Budget Resolutions

Lucy Frazer Excerpts

1st reading: House of Commons
Tuesday 28th November 2017 Commons Chamber

[Rebecca Long Bailey]

I thank my hon. Friend and neighbour for her contribution, and she is correct in what she says. I do not think we saw anything in the industrial strategy that goes any way towards rebalancing the regional divides in investment spending in R and D. Critically, a Labour Government would also ensure that the UK maintains our leading research role by seeking to stay part of Horizon 2020 and its successor programmes after we leave the EU. As with so many areas outlined in the White Paper, the UK’s research role is compromised by the Government’s reckless and cliff-edge approach to Brexit.

Let me turn to the second foundation: people. Key policies include establishing a technical education system, investing £406 million in maths, digital and technical education, and creating a national retraining scheme with an investment of £64 million. Again, the intent is good, but let us remember that the Government cut £1.15 billion from the adult skills budget from 2010 to 2015. Similarly, on first analysis the £406 million appears to be the sum of the amounts the Government have already spent on maths, computing and digital skills. The reality is that the Chancellor has overseen the steepest cuts to school funding in a generation, at £2.7 billion since 2015, according to the National Audit Office, and a cap on public sector pay that has seen the average teacher lose £5,000 since 2010. [Interruption.] Unfortunately, the long term results of that are clear, and I do not know why Government Members are protesting. The Government have missed their recruitment targets five years running, and for two years in a row more teachers have left the profession than joined. The policies contained in the White Paper are a start, but they are not even enough to undo the damage since 2010, let alone form part of a decent industrial strategy.

[Lucy Frazer (South East Cambridgeshire) (Con)]

rose—

[Rebecca Long Bailey]

I am going to make some progress.

The strategy identifies infrastructure as the third foundation of productivity and outlines £31 billion of investment through the national productivity investment fund, with some ring-fenced for the necessary infrastructure for electric vehicles and boosting digital infrastructure. As I outlined yesterday, TUC analysis shows that that £31 billion increases investment to just 2.9% of GDP, whereas the average spent on investment by leading industrial nations in the OECD is at least 3.5%. In addition, it is unclear whether the extra £7 billion announced in last week’s Budget is new money at all, rather than a re-allocation from other areas of capital spend which was previously budgeted—it would help if those on the Government Front Bench listened to this question, as it is important. Perhaps the Secretary of State can confirm the meaning of footnote 3 in table 2.1 of the Budget Red Book, because it does not appear to be very clear.

Key policies to improve the business environment are sector deals; a £2.5 billion investment fund incubated in the British Business Bank, as announced in the Budget; and yet another review of encouraging growth in small and medium-sized enterprises. That is, sadly, another case of lacking ambition—

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[Lucy Powell (Manchester Central) (Lab/Co-op)]

It is a pleasure to follow the hon. Member for Mid Norfolk (George Freeman). Perhaps he could take the Prime Minister to the public sector leadership academy now that he has a bit of time on his hands.

The key issue of the Budget is productivity, but that is nothing new at all. The productivity gap is now widening. An average worker in Germany produces the same output in four days as we produce in five. The issue is not how we can stretch those who are operating at the high end, although that is a good thing, but that we have an extremely long tail of low skills, with too many people working below their potential and, often, their skill set. That is set to get even worse with automation, with many more millions of low-skilled workers chasing fewer and fewer jobs. There is very little in the Budget to address this issue, which really does need to be the key driver of Government policy.

[Lucy Frazer]

The hon. Lady says that there is nothing in the Budget about that, but what about T-levels, maths and computer science training, and adult learning? There is a whole raft of measures to upskill our workers.

[Lucy Powell]

I will come back to those issues later in my speech. There are some advances, but they are not backed by resources. We have seen huge cuts in post-16 education over the past seven years, which has meant that the gap has widened further and further.

As the Social Mobility Commission again stated today, we do know how to pull up this long tail because we are doing so in London. It requires a pool of talented teachers, resources, and a clear local and national strategy. There was nothing in the Budget on the key issue of teacher retention and recruitment, which is now reaching a crisis point, and nothing on teacher pay or teacher workload. I could not believe it, but nothing was said on school budgets.

