Income Tax (Charge)

Lucy Frazer Excerpts

Thursday 28th October 2021 Commons Chamber

[The Financial Secretary to the Treasury (Lucy Frazer)]

It is a privilege to close this debate on behalf of the Government. As we come out of the biggest recession in 300 years and emerge from the pandemic, it is critical that we as a Government support our people and our businesses, and this has rightly been the subject matter of today’s debate.

This is a Budget that delivers a stronger economy for the British people. It is a clear expression of what this Government stand for and what we are determined to achieve: investment in a more innovative, high-skilled economy, because that is the only path to individual prosperity; world-class public services, because they are essential to our day-to-day living; backing business, because our future cannot be built by the Government alone; help for working families with the cost of living, because we will always give families the support they need; and levelling up, because opportunity should never be limited to the few and should not depend on where a person was born or who their parents are. Our goal is an economy fit for a new age of optimism, and this Budget is our foundation.

The right hon. Members for Doncaster North (Edward Miliband) and for Wolverhampton South East (Mr McFadden) and the hon. Member for Brent North (Barry Gardiner) talked about investments over the past 11 years, stagnation and the lack of growth. I wonder whether they remember the financial circumstances in which their party left the country when it left office, as my hon. Friend the Member for Crewe and Nantwich (Dr Mullan) pointed out. As they talked about economic stability and credibility, I wondered whether they had spotted that, under its current leader, Labour has made more than £400 billion-worth of spending commitments, in opposition to the Government’s responsible decisions to pay for our plans, yet announced just £5 billion-worth of proposed revenue rises, showing that it has no plans beyond reckless spending and no plans to deliver responsible public finances. As my hon. Friend the Member for Ipswich (Tom Hunt) said, it is important that an elected Government have economic credibility, and that rests with this Government.

The right hon. Member for Wolverhampton South East said the Government’s plan will only increase taxation. I wonder whether he was listening to the Chancellor yesterday when he talked about his fiscal rules, whether he heard the Chancellor’s commitment to cut taxes and whether he heard that the first step is a cut of the taper rate for those on the lowest incomes.

A year ago this country was experiencing the deepest recession on record, but thanks to the Chancellor’s plan for jobs, which the Office for Budget Responsibility yesterday called “remarkably successful,” we are fast recovering. The OBR expects the economy to return to pre-pandemic levels at the turn of the year, earlier than it thought in March. It has revised anticipated growth up every year for the next five years, and it has revised expectations on unemployment down to 5.2%, with more than 2 million fewer people likely to be out of work than was predicted at the height of the pandemic. Wages are also rising. In other words, the decisions this Government took during the pandemic were the right ones for the economy and for the British people.

The subject of today’s debate is support for people and businesses, and that support is clear to see. I start by addressing our support for people, and particularly for those on low incomes. It was a Conservative Government who introduced the national living wage in 2016, and the Budget increases it by 6.6% to £9.50 an hour, raising the pay of over 2 million of the lowest-paid workers. The hon. Member for Glasgow Central (Alison Thewliss) said that that is not enough, but I wonder whether she realises that the rate is set by the Low Pay Commission, and that is what we have accepted.

[Alison Thewliss]

Does the Minister accept that she is talking about not a real living wage but a minimum wage? The real living wage will be set by the Living Wage Foundation on 15 November. Will she match that?

[Lucy Frazer]

As the hon. Lady knows, we are on a trajectory to get the national living wage to a higher rate. We need to increase the national living wage, as we have by 6.6% this time round, and it will go up again in time. She will have heard Conservative Members asking how it will work for the businesses that are paying it, so there is a balance to be struck. This Government are progressing on that trajectory to the right path.

We are also reducing the universal credit taper rate from 63% to 55%, which, combined with a £500 increase in the work allowance, means an effective tax cut worth more than £2 billion a year. The hon. Member for Glasgow Central said that that would not help families, so let me give an example: a single mum living in Darlington who works full time on the national living wage would see a £1,200 increase in her pay by December, and that would be £1,900 in April when the new national living wage comes in. My hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) acknowledged the transformative effect that the increases to the national living wage and the universal credit taper will have for many of his constituents. I am grateful for the constructive comments made by the hon. Member for Ceredigion (Ben Lake) in welcoming the national living wage and public sector pay increases.

