Income tax (charge)
Bernard Jenkin Excerpts(3 weeks ago)
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Sir Bernard Jenkin (Harwich and North Essex) (Con)
I congratulate the hon. Member for Ribble Valley (Maya Ellis) on her spirited maiden speech. Her speech, along with the other maiden speeches, underlines how new Members come here with good will in their hearts, full of good intentions and full of ideals. It is heartening to see that in new colleagues on both sides of the House.
I do not think the new Labour Government have any lack of good intentions, but this Budget is happening in something of a political bubble. Much of the Chancellor’s discourse seems to reflect a continuation of the general election campaign, which we now know could have been fought more honestly, openly and transparently by the Labour party.
That said, I am sure the Chancellor believes she has produced the best Budget for this country. The biggest cheer from the Labour Benches yesterday seemed to be for the 1p cut in draught beer duty, but I have since spoken to people in the hospitality industry, and they have described this as a shattering Budget. The money that publicans and restaurateurs will now have to pay their staff, and pay for their staff, massively dwarfs any benefit they could possibly pass on to their customers from the 1p beer duty cut. In fact, most of the increased beer prices that we will see as a result of this Budget are a direct consequence of the tax increases inflicted on businesses. I am afraid that those cheers demonstrate a complete lack of reality about the world we live in.
The character of this Budget reflects a reversion to the failed Labour policies of the 1960s and 1970s. It is naive to believe that taxing wealth creators, wealth creation and capital formation will not drive entrepreneurs and business leaders out of our country, which is happening. It is also deceiving, because the Budget reflects that Labour’s plans were not fully costed, and it is destructive of wealth, wealth creators and pensions. The Budget massively reduces people’s incentive to save into their pension pot, as they will now be taxed on what is left over at the end of their life to pass on to their children.
Of course, there is also a streak of vindictiveness towards wealth creators. I heard a Labour Member shout “Good!” when the shadow Chancellor said that we are climbing the league table of countries with higher tax rates across the economy, moving beyond Germany. The attitude that taxation is somehow an inherent good has limits, and we are going beyond those limits.
Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)
On that point, will the hon. Gentleman give way?
Alex Sobel
What is wrong with the German economy? The German economy has consistently performed well over the past 30 years, in excess of our economy, and has a strong industrial strategy. This Government are going to produce an industrial strategy so that we can have just as strong an economy as Germany, and a similar tax base.
Sir Bernard Jenkin
When Margaret Thatcher was elected in 1979, we were the sick man of Europe. What she, Lord Howe and Lord Lawson did to the British economy in that period put us on a faster growth track than the German economy. Since that time, we have been falling behind again. This Budget will help us fall behind again.
Elements of this Budget are a defiance of reality, because behind the cheer for the 1p cut on draught beer is the real world outside. I have been watching the gilt rate—the 10-year bond rate—on my telephone. It closed yesterday at 4.362% after going up substantially in the last hours of trading, and now stands at over 4.5%. That means the Budget has spooked the markets into increasing the cost of borrowing, which the Government will have to pay. The idea that these measures are pain free, and that getting more tax revenue in and borrowing more is going to bail out the economy, is very flawed.
I do not suggest there is going to be a bond crisis tomorrow, but we are enmeshed in a debt trap in this country, as are so many other mature democracies, after the energy crisis and covid, so there is likely to be another liquidity crisis of some kind over the next few years. How well prepared will this Government be, if they have already put up taxes and borrowing to spend on more consumption, rather than for our long-term economic benefit?
This is not a Budget for growth. Apart from the initial impact of the extra spending in the forthcoming year, the throttling back of expenditure, then the decline in borrowing and the burden of the extra taxes, suppresses economic growth, which the Office for Budget Responsibility is perfectly clear about. It was an empty promise for the Prime Minister to say, “We are going to prioritise economic growth.” This Budget simply does not prioritise economic growth. We have forgotten all the lessons of our economic history, learned from the disastrous policies of the 1960s and 1970s.
If socialism worked, everyone would do it. Socialism does not work. This is a more socialist Government than we have seen since the 1970s. They have forgotten what Tony Blair and Gordon Brown did. It was Gordon Brown who cut the capital gains tax rate. As Chancellor, Gordon Brown was the successor to Margaret Thatcher and continued with many of the same policies. Gordon Brown did not set up a ludicrous vanity project like Great British Energy. He did not believe that taking control of investment in a sector like energy would increase the wealth of the country. All the equivalent state-owned enterprises around Europe lose money—the Government will not make a return in that sector.
Yuan Yang
The hon. Gentleman mentions Gordon Brown. Yesterday’s Budget starts to restore the level of Government spending as a share of the economy to levels that are similar to those under Gordon Brown and the last Labour Government. It starts to restore the foundations of our public services. Does the hon. Gentleman welcome that restoration and investment?
Sir Bernard Jenkin
I wish we could all have everything that we wanted. Gordon Brown inherited a golden economic legacy from the Conservatives in 1997—[Interruption.] Yes, he did. Debt was falling and growth was outstripping our competitors. By the time of the financial crash in 2008, he had already increased borrowing and spending. The consequence of the financial crash is that he achieved what every Labour Government always achieve: they leave office with higher debt, higher unemployment and higher inflation. That is what Labour Governments always do, and that is what this Labour Government are set to do again.
