Autumn Statement Resolutions
Alex Cunningham Excerpts(5 months ago)
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Alex Cunningham (Stockton North) (Lab)
You are most generous, Madam Deputy Speaker. So often I have stood here and seen my time go from 10 minutes to three minutes, so I am grateful. We have an autumn statement that does no more than tickle our economy and does more harm than good for those in the greatest need. We needed to see policies that support working people and hard-pressed families, all of whom are suffering from a cost of living crisis not of their making. We need to see measures that tackle the scourge of child poverty in particular. Almost 34% of children in my constituency live below the poverty line. In the north-east, 67% of children in poverty are from working families. That is thousands of children going to bed hungry and missing the opportunities available to their better-off peers. Every parent wants the best for their children, but many are struggling. Wages are too low, childcare is too expensive, decent homes are unaffordable and the social security system is not properly protecting and supporting those who rely on it. Food bank use and in-work poverty have risen, and more than 4 million children are now living in poverty.
The social security system should provide genuine security for all families, but cuts since 2010 have pushed children into poverty. I believe that by reducing poverty and providing effective early help, we can also alleviate some of the pressures on families that are contributing to the rising numbers of children in the care system. We need to support foster and kinship carers to increase the number of secure, loving homes for children, tackle profiteering by private children’s homes and provide co-ordinated support for care-experienced people to reduce the disadvantages they face.
Responding to the King’s Speech, the interim chair of the North East Child Poverty Commission, Michele Deans, said:
“The King’s Speech spoke today about building a better future for our children and grandchildren, and yet completely failed to address one of the single biggest barriers to achieving this for the North East—unacceptably high child poverty and growing levels of hardship for families right across our region.”
Sadly, the same can be said after today’s statement. It is simply not good enough. More must be done to address the unacceptable position we are in with hundreds of thousands of children up and down the country living below the breadline.
We know that the right policies can make a difference. Analysis in 2020 by the Institute for Public Policy Research shows that the north-east saw the biggest fall in child poverty of any region from 1999 to 2013. People from all walks of life are suffering, though. Chris McDonald, who I expect to succeed me as the MP for Stockton North, was out in Wynyard, the most affluent part of my constituency, if not the north-east, and he was getting a clear message: even families with good incomes are suffering at the hands of the Tories. Some are facing increases of thousands of pounds on their mortgages as fixed-term interest rates run out, but everyone is feeling the effects of inflation, with the poorest suffering most as food inflation is way higher than the current headline figure.
The Prime Minister claims that the Government took difficult decisions to halve inflation. He has got some nerve, claiming the work of the Bank of England as a policy success. Paul Johnson, the director of the Institute for Fiscal Studies, said that the Government’s pledge to halve inflation was
“opportunistic…given the fact that the Bank was, in January, forecasting that inflation would…halve.”
At the start of the year, the Prime Minister and the Chancellor promised to get the economy growing, but growth is flattening. The Bank of England has downgraded its economic forecasts, and the IMF says that the UK will be the lowest grower in the G7 next year. In spite of that, we have a rising tax burden, and public services are on their knees, but there is little if anything for those in greatest need, and certainly not for those public services.
Job creation should have been a focus for the autumn statement. Teesside is fit to burst with potential when it comes to emerging energy-intensive industries and carbon capture, utilisation and storage. The jobs and opportunities that they could create for our area are huge, but many of the promises from the Government and the Tees Mayor remain just that—promises. Sometimes, it feels that we have heard more promises than we have seen jobs delivered.
I would have liked to have seen the Chancellor announce a proper package of support to get our net zero cluster under way and a strategy that supports businesses as they transition to net zero. Commitments have been made, and I welcome them, but the stream of organisations that have come to talk to me about net zero, CCUS and industry all say the same thing: the lack of a proper industrial strategy and snail-paced decision making is hampering their ability to get on with their job and often win the investment needed from their overseas bosses. The more the Government dither and delay, the more they will hinder the UK’s chances of leading the world on the path to net zero. The UK has led the world in clean energy investment, and its market is mature, ambitious and ready to invest to hit net zero, but the failure to get on with the decision making is impacting businesses confidence.
As chair of the chemical industry all-party parliamentary group, I attended the Chemical Industries Association dinner last week, where its president, the director of Ineos, Tom Crotty, reminded us that chemicals is one of our major industries, but that we are not getting our fair share of investment. He said:
“The most recent figures show that in the UK, the global chemical industry invests a little over 1% of what it invests in China, 4% of what it invests in Europe and 4% of what it invests in America. And the situation has significantly tipped in favour of America, away from our continent.”
The reason, he said, was the Biden’s Administration’s Inflation Reduction Act. Paul went on to say:
“12 months ago I stood here and said: Where is our equivalent of the USA’s IRA? A piece of regulation that will see an historic down payment on deficit reduction to fight inflation, invest in domestic energy production and manufacturing, and reduce carbon emissions by roughly 40% by 2030.”
Tom pleaded with the UK Government to act, but the wait goes on. Today, the CIA has welcomed some measures in the Chancellor’s statement.
No strong economy can be created without a healthy workforce. For a healthy workforce, we need a robust, 21st-century health service. For 13 years I have campaigned for a new hospital for Stockton-on-Tees, which was planned but axed in 2010 under the Conservative-Lib Dem coalition Government. Our area was lagging behind on health inequalities then, and they have got worse, not better. It is no good the Chancellor penalising sick people because they cannot work, when he fails so spectacularly to properly fund our NHS. We need our best facilities to support people to live healthier lives, and the dedicated healthcare professionals who work so hard to improve the health of our communities. Sadly, the same problem exists in communities across our country, and there was no indication of any real change. The next Labour Government will sort it out, and have a social care service that justifies the word “care” in its title.
