Autumn Statement Resolutions

Meg Hillier Excerpts

Wednesday 22nd November 2023 Commons Chamber

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

Before launching into my speech, I will pick up some comments made by the right hon. Member for North Somerset (Dr Fox). He said that his Government were in favour of the measures laid out today but that the official Opposition, represented by my right hon. Friend the Member for Leeds West (Rachel Reeves), were in favour of public spending. I think it worth pointing out, as I have the privilege of chairing the Public Accounts Committee, that this Government have been putting off issues repeatedly until they reach crisis point. It is all very well for them to say that they do not want to spend money on the public sector, but they are actually costing it more. For instance, our Committee recently produced a report on the school building programme which revealed that 700,000 pupils were in inadequate premises; and although a former Prime Minister announced a programme for the building of 40 hospitals, there are still only 32, and the building of those hospitals is expected to “bunch” by the late 2020s or thereabouts.

[Matt Rodda (Reading East) (Lab)]

My hon. Friend is making an excellent speech, and has just made an important point. My local hospital, the Royal Berkshire Hospital in Reading, is one of those that were promised something but have not yet received anything. This is a problem for many communities around the country

[Dame Meg Hillier]

It is a real concern. Those 32 hospitals are just the tip of the iceberg of what is needed, and nothing is in train yet, so if it bunches into the late 2020s and then into the 2030s, that could leave some—the seven affected by reinforced autoclaved aerated concrete—beyond their useful life, and it will mean a squeeze on construction.

For schools and hospitals alone this is a huge challenge, but it is also worth mentioning an animal health centre in Weybridge, in the constituency of the hon. Member for Runnymede and Weybridge (Dr Spencer), which has suffered from under-investment for a long time. If we had two zoonotic diseases in this country, we could not currently cope with that, because the centre is greatly in need of public sector investment.

These are things that the Government cannot dodge, because it is not possible to bring in other resources. It is easy to make jibes, but in reality there is a big challenge. We have, of course, seen councils squeezed until the pips squeak, although they are vital to the delivery of services that will not be delivered by anyone else. There is no private sector alternative, even for those whose ideology leads them in that direction.

Overall, there was a great deal of smoke and mirrors in the statement. I have had a look at the Green Book, although I cannot claim to have gone through every pledge in enormous detail because there has not been time since the Chancellor sat down, but we have already seen pledges in earlier Budgets and autumn statements unravel. One pet idea of a former Chancellor, the lifetime ISA, was not mentioned today; I certainly could not see anything in the Green Book about it. Those who have a lifetime ISA can invest in a property that is worth up to £450,000. In my constituency, it is impossible to find any new-build property for £450,000. The level has not kept up with prices, and as far as I can see there is to be no uprating. This means that many young people who hoped that this would help them to get a foot on the housing ladder have no hope. If any of the Treasury Ministers can say anything about that, my constituents will be glad to hear it.

I have just given an example of a dud financial product, delivered and then forgotten about. The Chancellor also mentioned childcare. Notwithstanding the pledge to provide free childcare for parents of children aged one and two, not enough places are available, because the money has not gone into delivering those places. Childcare facilities will not be able to provide childcare at less than the cost of the hourly rate of the people providing it. This is simply a pledge without any back-up, which is of real concern.

I am pleased to see that the local housing allowance has received its long-overdue increase, but I am not sure whether it will make any difference in many parts of the country where there is still a shortage of housing, apart from very expensive private rented housing. I will be touching on housing costs in Hackney.

Local government is struggling and failing, and the much-vaunted levelling up has been opaque. We cannot see exactly where the money has been spent and we have not really seen results. There is a lot of flim-flam and promise but the money is spread very badly, as reports this week have highlighted. Local government is one area that is being squeezed considerably, and now there is this idea that if a big planning application is not dealt with in a given timeframe, the council will have to refund the planning fees. Where are all the planners who are supposed to do this work, given the enormous shortage of that skill in local government?

Also, the fees do not currently even cover the costs of a planning application, as many developers tie planning departments up in knots as they argue for more storeys or fewer affordable housing units, and they can go on doing that for a year. It is not always the fault of the planners when there are delays in planning applications, but that is an easy statement to make. My party wants to ensure that the planning system works so that we can get those new homes built and get all the necessary capital infrastructure moving. There will be a proper plan behind the pledges of my party when we get to our manifesto.

