Sajid Javid debates involving HM Treasury during the 2015-2017 Parliament

Budget Resolutions

Sajid Javid Excerpts
Thursday 9th March 2017

(7 years, 2 months ago)

Commons Chamber
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Sajid Javid Portrait The Secretary of State for Communities and Local Government (Sajid Javid)
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Yesterday the Leader of the Opposition gave a response that sounded as though it had been written a week ago, regardless of what was actually in the Budget, and now the shadow Chancellor has just done the same. That shows us all, once again, that the Labour party never learns.

There has been no recognition of the state in which the right hon. Gentleman’s party left the country’s finances, no awareness of the millions of lives devastated by Labour’s record-breaking recession, and absolutely no understanding of the most basic rule of any responsible Government: if you want to spend money, you have to raise it. If the right hon. Gentleman had been standing on the steps of No. 11 yesterday, holding up his little red book—I mean box—he would have come here and announced half a trillion pounds of additional borrowing, and every last penny of that, every last penny, would have had to be serviced and paid off by our children and our children’s children for decades to come. [Interruption.]

Let me explain to the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), who is speaking from a sedentary position, how finance actually works. If you borrow money, you have to pay it back. Tens of millions of hard-working Britons know that. They do it every month, with their mortgages, their loans and their credit card bills. That concept, however, seems to elude the right hon. Gentleman. Well, let us hope that he learns something today: after all, I have always been a great believer in workplace learning.

Angela Eagle Portrait Ms Angela Eagle
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Obviously it is important to get the deficit down. The Government said that they would eliminate it by 2015, two years ago, and now the Budget document makes it clear that it may not be eliminated by 2025. Is that the Secretary of State’s definition of success—being 10 years late with a five-year plan?

Sajid Javid Portrait Sajid Javid
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We have heard no apology from the hon. Lady for the fact that during the 13 years in which Labour was in power, there was an almost threefold increase in the national debt and the country was left with a larger budget deficit than any other major advanced economy.

Seema Malhotra Portrait Seema Malhotra
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Can the Secretary of State name a promise that the Government have actually kept in relation to the economy?

Sajid Javid Portrait Sajid Javid
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One kept promise on which the hon. Lady could have focused is the creation of 2.7 million jobs in our economy since 2010. They call themselves the Labour party, Madam Deputy Speaker, but they could not care less.

Oliver Dowden Portrait Oliver Dowden (Hertsmere) (Con)
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Does my right hon. Friend think that the £500 billion-worth of additional spending proposed by the Labour party would do anything to increase or reduce the deficit?

Sajid Javid Portrait Sajid Javid
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As always, my hon. Friend makes a good point. Conservative Members know that, if implemented, Labour’s plans would result in not only more spending but more debt. Labour Members would increase the deficit and return us to another Labour record-breaking recession if they ever had the chance.

None Portrait Several hon. Members rose—
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Sajid Javid Portrait Sajid Javid
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I will plough on, but I will give way again shortly.

Figures released since the autumn statement have provided further evidence of the fundamental strength and resilience of the UK economy. Growth is forecast to hit 2% this year, the deficit is on course to reach its lowest level in two decades, and debt as a proportion of national income is forecast to begin falling in 2018-19 for the first time in more than 15 years.

Stephen Doughty Portrait Stephen Doughty
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If we borrow money, of course we must pay it back. Why was there no mention of Brexit in the Budget, given that, according to the Office for Budget Responsibility, the cost of Brexit to the public finances could be an extra £58 billion? That is a huge sum, which we would have to repay.

Sajid Javid Portrait Sajid Javid
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My right hon. Friend the Chancellor talked about leaving the European Union. In fact, I think that that was one of the first things that he mentioned in his Budget statement. It is a shame that the hon. Gentleman was not listening.

Most important, the success that I have described is being felt in the pockets of ordinary working people, with real wages forecast to rise in every year up to 2020-21. Britain is home to more private sector businesses than ever before, and that is providing more jobs than ever before. We have gone from record-breaking recession to record levels of employment. But of course we are not complacent: there is much more to do. Going on a wild spending spree simply because of improved growth forecasts would be like going down the pub to celebrate the extension of an overdraft. Our focus on sustainable, stable public finances must continue, and the Budget provides for exactly that.

Steve Reed Portrait Mr Reed
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The Secretary of State is lecturing the House on how finance works, but we would like to know more about how it works in his Department. He has denied offering Surrey County Council a sweetheart deal, but the BBC has now published a letter from officials in the Department for Communities and Local Government which shows that they did, in fact, offer Surrey more cash in a unique deal. Did the Secretary of State know about that letter when he issued his denial?

Sajid Javid Portrait Sajid Javid
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If the hon. Gentleman had cared to look at a written ministerial statement published on 9 February, he would have seen that it states very clearly that Surrey approached the Department, as do many other councils before a financial statement, asking for more money. It made a request for a business rates retention plan, which was firmly rejected.

Charles Walker Portrait Mr Charles Walker (Broxbourne) (Con)
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Will my right hon. Friend give way?

Sajid Javid Portrait Sajid Javid
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I will, but then I must carry on.

Charles Walker Portrait Mr Walker
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I thank my right hon. Friend for visiting my constituency—[Interruption.]

Charles Walker Portrait Mr Walker
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Thank you very much for that protection, Madam Deputy Speaker. It is much appreciated.

