Budget Resolutions

Vicky Ford Excerpts

1st reading: House of Commons
Tuesday 28th November 2017 Commons Chamber

[Rebecca Long Bailey]

I could not agree more. That is very articulately put.

It is not as if the Government were not warned of the problems of austerity by my right hon. Friend the shadow Chancellor. Indeed, the International Monetary Fund warned the Government that

“episodes of fiscal consolidation have been followed, on average, by drops rather than by expansions in output… The increase in inequality engendered by financial openness and austerity might itself undercut growth, the very thing that the neoliberal agenda is intent on boosting.

Refusing to heed that advice was a deeply reckless act.

The current Chancellor may well turn around and lament post-crisis productivity, but let us remember that he was in the Cabinet while this economic mess was being created. He is not absolved of responsibility, but he has the opportunity to admit that that approach was wrong and to change course.

Unfortunately, although the Chancellor admitted in his Budget speech last week that there is a big productivity problem—a big gold star for Phil there—there was very little to give our economy the upgrade it desperately needs, nor was there any attempt meaningfully to level up regional investment spend.

Indeed, despite the Chancellor’s jovial attempts at talking up our ability to harness the fourth industrial revolution, the Office for Budget Responsibility looked at his future investment plans and cut its forecast for growth in productivity, but he still had one last chance—the industrial strategy. I waited with bated breath yesterday, desperately hoping that the action would match the rhetoric. It started well enough with the strategy’s stated goal to create an economy that boosts productivity and earning power throughout the UK. “That’s spot on,” I thought. But sadly, having looked into the strategy in a little more detail, it seems little more than a repackaging of existing policies.

Unfortunately, the Conservatives have form on this. There has been a long line of PR gimmicks that simply do not deliver. Members may recall that, back in 2011, the previous Chancellor announced a march of the makers, but UK manufacturing has since grown at less than half the European average. Similarly, much was made of the northern powerhouse, which sounds great, but only two of the top 20 infrastructure and construction projects in the Government’s pipeline are in the north-east, north-west or Yorkshire and the Humber, leading my hon. Friend the Member for Bolsover (Mr Skinner) to call it the “northern poorhouse.”

No one can argue with the core principles outlined in the 255-page document we saw yesterday but, as the Financial Times summarised today,

“the judgment being passed…is that it amounts to a good start—but much still remains to be done to ensure success.”

Although the strategy certainly acknowledges many of the fundamental problems our economy faces, I fear that the level of detail and proposed investment simply do not match the surrounding rhetoric, falling far short of what is needed.

The White Paper gives us a handy one-page summary of the strategy’s key policies to strengthen the “foundations of productivity.” It is perhaps poignant to point out that even the previous Chancellor was trying to fix our foundations and outlined a productivity plan called “Fixing the foundations” two years ago. What happened to that? I digress slightly.

Let us look at the first foundation: ideas. The key policies are raising total R and D investment to 2.4% of GDP by 2027, increasing the R and D tax credit and allocating some of the increased spend to a second wave of the industrial strategy challenge fund. Although increasing R and D spend is, of course, a step in the right direction, it is an unambitious target.

[Vicky Ford (Chelmsford) (Con)]

Given that this is the largest increase in research and development and innovation funding in more than 40 years, what part of it is unambitious?

[Rebecca Long Bailey]

The hon. Lady misses the point. The UK has been below the OECD average of 2.4% of GDP for years, and we are way behind global leaders such as South Korea, Japan, Finland and Sweden, which all spend at least 3% of GDP on R and D. If we are to be in any way capable of competing on a world stage, we have to up our game. If the Government really want us to be at the forefront of the fourth industrial revolution, they should be aiming above the average, rather than just trying to catch up.

Furthermore, not reforming where and how it is spent risks widening regional divides, as almost half of all research funding currently goes to the south-east. To quote a Conservative Member:

“If we just put more money into the same funding streams we will have the same outcomes and continue to spend half the science budget in just three cities.”

--- Later in debate ---

[Vicky Ford (Chelmsford) (Con)]

This is my first time taking part in a Budget debate, and I would like to say some thank yous.

Thank you to my Conservative colleagues for the work they have already done on controlling the deficit, restoring the public finances and rebuilding a strong economy, so that we can afford the many measures we take today.

Thank you on behalf of young people. I remember that, under Labour, nearly 1 million young people were not in employment, not in education and not in training. Today, youth unemployment is at all-time lows.

Thank you for investing in skills and especially in maths. When I went to university, I was a very rare breed: a girl who did maths. Today, that breed is still too small. So, girls, listen: if you do maths and a science at A-level, you will earn 30% more than your peers. The £600 per pupil taking A-level maths that will go to each school can be transformational for this country.

Thank you for removing stamp duty for first-time buyers. It is hard to get on the property ladder in my constituency, and that will make a difference.

Thank you for listening on universal credit. We must help those most in need. Thank you especially for making it easier for the housing element of the benefit to go straight to the landlord. That is an idea I pitched to the Chancellor, and he had no tin ear.

Thank you for funding the NHS, and especially for underwriting the pay increases for our nurses and for investing in the capital budgets. I am glad that south and mid-Essex will be among the first to benefit.

But most of all, thank you for the support for innovation. I am proud to live in a country where there are 40 start- up businesses every hour—that is three a day in my constituency. I am proud that there are 28 great British start-ups that are now billion-dollar businesses. I am proud that this Government are investing more money in science and research than any other Government for the past 40 years, because scientists are the people who find real solutions to real problems, and they will build us a better future.