On skills, we all want to see a skilled-up economy, but again we are looking at a failure over 13 years, after all the promises. The Green Book tells me that there will £50 million for a two-year pilot to stimulate training in growth sectors and address barriers to entry. I think we have heard this one before. It is great to see a pilot, and great to see investment in it, but it is always too late. I was arguing over a decade ago that we needed skills in the green growth industries. An industrial strategy that included that would have boosted the economy and got us ahead of the game internationally on green issues. We need construction industry skills, including in the skilled trades. That was predictable when we went through the Brexit vote in 2016, yet here we are in 2023 and we still have those challenges.

There are huge skills issues in civil and nuclear defence, as my Committee, the Public Accounts Committee, has repeatedly highlighted. We cannot create highly experienced people in a decade, but we could have gone a long way if work had been done earlier. We also lack skills in fire safety. I should declare an interest in that I live in a block that had cladding. We need fire safety engineers to get through the process, and there is a shortage of them. It only takes three years to train for that role, and if we had started doing that after Grenfell, we would be much better placed now.

I will be generous and say that I welcome some things in the autumn statement. The piloting of additional jobcentre support for universal credit claimants at seven weeks in 90 jobcentres is a good thing. As we repeatedly say on the Committee, it is good to pilot initiatives—and 90 is quite a big pilot—so that we can learn and make sure that they work properly and become embedded. Seven weeks—nearly two months—is a long time to be without work, and if people can get that extra bit of intense support early on to keep them off long-term unemployment, that will be a good thing.

But I am massively concerned about ending benefits after 18 months for people who say that they will not go to work. People have many issues that are health-related but that do not qualify them for the personal independence payment. I pay tribute to the jobcentre coaches in the jobcentre in Hackney, and particularly those who work with the most vulnerable and disabled people. They provide amazing support to people, but we need a lot of those really good people to deliver this, and they will all need to be trained and developed. All previous work programmes show that health is one of the big final barriers to getting people into work, and that there is a residual group of people who, for various health reasons, cannot easily access work. The DWP is often called the Department of wonderful people, but however great its staff might be, they cannot always cross that barrier to deal with someone’s health problem, because that is a whole different issue for that individual in relation to their medical support, if they have it. The Public Accounts Committee has repeated endlessly that sanctions do not work and that they just cause real problems for people. In Hackney, we have just over 16,000 people claiming universal credit and over a third of them are in employment, so these are not all people who are not working.

But there are many other barriers, including childcare and travel costs, as well as significant logistical barriers matched to particular jobs. I vividly remember a gentleman coming to my surgery who was a kitchen porter. He wanted to improve his English, as it was not his first language, and he was struggling to get a job. He went to the jobcentre and they were sending him to zone 6. For people outside London, my constituency is in zones 1 and 2, and zone 6 is quite a distance away and a lot more expensive to travel to. The time and cost of travel for someone on a kitchen porter’s wage, even with an uplift in the minimum wage, will still be challenging in London, combined with the fact that he had two small children and a wife who also had a low-paid job. It was logistically impossible for him to do what the jobcentre was asking of him. If we are going to have all these changes, there needs to be an awful lot of investment in jobcentres to get anywhere near making them work. What will happen at the end of 18 months if someone is not in work? Will they be left destitute? There are lots of questions there.

I am interested in the national insurance contributions for self-employed people. The Public Accounts Committee has looked at serious challenges with pensions and pension records in the DWP. I will not go into too much detail now—for those who are interested, our work is all on our website—but there have been issues with inaccurate record keeping and the databases and systems in the DWP not talking to each other. The problem first affected a group of women—widows over 80 and others—who did not get their full state pension, but an issue was uncovered more recently that affects mostly women who had caring responsibilities and should have had credits but, because of the links between HMRC and DWP not working properly, those were not properly recorded and reflected.

Whatever the policy, we need to make sure that it works technically. It says in the Green Book that credits will be applied, but we need to make sure that the technical system is in place, because it would be a tragedy if people who are self-employed found later down the line that they could not claim the state pension because that circle had not been squared.

