Ministerial Code/Register of Ministers’ Interests

Lindsay Hoyle Excerpts

Tuesday 18th May 2021 Commons Chamber

[Angela Rayner]

The ministerial code is clear: there must be no misuse of taxpayers’ money, nor actual or perceived conflicts of interest, but time and again Ministers act like the rules are for other people—none more so than the Prime Minister himself. Last year, he declared £15,000 from a Tory donor for his sleazy jet trip to a private island. This weekend, we read that the real cost was double that, and paid by someone else entirely.

People might ask, “Why is this important?” It is important because it goes to the very heart of our democracy. Who do our Government answer to: the public, or private interests? We learned only from the media that the Prime Minister has blocked the publication of the independent commissioner’s report. Can the Minister tell us why the delay? Does she accept that the rules apply to everyone, even the Prime Minister, and will he accept—

[Mr Speaker]

Order. This case is with Standards, and really we ought to keep away from it until Standards has been able to deal with it.

[Angela Rayner]

Okay. Thank you, Mr Speaker.

The list of Ministers’ interests is also mysteriously delayed, I assume while the Prime Minister tries to remember who paid for his flat, but does the Minister accept that if the Prime Minister can block the independent adviser from investigating he cannot in practice be fully independent, because the code clearly is not preventing actual or perceived conflicts of interests?

When the Home Secretary lobbies on behalf of a former adviser flogging substandard face masks, who lands a £100 million contract without tender and at double the going rate, who cannot perceive that as a conflict of interest? It is something that we know not from the Home Secretary declaring it, but because it was revealed in an admin error. Then there is the Health Secretary, who appears to have ordered an official to recommend a bid that he had not even read from a former Tory MP, who pocketed another £200 million of taxpayers’ cash. Surely the independent adviser must investigate those cases with no prime ministerial veto.

Finally, there is the Prime Minister’s own top adviser, Lord Lister. He concealed being paid by a luxury developer owned by yet another Tory donor, which was granted a record-breaking taxpayer-backed loan by the very public body that Lister chaired—money that was meant for affordable homes, but given out at mates’ rates for luxury flats and private profit. Will the Government release the loan agreement, along with the correspondence on that decision, and hand it to the independent investigator, and when will they publish their report on officials’ second jobs? When Ministers and advisers use the public purse as a personal cashpoint, the public have a right to know.

[Mr Speaker]

Order. Before we start, the supplementary was meant to be two minutes. I did interrupt, so I allowed some leeway. I will therefore also allow some leeway for the reply. When we mention Members of the other place, it is meant to be on a substantive motion. I know that seems strange, but these are the rules of the House, which I do not make; the House has made them and adopted them. We must stick to the rules. We do not criticise individual Members of the other House except on a substantive motion.

--- Later in debate ---

[Penny Mordaunt]

I am sure that the Cabinet Secretary will respond to the hon. Lady. He takes his responsibilities very seriously. The problem is that the matter is now the subject of a review—it is a subject for someone else to look at. I think, in all honesty, that there is nothing I or the Prime Minister could say at the Dispatch Box that will satisfy people until someone independent says it. I have to say, again, that this is a sideshow. I very much encourage the hon. Lady to return to the matters of substance, which I am sure are the issues that her constituents care about.

[Mr Speaker]

I will just say for the record that I expect MPs’ letters to be answered. MPs on all sides have a job to do, and they can only be helped by early answers to their correspondence.

[Mr Peter Bone (Wellingborough) (Con) [V]]

Over the past few weeks, I knocked on hundreds and hundreds of doors in my constituency during the local elections, and not a single constituent mentioned the wallpaper of the Prime Minister or his holidays. What they were concerned about was welcoming the implementation of Brexit, how the Government were handling covid and the success of the vaccination programme. Does the Paymaster General agree that unless the Labour party gets its act together and starts listening to the people and their concerns, it will remain the Opposition party?

--- Later in debate ---

[Debbie Abrahams (Oldham East and Saddleworth) (Lab) [V]]

I have a high regard for the Minister, but I am afraid I struggle with her explanation on this issue. On 22 February, inadvertently or not, the Prime Minister made a misleading statement to the House regarding PPE contracts. He stated that they were all published. They were not. That is based on a High Court ruling and is irrefutable. His lack of apology and correction of the record is clearly a breach of the ministerial code. That this happens with seeming impunity—

[Mr Speaker]

Order. A criticism is only on the substantive motion. This cannot be used. It has already been tried earlier. The rules of the House must be obeyed. I know it is not what Members want to hear, but I am in charge of ensuring that the rules are kept to. Unfortunately, we cannot continue with that question.

[Jacob Young (Redcar) (Con)]

We all know that Government procurement is a long, clunky and expensive process. It was therefore of clear national importance for the Government to fast-track some procurement decisions, particularly in relation to PPE, to protect people and keep people safe. Does the Minister agree that the recent elections in Teesside, where we gained a new Member of Parliament and a landslide for the Tees Valley Mayor, show that the public support our decisive decision making over the Labour party’s political point scoring?

--- Later in debate ---

[Penny Mordaunt]

I have said several times this afternoon that the public do care about that and they are right to do so. We should be here to answer questions about those issues. What I am not going to put up with is decent colleagues, decent businesses and members of the public being smeared by innuendo. I think that I have made my views very clear on that, and I hope that Opposition Members, including the right hon. Member for Ashton-under-Lyne (Angela Rayner)—and I do wish her well—reflect on that.