Sir Bernard Jenkin
I am not going to give way any more. We need only look around the world to see that the idea that an ever-larger state makes the people richer is confounded by economic experience, otherwise the richest countries in the world would be those with the biggest state. It is businesses and free enterprise that generate the wealth that pays for the public services we need.
We can all recall Milton Friedman’s four ways to spend money. There is people’s own money that they spend on themselves: they think about it, spend it very carefully and make sure they get the maximum value for money. There is money that people spend on other people, such as when they buy a present: they may want to keep the cost down and may not be sensitive about whether the person really wants a particular gift or not. There is somebody else’s money that people spend on themselves: when people use expense accounts, they go on the most expensive aeroplane or get the biggest car their company will pay for. Finally, there is somebody else’s money that is spent on other people: that is what Governments do. It is a reality that Governments are the worst allocators of resource for ensuring future wealth creation. That is just a fact.
The record will always confirm that if we want to create more wealth, the smaller the state can be, the faster economic growth will be and the more we can afford to then spend on public services. This Government are profoundly un-strategic—just look at what the OBR says about investment:
“Tax rises in this Budget weigh on real incomes, so private consumption falls as a share of GDP”—
that means people are going to be getting poorer. It continues:
“Corporate profits are expected to continue falling as a share of GDP in the near term”.
It adds that
“business investment falls as a share of GDP as profit margins are squeezed, and the net impact of Budget policies lowers business investment.”
Is that good for the British economy? I submit not.
What about debt? If someone has too much debt, the one thing they should do is not borrow more money, if they want to get out of a debt trap—[Interruption.] Members on the Government Benches have surgeries attended by people who are in debt. The one thing hon. Members will tell them not to do is to stack up more debt, but that is what the Government have chosen to do. That is not a long-term policy.
Finally, what about GDP? I take no pride in saying that growth in GDP has been struggling for a decade or more—
Sir Bernard Jenkin
Yes, I do not think we did enough to dynamise the British economy. We did not do enough, but I was very grateful for the support of the Liberal Democrats for the first five years of the Conservative Government. That helped us to keep public expenditure under better control so we could begin that process.
GDP per head has really been flatlining. We are falling significantly further behind the United States, but what are the trends? On these trends, we will be overtaken by Poland by 2030 in terms of GDP per head. What are this Government doing to address the real long-term trends? Let us look to 2050. What is the shape of public expenditure going to look like in 2050? This Budget does not begin to address that. What will be our national debt on a long-term basis? What is happening to our demographic, including the ageing population and the ratio of people in work and out of work? What are this Government doing to address that trend and to address the immigration trend, because that is adding to the cost of our economy?
How will we be able to increase defence spending? The Chief of the General Staff has recently said that this country could well be directly involved in a war within the lifetime of this Parliament. We will have to spend more on defence, as well as controlling the rest of the public sector. It is many decades since health, education and welfare started swamping out every other kind of expenditure in the Government. If we are to survive as a country, we will have to address these very damaging long-term trends.
Sir Bernard Jenkin
If the hon. Gentleman will forgive me, I am just drawing to a close.
What is the true cost of decarbonisation? That is something that the Government are hopelessly naive about. It is as though investing in decarbonisation is somehow a get-out-of-jail-free card, and everybody’s bills will start to come down, but anyone involved in the industry will say that that is not the case. The need to dynamise our zombie economy is still there and being made worse by the burdens that this Government have inflicted on us. How will we re-industrialise our economy when deglobalisation has taken away the opportunity to import all the cheap things that we used to make, but no longer do? Those are the real strategic challenges, and the Budget does not begin to address them.
Richard Baker (Glenrothes and Mid Fife) (Lab)
Thank you, Madam Deputy Speaker, for giving me the opportunity to speak about how this Budget is fixing the foundations of our economy, which could not be more important for my constituents. I listened with interest to the remarks of the hon. Member for Harwich and North Essex (Sir Bernard Jenkin) about the last Labour Government. Let us remember that the last Labour Government lifted 900,000 children out of poverty. What costs to our economy are caused by poverty, rather than getting people into work and securing for them the quality of life and living standards that they deserve?
Richard Baker
Of course, because I have just mentioned the hon. Gentleman in my speech.
Sir Bernard Jenkin
One hon. Member complained about food banks. Actually, food banks started under Tony Blair. I think that we need to share these problems and concerns. We need to understand each other’s different approaches to economic policy if we are eventually to have a solid approach to reviving the economy of this country, but I am afraid that this Budget does not do that. There will be more poor people as a result of this Budget.
Richard Baker
I thank the hon. Member for his intervention. In Scotland we say, “Facts are cheils that winna ding.” The fact of the matter is that 900,000 additional children were lifted out of poverty by the previous Labour Government, and the rise and use of food banks under this Administration has been exponential —to the extent that, now we as a Government are dealing with food banks running out of food because of the level of poverty that we have inherited. This Budget will fix the foundations of our economy. It will redistribute wealth, tackle poverty and invest in growth. That is why we can look forward to what will be achieved by this Government, thanks to the decisions taken by my right hon. Friend the Chancellor of the Exchequer.