With fuel prices at their highest level in eight years, we are not prepared to add to the squeeze on families and small businesses, which is why the Budget freezes fuel duty for the 12th year in a row. The hon. Member for Newport East (Jessica Morden) is wrong to say that we are not supporting people with their gas bills: in addition to the fuel-duty freeze, we have the warm homes discount, which supports 2.2 million people, who receive a £140 rebate on their bills. Like the hon. Member for Cardiff North (Anna McMorrin), the hon. Member for Newport East called for a cut to VAT on fuel bills—something the Labour party calls for—but what would that do? What would happen if we cut VAT on fuel? Such a cut would apply for everyone, across the board, so who would it help as well as the low-paid? It would help the wealthy. I am quite surprised to hear Opposition Members suggest that.

[Barry Gardiner]

Does the Minister recognise that it is the poor who pay the largest portion of their disposable income in fuel costs? She is absolutely right that such a cut would, of course, be of greater benefit in monetary terms to the wealthy, who tend to spend more on energy, but in terms of the difference made to lives, 5.7% of the disposable income of the very poorest goes on energy costs.

[Lucy Frazer]

The hon. Member makes a valid point and I absolutely recognise that, but the way to solve that problem is not to give a tax benefit to a large group of people who simply do not need it, but to give discrete, directed support to those who do need it. That is what this Government have done: the hon. Member will know that six weeks ago we announced £500 milllion to support the most vulnerable families when they absolutely need it.

Members from all parties mentioned the support for families and for family hubs and welcomed the measures in the Budget. I was pleased to hear the support from my hon. Friends the Members for Don Valley (Nick Fletcher) and for Newton Abbot (Anne Marie Morris). My hon. Friend the Member for Telford (Lucy Allan) made a good speech about how important it is to support struggling families, and I was interested to hear what my hon. Friend the Member for Crewe and Nantwich said about the importance of not only supporting young families financially—we have heard how important it is to support recent mums and dads—but giving them emotional security as well.

I was disappointed to hear the shadow spokesperson, the right hon. Member for Wolverhampton South-East, speak about our lack of support for education, because we have invested significantly in education, not only in this Budget but in previous ones. This Budget provides a wide variety of support through the education system. We are increasing the core funding for schools, with an additional £1,500 per pupil, and providing catch-up funding, with an additional £1.7 billion bringing the sum up to £5 billion, In addition, as my hon. Friend the Member for Ipswich said, we are increasing the funding for SEND provision, with an extra 30,000 places for pupils with high needs. Through our new Multiply programme, we are helping school leavers who did not get the maths skills that they ought to have got at school.

[Catherine West]

There are some really good measures in the education package, but does the Minister not accept that returning us to 2010 expenditure on education when we have more children to educate, a bigger population and a need to look at the workforce as well, does not really help us in terms of the productivity puzzle, which is key to making the Brexit challenge work?

[Lucy Frazer]

The £4.7 billion investment in core school funding will be welcomed by schools and will enable them to support their students over the coming years. I would like to take this moment to thank all those teachers across the country who have committed so much over the course of the past 18 months in very difficult and challenging circumstances. I know that, although schools are back, students have lost time and there is a huge amount of work to do. Our one-to-one tuition and other such measures will help with that. The mark of a good Budget is one that makes a difference to people’s lives, in many different ways, and I hope that this Budget makes that difference.

Let me turn now to skills. Supporting people does not just mean cutting their tax bill. If we want to build a stronger economy and spread opportunity, we need to do more to boost people’s skills. I have talked about education, but, in addition, we are spending £3.8 billion over the Parliament, with more hours learning for 16 to 19-year-olds, expanded T-levels, more traineeships, more Institutes of Technology funding for the lifetime skills guarantee, and a large increase for apprenticeships by the end of the Parliament. I was very pleased to hear the hon. Member for Hornsey and Wood Green (Catherine West) welcoming our boot camps, which are increasing skills for people across the country.

Every Government should aspire to provide greater life chances for future generations, but this Government not only have the ambition, but have already shown through their plan for jobs that we can level up and we will continue to do so with this Budget.

[Anna McMorrin]

Will the hon. and learned Lady give way?

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[Lucy Frazer]

I will press on at the moment.

