Budget: Pre-announcement of Provisions

Simon Clarke Excerpts

Tuesday 26th October 2021 Commons Chamber

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

(Urgent Question): To ask the Chancellor of the Exchequer for a statement on the details of all the provisions in the upcoming Budget that have been made public in advance of the Chancellor’s statement.

[The Chief Secretary to the Treasury (Mr Simon Clarke)]

Mr Speaker, I have the deepest respect for you, this House and all its processes. It is a pleasure to be with you this afternoon. The ability of Parliament to scrutinise the Government, including the Budget, is clearly crucial, which is why we have five days of parliamentary debate ahead of us this week and next, and it is why my right hon. Friend the Chancellor will, in addition, be appearing before two Select Committees of this House next week.

Tomorrow my right hon. Friend will announce a Budget that delivers a stronger economy for the British people, invests in public services and levelling up, and delivers on growth and jobs with a pay rise for 7 million people— 5 million in the public sector and 2 million through an increase in the national living wage.

I will briefly summarise the headline announcements we have already made on the Budget, with the caveat that the bulk of the detail of the Budget will be delivered by the Chancellor himself at this Dispatch Box tomorrow. Importantly, that includes all market-sensitive information. Part of the Government’s objective in trailing specific aspects of the Budget in advance is to help communicate to the public what we are doing with their hard-earned money, because we believe there is merit in clear and accurate information.

I now turn briefly to just a few of the measures we have announced: an increase in the national living wage from £8.91 to £9.50 an hour, meaning an extra £1,000 a year for a full-time worker; £3 billion-worth of investment to build a high-wage, high-skill economy, with a doubling of investment in 16 to 19-year-olds and a quadrupling of the number of skills boot camps; and a multibillion-pound overhaul of local transport to help level up communities across England, with transport settlements for city regions increased to £5.7 billion and allocated directly to cities. As part of the spending review, there is a £5.9 billion deal for the NHS to tackle the backlog of non-emergency procedures and to modernise digital technology, with at least 100 community diagnostic centres to help clear most test backlogs by the end of this Parliament.

These are just a few of the measures that the Chancellor will outline to the House tomorrow as the Government continue their work to deliver a stronger economy for the British people.

[Bridget Phillipson]

Thank you for granting this urgent question, Mr Speaker.

We face an urgent cost of living crisis. Prices are up in our shops, at our petrol pumps and on our heating bills. Families and businesses are waiting and hoping for the Chancellor to take the action that they and our country desperately need. He has not even delivered his Budget yet and it is already falling apart. In recent days, we have read thousands of words about what he plans to do, but the silence is deafening on the soaring bills and rising prices facing families and businesses.

I have five questions for the Chief Secretary to the Treasury today, and I ask him to answer them clearly and simply, not through a press release but to this House. First, will he properly justify withholding from Parliament decisions that he and his colleagues have detailed in the press?

Secondly, the right hon. Gentleman just stood at the Dispatch Box and said that he believes in clear and accurate information. On that basis, will he confirm he understands that, for a full-time worker on the minimum wage in receipt of universal credit, a rise to £9.50 an hour will place far less than an extra £1,000 in their pocket?

Thirdly, will the right hon. Gentleman confirm that the public sector pay rises that Ministers told newspapers about yesterday will be real-terms pay rises, as the Under- Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Sutton and Cheam (Paul Scully), was unable to do so on the telly this morning?

Fourthly, will the Chief Secretary to the Treasury follow Labour’s lead and confirm today, now he is with us, that he will be cutting VAT on domestic heating bills to 0% for six months? Finally, will he back Britain’s high-street firms and freeze business rates now and replace them with a better system fast?

The right hon. Gentleman can tell the newspapers; it is time for him to tell this House.

