Income tax (charge)

Grant Shapps Excerpts

Tuesday 17th March 2020 Commons Chamber

[The Secretary of State for Transport (Grant Shapps)]

Last week’s Budget was a blueprint for a more connected, more prosperous and more equal Britain—a nation where we deliver on our promises, where investors want to do business and where stable employment, decent housing, reliable transport, excellent healthcare and education, and the same opportunities extend to everyone in society, no matter where they live. Today’s Budget debate comes against a background of a global health emergency, however, so we must come together as a country to face the unprecedented threat posed by the coronavirus outbreak.

I pay tribute to and thank my opposite number, the hon. Member for Middlesbrough (Andy McDonald), for his truly constructive support through this crisis. For several years, the country has looked on the House and its behaviour and seen it divided, in particular over the vexed issue of Brexit, so the way that this matter is being approached by the official Opposition and others is truly welcome. People will look at the House and see that, when it comes to rising to the occasion, we can to work together in the country’s interests.

This crisis requires radical action and support for our incredible health service, for businesses, for the self-employed, and, of course, for the elderly, sick and vulnerable members of our society. We made a start on that last week in the Budget where the Chancellor set out a £12 billion package of measures designed to counteract the immediate impact of the virus.

[Several hon. Members rose—]

[Grant Shapps]

I will not give way yet; I want to make some progress.

That package was part of a wider £30 billion stimulus to offset the economic impacts. However, we understand that this is effectively a war. The enemy is a virus, but we must none the less approach it in the same way as a war.

[Several hon. Members rose—]

[Grant Shapps]

Again, I want to make a bit of progress, because I am aware that many hon. Members want to speak in the debate.

We have been clear about how we will fight the war. The first principle is to follow scientific advice at every step. It is all too easy to be distracted by the demands of round-the-clock media coverage, by the clamour on social media or by means and measures that sound good at the time, but are not based on irrefutable scientific logic. We will continue to base our decisions on what the experts believe is in the best interests of this country.

[Chris Bryant (Rhondda) (Lab)]

I wholly support following the evidence and scientific advice, but the Government’s advice yesterday to avoid pubs and restaurants has caused a genuine outcry across the whole hospitality industry, because people are terrified that their businesses will be closing forever in two to three weeks’ time. They cannot manage their overheads, they desperately need support and they cannot even claim for insurance because the Government will not formally close them. Why will the Government not make that decision now?

[Grant Shapps]

The hon. Member speaks for the concerns of many across the House and across the country. I do not think there can be any denying it, because that is the severity of the enemy in this war. I reassure him, and many other hon. Members who plan to make interventions, by saying that my right hon. Friend the Chancellor of the Exchequer will say more on that later today.

At no point will we stop listening to the advice or reacting to events, because as the progress of the virus changes, so will the response. The nature of this crisis and the circumstances are changing all the time, so our response will evolve to meet the threat until the virus poses no threat to the country or to our citizens.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

The Secretary of State will know that other countries have pledged to support every business so that it does not go bankrupt during the worst period of coronavirus infection, that they are supporting laid-off workers to the tune of 75% of their income, and that serious support is being given to the self-employed, many of whom will now not have any work. When will the Government take similar measures in this country?

[Grant Shapps]

As I said in pre-empting the hon. Gentleman’s intervention, the Chancellor will say more about all that shortly. I recognise the concerns raised by the hon. Gentleman and other hon. Members.

My own sector, transport, is massively affected, so we are working to support the whole industry under these extreme circumstances. We are looking at a range of options to help the rail, aviation and bus sectors. We have already taken action to prevent the empty ghost flights that were flying because of the 80/20 rule, which meant that they had to make pointless journeys even if they did not have anybody on board. I took action by writing to Airport Coordination Limited, the slots co-ordinator in this country, and the European Commission on a couple of occasions. They have provided relief, which means that we no longer have to have those flights in the skies, but it will not lead to airlines necessarily losing their slots.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

Clearly we all await the Chancellor’s announcement tonight with interest. I hope that it surpasses the response to the 2008 financial crisis. Regrettably, we need a fiscal response and a level of Government intervention on that scale. We do not want to see that, but it is what we need for people’s lives and for strategic industries.