The 1%-a-year increase in funding to Whitehall is, of course, a repeat of what was said earlier in the year, but it is a real-terms cut, so every Department will have to trim what it is delivering.

There are so many other failing areas. We have talked about hospitals and schools, where we know that demand is really big. The Department for Education wanted to build 200 new schools a year. In the 2020 spending review, it was allocated £1.3 billion for just 50 new schools a year. Now, there are 100 schools with reinforced autoclaved aerated concrete that need to be in that programme—the Secretary of State identified that problem at the end of August, just days before term started—and they are knocking other schools down the list. Eventually, there will be 500; goodness knows how long that will take on the current timeframe. Public spending is not always a bad thing; in fact, delaying it can cost a lot more to the taxpayer and those trying to receive services in the meantime.

I welcome the money for debt management in HMRC. That is good, but we on the Public Accounts Committee will of course be watching closely how it works. If money is invested well in the DWP and HMRC, we can see real dividends for the taxpayer, and no one wants to see fraud and bad debt.

Despite the increase in local housing allowance, which is a help, the LHA rate still causes problems. In the private rented sector in Hackney, the average rent for a two-bed is just shy of £2,000 a month, and there are 30% fewer private rented properties available now than there were before the pandemic. Before today—I have not been able to establish whether today’s announcement will have a real impact in Hackney—not a single property was available to those on low incomes at LHA rates. If we are only going up to the 30th percentile, there will still be a real challenge in a borough where we have seen more homes for rent built at the luxury end of the market than at the lower end. Anyone lucky enough to be in a low-cost, relatively stable private sector home does not really have the option to move, so the supply is not being replenished.

That brings me to a really difficult issue for my constituents. One in two children lives in poverty, we are the 22nd poorest borough in the country and we have such a serious housing problem. I mention that every time I speak in the Chamber, and I make no apology for that. Not only do we have generation rent living in insecure properties, with rents spiralling out of control, but we have a huge shortage of social housing. In the year to 2022, only 671 social housing units became available, down from 1,200-odd in 2016-17.

That diminution is explained partly by the fact that, once someone has got social housing, they do not move out, because there is nowhere to go. That is leaving many of my constituents living in massively overcrowded conditions. Someone came to see me at my last surgery who has three children in a one-bedroom housing association flat, but the housing association has nowhere to put him, so he is bidding on the council list. If his case is typical, he will be waiting 12 years for a two-bedroom property. We have 3,759 children in temporary accommodation, which is enough to fill eight primary schools and is 1% of the population of my borough. We are having to close schools because children are leaving, as lots of families cannot afford to live in Hackney any longer. Those children are often housed outside the borough, because of the cost of housing in Hackney. So this is a really big concern.

In the year to 2023—in the last financial year—more than 4,000 residents approached the council seeking housing help, which is an increase of 18% on the figure for 2018-19. These figures are increasing exponentially every year, despite the best efforts of our excellently run Labour council. Under the new mayor, Caroline Woodley, and her predecessor, there has been a real desire and effort to build properly affordable social housing, including council housing. However, this is a drop in the ocean for the need. This autumn statement does nothing to help the people I am talking about. People are living in poverty and in overcrowded conditions. As my hon. Friend the Member for Ealing North (James Murray) says from the Front Bench, they are not better off than they were 13 years ago. They are considerably worse off and there is no hope—except, I hope, a general election, when my party will come in to try to sort out this mess.

[Priti Patel (Witham) (Con)]

I am pleased to follow the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier). She has made some important points, some of which I will come on to shortly. I am grateful to my right hon. Friend the Chancellor of the Exchequer for his statement. As we go through the details of the announcements and the delights of the OBR forecast, there will be much discussion in the forthcoming debates. I always take the view that Budgets and fiscal events, some of which I have been part of in the past, need to address three crucial challenges: whether they support the economic freedom of our constituents; whether they empower businesses and enterprise to create economic growth, as it is the private sector, not the state, that grows the economy—I will come on to state spending shortly; and whether they manage the public finances in a sound and sustainable way.