[Mr Speaker]

I will now suspend the House for three minutes to enable the necessary arrangements to be made for the next business.

Oral Answers to Questions

Lindsay Hoyle Excerpts

Tuesday 27th April 2021 Commons Chamber

[Jesse Norman]

My hon. Friend is absolutely right. I salute the people of Carlton and I rejoice in the businesses of Mapperley. I encourage businesses across the constituency of Gedling to take advantage of the Government’s unprecedented package of support, including the £5 billion-worth of grant support that the Chancellor announced at Budget, which is providing a lifeline for businesses as they relaunch their trading safely.

[Mr Speaker]

I am now suspending the House for three minutes to enable the necessary arrangements to be made for the next business.

Oral Answers to Questions

Lindsay Hoyle Excerpts

Tuesday 9th March 2021 Commons Chamber

[John Glen]

The Government are committed to encouraging business investment in Doncaster and its surrounding area, and at the Budget we confirmed £23 million funding for Goldthorpe’s town deal—just due west of the town—and that will boost economic growth and encourage business investment in the area. MHCLG is currently assessing the remaining 49 towns fund bids, including those from Doncaster and Stainforth; we will make further announcements on those in due course.

[Mr Speaker]

I am suspending the House for a few minutes to enable the necessary arrangements for the next business to be made.

Government's Management of the Economy

Lindsay Hoyle Excerpts

Tuesday 23rd February 2021 Commons Chamber

[The Chief Secretary to the Treasury (Steve Barclay)]

I thank the hon. Member for Oxford East (Anneliese Dodds) for securing this debate, which is an important opportunity to take stock ahead of next week’s Budget. With the leave of the House, Mr Speaker, I shall also close the debate for the Government later.

The hon. Lady, and Members from all parties, will appreciate that I cannot discuss any of the specifics of next week’s Budget, but I can say that although we may not always agree on the way ahead, I believe that we in this House all want the same outcome: a vibrant and prosperous economy that gives people everywhere the opportunities that they deserve.

In responding to the motion, I intend to do three things. First, I shall briefly remind the House of the economic and fiscal situation that we inherited in 2010. [Hon. Members: “Good idea!”] It is a welcome motion for enabling that. Secondly, I shall examine the state of the economy a decade later, noting the difference, for which the credit goes to previous Treasury Ministers—not current Conservative Treasury Ministers—who took difficult decisions in the national interest. Finally, I shall say a little about the Government’s ambitions now, with the obvious caveat that a Budget is imminent.

As Members will recall, the outlook in 2010 was not good. The financial crisis had torn a hole in our country’s future, the economy was shrinking and the deficit was ballooning. As George Osborne said at the time of his speech in the Queen’s Speech: Economy debate in 2010 :

“Getting over the worst economic inheritance any modern government has been bequeathed by its predecessor is not so easy.”

He also noted that the British economy had become

“deeply unbalanced…Unbalanced between different parts of the country…Unbalanced between different sections of society… Unbalanced between different parts of our economy”.

As set out by the most recent Labour Chief Secretary, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne)—I accept that it was a light-hearted note and that much of the criticism he has received has probably been unfair, but the substance remained—there was no money left.

The coalition Government took power in 2010, at a moment when one thing mattered more than anything else: strong leadership prepared to make the right decision in the national interest. As hon. and right hon. Members will recall, in the years that followed the Government took steps to put this country back on a stable financial footing, because we need a strong economy to fund strong public services. The economy expanded in every year of the decade that followed. In fact, between 2010 and 2019, it grew by a total of 19.2%, which was faster than France, faster than Italy and faster than Japan—a reality not reflected at all in today’s motion. Achieving that success was about many things, not just fiscal discipline. In 2010, for instance, the Government created the Office for Budget Responsibility, which introduced independence, greater transparency and credibility to the economic and fiscal forecasts on which fiscal policy is based. Indeed, 10 years on, the OBR is considered by many of its peers to be the gold standard of independent fiscal institutions.

Just as now, a key focus for the Government throughout that period was protecting, supporting and creating jobs; here, too, the numbers are impressive. Participation in the labour market reached a record high of 79.8% in the three months to February 2020—three percentage points higher than in 2010. In the same year, the UK had a higher employment rate and a lower unemployment rate than both the OECD and G7 averages. Between the 2010 election and the end of 2019, we saw over 3.8 million more people in employment—equivalent to an average of nearly 1,000 extra people in work every single day—and 85% of that growth was in high-skilled occupations. Importantly, that growth was across the board. The employment rate increased for all regions in the country, as well as for women, for young people and for poorer households. Indeed, prior to the pandemic, the employment rate among women was at a record high of 72.7%, and youth unemployment was down almost half on 2010.

If hon. Members remember just one key statistic, perhaps it should be this: real household disposable income per head—the Treasury’s preferred measure of living standards—was 11.4% higher in 2019 than at the start of 2010, and incomes grew most strongly for households on lower and middle incomes. Remember that this was also the decade when we made significant personal tax cuts and introduced the national living wage, which we have increased every year. Taken together, changes to the national living wage, personal allowance and national insurance contributions mean that an employee working full-time on the national living wage is more than £5,200 better off than in April 2010. This is a track record of which any Government of any political persuasion should be proud.