[Lucy Frazer]

Will the hon. Lady give way.

[Lucy Powell]

Very quickly—

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[Lucy Frazer (South East Cambridgeshire) (Con)]

I have been disappointed by Opposition Members, who have failed to recognise a number of facts. They have criticised the gender pay gap when it has actually narrowed. They have criticised school funding without recognising that the fairer funding deal puts an extra £1.3 billion into our schools. They have suggested more spending without being able to respond to an intervention asking what the interest payment bill would be on increased borrowing of a trillion pounds. The Opposition look only at spending; they do not see the optimistic opportunities presented by our future.

Our great country has been a leader on the world stage for decades. We have been the choice of location for foreign investment. We are a global economic power at the same time as being in the top 20 happiest places to live in the world. We are now at a crossroads, forging new relationships with the EU and the rest of the world while, as the Secretary of State for Business, Energy and Industrial Strategy pointed out, an industrial revolution sweeps across our globe, and we start from a good place. Out of 137 countries, we are ranked second for the quality of scientific research institutions, third for the capacity to attract talent, fourth for technological readiness and 12th for overall innovation. The measures set out in the Budget will ensure that we continue to be at the cutting edge of technology, innovation and business growth, with £31 billion for the national productivity investment fund, £2.3 billion for investing in R and D and £500 million for a range of initiatives from artificial intelligence to 5G and full-fibre broadband.

However, as we progress through the technological revolution, we must remember that it is equally as important to recognise and value the skills of those who serve us in our communities: those who teach us, nurse us and protect us. The Secretary of State rightly pointed out that we have an ageing population that we need to care for, and the answer is not just technological; we need more people in the caring professions. I therefore welcome the Chancellor’s announcement that he will put more money into the NHS and his offer to fund increased pay awards. We also need to ensure that we improve our skills base, and the Budget includes £40 million to train maths teachers across the country, tripling the number of trained computer science teachers. I welcome the Budget and the industrial strategy, but we must also remember to embrace the new world.

Finance (No. 2) Bill

Lucy Frazer Excerpts

Committee: 1st sitting: House of Commons
Monday 18th December 2017 Commons Chamber

[Peter Dowd]

In short, no. The Institute for Fiscal Studies has made no link whatsoever between the rate of corporation tax and tax take. This is one of these myths that have been presented to the House time after time, which in the main we have tried to ignore, but at some point we have say that it is complete and utter claptrap, not to put too fine a point on it.

The banking surcharge, supposedly introduced to compensate the taxpayer for this levy loss, will not come close to making good the difference. The Chancellor still has a choice though: he could reverse the cut to the bank levy and end the crisis in our children’s services instead.

It is increasingly clear that the oldest political party has run out of steam.

[Lucy Frazer (South East Cambridgeshire) (Con)]

Does the hon. Gentleman therefore think that France’s recent proposal to cut taxes for higher earners in order to woo bankers over to France is an incorrect policy, and that France has got it wrong because low taxes do not encourage investment and growth in a country?

[Peter Dowd]

The only thing that is going to attract people over to France is the shambles that the Government have made of their Brexit negotiations. That is a significantly bigger factor than, for example, the banking levy.

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[Jonathan Reynolds]

This country is in the grip of a severe housing crisis that the Conservatives have allowed to spiral out of control over the past seven years. Making sure that people have a roof over their heads and can raise their families somewhere safe, decent and affordable is more than just a matter of sound public policy—it is surely a yardstick of a decent society. At the moment, we are falling short of this yardstick to a degree that is shameful for one of the world’s most affluent nations.

Now, after seven years of Tory government, the Government say that they have noticed the problem, yet it is on the brink not of being resolved but rather exacerbated. The Chancellor’s autumn Budget, from which the measures in the Bill are drawn, falls woefully short in addressing the scale of what is needed. Since 2010, house building has fallen to its lowest level since the 1920s, rough sleeping has risen year on year, rents have risen faster than incomes and there are almost 200,000 fewer homeowners in the UK.

[Lucy Frazer]

Can the hon. Gentleman confirm whether Labour built houses when it was in office or house building fell when Labour was in office?