[Mr Clarke]

It is important that we consider all the measures that have been trailed in the round. It is clear that the wider announcements that have been made are entirely accurate. The national living wage is to rise by £1,000 a year, which will take the benefit for a full-time worker on the national living wage to £5,000 since 2016. That is a substantial increase. It beggars belief that the Labour party can stand there and say that a 6.6% increase in the national living wage is somehow not enough. It needs to be considered in conjunction with all the other announcements that have been made, including the £500 million household support fund, the energy price cap and all the action that we have taken to freeze fuel duty and to keep bills low. We are acutely conscious of the pressures that face households and we take action to modify them.

On public sector pay, which the hon. Lady asked about, I am delighted that we will be returning to the normal processes that adjust public sector pay in the light of all the pressures that exist. It will be for the relevant pay review bodies to discuss that, in conjunction with the Government, in the normal way. I am not going to pre- empt that work, but we will work closely with them to make sure that what is announced is right. The Chancellor will have further details on that in his speech.

On the cost of energy, the energy price cap is protecting households, with up to £100 a year off their bills. That is the right thing to do. We all recognise that that is a priority for all our constituents.

On business rates, we will get the upshot of the fundamental review of how we can get the future of business rates right. The Labour party has committed to abolishing business rates, without any clear idea of how it would fund that. Indeed, the disconnect between what the Labour party has committed to and what it has actually identified the funding for is somewhere in the region of £400 billion of commitments with £5 billion of savings to pay for them. That is not a responsible way to run the economy.

What you will be hearing from the Government Benches tomorrow, Mr Speaker, is a clear plan to make sure that we can not only balance the books but take our economy forward in a way that works for the benefit of all our communities. That is obviously the priority for my right hon. Friend the Chancellor and for me.

[John Redwood (Wokingham) (Con)]

This is not the first Government who have wanted more than one day’s news out of a Budget, but the right way to do it is for all Ministers to observe complete Budget secrecy, for the Chancellor to announce the tax changes and the block totals on spending and then, in the days that follow, for Cabinet Ministers to come to the House to announce the detailed spending plans and subject them to our scrutiny. If that was right for all previous Governments, why is it not right for this one?

[Mr Clarke]

I thank my right hon. Friend for his question, and I completely share his assessment of the importance of this House, of which both the Chancellor and I are acutely aware. In 2013, the then Chancellor, George Osborne, asked the permanent secretary for Her Majesty’s Treasury to conduct a review of the practice of the release of Budget information under embargo on Budget day, and he set out a series of recommendations. His central conclusion was that the Treasury should introduce

“a ban on the pre-release of the core of the Budget…that is: the economic and fiscal projections, the fiscal judgement and individual tax rates, reliefs and allowances.”

We have observed that stricture in full and I am obviously totally committed to continuing to do that.

--- Later in debate ---

[Alison Thewliss (Glasgow Central) (SNP)]

I do not know whether to congratulate the Minister on his promotion, as he has come here to give us the Budget a day early. What he has not given this House is an apology. He should not be announcing things on Twitter; we should be waiting for the Budget to see the full detail. This has been going on since September—it is not new. There have been daily announcements drip-feeding the entire Budget ahead of time. Of course, the Government hold all the cards, along with the Office for Budget Responsibility, because we cannot tell what the detail actually means. For Scotland, we cannot tell what the Barnett consequentials —if, indeed, there are any—will be.

We know what is going to be in the Budget speech and we know what is not going to be in it, because the Government have not done things such as carbon capture and storage in Scotland. Of course, none of it is what the Government and the Chancellor should be doing in the Budget speech. They should be reinstating the £20 universal credit cut; scrapping the national insurance tax on jobs; tackling the spiralling cost-of-living crisis; and supporting hospitality and tourism with a VAT cut to see them through the winter months and into next year.

If the Government cannot be responsible with the powers that they hold and if they cannot be trusted to give us the actual truth on Budget day tomorrow, all the financial powers—I call for this again—should be given to the Scottish Parliament so that we can make the decisions that are right for the people of Scotland.

