ECOFIN
Sajid Javid Excerpts(4 years, 5 months ago)
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The Chancellor of the Exchequer (Sajid Javid)
A meeting of the Economic and Financial Affairs Council (ECOFIN) will be held in Brussels on 8 November 2019. The UK will be represented by Mark Bowman (Director General, International Finance, HM Treasury). The Council will discuss the following:
Excise duties
The Council will be invited to agree the directive on general arrangements for excise duty (recast); the regulation on administrative co-operation of the content of electronic registers; and amendments to the directive on the structures of excise duty on alcohol.
VAT data from payment service providers
The Council will be invited to agree a general approach on amendments to the directive on the common system of VAT with regards to requirements for payment service providers; and the regulation on administrative cooperation in the field of VAT concerning measures to combat VAT fraud.
VAT treatment for small enterprises
The Council will be invited to agree amendments to the directive on the common system of VAT in regards to the special scheme for small enterprises.
Current financial services legislative proposals
The Finnish presidency will provide an update on current legislative proposals in the field of financial services.
European Central Bank—executive board member
The Council will be invited to adopt a recommendation to the European Council on the appointment of a new member of the executive board of the European Central Bank.
Digital taxation
The Council will be updated on the current state of play of digital taxation and will discuss the way forward.
European Fiscal Board report
The Council will be presented with the 2019 annual report of the European Fiscal Board.
EU statistical package
The Council will be invited to adopt Council conclusions on the EU statistical package and to review progress achieved.
Climate finance
The Council will be invited to adopt Council conclusions on climate finance for the COP25 climate summit.
Follow-up to international meetings
The presidency and Commission will inform the Council of the main outcomes of the G20 meeting of Finance Ministers and Central Bank Governors and the IMF and World Bank annual meetings held in October 2019.
Stable coins
As an AOB, the presidency will inform the Council about a joint statement on stable coins to be agreed at December ECOFIN.
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Work of the Department
Sajid Javid Excerpts(4 years, 5 months ago)
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The Chancellor of the Exchequer (Sajid Javid)
The fundamentals of the UK economy are strong, and the public finances have been repaired. Government action has supported the British people with the cost of living. Poverty and inequality have been reduced, ensuring everyone can benefit from the UK’s economic success. Investment has increased, promoting productivity, creating job opportunities and driving growth in the economy.
Since 2010, the hard work of the British people has: reduced the deficit by four fifths; created 1,000 new jobs a day to reach near-record employment; and overseen nine consecutive years of growth. The Government’s Brexit deal will give people and businesses the certainty they need to invest.
Economy and public finances
The economy has grown 18.9% since 2010. The IMF’s latest world economic outlook forecasts the UK to grow as fast as France, and faster than Germany, Italy and Japan in 2019 and faster than all four in 2020.
The inflation rate is stable and low at 1.7%, below the Bank of England’s target of 2%.
Borrowing has been cut by over four fifths as a share of GDP since 2010, from a post-war high of 10.2% in 2009-10 to 1.9% in 2018-19, the lowest level since 2001-02.
There are 3.6 million more people in work, and the employment rate is at a near record high.
Unemployment has fallen by 1.2 million. The unemployment rate is near its lowest level for over four decades.
The proportion of low paid jobs is at its lowest since records began in 1997.
The number of unemployed 16 to 24-year-olds has fallen by 47% since 2010, and over 80% of 16 to 24-year-olds are in work or full time education.
The gender pay gap, hourly pay, excluding overtime, is at a record low of 17.3%. For full-time employees, the gap is 8.9%, near the record low.
Over 60% of the growth in employment since 2010 has been outside of London and the south east.
The Government have committed more than £2.7 billion towards city and growth deals for all parts of Scotland, Wales and Northern Ireland.
This UK Government investment is creating jobs and driving regional economic growth across Scotland, Wales and Northern Ireland.
Supporting the cost of living
The Government have cut income tax for 32 million people since 2015-16, saving the typical basic rate taxpayer £380 and taking 1.74 million out of income tax altogether.
Supported by the national living wage (NLW), the lowest paid saw their wages grow by 8% above inflation between April 2015 and April 2018. The NLW increased by 4.9% on 1 April to £8.21, increasing a full-time minimum wage worker’s annual pay by over £2,750 since its introduction.
Fuel duty has been frozen for nine consecutive years, so the average driver will have saved a cumulative £1,000 compared to pre-2010 plans.
The introduction of a new temporary energy price cap on default standard variable tariffs this year has protected 11 million customers from poor value energy bills.
The doubling of free childcare for eligible working parents of three and four-year-olds which will save parents who take up full entitlement up to £5,000 a year per child.
Poverty and inequality have been reduced
Real household disposable income per person is above its pre-crisis peak, and it is 11.2% higher than at the start of 2010, meaning people have more money to spend than they did in 2010.
Income inequality is lower now than it was in 2010.
The top 1% of income taxpayers pay over 29% of income tax, higher than at any time since 1999.
Since 2010 there are, before housing costs:
400.000 fewer people in absolute low income.
100.000 fewer pensioners in absolute low income.
300.000 fewer working-age adults in absolute low income.
The percentage of people in absolute poverty, after housing costs, is around its record low.
Since 2010 there are over 1 million fewer workless households, and the number of children living in workless households is down by 730,000, both record lows.
Boosting productivity
Since 2010 the Government have:
Provided over half a trillion pounds in capital investment, investment in skills, and reduced taxes for businesses.
Established the national productivity investment fund (NPIF) to deliver additional capital spending for areas critical for improving productivity across all parts of the UK. The NPIF is now set to deliver £37 billion of high-value investment to 2023-24 in economic infrastructure, R and D, and housing.
Improved technical education by reforming apprenticeships and developing new T-levels for delivery from September 2020.
The Government have supported business and enterprise with lower taxes:
The UK has the most competitive corporation tax rate in the G20 at 19%.
Since Budget 2016, the Government have announced reductions to business rates worth more than £13 billion over the next five years.
Funding public services
Spending Round 2019 (SR19) saw the fastest planned increase in departmental day to day spending for 15 years. Resource spending is now set to rise by 4.1% in real terms from 2019-20 to 2020-21.
SR19 was the first SR since 2002 where no department will face a cut in its resource Budget.
SR19 funded:
An extra £750 million investment in policing in 2020-21 to begin delivering the Government’s commitment to recruit 20,000 additional officers by 2023, up to 6,000 officers will be in place by the end of 20-21;
Further health investment, building on the extra funding provided last year of £33.9 billion a year by 2023-24 in cash terms, compared to 2018-19, the largest cash increase in public services since the Second World War.
A cash increase in schools spending of £2.6 billion in 2020-21, rising to £7.1 billion in 2022-23, compared to 2019-20.
£400 million extra to train and teach 16 to 19-year-olds to get the skills they need for well-paid jobs in the modern economy.
To fund public services, the Government have taken unprecedented action to make sure people pay their fair share of tax. The Government have introduced over 100 measures to tackle tax avoidance, evasion and other forms of non-compliance since 2010 which, alongside HMRC’s compliance work, have secured and protected an additional £200 billion in tax revenue which would otherwise have gone unpaid.
[HCWS67]
The Economy
Sajid Javid Excerpts(4 years, 6 months ago)
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The Chancellor of the Exchequer (Sajid Javid)
I have been sitting here for the last 30 minutes or so listening to the shadow Chancellor, and I have to say, “The brass neck of the shadow Chancellor!” No mention of the jobs boom and rising wages; no mention of bringing the deficit down by four fifths; no mention of our huge investment in public services; and no support at all for this Queen’s Speech, which delivers on the people’s priorities and moves this country forward from a decade of recovery to a decade of renewal. It is a Queen’s Speech that backs our NHS with £34 billion a year of new investment by 2024, that backs law and order with 20,000 new police officers, that backs the next generation with £14 billion more funding so that every school has more money for every child, that takes great strides towards decarbonising our economy and that boosts our economic infrastructure, increasing investment in roads, railways and energy.
Sir Edward Davey (Kingston and Surbiton) (LD)
Will the Chancellor publish today an economic impact assessment—an assessment of the public finance impacts —of the Prime Minister’s hard-deal Brexit, and if he won’t, why not?
Sajid Javid
If the right hon. Gentleman bears with me, I will come on to that issue in just a moment.
We can only do all these things that I have just mentioned because of the strength of our economy and our commitment to fiscal responsibility, and because of the hard work of the British people over the last decade. We will not throw that away.
One of the most important measures in the Queen’s Speech is of course the withdrawal agreement Bill. Passing this Bill will allow us to get Brexit done, to focus on the people’s priorities and to move forward as a country.
And let me be clear about one thing: people said that we could not do it—they said that we would not be able to reopen the withdrawal agreement—and we did; they said that we would not be able to get rid of a backstop, and we did; they said that we would not be able to negotiate a better deal, and we did. And then they said that we would not get Parliament to support that deal, and, guess what, we did that too. They were wrong, wrong and wrong again, as they always are.
Let me address the issue raised by the right hon. Member for Kingston and Surbiton (Sir Edward Davey) and the shadow Chancellor about concerns expressed in this House about the impact assessment of the deal. What Parliament is being asked to vote on is the withdrawal agreement, which covers the deal on the budget, citizens’ rights and Northern Ireland. The Government have already provided and published a full impact assessment; it is a shame that the shadow Chancellor has not even bothered to look at it yet. The political declaration lays the groundwork for our future relationship, and with those final details still to be negotiated the only thing blocking us from getting on with Brexit is the Labour party and its disposition to dither and delay. Once we leave the EU we will start those talks, and of course we will keep Parliament fully informed at every stage of the process.
Susan Elan Jones (Clwyd South) (Lab)
I knew I had a sense of déjà vu when I heard the Chancellor speak, and I remember from when: it was from when I was a child listening to “Jackanory.” This is exactly the same: story time. The previous Prime Minister published a proper economic assessment of her Brexit deal; why will this current Prime Minister not do the same? For heaven’s sake, just answer the question.
Sajid Javid
The hon. Lady was a fan of “Jackanory”; now I know why she joined the Labour party. It is all fitting into place.
On that point, some Members may point to the economic analysis, as the hon. Lady has, that was published by the Government in November of last year, but that document looks at the possible economic impact of a generic average free trade agreement; it does not represent the ambitious free trade agreement that we have agreed. We have agreed with the EU that both parties will have a deep, best-in-class free trade agreement that is far more ambitious on things like data exchange, tariffs, energy and financial services, and none of those benefits are captured in the Government’s previous modelling. So it is clear that what we need to do is this: end the dither and delay and move forward as a country.
Ruth George (High Peak) (Lab)
The Chancellor said that the economic prosperity has been delivered by the hard work of the British people. Does he agree that that is the 14 million people who are now in poverty and the 4.5 million children who are living in poverty, and why is his Queen’s Speech silent on how to lift those people out of poverty and end what he calls their hard work?
Sajid Javid
I would think that, being a member of a party that is called the Labour party, the hon. Lady would understand that the best way out of poverty for anyone is a growing economy that creates jobs. Since 2010, there are over 1 million fewer workless households—a record low—there are 730,000 fewer children living in workless households, also a record low, and there are 50,000 fewer households where no member has ever worked.
Harriett Baldwin (West Worcestershire) (Con)
Will the Chancellor in his excellent speech also tell the House how much better off someone on low pay is, because, with the increases in the living wage and the increases in the tax-free threshold, households are taking home much more, particularly the lowest paid?
Sajid Javid
I am pleased that my hon. Friend has raised that, because it allows me to remind the House that since 2010, because of the actions that we have taken, including the rise in the minimum wage and tax cuts, the average person working full-time on the minimum wage is around £3,500 better off a year—that is because of actions we have taken.
Our relationship with the EU is a critically important factor affecting the UK economy, but it is of course not the only one. Unlike the Labour party, we will never talk down Britain’s economy. The shadow Chancellor has predicted a recession almost every year since we came into office, as he was doing just a moment ago—he does it all the time—but the underlying fundamentals of our economy are incredibly strong: nine years of growth; a healthy labour market with the lowest unemployment rate this country has seen in 45 years; low and stable inflation; and an attractive environment for foreign investment.
So I am optimistic about the future, but I am not complacent. We need to prepare our economy to seize the opportunities of leaving the EU, and that is why we are putting to the House the programme in this Queen’s Speech.
Tom Tugendhat
My right hon. Friend has already addressed one issue in looking at the impact assessments of various plans. Has he done an impact assessment of what the implications of borrowing £200 billion would be on the British economy—what it would do to future investment and future pensions, and what it would actually do to the working people of this country and how it would destroy their futures?
Sajid Javid
Even my nine-year-old daughter could do that impact assessment; she would not even need a calculator. It would crash the economy, like every Labour Government do.
Ben Bradley
My hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) has somewhat stolen my thunder. There is a lot of talk about economic impact assessments, but what about rising income tax, rising corporation tax, death duties, taxes on flights and holidays, and voting against nearly £10,000 of tax cuts in this place under this Government? That is the shadow Chancellor’s Policy. What is my right hon. Friend the Chancellor’s economic impact assessment of what that would do to the pockets of my constituents?
Sajid Javid
I will come on to just that, and I thank my hon. Friend for reminding us; we know the impact of that would be again to crash our economy.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
The Chancellor knows that under the British Government’s Brexit plans, the no-deal cliff-edge would only move to the end of phase 2. So if we do get to his Budget statement on 6 November, can we ask the Office for Budget Responsibility to give us some analysis of what that would mean for the British economy?
Sajid Javid
First, there is no no-deal cliff-edge. If the hon. Gentleman wants to have a smooth exit from the EU, he knows what to do—vote for the deal and support the Government’s programme motion.
Sajid Javid
Sound public finances are the foundation of economic prosperity and strong public services, and we have come a long way since 2010. We inherited a deficit of 10% of GDP. At that time, that was the biggest Budget deficit of any advanced economy. It was equivalent to borrowing £5,000 every single second.
Sajid Javid
The hon. Gentleman says we caused it. That was what was in place when Labour were in office —£5,000 every second. Let us address that point. [Interruption.]
Sajid Javid
I think what the hon. Gentleman wants to hear is the point I am going to make next, because I think he wants to be reminded that the whole economy was scarred by Labour’s great recession. It gave us the biggest banking crash, not just in British history, but in global history. [Interruption.] The shadow Minister, the hon. Member for Oxford East (Anneliese Dodds), from a sedentary position, asks why; let me tell her why. The shadow Chancellor—[Interruption.] Let me explain. The shadow Chancellor referred to the work of Gordon Brown as though Gordon Brown did some good things. Gordon Brown was the Labour Chancellor that deregulated the banking and financial sector, and—[Interruption.]
Madam Deputy Speaker
Order. It is a very important debate, but I do not want the Chancellor of the Exchequer to be shouted down.
Sajid Javid
As I was saying, Gordon Brown, as Chancellor in 1997, boasted about deregulating the banks and the financial sector. At the time, he was warned by the then shadow Chancellor—the Conservative shadow Chancellor—Peter Lilley, that deregulation would
“cause regulators to take their eye off the ball”—[Official Report, 1 November 1997; Vol. 300, c. 731-2]—
and that it would be a field day for spivs and crooks everywhere. That is what he said, in this House, and during Labour’s term in office, bank leverage rocketed from an average of 20 before they came to office to an average of 50 times during their entire time in office. Labour was responsible for the biggest banking crash in global history, and they had better get used to it.
Sajid Javid
I will give way when I have made some progress.
We have turned the economy and the public finances around, and I am not prepared at all to throw away that hard work. The Queen’s Speech puts fiscal responsibility at the heart of our plans, with a clear commitment to ensuring that we keep control of borrowing and debt. I will set out our detailed plans in the Budget.
Rushanara Ali (Bethnal Green and Bow) (Lab)
I just want to highlight the brass neck of the Chancellor, having worked in the banking sector, not to accept that it is the banking crisis—the clue is in the name. He then came into Parliament and presided over dreadful, drastic cuts on our constituents—police cuts, school cuts; the list goes on. Now he has the brass neck to say that it is all going to be fine—that we can have our cake and eat it. Having damaged people’s lives, he should take responsibility before he starts attacking the Labour party.
Sajid Javid
Now, I know the hon. Lady has to say those things, because I think she is applying for a job as well, but she knows that when she became an MP, in the same year as I did, the deficit that the new Government inherited was 10% of GDP. She talks again about the banking crisis. She has to ask herself: why did Britain have the biggest banking crisis in global history? The answer is, because of the Labour Government.
Sajid Javid
I give way to my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake).
Kevin Hollinrake
One of the worst effects of the banking crisis was the impact that it had on many thousands of small and medium-sized enterprises in this country, who lost their livelihoods and sometimes their homes. The Business Banking Resolution Service, which has been set up to deal with historic complaints, is excluding many people on very tight eligibility criteria, which I regard as unfair, as someone who sits on that steering group. I believe it requires the intervention of the Chancellor to get UK Finance to come to the table, to be fairer about those eligibility criteria. Will he commit to do that?
Sajid Javid
Look, first I commend my hon. Friend for all the work that he has done, and continues to do, to support small businesses throughout the country. He has raised an important issue. He knows that work is ongoing to address that, but I would be happy to meet him and discuss it further.
Kirstene Hair (Angus) (Con)
Is it not because of the hard work of this UK Government to balance the economy that we are spending more in the devolved nations, with an extra £1.2 billion for Scotland in the latest spending review? Does he agree that that is in stark contrast to the shadow Chancellor, who would enable a second independence referendum in Scotland on a whim, despite the will of the Scottish people, who do not want that referendum, despite the economic damage that that would cause, and despite the fact that he used to belong to a Unionist party?
Sajid Javid
My hon. Friend is absolutely right. In fact, the SNP’s obsession with another damaging referendum on independence is already hitting growth in Scotland, and that is why Scotland is lagging behind in growth terms compared with any other part of the UK.
Sajid Javid
I will make some progress and then I will give way.
