Budget Resolutions

Neil O'Brien Excerpts

Tuesday 30th October 2018 Commons Chamber

[John McDonnell]

My hon. Friend has got it exactly.

It takes something, does it not, to have headteachers marching on Downing Street? That has never been seen before. Just what did yesterday’s Budget do to tempt teachers back? What the Chancellor offered was “little extras”. It was an insult, especially when 60% of teachers are not getting a pay rise this year.

There are now 4 million children living in poverty, 500 children’s centres have closed, 500 children’s playgrounds have closed and 128,000 children are living in temporary accommodation. When children’s social care faces a funding gap of £3 billion by 2025, what did the Chancellor offer? Just £84 million for just 20 councils. That will not even scratch the surface of the problem.

[Neil O'Brien (Harborough) (Con)]

rose—

[John McDonnell]

No.

We have a record number of children coming into care. I know what coming into care means for a child: they are scarred for life. Why are they coming into care? Because there has been a 40% cut in funding to councils for early intervention to support families. Let the Government justify that.

On young people, the YMCA reports that spending on youth services has fallen by 62% since 2010. The average graduate comes out of university with a £50,000 debt. The IFS describes home ownership among young people as having collapsed completely. Tragically, with the mounting pressure, a decades-long decline in suicide among men has been reversed since 2010.

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[John McDonnell]

I understand the hon. Member for Croydon South (Chris Philp); he gets excited at times, but as someone who has been excited myself at times, I completely understand.

The Government have been repeatedly forced by the courts to change how they are treating disabled people. They do not seem to have learned their lesson yet, so yesterday we saw no restoration of disability premiums, no end to the cruel social security freeze, and no end to dehumanising and unreliable work capability assessments.

The Government are also putting the livelihoods of future generations at risk. A few weeks ago the world’s leading authority on climate change said that avoiding dangerous climate change would require “rapid, far-reaching and unprecedented” action. What did we get yesterday? We got no mention of climate change, no reversal of cuts to renewable energy, and no significant environmental policy.

[Neil O'Brien]

I am curious: the other day the Government voted through a £650 million scheme to improve energy efficiency and home insulation; why did the Labour party vote against it?

[John McDonnell]

Because it was not on a scale that would have had sufficient impact. I welcome interventions, but I think we should have a rule that when Members intervene they should describe their background, in this case as advisor to George Osborne, who cut back on the solar energy industry, who undermined wind power in this country, and who set us back so that we will never meet our climate change targets.

The impact—[Interruption.] Calm down, calm down—George Osborne used to say that to me, and I said “I’ll calm down when you resign,” and he did. The impact on the self-employed and small businesses has been equally stark. Some 51,000 high street stores closed last year. Wages for the self-employed have collapsed to around the same level as 20 years ago.

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[Matt Hancock]

So many of us know just how important air ambulance services are and the countless lives they save. I am delighted that, on top of the £20.5 billion for the NHS—the biggest ever, longest ever cash settlement for any public service in history—there was £10 million for air ambulances.

[Neil O'Brien]

If my right hon. Friend will excuse another Leicestershire-based health intervention, I am incredibly grateful for the creation of the new Cottage Hospital in Market Harborough, the gleaming new A&E ward at Leicester Royal Infirmary and the decision to save the brilliant children’s heart unit at Glenfield Hospital. Does he agree that that is a more welcome record than the Labour party’s record of bankrupting the country, giving us the biggest recession since the second world war and putting 1 million people on the dole?

[Matt Hancock]

It is true that the Labour party in office has always left unemployment higher than it found it; it is true that, while Labour left the deficit higher, we are bringing it down; and it is true that inequality, too, is coming down. Page 8 of the distributional analysis shows that, contrary to what we heard in that paean of gloom from the shadow Chancellor, the biggest rises in full-time employee gross weekly real earnings over the last three years have been among the 10% least well paid in our country. That is what this Conservative Government are doing—delivering for everybody in our country.

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[Neil O’Brien (Harborough) (Con)]

It is a pleasure to speak in favour of this Budget, which continues the important work that was begun in 2010. A lot has been achieved. We have record employment, with 3.3 million more jobs and 1,000 more people in work every single day. I am particularly proud that we have halved youth unemployment, meaning that more young people can get a good start in life. I meet them all the time in Harborough, and it is a huge pleasure.

Incomes are now rising the fastest that they have in a decade—most rapidly at the bottom end of the labour market—and the national living wage has already increased the wages of people on it by £2,750 a year. That will go up to about £5,000 a year, and combined with increases in the personal allowance, that has raised the income of someone working full time on the national living wage by 44% since 2010 alone. That is one reason why inequality is now lower than at any time under Labour.

The deficit is also down by nine tenths and debt is falling as a share of the economy—in fact, debt as a proportion of GDP is now forecast to go down by a whopping 11 percentage points. The corner has definitely been turned. In the Budget, the Chancellor has helped small businesses in my constituency. He has helped with the cost of living. He not only has debt falling but has a lot of headroom to respond to the needs of our public services. I will come back to that point in a moment, but first, let me note some of the progress we have seen in our public services in recent years, starting with schools.