I will finish on smoking and health. The all-party parliamentary group on smoking and health, of which I am a vice-chair, recently published data showing that smoking cost public finances in England £21 billion in 2023—nearly double the tobacco tax take of £11 billion. Of that cost, £3.5 billion is accrued by the NHS and social care, but the majority is lost productivity, which reduces direct taxes and increases social security payments.
Analysis for the National Institute for Health and Care Excellence shows that smoking cessation treatment is one of only a handful of healthcare interventions that are cost saving to the NHS. In the first year, it reduced hospital admissions, improved surgical outcomes, improved birth outcomes and was as effective at reducing anxiety and depression as anti-depressants. However, according to the Health Service Journal, NHS England has told trusts that they can cut NHS long-term plan prevention funding, which includes smoking cessation, to help balance their overstretched budgets. That is the falsest of false economies.
The solution recommended by the APPG is a “polluter pays” levy on tobacco manufacturers, which make an average 50% profit compared with less than 10% for UK manufacturing. I welcome the Government’s measures to deal with smoking, but they need to go so much further. In 2015, when the Government consulted on a polluter pays tobacco levy, it was prohibited by the EU. No more. It can be done now—it may be one of the very few benefits of our leaving the EU. We need to do much more than tickle our economy. We need to hit it with a sledgehammer of measures that will address our decline and better look after our people. We did not get that today. It is time for a Labour Government.
Oral Answers to Questions
Alex Cunningham Excerpts(5 months, 2 weeks ago)
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Marco Longhi (Dudley North) (Con)
Alex Cunningham (Stockton North) (Lab)
The Chief Secretary to the Treasury (Laura Trott)
My hon. Friend is rightly very focused on making sure that every single pound of taxpayers’ money is spent wisely, and I can assure him that the Government share that goal. In June, the previous Chief Secretary to the Treasury launched the public sector productivity programme, and we will provide an update at the autumn statement.
Laura Trott
My hon. Friend is right that public sector productivity must be improved. That is exactly what the review is looking at and what we will address. I look forward to talking to him more about it in due course.
Alex Cunningham
I welcome the fact that the taxpayer has spent hundreds of millions of pounds on remediation work at the Teesworks site in Redcar. I do not welcome the fact that the assets, including 90% of the operating company and tens of millions of pounds of scrap, have been handed over by the Tees Valley Mayor to two private companies, whose owners are laughing all the way to the bank. Is that really good value for taxpayers’ money?
Laura Trott
I think these claims have been addressed by the Mayor, and I will not have anything further to say about them.
Jeremy Hunt
I welcome my hon. Friend’s expertise in this area, which is of great benefit to the House and to me as I consider fiscal measures. As we are so close to the autumn statement, I would say that the way that we treat costs in our investment and pension funds industries is not optimal, and we need to reform it.
Alex Cunningham (Stockton North) (Lab)
Jeremy Hunt
My right hon. Friend the Member for Salisbury (John Glen) did an excellent job and we all salute his brilliant work. If he were here now, he would remind the hon. Gentleman that we have the lowest tax burden of any European country in the G7.
Mortgage and Rental Costs
Alex Cunningham Excerpts(10 months ago)
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Alex Cunningham (Stockton North) (Lab)
I well remember 1979, when mortgage interest rates soared under Thatcher’s Tory Government as the Bank of England base rate hit 17%. Those who were buying homes at the time knew all about it. My wife Evaline and I, both in relatively well-paid professional jobs, had moved home a couple of years before and, like many others, had maximised our mortgage to secure the house we wanted for our growing family. Little did we know that the cost of our mortgage would almost double in a couple of years.
My elder son John says he remembers Evaline and I regularly sitting at the table to go through our finances, often robbing Peter to pay Paul, while realising that Peter would still have to be paid with plenty of interest on top. Yes, the anxiety goes well beyond mortgage holders; it affects the whole family. Like many homeowners today, we contemplated selling up and moving to a smaller home, but the reality was that we would not only have lost our new home; we would not have been any better off.
I have huge sympathy for people today who are seeing their mortgage costs go through the roof, largely because the Tories crashed our economy by making some extremely daft decisions when our economy was still trying to cope with the double whammy of Russia’s illegal war against Ukraine and our exit from the European Union. We had it tough when our costs doubled, but today’s Tory mortgage bombshell is so much worse.
Moneyfacts data suggests that the typical rate of a two-year fixed-rate mortgage has increased to almost 6%, almost double the rate of a year ago, and the Resolution Foundation estimates that 6.5 million households will be affected by the post-mini-Budget rise in mortgage rates by 2026. Other huge consequences emanate from the Government’s decisions. This week, economists warned that there is a real risk of job losses and potential recession. The latest forecast for economic growth suggests that the UK is struggling to get out of the slow lane, with growth of just 0.2% forecast for the year.
On Sunday, I watched the Prime Minister ducking and diving under quite simple questioning from the BBC’s Laura Kuenssberg, and it sickened me that he had the nerve and the gall to tell mortgage holders to hold their nerve. He lives just down the road from me, and I wonder if he would like to sit down with a few of my constituents whose fixed-rate deals are coming to an end within the next few weeks. One of them faces an increase from just short of £800 a month to £2,600 a month. I would like the Prime Minister to outline how that constituent should hold their nerve and retain their home.
That same constituent, like everyone else, is not only seeing their mortgage go through the roof. They must also cope with a near 20% increase in food prices, which according to the Office for National Statistics is the greatest hike in 45 years. That can be added to the extra burden of council tax increases across the country, as local authorities collect the Government’s social care levy because the Tories have so drastically underfunded social care in recent years.
