Public Spending: Inheritance

Caroline Nokes Excerpts

Monday 29th July 2024 Commons Chamber

[Daisy Cooper (St Albans) (LD)]

The legacy of the Conservatives’ new hospitals programme is dire, but the Chancellor will know that there is also a cost to delay. We have life-expired buildings that will continue to need to be patched up until they are replaced, so I urge the Chancellor, as I urged the Secretary of State for Health and Social Care last week, to give the go-ahead to those projects that are ready to go and involve life-expired buildings. Will she review the outdated rules, and allow hospitals to spend more of their capital funds on helping with repairs and rebuilds?

[Madam Deputy Speaker (Caroline Nokes)]

I call the Chancellor.

[Rachel Reeves]

I welcome you to your place, Madam Deputy Speaker. My right hon. Friend the Secretary of State for Health and Social Care will meet with people affected. We were promised a new hospital in Leeds that has never been built, so I understand the concerns that right hon. and hon. Members have about the hospital programme. However, there is a £22 billion in-year overspend, which means taking incredibly difficult decisions. They are not the decisions that we would want to make, but they are responsible ones in the circumstances, given our dire inheritance from the Conservative party.

[Rachel Reeves]

My hon. Friend is welcome on the Government Benches with his expertise. Everything in our manifesto was fully costed and fully funded, including 40,000 additional NHS appointments every single week, which will be funded by cracking down on tax avoidance and ensuring that people who make their home in Britain pay their taxes here. We will finally deal with the terrible situation of non-doms claiming that they do not live in Britain for tax purposes, despite making their home here. Those people should contribute to the public purse; under Labour, they will.

[Madam Deputy Speaker (Caroline Nokes)]

I call Sir Julian Lewis.

[Sir Julian Lewis (New Forest East) (Con)]

Congratulations on your election, Madam Deputy Speaker.

I cannot hope to match the splendid double entendre of the hon. Member for Walthamstow (Ms Creasy), but I may I say to the Chancellor that one effect of being here for a long time is a realisation that no one party has a monopoly on wisdom? Given the impartial assessment by the Library that covid cost this country between £310 billion and £410 billion, is she willing to at least concede that the previous Government did a pretty good job in getting inflation down to 2% less than two years after the pandemic?

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[Madam Deputy Speaker (Caroline Nokes)]

I call Bill Esterson.

[Bill Esterson (Sefton Central) (Lab)]

Welcome to your place, Madam Deputy Speaker.

It was not just the public finances that the Conservatives mismanaged over 14 years; they failed to support industry too. Figures published today demonstrate that Britain has dropped out of the top 10 countries for manufacturing for the first time since the industrial revolution. I welcome my right hon. Friend’s commitment to leveraging millions more in private investment to make up for the record low levels of private investment we saw under the previous Government. Does she agree that the latest manufacturing figures show how critical it is that the Government work closely with business and trade unions on a long-term industrial strategy?

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[Rachel Reeves]

First, it is an extraordinary omission that the previous Government did not set affordability criteria for the independent pay review bodies, which meant that they were able to come back with these recommendations. It would be almost without precedent not to accept recommendations from an independent pay review body. If the hon. Gentleman wants to go to the doctors, nurses, teachers, police officers and those in the armed forces in his constituency and say that they do not deserve a pay increase in line with private sector wages, that is up to him, but I believe that those public sector workers deserve those pay increases.

On pensions and the winter fuel payment, this is not the decision I wanted to make and it is not the decision I expected to make, but we have to make in-year savings, which is incredibly difficult to do. Without doing that, we would put our public finances at risk. We are ensuring that everybody who is entitled to pension credit—the poorest pensioners—continue to get the winter fuel payment, and we will work with the Department for Work and Pensions, local authorities and charities to boost the take-up of pension credit.

[Madam Deputy Speaker (Caroline Nokes)]

I call Rachael Maskell.

[Rachael Maskell (York Central) (Lab/Co-op)]

Thank you, Madam Deputy Speaker, and welcome to your place.

I thank my right hon. Friend for her forensic approach to the nation’s finances. As she digs deeper, she will see that York, the city I represent, is at the bottom of many of the matrices for the funding formulas. Will she look at the funding formulas before the Budget so that we can see the distribution of funding? The last Government handed out, for pet projects, much of the money that she is trying to get control of now, but will she look at how that is distributed across the country?