It was not just households across the country that understood the benefits; the world recognised them too. In 2018, the UK topped the Forbes list of best countries for business for the second year running. A year later, the World Economic Forum acknowledged our strengths in innovation capability, business dynamism, institutions and market size. Businesspeople everywhere felt the same. The UK has the third highest foreign direct investment stock in the world after the US and Hong Kong, and more foreign investment than Germany and France combined. None of this reflects today’s motion; indeed, it reflects strong leadership, fiscal responsibility and a Government prepared to act in the national interest.

Coronavirus has been a great challenge that we, as a country, have had to face together. Every country has had to reckon with the virus’s economic impact, but because of the decisions made by successive Chancellors over the past 10 years, our economy and public services were strong when the pandemic hit. The markets understood that we were a Government who could plan for the future and make decisions when they mattered. As a result, we have been able to respond in the way in which we have. This House has heard about that response numerous times. It is one of the largest and most comprehensive responses in the world, totalling more than £280 billion since March 2020. Millions of jobs and livelihoods have been supported through the furlough scheme and the self-employment income support scheme. We have allocated billions of pounds in loans and grants to businesses across the UK. It is a response that the IMF singled out as

“one of the best examples of coordinated action globally”.

It called the response “aggressive” and “unprecedented”—that is a frequently used word, but I do not apologise for using it again. Indeed, the Resolution Foundation has said that the response

“prevented an unprecedented collapse in GDP from turning into a living standards disaster.”

The fact that we had rebuilt the public finances in recent years, combined with the UK’s strong institutional framework, gave us the wherewithal to borrow to provide the significant economic support that was required. Our decade of economic success made all of that possible.

I know that the Opposition wish to keep talking about the past, which is surprising given that many of those years were spent supporting the economic policies of the previous Leader of the Opposition. I am always more than happy to speak about our record over the past 10 years—I welcome today’s motion as providing an opportunity to do so—but I, like this Government, want to look forward to the future.

Last year’s spending review tells us everything we need to know about this Government and this Chancellor’s direction of travel. There was significant additional funding to help our public services in their continuing fight against the pandemic—we are making record investments in public services, including an historic settlement for the NHS, which provides a cash increase of £33.9 billion a year by 2023-24; we are providing better lifelong learning, such as through the £375 million to deliver the Prime Minister’s lifetime skills guarantee; we are recruiting more police officers to make our streets safer, with more than 6,600 already recruited towards our 20,000 target; we are implementing our 10-point plan to tackle climate change, mobilising £12 billion of Government investment, which will in turn create hundreds of thousands of green jobs across the country, including in carbon capture and storage, electric vehicles and renewable energy; we are investing in technology, innovation and the digital economy, as part of our goal to make the UK a science superpower—this Government are increasing investment in research and development at the fastest speed and greatest scale since records began; and we are investing in the UK’s economic recovery, with more than £100 billion of capital investment next year to spread opportunity, create jobs and drive economic growth.

The motion states that the last decade “weakened the foundations” of the economy, yet we saw nine years of continuous growth, while we reduced the deficit from 10% to below 2%, The motion says that the UK was “particularly vulnerable”, yet we have consistently protected our NHS, with the 2018 NHS settlement being the biggest cash increase in public services since the second world war. The motion says that our actions during the pandemic have “exacerbated the problems”, yet we have vaccinated more than one in three adults, which is far more than any other European country. The motion says that the UK has suffered

“the worst economic crisis of any major economy”,

yet independent bodies such as the IMF have praised the UK’s response, which in turn was possible only because of the economic decisions of the last decade. The motion talks of “inequalities”, yet distributional analysis of the Government’s interventions shows that we protected the poorest working households the most, through schemes such as the furlough. It is because of our economic record that we have been able to place the protection of jobs at the heart of our covid response, with the furlough and the other business support measures.

As the Chancellor said last month:

“Sadly, we have not been and will not be able to save every job and every business, but I am confident that our economic plan is supporting the finances of millions of people and businesses.”—[Official Report, 11 January 2021; Vol. 687, c. 23.]

He was right, and jobs will remain at the heart of his economic plan, as we work together to build back better and level up the whole of the UK.

[Mr Speaker]

Before we head up to Scotland, I remind Members that there will be a three-minute limit after the SNP spokesperson, Alison Thewliss.

Exiting the European Union (Value Added Tax)

Lindsay Hoyle Excerpts

Wednesday 3rd February 2021 Commons Chamber

[The Financial Secretary to the Treasury (Jesse Norman)]

I beg to move,

That the Value Added Tax (Miscellaneous Amendments to Acts of Parliament) (EU Exit) Regulations 2020 (S.I., 2020, No. 1312), dated 18 November 2020, a copy of which was laid before this House on 19 November, be approved.

[Mr Speaker]

With this we will take the following motion:

That the Value Added Tax (Miscellaneous Amendments to the Value Added Tax Act 1994 and Revocation) (EU Exit) Regulations 2020 (S.I., 2020, No. 1544), dated 18 December 2020, a copy of which was laid before this House on 21 December, be approved.

[Jesse Norman]

These two statutory instruments are part of a package of measures connected to the UK’s exit from the EU. They make a number of consequential and necessary changes in order to ensure that the VAT system continued and continues to operate, as required, following the end of the transition period. They have been designed to ensure fairness, to protect against double taxation and avoidance, and to make certain that existing reliefs continue to apply following the UK’s departure from the EU. Both instruments took effect at the end of the transition period.