Anybody looking at events in Scotland will see that my constituents have suffered from two Governments failing to deliver on investment and failing to deliver on growth. Their mismanagement of the public finances stands in sharp contrast to the measures that have been bought forward by my right hon. Friend the Chancellor of the Exchequer, who has taken some challenging decisions on taxation, to ensure that there is no return to austerity and that we can invest in growth.
The Budget gives us the chance to move on from the reckless incompetence of the Tories here in Westminster and of the SNP in Holyrood. It is a chance to move on from the catastrophic mini-Budget of Liz Truss—a mini- Budget that caused so much damage to my constituents. The hon. Member for East Grinstead and Uckfield (Mims Davies) conjured up images of Halloween in her speech, but the economic nightmare was caused by the Conservative party, and our constituents paid the price in their living standards.
Those of us in Scotland cannot underestimate the impact of the shambolic stewardship of Scotland’s finances by the SNP. It is one thing for the SNP to crash the finances of its own party, but quite another to crash the finances of our country. The SNP Government have completely mishandled contracts for much-needed new ferries. Other public sector projects have been overspent by millions, while others have been delayed or cancelled. They have also failed to spend hundreds of millions of pounds which had been allocated to them in structural funds. Funding for our local authorities has been slashed. The housing budget has been cut, and the Institute of Fiscal Studies assessed that the Scottish health budget faced a real-terms cut under the SNP in this financial year.
While we know that this Budget is fixing the foundations, so that we can deal with the reckless approach of the previous Government here, the SNP cannot simply blame everyone else for its own mistakes, as, yet again, it has attempted to do over the past 24 hours.
James Murray
Although we will not comment on market movements, the Chancellor outlined yesterday two new robust fiscal rules, which are the bedrock of stability on which this Budget is built. Those rules will put the public finances on a sustainable path and prioritise investment to support long-term growth. The current budget is in surplus by £9.9 billion in 2029-30, with net financial debt falling in 2029-30 and with headroom of £15.7 billion.
When we went into the election in July, the first steps that we promised to the British people opened with these three words: “Deliver economic stability”. As the Chancellor confirmed yesterday, our first fiscal rule is the stability rule. That means we will bring the current budget into balance so that day-to-day spending is met with tax receipts. No more borrowing for day-to-day spending, no more living beyond our means, and no more papering over the cracks. Our tough new stability rule means that the British people, businesses and the markets can all see the fiscal responsibility that will underpin every decision we take in government.
The Chancellor is clear that taking the tough decisions needed to deliver stability is not always easy. The previous Government ducked the difficult decisions. They made promise after promise to the British people that they knew they could never afford. Our stability rule offers a different approach. Meeting it means we needed to raise taxes, but we have been clear that we will protect working people. That is why the Budget does not increase income tax or national insurance contributions that working people see on their payslips. Instead, we are balancing the books in a fair way.
That does not always mean decisions are easy—far from it—but it is also right that, before considering any changes to taxes, we make sure everyone pays the tax they owe by closing the tax gap. That is why, as the Chancellor set out yesterday, we will deliver the most ambitious package to close the tax gap that this country has ever seen. Alongside a series of policy changes set out in the Budget documents, by 2029-30 HMRC will have recruited 5,000 additional compliance officers and funded 1,800 additional debt management staff. Together, that will mean £6.5 billion in additional tax revenue to pay for the country’s priorities before we make a single change to a tax rate or threshold.
Beyond the crucial work to close the tax gap, the Budget confirms that we will implement our manifesto promises, including to abolish the non-dom tax loophole, which the OBR says will raise £12.7 billion over the forecast period. We will end the VAT exemption and business rates relief for private schools, which the OBR confirms will raise £1.8 billion a year by 2029-30. As of today, we have increased the stamp duty land tax surcharge on second homes to 5%, helping more than 130,000 people to buy their first home or move home over the next five years, while raising £310 million a year by 2029-30 to support public services.
I know hon. Members have raised questions about some of the other tax changes announced in the Budget, and I am glad to have the opportunity to respond. In particular, I would like to address the changes we have made to inheritance tax, specifically the reforms to agricultural property relief. I realise that people may be concerned about the impact on family farms, so I would like to make clear some of the facts about how the reforms to this relief will work. The main rate of agricultural property relief on all assets was set at 50% until 1992, at which point it was raised to 100% just before the election that year.
Let me be clear: these reforms still provide a very significant level of relief to protect family farms. The Chancellor confirmed yesterday that the first £1 million of combined business and agricultural assets will continue to receive 100% relief in most circumstances. Assets above £1 million will attract a 50% relief, equal to the pre-1992 rate, which means that inheritance tax will be paid at a rate of 20% instead of 40%. Our reforms, in a tough fiscal context, still leave the relief as being far more generous than it has been in the past.
It is important to note that agricultural and business property reliefs are in addition to the nil rate bands and other exemptions, such as the transfers between spouses and civil partners, and the rules on gifts. Indeed, the National Farmers Union director of strategy has highlighted that these other features of the tax system are important. He said just today that APR
“is not the be all and end all for passing on farms on death.”
