancellor stuck with the 1% real-terms increase in public expenditure. We should be making public expenditure flat in real terms, and we need to recognise that the best way to afford public expenditure is through economic growth.
A matter for rejoicing—I know that the people in North East Somerset will be delighted, and the Chancellor mentioned this—is that at least the OBR and the Treasury have been willing to look at a particular tax to see if cutting it makes things better: the tax cut from 28% to 24% on property. I own property—I refer to my entry in the Register of Members’ Financial Interests—so the change may be beneficial to me, but moreover it shows that Laffer works when even the Treasury and the OBR come round to thinking about it.
Where else could that be done? The hon. Member for Solihull (Julian Knight) mentioned the tourist tax. It is the easiest tax for the Government to have got rid of. We know—all the evidence is there—that it costs the economy and the Treasury money, yet the Treasury ploughs ahead with the obstinate view that a tax rate produces a set amount of tax, which we know to be false. Go back to 1979, when 98% tax rates raised much less money than 40% tax rates ultimately did. That is why I am not at all keen on the attack on non-doms.
The OBR forecast expects 350,000 immigrants, net, to come to this country every year up to 2028-29. That is built into its forecasts. We need to get control of that. On the one hand, we need to get control of people coming in and undercutting the British workforce, lowering wages in areas such as social care. On the other hand, we want as many billionaires as are willing to come, because they are small in number yet contribute very largely to the economy. Attacking them, and making things harder for them, might be a means of stealing the Labour party’s clothes, but it is not good economic policy.
Sir David Davis
Doubly so, because post Brexit, other countries—France in particular—have actively set out to drag those billionaires into their country.
Sir Jacob Rees-Mogg
France, Italy and Portugal, our oldest ally. Yes, absolutely, other countries are competing for the very rich, who will go to those countries, rather than coming here.
I am also not in favour of the extra tax on oil companies. We need more oil and gas. One of the reasons why our productivity has been low and our economy stagnant, compared with the United States, is our much higher energy prices. We need to wean ourselves from the green ideology, which is making us cold and poor, and is one of the biggest factors to undermine economic growth in the past 15 years. We should not be attacking the oil companies; we should be welcoming and encouraging them.
The time limit is very tight, but there is good news that Members will like: time on the Finance Bill is unlimited, so I look forward to resuming my comments on Second Reading.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
The House will be surprised to know that I will talk about not billionaires, but ordinary people in my constituency of Kingston upon Hull North, for whom this Budget provides very little.
The Budget also provides very little investment, which we desperately need in Hull and the Humber. It exposes the reality of what levelling up actually means for the north as we come to the end of this Parliament. It is trifling; it is not transformative. The Chancellor mentioned Canary Wharf. That is not an area in need of levelling up. The Hull and East Riding devolution deal comes with headline-catching funding of £400 million, but it is spread over 30 years. That is £13.3 million a year shared between two councils. That comes nowhere near reversing Hull’s loss of £111 million a year since 2010. That stands in direct contrast to the Government’s economic transformation and integration deal with Rwanda, which comes with at least £370 million over five years—an average of £74 million a year—for levelling up in Rwanda.
I will focus mainly on what is not in the Budget: any compensation for the infected blood victims. That is despite the fact that 118 Members of Parliament from 10 parties wrote to the Chancellor last week, asking him to make an announcement on the allocation of funding for those people, and it comes after this House defeated the Government in December by voting to set up a compensation body through the Victims and Prisoners Bill.
Catherine West (Hornsey and Wood Green) (Lab)
I congratulate my right hon. Friend on her excellent work on the contaminated blood scandal on behalf of all our constituents. Does she agree that it is heartbreaking for children to have watched their parents go through this?
Dame Diana Johnson
My hon. Friend, who has also campaigned on the issue over the years, makes a good point; I will come to that.
Ministers received the final recommendations on compensation from Sir Brian Langstaff in April 2023. They also received the framework compensation document from Sir Robert Francis in April 2022, which allowed them to prepare for compensation to be paid. However, today there is not even an allocation for further interim payments to alleviate the immediate suffering of parents who have lost children, and children who have lost parents. Let me give the House an example of what that looks like. Sam Rushby, whose entire family—mum, dad and three-month-old baby sister—all died of AIDS by the time he was three, has received no compensation, and would benefit from the interim payments that Sir Brian Langstaff has recommended that the Government pay.
Paragraph 3.45 of the OBR document confirms that it has not been able to take into account plans for compensation for contaminated blood victims, as no money has been identified by the Treasury for that compensation. The OBR seems to have missed the point that Sir Brian has already made his final recommendations on compensation, and the Government do not need to wait until May to decide what to do next.
The Chancellor’s views have evolved over time. On 21 June 2019, Ann Dorricott, the widow of the Chancellor’s late constituent Mike Dorricott, who died because of the infected blood scandal, said in evidence to the inquiry that her husband was told in February 2014 by the Chancellor: “Don’t worry about this, we’ll sort it.” On 27 July 2022, the Chancellor told the infected blood inquiry that it could be seen as a “huge failing of democracy” that victims had waited so long for justice. After the first interim report from the infected blood inquiry, which set out that the Government should pay interim payments, the current Chancellor wrote to the Government on 3 August 2022, with two fellow former Health Secretaries, stating:
“The victims and their families deserve nothing other than the complete and immediate acceptance of Sir Brian’s recommendation. To refuse to do so would simply continue the injustice thus far handed out by the state to a group of innocent victims condemned to years of suffering and neglect.
Any delay to such payments, for instance by arguing that we need to wait for the inquiry to finish, for a new Prime Minister, or for Parliament to return, will sadly almost certainly see more of the victims die before they see justice.”
By the time the Chancellor appeared at the public inquiry on 28 July 2023, his views had changed. He then said:
“It is a very uncomfortable thing for me to say but I can’t ignore the economic and fiscal context because, in the end, you know, the country only has the money that it has”,
and that
“I can’t give you a sense as to the timescales.”
To play politics with victims of the infected blood scandal is, frankly, unforgivable. Those infected and affected are not responsible for the economic state of this country, and the Government have already accepted the moral case for paying compensation. The approach that Ministers are taking is tin-eared, with no allocation in this Budget for compensation. They tell us that they are working at pace, but they are not meeting with any of those infected or affected, or taking soundings from any of the campaign groups. They are hiring experts to advise them and refusing to give the names of those people, and decisions are being taken behind closed doors. This is not the way to treat people who have suffered and been dismissed and ignored for decades. The way this Government are behaving is shameful.
Suella Braverman (Fareham) (Con)
I rise to welcome many elements of today’s Budget, notably the cut to the main rate of employees’ national insurance from 10% to 8%; the changes to the high-income child benefit charge, which will help half a million families; and the raising of the VAT threshold for small businesses from £85,000 to £90,000. Speaking on behalf of many small and medium-sized businesses in Fareham, I know that they will warmly welcome that change.
However, the real test for us today is to ask ourselves whether the measures that have been announced will turn the tide. Will they turn the tide on the highest tax burden in 70 years, since world war two? Will they turn the tide on our prospects of galvanising the British economy and stimulating growth after a decade of sluggish productivity? Will they turn the tide and send the message to British taxpayers that we, the Conservatives, are the party of low tax and on their side? Those are the real questions that we need to ask ourselves, honestly and with dispassionate fairness, because if we are not honest with ourselves, we have no one else to blame if we hand the keys of power to the Labour party.
I want the British people to know what that will mean for them. A Labour Government will mean tax rises to fund £28 billion-worth of uncosted promises—Opposition colleagues are shaking their heads, but it is true. A Labour Government will mean undoing Brexit and aligning the UK more closely with the European Union, and opening our borders to potentially unlimited numbers of people from the EU. Just as night follows day, a Labour Government would also—as every Labour Government in our history have done—leave this country with more unemployment and more job losses than when they entered government. That is something I do not want to see, and I am incredibly proud that since 2010 this Conservative Government have created 800 jobs a day. That jobs miracle is something that Conservative Members can all be proud of. It will bring huge prosperity and wellbeing to millions of people across the country.
Our approach as Conservatives must be one of responsible management of the public finances. Yes, we want to cut taxes, because that is the way to stimulate growth and then reinvest more tax revenue in delivering first-class public services. I am very proud of our track record on public service delivery over the past decade: whether it is the increased numbers of doctors and nurses, the phenomenal improvement in our literacy and numeracy rates in English schools, or 20,000 new police officers, I am proud of many of the outcomes that we have produced thanks to our commitment to our vital public services.
Just in my local area, Fareham Community Hospital has seen an increase of new services—from a new chemotherapy unit to same-day access to a GP service and a regional renal dialysis centre, all in the last few years—and there has been a £58 million investment in a new accident and emergency department at our local Queen Alexandra Hospital.
To be fair to the Government, things have been incredibly tough and challenging over the last few years. Needless to say, we paid the wages of millions of people to, in effect, stay at home. I am very proud of the furlough scheme, but I do think that we all need to reflect—again, dispassionately and fairly—on the decisions we made during the pandemic. My own view, with the benefit of hindsight—I am not absolving myself of any responsibility because I sat in Cabinet at the time of these decisions—was that we actually did spend too much, we did lock down too soon and too hard, and we did shut schools in a way that was harmful rather than helpful. In the event of a similar pandemic, I hope that we do not make the same mistakes again. I do not blame anyone—it was a time of unprecedented fear and uncertainty—but I think we have to learn the lessons, so that in the event of something similar happening we do not repeat those decisions. I think we overreached, overspent and overcompensated for what could have been handled in a less damaging way for the economy and for the British people in the medium term.
Returning to the Budget, if we are serious about putting the British taxpayer first, personal taxes are a good place to start, which is why I welcome the changes to national insurance. However, I agree with my right hon. Friend the Member for Haltemprice and Howden (Sir David Davis), as my preference would have been a 2p cut off the basic rate of income tax, an increase in the personal allowance and raising the income tax thresholds to properly fix a tax regime that has, I am sad to say, become a disincentive to work and endeavour in too many cases. A cut of 2p off the basic rate and an increase in the personal allowance—say from £12,500, where it currently stands, to £20,000, or even to £15,000 or £16,000—would have helped poorer households and lifted about 20% of all taxpayers out of tax altogether. Cutting income tax rather than national insurance would help a broader range of taxpayer, including workers, savers and pensioners.
Let me say a word about pensioners. Yes, they have the benefit of the triple lock, but it is fair to say that since 2010 the income tax bill of the retired has increased by hundreds of pounds—some estimates put it at £400. The value of the triple lock has actually been depleted because of the fixed thresholds in income tax and, in particular, the personal allowance. I do regret that income tax was not chosen as the tax to cut over national insurance, because pensioners have lost out as a result.
I think those thresholds need to be raised to tackle the invidious problem of fiscal drag. We have seen too many workers—millions, in fact—on low or middle-level salaries being dragged into higher tax brackets in a way that was never intended. Nurses, teachers and police officers are paying a 40% rate of income tax, which was never the plan, because the frozen thresholds have not been raised in line with inflation. It has been proved that that is a disincentive to promotion and to working longer hours, and it is a reason why many more people are choosing to take early retirement or to work less. That is a drag and has an adverse impact of our tax system. I think this was a missed opportunity, and I hope the Prime Minister remembers the promise he made during his leadership campaign that he would plan to cut the basic rate of income tax eventually in this Parliament.
How do we actually pay for some of these tax changes? I agree with my right hon. Friend the Member for North East Somerset (Sir Jacob Rees-Mogg) that we really have to start questioning the validity of the forecasts and the assessments made by the OBR. One way that savings could be made is in looking at net migration and overall levels of legal migration. I am very pleased that the OBR seems to have shifted away from its orthodox view, which has traditionally been that more people coming into the country, largely on low wages, is necessarily a net benefit for the economy. Just last month, David Miles of the OBR attenuated that view by saying that, no, we cannot assume there to be fiscal benefits from increased migration. There have been assessments that the UK has paid £24 billion since 2020 to cover the costs of non-working migrants, and the IFS has confirmed that non-EU net migration has had a net fiscal cost overall. Getting net migration down is key to saving costs.
I would have liked to have seen many other areas included, such as cutting public spending, which has been mentioned already. Overall, this Budget has some welcome elements, but it also represents something of a missed opportunity to properly send a message that we are on the side of the British taxpayer, that we will lower taxes, and that we will galvanise the economy to produce growth.
Judith Cummins (Bradford South) (Lab)
Year after year, I have risen in this Chamber as the Government watered down their commitments on levelling up, transport and living standards, and now it seems there is nothing much left to water down. Every year I have called for urgent action to prevent the collapse of our national health service, and now the Prime Minister admits that his plans have failed. The Government profess that they stand for law and order, but systematic cuts have seen confidence in our justice system plummet. Just as poverty peaks during this Government’s cost of living crisis, they have created months of uncertainty over the household support fund for vital services such as foodbanks.
Today’s Budget reaches the pinnacle of 14 years of cynical short-termism under this Government. From levelling up to healthcare, the Budget fails to deliver for the people of Bradford South. Last week, the Prime Minister went on a so-called levelling up tour, claiming that:
“levelling up is about providing people with better opportunities to work, travel and feel proud of where they live.”
