Spending Round 2019

Baroness Stroud Excerpts

Wednesday 25th September 2019 Lords Chamber

[Baroness Stroud (Con)]

A Government have two key opportunities to really change the fabric of our society structurally: one is the Budget and the other is the spending review. To do that effectively, however, it is important to understand the shape of our nation, what is working and what is not.

The Legatum Prosperity Index—in which I declare an interest—tells a really interesting story about the UK. Economically, where so much of our energy rightly goes, we have a relatively strong story to tell: an open economy that is performing particularly well in enterprise conditions and the investment environment. Socially, however, where many in this House have been arguing that greater investment is needed, we are held back by weakening social capital. There comes a time when the economy cannot do all the heavy lifting on its own. To build prosperity, there needs to be equal focus on the economic and social well-being of our nation. I suggest that that time is now.

The spending review rightly calls this out with a significant investment in our key public services such as education and health. However, where this money will go and how it is to be spent will be crucial in determining how successful an investment this will prove. As the Prime Minister stood on the steps of No. 10, amid the Brexit narrative, one recurring theme of his speech struck me. “We will level up”, he said, over and over again. He has inherited a deeply uneven and divided Britain, where two halves of the same country see and experience life very differently, where one half feels there is opportunity ahead of them and the other feels left behind. Rarely has there been a more important time to “level up”.

Looking back, there have been many attempts at this. We had Tony Blair’s focus on the country “for the many and not the few”, and Gordon Brown’s “future fair for all”. We had David Cameron’s “big society” and Theresa May’s “burning injustice”, but since 2001 the number of people in poverty has remained remarkably static at just over 20%. Our approach to rebuilding the fabric of our society—of levelling up—has to be about more than rhetoric. I welcome the investment in our children’s education announced in this year’s Spending Review. The gap in educational achievement between those in poverty and those adults with GCSEs is too great at 13%. If the focus is on levelling up, could the Minister outline the strategy for ensuring that it is our most disadvantaged children who will benefit? I welcome the investment in our police; the difference between the level of safety felt by those in poverty and those who are not is too great at 7%. If the focus is on levelling up, could the Minister outline the strategy for ensuring that it is our most disadvantaged communities that will benefit?

What is needed is a levelling-up strategy, where the focus is on genuinely improving the lives of those left behind. The latest figures show that 14.3 million people are struggling to make ends meet at any given moment —this is just over one-fifth of the UK’s population. We are the fifth-richest nation in the world, and our prosperity can be converted into better outcomes for all of us. We should not tolerate the extreme poverty we see in the UK. If the narrative of levelling up is to be fulfilled, these are the people who should benefit first, as others have already said.

To do this, I suggest, three pressing social issues urgently need attention, and I ask the Minister to identify how these are being addressed in the spending review. The first is wages. It now takes two full-time wages to ensure that a family is not in poverty. Our Prime Minister talks about,

“higher wages, higher living wage”.

It is a tantalisingly attractive phrase in an inspiring speech, but what does it mean? Raising the national living wage has been a hugely positive step forward, but what is the Government’s strategy at this time for addressing this structural challenge.

The second is health: half of all families living in poverty have a disabled adult or child living in the home, compared to a third of people not in poverty. This makes it much harder to work and, more importantly, to work full-time. The investment in health in the spending review is hugely welcome, but could the Minister outline how much of this will go to supporting those with physical and mental health challenges to get into work and stay in work? This would be a real levelling up. The third is the 7 million people who live in persistent poverty: just under half of those in poverty now have also been in poverty for at least two of the last three years. There is an urgent and immediate need to ensure that they do not stay there. What is the Government’s poverty strategy in this spending review that will break this cycle?

From my own experience, I know that the Treasury and the OBR are predominantly focused on economic and not social outcomes. It will take a really committed and visionary Treasury team to refocus it on building genuine prosperity and economic and social well-being, and to build social strength back into the fabric of our nation. A fairer and kinder country would make us all proud. Our Prime Minister has said that this will be done by physically, and literally, renewing the ties that bind us together—by levelling up. There is a huge hunger in the country for this genuinely to happen. This spending review has a massive opportunity to be a force for good, but could the Minister give us insight into the strategy that sits behind the numbers?