I thank my right hon. Friend the Secretary of State for visiting Broxbourne last week. May I divert him from Surrey to Hertfordshire, where a much bigger problem relates to an incinerator application? The awarding local authority, Hertfordshire, is also the planning authority in this instance, which strikes me as a conflict of interests. I suspect that my right hon. Friend cannot focus on that now, but will he take into consideration such conflicts of interest in local authorities?

Sajid Javid Portrait Sajid Javid
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I think my hon. Friend will understand that it would not be appropriate for me to comment on a particular planning application, but if he would care to furnish me with more information, I am sure that officials in the Department will take a look at it.

Steve Reed Portrait Mr Reed
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Will the Secretary of State give way?

Sajid Javid Portrait Sajid Javid
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I will in a moment.

By maintaining a robust, growing economy, we will be well placed to make the most of the opportunities that Brexit will bring. The Budget also allows us to make additional commitments in a number of areas without putting our hard-won economic recovery at risk. The first of those areas is adult social care. The true measure of any society is how it cares for its most vulnerable citizens. Given advances in medical care and an ageing population, many councils have found it increasingly difficult to meet the costs of care in their communities.

Steve Reed Portrait Mr Reed
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Will the Secretary of State give way, on that point?

Sajid Javid Portrait Sajid Javid
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I will give way once more to the hon. Gentleman.

Steve Reed Portrait Mr Reed
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I am grateful, because social care was the subject of the correspondence with Surrey County Council. When the Secretary of State issued his denial, was he aware that his own director of local government finance, Matthew Style, had sent a letter to the council offering it a unique financial deal?

Sajid Javid Portrait Sajid Javid
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I think I have already answered that question for the hon. Gentleman: there was no deal available to Surrey that is not available to any other local authority.

I have been working on adult social care with my right hon. Friends the Secretary of State for Health and the Chancellor of the Exchequer. The result is a Budget that delivers £2 billion of additional funding for adult social care. Let me be very clear: every single council in England responsible for adult social care will benefit from this additional funding, rural or urban, north or south, Labour or Conservative. To allow councils to move fast so that they can put in place extra social care packages as soon as possible, we will publish the allocations later today. This additional money, front-loaded for 2017-18, will make an immediate difference to people in our communities who need care and support, and it will bring the total dedicated funding available for adult social care in England to £9.6 billion over the course of this Parliament.

I know that this is a novel concept for the Labour party, but more money is not the only answer. This Government are not just dedicated to sustainable economic growth; we also believe in sustainable public services. Demand for adult social care is not about to stop rising, and the challenge of paying for it is not going to go away. The £2 billion announced in this Budget will make a significant difference over the next three years, but the challenge will not suddenly vanish in 2020.

The funding model for the adult social care system is clearly in need of substantial reform and improvement; it has to be made fairer and more sustainable, and we are absolutely committed to doing just that. We are looking at all the options, and later this year we will be publishing a Green Paper setting out a long-term plan that will ensure that proper care is provided to everyone who needs it.

Bob Blackman Portrait Bob Blackman (Harrow East) (Con)
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The announcement of money now will be warmly welcomed across the country, but before my right hon. Friend announces the details of the long-term plan, which we welcome as well, the short-term issue is whether the money is new money or money being brought forward from later years, and whether it will be added to baseline budgets so that local authorities can expect to receive that funding each year, rather than being just one-off funding. Finally, the formula by which this is distributed is key, because different local authorities are under different levels of pressure.

Sajid Javid Portrait Sajid Javid
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I am pleased that my hon. Friend asks that question as it allows me to say more on this issue. First, I can confirm that the £2 billion is all new money; it is new grant from central Government. Secondly, I can confirm that it will be added to every local authority’s baseline over the next three years as that money is distributed. My hon. Friend also rightly asked about how it will be allocated. The vast majority of the money will be allocated using the improved better care formula that already exists and is transparent and open, which will mean that account can be taken of not just the needs of every local authority but of their ability to raise money through council taxes. A small portion—10%—will be allocated using the existing relative needs formula, and the purpose of that is to make sure that every local authority in the country that has responsibility for adult social care is able to access new funding.

Barbara Keeley Portrait Barbara Keeley (Worsley and Eccles South) (Lab)
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The Secretary of State tells us that the vast majority of the money will be allocated via the better care fund. We know that the settlement before Christmas caused problems and that a third of councils lost out, including mine which lost out because of the adult social care bill. Will he say how the rest of the money will be allocated?

Sajid Javid Portrait Sajid Javid
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I thought I had just made that clear, but I will repeat it and be a little more specific: 90% will be allocated using the improved better care fund formula and 10% will be allocated using the relative needs formula. These are two existing formulae already in place and, as I said, further details will be published this afternoon, with the allocations and a description of those formulae. I hope that is helpful to the hon. Lady.

We also need to make sure that councils deliver the best possible local care services. There are many excellent examples of best practice around the country, but there is a big difference between the best-performing and worst-performing areas. There is clearly room for improvement across the sector, so alongside the additional funding announced in the Budget my right hon. Friend the Health Secretary and I will shortly announce measures to help ensure that those areas facing the greatest challenges can make rapid improvement.



Looking at health more widely, we are already committed to a £10 billion annual increase in NHS funding by 2020. This Budget goes further still: there is £325 million to allow the first NHS sustainability and transformation plans to go ahead, meaning more efficient and more effective healthcare for local people; and there is another £100 million to fund improvements in accident and emergency departments for next winter, including better on-site triage and GP facilities. That is enough to fund up to 100 new triage projects, taking some of the strain off our A&E departments.

