Simon Clarke
Main Page: Simon Clarke (Conservative - Middlesbrough South and East Cleveland)Department Debates - View all Simon Clarke's debates with the HM Treasury
(2 years, 4 months ago)
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The Chief Secretary to the Treasury (Mr Simon Clarke)
I hasten to say that we very much remain in office, Madam Deputy Speaker. I am pleased to respond for the Government to this debate. I begin by saying, as I have on many occasions, that we understand the impact of global inflationary pressures on the cost of living. We have already acted in many different ways to ease those pressures, and we will continue to do so; we are acting, as we see it, reasonably and responsibly to help UK households get through this. The reality is that we are experiencing a perfect storm of international supply shocks. High global energy and commodity prices, together with problems affecting international supply chains in the wake of the pandemic, have pushed up prices around the world, and consumers and businesses are feeling the pinch.
Chi Onwurah
I thank the Chief Secretary for giving way. Is it his view that 10 years of austerity economics, which slashed the capacity of both central and local government to spend, left our Government’s public services with the resilience to meet the demands of the covid crisis, and the cost of living and inflation crisis?
Mr Clarke
I take the view that 10 years of responsible government made sure that this Government had the financial resources available to unleash £400 billion of support for the UK economy in response to the pandemic.
On top of the issues with supply chains, Russia’s invasion of Ukraine has significantly worsened the situation. I know that the House is united in the view that we should stay the course with Ukraine and stand up for freedom and democracy there in the face of this barbaric onslaught, but that comes at a cost. Domestic factors have also started to play more of a role. For example, although our very low rate of unemployment is welcome and good in its own right, that contributes to the relatively high rate of inflation.
Rising inflation poses a challenge for the public finances, as it does for family budgets. As in many other countries, high inflation is acting as a curb on growth. The good news, which I will come to, is that the Government have the tools and the determination to tackle inflation and boost growth—namely, an independent monetary policy, a responsible fiscal approach and a focus on supply-side reform.
Hywel Williams
I notice that the right hon. Gentleman did not include Brexit in his little list. Last week, the Resolution Foundation said that by 2030, Brexit will cost the average worker more than £470 per annum in lost pay. Would he like to include that in his list?
Mr Clarke
Well, there have been many projections about Brexit, many of which have proved totally wrong. I certainly do not regret my vote to leave the European Union. We managed the fastest vaccine roll-out in Europe; we are able to create our new freeports; we are free of the European Court of Justice; and we are not sending huge sums to Brussels, and can instead deploy that money for the public good. Frankly, those are all reasons why this Government were returned with a thumping majority in 2019. Crucially, it is a settled question, and it would be well for this country to move beyond it. There are all sorts of debates to be had about how we can take advantage of our decision to leave the European Union; those would be a more productive use of this House’s time.
We have a plan to grow the economy sustainably, boost productivity and improve living standards for millions of households in the years to come. In the past two years, the Government have demonstrated our determination to lead this country through the worst crisis—indeed, crises—in living memory. We will do the same as we tackle the challenges of today. As I have mentioned, the Government have taken steps to address the cost of living challenges. We are putting £37 billion into helping households, and are targeting that support at those who need it most. The households most vulnerable to high inflation will receive an extra £1,200 this year, with the first payments coming next month. Everyone will benefit from our energy support package, which will provide £550 for 28 million households.
Dr Luke Evans
I have had the good fortune to go to Hinckley jobcentre to see how things are functioning there, given the adversity that our constituents face. One of its strongest features is the household fund, which delivers to those who are most needy. It gives the officer who sits in front of an individual the flexibility and accountability to support them at that point. Is that not exactly what we should be doing—targeting our greatest support at those who are most vulnerable?
Mr Clarke
I completely agree. That has also been my experience at my jobcentre. It is really important that across the House we emphasise that our jobcentres are a fantastic source of support and not something to be scared of. The teams in my constituency could not be more committed to helping the public; I am sure that the same is true of those in my hon. Friend’s constituency. That is a really important message, given our aim of getting as many people as possible into work.
Crucially, our package of support is more generous than what the Labour party suggests; that may be why there has been some chuntering on the Opposition Front Bench. The public, if they are in the 8 million means-tested benefit households, will receive £1,200 under our plans, compared with only £600 under Labour’s. The Institute for Fiscal Studies has said of our intervention:
“On average the poorest households will now be approximately compensated for the rising cost of living this year.”
On top of that, we have cut fuel duty, and we have set aside £1 billion to help those who are most in need with the cost of essentials such as food, clothing and utilities through the household support fund, which my hon. Friend the Member for Bosworth (Dr Evans) mentioned.