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[Rachel Reeves]

I can see, on behalf of the hon. Gentleman’s constituents, the frustration and anger that he feels at the previous Government letting his constituents down so badly by not funding the hospitals that they promised. I commit to my right hon. Friend the Health Secretary meeting everybody affected. We also have a workforce plan, to invest in the future workforce in our national health service, and we are announcing today that we are accepting in full the recommendations of the independent pay review bodies to pay properly our doctors, nurses and others who work in our NHS.

[Madam Deputy Speaker]

I call Torsten Bell.

[Torsten Bell (Swansea West) (Lab)]

Congratulations on your new post, Madam Deputy Speaker.

There can be reasonable political debate across the House about the total levels of public spending—there was a lot of that during the election campaign, with our calling for higher levels of public investment—but there should be complete agreement about the need for the Treasury to ensure that public money is well spent. At the top of that is making sure that the policies and commitments of every Department match their budgets. We hear from experts right around the country today that they do not match those budgets, so can the Chancellor reassure this ex-Treasury official, this House and my Swansea constituents that this will never happen under this Labour Government?

[Rachel Reeves]

I thank my hon. Friend for that question and welcome him to his place in this House—he speaks powerfully, based on his previous experience. I will fix the mess that we have inherited, but it is a terrible mess: a £22 billion in-year gap between what was forecast to be spent and what was actually being spent by the previous Government. We will get a grip on our public finances; that requires tough choices, but that is the role of Chancellor, and it is the role of Government. These are choices that the previous Government ducked and diverted, but we will make the difficult decisions to get our public finances back on a firmer footing.

[Madam Deputy Speaker (Caroline Nokes)]

We could do with some masterclasses in short questions and short answers.

[Nick Timothy (West Suffolk) (Con)]

Earlier, the Chancellor quoted Paul Johnson of the Institute for Fiscal Studies, but she omitted the end of his comments. He said that half of the spending hole she claims is public sector pay

“over which govt made a choice”.

That is the truth, is it not? The Chancellor does a good shocked face, but she chose to create her own spending hole, did she not?

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[Rachel Reeves]

There is nothing pro-growth about making commitments that we cannot afford. There is nothing pro-growth about having £22 billion of unfunded commitments. We saw that when Liz Truss did her mini-Budget less than two years ago, and right hon. and hon. Opposition Members would do well to learn that lesson.

[Madam Deputy Speaker (Caroline Nokes)]

I call Clive Lewis.

[Clive Lewis (Norwich South) (Lab)]

I welcome you to the Chair, Madam Deputy Speaker.

My right hon. Friend the Chancellor will probably not be too surprised to hear that when it comes to wasteful and expensive vanity projects, the Conservative party has not confined itself to national matters. Conservative-run Norfolk county council is attempting to push through a £300 million vanity road known as the Norwich western link, which measures 3.9 km at a cost of more than £70 million a kilometre. Will she look at that environmental and financial disaster, and work with those of us who know that there are more cost-effective and ecologically sound alternatives?

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[Rachel Reeves]

Yes, page 5 of the “Fixing the foundations” document that we have published today sets out the pressures on public spending. On rail services:

“Pressures have emerged on rail finances, primarily due to the weaker-than-expected recovery in passenger demand”,

as well as the cost of industrial action, have led

“to a pressure of £1.6 billion”

in this financial year alone.

[Madam Deputy Speaker (Caroline Nokes)]

I call Christine Jardine.

[Christine Jardine (Edinburgh West) (LD)]

I would also like to welcome you to the Chair, Madame Deputy Speaker.

Much of what the Chancellor says I welcome—no fresh income tax, national insurance or VAT—but I am sure the Chancellor will recognise the concern that many pensioners, particularly in the coldest areas of the country, will be feeling at the announcement of the withdrawal of winter fuel payments. Although she is saying that she will work on bringing more people forward and encouraging them to sign up for credits, can she tell us how she is going to do that if she is also going to cut the Government communications budget?