Norman Lamb Portrait Norman Lamb
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The Secretary of State mentions the £325 million, but does he acknowledge that £1.2 billion was taken out of capital spending in the current financial year, and that this money will only go to about six STP areas, leaving the rest of the country without extra capital spending at all?

Sajid Javid Portrait Sajid Javid
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I know the right hon. Gentleman cares about this issue and was deeply involved in it when he was a Minister. I am sure he knows that when the Government set out their plans for the additional £10 billion per annum by 2020, the NHS five-year plan was calling for £8 billion. This goes over and above that. The announcement made in yesterday’s Budget of the additional £325 million plus the £100 million is on top of the £10 billion per annum.

Keith Vaz Portrait Keith Vaz
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Does the Secretary of State share my concern that there is not enough emphasis on prevention for long-term conditions such as diabetes? His ministerial colleague sitting on his left, the hon. Member for Battersea (Jane Ellison), was probably the best diabetes Minister we have ever had, and a lot of what she did was on prevention. Why has more money not been made available for investing in the future and cutting the taxpayers’ contribution in years to come by setting up prevention centres for conditions such as diabetes?

Sajid Javid Portrait Sajid Javid
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The right hon. Gentleman makes a good point about the importance of public health, and he is absolutely right to pay tribute to the former Health Minister, who is now the Financial Secretary to the Treasury, for the work she did. I hope he will agree with me that the work that my hon. Friend and others did shows that they have taken this issue seriously. Some of the measures that the Chancellor talked about in his Budget statement—the so-called sugar tax, for example—will help in the long term with prevention, especially in the case of diabetes.

Health and social care are not the only public services that we are investing in. The Budget funds a further 110 new free schools. It funds free school transport to include all children on free school meals who attend a selective school. It also provides an additional £216 million of investment in existing schools.

When I was a teenager, my comprehensive school refused to let me study the A-levels of my choice; the people there said that it would be a waste of time and that I should leave school and just go and get a job instead. What I did was get on the bus and go to the other side of Bristol to sign up at Filton Technical College. I am proud to call myself a graduate of FTC. The education I received there was second to none. Without Filton, I certainly would not be standing here today—so you can blame them if you wish I wasn’t.

Many opportunities were opened up by my time at Filton, but for years afterwards I would still see eyebrows raised and sneers barely supressed when I said that I had been to a technical college. For too long in this country there has simply not been parity of esteem between valuable technical education and more academic study. As Business Secretary, I began the process of changing that, including by creating the Institute of Apprenticeships. I am very pleased that the introduction of T-levels announced yesterday will continue that process.

We are following the work carried out by Lord Sainsbury, Baroness Wolf and other experts in this field to radically improve technical education, and in doing so we are investing an additional £500 million a year in our 16 to 19-year-olds. We will also be offering maintenance loans for those undertaking higher level technical qualifications at the new institutes of technology and national colleges.

Seema Malhotra Portrait Seema Malhotra
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Notwithstanding the challenges Labour has posed on the Budget, I welcome the T-levels and the emphasis on technical education. I think the Secretary of State will acknowledge that Labour Members have also argued for an increase in vocational education. This sends a very important message to the young people in my constituency who I talked to yesterday that there is great value in having this alternative. The challenge will be to integrate it well enough in the workplace so that it leads to real, skilled jobs in the future.

Sajid Javid Portrait Sajid Javid
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The hon. Lady rightly points to the challenge of ensuring that employers recognise the changes. Initiatives such as the new Institute of Apprenticeships, which is employer-led, will help to set the standards for the technical training. That will make a difference in ensuring that employers welcome the new qualifications.

The measures I have talked about so far will improve lives right across the country, but we recognise that local areas across Britain want greater control of their own services and infrastructure. The Government, the Greater London Authority and London Councils have reached an agreement on further devolution for our great capital city. This includes exploring a pilot for a development rights auction model and joint work to identify what elements of the criminal justice services can be delivered locally. We will also be agreeing a second health and social care memorandum of understanding to support work on prevention, integration and estates reform.

However, there is more to this country than its capital city. I should know: I was born in the north, raised in the south-west and elected in the midlands. Today, the Chancellor is in Dudley, launching our midlands engine strategy. This follows the northern powerhouse strategy published after the autumn statement.

Richard Burden Portrait Richard Burden (Birmingham, Northfield) (Lab)
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The Secretary of State and I are both midlands Members of Parliament. I welcome the focus on the midlands in the Budget. There are some useful initiatives in it. Would he care to comment on the strategy being brought forward today by Midlands Connect? It is charged with looking at the transport infrastructure side of delivering the midlands engine, and in particular at east-west connectivity, and it makes it clear that, for the midlands engine to work and deliver its potential, it will need a long-term perspective and investment of £1 billion per annum over a 30-year period. What confidence can we have that that long-term commitment will be given?

Sajid Javid Portrait Sajid Javid
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As a midlands MP, the hon. Gentleman will understand that the devolution deal for the region will lead to additional funding of more than £1 billion over the next 30 years, which can be invested in priorities such as transport infrastructure. I believe that the right leadership is in place, and that that is exactly what will happen. That is why I am supporting Andy Street to become the next Mayor, and I hope that the hon. Gentleman will join me in expressing his support for him. Perhaps that is what he was just doing.

