House of Commons
Wednesday 22 November 2017
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
Cabinet Office and the Chancellor of the duchy of lancaster
The Minister for the Cabinet Office was asked—
Public Sector Cyber-security
Our national cyber-security strategy, supported by £1.9 billion of transformational investment, sets out measures to defend our people, businesses and assets, deter our adversaries and develop cyber-skills. These include the creation of the National Cyber Security Centre and direct investment in central and local government, the health sector and the defence sector.
Yes, indeed. That is the whole point not just of the National Cyber Security Centre, but of the very significant investment I have just mentioned—£1.9 billion—which is set to transform defences against cyber-attack across the public sector, for central and local government, particularly the health and defence sectors, as well as advising the private sector, because our defences obviously need to be mutually dependent across the public and private sectors.
Does my right hon. Friend not accept that none the less there is a slight lack of clarity on who within the Government has ultimate responsibility for cyber-security, both offensive and defensive? Is not it time we had a cyber-department that would be responsible for defending this nation against cyber-attacks and thinking about ways it could possibly be used abroad?
My hon. Friend is right that we need proper co-ordination. That co-ordination role falls to the Cabinet Office, but clearly there are important areas where the Home Office has direct responsibility for operational matters, and obviously the Ministry of Defence has responsibilities in purely military terms. I am happy to reassure him that the co-ordination comes through the Cabinet Office.
As we have just come to the conclusion that a cyber-influence was entirely invisible and beyond any mechanisms that the electoral college has to control it, and as the Prime Minister has said that there was cyber-influence in the elections and probably in the referendums, is it not time we decided that we should have no faith in those two results and that we should look for another referendum, because second thoughts are always better than first thoughts?
The hon. Gentleman raises a serious point. There is no evidence of any successful attempt to interfere with our electoral processes. Indeed, it is particularly difficult to have a cyber-attack against an electoral system that requires voters to put crosses on pieces of paper using small pencils, so that undoubtedly old-fashioned system is very effective against cyber-attack.
To defend ourselves against cyber-attack, it is essential that we recruit and retain people with the necessary skills to take up the cudgels on our behalf in the cyber-arms race. What steps are the Government taking to recruit and retain people with those skills in the public sector?
My hon. Friend makes a good point. The National Cyber Security Centre, along with GCHQ, has established a programme of assessment and certification. Some 20 degrees have been certified, most of which are one-year postgraduate master’s degrees in cyber-security, and 14 universities are now academic centres of excellence in cyber-security research, precisely so that we can maintain a pipeline of skilled people to help our cyber-defences.
We have learnt today that Uber’s suppression of a database hack involving tens of millions of people is to be investigated, but there were 9,000 data breaches by the Government in a single year, according to the National Audit Office, although they notified the Information Commissioner’s Office of only 14 of them. Such contraventions clearly pose questions about our personal privacy and security. Given the scale of what is happening with the internet, action is clearly needed for further protection of the public. But last year the Government spent only—
We are absolutely getting on with spending the money to protect our citizens in the ways I have just set out. The hon. Gentleman will realise that that £1.9 billion is to be spent over five years, so the fact that we have spent £230 million-odd in the first year is about what we would expect. It is a continuous programme of continuous improvement.
The Queen’s Private Estate: Ethical Investment
The Chancellor of the Duchy of Lancaster was asked—
I congratulate Her Majesty the Queen, Duke of Lancaster, and His Royal Highness the Duke of Edinburgh on their platinum wedding anniversary, and I pay tribute to their decades of public service to our country.
Her Majesty voluntarily pays tax on all income received from the duchy. The duchy’s investment strategy is based on advice and recommendations from its investment consultants.
One of the revelations we saw in the Paradise papers was an investment by the royal estate in the shambolic and exploitative company BrightHouse, which preys on and exploits many of my constituents. Does the Minister understand the absolute anger in Glasgow East at that revelation, and what is he going to do about it?
Bearing in mind what the shadow Chancellor, the right hon. Member for Hayes and Harlington (John McDonnell), said when a statement was made on the Paradise papers, perhaps he should have checked that out, because I can confirm to my hon. Friend that the last investment of this sort was made in 2005.
Donations to political parties show stark differences between our party and the Government’s. They are dependent on the ultra-wealthy few, while our party is powered by the many. In the light of the revelation in the Paradise papers that key Tory donor Lord Ashcroft was using offshore tax havens to shelter his wealth, will the Minister and his colleagues be accepting his donations to the Conservative party?
