Spending Round 2019

Lord Duncan of Springbank Excerpts

Wednesday 25th September 2019 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy and Northern Ireland Office (Lord Duncan of Springbank) (Con)]

My Lords, I thank all your Lordships for your warm welcome on my new role. It is nice to be here for a brief time—I am not wholly convinced it will be my permanent future—but, none the less, I am interested in each of the comments made by noble Lords this evening.

I think there has been far more consensus than there has been division on some of the issues affecting wider society. I am reminded of some remarks, again, by Benjamin Disraeli, which he would have written in Sybil, a book subtitled Two Nations. He said:

“Two nations; between whom there is no intercourse and no sympathy; who are as ignorant of each other’s habits, thoughts, and feelings, as if they were dwellers in different zones, or inhabitants of different planets”.


He spoke not of different parts of this kingdom, nor indeed of different social classes; he spoke simply of the rich and the poor—a reminder again that some challenges are with us and must be addressed even now afresh.

I have also thought how we might frame this debate, and I was struck by the comments made by the right reverend Prelate the Bishop of Durham. It put me in mind of some remarks by a former Vice-President of the United States, Hubert Humphrey, who simply said that,

“the moral test of government is how that government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; and those who are in the shadows of life, the sick, the needy and the handicapped”.

That is a test that we need to embrace now.

In lots of ways, this particular spending review does a number of things, but it does not seek to do everything. We need to recognise the difference between what a spending review is destined to try to achieve and what a Budget is setting out to try to achieve. I take for example, one aspect, which I know a number of Lords have touched on this evening: education. It is very easy to talk about education in simple, glowing terms or in simple statistics and headlines. However, it is important to recognise that we made great strides forward in collaboration with the Liberal Democrats in our coalition Government back in the day: 85% of pupils are in good or outstanding schools, compared with 66% in 2010; there are 10,000 more teachers and 921,000 new school places since then; and there are 160,000 more six year-olds on track to become fluent readers compared even with last year.

When we look at the money we put into education, we begin to see how that money can make a difference. Money spent wisely is money well spent. I will touch upon the comments of the noble Lord, Lord Davies. The minimum per pupil funding for a primary school pupil will become £4,000, for a secondary school pupil £5,000. We are putting £66 million into early years spending, and £400 million more will go into further education. Each of these elements should create a positive pathway to move issues forward.

Social care is perhaps one of the shadowy areas that Hubert Humphrey spoke of. In many respects, this is a new area as we begin to explore how funding will work. The money we are putting into social care is significant, but it is only to stabilise the system until we can begin to understand how best we can tackle the wider challenges that exist within the social framework. For too long we have seen these simply as issues to be dealt with by the individual; there is a wider community interest which we have recognised. That is why I expect that the Budget itself, which will come later, will look at this head-on and should, I hope, begin to make a significant difference.

I will try to answer all questions in the time available, but I hope noble Lords will appreciate that there were quite a few. I will begin by picking on the right reverend Prelate, just because I happen to have the notes at hand. I hope he will forgive me. The question of health and social care that I have already touched upon will become important. The £1 billion will make a difference. There is an additional £500 million which should begin to stabilise the system. It does not solve the problems but begins to take us in the right direction.

The right reverend Prelate asked very specifically about unaccompanied children and legal aid. Unaccompanied children were brought into the scope of legal aid in immigration matters when the Ministry of Justice’s Legal Support action plan was published in February 2019. I hope that will go some way to addressing that particular issue. We are committed to ensuring that everyone can get the timely support that they need to access that justice system. If you cannot access justice, you cannot secure it. It is very simple.

There was a question on whether we should be in any way rejoicing that there are 10,000 more prison officers. In some respects, the answer to that should simply be no. That is not a way we should measure things, but it is not the only way we seek to measure things. It is about ensuring that those who find themselves in prison find a way out of prison without returning, looking at the recidivism rates themselves to ensure that people who have found their way into that troubled area are able to find their way out of it. In order to do that, we have to take the pressure off the system itself. Those 10,000 extra guards should, I hope, make some difference. However, it should not be a metric by which we measure the success of our society; it is simply a reflection of the need that these aspects have for us.

The right reverend Prelate will be aware that many aspects relating to benefits will appear in the Budget more sensibly because that is where they will rest. What we are looking at here is the departmental spending aspects. The Government are increasing spending on universal credit: it will be £2.5 billion higher in 2023-24 than when the decisions were taken in 2016.