The Value Added Tax (Miscellaneous Amendments to Acts of Parliament) (EU Exit) Regulations 2020 make three changes to the VAT Act 1994 and one change to the Taxation (Cross-border Trade) Act 2018. The first change applies to the VAT treatment of aircraft handling services. Until the end of the transition period, the VAT Act included a VAT zero rate for handling services supplied to aircraft operating on international routes. These included landing and housing fees, security and fire services. This zero-rate band also applied to the handling and storage of goods carried in those aircraft, but only at a customs and excise airport. However, suppliers could previously rely on EU legislation to zero-rate their services at non-customs and excise airports. This instrument therefore provides for the continued application of the relief in UK legislation following the end of the transition period.

Secondly, this instrument includes a new VAT zero rate for the handling services supplied to international trains. These include network track access, shunting and storage, station and guard services, light maintenance services and the handling and storage of goods carried on the trains. The measure aligns the VAT treatment of international trains with that of qualifying ships and aircraft. For ships and aircraft, services for which the zero rate applies can be carried out only at a port or airport, but for international trains these services could be supplied at various other sites along a rail route. The instrument therefore provides a power for the Revenue and Customs commissioners to specify those sites in a notice. That will ensure that the relief applies appropriately to trains.

Thirdly, the instrument makes a change that allows those supplying pension fund management services to funds established in the EU to recover the VAT that they incur.

Finally, the instrument removes a change made in the Taxation (Cross-border Trade) Act 2018 to the VAT treatment of certain travel services. The change is no longer necessary because the subsequent Value Added Tax (Tour Operators) (Amendment) (EU Exit) Regulations 2019 included a revision of the VAT treatment of such services.

Let me turn to the second instrument to be debated: the Value Added Tax (Miscellaneous Amendments to the Value Added Tax Act 1994 and Revocation) (EU Exit) Regulations 2020. This legislation includes four changes to the Value Added Tax Act 1994 and the revocation of an instrument laid in 2019 in connection with EU exit.

First, the legislation makes changes to the DIY house builders’ scheme to place self-builders in Northern Ireland in the same position as those in Great Britain. The DIY house builders’ scheme allows people who construct their own dwellings—a relevant residential or charitable building—or make a residential conversion to claim back the VAT on certain building materials, including VAT incurred on imports. Under the Northern Ireland protocol, materials bought by self-builders in Northern Ireland from suppliers in an EU member state may be subject to VAT in Northern Ireland. The instrument ensures that a DIY house builder in Northern Ireland can recover VAT charged on materials bought from a supplier in an EU member state.

Secondly, the instrument allows HMRC to obtain information in relation to VAT owed by businesses and individuals in member states. Similar legislation applied to the whole of the UK until the end of the transition period, reflecting the requirement for mutual co-operation between member states in connection with VAT. The retention of the legislation, particularly in respect of Northern Ireland, is a requirement of the withdrawal agreement.

Thirdly, the instrument contains measures to prevent unscrupulous businesses from avoiding import VAT. Under the Government’s commitment to unfettered access, goods in free circulation in Northern Ireland that are moved to Great Britain are relieved from duty and VAT on entry. However, UK customs legislation contains a provision to remove the duty relief if it is found that goods have been routed from an EU member state via Northern Ireland to Great Britain in order to avoid import duty. The instrument ensures that, if the customs provision is triggered, the VAT relief will no longer apply as well. It also prevents double taxation for businesses that make exempt supplies and move goods from Great Britain to Northern Ireland.

Finally, the instrument revokes the Finance Act 2011, Schedule 23 (Data-gathering Powers) (Amendment) (EU Exit) Regulations 2019, which were laid in the event of a no-deal scenario and are therefore no longer required.

The instruments provide a number of significant and necessary changes to ensure that the VAT system continues to operate as required following the end of the transition period. They will ensure fairness, protect against double taxation and avoidance, and make certain that existing reliefs continue to apply. I hope colleagues will join me in supporting this legislation, which I commend to the House.

Oral Answers to Questions

Lindsay Hoyle Excerpts

Tuesday 26th January 2021 Commons Chamber

[Stephen Kinnock [V]]

The Chancellor likes to claim that the UK offers one of the most generous support schemes for self-employed people in the world, but self-employed women who have taken maternity leave in the past few years are not supported generously at all—in fact, they have received a lot less financial support than their peers who have not taken maternity leave. The charity Pregnant Then Screwed reported that around 75,000 self-employed women have been subject to— [Inaudible.]

[Mr Speaker]

Did you get any of that, Minister Norman?

[Jesse Norman]

indicated assent.

[Mr Speaker]

If you can get something out of it, please do.

[Jesse Norman]

If I may just say, the hon. Gentleman is wrong. We are not talking about a claim that is not validated by third parties; it is understood internationally that the scheme is one of the most generous in the world. He will be aware that the issue is subject to legal challenge, which limits what I can say, but I can tell him that the Government are well aware that some self-employed people found that their eligibility for the scheme was affected if they had taken time out of their trade in 2018-19, which is why, in June last year, the scheme’s eligibility criteria were revised to ensure that people in that situation were able to claim self-employment income support.

--- Later in debate ---

[Steve Barclay]

As my right hon. Friend the Chancellor set out a moment ago, the Office for Investment, led by Lord Grimstone, is focused on exactly that issue, working in tandem with the Build Back Better Business Council, which the Prime Minister and the Chancellor chair.

