Budget Resolutions and Economic Situation

Catherine McKinnell Excerpts

Tuesday 22nd March 2016 Commons Chamber

[John McDonnell]

I will in a minute. There is no need to shout out so loud again.

The right hon. Gentleman saw the unfairness of the PIP cuts to disabled people in the Budget. As he said, it is a Budget that benefits high earners. He also saw himself being set up by his own Cabinet colleague.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The shadow Chancellor is right to say he does not agree with the former Secretary of State’s policies. Indeed, even with the U-turn on PIP disabled people are still left distressed by the reforms that will still be going through. Will he join me in urging the Chancellor and the new Secretary of State for Work and Pensions to look again at this very flawed process?

[John McDonnell]

I fully concur. The same week that this was being discussed, ESA was being cut by £30 a week.

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[Mrs Maria Miller (Basingstoke) (Con)]

It is a great pleasure to follow the hon. Member for East Lothian (George Kerevan), who always speaks so eloquently, but I must say that I disagree with absolutely every word he said. Boosting productivity is at the heart of this Government’s Budget, which is plain for everybody to see. My right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) said that the global economy is slowing down and that we need to be fighting fit for the future. This Budget will help put Britain in that place.

I pay tribute to the Chancellor for delivering such a strong Budget, but what we should all do first is pay tribute to our nation’s wealth creators. It is they, not us sitting here in Parliament, who have put Britain back on top with one of the world’s strongest economies. They are the farmers whom I met last week in Hampshire. They are the partners who run the new John Lewis store in my constituency. They are small and medium-sized businesses up and down the country. They are people like Beryl Huntingdon, who runs Absolutely Offices, or Graham Murphy, who runs RDT. They are the people, innovators and entrepreneurs putting Britain back on top. We must acknowledge their immense hard work in getting our country into the position it is now in.

[Catherine McKinnell]

Will the right hon. Lady give way?

[Mrs Miller]

If the hon. Lady will forgive me, I want to make progress because of the number of people who want to contribute.

The Government have recognised their role in creating the right conditions for business success. They have created an environment in which businesses feel confident about investing by putting in place the right reductions in business and job taxes to encourage growth and success. They have put in place the right infrastructure investment—the £100 billion going into infrastructure over this Parliament, including Crossrail 2, which will do so much to reduce pressure on other parts of the rail network, such as the Wessex route, which affects many hon. Members and is well over capacity. The Budget is also investing in people, underlined by the commitment to 3 million new apprenticeships by 2020, including 5,000, some of which will be degree level, in my constituency at the Basingstoke College of Technology.

People are the biggest asset of most organisations. According to the CBI, some of the biggest challenges facing business in the UK today are retaining top talent and getting appropriately skilled staff. We may have record employment levels, which is to be applauded, and the highest number of women in work, but if we are to be fighting fit for the future, we must get the best out of every single member of our community. While much has been done, there is still more to do, particularly on women’s role in the workforce.

Record numbers of women are in work and the Chancellor is to be congratulated on that, particularly because of the investment he secured for doubling the amount of free childcare. There are 2 million women who would like to be in work and 1 million working women who would like to work more, but they cannot find the right jobs. Some 41% of women in this country work part time, many because they cannot get hold of the right flexible work that fits around their family and caring responsibilities. I gently draw the Chancellor’s attention to the second report of the Women and Equalities Committee, which is all about one of the Government’s great aspirations: to eliminate the gender pay gap in a generation. We can do that if all jobs are more flexible, if men are better able to share care in their family life, and if there are national pathways for women to get back into work.

I also draw the Chancellor’s attention to an Equality and Human Rights Commission report, published today, on the level of maternity discrimination that 77% of pregnant mothers and people on maternity leave are enduring. We are not making the best use of women in this country, and I would like the Government to pledge to take active steps to change the situation, so that all women can do a job that they want to do in order to make the biggest contribution they can to boosting productivity in this country.

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[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

We learned many things from last week’s Budget, and we have learned perhaps even more from the fallout since. However, the overriding message we seem to be getting is that, six years into his job, the Chancellor cannot keep a promise and does not seem to learn from his past shambolic Budget mistakes. He promised to balance the books by last year, to get debt falling as a percentage of GDP each year and to keep welfare spending within his welfare cap, but on virtually all of his own fiscal targets, as the independent Office for Budget Responsibility confirmed last week, he has failed to deliver.

