Section 5 of the European Communities (Amendment) Act 1993

Jim Cunningham Excerpts

Tuesday 26th March 2019 Commons Chamber

[Elizabeth Truss]

The UK economy is projected to grow under all circumstances. Our future is in the hands of individuals and businesses in this country. It is those people who determine whether we will be successful or whether we will fail. I have a huge amount of respect for the entrepreneurs in this country who are setting up new businesses, growing and investing. We have a very bright future ahead of us.

The reality is that the threat to British prosperity is not our precise relationship with the European Union, but the ideas of some in this Chamber who want to limit people’s opportunities, see public spending balloon and start increasing our national debt again by £1,000 billion. And what would happen then? Taxes would go up; people would be able to keep less of their own money; businesses would not have the funds they needed to invest in the future; and our economy would decline rather than grow. That is the real threat to British prosperity. Fundamentally, we have been successful and moved on from the post-crash era because we have backed the British people and British businesses to succeed. We have not gone out there and said that business is the enemy—something that should be fought against. We have said that business is a friend of success and aspiration, and we need to back it.

This year represents a big opportunity for Britain. First, 2019 is the year when we are leaving the European Union, but it is also the year of the spending review. As the Chancellor announced in the spring statement, we will be launching the spending review just before the summer and completing it in the autumn. That spending review will set the budgets for the next three years. For the first time since the financial crash we have choices, because there is now headroom in our budget. That headroom is thanks to the fact that there are more people in work than ever before, and they are contributing in taxes.

We now have choices we can make. First, we have the ability to cut taxes, which we will already be doing this April. People will see more money coming into their bank accounts from this April onwards thanks to the fact that this Government have decided to reduce taxes for those on the basic rate and for those on the higher rate. We are also able to invest in public services. Because we have taken these difficult decisions, we have allowed the economy to grow. We have an opportunity to modernise government to make it sleeker and better value for the people it serves.

[Mr Jim Cunningham (Coventry South) (Lab)]

On investing in public services, what is the right hon. Lady going to do to invest in local authorities so that they, in turn, can invest? Coventry is a good example. Coventry has encouraged small businesses, and we have the University of Warwick science park and so forth. What is she doing to encourage local authorities to invest in their public services, as she knows that for the past few years that has been very difficult for local authorities, to say the least?

[Elizabeth Truss]

I was very glad to visit a successful business in the hon. Gentleman’s constituency. I know that he is very committed to the development of business in his area. It is important that money spent is raised locally as far as possible. As a Government, we have rebalanced from central Government giving money to local government to more of that money being kept locally, whether through business rates retention or council tax. That is an important principle. However, we did recognise in the Budget that local authorities were under pressure. That is why we put in an extra £650 million, which can particularly be spent on adult social care and children’s social care where there is pressure. Of course, we will look at that balance in the spending review.

At the moment, we have a complicated landscape in the support offered to business. When there is a complicated landscape, it can sometimes be the big businesses that know how to work the system that end up getting the money. We need to move to a system where we have lower taxes and it is clearer and simpler to see where the support is. Of course, we are also investing in the infrastructure that helps business to succeed, whether it is local roads, fibre or rail. Ahead of the spending review, I am making visits around the country to hear from people on the ground to understand what the public’s priorities for public spending are. It can sometimes be easy in Whitehall to listen to the big lobby groups— the big organisations that have an operation here in Westminster—but I want to hear what people in Coventry and other places around the country think about what their priorities are. I have done a few of these sessions so far, and the topics that come up tend to be education, local roads, the NHS—for which we have already put in additional money—and police. We need very much to keep in mind what the public want to see our money spent on rather than just listening to the big organisations.

--- Later in debate ---

[Peter Dowd]

I will pick up some of those points later.

The reality is that meanwhile, the Government have presided over the slowest recovery since the 1920s—stubborn fact. The OBR has revised down GDP growth, and business investment is now falling. Those are not my figures; they are the OBR’s figures. What about wages? I will touch on the points that the hon. Member for Redditch (Rachel Maclean) raised. Real wages are still lower than they were a decade ago, and according to the OBR,

“average earnings growth remains below the rates typical before the financial crisis”.

These are real people’s real lives—real wages are not going up. For many workers who have seen their wages stagnate, borrowing and debt has plugged the gap. Household debt relative to income is forecast to increase over the next few years.

What about transparency in Government spending? Long gone are the days when Tory Ministers hailed their Government as the most transparent in history—replaced by a culture of secrecy and a disregard for parliamentary convention that saw the Government held in contempt of Parliament for the first time in history. It is not a proud record to have.

Even on transactional issues, such as the regular and timely release of figures for departmental spending of over £25,000, the Government seem to have quietly backslid, in some cases releasing data series late, incomplete, or not at all. The question is: what are they hiding? The Chief Secretary has made much of the Government’s record on the deficit, yet the reality is that on her watch, and that of her predecessor, they have simply passed deficits on to our schools, our hospitals and our local councils, with departmental spending cuts of over £40 billion since 2010.

[Mr Jim Cunningham]

When we talk about more money being put into Departments, whether for education or the health service, we have to remember that any additional money starts from a lower base. The Government are partially replacing what they took out in the first place. People do not seem to understand that major point. They said that austerity was over, but we still have it. Yes, people are in jobs, but they are very low-paid jobs. That is not taking people out of poverty; that is keeping people in poverty. What interests me the most, however, is that nothing has been said about further education, which has had major cuts. If the Government want to continue with austerity, they have to do something about further education.

[Peter Dowd]

My hon. Friend has obviously been reading Labour’s “Funding Britain’s Future” document, in which we picked up on that particular point. The hon. Member for Redditch mentioned tax cuts. Try telling that to people who have had 15% and 16% rises in their council tax, because the Government have shunted that on to the people. They are still taxpayers. Try mentioning to them that they have fantastic local services, when increases to their council tax do not even cover social care bills.

The Chief Secretary has bragged about the so-called Tory jobs miracle. However, she made no mention in the speech of the fact that it is built on insecure work, low pay and regional disparities. We have nearly 4 million people in insecure work and nearly 3 million people working under 15 hours a week across the UK. Workers in the north-east earn around £200 less than those in London, reifying the regional imbalance.