Spending Review 2020

Baroness Barker Excerpts

Thursday 3rd December 2020 Grand Committee

[Lord Loomba (CB) [V]]

My Lords—[Inaudible.] Just one minute, please.

[The Deputy Chairman of Committees (Baroness Barker) (LD)]

Please go ahead, Lord Loomba.

[Lord Loomba (CB) [V]]

Yes, I am coming. It is just that—[Inaudible.]

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[The Deputy Chairman of Committees (Baroness Barker) (LD)]

We cannot hear the noble Lord. We will try to sort out the difficulties and come back. For the moment, I call the noble Lord, Lord Bradshaw.

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[The Deputy Chairman of Committees (Baroness Barker) (LD)]

I ask the noble Lord, Lord Loomba, to stand by to follow the next speaker, the noble Baroness, Lady Eaton.

[Baroness Eaton (Con) [V]]

My Lords, today I shall focus my remarks on the impact of the spending review on councils. Local government has been critical in the fight against Covid-19, protecting the most vulnerable, supporting our local businesses and keeping the country running. Given the commendable leadership from our local politicians and their officials, it is right that the spending review provides some financial certainty for councils next year. A potential increase of 4.5% in council spending power will help support vital local services, albeit that the increase assumes that council tax bills will rise by 5% next year—something that will place a financial burden on households at a time of economic uncertainty.

While the spending review did make progress in helping address the short-term pressures on councils, as it is a one-year settlement there is still much to do. The financial pressures facing local services have increased because of Covid, and the challenge facing councils is stark. It is time for change, which is why I support the LGA’s calls for multiyear financial settlements and place-based budgeting, which will give councils long-term certainty, sustainability and, as importantly, the power to innovate.

While every pot of money that national government announces is a tempting opportunity for a ministerial press release, we need to look again at how that approach fragments funding and creates unnecessary complications and duplications. The Levelling Up Fund would be a good place to start this conversation, along with a move back to the community budgets model that I helped pilot a decade ago. By giving councils financial sustainability, certainty and the power to do things differently, we can empower their efforts to level up inequalities and rebuild our national economy, one local economy at a time.

[The Deputy Chairman of Committees (Baroness Barker) (LD)]

I call again the noble Lord, Lord Loomba.

[Lord Loomba (CB) [V]]

My Lords, 2020 has been [Inaudible.]

[The Deputy Chairman of Committees (Baroness Barker) (LD)]

I am sorry, we cannot hear the noble Lord, Lord Loomba. We will have to go to the next speaker, the noble Lord, Lord Davies of Brixton.

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[Baroness Buscombe (Con) [V]]

My Lords, finally we have recognised the critical need to increase, in real terms, our defence spending. The key point was the Prime Minister’s reference to a unit that will be set up to monitor procurement. Five years’ ago, industry personnel told me—lawyer speaking to lawyer—that they would welcome much more rigour in the procurement system. This is critical to counter equipment that arrives too often substandard with long lead-times for spare parts. We also need a strong focus on what inexpensive measures would significantly improve the capabilities of our armed forces personnel—such as much healthier food and natural light replacements in our modern warships—as well as the expensive hardware.

In addition, it is right to reduce to our development spend to 0.5% of GNI in the light of our economic emergency. This crisis also presents a real opportunity to fully review the DAC rules on which we classify our ODA spending.

I have just one thought regarding our spending at home: when I left the DWP, pre Covid, our welfare system was already unsustainable. Although 1,000 additional people were working each day and there were around 700,000 job vacancies, still 13.9% of all working-age households in the UK were entirely workless. This is not sustainable post Covid.

Separately, our reliance on the private sector to create the wealth to pay for all this is fundamental. However, we are now at risk of making the UK the least attractive shopping destination in Europe through changes to tax-free shopping rules that will trigger real and negative behavioural change in high-spending visitors. Post Brexit, we must showcase the very best of the British-made, high-quality and often bespoke for export goods that we manufacture right across the UK. How will these tax changes help with so-called levelling up when some of those highly skilled jobs could now be at risk? Will my noble friend the Minister agree to keep a close watch on this?