[Mr Speaker]

Order. I now suspend the House for three minutes to enable the necessary arrangements to be made for the next business.

Economic Update

Lindsay Hoyle Excerpts

Monday 11th January 2021 Commons Chamber

[Tom Hunt (Ipswich) (Con)]

The hospitality sector in Ipswich certainly welcomes the grant support the Chancellor announced last week—that is very welcome—but about a month ago I held a virtual roundtable event for the sector in Ipswich and it was probably one of the most sobering virtual meetings I have taken part in since this pandemic started. It was very sad to hear about the extreme anxiety those in the sector have; they have poured their whole lives into the businesses where they are working and there is still concern even now. So will my right hon. Friend confirm that he will be reflecting on what further support might be provided ahead of the Budget? I am talking specifically about a potential extension of the business rates holiday throughout 2021 and also the support on VAT, because there is light at the end of the tunnel but when we go into that much better place I want to make sure that The Brickmakers Arms, The Kingfisher, the Belstead Arms, Pauls Social Club and the California Social Club, which I am now a member and stakeholder of—I own part of it now that I have become a member—are there with us.

[Mr Speaker]

Order. It has to be a shorter question. We have put you on early to make sure you can get things mentioned, but you cannot make a speech in a question. I think we more or less have the drift of it.

[Rishi Sunak]

My hon. Friend is a fantastic champion for his local hospitality industry, and I very much hope I have a chance to visit the California Social Club in Ipswich at some point in the future. I will bear in mind his suggestions for how we can look at providing further support. This is a vital industry for our local communities and nationally it employs more than 2 million people, and he rightly says that they have borne the brunt of these restrictions and deserve our support as we emerge on the other side.

Future Relationship with the EU

Lindsay Hoyle Excerpts

Thursday 10th December 2020 Commons Chamber

[Penny Mordaunt]

The hon. Lady will know the reasons why those clauses were in the UKIM Bill. We will not compromise on the integrity of the United Kingdom. The fact that the Prime Minister made that offer shows that we are doing everything we can to be creative and try to ensure we get a preferable outcome. As I say, the Prime Minister has resolved that he will not move on those red lines.

[Mr Speaker]

Order. To allow the safe exit of hon. Members participating in this item of business and the safe arrival of those participating in the next, I am suspending the House for a few minutes.

Oral Answers to Questions

Lindsay Hoyle Excerpts

Tuesday 1st December 2020 Commons Chamber

[Jesse Norman]

My right hon. Friend is absolutely right to focus on testing. As he will be aware, the “test to release” regime combines a much shorter self-isolation period with a real focus on public health. As he will also know from the global travel taskforce report, we as a country are continuing to explore pre-departure testing with partner countries on a bilateral basis, including different models by which that might be delivered.

[Mr Speaker]

Question 15 is withdrawn, so we have a substantive question to the Chancellor.

--- Later in debate ---

[Andrew Griffith]

I thank my right hon. Friend for his answer. Many businesses in Arundel and South Downs, such as hospitality, events, beauty and wedding venues, have been hit terribly hard by the pandemic. It is no exaggeration to say that the support he has offered so far has been an absolute lifeline. But as my constituents now find themselves in tier 2, with all the uncertainty and restrictions, will he continue to do what he can to protect the very enterprises this nation will need—

[Mr Speaker]

Order. Questions have got to be short and punchy—that is the idea of topicals—to get everybody in.

[Andrew Griffith]

To prosper.

--- Later in debate ---

[Rishi Sunak]

The hon. Lady raises a good point. Obviously, the news about Arcadia and Debenhams will be deeply worrying for employees and their families, and the Government stand ready to support them. With regard to various things that are ongoing, there are negotiations between various parties in the companies at the moment, particularly with regard to pensions, and it would not be right for me to comment specifically on those, but she can rest assured that we keep an eye on the situation.

[Mr Speaker]

Let us go over to Robert Halfon and Sweep.

[Robert Halfon (Harlow) (Con) [V]]

Thank you, Mr Speaker. I thank my right hon. Friend for the financial package worth more than £150 million to support Harlow businesses and hard-working residents, but will he recognise the difficulties that are being faced by my constituents, particularly freelancers and directors of limited companies, who have been without any form of financial support—or almost any form of financial support—for eight months now? This is having a detrimental impact on my constituents’ livelihoods and mental health, so will the Minister outline what steps he is taking to ensure that these individuals, who have so far found themselves excluded from covid-19 support schemes, are able to access some significant financial assistance?

Spending Review 2020 and OBR Forecast

Lindsay Hoyle Excerpts

Wednesday 25th November 2020 Commons Chamber

[Mr Speaker]

Before the Chancellor of the Exchequer addresses the Chamber, I would like to point out that British Sign Language interpretation of the statement is available to watch on parliamentlive.tv.

[The Chancellor of the Exchequer (Rishi Sunak)]

Mr Speaker, today’s spending review delivers on the priorities of the British people. Our health emergency is not yet over and our economic emergency has only just begun, so our immediate priority is to protect people’s lives and livelihoods. But today’s spending review also delivers stronger public services, paying for new hospitals, better schools and safer streets, and it delivers a once-in-a-generation investment in infrastructure, creating jobs, growing the economy and increasing pride in the places we call home.