What are the numbers on Teesside? In Stockton North, 8,900 families face an increase of £1,400 this year. The pain is the same across the Tees valley, with 11,900 families in Stockton South paying £1,800 more, 9,000 families in Darlington paying £1,400 more, 7,200 families in Middlesbrough paying £1,200 more, 9,300 families in Middlesbrough South and East Cleveland paying £1,700 more, and 8,000 families in Redcar paying £1,500 more.
The Tory mortgage crisis has other wide-ranging impacts. The Government’s failure to build sufficient homes over the last decade has led to limited supply and forced prices up, making it more difficult for people to get on the housing ladder. We also see developers putting some projects on hold and scaling others back. The Government’s housing figures, published today, show that affordable housing providers have stalled or stopped schemes, as they are experiencing what they say is a “perfect storm” of build cost inflation, rising labour costs, material unavailability, building remediation issues and a duty to support tenants through the cost of living crisis. Developers cutting the number of homes they are building will have an inevitable impact on jobs not only in the building sector but across the supply chains that support it.
We could go on forever about the excess profits being made by the banks, as they cash in on higher interest rates, but that appears to be fine by the Government. Now that times are good again for the banks, they need to do so much more. They should concentrate on helping their customers instead of their share price and their bottom line. I wish I could be confident that they will all act, but I am not. It is down to the Government to take action to compel them to do so.
Andrew Griffith
I will give way in a moment. Let me say this in all seriousness: the only bombshells that we should be talking about are those that are falling on the Ukrainian people, and it cheapens the Opposition that we hear again and again the slogan of the week, and what we do not hear about is the broader geopolitical and macro environment in which this country finds itself. The British people have a much greater awareness of these matters than those on the Opposition Benches.
Alex Cunningham
The Minister mentions global factors, but last week the Bank of England noted that since its last decision, the swap rate—the key rate that influences mortgage interest rates—had increased almost twice as much in the UK than in the US and more than three times as much in the UK as in the euro area. Does the Minister agree with the Bank of England?
Andrew Griffith
I am grateful that we have belatedly found some international comparisons. The hon. Gentleman will therefore understand that we are seeing exactly the same rises—sometimes a little more, sometimes a little less—across most of the developed western economies. That is why this Conservative Government are taking action. We have helped people through these difficult times by giving the average household—[Interruption.] Do Members know how much? We are giving the average household £3,300 at a cost of £94 billion to the Exchequer. That is one of the largest support packages anywhere else in Europe. I will happily give way if any Labour Member wishes to challenge that.
When it comes to our generosity, this Government have increased the national living wage and pensions by record amounts, because this is a Government who will always put the vulnerable first. In addition to the explanations given by the Chancellor in this place yesterday, the Chief Secretary to the Treasury, in his fantastic remarks earlier today, set out in some detail our support for those struggling with their mortgage payments in these difficult times. The Chancellor’s new mortgage charter provides peace of mind about extending an existing mortgage or moving on to interest-only payments for six months, giving those who are worried about mortgage repayments some valuable respite. Vitally, it also gives genuine security to those who are at risk of losing their homes because they fall behind on mortgage payments.
Mortgage Charter
Alex Cunningham Excerpts(10 months ago)
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Jeremy Hunt
Let me tell the hon. Gentleman what we have done for those families. This year, families on means-tested payments will get a payment of £900, pensioner families will get a payment of £300 and families with someone who is disabled will get an extra payment of £150, alongside a lot of other measures.
Alex Cunningham (Stockton North) (Lab)
Two of my constituents face a near tripling of their mortgage payments to over £2,600 a month. It is easy for me to talk about the Tory mortgage bombshell and rightly blame the Government for crashing the economy, but what does the Chancellor have to say to my constituents? Why do they have to pick up the bill for Government incompetence?
Jeremy Hunt
What I would say to the hon. Gentleman’s constituents is that we are taking the difficult decisions to deal with inflation in this country, as other countries are doing. We will do what it takes, because dealing with inflation is the only way in the long run that we can stop more families going through what is happening to the constituents he mentions.
Oral Answers to Questions
Alex Cunningham Excerpts(11 months, 3 weeks ago)
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Alex Cunningham (Stockton North) (Lab)
The Economic Secretary to the Treasury (Andrew Griffith)
Compared with the G7, the UK had the highest rate of growth in each of the past two years. The International Monetary Fund UK growth forecast for 2023 has been upgraded by more than that for any other G7 country, and the IMF has said that the UK is “on the right track” for economic growth.
Alex Cunningham
The Minister paints a pretty picture. The British people want hope for the future, but all they see is Britain continually lagging behind on the global stage and prospects for their families getting worse. The IMF says that Britain will have a smaller economy by the end of the year and the poorest growth of the G7 over this year and next. In March, UK inflation was the highest in western Europe, and projections show that it will be the highest in the G7 this year, while food prices are rising 50% faster than in the G7. Whose fault is it?
Andrew Griffith
It is certainly the hon. Gentleman’s fault if, having asked that we assess performance across the G7 and we do precisely that, he does not like the answer. The reality is that across the G7, growth has fallen and inflation has risen, but we know the sources of that—it is not this Government; it is the fault of Putin and the global covid pandemic, whether the Opposition like it or not.
Oral Answers to Questions
Alex Cunningham Excerpts(1 year, 1 month ago)
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Catherine West (Hornsey and Wood Green) (Lab)
Alex Cunningham (Stockton North) (Lab)
Jeff Smith (Manchester, Withington) (Lab)
Alex Cunningham
While the sector would have liked more, I welcome the £20 billion over 20 years for carbon capture, use and storage in the Budget. Will the Minister now confirm that the Teesside-Humber project will go ahead and how additional clusters will be selected through the track-2 process?