Indeed, these exemptions mean that if someone has no other assets and is passing it on to a direct descendant, a farm or farming business worth up to £2 million can be passed on without paying any inheritance tax at all. Furthermore, those liable for a charge can in most circumstances pay any liability over 10 annual instalments.
Let me also be clear about the data on agricultural property relief. The total value of a farm should not be confused with the value being passed on at death. Multiple family members can own part of a farm. For example, if an individual jointly owns a farm worth £3 million with their partner, only £1.5 million is in their estate at death. In 2021-22, the most recent year for which data is available, the median value of assets qualifying for APR was £486,000. Three quarters of estates claimed for assets below £1 million, and such estates will continue to pay no inheritance tax at all. Just 463 claims were for agricultural assets of over £1 million, or 27% of all claims. The largest assets, those worth over £2.5 million, related to just 7% of claims for APR. That data is published openly on gov.uk for everyone to see, and I encourage people to investigate it.
Sir Bernard Jenkin
It does seem rather odd to introduce a new tax and then to defend it on the basis that very few people will pay it. Why is the Minister so confident that it will yield anything recognisable in terms of a contribution to the public finances? The few landowners who will be caught by this measure will be making other arrangements to ensure that they avoid it, particularly the very large landowners.
James Murray
I thank the hon. Gentleman for acknowledging that the impact of these changes is limited and targeted. That is an important point. He leads me on to my concluding point, which is to point out that the decision we have taken to retain APR, but to limit its generosity for the top quarter or so of assets, is the right approach to fixing the public finances while also protecting family farms.
I have set out some of the detail of how we are restoring stability and responsibility to the public finances and meeting our first fiscal rule, the stability rule. As the Chancellor set out yesterday, that rule is accompanied by the investment rule, which makes sure that debt is falling as a share of the economy. Debt is measured as net financial debt—a statistic measured by the Office for National Statistics since 2016, and forecast since then by the OBR. It recognises that Government investment can deliver returns for the taxpayer by counting not just liabilities on our balance sheet, but our financial assets too. That new approach provides space to deliver the step change in investment that our country needs, within a strong fiscal framework that puts public finances on a sustainable path.
To drive investment further still, the corporate tax road map, which we published yesterday, commits us to providing the best environment for businesses through a predictable, stable, tax system. It caps the headline rate of corporation tax at 25%—the lowest in the G7. It maintains our world-leading capital allowances system, including permanent full expensing and a £1 million annual investment allowance. It maintains our generous R&D reliefs so that the most innovative companies can invest in the long-term future of our country.
Before I conclude my remarks, let me thank all hon. Members for their contributions today. It is a pleasure still to be hearing maiden speeches so far into this Parliament. I found the speech from my hon. Friend the Member for Worcester (Tom Collins) truly uplifting as he spoke about what he drew from the past of his constituency, the promise of the future and, most importantly, the people who he represents and the inspiration they give him. I thank him for bringing some of that uplifting inspiration to the Chamber.
I thoroughly enjoyed the maiden speech by my hon. Friend the Member for Dagenham and Rainham (Margaret Mullane), and everyone in this Chamber will immediately have felt the connection that she has to her constituency and the people she represents. Having formerly been the Deputy Mayor for Housing in London, I found her emphasis on the history and future of affordable housing particularly close to my heart.
My hon. Friend the Member for Livingston (Gregor Poynton) spoke passionately about his constituency, and perfectly articulated the strength of our Union in the UK, balanced with the strength of our national identities in Scotland, England, Wales and Northern Ireland. I thought he encapsulated that perfectly in his speech, and I will be looking at Hansard to remember his phrasing.
The maiden speech from my hon. Friend the Member for Ribble Valley (Maya Ellis) touched us all as she spoke about her late father, who I am sure would be incredibly proud of what she has achieved. I thank her for sharing that close personal story with us today.
We also heard from the hon. Member for Carshalton and Wallington (Bobby Dean) whose maiden speech I believe I heard last time I was at the Dispatch Box. Was he trying to claim that the change in fiscal rules was his campaign win during his speech? I am pretty sure it was the Chancellor of the Exchequer who came up with the idea, but I thank him for his contribution none the less, and I look forward to seeing him on the Treasury Select Committee.
I also thank my hon. Friend the Member for Leeds Central and Headingley (Alex Sobel) for acknowledging the importance of working with mayors across the country, including the excellent Mayor of West Yorkshire.
Let me briefly address two points made by Opposition Members, including the hon. Member for North Cotswolds (Sir Geoffrey Clifton-Brown) who spoke about a pensions review. It is an excellent idea to have a pension review, so I am glad that the Chancellor announced in August a landmark pension review, which is looking at how to boost investment and to increase pension pots. It will set out how billions of pounds of investment could be unlocked from defined contribution pension schemes and how pension pots in such schemes could be boosted by up to £11,000. I hope that the hon. Gentleman will look at that review, and I would welcome discussing it with him in due course.
