Economy and Jobs

Sajid Javid Excerpts

Monday 20th January 2020 Commons Chamber

[The Chancellor of the Exchequer (Sajid Javid)]

The Shadow Chancellor really is a shadow of his former self; that was a litany of complaints and unreconstructed misery. While he is reading from the same old script—one that has been decisively rejected by the British people—we are writing a new chapter for our great country. We have an unshakeable belief in the brilliant future of this great country. While Labour just keep on refighting the same old internal battles, this Conservative Government are getting on with improving our schools and our NHS, tackling crime and getting Brexit done. We will repay the trust that millions of voters have put in the people’s Government.

[Robert Halfon (Harlow) (Con)]

Does my right hon. Friend agree that, with the national living wage, the freeze in fuel duty and the investment in apprenticeships and skills, it is the Conservative party that is the true workers’ party of Great Britain?

[Sajid Javid]

Absolutely. May I take this opportunity to commend my right hon. Friend for all the work he has done on all three of those issues. He is absolutely right in what he says.

Our work has started with this Queen’s Speech, the most radical Queen’s Speech in a generation. It will enshrine in law the largest cash settlement in the NHS’s history and invest more in our schools; it will revolutionise our national infrastructure and make great strides towards net zero emissions by 2050; it will level up, spreading prosperity and opportunity across every region and country of the United Kingdom; and it will build that brighter future for our country on the foundation of economic security and sound public finances. This is a one nation Government delivering the people’s priorities as we embark on a decade of renewal.

As we begin this new chapter in our country’s history, we start with strong economic fundamentals. Our economy has grown in each of the past nine years, and just today, when the International Monetary Fund updated its world economic outlook, it forecast that this year the UK will grow faster than France, Germany, Italy and Japan. Our jobs miracle continues—it is a miracle; Members would think that a party that calls itself the Labour party would welcome a jobs miracle—with the highest employment rate ever and an unemployment rate that is the joint lowest for 45 years.

The UK is an open and competitive economy with some of the most innovative and exciting businesses in the world. Just last week, new figures showed that tech investment in the UK grew faster last year than in the US, China, France and Germany. Although we are optimistic about the future, we are not complacent. It is clear that the uncertainty and indecision of recent months has held back our economy. The global economy is slowing, and an open economy like ours is not immune to global trends. Our productivity growth has not yet recovered to pre-crisis levels, acting as a brake on the potential of our country. The Government have a real opportunity to tackle some of these long-term challenges. I will set out our new economic plan in the Budget on 11 March.

[Julian Knight (Solihull) (Con)]

On my right hon. Friend’s point about investing in new technology and in the future, will he confirm that the Government remain committed to the 2018 automotive sector deal on funding for research into and the development of the infrastructure necessary to support connected and autonomous vehicles? That is a matter of great concern to my constituents and the wider west midlands.

[Sajid Javid]

Yes—I am pleased that my hon. Friend has asked me that. We are absolutely committed to that deal; indeed, we want to go further. The automotive sector is one of our most important sectors, responsible for much of the growth and many of the jobs in our economy. It will certainly get the Government’s strong support.

Let me briefly address an important question for the future of our economy: our future relationship with the EU. We are leaving the EU, its single market and the customs union. We are seeking an ambitious, Canada-style free trade agreement. In doing so, we will be a sovereign and independent country, not a rule taker, so yes, some things will change. It is a new chapter. We are ambitious for British businesses, through a close relationship not only with the EU but with other partners. Some 90% of global growth is expected to come from outside the EU over the next decade, so there are real opportunities for the UK. We will maintain high standards not because we are told to, but because that is what the British people want. Above all, we will be driven by British interests.

[Sir Robert Neill (Bromley and Chislehurst) (Con)]

I welcome what my right hon. Friend is saying, but will he bear in mind in particular the need to protect the interests of the financial services sector, as Britain is a world leader in financial services? It is right that so large a sector would not necessarily be a rule taker, but does he recognise that we need better than the current equivalence regime, to make sure that we maximise access for our world-leading financial services?

[Sajid Javid]

I agree absolutely with my hon. Friend and will come to that topic in just a moment.

The foundation of our new economic plan is fiscal responsibility. It has taken a decade of hard work by the British people to turn our public finances around. The deficit has fallen from 10% of GDP in 2010 to just 1.8% today. We are not going to throw that away. We were elected on a platform to manage the public finances responsibly, so it is a matter of trust, as well as economic credibility, that we deliver on that promise to the British people. We will be bound by a credible new fiscal framework that will keep our borrowing and debt under control while allowing for new investment in levelling up and spreading opportunity throughout the country. At the Budget, I will publish a new charter for budget responsibility that will give effect to those rules, and the Office for Budget Responsibility will scrutinise our performance against them.