I suspect that you, Mr Deputy Speaker, like me are old enough to remember the great Conservative Budgets from the 1980s delivered by Geoffrey Howe and Nigel Lawson—you do not need to agree with me on that right now. They set the benchmarks that any Chancellor, especially a Conservative one, should look to and follow to get the right balance of creating economic growth and sustaining the public finances in a suitable, sustainable and measured way. It should always be the mission of a Conservative Government to ensure that people can keep more of what they earn; it is right that the Chancellor used that statement a number of times and spoke about the fiscal measures he is introducing to ensure that that happens.

Of course, businesses and people spend their money far more effectively, efficiently and productively than the state, which is why low-tax economies are also naturally the fastest growing ones. A lower tax burden would mean more money in the pockets of our constituents to provide for themselves and their families. Having listened to speeches made by those on the Opposition Benches, it is fair to say that we would all agree that we want all our constituents to be well-off, financially and economically, for their families and their futures. A lower tax burden would also mean more money available to businesses to invest and expand. The Chancellor touched on some measures, and I shall do so shortly, on jobs and higher salaries. Naturally, this leads to more resources for economic growth. That is also why I fundamentally believe the Government should look to bring the levels of personal taxation down. The Chancellor mentioned that today, but I might suggest a few cheeky measures to say what more we can do on that, as more can be done.

Today’s autumn statement marks—these might actually be the words of the Chancellor—a major moment when the Government and the country change gear and focus on how to drive growth in the decade ahead with the a package of tax measures, while seeking to ensure that inflation continues to fall. That is absolutely right. There are different ways in which it can be achieved, and the Chancellor has outlined the ways in which he wants to make sure that it happens.

On the measures announced today, naturally I support cutting the main rate of national insurance contributions—the infamous NICs—from 12% to 10%. It was refreshing to not only address but go as far as abolish class 2 contributions for the self-employed. That will have implications and the devil is in the detail, as touched on by the hon. Member for Hackney South and Shoreditch, including issues of interoperability, such as how that will relate to and engage with the pensions system, technical measures and delivery. That is a fact of life. I do not want to be pointed, but HMRC and DWP use two different systems that are not always interoperable; I am a former DWP Minister and a former Treasury Minister, so I have seen that in action. I urge the Government to pay attention to the delivery of that measure, and I have no doubt that the Public Accounts Committee will be watching very closely as well.

On reducing the tax burden, my colleagues on the Treasury Bench will expect me to say that I maintain, fundamentally, that we can do more to freeze income tax levels. I know Treasury Ministers have heard me and indulged me on that subject before. Back in 2010, the measures around the tax-free threshold and increasing the higher rate threshold were a significant way to help families directly, in a sustainable way. I point to that example because it did not lead to a fall in inflation. Of course, the inflationary measures we see now—external measures, such as the war in Ukraine and energy prices—are different, but I will continue to lobby the Government relentlessly because I want to see a shift in tax-free and higher rate allowances.

That is important in the context set out by the OBR today, which states:

“Tax changes in this Autumn Statement reduce the tax burden by 0.7 per cent of GDP but it still rises in every year to a post-war high of 37.7 per cent of GDP by 2028-29. Income tax increases explain most of the increase in this forecast, rising from 10.2 per cent of GDP this year, to 11.3 per cent in 2028-29”.

Those increases are driven by, dare I say it, the threshold freezes in income tax rates and the nominal earnings growth that will come from that. The implications are self-evident: more of our constituents will pay more income tax, there is the infamous fiscal drag and more people will move into higher rate bands, so ultimately 400,000 more people will pay the additional rate.

[Dame Meg Hillier]

Does the right hon. Lady agree that will create a burden for those people who will then have to complete a tax return? In addition, there will be an impact on child benefit, so there is a double whammy once people hit the higher threshold, if they have children.

[Priti Patel]

The right hon. Lady is correct and makes an important point. I do not want to be boxing the ears of my hon. Friends on the Treasury Bench today, which is their day, but I sound like a broken record on this subject. I would go for complete streamlining and simplification of the tax system, even on NI, where I would like to see measures such as the merger of income tax and NI. I would love to see a simple system where we do not have the burdens of bureaucracy. Even when we spoke about full expensing in the Budget, the business and regulatory implications are pretty vast. The childcare measures are very good and encouraging, but from, a personal perspective, even more complexities are being introduced to the system and we, as Conservatives, could do much more to streamline that.