Of course, this Government’s shortcomings go much further than the Chancellor’s own meaningless targets. A mere six months ago, the Prime Minister told his party conference that he would govern according to “one nation, modern, compassionate” Conservatism. This is the same Prime Minister who last week cheered on a Budget that cut capital gains tax, raised the threshold for the 40p rate, further cut corporation tax, and would see the poorest losing about £1,500 a year in the next few years while some of the richest gain £200. To top it off, the Chancellor pledged to slash disability benefits by up to £1.3 billion a year, which the OBR estimated would lead to some 370,000 disabled people losing an average of £3,500 a year.

[Robert Jenrick]

I want to give some context on the important point about capital gains tax that is being made by the Opposition. Jim Callaghan created capital gains tax when he was Chancellor in 1965, but it has always been lower under Labour Chancellors than under Conservative Chancellors. Even after this change, capital gains tax will be 2% higher under this Chancellor than it was under Alistair Darling, and indeed Gordon Brown in the previous Labour Government.

[Catherine McKinnell]

I do not understand the hon. Gentleman’s point. He is digressing on details of capital gains tax when the point I am clearly making is about the context in which the cut has been made, where the burden of this Budget very much falls on the poorest and the most vulnerable in our society. If that is compassionate Conservatism, bring the nasty party back!

I am pleased and relieved that the Government have backed down on this issue within less than a week. However, I am angry that those people who rely on the personal independence payment, including 1,100 people in Newcastle upon Tyne North, have endured days and weeks of huge anxiety about how they would cope if this level of support was cut. It is unforgivable. I remain equally concerned about how the existing reforms to PIP are quite clearly failing disabled people. Constituents continue to get in touch with me following my recent question to the Prime Minister because they have been told that they are no longer eligible for a Motability vehicle despite its clearly being the only means by which they can leave the house, or indeed get to work. The new PIP assessment is fundamentally flawed. I strongly urge the Work and Pensions Secretary and the Chief Secretary to the Treasury to revisit this issue with fresh eyes and look at reforming the current PIP changes before they embark on any further welfare reform.

Despite the Chancellor’s so-called

“revolution in the way we govern England”,

with the pledge last May to give local areas greater control over local transport, housing, skills and healthcare, it appears that he does not place the same faith in local communities when it comes to our schools. Last week’s Budget confirmed that, far from handing control to local communities, the Government are about to embark on the greatest ever centralisation of our schools system, which will see an end to the role, now a century old, of democratically accountable local authorities as the stewards of our children’s education. My Front-Bench colleagues have already highlighted the glaring black hole in the finances of this plan—£560 million—which raises questions about the extent to which the schools budget will be raided to make up the shortfall.

[Mr Jim Cunningham (Coventry South) (Lab)]

My hon. Friend mentions the schools budget. I do not know whether she is aware that in Coventry one or two academies are already in serious trouble because of falling numbers as a result of certain changes in the education budgets.

[Catherine McKinnell]

I appreciate my hon. Friend’s point. It is not just local academies that are in trouble—there are some much bigger and more serious questions that we need to raise. First, why are the Government doing this? There is no proof whatsoever that academies per se raise educational standards. It is a distraction that schools now need to focus on this rather than on their educational attainment. Secondly, how will the Government enable the local political leadership to drive up standards and work together, as happened so effectively with the London Challenge, if the power and decision making is so centralised in Whitehall?

Is the Department for Education even fit for purpose to deal with over 20,000 schools across the country—about 3,400 secondaries and almost 17,000 primaries? There are signs that it is already struggling with its current workload of 4,000 schools. As the Education Committee, of which I am a member, recently uncovered, the Department could not even deliver its annual accounts to Parliament in time and required a statutory extension, and there remains doubt as to when it will ever be able to present them. This mass rush to conversion will only add to the current mess. We need only look at the fiasco of the free schools application process, where there is no clear rhyme or reason to the Department’s decisions to authorise new schools.

We see a Department in disarray. Of particular concern for my constituents is how the forced academisation process will fit alongside the large-scale programme of house building that is planned for our area. As a result of the coalition’s national planning policy framework, some 21,000 new homes are expected to be built in Newcastle by 2030, a large proportion of which will be in my constituency. That will require new school capacity, but who will be the guiding mind that will match and create that new school capacity in an area that will be controlled by Whitehall? Newcastle City Council already finds itself in the impossible position of being unable to establish new community schools to cope with existing demand. How on earth will it be able to deliver the right school places across Newcastle upon Tyne North when every school is accountable to the Secretary of State?