I want to contrast our approach with that of Labour Front Benchers, who have demanded higher borrowing and higher taxes at every Budget and Queen’s Speech for the past 40-odd years. Their tax rises would hit hard-working families, and they will not be clear on that. Their tax avoidance plans contain a £2.5 billion mistake, and that is according to the Institute for Fiscal Studies. Their spending promises would cost far more than they say. Their manifesto contained £1 trillion of spending commitments. For the shadow Chancellor’s benefit, let me say that that is £1,000 billion of spending commitments. They have not costed expensive promises such as renationalisation, and they have made dozens of unfunded promises since the last election. And you know what is even worse than that? The shadow Chancellor has admitted that the huge borrowing plans that he has are just “the first step”—he means the first step back to the road of ruin.
Matt Rodda
I wonder whether the Chancellor remembers the following statement, which is from his own website; it is still there today:
“The only thing leaving the EU guarantees is a lost decade for British business”.
Perhaps he would like to comment on that.
Sajid Javid
I will comment on that because, probably like the hon. Gentleman, I campaigned for remain, and I lost the argument; but I am a democrat, unlike the hon. Gentleman.
Mark Pritchard (The Wrekin) (Con)
I am glad to report that Shropshire has the lowest unemployment in its history. In fact nationally, as the Chancellor knows, there are over 1 million vacancies, which in itself raises a challenge for the Government as a result of their own success. As we discuss the points-based migration system with colleagues across government, given that many vacancies in Shropshire need to be filled in agriculture, in the NHS and in manufacturing, can we ensure that we still secure the very best and brightest for our jobs market not only domestically, but from the international community—Commonwealth, non-Commonwealth and the EU?
Sajid Javid
Yes, I agree with my hon. Friend. When I address amendment (h), I will say a bit more about that.
Sajid Javid
I will make some progress.
There are some who would have us abandon fiscal responsibility altogether, and to those people I say this: it is only because of the hard work of the British people that we can now afford to invest more, and that is what we are doing when we kick-start a decade of renewal in this country. Our top priority is economic infrastructure. High-quality and reliable infrastructure is essential to how we live, work and travel. The UK is the fifth-largest economy in the world, and it is not good enough that we have fallen so far behind other nations on infrastructure, so we are going to fix that. I can therefore confirm today that our national infrastructure strategy will be published at the Budget. That strategy will deliver better transport, faster broadband and wider mobile coverage. It will level up every region and nation of this great United Kingdom and deliver an infrastructure revolution. The strategy will take great strides for the decarbonisation of our economy, which is one of this country’s most important challenges, by building on our record as the first major economy in the world to legislate for net zero by 2050.
Eddie Hughes (Walsall North) (Con)
I thank the Chancellor for responding so positively to a joint campaign by me and Andy Street, the Mayor of the West Midlands, for funding to open two additional train stations in Walsall, including one in Willenhall in my constituency. I thank the Chancellor for that money.
Sajid Javid
That is exactly what I mean when I talk about levelling up the economy and ensuring that all parts of our great nation are benefiting from the infra- structure revolution.
Tim Farron
The Chancellor is being generous in giving way. As taxpayers, the British people collectively bailed out the banks a decade ago, and the banks have repaid taxpayers by closing down branches on every high street and in every village in the country. Just in the past two weeks, we have seen Barclays withdraw from the scheme that underpinned the Post Office, which now does its work for it. Will he stand up to Barclays and demand that it remains part of that Post Office scheme?
Sajid Javid
I agree with the hon. Gentleman that the banks should think carefully about their responsibilities to all communities, and the Economic Secretary to the Treasury met the chief executive of Barclays just today to discuss that very issue.
Luke Graham (Ochil and South Perthshire) (Con)
I welcome my right hon. Friend’s announcements on infrastructure and broadband, which will also apply to Scotland. Will he also confirm that we were spending around £20 billion more on interest payments when the Conservatives and Liberal Democrats came into government? Those interest payments were going to international bondholders, so the friends of the international bankers and financiers are, in fact, in the Labour party, not the Conservatives.
Sajid Javid
My hon. Friend is right. A Labour Chancellor deregulated banking and created a light-touch system, and we all paid the price.
I want to compare my approach to infrastructure with Labour’s. I am going to invest in new infrastructure that will grow the economy. Labour would borrow hundreds of billions to renationalise productive assets and then run them into the ground. I want to unleash all the talent and expertise of the private sector. Labour says—I quote the shadow Chancellor here—that business is the “enemy” and would tax it into submission. I will do all my work within a careful and credible fiscal framework; Labour would simply waste the money just like last time.
Clive Efford
There is a real credibility gap in what the Chancellor is saying, because if austerity was the right thing to do in 2010, why is it not still the right thing to do now, given that debt has doubled to £1.8 trillion or 80% of GDP? How can we believe that the Government intend to go on this huge spending spree when they have been doing quite the opposite to try to tackle the problem? The Chancellor is keen on quoting the Institute for Fiscal Studies, but it predicts that we will need another dose of austerity if he carries on. This economy needs investment, not the austerity that the Government are planning.
Sajid Javid
First, the IFS does not predict that at all, so the Gentleman should check his facts. Secondly, I gently point out to him that debt is brought under control by controlling borrowing. Borrowing is the deficit, and the deficit was what the Labour party left at 10% of GDP, but it is now four fifths less than that. Controlling borrowing is how we bring debt under control.
Better infrastructure and fiscal responsibility will enable our future economic growth, but so will trade. Ninety per cent. of future global economic growth is estimated to be outside Europe, with more than a quarter coming from China alone. Britain has always been an open country that believes in free trade. British businesses have strong trading relationships around the world. The new deal that we have agreed with the EU will allow us to have an independent trade policy and to strike new trade agreements with countries around the world, and the new trade Bill will put that into practice. Let me compare that with Labour’s position on trade. Labour would lock us into the EU customs union, ending any chance of an independent trade policy. How did Labour’s head of trade policy describe Labour’s views? He said:
“We reject the whole principle of free trade.”
Our support for free trade is not the only thing that marks Britain out on the global stage. Our remarkable financial services sector, which is now back to good health, does so, too. It is not just the City of London; our financial services sector involves the entire UK. All our financial and professional services firms truly are a national asset, employing more than a million people and contributing more than £130 billion to our economy every year. The financial services legislation that we brought forward in the Queen’s Speech will maintain and enhance our position as a world-leading financial centre after we leave the EU.
This Queen’s Speech gets Brexit done, invests more to grow the economy and delivers on the people’s priorities: action on infrastructure, trade and financial services, and a new economic plan for a new decade of renewal.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I am sure that the Chancellor is correct that some parts of the economy will benefit from a number of the changes, but other parts of the economy, particularly in the north-east, will be heavily damaged by the plans that he is outlining and that are outlined in the deal. The north-east exports over 60% of its goods to the EU, and hurting that relationship will be hugely damaging to our region. He does not seem to be taking any account of the disparate regional impacts around the country.
Sajid Javid
I do not accept the hon. Lady’s analysis. Once we leave the EU with the close economic partnership that is set out in the political declaration, our economy will continue to be one of the strongest in the world, unleashing many new opportunities for all parts of our country, including the north-east.
Turning to the amendment tabled by the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), let me be clear about one thing: Britain will always be an open, global, outward-looking country. I am proud of living in a country as diverse as this one. We have dropped arbitrary immigration targets and recently announced new highly flexible fast-track visas for scientists; none of that will change as we leave the EU. We will continue to welcome the best and the brightest from across the world. I therefore urge all hon. Members to vote against amendment (h) because it is important that we end free movement as we regain control of our borders.
I turn now to the shadow Chancellor’s amendment. There are no mainstream parties in the developed world with an economic agenda as extreme as the one now proposed by Labour. There is no tax that the Labour party would not hike, there is no business that it would not nationalise, and there is no strike that it would not support. Instead of embracing the future, the shadow Chancellor demands that we turn back the clock on progress. He claims that 95% of people would face no income tax hikes under Labour, but then proposes more than 20 new tax hikes. He claims that he would protect pensioners, but tell that to the millions whose pensions will be smashed by Labour’s threats to renationalise vast swathes of the economy without any proper compensation. He told businesses he had nothing up his sleeve, but then he announced plans to confiscate £300 billion of shares from private investors in the biggest state raid this country will ever see.
The shadow Chancellor has never worked in a business. He does not get business. He even refuses to name a single business that he admires. And guess what? He calls business the real enemy. Given his threats to hike taxes, to renationalise businesses and to load them up with new bills and regulations, I am pretty sure the feeling is mutual.
We have even heard Labour officials suggesting—I am not making this up—the nationalisation of travel agents. It will be free trips to Havana for Labour Front Benchers, and perhaps a ticket to Siberia for the hon. Member for West Bromwich East (Tom Watson). The simple truth is that Labour is not fit to govern. It would wreck the economy and hard-working families would pay the price, just like last time.
These are the fundamental dividing lines in British politics today. We will raise wages; Labour will raise taxes. We will back business; it will smash business. We will get Brexit done; it will dither and delay. A Conservative party that believes in free enterprise and that will get Brexit done and deliver the change people want; or an anti-aspiration, anti-business Labour party led by a pair who would wreck the economy, cancel the referendum and leave Britain less secure and less safe.
I know the shadow Chancellor is a fan of the little red book, but these days he is less Chairman Mao and more Colonel Sanders—too chicken to face an election. Let us back this deal; let us back this Queen’s Speech; and let us have a general election. I commend the Queen’s Speech to the House.
ECOFIN
Sajid Javid Excerpts(4 years, 6 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Sajid Javid)
A meeting of the Economic and Financial Affairs Council (ECOFIN) was held in Luxembourg on 10 October 2019. The UK was represented by Mark Bowman (director general, International Finance, HM Treasury). The Council discussed the following:
Budgetary instrument for convergence and competitiveness for the euro area
The European Commission presented the governance framework on the budgetary instrument for convergence and competitiveness for the euro area.
Current financial services legislative proposals
The Finnish presidency provided an update on current legislative proposals in the field of financial services.
European Court of Auditors’ annual report
The President of the Court of Auditors presented the auditors’ report on the implementation of the budget of the European Union for the 2018 financial year.
The European financial architecture for development
The chair of the high-level group of wise persons on the European financial architecture for development presented the main findings of their report to the Council. This was followed by an exchange of views.
Implementation of the anti-money laundering (AML) action plan
The Council held an exchange of views on the progress made in implementing the AML action plan to consider the future strategic priorities in this area.
Anti-money laundering directive: policy towards “high-risk third countries”
The Council held an exchange of views on the policy towards AML-related “high-risk third countries”.
European semester 2019 - lessons learnt
The Council held an exchange of views on lessons learnt from the European semester 2019.
Preparation of the G20 meeting of Finance Ministers and central bank governors and of the IMF annual meetings
The Council approved the EU’s G20 terms of reference and international monetary and financial committee statement, ahead of the annual meetings in Washington DC.
Coalition of Finance Ministers for climate action
The Finnish presidency presented the state of play of the coalition of Finance Ministers for climate action.
Appointment of a member of the executive board of the European Central Bank
The Council adopted a recommendation to the European Council on the appointment of a new member of the executive board of the European Central Bank.
Capital markets union
The Commission informed the Council on its plans on the capital markets union and the presidency outlined the next steps.
Status of the implementation of financial services legislation
The Council took stock of the status of the implementation of financial services legislation.
[HCWS30]
ECOFIN
Sajid Javid Excerpts(4 years, 6 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Sajid Javid)
A meeting of the Economic and Financial Affairs Council (ECOFIN) will be held in Luxembourg on 10 October 2019. The Council will discuss the following:
Budgetary instrument for convergence and competitiveness for the Euro area.
The European Commission will present the governance framework on the budgetary instrument for convergence and competitiveness for the euro area.
Current financial services legislative proposals.
The Finnish presidency will provide an update on current legislative proposals in the field of financial services.
European Court of Auditors’ annual report.
The President of the Court of Auditors will present the auditors’ report on the implementation of the budget of the European Union for the 2018 financial year.
The European financial architecture for development.
The chair of the high-level group of wise persons on the European financial architecture for development will present the main findings of their report to the Council. This will be followed by an exchange of views.
Implementation of the anti-money laundering (AML) action plan.
The Council will hold an exchange of views on the progress made in implementing the AML action plan and consider the future strategic priorities in this area.
Anti-money laundering directive: policy towards “high-risk third countries”.
The Council will hold an exchange of views on the policy towards AML-related “high-risk third countries”.
European semester 2019—lessons learnt.
The Council will hold an exchange of views on lessons learnt from the European semester 2019.
Preparation of the G20 meeting of Finance Ministers and central bank governors and of the IMF annual meetings.
The Council will be invited to approve the EU’s G20 terms of reference and international monetary and financial committee statement, ahead of the annual meetings in Washington DC.
Coalition of Finance Ministers for climate action.
The Finnish will present the state of play of the Coalition of Finance Ministers for Climate Action.
Appointment of a member of the executive board of the European Central Bank.
The Council will be invited to adopt a recommendation to the European Council on the appointment of a new member of the executive board of the European Central Bank.
Capital Markets Union.
The Commission will inform the Council on its plans on the capital markets union and the presidency will outline next steps.
Status of the implementation of financial services legislation.
The Council will take stock of the status of the implementation of financial services legislation.
[HCWS1857]
Oral Answers to Questions
Sajid Javid Excerpts(4 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Helen Hayes (Dulwich and West Norwood) (Lab)
The Chancellor of the Exchequer (Sajid Javid)
We would prefer to leave with a deal, and we continue to work energetically and determinedly to get a better deal, but the Government are turbo charging their preparations to ensure we are ready to leave without a deal on 31 October. All necessary funds have been made available. The fundamentals of the British economy are strong: real wages are growing; employment is at a record high; and unemployment is at an historic low.
Rushanara Ali
The Government’s Yellowhammer document, or base case scenario, states that there will be job losses, that food supplies will decrease and that financial services and law enforcement data and information sharing will be disrupted. Last night, we heard about customs clearance zones in Ireland and Northern Ireland, and the Brexit Secretary has admitted that there is insufficient time to complete the work. The Government spent £100 million on a PR campaign called “Get Ready for Brexit”. Is it not time that the Chancellor admitted that the Government are far from ready for Brexit and instead are heading for causing chaos in our country?
Sajid Javid
The hon. Lady will appreciate that the uncertainty around Brexit has caused businesses significant concern. They want to see the Government deliver Brexit and leave on 31 October, and that is what we will do. Significant preparations have been made for a no deal, including trade agreements reached, increases in personnel at Border Force and more than 600 statutory instruments laid in this Parliament. If she wants to help, she should support the Government in getting a deal.
Helen Hayes
There is evidence of a rise in short positions being taken out against the pound. Is the Chancellor confident that the hedge funds taking those short positions, some of which donated to the Prime Minister’s leadership campaign and the Conservative party, have no inside information about the planning or timing of a no-deal Brexit?
Mr Philip Hollobone (Kettering) (Con)
If we leave the EU without an agreement, do we get to keep the £39 billion?
Sajid Javid
The figure of £39 billion is based on a deal. If we end up leaving with no deal, that £39 billion number is no longer relevant.
Charlie Elphicke (Dover) (Ind)
Is the Chancellor aware that the chief executive of the port of Dover has said that we are 100% ready to leave the EU, and will he help that readiness by bringing forward plans to dual the A2 to the port of Dover?
Sajid Javid
I thank my hon. Friend for drawing the House’s attention to this issue. I am aware of that. I know, for example, that the investment the Government have made through Border Force, including the extra officers, is helping, and I am confident that in all circumstances we can keep trade flowing.
David Linden (Glasgow East) (SNP)
Sajid Javid
We do not know that at all. That is just scaremongering from the Scottish National party. We know that businesses throughout the UK, including in Scotland, want this uncertainty to end and want us to leave on 31 October.
John Stevenson (Carlisle) (Con)
Does the Chancellor agree that if we were to leave with no deal, there could be a potential economic impact on our European partners and that therefore it is as much in the EU’s interests to reach a deal as it is in ours?
Sajid Javid
My hon. Friend has made an important point: it is in everyone’s interests—ours and our European friends and partners—that we reach a deal. Intensive negotiations are going on, both with the Irish Government and with other European partners, and there is a very strong recognition that it is in all our interests that we reach a deal.
Sir Edward Davey (Kingston and Surbiton) (LD)
Is the Chancellor aware that the Office for Budget Responsibility’s alarming fiscal analysis of a no-deal Brexit assumes that the Government’s preparations are successful—and so result in a miraculously benign no-deal Brexit—and that even with this least-damaging no-deal Brexit the OBR predicts a hit to Britain’s finances that would destroy every single spending announcement by the Prime Minister and the Chancellor? Given that, is it not unacceptable for a Chancellor in a Government publicly contemplating a no-deal Brexit to fail to tell the truth to the British public that spending on health, schools and police will be slashed in the event of a no-deal Brexit?
Sajid Javid
First, I do not recognise that picture at all. It has been made up by the Liberal Democrats. Secondly, the right hon. Gentleman talks about what is unacceptable. What is unacceptable is for the Liberal Democrats to pretend that the referendum on the European Union never happened.
Kirsty Blackman (Aberdeen North) (SNP)
We have heard in the media today that the UK Government will have proposals ready to send to the EU by the end of the Tory conference this week. The Prime Minister’s main negotiating strategy seems to be to convince the EU that we are willing to accept no deal, and hope that it will capitulate at the last minute. Can the Chancellor name one occasion on which the EU has folded at the last minute in international negotiations?
Sajid Javid
Can the hon. Lady name a single negotiation in which we have not had the ability to walk away, out of the room?
Kirsty Blackman
These are supposed to be questions to the Chancellor, not to me.
Businesses are not ready for a no-deal Brexit. They are already losing EU workers, and are closing down as a result. In a no-deal Brexit, they will be hit by tariffs, and many more of them will sink as a result of that. People will lose their jobs. Given that there is now less than a month until Brexit day, does the Chancellor really believe that there is time to negotiate a deal? If not, will he ensure that the Prime Minister respects the law and requests an extension?
