Budget Resolutions

Charlie Elphicke Excerpts

1st reading: House of Commons
Thursday 1st November 2018 Commons Chamber

[James Brokenshire]

I have to say in the nicest possible way that it is a bit rich for the right hon. Gentleman to make that point. Labour’s spending plans would cost £1,000 billion. It is an extraordinary sum of money, and all the people up and down the country would bear the cost of the debt for borrowing.

[Charlie Elphicke (Dover) (Ind)]

My right hon. Friend is making a typically powerful speech. Will he tell the House how the measures in this Budget will help young people on to the housing ladder, particularly as since 2001 home ownership levels have halved for people aged between 16 and 35?

[James Brokenshire]

My hon. Friend makes an important point. The steps under this Government have led to an increase in home ownership, and the first time buyer rate has started to increase under this Government. This has been a challenge and initiatives such as Help to Buy have been important in realising that ambition and the aspiration for people to be able to own their own home. There is also the investment in social and affordable housing through our specific £9 billion programme, which is firmly focused on that.

I want to come back to my point about local government and the pressures we recognise have been growing especially around social care. That is why I am delighted that the Chancellor committed around £1 billion of extra funding for local services, with a strong focus on supporting some of our most vulnerable groups. That includes £650 million for adult and children’s social care; £240 million of that will go towards easing winter pressures next year, with the flexibility to use the remainder where it is most needed for either adult or children’s services. That is on top of the £240 million announced last month to address winter pressures this year.

In addition, the Budget pledged an extra £84 million over the next five years to expand our successful children’s social care programmes to more councils with high or rising numbers of children in care, and an extra £55 million is being made available for the disabled facilities grant in England in 2018-19. This new funding will allow councils to take immediate action to deliver the services their residents need while protecting them from excessive council tax bills.

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[Andrew Gwynne]

My hon. Friend is absolutely right, because all this does is shunt costs on to other parts of the public sector. That is not a sustainable way of continuing. Sadly, I could give many more examples, yet the Government’s answer to these problems is not to drop the £1.3 billion cut to funding next year, nor to properly address the crises in social care and children’s services, but to offer mere crumbs from the table, which will do little to fix the problem that has been created.

[Charlie Elphicke]

I am listening to the hon. Gentleman’s speech with great interest, but he has not answered the question put to him by my hon. Friend the Member for Aldershot (Leo Docherty). The shadow Chancellor says that he supports the tax cut and the Leader of the Opposition says that he does not. Where does the hon. Member for Denton and Reddish (Andrew Gwynne) stand?

[Andrew Gwynne]

Let me make it very clear. In case the hon. Gentleman has not realised, this is not a Labour Budget. A Labour Budget would look very different. We will not vote today to restrict extra money for the lowest paid in our country, and when we have a Labour Government offering hope for the future, a Labour Budget will rectify the giveaways to the top.

The Chief Secretary to the Treasury believes that the Government have not cut local government budgets, but the fact is that, since 2010, spending power—the Government’s preferred measure—has fallen by 28.6%, which includes the 49.1% cut to central Government grants for local authorities. Yes, local authorities have been given new powers to raise funds, but the reality is that a 1% council tax increase in her area raises significantly more than a 1% council tax increase in mine. She can shake her head, but if she does not understand that areas whose properties are predominantly in bands A and B do not raise the same amount as areas with properties in higher council tax bands, perhaps she should not be Chief Secretary to the Treasury.

I will make the position clear, because Treasury Ministers appear to have found these calculations very difficult. The Chief Secretary to the Treasury told “Newsnight”:

“We are not making cuts to local authorities. What we have done is give them more revenue raising powers so that decisions can be taken locally.”

I am happy to give Government Front Benchers the calculations provided by the Tory-led Local Government Association and by the National Audit Office. The Institute for Fiscal Studies has gone further and provided an analysis of how the cuts have fallen across the country:

“the most deprived authorities, including Barking & Dagenham, Birmingham and Salford, made an average cut to spending per person of 32%, compared to 17% in the least deprived areas, including Warwickshire, Wiltshire and Dorset.”

These hardest-hit councils have been dealt a second blow by the Government’s reliance on council tax to fund the struggling social care sector, as they are unable to raise anything like enough through the social care precept compared with councils in wealthier areas.

The Secretary of State for Housing, Communities and Local Government can shake his head, but this year Tameside Metropolitan Borough Council, one of the two authorities that make up my constituency, has a £16 million social care funding gap. One per cent. on council tax in Tameside brings in £750,000. The Tamesides of this world are never able to fill that social care gap from council tax, and that is what is so unfair.



Instead of providing the much-needed reform of social care, this Budget has once again shown a Government committed to sticking-plaster solutions. There is no Green paper and no long-term plan. Just as the £1.3 billion cut hits next year, the Government will need to find £1.5 billion just to keep social care running. Behind these figures are real people who need help, and the Government sit idly by.