Finally, in addition to the fact that apprenticeships were not mentioned in the Chancellor’s Budget even though we were promised that they would be, another glaring omission was the lack of any announcement about how the Government intend to protect our regional airports from the impact of devolving air passenger duty to Scotland. That is crucial to Newcastle airport, which supports 12,000 jobs in the region, and through which £300 million of goods are exported every year. All talk of a northern powerhouse will be completely undermined if the Chancellor fails to deal with the issue urgently.

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[Greg Hands]

We remain on course to deliver our budget surplus in 2019-20, which is far more than Labour ever achieved. I would have thought that the hon. Lady would take the opportunity to congratulate the Government on the new commitment to flood defences in Leeds, which she did not mention.

I will be working to find a further £3.5 billion of efficiencies by 2019-20 so that we deliver that surplus by the end of this Parliament. That means that we keep our economy on course, and we refuse to pass on the burden to our children and grandchildren.

At the same time, we will continue to reward aspiration, back growth, invest in education and help people get on in life—because this is a Budget that backs Britain’s businesses. It cuts the burden of business rates by £6.7 billion over the next five years, taking 600,000 of our smallest firms out of business rates altogether. It cuts the rate of corporation tax even further, to 17% in 2020, giving us the most competitive rate in the G7 and benefiting more than 1 million businesses. Through a £1 billion North sea oil and gas package, it is a Budget that helps Britain’s largest industry succeed in difficult economic times; through cuts to both the higher and basic rates of capital gains tax, it encourages investment—the lifeblood of Britain’s businesses; and, through the abolition of class 2 national insurance contributions, it creates a simpler tax system and a tax cut of more than £130 for the 3 million-plus self-employed people in Britain—this Government stand squarely behind them.

This is a Budget that puts cash into people’s pockets. It raises the tax-free personal allowance to £11,500 from next year, and the higher rate threshold to £45,000. We recognise that money should be in savings accounts as well as in pockets, so this is also the Budget that creates the lifetime ISA, helping people to buy their first home or save for their retirement. This is a Budget that freezes fuel duty, helping people every time they fill up their tank. It is a Budget that supports responsible drinkers; helps the nation’s pubs and gives a further boost to the Scotch whisky industry.

I recall seeing on the morning of the Budget the Scottish National party’s lead spokesman saying that he had three asks in this Budget, and he listed them on Twitter. They were to freeze fuel duty, to keep down duty on Scotch and to have a fiscal package for oil and gas. We have met all three of his asks and much more, and this is a very good Budget for Scotland, too.

It is a Budget that strengthens our tax base, through reforming the tax system so that it is in line with the realities of global, 21st-century economics. As I said, in this Budget we take action on the scourge of obesity, which, as well as putting unsustainable pressures on the NHS, ruins people’s health and quality of life, and costs the country about £27 billion a year.

[Catherine McKinnell]

rose—

[Greg Hands]

I do not have time to give way. Because we continue to get the public finances under control, our Budget—[Interruption.] I am sorry, but all the Labour MPs elected in 2010 and 2015 do not remember the last Labour Government, and that is part of their problem. Because we get the public finances under control, our Budget gives this country a stable base from which to support those in need of support. That is a point that too many on the Opposition Benches still do not get: there can only be true social justice on the back of a functioning economy. Had we not taken action in 2010, borrowing would have been £930 billion more by the end of the decade than it is now forecast to be. On a serious point, one more downturn and we could have lost control altogether in this country, and when that happens it is the poorest and the most vulnerable who are hit the hardest. So we say: never again. That is why we take action now, so we do not pay later.

To conclude, I am sure that some on the Opposition Benches will vote against the Budget tonight, but they will be voting against more money going to our schools. They will be voting against 600,000 small businesses being taken out of paying business rates altogether. They will be voting against support for our North sea oil and gas industry. They will be voting against increases for children’s healthcare. They will be voting against helping working people save for their future. They will be voting against lower taxes for the lowest paid. They will be voting against a better future for Britain.

I say that Members should vote for this Budget. Stability, security, prosperity is what the electorate asked us to provide last May and it is that which this Budget provides, and I ask the House to support it tonight.

Amendment (b) agreed to.

Amendment made: (a), after ‘importation’ in paragraph 2(a), insert—

‘other than in respect of value added tax on women’s sanitary products’.—(Paula Sherriff.)

Main Question, as amended, put.