Budget Resolutions

Diana Johnson Excerpts

Thursday 12th March 2020 Commons Chamber

[John McDonnell]

I just say to the hon. Gentleman that that sum is minuscule in comparison with the cuts that have gone on. This will not be some immense revitalisation of our library services—far from it. Indeed, a lot of that will be swallowed up by the deficits that local authorities have developed by trying to maintain their existing services. I doubt there will be any new libraries; this might perhaps allow some existing libraries to keep their heads above water, but even that is difficult to envisage.

[Dame Diana Johnson (Kingston upon Hull North) (Lab)]

May I take my right hon. Friend back to the issue of domestic abuse? We all welcome the abolition of the tampon tax, which was championed by the former Member for Dewsbury, Paula Sherriff, but the funding raised from that—£393 million—was put towards services combating violence against women and girls. Does my right hon. Friend have any indication of how that gap in funding will be met for those vital services?

[John McDonnell]

We have had no indication about that, but I am pleased that my hon. Friend raised the issue, and perhaps we will get a response from the Government in due course. I congratulate her and Paula Sherriff. That long campaign paid off, which shows what tenacity can do, even in this House.

Let us get this Budget into context. The Institute for Fiscal Studies stated that £54 billion of day-to-day spending was needed, outside health and social care, to return to levels of per head expenditure in 2010. Not only does the Budget not meet that target, it goes nowhere near it. Why have the Government not gone further?

People need to understand what Conservatism is in this country, and what it means. For me, it means that the Conservative party will say or do anything it can to gain and retain power—anything except shift real power and wealth to working people. Just look at what the Government did yesterday on taxation, by choosing to keep entrepreneurs’ relief largely intact. That is a tax relief for 5,000 individuals who make an average of £350,000 each. There was a U-turn on the tax for foreign buyers of UK property. The surcharge is reducing from 3% to 2%, which reduces the amount of money earmarked— what for? For rough sleeping. So much for “the people’s priorities”.

This social emergency has been created by a fundamental failure of economic policy. It was interesting to hear the Chancellor, and others, tell us time and again how this country’s economic fundamentals are currently so sound. We warned them that austerity would damage the economy, and 10 years later, the verdict is clear. The statistics speak for themselves. Yesterday, the Office for National Statistics reported that prior to the coronavirus outbreak, growth in the three months to January was 0.0%. Manufacturing output was down by 1.2% over the same period, because of what the ONS described as “widespread weakness”. Productivity growth over the last 10 years has been at a dismal 0.3% average, and on pay growth, the slowest economic recovery for a century has been described by the chief economist at the Bank of England as a “pay disaster”.

In the Budget, there is a 0.4% downgrade for gross domestic product this year, even before calculating the impact of coronavirus. We have the weakest official growth outlook on record, according to the Resolution Foundation, with pay growth weakening in every year of the forecast—an outlook that will hit every household by £600 a year. Of course the Conservatives have failed to tackle in this Budget any long-standing challenges at the heart of our tax system, such as how we treat capital alongside income fairly, how local councils can have stable funding, or how we rationalise the long list of tax reliefs that provide opportunities for tax avoidance and evasion.

The Tories have not scrambled together this Budget because good economic performance made it possible. Yes, they have plagiarised some of Labour’s ideas, from rewriting the Green Book to bringing some of the railways back into public ownership, but that was only because they were forced to do that as a result of their own economic failures.

This week’s Budget shows that Tory tendency again, this time on infrastructure. A gimmicky grab-bag of projects was announced, while yet again the Government put off publishing the national infrastructure strategy. Even those announcements are disappointing. There is no commitment to deliver funding for the full northern powerhouse rail project, and four fifths of the £500 million investment in electric vehicle charging infrastructure is a reannouncement from 2017. The pothole fund is a repeat of a policy that was announced at least twice by the right hon. Member for Maidenhead (Mrs May), and will be enough to repair about a quarter of the potholes.

There is an overall infrastructure pledge that goes only halfway to filling up the £192 billion infrastructure hole that the Tories created by underinvesting between 2010 and 2020. Again, the Tories have given us very little detail on who will build this infrastructure and who gains from this investment. On broadband, for example, their £5 billion investment will be a subsidy to private providers such as Virgin. There is no sense in this Budget that the Tories have any understanding of the skills investment that is needed to ensure that infrastructure can be delivered by those most in need of upgrading their skills and of being able to have a decent standard of living as a result.