Our immediate priority is to protect people’s lives and livelihoods, so let me begin by updating the House on our response to coronavirus. We are prioritising jobs, businesses and public services through the furlough scheme, support for the self-employed, loans, grants, tax cuts and deferrals, as well as extra funding for schools, councils, the NHS, charities, culture and sport. Today’s figures confirm that, taken together, we are providing £280 billion to get our country through coronavirus. Next year, to fund our programmes on testing, personal protective equipment and vaccines, we are allocating an initial £18 billion. To protect the public services most affected by coronavirus, we are also providing: £3 billion to support NHS recovery, allowing it to carry out up to a million checks, scans and operations; over £2 billion to keep our transport arteries open, subsidising our rail network; more than £3 billion to local councils; and an extra £250 million to help end rough sleeping. Although much of our coronavirus response is UK-wide, the Government are also providing £2.6 billion to support the devolved Administrations in Scotland, Wales and Northern Ireland. Taken together, next year, public services funding to tackle coronavirus will total £55 billion.

Let me turn to the Office for Budget Responsibility’s economic forecasts. I thank the new chair, Richard Hughes, and his whole team for their work. The OBR forecasts that the economy will contract this year by 11.3%, the largest fall in output for more than 300 years. As the restrictions are eased, it expects the economy to start recovering and growing by 5.5% next year, 6.6% in 2022 and then 2.3%, 1.7% and 1.8% in the following years. Even with growth returning, our economic output is not expected to return to pre-crisis levels until the fourth quarter of 2022. The economic damage is likely to be lasting. Long-term scarring means in 2025, the economy will be around 3% smaller than expected in the March Budget.

The economic impact of coronavirus and the action we have taken in response means that there has been a significant but necessary increase in our borrowing and debt. The UK is forecast to borrow a total of £394 billion this year, equivalent to 19% of GDP—the highest recorded level of borrowing in our peacetime history. Borrowing falls to £164 billion next year and to £105 billion in ’22-’23, then remains at around £100 billion, or 4% of GDP, for the remainder of the forecast. Underlying debt, after removing the temporary effect of the Bank of England’s asset purchases, is forecast to be 91.9% of GDP this year. Due to elevated borrowing levels and a forecast persistent current deficit, underlying debt is forecast to continue rising in every year, reaching 97.5% of GDP in ’25-’26.

High as these costs are, the costs of inaction would have been far higher. But this situation is clearly unsustainable over the medium term. We could only act in the way we have because we came into this crisis with strong public finances. We have a responsibility, once the economy recovers, to return to a sustainable fiscal position.

This is an economic emergency. That is why we have taken, and continue to take, extraordinary measures to protect people’s jobs and incomes. It is clear that those measures are making a difference. The OBR now states, as the Bank of England and the International Monetary Fund already have, that our economic response has protected jobs, supported incomes and helped businesses to stay afloat. It has said today that business insolvencies have fallen compared with last year, and the latest data shows the UK’s unemployment rate is lower than that of Italy, France, Spain, Canada and the United States.

We are doing more to build on our plan for jobs. I am announcing today nearly £3 billion for my right hon. Friend the Secretary of State for Work and Pensions to deliver a new three-year restart programme to help over a million people who have been unemployed for over a year to find new work. But I have always said: we cannot protect every job. Despite the extraordinary support we have provided, the OBR expects unemployment to rise to a peak, in the second quarter of next year, of 7.5%— 2.6 million people. Unemployment is then forecast to fall in every year, reaching 4.4% by the end of 2024.

Today’s statistics remind us of something else. Coronavirus has deepened the disparity between public and private sector wages. In the six months to September, private sector wages fell by nearly 1% compared with last year. Over the same period, public sector wages rose by nearly 4%. Unlike workers in the private sector, who have lost jobs, been furloughed, and seen wages cut and hours reduced, the public sector has not. In such a difficult context for the private sector, especially for those people working in sectors such as retail, hospitality and leisure, I cannot justify a significant across-the-board pay increase for all public sector workers.

Instead, we are targeting our resources at those who need it most. To protect public sector jobs at this time of crisis, and to ensure fairness between the public and private sectors, I am taking three steps today. First, taking account of the pay review bodies’ advice, we will provide a pay rise to over a million nurses, doctors and others working in the NHS. Secondly, to protect jobs, pay rises in the rest of the public sector will be paused next year. But, thirdly, we will protect those on lower incomes; the 2.1 million public sector workers who earn below the median wage of £24,000 will be guaranteed a pay rise of at least £250. What this means is that while the Government are making the difficult decision to control public sector pay, the majority of public sector workers will see their pay increase next year.

And we want to do more for the lowest paid. We are accepting in full the recommendations of the Low Pay Commission to increase the national living wage by 2.2% to £8.91 an hour; to extend this rate to those aged 23 and over; and to increase the national minimum wage rates as well. Taken together, these minimum wage increases will likely benefit around 2 million people. A full-time worker on the national living wage will see their annual earnings increase by £345 next year—compared with the position in 2016, when the policy was first introduced, that is a pay rise of over £4,000. 

These are difficult and uncertain economic times, so it is right that our immediate priority is to protect people’s health and their jobs, but we need to look beyond. Today’s spending review delivers stronger public services—our second priority. Before I turn to the details, let me thank the whole Treasury team, and especially my right hon. the Chief Secretary, for their dedication and hard work in preparing today’s spending review. Next year, total departmental spending will be £540 billion. Over this year and next, day-to-day departmental spending will rise, in real terms, by 3.8%—that is the fastest growth rate in 15 years. In cash terms, day-to-day departmental budgets will increase next year by £14.8 billion.