[Mr Clarke]

I thank the hon. Lady for her remarks. I think that we are much stronger as one United Kingdom. The OECD has reaffirmed that we are expected to have the fastest growth in the G7 both this year and next and that is something that we are achieving as one country together. She asked about the Barnett consequentials. Those will be set out very clearly in the Budget tomorrow. (Interruption.) I can assure her that, of course, we consider this very closely and we will be in a position to give good news for Scotland as part of a strong United Kingdom tomorrow. I had productive conversations about the future of the fiscal framework with the Scottish Finance Minister, Kate Forbes, just last week. I can commit that I will be speaking to her in accordance with the usual Budget conventions tomorrow morning, ahead of the statement.

[Jake Berry (Rossendale and Darwen) (Con)]

I am sure that my right hon. Friend accepts that the rabbit may be out of the hat. So if the Chancellor is still looking for a fluffy bunny to present on Budget day, may I advise that we make a huge announcement about the Government’s levelling-up fund? That would be welcomed by communities across the north of England and demonstrate our Government’s commitment to make sure that we level up the peoples of the north.

[Mr Clarke]

I thank my right hon. Friend for his question. He is absolutely right that levelling up is a core theme of this Government. It is something of which I am very proud, as a north-eastern MP, to have the chance to help deliver, and it is going to be one of the golden threads of the Budget and spending review tomorrow. I wish that I could start plucking rabbits out of the hat for him now, but he will have to wait just a few more hours to get some, hopefully, very welcome news.

[Mr Speaker]

Sky TV tomorrow.

[Dame Angela Eagle (Wallasey) (Lab)]

Thank you, Mr Speaker, for granting this urgent question. It has taken me nearly 30 years, but I now find that I agree with the right hon. Member for Wokingham (John Redwood) in his question. This is serious. As an Opposition, we cannot look in detail at the slew—the blizzard—of Budget announcements that have been going on week after week, because we do not have the OBR report and we do not have the detail. This is treating parliamentary democracy with utter contempt and the Minister should be completely ashamed of himself. He should have come to this House and apologised. His boss should have come to this House and apologised.

[Mr Clarke]

I thank the hon. Lady for her points. Clearly, as a former Treasury Minister herself, she would never have engaged in any activity of this kind. The point is that there is absolutely no question of our commitment to observing all the proprieties, reflecting the Macpherson review, which was an internal review conducted by Sir Nicholas, the then permanent secretary, to work out what was sensible in advance of the Budget. We have not commented on any of the substantive tax measures and there will be a raft of full information in both the Budget documents and the documents provided by the OBR, which obviously provides a level of detail that the last Labour Government never provided in terms of their equivalent events.

[Sir Desmond Swayne (New Forest West) (Con)]

There are two sides to this coin. The first is the Government broadcasting without first letting us know. The other is the information that they are trying to keep from us. Why was the leaked information on the substantial costs of winter plan B marked “Not for publication”? What are the Government trying to hide? Why are they frightened of our scrutiny?

[Mr Clarke]

I thank my right hon. Friend for his question. I will not comment on leaks—[Laughter.] The absolute bottom line is that we are, of course, committed to plan A, and there is no question but that he will find that plan A remains the resolute conviction of both this Government and, I believe, this House in terms of how we can most sensibly take the country through the winter ahead. We are not moving to plan B. We are committed to plan A. He should be reassured that we want to keep our economy and society open as we move through the challenges of the weeks and months ahead.

[Clive Efford (Eltham) (Lab)]

I have been here for many years and have seen many Budgets. I have seen the Order Papers being waved on the day, and then the Budgets fall apart over the following hours and the following days, but this is the first Budget that I have seen fall apart before Budget day. We have heard the announcement about public sector pay, but we have not heard whether, if it is increased, that increase will be funded, or whether it will have to come from within existing budgets. When the Government were forced to increase the pay rise for nurses from 1% to 3%, they did not fund it; they forced it to be funded from within NHS resources. Since we are into leaks, will the Minister tell us whether the Government intend to fund a public sector pay increase?

[Mr Clarke]

Ensuring that we can move out of the shadow of the public sector pay freeze is obviously something that we are all glad to be able to do. The Chancellor will set out the full details of how that will operate in his statement tomorrow.