Sadly, the Government’s small contribution to alleviating this crisis will for many people be far too little, and, for many councils, far too late. One of the most sacred values and duties of any Government is to ensure that the most vulnerable in society are protected. With overspending on children’s services hitting a new high of £800 million a year, the Chancellor’s pledge of £84 million for just 20 councils—I am interested to know which 20 councils they are—comes nowhere close to addressing the national crisis. Both crime and the fear of crime are rising in our neighbourhoods, yet this week’s Budget offers not a single extra penny for neighbourhood policing. The National Audit Office and the Select Committee on Home Affairs are warning that, without funding, our police service is teetering on the edge of collapse. The number of police officers has already fallen by 21,000 since 2010, and the independent police watchdog is warning that

“the lives of vulnerable people could be at risk.”

But instead of fixing the problem, the Treasury sees fit to play fast and loose with public safety with a £165 million raid on pensions. We are now in an unprecedented situation where police chiefs are threatening legal action against this Government.

The chief constable of Greater Manchester police has warned that upcoming budget cuts could take officer numbers back to levels last seen in 1975, wiping out the 50 additional officers funded by this year’s council tax precept. Another 600 officers need to be cut, on top of the 2,000 we have already lost, because of this Government’s mess on pensions.

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[Charlie Elphicke (Dover) (Ind)]

The test of any Budget is: does it take us closer to where we want to get to in 10 years’ time? It seems to me that one of the most important things to do over the next few years, and one of the dreams that so many Conservative Members have had for so many years, is the dream of a balanced budget. Once again, this appears to be a little bit like the apple of Tantalus. I am concerned about that because I believe, as the fiscal conservative I have always been, that we need to head towards a balanced budget.

Achieving a balanced budget has been delayed, but I am glad that we are still heading in that direction. The OBR says of the Budget policy decisions:

“Taken together they turn the £3.5 billion surplus…forecast for 2023-24 into a £19.8 billion deficit.”

It also says of the balanced budget objective:

“Had there been no fiscal loosening in the Budget, the objective would have been achieved in 2023-24.”

As it is, achieving that objective by 2025-26, it says, “looks challenging”. That is still an important aim. We must bear in mind that debt interest payments each year are about £52 billion and measures in the Budget will increase those payments by about £1 billion in future years. Opposition Members argue for ever more increases in spending, but I argue that it is better to ensure restraint, continue on our current track and aim for a balanced budget sooner rather than later.

We must also think about the kind of country we want to build. We want to build an enterprise powerhouse and a country that supports enterprise, small businesses and the self-employed. That is why it is important to make things easier for small business people and not to sandbag the self-employed with extra taxes and regulations, instead supporting them and ensuring that their enterprise is backed.

We must be the party of home ownership. Home ownership matters. As I said in an intervention, since about 2001, home ownership among people aged 16 to 34 has halved. We need to increase it. Meanwhile, the number of those renting has gone from about 10% to 20%. We must offer our young people better than a life of renting, and give them the chance to get on the home ownership ladder and build up a stock of wealth in a lower-tax country that ensures that hard work is rewarded.

[Giles Watling]

Does my hon. Friend recognise that the recent reduction in corporation tax oxymoronically produced more tax in the coffers? It is worth reducing the tax.

[Charlie Elphicke]

My hon. Friend is right: if we cut the rate we up the take. We must support small businesses most of all because, since about 2000, small enterprises and businesses have created 4 million new business jobs. Big business has created just 800,000 jobs, so small businesses are the enterprisers and job creators that take our country forward and turbocharge our economy.

If we are to have more public spending, it is important to ensure we have public service reform. We must look at how public services are delivered and ask ourselves whether they can be delivered more efficiently. Are there activities that Government should do more of? Are there activities they should do less of? Why do we not have, alongside the Office for Budget Responsibility, an office of spending responsibility, or even a Budget committee so that the House can consider such matters and press individual Departments to embrace reform and fiscal rectitude?

We also need higher investment. It is all very well having a culture in which we get lots of people with low skills to do low-value-added jobs that lead to no productivity. Why are we not encouraging more investment in more equipment that can be operated by fewer, more highly skilled people who are better paid and drive our productivity forward?

I must take issue with the comments of the right hon. Member for Twickenham (Sir Vince Cable) about how it is all indebted and about the corporate sector—that is absolute rubbish. Some £750 billion on corporate balance sheets has not been spent. There is a conundrum as to why that money is not being invested. We must consider the possibility of time-limited, perhaps very generous, investment allowances to get those corporates to invest in our economy, and to drive the investment and productivity gains that we need.

We need more competition in this country. Why do we put up with Openreach and its appalling service? Why has it not been unbuckled from BT with a strong investment target? Why do we have an oligopoly of banks and of big energy providers, and why have we not taken action on that? We need a bit more trust-busting from the Government and a bit more backing for the consumer interest over the corporate interest.

The Conservative party should be the party of small enterprise and investment. It should be the party that champions the consumer interest and is tough on corporatism and tough on the causes of corporatism. We also need to be the green and environmental party, which is why in the spending review we need a step change in investment in electric car charging points because it is not good enough. Only when we get that straight will big corporate car fleet buyers start to buy the cars that would then go into the second-hand market, so that this country can have the electric future on our roads that it should have.

[Several hon. Members rose—]