The hon. Gentleman will also be pleased to hear that this morning we published details of £392 million of additional funding for the midlands, allocated through the third local growth fund. That money will further unlock the region’s potential, funding infrastructure and creating jobs. Much of it will go to Birmingham, for example. The Budget includes £90 million for the north and £23 million for the midlands from a £220 million fund that addresses pinch points on the national road network. The Chancellor has launched a £690 million competition for local authorities across England to tackle urban congestion and get local transport networks moving again. That is a serious investment in our communities that will make a real difference to the daily lives of millions of people and countless businesses. We can make that investment precisely because of the fair, progressive changes that we are making to the tax system. We are levelling the playing field between employees and the self-employed, and 60% of the self-employed—the lowest earners—will gain from these reforms. We are also continuing to reduce corporation tax on all profitable companies, large and small, so that hard-working entrepreneurs keep most of the fruits of their labours.

We are taking a number of steps to make business rates fairer. I have never made any secret of my support for business, and for small businesses in particular. Seeing my dad’s shop struggle was one of the reasons I came into politics in the first place. From the biggest cities to the smallest villages, the local high street and the local pub form the heart of countless communities across our country. That is why the Chancellor and I listened closely when concerns were raised over this year’s business rate revaluation, and why I was happy to work with colleagues across Government to secure action.

The majority of business will see no increase or even a fall in their business rates, but I know that if someone’s rates are going up, it is no consolation to hear that someone else’s will be going down. The bigger picture will not pay their bills, so the Budget introduces three new schemes that will help businesses facing steep rises. The first involves additional support aimed specifically at small and rural businesses that are losing some or all of their rate relief and are facing large percentage increases in their bills as a result. The additional relief will limit the annual increase in the bill for an eligible business to the greater of either £600 or the cap in increase for small properties in the existing transitional relief scheme. That is 5% in real terms in 2017-18. No small business losing some or all of its relief as a result of the revaluation should see its bills rise by more than £50 a month in 2017-18.

The second measure is the establishment of a £300 million discretionary fund for local authorities to use over the next four years. Each billing authority will receive a share of this funding and will be able to use it to deliver targeted support to the most hard-pressed ratepayers in its area. This will allow local authorities to more than double the amount they spend on discretionary relief in 2017-18. Finally, there is a new relief for pubs. This will provide a flat £1,000 discount in 2017-18 on bills for all pubs with a rateable value below £100,000. My Department will be publishing full details later, but up to 36,000 pubs—that is approximately 90% of them— could benefit from the relief. The cost of all three models will be met in full with new money allocated by central Government.

Recent consultations have shown little appetite for wholesale reform of the business rate system. However, there is scope to reform the revaluation process, making it smoother and more frequent to avoid the dramatic increases that the present system can deliver. We will set out our preferred approach to delivering this in due course, and will consult on it before the next revaluation is due. In the medium term, we need to find a better way of taxing the digital part of the economy so that online businesses do not enjoy an unfair advantage. This is another example of the way in which this Government deliver lasting reform alongside immediate investment. It is the difference between a sticking plaster and long-term cure.

Peter Bottomley Portrait Sir Peter Bottomley (Worthing West) (Con)
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The Chancellor has announced that there is to be a Green Paper on dealing with unfair clauses and terms in consumer contracts. I do not know whether the Secretary of State has been paying attention to the difficulties that leaseholders are facing, but will he ensure that, one way or another—preferably one way and another—those are taken into account, if necessary through a super-complaint, so that unfair terms can be struck out and those who exploit leaseholders can be dealt with firmly?

Sajid Javid Portrait Sajid Javid
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I commend my hon. Friend on the work that he has done on leasehold abuses. That Green Paper is being led by my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy, and we are considering whether leasehold abuses could be included in it.

We are not just putting billions of pounds more into adult social care; we are developing a whole new strategy to safeguard it for the long term. We are not just tackling the short-term problems created by the business rates revaluation; we are looking at ways to improve the system for many years to come. We are not just continuing to invest in world-class public services; we have also asked Sir Michael Barber to look at ways of making government more efficient so that we get maximum value for taxpayers’ money.

As we debate the Budget, let us not forget that every last penny invested by any Government ultimately comes from taxpayers—from hard-working employees and fast-growing businesses—and they can succeed only if we have a strong, stable, sustainable economy. Without that, there would be no NHS, no outstanding schools, no social care for the vulnerable and no support for small businesses. We have all seen what it looks like when Governments forget that. After 13 years of Labour rule, their Chief Secretary to the Treasury said that there was no money left.

The Leader of the Opposition stood at the Dispatch Box yesterday and made promise after promise. It was fantasy economics, with billions upon billions of pounds in unfunded and unaffordable measures that would undo in an instant everything the people of this country have worked so hard to achieve over the past seven years. We are cutting the tax burden on businesses; he wants to increase it. We are reducing the deficit; he wants to raise it. We want to borrow less; he wants to saddle our children with the bill for another reckless spending spree. Government Budgets are big, complicated things, but they are simple at their heart: if we want to spend more, we have to borrow more, tax more, or cut spending elsewhere. Anyone who says otherwise is not being straight with the British people. There is no such thing as a magic money tree. Sustainable public services can be funded only by sustainable growth. This Budget delivers both. The Opposition would give us neither.

Enterprise Bill [Lords]

Sajid Javid Excerpts
Wednesday 9th March 2016

(8 years, 2 months ago)

Commons Chamber
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John Bercow Portrait Mr Speaker
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I can now inform the House that I have completed certification of the Bill, as required by the Standing Order. I have made no change to the provisional certificate issued yesterday. Copies of my final certificate will be made available in the Vote Office and on the parliamentary website.