Let us not forget the third emergency we are facing today. Future generations will never forgive this Government for their failure to address climate change in this Budget. Infrastructure investment, if properly planned, could have been an opportunity to shift the tracks on which this economy runs towards a zero-carbon future. The Government have missed that opportunity. The Institute for Public Policy Research’s environmental justice commission said that £33 billion a year in green investment was needed for the Government to achieve only their weak target of net zero emissions by 2050. The Chancellor has fallen woefully short of that target. Instead, the Chancellor has opted for £27 billion to be spent roads, which currently contribute 90% of the UK’s transport emissions. They have committed less than one fifth of that to buses and cycling. Fuel duty is still frozen, with no effective assistance to encourage the shift from cars dependent on fossil fuel to less polluting cars and public transport. There is no new support for renewable energy sources such as wind and solar. In the year when we host COP26, this Budget will be seen as a betrayal of future generations.

What are the lessons we must learn from this Budget? It should not take a medical crisis before a Government wake up to funding the NHS adequately. It should not take a collapse in the economy and the threat of recession to force a Government to invest. It should not take our children going on strike to force a Government to take climate change seriously. Our community has experienced 10 years of immense suffering under austerity for nothing—for the pursuit of ideology; a political and economic experiment that has failed. This Budget should have been the most significant since the second world war. It should have been a turning point. As time has allowed scrutiny of this Budget in the past 18 hours or so, it has become clear that it has failed. It does not come close to reversing the damage of the past 10 years of austerity.

I give this final warning to the Government and to all of us. If we sow the seeds of disappointment and disillusionment, it could stir up a form of politics that none of us wishes our country to experience. We need the Government to recognise that they have a responsibility to bring forward—it may now be in autumn—a Budget that tackles our social emergency, our crisis in public services, the levels of poverty and inequality in our society, and the existential threat of climate change. The Opposition will do everything we can to ensure that the Government listen and bring that Budget forward.

--- Later in debate ---

[Alok Sharma]

I am a modest man. I do not like to boast—I just like to state facts, and the fact is that we have record levels of employment in our country.

Let us talk about what has happened for businesses. Since 2010, we have seen corporation tax come down by 9% to be the lowest in the G20. Business registrations are up by over 60%, with nearly 150,000 more firms registered in 2010. Wages growth has been outpacing inflation for 23 consecutive months. The UK is in the top 10 countries in the World Bank’s ranking for ease of doing business and in the top five of the Global Innovation Index. [Interruption.] I do not know—maybe the shadow Chancellor finds that funny, but I do not. I think it is something that we should be very proud of in this country.

I certainly am delighted to be part of the most business-friendly Government ever, and of course, we want to go even further. We are extending the British Business Bank’s start-up loan scheme for a further year, supporting up to 10,000 loans. We are providing another £200 million for life sciences and more funding for growth hubs. In short, we are on the way to making the United Kingdom the best place in the world to start and grow a business.

Of course, the best businesses need the best ideas. Research and development drives up productivity, which leads to high-value, high-wage employment and an increase in exports. That is why I am delighted, as I know Government Members are, that we are committing to spend £22 billion a year on research and development by 2024-25. This is the fastest and largest increase in Government R&D spend ever and there is a multiplier effect, for every pound of public R&D spend delivers around £7 of economic benefit for the country as a whole.

Britain is home to four of the world’s top 10 universities. We are a world-leading nation when it comes to winning Nobel prizes. The UK has produced around 14% of the world’s most impactful research. UK researchers and businesses are cutting carbon emissions, curing genetic diseases and pushing the frontiers of artificial intelligence. Ours is a country that gave the world penicillin, the steam railway and the worldwide web, and we are turbo-charging this tradition of invention and discovery by establishing a brand-new research funding agency, letting researchers pursue high-risk, high-reward projects. We are betting big on Britain’s pioneers and problem solvers as they seek to transform every aspect of our lives, from the journeys we make to the medicines we take.