Overseas aid is an issue very dear to my heart. The 0.7% of GDP is an important measure of our society. We are one of the few developed nations actually to try to meet that. However, we have got to make sure that the money spent works. It cannot be based upon return to the United Kingdom, although we must make sure it is value for money. Money spent unwisely is, in some respects, money lost. It should look at issues around poverty but should also begin to question the notion of how we address the wider global climate change and look at some of the wider issues that rest underneath that. I am proud that we managed to commit that fund. However, I want to make sure that it works for everybody here at home, to make sure that there is support among those who seek to continue the spending, so that it does not get undermined by people saying, “Why are we spending money on foreign people doing foreign things?” We are all part of a global community, and I think we should be able to recognise that.

A number of noble Lords touched on the north, but my noble friend Lord Kirkhope in particular touched on devolution. We often think about devolution within the nations of this United Kingdom but in truth—he is absolutely right in flagging this up—the question is: how does it break through to the parts of Great Britain? It is true that we need further investment, and this spending review looks at investing in a new towns schemes, bringing substantial funds into the north to try to bring this about. This cannot be tokenistic, it must come from the ground up, it must be money spent wisely and it needs to be accountable. We need to see value for money—it is not about headlines, it is about making sure that the people themselves experience the benefit.

Returning to the issues raised by my noble friend Lord Kirkhope, I am also aware that that question of mental health is absolutely vital. For too long our health service has seen this as a separate issue to be encountered later—it is not. It is at the heart of so many of the problems experienced by wider communities. A number of noble Lords have raised this matter, and that is why the Government have been willing to commit money directly into the mental health area. Is it enough money? I do not think there could ever be enough money committed into this area, but I hope it is a beginning, to move us in the right direction. I welcome my noble friend’s comments in this regard. It is important that as a community we recognise, as we pull these things together, that nobody should be left behind.

The noble Lord, Lord Tunnicliffe, raised a number of issues, including some put forward by the Labour Party itself. I do not want to be overly political here because each party must decide how it wishes to promote wider ideas. However, I note that some of the aspects appear to be broadly uncosted and unfunded. One of the challenges when you are trying to address wider austerity issues is to make sure your books are balanced and you can deliver what is most important—the sustainability of support. Those very elements are critical to giving confidence that we can deliver against them. I admire each of the aspects of the issues he raised, but they must be sustainable in the way they are delivered. Again, I respect the comments made by the Liberal Democrat Benches, recognising that we cannot spend our way out of a problem. We need to find the right balance in the way we address this. It is not always going to be easy, but I hope that we can find the right dynamic to do it.

If you will forgive me, I will work my way through my notes. The noble Lord, Lord Tunnicliffe, was also asking about the timing—and a number of noble Lords raised this question. Is this a pre-election attempt—a would-be pre-election attempt—to interest the wider community? In truth, I think noble Lords will recognise that 31 October is a watershed moment. Whatever you make of that, there needs to be a recognition that after that point there will need to be a brave new tomorrow. Exactly what that looks like will depend on how we enter that point, but we need to be in a position to look at that in a different fashion—a way of seeing how we can begin to budget. That is why, in looking at the spending review, every attempt was made to ensure that it was as up to date as could be, but it does not replace the Budget, which is yet to come later this year. The OBR will have the full details of that material, allowing for a detailed analysis of how money will be spent, and there will be a greater ability to interrogate that. We recognise that a number of issues have lain dormant as we have tackled Brexit. A number of noble Lords this evening and on other occasions have been very clear that we have, in the past, been guilty of becoming indulgent in regard to Brexit and not looking at what we need to be getting our hands dirty with, which is the issues of the people. This spending review aims to try to achieve that as best we can.

The noble Lord, Lord Livermore, asked a number of very detailed questions, particularly in regard to the lower deciles. He is absolutely right to flag this up, because one of the challenges is that if we cannot address the lower deciles the disparity between the rich and the poor—the very thing that Disraeli was talking about—becomes ever greater. In some respects, we have made progress in looking at the living wage, which has made a difference, but to secure the living wage you have to be in work. More people are in employment, which is important, but not enough people are in employment. We need to make sure that not only those on the living wage but those living and working in poverty are recognised. This will be explored further in the Budget itself, but I take away from the points he made the absolutely critical point: we cannot have people left behind who are getting poorer through no fault of their own, and we need to be very careful to achieve that.