Under Standing Order No. 83M, consent motions are therefore required for the Bill to proceed. Copies of the motions are available in the Vote Office and on the parliamentary website, and they have been made available to Members in the Chamber. Does the Minister intend to move the consent motions?

John Bercow Portrait Mr Speaker
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I believe I have had the necessary nod. We must now under the relevant Standing Order forthwith resolve into the Legislative Grand Committee (England and Wales), and thereafter into the Legislative Grand Committee (England).

The House forthwith resolved itself into the Legislative Grand Committee (England and Wales) (Standing Order No. 83M).

[Mr Lindsay Hoyle in the Chair]

--- Later in debate ---
Sajid Javid Portrait Sajid Javid
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I beg to move, That the Bill be now read a Third time.

Businesses are Britain’s engine room. The success of our whole economy is built on the hard work and determination of the people who run and work for them. I will always back them, and I will always stand by them. That is why one of my first acts as Business Secretary was to introduce this Bill. [Interruption.]

Lindsay Hoyle Portrait Mr Deputy Speaker (Mr Lindsay Hoyle)
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Order. Can we have less noise while the Secretary of State is addressing the Chamber?

Sajid Javid Portrait Sajid Javid
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Thank you, Mr Deputy Speaker.

It is certainly an ambitious Bill that covers a lot of ground. During its passage through the House, it has grown to cover still more, adding to the benefits it will bring businesses right across the country. That would not have been possible without the dedication of the officials and Clerks here in Parliament and the officials back at my Department, so let me take this opportunity to thank them, on the record, for all their hard work.

Huge credit should also go to my ministerial colleagues, who have worked tirelessly to steer the Bill through the House Commons—the Minister for Small Business, Industry and Enterprise, the Minister for Skills and the Minister for Housing and Planning. They have all done a tremendous job, and I really cannot thank them enough. Finally, I would also like to thank the hon. Member for Wallasey (Ms Eagle), who on Second Reading found it in her heart to call one clause “entirely sensible”. She is not in her place at the moment, but coming from her, that was high praise indeed!

The result of today’s vote on Sunday trading is disappointing. Our amendment was about attracting more people to high streets, helping struggling local businesses and helping to secure jobs for hard-working people. It would have made a lot of difference to many businesses up and down the country.

I respect the views of hon. Members who supported the amendment as a matter of principle; I have full respect for that. However, I am extremely disappointed by the childish and hypocritical actions of SNP Members. They seek to deny English and Welsh shoppers the same freedoms that are enjoyed in Scotland, and although they are a party built on the principle of devolving powers from Whitehall, they deliberately stand in the way of a measure that does just that.

Andrew Percy Portrait Andrew Percy (Brigg and Goole) (Con)
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As someone who believes that people in England should have a measure of devolution in response to the devolution that exists in the rest of the country, I would like to ask my right hon. Friend to confirm what actually happened today—that irrespective of whether Sunday trading is a good thing or a bad thing, the majority of English Members of Parliament voted in support of giving our local communities and our local councils the right to decide this matter for themselves, yet they have been denied by MPs from a part of the United Kingdom that it would not have affected at all.

Sajid Javid Portrait Sajid Javid
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My hon. Friend is absolutely right. The SNP are only interested in creating headlines, not jobs, and my hon. Friend’s point is absolutely correct—a clear majority of English and Welsh MPs wanted to see this change, but it was denied by the SNP.

None Portrait Several hon. Members rose—
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Sajid Javid Portrait Sajid Javid
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I shall give way in a moment.

This shows that we were absolutely right when we warned during the election that if a weak Labour Government ever got into office, they would be propped up by an unprincipled SNP. That is why we must never let either of those parties get closer to power.

Angela Eagle Portrait Ms Angela Eagle
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I think the right hon. Gentleman should learn a bit of grace in defeat, because that is what the House likes. Will he confirm that these proposals did not fall under the EVEL or the WEVEL parts of our procedures, and will he also confirm that, having listened to the will of the House, this Government have no intention of bringing these Sunday trading proposals back before us?

Sajid Javid Portrait Sajid Javid
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Of course we always listen to the will of this House, but that does not take away from the fact that the majority of English and Welsh MPs wanted to see this change—this flexibility on Sunday trading that would have been a right for local authorities in England and Wales to enjoy in the same way as it is enjoyed in Scotland. It was denied because of the SNP.

Mark Field Portrait Mark Field
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I note the disappointment that the Secretary of State has shown in this regard, but I am afraid that it is not enough simply to blame the SNP. I accept that SNP Members have been opportunistic, but surely it shows the fundamental flaws in elements of the EVEL arrangements. Does not the fact that something that is essentially devolved did not fall under the EVEL framework suggest that we should look at the arrangements again rather than incurring the wrath of, and the attributing the blame to, the SNP for taking the opportunistic step that it did over this matter?

Sajid Javid Portrait Sajid Javid
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My right hon. Friend, as always, makes a very important point. He will know that EVEL did not apply because this change in Sunday trading was tied up with a plan to extend workers’ rights that would have applied throughout the UK, but we should reflect on what he says, because the people of England and Wales have been denied a change that would have put them on a par with what is currently practised in Scotland.

