Budget Resolutions

Meg Hillier Excerpts

Wednesday 30th October 2024 Commons Chamber

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Before I begin, I must—as well as drawing the House’s attention to my entry in the Register of Members’ Financial Interests—draw its attention to the fact that I have a family member who works for Allied Irish Bank.

I have been looking forward to today. I feel honoured to have been chosen by this House, on a cross-party basis, to chair the Treasury Committee, and to be the first Labour Treasury Committee Chair to welcome the Budget of a Labour Government and our first female Labour Chancellor. I thought that, after a 14-year wait, this would be an exciting moment; and in a moment of sentimentality, realising that for the second time today I would be following the right hon. Member for Richmond and Northallerton (Rishi Sunak), I was going to reflect on an interesting constitutional position. When I was in my former role as Chair of the Public Accounts Committee, there was common ground at times with the Prime Minister of the day. In private, when I had cause to meet the right hon. Gentleman, he was courteous, thoughtful and respectful, had the national interest at heart, and, when it came to constitutional matters, was in very much the same place as me. I was therefore very disappointed today by the cheek of the right hon. Gentleman in standing up and having the chutzpah to talk about fear, foreboding and uncertainty.

It was the 2022 mini-Budget that plunged the country into crisis, put up the mortgage rates of our constituents, and is still leaving people living in great hardship. It was on the right hon. Gentleman’s watch as Chancellor—although he did some things about covid that we would all recognise needed to be done, and we recognised it at the time—that the bounce back loans led to a significant amount of the fraud that resulted from covid. Now my right hon. Friend the Chancellor has stood up, and what has happened? The FTSE is up—and it has gone up by more since I stood up, by 1.6 percentage points, unless anyone can update me—and the OBR has said that this will add growth to the economy.

The right hon. Gentleman also attacked the Chancellor on fiscal rules. Let us be clear: fiscal rules are not a new thing. Since 2011 there have been seven fiscal mandates, five supplementary debt targets, two supplementary borrowing targets, and an investment limit. The rules set in 2011 lasted three years, but in the last three years we have had three different fiscal mandates, two different supplementary debt caps, and one supplementary borrowing target. I think the Chancellor knows that when she is in front of the Treasury Committee we may challenge her and ask her about her fiscal rules, but I have certainty—we all have certainty—that she will be in her post for long enough to stick to the fiscal rules that she has set. They will have a longevity beyond the previous Government. I welcome this Budget, and pay tribute to my right hon. Friend. The UK’s first woman Chancellor stood at that Dispatch Box, and another glass ceiling was shattered. She should be proud; we are proud, and I congratulate her on that achievement.

It is my first Budget as Chair of the Treasury Committee. I have spent 13 years examining public spending in enormous detail, including nine years as Chair of the Public Accounts Committee. Like me, the Chancellor was a scrutineer: she chaired the Business and Trade Committee, and she understands the importance of scrutiny. I am very clear that the Treasury Committee will not give the Chancellor an easy ride, because she is a highly capable woman who can come and explain all her decisions to us. She knows that it is our job to rigorously examine the detail of the Budget next Wednesday, when she will appear in front us. She will be getting a bit of what she dished out as Chair of the Business and Trade Committee. I know that she will expect nothing less than robust challenge—if she were not up to it, she would not be in her post.

I have to say that I am disappointed that so much of this Budget was revealed before today, which is not normal practice. Going forward, I hope that constituents and the MPs representing them will be the first to know about major issues, and that courtesy to this House and the Treasury Committee will be a hallmark of Treasury engagement.

This Budget comes at a very exciting time, but it is a difficult one for the Chancellor. She has made it very clear that she will deliver certainty, and she has inherited one hell of a mess. We have had a tumultuous period: Brexit, the pandemic, the mini-Budget, 14 years of austerity, delayed and failed decisions, particularly on capital spending—we have had three carbon capture and storage projects that have never come to fruition—the saga and cost of stop-and-start on High Speed 2, 700,000 pupils in schools that are not fit for purpose, public services on their knees, and public sector net debt at its highest rate since the second world war.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

I congratulate the hon. Lady on her unopposed election as Chair of the wonderful Treasury Committee. Does she share my concern that the individual who has been appointed to the office for value for money was previously on the board of HS2?

[Dame Meg Hillier]

The hon. Lady is a former Chair of the Treasury Committee and I welcome her being a member of it, as she will add great value. As she knows, we will have the opportunity to raise questions with the Chancellor at next week’s hearing. She has now been forewarned that the hon. Lady may ask about this issue. It is important that we recognise good people who provide support in the public sector by watching our public finances, and I always take people on good faith unless I have a reason not to do so. We have an opportunity to explore this issue elsewhere.