There are other ways of putting money back into people’s pockets. From next week, as the Chancellor explained in the spring statement, working people
“will be able to earn £12,570 a year without paying a single penny of income tax or national insurance…That is a £6 billion…tax cut for 30 million people across the United Kingdom”.—[Official Report, 23 March 2022; Vol. 711, c. 340.]
Rushanara Ali
The Chief Secretary mentions ways of putting money into people’s pockets. Will he explain how he will recover the £26.8 billion that the Treasury has lost to fraudsters and error, and the £11 billion lost by failing to insure against interest rate rises? If the Government could recover that money, or if they had not wasted it through fraud and mismanagement, there would be billions of pounds in the public purse to support our constituents right now. Instead, it has been lost through incompetence.
Mr Clarke
I respect the hon. Lady from our days of old on the Treasury Committee, and I completely share her commitment to managing public money responsibly, but I gently disagree with those numbers. Clearly some fraud has been perpetrated during the pandemic, and we are managing it actively; indeed, in July, the new public sector fraud authority will go live, backed by some £25 million of additional funding, which is a welcome step. However, sometimes the figures cited in fraud debates capture items such as the write-down in value of the personal protective equipment that was purchased at an absolute premium at the height of the pandemic and that subsequently became worth much less in an era of much greater supply. We should be careful to take the issue seriously, but should not convey the impression that things are as bleak as the hon. Lady makes out.
Mr Clarke
I am going to make some progress at this point.
The Chancellor has also announced his intention to cut the basic rate of income tax from 20p to 19p in the pound from 2024. This will be the first income tax cut for 16 years, and it will be a £5 billion tax cut for 30 million people. The Chancellor has also said that he will set out his support for businesses in more detail in the autumn Budget.
Crucially, everything that we have done has been done responsibly, reflecting our continued commitment to strong and sustainable public finances. In direct contrast, the Labour leadership has so far promised £99.5 billion of day-to-day spending commitments—
Mr Clarke
I can provide the hon. Gentleman with the full details if he would like a list.
However, Labour has only announced £7.5 billion in revenue to pay for those commitments, less than one tenth. That leaves a £92.5 billion fiscal black hole of unfunded public spending commitments, which would almost double our current borrowing. This year we will spend £80 billion just paying interest on our debt. That is nearly four times what we spent last year, and those numbers should concern the whole House. The Office for Budget Responsibility made it very clear at the time of the spring statement that our fiscal headroom could be
“wiped out by relatively small changes”
to the “economic outlook”. Labour’s £92.5 billion black hole would mean an extra £3,303 per household in general taxation or extra borrowing. In opposition, parties have the luxury of promising it all and not being responsible for delivering any of it.
Rushanara Ali
It is rather rich for the Minister to lecture the Opposition about funding when he has not even been able to tell us how much will be lost in fraud on his watch. His own counter-fraud Minister, after he resigned, said that it had been
“happy days if you were a crook”.
That is what his Government are doing—dishing out money to crooks. Perhaps the Minister could answer my earlier question: how much money has been lost to fraud and incompetence, and how will he recover that money?
Mr Clarke
We have set out a very clear plan to recover that money, and we have provided regular periodic updates on the progress that we are making against fraud, but we do not accept Lord Agnew’s characterisation of the situation. We continue to pursue this, and obviously the authorities reserve the right to pursue individuals and companies wherever it is clear that wrongdoing has occurred.
As a Minister, I am proud to be part of a Government who support people through difficult times, but that needs to go hand in hand with fiscal responsibility. The support that we are providing is timely, temporary, and targeted at those who need it most to avoid pushing up prices and interest rates further.
The motion lists a number of other issues, including passports, driving licences, GP and hospital appointments, court dates, and airports. Let me take each of those in turn.
Owing to covid-19, more than 5 million people delayed applying for British passports. Following the return of unrestricted international travel, there has been unprecedented demand for new passports, with 9.5 million applications forecast for this year. That compares with 4 million applications in 2020 and 5 million in 2021. Since April 2021, 650 additional staff have been brought in, with a further 550 arriving over the summer, and those numbers are starting to tell: more passport applications are being processed than ever before. In fact, between March and May alone, the Passport Office completed the processing of some 3 million applications. Since April 2021, people have been advised to allow up to 10 weeks to receive their passports, and 98.5% of applications have hit that target. For the small percentage of customers whose applications take longer than 10 weeks, and who are due to travel within a fortnight, there is an expedited service, at no additional cost, to ensure that they obtain their passports in time.
I am encouraged by the hard work of employees at the Driver and Vehicle Licensing Agency to clear the backlog in the processing of driving licence applications and waiting times for driving tests which built up throughout the pandemic and last year’s industrial action. I am confident that the DVLA remains on track to reduce waiting times further over the course of this year.