The hon. Member for North East Fife (Wendy Chamberlain) spoke about the Scotch whisky industry. I understand that it may not have welcomed everything in the Budget, to put it mildly, but I want to be clear that we feel that the overall package on alcohol balances the commercial pressures on the alcohol industry with the need to raise revenue. Of course, 90% of whisky is exported so no duty is due on that. We have also looked to support the Scotch whisky industry by reducing fees for geographical verification—specific support that I hope will help the industry in the years ahead.
Today’s debate has brought to the surface the stark difference between this side of the Chamber and the other. The Conservatives have made it clear, yet again, that they are unable to take responsibility for the state of the country as they left it. In contrast, Labour’s first Budget makes it clear that, above all else, we are taking the difficult and responsible decisions to fix the mess they made. We know there are no shortcuts. We are realistic about that, but our Budget is the one our country needs. It is a Budget to restore economic stability while protecting working people, to fix the foundations and fix the NHS, to invest in the future and to rebuild Britain. I commend it to the House.
Ordered, That the debate be now adjourned.—(Taiwo Owatemi.)
Debate to be resumed on Monday 4 November.
Ministerial Code: Policy Announcements
Bernard Jenkin Excerpts(3 weeks, 2 days ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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Nick Thomas-Symonds
My hon. Friend is absolutely right. Frankly, when I heard Conservative Members talk about ethics and standards in Government, I thought that irony had died.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
Can we take it that the Government did not think that the Chancellor’s announcement in America last week was important? I think most people in this House felt that it was. Therefore, if it was important, did the Chancellor break the ministerial code?
Nick Thomas-Symonds
The Chief Secretary to the Treasury made a statement to the House yesterday. The entire Treasury team has been here answering questions today. The Chancellor will deliver a Budget tomorrow and we will have four days of debate on it. I doubt that the House has seen so much of the Treasury team since the Tories were forced to deliver two emergency Budgets in September 2022.
Grenfell Tower Inquiry Phase 2 Report
Bernard Jenkin Excerpts(2 months, 2 weeks ago)
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The Prime Minister
It is important that there is full accountability and that, where appropriate, people are brought to justice—that is the least that the families, the survivors, the bereaved and the community deserve. I absolutely understand my hon. Friend’s point about the wider community. This tragedy has impacted the wider community, as he well knows from his work as the constituency MP. I saw a bit of that when I visited. There are various writings on the wall around the memorial, where people from the area have recorded their private views, and they are an important read for anybody who wants to be in a position of leadership.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I thank the Prime Minister for his statement, and I also thank Sir Martin Moore-Bick.
May I refer the Prime Minister to recommendation 113.58? After Piper Alpha, an independent offshore safety investigation body was established. After the Paddington rail crash, we established the independent Rail Accident Investigation Board. Former Fire and Housing Minister Nick Raynsford, former chief investigator of the air accidents investigation branch Keith Conradi, a leading building control specialist and I made a submission to the inquiry recommending that there should be independent incident investigation of serious building failures of this nature, which would be able to conduct an investigation far more quickly than a public inquiry and with accumulated expertise. However, that role has been left to the London Fire Brigade, which has been heavily criticised and would therefore be conflicted in any investigation of a similar incident. That is why the LFB was not put in charge of investigating this incident in the first place. Could we come and see the Prime Minister about this very serious matter?
The Prime Minister
I thank the hon. Member for raising a really serious issue. We will, of course, look at that recommendation. We will report to the House, and I will make sure that a meeting is set up so that he is able to input directly into our considerations on that particular recommendation and any others that he has concerns about.
Debate on the Address
Bernard Jenkin Excerpts(4 months, 1 week ago)
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Sir Bernard Jenkin (Harwich and North Essex) (Con)
It is a pleasure to see you in the Chair this afternoon, Mr Deputy Speaker, and an honour to speak so early in this debate and to follow the right hon. Member for Hayes and Harlington (John McDonnell). His speech was preceded by the contributions of two Opposition party leaders, the right hon. Members for Kingston and Surbiton (Ed Davey) and for Aberdeen South (Stephen Flynn). They all demonstrated that you cannot keep a good Parliament down, Mr Deputy Speaker. We already have the Liberal Democrats trying to rerun the referendum on proportional representation; the Scottish National party wants to rerun the referendum on Brexit and, of course, on Scottish independence; and I encourage the right hon. Member for Hayes and Harlington to continue a healthy debate about matters such as the two child policy, because his speech has just brought into question the argument that the bigger someone’s majority, the more control they have over their party. I look forward to an entertaining Parliament in that respect.
This is my first opportunity to draw the House’s attention to a report produced by the Liaison Committee in its dying moments in the previous Parliament—it was actually published after Parliament had risen but before Dissolution—about strategic thinking in government. I ask myself whether the King’s Speech reflects comprehensive strategic thinking in government. I think it does in parts, but certainly not in others.
It is a significant moment when a newly elected Government’s Gracious Speech is delivered, because that is when the rhetoric of the campaigning hits the reality of governing. How strategic are this Government? Much of the speech is good. Budget responsibility and the prioritising of wealth creation are good things, but how is that to be achieved with enhanced employment rights, which we know are a threat to the flexibility of the labour market and which businesses are already warning will destroy jobs?