Leaving the EU: Civil Servants
The Minister for the Cabinet Office was asked—
The whole Government are preparing for the UK to make an orderly and successful exit from the European Union. We are equipping ourselves with the right people and the right skills across the Government to make that happen. Although workforce planning is primarily the responsibility of each Department to determine, the civil service constantly reviews its capabilities in this respect.
After a decade of austerity, it seems that £400 million and 8,000 new staff, including 5,000 for Her Majesty’s Revenue and Customs, can be found to deal with Brexit. Will the Minister tell Treasury and HMRC bosses that it is more ludicrous than ever to propose to close Cumbernauld tax office, with its experienced and dedicated workforce?
As the hon. Gentleman will know, the Cabinet Office works closely with HMRC on workforce planning and, indeed, on Government hubs, with which we are seeking to make sure that we make the best possible use of our resources to provide an effective civil service that provides the best service for his constituents.
Given the additional burdens on civil servants from Brexit, does the Minister agree that the civil service people survey is important to Ministers for judging the working conditions, training and skills of our civil servants? Does she share my surprise that yesterday, in his evidence to the Public Administration and Constitutional Affairs Committee, the Public and Commercial Services Union representative said that he actively encouraged members not to reply to that survey? Will she reaffirm how increasingly important the survey is, so that we can get feedback and ensure we have the right capacity and capabilities in the civil service?
My right hon. Friend is absolutely correct to say that the survey is crucial to Ministers, and I greet it with relish when it arrives on my desk. It provides invaluable information about our workforce, their attitudes and how they feel about working for us. I am very surprised at the PCS comments, but I reassure all unions that I continue to leave my door open to them and that I am as interested in their views as I am in everybody else’s.
Has the Minister seen the remarks made by the eminent former senior civil servant, Sir Martin Donnelly, who set up the new Department for International Trade? Will she take heed of his warning to the Government:
“We are now just 16 months from Brexit—the biggest shock to the UK economy in living memory”?
I am sure that it will come as no surprise to the hon. Gentleman that the Cabinet Office works closely with those Departments most affected by exit from the EU, including the Department for International Trade as well as the Department for Exiting the European Union and, of course, the Department for Environment, Food and Rural Affairs and the Department for Business, Energy and Industrial Strategy. I have seen those comments, but I reassure the hon. Gentleman that we are making sure that we have the right people in place to deliver the successful transition we need.
The Cabinet Office is supposedly co-ordinating this country’s exit from the European Union, so it really ought to know this stuff. The Minister has not answered the question. Will she clarify whether that is because she does not think that Parliament is entitled to the information about how many staff are working on it and how much it costs, or is it because the process is such a shambles that she is unable to provide that information?
The Government are currently considering the 256 responses to our call for evidence on the accessibility of voter registration and voting. I will soon lay draft legislation to improve the accessibility of the anonymous registration scheme for survivors of domestic violence, and I recently implemented the findings of an accessibility review on the “Register to vote” website.
A 2014 survey by Mencap found that 60% of people with a learning disability found the process of registering to vote too difficult. Registration forms are often complicated and not accompanied by an easy read guide. The Electoral Commission report, “Elections for everyone”, published earlier this month, agrees and calls on the Minister to act. Will he commit to improving the Government’s online registration process, and will he ensure that every local authority provides easy read information and a good helpline, so that no one with a learning disability is disenfranchised?
I thank the hon. Lady for raising the report by Mencap, which has been working closely with the Cabinet Office and is a member of the “accessibility to elections” working group. I do not disagree with the premise of her question: we need to do more, in the 21st century, to make sure that our elections are accessible for everyone and that we remove barriers for those who are disabled. I am absolutely committed to doing that. It is right that we now consider all the responses and we will publish our report later next year.
Millions of people are missing from the electoral registers, but there are high levels of support for reforming our electoral registration system—in particular, for automatic voter registration when a person receives their national insurance number. When will the Government implement the necessary reforms to ensure that our democracy works for the many, not just the few?
We believe that we need a democracy that works for everyone, which is why we are determined to introduce a democratic engagement strategy, which will be published in December. When it comes to those on the electoral register, a record 46.8 million people are now registered to vote. Actually, since the introduction of individual electoral registration, 30 million people have registered to vote, 75% of them using the online system. That is a remarkable success.