On NHS waiting lists, I want to take this chance to thank the NHS for the commitment with which it is tackling the backlog that built up during the pandemic. This Government are already instituting one of the largest catch-up programmes in the history of the NHS, spending more than £8 billion between this financial year and 2024-25 to tackle the backlog so that the NHS in England can deliver some 30% more activity in 2024-25 compared with pre-pandemic levels.
Helen Morgan (North Shropshire) (LD)
In the Shrewsbury and Telford Hospital NHS Trust, nearly 18,000 women are waiting for a breast scan that is overdue, largely because of a shortage of individuals who can perform those scans. Five full-time equivalent posts have been left vacant. Does the Minister agree that something needs to be done to tackle these workforce issues so that we do not fail to deliver key services and increase the risk of avoidable death?
Mr Clarke
I want to reassure the hon. Lady and her constituents that we completely agree that there is a need to ensure that those sorts of scans happen as speedily as possible. That is why the total budget of the Department of Health and Social Care in 2024-25—that is to say, at the end of this Parliament—will stand at £188 billion a year. That is a truly colossal sum of money and it equips the NHS to bear down on precisely these backlogs in a way that will help women in her constituency.
Dr Luke Evans
I sit on the Health Committee, and we were talking this morning about some of the problems with the workforce and the interaction between primary care and secondary care. One of the responses was that the 42 new integrated care systems that have been put in place will give us the flexibility to change the system. Does the Minister agree that this is exactly the kind of planning and foresight that allows us to deliver better for the future, and to future-proof our health service to try to deal with some of the problems that we all know are affecting western world medicine?
Mr Clarke
I agree with my hon. Friend. It is crucial that the NHS continues to reform and, frankly, become more fit for a technological age, as well as for one in which we can anticipate these problems ahead of time. We should act to improve the use of all the technologies, which will mean that we get more value for taxpayers’ money. With an ageing society that is plagued by so many avoidable and preventable conditions, we need to be able to catch them in time, and that planning and foresight will be crucial for the future.
John Redwood
When I asked representatives of the Health Department how many chief executives there were in NHS England, they said that they did not know. Has my right hon. Friend had any more success than I have in finding out how much senior management there is, how it is aligned with the interests of patients and how wisely it is going to spend the extra money he is giving it?
Mr Clarke
My right hon. Friend is right to say that with this budget for the NHS comes a responsibility for that organisation to be absolutely open and candid—in a way that, frankly, it has too often not been—about where its resources are deployed, and certainly to avoid funding a culture of managerialism at the expense of the patients. We have had recent success in securing some of the data that we have been looking for, but this is a subject where ongoing pressure from across the House for greater transparency is welcome. Certainly if there is any data that we hold that my right hon. Friend would like to see, I will do my best to facilitate that.
James Daly
I welcome the steps the Government are taking to address the challenges within the system. Does my right hon. Friend agree that it is a bit rich for Labour Members to be lecturing anybody on waiting times when waiting time targets in Wales have not been met for many years? As of May 2022, nearly 700,000 patients were waiting for care, which is a 50% increase since February 2020. That is a record to be ashamed of.
Mr Clarke
My hon. Friend makes an important point. The performance of the Welsh Government in this area is genuinely concerning, but this also demonstrates a point about fundamental fairness. This debate is sometimes mischaracterised as everything being this Government’s fault, but as we have heard from the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), the performance of the Scottish healthcare system is blighted by many of the challenges that we are facing in England. Clearly there are also problems in Wales and significant problems in Northern Ireland. What matters is that we set out a clear plan to deal with them.
Our NHS elective delivery plan states that by next month no one will be waiting more than two years for elective care, except where patients choose to wait longer for some reason, and in a number of highly specialised areas.
We know that considerable progress has been made in achieving that target. The number who have waited two years or more in acute hospitals has fallen by 15,000 to 6,700, down from a peak of 22,500 in January. At the same time, the Government are on track to deliver our manifesto commitment for 50 million more primary care appointments by 2024. GP appointment numbers have already recovered to pre-pandemic levels, with 25.3 million taking place in April, of which 1.3 million were covid vaccinations.
The motion also mentions court dates, where we are also making good progress. We are providing almost half a billion pounds to address criminal court and tribunal backlogs.
Rob Butler
The shadow Chief Secretary was reluctant to give me a straight answer to my question, so I wonder whether the Chief Secretary would tell me whether he believes the strike by barristers will lengthen or shorten the waiting times in our courts. Does he think strikes by public service workers more generally will do anything to help our economy and our recovery from the covid pandemic?
