Sajid Javid
Main Page: Sajid Javid (Conservative - Bromsgrove)Department Debates - View all Sajid Javid's debates with the HM Treasury
(5 years ago)
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The Chancellor of the Exchequer (Sajid Javid)
I have been sitting here for the last 30 minutes or so listening to the shadow Chancellor, and I have to say, “The brass neck of the shadow Chancellor!” No mention of the jobs boom and rising wages; no mention of bringing the deficit down by four fifths; no mention of our huge investment in public services; and no support at all for this Queen’s Speech, which delivers on the people’s priorities and moves this country forward from a decade of recovery to a decade of renewal. It is a Queen’s Speech that backs our NHS with £34 billion a year of new investment by 2024, that backs law and order with 20,000 new police officers, that backs the next generation with £14 billion more funding so that every school has more money for every child, that takes great strides towards decarbonising our economy and that boosts our economic infrastructure, increasing investment in roads, railways and energy.
Sir Edward Davey (Kingston and Surbiton) (LD)
Will the Chancellor publish today an economic impact assessment—an assessment of the public finance impacts —of the Prime Minister’s hard-deal Brexit, and if he won’t, why not?
Sajid Javid
If the right hon. Gentleman bears with me, I will come on to that issue in just a moment.
We can only do all these things that I have just mentioned because of the strength of our economy and our commitment to fiscal responsibility, and because of the hard work of the British people over the last decade. We will not throw that away.
One of the most important measures in the Queen’s Speech is of course the withdrawal agreement Bill. Passing this Bill will allow us to get Brexit done, to focus on the people’s priorities and to move forward as a country.
And let me be clear about one thing: people said that we could not do it—they said that we would not be able to reopen the withdrawal agreement—and we did; they said that we would not be able to get rid of a backstop, and we did; they said that we would not be able to negotiate a better deal, and we did. And then they said that we would not get Parliament to support that deal, and, guess what, we did that too. They were wrong, wrong and wrong again, as they always are.
Let me address the issue raised by the right hon. Member for Kingston and Surbiton (Sir Edward Davey) and the shadow Chancellor about concerns expressed in this House about the impact assessment of the deal. What Parliament is being asked to vote on is the withdrawal agreement, which covers the deal on the budget, citizens’ rights and Northern Ireland. The Government have already provided and published a full impact assessment; it is a shame that the shadow Chancellor has not even bothered to look at it yet. The political declaration lays the groundwork for our future relationship, and with those final details still to be negotiated the only thing blocking us from getting on with Brexit is the Labour party and its disposition to dither and delay. Once we leave the EU we will start those talks, and of course we will keep Parliament fully informed at every stage of the process.
Susan Elan Jones (Clwyd South) (Lab)
I knew I had a sense of déjà vu when I heard the Chancellor speak, and I remember from when: it was from when I was a child listening to “Jackanory.” This is exactly the same: story time. The previous Prime Minister published a proper economic assessment of her Brexit deal; why will this current Prime Minister not do the same? For heaven’s sake, just answer the question.
Sajid Javid
The hon. Lady was a fan of “Jackanory”; now I know why she joined the Labour party. It is all fitting into place.
On that point, some Members may point to the economic analysis, as the hon. Lady has, that was published by the Government in November of last year, but that document looks at the possible economic impact of a generic average free trade agreement; it does not represent the ambitious free trade agreement that we have agreed. We have agreed with the EU that both parties will have a deep, best-in-class free trade agreement that is far more ambitious on things like data exchange, tariffs, energy and financial services, and none of those benefits are captured in the Government’s previous modelling. So it is clear that what we need to do is this: end the dither and delay and move forward as a country.
Ruth George (High Peak) (Lab)
The Chancellor said that the economic prosperity has been delivered by the hard work of the British people. Does he agree that that is the 14 million people who are now in poverty and the 4.5 million children who are living in poverty, and why is his Queen’s Speech silent on how to lift those people out of poverty and end what he calls their hard work?
Sajid Javid
I would think that, being a member of a party that is called the Labour party, the hon. Lady would understand that the best way out of poverty for anyone is a growing economy that creates jobs. Since 2010, there are over 1 million fewer workless households—a record low—there are 730,000 fewer children living in workless households, also a record low, and there are 50,000 fewer households where no member has ever worked.