--- Later in debate ---

[Bim Afolami]

Of course I understand that distinction, but that does not take away from the fact that if we are borrowing, it has to be paid for. Unless the Labour party can show how it is going to raise that money—[Interruption.] Look, the non-dom tax has been used about 15 times to pay for 15 different things; that is not going to cut it. Unless the Labour party can say how it is going to pay for that extra £28 billion, it is not fiscally responsible. So on that measure, I say bring it on.

Let us look at whether working people will be better off as a result of this autumn statement. My right hon. Friend the Member for North Somerset (Dr Fox) talked about the need to responsibly bring down taxes for working people, and that is what we have done. The cut in the national insurance rate, worth £450 to the average worker, will benefit 29 million people. That matters to my constituents and to all the constituents we represent in this House. That is what this autumn statement delivers. The national living wage is up 30% in real terms—30% after inflation—in this Parliament. Again, that is what this autumn statement delivers. As a result of the measures on the local housing allowance, 1.6 million of the most vulnerable households in this country are all going to get an extra £800.

Contrast that with the record of the Labour party. Do not let them fool you, Madam Deputy Speaker; Labour Members do not believe in tax cuts. They do not believe in low tax. They are trying to pretend that they do, but we all know that they do not. They believe—and it is a reasonable, principled position—in ever greater, ever expanding Government control, debt and tax. That is their position.

Those of us on this side of the House and this Government have a different philosophy and a different policy. We believe in backing British business. We believe in backing the British people. We believe in cutting taxes for working people. We faced a once-in-a-lifetime pandemic earlier in the Parliament, and we spent over £450 billion supporting the lives, jobs and health of our constituents. That has led to an increase in our tax burden. But that is why this autumn statement is so important—because we are turning the corner.

[Dame Meg Hillier]

Will the Minister give way?

[Bim Afolami]

I will not.

Members may wonder how we are able to cut taxes and bring our debt down at the same time in a fiscally responsible way. We are able to do it because we back British business. There are over 100 growth measures in this autumn statement. The policy of full expensing means that for every pound that our businesses are able to invest, they will get 25p off their tax bill. There are measures to protect small businesses on business rates; on R&D tax credits, we are reducing the rate at which the credit is taxed from 25% to 19%; and we have introduced investment zones across huge swathes of our country. A few years ago, I co-authored with the Chief Secretary to the Treasury a policy on accelerator zones. These have been ideas on this side of the House for a long time, and this autumn statement puts them into practice. My good friend and constituency neighbour, my hon. Friend the Member for North East Bedfordshire (Richard Fuller), knows that I share his view that we need to make sure that regulators adhere to the need to focus on growth and competitiveness.

It would be remiss of me not to address some of the comments made during the debate. The Chair of the Public Accounts Committee, the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier), addressed many points. I listened carefully to her concerns about the welfare measures, which were shared by the Chair of the Work and Pensions Committee, the right hon. Member for East Ham (Sir Stephen Timms). I say gently to them both that what we are trying to do with the back to work plan and reform of the work capability assessment is to support the most vulnerable while making sure that taxpayers’ money is used sensibly and that only those who need it are given that support.

My right hon. Friend the Member for Witham (Priti Patel), who is a good friend, focused in her excellent speech on the need for a low-tax economy. She said that she would like to see some more “cheeky measures”—her words, not mine—to get personal tax down. I assure her that I will constantly listen to her and take her advice. Given her great experience, I am sure others on the Treasury Bench will do so too.

This country is full of potential, with the most innovative industries in Europe and the best minds in the world. With this autumn statement, this Government are backing this country. Labour do not have a plan. They do not understand the economy. They want to borrow £28 billion extra, yet they want to take everything in the autumn statement. How are they going to pay for it? We have a plan; they do not. I commend the autumn statement to the House.

Ordered, That the debate be now adjourned.—(Mark Fletcher.)

Debate to be resumed tomorrow.