Budget Resolutions and Economic Situation
Max Wilkinson Excerpts(1 week, 6 days ago)
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Dame Meg Hillier
The hon. Gentleman raises quite a detailed point, but we know that AI can add about 0.2% to productivity in the economy overall. I do not have direct figures for the NHS, but my sister Committee—the Health and Social Care Committee, ably led by the hon. Member for Oxford West and Abingdon (Layla Moran)—will no doubt be looking at these issues. As he knows, the Committee corridor is examining the power of AI, covering both the costs and the opportunities, and I am sure the House will continue to discuss the opportunity to improve productivity in various guises and to scrutinise the Government very robustly on that.
What is interesting about the Budget is that some of its measures are for today, but it is clearly rooted in longer-term reforms, which I welcome, because we need to be thinking about the long term. One of those measures is devolution, and I am a firm believer that power should be devolved to the most appropriate level. In fact, when I was a baby councillor with the now chief of staff to the Prime Minister back in 1994, he and I were both responsible for devolving powers to areas within pram-pushing distance. I should say for younger Members that this was before the days of the internet, which perhaps dates me too much. Giving people a say over spending in their own local area can be a really powerful way of engaging people with the decisions that are made—not seeing politics as something distant and remote, but very much part of their communities.
Dame Meg Hillier
I have given way several times, and a lot of Members are waiting to speak.
Whitehall is often just too distant—not just physically and geographically, but in attitude—from communities and towns up and down the country. I always say that we should not make decisions about people without people. However good our civil service is—and I pay great tribute to the many civil servants I have quizzed over the years about public spending—there will still be a challenge if we do not have the right people around the table, and that may be because they just do not know what is going on in a geographical area.
Our mayors have a very important role, but if money is to be devolved to them, there needs to be very strong local accountability. Of course, the last Government abolished the Audit Commission, which I think is a great sadness, and we have seen huge challenges in local government audit. The Mayor of London has the strongest accountability, with 25 London Assembly members able to challenge him openly and regularly about his spending, and powers to delve into the detail, but mayors in other areas do not have that.
I would say to the Government and the mayors that there is very good reason to have very strong accountability. First, a mayor will want to prove to their constituents that they have spent money effectively, and to be transparent about that, so that when they come up for re-election, people know that their mayors are not frittering away their hard-earned tax pounds and that they are delivering the things they want. Secondly, if a mayor spends money well in their area, they might prove to the Government that they can get more bang for the taxpayer pound than Whitehall achieves by doing it from a distance. Dare I say it, but there may even be times when the Government of the day do not give quite enough money to deliver what was promised, and mayors need the figures to prove that they have been short-changed. In all those circumstances, we need a stronger accountability process, and I hope that we do not go so fast in the drive towards devolution that we do not have those checks and balances in place.
I am very pleased about the moves on cheaper energy and clean power. The Chancellor mentioned GB Grid, which is a start, but about 400 projects are needed to upgrade the grid, and I believe that GB Grid covers 10 or 11 of them, so there is still a huge challenge to get the grid up to speed to meet the target of net zero by 2050. I think the pledge to buy and build only when new technologies will lower bills and be connected to the grid may be an important driver in that area. We may want to quiz the Chancellor about that—as, I am sure, our sister Committee, the Energy Security and Net Zero Committee, will want to do with the relevant Ministers in due course. I welcome the energy cost reductions for businesses, because I think all Members across the Chamber have heard that businesses have been really struggling in that regard. I have also been pushing for the closure of the loophole on VAT for online marketplace sales, so I am pleased to see that.
On the face of it, this Budget looks as though it has done a good job, but the devil is of course in the detail, so I again put the Chancellor on warning that we will be looking through that detail over the next few weeks. We have the Office for Budget Responsibility before the Treasury Committee next week, alongside other economists, and we will have the Chancellor himself on 11 November, when we will have had a chance to go through all the figures in detail and can challenge him on what he has promised today and the promises for the future.
Overall, I think we must see cross-party support for the approach to support households in these challenging international times, when a lot of the things that buffet the Government are very difficult for them to control. We must support small businesses. Quite rightly, we all are lobbied a lot by our small businesses. People invest their energy in their businesses, and they need support. We need a long-term vision. Part of our challenge as scrutineers of the Government on the Committee corridor is to hold them to account for their 10-year plan—which we have yet to see—for reshaping the state and devolution. I again warn all Ministers sitting on the Front Bench that the Budget may feel good after the statement today, but we will be challenging them in detail about the money they are spending, whichever Committee they appear before.