Harriett Baldwin (West Worcestershire) (Con)
Will the Chancellor in his excellent speech also tell the House how much better off someone on low pay is, because, with the increases in the living wage and the increases in the tax-free threshold, households are taking home much more, particularly the lowest paid?
Sajid Javid
I am pleased that my hon. Friend has raised that, because it allows me to remind the House that since 2010, because of the actions that we have taken, including the rise in the minimum wage and tax cuts, the average person working full-time on the minimum wage is around £3,500 better off a year—that is because of actions we have taken.
Our relationship with the EU is a critically important factor affecting the UK economy, but it is of course not the only one. Unlike the Labour party, we will never talk down Britain’s economy. The shadow Chancellor has predicted a recession almost every year since we came into office, as he was doing just a moment ago—he does it all the time—but the underlying fundamentals of our economy are incredibly strong: nine years of growth; a healthy labour market with the lowest unemployment rate this country has seen in 45 years; low and stable inflation; and an attractive environment for foreign investment.
So I am optimistic about the future, but I am not complacent. We need to prepare our economy to seize the opportunities of leaving the EU, and that is why we are putting to the House the programme in this Queen’s Speech.
Tom Tugendhat
My right hon. Friend has already addressed one issue in looking at the impact assessments of various plans. Has he done an impact assessment of what the implications of borrowing £200 billion would be on the British economy—what it would do to future investment and future pensions, and what it would actually do to the working people of this country and how it would destroy their futures?
Sajid Javid
Even my nine-year-old daughter could do that impact assessment; she would not even need a calculator. It would crash the economy, like every Labour Government do.
Ben Bradley
My hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) has somewhat stolen my thunder. There is a lot of talk about economic impact assessments, but what about rising income tax, rising corporation tax, death duties, taxes on flights and holidays, and voting against nearly £10,000 of tax cuts in this place under this Government? That is the shadow Chancellor’s Policy. What is my right hon. Friend the Chancellor’s economic impact assessment of what that would do to the pockets of my constituents?
Sajid Javid
I will come on to just that, and I thank my hon. Friend for reminding us; we know the impact of that would be again to crash our economy.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
The Chancellor knows that under the British Government’s Brexit plans, the no-deal cliff-edge would only move to the end of phase 2. So if we do get to his Budget statement on 6 November, can we ask the Office for Budget Responsibility to give us some analysis of what that would mean for the British economy?
Sajid Javid
First, there is no no-deal cliff-edge. If the hon. Gentleman wants to have a smooth exit from the EU, he knows what to do—vote for the deal and support the Government’s programme motion.
Sajid Javid
Sound public finances are the foundation of economic prosperity and strong public services, and we have come a long way since 2010. We inherited a deficit of 10% of GDP. At that time, that was the biggest Budget deficit of any advanced economy. It was equivalent to borrowing £5,000 every single second.
Sajid Javid
The hon. Gentleman says we caused it. That was what was in place when Labour were in office —£5,000 every second. Let us address that point. [Interruption.]
Sajid Javid
I think what the hon. Gentleman wants to hear is the point I am going to make next, because I think he wants to be reminded that the whole economy was scarred by Labour’s great recession. It gave us the biggest banking crash, not just in British history, but in global history. [Interruption.] The shadow Minister, the hon. Member for Oxford East (Anneliese Dodds), from a sedentary position, asks why; let me tell her why. The shadow Chancellor—[Interruption.] Let me explain. The shadow Chancellor referred to the work of Gordon Brown as though Gordon Brown did some good things. Gordon Brown was the Labour Chancellor that deregulated the banking and financial sector, and—[Interruption.]
Madam Deputy Speaker
Order. It is a very important debate, but I do not want the Chancellor of the Exchequer to be shouted down.
Sajid Javid
As I was saying, Gordon Brown, as Chancellor in 1997, boasted about deregulating the banks and the financial sector. At the time, he was warned by the then shadow Chancellor—the Conservative shadow Chancellor—Peter Lilley, that deregulation would
“cause regulators to take their eye off the ball”—[Official Report, 1 November 1997; Vol. 300, c. 731-2]—
and that it would be a field day for spivs and crooks everywhere. That is what he said, in this House, and during Labour’s term in office, bank leverage rocketed from an average of 20 before they came to office to an average of 50 times during their entire time in office. Labour was responsible for the biggest banking crash in global history, and they had better get used to it.