Thanks to the hard work of the British people, we have got that deficit down, and debt is under control. We can now afford to invest more in levelling up and spreading opportunity right across our country. The first step will be our national infrastructure strategy. Better infrastructure can boost people’s earning power by making it easier to find work. It can help businesses access new markets. It can help us thrive and grow. It can boost communities and places and improve standards of living. It is simply not good enough that we have fallen behind so many other countries on infrastructure, and the Government are going to fix that.

[Peter Grant (Glenrothes) (SNP)]

The Chancellor may be aware that a very welcome infrastructure announcement was made just before Christmas, when the Scottish Government gave the long-awaited confirmation that the Levenmouth rail link will be reinstated. Exactly how much money do the United Kingdom Government intend to put into that vital project?

--- Later in debate ---

[Sajid Javid]

I am afraid I did not catch the name of the project the hon. Gentleman mentioned. If he wants to stand up again and mention it, I will reply.

[Peter Grant]

The Levenmouth rail link—I can give the Chancellor a map if he wants to know where it is.

[Sajid Javid]

The good news for our citizens, whether in Scotland, England, Northern Ireland or Wales, is that our infrastructure revolution and the funds we intend to use to build new infrastructure will benefit every part of the United Kingdom. When we set out our plans and provide more detail in the forthcoming Budget, there will no doubt be a lot more investment in Scotland.

[Wera Hobhouse (Bath) (LD)]

The climate emergency is real, and we need to transfer quickly to energy resources that are not fossil fuels. That means we need a much bigger electricity grid. Is part of the Chancellor’s proposals for new infrastructure about how we actually get to a fourfold increase in electricity and the infrastructure that needs to go with that?

[Sajid Javid]

The infrastructure revolution will include significant new investment in our ambition—the statutory requirement to get to net zero by 2050, and also our ambition to make great strides towards that. If she will allow me, I will get in a few moments to the amendment in the name of the right hon. Member for Kingston and Surbiton (Sir Edward Davey), which touches on the all-important issue of climate change.

We will invest in infrastructure in every corner and nation of the United Kingdom. We will invest in roads, in railways and in broadband so that our country can boast the most formidable connectivity on the planet.

We will put significant investment into one of the most critical challenges we face, and that is climate change. Our strategy will take huge strides towards achieving our world-leading commitment to achieve net zero emissions by 2050. We will invest in new technologies and markets as we look ahead to the critical COP26 talks later this year.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The Chancellor talks about the investment in technology to challenge climate change. Does that mean the Conservative party will now drop its ideological opposition to onshore wind?

[Sajid Javid]

We have a review into how net zero will be achieved by 2050, and when we publish it the hon. Gentleman will see exactly how we are going to achieve that.

As well as securing our fiscal foundations, levelling up across our country and decarbonisation, our new economic plan will build on one of our more fundamental economic strengths as a country, and that is our openness. This country has always been an open, global, outward-looking country. At the heart of that openness is our belief in free trade. Free trade has raised living standards around the world, it has created jobs and it has lifted millions around the world out of poverty. It will remain a guiding principle of our economic policy.

As we leave the EU, we will have the opportunity to strike new trade deals with our friends and partners across the world. This is a huge opportunity for Britain, especially with so many of our businesses having fantastic trading relationships abroad. The trade Bill that was announced in the Queen’s Speech will help make this opportunity a reality.

When it comes to trade, our biggest exporting sector is our financial and professional services sector, which is a national asset. It employs more than 1 million people, contributes nearly £130 billion to our economy each year and adds value to every region and nation in the UK, not just the City of London. The Queen’s Speech introduces a new financial services Bill that will make sure we secure and enhance the success of that industry.

Of course, openness to the world does not mean that we give up control of our borders. The immigration Bill in the Queen’s Speech will take the necessary steps to end free movement as we leave the EU and regain control, but that does not mean that this country is closed to the best and the brightest from around the world. I am proud of living in a country as diverse as this. Diversity adds to the vibrancy of our society and the growth of our economy. Some of our greatest scientists, artists and entrepreneurs have been first and second-generation migrants. We will never forget their contribution. That is why we have dropped any arbitrary immigration targets, and we are reforming our immigration system through initiatives such as the new, highly flexible fast-track visas for scientists. I urge Members of the House to vote against amendment (b) in the name of the right hon. Member for Ross, Skye and Lochaber (Ian Blackford).