Sajid Javid
Significant work is going on to prepare the whole country for a potential no-deal outcome, and that includes helping businesses. I have allocated an additional £2.1 billion on top of the £2 billion that was already there, and that means that we can do much more to help businesses, including sending them more than 750 communications on preparedness and more than 100 technical notices.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
The Government’s current policy is that we can have higher public spending, falling debt and a no-deal Brexit, but those three things are impossible to deliver together, so on which of them are the Government not telling the truth?
Sajid Javid
The Government are focused on leaving the European Union on 31 October. We are trying to do that with a deal, but if we do not, we will leave with no deal. The hon. Gentleman talks about the Government’s policy. At least this Government have a clear policy on Brexit; what is the policy of the Labour party?
Mr Peter Bone (Wellingborough) (Con)
Alison Thewliss (Glasgow Central) (SNP)
The Chancellor of the Exchequer (Sajid Javid)
The recent spending round has delivered the fastest real growth in day-to-day spending in 15 years, targeting additional money on the people’s priorities of healthcare, education and tackling crime. We will publish alongside the next Budget an analysis of how these spending changes are distributed.
Alison Thewliss
We on the SNP Benches welcome the Chancellor’s announcement on his pretendy living wage, because we have been calling for it for four years, but his promises still fall 5p short of the London living wage today, never mind in 2024. A 16-year-old today would have to wait five years to be entitled to it. Will he end the state-sanctioned age discrimination of his pretendy living wage, so that all people, regardless of age, can receive a fair day’s pay for a fair day’s work?
Sajid Javid
I welcome the hon. Lady’s support. It was this Government who introduced a national living wage in 2016. It was this Government who increased the rate, as recently as April this year. The announcement that we have made, which I will have more to say about later, will help to end—actually will end—low pay for good in our great country.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
The best way to improve living standards is to reduce tax burdens. Does the Chancellor share my concern that anyone in Scotland earning more than £27,000 is paying more than the equivalent English taxpayer, and that more than 1 million Scots are paying £500 million in extra taxation?
Sajid Javid
I believe the First Minister actually promised not to raise taxes, but in fact the SNP has raised taxes on more than 1 million Scots. Doctors, teachers and police are all paying more in Scotland than in any other part of the UK. Scotland is now the highest-taxed part of the UK, and the Scottish people will remember that at the next Scottish elections.
Chris Evans (Islwyn) (Lab/Co-op)
Since this Government came to power, they have relied heavily on monetary policy. The Chancellor of the Exchequer will know that quantitative easing and interest rates have now been cut to the bone. Is he concerned by noises coming from the Bank of England that interest rates could rise, and the effect that that would have on heavily indebted middle-income families?
Sajid Javid
The hon. Gentleman should know that the Bank of England is independent, and therefore monetary policy decisions are independent. I know that his friends on the Opposition Front Bench do not recognise or respect that, but it is a very important part of our economic system.
Sir Mike Penning (Hemel Hempstead) (Con)
The Chancellor will know that one of the Government’s fiscal policies that is fundamentally wrong is the loan charge retrospective taxes on our constituents. Whether it is one death, no deaths or seven deaths, families are being destroyed because of the retrospective charge. Surely we should put a stop to it now.
Mr Speaker
Order. The matter in hand is the effect of fiscal policies on living standards.
Sajid Javid
Well, it is fiscal policy, Mr Speaker, in the interests of my right hon. Friend, and he is right to raise the matter. He will have heard the Financial Secretary to the Treasury, in answer to the previous question, point to the independent inquiry that is taking place, led by a gentleman who has considerable respect. We will await the outcome of that inquiry.
Peter Dowd (Bootle) (Lab)
The effects of the Government’s fiscal policies on living standards have been devastating, especially for vulnerable people, so is it still Government policy to remove the benefits freeze in April 2020?
Sajid Javid
The hon. Gentleman talks about the Government’s fiscal policy, which is a core part of our overall economic policy, and it is that policy that has led to a jobs boom, with 3.7 million more people in work since 2010, and over 1 million fewer working households in our country living in poverty. The real threat to the living standards of working people is the agenda of the Labour party.
Peter Dowd
It would have been helpful to get an answer to the question. We have a Prime Minister who cannot be candid even with the Queen, a Health Secretary who claims there will be 40 hospital rebuilds when in fact it is just six reconfigurations, and a Chancellor who worked at a senior level for a bank that a US Senate Committee found had caused
“material damage to ordinary people and the wider global economy”.
Why would anyone believe a word that this self-serving Government say? They are led by a Prime Minister who, many claim, believes that telling the truth is an illness to be avoided.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
Neil Coyle (Bermondsey and Old Southwark) (Lab)
The Chancellor of the Exchequer (Sajid Javid)
The Government remain committed to ending rough sleeping. That is why I announced £54 million of new funding to reduce homelessness and rough sleeping in last month’s spending round, following on from discussions with my right hon. Friend the Housing Secretary, which will take total resource funding to £422 million next year.
Neil Coyle
It has been revealed today that two rough sleepers died on the streets every day last year. The Government committed to halving rough sleeping by 2022, but their own guesstimate is that it fell by only 74 people last year, not the 500 required for them to be on target. That puts them three decades behind schedule, so when will the Treasury provide councils and homelessness charities with sufficient funds to properly tackle this national shame?
Sajid Javid
This is an important issue, and I am glad that the hon. Gentleman has raised it today. He will know that there are multiple causes of rough sleeping, which means that we need action across Government. That is why the Government have set out a rough sleeping initiative to deal with the causes, such as mental health, family breakdown and addictions. I think he will appreciate that we need cross-Government work. That needs to be properly funded. The £422 million that I referred to a moment ago is a 13% real-terms increase, and it will end rough sleeping by 2022.
Lyn Brown (West Ham) (Lab)
Many people going to work today, not just in London but in cities and towns across England, will have seen at least one fellow citizen sleeping rough. Eight thousand beds have been lost, universal credit has cost tenants their homes, and as we have heard, 726 people died on the streets last year. Charities say that the funding gap is £1 billion. The Chancellor has said that ending rough sleeping is in our gift, but how many more of our fellow citizens will have slept on our streets before he delivers?
Sajid Javid
I hope that the hon. Lady welcomes the extra resources being put into fighting homelessness and rough sleeping—as I said, a 13% real-terms increase. She might recall that when I was Housing Secretary, we introduced new programmes to deal properly with rough sleeping, for example the Housing First pilots that are taking place in three parts of our country and showing real resource. We are starting to see falls in rough sleeping for the first time in a number of years, and I think the British people would appreciate cross-party co-operation on this very important issue.
Robert Halfon (Harlow) (Con)
Daniel Zeichner (Cambridge) (Lab)
The Chancellor of the Exchequer (Sajid Javid)
Treasury Ministers regularly engage with Secretaries of State on all aspects of public funding, including 16 to 19 education funding. At the spending round, we chose to invest £400 million more in the sector next year, which will mean that the base rate of funding will rise to £4,188 and be growing at a faster rate than core school funding.
Daniel Zeichner
Away from the fantasy figures being peddled in Manchester this week, college heads and principals are struggling to work out whether to continue to raise their class sizes or to restrict subject choice. Will the Chancellor therefore tell Cambridge Regional College and the excellent sixth forms and sixth-form colleges in Cambridge whether they are going to be getting the extra £760 that the Raise the Rate campaign has calculated is necessary or the meagre £188 per pupil per year he is offering?
Sajid Javid
The hon. Gentleman might call these fantasy figures, but this is the biggest increase in funding for 16 to 19-year-olds in a decade, and it has been hugely welcomed by the sector. It includes £212 million of targeted interventions, on the courses that are the most costly to deliver, such as engineering and construction. I would have thought he would have welcomed that.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
Sajid Javid
My hon. Friend will know that in the spending round I announced a £4.6 billion increase in school spending. I know that he has campaigned on funding for his local schools and can tell him that 80% of the secondary schools in his area will see their funding level go up to at least the new minimum level of £5,000 per pupil.
Huw Merriman (Bexhill and Battle) (Con)
Christine Jardine (Edinburgh West) (LD)
The Chancellor of the Exchequer (Sajid Javid)
I have three clear priorities as Chancellor: to ensure a strong economy, to get Brexit done and to deliver on the British people’s priorities. That is why I am pleased to confirm that this Government will bring an end to low pay. We are setting two new targets for the national living wage over the next five years: raising it to two thirds of median earnings and extending it to workers aged 21 and above. That will give 4 million workers an average pay rise of £4,000. I will set out further details in the next Budget. This Government are proving again that they are on the side of working people. Thanks to the hard work of the British people, we are moving from a decade of recovery to a decade of renewal.
Christine Jardine
When the Chancellor was Home Secretary, he told me and other More United MPs that officials were looking into the potential economic benefits of lifting the ban on asylum seekers working, which the Lift the Ban coalition says would bring £42 million into the economy. Now that he is Chancellor of the Exchequer, will he lift that ban in order to allow asylum seekers such as those in my constituency to contribute to the economy and to have the dignity that they deserve?
Sajid Javid
The hon. Lady makes an important point, and I am glad that she has brought my attention to it again. As Chancellor, I want to ensure that across Government every Department is doing its bit for the economy. Some of the people she is talking about will be vulnerable people and the current rules are worth looking at again. It is something that the Home Office is taking very seriously.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
John McDonnell (Hayes and Harlington) (Lab)
Will the Chancellor give the House a quick fact-check of his speech yesterday? The Conservatives have cut funding for buses by £640 million a year. Yesterday, he announced nothing new; he simply reannounced £220 million from the spending review. His Government have cut £900 million a year from annual youth services budgets. Yesterday, he offered £500 million, possibly as a one-off. The National Infrastructure Commission says that we need £33 billion to roll out full-fibre broadband. Yesterday, he offered £5 billion. All of those promises will count for nothing if there is a no-deal Brexit. Has he not just followed the Cummings code: grab a headline, possibly wrap it around a bus and ignore the truth? But there is one figure that I would like to ask him about: 120,000. What significance does the figure 120,000 have for him?
Sajid Javid
The right hon. Gentleman knows that the last time his party was in office, we had the biggest budget deficit in our peacetime history and the biggest banking collapse this country has ever seen, and our country was virtually bankrupt. Now our economy is strong, with the lowest unemployment rate in 45 years, and it is because the economy is strong that yesterday I could make the announcement of investments in buses, roads, youth facilities and full fibre. If he wants to see that kind of investment continue at the next general election, he should vote Conservative.
John McDonnell
I did not ask about the Chancellor’s record at Deutsche Bank; I never asked about the products he was selling that brought about the financial crash.
Let me tell the Chancellor what the figure 120,000 means. It is the number of deaths linked by the British Medical Journal to the Conservatives’ cuts since they came to power in 2010. No amount of spin will wash away the memory of nine years of this scale of human suffering. He claimed yesterday:
“We believe in a society where everyone knows that if they work hard, and play by the rules then they will have every opportunity to succeed.”
But isn’t it true that the Conservatives have broken the link between people working and being able to lift themselves out of poverty, when 70% of our children living in poverty are in households where someone is at work? And isn’t it the case that, despite the Chancellor’s pathetic attempt yesterday at playing catch-up to Labour party policy, under the Tories’ plans no one will reach the Tories’ target minimum wage until five years from now? And isn’t it the truth that, with this Chancellor and Prime Minister in charge, the Conservatives will always be the party of tax avoiders, bankers and the super-rich?
Sajid Javid
Let me tell the right hon. Gentleman a fact: the Labour party no longer represents working people and it is no longer the party of working people. That stopped a long, long time ago. He should reflect on his own policies of renationalisation; mass confiscation of private property, including the shares and homes of individual investors; protectionism; and state control. He calls business the real enemy, but the fact is that the Labour party is no longer fit to govern. It would wreck the economy and it would be hard-working people who would pay the price.
Amber Rudd (Hastings and Rye) (Ind)
I have had heartbreaking meetings with constituents from Hastings regarding the loan charge, where I have heard tragic and sad stories about the destruction of families and their finances. Although I of course welcome the review that is to take place, may I urge the Chancellor to reconsider the position of not suspending the loan charge during the review period?
Sajid Javid
I share the hon. Gentleman’s desire to ensure that all parts of our great country are benefiting from our strong economy. We have seen a jobs boom since 2010, after the deepest recession in our peacetime history under the previous Labour Government. Of the 3.7 million jobs that have been created, 65% are outside London and the south-east, which will be benefiting his communities and so many more.
Andrew Jones (Harrogate and Knaresborough) (Con)
One of the ingredients of economic growth—we have talked about boosting small businesses—is improving the productivity within the economy. What are the ministerial team doing to boost productivity?
Jessica Morden (Newport East) (Lab)
Sajid Javid
I will make certain that the Business Secretary is aware of the hon. Lady’s concerns. The Treasury obviously takes an interest in this issue but she will know that the Department for Business is taking the lead on it. Obviously, and rightly, she is concerned about jobs in her constituency. She would welcome the fact, I hope, that because of the policies of this Government more generally since 2010, we have seen in her constituency a 50% fall in the headline unemployment rate.
Greg Clark (Tunbridge Wells) (Ind)
As we leave the EU, we need to reinforce our international reputation as a powerhouse of scientific excellence. In 2017 we spent 1.7% of national income on research and development, while Germany spent 3% and Israel 4.3%. So will the Chancellor use his next Budget to make substantial progress towards our 2.4% target and recommit to the medium-term target of 3% of national income going into research and development?
Sajid Javid
First, may I thank my right hon. Friend for his excellent work as Business Secretary, including in this hugely important area of research and development? He set some ambitious targets. We intend to stick to those targets, if not go even further, which I am sure he would welcome. Obviously I will not set out the Budget now, but I absolutely share his ambition, and I think he will be pleased with what we eventually do.
Rachael Maskell (York Central) (Lab/Co-op)
Sajid Javid
We are investing in York and investing throughout the country by creating a dynamic, free enterprise economy that is creating jobs. We have the lowest unemployment rate in our country in 45 years. I would think that a party that calls itself Labour would actually welcome that. In the hon. Lady’s own constituency, since 2010—since the Labour Government were kicked out—we have seen a fall of 12,300, or 64%, in the unemployment numbers. That is something she should welcome.
Kevin Hollinrake (Thirsk and Malton) (Con)
I welcome the introduction of the new business banking resolution service that will start to hear cases of historical problems later this year. In the previous Chancellor’s letter of 19 January, he stated that that scheme should carefully consider all cases that come before it. How is that possible when the research of the all-party parliamentary group on fair business banking determined that 85% of cases are excluded?
Sarah Jones (Croydon Central) (Lab)
Sajid Javid
I can see that this is an important issue, and I will ensure that a meeting takes place with the appropriate Minister.
Several hon. Members rose—
David Duguid (Banff and Buchan) (Con)
I welcome the Chancellor’s commitment yesterday of £5 billion to support gigabit broadband across the whole of the United Kingdom. He will be aware that, historically, the Scottish Government have been responsible for the roll-out of superfast broadband, which is way behind what they promised, and not a penny of the £600 million that they announced in 2017 has been spent. Will my right hon. Friend confirm that future broadband funding will be paid directly to local authorities, bypassing the Scottish Government, who have failed rural constituents such as mine more than most?
Sajid Javid
The investment that I announced yesterday is hugely important for the entire country, including Scotland. My hon. Friend is right to point to the abysmal record of the Scottish Government in delivering broadband for their people, so we should certainly look at whether there is a much better way to deliver it.
Paula Sherriff (Dewsbury) (Lab)
Fiona Bruce (Congleton) (Con)
I thank Ministers for providing funding to help evidence and establish the business case for reopening Middlewich railway station—a key priority for my constituents. What wider fiscal steps are they taking to support my constituency by supporting the northern powerhouse and midlands engine?
Sajid Javid
I thank my hon. Friend for working tirelessly on behalf of her constituents to ensure that more infrastructure, including rail and road, is delivered locally. She will know that one of the first commitments of the new Administration was to Northern Powerhouse Rail and further funding for the midlands engine. She may also know that yesterday I announced a White Paper on further devolution, which I think she will welcome too.
Marsha De Cordova (Battersea) (Lab)
The social security benefits freeze has led many children and families into poverty and destitution. The Chancellor failed to answer the question from my hon. Friend the Member for Bootle (Peter Dowd), so I ask him again: yes or no, will he lift the social security freeze next year?
Justine Greening (Putney) (Ind)
Thank you, Mr Speaker. The Government seem to be making pre-election spending pledges with all the velocity of a high-power water jet. I wonder whether the Chancellor will point it in the direction of Hammersmith bridge. It has been closed for several months, but even its repair plan would not enable it to take double-decker buses. Will he look at whether his bus pledge can extend to the capital required to enable it to be successful?
Sajid Javid
I know that this is a very important issue for my right hon. Friend and her constituents. I share some of her concerns, which is why it has troubled me that the Mayor of London is not taking this issue seriously. Why is that? He has the funding available if he chooses to deploy it. He can make a difference immediately, but he refuses to do so.
ECOFIN
Sajid Javid Excerpts(4 years, 7 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Sajid Javid)
An informal meeting of the Economic and Financial Affairs Council (ECOFIN) was held in Helsinki on 13-14 September 2019. The following was discussed:
Working Lunch
Enhanced Action on Climate Change
Ministers discussed how to move climate action forward in the policy areas relevant for finance Ministries.
Ministers were then joined by central bank governors for the first working session.
Working Session I
Resilience of Financial Market Infrastructure
Ministers and central bank governors discussed the resilience of financial market infrastructure and the role of the financial sector in countering hybrid threats.
Capital Markets Union
Ministers and central bank governors then discussed the priorities in the field of the Capital Markets Union for the next institutional cycle.
Working Session II
EU Fiscal Rules
Ministers discussed the functioning of the current set of EU fiscal rules with the aim of providing input into the European Commission’s review of the EU fiscal framework, due in late 2019.
Energy Taxation
Ministers then discussed the present and possible future role of energy taxation in mitigating climate change, based on experiences at national and EU level.