In 14 years, what opportunities have this Government given to people in Bradford South? Network North is a shell of the broken promise that was once proudly hailed as Northern Powerhouse Rail. In Bradford, rather than being offered new high-speed rail lines and enhanced connectivity, we are told to celebrate the announcement of a new platform at Bradford Forster Square. That is not the ambitious and transformative Northern Powerhouse Rail that was promised no less than 60 times by this Government. Despite all the talk, Bradford South has not seen a penny from the levelling-up fund. The opportunity to level up this country has been squandered.
With the Government having betrayed the north with their failed levelling-up agenda, what has become of the self-professed party of law and order? The Prime Minister continues to argue that the Government’s plan to make our streets safer is working. Recent reports show that across half the country not a single break-in case was solved—that is no convictions in half the country. Let me be clear: that speaks to the systematic underfunding of our police. The Conservatives are failing on a basic requirement of government to protect our homes. The police should be fighting crime, not fighting for funding.
If our streets are less safe, what are the Government doing for the national health service? More than 34,000 people across Bradford are now on NHS waiting lists for treatment, and the Prime Minister has admitted that he has failed on his pledge to cut waiting lists. The NHS is crying out for funding, but today’s Budget does next to nothing. Just two weeks ago, I visited a Yorkshire Ambulance Service station in Bradford South. I spoke to the mechanics who work miracles on an old fleet, keeping ambulances on the road for up to 10 years and far beyond their recommended lifespan. Fixing those ambulances is not always possible, and it often leads to skilled paramedic crews being stranded and unable to do their job of saving lives. The ambulance service is crying out for increased capital investment, but new ambulances, just like the 40 new hospitals, are an illusion under this Government. We need a healthcare service that is fit for the future and will care for everyone from the cradle to the grave. Today’s Budget will do little to help the NHS.
Over 14 years this Government have presided over persistent decline. Just think about what Labour achieved when we were last in government: the shortest waiting times in history; crime down by a third; the cancer guarantee; half a million children taken out of poverty; the national minimum wage; the winter fuel allowance; record results in schools; and peace in Northern Ireland. That was a record that Britain could be proud of; that was Britain under a Labour Government.
Sir Robert Syms (Poole) (Con)
In six minutes, it is difficult to put all the good things about this Budget in my speech, but I will try. I will start with the context. We faced the worst public health pandemic for 100 years. We took that on, and made some difficult decisions, because Boris Johnson wanted to save frail people from dying. We sometimes forget how scary and difficult it was dealing with that pandemic. I admit that I was somewhat sceptical of lockdown, and voted against it 16 times, but we cannot impugn the Government’s motives—they were trying to save lives—certainly in the first year, when we did not quite know with what we were dealing. An awful lot of the additional money was funded to keep businesses afloat, some of which have gone on for generations, and to keep people in employment through furlough. What we see today is fairly full employment in this country, and a lot of that is down to the fact that the Government invested money in people when there was a national emergency.
A lot of the problems for the Government over the past year or two are therefore the consequences of lockdown, its cost and the implications of that for public services with people working from home and so on. The first thing I would say is that things are starting to normalise, in the sense that we are getting a falling deficit, national debt is likely to fall and growth is likely to pick up over the next two or three years. As a result of that, for the second fiscal event in a row the Government have been able to cut taxation for 27 million people who are in work. That is to try to improve the incentives for those in work, and that is to be welcomed.
However, the Chancellor had a balance to maintain, because the most important thing is not just to cut tax, but to get interest rates coming down. Inflation is likely to be 2% in the next month or two, and that affords the Bank of England the opportunity to cut rates. Some people in the City think that will probably be on three or four occasions as we go into the summer. If we end up in a situation where we have inflation at 2% or 2.5% and pay increases of 5% or 6%, and we have tax reductions through national insurance and falling interest rates, inevitably the standard of living of many people in this country will go up. That means that people will have more money to spend and the economy should be able to grow. There is a plan, and it is working. I do not think single Budgets make much difference, but it does make a difference when we have a fiscal policy set out over two or three fiscal events and Budgets that want to take things in a particular direction.
I admit I am a bit of an OBR sceptic. Black holes tend to disappear and then arrive. Often it produces figures that are wrong, but on the whole, having a body to give an independent view reassures markets. I am a bit of a Bank of England sceptic, too. The comments of my right hon. Friends the Members for Wokingham (John Redwood) and for Haltemprice and Howden (Sir David Davis) are right: we need to look at the Bank of England’s remit. Growth should be in there, as well as inflation. An interesting thing is that we still pretend that the Bank of England is independent. The reality is that because of that, we do not give it precise advice on what it should do with the overhang from quantitative easing.
My right hon. Friend the Member for Wokingham made the important point that we have lost £40 billion or £50 billion on bonds that the Bank of England bought to get us through covid, and that is largely about timing. If we sell bonds when interest rates are falling, we get better bond prices, and if we sell when interest rates are rising, we get worse bond prices. The tax cuts in this Budget on national insurance are worth about £10 billion. The Bank of England, by mis-timing the selling of bonds it bought in quantitative easing, has so far wasted five times that. If one thinks of a world in which we had not had to pick up that bill and we had delayed getting rid of some of the bonds accumulated with quantitative easing to a time when interest rates were falling, the tax reductions we could have introduced today would have been far more ambitious.
I hope that as interest rates fall, the losses will fall from selling bonds and quantitative easing, and we will get into a better fiscal position. I am sure there is room for another fiscal statement before the next general election. If there is, I look forward to further tax cuts as we go ahead.
Cat Smith (Lancaster and Fleetwood) (Lab)
I hope it is not news to anybody in the Chamber that the public’s trust in politics and politicians feels very low right now. Many people have been telling me that they do not feel their voices are heard in politics. So, ahead of the spring Budget, I did a piece of work in my constituency, surveying my constituents and going to meetings of pensioners and groups of young people to ask them what their economic priorities are, and I have matched them against what we have heard in the Budget. I thank all the village newsletters and local papers that carried my survey, which means I have a detailed idea of what my constituents are concerned about.
If we listened to Ministers’ crowing over falling inflation in recent months, we would be forgiven for thinking that the cost of living crisis was over, but the 11% high in inflation was because of the decisions made by the Government and that mini-Budget. Responses to my survey from my constituents make it abundantly clear that the cost of living crisis is not over. In the hundreds of replies I received, more than 80% told me they are worse off than they were five years ago, so the message to the Chancellor must be that the cost of living crisis is not over but very much real, and people are really struggling right now.
High energy costs were the most frequently mentioned issue in the survey and have particularly affected elderly and disabled constituents I was told chilling stories by constituents about the steps they have taken to reduce their energy bills. Some have told me that they have turned off their hot water and heating completely, even on the coldest of days, due to the increased prices.
Other costs commonly mentioned were food prices and mortgages. My constituent Steven from Lancaster bought his first home last summer, but the mini-Budget and the spike in mortgage rates means that he is paying hundreds of pounds more out of his wages every single month. That is money he would like to spend on dental treatment—his NHS dentist closed—but he cannot. It is money that he needs to spend on his massively increased energy bills, but he cannot. That is a really good example of the problems faced by so many constituents in different circumstances.
Common themes that popped up time and again were pensioners struggling to make ends meet, people dependent on support from their parents or other family members to pay the bills each month, and people telling me they were just about managing but really struggling to meet one-off costs such as the car or the washing machine breaking down. As one constituent put it:
“We are not living; we are existing”.
I want better for my constituents, and I want better for the country.
A YouGov poll commissioned by the Joseph Rowntree Foundation found that three quarters of Brits are worried about the current levels of funding for public services. That was very much reflected in the concerns raised by my constituents. No one will be surprised to learn that most concern was reserved for the NHS, with longer waiting lists and the poor availability of NHS dentists coming up time and again. However, constituents also raised funding for schools, roads and public transport, and the local authorities who are really struggling to deliver those public services on the ground in my constituency. I pay tribute to all my local councils—Lancaster, Wyre and Lancashire—which are run by a variety of different political combinations but all facing incredibly difficult financial settlements.
There is real fear about the impact that reckless tax cuts could have on public services across Lancashire, coming on top of more than a decade of Tory austerity. In the survey, one constituent said:
“Tax cuts will not save our impoverished public services”.
I could not say it more clearly than that.
My constituents are also concerned about the levels of inequality we see across the UK. There is the idea that energy companies do not pay their fair share, and yet when constituents get their energy bills, they really struggle to meet them. One summed it up:
“Reducing taxes for the better off as a pre-election booster does nothing to help ordinary people with soaring food and heating bills.”
I can already see emails coming into my inbox from pensioners who are unhappy that the changes to national insurance do not benefit pensioners, who are really struggling. While the triple lock goes some way, it does not compensate for the rising cost of living and inflation spiralling out of control.
Janet from Pilling was desperately hoping to hear something from the Chancellor about redress for victims of sodium valproate. Both her sons live with lifelong disabilities having been harmed by the drug. She had held out hope, given that from his previous role as Chair of the Health and Social Care Committee, the Chancellor knows the heartache and financial cost paid by those victims. She is disappointed that there has not been an announcement today regarding redress, particularly because, as I understand it, the Government have had an early copy of the report on the subject by the patient safety commissioner for England for several months. I urge the Ministers on Treasury Bench to respond at speed to that excellent report and to do the deeds to match the Chancellor’s words on this matter.
On redress, I associate myself with the comments of my right hon. Friend the Member for Kingston upon Hull North (Dame Diana Johnson) on infected blood. I also want to raise the matter of the justice needed for victims of the Horizon Post Office scandal.
I have been contacted by many constituents who work in the hospitality sector, including Liz, who runs the fantastic Cafe Dolce in Lancaster. She highlighted the difficulties that many business face because of rising costs. She wanted tailored support for the hospitality sector, but I fear she will be disappointed with today’s offerings.
Are we better off now than we were 14 years ago? The resounding view from my constituency is absolutely not. Taxes are still rising, prices are still going up in the shops and mortgage rates are higher, and nothing that the Chancellor said today changes that. It is time for change. It is time for a general election.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
It is a pleasure to speak in today’s debate. I strongly welcome the measures announced in the Budget. We heard about increasing investment and growth. I am pleased that the Treasury Committee will scrutinise the OBR and the Chancellor next week. It is important that we consider the Bank of England’s policy on selling gilts, which my hon. Friend the Member for Poole (Sir Robert Syms) referred to, and the impact for the OBR and the room that it gives. I recommend that hon. Members look at Ed Conway, the Sky journalist, for more on that. I am sure that will open their eyes in many ways.
I enjoyed the measures on investment in life sciences. The Speke factory in Liverpool is getting a massive boost, which will have a welcome impact on jobs. The Budget responded to SMEs by adding leasing to full expensing. The ongoing activity of the Department of Business and Trade and all of Government shows that Britain is open for business.
I welcome the measures on pensions. When I was working in the DWP with my hon. Friend the Member for Hexham (Guy Opperman), who was then Pensions Minister, we were concerned about the poor returns for defined contribution savers. I welcome the progress in that regard that has been set out today. The British ISA is a brilliant idea, and I look forward potentially to investing in one myself.
The overall outcome of the Budget is to make work pay. National insurance is a tax levied on weekly income. The current threshold is £242 a week, which is equivalent to just over 23 hours a week at the current national living wage. In Suffolk Coastal we have a lot of seasonal workers. The national insurance cut will be welcome to them, because during the summer months, when there is an increase in the hospitality sector, employers are often looking for more employees. Combined with the cut that is already applied to people’s pay packets, the average saving is £900 per person, which is significant.
Those on lower incomes should bear in mind that when the Prime Minister was Chancellor, he cut the universal credit taper rate to 50%. That provided a significant boost to make sure that work pays. I welcome some of the sensible changes to help with that. The fact that 800 jobs a day have been created since we came into power in 2010 is truly astonishing and shows how important it is to get people into work and keep them in work. My right hon. Friend the Work and Pensions Secretary will continue to work on that, particularly considering the impact of covid.
I also welcome the assurances on childcare. I have a new nursery opening on 2 April in Leiston in my constituency called Spring, in response to the Government’s support. I wish Daisy Plumridge well.
Another aspect that my constituency will particularly welcome is the abolition of the furnished holiday lettings tax regime, as visitors are an important part of our economy. Too often, the measure has become a way to, in effect, subsidise people buying second homes, with the extra income from letting the property out for part of the year. It is wise that we have considered the matter. There have been a few things along the way, but I think this significant change will ensure that we have professional landlords who think about families and the longer term.
I expect Suffolk will welcome the tax relief extended to Freeport East. I recently visited Felixstowe port alongside the new Maritime Minister, the noble Lord Davies of Gower.
A number of pubs in my constituency and, indeed, the brilliant Adnams Brewery will welcome the freeze in alcohol duty.
I hope that more of my village halls will take advantage of the £5 million fund investment. The extra £75 million in section 4.24 of the Red Book for internal drainage boards will provides a useful boost to the important work done by local farmers. Also in the Red Book, I am pleased to see reference to the consultation that we launched in March 2023 on tax relief relating to those entering environmental land management schemes. It has been the case that people only get agricultural tax relief from generation to generation on land that is actually farmed. That is an unnecessary barrier and I welcome the change that will come into effect from April next year. The support for tenancies is also important for our countryside.