James Cartlidge
I pay tribute to the hon. Gentleman for his consistency—he raised this with me on Thursday in my winding-up speech on the Budget debate. As I said then, we will announce further details soon, but I can confirm that I will be meeting the Carbon Capture and Storage Association tomorrow. I look forward to the meeting. This is an incredibly important step forward, because we must remember that carbon capture does not just give us clean energy, but enables heavy industry to decarbonise.
Autumn Statement Resolutions
Alex Cunningham Excerpts(1 year, 5 months ago)
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Alex Cunningham (Stockton North) (Lab)
On Thursday evening I had the privilege of attending the Chemical Industries Association annual dinner, where the principal speakers were ridiculing the Government for their lack of action on education, training and support for the industry, particularly on regulation, including the REACH regulation, which the Government want to have their own version of. Those in the industry are frightened about what the future holds for them. They are not talking about expansion and innovation; they are talking about survival. Why is that?
John Glen
I very much recognise that this country faces very difficult headwinds, as I said in the opening of my speech. Obviously the extensive support package that we have put out there for consumers and businesses will offer some relief from some of those pressures, but the major challenge we face as a country and an economy is a level of inflation that we have not seen for 41 years. The measures in this statement are designed to tackle that and, as the OBR recognises, make this recession shorter and shallower than it might otherwise have been.
I will now turn to the armed forces and security. We already know that Putin’s aggression has piled pain on citizens across the free world, as well as brave protesters in Russia. As President Ronald Reagan once said:
“Optimism comes less easily today, not because democracy is less vigorous, but because democracy’s enemies have refined their instruments of repression.”
Today there is still nothing certain about democracy’s victory, but if one thing does give me optimism, it is the courage of our armed forces, so we will continue to maintain the defence budget at at least 2% of GDP, to be consistent with the enduring NATO commitment. Of course, we also stand up for what we believe in through overseas aid. The OBR’s forecast shows a significant shock to the public finances, as I have set out, so it will not be possible to return to the 0.7% target until the fiscal situation allows, but I want to reassure the House that we remain fully committed to the target, and the plans that I have set out today assume that official development assistance spending will remain at around 0.5% for the forecast period.
Jonathan Ashworth
As always, the hon. Gentleman makes his point with force. The consequence of freezing the childcare element is that more parents working limited hours—it should not affect women more than men but does so disproportionately as they tend to do the childcare—will not be able to work extra hours because they will not be able to afford the extra childcare associated with working those extra hours.
Alex Cunningham
As I understand it, carers who are able to claim carer’s allowance can earn up to £132 a week, but the welcome increase in the national minimum wage means that many of them face a choice: they can either give up work or earn the extra money. Does my right hon. Friend agree that we need to extend the earnings limit for carers as well as for everybody else?
Jonathan Ashworth
My hon. Friend makes a point not dissimilar to that made by the former Leader of the House, the right hon. Member for South Northamptonshire. All these things need to be looked at in the round, and the wider implications of tweaks here and there need to be properly assessed when making decisions. If the Treasury Minister is prepared to meet the former Leader of the House to discuss the impact on those who need childcare, I hope that he will also be gracious enough to meet my hon. Friend to talk about the impact of the changes on carers.
Let me move on to the Government’s proposal for another round of energy support, this time targeted at those on means-tested benefits only. Again, because this is a flat rate, families with children—they spend more because they are larger families—will get proportionately less. It is worth noting that, even with the inflation-proofed uprating of benefits, which we welcome, we will still have 4 million children growing up in poverty, and we will still have 500,000 children destitute, hungry, ill-clad, cold and often without a decent bed to sleep in. Tackling these shameful levels of child poverty is surely the obligation this generation owes to the next, but we still have no child poverty strategy from this Government. Tackling these unfairnesses is also key to unlocking growth, because an economy with so much poverty and so much inequality is a weaker, less-productive economy, which leads to a greater burden of ill health, forcing more people out of work against their wishes.
That brings me to the health announcements made by the Chancellor. He is of course a former Health Secretary—the longest serving Health Secretary, in fact—and he made great play of the increase in health spending. However, he knows as well as I do, both from the many exchanges I had with him across the Dispatch Box over many years and through his time as the Chair of the Health and Social Care Committee, that what he announced was an increase in NHS England funding. As the Chancellor well knows, and he probably produced reports on this when he was at the Health and Social Care Committee, overall health spending includes public health, capital and training budgets, which means that the uplift is 1.2%. That is below the 2% of the Osborne years and well below the historic 4% uplifts that health services enjoyed historically. This is at a time when the typical wait for treatment in the health service has doubled from seven to 14 weeks, when 400,000 people are waiting beyond a year for treatment, which is enough to fill Wembley stadium four and a half times over, and when 7 million are on the waiting lists. This is not just miserable for patients; it holds our economy back.
Alex Cunningham (Stockton North) (Lab)
It is no longer surprising, really, that the Government will not recognise their failures. The Chancellor claimed that this is an international crisis caused by an unprecedented situation, but their tactic is to call unprecedented any problem that they are unable to tackle. That was seen, too, during the height of the covid pandemic. Above all, the Chancellor wants to avoid Conservative economic mismanagement being blamed for the cost of living crisis.
But the public cannot be taken for fools. They know that the Chancellor is trying to rewrite history: not just the 12 years of Tory mismanagement of the economy but his own role in damaging our NHS when he was Health Secretary. The same public know that the global situation does not explain why the UK has been hit harder than most. The Bank of England’s recent monetary policy report confirmed that Tory economic failures—UK-specific factors—were adding to borrowing costs. The UK is forecast to have the highest inflation in the G7 in 2022 and 2023. Opposition Members know why: the Conservatives left us uniquely exposed to the inflationary shock, shutting down our gas storage, stalling our nuclear power investment and banning renewable technologies such as onshore wind. The Chancellor has been put to work to try to right the wrongs of his many predecessors, but his actions are not enough to overcome the now mounting pressures from all sides. It is too little, too late.