Just as the Budget seeks to help working families, so it supports businesses as they continue to recover from the pandemic, with a particular focus on encouraging them to invest. Small businesses are the lifeblood of the British economy. Their contribution to this country, day in, day out, is extraordinary, and we want to support businesses to grow, so the Budget introduces changes such as the new 50% relief for eligible retail, hospitality and leisure properties—a tax cut worth almost £1.7 billion. The Budget also cancels next year’s planned increase in the business rates multiplier—a tax cut worth £4.6 billion for businesses. Taken together, the Budget cuts to business rates amount to support of £7 billion over the next five years. I am really pleased that that was welcomed by my hon. Friend the Member for Newton Abbot. The right hon. Member for East Ham (Stephen Timms) suggested that this was not significant support, but in fact it is the largest support by way of business rates over a period of time, save for the coronavirus measures.

I would like to address one point that was raised by the hon. Member for North Tyneside (Mary Glindon). There was a suggestion that freeports—one of our measures that significantly support business—were not generating economic activity. Let me say that we are already seeing evidence of new investments at freeports. DP World, for example, is investing £300 million at the Thames freeport.

Let me turn now to investment. We are boosting innovation by investing in our world-leading research and development sector, maintaining our target to increase annual public R&D investment to £22 billion, and spending £20 billion every year by 2024-25. On top of initiatives such as Help to Grow and the Future Fund, we are increasing regional financing to help businesses innovate and grow, and providing £1.6 billion for the British Business Bank to expand the UK-wide regional angels programme and establish new regional funds. As my hon. Friend the Member for Sedgefield (Paul Howell) recognised, it is extremely important to improve our science education and investment, and that is exactly what we are doing. We want this country to be the most exciting and dynamic country in the world for business, and it will be.

The position in relation to the devolved Administrations was mentioned by several Members, including the hon. Members for Merthyr Tydfil and Rhymney (Gerald Jones) and for Pontypridd (Alex Davies-Jones), and my right hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell). Some of them mentioned funding for the coal tips in Wales. I point out that in this Budget the devolved Administrations have had the biggest funding settlement ever, with the biggest annual block grants in real terms of any spending review settlement since devolution in 1998. I do hope, as the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) said, that that money is spent well.

[Alex Davies-Jones]

The Minister mentions the block grant that is given to the devolved nations, but surely she and the Government recognise that the £600 million needed for the coal tips legacy cannot be paid for by the Welsh Government alone. It was the UK that benefited from those coal tips, so it cannot be for the Welsh Government to pay for the legacy on their own, especially when it predates devolution.

--- Later in debate ---

[Lucy Frazer]

As the hon. Member knows, these matters can be dealt with through devolution. As I mentioned, there is a significant funding settlement coming the way of the devolved Administrations; obviously, it is up to them how they spend that money.

As the country emerges from the worst economic shock that we have ever seen, this Government choose to invest in people, in skills, in innovation—in our future. The Budget and spending review begin to deliver the new economy and optimism of which the Chancellor spoke yesterday, with a pay rise for over 2 million people, a £2 billion tax cut for the lowest paid, the biggest business rates tax cut in 30 years and the largest real-terms increase in departmental spending this century. This Budget levels up to a higher wage, higher skilled and higher productivity economy. It is a Budget that will be measured by the difference that it makes to people’s lives across the country. I commend it to the House.

Ordered, That the debate be now adjourned.—(Scott Mann.)

Debate to be resumed Monday 1 November.

[Mr Deputy Speaker (Mr Nigel Evans)]

I thank every Member who participated in the debate, because everybody turned up for the wind-ups. We will pause briefly as those who wish to leave the Chamber do so, before I call the hon. Member for Easington (Grahame Morris) to present the petition.

Oral Answers to Questions

Lucy Frazer Excerpts

Tuesday 12th December 2017 Commons Chamber

[Greg Clark]

I certainly am. As the hon. Gentleman knows, throughout this process we have been absolutely determined to send a clear message to Boeing and to the US Administration that this action is unfair. Its effects on Belfast are intolerable. I will have further conversations later this week to continue to press the case with all the parties concerned.

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

I recently visited the Cambridge biomedical campus, which brings together academia, business and healthcare. Does the Minister agree that this is important collaboration, which will help boost productivity, improve our economy and create jobs for the future?

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.

Tuition Fees

Lucy Frazer Excerpts

Wednesday 19th July 2017 Commons Chamber

[Angela Rayner]

I absolutely agree with my hon. Friend. This was a really hot topic during the general election. I believe that the Opposition have the best interests of young people at heart, and the Government really need to listen to where the population are on this particular issue.