Tommy Sheppard Portrait Tommy Sheppard (Edinburgh East) (SNP)
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I apologise for the difficulties in which the SNP has placed the Government, but we were simply voting to defend the interests of our constituents, whose rights at work on a Sunday would have been affected by this Bill, and it is our right to do so. I ask the Secretary of State to stop harbouring this grievance against Scottish Members.

Sajid Javid Portrait Sajid Javid
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The hon. Gentleman should really be ashamed of his party’s performance today. He tries to hide behind a policy, but we know that the only thing the SNP was interested in today was headlines and denying the people of England and Wales a change that, as expressed in their MPs’ will, they clearly wanted to see. That is all the SNP was interested in.

Kevin Brennan Portrait Kevin Brennan (Cardiff West) (Lab)
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Will the Secretary of State give way?

Sajid Javid Portrait Sajid Javid
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I shall carry on for a while. Other Members will want to speak.

Of course, the Bill is about much more than just Sunday trading. It will create an institute for apprenticeships, which will help British businesses to develop the talent that they will need to compete in the years ahead; it supports our deregulation agenda, making it simpler to do business; it addresses the issue of business rates; it will help to release pub landlords from restrictive contracts; and it will give the Green Investment Bank the freedom and flexibility that it needs to grow.

I am particularly proud of the measure that will create a small business commissioner. I have seen for myself, too many times, how hard it is for a small business or sole trader to challenge a larger firm. I have seen how late payments, unfair charges and other obstacles may not just make it harder to do business, but actually drive companies to the wall. The creation of a small business commissioner will make a real difference in tackling such problems, and I am pleased to note that it has widespread support.

Wendy Morton Portrait Wendy Morton (Aldridge-Brownhills) (Con)
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Before I entered the House, I had more than 25 years of experience in a small business—in fact, a micro-business. I have previously drawn Members’ attention to my entry in the Register of Members’ Financial Interests. Does the Secretary of State agree that this is exactly the sort of thing that we should be doing for small businesses throughout the country, in order to tackle the real difficulties that they experience as a result of late payments?

Sajid Javid Portrait Sajid Javid
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I agree wholeheartedly with my hon. Friend. I think that the measure will make a huge difference. Small businesses are often held back from challenging larger firms, and I hope that it will give many of them the confidence that they need.

Kevin Brennan Portrait Kevin Brennan
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The Secretary of State said, and the Minister for Housing and Planning said earlier, that passing the amendment would mean the removal of workers’ rights. As I understand it, however, schedule 5 is still in the Bill following the vote, so the additional workers’ rights are there—and they should stay there, as well. Will the Secretary of State confirm that that is the case?

Sajid Javid Portrait Sajid Javid
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I can confirm that that is not the case. As the hon. Gentleman knows, the Government presented a package consisting of more flexibility for Sunday trading hours along with additional workers’ rights. Since that package has been rejected, there will be no additional rights, because they will be unnecessary.

Kevin Brennan Portrait Kevin Brennan
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On a point of order, Mr Speaker. I hope that it is a point of order. My understanding is that the passing of amendment 1 does not affect the presence of schedule 5, which is entitled “Sunday opening hours: rights of shop workers”, and that, as we send the Bill to the House of Lords, those workers’ rights are enshrined in it.

John Bercow Portrait Mr Speaker
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The short answer to the hon. Gentleman’s point of order is that the passage of amendment 1 does not affect the presence of the schedule in the Bill. As I am not an expert on legislative interpretation and impact, and it is not for me to speculate upon that, I will not, but I stand by—on, of course, the basis of advice, and my own study—the first part of my answer to the point of order. I have sought to give that information in a dispassionate way, responding to a factual inquiry with what I understand to be a factual response.

Sajid Javid Portrait Sajid Javid
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Thank you, Mr Speaker.

Last May I launched the Bill at an event in Bristol, the city where I grew up. It is the city where I saw, in my parents’ shop, the special values that are needed to build and run a business. This is a Bill for people who share those values. It does not matter whether they are behind a shop counter or behind the wheel of a van, or whether they are working in a high-rise office or from their kitchen table. If they are striving to do what my parents did—if they are working to build a business, to grow the economy and to create jobs—the Enterprise Bill will help them to do just that, and I commend it to the House.

Budget Resolutions and Economic Situation

Sajid Javid Excerpts
Tuesday 14th July 2015

(8 years, 10 months ago)

Commons Chamber
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Sajid Javid Portrait The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid)
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Last Wednesday, the Chancellor unveiled a one nation Budget with one aim in mind: security—the economic security of a country that lives within its means; the financial security of lower taxes and higher wages; and the national security of a Britain that defends itself and its values. Since then we have had almost a week of debate—a week of the Opposition trying and failing to pick holes and a week in which we have had the usual predictions of doom and disaster. It is a familiar story from Budget debates past. In June 2010, the then shadow Chancellor called our approach “a profound mistake” that ran the risk of “derailing the recovery”. Two years later, another shadow Chancellor said that our long-term economic plan had “failed”, although I should add that in the same speech, the former Member representing Morley and Outwood also warned that “after hubris comes nemesis”—a lesson he apparently failed to learn himself. Let us fast forward to 2015, and yet another shadow Chancellor said last week that

“this Budget made the wrong choices for working people”.—[Official Report, 9 July 2015; Vol. 598, c. 481.]

We have heard it all before.

