Budget Resolutions

Jeremy Lefroy Excerpts

Tuesday 30th October 2018 Commons Chamber

[Jeremy Lefroy (Stafford) (Con)]

Our country faces some immense challenges and this Budget—from a fine Chancellor, who I hope stays for many more Budgets—does good work in tackling a number of them, but there are several others that I want to address and that some colleagues have touched on.

The first challenge to which the Chancellor and the Prime Minister have risen is the need to fund healthcare properly. A number of Members across the House have regularly made the case for an increase of about £20 billion a year to bring our spending in line with German or French levels, and this is happening. But I agree with the point made yesterday by the hon. Member for Bassetlaw (John Mann)—that is, that we need to pay for this. It should not just come from additional borrowing, and we should continue to look at using hypothecated or other forms of revenue, particularly when it comes to social care.

A second challenge that the Chancellor has met—as, indeed, have employers up and down the country—is the need to increase and maintain employment, and to reduce unemployment to the lowest level in decades. The unemployment rate has fallen from 8% to 4%. In many constituencies, including mine, it has fallen much further than that, but every person out of work is still one too many. It is also welcome that on the whole jobs are gradually becoming better paid.

The third area in which the challenge is being met is defence and our global role, particularly in international development. The UK is one of the only major countries in the world—if not the only one—to maintain both the 2% defence commitment under NATO and the 0.7% official development assistance, and I welcome that. In difficult times, we can be proud that the UK will meet our international commitments as well as the commitments to our own people on safety and security.

Now, what about the challenges? The big and immediate one is clearly exiting the EU. It is absolutely essential that we reach a deal. I am a member of the Exiting the European Union Committee, and the more I hear of the consequences of no deal, the more apparent it is just how damaging it would be to the EU and to the UK. The Chancellor recognises this, and I sincerely hope that he does not have to come to the House with his alternative Budget. But this is not just about exiting the EU; it is about the future of the economy.

My hon. Friends the Members for Mid Norfolk (George Freeman) and for The Cotswolds (Sir Geoffrey Clifton-Brown) have mentioned the challenges we face and the future opportunities. The right hon. Member for Birmingham, Hodge Hill (Liam Byrne) and I recently produced a book on the future of work, looking at countries around the world that are meeting these challenges, including South Korea, Singapore and Argentina. Lots of people across the country are trying to meet these challenges, but they also exist globally.

It is an honour to follow the hon. Member for Makerfield (Yvonne Fovargue), who was right about funding for 16 to 18-year-olds. The years from 16 to 18 are a critical time, and funding dropping off at that stage poses some severe challenges to colleges and schools.

[Mr Jim Cunningham]

Like me, the hon. Gentleman is a west midlands MP, and knows that the west midlands economy is very important to the country. I am not sure whether the Government have clarified whether there will be more money for further education. Further education is the backbone of things such as apprenticeships, and we need more apprenticeships. Does the hon. Gentleman agree that we should be focusing on this important area?

[Jeremy Lefroy]

Indeed, and I think I just mentioned that. In my constituency, Newcastle-under-Lyme College and Stafford College do excellent work, as does South Staffordshire College, but they are underfunded, particularly at that level.

A further challenge is balancing the Budget. The OBR report refers to the Chancellor in terms of St Augustine, as it describes the Budget as Augustinian—“make me chaste, but not yet.” I believe that it is nearly 20 years since the UK has run a Budget surplus, and we are now pushing that back by a further two years. This is not the way to go. We have to look carefully at how we can return to a balanced Budget or a surplus, which can only come from growth, more efficiency or allowing tax rates to rise—we have some of the lowest revenues as a percentage of GDP in the G7—but that has not happened this time. If we are to maintain a sound fiscal policy, it will have to happen soon. The country needs to build up assets in better times to meet the challenges of hard times, and one of those assets is a surplus Budget and a reducing deficit.

Local government finance has been mentioned today. This is a great challenge because I believe, as do pretty much all colleagues in this House, in the importance of devolution and making decisions locally. However, the Government are placing more and more pressures on local government, without giving it the means to deal with them. Local authorities, including Staffordshire, have done excellent work to reduce spending while maintaining services over the last eight years. That cannot go on. Local government has reached the bottom. I welcome the additional money, but we need to see more, particularly in terms of loosening up the requirements for referendums.

The right hon. Member for Enfield North (Joan Ryan) rightly said that the Office for Budget Responsibility report talked about the low savings rate and rising personal debt. That incredibly important area has not been focused on, and I am extremely concerned about it. We need to help households rebuild their balance sheets. People cannot always look to Government to support them in times of difficulty. Personal assets are vital, and I urge the Chancellor to look at ways of encouraging saving, difficult though that is—including efficient lifetime savings accounts that people can draw on in times of difficulty, financial education in schools and further support for credit unions.

We have the biggest current account deficit in the G7—from memory, it is about 3.8%. That is down from 5.1%, but it is still too much. We are too dependent on resources from other countries, and we need to build up our network of foreign assets, from which we receive income. At the same time, we need to reduce our balance of trade deficit.

Finally, we have the challenge of supporting people on the lowest incomes who are long-term sick or disabled. At a time when many people in this country are seeing their incomes continue to rise and are living in prosperity, which I welcome, we need to meet the needs of those who suffer from disability, sickness or low income. I welcome the changes to universal credit, but it still does not work for everyone. I welcome the additional money, but we have to make sure that nobody loses out in the transfer to universal credit, most particularly disabled people. Others, including my hon. Friend the Member for South Cambridgeshire (Heidi Allen) and the right hon. Member for Birkenhead (Frank Field) yesterday, have spoken about how that could be done.

This Budget is a chance to tackle long-term challenges in difficult circumstances, with the coming exit from the EU. The Chancellor has seized the chance to address some of those areas, on which I congratulate him. I believe that, but for this challenge of exiting the EU, he would have tackled other areas, too, but the challenges that remain cannot be put off for ever.