[The Deputy Chairman of Committees (Baroness Barker) (LD)]

I remind noble Lords that the speaking limit for today’s debate is two minutes.

[Lord Bilimoria (CB) [V]]

My Lords, there is a forecasted drop in GDP of more than 11% this year, the worst in 300 years; the fear of unemployment possibly going up to 7.5%—almost 3 million people—by Q2 2025; debt to GDP more than 100%—the last time that happened was in 1963; and a deficit of £400 billion. The amazing support that the Government have given during the Covid pandemic of almost £300 billion—and counting—and many measures in this spending review are so welcome. The new national infrastructure bank is fantastic and upgrading infrastructure is great, but does the Minister agree that broadband should be at 100% coverage of the country, not 85%?

On the plan for jobs, we need to avoid long-term unemployment. The scarring would be horrible. Young people, in particular, have suffered so much; we cannot have youth unemployment. We urgently need the energy White Paper. Can the Minister confirm that it will come soon? There must be no talk of tax rises, because what would be worst for the recovery—for businesses to bounce back after this—is stifling that recovery by increasing taxes. We need to create growth, which means keeping taxes low. It is that growth and the creation of jobs that will pay the tax that will pay for the public services. That is the best solution.

The approval of the Pfizer-BioNTech vaccine is a major breakthrough against Covid-19. After the loss of so many lives and livelihoods, it now really feels as though there is light at the end of the tunnel. Does the Minister agree that three things are now needed to shore up confidence? The first is the continued, urgent rollout of rapid, mass, affordable antigen lateral flow testing throughout the country, available in schools, workplaces, colleges and universities and at airports and factories—everywhere. That regular testing is a huge part of the solution.

Secondly, firms need clarity about the level of support through to March and beyond. Thirdly, we need transparent trigger points for exiting higher tiers and a robust, evidence-based approach to ongoing restrictions.

[The Deputy Chairman of Committees (Baroness Barker) (LD)]

Lord Loomba, please stand by to speak after the next speaker. I call the noble Baroness, Lady Sheehan.

[Baroness Sheehan (LD)]

My Lords, the Chancellor says that,

“during a domestic fiscal emergency … sticking rigidly to spending 0.7% of our national income on overseas aid is difficult to justify to the British people”.

I wonder: with what evidence does he so impugn the British public? The most recent edition of the World Giving Index, commissioned by the Charities Aid Foundation and compiled by Gallup, puts Britain at number six globally and the second most generous country in Europe after Ireland. I suggest to the Minister—or the Chancellor—that, rather than having to justify helping the world’s poorest to the British public, the cut to the aid budget is in fact to pacify the right wing of his party, to the extent of breaking a manifesto pledge.

That is a shame, because evidence from diplomats to the Commons International Development Committee says otherwise. The former UK ambassador to Jordan, Peter Millett, said:

“Our aid programmes certainly enhanced our influence.”


The former UK ambassador to Yemen, Frances Guy, said that the UK’s aid

“counts towards general respect for the UK in multilateral institutions and gives the UK a bigger voice in multilateral meetings”.

It is not just the diplomats. The noble and gallant Lord, Lord Richards of Herstmonceux, said that our 0.7% aid commitment sends

“a strong signal that the UK is a reliable partner for long-term economic, social, environmental and educational advancement across the globe”

and that this is

“cheaper than fighting wars”.

Those sentiments were echoed by the noble Lord, Lord Dannatt, in your Lordships’ House just last week.

The architects of this reprehensible decision have shown that they know the price of everything and the value of nothing.

[The Deputy Chairman of Committees (Baroness Barker) (LD)]

My Lords, once again I call the noble Lord, Lord Loomba.

[Lord Loomba (CB) [V]]

My Lords, 2020 has been an unprecedented year, with many charities—[Inaudible.]

[The Deputy Chairman of Committees (Baroness Barker) (LD)]

I am sorry, Lord Loomba. Yet again we cannot hear you. I am afraid that we will have to move on to the next speaker. I call the noble Baroness, Lady Redfern.