Every year, the Opposition warn of catastrophe around the corner, yet every year Britain’s economy has got stronger. They said our policies would lead to mass unemployment, yet today more people are in work than ever before. They said that economic growth would be strangled; today, our economy is growing faster than any other in the G7. They said we could not bring down the deficit, yet today we are on course to have a surplus by the end of this Parliament. Even the most partisan critics can see that our economic plan is working. That is why, in May, the British people gave us a mandate to finish what we started, which is exactly what this Budget delivers.

David Anderson Portrait Mr David Anderson (Blaydon) (Lab)
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While I accept that it is part of political knockabout that the Government say one thing and the Opposition say another, does the Secretary of State agree with external groups such as Parkinson’s UK, which said that the change to welfare benefits will have a debilitating impact on people with Parkinson’s and will do them real harm? Does he think that is part of the political knockabout, or does he accept what it is saying?

Sajid Javid Portrait Sajid Javid
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What I accept is that we need a welfare system that protects the vulnerable and is affordable and sustainable for the long term. As we deal with excessive welfare spending, we are able to strengthen the economy, which means higher wages for working people. I hope that the hon. Gentleman can support that.

Geraint Davies Portrait Geraint Davies (Swansea West) (Lab/Co-op)
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Does the Secretary of State accept that child tax credits are, in fact, work incentives based on the American earned incomes tax credit, and that the reason the cost is so high at £30 billion is that productivity and wages are so low? In particular, there are 800,000 fewer people now earning over £20,000 than there were in 2010. Is that not a complete failure?

Sajid Javid Portrait Sajid Javid
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I think the hon. Gentleman would agree that it is better to have a sustainable welfare system that protects the vulnerable while at the same does not allow companies to get away with paying lower wages than they otherwise were. I hope he supports our national living wage, especially the fact that it means someone working at the national minimum wage today will get at least £5,000 more a year by 2020 because of our national living wage.

A business-led economy in which hard work is rewarded, entrepreneurs are encouraged and aspiration is applauded —that is at the heart of our Budget. Above all, it is a Budget that supports business. For all the rhetoric one hears from politicians, Governments do not create jobs; businesses do. As my right hon. Friend the Secretary of State for Work and Pensions said last week:

“It is only when businesses are thriving that the people of our country can thrive too.”—[Official Report, 9 July 2015; Vol. 598, c. 482.]

It is only a strong and growing economy that allows us to invest in the NHS and schools; and it is only a strong and growing economy that allows us to spend money on protecting our most vulnerable citizens. Anyone who is successful in business should be congratulated and not condemned.

Helen Whately Portrait Helen Whately (Faversham and Mid Kent) (Con)
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Does my right hon. Friend welcome, as I do, the introduction of a national living wage, which will increase the pay of the worst paid and help make work pay?

Sajid Javid Portrait Sajid Javid
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My hon. Friend is absolutely right. At the heart of the new national living wage is just what she says—it will mean working people earning even more, and it will go on to boost productivity, too.

Aggressive regressive policies that penalise honest labour have no place in the modern world. That is why we have already cut the main rate of corporation tax to 20%, rewarding productive companies and boosting UK competitiveness. It will now fall further to 19% in 2017 and just 18% in 2020, making it the lowest in the G20. More than a million businesses will see their tax bill fall as a result, allowing them to invest more in their staff and facilities.

That is not all. As corporation tax falls, tax allowances for growing businesses will rise. The annual investment allowance will be set at £200,000—its highest-ever permanent level, while the employment allowance will increase by £1,000 to £3,000, cutting employer national insurance contributions still further. By next year, businesses will be able to employ four people full time on the national living wage and pay no national insurance at all. By April next year, we will publish a business tax road map, setting out our plans for business taxes over this Parliament and giving employers the information they need to plan ahead.

From September 2017, working families with three and four-year-olds will receive 30 hours of free childcare—twice what they currently receive. This will help the parents themselves, but it will also get more skilled employees back in the workforce sooner—a real bonus for British business.

David Rutley Portrait David Rutley (Macclesfield) (Con)
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I welcome my right hon. Friend’s announcements. In tandem with the enterprise Bill and plans to review self-employment, does he agree that they will help boost the enterprise culture that we Government Members believe is vital to further the interests of our national economy?

Sajid Javid Portrait Sajid Javid
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I agree absolutely with my hon. Friend. Conservative Members have always understood the power and importance of enterprise, while Labour Members have never understood just how important it is to boosting our productivity and making sure that our economy keeps growing and creating jobs at a record rate.

Nia Griffith Portrait Nia Griffith (Llanelli) (Lab)
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The Secretary of State makes great play of the importance of long-term planning. We all understand its importance for business, so what would he say to the company near Chepstow that used to make wind turbines but is now facing closure because of the sudden change in policy by his Government? Is it not sad that this Government, which should be offering certainty to business, are not only changing policy willy-nilly, but leaving a really big question mark over the European Union that is making businesses very jumpy indeed?

Sajid Javid Portrait Sajid Javid
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No one wants to see any company close in Britain, and no one wants to see any of the job losses that would potentially come alongside that. What is most important when changes in the economy affect businesses is a growing economy so that businesses are growing at record rates. We have record high growth as a country among the G7, which is exactly the sort of environment we want so that other companies can continue to grow alongside.

The national living wage will put more money in customers’ pockets. This will deliver a real boost to businesses right across the country, as eight out of 10 people who will see their pay rise live outside London and the south-east of England. These measures will all support growing, dynamic businesses, as we work with them to tackle the economic challenge of our time.