The Queen’s Speech will also support the living standards of our people. The best way to boost living standards is to support working families to earn more and to keep more of what they earn. That is why we aim to raise the national living wage to two thirds of median earnings within five years, and why we are extending its reach to those aged 21 and over. I recently announced a rise in the national living wage of more than 6%, starting on 1 April. This is its largest increase since it was introduced. That is a pay rise for 2.3 million of Britain’s lowest-paid workers.

We are cutting taxes, too. We have already increased the personal allowance to £12,500 and the higher-rate threshold to £50,000 one year earlier than planned, and we will go further when we increase the national insurance threshold next year—a tax cut for more than 30 million people. We have also set out our tax plans regarding the triple tax lock, with no increases in the rates of income tax, VAT or national insurance in this Parliament.

Let me turn briefly to the amendment in the name of the right hon. Member for Kingston and Surbiton (Sir Edward Davey). The UK is already a world leader in clean growth. Between 1990 and 2017, the UK reduced its emissions by 42% while growing the economy by two thirds. We have reduced the carbon intensity of our economy faster than any other G20 country since 2000. Our clean growth strategy sets out how we will continue to cut emissions, while keeping costs down for consumers, creating good jobs and growing our economy, but, of course, we need to go further. The Treasury is carrying out a world-leading net zero review. Our national infrastructure strategy will provide significant new investment into the decarbonisation of our economy and we are acting internationally through the COP26 talks, which will be in Glasgow later this year, so I urge hon. Members to reject the amendment.

[Rachel Reeves (Leeds West) (Lab)]

I welcome the investment that the Chancellor speaks of and the commitment to get to net zero by 2050. Climate change also means more extreme weather events. In Leeds West, we had serious floods in 2015, and yet still the Government refuse to put in the funding to build the flood defences to protect against the one in 200-year flood event that we experienced. When will the Government put the money into that infrastructure?

[Sajid Javid]

That is an important point. I am aware of some of the serious flooding to which the hon. Lady has referred. That is why our national infrastructure plan includes much more funding—significant new funding—for flood defences, and I hope that she will welcome that and support those plans when they come before this House.

Let me also briefly address the amendment in the name of the Leader of the Opposition. Every Labour MP stood on a manifesto that would have cost the average taxpayer an extra £2,400 each year—each and every one of them did that. Labour committed to spending an extra £1.2 trillion over five years, which is equivalent to funding the NHS budget for nine years. It is no wonder that the hon. Member for Salford and Eccles (Rebecca Long Bailey) said, just a few days ago, that the policies that she helped to write lacked “economic credibility”. It is a bit late for that.

Whatever they may say now, every single one of the would-be Labour leaders tried to make the Leader of the Opposition Prime Minister. They endorsed his vision, his world view and his ideas for Britain, and that is why they will never be able to bring the change that the British people voted for. Instead, they are confirming that Labour is the party of the past and that it is out of touch with working people. Labour will just keep on refighting the same old internal battles while this Conservative Government get on with renewing the country.

[Mike Amesbury (Weaver Vale) (Lab)]

I remind the House that taxpayers paid billions of pounds to bail out banks that the Chancellor worked for when he was an investment banker; he should be thanking the British taxpayer.

[Sajid Javid]

May I remind the hon. Gentleman that the banking crisis was so much worse in this country because of the changes made by the previous Labour Government? They were responsible for the depth of that crisis. Gordon Brown and Tony Blair should have listened to the then shadow Chancellor Lord Lilley, who now sits in the other place; at the time, he said that if Labour went ahead with those changes it would be a “field day” for “spivs and crooks”. If they had listened to him, things would have been different. It was the Labour Government who were responsible for the largest banking bail-out in history, and the British people will never forget that.

Just a few weeks ago, the British people were given the starkest choice in decades, between two completely opposed economic visions. On the one hand, the Labour party wants to reach into every corner of people’s lives with the dead hand of nationalisation, excessive regulation and punitive taxation, and its answer to any question one cares to name is yet more state intervention. On the other hand, the Conservatives believe in a dynamic market economy, founded on a promise of openness, enterprise and freedom. The British people have made a decisive choice. They have given us a mandate to deliver. We have a tremendous opportunity to get on with tackling some of the long-term challenges for our economy. A new economic plan will transform the country as we go from a decade of recovery to a decade of renewal. I commend this Queen’s Speech to the House.