[HCWS1836]
Spending Round 2019
Sajid Javid Excerpts(4 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Sajid Javid)
Let me start by saying a few words about the circumstances surrounding today’s statement. We are in uncharted waters. I understand the strong feelings around the House on these important questions, but it cannot be right for a proud, sovereign democracy to ignore the will of the people. If the House votes for the Bill this afternoon, all we will be doing is delaying what the people have entrusted to us to do, and creating even more uncertainty for our democracy and our economy through a general election that nobody wants. We cannot allow that uncertainty to distract us from delivering on the people’s priorities, so today, to give certainty where we can, I announce our spending plans for Britain’s first year outside the European Union.
After a decade of recovery from Labour’s great recession, we are turning the page on austerity and beginning a new decade of renewal. A new economic era needs a new economic plan, and today we lay the foundations with the fastest increase in day-to-day spending for 15 years. The plans I announce today mean that we will be able to build a safer Britain where our streets are more secure; a healthier Britain where we can care for people throughout their lives; and a better educated Britain where every child and young person has the opportunity to succeed, no matter where they come from or who their parents are. We will build a global Britain where we walk tall in the world with more, not less, of a presence on the international stage; a modern Britain where we embrace diversity as a strength; an enterprising Britain where we are proud of our scientists, our inventors and our entrepreneurs; and a prosperous Britain where we live within our means and growth comes from every corner of this nation. Today we lay the foundations for a stronger, fairer and more prosperous future for our great country.
It has been three years and three months since the British people gave us their instruction to leave the European Union. If people are going to have faith in the ballot box again, we absolutely have to follow through on that instruction. That is why we have set a deadline of 31 October—just 57 days away. The Government still believe that the best outcome would be to leave with a deal, and we could not be more serious about negotiating for such an outcome. My right hon. Friend the Prime Minister has set out our position, and our central ask is clear: to remove the anti-democratic backstop from the withdrawal agreement. But without the ability and willingness to walk away with no deal, we will not get a good deal.
I know that some businesses and households are concerned about what a no-deal outcome would mean for them. I recognise that, and I understand that the uncertainty around Brexit is challenging, but this is ultimately a question of trust in our democracy. In the end, a strong economy can only be built on the foundation of a successful democracy.
Mr Kenneth Clarke (Rushcliffe) (Ind)
On a point of order, Mr Speaker. What has this got to do with the spending review?
Mr Speaker
Points of order ordinarily follow statements, as I know the Father of House is well aware. The Chancellor’s opening remarks were, frankly, out of order. That is the reality of the matter. [Interruption.] Order. I do not need any help from anybody chuntering from a sedentary position. With the very greatest of respect, I will provide the rulings from the Chair. I hope everybody is very clear that that is the way it works in this place. The opening remarks from the Chancellor were out of order and I exercised a degree of latitude, but the right hon. and learned Member for Rushcliffe (Mr Clarke) is right that the statement should be focused on and exclusively concerning the spending round. As it is, the Chancellor consulted me yesterday because he was concerned about the length of the statement. It should not be longer as a result of remarks that do not relate to that subject. That is all I need to say; it is very straightforward, and I know that the Chancellor of the Exchequer will comply with that simple stricture.
Sajid Javid
Thank you, Mr Speaker.
Let me reassure people of this: if we leave with no deal, we will be ready. Within my first few days as Chancellor, I provided £2.1 billion of extra funding for Brexit and no-deal preparedness, and today I can announce that we will provide a further £2 billion for Brexit delivery next year as well. That means more Border Force staff, better transport infrastructure at our ports and more support for business readiness. I have tasked the Treasury with preparing a comprehensive economic response to support the economy if needed, and will work closely with the independent Bank of England to co-ordinate fiscal and monetary policy.
Sensible economic policy means that we should plan for both outcomes, and we are doing so, but we should be careful not to let our focus on planning and preparedness distract us from the opportunities that lie ahead. Brexit will allow us to reshape the British economy and reaffirm our place as a world-leading economic power. We will have the opportunity to design smarter, more flexible regulation and to cut red tape that stifles innovation. We will be able to replace inefficient EU programmes with better, home-grown alternatives. Even if we leave with no deal, I am confident that we will be able to secure a deep, best-in-class free trade agreement with the EU and pursue a genuinely independent free trade policy with the rest of the world. Deal or no deal, I am confident that our best days lie ahead.
Although the immediate outcome of the talks is uncertain, there are some things that we can be certain about when it comes to the economy and our ability to set out what we can afford to spend. As we look towards our future outside the EU, we can build on some extraordinary economic strengths. At its heart, this country is an open, outward-looking trading nation. We are at our best when we look out to the world beyond our shores. That is not just a slogan. We are the No. 1 destination in Europe for inward investment. Our language, our location, our legal system and, most of all, our people make the UK a global hub for business. We are the home of world-class businesses. A stream of ideas and innovations flows from our brilliant universities and research institutes, making the UK second only to the United States in the all-time rankings of Nobel prize winners. We also have an economic landscape that has been watched over by long-standing, well respected institutions. All that will continue as we forge a new economic relationship with the EU.
But the vision of an open free-market enterprising economy is under threat, and if that threat transpires, it will have a direct impact on our spending power. It is under threat not from the people on the other side of the channel, but from the people on the other side of the Chamber. Let us be in no doubt about the biggest threat to the UK economy. The No. 1 concern raised by businesses and international investors is not the form of our exit from the EU; the real “Project Fear” is the agenda of the Labour party. If the Opposition had their way, whole sectors of the economy—
Mr Speaker
Order. This really is very unseemly, and I am sorry to have to say that to the Chancellor of the Exchequer, who has always been unfailingly courteous in his personal dealings with me and probably with everybody else. I say what I say with a heavy heart and not without reflection. There is a very long-established procedure to statements of this kind, and it bothers me greatly that the right hon. Gentleman, in the course of a statement, seems to be veering into matters outwith—not even tangential to, but unrelated to—the spending round upon which he is focused, and I know that I say what I do with the vigorous concurrence of people who have been in this House a great deal longer than he or I. I must therefore ask the Chancellor, who I am sure is fleet of foot, so to adjust his remarks from his prepared text in order that he focuses upon that which he should focus on and not upon that which is immaterial to the statement. I am setting out the position and no one, be he ever so high, is going to tell me what the procedures in the Chamber of the House of Commons are.
Sajid Javid
Mr Speaker, you will recall that when I first took my seat as the Member of Parliament for Bromsgrove, the economy was in a very difficult and different position. Since then we have had to work hard to restore the nation’s finances, and it is precisely because we have restored the nation’s finances that we can have the spending commitments that I am about to make today. I have to—if I may, Mr Speaker—set out the context of the situation then and how we got out of it, so that we can focus on how we can generate the spending power that we are able to deploy today.
Back then, our budget deficit was 10% of GDP. We borrowed £150 billion in Labour’s last year in office. It was the highest deficit in our peacetime history. We were borrowing £1 in every £4 that was spent. The Labour party lost control of the nation’s finances, as it always does, and it fell to the Conservatives to pick up the mess.
My two immediate predecessors took the difficult decisions that we needed to bring the deficit under control, allowing us to have the spending that I am setting out today. They did that not for ideological reasons, but because running an enormous deficit meant that our debt was rising at an unsustainable rate, making our economy vulnerable to shocks and passing on a huge burden to the next generation. The deficit is now 1.1% of GDP. For the first time in a generation, public sector debt is falling sustainably as a share of our national income, and we have boosted our credibility around the world and built confidence in the UK economy again. Labour left behind a bankrupt Britain, and we have fixed it.
Thanks to those difficult decisions and the hard work of the British people, we can now afford to turn the page on austerity and move forward from a decade of recovery to a decade of renewal. Our careful management of the public finances means that we can now afford to spend more on vital public services, so today I am deciding to set the real increase in day-to-day spending next year at £13.8 billion, delivering on the people’s priorities across the NHS, education and police, and giving certainty to all Departments about their budgets for next year—clearing the decks for a Government who are delivering Brexit.
I have always believed in the importance of living within our means, and—unlike the Labour party—I will not squander the hard work of the last nine years, so even with the extra spending, we are still meeting the current fiscal rules. While the biggest challenge a decade ago was getting the deficit down, our biggest challenge today is getting our long-term economic growth back to where it was before Labour’s great recession. If we can do that, we can ensure that there can be future spending increases that can also be sustainable, boosting wages and raising living standards, which have stagnated for too long, levelling up across the regions and nations.
We need to improve our productivity—the amount that is produced every hour worked. That is not just a technical term. Slower productivity means lower wages and uneven growth across the country. If productivity had continued to grow at its pre-crisis levels, then average annual wages would be £5,000 higher. That pressure on people’s pay packets speaks to a wider sense of disillusion and unfairness, especially in so many towns and cities outside London and the south-east. Even as the economy has grown, and people have worked hard, not everyone feels they have benefited. There is a real sense of anxiety that has emerged over the years: a sense that politicians are not listening and that the system is not working; that the free market model is not living up to its promise. We are seeing divisions emerge throughout society between regions and communities, rich and poor, rural and urban, young and old. Addressing those concerns will be a serious effort, and that is what will be shown in these spending plans today. We will develop a new economic plan for the years ahead—a plan that moves beyond the last decade of economic recovery and looks forward to a decade of renewal; a plan that invests more in the future growth of this country.
We can afford to invest more because our economy is growing and our public finances are strong. We are also deciding on our fiscal approach at a time when the cost of Government borrowing is at record lows. Interest rates have been low for many years, and in recent weeks the cost of Government borrowing has fallen below 1% across all maturities. In the years after the financial crisis, many expected interest rates to swiftly rise to pre-crisis levels, but structural factors have kept interest rates low, not just in the UK but across the developed world, increasing our confidence that we will be able to continue to see low rates for a number of years. So it is my judgment today that with a strong fiscal position and record low cost of borrowing, we can invest more in our growing economy.
That does not mean that we can borrow more for ever and ever. The sustainability of our public finances depends on wider factors, not just the cost of borrowing: our population is ageing; the global economy is slowing; the challenge of decarbonisation is real. So we will not be writing blank cheques, unlike Labour. We will not be able to afford everything, and we will need to prioritise investment in policies that deliver real productivity gains and boost economic growth in the long term. We will still need to make difficult choices about our national priorities, within a clear set of rules, to anchor our fiscal policy and keep control of our national debt. So today I can announce that ahead of the Budget later this year I will review our fiscal framework to ensure that it meets the economic priorities of today, not of a decade ago.
The first priority of our new economic plan will be to rebuild our national infrastructure. High-quality and reliable infrastructure is essential to how we live, work and travel, but the truth is that across many decades Governments of all colours have under-invested in infrastructure. The quality of our infrastructure means that we have fallen behind our competitors. We are the fifth largest economy in the world. It is not good enough that we are so far behind on infrastructure. It is not good enough that so many commuters spend their morning staring at a “Delayed” sign at their train platform. It is not good enough that our small business owners waste so much time because of slow internet speeds and poor mobile communications. We are going to change that. We want faster broadband for everyone in the country, quicker mobile connections and better signal coverage, cleaner energy, greener transport, and more affordable fuel bills for our homes and offices. We want more trains and buses to connect the great cities of the north. We want to build world-class schools and hospitals. We want to push the frontiers of science and technology and turbocharge our ambition on research and development. We want to build and invest in every region and every nation of this great United Kingdom. From the motor highway to the information highway, we will settle for nothing less than an infrastructure revolution.
To keep spending under control, we will of course set a high bar for funding projects. They will have to show real value for money with credible delivery plans and budgets, starting with the Government’s rapid review of HS2. We will target that investment at national priorities like regional growth and decarbonisation. Let me take this opportunity to thank my hon. Friend the Member for Chelmsford (Vicky Ford) for her tireless work as chair of the all-party parliamentary group on infrastructure. So yes, we will use the Government’s resources to kickstart the infrastructure revolution, but we will also do more to give private investors the confidence to back these projects too. We want all this to be underpinned by strong, independent institutions. We set up the National Infrastructure Commission in 2015, and we will continue to rely on its expert advice as we look carefully at other institutional reforms that might be needed. So our infrastructure revolution will be strategic and carefully planned.
Speaking of revolutionaries, let us contrast that with Labour’s approach. I will invest in new infrastructure that will grow the economy, and Labour will borrow hundreds of millions to renationalise unproductive assets and then run them into the ground. The choice for the country is clear, between a wasteful ideological Opposition with outdated ideas and a Government who will kick- start a decade of renewal for this country.
Today we lay the foundations of a new economic plan. We are turning the page on a decade of necessary work to fix the public finances and writing a new chapter in our public services. Health and Education are not just the names of Departments; they are lifelines of opportunities, just as they were for me when I was growing up: the teachers and lecturers who persuaded me to study economics in the first place—[Interruption.]
Mr Speaker
Order. There will be ample opportunity for colleagues to question the Chancellor of the Exchequer, but the statement must be heard.
Sajid Javid
Health and education are lifelines of opportunities, just as they were for me when I was growing up: the teachers and lecturers who persuaded me to study economics in the first place; the police officers who kept us safe when the street I grew up in became a centre for drug dealers; the NHS that cared for my dad in his final days. These are not just numbers on a spreadsheet; these are the beating heart of our country, and we invest to support them today.
As I turn to the details of today’s announcement—[Hon. Members: “Hooray!”] Wait—it is coming. Let me first thank the dedicated officials in the Treasury for all their hard work delivering what I am told is the fastest SR in history. Let me particularly thank the Chief Secretary to the Treasury, my right hon. Friend Member for Richmond (Yorks) (Rishi Sunak), who takes the approach to spending you would expect from an adopted Yorkshireman. He has displayed his typical mix of energy, courtesy and rigour. Let me just say that there is no productivity problem in the Chief Secretary’s office.
Next year, I will add £13.4 billion to the plans for total public spending, including £1.7 billion pounds added to capital spending. These extra funds take the real increase in day-to-day spending to £13.8 billion pounds, or 4.1%. That means I am delivering the fastest increase in day-to-day spending for 15 years. That funding allows us to start a new chapter for our public services and to fund the people’s priorities. Our decisions today have been guided by our ambition to build a safer Britain, a healthier Britain, a better educated Britain and a more global Britain.
My family grew up on a road in Bristol that a national newspaper described back then as Britain’s most dangerous street, but to us it was just home. After we left, my brother became a policeman and has been in the force for over 25 years. I have seen the impact the job has on the lives of those who are courageous enough to do it. So today I pay tribute to the bravery, courage and dedication of our hard-working police officers. As Home Secretary, I saw first-hand how the demands on our police forces are changing and increasing. Yes, traditional crime is down by a third since 2010, but the threats from terrorism have escalated and evolved. The internet is changing how criminals operate and break the law, and we have seen too many horrifying stabbings on Britain’s streets. With our frontline officers reporting that they are overstretched, it is clearly time to act and do more.
Today I can announce a 6.3% real-terms increase in Home Office spending—the biggest increase in 15 years. That means £750 million to fund the first year of our plan to recruit 20,000 new police officers, with an extra £45 million this year, so that recruitment can start immediately, getting the first 2,000 officers in place by the end of March. Let me thank my hon. Friend the Member for South West Bedfordshire (Andrew Selous), my right hon. Friend the Member for Wokingham (John Redwood) and my hon. Friends the Members for Isle of Wight (Mr Seely), for Nuneaton (Mr Jones) and for Telford (Lucy Allan) for championing the police and police resourcing,
The threats facing our police officers are evolving too, so the way we resource them will have to evolve in three areas. First, serious and organised crime is the most deadly national threat faced by the UK, costing the nation at least £37 billion a year. The scale and complexity of this threat means that we need to do more to develop our response, so I am announcing today a formal review to identify the powers, capabilities, governance and funding needed ahead of a full spending review next year.
Secondly, this year sadly has seen more attacks on places of worship, including mosques and synagogues. That is unacceptable in a diverse, open, tolerant society like ours. To protect our religious and minority communities, I am announcing today that I will double the places of worship fund next year. I thank my hon. Friends the Members for Hendon (Dr Offord) and for Finchley and Golders Green (Mike Freer) for their tireless work in combating hate crime. I am also today announcing £30 million of new funding to tackle the scourge of online child sexual exploitation.
A better resourced police force will deliver better outcomes for the British people, and it will increase the demands on our already overstretched criminal justice system. So today we invest more in our criminal justice system to manage that increasing demand, with a 5% real-terms increase in the resource budget for the Ministry of Justice, an increase in its capital budget to £620 million next year and an extra £80 million for the Crown Prosecution Service. Taken together, today’s spending round will dramatically improve the functioning of the criminal justice system, with more prosecutors, a reformed probation system, better security in prisons and funding to begin delivery of 10,000 new prison places.
The spending round is delivering on the people’s priorities, and there is no higher priority than the NHS. Last year, we increased NHS spending by an extra £34 billion a year by 2023-24. That was the single largest cash increase in our public services for more than 70 years. Today, we reaffirm our commitment to the NHS with a £6.2 billion increase in NHS funding next year. We are investing more in training and professional development for our doctors and nurses, and over £2 billion of new capital funding, starting with an upgrade of 20 hospitals this year, and £250 million for groundbreaking new artificial intelligence technologies to help solve some of healthcare’s biggest challenges today, such as easier cancer detection, discovering new treatments and relieving the workload on doctors and nurses.
We cannot have an effective health system without an effective social care system too. The Prime Minister has committed to a clear plan to fix social care and give every older person the dignity and security that they deserve. I can announce today that councils will have access to new funding of £1.5 billion for social care next year. Alongside the largest increase in local government spending power since 2010, and on top of the existing £2.5 billion of social care grants, that is a solid foundation to protect the stability of the system next year and a down payment on the more fundamental reforms that the Prime Minister will set out in due course.
But that is not the only action I am taking today to support vulnerable people. On any given night, there are too many people sleeping rough on our streets. The human cost is too high. Today we do more, with £54 million of new funding to reduce homelessness and rough sleeping, taking total funding to £422 million next year. That is a real-terms increase of 13%. I thank my hon. Friend the Member for Harrow East (Bob Blackman) for his tireless work in fighting homelessness.