The proportion of pupils in good or outstanding schools has gone up from 66% to 86% since 2010, which is a huge improvement. Thanks to the national fair funding formula, we are addressing the historical unfairness that has seen places such as Leicestershire do badly. As a result, funding in my constituency over the next two years will go up twice as fast as the national average—and, through things such as the sugar tax and the condition improvement fund, we have seen big improvements such as the new school hall in South Kilworth.

We have also seen many improvements in our schools that are not to do with just spending more money. We have ended the right of appeal against exclusions so that we protect teachers and other pupils against disruption and violence; we have introduced year one phonics screening to nip problems in the bud; we have ended grade inflation and restored rigour; we have stopped Ofsted being so overbearing, which many teachers will welcome; and we have enabled innovations such as the brilliant free schools, which are now the highest-performing type of school in our system.

The improvements go beyond schools and into further education. FE colleges in my constituency can now teach the new T-levels, a new, more rigorous qualification with 25% more funding per student and 50% more hours taught and worked.

[Emma Hardy]

Would these be the same T-levels that the Minister for Apprenticeships and Skills said she would not allow her own children to sit?

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[Neil O'Brien]

The new T-levels will fix a problem that has been known about for 100 years and give us a more technical system that will be more like the German one and will be the envy of the world.

I welcome the £20 billion for the NHS—a staggering £400 million extra a week—and the fact that we have a vigorous new Health Secretary who is bringing new technology into the NHS in order that it will no longer be the place with the most fax machines and pagers in the world. If you really love something, you want it to be the best it can be and you make it the best it can be.

I welcome the fact that crime is down since 2010 and that we protected police spending in real terms in the 2015 spending review, and I welcome the £200 million a year extra in the Budget to counter serious youth violence and the money for counter-terrorism, but I hope that those are a down payment on a strong settlement for law and order in the spending review. I have been unhappy with the lenient sentences people have received in recent cases, such as the motorcyclist who repeatedly kicked a police officer in the head but was spared jail—that was a mistake; an unprovoked assault and wounding in Market Harborough that did not lead to imprisonment. Assaults on prison officers in HMP Gartree were not even prosecuted. We should be jailing more people for longer, and if we need to find additional resource to do it, it will be money well spent.

In the battle to get our terrible deficit under control, a corner has been turned. In the 2010 spending review, annual average real growth in departmental spending was minus 3%; in 2015, it was minus 1.3%; and from next year, it will be plus 1.2%—a clear difference in direction. Some people now argue that, if we exclude everything that is going up, such as health, defence and aid, other things are going down. I have two things to say about that. First, yes, absolutely the NHS has been prioritised—because it is the people’s priority. Secondly, the Chancellor has sensibly left himself some headroom. With national debt as a percentage of GDP now forecast to fall by 11 percentage points over the forecast period, compared to 7.5 percentage points before, we now have some headroom.

Only through a thorough spending review can we find out how much money we need on top of more efficiency. Once that review is complete, if the Chancellor feels he needs to use some of that headroom to invest in strong public services, he will have my full support, but while such a balanced approach has my support, the country is in no position to go on a massive spending spree. To use a diet metaphor, we have been through a difficult diet to stop the country having a heart attack and we have got the weight off, and some people say that we should get back on the burgers and the cream buns. No, we need to stay fit for the long haul and have a strong economy. That is what we will do.

Now that the partisan part of this debate is over and the real cognoscenti are here, let me finish with a couple of points we do not talk about enough in these debates. Labour sometimes says that this is an ideological choice and that we did not need to reduce spending. Why then did Labour’s last Budget propose to reduce total managed expenditure from 48% of GDP to 42% of GDP? We in practice reduced it to 41% of GDP, but the idea that the difference between 42% and 41% is the difference between a massive ideological crusade and sensible socialist cuts is ridiculous. We should be clear in the House that the differences are not so great as they are sometimes made out.

Secondly, we must be careful about promising people a huge spending splurge. We are an ageing society, and the OBR’s fiscal sustainability report forecasts that, in the absence of no policy changes, debt-to-GDP will start to rise because we are all living longer and using the NHS more, and that this will take debt to more than 250% of GDP in the second half of the century. Let us not promise people things we cannot deliver.

Thirdly, let us not be complacent about managing our debt. Sometimes people say, “Oh well, after the second world war we had huge debts that were 250% of GDP and that was fine.” I say to them that we used to have 25% inflation in this country, which cut through our debts pretty quickly, we did not have index-linked debt and we did not have an independent central bank. We must recognise in this House that if we run up big debts, it will be much more difficult than it ever was before to get them down. We must have a prudent approach.

To conclude, if Members on either side of the House say that we should use some of the headroom that we have earned to invest in strong public services, I agree with them. However, if Members want to pretend that there was an easy alternative to what has been done over the past eight years, that is just not the case. If they want to pretend that we can use magic money tree-ism to fund everything we want and not worry about the deficit ever again, that is just not true. The most sensible Opposition Members know that, and if the Opposition ever find themselves in government they will experience it. I plead for an honest debate in this House. We have to have a balanced approach and we must not promise people things that simply cannot be delivered.