To deliver efficient, economic and effective outcomes for users of public services, it is important that the Government get the public sector productivity plan right. I am thinking of the NHS, in particular. In my short time as Secretary of State for Health and Social Care, we started to look at why there were so many agency workers. The NHS, as many on the ground in hospitals and other parts of it will know, can be an exceptionally inflexible employer. It is no surprise that quite a lot of people turn to being bank staff or go to agencies. I hope that the plan is not just about doing an economic exercise; this is about culture and leadership in our hospitals. The variable performance around the country, which we have made much more transparent, shows the changes that good leadership can make. That is often driven by culture, as well as high expectations, and is to be welcomed. I say to those on the Front Bench that that it can be too easy to be a locum exclusively.
I look forward to voting for these measures. This is a Budget for growth and to make work pay, and I look forward to its being supported by the House.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
Today is very much a missed opportunity. Much has been said by colleagues, particularly on the Government Benches, about levels of debt and tax, but the fundamental issue, going back to the financial crisis in 2008-09, has been a failure to deliver sustainable economic growth. We heard much from the Chancellor today about growth and productivity, but when we dive into the detail, it simply does not add up.
As my right hon. Friend the Member for Dundee East (Stewart Hosie) said, the starting point is GDP per capita. In many respects, the starting point for today’s debate should be what has been happening over the past couple of years. If we take the period since March 2022, GDP per capita has fallen by as much as 1.5%. Indeed, the OBR tells us that household incomes will not get back to the pre-pandemic level until 2025. The harsh reality for all our constituents is that they are poorer.
We have heard all the brouhaha today about cutting tax, and we have had some criticism of the OBR, but we need a set of forecasts on which to base the decisions that we take. According to the OBR forecast for the next five-year period, the average GDP growth per annum is one and two-thirds per cent.—the same level as it forecast last November. For all the changes that have taken place, there is zero movement on the needle on expectation of economic growth.
I hope that we have a more detailed discussion on these matters. Members have touched on the issue of growth and, I would say, the issue of productive potential in the UK. Let us have a debate about where that productive potential is and how we grow the economy, because, quite simply, I do not see that in what the Government have come forward with today.
These things are based on the OBR book, as has been talked about, but let us look at the detail. The headroom that the Government have is—let us be honest—limited and is based on an assumption that the fuel price escalator takes place every year from now. Well, it has not taken place since 2011. In that sense, what the Government have told us today about their headroom is an absolute fantasy.
Tax as a percentage of GDP is going to hit 37.1% at the end of the forecast period. We hear many Tory MPs say that tax is coming down. No, it is not; all that is happening is that some of the tax increases are being ameliorated. Fiscal drag has been much talked about, but the forecast is that the fiscal drag from the failure to increase tax bands will result in a £40 billion tax take, so let us have some honesty about what is going on. Where is the plan for growth? Where is the plan for an industrial strategy? I am glad that my colleagues in the Scottish Government are taking this issue seriously—we will have an industrial council.
Much has been said about Labour’s plans—now backtracked on—for £28 billion of green investment, but we need to recognise the scale of the opportunity to decarbonise the economy and create jobs. Let me take the example of green energy in Scotland. We can increase our green energy output fivefold and create up to 235,000 jobs. If we do not do that, other countries will make that investment and benefit from the opportunities in green energy. We need to grasp those opportunities and ensure that we can transition the economy. We need to ensure that we are creating the circumstances whereby people want to come and invest here.
Let me turn to public spending. Again, in real terms, public spending per capita over the next few years will be flat. Of course, that comes after many years of constraint on our public services. Taking into account the investment going into the ringfenced areas, notably the NHS, between now and 2028 the real-terms decline in public spending will be 2.3%. What is 2.3%? It is about £20 billion. We often hear people say that austerity has not happened. My goodness! Look at our constituents and the cuts that are taking place. Look at local authorities in England and the challenges they face. The Government are taking out £20 billion over the next few years. What is taking place is absolutely shocking. [Interruption.] I hear somebody chuntering from a sedentary position about Scotland, but at least we have tried to ameliorate some of the effects of the cuts. We have invested in the child payment to drive people out of poverty.
The harsh reality of this Budget is that there is no hope for people in Scotland. It is more of the same: low growth, no increase in productivity, no vision and no investment in the green economy. I say to voters in Scotland that, come the general election—bring it on!—they will have a choice: a Government in Scotland who have a focus on investing in an industrial strategy for delivering the new green jobs for the next generation; or more of the same from broken Britain and more pressure on public services. That is the choice that people in Scotland will face on the back of this Budget.
Sir Edward Leigh (Gainsborough) (Con)
The Chancellor, in his excellent speech, mentioned that he would unleash £100 million-worth of levelling up. Hon. Members may guess the subject to which I will briefly allude, which I constantly mention in this House. There is a bit of levelling up in Lincolnshire, worth £300 million, which is the levelling up that we were hoping to achieve at RAF Scampton, the most iconic RAF base in the country. That levelling up would involve using a 10,000-foot runway and superb heritage buildings that were the home of the Dambusters and the Red Arrows, so I appeal once again to the Government to listen to me. I have been begging them for the last year to agree to a compromise on this. I see one of my Lincolnshire colleagues on the Front Bench, the Exchequer Secretary to the Treasury, my hon. Friend the Member for Grantham and Stamford (Gareth Davies), and I am sure that he has a certain amount of influence on his fellow members of the Government. I hope that the Government will listen to what I have been saying for the last six months, which is that we should compromise by taking some migrants on a small part of the base and unleashing the rest of the base for levelling up. That is what Lincolnshire needs more than ever: it needs more jobs and more growth, and I hope that this is a Budget for that.
This is a debate about the Budget, not about illegal migration, but this whole saga of putting up more and more people in hotels or in military bases must end. We have to get the Rwanda Bill through Parliament, we have to have a proper deterrent and we have to stop these people who are making a joke of our border control, but the far more serious problem than illegal migration is legal migration. When I entered the House 40 years ago, net legal migration was running at about 17,000 a year. Twenty years later, it was 185,000 a year, and now it is over 600,000. That puts a massive strain on the economy.
The fixation on importing cheap labour is immoral and unpatriotic. We cannot undermine our own workers by letting in people and paying them lower than average wages. There is a single thing that the Chancellor could do, and that would be to end all the shortage schemes and simply insist that if someone wants to come and work in the UK, they would have to earn the UK national average wage of roughly £33,000 as a minimum. Not only does such an influx of people drain our economy, displacing investment in domestic skilled work; it also puts an immense strain on public services, with more British citizens than ever, including the least advantaged, struggling to get GP appointments and secure school places for their children.
We must deal with net legal migration. It is the single biggest problem facing our Government and we have to act on it. We know that we are importing all these people because we are not paying enough to our NHS or care staff. We therefore have to import people from all over the world, but there are 9.3 million people of working age in the UK who are claiming benefits, and that statistic is set to rise remorselessly. Productivity rates are decreasing and they are projected to fall further in the coming years. We have to address this fundamental weakness of the British economy: we are not paying proper wages to our people; we have too many people of working age on benefits; and we are importing too many people from the rest of the world.
On the broader case, I have been listening to what my colleagues have said and I would have preferred a cut in income tax to a cut in national insurance. That would have been much more dynamic, and people understand it. Also, many people do not pay national insurance, including savers and people of pension age. There is no point in keeping the triple lock if we are dragging more and more pensioners—not rich pensioners—into paying tax and sometimes into a higher rate of tax. I would have preferred a cut in income tax rather than national insurance but I understand where the Chancellor is coming from on that.
I want to say a word about the Office for Budget Responsibility. I cannot understand why we seem to have outsourced so much of our economic management from the Chancellor of the Exchequer to the OBR and the Bank of England. People say, “Look what happened when we did not listen to the OBR in the ‘disastrous’ mini-Budget”, but the reason that that Budget went wrong was not that we did not listen enough to the OBR’s forecasts—which are often wrong—but that there were too many unfunded tax cuts. As a nation, we have to become a dynamic, low-tax, low-regulation economy. That is the only way forward for a Conservative Government. I am very dubious about these OBR forecasts.
Generally, we should not put too much faith in opinion polls, which are simply a test of opinion. What will matter in the coming general election is that people have a choice. We accept that we are paying too much tax, we accept that we have been hit unbelievably badly by lockdowns, the pandemic and the war in Ukraine, and we accept that people are regulated too much, but when my constituents go to vote—in May, November or whenever—I will ask them, “Do you want to pay even more tax? Do you want even more regulation, and even more migration to this country?” The answer is a resounding no, so speaking for myself, I shall be voting Conservative.
Catherine West (Hornsey and Wood Green) (Lab)
It is a pleasure to follow the right hon. Member for Gainsborough (Sir Edward Leigh), and to hear about all the challenges in his constituency.
There is nothing more important than giving children the best start in life. I first went into local politics through the Sure Start movement. Many of the women I volunteered with back then are now senior in early years provision, and it is a wonderful thing when we get it right. Last Sunday, in an interview on the BBC’s “Sunday with Laura Kuenssberg”, the Chancellor said that he could not guarantee that working parents of two-year-olds would get their promised 15 hours of free childcare. It is simply not good enough to see yet another broken Government promise. The Chancellor announced the free hours this time last year—a whole year ago—and they have still not been delivered.
My constituent Gillian has two young children, and she found out in January that her local nursery was closing down due to a lack of staff. She wrote to me:
“We were informed of this yesterday afternoon, I immediately stopped what I was doing, and started calling nurseries and childminders in the area. I must have called 25 childminders, none of which have availability.”
Imagine her panic when she knew that she would either have to give up her job, move house, move in with her parents or work part time. Parents are already hard pressed, whether it is because their mortgage has gone up, their private rent has gone up by 20% overnight in the past 12 months, or they are waiting for a social home to become available. Families in Hornsey and Wood Green are facing extreme pressure.
What good are free hours if families cannot find a nursery that is still open? The free hours need to be properly funded, yet so many early years settings have closed. As I heard from Councillor Brabazon, who runs children’s services in Haringey borough, many childminders have left the sector due to a lack of support from the Government. How will the Chancellor provide parents with more free hours if nurseries cannot recruit or retain staff? How will he prevent nurseries in my constituency from closing down? Will he guarantee that every eligible child will get their free hours in April, or will he move the goalposts again, and move the date to September 2024, or perhaps September 2025? Delivery seems to have an ever-moving boundary. He continues to move the goalposts. At this rate, children will be in secondary school before they have adequate childcare provision.
As well as the need for affordable and accessible childcare, there is the problem that thousands of children live in unsuitable temporary accommodation, including hotels, due to the Government’s abysmal housing policy. This is not a new problem, and it has been bothering many Members. The Government’s refusal to scrap section 21 and build social and affordable homes has contributed to the mess. There have never been more children in poor-quality, temporary accommodation, which is causing desperation for so many. In some cases, as the press have reported in the past week, children are dying in temporary accommodation.
London boroughs are now spending £90 million a month on temporary accommodation, according to London Councils, and more than 175,000 Londoners are homeless and living in temporary accommodation, including 85,000 children. On average, there is at least one homeless child in every London classroom. It is an absolute disgrace that we are spending so much money on temporary accommodation—it is mainly housing benefit—when that money could have been turned into the bricks and mortar of new homes.
Up and down the country, families are fed up with the Government’s broken promises and incompetence. This Budget will do naught to fix it. Only Labour has a plan to break down the barriers and provide children with the best chance in life. We need an end to the Tories’ sticking-plasters, and an end to Rishi’s recession. We need a general election and a Labour Government.
Paul Bristow (Peterborough) (Con)
I rise to welcome this Budget—a low-tax Budget focused on increasing productivity in our public services. By goodness, do we need it.
Yesterday, I had dinner with an old friend who had spent quite some time out of the UK. We were talking about what he felt life was like in the UK now, and he said that he felt that society was becoming “infantilised”. When I asked him what he meant, he talked about the ever-increasing intrusion of the state and other bodies into the lives of ordinary people. When I asked him for an example, he decided, curiously, to talk about the railways. He had got a train the other day and he was told on several occasions to mind the gap, to contact the British Transport police if he saw something suspicious, to ensure that he had the correct ticket for his fare, and to “See it. Say it. Sorted.” He was told that on loop about 20 times. One might think, “Why is he talking about these safety announcements? Surely they make sense.” But it was not as if my friend was about to leap into the gap, or pick up strange packages. It was not as if he was planning to evade his fare. The British state, or the institution in question, seemed to want to tell that individual about the dangers constantly. We are over-regulated, over-taxed, over-governed and over-leveraged, both at state level and individually. Thank goodness we have a Budget that will try to address some of those problems.
We desperately need a low-tax economy and productivity in our public services. There is no clearer example of the over-burdensome, intrusive and nannying element of the state than Peterborough City Council. Its administration would rather axe lollipop ladies, one of the only physical manifestations of the city council left on our streets, than tackle inefficiency in its back office, or look to make savings through productivity. It would also rather demolish, or at least close, three bridges—we can count them—over a local beauty spot known as Cuckoo’s Hollow, thus in effect cutting off hundreds of people from shops, and preventing them from going about their business. Many of those people are disabled, many have mobility issues and many are elderly. The council would rather do that on spurious health and safety grounds than take a common-sense approach and repair each bridge individually, one at a time. Instead, the council would rather close them overnight and not tell a single soul about it. More people have walked on the surface of the moon in the past 70 years than have been placed in any sort of danger by these bridges. But that shows the sort of council we have.