A healthy environment is a precondition for a healthy population, and that is why we have set out an ambitious 25-year plan for the UK’s natural environment. Today we go further. Leaving the EU provides an opportunity to set world-leading environmental standards, and we are giving the Department for Environment, Food and Rural Affairs £432 million of funding to do so. We are providing £30 million of new money to tackle the crisis in our air quality and another £30 million for biodiversity, including the expansion of our Blue Belt programme—a vital part of our campaign to protect precious marine species such as turtles, whales and seabirds. We are stepping up our leadership on climate change, with new funding for the Department for Business, Energy and Industrial Strategy to develop new programmes to help meet our net zero commitment by 2050, and we will set out further details of our plans for decarbonisation in the infrastructure strategy later this year, keeping our promise to be the first Government in history to leave our environment in a better condition than we found it.
Alongside providing for the health of our population, the most important task of a Government is to educate the next generation. Education and skills are at the heart of our vision for national renewal. The economy is not just about GDP or PSNB—there are many broader tests that matter too. Are children growing up to be better off than their parents? Do hard work and talent matter more than where you are born? A good school and inspirational teachers are the most effective engine for social mobility. That is why today we are delivering on our pledge to increase school spending by £7.1 billion by 2022-23, compared with this year.
Next year, we will make sure that day-to-day funding for every school can rise at least in line with inflation and rising pupil numbers, with the schools that have been historically underfunded benefiting the most. Every secondary school will be allocated a minimum of £5,000 for every pupil next year, and every primary school will be allocated at least £3,750 per pupil, on track to reach £4,000 per pupil the following year. This funding will mean that teachers’ starting salaries can rise to £30,000 by 2022-23, so that we can attract more of the best graduates into teaching. We have allocated nearly £1.5 billion per year to contribute to teachers’ pensions, and we are providing over £700 million to give more support to children and young people with special educational needs—an 11% increase compared with last year.
The funding for nearly every other Department I am announcing today will be for just one year, but we recognise the importance of schools being able to plan, so we are announcing today a full three-year resource settlement for schools, levelling up education, improving standards and giving every young person the same opportunities in life wherever they live in our great country. Let me particularly thank my hon. Friends the Members for Bexhill and Battle (Huw Merriman), for Cheltenham (Alex Chalk) and for St Albans (Mrs Main) for championing schools.
The education system is about more than just schools. For too long, further education has been a forgotten sector. Over 1 million young people continue their education beyond the age of 16 at colleges or sixth-forms—and I know because I was one of them. I went to my local FE college. If I had not had the teachers and the lecturers that I did, I would not be standing here today as Chancellor. Further education transformed my life, and today we start transforming further education, with a £400 million increase in 16-to-19 education funding next year. The base rate will increase to £4,188, a faster rate of growth than in core school funding. Let me congratulate my right hon. Friend the Member for Harlow (Robert Halfon) and my hon. Friend the Member for Harborough (Neil O’Brien) on their representations on further education.
The Government will also increase early years spending by £66 million to increase the hourly rate that is being paid at maintained nursery schools and other childcare providers that deliver the Government’s free childcare offer. I want to thank my right hon. Friend the Member for Chipping Barnet (Theresa Villiers) for raising this issue with me.
Our young people deserve high-quality services and support even after the school day is over. Earlier this year, following a recommendation from my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith), I visited the fantastic OnSide youth zone in Barking. It was a brilliant example of how much Britain’s network of youth centres adds to their local communities, getting young people off the streets and changing lives for the better. Today, I am asking the Department for Digital, Culture, Media and Sport to develop proposals for a new youth investment fund, and to set out plans to build more youth centres, refurbish existing centres and deliver high-quality services to young people across the country.
Better schools, higher pay for teachers, more youth centres—that is how this Government will improve social justice and create opportunity for all, but our ambitions for a truly national renewal do not stop there. We are a one nation party and this is a one nation Government, so at the heart of our new economic plan is the need to level up across this country. Every region and nation in the United Kingdom will benefit from the new funding I am providing today for the police, schools, health and social care, and much more. Today, we confirm funding of £3.6 billion for the new towns fund, providing a wave of investment to our regions and places, and better transport links across the country will be a crucial part of levelling up across the nation. We have already allocated a total of £13 billion for better transport across the north. We will fund the Manchester to Leeds route of Northern Powerhouse Rail, and we will set out more details—far more details—in the autumn on our new infrastructure strategy.
Mr Speaker, you may not know this, but my dad was a bus driver. Having watched him work, I know that local buses can be a lifeline for many communities. Today, we put the wheels back on the great British bus, with more than £200 million to transform bus services across the country. We are funding ultra low emissions buses, and we will trial new on-demand services to respond to passenger needs in real time. We will set out more details of our new buses in due course—once my right hon. Friend the Prime Minister has finished painting models of them.
Our new economic plan will not stop at the borders of England; it will be a plan for all the nations of the United Kingdom. In Scotland, decisions taken in today’s spending round will provide over £1.2 billion of extra funding for next year. We are taking a further step today to support Scottish farmers. In 2013, when the UK Government allocated common agricultural policy funding within the UK, Scottish farmers lost out. Today, we correct that decision, making available an extra £160 million for Scottish farmers—something I know my hon. Friends from Scotland on the Conservative Benches will be pleased to hear. I would also like to take the opportunity to thank my friend Ruth Davidson for everything she has done for that great nation.
In Wales, today’s spending round means an extra £600 million of funding for the Welsh Government. In Northern Ireland, we are providing an extra £400 million from today’s announcements. I welcome the case that has been made by the DUP for improved hospice care and for support for those who have been tragically wronged in the contaminated blood scandal. Those are rightly devolved matters, but I sincerely hope that the Northern Ireland Administration will use some of the new funding that we are providing today to address those issues. Taken together, today’s announcements will give the devolved Administrations the biggest spending settlement for a decade.
Throughout our history, Britain has always been at its best when we are open, global and outward looking. Trading with the world beyond our shores has always been key to Britain’s economic prosperity. As we seize the opportunities of Brexit, we can establish new partnerships and trade relationships across the globe. For too long, we have let those trading relationships wither. As my right hon. Friend the International Trade Secretary would be the first to acknowledge, this is a disgrace. Today, we invest in securing Britain’s influence in the world. We support diplomacy, with £90 million of funding for 1,000 new diplomats and overseas staff, and 14 new and upgraded diplomatic posts. We will boost trade with £60 million to extend the GREAT campaign for next year.
If hon. Members are in any doubt about Britain’s important role on the world stage, they should just look at the bonanza of international festivals and events that I am funding today. In December, we will welcome the NATO leaders meeting. Next year, we will host the COP 26 discussions, if our bid is successful, thanks to the leadership of my right hon. Friend the Member for Devizes (Claire Perry). In 2021, we will host the G7, and in 2022, we will host the Commonwealth games in Birmingham. Today, I can confirm the Government’s total commitment to this celebration of sport will be over half a billion pounds. The games will be a huge boost for the west midlands, and I would like to congratulate Andy Street on the leadership he has shown in that region.
One of my personal highlights of the summer was meeting the England cricket team in the Downing Street gardens. That world cup winning side showed us the importance not just of talent and hard work, but of diversity—a skipper from Ireland, a bowler from Barbados and an all-rounder from New Zealand. As with our cricket team, so with our country: we are the most successful multi-ethnic democracy in the world. I am proud to live in a country where someone with my background can be Chancellor of the Exchequer. This spending round embraces modern Britain in all its diversity. We make available today an additional £10 million to continue the integration areas programme that I first announced in 2018 as Communities Secretary. That fund will continue to support thousands of the estimated 1 million adults in the UK who do not speak English well or at all.
Openness to talent from around the world matters for our economy, too. Once we have left the EU, we will be able to create a points-based immigration system that meets the needs of the UK economy and the British people. We have already dropped arbitrary immigration targets. We have recently announced a new, highly flexible fast-track visa for scientists. Today, I am putting funding in place to give victims of the Windrush scandal the compensation that they deserve. This is all part of confirming, once and for all, that Britain will always be open to the world’s brightest and best talent.
Nowhere are our values of openness and tolerance better expressed than in international aid. The UK aid logo can be seen around the world—on health clinics, school books, emergency food suppliers. Today, we protect our commitment to spending 0.7% of our national income on aid.
Global Britain is about projecting our values into the world, but we know that hard power matters, too. Britain already spends more on our defence and national security than any other country in Europe. We are one of only seven countries to meet the 2% commitment to NATO. Today, we go further still, with an additional £2.2 billion of funding for the Ministry of Defence—a real-terms increase of 2.6% for the budget next year—increasing again the share of our national income we spend on defence and national security.
This year is the 75th anniversary of the D-day landings. We pay tribute to the sacrifices of the extraordinary generation of British soldiers who fought and died during that campaign. Today, I can announce £7 million of funding for the Normandy Memorial Trust to complete its memorial overlooking Gold beach, where so many troops came ashore. We will also support the veterans of today’s wars, as we confirm the funding today for the new Office for Veterans’ Affairs. I congratulate my hon. and gallant Friend the Member for Plymouth, Moor View (Johnny Mercer) on his tireless work in championing veterans.
I have set out today a big increase in public spending that will pay for more police and safer prisons, more nurses and better hospitals, and more money for schools and further education. I now turn to the remaining Departments across Whitehall, those that have not been protected over the last decade. Investing in the people’s priorities inevitably means difficult decisions elsewhere. Every spending review presented to this House over the past 15 years has had to find cuts from those Departments. This party has never shied away from taking the difficult decisions to make sure that we live within our means. Those decisions were tough, but they have paid off, so I can announce today that no Department will be cut next year. Every single Department has had its budget for day-to-day spending increased at least in line with inflation. That is what I mean by the end of austerity: Britain’s hard work paying off, and our country living within its means and able to spend more on the things that matter.
I am delivering today’s spending round in unusual circumstances. Understandably, much of our attention and the attention of the country is focused on the important matters before the House later today, but we must not forget that Brexit is not all that matters to the British people; it is not the only topic at the dinner table. Today’s spending round ensures that if you fall ill, you can get the care and support that you need; that when you drop off your child at the school gates, you can trust that they will get the best possible education; and that when you walk down the street, you can feel safe and secure. Today, we move from a decade of recovery to a decade of renewal. Yes, we will keep control of the public finances, but we will invest, too, in the long-term growth of this country.
It was just six weeks ago today that this new Administration took office. The Prime Minister promised that we would not wait until Brexit day to deliver on the people’s priorities, and today we meet that promise with a new chapter for our public services, a new plan for our economy and a new beginning for this country. I commend this statement to the House.
John McDonnell
Thank you, Mr Speaker. The member of staff was escorted off the premises by an armed police officer. Can I just say that that is no way to treat a member of staff? I ask the Chancellor to tell Mr Cummings, on the spending review: do not insult the intelligence of the British people. The people will see today’s statement as the grubby electioneering that it is.
This is not a spending review as we know it. This is straight out of the Lynton Crosby handbook of opinion-poll politics. The Tories have checked what the top three or four issues in the polls are and they have cynically judged how little money they have to throw around to try to neutralise those issues and the concerns of people. To come here and try to fool us with references to people’s priorities is beyond irony.
When did this extremist, right-wing Tory group ever put the people first—ever? Were they putting the people first when they froze child benefit year after year or when they introduced universal credit, a brutal regime? The result this summer, according to the Childhood Trust, was children scavenging for food in bins because they did not have free school meals in the summer holidays. Were they putting people first when they cut council budgets, and prevented 1 million elderly and disabled people from getting the social care they needed? Were they putting people first when they cut social services budgets so much that we now have record numbers of children coming into care and 155 women a day turned away from refuges?
We are expected to believe that these Tories, who for years have voted for harsh, brutal austerity, have had some form of damascene conversion. I tell you, they treat our people with contempt. Announcements have been dripped out over the last week or so, all designed to give the impression of a spending spree—announcements dictated by No. 10 and meekly accepted by a Chancellor too weak to conduct a full multi-year spending review as he should, even before the Government’s majority disappeared yesterday.
We have seen the so-called headroom, which the Chancellor’s predecessor had claimed was needed to prepare for a no-deal Brexit, spent instead on preparing for a general election. We all know that the Chancellor may not be in his job very long and maybe that is why he felt he needed to rush a spending round based on figures from March, rather than wait for the Office for Budget Responsibility to tell him officially what the rest of us have known for some time: that the economy, after nine years of Tory austerity, is in bad shape and, yes, is getting worse, stagnating.
A full fiscal event would have meant new economic forecasts and the need for a fiscal framework to give Departments security over the Parliament, allowing them to plan ahead after years of cuts. Instead we get this sham of a spending review. The Tories are claiming to be against austerity after years of voting for it. They are claiming to be using headroom, which the Chancellor knows has largely disappeared, yet they are still failing to deliver a real end to austerity.
Let us take a look at some of the announcements that the Chancellor has confirmed today. For schools, the Chancellor announced new spending of £1.8 billion next year. The Institute for Fiscal Studies has previously estimated that it would cost £3.8 billion this year alone to reverse the cuts that have been made. Was the Chancellor aware, when drawing up his spending plans, that the Department for Education budget as a whole has been slashed by almost £10 billion in real terms since 2010? The reality is this, is it not: heads will still be sending out begging letters and teachers will still be buying basic materials for their classes?
The Government have some front to mention childcare after hundreds of Sure Start centres closed on their watch, undermining the start in life for our children. They mention that £700 million was announced for children with special educational needs and disabilities. Does the Chancellor know that the Local Government Association found that councils already face a funding shortfall for SEN children of £1.2 billion by 2021? The reality is that these children will still be left vulnerable and in need, with their futures in jeopardy. That is what it means today.
Further education colleges are getting a one-off £400 million. Does the Chancellor really think that they should be grateful when he has cut £3.3 billion from them since 2010? The reality is that the economy will continue to desperately need skills and training, and our young people will still be denied them.
On the NHS, the announcement of £1.8 billion spending for the NHS has already been exposed as largely a reannouncement of existing money. There is no mention, is there, of the £6 billion backlog in the maintenance we need in our hospitals? Our hospitals are still using buckets to catch water coming through leaking roofs. Operating theatres are closed because of the lack of maintenance over the past nine years of austerity. The Government mention GP waiting times. Any announcement on GP waiting times is likely to turn out to be totally undeliverable. Why? Because we have just lost 600 full-time equivalent GPs over the past year. They are just not there because of nine years of lack of investment.
On local government, any new money for local government today will be a drop in the ocean compared with the 60% funding cuts that councils have suffered in recent years. What effect does the Chancellor estimate his announcement today will have, for example, on the crisis in children’s services that we have highlighted at every spending review and budget over the past two years? There has been a 29% drop in Government funding after eight years and as a result vulnerable children are left at risk.
On homelessness, the Chancellor mentioned £54 million of additional spending to tackle homelessness. There has been a 160% increase in people sleeping rough. In the past two years, people have died near the doors of Parliament. The LGA says that there is a £100 million spending gap just to get by. The most vulnerable in our society have been put at risk as a result of the Government’s austerity over nine years, and he expects us to celebrate an inadequate attempt to plaster over the problems we have.
On bus services, the Chancellor mentions £200 million allocated to them. That is a third of the £645 million that has been cut from bus services since 2010.
The Government seem to forget that they cut 20,000 police officers. The Chancellor expects us to celebrate what he has announced today, when we now know that at best there will be only 13,000 on the streets. Can he tell us how many will be frontline? We will support him in the investment to protect religious establishments and communities, and we will support him in tackling the problem of protecting young children from online abuse—of course we will—but the real protection comes from the safer neighbourhood teams that we constructed under Labour and that we had in every one of our wards, with a sergeant, police officers and police support officers, all of whom have been wiped out. [Interruption.] An hon. Member shouts, “Not true.” He needs to go out into the community and talk about the increase in violent crime in our communities as a result of what has happened.
The Chancellor spoke of money to create another 10,000 prison places. Can he just tell us: are they the same 10,000 prison places promised by previous Justice Secretaries in 2016, 2017 and yet again in 2018? Can he answer how many suicides and how many assaults on staff have taken place because of the Government’s cuts to prison staff over the past nine years? Will he, or someone in the Government, ever apologise to the Prison Officers Association for ignoring its warnings about the effect of staff cuts on safety in our prisons?
Those are just some of the announcements we heard today, but there are many that we have heard very little about. What about those who have been effectively forgotten in the Chancellor’s opportunist, one-year spending round? What about real structural reform to address the social care crisis, which we have been waiting for, for how many years—three, four? All we have now is a sticking plaster of £1 billion, which will leave this sector in the same sorry state as it is in now. What does that mean in real terms? It means 1.4 million people not getting the care they need and 87 people a day dying before they get the social care they need to support them.
I understand that the Chancellor’s mates, the bankers, were pushing the other day for more tax cuts and less regulation. I suppose they think they have a soft touch in No. 10 and No. 11. I hope he sent them packing. When we compare how much has been cut from the basic social services that we and vulnerable people need for support, with what is calculated to be, by the end of the next couple of years, £110 billion given out in tax cuts to corporations, we can see why people do not believe the Government have any concept of social justice or equality. Does the Chancellor have any words for the thousands suffering—[Interruption.] The right hon. Member for Uxbridge and South Ruislip (Boris Johnson) said, “Pathetic.” I’ll tell you what develops real pathos. Many of us in our constituency surgeries are having to deal with people who are dependent on universal credit. Yet the Chancellor did not have any words for the thousands who are suffering from the brutal roll-out of universal credit—the people we represent who are now queueing up at food banks as a result of the cuts. Traditionally, the spending review concentrates on departmental expenditure limits, rather than social security. I appreciate that. But there was no reason why the Chancellor could not have signalled the Government’s intent at least to end the misery and hardship that their policy is causing and to end the roll-out of universal credit as it now is.