Specifically on transport, the Secretary of State talks about support for airlines and the rail and bus industries. Does he accept that we may have to put some of those into national ownership, even if for a temporary period? Will he consider relaxing the rules on bail-outs for municipal bus companies and others? In Cardiff, Cardiff Bus will really struggle. We need the rules to be relaxed so that we can give it the right support, so it can survive and pay its workers.

[Grant Shapps]

The hon. Gentleman is right to say that the principle should be that, as far as we can make it work, people—individuals and companies—are in the same position when we come out of this situation. I feel that we will be in a somewhat changed world and changed environment on the other side of it, but good organisations should not be going bust. It will be hugely challenging. We will require a lot of different responses and mechanisms to get there, including, on occasion, organisations being run by the public sector, which we have already seen in the case of trains for a completely different reason.

Turning to trains, it makes no sense for us to run empty trains. As fewer people will be travelling following last night’s advice and guidance from the Government and the Prime Minister, timetables may be altered in the short to medium term to ensure that we do not effectively run ghost trains. We are also determined to ensure that companies are left in as strong a position as possible so that they can continue to operate afterwards. Despite the immensely challenging situation in which we find ourselves, we will work in partnership with the transport industry to keep essential services running for the public and for those who need to get to work, who have essential business and who will therefore still be travelling.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

On the proposal to reduce the number of trains, buses and tubes that are running, given that so many of them are so crowded at the moment, would it not make sense to keep many more of them running so that those essential workers who still have to get to work have more space?

[Grant Shapps]

The right hon. Lady makes an excellent point, as ever. The reality is that, because of social distancing, it might well be desirable to have more space between people so that they can keep some distance. Yes, that absolutely needs to be taken into account as we consider the timetabling.

We will get through this crisis together as a nation. Working in this great national effort, we will ensure that we come through on the other side and provide hope for all our citizens. The Budget shows that we are serious about the pledges we have made and about the trust that the electorate put in us only three months ago. We intend to deliver on those infrastructure pledges.

The Department for Transport has already been working hard to deliver on those pledges. For example, in recent weeks we have taken decisive action to improve journeys for millions of Northern rail commuters by putting the franchise into the operator of last resort. We have announced plans to extend discounted train travel to more than 830,000 veterans. The Minister of State, my hon. Friend the Member for Daventry (Chris Heaton-Harris), has kickstarted work on reversing the Beeching cuts, which have so blighted the nation in decades past and prevented people from being interconnected. In January we announced the preferred route for the east-west rail link that will connect Oxford and Cambridge, which will increase access to jobs and make it easier and cheaper to travel, creating a region that has been dubbed the UK’s silicon valley. We are not only making journeys more efficient and easier; we are also making them cleaner. We are consulting on bringing forward the end of fossil fuel cars and vans to 2035, or earlier if practical. We are taking enormous steps forward.

The Chancellor has delivered a Budget that includes some of the most ambitious infrastructure programmes seen since the 1950s. It will help to level up this country. Infrastructure that is unreliable, overcrowded and no longer fit for purpose acts as a drag anchor on our entire economy. When it is efficient and gets people where they need to be, it can turn around the fortunes of our towns and cities. With interest rates at an historic low, now is the time to get Britain building.

[Bob Seely (Isle of Wight) (Con)]

As my right hon. Friend knows, I am pressing for a better deal for the Isle of Wight. What are the criteria for the levelling up agenda? The Island is part of the wealthy south-east, but our economy has more in common with the north, or indeed with parts of east Devon and Cornwall, so what does levelling up look like for us? Is it part of the funding settlement or is it infrastructure projects?

[Grant Shapps]

My hon. Friend makes an excellent point. As many Members across the House will know, people often think that just because a constituency is in a certain part of the country—the south-east in his case—it must be enormously prosperous. Many of us represent enormously deprived communities, perhaps just an individual ward, within an otherwise prosperous area, so it is very important that the criteria for levelling up take that all into account. That is why the Green Book is being rewritten as a result of last week’s Budget. We look forward to hearing more about that in due course.