[Dr Julian Lewis (New Forest East) (Con)]

The Minister is one of the nice guys in Parliament and richly deserved his promotion. What he did not deserve was to be put in this position by an untenable policy. I have to ask him the question: why is it important, right or necessary to share Budget information with the media before it is shared with this House, where it can be subjected to proper scrutiny, and will he give an undertaking on behalf of the Treasury team to stop doing it?

[Mr Clarke]

I thank my right hon. Friend for his kind words. As a Treasury team—indeed, as a Government—we are all committed to ensuring that this House is fully respected. That remains at the core of our work. As a Member of this House, I take that very seriously, and so does the Chancellor. Clearly, when we set out certain announcements, we try to provide some specific information about what the Government are seeking to achieve with those measures. We have respected absolutely and in full the stricture that we should not be talking about tax measures or adjustments, and that is something that I can commit we will absolutely continue to do.

[Wendy Chamberlain (North East Fife) (LD)]

Education has been very much missing from the pre-announcements. Given the amount of learning that our children have lost due to covid, I wonder whether the Minister would give us another leak or pre-announcement by letting us know whether the full £15 billion advocated by the Government’s education recovery adviser before he resigned will be allocated to education, and what support he will be giving to the devolved nations on the same topic.

[Mr Clarke]

It is obviously tremendously important that we help our schools to catch up, given the impact of the months of lost learning owing to the pandemic. I have seen that in my constituency, as the hon. Member will have in hers. The Government have committed £3 billion to date to help with education catch-up. The Chancellor will be speaking more about this matter in his statement tomorrow.

[Mr Philip Hollobone (Kettering) (Con)]

Funded by taxpayers through Her Majesty’s Treasury, the NHS hospital building programme is a flagship policy and a key part of the Treasury’s medium-term forecasts. Kettering General Hospital is one of those hospitals. When NHS England approves the strategic outline case for the hospital and submits those proposals to the Chief Secretary for sign-off, will he look favourably upon it, because it is a key priority for constituents in Kettering?

[Mr Clarke]

My hon. Friend is absolutely right to speak up for the hospital in his constituency. The Government have committed to 40 new hospitals and 70 hospital upgrades. That is a core part of our programme to ensure that the NHS is fit for the future. I will, of course, be delighted to look at the case for Kettering General Hospital, as will ministerial colleagues across the piece, including at the Department of Health and Social Care. I would be delighted to have further meetings on the subject with my hon. Friend, if that would be useful to him.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

Mr Speaker, the Minister said at the beginning that he respected you and this House, but does he not accept that the reason that we are here now, having this urgent question, is precisely because the opposite has happened? When he answers that question, perhaps he can also enlighten us: has he had discussions with the Welsh Government about the UK shared prosperity fund in the way that he has with the editors of the national newspapers?

[Mr Clarke]

There is absolutely no doubt that we have observed all the proprieties by not talking about tax measures in any of the discussions that have been had. I am in regular contact with the Welsh Government. Indeed, I met the Welsh Finance Minister last week and will be speaking to her again tomorrow morning ahead of the Budget, in the usual way.

[Jacob Young (Redcar) (Con)]

I welcome the announcements that have been trailed ahead of the Budget, in particular the latest announcement on the national living wage. Will my right hon. Friend outline how this national living wage will help my constituents and his in Teesside?

[Mr Clarke]

Ensuring that work always pays is one of the foundational principles of this Government. It is what differentiates us, frankly, from the last Labour Government, who had a series of policies that, I am afraid, did not incentivise work. That led to what the then editor of The Spectator termed,

“the most expensive poverty in the world.”

I am afraid that that was the unfortunate legacy of a series of failed policies. My hon. Friend is absolutely right in saying that the national living wage rise is the right thing to do. I am excited about that policy, and it continues our strong track record of ensuring that our plan for jobs is matched by rising living standards.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

Diolch, Mr Speaker. Many of the pre-Budget announcements relate to the so-called levelling-up agenda, of which the community renewal fund is a key element. Given the delay in announcing the initial successful bidders, will the Minister press the Chancellor at this late stage to make an announcement tomorrow to extend the delivery time for those that were successful in the first phase?