Our council would also rather fence off a local open space called Werrington fields, because it has some sort of concern about safeguarding. It would rather close a swimming pool—the regional pool in Peterborough, where I learned to swim—because, again, it has taken an over-cautious approach, in response to a survey; it has taken the worst-case scenario as being the letter of the law. The council would rather close it than make do and mend.
We have a planning system that treats people who want to build a small granny annexe, or a small addition to their house, as though they wanted to build St Paul’s cathedral or the Taj Mahal next to their house, rather than something that would obviously benefit the local economy and that individual family. We need to accelerate supply-side reforms to planning, and to get Peterborough and this country building.
We need to take a more mature approach to politics, and to how we talk about the economy and public spending. I am incredibly proud of the investment—hundreds of millions of pounds—I have managed to secure for future infrastructure in my city of Peterborough. We have not had our fair share over many years. However, we talk about spending commitments as if the amount we spend is itself the goal, but what we really want is outcomes. We say, “We are spending more than ever before on x, y and z,” but spending is not the goal. The outcome—what we get for our buck—is the goal, along with productivity. That is the sort of change we need to see. I was incredibly pleased to hear that point made very clearly in the Chancellor’s excellent speech.
Nowhere does the productivity challenge embed itself more than in our national health service, so I was pleased to hear about the public sector productivity plan. There are three things we might think about to increase the productivity of our NHS. First, the consultants, clinicians, nurses, doctors and people we pay to care for patients must operate at the top of their licences. I was disappointed to hear disparaging comments from the Opposition about the Prime Minister’s views on physician associates. We want more physician associates in our national health service, so that consultants, doctors and nurses can do what they need to do and operate at the top of their licences.
Secondly, we need to streamline ranking and grades in our NHS to ensure that people can move from one element of the service to another more easily. That will increase productivity and job satisfaction. Finally, organisations such as the National Institute for Health and Care Excellence and programmes such as “Getting it right first time” tell us what works and how to do the best for patients, but the NHS does not adopt that advice at pace or at scale. We need to follow that advice to increase productivity in our NHS. I hope that the public sector productivity plan addresses some of those issues.
If we continue with the infantilisation of our society, where will it end? It will end with the Labour party, one of the two great political parties in our democracy, mandating a policy that tells people that teachers are there to brush children’s teeth. Where does the responsibility of the state end, and that of parents begin? If we are mandating teachers to brush children’s teeth in schools, we have a long way to go to create an independent and non-infantilised adult population in this country.
Several hon. Members rose—
Mr Deputy Speaker (Mr Nigel Evans)
I am grateful to Members for sticking to six or seven minutes, as Dame Rosie suggested. We do not want to impose a formal time limit if we can get away with not doing so, but the informal time limit would mean that everyone got in, and had roughly equal time.
Gareth Thomas (Harrow West) (Lab/Co-op)
It is a pleasure to follow the hon. Member for Peterborough (Paul Bristow). I am afraid that this Budget will make little positive difference to his constituents or mine, or to the country at large. The cuts in national insurance announced today will not compensate for the interest rate rises my constituents have had to suffer, or for the plans announced by Conservatives in Harrow Council to push up council tax by some 16% in the coming years. The OBR confirmed today that living standards will stay below those of 2019 for at least another two years, meaning less money in my constituents’ pockets, in family budgets, and for our high streets.
The Budget will do little to reverse the sustained under-investment in public services in Harrow or across the country. Every school in my constituency now has less funding in real terms than in 2010. On average, schools in my constituency have seen a reduction in real terms since 2010 of almost £900 per pupil. In real terms, more than £12 million has been cut from school budgets since 2010 in Harrow West. The four high schools in my constituency have been hit particularly hard, seeing real-terms funding cuts of between £900 and almost £1,900 per pupil, and the primary schools have seen cuts in their spending power of between £200,000 and almost £600,000, compared with 2010. The excellent Pinner Park Primary School, which I was lucky enough to attend, has seen a real-terms cut per pupil of £880 since 2010, and a loss of almost £740,000 in spending power.
Many schools in my constituency, and indeed across the country, face huge problems recruiting and retaining teachers and other staff. In my constituency that is due in no small part to London’s housing crisis. I have always wanted to see the inner London allowance for teachers extended to outer London, to help deal with the recruitment crisis in my constituency and other parts of outer London. There was nothing in the Budget to deliver the level of investment that schools in my constituency deserve.
On special needs funding, although I welcome the small announcement that the Chancellor made today, Ministers still do not appear to have grasped the scale of need. In Harrow, which has traditionally been poorly supported by Conservatives—and whose problems have now been exacerbated by a poor Conservative Administration—just 29% of education, health and care plans were issued to support young people with significant special educational needs within 20 weeks, which is lower than rates in Barnet, Hillingdon and Brent.
Conservatives Ministers have three times rejected bids for funding from Harrow Council for another urgently needed special needs school, for 290 extra places. That shortage of locally provided, appropriate special educational needs and disabilities places is forcing the use of expensive private school places, causing transport costs to rocket and causing parents of SEND children the ever-present worry that their child’s place will be taken away, or that they will have to settle for a placement that is not fully appropriate. It is also placing heavier pressures on mainstream schools, which are not getting sufficient extra funding to ensure that some of their SEND pupils are properly supported.
Parents of children with special educational needs are telling me that the council locally—I know that this is mirrored nationally—does not have the resources or staff to complete those education, health and care plans in good time. The parents of one young person in my constituency, awaiting a second occupational therapy assessment in order to complete an EHCP that was started in June last year, have just received a letter to say that OT assessments will be delayed again because the service is running at a reduced level.
Support for children with special educational needs is in crisis, and this Budget is not offering the investment necessary to bring new hope to the thousands of families who have been let down by the Government’s failure to invest over the past decade in Britain’s next generation.
The NHS in Harrow is on its knees. Nationally, one in every seven people in England is on an NHS waiting list, which is more than ever before. That means they are putting their lives on hold, having to manage in pain and discomfort for months. For far too long, trying to get an appointment to see a GP in Harrow has been a struggle for too many people.
In a sign of the scale of the crisis in access to primary care, I understand that a new system for urgent GP appointments is being forced on all GP surgeries across north-west London. No consultation on that plan has happened up until now and independent medical advice suggests serious concerns about patient safety flowing from it. It would have been far better had the underfunding of the NHS not led to the closures of 8 am to 8 pm walk-in urgent care centres in my constituency. They eased the pressure on GP surgeries and, crucially, on accident and emergency services.
One major NHS reform that would make an immediate difference locally is for an investment in a 50% expansion in intensive care beds at Northwick Park Hospital, which serves my constituency—from a 24-bed unit at the moment to 36 beds. That would help to ease the huge daily pressure on A&E in what is the busiest hospital in London for blue-light ambulance visits. I make no criticism of the staff there; they are doing an impressive job. Sadly, though, this is a Budget that will see further cuts in the support available from the NHS, and a lack of investment in our schools, too. I hope that, even at this late stage, Ministers will find a way to begin to put that damage right.
Mr Tobias Ellwood (Bournemouth East) (Con)
We are on day one of the four days in which the House will debate the Chancellor’s Budget statement, but within minutes of the Chancellor sitting down we heard Opposition parties roll out their headline soundbites, such as “Look where we are after 14 years of Tory rule.” I suspect we will hear a lot of that in the lead-up to the next general election, which is fast approaching, in the hope that the wider geopolitical context in which we have had to govern is completely glossed over. That simply trivialises the importance of this debate, so let us do it justice, and appreciate what has actually happened over the past 14 years.
We have had to endure the largest global pandemic since 1920. It cost more than £400 billion to protect our economy and vaccinate the nation. We continue to endure the worst war in Europe since 1945, which is impacting both the continent’s security and its economy, with global oil prices having increased by 11%, UK wholesale gas prices having risen by 40%, and food prices having spiked following Ukraine’s grain export disruption. That is the monetary and fiscal backdrop—the challenging context—that we find ourselves facing today. It sits behind the cost of living crisis, with double-digit inflation, and has led to the unprecedented but necessary colossal state intervention that we are now slowly moving away from.
Look at the situation that we inherited 14 years ago: UK debt was rising, the deficit was about £150 billion a year, and unemployment was higher than in 1997. Labour would rightly point out that it had to endure the global financial crisis that hit Britain hard, but that underscores my point about the context of the global economic headwinds that we have had to face. Of course I would like to see more money to further ease the burden on households, tackle the waiting lists, and upgrade our defence posture, but the reality is that the Conservatives have had to manage the UK economy through the toughest of circumstances, during which time there have been successes that should be acknowledged, including investment in our schools, the roll-out of free schools and academies, our jump in the international league tables, and the roll-out of the pupil premium and free school meals.
Our welfare structures are far simpler, fairer and better targeted, with transformative free childcare as well. National insurance contributions have now been cut to 8%—a tax cut for 29 million people. On the green economy, our agenda is world-beating: the fastest decarbonisation of any major economy, and the first to legislate for a net zero target. We hear today that there will be further steps as we invest in the modular nuclear reactor programme. Thanks to the tax breaks and investment incentives, we have the third-largest tech sector in the world, behind the United States and China. We are global leaders in pharmaceuticals, life sciences, quantum computing, artificial intelligence and aerospace, as well as fintech and financial services, backed up by some of the best universities in the world.
Crime is falling. Police numbers are now rising. Violence reduction units to tackle knife crime, which I have been campaigning for with the Chancellor, are now being rolled out, including in my constituency of Bournemouth. A new generation of hospitals are being built, with upgrades to existing hospitals, such as we are seeing in Bournemouth. There are 42,000 more doctors and 72,000 more nurses. The levelling-up programmes are transforming communities up and down the country, including Bournemouth’s seafront, and we are on target to build 1 million new homes in this Parliament.
On defence and security, we have expanded our surface fleet with two carriers. We have upgraded our Air Force and our continuous at-sea deterrence programme. We formed the National Security Council as well as the National Cyber Security Centre, and signed up to AUKUS. We have hosted G7 summits and the NATO summit, and have played a lead role in Ukraine, as well as defending safe maritime passage in the Red sea.
So please do not say that it has been 14 wasted years. That is an insult to the British people. It has been challenging, absolutely, and not without frustration—I can say that at first hand—but had Labour been in office without benefit of hindsight, would it have fared so much better than us? Bear in mind that the right hon. Member for Islington North (Jeremy Corbyn)—he is in his place—would have been at the helm for some time. He would certainly have taken Britain in a very different direction. I think he would acknowledge that.
Jeremy Corbyn (Islington North) (Ind)
Will the right hon. Gentleman give way?
Jeremy Corbyn
Yes, it would have been a very different direction. There would not be the levels of poverty, homelessness and inequality that we see in this country today.
Mr Ellwood
I gave the right hon. Gentleman the opportunity to put his words on the record. I look forward to hearing what he has to say.
Here is the rub: it is not likely to get any easier in Britain. Global storm clouds are gathering again. Our world is becoming more contested and more fragmented. We face evermore testing times ahead, with increased threats to our international rules-based order. The question is, who is best placed to strengthen our economy, to navigate us through further global shocks and to lead the country? With inflation now falling—heading towards 2%—wages rising, business confidence returning, education standards improving and the UK growing faster than most of the other members of the G7, this is clearly a Budget for growth, which we should all support.
Kim Leadbeater (Batley and Spen) (Lab)
It is a pleasure to follow the right hon. Member for Bournemouth East (Mr Ellwood). I am glad that things are going so well in his constituency; I wish it were the same in Batley and Spen.
Today’s Budget was an opportunity to get Britain back on track, to unlock our great potential and to begin the important work of getting Britain’s future back. Sadly, however, this Budget failed to address the deep-rooted economic challenges that we face, and the Government have to accept some responsibility for that, in particular for the chaos of the past five years, when we have seen five different Chancellors. Such political instability is damaging, to businesses, families and communities.
To be fair to the current Chancellor, he has the unenviable task of trying to tell people that everything is going to be okay, when for many people that is just not how they feel. Many people are struggling to make ends meet. People who work full time are having to use food banks and, everywhere they look, things are just not working, whether that is the buses or the trains, getting support for their children with special educational needs or with their mental health, or accessing a doctor or dentist.
So many people in my Yorkshire constituency tell me that they feel significantly worse off than they did 14 years ago. If I mention levelling up, they often simply laugh. I hear of the daily sacrifices that people make, the hard work people put in, but the feeling is that this hard work and sacrifice is just not paying off. They see a Prime Minister who has implemented 25 tax rises since 2019 alone, giving us the biggest income tax burden for decades. They know and feel that this economy is just not working for them.
People want to see and feel real change, but I know that they will be sorely disappointed to hear this Budget that will not even scratch the surface of the challenges they face. Like people across the country, families in Batley and Spen have faced a tough couple of years. The disastrous mini-Budget of 2022 saw their mortgage repayments and their weekly outgoings, including the cost of their food shop, spiral out of control. One family I spoke to recently, where both parents work full time, have to find an extra £350 a month for their mortgage. The national insurance cut will simply not cover that, meaning that they will have to sacrifice paying for precious family activities or will not be able to pay for their kids to go on school trips.