Jim Dickson
The situation that the right hon. Gentleman is describing sounds like what pertained for the previous 14 years. We are turning that around.
Since the 2024 election, this Government have demonstrated a clear strategy to get on and fix the foundations of our country, most obviously in public spending, that had fractured under the previous Administration, and that includes defence spending. The Budget is built on long-term investment in infrastructure and crucial new projects. Nowhere is that better illustrated than in my constituency, in north Kent, where the funding for the lower Thames crossing—public funding, supporting big private sector investment of over £10 billion—will make such a difference to Dartford residents once it is complete.
The Chancellor’s announcement that he is expanding support to businesses and infrastructure projects through the National Wealth Fund and the British Business Bank is most welcome, and it has the potential for an investment boost right across the UK. As a tangible, practical example of how investment can make a difference in our constituencies, I commend the spending review that saw the announcement of the structures fund to invest in distressed transport assets across the country that were beyond the capacity of local authorities to repair. In Dartford, we hope to hear that funding has been allocated to repair the collapsed Galley Hill Road, which links Dartford with Gravesend, in the coming weeks.
As the Chancellor made clear, and as other hon. Members have pointed out, another long-term impact of the situation in the middle east is the rise in energy bills, which is likely to affect all of us over this winter. I remain extremely worried about the impact that will have, particularly on the most vulnerable households. Only this week, EDF Energy put out a new forecast that has the average household energy bill rising by more than a quarter, to £2,192 per year in January and potentially even higher in April. Clearly the blame for these price rises should be put squarely on the architect of the conflict between the US and Iran. I welcome all the work that this Government have done since 2024 to begin to transform our energy system.
I welcome very much today’s announcement that standing charges will be removed from gas bills next year, and the additional £100 of support for all those living in homes in council tax bands A to D, which will support over 35,000 households in Dartford over the next year. It may or may not be true, but I heard that Conservative spokespeople were taking to the airwaves following the Budget to say that they opposed the £100 discount. If that is the case, I think it is wrong and disgraceful. However, I hope that Ministers will look further at what we can do to shield the most vulnerable and accelerate the work to break the link between increasingly volatile gas prices and the prices that we pay for electricity.
I have also been among those calling for more support on business rates for small businesses. I am really pleased to hear about the changes that will see many cafés, shops and pubs taken out of business rates entirely, paid for rightly by a rise in machine games duty. I think most of us in this House can support that tax.
In my previous life as a local councillor, I saw the growing levels of homelessness on our streets, as I do now, and the dire consequences for those stuck there. It is therefore right that the Government are putting in place funding for the rest of the Parliament to offer a route off the streets to anyone sleeping rough. We have needed a comprehensive strategy to tackle rough sleeping for the past 14 or 15 years, and we finally have one.
I also support the proposed changes to bring in a first-time buyer ISA to replace the lifetime ISA. I look forward to more details on the Your First Home scheme, which I believe will be a boost to new developments such as those in Ebbsfleet Garden City in my constituency.
I am really pleased to see that the Red Book published along with today’s Budget confirms the formation of either a mayoral or foundation strategic authority for Kent. That is important news for our region. If a foundation authority or a mayor was in place, for instance, they could find the investment to ensure that we bring international rail services back to Kent after they were lost six years ago.
Max Wilkinson
Does the hon. Member think it is right that people in Gloucestershire feel somewhat left out of the devolution agenda? We have been placed on the pause list for local government reorganisation, even though there is local consensus, and we are the only place in the whole of the west and south-west region without a devolution deal, even though there is a consensus on that as well. I say that in the knowledge that a Minister sitting on the Treasury Bench, the hon. Member for Bristol South (Karin Smyth), is from the west of England, and—as I understand it, based on what I hear from local councillors—Gloucestershire would like to have the same as her region. Does the hon. Gentleman agree that Gloucestershire could reasonably feel a bit left out and miffed by what is going on?
Sir Bernard Jenkin
If the hon. Gentleman is saying, “If only we were not doing this later retirement thing, there would be more jobs for young people,” I have to say that managing the economy in that way is not very successful. It does not work.
On the forecast, the Government set great store by what the IMF says about the UK’s deficit reduction programme. The Red Book states:
“The IMF forecasts that the UK’s deficit reduction this year will be bigger than any other G20 country.”
I am afraid that there are a lot of lemmings rushing over cliffs in that G20 bloc. It is not a good benchmark for success. In any case, the forecast is based on the forecast that the Government have given to the IMF, and the reduction has not been delivered yet. The Government have not started to deliver the debt reduction programme. The OBR says that debt rises from 95.5% of GDP this year to 97.3% in 2028-29. The headroom is just £15 billion in 2029-30, which is £7 billion less than at the last Budget. The OBR says there is only a 56% chance of meeting the rule. As the bond markets digest this Budget, I am not sure they will be quite as sanguine as they have been.