We have already seen how public R&D funding can create centres of excellence right across the United Kingdom. In Coventry, the UK Battery Industrialisation Centre will soon be developing new ways of scaling up factory production for electric vehicles. In Manchester, the Graphene Engineering Innovation Centre is helping to make cutting-edge composites for affordable electric vehicles. In Harwell near Oxford, our Satellite Applications Catapult is working on applications to remove space debris from orbit. In Scotland, we are backing a world first medicines manufacturing innovation centre, which will help new drugs to reach patients faster. In Northern Ireland, our Digital Catapult is providing mentoring and advice to help cyber-security firms to scale up and succeed. In Wales, we are backing the first compound semiconductor cluster anywhere in the world—a technology that could underpin everything from wearable health sensors to autonomous vehicles in the years ahead.

I am determined that as the UK forges a path as a science superpower we use that opportunity to level up centres of excellence across our whole country. As part of that, my Department, with the Treasury, is committing to creating a northern campus, but I want to be clear that levelling up and having staff across the country has always been part of my Department’s agenda. Some 84% of its partner organisations are already based outside London, while BEIS itself already has sites across the UK, including in Aberdeen, Birmingham and Cardiff.

In the coming years, we will need to make the most of ideas, innovations and solutions from each and every corner of our United Kingdom. The shadow Chancellor will agree that nowhere is that more true than in tackling climate change. Part of my Department’s mission is to deliver clean energy and to lead on the path to net zero emissions by 2050. Since 2010, as a result of the actions we have taken, the United Kingdom has cut its carbon dioxide emissions by around 30%. Driven by investment in renewables, 99% of the UK’s solar photovoltaic capacity has been deployed since 2010. Today, the UK has more installed offshore wind capacity than any other country in the world.

Our contracts for difference auctions have helped to reduce the price of offshore wind by two thirds in the last five years. The UK already has more than 460,000 jobs in the low-carbon sector spread right across our country. From Siemens in Hull to MHI Vestas on the Isle of Wight, we have seen hundreds of new jobs making turbine blades, and last year Ørsted launched the world’s largest offshore wind operations and maintenance facility in Grimsby.

In yesterday’s Budget, the Chancellor announced that he would more than double R&D spend in the energy innovation programme. The Budget backed nuclear fusion to develop and build the world’s first commercially viable fusion power plant by 2040. It backed low-emission vehicles, including with funds to support the roll-out of a fast charging network for electric vehicles, and it will fund a new heat network scheme and put £800 million behind two or more carbon capture and storage clusters, one by the mid-2020s and a second by 2030. [Interruption.] I hear the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) chuntering, if I may call it that—I do not mean to be rude—from a sedentary position. I hope he will appreciate that carbon capture and storage will have to be part of the mix going forward, which is why we are investing almost £1 billion in it.

[Dame Diana Johnson (Kingston upon Hull North) (Lab)]

The Humber is one of the areas that have been put forward for the carbon capture pilot. As the Humber is the highest emitter of carbon in the United Kingdom, we believe that we should be the first to enjoy some of that £800 million. I wonder if the Secretary of State might want to back the Humber in that proposal.

[Alok Sharma]

In the spirit of bipartisan friendship, I would be very happy to sit down and talk with the hon. Member about her proposals. I make no promises at that Dispatch Box, but, as I hope colleagues will know across the House, I am always happy to talk to colleagues and get their input.

Thanks to the industries I discussed earlier, we aim to have up to 2 million green jobs in our economy by 2030. The UK economy has grown by 75% since 1990. At the same time, we have cut emissions by 43%. We have demonstrated that green growth is possible. We have the opportunity to turn climate change into a green growth opportunity for the global economy. As the shadow Chancellor noted, this November, COP26, the UN climate conference, which will be the biggest summit ever organised by the UK, will take place here. Whether globally we live in the south or the north, the east or the west, we share one life-giving but fragile planet. All our futures are indeed intrinsically linked. COP26 can be where the world comes together to ramp up momentum towards a zero carbon economy. It can send out a message of ambition and hope that decarbonisation is the future, with huge opportunities for those who are willing to act now.

In conclusion, the Budget delivers for our businesses, innovators and entrepreneurs. It is a Budget to power pioneers and problem solvers right across our country. We are a one nation Government committed to levelling up investment, growth and opportunity across the whole of our United Kingdom, and I commend the Budget to the House.

--- Later in debate ---

[Dame Diana Johnson (Kingston upon Hull North) (Lab)]

It has been a great pleasure to hear the maiden speeches of three new hon. Members this afternoon, and particularly to hear about Appleton. I grew up in Cheshire and I know Appleton very well, so it brought back some very nice memories. I wish all those new hon. Members the very best with their parliamentary careers.