Most shockingly, the Chancellor has given no sign that he understands the scale of the climate emergency facing us and the urgency of the significant Government response that is needed. He mentions the climate but allocates minuscule amounts of funding to address an existential threat to our society. I hope that in the next few weeks Members will remember those who got no comfort from today’s announcements, if the Government push ahead with their plans for tax cuts that mainly benefit the wealthy, as is widely rumoured. I hope that Members will remember all those individuals and services that were deemed too unimportant by the Chancellor to address today. I tell him that whenever that election comes—in any election campaign—he can be sure that the Labour party will remind those people and the voters what nine years of austerity have done to them, and of today’s failure to act. The opportunity was there today really to end austerity—to start reversing austerity—and to give people some hope. What a missed opportunity.
We remember when we were told that there was no alternative, and that there was no money. We all know the lines—we have heard them enough times. They were not true then and they are not true now. The majority of economists have always agreed that there was another approach that the Government could have taken, rather than austerity, and we always argued—and we were right—that austerity was a political choice, not an economic necessity. As recently as March, the Conservatives ploughed on, saying that there was no alternative. Look at them now suddenly proclaiming an end to austerity—after 125,000 excess deaths as a result, after £100 billion has been taken out of the economy, and after the worst decade for wage growth since the 19th century—just because there may be an election around the corner. After all that, to deliver a pathetic sum to spending Departments, who are on their knees at the moment, is just adding insult to injury.
This is a Government who are not just callous and uncaring, but hypocritical. This is not a Government—it is a racket. They pretend to end austerity when they do nothing of the sort. They pretend to plan ahead while they plot a no-deal Brexit that would devastate parts of our economy. They are a Chancellor and a Prime Minister, as my right hon. Friend the Member for Islington North (Jeremy Corbyn) said yesterday, with no mandate, no morals and no majority. They are trying to distract us from the crumbling public services and stagnating wages that they have created after a decade in charge. It is almost as if they forget they have been in government for nine years. They seek to fool the British public with fantasy promises of a Brexit deal that they knew they could not deliver and they were not even trying to negotiate. This short-lived Government will go down in history for its unique combination of right-wing extremism and bumbling incompetence. This is a Government that betrays the people it is meant to serve—a Government that will never be forgiven, but will soon be forgotten.
Sajid Javid
At least the shadow Chancellor did not try to throw a little red book at me this time. He attacks the decisions that were made over the last decade to restore the nation’s finances. He attacks the same free enterprise system that has delivered the prosperity that our nation enjoys. He refuses to understand that a strong economy is absolutely necessary to pay for public services.
Why have we made these decisions over the last decade that get us to where we are now, where we can properly end austerity for good? Labour trashed the economy the last time it was in power, like it always does. The shadow Chancellor talked about cuts that were made to public services over the last decade. Let us just remember what we inherited—the absolute mess that we inherited—in 2010: a deficit that was 10% of GDP, with £150 billion in borrowing in that year. It was the biggest budget deficit in our peacetime history and the biggest budget deficit of any large industrialised nation. Labour was borrowing £5,000 a second. There was the deepest recession that we had seen in almost 100 years. The shadow Chancellor talked about the bankers. Which Government gave us the biggest banking bailout in global history? It was the last Labour Government. That was our inheritance.
It was absolutely clear that had that unsustainable rate of spending continued, with no link between what was coming in and what was going out, the country would have gone bankrupt, just like it did with Labour in the past, when we had to go cap in hand to the International Monetary Fund. That is the legacy of every Labour Government. It took Conservatives to clear up Labour’s mess, bringing the deficit under control, bringing debt under control—having it falling for the first time in a generation in terms of the proportion of national income—reducing taxes for 40 million people and backing millions of businesses. And we have had a jobs miracle, with more people employed today in Britain than at any other time in our history and the lowest unemployment rate since 1975.
The shadow Chancellor talked about the impact of our policies on economic growth. Let me tell him about the impact on economic growth: since 2010, since the Conservatives were back in office, our economy has grown by 18.7%—faster than the economies of France, Italy and Japan. I will tell him about the risk to the economy—the only risk to the economy is from the shadow Chancellor, his policies and the entire Labour party. They have a tax hike for everyone. They have a tax hike if you happen to own a garden, if you want to give a gift to someone, if you want to go on holiday, if you own a home—whoever you are, they have a tax hike for you. They want to raid private pensions. Just this week, we learned more about their plans. They want to confiscate 10% of almost all our large companies. That is £300 billion that they want to confiscate from pensioners’ private plans. They also want to renationalise industries—is it seven, eight or nine? I do not know how many industries they want to renationalise—
Mr Speaker
Order. Please resume your seat, Chancellor of the Exchequer. I gently point out that there is a difference—long understood and observed—between a debate, in which there is a free play of arguments, ideas and commentary on policies, and a statement. The Chancellor, with a little encouragement from me, delivered a statement and he has been questioned on the statement. To the questions, he is supposed to provide replies. This is not an occasion for a general political debate—[Interruption.] No, I know exactly what the situation is and I have very much more experience of these matters than some of the people who think that they can criticise, so I do know what I am doing. The answer is to provide the answers to the questions—[Interruption.] Order. Provide the answers to the questions and then other colleagues will have the opportunity to question the Chancellor. It requires just a little versatility on one’s feet.
Sajid Javid
I have to say, Mr Speaker, I did not detect many questions, so I will finish very quickly to give an opportunity for Members to ask proper questions.
The simple truth is that Labour is unfit to govern. It would not deliver Brexit. It would wreck our economy over again. Hard-working families will pay the price and we will not let it happen.
Mr Kenneth Clarke (Rushcliffe) (Ind)
I genuinely welcome my right hon. Friend to his appointment and congratulate him on it, and I sincerely wish him every success in carrying out his extremely important duties. I also welcome the many spending announcements he made. In particular, I single out further education, to which successive Governments have been trying to give better priority for the last 30 or 40 years. I hope that it shows in effect. Will he reassure me that the announcements that he has made are consistent with the fiscal rules of his predecessors, that we are still subject to the same limits on the deficit that were laid down, and that he is still aiming to achieve year-by-year reductions in debt as a proportion of GDP? If he can give me those assurances, it demonstrates what he has just said: that he is able to make these welcome announcements because austerity has been brought to an end by the achievements of his two predecessors over the last nine years.
Sajid Javid
I welcome the warm words of my right hon. and learned Friend. I remember all the excellent work he did when he held this position and I hope that I can learn from the way in which he performed his duties as Chancellor.
My right hon. and learned Friend asks me a specific question about the fiscal rules. This spending round is within the current fiscal rules. According to our forecasts, we expect to meet both the key rules of borrowing staying inside 2% of GDP and seeing a further fall in debt as a proportion of GDP. I would, however, point him to some of the other comments I made in my statement about looking again at the fiscal rules, particularly with an eye to taking advantage of record low interest rates and investing more—credibly—in an infrastructure revolution.
Kirsty Blackman (Aberdeen North) (SNP)
I thank the Chancellor for advance sight of the statement.
The gimmicks and gems the Chancellor has presented today are nothing more than an effort to distract us from the crippling crisis that the Government are dragging us into. If that was meant to be a pre-election Budget, if I was a Back-Bench Tory I would be quaking in my boots right now. In less than two months, we could face a no-deal Brexit, unless that threat is removed today by the House of Commons supporting the cross-party Bill to secure an extension. The threat cannot be underestimated. We are standing here facing increased uncertainty due to Brexit. The outlook for our economy and for public finances remains extremely uncertain. The economy has already taken a hit, as we saw GDP contract 0.2% in the second quarter of 2019. As Paul Johnson of the Institute for Fiscal Studies put it in The Guardian,
“Making big fiscal announcements in a period of great economic uncertainty means we will have little idea how sustainable or costly decisions made this week will be. The risks are exacerbated by not having up-to-date forecasts from the OBR.”
While the Chancellor has announced increased spending today, this will not help to end austerity; it will only pause some of the hardship in the short term. Meanwhile, Brexit will bring lasting and long-term damage to our economy, and to our citizens’ livelihoods.
With the economy already faltering, the Chancellor’s predecessor has warned that a disruptive no-deal Brexit could have a £90 billion hit on the Exchequer and suggested there would be no money available. A no-deal Brexit would be devastating for Scotland, with the potential to destroy 100,000 Scottish jobs and cost every person the equivalent of £2,300 a year. Brexit caused UK manufacturing activity to contract in August for the fourth consecutive month to the lowest level since 2012. According to the BBC, sterling fell below $1.20 on 3 September to its lowest since October 2016. The Chancellor pretends his Government are putting people first, when in reality they are putting the cult of leave campaigners and their Brexit obsession before the interests of the economy and citizens.
Yesterday in Scotland the First Minister announced our programme for government, putting tackling climate change, protecting our economy and reducing inequality at the heart of our policy-making agenda. Here we are talking about food and medicine shortages, reducing opportunities for our young people and complete Brexit chaos. For the people of Scotland, this is a tale of two Governments, and only the SNP Scottish Government are acting in our interests.
The IFS is clear that pre-election bribes do not mean an end to austerity—that decade of austerity that cumulatively cut the Scottish block grant by more than £12 billion in real terms, left people having to choose between heating their homes and feeding their children and reduced social security payments for disabled people four times faster than the cuts for others.
If the Tories seriously wanted to make life better for citizens, they would give Scotland its fair share. This means the Chancellor should repay the £140 million of VAT owed to Police Scotland in refunds. We have been arguing for years for the convergence uplift moneys to be returned. There are 50 mentions of it in Hansard, 45 of them from the SNP, and most of the others in response to SNP questions. I am pleased with the pressure that we and our colleagues in the Scottish Government have brought to bear on this Government. It also means that Scotland must get its £3.4 billion share of the DUP’s dirty deal Brexit bung. Will the Chancellor rule out any new confidence and supply agreement with the DUP that would give them more money before we get the £3.4 billion we are owed?
Furthermore, it would appear that the Chancellor will overshoot his Government’s borrowing targets. Will he confirm that, and will he tell the House what borrowing rule changes he will introduce in the Budget? Will he guarantee that Scotland will not lose any of the EU funding it currently receives? The UK Government must, at the very least, match the compensation scheme already put in place by the EU and the Irish Government for the beef and suckler sectors in Ireland.
Finally, the Government must scrap the proposed £30,000 salary limit on foreign nationals entering the UK. Scottish Government analysis has found the average EU citizen in Scotland adds £10,400 to Government revenue and £34,400 to GDP each year. The proposed £30,000 salary limit on foreign nationals to the UK has been shown to be unworkable and should be scrapped. While the Tories balance the books on the backs of the most vulnerable and disadvantaged, the SNP Scottish Government are leading the way to deliver a fairer Scotland.
Sajid Javid
The hon. Lady complains about the settlement with respect to Scotland. I remind her that, under the Barnett block grant, Scotland will see an increase of £1.2 billion in its spending power next year. On top of that, it will receive an additional £160 million for Scottish farmers, thanks to the representations of Scottish Tory MPs, who seem to actually care about Scottish farmers. Despite that, she complains.
The hon. Lady talked about uncertainty. I would have thought, therefore, that she would have welcomed today’s statement. I think she referred to it as a Budget. First, there is a spending round, which is focused only on spending, not taxes or capital investment, and designed to give certainty to all Departments across Government on funding for the next year. Without it, they would not have that certainty. She claimed that Brexit uncertainty was damaging the economy. Need I remind her that, since the referendum, we have had record growth in British businesses, record growth in jobs—almost 1,000 new jobs created a day, with more people employed today than ever before—and record inward investment? If she wants to end uncertainty, she should support this spending round and make sure we leave the EU on 31 October.
Several hon. Members rose—
John Redwood (Wokingham) (Con)
Wokingham and West Berkshire Councils need money for social care and schools. The current funding is not adequate. I am grateful to the Chancellor. This is very welcome. Does he agree that, at a time of world slowdown, led by a manufacturing recession in several leading countries, a boost to the economy is much needed here and that this is part of that boost?
Sajid Javid
My right hon. Friend speaks with great experience. I very much agree that one of the outcomes of today’s spending round will be a further confidence boost to our economy.
Alison McGovern (Wirral South) (Lab)
The Chancellor claims that this is a boom in public spending, but we all know how big the bust has been, and nowhere has it been bigger than in DWP spending. Its spending will see a real-terms rise of 1.9%, which is welcome, but I ask the Chancellor: taking into account increases in the state pension and population increases, will he commit to no further cuts within that budget to working-age benefits?
Sajid Javid
The hon. Lady will know that this spending round covers day-to-day departmental spending and that the vast majority of DWP spending is not covered by day-to-day spending. So, when we get to a Budget, we can say much more about DWP spending. She will also recognise that this spending round will help more vulnerable people by protecting our economy and making sure it continues to grow and to generate jobs, which is the best way out of poverty.
Sir Michael Fallon (Sevenoaks) (Con)
I welcome the increase in defence spending, which is well justified by the increase in the threats that the country faces. However, can my right hon. Friend reassure the House that any revision of the fiscal rules will never make the Government vulnerable to the charges of fudged targets, reference periods and spending classifications that characterised the last Labour Government?
Sajid Javid
I thank my right hon. Friend for his support for the increase in defence spending and I can give him that assurance. When the fiscal rules are looked at in time for the next Budget, that will be done openly, transparently and clearly, which is exactly what is needed to maintain market confidence.
Sir Edward Davey (Kingston and Surbiton) (LD)
I welcome the Chancellor to his post, but is it not the case that headteachers, chief constables and NHS managers simply cannot rely on his fantasy figures if Britain crashes out of the EU?
The independent watchdog, the Office for Budget Responsibility, said just two months ago that a no-deal-Brexit would add £30 billion a year to public borrowing for the next four years. What insurance has the Chancellor taken out against that massive risk to his spending plans? Is this not just a con?
Sajid Javid
The right hon. Gentleman should know that the Government have no plans to—as he puts it—crash out of the EU. Our plan is to get a deal and, if he wants to help us to get a deal, he should not vote for the surrender Bill tonight.
Justine Greening (Putney) (Ind)
The real revolution that Britain needs is a revolution in social mobility and equality of opportunity. I welcome the announcement of investment in schools, but may I encourage the Chancellor to revisit investment in children’s services if he really wants to close the opportunity gap? May I also encourage him to look at reform closer to home, in his own Department? The Treasury is simply not fit for purpose when it comes to understanding how to invest in Britain’s biggest asset, which is its human capital—its people.
Sajid Javid
My right hon. Friend speaks with great experience and is right to highlight issues relating to children’s services. I can assure her that in the numbers that I have given today she will see, beyond the excellent investment in schools, investment across the board that will benefit children, especially vulnerable children, through social services in particular. She also made a good and valid point about human capital and the need to view it in a different way, and that is something that I am very interested in pursuing in the Treasury.
Wes Streeting (Ilford North) (Lab)
If Dominic Cummings had not sacked his special adviser, he might have come up with a better speech.
I note that the Chancellor did not mention the growth figures, which is not surprising given that our economy is shrinking and every major sector of it—services, manufacturing, construction—is struggling. Is it not the case that, whether we are talking about the future of those industries or the spending plans that the Chancellor has set out today, every single promise is at risk from the no-deal recession that his Government are pursuing with their reckless no-deal policy?
Sajid Javid
The hon. Gentleman claimed that I had not mentioned growth figures. There are no new growth figures today because there is no OBR forecast, but I did refer to growth: in fact, I drew attention to the IMF forecast that we would grow faster this year than France, Italy and Japan.
The hon. Gentleman also talked of the risk to the economy. The risk to the economy is the uncertainty of not leaving the EU, and we must leave by 31 October. If he wants to end that uncertainty, he knows what he must do tonight.
Kirstene Hair (Angus) (Con)
I warmly welcome the spending review. I welcome the extra £1.2 billion for Scotland and the extra £160 million for our farmers, and I was delighted to note the increase in Ministry of Defence spending. I urge the SNP Scottish Government to spend that money on education, health, policing, and connectivity in my constituency. Does the Chancellor agree that what we should be doing—what the SNP should be doing—is welcoming this extra investment, which shows the strength of being part of our United Kingdom, and removing the threat of independence, which would unleash the economy in Scotland?
Sajid Javid
I agree wholeheartedly. Let me take this opportunity to thank my hon. Friend for—along with other Conservative colleagues—helping me to focus on the issue of Scottish farmers, which has helped to secure the £160 million. She is also right about the extra £1.2 billion for Scotland. It is a huge amount—a record amount—but, unfortunately, one thing that we can be sure of is that the SNP will waste it.
Sammy Wilson (East Antrim) (DUP)
Notwithstanding the best efforts of some Opposition Members to talk the economy down, I am glad that the Chancellor has been able to make these announcements. I welcome the £400 million for Northern Ireland, which will help us to recruit police officers, reduce waiting lists and give some relief to school budgets. Does he recognise, however, that, if he is to realise his goal of levelling growth across the United Kingdom, much more still needs to be done to ensure that resources are sent to Northern Ireland and other regions of the United Kingdom to ensure that growth is experienced equally across the UK?
Sajid Javid
My right hon. Friend has made an important point. I thank him for his welcome for the extra £400 million for Northern Ireland, and also for his reference to levelling growth across the country. In my statement, I referred a number of times to the need to ensure that we have growth in every part of our great United Kingdom. That will require infrastructure investment and I hope that, when I set out the infrastructure strategy later this year, he will welcome it for those reasons.
Mr Richard Bacon (South Norfolk) (Con)
Will the Chancellor tell us when we can expect an announcement on funding for serviced plots of land?
Sajid Javid
Let me take this opportunity to thank my hon. Friend for all the work that he has done in relation to self-build homes and more generally, in promoting easier access to homes for everyone. We are discussing that issue with the Ministry of Housing, Communities and Local Government, but I will pursue it further and get back to him.
Rachel Reeves (Leeds West) (Lab)
I am surprised that the Chancellor has the cheek to call this a spending review because it is nothing of the sort. It is no surprise that the Office for Budget Responsibility did not dignify it with its own economic and fiscal analysis, as normally happens with spending reviews.