Too often Conservative Members have been fighting for survival and fighting among themselves. In that time, families have become worse off. The UK is forecast to have the lowest growth in the G7 over the next two years. Growth has been at best sluggish over the last Tory decade, and I get a wee bit fed up with Ministers trying to claim the contrary. As it stands, real household disposable income per person will be lower at the end of this Parliament than it was at the beginning. That means that our people will be poorer and that those at the bottom of the income scale, including millions in work, will be struggling. And that is before the full impact of energy is factored in.
Among those in poverty are the many unpaid carers in our constituencies. Other carers earn up to £132 a week and claim carer’s allowance. I welcome the rise in the national living wage to £10.42, but if the earnings limit for carers is not increased as well, their benefits will be severely impacted. I hope that the Minister will reconsider that issue.
Carers UK responded to the statement with concerns about the long-term sustainability of funding for social care. The chief executive said:
“Long term sustainable funding of social care must remain an urgent priority for Government, to provide a decent life for people needing care, to prevent carers from having to give up work in order to care and to stop their health and wellbeing from deteriorating”—
quite a quote. The modus operandi of this Government is short-term thinking for long-term challenges. A two-year delay to the social care reforms announced last year will only make things worse. Yet again, the Tories fail to deliver for social care.
The Chancellor’s statement also demonstrates a continued lack of action to address health inequalities. What is he really doing about that promise of 40 new hospitals? He gave them a mention, but we do not know whether they exist only in fiction or whether they might be just a few extensions and a couple of refurbishments. The Minister should be aware of the health inequalities in my community —I make enough speeches about them. The bottom line is that we need one of those new hospitals to replace the crumbling facilities at North Tees hospital in Stockton if we are to make any real progress on the blight that means that life expectancy in our area can vary by 16 years. While I am on about health inequalities, why on earth will the Government not put a levy on tobacco companies’ profits to fund a desperately needed tobacco control plan?
Unison, of which I am a member, is disappointed with the Chancellor’s statement, as are the other trade unions. Responding to the statement, Unison’s Christina McAnea said:
“The government acts like there’s no public sector pay or workforce crisis. Nothing was said today to change the minds of NHS staff currently voting on strike action.”
How can the NHS hope to improve waiting times for patients when it cannot hang on to experienced staff or halt the exodus of key workers? Our nurses are overworked and underpaid, and they desperately need a Government who recognise their contribution and understand that well-funded public services are a driver of UK economic growth.
The Federation of Small Businesses has said:
“Stealth taxes from fuel to freezing the National Insurance contribution threshold is a difficult pill to swallow when firms are battling for their futures.”
Furthermore, gutting the research and development tax credit scheme will crush innovation and growth, resulting in tens of thousands fewer R&D-intensive small businesses. That doom loop makes a mockery of plans for growth. The Chancellor has stewardship responsibilities to the next generation, but he has failed it with this move to kill R&D.
I wonder whether other Members of the House were as surprised as I was that the Chancellor failed to provide longer-term, appropriate support for energy bills. According to National Energy Action, changes to the energy price guarantee mean that the breathing space for households struggling with energy costs will now be shorter lived and less helpful. An average bill of £3,000 from spring will be an increase of 40% on the record levels today, given that the Government have ceased the support currently provided through the energy bills support scheme. Energy bills have gone up by a staggering 130% in 18 months. Sadly, that means there is now no end in sight to the energy crisis for struggling households. Even those who enjoy above-average incomes are feeling the shock.
The Green Alliance notes that, despite the continued cost of the energy price guarantee, there was no new money for energy efficiency in this Parliament. A further £6 billion was announced from 2025. There are three winters before then—three winters for the old and the vulnerable to die in. It strikes me that the Government are convinced by their own publicity, while everyone else—from the Office for Budget Responsibility to major industrialists—is not. The Government claim that growing the economy will provide more money for public services. Yes, but the Chancellor’s measures fail to do that, and it is our public services, our people and, above all, the most vulnerable in our society who are paying the price for 12 and a half years of Tory incompetence.
Health and Social Care Levy (Repeal) Bill
Alex Cunningham ExcerptsTuesday 11th October 2022
(1 year, 6 months ago)
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Chris Philp
We will deliver growth if we encourage people across the whole income spectrum—people doing jobs on lower incomes, those on higher incomes, businesses big and small alike. We need to encourage the entire economy, which is why tax cuts in the growth plan are broadly based, like the tax cut we are debating now. We need to encourage them all, which includes companies and people who are internationally mobile. I used to be technology Minister, and most technology businesses have a choice about where they locate. They are very internationally mobile. They could go to New York, San Francisco, Singapore—they could go anywhere in the world. We need to ensure that every part of the United Kingdom is attractive to such businesses, and the growth plan intends to create those conditions that make us attractive as a nation.
Alex Cunningham (Stockton North) (Lab)
The Minister seems to have mentioned everything except the need for a healthy workforce. Local authorities spend £1.2 billion every year on social care needs caused by smoking, and that will get more expensive if the Government fail to address the issue of tobacco. This morning the Health and Social Care Secretary hinted that she will do less, not more, to tackle the dangers of smoking. Will the Minister join me and press her to bring forward the tobacco control plan, to help protect the health of the nation and save health and social care costs?
Chris Philp
I do not think I should trespass into the realm of my right hon. Friend the Secretary of State for Health and Social Care and Deputy Prime Minister. She will make her own views and policy on that issue without intervention from me. We are ensuring that the NHS is well funded so that it can provide the treatment our constituents need. Our commitment to NHS funding is undiminished.