Sajid Javid
I will give way when I have made some progress.
We have turned the economy and the public finances around, and I am not prepared at all to throw away that hard work. The Queen’s Speech puts fiscal responsibility at the heart of our plans, with a clear commitment to ensuring that we keep control of borrowing and debt. I will set out our detailed plans in the Budget.
Rushanara Ali (Bethnal Green and Bow) (Lab)
I just want to highlight the brass neck of the Chancellor, having worked in the banking sector, not to accept that it is the banking crisis—the clue is in the name. He then came into Parliament and presided over dreadful, drastic cuts on our constituents—police cuts, school cuts; the list goes on. Now he has the brass neck to say that it is all going to be fine—that we can have our cake and eat it. Having damaged people’s lives, he should take responsibility before he starts attacking the Labour party.
Sajid Javid
Now, I know the hon. Lady has to say those things, because I think she is applying for a job as well, but she knows that when she became an MP, in the same year as I did, the deficit that the new Government inherited was 10% of GDP. She talks again about the banking crisis. She has to ask herself: why did Britain have the biggest banking crisis in global history? The answer is, because of the Labour Government.
Sajid Javid
I give way to my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake).
Kevin Hollinrake
One of the worst effects of the banking crisis was the impact that it had on many thousands of small and medium-sized enterprises in this country, who lost their livelihoods and sometimes their homes. The Business Banking Resolution Service, which has been set up to deal with historic complaints, is excluding many people on very tight eligibility criteria, which I regard as unfair, as someone who sits on that steering group. I believe it requires the intervention of the Chancellor to get UK Finance to come to the table, to be fairer about those eligibility criteria. Will he commit to do that?
Sajid Javid
Look, first I commend my hon. Friend for all the work that he has done, and continues to do, to support small businesses throughout the country. He has raised an important issue. He knows that work is ongoing to address that, but I would be happy to meet him and discuss it further.
Kirstene Hair (Angus) (Con)
Is it not because of the hard work of this UK Government to balance the economy that we are spending more in the devolved nations, with an extra £1.2 billion for Scotland in the latest spending review? Does he agree that that is in stark contrast to the shadow Chancellor, who would enable a second independence referendum in Scotland on a whim, despite the will of the Scottish people, who do not want that referendum, despite the economic damage that that would cause, and despite the fact that he used to belong to a Unionist party?
Sajid Javid
My hon. Friend is absolutely right. In fact, the SNP’s obsession with another damaging referendum on independence is already hitting growth in Scotland, and that is why Scotland is lagging behind in growth terms compared with any other part of the UK.
Sajid Javid
I will make some progress and then I will give way.
I want to contrast our approach with that of Labour Front Benchers, who have demanded higher borrowing and higher taxes at every Budget and Queen’s Speech for the past 40-odd years. Their tax rises would hit hard-working families, and they will not be clear on that. Their tax avoidance plans contain a £2.5 billion mistake, and that is according to the Institute for Fiscal Studies. Their spending promises would cost far more than they say. Their manifesto contained £1 trillion of spending commitments. For the shadow Chancellor’s benefit, let me say that that is £1,000 billion of spending commitments. They have not costed expensive promises such as renationalisation, and they have made dozens of unfunded promises since the last election. And you know what is even worse than that? The shadow Chancellor has admitted that the huge borrowing plans that he has are just “the first step”—he means the first step back to the road of ruin.
Matt Rodda
I wonder whether the Chancellor remembers the following statement, which is from his own website; it is still there today:
“The only thing leaving the EU guarantees is a lost decade for British business”.
Perhaps he would like to comment on that.
Sajid Javid
I will comment on that because, probably like the hon. Gentleman, I campaigned for remain, and I lost the argument; but I am a democrat, unlike the hon. Gentleman.