[Jonathan Reynolds]

Labour’s record in office is 2 million more homes, 1 million more homeowners, and—something that is particularly important to me as a Labour councillor during some of that time—an incredible investment in social housing. In local government, we used to ask whether we could ever fulfil the backlog in repairs that the Thatcher and Major Governments had created, but we did, and it made a tremendous difference to people’s lives.

The one headline-grabbing move that the Chancellor made in the autumn Budget was the abolition of stamp duty land tax for first-time buyers up to the value of £300,000. I acknowledge that this was a Labour policy included in our manifesto for the June 2017 general election, but we were very clear in that manifesto that the measure should be proposed only if there were accompanying measures to increase supply. Without these, stamp duty land tax cuts risk further inflating a housing bubble that is snatching the idea of home ownership out of reach for the younger generation.

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[Jonathan Reynolds]

No, we are not, as I have just explained, but there have to be measures that genuinely increase supply. I will explain to the hon. Lady that the measures in this Budget do not in any way contribute to that, and we will get on to the Office for Budget Responsibility’s definition.

[Lucy Frazer]

The Budget states that 300,000 houses will be built every year. That is a measure to increase house building, so will the hon. Gentleman commit to supporting the stamp duty measure?

[Jonathan Reynolds]

Members have become accustomed to the fact that the number of homes that the Government claim to build is not always the actual number that are built. I will get to some of that record of failure later in my speech.

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[Jonathan Reynolds]

Absolutely. A combination of policy measures—not just the failure on new housing completions, but a range of other measures—has contributed to this toxic situation. We see it perhaps most visibly in Greater Manchester—I live there and represent part of it—than in any other part of the country, and thank goodness that we in Greater Manchester have a Labour Mayor in Andy Burnham who is so determined to make a difference on this matter. If Labour was in power, we would set up a taskforce, led by the Prime Minister, to end this, and we would start by setting out plans to make available at least 4,000 homes for people with a history of rough sleeping.

The homelessness statistics obviously include the hundreds of families who tragically lost their homes in the Grenfell Tower disaster in June, four-fifths of whom are still living in temporary accommodation. Although Labour welcomes the additional funding for mental health services for those affected by Grenfell, we have profound concerns about the fact that no new money has been allocated for fire safety throughout the country. The Government ignored calls to fit sprinklers to all social housing tower blocks in 2013, after the disastrous and fatal events that happened at Lakanal House and Shirley Towers, so it remains the case that only 2% of tower blocks in the UK have sprinklers installed. That figure should be of serious concern to us all.

We can see that the measures included in the Bill fall far short of what is needed to fix the housing crisis in Britain. We want in particular to discuss one measure that the Opposition are concerned may be being used as a fig leaf for just another cut. This is in regard to clause 8, the income tax exemption for the armed forces accommodation allowance, which the Minister mentioned. The explanatory note to the clause states that this is

“to allow members of the armed forces to give up their entitlement to accommodation in exchange for an allowance to be used to rent or maintain accommodation in the private market.”

Labour is concerned that this manoeuvre is designed to force more servicemen and women into the private rental sector, as part of a Government shift towards selling off the military housing stock in which armed forces personnel would ordinarily be housed.

[Lucy Frazer]

The hon. Gentleman has mentioned that Andy Burnham is the Mayor of the area he represents. Does he remember that, in 2010, when Andy Burnham was standing for the leadership, he said:

“These issues are important, particularly stamp duty as it stands in the way of young people getting on in life”?

[Jonathan Reynolds]

I commend the hon. and learned Lady for googling that so fast. I do not think that Andy Burnham’s resolution to tackle homelessness should be laughed at; it is admirable. As someone who has lived in Greater Manchester for nearly 20 years now, I see the scale of the social and urban decay on the streets around us. Anyone who travels to Manchester and moves a short distance in any direction from Manchester Piccadilly station will see what an appalling state of affairs we have reached. It is simply the case that every time the Conservatives are in power, they increase homelessness. For me, that is the most visible sign of a Conservative Government in office, and I commend any politician—Andy Burnham is leading on this for us in Greater Manchester—who makes the difference.