Budget Resolutions

Jane Ellison Excerpts

Thursday 9th March 2017 Commons Chamber

[The Financial Secretary to the Treasury (Jane Ellison)]

We certainly have covered a lot of ground in today’s debate; indeed, we have strayed internationally, as well as covering an awful lot of domestic policy. Before I address some of the key themes, I wish to stress again the central point made by my right hon. Friend the Secretary of State for Communities and Local Government when he opened the debate. Our ability to provide public services is entirely dependent on our ability to pay for them. Indeed, the right hon. Member for Leicester East (Keith Vaz) said in his speech that before we talk about spending, it is important to talk about how we would raise the money. That is the last thing we have heard from the Opposition today.

Key to this debate is the fact that if we do not live within our means, deal with the deficit and get debt falling, we simply will not be able to continue to fund the public services that we all care about on both sides of the House; of course, the generations to follow will then suffer. We have seen how debt has been left for others to deal with, which is why at the heart of the Budget and our economic policy is our continued resolve to restore the public finances to health, increase our economic resilience and secure our public services for the future. At the heart of our aims is the work to bring down the deficit. We have made great strides, and in doing so we have been able to bring what we spend and what we raise further into line. That is how we can afford public services.

We have already cut the deficit by almost two thirds, but the work is not done. We are also on course to get debt falling as a share of GDP by 2018-19. We are, though, the first to acknowledge that there is no quick fix, no silver bullet and, contrary to assertions by Opposition Members, no magic money tree. That is why we are sticking to the spending plans we have set out and why we are taking a systematic look at how we can become ever smarter in how we spend taxpayers’ money, including by conducting an efficiency review that aims to get more value for money and to save £3.5 billion. As my right hon. Friend the Secretary of State said earlier, we are looking forward to benefiting from the insight and expertise that Sir Michael Barber can bring to bear on the process.

We all have to acknowledge that this work is part of a longer-term challenge. There are many pressures on services in advanced economies around the world, and if we do not grapple with the issue of how we pay for things, we just cannot tackle them. We heard quite a lot from the shadow Minister, the hon. Member for Worsley and Eccles South (Barbara Keeley), about social care. We made a significant announcement in the Budget statement about a £2 billion injection of extra cash—[Interruption.] Opposition Members say from a sedentary position that it is not enough; I return to my previous point: we have heard so much from them about where they would spend more, but we have heard absolutely nothing about how they would pay for it. They have a few gimmicky ideas, to which I shall come—I am going to address one of them head on—but their answer really is the magic money tree. We have made new money available, and further details have been announced today about how it will be allocated. That is real money made available very quickly—£1 billion is being made available for the new financial year starting in just a few weeks—and it is really important that we do that.

Nevertheless, we acknowledge that there is a longer-term challenge. As I said, all advanced economies face pressures as populations become older and the rise in complex and chronic conditions continues. As well as offering some kind words about me relating to my previous role, the right hon. Member for Leicester East rightly drew our attention to the Government’s work on prevention. I shall not be drawn into talking about that too much—as a former public health Minister, I could talk on that for some time—but I remind him of the national diabetes prevention fund and the related work, and the £16 billion a year from the public health budget that we give to local government.[Official Report, 13 March 2017, Vol. 623, c. 1-2MC.] All Members have acknowledged what the sugar levy and other work are doing to turn the sugar tide.

I also draw the right hon. Gentleman’s attention to page 35 of the Budget book—our consultation on the damage that white cider can do. We are consulting on the alcohol by volume duty rates because we have heard from many charities, particularly those working with the homeless, about the impact of the abuse of white cider, in particular, on the health of homeless people and many young drinkers and the increase that it provokes in the frequency of visits to A&E.

[Barbara Keeley]

Surely the key point is that we are almost abandoning prevention. Some 1.2 million older people live every single day with unmet care needs. There is no prevention when a frail older person who needs care does not get it, and this money goes nowhere to helping with that.

[Jane Ellison]

I disagree with the hon. Lady about prevention. We can do a lot on prevention, particularly with older people. With this new money, we can have more care packages. For example, falls prevention, which is delivered in the community or at home, is one of the most valuable ways to keep people out of accident and emergency. But we are not in any way downplaying the challenges of dealing with these pressures. We are not burying our heads in the sand. It is a matter not just of common sense but of responsible government that we must face up to the question of how to secure our social care system for the long term. He is not in his place, but the right hon. Member for North Norfolk (Norman Lamb), my former colleague in the Department of Health, talked about that, and there are areas of great agreement across the House about some of those challenges. That is why we announced that we will publish a Green Paper by the end of the year in which we will set out our proposals to put spending on a sustainable footing.

The hon. Member for Worsley and Eccles South said from the Opposition Front Bench that this was about the long grass. I will not embarrass her by reading out the very long list of times that the last Labour Government attempted to grapple with this issue over 13 years.

[Barbara Keeley]

rose—

[Jane Ellison]

No, I am not going to take another intervention—I will take the same time that the hon. Lady took.

The list is very long. Labour said in its 1997 manifesto that it would tackle this issue; there was a royal commission in 1999, a Green Paper in 2005 and the Wanless review; it was said that the issue would be resolved by the 2007 comprehensive spending review, and there was another Green Paper in 2009—13 wasted years. I am afraid that Opposition Members provoked me to embarrass them. Their long grass was very long indeed.