[Mr Clarke]

I would be happy to look at the hon. Gentleman’s recommendation, but there will be further announcements on the community ownership fund tomorrow.

[Andy McDonald (Middlesbrough) (Lab)]

Mr Speaker, you may have read in the press that the Chancellor is preparing to tell us tomorrow that the national minimum wage will increase to £9.50 next April, but that remains way below the income that a worker can live on. Worse still, the savage age discrimination will carry on, with young people in Middlesbrough, across Teesside and across the country having to suffer appallingly low pay. The current rate for under-18s is £4.62 an hour. That is an increase of just 98p since 2010, meaning that their wages have gone down in real terms. Will the Government stop treating young people with such disdain, commit to scrapping the age bands and uplift the national minimum wage to £15 an hour, so that all workers can live fully flourishing lives?

[Mr Clarke]

I thank the hon. Gentleman for his point. Clearly, he might want to take this matter up with the leader of his own party, as I understand that it has been the subject of some disagreement. The Government are of course committed to ensuring that younger workers get fair pay. We obviously have to balance that against the wider commitment that we have to ensuring that we do not perpetuate the serious situation of youth unemployment that we inherited from the last Labour Government. There will be good news for younger workers in the Budget tomorrow.

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

These decisions made by the Government deeply affect people’s lives: energy bills are rocketing; inflation is up; food and petrol prices are up; furlough has ended; and universal credit has been cut. It is no wonder that Citizens Advice Scotland is predicting that my constituents and others will face a really tough winter. They then face an increase in national insurance. With that in mind, is the Chancellor really going to give his old pals in the City a tax cut in the Budget tomorrow?

[Mr Clarke]

The hon. Gentleman will be aware that the £500 million household support fund is being put in place precisely to ensure that we protect families through the winter that lies ahead. That comes on top of all the measures that we have put in place to ensure that we adjust for the cost of living. This Government tax people very fairly. The richest 1% and 5% are paying more tax than they did under the last Labour Government. That includes the banks, which pay their fair share as part of a wider economic settlement.

[Catherine West (Hornsey and Wood Green) (Lab)]

VAT receipts have been climbing, which is a good thing. Will the Treasury look at helping those with very high fuel bills—for example, those with many children, those who have to keep their heating on during the day, those who are ill and pensioners—over the coming winter? Will the Minister consider that as part of tomorrow’s package—which, of course, will be announced tomorrow?

[Mr Clarke]

The household support fund is specifically targeted in order to help with the cost of living. Indeed, much of it is ringfenced for families with children, reflecting the sense of what the hon. Lady is saying. The energy price cap works with that, as does the warm home discount. The warm home discount is becoming more generous next year, as the number of people who benefit from it rises from 2.2 million to 3 million, and its value rises from £140 to £150. Those are the kinds of measures that we will continue to look at. The Chancellor will speak about VAT as part of the wider Budget settlement tomorrow.

[Jack Dromey (Birmingham, Erdington) (Lab)]

Eighteen years ago, I was deputy general secretary of the Transport and General Workers Union. I was a founder member of the drive for the living wage, when we organised 3,000 cleaners in Canary Wharf and the City of London. I agree with the Resolution Foundation that the proposed increase would “not remotely compensate” those who will lose £1,000 as a result of the cut to universal credit. With workers facing a cost of living crisis, rising energy costs, rising inflation, rising fuel costs and rising food prices, is it not the case that workers’ living standards will continue to be squeezed as the Government give with one hand and take away with another?