I will end by responding to a point that we heard from the hon. Member for Hornsey and Friern Barnet (Catherine West). She talked about us getting back into the European Union and said that 60% of the economy is dependent upon trade with Europe. That is rubbish. What proportion of GDP do we export to the EU in goods? The single market is about goods. Incidentally, our record on services exports outside the EU is that there has been a dramatic, massive increase.
Sir Bernard Jenkin
No, I will not give away. Only 5.9% of the UK economy is goods exports to the EU. A much larger proportion goes outside the EU. Incidentally, during our period of membership, the proportion of GDP that we exported to the EU was in steady decline from 1992 to 2021. Other factors have led to the decline in our exports with the EU.
Overall—this is the astonishing thing, and I will end on this point—our economy has outgrown France and Germany since 1992. Leaving the EU has not reversed that trend. I wonder whether Government Members do not understand the irony when they say, “We are the fastest-growing economy in the G7.” That has often been the case, because the EU is not a very efficient market and does not add much value to our economy. In fact, we have grown our exports to the rest of the world.
Sir Bernard Jenkin
No, I am not giving way; I have given way twice. [Interruption.] Members may shout me down, but they do not want to hear the facts. The fact is that our economy is now growing faster outside the EU than it would have done, because of two sectors: financial services, and tech and AI. They are not regulated by the EU. Employment in the City of London has doubled since 2016. All the doom-mongers who told us that the City was finished were wrong.
Andrew Lewin
I think the right hon. Member is talking about the issue of the Chagos Islands, which has absolutely no bearing on the speech that I am making today, but if the Conservative party wants to hold to its position that the current deal with the EU is a good one, I will take that debate any day of the week.
Andrew Lewin
I will not give way now, but I may do so later. [Interruption.] I am keen to make some progress.
Closer to home, in Welwyn Hatfield, 35,000 households will benefit from the £100 direct payment to help with energy bills this winter. The ending of standing charges on gas bills will particularly help those in smaller homes and flats, and it is unquestionably the right thing to do. I was also pleased, earlier in the week, to see the announcement about the warm homes plan, with low and zero interest rate loans for people who are able to make energy improvements to their properties, and cheaper public charging for electric vehicles. That is an all-round energy package that I believe we can support.
Let me now say a little about the national health service, which has not featured in the debate as much as it might have. Waiting lists have fallen sharply since the election of this Government, and ambulance response times in my region in the east of England have improved markedly in the last year. There is a great deal more work to do—there is no question about that—but this improvement has only been possible because of the investment made in this and previous Budgets. It is striking that £37 billion more is being spent on the NHS under this Government than was spent by the Conservatives.
Defence Readiness
Max Wilkinson Excerpts(5 months, 3 weeks ago)
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Max Wilkinson (Cheltenham) (LD)
I represent the constituency of Cheltenham, which is the home of GCHQ, where thousands of people work every day to keep us safe. They work quietly and never ask for our thanks. In this House, it is right that we acknowledge that whenever we can. I strongly agree with the points made earlier about the urgency of investment in defence. As a member of the all-party parliamentary group on rearmament, I commend the comments made by my hon. Friend the Member for Tunbridge Wells (Mike Martin).
I also echo the comments made by my hon. Friend the Member for Lewes (James MacCleary) about the need to reintegrate with Europe as soon as we possibly can—if not on the economy then for defence alone. Almost 10 years ago, this country voted to leave the European Union, but it is now clear that whether you voted leave or remain, you did not get what you voted for. Has Brexit made us wealthier? No. Has it made us healthier? No. Has it made it easier for businesses to grow, as we were told by the Conservatives? No. Has it lowered our taxes? No. Has it helped us protect our environment? No. The faeces flowing into our rivers suggest strongly that it has not helped our environment.
Has Brexit helped us run a more effective immigration and asylum system? No! The gangsters profiting from small boats are laughing all the way to the bank. On the subject of today’s debate, has it made us more secure, and has it boosted national resilience? No! We are reliant on an unstable United States, run by an unpredictable leader who many now think is mad, with a deputy who is intent on fomenting discontent on our streets. Who is responsible for the abject failure of Brexit? It is certainly not the people of this country.