When the Chancellor made his three-year commitment to school spending, he said that he recognised the importance of schools’ being able to plan. May I ask him whether local authorities should also be able to plan for the future when investing in social care and youth services and tackling homelessness? If he thinks that they should be able to do that, why did they not get a three-year settlement as well?
Sajid Javid
Let me first say gently to the hon. Lady that this is a spending round. I have not referred to it as a spending review. As she may know, a spending review normally covers a number of years, whereas a spending round covers a single year. She said that I had not “dignified” it with an OBR forecast. No spending review or spending round comes with an OBR forecast; that is normally the case with a Budget, and there are two forecasts a year. I thought that she might already know that, but I am happy to let her know now. She also talked about the funding of sectors such as social care and youth services. I did refer to those: I set out plans for next year, but also plans for the future involving, for example, the new youth investment fund.
John Stevenson (Carlisle) (Con)
The Chancellor clearly recognises the importance of growing the economy, because it is through a growing economy that we can afford public services. I understand that, with a view to achieving growth—particularly in the north—there have been discussions about the possible creation of free ports in the north of England. Carlisle Lake District Airport, which is owned by the Stobart Group and which commenced commercial flights recently, has the ambition to create an airport free port. Would the Chancellor support that?
Sajid Javid
As my hon. Friend will know, we have accelerated our work on the free ports generally, which is being led by the Trade Secretary and the Chief Secretary to the Treasury. However, I should be happy to consider a proposal for an airport free port.
Chris Bryant (Rhondda) (Lab)
Instead of wasting £4 billion on no deal, can the Chancellor just spend some money in the Rhondda, please? Just 2% of that figure would pay for finishing off the Rhondda Fach relief road; for rebuilding Llyn-y-Forwyn school; for buying new trains, which might actually be clean and run on time, for the Treherbert line; for providing a new home for the Rhondda sea cadets; and for a new PET-CT scanner for south Wales.
Sajid Javid
The good news is we do not have to choose between investing in leaving the EU and investing in Rhondda or anywhere else in the country, and the reason is that, under the Conservatives, we have a strong economy. But if the Labour party were ever in charge, we would not have the money to invest anywhere.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
I thank the Chancellor for his statement and particularly the focus on rebuilding our infrastructure. Of course he is right to ensure that it delivers value for money. May I therefore ask that he has another look at the lower Thames crossing to ensure that it is delivering value for money and that it delivers its primary aim of relieving congestion at the existing Dartford crossing?
Sajid Javid
The general point my hon. Friend makes about infrastructure and value for money is of course absolutely right, and as we spend more on infrastructure we must make sure that that principle is always maintained. He has invited me to take a further look at the lower Thames crossing. I will be happy to do that and to discuss it with him.
Caroline Lucas (Brighton, Pavilion) (Green)
The Chancellor tells us that the challenge of decarbonisation is real, as if he has only just discovered it. But we face a climate emergency, so why have we not had a spending round that would actually match that climate emergency? Green groups are urging him to commit at least 2% of GDP on immediate climate action. Is he going to do it, or is this just going to pile up with all his other broken promises?
Sajid Javid
This spending round is focused on day-to-day resource spending. The hon. Lady may know that some very important investments that will need to be made on decarbonisation will be capital investments and that is just not covered today, but that does not mean to say it is not going to happen and is not taken seriously. However, one step that we have taken today is to provide more funding to the Department for Business, Energy and Industrial Strategy to work with the Treasury on the decarbonisation plan to meet the net 2050 targets; there is additional funding of £30 million to work on that programme. There are also other measures I have announced today that would help—for example, the £200 million on ultra-low emission buses. I hope the hon. Lady would welcome that, too.
Alberto Costa (South Leicestershire) (Con)
I welcome the Chancellor to his position. The leaders of Conservative-led Blaby District Council and Harborough District Council, both in my South Leicestershire constituency, would greatly welcome a meeting with the local government finance Minister. Will the Chancellor help to organise that, so that the Minister can discuss the additional funds that the Chancellor has announced today?
Sajid Javid
I will gladly help my hon. Friend to organise such a meeting. I will certainly speak to Ministers in the relevant Department.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
The Chancellor will know that the Select Committee on Home Affairs has called for a long time for substantial additional resources for policing and that is important, so can he confirm that the £750 million he refers to is a real-terms increase and is all central Government funding, as he will know that central Government funding for policing has been cut by £3 billion since 2010? Can he also confirm that this is not yet enough to fund the restoration of the over 20,000 police officers who have been cut since 2010, and it also does not reverse any of the cuts of 7,000 PCSOs and 5,000 specialists since 2010?
Sajid Javid
What I can confirm to the right hon. Lady, and I hope she will find this helpful, is that for the Home Office my starting point was to roll over all funding in real terms that it had received this year, so that was the baseline, which had not been done before. I added to that the extra costs that would be required, with the major cost being for the extra officers. So the real-terms increase in the Home Office budget is £800 million. That is an increase in the real-terms growth rate of 6.3%, the biggest real-terms increase in the Home Office budget in 15 years.
Sir Edward Leigh (Gainsborough) (Con)
As we saw on the Public Accounts Committee during the Labour years, if there are rapid increases in public spending, particularly on health, they are invariably accompanied by increasing levels of unproductivity, so how is the Chancellor going to maintain his laser-like focus on economy and efficiency and ensure that a greater proportion of our spending is not sucked into administration, away from the frontline? In other words, tax and spend on its own does not work.
Sajid Javid
My right hon. Friend makes an important point. He talked about it in the context of health, but we could apply it to the spending of many other Departments. He is absolutely right that as we allocate this new spending, especially if it is multi-year funding amounting to billions of pounds, it is imperative that we make sure every penny is spent wisely. That work is done jointly with the Department, but also in a unit in the Treasury. We will have a laser-like focus on efficiency, and if we need to take action we will not hesitate.
Frank Field (Birkenhead) (Ind)
The Chancellor did not mention families who are today hungry and facing destitution; those families have suffered cuts of £1,200 in benefits. What message would he like to send them today?
Sajid Javid
I will say two things on that to the right hon. Gentleman. First, as I said in reply to a previous question, for welfare and the DWP today’s settlement covers only day-to-day resource spending and, as he will know, most spending on benefits is not day-to-day resource spending. Secondly, to answer his question on how this spending round will help people in such vulnerable positions, what I have announced today underlines the fundamental economic strength, and that will bring more confidence, meaning our economy can continue to grow and continue to generate jobs—and jobs will always continue to be the best sustainable way out of poverty.
Luke Graham (Ochil and South Perthshire) (Con)
I welcome the Chancellor’s statement, including the £1.2 billion extra that will be coming to Scotland, which is an increase on the real-terms increase we already received in the Budget last year. May I especially thank him for the £160 million that will be coming back to our constituencies in rural funding, which was demanded by NFU Scotland and requested by my constituents, and is delivered by the Scottish Conservatives, with his help?
Sajid Javid
My hon. Friend is right on every count; it has been delivered by Scottish Conservatives, and may I take this opportunity to thank him for all the representations that he made to me, along with his colleagues, and for achieving this result? It just shows that Scottish Conservatives really care about their constituents, unlike the SNP.
Dr Sarah Wollaston (Totnes) (LD)
This morning I met with NHS trust leaders from around the country; they painted an absolutely shocking picture of infrastructure that is crumbling, unsafe and broken. They welcome the unfreezing of £1 billion so that they can get on and fix some of that, but it does not go far enough; there is a £6 billion backlog, and they are asking for us to reach the levels of comparable countries in spending on NHS infrastructure. Will the Chancellor meet me to discuss their serious concerns and the measures that we need to take to move this forward?
Sajid Javid
I thank the hon. Lady for welcoming one of the changes I made a few weeks ago, which was to unlock or bring forward £1 billion of new capital investment in our hospitals and an additional fresh £850 million on top of that to upgrade 20 hospitals. She makes an important point, but today’s announcement is about day-to-day resource spending whereas she is talking about another important area, which is capital. I will make sure she gets the meeting with Ministers she wants.
Sarah Newton (Truro and Falmouth) (Con)
I very much welcome this additional investment in our vital public services. The “Britain’s Leading Edge” report that I helped launch in July evidenced an historical bias in the funding of our public services between England’s regions and major cities. Will my right hon. Friend use the spending review to end this bias, so that regions such as Cornwall can play their full part in the Treasury’s economic renewal plans?
Sajid Javid
I agree with my hon. Friend, and she has made this point powerfully on a number of occasions. In the past, for example, we talked about making sure that police funding reflects local need. I hope she will have noted that in my remarks today I talked a lot about levelling up across the country, whether in infrastructure investment or in investment in public services, and I can give her an assurance that Cornwall will not be left behind.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
I look forward to sharing plans for the Southern Rail access to Heathrow, which I hope will form an important part of the Chancellor’s new infrastructure strategy.
This month, Hounslow clinical commissioning group was due to present the full business case for the planned and urgently needed Heston health centre redevelopment to its governing body. However, the project is on hold after questions about whether the local improvement finance trust scheme, which was originally advised by the Department of Health and Social Care as the best-value funding option, could still go ahead following confusion around the Treasury’s policy on LIFT schemes last year. Will the Chancellor meet me to review the situation, so that we can see whether the existing plans can be approved or whether any of the alternative capital funding he has announced will be available to enable this important and urgent development to go ahead?
Sajid Javid
I will happily discuss with officials the issue that the hon. Lady has raised, and I am sure that they will be happy to meet her.
Huw Merriman (Bexhill and Battle) (Con)
I thank the Chancellor for the extra money for local government and social care, which will prove hugely impactful for East Sussex. I should like to make particular reference to the schools spending increases. The increase to £5,000 for secondary schools and £4,000 for primary schools next year will help East Sussex schools to almost catch up with some of the wealthier parts of the country. I should also like to thank the teachers, headteachers and governors who have fought their campaign, with me, with respect, reason and absolute passion to deliver the best for their schoolchildren.
Sajid Javid
I want to take this opportunity to thank my hon. Friend for his campaigning and for the way in which he has worked with the Treasury and the Department for Education on this. I think he is referring to the f40 campaign, with which I am very familiar as a constituency MP. I am pleased that we have been able to make this huge step change in school funding, which I know has been welcomed across the country.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
After all the announcements over the summer, I had hoped for more detail today. The Chancellor and his Department might have a laser-like focus, but he can rest assured that the Public Accounts Committee will be delving through these figures and holding him to account.
As others have said, the Chancellor has indicated that he is going to change the fiscal rules. We already have an 85% ratio of debt to GDP. Can he advise us of the tolerance level that he would go up to in that debt level, and is he considering increases in taxation?
Sajid Javid
I welcome the scrutiny from the hon. Lady’s very important Committee. She might not have enough time, but there is a lot of detail in the book has been published alongside my statement today. She referred to a figure of 85% for the ratio of debt to GDP. I think the last Office for Budget Responsibility forecast in March had it at 82.2% and on a declining trajectory. On the changes to the fiscal rules, I have set out that I am looking at the fiscal rules in time for the Budget. There may well be changes, but I do not want to set out what they will be today, because we have not decided.
Jeremy Lefroy (Stafford) (Con)
I welcome the Chancellor and his statement. Does the spending round contain any provision for the establishment of a UK development and investment bank, which I believe would be an extremely strong vehicle to make the kinds of investments that he talks about in the public and private sectors and internationally?
Sajid Javid
Today’s statement does not focus on capital, but my hon. Friend’s suggestion would certainly involve capital investment if it happened. I know that he has spoken to the Economic Secretary to the Treasury about this, and we are happy to have further discussions.
Dame Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
The people of Liverpool have suffered a horrific 64% cut in funding for local services. I was pleased to hear the Chancellor say this afternoon that no Department will be cut next year, but is there an absolute guarantee that Liverpool City Council will not have any real-terms reductions in its funding for local services next year? And when will he make the money available to complete the new Royal Liverpool Hospital?
Sajid Javid
The hon. Lady will know that local council funding will be a combination of grant funding and locally raised funding, so it is hard to say specifically what might happen to any particular council’s funding, as it will depend in large part on what that council chooses to do. However, I hope that I can give her some reassurance by telling her that, following today’s announcement, the core funding for local government next year across England will receive its highest increase in a decade.
Mary Robinson (Cheadle) (Con)
In the north, there are 42,000 more people in work than there were a year ago, and 280 businesses are being supported through the £400 million northern powerhouse investment fund. I welcome the Chancellor’s announcement of the infrastructure revolution, and indeed the acceleration of the HS3 Northern Powerhouse Rail project. Will he ensure that, throughout the next year, the northern powerhouse is kept at the heart of Government thinking on the economy and on what we can do in the north to close the productivity gap and really deliver for the country?
Sajid Javid
Yes, I can absolutely give my hon. Friend that guarantee. I should also like to congratulate her on the excellent work that she has done locally to bring this issue to the attention of the Treasury, especially in relation to infrastructure investment in the north. She has done a fantastic job, and I would be happy to meet her and listen to her ideas, especially on infrastructure.
Budget Resolutions
Sajid Javid Excerpts(6 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Communities and Local Government (Sajid Javid)
It is a pleasure to respond to the Shadow Chancellor, although I am grateful that, for everything we have heard in the past half hour, he did not literally throw the book at me.
On Saturday, it will be exactly two years since the right hon. Gentleman cited one of history’s worst mass murderers in defence of his own economic policies. So let us take a look at some of the great leaps forward our economy has taken in those two years. Employment: up. House building: up. Inward investment: up. Borrowing: down. Last year, the British economy grew faster than that of any other G7 nation. This week, the CBI said that manufacturing order books have not been this full for almost 30 years. Siemens has said that it is cutting jobs on the continent, but expanding its UK operation, investing more money and creating even more jobs.
Whatever way we look at it, this is a Government that are getting things done—a Government that are growing the economy, and a Government that are building a Britain fit for the future. Yesterday’s Budget builds on that success and lays the way for much more to come. It is a Budget that will lead to us building more homes in the right places and at the right prices, a Budget that will protect and enhance our precious public services, and a Budget that will tackle the burning injustices that still plague too many people in this country.
First among those injustices is the state of the housing market. As I have said before, our home is so much more than just the place we go to sleep at night. It shapes who we are, provides stability and security and shapes our life chances, opening up or closing off all kinds of opportunities. A fair, affordable housing market builds strong families and strong communities. A broken one is, of course, a barrier to social mobility and a root cause of intergenerational unfairness.
The way to fix the broken housing market is to build more homes, and that is exactly what we are doing. Last year there were 217,000 net additions to the housing stock—the highest such figure in almost a decade. But we are under no illusions about the fact that there is much, much more to be done.
Labour’s answer to the housing crisis—in fact, Labour’s answer to everything—is simply to throw more of someone else’s money at the problem and hope that it goes away. The last time Labour tried that, we ended up with house building at its lowest level since the 1920s and an economy on its knees. This country needs at least 300,000 new homes a year. Do you know how many Labour started in its last full year in office, Madam Deputy Speaker? It was 75,000—the lowest number of starts in peacetime since the 1920s.
Chris Williamson (Derby North) (Lab)
I am delighted that the Secretary of State says there will be a renaissance in house building. Can we therefore look forward to an announcement of a renaissance in council house building? Does he accept that the cost of building council houses is in large measure covered by the income generated from the rental stream? It is basically a free hit, so why will he not admit that it is important that we start to build the council houses that we need to tackle the housing crisis?
Sajid Javid
I am glad that the hon. Gentleman raises the issue of council houses, because it gives me another opportunity to remind the House that in 13 years in office, Labour built fewer council houses than have been built since the return of a Conservative-led Government. Yesterday’s measures, which I will come to in a moment, are ambitious and will lead to more council houses, which we welcome.
Clive Efford
Can the Secretary of State explain how it is logical to cut stamp duty on houses worth less than £300,000, which will increase the price of properties, cut the tax coming in and benefit not first-time buyers but only those selling properties?
Sajid Javid
I think the hon. Gentleman should speak to the leader of his own party, who stood at the Dispatch Box yesterday claiming that it was his policy from his manifesto. The hon. Gentleman needs to go and do some homework.
When Labour came to power in 1997, the average home cost three and a half times the average wage. By the time it slunk out of office in 2010, it was nearly seven times the average wage. As for the neediest in society, Labour cut the number of social homes for rent by more than 420,000 units. That is its track record.
Wes Streeting (Ilford North) (Lab)
The Secretary of State says that we need 300,000 new homes a year to address the housing crisis, so presumably he has just committed to making sure that that many homes are built. Until he addresses the supply side of the housing crisis, he must stop fuelling demand-side pressures, which is what he has done. As the Office for Budget Responsibility has said, the elimination of stamp duty will fuel demand at a time when he is not meeting the supply pressures.
Sajid Javid
Where the hon. Gentleman is right is on the need for further planning reform. That is why the Budget follows on from the housing White Paper earlier this year with further reforms, some of which I will come to in a moment. Where he is completely wrong, like the hon. Member for Eltham (Clive Efford), is on stamp duty. He should have a conversation with young people buying their first house, who can save up to £5,000.
Peter Heaton-Jones (North Devon) (Con)
Does my right hon. Friend agree that what we need now is clarification from the Opposition on what they will do when it comes to a Division on the plan to scrap stamp duty for first-time buyers? Will they block those plans? If so, that says more about where they stand than any words they could ever say.
Sajid Javid
My hon. Friend will not be surprised to learn that the Opposition do not know what they would do. They have no idea, other than borrowing billions of pounds more and trying to bankrupt this country once again.
What Labour has never understood is that getting more homes built requires action on many fronts. It is the easiest thing in the world to say, “We’ll build more homes”, but it is meaningless unless we address where we are going to build them, what we are going to build and how, who is going to do the building and who is going to pay for it all.
Emma Hardy
The right hon. Gentleman makes the point about where we build homes and the need to get the people to build them. Does he recognise that providing money to create maths teachers will not help with the skills shortage that we have in the building industry so that we can create the builders we need to build properties?