That is the reality for many people, as a result of the political choices of this Government, who remain intent on blaming everything and everyone else for their mess. The Government cannot pretend that the Conservatives’ mini-Budget was anything other than an economic disaster, for which we are all now paying the price. Ministers may celebrate that inflation just about halved last year, but the reality for families in Batley and Spen is that food prices went up by 7% last year and are still rising today, while our economy has now dipped into recession. Regularly in this place, we rightly pay tribute to the dedicated volunteers who give up their time to run our increasing number of food banks, but it is not acceptable that over the past decade we have somehow managed to normalise their existence, as though food banks are something to be proud of.
It is not just families that are feeling the pinch; small businesses in the towns and villages I represent are finding it incredibly tough. I recently met local landlords and landladies who face increased overheads, which they simply cannot pass on to customers and consumers who have their own cost of living pressures. Some local pubs have already closed, and more are under threat.
I will turn now to the pressures on local authorities, about which we have seen much in the news over recent days. Kirklees Council has lost over £1 billion of funding since 2010, and is facing unprecedented financial pressure. The Government must take responsibility. Indeed, if the Conservatives had kept Labour’s funding formula, Kirklees would currently be in surplus. Instead, like many other councils, Kirklees is having to make cuts worth almost £50 million just to balance the books, so once it has fulfilled its statutory obligations on education, refuse collection and social care, it faces the impossible dilemma of choosing which leisure centres, libraries, town halls, mental health services or registry offices to close. The impact on my constituents is devastating. Luckily, we have managed to save Batley sports and tennis centre, but the battle for Cleckheaton town hall and other vital local services continues.
The Budget should have ring-fenced money for sports and leisure facilities, libraries and town halls. Those things are not nice-to-haves; they are essential parts of our community infrastructure, and we need them to keep the population fit and healthy, reducing long-term pressure on the NHS. They are the key to happy, healthy and well-connected communities.
More broadly, local government funding needs fundamental reform. The current funding formula is not fit for purpose and means that local councils face either extreme hardship or potential bankruptcy, no matter which party controls them. Local government is often the most direct interaction that people have with politics, and it carries a huge burden in ensuring that local services work for residents. Failing to fund those services properly is causing a backlog of issues that we will eventually have to pay for anyway. The current situation is unsustainable and does not make economic sense, so I ask the Chancellor and the Levelling Up Secretary to urgently reform the funding formulas to ensure that adequate funding reaches the areas that need it most for basic services, which are the glue that bind our communities together.
The Budget was a missed opportunity to begin the work of rebuilding Britian, reforming our communities and unleashing our potential to get our future back. After years of financial and economic pain, it was an opportunity to reset and get our economy working for our communities again. Instead, all we got were a few tweaks, a couple of gimmicks and a few shiny announcements designed to distract from the flatlining economy, which is the fundamental issue impacting people daily across the country, including in Batley and Spen. I sincerely hope that the shadow Chancellor, my right hon. Friend the Member for Leeds West (Rachel Reeves), will be delivering the next Budget in a few short months, to deliver the change that we so desperately need to get Britian back on track, rebuild the relationship with our local authorities, and get our economy working once again for families across the country.
Nigel Mills (Amber Valley) (Con)
It is a pleasure to follow the hon. Member for Batley and Spen (Kim Leadbeater).
The test that I was going to give the Budget before I heard it was: “How does this help my constituents, particularly those who are still struggling the most with the cost of living crisis?” In fact, I think that was the priority for the Chancellor. We have seen inflation start to come back down to where we want it to be, interest rates have come back down from their peak, and the economy is probably performing slightly better than we had feared—although not as well as we might have hoped—so I was certainly hoping that he would not take any risks that might destabilise that position and would focus on what he could do for those who most need support. That is pretty much roughly what we saw: a steady-as-she-goes Budget that focused on those issues.
I certainly welcome measures such as the time extension for paying back universal credit advances and the extension of the household support fund, which are good ways of targeting funds at those who will need them most over the next six months. Clearly, the single biggest decision was the extra 2p off national insurance. That decision will help people to keep more of what they earn, make work pay and improve household finances, so I strongly welcome it. Like many, I would have preferred a change to income tax such as raising the personal tax allowance, which would have helped those earning the least quicker than a percentage change, but this is not a time to be picky. It is an expensive measure, but it is a welcome one that will really help people, and we should not ask for perfection.
In many a Budget speech, I have asked: “Can we have a sense of direction for what we are trying to do?” I welcome the increase of the VAT threshold to £90,000 after a long pause, but it would be helped if we pegged it to something. Are we trying to give a self-employed person a median income after incurred costs but without their being in the VAT regime? Is that what we are trying to do? Is that where we should try to peg the threshold? Otherwise, we are just plucking random numbers out of the air occasionally. It would be better to have the right starting position and to index it every year to give some predictability.
Having asked for that sense of direction, we actually have one on national insurance. It appears to be the Chancellor’s view that double-taxing income through two different taxes is the wrong thing to do, and he seems to want to phase out national insurance when we can afford it. That is a welcome sense of direction, but if he really thinks double-taxing is the wrong thing to do, he could stop it more quickly by abolishing national insurance, putting more on income tax and just having one tax. The revenue we would get from taxing more passive income at a slightly higher rate would probably pay for a lower rate on earnings, so we would not have to make it literally 28%—we could probably get away with a slightly lower rate in that situation. If we are being radical and that is the direction we want to go in, the Chancellor could perhaps look at dusting off the old exercises on whether we really need those two taxes to be separate.
If we really believe that it is wrong to tax work higher than other forms of income, it seems slightly incongruous on the same day to reduce the capital gains tax rate on the sale of second properties. That shows how hard it is to have simplistic views, because we finally have a dynamic assessment that shows that if we lower the rate, we get more activity and more revenue. It would seem rather perverse to reject that and want to have a principle that gives us less money, so I think I welcome that change, even though it looks slightly inconsistent on the face of it.
I will use my last couple of minutes to welcome a couple of other small things. The fuel duty freeze is hugely welcomed by my constituents, who rely on their cars quite significantly. I also welcome the alcohol freezes, which are largely welcome in trying to help the hospitality trade.
I have called for the abolition of the non-dom tax regime in about the past three Budgets, so I welcome the fact that the Chancellor has done so. I was expecting a little fudge this time—perhaps he would reduce the number of years that a person could claim it from 15 to 10, or increase the amount they have to pay to access that regime—but announcing a complete reform of how we tax temporary residents and non-residents is absolutely the right thing to do. Our regime is completely out of date. Resident, non-resident, ordinarily resident, settled, habitually resident, domiciled, non-domiciled—I do not think anybody understands what on earth all those things mean. Having one modern regime, where everybody who is a long-standing resident pays the same taxes, is absolutely right.
It is fair to say that if somebody comes here temporarily to run a business or start one, or on an exchange with an employer, we do not really want the hassle of working out their whole worldwide situation, because by the time we work it out, they will have left anyway. Having a short-term exemption and then a much clearer, more modern regime that provides certainty and fairness is the right way to go, and much more defendable than the historic regime, which depends on where a person’s father was born. How on earth could we defend that in the modern day? I welcome the fact that the Chancellor has grasped that nettle in a proper, coherent way, and I look forward to seeing the final detail of those changes when the consultation takes place.
In a similar vein, I welcome the reforms to the child benefit charge. I thought that when the Chancellor said that two people earning £50,000 would be exempt, he was hinting that he thought £100,000 was the right place to set the household income level, but he did not actually say that. I look forward to the consultation establishing where we think the long-term correct position is; I think £100,000 would be a fair place to put it.
Overall, I welcome a Budget that is probably about the best that could be done, given that our deficit in the next financial year is £87 billion. For those who think we could be spending more or taxing less, I ask them how big a deficit we can really be running, and for those who think that relying on five-year forecasts is a bit risky, I would say that I sense that relying on the one-year forecast would get us a very different Budget. I think the Chancellor has found the right balance and that we are going in the right direction, and I look forward to supporting the Budget resolutions next week.
Jeremy Corbyn (Islington North) (Ind)
I ask the House one question: how can it be right that, in the sixth richest country in the world, more than 4 million of our children are living in poverty, and the richest 10% of households earn or receive an income over 10 times that of the poorest 10%? In my borough, in which some extremely wealthy people live, one in four people live in poverty, making us the sixth most deprived borough in London—in other words, there are 26 other boroughs that are less deprived. Some 19,000 people in my borough experience high levels of food insecurity. I am delighted that the Mayor of London has pledged free school meals across the whole of the city, even though my borough has been providing them since 2010. It is a huge step forward. We have a very high rate of child poverty, with 47.5% of our children living in poverty. This Budget could have done so much to reduce levels of child poverty and improve the livelihood of some of the poorest people in the country, which is why I intervened on the right hon. Member for Bournemouth East (Mr Ellwood) in the way I did.
We have what I think is an immoral and disgraceful two-child policy on benefit levels in this country, which means that children in large families lose out. Large families are already often poor because they are large, and they are then made even poorer by the discrimination against the third, fourth or even fifth child in the family. It would not be madly expensive to end that policy, and it would take 250,000 children out of poverty. It would cost £1.3 billion. The Chancellor announced that the non-dom abolition, which I agree with, would free up more money for tax cuts in the future, but that could have been used to end the two-child policy, in a very neat synchronisation of two policy changes. The Chancellor could also have looked at page 63 of the OBR report, which tells us that there are now estimated to be £156 billion-worth of uncollected taxes in this country. That is more than double what it was five years ago, and the figure is getting worse and worse.
It seems that in this Budget the Chancellor was more interested in appealing to a small number of people with some degree of tax cuts through lowering national insurance, but I ask this question: is it fiscally responsible to plunge more families or more people into desperate poverty than at present? A quarter of a million people in this country are homeless, and more than 1 million households are on social housing waiting lists. Most young people have no chance whatsoever of being able to rent somewhere of their own, because rents are simply too expensive, and they have to share. They cannot even think about buying anywhere, and they have almost no chance of getting on a council waiting list, unless they have either large numbers of children, or quite complex medical conditions or stress levels.
We have a housing emergency—we see that emergency every day when we come to this building and see homeless people on the streets of London begging. Those numbers are increasing as time goes on. As my hon. Friend the Member for Hornsey and Wood Green (Catherine West) pointed out, the amount of money we are spending through public expenditure on housing benefit to subsidise very expensive private rented accommodation is part of a catch-up every year. The local housing allowance rises a bit, the landlords raise the rent a bit more and the public have to pay this exorbitant level of rent. Why on earth can we not have rent controls—private sector rent controls—which are pretty normal across most European cities and, indeed, in parts of the United States?
In my borough, we have 15,000 households on the waiting list for social housing. The only way forward to deal with the housing crisis is not to pledge to build millions of homes, as the Government are doing, but actually to pledge to build council housing at secure and affordable rents to guarantee decent-quality housing for people. This country did that, under both parties, in the two decades after the second world war, and then we had the Thatcherite idea of selling off social housing, which was very nice for those who were able to buy it very cheaply at the time, but every other generation since then has paid the price of that policy. I ask the Government: why do they not give priority to the housing needs of the majority of the population and those in desperate need, recognising the effect on child poverty, the effect of underachievement in school and the effects on society as a whole of the very poor-quality housing so many people live in?
The underfunding of local government has enormous implications. When the Government say they are very pleased that Britain is an attractive place for arts and culture, that is wonderful and I absolutely agree. I want us to be an attractive place for art, entertainment and culture, but if they cut local government expenditure, the art centres get underfunded, the performing arts suffer and the whole cultural scene suffers as a result, as does so much else.
I know you are concerned about the time, Mr Deputy Speaker, so I will conclude with a letter that the leader and deputy leader of my local authority in Islington, Kaya Comer-Schwartz and Diarmaid Ward, wrote to the local paper in a plea to the Chancellor before the Budget. They made several points. First, they called for more realistic local government funding so that they did not have to cut services or reduce them in some way. They are doing that, and they have lost £300 million due to central Government underfunding. They asked for rates to build much needed new council homes. The council has done well on building on land that it owns, but it cannot afford to buy anywhere else, or it must build a mixed development with less council housing than we could have. They also asked for full flexibility about how the money could be spent. We need much more responsibility put on to local governments to spend the money as they see fit, and that will help with the housing issue.
Finally, while the Chancellor said a great deal about the NHS, he did not mention social care at any point in his speech. For many, social care is a crisis, with many families devastated by its cost. Many women have to give up their jobs, careers and hopes because they must care for elderly relatives or those with profound disabilities. We can do so much better in this country than we are doing. This Budget is not welcome at all. It is a huge missed opportunity.
Kevin Foster (Torbay) (Con)
It will come as no surprise to the right hon. Member for Islington North (Jeremy Corbyn) that while it is a pleasure to follow him, I do not agree with many of his suggestions. I do agree, however, that housing is one of the defining issues, and while I might not agree with his proposed solutions, it is certainly something we need to address.
It is worth looking at this country’s economic picture in context. During this Parliament we have had a once-in-a-century pandemic and the return of war between nations in Europe for the first time since 1945, with the resulting price shocks sent through the world economy. We must look at the context we are operating in—rarely mentioned in speeches from Labour Members. When we look at the achievements, we see the stunning figure of 800 new jobs created a day, and lower unemployment. Previously, when we have seen big economic shocks people have ended up unemployed, with all the impacts that brings for them and their family. Let us look at the figures published yesterday by the Department for Work and Pensions regarding how economic inactivity rates in the UK are lower than those in the USA, France, Italy and South Korea. Indeed, they are lower than the G7 and the EU average. That is real people being kept in jobs, and if we had not had the interventions during the pandemic that we are now having to pay for, it might have been a very different picture.