We are injecting not just new money into social care but an extra £425 million into the NHS to help A&E departments triage patients more effectively and to support local NHS organisations as they reform and improve for the long term the way services are provided to patients. By putting more money into social care and those specific parts of the NHS—triage and capital for A&E—we are addressing some of the very issues that Simon Stevens has talked about recently as immediate challenges of dealing with pressures in the system.

My hon. Friend the Member for Harrow East (Bob Blackman) asked about STPs. The investment that we set out will make a real difference by supporting regions with the strongest plans that are ready now to deliver their long-term visions. We will revisit STPs in the autumn to see whether there are further areas with strong cases for investment, but the NHS obviously also has a part to play in looking at how it can, for example, dispose of unused land and reinvest that money. I give my hon. Friend that assurance.

Let me talk a little about education and skills. We have already taken action to fundamentally reform and improve school education, with the result—this is never acknowledged by the Opposition—that 1.8 million more children are in good and outstanding schools compared with 2010. The simple fact is that vastly more children are getting a good or outstanding education. In this Budget, we further galvanised our schools with £320 million of investment in new schools and £216 million for the maintenance of existing schools.

My right hon. Friend the Secretary of State for Communities and Local Government spoke compellingly about the sweeping reforms that we have introduced to put technical skills at the heart of our education system. I sense great cross-party consensus that that has been an undervalued part of our education system. That will give young adults a chance to develop new talents that will stand them and, of course, our country and economy in good stead as we work towards the high-skill, high-wage and hi-tech economy that will help us to be competitive in a global marketplace.

I have spoken about the importance of controlling our public finances, investing carefully in our public services and ensuring that our spending is sustainable. Alongside that, I want to make a few remarks about the importance of ensuring that our tax system is sustainable. We cannot talk about one side without talking about the other. The flipside of how we invest in public services is how we fund them. Let me address two issues.

First, a number of hon. Members have mentioned business rates. It is right that we update them to reflect today’s property values, but we recognise that this has meant a sudden jump for some. I thank my hon. Friend the Member for Richmond (Yorks) (Rishi Sunak) for his excellent speech. I am familiar with some of the pubs in his beautiful constituency. He mentioned the importance of supporting pubs. That was part of the £435 million package of support that the Chancellor outlined yesterday. He has been working on that with the Secretary of State for Communities and Local Government to help businesses manage the steepest increases following the business rates revaluation.

Secondly, there has been much discussion in this debate of the changes we have made to national insurance contributions, and I will respond directly to some of the points made. Let us be clear that the contributory benefits funded by national insurance contributions are very different from employment rights. Much of this debate and the public discourse has criss-crossed between those two important, but distinct, subjects. National insurance pays into a fund that pays out to the NHS and contributory benefits—principally the state pension, but also parental pay. We have announced that we are looking carefully at maternity and paternity rights.

[Wes Streeting]

It’s a one-way street.

[Jane Ellison]

No, we have said that it is 20% of the fund, but the vast majority of the national insurance fund pays towards the state pension, which, as has been made clear, is now available to the employed and the self-employed. That is part of an important and necessary step to level up what benefits people get. It is also important and necessary to level the playing field when it comes to what people pay in.

The Prime Minister has asked Matthew Taylor to look at the important issue of employment rights. We will get the Taylor review later this year and will return to look at those important issues. Whether people are self-employed or an employee, if they do a similar job, get a similar wage and receive similar benefits, they should pay a similar tax. That is actually recognised by Labour’s shadow Work and Pensions Secretary, the hon. Member for Oldham East and Saddleworth (Debbie Abrahams).

I really hope that the hon. Members for Ilford North (Wes Streeting), for Bristol East (Kerry McCarthy), for Bootle (Peter Dowd), for Cardiff South and Penarth (Stephen Doughty) and for Feltham and Heston (Seema Malhotra) are not disowning the self-employment review and commission that was launched last November by the hon. Member for Oldham East and Saddleworth, who said that one of the five principles of Labour’s self-employment commission was that self-employed NICs should rise towards employee levels. She went on to say:

“We cannot expect employees to continue to pay more into the system while offering equality of entitlements across employment status.”

I realise that Labour’s Front Bench rotates with dizzying speed—[Interruption.]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order.

[Jane Ellison]

Thank you, Madam Deputy Speaker. They don’t like it up ’em!

I realise that the Labour Front Benchers rotate with dizzying speed, but I suggest that Labour Members look at the self-employment commission that they launched only last November. The majority of people who are affected by the change will be better off from the combined changes to national insurance contributions. Only someone with profits of more than £16,250 will have to pay more and, as some hon. Members have remarked, the new state pension is worth an extra £1,800 of pension entitlement to those who will now be on it. That is something that the Federation of Small Businesses, among others, has campaigned for.

It is obvious from the critique we have been offered by those on the Opposition Benches that, while they have a plethora of suggestions about how to raise taxes and raise spending, they have absolutely no coherent alternative economic policy. That was clearly in evidence yesterday, in the response we heard from the Leader of the Opposition, and the fact that there are so many former Front Benchers sat behind today’s Front Benchers is also testimony to it. We need to get spending and revenue-raising in balance; that is the mark of a responsible Government, and that balance is what allows us to safeguard the services we all value for the future.