It is absolutely right that the tone of the debate this afternoon has been to accept that this Budget has been hijacked, as it were, by the coronavirus and the need for action to be taken. I want to commend the Government for the financial support they are putting in, with the £12 billion to provide support for public services, businesses and individuals whose finances will be affected, and the £5 billion for the NHS and other public services. I think that that is absolutely right, as is the extension of statutory sick pay. However, I hope that, in the emergency legislation that will be brought before the House in the next few days and weeks, we will see something for the people who are not covered by statutory sick pay.

The NHS will be under huge pressures in the coming weeks and months. While it is very welcome to see this additional emergency funding going in, this will shine a light on capacity in the NHS after many years of not being funded as adequately as we would like. I pay tribute to the wonderful staff of the NHS, who are working around the clock to treat patients and contain the disease.

Social care was not mentioned in the Budget—it remained untouched—and like my right hon. Friend the shadow Chancellor, I remain concerned about the ability of that sector to cope with coronavirus. I was also concerned that local authority funding was untouched by the Budget. By 2022, local authorities will have lost 60p in every pound due to cuts, and cuts to the public health budget will also come home to roost. No allocations have been made to public health directors for the coming financial year, which starts in just a few weeks. The Treasury has made no assessment of the impact of this Budget on women, and it is down to organisations such as the Women’s Budget Group to tell us that 14% of workers will not benefit from the increase to the national insurance threshold, and 60% of those are women, because they are in the lowest paid jobs.

Earlier I mentioned the tampon tax. When the Minister responds to the debate, will he say something about where the estimated £393 million a year, which was raised from the tampon tax, will be found, so as to continue funding projects that combat violence against women and girls? Levelling up does not just mean cash injections into threadbare public services, or an infrastructure revolution; it also means a system of social security that will protect women and their families, and lift them out of poverty. That is particularly important after the recent Marmot review, which showed that for the first time, life expectancy for women in the most disadvantaged communities is going down. Working families in Hull have been hit hard by the benefits freeze, the two-child limit for child tax credits, and the baked-in five-week wait for universal credit, but there was no announcement in the Budget to support families who are struggling to make ends meet.

Let me mention some of the announcements that were made about Hull and the Humber. I and six of my Humber colleagues wrote to the Chancellor a fortnight ago, to ask him to invest in building the first fully deployed carbon capture and storage cluster in the UK, in our most carbon-intensive region. I was pleased that the Secretary of State has agreed to meet me, because I think the Humber has a compelling case to be one of two pilots for that scheme. I am pleased that the Government have decided not to introduce the rise in vehicle excise duty for new motorhomes. The caravan and motorhome sector is a big employer for local businesses in the region, and such a step would have caused it major problems.

On transport, I am all for the Chancellor’s plans for levelling up and investing in the north, but in the Budget I heard reference only to the railway line between Manchester and Leeds, and not to the larger plan for a northern powerhouse rail link between Liverpool and Hull. I hope the Government will make further announcements about that. I was pleased with the additional funding for flooding and flood resilience, and I hope the Government will support the plan brought forward by the previous Member for Scunthorpe, which was to have the National Flood Resilience Centre based there. I know that the Secretary of State for Environment, Food and Rural Affairs has assured the new hon. Member for Scunthorpe (Holly Mumby-Croft) that the Government are looking seriously at the funding bid that was submitted jointly by Humberside Fire and Rescue Service, and the University of Hull, and in light of what has happened in recent months, that would provide welcome resilience training to the whole United Kingdom.

Finally, the devolution deal for West Yorkshire was announced yesterday, with a mayoral combined authority from May 2021. With the South Yorkshire deal already done, the new deal means that the Yorkshire-wide devolution deal is dead. For the Humber, what happened yesterday in Committee Room 16 was probably more important, because it was sadly agreed that rather than having a Humber devolution deal, we are now going to move to a north-bank deal and a south-bank deal. From what was said yesterday—the Minister was there—I hope that we might be able to get to the point where we agree on a development corporation around the Humber, which is an economic entity and area that has the capacity to really power the northern powerhouse if we get agreement on both the north and south bank of the Humber. I hope that will come to fruition in any mayoral combined authority on the north and south bank.