Mark Pritchard (The Wrekin) (Con)
I am glad to report that Shropshire has the lowest unemployment in its history. In fact nationally, as the Chancellor knows, there are over 1 million vacancies, which in itself raises a challenge for the Government as a result of their own success. As we discuss the points-based migration system with colleagues across government, given that many vacancies in Shropshire need to be filled in agriculture, in the NHS and in manufacturing, can we ensure that we still secure the very best and brightest for our jobs market not only domestically, but from the international community—Commonwealth, non-Commonwealth and the EU?
Sajid Javid
Yes, I agree with my hon. Friend. When I address amendment (h), I will say a bit more about that.
Sajid Javid
I will make some progress.
There are some who would have us abandon fiscal responsibility altogether, and to those people I say this: it is only because of the hard work of the British people that we can now afford to invest more, and that is what we are doing when we kick-start a decade of renewal in this country. Our top priority is economic infrastructure. High-quality and reliable infrastructure is essential to how we live, work and travel. The UK is the fifth-largest economy in the world, and it is not good enough that we have fallen so far behind other nations on infrastructure, so we are going to fix that. I can therefore confirm today that our national infrastructure strategy will be published at the Budget. That strategy will deliver better transport, faster broadband and wider mobile coverage. It will level up every region and nation of this great United Kingdom and deliver an infrastructure revolution. The strategy will take great strides for the decarbonisation of our economy, which is one of this country’s most important challenges, by building on our record as the first major economy in the world to legislate for net zero by 2050.
Eddie Hughes (Walsall North) (Con)
I thank the Chancellor for responding so positively to a joint campaign by me and Andy Street, the Mayor of the West Midlands, for funding to open two additional train stations in Walsall, including one in Willenhall in my constituency. I thank the Chancellor for that money.
Sajid Javid
That is exactly what I mean when I talk about levelling up the economy and ensuring that all parts of our great nation are benefiting from the infra- structure revolution.
Tim Farron
The Chancellor is being generous in giving way. As taxpayers, the British people collectively bailed out the banks a decade ago, and the banks have repaid taxpayers by closing down branches on every high street and in every village in the country. Just in the past two weeks, we have seen Barclays withdraw from the scheme that underpinned the Post Office, which now does its work for it. Will he stand up to Barclays and demand that it remains part of that Post Office scheme?
Sajid Javid
I agree with the hon. Gentleman that the banks should think carefully about their responsibilities to all communities, and the Economic Secretary to the Treasury met the chief executive of Barclays just today to discuss that very issue.
Luke Graham (Ochil and South Perthshire) (Con)
I welcome my right hon. Friend’s announcements on infrastructure and broadband, which will also apply to Scotland. Will he also confirm that we were spending around £20 billion more on interest payments when the Conservatives and Liberal Democrats came into government? Those interest payments were going to international bondholders, so the friends of the international bankers and financiers are, in fact, in the Labour party, not the Conservatives.
Sajid Javid
My hon. Friend is right. A Labour Chancellor deregulated banking and created a light-touch system, and we all paid the price.
I want to compare my approach to infrastructure with Labour’s. I am going to invest in new infrastructure that will grow the economy. Labour would borrow hundreds of billions to renationalise productive assets and then run them into the ground. I want to unleash all the talent and expertise of the private sector. Labour says—I quote the shadow Chancellor here—that business is the “enemy” and would tax it into submission. I will do all my work within a careful and credible fiscal framework; Labour would simply waste the money just like last time.
Clive Efford
There is a real credibility gap in what the Chancellor is saying, because if austerity was the right thing to do in 2010, why is it not still the right thing to do now, given that debt has doubled to £1.8 trillion or 80% of GDP? How can we believe that the Government intend to go on this huge spending spree when they have been doing quite the opposite to try to tackle the problem? The Chancellor is keen on quoting the Institute for Fiscal Studies, but it predicts that we will need another dose of austerity if he carries on. This economy needs investment, not the austerity that the Government are planning.
Sajid Javid
First, the IFS does not predict that at all, so the Gentleman should check his facts. Secondly, I gently point out to him that debt is brought under control by controlling borrowing. Borrowing is the deficit, and the deficit was what the Labour party left at 10% of GDP, but it is now four fifths less than that. Controlling borrowing is how we bring debt under control.