And this is a spending review for the whole United Kingdom. Through the Barnett formula, today’s decisions increase Scottish Government funding by £2.4 billion, Welsh Government funding by £1.3 billion and Northern Ireland Executive funding by £0.9 billion. The whole of the United Kingdom will benefit from the UK shared prosperity fund, and over time we will ramp up funding so that total domestic UK-wide funding will at least match EU receipts, on average, reaching around £1.5 billion a year. To help local areas prepare for the introduction of the UKSPF, next year we will provide funding for communities to pilot programmes and new approaches. And we will accelerate four city and growth deals in Scotland, helping Tay Cities, Borderlands, Moray and the Scottish islands create jobs and prosperity in their areas. 

          Our public spending plans deliver on the priorities of the British people. Today’s spending review honours our historic, multi-year commitment to the NHS. Next year, the core health budget will grow by £6.6 billion, allowing us to deliver 50,000 more nurses and 50 million more general practice appointments. We are increasing capital investment by £2.3 billion: to invest in new technologies; to improve the patient and staff experience; to replace ageing diagnostic machines such as MRI and CT scanners; and to fund the biggest hospital building programme in a generation, building 40 new hospitals and upgrading 70 more. We are investing in social care, too. Today’s settlement allows local authorities to increase their core spending power by 4.5%. Local authorities will have extra flexibility on council tax and the adult social care precept, which, together with £300 million of new grant funding, gives them access to an extra £1 billion to fund social care—and this is on top of the extra £1 billion social care grant we provided this year, which I can confirm will be maintained. 

          To provide a better education for our children, we are also getting on with our three-year investment plan for schools. We will increase the schools budget next year by £2.2 billion, so we are well on the way to delivering our commitment of an extra £7.1 billion by 2022-23.

Every pupil in the country will see a year-on-year funding increase of at least 2%, and we are funding the Prime Minister’s commitment to rebuild 500 schools over the next decade. We are also committed to boosting skills, with £291 million to pay for more young people to go into further education, £1.5 billion to rebuild colleges, £375 million to deliver the Prime Minister’s lifetime skills guarantee and extend traineeships, sector-based work academies and the National Careers Service, as well as improving the way the apprenticeships system works for businesses.

We are also making our streets safer. Next year, funding for the criminal justice system will increase by over £1 billion. We are providing more than £400 million to recruit 6,000 new police officers—well on track to recruit 20,000—and £4 billion over four years to provide 18,000 new prison places. New hospitals, better schools, safer streets—the British people’s priorities are this Government’s priorities.

Today’s spending review strengthens the United Kingdom’s place in the world. This country has always been and will always be open and outward-looking, leading in solving the world’s toughest problems. But during a domestic fiscal emergency, when we need to prioritise our limited resources on jobs and public services, sticking rigidly to spending 0.7% of our national income on overseas aid is difficult to justify to the British people, especially when we are seeing the highest peacetime levels of borrowing on record. I have listened with great respect to those who have argued passionately to retain this target, but at a time of unprecedented crisis, Government must make tough choices. I want to reassure the House that we will continue to protect the world’s poorest, spending the equivalent of 0.5% of our national income on overseas aid in 2021, allocating £10 billion at this spending review. Our intention is to return to 0.7% when the fiscal situation allows. Based on the latest OECD data, the UK would remain the second highest aid donor in the G7—higher than France, Italy, Japan, Canada and the United States. And 0.5% is also considerably more than the 29 countries on the OECD’s Development Assistance Committee, which average just 0.38%.

Overseas aid is, of course, only one of the ways we play our role in the world. The Prime Minister has announced over £24 billion of investment in defence over the next four years—the biggest sustained increase in 30 years—allowing us to provide security not just for our country, but around the world. We are investing more in our extensive diplomatic network, already one of the largest in the world, and providing more funding for new trade deals. We should, however, judge our standing in the world not just by the money we spend, but by the causes we advance and the values we defend.

If this spending review’s first priority was getting the country through coronavirus and its second was stronger public services, then our final priority is to deliver our record investment plans in infrastructure. Capital spending next year will total £100 billion— £27 billion more in real terms than last year. Our plans deliver the highest sustained level of public investment in more than 40 years —once-in-a-generation plans to deliver once-in-a-generation returns for our country.

To build housing, we are introducing a £7.1 billion national home building fund, on top of our £12.2 billion affordable homes programme. We will deliver faster broadband for over 5 million premises across the UK, better mobile connectivity with 4G coverage across 95% of the country by 2025, the biggest ever investment in new roads, upgraded railways, new cycle lanes and over 800 zero-emission buses. Our capital plans will invest in the greener future we promised, delivering the Prime Minister’s 10-point plan for climate change. We are making this country a scientific superpower, with almost £15 billion of funding for research and development, and we are publishing today a comprehensive new national infrastructure strategy. To help finance our plans, I can also announce that we will establish a new UK infrastructure bank. Headquartered in the north of England, the bank will work with the private sector to finance major new investment projects across the United Kingdom, starting this spring.

I have one further announcement to make. For many people, the most powerful barometer of economic success is the change they see and the pride they feel in the places we call home. People want to be able to look around their towns and villages, and say, “Yes, our community—this place—is better off than it was five years ago.” For too long our funding approach has been complex and ineffective, and I want to change that. Today I am announcing a new levelling-up fund worth £4 billion. Any local area will be able to bid directly to fund local projects.