What about all the new super-quangos, which are rather an echo of Labour Governments past? What about a new Great British Railways, like the failed Strategic Rail Authority under John Prescott? What about a new Great British Energy? I do not suppose that is going to be quite like the old Central Electricity Generating Board, but the limits on its authority and spending power make it rather less significant, as the SNP leader, the right hon. Member for Aberdeen South pointed out. What about a new industrial strategy council, which is rather like the unlamented National Enterprise Board set up by Tony Benn in 1975? The Prime Minister claimed that this is
“nothing less than national renewal”,
but I suggest that these are little more than the recycling of old, failed ideas.
I did not think Lords reform was going to be a first-term priority for a Labour Government. It is probably just red meat for a few Labour MPs. There is to be a new House of Commons modernisation committee, but that is 25 years out of date. The House of Commons modernises itself without having a modernisation committee. Is that really deserving of such prominence in a King’s Speech as a strategic priority of the Government?
The Government appear to be deaf to the ironies of the conflicts within their own programme. They say that
“greater devolution of decision making is at the heart of a modern dynamic economy”,
and I welcome that, but it is only to do things like taking control of buses. It is certainly not to take control of where the houses are built and of the housing targets in different areas.
I welcome the commitment to speeding up infrastructure investment. To that extent, I hope the Government will welcome the inheritance from the previous Government of the freeports, particularly the Harwich and Felixstowe one in my constituency. That freeport is an initiative that the Government should be pleased to advance. It has the support of all the political parties in Harwich, which are committed to its success. Given the new Government’s commitment to funding infrastructure, I look forward to meeting the new Minister to discuss how we can develop the Bathside bay to generate industry and jobs for local people.
I think the Government will find that the Norwich-to-Tilbury pylons proposal is a less welcome inheritance. I welcome their objective to
“unlock investment in energy infrastructure”,
but I would like to assist with that, because it does not mean that the Government must blindly approve of anything that National Grid produces at first flush and thinks is a good idea. The Norwich-to-Tilbury pylons proposal has been much in the national news because of the local campaign against the desecration of unspoiled countryside. This is not opposition for its own sake. The submission that I will make later this week in response to the current consultation will set out how the objectives for Norwich to Tilbury cannot be achieved with the current proposals, and can be achieved more quickly and at a lower lifetime cost than that of the current proposals.
Despite what the Prime Minister tries to insist is his programme, it is still dominated by the short-term tactics of gaining power and retaining it. We heard that in his jibes at the Conservative party rather than addressing the fundamental challenges that threaten our national survival—and I put it at no less than that. What are those challenges? They can be summarised as the six big Ds: debt; digitisation, which is transforming the way we live our lives; decarbonisation; deglobalisation, which has thrown globalisation into reverse as a result of the pandemic and rising international tensions; demographics, which are afflicting every OECD country; and defence.
I very much welcome the appointment of Lord Robertson to help oversee a bipartisan defence review. It will find that we need to commit far more than 2.5% of GDP to defence to help prevent another major war. I urge hon. Members to keep thinking about Ukraine; I am very glad the Prime Minister mentioned it in his remarks. If Russia succeeds in Ukraine, we can say goodbye to European and transatlantic security.
One of the findings of the Liaison Committee’s report on strategic thinking in government is that long-term strategy can be truly sustained only if it lasts across successive Parliaments and periodic changes in government. What comes to mind includes continuous at-sea deterrence, the counter-terrorism strategy, the operation of GCHQ and indeed the survival and continuation of the national health service and the achievement of net zero.
I hope that the Government will use their considerable majority to offer to make the radical reforms which, for example, the NHS needs, by finding the cross-party consent and consensus needed to drive through such reforms, as they will undoubtedly create divisions in both parties. The Government have an unrivalled opportunity finally to tackle the social care question, but, if we want it to stick, it must be agreed across the House.
The report covers the capacity of Whitehall for strategic thinking, how the centre of Government can lead strategy more effectively, how strategy must engage the public—particularly younger generations—in governing for the future, and how scrutiny by Select Committees can promote strategic thinking in government. I very much hope that if right hon. and hon. Members have not already read just the first chapter of the report, they will do so, because it is a manifesto for how Parliament and Government should work together to help promote the kind of country that we want, which is so threatened by the international events that we see.
I see Ministers sagely nodding—and I appreciate that—but the Government have yet to respond to the report. There are two proposals in it that I very much hope they will adopt. One is that they will recreate a national school for government to train our civil servants and spads—and even Members of Parliament—in what strategic thinking really is instead of just scrabbling around with focus groups and opinion polls to tell us what to do. The other is that the House should establish a committee for the future, as is happening in other Parliaments around the world—we drew a lot on international experience —which should be looking much further ahead than most Select Committees have time to look. That would be a great reform for the Government to bring in.