With interest rates at an historic low, it is time to get Britain building. That is why the Chancellor set out plans to inject £640 billion by 2024-25 into roads, railways, hospitals, broadband, housing and research, to modernise the fabric of our country, turbo-charge our economy—perhaps to electrically charge our economy —and get every single region of the UK growing, not matter where it is.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Strategic investment in infrastructure is very welcome, but another Budget measure that the Chancellor announced was the removal of the red diesel rebate for the construction industry, which means the cost of diesel for construction will double. That is predicted in the Red Book to bring in £5 billion over two years. How much of that £640 billion investment will be written off by paying costs for diesel?

[Grant Shapps]

The hon. Gentleman, who has questioned me passionately many times about greening the economy, will appreciate that red diesel contributes tremendously to the problems he often cites. There will be a consultation, so he will have an opportunity to put his concerns on the record, as he has done partially today.

The Government will provide more details on our investment priorities when we publish our national infrastructure strategy in the spring and the comprehensive spending review later this year. That will include taking forward Northern Powerhouse Rail, having already committed to the section between Manchester and Leeds, and reversing many of the Beeching cuts, as I have mentioned. I am grateful to Members across the House for bringing forward an extraordinary number of potential Beeching reversals, which the Minister of State, my hon. Friend the Member for Daventry, is now in the process of assessing, working with colleagues across the House. We are also delivering High Speed 2, to transform rail connections between our major cities while releasing capacity on our existing railways, particularly for freight.

We will present an integrated rail plan for the north and for the midlands, examining how HS2 and Northern Powerhouse Rail can best work together, along with wider investment in transport across the regions. We have the largest ever investment in English strategic roads. We have £27 billion to tackle congestion and increase capacity. We have £2.5 billion to fill potholes and ensure that more do not develop. We have £5 billion for the roll-out of broadband, particularly in rural areas, to ensure that our four nations are fully linked together. We have record funding of £5.2 billion for flood defences—we have seen recently how important it is to have that cash going in. We have £4.2 billion for urban transport through long-term settlements with eight mayoral combined authorities. We have £22 billion for science, innovation and technology by 2024-25, to help us develop new products and services to sell around the world.

Of course, we also have a massive housing programme. We have made significant progress towards building more affordable, high-quality homes in recent years— far more than when I was Housing Minister—and the housing supply is now at its highest level for 32 years, which is quite an achievement. However, we still have a long way to go. The Budget mentioned remedying some of that shortfall, first by extending the affordable homes programme with a multi-year £12 billion settlement, and secondly by helping local authorities to invest while such low interest rates are available.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I very much welcome the investment that my right hon. Friend has announced. However, if we do not get our businesses through the crisis of the next few months, much of that investment will not bear fruit as it should. He has quite rightly said that he wants businesses to be in the same place in the future that they are in today, but lots of the income they will lose over the next few months will never come back. Does he agree that we must put in place a package of financial support based on grants, not merely business loans?

[Grant Shapps]

I do not want to pre-empt what the Chancellor might say later, but I am grateful to my hon. Friend for making that point. I will repeat what I said at the beginning of my speech and then wrap up my remarks, to allow other Members to contribute. The situation is clearly approaching what we would otherwise, in different times, thing of as a war that this country needs to fight. As in a war, we need to deploy every possible weapon, and of course that will involve a variety of financial and other tools to do precisely that. Nothing must be off our radar when we consider the possible responses.

Levelling up will not be achieved through a single fiscal event such as the Budget, but it will be part of an integrated plan over the next five years, and I have mentioned already some of the other fiscal events. One of the most powerful agents for change will be the infrastructure programme that I have outlined today to get Britain building. The process will be triggered by an historic investment, through the national infrastructure strategy, the spending review and an autumn Budget later this year. We know that there are big challenges ahead—the most immediate, as hon. Members across the House have said, is dealing with the coronavirus outbreak.

This Budget is designed to build a strong foundation to make us fairer and more equal as a country, where we harness the potential of every region, and where people’s ambitions can be achieved. But we also recognise that we are doing so in the immediate short term against the backdrop of tackling what is perhaps the greatest health emergency that the country has seen since the Spanish flu. I know that we can do this as a country. I know that we can do this by showing the same spirit that this House has demonstrated in the past few weeks; by working together, finding the right solutions and getting the job done. That is our vision, and that is what we will deliver.

[Several hon. Members rose—]