Budget Resolutions

Damian Hinds Excerpts

Wednesday 11th March 2020 Commons Chamber

[Damian Hinds (East Hampshire) (Con)]

It is always a pleasure to follow the hon. Member for Islwyn (Chris Evans), who made some very important points about our high streets. It has been a great privilege to witness this afternoon truly brilliant maiden speeches on both sides of the House from new Members who are going to be great assets to this House and to our democracy.

It has also been a pleasure to hear what the Government are doing in this Budget, which directly hits some of our most important objectives around climate change, levelling up and spreading opportunity, and driving productivity. I particularly want to talk about the last of those. Productivity can be boosted by a Budget, but productivity also boosts a Budget. All Chancellors need to find more cash—first, because in any year there are always some taxes that are in, or are going to be in, terminal decline, such as taxes on tobacco, on fuel and on hydrocarbons. Some taxes turn out to be more successful in their aims than anticipated, such as the sugar tax or soft drinks industry levy, and therefore take in less than first anticipated. There are always new priorities—for my right hon. Friend, they are in delivering on the key levelling-up and investment agenda. Then, of course, there is the unexpected. Nothing could be more devastating and more unexpected than a global pandemic. We must be ready to tackle these things when they come.

There are five different ways that we can find money. First, we can spend less on something else. Of course, that is always where we should start, prioritising and making the money go as far as it can. Sometimes we need to raise taxes. No one likes raising taxes, but sometimes it is necessary. We can borrow when it is to finance productive investment. A good way is to grow the economy. We can do that by growing the working-age population. A fair amount of that has been done in the past number of years, under various Governments. Growing the working-age population creates its own pressures on public services. On the other hand, we find ourselves in a better position in terms of the so-called dependency ratio than we would have been in otherwise, and in a better position, relatively speaking, than other countries such as France, Italy, or, especially, Japan. Best of all is to grow productivity per person. Higher productivity pays for all the public services that we so value, but it also means higher pay for people, and that is especially important to the very large numbers of people working in our largest-volume sectors such as hospitality and retail.

We talk about the productivity gap that we have against other countries. It is important to note that this is not new. I am 50 years old, and in the year I was born, our productivity gap against the United States was 37%. It is not quite so high today. It is true, however, that after the crash in the last years of the Labour Government, we, as a country, took a bigger dive than other countries in terms of our output, and we have had slower growth since. That has been partly to do with the fact that we have largely maintained high levels of employment. I would much rather have a productivity puzzle than the levels of mass youth unemployment that we saw in a number of other countries. We still have a large gap today, according to the OECD: 12% against Germany, 14% against France, and 18% against the United States. Of course, those are averages that conceal very large variations between different parts of the country.

There are many aspects to productivity, from the underlying shared infrastructure, to automation and technology, to the diffusion of new technologies, to process improvement and management. Then there is skills and human capital, which is what I want to speak about. I very much welcomed hearing the Chancellor talk about undertaking a review of the approach.

We have seen remarkable progress in this country on education. We not only have a reformed curriculum and are back in the international top 10 on primary reading. We have also narrowed the gap in attainment between the rich and poor—what we might call the original levelling up—since 2010 by 10% or more at every stage, from early years to primary school, GCSEs and university entry.

There is always further to go. There has long been a gap in attention paid in this country to vocational and technical education. We have many people in this country who are educated to degree level—so-called level 6. We have far fewer people than many other countries who are educated to intermediate-level technical qualifications —levels 4 and 5—and our vocational education is less intensive than in world leaders such as Germany.

We are in the midst of a major upgrade in our technical and vocational education and training. Alongside apprenticeships, the introduction of T-levels this September is at the heart of that upgrade. T-levels will be a more intense qualification—typically 900 hours rather than the 600 at present—and they will be designed by business, with a substantial industrial placement of 45 days or so. Everybody who comes through the T-level route will have studied English, maths and digital, as well as their core technical subject. It is important that the Government continue to learn from previous attempts to reform technical and vocational education, especially the need to stick with the programme and keep the integrity of the design. We also need business to very much be a partner, alongside the public sector.

I want us to go further on technical and vocational education and to knock down the wall that still exists between the academic and technical routes. In fact, that is happening anyway, with the changes we are seeing in the labour market and the structure of industry. These days, both need to prosper in many sectors. We need to reform higher technical qualifications at levels 4 and 5 and thin out the vast array of qualifications that young people can be presented with. We need to ensure that we match up the skills being taught in our system with what business needs. That happens semi-automatically with T-levels and apprenticeships, because of the availability of placements in firms, but we need to ensure that the numbers marry up for other qualifications.

We need to do more on adult skills and reskilling. The ongoing design of the national retraining scheme is timely. We need to clarify the link between that and the national skills fund, as well as the UK shared prosperity fund, which my right hon. Friend the Member for Maidenhead (Mrs May) mentioned.

Finally, in our focus on human capital, productivity, progression and pay, I would like us increasingly to link our approaches in employment public services and the health service and rethink how we can support people who are already in work to get on through the infrastructure we have, including the jobcentre network, the National Careers Service and our retraining facilities. Given the time constraints, all that is for another day. For now, I want to congratulate my right hon. Friend the Chancellor on his Budget and commend it.