The current plans are all part of a pattern of behaviour from this Government. They tripled tuition fees to £9,000. They abolished maintenance grants for students, meaning that the poorest students will take on the most debt. They promised, when they tripled tuition fees, that the threshold at which graduates repay their student debts—it is currently £21,000—would rise in line with earnings. In fact, the then Universities Minister said:

“We will increase the repayment threshold to £21,000, and will thereafter increase it periodically to reflect earnings.”—[Official Report, 3 November 2010; Vol. 517, c. 924.]

They broke that promise as well. While tuition fees continue to rise, the repayment threshold remains frozen, hitting graduates on lower salaries each and every year.

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

The hon. Lady refers to broken promises. Will she tell us which party stated in 2001 that it would not introduce top-up fees because it had legislated against them, and then introduced them in 2004?

[Angela Rayner]

The hon. and learned Lady will know that when we introduced tuition fees and dealt with that issue, we invested considerably and increased the amount of maintenance grants and support on offer to poorer students. Recently, even Lord Adonis, the architect of those tuition fees, called fees a

“Frankenstein’s monster of £50,000-plus debts for graduates on modest salaries who can’t remotely afford to pay back these sums while starting families”.

Oral Answers to Questions

Lucy Frazer Excerpts

Tuesday 14th March 2017 Commons Chamber

[Greg Clark]

The hon. Lady makes a very good point. If we are to take advantage of the opportunities that exist, we need to upgrade our technical education. That is why in last week’s Budget the Chancellor made such a clear commitment, prominent in the industrial strategy, to transform the level of technical education, including to increase by 50% the hours of tuition that are available. Cyber-security is one of the areas in which I would expect that to be applied.

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

20. I welcome the £90 million that the Chancellor has given in the Budget for PhD places. Has the Secretary of State determined how they will be distributed and whether the academically excellent area of Cambridgeshire will benefit from this funding?

[Greg Clark]

Yes. I would expect all competitive areas to make a bid for these places. The University of Cambridge and Anglia Ruskin University in Cambridgeshire, and other institutions more broadly across the country, will be in a good position to benefit from that.

Oral Answers to Questions

Lucy Frazer Excerpts

Tuesday 13th December 2016 Commons Chamber

[Jesse Norman]

There has been no special deal for Nissan or any other part of the motor industry. Whatever arrangements are made to support different sectors of the UK economy are fully transparent. The general picture is that we are proceeding vigorously and with some care towards a rather attractive destination.

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

16. Superfast broadband is essential to many small businesses. Does the Minister agree that it is very disappointing that many villages in my constituency of South East Cambridgeshire do not have connectivity and face delay in getting it? Will he join me in encouraging and supporting further connectivity across the region?

[Jesse Norman]

My hon. and learned Friend is right. She will know that I have been a pretty tireless campaigner for superfast broadband, especially in relation to BT and Openreach. I agree with her about the importance of broadband. The autumn statement announced a £1 billion package for fibre and 5G connectivity, prioritising business connections across the UK. That follows the superfast broadband programme, which is due to deliver 91% coverage in South East Cambridgeshire by mid-2017 and a new universal service obligation.

Oral Answers to Questions

Lucy Frazer Excerpts

Tuesday 13th September 2016 Commons Chamber

[Greg Clark]

I would be interested in the support of the Labour party for promoting British business around the world. The hon. Gentleman will know, from our previous work on local growth, that he will always have a willing ear and assistance from me in doing that. He was kind enough to welcome me; I welcome the Opposition Front Bench team. The hon. Member for Hemsworth (Jon Trickett) was my shadow in my role at the Department for Communities and Local Government. He has followed me here—perhaps he is not so much a shadow as a stalker, but I regard it as flattery. [Laughter.]

As I said in my initial answer, relationships are important. We can exchange letters and bits of paper, but it is important that we get to know well our partners around the world. I have done that and my colleagues have done that. As I said earlier, I visited our investors and manufacturers in Japan and India. I will continue to do so.

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

23. Cambridgeshire is a net contributor to the Treasury, with 20,000 businesses generating revenues of over £30 billion. As local politicians, we have had cross-party meetings with business leaders about the implications of Brexit for our local economy. Will the Secretary of State visit the Cambridge Science Park in my constituency to discuss the implications?

[Greg Clark]

As my hon. Friend knows, I am a frequent and enthusiastic visitor to Cambridge. One of the important features of our industrial strategy is to have a clear recognition of the contribution and local leadership that different places bring. I have appointed the Minister for Universities, Science, Research and Innovation, my hon. Friend the Member for Orpington (Joseph Johnson), as the lead liaison for Cambridge, but I will of course be very happy to visit myself.