My predecessor, my noble friend Lord Young, asked a number of questions, some related to those of the noble Lord, Lord Livermore. He will know far better than I, I do not doubt, that the majority of DWP spend is annually managed expenditure—AME—and the spending review deals with resource spending, so we will see a slight difference in the way this comes forward. The local housing allowance is part of that AME spending, but this is an important issue and I do not want to lose sight of it. I want to make sure that this is absolutely at the heart of the housing question addressed in the Budget and I will ensure that my right honourable friend the Chancellor does that very thing. It would be short-sighted were we to lose track of what that could mean.

The noble Lord also asked when the next OBR forecast will be. The answer is that I do not know—that was an easy one; good—but the Chancellor will know, and I do not doubt that in due course he will tell me, and I will pass it on that further information if I am blessed by retaining this position.

My noble friend Lady Stroud asked a number of quite difficult questions about health, particularly on how those with disabilities are affected. The spending review included £7 million to expand Jobcentre Plus advisory support in schools for young people with special educational needs, and to extend eligibility for access to work to cover internships for disabled people. I would like to know more about that so I will write to my noble friend—I would like more information to understand that as well. The Government will continue to support the most vulnerable: spending on benefits to support disabled people will be higher in every year to 2023 than it was in 2010, which is not unimportant. As for question of wages, the living wage has risen and that is not to be lightly set aside. The total increase in annual earnings should be higher, by a factor of some significance, than they were in 2016. The lowest earners had the fastest pay rises in the last 20 years, but they have not risen far enough, because they started from a lower point—we cannot lose track of that either.

I shall touch briefly on some of the wider questions in the spending review. Local government spending was raised by a number of Peers, particularly recognising the challenges faced in the settlement for local government. Clearly, there are moneys coming in different areas. There will be a 4.3% core spending power increase. We will see real-terms increases: there will not be just a levelling down in that regard. The extra £1 billion grant for social care, which will affect adults and children, with an additional £500 million, should provide some respite for the budgets of local government. The estimated increase in core spending powers is £2.9 billion, including reference to later consultation of the 2% core council tax referendum threshold and a 2% adult social care precept. That should go some way, again.

On the wider question of housing, and particularly the absence thereof—homelessness—we have put forward £422 million to help reduce homelessness and rough sleeping, including an additional £54 million in 2020-21, a real-terms increase of 13% from 2019-20. Is that enough? I suspect not, but I hope it makes some difference and begins a journey as we try to improve these aspects.

The question of the Foreign and Commonwealth Office was raised by some noble Lords.

[Lord Greaves]

The Minister might like five seconds’ rest. He has not tackled the point I raised, which is that none of this new money—or extra money, if that is what it is—for local government appears to be coming to ordinary district councils and unitary councils for their ordinary local, street-level, neighbourhood services. In many places these are in a state of potential collapse.

[Lord Duncan of Springbank]

The noble Lord raises an important issue. We talk about millions and billions, and various other ways of assessing money, but if people in the street and in their homes do not experience the benefit of that, it simply seems to wash over them. I will explore further how that money will arrive in the very council forums he discusses, I will write to him on that basis and put that letter in the Library.

Before I forget, the noble Baroness, Lady Kramer, asked a very technical question. My team simply said that we will have to write to her. If she will allow me, I will write to her on that point and put that letter in the Library.

I am running slightly short of time. I am not trying to short-change anyone, but if I end up leaving anyone out, or they feel they have not had full value, I will happily respond to any points beyond that.

The important points I want to stress, as I try to draw my remarks to a close, will be twofold. One is that the spending review itself is based on the best forecasts available at the time. The question of how they go forward is short-term; it will last for one year but the important thing is that it sets a new direction. We have turned a page. We often use “austerity” as a pejorative term, and for many people it is to live through that, but in truth it is about living within means and spending wisely. From hereon in, we must make sure that the money we spend delivers and that those in receipt of it see the benefit of it. I hope that this spending review will do that very thing. Importantly, going forward, the Budget will also begin to put the flesh on to the wider bones which we have set out here. I hope that will give noble Lords some confidence that the system itself, and the approach we are adopting, has not been jerry-rigged or in any way seeks to undermine what has been going forward.

I know that I have left a number of questions unanswered but I shall not be able to find the questions and answers at this moment. I realise that it is now slightly late and that some of your Lordships, like me, may be a little wearier than we would have been otherwise. If noble Lords will forgive me, on that basis—if I have left anything out, please come back to me and I will respond formally—I shall sit down and let your Lordships all go home.

Motion agreed.