Sajid Javid
First, I would have thought the hon. Lady would welcome the extra investment in maths. If she had been listening to the Budget, she would have also welcomed the partnership that we are beginning with the TUC and the CBI to invest in the skills of the future, and the additional funding to get more skills into the construction industry.
Our housing White Paper promised action on many fronts, and that is what the Budget delivers, with more than £15 billion of new financial support to help make it happen. Over the next five years we will commit to a total of at least £44 billion of capital funding, loans and guarantees to support our housing market, to boost the supply of skills, resources and land for building, and to create financial incentives to deliver an average of 300,000 net additional homes a year—or to put it another way, almost three times as many as the shadow Housing Minister managed when he was Housing Minister.
Susan Elan Jones (Clwyd South) (Lab)
The right hon. Gentleman speaks about action. Why are the Government not taking action on developers who sit on land? The Chancellor spoke yesterday about a consultation, but we all know what needs to happen, so why do they not just do it?
Sajid Javid
It really bewilders me that although the Opposition Benches were full yesterday for the Budget, it seems like no one was actually listening. If the hon. Lady had been listening, she would have heard some of the measures that the Chancellor announced, including the change to the delivery test and the new inquiry, which I will come on to.
The Budget provided new money for the home building fund, to get small and medium-sized house builders building again. The Chancellor also promised £630 million for small sites to unlock the delivery of 40,000 homes; £400 million for estate regeneration; a £1.1 billion fund to unlock strategic sites, including new settlements and urban regeneration schemes; and £8 billion of new financial guarantees to support private house building and the purpose-built private rented sector.
Rachael Maskell (York Central) (Lab/Co-op)
Can the Secretary of State explain why York’s Conservative-led council submitted a local plan that seriously undershot the number of houses he is referring to? Why such a disparity within his own party?
Sajid Javid
The hon. Lady will know that we are currently consulting on how councils across the country, however they are led, should assess housing need. Once the proposals go forward, it will be clear that no council will be able to avoid building the houses it needs to.
In the areas where supply and demand are most badly mismatched, where most homes are unaffordable to most people, we will increase local authority housing revenue account borrowing caps by a total of £1 billion. That will allow ambitious councils to invest in new homes where they are most needed. We will bring together public and private capital to support the delivery of five new locally led garden towns in areas of high demand. We are committed to building up to 1 million new homes in the Oxford-Milton Keynes-Cambridge corridor by 2050, and we have agreed one of our first ambitious housing deals, with Oxfordshire, to deliver 100,000 homes by 2031.
Rebecca Pow
Taunton has been made a garden town, and I am very proud to be part of it. Will the Secretary of State confirm that as well as building more homes, we are going to build homes that people really want to live in? We are going to make good communities and good places to live, with the right infrastructure and all the facilities that people want. We are going to be the Government who bring housing into the 21st century.
Sajid Javid
My hon. Friend is absolutely right. It is not just about building homes; it is about building communities. That means, among other things, supplying the infrastructure that is required, and I will come on to that.
Chris Williamson
The Secretary of State is being generous in giving way. Can he give us an indication of how many additional council houses will be built as a consequence of the lifting of the debt cap to the proposed level? I do not think it is very many—fewer than 10,000.
Sajid Javid
The hon. Gentleman keeps making that point, and I welcome it. I thank him for giving me another opportunity to remind the House that under the Conservatives, more council houses have already been built than were built during 13 years of Labour rule. How many more houses are built will depend on how ambitious local authorities are, but the objective is to ensure that thousands more are built each year by increasing the cap.
We have set out measures to support the workforce in this industry by providing an additional £34 million to develop vital construction skills such as plastering and bricklaying. As I have said, getting the country building will require more than just money. Planning reform is also required. We will focus on getting homes built in urban areas, where people want to live and where the most jobs are created. That will include making the best use of our urban land while continuing the protection of our green belt. We will focus on creating high-quality, high-density homes in city centres and around transport hubs.
To put the needs of our young people first, we will ensure that councils in high-demand areas permit more homes for local first-time buyers and renters. We are also launching an independent inquiry into so-called land-banking, with the promise of serious action if developers are shown to be holding back supply for financial rather than practical reasons. I am pleased that my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) has agreed to lead that work.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Secretary of State is going on, yet again, about investment in the south of England, but he has not mentioned Yorkshire or the north of England. Will we, for example, get the electrification of the trans-Pennine rail system? We have real opportunities to grow the population and wealth in the north of this country, but the Government do not hear that message.
Sajid Javid
The hon. Gentleman will know, if he has had an opportunity to study the Budget closely, that the Chancellor referred to the housing deals that we are working on in Greater Manchester, Leeds and the west midlands. The hon. Gentleman mentioned the trans-Pennine railway, and he will know that the Chancellor offered an additional £300 million yesterday for the trans-Pennine railway. I am sure the hon. Gentleman will welcome that.
Helen Whately (Faversham and Mid Kent) (Con)
A moment ago, the Secretary of State mentioned the review of the build-out of houses. One issue in my constituency is that many planning permissions are granted, but there seems to be a delay before the houses are built. We are getting the blight but not the benefit, and therefore not the affordability. May I welcome the Secretary of State’s plans to make sure that not only are planning permissions granted, but houses are built?
Sajid Javid
My hon. Friend is right to highlight that. Many councils are, like hers, willing to take what may be tough decisions, provide the land for new homes and give the planning permissions, only to find that developers do not build those homes out at all, or that they do so far too slowly. The measures in the housing White Paper are hugely welcome and will make a difference, but I am not sure whether they are enough. That is why we wanted to have an independent inquiry, and I am sure that it will make a big difference.
The whole planning and building process will be overseen by our new national housing agency, Homes England. That agency will be based on the Homes and Communities Agency, but its remit will be far larger and will bring together money, expertise, planning and compulsory purchase orders. That will allow it to offer specific solutions to the barriers faced by different areas, maximising its impact and getting more of the right homes built in the right places.
It is no good building homes if people cannot afford them. Growing the economy and raising wages are key to that but, as I said last week, young people face a housing market that is very different from the one that their parents’ generation enjoyed. We are going to get more homes built, but that will not happen overnight. What has happened overnight is a change that means that no stamp duty will apply for the vast majority of first-time buyers. On average, a first-time buyer will save £1,600. In addition, we have provided £200 million for a pilot to extend the right to buy to housing association tenants in the midlands, allowing people to own the homes in which they have lived for many years and giving them the same opportunity as that enjoyed by council tenants.
Huw Merriman
Will my right hon. Friend take into account the fact that the stamp duty change—much as it may have been scoffed at—has given a couple in my constituency, both of whom work in the public sector, £2,500 towards buying their own home? I thank him, on behalf of my constituents, for that policy, which will have a massive impact for a younger generation that is already struggling.
Sajid Javid
I am very pleased to hear that from my hon. Friend. I, too, have received emails overnight from members of the public who have welcomed the change. I am sure the Leader of the Opposition has received similar emails, and I am sure he is all excited about sharing them with us at Prime Minister’s Question Time next week.
Not everyone is lucky enough to have a home. One person living on the street is too many, but the latest figures are simply unacceptable. It is clear to anyone who walks around any of our major cities that the current approach to tackling homelessness is not enough. It is time for a bold new way of doing things, and this Budget provides some of the resources required to do just that.
I have been a fan of the Housing First approach for some time. It does exactly what it says on the tin: it involves getting people off the street and into a safe and secure home first, and then dealing with the problems that may have forced them on to the streets in the first place. That sounds obvious, but it is a complete reversal of the traditional way of doing things under successive Governments. Earlier this year, I saw for myself how that approach has eliminated rough sleeping in Helsinki, and I want to see whether we can make it just as effective in our own country. That is why the Chancellor announced yesterday £28 million for Housing First pilots in the west midlands, Greater Manchester and the Liverpool city region.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Does the Secretary of State not realise that that is not particularly innovatory and that Labour did end the obscenity of rough sleeping in less than 10 years when we were in government? If the Government had not removed the safety net of support services and housing, we would not have had people sleeping rough on our streets in the past seven years.
Sajid Javid
I know that the hon. Lady means well and that on this issue, at least, there is usually a welcome cross-party approach, but she is wrong to suggest that rough sleeping was ended at any time, under any Government. In fact, under the last Labour Government, statutory homelessness peaked in 2007. Since then, it is down by more than 50%. I hope that she agrees that we can all work together to do more to combat homelessness. For that reason, I hope that she will welcome the announcement of the new homelessness reduction taskforce, which will pilot a number of new ideas to help to cut rough sleeping by 2022 and to eliminate it altogether—working together—by 2027.
Homes are only part of the picture. Communities need roads, railways, schools, GP surgeries and much more besides. Investing in infrastructure can unlock a huge range of new sites and avoid putting too much pressure on existing communities that already feel squeezed. That is why we are committing a further £2.7 billion to more than double the size of the housing infrastructure fund, investing not just in houses but in the services that we all depend on.
Of course, our support for public services is not limited to new communities. We are putting an additional £6.3 billion of new funding into the NHS, upgrading facilities, improving care, improving A&E performance, reducing waiting times and treating more people this winter.
Ms Karen Lee (Lincoln) (Lab)
I am a nurse and I still do bank shifts at Lincoln County Hospital, and I am sorry but I really do not recognise what the Secretary of State is describing. Hospitals have got leaking roofs, with buckets to catch the water coming in, and nurses leave shifts at least an hour late, while our pay has been capped and we have lost 14% since 2010. I am sorry, but I do not recognise the NHS he is talking about.
Sajid Javid
I say gently to the hon. Lady that if this country had taken Labour’s approach to the economy, we would be heading for bankruptcy again, and there would be no new money for the NHS. I hope that she will join Members on both sides of the House in welcoming the additional £2.8 billion going to the NHS in resource spending next year and the additional £3.5 billion that has been made available for capital spending over the next five years.[Official Report, 27 November 2017, Vol. 632, c. 1MC.]
Chris Williamson
On the point about the country becoming bankrupt, will the Secretary of State remind the House how much extra this Government have borrowed since they came to power?
Sajid Javid
This is a timely point at which to remind the hon. Gentleman that when a Government leave this country with the biggest budget deficit of any industrialised country, there are consequences, and Labour Members have not once—I repeat, not once—got up at the Opposition Dispatch Box to apologise for what they did to this country in their 13 years in office.
The Chancellor has also promised to provide additional funding for a future NHS pay settlement, so that our nurses are properly rewarded without taking money out of patient services. We are investing more in our schools: they will get £600 extra for every pupil who takes A-level or core maths; £27 million will help to improve how maths is taught in 3,000 schools; £49 million will go towards helping students resitting GCSE maths; and £350,000 of extra funding a year will be given to every specialist maths school that has been set up across the country. That is a massive investment in numeracy—sadly, it comes too late for the shadow Treasury team—that will help to ensure our young people have the skills they need to compete in the future high-tech jobs of the 21st century.
Not all public services are the responsibility of central Government; many are delivered by our brilliant local councils, whether parishes, districts, counties, metropolitans or unitary authorities. I am well aware of the pressure that local authority budgets are under, particularly with regard to social care. That is why this year’s spring Budget provided an extra £2 billion to help to meet the immediate needs in this vital area. I remain totally committed to delivering fair, effective funding for councils at all levels, and we will obviously return to this in next month’s local government finance settlement.
In the meantime, we are pushing ahead with our pilot schemes for 100% local business rate retention, including in London, and we are reforming business rates themselves. Revaluations will switch from every five years to every three years, avoiding the cliff edge that currently confronts many businesses, particularly smaller ones. We are changing the law so that businesses affected by the so-called staircase tax decision can have their original bills reinstated and backdated. We are bringing forward the change in uprating from RPI to CPI, which will now take effect from next April, saving businesses £2.3 billion over the next five years.
One council, the Royal Borough of Kensington and Chelsea, has had to deal with an unprecedented tragedy this year. The fire at Grenfell Tower should not have happened, and it should not have been possible. Since the blaze, the people of north Kensington have shown themselves to be remarkably resilient, courageous and proactive, and they deserve the full support of this Government and this House. We have already provided financial support for the victims of this terrible tragedy. This Budget sets aside a further £28 million to pay for community mental health support and to provide regeneration support for the area around Grenfell Tower and a new space for the local community to come together.
Clive Efford
Will the Secretary of State clarify what the Chancellor said yesterday about funds for fire safety precautions? Did he say that, where local authorities are told by an independent fire safety officer that sprinklers should be retrofitted in tower blocks, the Government will assist with paying for that to happen?
Sajid Javid
I thought the Chancellor was clear, but I am happy to help the hon. Gentleman by providing clarification. The Chancellor said that all local authorities need to do whatever is essential to keep their residents safe, which includes fitting sprinklers and anything else. If they receive such professional advice, they should of course follow it. If in doing so, they need to approach the Government for financial support, they should do so, and we will provide support.
Bob Blackman (Harrow East) (Con)
Will my right hon. Friend confirm that the Grenfell relief fund will be available immediately and that we will not have to wait until the next Budget year on 1 April, so that the poor victims, who have suffered greatly, can get the help they need right now?
Sajid Javid
Yes, I am very happy to confirm that for my hon. Friend. The new funding that the Chancellor announced yesterday will be available immediately.
The most recent additions to the local government family are the combined authorities, led by the six directly elected Mayors. Under this Budget, they will be able to improve local transport with half a new £1.7 billion transforming cities fund. The remainder will be open to competition by other English cities. A second devolution deal has been agreed with the incredible Andy Street in the West Midlands; a whole new devolution deal has been struck north of the Tyne; and we are developing a local industrial strategy with Greater Manchester. We are investing £300 million to ensure that HS2 infrastructure can accommodate future northern powerhouse and midlands engine rail improvements.
This kind of devolution is how to deliver growth and opportunity right across the country. It is how to boost productivity and secure new jobs and increased security for hard-working people wherever they live. It underlines the fact that this is a Budget for the whole country: a Budget for the many, not the few. [Interruption.] That has woken up Labour Members, and perhaps my next point will as well. On Tuesday night, almost 24 hours before the Budget was delivered, the Leader of the Opposition emailed his supporters to call on them to oppose everything the Chancellor was going to say. I know that Marx once said:
“Whatever it is, I’m against it,”
but that was Groucho, not Karl. It is great that Labour Members have found a new source of inspiration, but their economic plans are no laughing matter.
On Sky News yesterday, the shadow Housing Minister said that people should look at what the Institute of Fiscal Studies said about the spending plans in his party’s manifesto, so I did. I took a look, and it said:
“What Labour actually want you to hear is that the spending increases they promise…would be funded by tax increases solely affecting the rich and companies. This would not happen… In the longer term, much of the cost is likely to be passed to workers through lower wages or consumers through higher prices.”
Those are not my words, but those of the independent IFS.
Kirsty Blackman (Aberdeen North) (SNP)
Is the Secretary of State aware that the IFS has just issued a press release saying that workers are now facing two lost decades of earnings growth?
Sajid Javid
I am aware—far more than the Labour party, despite its name—that what workers want is work. That is why we should celebrate the fact that we have more people employed today than at any time in our history, and we have the lowest unemployment rate in 40 years.
Labour Members talk a good game, but all they have are blank cheques they know will never be cashed and empty promises they know they will never be able to keep. Over and again, the shadow Chancellor refuses to say how much his spending plans would cost, how much he would have to borrow and how much debt he would pile on to the next generation. He says that he does not “need a number”, because that is “what iPads are for”. He even accused one reporter of wanting him to “pluck a figure” out of thin air. Well, no, we do not want him to pluck a finger out of thin air—[Interruption.] A figure, and a finger as well. He is good at putting up the finger—we know that. We want him to tell the British people how much his plans would cost. His failure to do so can mean one of only two things: either he has no idea what the cost would be, in which case he is not fit to be Chancellor, or he does know, but is refusing to share his dirty little secret because he is all too aware of how shameful it is.
John McDonnell
I have taken a vow that I will not throw about any form of book in the Chamber ever again, but may I suggest that we send the right hon. Gentleman a copy of the “Grey Book”, which identified every policy, all costings and all funding sources—including our capital transformation fund—that would build the homes that we need and ensure a fair taxation system? That is how we would fund our policies. The only numbers in the Tory manifesto were the page numbers.
Sajid Javid
Once again, the shadow Chancellor says that he will provide the numbers, but on every single occasion he has failed to do so. He did that again yesterday after the Budget, and he will no doubt keep doing it for as long as he feels that he can get away with it. It is no surprise that, while we are building a Britain that is fit for the future, Labour is planning a run on the pound. Yesterday, the Chancellor stood at the Dispatch Box and laid out a compelling vision for housing and public services and for making this a country that works for everyone. Today, the shadow Chancellor appears again peddling a bankrupt ideology that will bankrupt the country and take our schools and hospitals with it. His reckless plans would drive up interest rates and unemployment. He claims to be on the side of the many, but his policies would make it harder for people to pay their rent or their mortgage and harder for ordinary working people to save up for a home of their own.
Whenever the shadow Chancellor speaks, he tries to paint a picture of a fading, failing, divided nation. He talks down our economy, our prospects, our public services and our people. It suits his purpose, I suppose, but the country that he describes is not the country I recognise. When I look at the world that my parents grew up in—no electricity, no plumbing, and my mother was not even allowed to go to school—it reminds me again just how lucky I am to have been born British; how lucky we all are to have been born British.
We have one of the world’s biggest, most successful economies. We speak the language of global business, the language of the world wide web—the world wide web that we invented. We are home to more Nobel prize winners than every country bar one. Our legal system is the most respected in the world. We are unrivalled in art, culture and the creative industries. The NHS is the envy of countless nations. We have given the world everything from the steam engine to Shakespeare and even the glorious game of cricket. We may not be the biggest or the brashest, but Britain is, without doubt, the best country in the world in which to work, play, learn and live. A country with an incredible history, and an amazing future still to come. This Budget builds on that history and embraces that future. This is a country of which we should be proud, and this is a Budget that truly does it justice, and I commend it to the House.