Let me turn to the Bill, which repeals the health and social care levy. Members will recall that the health and social care levy was originally announced in September last year, and the Health and Social Care Levy Act 2021 received Royal Assent on 20 October last year. The levy had two phases: first, a temporary 1.25% increase for employers and employees in the current tax year; and then from April 2023 a formal surcharge of 1.25%, which would have affected not just those of working age but also those of state pension age. The Bill repeals that Act with elegant simplicity. Clause 1 states simply:
“The Health and Social Care Levy Act 2021 is repealed.”
Alex Cunningham
The hon. Member for South Suffolk (James Cartlidge) has made this point: if £17 billion is being removed from the Exchequer, how can we have all that extra spending on the NHS and on social care if there is no additional taxation?
Chris Philp
As I pointed out, we will set that out on the 31st. The Chancellor has a number of measures in mind to make sure, over the medium term, that this is fully funded, and critically, so that we can do this and the other things in the growth plan—this is obviously only one measure among many—to make sure that we get debt falling as a proportion of GDP. Hon. Members are asking entirely reasonable questions, but the point of the medium-term fiscal plan, and the details that will accompany it on 31 October, is to answer precisely those questions.
Let me set out the benefits that the move will confer on employees earning more than £12,570 and self-employed people earning more than £11,909. The average saving for people in work who are earning more than those thresholds will be approximately £330 next year. Combined with the increase in the threshold that took effect last July, the saving for the average worker earning above those thresholds will be £500 next year. That will clearly be welcome at a time of economic challenge. Moreover, almost a million businesses—920,000—will get an average tax cut of just a shade under £10,000 next year: £9,600, to be precise. That will be very welcome indeed.
It is worth being clear that the increase in the threshold that was put through a few months ago means that people on lower incomes pay very little in national insurance or income tax these days. I am sure that Members of this House who want to see the burden of taxation made as light as possible, particularly for those with lower incomes, will strongly welcome the increase in the threshold. It follows the very substantial increases in the income tax threshold over the past 12 years, from about £6,500 back in 2010 to £12,500 today, which have lifted people on the lowest incomes out of national insurance and out of income tax entirely.
I have already made the point that the reversal of the levy is part of a much wider plan. Over the coming days and weeks, my colleagues the Secretaries of State for various Departments will announce further supply-side measures to stimulate growth in our economy, including by making the planning system faster, making sure that business regulations are not unduly onerous, improving childcare, addressing questions concerned with immigration and agricultural productivity, and improving digital infrastructure. As I have said, we will do so in a way that makes sure that debt over GDP falls over the medium term.
Chris Philp
I was about to finish, but as the hon. Member is an old friend, I will give way one last time.
Alex Cunningham
I am grateful; I enjoyed my time dealing with justice issues opposite the right hon. Member. Twelve years ago, one of his predecessors—a Lib Dem, in fact—cancelled the new hospital for Stockton. The need for one is far greater than ever and the Chief Secretary seems very capable of splashing the cash, so will he finally approve funding for a new hospital in Stockton?
James Murray
I am going to make some progress. I may let the hon. Gentleman intervene again in a few moments.
As I was saying, right now our message to the Prime Minister and the Chancellor is to keep on U-turning. They need to U-turn on their whole disastrous approach to the economy, which the Chancellor set out just over two weeks ago. That Budget—in all but name—was the most destructive, unfair and irresponsible fiscal announcement in a generation.
The Prime Minister and the Chancellor should now U-turn on their decision to lift the cap on bankers’ bonuses. They should U-turn on their refusal to ask oil and gas giants to put some of their eye-watering excess profits towards helping keep to people’s energy bills down. They need to U-turn on their discredited, dangerous trickle-down approach to the economy. It is time for them to reverse their disastrous kamikaze Budget, which has unleashed an economic crisis that they made in Downing Street, and which working people are paying for through higher mortgages and prices.
Alex Cunningham
My hon. Friend says, rightly, that we support this particular U-turn, but is he not as perplexed as I am about where all this money will actually come from—or does he know that, rather than having a magic money tree, the Tories have a full orchard?
James Murray
My hon. Friend is right to point out that the Conservatives’ sums simply do not add up. However, you do not have to take our word for it, Mr Deputy Speaker. Just look at the markets: they have issued their own judgment on the Conservatives’ so-called economic plan, and they are not convinced.
As we consider the repeal of the Health and Social Care Levy Act, it is important to remember how the Government’s decision to bring in this national insurance hike came to pass in the first place. Over the last 12 years under the Conservatives, we have been stuck in what the Chancellor himself rightly described last month as a “vicious cycle of stagnation”. With tax revenues stagnating under low growth, the Government made it clear that they felt the only way to raise more funds was to raise taxes on working people.
On Second Reading of the legislation that is being repealed today, the then Chief Secretary to the Treasury tried to defend the Government’s approach, saying that this new charge would
“enable the Government to provide additional funding to the NHS so that it can recover from the pandemic.”—[Official Report, 14 September 2021; Vol. 700, c. 843.]
We argued at the time that if the Government felt that they had to raise taxes, those with the broadest shoulders should contribute more, but the Government refused. They pushed ahead with this tax rise on working people and their jobs, and they refused throughout the debate on the original legislation to ask those with the broadest shoulders to take more of the burden. Now, as they repeal the legislation for the national insurance increase, they have abandoned any attempt at fiscal responsibility altogether, with an economic approach that has borrowing at its heart.
In a letter sent to the shadow Chancellor and the shadow Secretary of State for Health and Social Care on 22 September, the Economic Secretary to the Treasury wrote:
“The additional funding used to replace the expected revenue from the Levy will come from general taxation and may require further borrowing in the short-term.”
Labour takes a different approach. Our pledges are fully and fairly funded. As the shadow Chancellor has set out, we would boost NHS investment by ending the outrageous non-dom tax loophole exploited by the super-rich. We will use money from what is saved by scrapping that arcane practice to double the number of district nurses qualifying every year, to train more than 5,000 health visitors, to create an additional 10,000 nursing and midwife placements every year and to double the number of medical students so that our NHS has the doctors it needs.