Jonathan Reynolds Portrait Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
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The right hon. Gentleman has made an intellectual case for what he calls the national living wage, which most people would call a rise in the national minimum wage. Why did the Government not choose to bring in the national living wage? Surely the case he has made is for the national living wage.

Sajid Javid Portrait Sajid Javid
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Perhaps the hon. Gentleman missed last week’s Budget and what the Chancellor said. The Chancellor did introduce the national living wage. Of course it will be phased in over five years, but by 2020 it will be equal to at least 60% of median earnings. It is the national living wage.

Roger Mullin Portrait Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
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Will the right hon. Gentleman confirm the situation in Scotland for UK Government employees? Will they get his Government’s low national living wage or will they get the living wage that applies in Scotland, which is considerably higher?

Sajid Javid Portrait Sajid Javid
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People will be receiving the new national living wage, as set out by the Chancellor in his Budget. That is a huge step forward, raising the incomes of millions of people throughout Britain. At least 2.6 million people will benefit directly, and a further 6 million will also benefit. I am sure that the hon. Gentleman will join me in welcoming that.

David Anderson Portrait Mr Anderson
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The Secretary of State is being very generous. May I ask him what will be the living wage—his living wage—for under-25s and for under-21s?

Sajid Javid Portrait Sajid Javid
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As the hon. Gentleman may know, the new national living wage applies to those aged 25 or older. The statutory wages for younger age groups are already being set by the Low Pay Commission.

The economic challenge of our time is boosting Britain’s productivity. Britain is home to some of the world’s most dynamic businesses, staffed by incredibly talented, hard-working individuals, yet our productivity—the rate of output per hour worked—is well below its potential. Let me put this in stark terms. It now takes a worker in the United Kingdom five days to produce what his or her counterpart in France can deliver in four. There is encouraging news—the British automotive industry is among the most productive in the developed world, with a vehicle rolling off the production lines every 20 seconds—but by and large, in a situation familiar to fans of the England men’s football team, the country that invented modern industry has fallen behind its competitors, and the Germans in particular.

Jim Cunningham Portrait Mr Jim Cunningham (Coventry South) (Lab)
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What does the Secretary of State think we need to do in Britain to improve our productivity?

Sajid Javid Portrait Sajid Javid
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If the hon. Gentleman had joined me in Longbridge on Friday, he would have heard me set out the Government’s productivity plan, which I shall come to in a moment.

Productivity is not just some obscure measure that is of interest only to economists. Higher productivity means higher incomes. When productivity rises, standards of living rise too. That is why, as part of last week’s Budget, we published “Fixing the foundations: Creating a more prosperous nation”. It is our blueprint for getting Britain moving, building and growing, and creating the environment that is needed to tackle the productivity gap once and for all.

The productivity plan will support apprentices with a new compulsory apprenticeship levy that requires large businesses to invest in their own future. It will boost skills with a radical streamlining of further education qualifications and the creation of prestigious institutes of technology. It will support infrastructure, with vehicle excise duty paying for a new roads fund, and a plan to put Network Rail and the rail investment programme back on track. It will allow us to invest in innovation, putting nearly £7 billion into the UK’s resurgent infrastructure, and developing our network of Catapult centres for commercialising technology. It will make our world-class universities open to all, removing the student cap and putting higher education on a more sustainable footing. It will ensure that superfast broadband is available to 95% of UK households and businesses by 2017, and it will make it easier for the market to roll out fixed and mobile infrastructure by reforming planning rules on taller masts. It will mobilise the whole of Government behind exporting, working alongside a more effective UK Trade & Investment and building stronger links with emerging markets.

Geraint Davies Portrait Geraint Davies
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I am grateful to the Secretary of State for his generosity in giving way again. Why did the front page of The Economist sum up the Budget with the words “politically astute, economically flawed”? Why did its editorial observe that it was a result of quick fixing that focused not on productivity but on abandoning investment in the railways, not allowing enough easy access to universities, and not raising skill levels and improving infrastructure in order to make Britain strong?

Sajid Javid Portrait Sajid Javid
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Probably because The Economist was published before I launched the productivity plan on Friday.

The productivity plan will strip further red tape out of the planning system, making it easier to build the homes that British workers need. It will rebalance our economy, devolving further powers and responsibilities to the elected mayors of London and Manchester and working towards devolution deals with the west midlands, Sheffield, Liverpool, Leeds and West Yorkshire. It will create open and competitive markets with the minimum of regulation, an environment in which innovative businesses can thrive to the benefit of consumers.

The drivers of productivity are not a mystery; the barriers that prevent it are well understood. What has been lacking in this country for too long is the political will to do something about the problem by making the bold decisions that are necessary to unleash the full potential of British business. That is not lacking any more. This Government have the mandate and the will to deliver lasting change, and that is exactly what the Budget will do.

In the past few days, we have heard Labour’s former Chancellor say that his party lacks “a credible economic policy”. The Leader of the Opposition has attacked our changes in tax credits one day and supported them the next. We have heard the SNP’s economy spokesman, the hon. Member for Dundee East (Stewart Hosie), promise somehow to reduce the national debt while still running a deficit. On the Opposition Benches, economic competence is almost as rare as a Liberal Democrat Member.

Only this Government have the policies and the will to back British business. Only this Government have the foresight to invest in infrastructure and skills. Only this Government will build the homes that the country needs and the economy that it deserves. This Budget does not just fix the roof while the sun is shining. It fixes the foundations too, and I commend it to the House.