As a share of GDP, taxes are higher than at any time since world war two. Before the election, my right hon. Friend the Chancellor was tough on spending commitments, and sometimes there was a bit of moaning in the Tea Room. I do not want to tell tales out of school, but shadow Ministers were dismayed because they could not spend everything that they wanted to spend. As Chair of the Public Accounts Committee at the time, however, I knew what she was talking about and that what was coming was not going to be pretty, so I welcome some of the steps that she has announced today. I have not had a chance to look in the Red Book or at the detail, but the multi-year funding settlements that she has put in place are a great opportunity to give certainty to business and investors in our country. Hopefully, we will finally nail the issue of HS2, which has cost the taxpayer a fortune. We need to get on with that in order to make sure that we are delivering investment for our country.

I look forward to seeing the detail on cladding, but it is a big issue in my constituency, where many people’s lives are on hold as a result. The money for affordable homes is incredibly vital for those living in difficult situations, and the Chancellor is absolutely right to have finally funded the compensation schemes for infected-blood victims and for postmasters and postmistresses. When the state makes an error, the state needs to correct it. It should never be a party political football.

The Chancellor has had to make tough choices, and she has set out her fiscal rules to provide clarity to the markets and a long-term trajectory for investment and growth. We on the Treasury Committee will watch net financial debt closely to see how the benefit is measured, and it is important for taxpayers and the market that we do so. She will be more aware than anyone about the impact on the market if she does not manage debt very carefully. International investors may use the existing debt model, so when she comes in front of the Treasury Committee, I would be interested in talking to her about how she sees this playing out in the international arena.

[Dame Caroline Dinenage (Gosport) (Con)]

I have enormous respect for the hon. Lady, given her previous role and her important new role as Chair of the Treasury Committee. As the Chancellor will be coming to see the Committee shortly, could the hon. Lady put a question to her on my behalf. We all know that we can learn lessons from previous Budgets about the law of unintended consequences. The thing that most concerns me in this Budget is the combination of raising employers’ national insurance contributions, cutting the threshold at which they start paying NI, and raising the minimum wage. Could the hon. Lady ask the Chancellor whether there will be special support for businesses that employ a lot of people on low wages, such as care homes and childcare settings, which will be most impacted by the measures? Otherwise, the costs will be passed on.

[Dame Meg Hillier]

The hon. Lady is a very experienced Member of this House, and she has made her point. She will no doubt have the opportunity to speak in this Budget debate, and there will be plenty of opportunities across the Committee corridor. I welcome her as a fellow Chair. Committee Chairs are already planning how we will work together to ensure that we hold the Government to account, whichever party we represent.

The fiscal rules are designed to provide fiscal certainty and predictability, to bring a sense of discipline to the public finances, and to reassure the markets, as I have mentioned. I welcome that stability, as will the markets, as the FTSE increase suggests. Given the headroom that the Chancellor has secured under the new rule, the Treasury Committee will be watching how much she invests, because we need to see the growth that she has set out as her goal. That must be sustainable, so it needs to be productivity growth. There is no single solution, but analysis by the Resolution Foundation found that a 1% increase in capital stock increases productivity by 0.4%. We will look closely at this, and at the spending review in 2025.

On tax, the increase in employers’ national insurance to 15% is an understandable measure. It is always challenging to find money in these difficult fiscal circumstances, but the increase brings money into the Exchequer at a faster pace than some of the other measures that were mentioned in the media. I have a wide approach to reading about things. If we read The Daily Telegraph, we will think the world is going to hell in a handcart, but if we read more measured commentary, we will find that the Chancellor is judged well on what she has achieved today.

As the hon. Member for Gosport (Dame Caroline Dinenage) said, there are concerns about how the measures in the Budget interact. Alongside sister Committees, we on the Treasury Committee will examine those.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Will the hon. Lady and the Treasury Committee look very carefully at the Chancellor’s proposals on agricultural property relief? They are very likely to do damage to small, family-owned farms, and especially to tenants, who are likely to be evicted as a consequence. Will she look at what that might do—not just for basic justice, but for food security in this country?