Any form of electoral fraud will be taken extremely seriously by this Government. We have already stated that we intend to implement a number of recommendations made by Sir Eric Pickles’s report, “Securing the ballot”. Double voting is obviously a crime and we encourage anyone who has evidence of it to report it to the police. I recently met the Electoral Commission and the National Police Chiefs Council, and we will meet every six months to look at a strategy for tackling double voting. By introducing future reforms to postal voting, we hope that we will be able combat the issue.
The Electoral Commission estimates that some 40% of those who applied late to vote through the online system were actually duplicate registrations. Will my hon. Friend make sure that there is no unnecessary duplication of applications? That would also minimise bureaucracy.
My hon. Friend is absolutely right. The registration website has been incredibly successful: there were nearly 3 million applications to register at the last general election. Of course, there will be people who register having been registered locally already. There are local solutions to the issue. Local authorities such as Hackney have a look-up tool, and it is right that we explore further what solutions there may be, but I believe that a centralised database may be too costly.
According to figures published by the Electoral Commission, nearly 11,000 people tried to vote on 8 June but found that they were not registered to vote once they reached the polling station. Will the Government examine the use of Government data to place electors on the roll automatically and pilot the idea of polling day voter registration to ensure that every eligible voter is entitled to vote?
The Government sincerely believe in the principle of individual elector registration; we will not be returning to automatic voter registration. We want a register that is complete and accurate as possible. I am delighted that the Electoral Commission has demonstrated in a recent report that the accuracy of the register has risen from 87% to 91%.
We are committed to providing a clear and secure democracy, and we continue to work with local authorities to deliver voter identification pilots for the May 2018 local elections in areas such as Woking, Gosport, Bromley, Watford and Tower Hamlets, as part of our programme to strengthen electoral integrity.
I believe that the UK electoral system is one of the most robust in the world. It is difficult to manipulate through a cyber-attack, as we operate a manual counting and manual voting system. As the First Secretary mentioned in his earlier answer, that may be seen as old-fashioned, but it ensures that our system is protected and our democracy safeguarded.
The hon. Gentleman makes an interesting point, which I will be interested to go away and consider. We are already looking at issues of tenant security deposits, for example—one of the largest groups not on the register are movers and renters, which causes that churn. That is why we are determined to ensure that we have better data to identify where we need to focus our attention and ensure that everyone is able to register to vote.
Is the Minister aware that at the general election in June, there was a 300% increase in proxy votes in the Foyle constituency, resulting in Sinn Féin winning the seat by 169 votes? Many people are specifically saying that that was a clear case of electoral fraud and the theft of a constituency in this House. What will the Minister do to ensure that that does not happen again?
On the general principle of electoral fraud, it is absolutely right that we look at future measures to tackle electoral integrity. It is important that we should have confidence in our democratic system going forward. We will be looking at absent voting arrangements and postal vote harvesting, and we will introduce legislation in future to tackle these issues.
Following the Prime Minister’s July announcement that a public inquiry will be held into the contaminated blood scandal, the Government sought views from the affected community on how that should operate. I announced on 3 November that the inquiry will be statutory and sponsored by the Cabinet Office. My Department has now taken receipt of more than 800 consultation responses, which it is analysing thoroughly. I have agreed to meet the co-chairs of the all-party parliamentary group on haemophilia and contaminated blood and will make a further statement before the House rises for Christmas.
I am delighted to. We are developing a system called Contracts Finder—a free, online source for current and future public sector contracts above £10,000 in central Government and above £25,000 in the wider public sector. We are improving the visibility of supply chain opportunities available to SMEs via that site.
The Prime Minister has committed to reviewing the ministerial code to ensure that it remains fit for purpose, and she will update the House in due course.
The Government are committed to having greater diversity on the boards of public bodies so that they better represent the public they serve, and that includes moving public bodies out of London when appropriate. We will shortly publish a diversity action plan that will focus on encouraging candidates from the widest range of backgrounds, including from outside London.
Our small business panel, which I met on 1 November to celebrate its first birthday, is working on a number of key issues to further break down barriers to entry for SMEs. It was pleasing to hear that Contracts Finder, and the mystery shopper service in particular, are, in the panel’s words, “stonkingly good”.
I recognise the individual case. The hon. Gentleman has written a letter to me on this matter and I hope he has received my response. The Government obviously update freedom of information arrangements regularly, so we will keep this matter in mind. There is a consultation on various points in the freedom of information code, which the hon. Gentleman is welcome to be involved in.