Mr Clarke
I thank my hon. Friend for his substantive question, and there was a certain reticence from the shadow Chief Secretary to answer it. The public will look in consternation at barristers striking when there is an offer on the table of a £7,000 a year pay increase for that profession. It comes down to a test of values: if they are serious about tackling the backlog in our courts, they should get to work, accept the pay offer and move forward. It would be helpful if the official Opposition, rather than looking at their feet or their phones, would get on with the job of persuading public service workers that the best interests of the public and those workers themselves lies in accepting reasonable pay offers, moving forward and not further gumming up public sector delivery by taking unnecessary strike action.
We are providing some half a billion pounds to address criminal court and tribunal backlogs. We have also extended 30 Nightingale courtrooms to help manage complex cases that would otherwise crowd out cases that are easier to answer. We are also investing £200 million to complete the £1.3 billion court reform programme. Reform is making our courts more modern, with a wide range of new online services to make the courts more efficient—this includes rolling out a new digital platform to manage 1.5 million annual criminal cases.
Finally, on airport delays, the reality is that we are seeing disruption globally in the travel sector as it is reopening, at pace, after almost two years of being shut down during the pandemic. Anyone who has seen the scenes recently at Schiphol or Dublin will recognise that, fundamentally, this is an international challenge. Where possible, the Government are supporting our aviation sector to manage the risk of disruption this summer. That includes using our post-Brexit freedoms to provide the sector with more flexibility when training new employees; working with Border Force to ensure preparations meet passenger demand; and allowing HMRC employment history letters to be used as a suitable form of reference check. Last week, we also laid regulations before Parliament that will help airlines prevent last-minute flight cancellations during the summer peak by allowing a one-off “amnesty” on airport slots rules.
While we are working around the clock to help people get on with their daily lives, the Labour party has, once again, chosen to side with its trade union paymasters and join the picket lines. During the pandemic alone, we delivered some £16 billion of emergency funding to keep the railways running, which is equivalent to £600 for every family in the UK. That level of subsidy is unsustainable and shows why reform is needed now, but instead of working together to achieve the reforms we need to make the railways fit for the future—and it is eminently achievable and fair, and really important—Opposition Front Benchers have backed the strike action and joined the picket lines. Those strikes have stopped people from getting to work, created additional stress for students taking exams and created untold problems for patients needing treatment. The shadow Front Benchers wish to form a Labour Government, but through their actions it is clear that a Labour Government would be content to see the country brought to a halt by militant union leaders. On this issue, the Opposition have displayed no leadership whatsoever.
I said that I would come back to the issue of inflation, and how the Government are addressing it. As the Chancellor told the House last month, we have three key tools at our disposal: independent monetary policy, fiscal responsibility and supply side reform. We have every confidence that the independent Bank of England will take decisive action to get inflation back on target, with it having averaged precisely 2% over the last 25 years. Our second tool is responsible fiscal policy. We know that any fiscal support we provide must be timely, targeted, and temporary, to avoid making the situation worse, by causing inflation, and interest and mortgage rates, to go up further than they otherwise would.
We are also taking an active approach to supply-side reform through initiatives such as the energy security strategy, which will reduce bills by increasing energy supply and improving energy efficiency; moving 500,000 jobseekers off welfare and into work; doing more to support older people back into the jobs market; and making our visa regime for high-skilled migrants one of the most competitive in the world.
The Opposition have no plan to tackle inflation. If they support double-digit, inflation-busting pay rises for public sector workers, do they accept the inflationary effect that will have? Does the shadow Chief Secretary accept that that would lead to higher and more prolonged inflation, hammering the incomes of more vulnerable households? How does Labour propose to pay for inflation-busting pay rises? Every Labour spokesperson who refuses to answer those questions—and they all do—is ducking questions that are fundamental to the running of our economy and our society. The public will draw their own conclusions.
We understand that growing the economy sustainably into the future is by far the best way we can support families in the long term. That is exactly why we will continue to invest in capital, people, and ideas, so that we can boost productivity and improve living standards. It is why we will cut the burden of taxation as we move out of the shadow of the pandemic over the years ahead. In his February 2022 Mais lecture and in the spring statement, the Chancellor spoke about his plans to create the conditions for private sector growth by supporting a culture of enterprise. Together, our plan for growth and our tax plan represent an ambitious strategy for boosting growth and productivity. By contrast, the Opposition call for a “new approach” to the economy. It is not a new approach: it is the same old Labour—uncosted spending, higher borrowing and a surrender to hard-line trade union bosses at every turn, every time. This Conservative Government will not make those mistakes. We will stick to our plan, make responsible choices and guide our country through difficult times to better days ahead.
Several hon. Members rose—