The fund will be managed jointly between the Treasury, the Department for Transport and the Ministry for Housing, Communities and Local Government, taking a new, holistic, place-based approach to the needs of local areas. Projects must have real impact, they must be delivered within this Parliament and they must command local support, including from their Member of Parliament. This is about funding the infrastructure of everyday life: a new bypass; upgraded railway stations; less traffic; more libraries, museums and galleries; better high streets and town centres. This Government are funding the things that people want and places need.

Today I have announced huge investment in jobs, public services and infrastructure, yet I cannot deny that numbers alone can ring hollow. They stand testament to our commitment to create a better nation, but on their own they are not enough to create one. When asked what our vision for the future of this country is, we cannot point to a shopping list of announcements and feel that the job is done. So as we invest billions in research and development, we are also introducing a new immigration system, ensuring that the best and brightest from around the world come here to learn, innovate and create. As we invest billions in the building of new homes, we are also simplifying our planning system to ensure that beautiful homes are built where they are needed most. As we invest billions in the security of this country, we are also defending free speech and democratic rule, proving that our values are more than just words. And as we invest billions in public services, we are also protecting the wages of those on the lowest incomes and supporting jobs, because good work remains the most rewarding and sustainable path to prosperity.

The spending review announced today sets us on a path to deal with the material matters of Government and it is a clear statement of our priorities, but encouraging the individual and community brilliance on which a thriving society depends remains, as ever, a work unfinished. We in government can set the direction. Better schools, more homes, stronger defence, safer streets, green energy, technological development, improved rail and enhanced roads: all investments that will create jobs and give every person in this country the chance to meet their potential. But it is the individual, the family and the community that must become stronger, healthier and happier as a result. This is the true measure of our success. The spending announced today is secondary to the courage, wisdom, kindness and creativity it unleashes. These are the incalculable but essential parts of our future, and they cannot be mandated or distributed by Government. These things must come from each of us, and be shared freely, because the future—this better country—is a common endeavour.

Today, Government have funded the priorities of the British people, and now the job of delivering them begins. Mr Speaker, I commend this statement to the House.

[Mr Speaker]

This is an important statement, which is why it has run much longer than usual, but that was agreed with the Chancellor. Obviously, I have divided up the time to give an increase to the other parties as well. I call the shadow Chancellor of the Exchequer.

--- Later in debate ---

[Sir Peter Bottomley (Worthing West) (Con)]

The House will be glad that the Chancellor has met the needs of the poorest, that he is going to maintain the increase to the state pension and that he is ensuring that people get opportunities to get back into work if they have been out of it. He talks about the £250 minimum for the lowest-paid people in the public sector. May I ask him whether that includes people working in local government or just national Government? That would be useful to know.

There will be a welcome for the increase in spending for schools. There are also many other things that people will think are sensible and that could—or should—have been done as the Labour Government went through the crisis in 2008, when they also implemented a public sector pay freeze. May I put it to him that it would be incredible if the Independent Parliamentary Standards Authority were to force a pay increase on Members of Parliament when others do not get it? One way or another, will the Government—and perhaps you, Mr Speaker —talk to IPSA and ensure that that does not happen? I have the view that MPs’ pay should only be adjusted after a general election; that may be a minority view, but I think it would be wrong for us to have pay forced on us when others cannot get a pay increase.

Let me turn to overseas aid. When the Departments were merged, the Foreign Secretary said that the 0.7% figure would be maintained. My right hon. Friend the Chancellor was elected in 2015, as I was, under a commitment to meet 0.7%. We were re-elected in 2017, and the only difference in 2019 was that the word “proudly” was put in front of that commitment. I am proud of that commitment. I will work with anyone across the House to make sure that a change of percentage does not happen. Obviously, with our GNP coming down by 10%, the amount that goes on aid will come down automatically. I fight to maintain the pledge that the Prime Minister, the Chancellor, the Foreign Secretary and I made at the last general election.

[Mr Speaker]

I do not like being brought into the situation on pay. What I would say is that there is no decision on pay; there is no award to MPs. There is a big mistake out there somehow that there is an amount that has been given. Let me reassure the Father of the House that that is not the case. It will not even be looked at til next year—probably later, towards Easter.

[Rishi Sunak]

I am grateful to my hon. Friend for his thoughtful and powerful contribution. I respect what he has to say on aid. He is right about the language that was used. He will know the extraordinary circumstances that this country and this Government are grappling with. In order for us to meet our many other commitments and deliver on the British people’s priorities, we have had to make difficult decisions. Of course, it is something that I regret that we have to do, but I believe it is the right decision so that we can keep delivering on the priorities of the people at what is an enormously challenging time.

I turn briefly to my hon. Friend’s other questions. On local government employees, he will know that those pay levels are not mandated by central Government, and local government will typically make its own decisions. With regard to the social care workforce, which I know he also cares about, he will know that many of those workers are on the national living wage and will benefit from the 2.2% uplift—£345—that we have accepted.

On my hon. Friend’s last point, I can tell him that the Chancellor of the Duchy of Lancaster wrote on behalf of the Government to IPSA in advance of this statement to inform it of the Government’s approach to public sector pay and to ask it to take that into consideration when it decides what it would like to do. Obviously, it is an independent body, but we have expressed our views in the light of the pay policy that we have announced today.