[Mr Clarke]

No, I do not accept the premise of the hon. Gentleman’s point. We remain committed to our ambitious target of the national living wage reaching two thirds of median earnings by the end of the Parliament and expanding it to include workers over the age of 21. We have done an awful lot to help with living standards—doubling the personal tax threshold, doubling free childcare, expanding free school meals for all five to seven-year-olds, and introducing the new household support fund and the energy price cap—and further measures will be announced by my right hon. Friend the Chancellor tomorrow.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I suppose the attraction of delivering a Budget by press release is that it bypasses this House, so when the Government announce billions of pounds to level up transport in the north, I do not get to say that there is nothing in that for Newcastle, where extortionate bus fares are part of the cost of living crisis that my constituents are facing; and when the Minister says that the minimum wage is going up, I do not get to point out that universal credit recipients in Newcastle will still be £800 a year worse off. Why does he think that the Government should not be accountable to the people of Newcastle upon Tyne Central?

[Mr Clarke]

I absolutely do believe that we should be accountable to the people of Newcastle upon Tyne Central. That is why I am here. It is why there will be a five-day Budget debate over the course of the days ahead. It is why my right hon. Friend the Chancellor will appear in front of a Select Committee. On the hon. Lady’s point about transport settlements, we need to unlock devolution in north-east England. My No. 1 ask of the Labour authorities in that part of the world would be to make sure that they get their act together and unlock a devolution settlement.

[Stephen Flynn (Aberdeen South) (SNP)]

As well as knowing what the Government will be doing, we also know what they intend not to do. We know that they will not be investing in carbon capture and underground storage in Scotland, and we know that they will not be match-funding the Scottish Government’s £500 million just transition fund. Yet the Treasury has raked in some £350 billion of oil revenues over the decades, so why is the Minister’s Department now turning its back on Scotland?

[Mr Clarke]

Leaving aside tired clichés about our attitude to Scotland, which I am afraid is all we ever get from SNP Members, we are of course a Government committed to the success of the whole of the United Kingdom. The Budget will contain within it many things that reflect the major benefits of the Union for Scotland just as much as for England, Wales and Northern Ireland. As a proud British citizen, I would not accept the sense of what the hon. Gentleman says. On carbon capture, utilisation and storage, the Scottish project remains the first reserve, as he will know. We intend to take this project forward, alongside a flourishing North sea oil and gas sector, offshore wind and all the things that will go together to reflect the £30 billion-worth of commitments made as part of our net zero strategy.

[Matt Western (Warwick and Leamington) (Lab)]

Thank you for agreeing to this urgent question, Mr Speaker, because this is getting out of hand, as I am sure you will agree. Only yesterday, I asked the Universities Minister if she would announce the decision on the Augar review and the Government’s response publicly in the Chamber, and she would not commit to that. Perhaps, Mr Speaker, you could follow that up with the Department for Education and make sure that the announcement actually is delivered here in the Chamber. In the past few days we have had more announcements than you get on the Clapham omnibus about the Budget, much of it commercially sensitive. When were the newspapers given details of the announcements the Government were making in the Budget, and when was the advisory board of the Conservative party made aware of some of these announcements?

[Mr Clarke]

I really do not know what the hon. Gentleman is implying with his question, but clearly no impropriety has occurred. All announcements are made as usual through the normal Treasury and cross-Government processes to make sure that those announcements are released to the media.

[Jim Shannon (Strangford) (DUP)]

Does the Minister agree that being drip-fed Budget snippets from the press rather than in this House makes it more difficult for right hon. and hon. Members to fully consider the principles without the biased slant of the media? Is he prepared to consider allowing Members access to the Budget the night before, under strict embargo, to enable consideration of the documentation rather than media presentation?

[Mr Clarke]

I thank the hon. Gentleman, who is of course one of the most assiduous Members of this House. Clearly we all look to make sure that the Budget documentation is as full and as frank as possible—we have the work of the independent Office for Budget Responsibility as well—to make sure precisely that the Budget debate that follows can be as fully informed as possible as to the full implications of all the measures that are announced.

[Mr Speaker]

Can I just ask for a little clarification from the Minister? He has made an announcement to the House that I am not sure is correct: he said that it is a five-day debate, but I thought it was only four days.

[Mr Clarke]

My apologies, Mr Speaker: it is a four-day debate.

[Mr Speaker]

At least we have heard it in the House first.