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[Rachel Reeves]

If our economy had grown at just the average rate for OECD economies over the past 14 years, it would today be worth £140 billion more. That would have been worth £5,000 for every family in Britain and would have meant an additional £58 billion for our public services, without increasing tax by a single penny. That shows how important economic growth is, which is why getting our economy growing is the No. 1 mission of this Government.

[Madam Deputy Speaker (Caroline Nokes)]

I call David Simmonds.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

Thank you and welcome to your place, Madam Deputy Speaker.

The estimates day provisions presented by the Chancellor to the House last week included a capital departmental expenditure limit of £12.655 billion for the Department of Health and Social Care. We know that it included the funds for the new Hillingdon hospital, which was granted planning permission and where work has already started. Does the Chancellor of the Exchequer stand by what she told the House in the estimates day debate, on which we all relied when casting our vote? Can she therefore assure my constituents that that hospital project, which was fully budgeted for and where work has already started, will be delivered by this Government?

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[Rachel Reeves]

I can fully understand why the hon. Gentleman’s constituents are so angry with the previous Government for leaving this mess and making unfunded commitments. I assure him that projects that have already started, such as the station he mentions, will go ahead.

[Madam Deputy Speaker (Caroline Nokes)]

Final question. I call Jim Shannon.

[Jim Shannon (Strangford) (DUP)]

Still the strongest legs in the Chamber, Madam Deputy Speaker. Thank you for calling me to ask a question.

I am very pleased to hear the Chancellor’s statement. The clear financial predicament is one that all the United Kingdom of Great Britain and Northern Ireland is in together. Will she confirm that, in light of the budget gap and the welcome announcement of the junior doctor pay offer, savings will be made in ways that do not affect required pay increases at the expense of our health staff, but that they will focus on cutting back on unnecessary quangos, on the estimated £500 million of taxpayers’ money that has been spent on issues such as diversity and inclusion—although important, they do not deserve priority in public spending—or on vanity projects such as Casement Park in Northern Ireland?

[Paul Holmes]

On a point of order, Madam Deputy Speaker. May I raise a significant issue that I am concerned about, in relation to the Chancellor’s statement? [Interruption.] The Chancellor obviously does not want to stay in the Chamber to hear this.

In the course of her remarks, the Chancellor appeared to indicate that the Government had knowingly laid wrong or misleading estimates before the House on Thursday last week which differed significantly from what she has presented today, one working day since those estimates were laid. This, if true, is of serious concern. What steps can we take to ensure that the Government retract either the estimates laid or the document that they produced today, and can you tell me whether this possibly constitutes a breach of the ministerial code?

[Madam Deputy Speaker (Caroline Nokes)]

The hon. Member will know that the Chair is not responsible for the content of contributions made by Ministers, but I am sure that his concern has been heard on the Government Benches. I am sure that if an error has been made in this instance, the Minister will seek to correct it as quickly as possible. It is for the Government to decide on the estimates that they put before the House.

[Kit Malthouse]

Further to that point of order, Madam Deputy Speaker. The Chancellor of the Exchequer made certain assertions about timing during her statement. However, we know from the media that the contents of the statement were briefed to The Guardian at 8.58 pm on Thursday, just after the estimates had been voted on. While I understand that the Chair is not responsible for the content of what is said at the Dispatch Box, the Chair is responsible for the integrity of documents that are laid before the House and on which we vote and rely. May I ask whether this is a matter for the Prime Minister in his governance of the ministerial code, or for the Commissioner for Standards in his upholding of standards in the House? Prima facie, in the absence of any evidence from the Chancellor, it looks as if we have all been misled.

[Madam Deputy Speaker]

The right hon. Member will know as well as I do that that is not for the Chair to decide. It is for the Government to decide what they put in their estimates and in documents that are published.

[Stuart Anderson]

Further to that point of order, Madam Deputy Speaker. The Chancellor said—for transparency—that she had found out about everything this weekend, but last week, prior to this weekend, she said that the Treasury had also met the Office for Budget Responsibility to explain how bad things were. The two cannot both be correct. Could the Chancellor come to the House and correct the record?

[Madam Deputy Speaker]

I have made it very clear that it is not a matter for the Chair. Those on the Government Benches will have heard three points of order on the same subject. If they wish to come to the House, I am sure the Chancellor will.