We all know in this House who is responsible for the failure of Brexit, and we all know that they are currently getting away with it. While the rest of us are undeniably poorer as a result of Brexit, there are 5 million reasons why the Reform party must keep claiming that it has been a huge success. We all know what those reasons are. Reform Members are deluded, and so are their pals in the Conservative party. They must, en masse, take responsibility for the fact that this country is now poorer and less secure as a result of their disastrous Brexit.
Our Government have a responsibility to be so much bolder in reversing the damage caused to this country. Every Labour Back Bencher and Minister knows that rapid reintegration with Europe is the only way to increase prosperity and security and boost business too. Apparently, the Mayor of Greater Manchester used to know it, but he is not sure for the next few weeks while he fights that awkward by-election. The good news is that the departed Health Secretary, the right hon. Member for Ilford North (Wes Streeting), is wildly pro-European again, which may or may not have something to do with the Manchester Mayor’s current travails. Who knows?
Such a moment of national challenge demanded a King’s Speech offering significant change to reintegrate with Europe for the sake of our economy and defence, but regrettably, the Prime Minister has offered us more of the same. Politics is about ideas, and the ideas that inspire me and those of us on the Liberal Democrat Benches are liberalism and internationalism. That will not change. The challenge facing our nation today can only be met by those ends.
At home, communities are crying out for real empowerment, yet this Government’s devolution agenda delivers only the illusion of local control. To achieve growth, including in our defence sector, Whitehall’s grip must be loosened to devolve real power and funding not just to distant regional centres away from our communities, but to towns and cities. Those include towns such as my constituency of Cheltenham, which stands ready to help, supporting the work of GCHQ and building on it at the Golden Valley cyber park, which is supported by this Government. I welcome that and commend the Government’s decision to do so.
The King’s Speech also ignores the new reality in British politics. The two-party system of the red team and the blue team shouting at each other is now over. That undermines our ability to have a thriving economy. It undermines our ability to make long-term plans to invest in the long-term defence and security of our country. It is a pity that Andy Burnham has changed his mind on proportional representation. That makes at least two U-turns before he has even rejoined this House, but let us hope he does a 180-degree turn when he gets back here.
This Government now face a stark choice. They either embrace proportional representation or usher in a future Reform Government propped up by the Conservatives to give us more of the same that they gave us before: the failure of Brexit, the lack of security and the failing economy. Sadly, this King’s Speech will not do what is needed to fix our relationship with Europe, to make us safer or to empower communities, and it will not change politics for the better. It is a crying shame that with a massive majority, the Government have a massive lack of ambition.
Oral Answers to Questions
Max Wilkinson Excerpts(9 months, 1 week ago)
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Luke Pollard
I am sorry that the shadow Minister missed my concluding remarks at the end of the Opposition day debate on the subject last week. Not once did he say why his Government started that deal; nor did he give details of the preparatory work that his Government were supposed to do to answer his own question. This deal secures the future of that UK-US base. We will continue working closely with our American allies to progress the deal, and will continue those conversations, but I am afraid that all the shadow Minister is asking for is more uncertainty. We are securing the future of that base; he is just talking it down.
Max Wilkinson (Cheltenham) (LD)
The Minister for Defence Readiness and Industry (Luke Pollard)
We entered negotiations on SAFE participation in good faith; however, no agreement was possible that met our national interests. We will continue to explore co-operation with the EU and its member states that strengthens European security and underpins our NATO-first policy. We are pleased that the Government have been able to conclude new defence partnerships with our European partners, including France and Germany.
Max Wilkinson
Does this not go back to the key problem that faces us as a nation, which is the failed Brexit bestowed upon us by the previous Government and their friends in the Reform party? Ministers have my sympathy as they try to unpick this mess, but they are going too slowly. Brexit is clearly the biggest barrier to us participating in this scheme. Is it not now obvious that our best economic interests and our national security are best served by a more rapid reintegration with the European Union?
Oral Answers to Questions
Max Wilkinson Excerpts(1 year, 9 months ago)
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Maria Eagle
I look forward to meeting my hon. Friend shortly when I visit some of those businesses in her constituency. The defence industrial strategy is the way in which we will seek to deal with the issues that she has raised.
Max Wilkinson (Cheltenham) (LD)
My constituent Owen was medically discharged from the Army after 17 years of service. Since then, he has been waiting for two years for a resolution of his claim under the armed forces compensation scheme. Does the Minister agree that that is too long to make a veteran wait, and what advice can he give me so that I can resolve my constituent’s case?
Al Carns
We are absolutely a Government who support veterans. If the hon. Gentleman will send me the details of that case, I will look into it personally. We pay out over £1 billion in compensation, and I have been to Norcross to ensure best standards up there.