It is worth seeing today’s Budget, not least the changes in national insurance, which are probably its largest part, in the context of the autumn statement. On average, a £450 tax cut for those in work in January, is now followed by another reduction. As someone who wants lower taxes and for people to keep more of the benefits of their hard work, I was encouraged by some of the comments from the Dispatch Box about that issue, and about the fact that those in work pay a higher tax rate on their income than those who get their income in other ways, although it will be no surprise to those on the Treasury Bench that I will also mention tax allowances, particularly the thresholds for the basic rate of income tax. All those in employment will benefit from national insurance rates being reduced, but in future we must consider particularly those who have saved for a small retirement annuity on top of the state pension. The effects of the triple lock have seen the state pension rise to protect people against some of the impacts we have seen with things such as price rises, so how will that be considered going forward?
It would be remiss of me not to mention a couple of things that I was fairly pleased to see, the first of which is the rise in the VAT threshold. We see the impact of that clearly in Torbay, in the guesthouse that closes when it approaches the threshold or the restaurant that put online what day it will open based on its estimate of when it will hit the threshold through the trading year. Having that threshold raised means instant growth for the hospitality sector in the bay.
It is welcome to hear the tax relief on performing arts and theatres being made permanent. I notice that the Ambassador Theatre Group, which owns one of the largest theatres in Torbay, the Princess, welcomes that measure. The alcohol duty freeze was also welcome. Torbay has more than its share of hospitality venues that will benefit from and welcome that change. Alongside that, the fuel duty freeze helps families with their budgets.
The change on short-term lets taxation is welcome. Airbnb-style accommodation has offered choice in the tourism and accommodation market, but we certainly do not need to be offering tax breaks to encourage that further, particularly when we are seeing what were family homes for rent over a long period being converted into holiday accommodation. The Chancellor is right to respond to the calls that have been made to end that tax relief. It is not particularly needed. If we are to give support to the hospitality sector, it is better done via targeted business rates reductions or by raising the threshold, which would support all small businesses, not just small businesses of a particular type in the sector.
I see this Budget in the context of the large support being offered to Torbay’s regeneration. More than £100 million has been made available by the Government to support schemes ranging from the Paignton Picture House’s revival, to the Torquay Pavilion, to the regeneration of the town centre.
Mindful of the guidance from the Chair on the length of speeches, I will end on planning. It is not about looking to concrete over the green belt or other areas, but the need to reshape our town centres for the future. In many ways, we need to have the type of reshaping of our town centres in the digital age that we had in the late 1940s and early 1950s for the mass motoring age, when our towns and cities had to move away from mostly having horses and carts on the street to having motor vehicles. Now, town centres need to reshape. The process takes too long. Even schemes with wide public support and Government funding behind them can take months to get through the planning process. We need to look again at that issue to stimulate growth and greater prosperity.
Overall, I like the direction of the Budget, which will make a positive difference in Torbay. It looks to lower taxes as we can, and sets out a clear difference between ourselves, who want to give people the opportunity to keep more of what they earn and to aspire for themselves and their family, and a Labour party that is without a plan.
Rachael Maskell (York Central) (Lab/Co-op)
It is a pleasure to follow the hon. Member for Torbay (Kevin Foster). His constituency is a tourist destination, much like York. The hospitality and tourism sector certainly faces its challenges, and I look forward to studying the proposals from Government.
This clearly is the last Budget of this Parliament and, after today, this Government. They have had 14 years, and the Tories are leaving the country with record debt, public services on their knees and households floundering with the cost of living, high rents and mortgages, utility, food and fuel bills up. Rather than repairing the economy, which is now in recession, the Chancellor has forgotten how his predecessor crashed the economy and left the nation’s pensions hours away from collapse, and how it will take a generation to recover. Households are now £870 worse off under the Prime Minister’s tax plans.
The Government are extending the household support fund—I have long campaigned for that—but by just six months, when so many families in our constituencies are hanging by a thread. As a rich country, Britain should not need such measures, but when many people have so much, we see how entrenched inequality is. The very safety net that should keep people safe has been slashed, and people are falling through it. Nearly 4 million people are living in absolute destitution, with 1 million on universal credit requiring budgeting advances, as the Chancellor said. We hear what the Joseph Rowntree Foundation is saying. Its research shows that social security is simply not enough for the essentials; it needs to be paid at a rate of at least £120 a week for a single person or £200 for a couple. Scope has said that disabled people fare even worse and need an additional £12 a week to keep themselves afloat. Of course, the cap put in place so that people get support for only two children means that children are left in poverty, too. It should be scrapped.
There was nothing for local government, and that will be ringing in the ears of councillors up and down the land. The Local Government Association says that one in five councils are facing bankruptcy. Since 2015, the City of York Council has seen a 53% real-terms cut in its settlement. National Government are stripping local government.
Where is the housing we need, not least the social housing? Why are people still waiting to see an NHS doctor or dentist? Why are people left languishing on the wards of our hospitals? It is because they cannot get social care because people are not paid enough to do that job. Crime is up, the justice system is dysfunctional, our schools are squeezing their budgets and our youth services have more or less disappeared—cut by 87% in York.
The Government have squandered 14 years. The consequences of running the economy poorly are stark, as I turn to the world’s poorest. We think about those right now in Darfur and in Gaza, where there is no food, no medicine and no hope. Failed economics means that overseas development aid has been slashed and people are left hungry and sick. That is why we cannot afford this Government.
Do not get me wrong—some people are doing incredibly well. They have profited from dodgy personal protective equipment contracts and dodged tax altogether. Now that the Prime Minister is planning his exit from Parliament—and, no doubt, Britain as well—he is reforming the non-dom status from which he has personally benefited. After 14 years of virtually no productivity and bouts of recession and economic volatility, with working people’s heard-earned taxes gambled and burned, the Budget has proven that the Government have failed to put people above party.
It will be tough for Labour—our inheritance has been squandered—but we will stabilise, invest in and reform the economy. We must do so, rebuilding with fundamental Labour values that determine economic competence and stability and address the scourge of inequality. We will invest in future industries and jobs, innovations, entrepreneurs, and science and technology, not least on climate mitigation, with Great British Energy decarbonising the grid. We will double onshore wind, triple solar power and quadruple offshore wind, bringing down energy bills for the benefit of all.
I was greatly disappointed that York and North Yorkshire’s green new deal did not get a mention. It has the opportunity to create 4,000 green-collar jobs. BioYorkshire will be a game changer for our region and for the climate. We need to ensure that we elect David Skaith as Labour’s first Mayor for York and North Yorkshire, because he will bring that project to life.
As we reform, we need to bring about change. We need to build the houses that the next generation need and this generation are desperately crying out for. We need to retrofit millions more homes to secure green homes for the future.
There are a few things from today’s announcement that I welcome, including the funding for the National Railway Museum as it expands as the world’s largest rail museum. I encourage hon. Members to come and visit as it opens its new doors. I welcome the changes to taxation on short-term holiday lets following my campaign and private Member’s Bill to stop landlords flipping their homes, but reforms that would ensure the housing we need have not come forward. I am disappointed that the Government will give grandfathering rights to existing properties, meaning that 2,000 family homes in York will not be returned, or have the opportunity of being returned, to families who desperately need them.
I am interested in what the Government had to say about the £3.4 billion investment in the NHS following the Health and Social Care Committee’s report on digital transformation. I look forward to scrutinising the plans.
As we celebrate International Women’s Week, I must highlight that women are always losers under Tory Budgets. With childcare costs rising and social care collapsing, the burden falls on women. We need to see change. Our first Chancellor in the new Government will be a woman, and I encourage her to introduce gender budgeting, in which every decision is stress-tested to ensure that it levels women with men. Fiscal policies, political choices and administrative procedures must address gender inequality, so that the economic output of women is recognised and equality is achieved, and we get better economic stability, better growth and greater productivity gains. That is working elsewhere, and I want it introduced in the next Parliament.
Today, there will be headlines; tomorrow, reality will hit. We will not forget these last 14 years. With the general election on the horizon, and the prospect of an economic reset under Labour, we must move forward with Labour’s values, which we have held for 124 years, and use our common purpose for the common good.
Mrs Natalie Elphicke (Dover) (Con)
I am delighted to follow the hon. Member for York Central (Rachael Maskell), who so often speaks with such passion on issues of poverty. I have very much enjoyed my visits over the years to the National Railway Museum. I will certainly take up her invitation to visit it in its renewed state in due course.
There is much to welcome in today’s Budget: taxes cut for working people, both the employed and the self-employed; progress on tackling inflation, which makes such a difference to everyday living costs; and the fuel duty provisions, which are so important to areas such as Dover and Deal, and so different from the tax on motorists by Labour’s London Mayor. The household support fund provides opportunities and support in Dover and Deal and across Kent to so many people, and I welcome the extension. The increase in the VAT threshold for small businesses to £90,000 is important. A number of local businesses have been in contact with me about that. I know that it will be important to hospitality businesses in our area. Finally, the focus on better healthcare outcomes and the investment are both welcome.
However, this could and should have been a Budget for housing. That opportunity has been missed. There has been a misanalysis by the Treasury of the fundamental importance of housing to achieving other objectives to do with wellbeing, health, educational opportunities, and the creation of savings and individual wealth over a lifetime. Not having the housing that is needed has caused a 23% increase in bed and breakfast housing, a 12% increase in the number of children in temporary accommodation, and a huge number of under-40s who are struggling to get on the housing ladder while paying record levels of rent. All that costs the taxpayer money; temporary accommodation costs councils £1.7 billion.
The Budget increases the housing benefit budget to £36 billion in 2024-25. It is throwing good money after bad to continuously spend on high-expenditure private rented housing, instead of spending on affordable and social housing, as should and could have been done in this Budget. That matters because England has fewer available homes for its population than any comparable developed nation, the lowest rate of available properties per population of all OECD countries, the oldest housing stock, and one of the highest proportions of substandard and inadequate housing.
Housing could and should have been a priority for this Budget. A Budget for housing could have accelerated the delivery of 100,000 affordable homes over the next 18 to 24 months. It could have provided a much needed boost to GDP of £15 billion to £17 billion per 100,000 new homes delivered. The Chancellor spoke today about inward investment; the value of house building to GDP underlines what an important industry it is. We could have seen an opening up of pensions to help first-time buyers get on the housing ladder while still saving for their pensions over the long term. That would transform home ownership opportunities for the under-40s, and put home ownership back within reach of working people aged 30 or under. There is so much more besides, but this has been a missed opportunity on housing.
I will raise two issues in the detailed Budget papers. First, there is the provision for a stamp duty land tax exemption for social housing. The papers state that that is available only for housing subject to public subsidy, but a large amount—indeed, the majority—of additional affordable housing is provided through section 106 and other planning requirements, and is not the recipient of public subsidy. That is the expectation of Homes England and the Greater London Authority. Will the Minister relook at the SDLT provisions to ensure that they reflect both a level playing field for all registered housing providers in the sector and the realities of the housing market?
Secondly, unleashing pension fund investment has been a long-term goal in the housing industries. Tremendous progress has been made in that area in recent years, yet so much more can be done. Will the Minister consider making housing part of the essential infrastructure provided for under the new unlocking of pension funds, and consider how the new UK ISA can be better used to help people get on the housing ladder?
Housing and house building are fundamental to the success of our country, the wellbeing of our nation and the prosperity of individuals, and they are therefore important to us all. I regret that that has not been properly reflected in the Budget, but I hope that I can meet the Minister to continue these discussions, and to see what can be done with the money available to build the homes that our country so desperately needs.
Mr Kevan Jones (North Durham) (Lab)
In his Budget statement, the Chancellor said: “In recent times…the UK economy…has dealt with a financial crisis, a pandemic and an energy shock caused by war in Europe”. Like Government Members today, he conveniently airbrushed out of history two of the Conservative Government’s self-inflected wounds. One of them is Brexit; page 38 of the OBR’s report states that trade with Europe is down 15%, costing the economy 4%, and that the long-term effects will not be known for 15 years.
The other issue airbrushed conveniently out of history—I am surprised that the Chancellor forgot this, because it is how he got his job in the first place—was the mini-Budget by the right hon. Member for South West Norfolk (Elizabeth Truss). We are still paying for that through people’s mortgages. Although she has gone off to pastures new, surrounded by an audience of conspiracy theorists and right-wing extremists, the core of what she argued is still on display. It is about a small state, and a society in which the Government will not invest in our public services. We have had 14 years of that. In the north-east, real-terms median wages are 7% below what they were in 2008. In my constituency, 24.7% of children live in relative poverty. It is absolutely disgraceful and makes me angry that in the sixth most prosperous country in the world, life expectancy in County Durham has been going down in the last 10 years, while suicide rates are at a record high in the north-east. That has not happened by accident.