Action Against Houthi Maritime Attacks
Bernard Jenkin Excerpts(10 months ago)
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The Prime Minister
That is why we are working extensively with our allies, broadening the international coalition of support condemning the Houthis’ behaviour, and putting pressure on them in all different ways. It is important that military action is not seen in isolation: it sits alongside wider diplomatic and economic strategies. As I said, we will bring forward new sanctions measures, together with our allies, in the coming days.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I express my full support for the action that my right hon. Friend the Prime Minister has approved. Will he extend his strategic objectives, because it seems that this threat will remain so long as the Houthis have a safe haven to operate from? It is a question of how we deal with that part of Yemen, which is effectively an ungoverned space.
The Prime Minister
It is clear that the Houthis’ behaviour is damaging the people of Yemen. We have talked previously about the importance of the supply of food into Yemen, but the destruction of oil infrastructure also deprives the Yemeni people of key revenue. These are all topics with which we are engaged with our Saudi partners. We very much support the negotiations. As my hon. Friend knows, a deal was announced in December. We would like to see a lasting peace and security for the Yemeni people for an inclusive political settlement, and I can assure him that, diplomatically, we are working very hard to achieve that aim.
Defending the UK and Allies
Bernard Jenkin Excerpts(10 months, 1 week ago)
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The Prime Minister
I commend the hon. Lady for her remarks and I wholeheartedly agree with her. We will absolutely not tolerate that kind of language on our streets. We have been crystal clear about that. We have said to the police that they should take all decisive action against those who promote and encourage terrorism and, indeed, those who incite hatred and division on our streets. I hope the hon. Lady will have seen today’s proscription of Hizb ut-Tahrir, which is another organisation that uses language similar to that she describes. Its promotion of terrorism is rooted in antisemitic ideology. I hope that gives her reassurance that we will confront this and stamp it out wherever we see it, because it is not in accordance with British values. Jewish people in this country deserve to be able to walk our streets in freedom and security.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I welcome my right hon. Friend’s decision last week to take military action in the Red sea, and the substantial increase in aid for Ukraine. Will he take this opportunity to reiterate and make it absolutely clear that it would be utterly against the national interest, and indeed the security interests of the world, for the British Prime Minister to be hobbled in the decisions that he makes about taking military action by the need to consult in advance? Does he not agree that the responsibility that he bears is intrinsic to his seals of office and should not be given up?
The Prime Minister
I thank my hon. Friend for his comments. In this case, it was necessary to strike with speed and protect the security of the operations. I believe that that is in accordance with the convention and, indeed, precedent on these matters. My hon. Friend is right: the Government need to protect the security interests of the United Kingdom. That means that sometimes we have to act decisively, quickly and securely. Fundamentally, we need to maintain the prerogative powers that allow the Executive to act in such emergencies, but of course I am responsible for those decisions, I do not take them lightly, and Parliament is responsible for holding me to account for them.
Cabinet Office
Bernard Jenkin Excerpts(11 months, 3 weeks ago)
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Sir Bernard Jenkin
I congratulate my right hon. Friend on his appointment—and a very welcome one it is too. Does he acknowledge that although the problem of churn and generalism in the civil service has been around for 50 or 60 years, since the Fulton inquiry in the 1960s under Harold Wilson, it has become worse and worse? I thank him for the evidence that the Government have submitted to the Liaison Committee’s inquiry on strategic thinking in Government and how Select Committees can better scrutinise it, but if the Government do not have in place the experts and the people with domain knowledge, domain expertise and subject experience, there is not likely to be much good strategic thinking going on, given that Ministers often seem to know more about the subjects than the officials they are dealing with. May I invite my right hon. Friend to give us a supplementary note for the inquiry, so that we can understand their thinking on this matter more deeply?
Oral Answers to Questions
Bernard Jenkin Excerpts(12 months ago)
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Oliver Dowden
That is a question for Lord Cameron, but I would be amazed if he had not been domiciled in this country for his entire life.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
The Minister for the Cabinet Office and Paymaster General (John Glen)
In July 2022 we launched a policy setting the expected assignment durations for the senior civil service—the SCS1 and SCS2 roles—at a default minimum of three years, to support the transfer of knowledge management and subject expertise. The initial impact of the policy will be reviewed by July next year, and there will be a fuller review in July 2025, following the completion of the first three-year cycle.
Sir Bernard Jenkin
I congratulate my right hon. Friend on his appointment—and a very welcome one it is too. Does he acknowledge that although the problem of churn and generalism in the civil service has been around for 50 or 60 years, since the Fulton inquiry in the 1960s under Harold Wilson, it has become worse and worse? I thank him for the evidence that the Government have submitted to the Liaison Committee’s inquiry on strategic thinking in Government and how Select Committees can better scrutinise it, but if the Government do not have in place the experts and the people with domain knowledge, domain expertise and subject experience, there is not likely to be much good strategic thinking going on, given that Ministers often seem to know more about the subjects than the officials they are dealing with. May I invite my right hon. Friend to give us a supplementary note for the inquiry, so that we can understand their thinking on this matter more deeply?
John Glen
My hon. Friend obviously knows a great deal about this as a result of his distinguished 31 years of experience in the House, but pivotal role allowances have been in place for 10 years to help us to retain certain key individuals. A number of initiatives were introduced by my distinguished predecessor Lord Maude, the former right hon. Member for Horsham, and I intend to build on those, but I am happy to engage with my hon. Friend, because this is a serious issue.