Better infrastructure and fiscal responsibility will enable our future economic growth, but so will trade. Ninety per cent. of future global economic growth is estimated to be outside Europe, with more than a quarter coming from China alone. Britain has always been an open country that believes in free trade. British businesses have strong trading relationships around the world. The new deal that we have agreed with the EU will allow us to have an independent trade policy and to strike new trade agreements with countries around the world, and the new trade Bill will put that into practice. Let me compare that with Labour’s position on trade. Labour would lock us into the EU customs union, ending any chance of an independent trade policy. How did Labour’s head of trade policy describe Labour’s views? He said:
“We reject the whole principle of free trade.”
Our support for free trade is not the only thing that marks Britain out on the global stage. Our remarkable financial services sector, which is now back to good health, does so, too. It is not just the City of London; our financial services sector involves the entire UK. All our financial and professional services firms truly are a national asset, employing more than a million people and contributing more than £130 billion to our economy every year. The financial services legislation that we brought forward in the Queen’s Speech will maintain and enhance our position as a world-leading financial centre after we leave the EU.
This Queen’s Speech gets Brexit done, invests more to grow the economy and delivers on the people’s priorities: action on infrastructure, trade and financial services, and a new economic plan for a new decade of renewal.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I am sure that the Chancellor is correct that some parts of the economy will benefit from a number of the changes, but other parts of the economy, particularly in the north-east, will be heavily damaged by the plans that he is outlining and that are outlined in the deal. The north-east exports over 60% of its goods to the EU, and hurting that relationship will be hugely damaging to our region. He does not seem to be taking any account of the disparate regional impacts around the country.
Sajid Javid
I do not accept the hon. Lady’s analysis. Once we leave the EU with the close economic partnership that is set out in the political declaration, our economy will continue to be one of the strongest in the world, unleashing many new opportunities for all parts of our country, including the north-east.
Turning to the amendment tabled by the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), let me be clear about one thing: Britain will always be an open, global, outward-looking country. I am proud of living in a country as diverse as this one. We have dropped arbitrary immigration targets and recently announced new highly flexible fast-track visas for scientists; none of that will change as we leave the EU. We will continue to welcome the best and the brightest from across the world. I therefore urge all hon. Members to vote against amendment (h) because it is important that we end free movement as we regain control of our borders.
I turn now to the shadow Chancellor’s amendment. There are no mainstream parties in the developed world with an economic agenda as extreme as the one now proposed by Labour. There is no tax that the Labour party would not hike, there is no business that it would not nationalise, and there is no strike that it would not support. Instead of embracing the future, the shadow Chancellor demands that we turn back the clock on progress. He claims that 95% of people would face no income tax hikes under Labour, but then proposes more than 20 new tax hikes. He claims that he would protect pensioners, but tell that to the millions whose pensions will be smashed by Labour’s threats to renationalise vast swathes of the economy without any proper compensation. He told businesses he had nothing up his sleeve, but then he announced plans to confiscate £300 billion of shares from private investors in the biggest state raid this country will ever see.
The shadow Chancellor has never worked in a business. He does not get business. He even refuses to name a single business that he admires. And guess what? He calls business the real enemy. Given his threats to hike taxes, to renationalise businesses and to load them up with new bills and regulations, I am pretty sure the feeling is mutual.
We have even heard Labour officials suggesting—I am not making this up—the nationalisation of travel agents. It will be free trips to Havana for Labour Front Benchers, and perhaps a ticket to Siberia for the hon. Member for West Bromwich East (Tom Watson). The simple truth is that Labour is not fit to govern. It would wreck the economy and hard-working families would pay the price, just like last time.
These are the fundamental dividing lines in British politics today. We will raise wages; Labour will raise taxes. We will back business; it will smash business. We will get Brexit done; it will dither and delay. A Conservative party that believes in free enterprise and that will get Brexit done and deliver the change people want; or an anti-aspiration, anti-business Labour party led by a pair who would wreck the economy, cancel the referendum and leave Britain less secure and less safe.
I know the shadow Chancellor is a fan of the little red book, but these days he is less Chairman Mao and more Colonel Sanders—too chicken to face an election. Let us back this deal; let us back this Queen’s Speech; and let us have a general election. I commend the Queen’s Speech to the House.