The Government made a great pledge to have more police officers on the beat, but we have 135 fewer than in 2010, even with the recent increases and extra expense. As for the joke of levelling up, which is the equivalent of pork barrel politics at its worst, it is not joined up across the country, but mainly focuses on the distribution of capital sums to places where the party in power can get political capital out of it. We have had one successful bid in County Durham, which happened to be in Bishop Auckland. It has got us half a bypass. Today, the Chancellor announced that there will be a new £100 million devolution deal for the north-east. In the last 14 years, Durham County Council alone has had to cut £260 million from its budget. Every single council in the north-east has lost upwards of 30% of its budget, so the money will not replace what has been lost.
We see from today’s Budget and the Red Book that there is stagnation, or even cuts, in every single non-mainline Department. For example, the budget for defence—both capital and revenue—goes down next year. In education, the budget flatlines. The 1% increase that the Chancellor announced today is basically a cut to our public services. That is not an accident; it is a fact of life, and it is because the Chancellor and the Prime Minister are so scared of the right-wing faction of their party. It is about squeezing the state and making sure that the Conservatives give away tax cuts, even though they have created their own problems through their wasteful economic mismanagement over the last 14 years. It will lead to dire cuts.
I feel strongly about local government, because it is quite clear that councils will fall over. The Government say that councils are falling over because they are being wasteful, and because some of them have done some very dodgy things in property, even though they were encouraged to by the Government during their time in power. People ask why 6% of Durham County Council’s budget is now spent on looked-after children and older people’s care. It is because austerity resulted in cuts in children’s services and the closure of Sure Start centres. It does not take a genius to work out that if we take away support for families, we get more children coming into the care system. That puts huge pressure on budgets; at the same time, the Government are offloading their responsibilities on to local council tax payers.
Let me finish by raising two issues that I feel very strongly about. The Budget is about kicking the can down the road, and frankly, the Government are a disgrace. Many people will know that I have been involved in the campaign to get justice for sub-postmasters for many years. I give credit to the Under-Secretary of State for Business and Trade, the hon. Member for Thirsk and Malton (Kevin Hollinrake), who has been a very good Minister and has tried to get the compensation out there. However, page 77 of the OBR’s report shows that the Budget puts no extra money into the new schemes. I agree with my right hon. Friend the Member for Kingston upon Hull North (Dame Diana Johnson): it is scandalous that no money has been allocated for the contaminated blood victims. That is cynical, and it is about kicking this issue into the general election and hoping that somebody else will deal with it. The Government have a moral duty to both groups of people, and need to put money aside for them.
This Budget is a missed opportunity, and it is more of the same. People in this country need to wake up and recognise that we cannot have well-delivered local services and well-structured, supportive communities under this Government. Until we get an election and people wake up to the facts, we will have more of what we have had over the last 14 years. The only way things will change is under a Labour Government.
Ruth Cadbury (Brentford and Isleworth) (Lab)
This Budget was overshadowed by the news that the Chancellor had done a fairly rare thing for a politician: put his hand in his own pocket. Was this for a youth club in Hounslow or perhaps a new high-tech hospital scanner? No, it was for his own party association. Meanwhile, my constituents have to live with yet another Budget from yet another tired Conservative Government. After 14 years of their Government, our economy is in recession, living standards are falling, public services are in crisis and our country is desperate for change. We have had 22 fiscal statements since 2014 that promised higher wages, higher skills and higher growth, yet they have delivered none of these.
Today we have had another statement promising dollops of jam next year at the earliest. My constituents, like all our constituents, are seeing their bills rise, their weekly shop get more expensive, their rents and mortgages skyrocket and their debts pile up. So what does this Budget offer them? The OBR figures show that under Sunak’s tax plan, working people are, on average, £870 a year worse off. The Government have given 5p for every 10p taken away from our constituents. This included the OBR’s revised estimate of the impact of tax threshold freezes that raise £31 billion over the forecast period and create 3.7 million more taxpayers.
This Budget does nothing to tackle the housing crisis, as many Members have said. This is the biggest crisis facing my constituents. Families locally cannot afford to rent, let alone buy. Key workers are being priced out of the area and home ownership is but a distant dream. Hundreds of children in my constituency are—I want to say living, but frankly they are existing in insecure, often dangerous, temporary accommodation, which is costing Hounslow Council and the benefits budget millions of pounds each year. That is money that could be spent on building new homes.
It is no wonder that more and more lifelong Conservatives I have met in recent months, whether in Chiswick or in by-election campaigns in Bedfordshire and Kingswood, have told me that they are no longer going to vote Conservative. This is probably why I was seeing so many glum faces on the Conservative Benches while the Chancellor was speaking, and that has been followed today by many of his party criticising his statement in their contributions, including the hon. Member for Dover (Mrs Elphicke), who has just spoken. Talk about a divided party!
This Budget fails to deliver not only for working families and people seeking accommodation, but for businesses. I think of the businesses I have met across Hounslow: pubs struggling with soaring energy costs, corner shops facing a crime spree, and manufacturers and exporters facing barriers to trading with Europe. This Budget offers them nothing—nothing on business rates, on improving trade or on skills. My constituents, taxpayers and users of public services as they are, assume that the Treasury understands basic economic concepts, including the concept that higher taxes for them mean more money for the Treasury and public services. Today, however, the Chancellor joked about coming late to discovering his inner Laffer curve, which means that raising some taxes sometimes results in less tax revenue. Is this why he is cancelling the alcohol duty rise due next year, as he has been told that he has lost a couple of billion in tax revenue since last year’s rise? That is a couple of billion that our public services desperately need. This is basic stuff; it is basic economics that is even covered in the GCSE economics syllabus.
My constituents, from Chiswick to Hounslow, deserve better than this Budget. This growing economic mess is what happens when a Government are obsessed with headlines, with the short-term win and with focusing on the politics rather than on the long-term investment that our economy needs. It is no wonder that we are trapped in recession, trapped with low growth, trapped with decimated public services and trapped with a weak economy. The tax burden on our constituents is higher. The cost of the weekly shop is higher. Rent, mortgages and energy costs are higher. Most people are worse off. After 14 years of Conservative rule, it is clear that my constituents and people across the country deserve better. It is time for change.
Ordered, That the debate be now adjourned.—(Aaron Bell.)
Debate to be resumed tomorrow.
Business without Debate
Dementia Care in Hospital
(2 months ago)
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Theresa Villiers (Chipping Barnet) (Con)
My constituent Lisa Rutter is the founder of the charity Dementia Club UK, which hosts events in Barnet for people with dementia and their families, to provide support, advice and much-needed time out of the house to socialise with other people who are coping with similar life experiences. This work gives Lisa great insight into dementia care and the pressures on unpaid carers, and she asked me to meet a group of carers over Zoom to hear about their relatives’ traumatic experiences when admitted to hospital. I found the meeting deeply disturbing, which is why I applied for this debate.
In the time available, I can only include brief points about each case. I cannot hope to convey the emotional impact of the stories as told by the carers themselves, and I cannot hope to get across their real distress and anger that their loved ones had been let down, but I hope to give the House an indication of the seriousness of the problem.
I will start with Lisa’s own story. Her mother, Tasoulla Gavriel, was admitted to Barnet Hospital with covid in November 2020. Sadly, she died shortly afterwards. Tasoulla was a lovely lady, and I met her on a number of occasions. She was assessed by the hospital to be an eight on the Rockwood scale, meaning that she was viewed as severely frail and approaching the end of her life. Lisa believes that this diagnosis was entirely wrong. Her mother was sitting up and alert when admitted, and she did not have serious comorbidities, apart from advanced dementia, which meant she needed help with eating.
When Lisa was told by the hospital that her mother needed an oxygen mask, she asked for Mrs Gavriel to be put in hand mittens to prevent her from pulling off the mask and harming her treatment. The hospital refused, on the basis that this did not accord with hospital policy because it amounted to a deprivation of liberty. The hospital decided that it was neither proportionate nor in Mrs Gavriel’s best interests for her to be given mittens. That is despite mittens being used when Mrs Gavriel had been admitted the previous year for a hip operation. Lisa sincerely believes that mittens could have saved her mother’s life.
Another deeply distressing aspect of this case is that covid visitor restrictions meant that Lisa had only very limited time with her mother in hospital. I raised this in Parliament at the time, urging visitor restrictions to be eased for patients with dementia. I very much welcomed the subsequent introduction of greater flexibility for people to spend time with their loved ones in hospital. We must never again return to restrictions of the sort we saw during the pandemic.
Some of the group I spoke to did not want to be named, so I will simply refer to them as Carers 1 to 5. Unlike the others, Carer 1 is not a constituent and his experience does not relate to my local Barnet Hospital, but I do not want to leave him out. He emphasised how crucial it is that people with dementia continue to move and walk, if they are to stave off further loss of cognition, but he told me that staff at the hospital to which his wife was admitted refused to help her to walk. Even more worrying, he had to intervene twice to prevent a nurse from giving her the wrong dose of medication. Had he not spotted the mistake, a potentially lethal dose could have been administered.
Richard Foord (Tiverton and Honiton) (LD)
I congratulate the right hon. Lady on securing this significant debate, as dementia is going to affect so many people’s lives in the coming decades, as more and more people are of retirement age. In Devon, the dementia specialist Jonathan Hanbury has suggested that we should place more funding and focus on community hospitals, community treatments and community services, so that people can keep their brain agile further upstream. He suggests that the NHS’s focus on funding for acute hospital services and expensive drugs misses the value of prevention. Does the right hon. Lady agree?
Theresa Villiers
Those are very valid points. It is important to keep people out of hospital for as often as possible, but that is particularly the case with dementia patients, given the dislocation and insecurity that comes with moving them to a different environment. Measures to keep people healthier for longer and to deliver care via the primary care system rather than in acute hospitals are an important way to address some of the problems I am outlining.
Jim Shannon (Strangford) (DUP)
I commend the right hon. Lady for raising this issue. Over the past couple of years, I have dealt with a number of incidents similar to the one she refers to. Does she agree that, for those with dementia and Alzheimer’s, the emotional upheaval of being taken from a safe place where they feel comfortable can often lead to incredible distress, which can, in turn, result in aggressive behaviour? I know of one young nurse who had her arm broken in two places. It was not the patient’s fault, as he was simply beside himself and could not let go of her. Does the right hon. Lady agree that there must be enough staff in place to ensure that one young nurse should not be left screaming in pain, with no one there to help her? Does she also agree that that patient deserves compassion and understanding for their outburst?
Theresa Villiers
The hon. Gentleman makes an important point. One problem that emerges from some of the cases I will talk about tonight is that disruptive behaviour by patients with dementia, including shouting, can often be just an attempt to communicate. It is vital that staff understand that. Of course, I agree that it is essential that we have sufficient numbers of staff to ensure that they can give appropriate attention to patients with dementia in these circumstances.
The father of Carer 2 died a month after being admitted to Barnet Hospital. This constituent reported that food and drink was often just left in a tray, with little apparent effort made by staff to feed her father. He was left all day in a chair or in bed, with no attempt made by the staff to encourage him to walk. He was not supported while in the toilet, and when that led to distressing and undignified consequences, including the soiling of his clothes and hands, he was not washed until the following day.
Carer 3 told me that her husband’s condition deteriorated significantly during a stay in Barnet Hospital. Apparently, the nurses complained and said that he screamed all night. My constituent explained to them that that meant he wanted to get up to go to the loo but was prevented from doing so by the side bars on the bed. He was simply calling out for help. She often found food left untouched, yet no one seemed to note that her father had stopped eating. The catering staff just took the uneaten meals away. His medication was also stopped without his family being told, which led to a worsening of his symptoms and his anxiety.
Carer 4 told me about her partner, who has early onset Lewy body dementia and was admitted to Barnet Hospital in April 2022 after a fall. Apparently, until that point he was walking, climbing stairs and coping fairly well at home, albeit that he was a little wobbly on his feet. But the last time he ever walked was when he arrived at the Barnet accident and emergency department.
My constituent was initially restricted in visiting hours and had to fight to be allowed to stay in the hospital outside those times. She felt that the staff, especially some of the agency workers, did not understand her partner’s care needs. She was given the number for the specialist dementia nurse covering the hospital trust, but the phone was never picked up, no matter how often she rang. During his stay in the hospital, her partner deteriorated far more quickly than he had before. He was kept in bed constantly and lost the ability to walk—he is only 55. At one point, after undergoing an MRI scan, he was left distressed and confused in a cold hospital corridor, wearing a hospital gown damp with urine after radiographers had removed incontinence Conveen equipment. After he got out of Barnet Hospital, he said he would never, ever go back, no matter the circumstances.
Carer 5 told me about her father, who was admitted to Barnet Hospital with pneumonia in November 2021. When an ambulance was sent to pick him up, he was able to walk downstairs without assistance and climb into the back. Throughout his stay, it was extremely difficult for my constituent to get to speak to any doctor or nurse about his care.
Theresa Villiers
Carer 5 became increasingly desperate to take her father home as his condition deteriorated. He had always been meticulous about his personal hygiene, an old-style gentlemen who always dressed in a shirt and tie, no matter what the occasion. After time in Barnet Hospital, he was unshaven and unkempt, and he stopped eating. It apparently took six months for him to return to something like his old self, but his appetite never returned to what it had been. He has since passed away.