In 2022, the last year for which we have figures, there was a 12.4% turnover from the senior civil service, and resignations were at 5%. We need to look carefully at what that means across different roles, and at how we can retain the specialisms for longer periods so that key Government programmes benefit from the sort of leadership that has enduring expertise at the table.
Oliver Dowden
I refer the hon. Gentleman to my previous answer about the well-established principle that Ministers can serve from the other place, which I believe last happened when Lord Mandelson was in the Labour Cabinet. However, the Government and my right hon. Friend the Foreign Secretary recognise this House’s desire to scrutinise him and he has committed to further measures to ensure that happens.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I thank the Government for publishing the report on governance and accountability in the civil service, which my noble Friend Lord Maude was commissioned to produce. May I point out that one of his recommendations in that very well drafted report is about learning from the experience of other civil services, such as those in New Zealand, Australia and Canada, where indeed they retain civil servants in post much longer by paying them better—
Mr Speaker
Order. Many Members wish to speak, but they will not get in if we are not careful.
Security Update
Bernard Jenkin Excerpts(1 year, 2 months ago)
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The Deputy Prime Minister
First, the integrated review refresh was clear about China being the No. 1 state-based threat to our economic security. The hon. Gentleman cites the foreign language training; that is just one element of the action that we have taken to increase our capacity in relation to China. Clearly, he would not expect me to comment on what the agencies are doing in respect of China, but I can assure him that within the Cabinet Office and its structures, we are constantly increasing the amount of resource that we put in, as is the Foreign Office.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I have some sympathy with my right hon. Friend the Deputy Prime Minister for wanting to strike the right balance. I very much welcome his recognition that we have come a long way from the ill-fated idea of a golden age with China, which was only eight years ago. Much of what has happened has been predicable and predicted, and we continue to predict what will happen, as he has heard this afternoon. Why are the Government so squeamish not just about talking about threats from China, but about calling China a threat? What is the difference between a challenge and a threat?
The Deputy Prime Minister
I am grateful to my hon. Friend for recognising the evolution and strengthening of our approach to China—I will not add to what I have said on that. We continue to enhance our capability in relation to China. I have outlined a number of the measures that we take; we continue to keep all those things under review. I want to reassure him and other Members on both sides of the House that we are absolutely clear about the threat that China represents, but at the same time, it is right that we engage with China, and that is the approach that we are taking, alongside working closely with our allies. I think that is a sensible and balanced approach that in no way underestimates the scale of the challenge in respect of China, as has been set out in numerous documents.
NATO Summit
Bernard Jenkin Excerpts(1 year, 4 months ago)
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The Prime Minister
The right hon. Gentleman talks about defence spending, and it is clear that not only have we met the 2% target, but we were one of the first to do so, and we have done so for over a decade. It is good that others are now catching up, and our leadership on this issue is unquestionable. How that money is spent is ultimately a question for our military chiefs, to ensure that we have the optimal mix of capabilities to protect ourselves against the threats we face. I will not pre-empt the defence Command Paper, other than to say that, when it comes to our armed forces, what is important is not just the quantum in terms of the Army, but how lethal they are, how deployable and how agile. That has been a particular focus of attention from the Chief of the General Staff, and it is a plan that we are putting in place. I would maybe draw slightly different lessons from the right hon. Gentleman’s on the conflict that Ukraine is currently experiencing. The capabilities that we have brought to bear have been in a range of areas, all of which have received extra investment. Again, those will be questions for the defence Command Paper, which he will not have to wait very long to see.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I thank my right hon. Friend for his statement, and congratulate him on contributing to what I think history will prove to have been one of the most significant summits in NATO’s history. Will he clarify what he understands is the intention with regard to Ukraine’s membership of NATO? What would be the purpose of delaying Ukraine’s membership beyond the end of hostilities in Ukraine and the victory for the Ukrainians? Without the article 5 security guarantee, rebuilding Ukraine will be much more difficult, because investors will not have confidence unless we are providing that security guarantee.
The Prime Minister
I thank my hon. Friend for his question. In the interests of time, I might point him in the direction of the Secretary-General’s press conference from the day before yesterday, which explained—in more detail than I have time for now—the process and how this has been done previously. As he pointed out, accession to NATO has never been a question of timing; it has always been a question of conditions and circumstances. My hon. Friend will be familiar with the fact that there is an ongoing conflict. There are also requirements on all NATO members when it comes to areas such as modernisation, governance and interoperability, which Ukraine is now firmly on the path towards fulfilling, not least because of the help and support that we have provided over the past year.
I agree with my hon. Friend that history will judge this to be one of the most significant NATO summits. There was the significant change in the defence investment pledge, so 2% is now firmly established as a floor, not a ceiling. There was the most comprehensive update to NATO’s war fighting plans in decades, if not since the end of the cold war, and they are remarkable in their breadth and significance. There was the accession of new members—Finland, and Sweden to follow. Lastly, there was the move on membership for Ukraine. Taken together, that represents a significant set of NATO achievements, sitting alongside the multilateral security guarantees. As my hon. Friend says, it has been an historic and very important couple of days.