[Dame Meg Hillier]

If I were the sort of person to get big-headed as a result of the number of Members asking me to do things that are probably not within my remit, I could extend the remit and the power of the Treasury Committee infinitely. Of course, it is the right hon. Member for Orkney and Shetland (Mr Carmichael) who chairs the Environment, Food and Rural Affairs Committee. As I say, we Chairs are planning to ensure that we work closely together on issues where there is an overlap of interests, and we will pick up on all these issues. The Government have promised openness, transparency and accountability, and I take my Front Benchers at their word on that. I am sure that the Chancellor and her Ministers will be available to talk to people and address Members’ concerns about specific elements of the Budget.

I welcome some of the other measures that have been announced. The increase in the national living wage will make a huge difference for so many of my constituents. They work hard and are certainly not shirkers, as some Conservative Members might call them, but they can barely make ends meet. In my constituency, many people work four days a week because they earn enough to be able to do so. Others have four jobs over seven days, just to hold body and soul together. I welcome the increase and the removal of age discrimination.

The devolution model makes so much sense in so many ways. On the Public Accounts Committee, we repeatedly looked at the challenge of bidding for pots of funds, which is costly and time-consuming. We need to trust our elected Mayors to make decisions for their area, and the model shows the direction of trust that, hopefully, this Government will continue to go down.

Before the last general election, I listed what I called the big nasties. This was just some of the additional spending that needed to take place on things that had been left, sometimes by the previous Government and, sadly, sometimes by successive Governments. These issues included the reinforced autoclaved aerated concrete failure in schools—I welcome the move finally to deal with that—the long waiting lists in the NHS and overcrowded prisons. From the Red Book, it looks as though the Justice Department has had an uplift, although it is difficult to make a full judgment on that in the few minutes I have had to glance through it.

Other things such the Animal and Plant Health Agency in Weybridge and Porton Down need investment. These are risky things not to invest in. There is going to be a challenge in public spending even with the increase. Although the increase is welcome, the growth that the Chancellor has called for and is trying to achieve will be required in order to deliver and ensure that we see the spending that we need. Even with the uplift that she highlighted—the 1.5% from next year in day-to-day spending—this is a very tight financial situation for all Government Departments.

The boost to the Department of Health and Social Care is staggering, and welcome. I am sure that the Public Accounts Committee, the Treasury Committee and the Health and Social Care Committee will, among us, hold the Health Secretary to account for his promises to make sure that that is spent well and delivers permanent and lasting change. Also, the capital investment is desperately necessary. It is not that long ago that the previous Government raided capital budgets for day-to-day spending in the NHS. That cannot be allowed to continue.

The investment in defence is also absolutely necessary. There is a huge gap in the defence equipment plan, which I know my right hon. Friend the Chancellor is all over, and she is right to make that increase. I look forward to the path to 2.5% of GDP on defence; never again should we be going below that.

Local government, although it has had a boost, is going to be very squeezed. Again, we will be working with sister Committees to look at that.

The Chancellor also promised to close or reduce the tax gap. That is very bold, and difficult to deliver, so again the Committee will be looking closely at how it is dealt with, as well as at the recovery of fraud moneys, which can be challenging to deliver in any particular timescale.

[Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)]

rose—

[Dame Meg Hillier]

I will give way to the Chairman of the Public Accounts Committee.

[Sir Geoffrey Clifton-Brown]

I thank the Chair of the Treasury Committee and congratulate her on her new role. There was one very welcome bit of the Budget today, and that was the funding for the infected blood scheme and the Post Office Horizon scheme, but will she join me in urging the Chancellor to ensure that those amounts are quickly paid out, so that those victims, whom we hear about almost every day in the media, are rapidly compensated and can get their lives back to normal?

[Dame Meg Hillier]

It seems that the Chair of the Public Accounts Committee—this is something the hon. Gentleman and I have in common—hears promises made by Governments of different colours who do not always deliver as they should. He is absolutely right. In fact, the National Audit Office, at my request, pulled together a document looking at compensation schemes. They are often put together differently—although these particular schemes have now been set—and some do not deliver as well as others. Windrush is also in that mix. This is important, and perhaps the hon. Gentleman is offering his services to the Chancellor to ensure that that money gets out of the door. Of course, his Committee will be examining these programmes as time goes on.

It gives me great pleasure to respond to the Budget today and to welcome a Labour Chancellor to her place. I wish her well, and I wish the Labour Government well, of course. I want to see these results on the ground in my constituency. As I say, the Chancellor will appear in front of our Committee, without fear or favour, over the coming years and we will be challenging her and her Ministers to make sure that they stick to the promises that she has laid out today.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

We now come to the leader of the Liberal Democrats, Sir Ed Davey.