Oral Answers to Questions
Alex Cunningham Excerpts(2 years, 2 months ago)
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Alex Cunningham (Stockton North) (Lab)
Ian Byrne (Liverpool, West Derby) (Lab)
Alex Cunningham
The Chancellor will have plenty of opportunities to get the answer right this morning. Data from the Office for National Statistics show that on average people aged 65 or over spend twice as much on energy compared with those under 30, so they will be hit twice as hard by escalating bills. Meanwhile, Energy UK tells us that without Government action there will soon be 6 million people, many of them pensioners, living in fuel poverty. Will the Chancellor persuade himself to really get into this and take up our pledge to remove VAT from energy bills and extend the warm homes discount? If he will not, what will he do, particularly for our most vulnerable pensioners who are suffering from this cost of living crisis?
Rishi Sunak
I am proud of this Government’s track record in supporting pensioners. Thanks to the triple lock, in place since 2010, pensions are, relative to earnings, the highest they have been in more than three decades. However, I recognise the anxiety that many pensioners will feel about rising energy bills, and we are always looking at the best way to support people. To help with exactly that phenomenon, the winter fuel payment provides up to £300 for everyone over the state pension age.
Tackling Fraud and Preventing Government Waste
Alex Cunningham Excerpts(2 years, 2 months ago)
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Ian Lavery (Wansbeck) (Lab)
It is quite simple really: the Tories cannot be trusted with taxpayers’ money. Since we have been in the Chamber, headlines in the national news have described as jaw-dropping the revelations in the Department of Health and Social Care annual report. Buried on page 199 is a suggestion that there were £8.7 billion in losses on PPE in the Government accounts:
“£0.67 billion of PPE which cannot be used,”
perhaps because it is defective,
“£0.75 billion of PPE which is in excess of the amount”
that might need to be used,
“£2.6 billion of PPE which is not suitable for use within the health and social care sector”,
and,
“£4.7 billion of adjustment to the year-end valuation of PPE”.
Alex Cunningham (Stockton North) (Lab)
I remember the statement in the House, way back in 2010, when the Government cancelled the new hospital for my constituency. It was going to cost about half a billion pounds. Does my hon. Friend agree that we could have had our hospital, and many others too could have had their hospitals, if this sort of waste was identified properly in Government?
Ian Lavery
I fully agree. What could the Government have used £8.7 billion for? A new hospital in my hon. Friend’s constituency? Other hospitals and clinics? Looking after the 6 million people who are still on the NHS waiting list as we sit in this Chamber?
That loss is in addition to what has already been explained in previous speeches. I repeat: the Tories cannot be trusted with taxpayers’ money. Lord Agnew’s resignation has rightly renewed interest in the Government’s attitude towards fraud and the wider handling of public money. He spoke about “schoolboy errors” with regard to this Government—hardly schoolboy errors, by the way, when we are talking about billions and billions of pounds. Is it any wonder that Lord Agnew—a true blue, a loyal blue—stormed out of the Lords? He stormed away because he thought this Government were making schoolboy errors, and he wanted absolutely nothing at all to do with the Treasury decisions and the facts of wasted taxpayers’ finances and fraud.
The figures are staggering. It is estimated that £29 billion a year is lost across Government in fraud, and £4.3 billion of that, paid out in fraud and error under covid support schemes, has simply been wiped away. It has been deleted. Some £3.5 billion in covid contracts was awarded to Tory-linked firms, implicating senior Ministers of the Cabinet. Yet, other than the odd ritual sacrifice to give the impression that they care, the Government and those involved have shown no accountability for that shocking mishandling of public funds.
I can guarantee that, had the 2019 election result been different, things would have been completely different. The right-wing politicians and the press would not have so keenly turned a blind eye to what is happening before our eyes. Mark my words, if £4.3 billion was lost through benefit fraud, the Government would not be taking such a relaxed view on things.
People are 23 times more likely to be prosecuted for benefit fraud than tax fraud in the UK, despite the fact that tax crimes cost the economy nine times more. I could talk for hours about how the Government attack people on benefits and disabled people, how they hound people through the horrible methods used to track down people who are merely existing in life. Yet, if someone has a super-yacht, they can go anywhere and forget everything. That is the sorry state we see our nation in.
It is not an accident or a fault in the system; it is how the system has been carefully designed. The richest in our society have close ties to the Government; they ensure that their money can be shuffled around in offshore accounts and through tax loopholes, while the poorest are relentlessly hounded by a bureaucratic leviathan, which ensures that the system does not give them an inch. This disproportionate focus on working-class crime and the benefit scroungers narrative, peddled relentlessly in the press through tabloids and programmes such as “Benefits Street”, which we all saw on television, has warped public perceptions in a deliberate strategy of divide and rule by the handful of those benefiting handsomely from this fraud at the very highest level.
Lord Agnew’s revelations tell us nothing that we did not already know. Whether that was through the Panama papers, the Paradise papers or the Pandora papers, it is a well-documented fact that the super-wealthy hoard their money to avoid tax that might actually improve society for the many. Instead of tackling this issue, which could save billions of pounds in funds for things such as social care, the Government would rather raise national insurance and cut universal credit, throwing thousands more families into poverty, while inexplicable sums of money accumulate in the hands of the global élite.
Just a nice taster: the rising fortunes of the world’s billionaires during the pandemic fuelled record sales of super-yachts, to the tune of £5.3 billion—that is not bad, is it? Eight hundred and eighty-seven super-yachts were sold in 2021—a 75% increase on the previous year. It is all right for some, is it not? It is not for others, of course.