Themes that emerged again and again in my discussions with this carers’ group included: repeated difficulties in carers getting to speak to nurses or doctors about the care needs and health of loved ones; failure by staff to understand the care needs of people with dementia; failure to ensure patients ate and drank; and failure to keep patients mobile and walking. From what I heard from my constituents, it is clear that allowing extensive visitor access is crucial for patients with dementia, so relatives can help communicate with staff and assist with feeding and care. As I said, we must never again tolerate the type of restrictions that were in place during covid. Communication by doctors and nurses to relatives must be improved as well.
The group asked that the NHS develops a much larger volunteer programme, training many more people to support dementia patients with eating and walking if they do not have family to help them. In addition, volunteers should be trained to advocate for dementia patients if they do not have relatives who are able to do that.
These cases show a need for a more in-depth and effective training programme for NHS staff on how to look after patients with dementia. I commend the training programme on understanding dementia that Barnet Council has commissioned my constituent, Lisa Rutter, to carry out and I urge local NHS services to consider taking part in that programme. We need to do as much as we possibly can to keep people healthier for longer, and ensure that when they get ill there is an option for treatment in the community, to keep as many people out of hospital as possible.
I want to emphasise that I appreciate the efforts being made by frontline NHS staff to care for and support people with dementia. I appreciate that, although there have been some serious failings in the cases I have referred to, thousands of people spend time in Barnet Hospital every year and receive the best quality care. I thank all the NHS workers who make that happen. I accept that there is currently great pressure on staff, as healthcare need continues to expand exponentially and the NHS undertakes the massive task of catching up after covid.
When I raised these cases with Barnet Hospital, it emphasised its commitment to ensuring that patients with dementia and their carers have the best experience possible. Staff told me they had set up a dementia service in 2016, managed by a dementia clinical nurse specialist. In 2023, the hospital apparently treated 356 patients, trained 1,598 members of staff and received some very positive feedback from patients and carers. In 2015, it was one of the first NHS trusts to sign up to John’s campaign to ensure carers can visit patients with dementia at any time outside visiting hours, by prior arrangement with the ward manager.
The trust provides dementia training above the expectations set by NHS England, including mandatory tier 1 dementia awareness training on induction. Specialist dementia training is also provided for all volunteers. To support patients during meal times, a red tray system is in place: patients who need additional time, encouragement or assistance are identified and provided with a red tray.
In 2017, it launched a “Keep me moving” campaign, which focuses on keeping patients as active as possible while they are in hospital. There is a telephone line for carers and loved ones to contact dementia clinical nurse specialists.
Although I recognise the value of these measures, and I welcome all of them, I am afraid that the cases I have outlined indicate that they are simply not always delivering the intended results; they are not enough. I believe that the failures in these cases demonstrate that more must be done to ensure that dementia patients receive the best care possible and that they receive dignified treatment at all times. I therefore hope that the management at Barnet Hospital will reflect carefully on the matters raised by my constituents, which I have set out this evening.
Care and support for people with dementia is one of the most important challenges of our generation. This is a task that is likely only to grow in scale when, in years to come, around one in three people born today are expected to develop dementia. We must ensure that every one of those people has access to high-quality health and social care. That means continuing to increase resources for the national health service, so that staff can give each patient the time and attention that they need.
In this financial year, the NHS resource budget is due to be £157.4 billion. It is due to reach £162.6 billion in 2024-25. I welcome the announcement this afternoon by the Chancellor of a further £5.85 billion. The total is far higher than ever before, meaning that the NHS has more hospital doctors and nurses than ever before and is delivering more appointments, tests, treatments and operations than ever before. But if we are to relieve pressure on the NHS and tackle waiting lists, and ensure that every patient gets the best care, we need to tackle delays in discharging people back into care settings in the community. To do that, it is essential that we fund local government to play its part. I welcome substantial increases in funding for social care over recent years, but the cost of social care continues to place real strain on council budgets.
If we are to have the care home places that we desperately need, care providers also need to be paid a rate by councils sufficient to provide the level of care needed by people with dementia. We also need a long-term strategy for the social care workforce to ensure that we train and recruit the people that we need to carry out these vital roles, and that we pay them appropriately given the importance of the job that they do.
Now that the Government’s science and research budget is one of the biggest in the world, we must give high priority to dementia research to tackle this massive epidemic. Lecanemab and donanemab represent an incredible breakthrough; finally, there is a glimmer of hope. These are the first ever drugs shown to address the disease itself rather than just its symptoms. We must ensure that the NHS is ready to start delivering these treatments once final approvals are given. That will require a step change in testing capacity so that we identify people who can benefit from the drugs in time for them to have an effect.
As a society, we must do everything we can to support unpaid carers, including with respite care. According to the Alzheimer’s Society, around 1.8 million people in England provide some form of care and support for friends or relatives with dementia. The overall value of those services provided amount probably to £12.2 billion.
I conclude this evening by paying tribute to every carer who looks after a loved one with dementia, including the six brave individuals who spoke to me about their experiences and prompted this debate today. They are all heroes to whom this country owes a huge debt of gratitude; they deserve our deepest thanks and our support.
The Minister for Social Care (Helen Whately)
I sincerely thank my right hon. Friend the Member for Chipping Barnet (Theresa Villiers) for securing this Adjournment debate, and for her powerful speech. She really brought the subject to life through the examples from her constituency of people’s experiences in hospital. They were very difficult stories to hear, and I am very sorry to hear of times when it sounds like the care for people’s loved ones has fallen short.
My right hon. Friend made some powerful points that I want to address, starting with the fact that, as she said, there are many thousands of people living with dementia, and the number is only expected to increase; indeed, there will be more than a million by 2025. Many people with dementia will also be living with other health conditions. At the moment, it is estimated that around a quarter of the beds in hospitals are being used by patients with dementia, so ensuring that people receive the right care when they are in hospital with dementia is really important, as is doing our utmost to avoid unnecessary admissions and ensuring that people are discharged from hospital on a timely basis.
It is really worth emphasising the point that my right hon. Friend made about dignity, and the fact that every single person counts, at whatever stage of their life. There are challenges to ensure that people living with dementia have that dignity, particularly when they are in hospital. I, too, pay tribute to the many unpaid carers who are looking after their loved ones with dementia. I know what a huge burden and challenge that can be. However much someone loves somebody, there is a huge demand on them when they are caring for somebody with dementia. It can be very difficult, very distressing and absolutely relentless, however much they love them. I pay tribute to all carers who are doing that.
My right hon. Friend spoke first about Lisa Rutter, who very sadly lost her mother, who was living with dementia, during the pandemic—in hospital, if I heard my right hon. Friend correctly. I thank Lisa Rutter for the work that she is doing as the founder of Dementia Club UK. It is fabulous to be supporting other people to look after loved ones with dementia, or indeed those with dementia themselves. My right hon. Friend talked about the time Lisa’s mother spent in hospital, and how, for instance, Lisa knew what her mother needed but felt that she was not listened to, and that it may have contributed to her mother’s death. My right hon. Friend also talked about the visiting restrictions during the pandemic. I will talk about those in a moment.
My right hon. Friend talked about another constituent, whose wife was in hospital. She rightly talked about the importance of mobilising somebody with dementia, and how her constituent’s wife was nearly given the wrong medication, which could have been fatal. She spoke about the importance of his intervention. She also spoke about a constituent who was a carer for their father, and the importance of mobilisation, and some of the communication challenges for somebody with dementia.
My right hon. Friend talked about one person who had been screaming all night, as described by the staff. Actually, the family member who knew them understood that they were calling for help, as they needed to go to the toilet. That brings to life how difficult it can be when somebody has dementia and is not necessarily able to articulate their needs and what they want. Those who know them well will often know what they are trying to say or communicate, but that can be difficult in hospital when they may be being looked after by staff who simply do not know them well enough to know what they mean.
My right hon. Friend talked about food being left uneaten. If somebody is not eating in hospital, clearly they are likely to lose weight and their condition may deteriorate. She also talked about medication being stopped, and she talked particularly about somebody whose partner had early onset dementia, and had been coping fairly well at home. He walked into A&E, and that was very sadly the last time he walked. That emphasises the challenge of keeping people moving and maintaining their ability to be mobile during a hospital stay. She also described the fight to visit outside visiting hours.
I very much hear my right hon. Friend’s asks on visitor access, volunteers being trained in dementia care, as well as staff training, and avoiding discharge delays, among other things. I will pick up on some of those.
First, on the challenge of caring for people with dementia when in hospital, many hospitals have worked hard to do better for patients with dementia, for example creating dementia-friendly environments by changing the colour and lay-out, ensuring that staff are trained in dementia, and having dementia leads and dementia-lead nurses, as well as having training for volunteers. Standard training in caring for people with dementia is available through NHS England for staff and volunteers.
Clearly, my right hon. Friend the Member for Chipping Barnet described examples where care fell short. I have no doubt that across the NHS, with the work already taking place, we can go further. I will raise the points that she made about secondary care with my colleague, the Minister for Health and Secondary Care, so that we can work together on ensuring that care is right in hospitals. He also has oversight of workforce, and we should focus on whether the training that I know is available is being taken up by enough staff, considering the number of people in hospital with dementia.
On visiting, my right hon. Friend spoke about a subject that is close to my heart. Having been involved in some of the decisions about social care visiting restrictions during the pandemic and knowing how hard those decisions were—weighing up the infection control concerns and ensuring people could spend time with loved ones—we have been putting in place changes to Care Quality Commission regulation to make visiting a fundamental right, a fundamental part of care and a fundamental standard of care to ensure better access for loved ones to their family members in care homes and in hospitals. I know in particular how important that is for people with dementia, among others. The CQC is consulting on the implementation of the regulatory change, which will be live shortly. I believe we have taken a significant step to address concerns expressed about visiting.
Another thing my right hon. Friend spoke about was faster discharge. I am very alert to the risk of patients deconditioning in hospital, particularly patients with dementia. That is why over the past year or so, we have worked hard with the NHS to get better at identifying patients at greater risk of deconditioning, in particular those with dementia, on their admission to hospital. We have done earlier discharge planning and have been getting care transfer hubs established all across the country, which will do the work on more complex discharges. Often someone with dementia may need more access to social care. We may need to increase the access to, availability and supply of social care, so that it is there for those who will need it when they leave hospital. We have made some real progress on that over the past year.
Helen Whately
I have very little time, so I am afraid I will not give way.
My right hon. Friend the Member for Chipping Barnet talked about the social care workforce, another subject close to my heart. We have a strategy for the care workforce. We are building care as a career, in particular to boost recruitment and retention among our home-grown workforce. We recently published the first ever national career structure for care workers, and we are launching a new national qualification to boost the supply of care workers.
Avoiding admission is another priority for me. Clearly, some people should be—absolutely must be—in hospital for the treatment they need, but we know that patients with dementia in particular can deteriorate in hospitals, so we are doing more work with the national health service and social care to avoid admission when it is not truly necessary by putting in place alternatives or, at the other end, supporting earlier discharge through the roll-out of the Hospital at Home initiative, or virtual wards, under which we committed to at least 10,000 hospital-at-home beds or equivalent as part of emergency care recovery plans. The NHS has over-delivered on that, so we now have more than 11,000 Hospital at Home beds, which help people who would otherwise be in hospital receiving acute care. They receive that care and are able to recuperate at home, avoiding the risk of a longer hospital stay and deconditioning.
My right hon. Friend talked about dementia research and the new treatments coming onstream. The Government have committed to doubling our investment in dementia research during this Parliament, and we are on track to do that with our dementia mission. We are also working very closely with NHS England to be ready for the breakthrough treatments lecanemab and donanemab coming onstream. I should be clear that we know very well—I have received clinical advice on this—that those treatments have quite significant side effects, so they will not be suitable for everybody and I put a note of caution there. We are waiting to hear whether they are approved by the Medicines and Healthcare products Regulatory Agency and the National Institute for Health and Care Excellence. In the event of approval, NHS England is taking steps to be ready to put in place the levels of diagnosis required to be able to support those treatments.
That goes hand in hand with the work that we are doing with NHS England to improve the diagnosis rate for dementia. We have a target dementia diagnosis rate of 66.7%. That dropped during the pandemic because dementia services and assessment had to be closed, but it has been gradually building up, and I expect NHS England to get back up to that level during the course of this year. That is really important, because having a diagnosis helps people—the individual with dementia and their carers, for example—to access the support and back-up that they should be receiving.
I am conscious of the clock ticking, so I have tried cover some of the territory that my right hon. Friend set out in her speech, which I thought was very powerful in raising these significant issues for those with dementia receiving care in hospital, their carers and loved ones. I completely agree about the importance of dignified treatment and treating those with dementia with dignity at all times. I know that that can be particularly challenging in hospital, but we have to ensure that that is the case.
We will ensure that we get all the necessary care in place outside hospital, which avoids unnecessary admissions; support people to be discharged from hospital quicker; get ready for the arrival of new dementia treatments; and raise awareness about the significant proportion of dementia cases that can be prevented or at least delayed by looking after our health. In fact, the risk factors for dementia are similar to those for heart disease and other things, and there is relatively low awareness of that. We will see more people with dementia in the years ahead, but we can do more to raise awareness of how people can maintain their health and stave it off.
Helen Whately
I am just coming to a close.
I thank my right hon. Friend for securing the debate. I will continue my work to pursue the topics that we have discussed this evening.
Question put and agreed to.