[Ms Nusrat Ghani (Wealden) (Con)]

Will my hon. Friend give way? [Hon. Members: “ Oh.”] I will be very quick. Is my hon. Friend also thankful for the £21 million—

[Ms Ghani]

Is my hon. Friend also thankful for the extra £21 million that will be invested in science and tech, helping us to create the jobs of the future?

[Vicky Ford]

Absolutely, because we need to make sure that we invest in not only the ideas and the innovators but the skills, the people and the places.

Brexit is coming, and it does bring huge risks. Now, more than ever, is the time to back ideas, back the innovators, invest in our infrastructure and inspire our industry. I am very proud to be supporting this Budget.

Finance (No. 2) Bill

Vicky Ford Excerpts

2nd reading: House of Commons
Monday 11th December 2017 Commons Chamber

[Mel Stride]

It is interesting that the hon. Gentleman mentions the amount that was required to bail out the banks, given that it was the then Labour Government who caused the problem that required the bail-outs in the first place. There is a long and detailed history of exactly what happened: we had lax regulation, and the Bank of England was not in a position to regulate the institutions concerned. The hon. Gentleman might like to look up the answer to his question himself and then inform other members of the Labour party of what he discovers.

[Vicky Ford (Chelmsford) (Con)]

Does my right hon. Friend agree that since the bank levy was introduced, the risk of bank failure has decreased dramatically due to new capital requirements on banks, and the considerably reduced risk that British taxpayers will have to fund cross-border bail-outs, given that we have international agreements on such matters?

[Mel Stride]

Yes, my hon. Friend is entirely right. We have made huge progress in making sure that the banks are fit and able to withstand whatever external shocks there might be. The Bank of England has been heavily engaged in that, as have the Government, and we are in a much more secure position—certainly than we were when we inherited the economy we saw when we first came to office in 2010.

--- Later in debate ---

[Peter Dowd]

No; I am going to make some progress. Public sector wages are now at their lowest level as against private sector pay for 20 years. Nor is there anything to address the botched roll-out of universal credit, which will cause real suffering to families this Christmas. Similarly, the Bill contains no measures to redress the disproportionate effect of austerity on women, and particularly on black and minority ethnic women. Instead, the Bill proposes a stamp duty cut that will, according to OBR analysis, increase house prices; and it fails to introduce measures to encourage the building of affordable homes to address the housing crisis.

The Bill includes plans to continue with the Government’s 2015 bank levy cut. It goes further, as the Minister seemed proudly to proclaim, by exempting all foreign banks from the levy and ensuring that from 2021, all banks will only have to pay the levy based on their UK balance sheets.

[Vicky Ford]

Looking back in history, the Conservative-led Government introduced the bank levy in 2011, but Labour voted against it. In 2015, we introduced the 8% surcharge so that banks would pay more. Again, the Conservatives voted for that, but Labour voted against it. Why is the hon. Gentleman now rewriting history?

[Peter Dowd]

It is not a question of rewriting history. We do not support Bills that continue austerity year in, year out. The Government got rid of the bankers’ bonus tax, which brought in significantly more money than the bank levy. My hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) referred to the bank levy earlier. I happen to have some figures here, which I will share with him if the Minister does not want to answer his question. Taxpayers bought £76 billion of shares in the Royal Bank of Scotland and Lloyds and contributed £250 billion in guarantees, another £280 billion in insurance and a further £100 billion in annual implied subsidy, according to the Bank of England, so we are asking for the bankers to pay a little bit more, after the billions of pounds that we spent on helping to bail them out.

While we are on the subject of regulation, let me say that in August 2007 the right hon. Member for Wokingham (John Redwood) produced a report on “Freeing Britain to Compete”, which was ratified by the Conservative party in opposition. In paragraph 6.1, he said in effect that we should not be regulating the banks so much and that the Labour Government were regulating them too much. He went on to say that the Labour Government claimed that if they did not regulate the banks so much, the banks would “steal” all “our money”. Many people believe that is right, especially when they look at the figures and the facts on the bail-out of the banks.

[Vicky Ford]

Will the hon. Gentleman give way?

[Leo Docherty]

Will the hon. Gentleman give way?

--- Later in debate ---

[Kit Malthouse]

The hon. Lady refers to schemes that require the employees to pay for the shares. In my view, businesses should be allowed to gift shares to their employees, and that should not necessarily form part of their remuneration package. At the moment, there are a series of ways for companies to give shares to their employees, but none is particularly tax efficient or confers particular advantages to a company. I would like a company that had a certain percentage of its shares in employees’ hands to pay a lower corporation tax rate than one that failed to involve its employees in the balance sheet. That would address the general idea that the Prime Minister has talked about—that employees should be more involved in the way that businesses, especially large businesses, are run. If shareholders at the annual general meeting every year are also employees, so much to the good. Dynamising and democratising capital has to be the way forward.

[Vicky Ford]

My hon. Friend has made excellent points about share ownership, but I want to bring him back to property ownership. Does he agree that reducing stamp duty for first-time buyers will make it so much easier for people to get on the property ladder—it is worth more than £3,000 for the average first-time buyer in my constituency?

[Kit Malthouse]

There is no doubt that stamp duty, as a frictional cost, causes all sorts of problems and distortions in the property market, and one may be at the lower end, particularly when dealing with an asset class that is highly geared—where taxation effectively has to be paid out of equity or deposit. That is operating throughout the property system. We are seeing a slowdown in the number of transactions, largely because of the frictional cost of exchange. That mechanism operates in any capital market. I may be out on a limb, and I am not the Chancellor of the Exchequer, trying to collect money to pay for everything else, but a general loosening of the stamp duty regime, and therefore more transactions in the property market, is more likely to mean that more people can access it at all levels.