I urge the Government to finally commit to putting an end to the rampant levels of corruption at the highest level, rather than punish the people of this country yet again.
Alex Cunningham (Stockton North) (Lab)
Today, we have heard many extremely worrying examples of fraud, waste and corruption by this Tory Government, with the NHS getting the headlines. Sadly, that kind of behaviour is not limited to Westminster. In the Tees Valley, waste and dodgy deals are happening on a concerning and escalating scale under the leadership of the Conservative Tees Valley Combined Authority Mayor.
A few days ago, The Northern Echo and the Daily Mirror revealed that the majority of shares in Teesworks, the former steelworks site, have been handed to Tory donors. Until recently, half the shares were owned by the public, but at the end of last year, 90% were held by joint venture partners JC Musgrave Capital and Northern Land Management, with no procurement or open tendering process to oversee the site’s development.
A director of the same Northern Land Management has donated to the political funds of not only the Tees Valley Mayor but north-east Tory MPs. Joseph Christopher Musgrave, who gives his name to JC Musgrave Capital, has also donated to the Conservative party. The whole thing smacks of cronyism but, as today’s debate has shown, that is no surprise. Sadly, the Tory party and the Tory Government are becoming synonymous with the mismanagement of public money.
Teesworks has benefited from huge sums of public money since the steel producer SSI was closed in 2015 after the Tory Government let it go to the wall. That led to the redundancies of 2,300 steelworkers and the end of 170 years of steelmaking on Teesside—the industry on which the entire area was built. Taxpayers in both Teesside and across the country have paid tens of millions of pounds to purchase the site, keep it safe in the meantime and clean it up for regeneration.
What return will taxpayers have if the site ever returns a profit and what say will the public have over who comes there? Is the 10% share that the South Tees Development Corporation still has sufficient to ensure that taxpayers get value for money? To me, that seems very doubtful. We all want to see the successful development of the site, but if it is successful, 90% of the profits will go to the private companies that now control Teesworks.
There are also hugely valuable materials in the land at the site, including millions of pounds’ worth of sandstone, steel and copper. I am told that lorry loads of materials are leaving the site every day without proper audit—to where, who knows? I would also like to know who got those contracts and how they were won. Was there a tendering exercise or was it just the old pals act? Now that so much of the site is under private ownership, I wonder whether the public will reap the financial benefits of the assets when they are sold on, or whether instead the millions will line the pockets of the Mayor’s donors.
The site is fundamental to the economic future of Teesside. It has the potential to be a major site for new green industries such as carbon capture and storage and hydrogen. It can help us to rebuild a sustainable modern industrial future for Teesside, but who will be making the decisions on who invests there and what industries and businesses are allowed to set up shop? Surely such decisions are too important to our local economy to be left in the hands of property developers who will always put profits before anything else.
I am at a loss about where to turn to get answers for local people on these pressing issues. One of the most frustrating elements of the Tory Mayor’s apparent leadership of the combined authority is how difficult it is to access information about how public funds are being managed and spent because he acts behind a cloak of secrecy. Deals that involve such large amounts of public money should benefit from public scrutiny, but there is a complete lack of transparency in the Mayor’s dealings, which seems to me to be evidence of a contempt for his constituents, who have a right to know how their money is being spent.
It has become impossible to get information that in the past would have been routinely available to the public. The Mayor has created layers of organisations through which his dealings take place, some of which are not even subject to the Freedom of Information Act. Teeswork itself is a classic example: the Mayor set it up in summer 2020, promising that the body would oversee the regeneration of the SSI steel site. But it is not clear what Teeswork actually is. Is it a brand name? Is it a company? What is its constitution? How are decisions made? None of that can be found anywhere online. Its board was hand-picked by the Mayor—a mix of local Tory businessmen, local government officials, the independent leader of Redcar & Cleveland Borough Council and the Tory MP for Redcar. There are no published minutes or paperwork anywhere on the website.
It is appalling—this is simply no way to run a public administration. Taxpayers footed the bill for the site when it was purchased and it is only right that they should reap the benefits of what the site has to offer. As my hon. Friend the Member for Middlesbrough (Andy McDonald) said, there needs to be a full investigation into all of this.
I have seen the Mayor commenting that handing over such a large proportion of the site to private firms was apparently necessary to create jobs. To which I say: we lost 2,300 jobs when Conservative inaction shut down the steelmaking industry on Teesside after a proud 170-year history. Local shareholders lost out when the Conservative Government and Tees Valley Mayor stood by when the Sirius mine project needed support, instead leaving it to be taken over by a multinational company, which left local investors—some of whom had put their life savings into the project—high and dry. We lost jobs when the Tories failed to support the world-famous Cleveland Bridge Company, which built the Sydney bridge. It just had a cash-flow problem. Despite the Tories’ promises to save the company, it closed, with the loss of a large number of highly skilled jobs.
I understand that the Mayor has been in the news this week throwing his weight behind our disgraced Prime Minister. He shared his concern that, without the Prime Minister, levelling up will be dead. I am sure that, like all of us here, the Mayor is looking forward to reading the levelling-up White Paper tomorrow. I wonder if he will find it to be the rubbish that the Secretary of State apparently says it is. I wonder whether this is what the Mayor means by levelling up—giving more power to Tory donors at the expense of local people, who should be benefiting from investment and jobs. I wonder whether he thinks levelling up includes billions of pounds of taxpayers’ money being mishandled while a town such as Billingham, in my constituency, fights to get £20 million from the levelling up pot but keeps being rejected, even though it has a higher need than other areas that have been awarded cash.
That is what so-called Conservative levelling up looks like to me—more money for the Tories’ friends and crumbs left for the local community. The message is clear: the Conservatives, both nationally and locally, cannot be trusted to treat taxpayers’ money with respect and get them the value they deserve.
