Budget Resolutions

Anne Main Excerpts

Wednesday 22nd November 2017 Commons Chamber

[Rachel Reeves]

That is a very good point. If we are to ensure that everyone benefits from a growing economy—we just about have growth, but not very much of it—we must have an inclusive economy and an inclusive economic strategy that works for every member of all our communities.

The Government might respond by saying, “It’s okay Labour Members. There is a productivity investment fund worth £7 billion.” “Hurray,” we all say, but the money will not start until 2022-23. Why on earth do we have to wait five years for a productivity investment fund? We all recognise the desperate need to improve our productivity, so why wait five years before putting money and support into doing that? I should have thought that it would be an urgent priority for the Budget, not something that could be kicked down the road for five years.

Let me now deal with the issue of housing. I am afraid that I am much less optimistic about the Government’s plans than the hon. Member for Mid Bedfordshire, because over the last hour or so, I have been looking at the Office for Budget Responsibility’s “Economic and fiscal outlook”. I know that not everyone likes to listen to experts, but I am one of those people who still think that they are worth listening to. If we believe what the experts at the OBR are saying, all the housing measures—not just the stamp duty measure—in the Budget will increase house prices by 0.3%, and there will be no change in the supply of housing compared with that set out at the March Budget. Notwithstanding all today’s fanfare, the OBR’s verdict, which is on page 53 of its document, is that there will be no change in supply, just an increase in house prices, which is the exact opposite of what we need if we are to ensure that more young people and families can get on to the housing ladder. Although I think we all share that objective, it is not met by the measures that have been announced today.

[Mrs Anne Main (St Albans) (Con)]

I understand the hon. Lady’s interpretation of the report and her concern about it, but in areas such as St Albans where the average house price is more than £500,000, young people were helped on to the housing ladder by the previous Chancellor, and the present Chancellor will be helping young people to save some more of their money and put it towards buying their homes. That will be welcomed by many areas with high house prices. Surely the hon. Lady accepts that the stamp duty measure is welcome.

[Rachel Reeves]

I am not making my own forecasts; I am taking those of the Office for Budget Responsibility. What people in St Albans, Mid Bedfordshire and Leeds West want is affordable housing and the ability to get on to the housing ladder, and that requires stable house prices and an increase in housing supply. According to the OBR, however, there will be no improvement in supply on the basis of the measures announced today, and house prices will be 0.3% higher than they would otherwise have been, so the measures will not have the desired effect. I understand that the hon. Lady wants her constituents to have those opportunities, but it does not sound as though her Chancellor’s Budget will enable them to do so. In fact, I think it will have the opposite effect.

--- Later in debate ---

[Mrs Main]

I thank my right hon. Friend for building on the apprenticeships scheme that this Government have been championing. They are doing such a good job of getting young people into learning those skills through a different route.

[John Redwood]

Yes, indeed. I hope that the public sector, as well as the private sector, takes that fully on board, because the Government and local government, with representations and leadership from a range of parties in this House, have a great opportunity to do more to promote, encourage and mentor. As the Chancellor has indicated, we are going to face a major revolution in robots, artificial intelligence and all kinds of applications of the digital economy. Great digital companies are making huge changes that have a big knock-on effect for more traditional businesses. We need to put all our weight behind a Government who wish to understand that revolution and try to ensure that more people are winners from it by changing jobs and developing new skills so that their careers can respond to the huge changes under way.

Quite rightly, a focus of attention for the public sector—in this Budget as in any other—is whether there will be enough money to do a decent job for public services. I, like any Labour MP, want to ensure that my local schools have enough money to pay good teachers and to have enough of them, and that my local hospital and surgeries have enough financial support to do a good job. I see from this Budget that there is a £6 billion overall fiscal relaxation in 2018-19 and a £10 billion relaxation in 2019-20, mainly on the spending side. I am quite sure, from what the Chancellor said, that as some relaxation of pay agreements occurs, money will come forward to meet those bills. It is important that when pay deals are reached, the health service, schools or whoever have the money to be able to meet those requirements. A modest fiscal relaxation like that is eminently affordable.

The current levels of debt or deficit are not alarming. I am pleased that the Government think that the level of debt as a percentage of GDP will come down very shortly, but we need to take into account the fact that the state now owns quite a lot of the debt itself. That makes a bit of difference. The United States of America is now embarking on a programme of cancelling and reducing the debts because it controls both sides of the balance sheet through the Federal Reserve Board.

I want to concentrate a little more on house building and housing. I am pleased that the Government are to have a speedy—and, I hope, thorough—investigation into the issue of how existing planning permissions can be better used and can translate into more homes more quickly. That is very much an issue in the Wokingham borough part of my constituency, where the borough has issued around 11,000 planning permissions for individual homes—more than enough, one would think, to allow the fast build rate required under the agreements in the local plans. There has been considerable delay, however, in bringing forward some of those houses. There is also a wish by others to try to get planning permissions elsewhere and to build outside the areas where the plan would prefer the building to take place. There is a lot to be said for concentrating the areas of building, because then the moneys can be applied in a planned and predictable way to the surgeries, primary schools and extra road capacity that are needed, whereas if inspectors grant permissions in a variety of different places around the borough on account of a slow build rate, far more capital will be required to keep up with the demands, because distance would become an issue for people needing to get to those facilities.

Looking at the national picture on house building, I welcome the idea that we should be able to have five new garden cities. The garden town movement was a fine one, many years ago, and there were some great successes with new towns and new cities in our country. I am not going to start choosing places where the new ones should go, because none of them will be in my constituency as we already have an awful lot of house building and development going on.