Ministers, like me, are absolutely passionate about making sure that people get to the ballot, whether at parish, town or district level. Do Ministers agree that it is really important that we continue to have polling cards at every election so that everyone can play their part in the electoral process?
As I have said, the Government are committed to ensuring that as many people are engaged in the democratic process as possible, and this includes ensuring electors are equipped with the information they need to vote. As a result, we have no plans to change the current arrangements for poll cards.
Departments will publish new gender pay gap figures before the end of the year to meet the requirements of the Government’s new gender pay gap regulations for all large employers. The new requirements will provide unprecedented transparency, generate wider debate, and encourage employers to take the action required to close that gap.
The Union needs Scotland’s two Governments to work together to get things done. One proposal in the Stirling city region deal is to co-locate all customer-facing public services in Stirling to a public sector innovation hub. Will my right hon. Friend commit to working with the Scottish Government and Stirling Council to bring that about?
I was delighted to be lobbied hard by my hon. Friend on this and other matters when I visited Stirling recently. He will be pleased to hear that the Department for Work and Pensions is committed to maintaining its current estate in Stirling for at least the next five years, and we can obviously discuss future options. I also hope to agree heads of terms for the Stirling and Clackmannanshire city deal early next year.
In his written statement on the contaminated blood inquiry, the Minister for the Cabinet Office simply said that:
“a further announcement will follow before the end of the year on the setting up of the inquiry.”—[Official Report, 3 November 2017; Vol. 630, c. 35WS.]
Those affected by this tragedy have not been given any information about what that means. Will he clarify whether he intends to appoint an inquiry chair by the end of the year?
The hon. Lady raises a very serious point. The contaminated blood scandal of the ’70s and ’80s was an appalling tragedy that should not have happened. She will, I am sure, appreciate that not only did we receive 800 responses to the consultation but, at the request of the all-party parliamentary group on haemophilia and contaminated blood, the end of that consultation was delayed until the end of October. All the decisions on the chair and the other things that need to be determined will, as I have already committed, be set out to the House before the Christmas recess.
The Prime Minister was asked—
I am sure that Members on both sides of the House will wish to join me in congratulating Sarah Clarke on her appointment as Lady Usher of the Black Rod. She will be the first woman to hold this role in its over-650-year history, and we offer her our best wishes.
This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House I shall have further such meetings later today.
The BBC is currently broadcasting “Drugsland”, a documentary series shot in my Bristol West constituency showing the catastrophic impact of drugs and drug laws on not just users, but the police and innocent bystanders. Will the Prime Minister commit to watching “Drugsland” and to setting up a royal commission on our drug laws, which are plainly failing?
I am pleased to say that the Home Office, under my right hon. Friend the Home Secretary, launched the Government’s drugs strategy only a matter of weeks ago. We recognise the importance of this issue. Drugs significantly affect people’s lives. Sadly, we also see people dying as a result of not only taking drugs, but the criminal activity that takes place around drugs. We take this very seriously; that is why we have launched our strategy.
My hon. Friend is absolutely right that grandparents do play an important role in the lives of their grandchildren. We can all, I am sure, sympathise with those who experience the anguish of being prevented from seeing their grandchildren if a parental relationship ends. Of course, when making decisions about a child’s future, the first consideration must be their welfare, but the law already allows family courts to order that a child should spend time with their grandparents. I understand that my hon. Friend has recently seen the Minister of State for Justice, and I am sure that the Ministry of Justice and the Department for Education will consider these points carefully.
I join the Prime Minister in congratulating the new Usher of the Black Rod. I am really pleased that it is at last a woman who has got that position.
I hope that the whole House will join me in sending solidarity following the atrocious suicide bombing that killed 50 people in eastern Nigeria. We should express sympathy to those who have lost loved ones for the obvious trauma they are all going through.
The Irish Prime Minister, who has discussed Brexit with the British Government, says:
“Sometimes it doesn’t seem like they have thought all this through”,
so can the Prime Minister reassure him by clearly outlining the Government’s policy on the Irish border?
First, I am glad that the right hon. Gentleman has welcomed the new Lady Usher of the Black Rod. I hope it will not be 650 years until the Labour party has a female leader. He also referred to the attack that has taken place in eastern Nigeria. Of course, I am sure that the thoughts and condolences of the whole House are with those who have been affected.
The right hon. Gentleman asked me to outline our policy in relation to the border between Northern Ireland and the Republic of Ireland. I am very happy to do so; I have done so on a number of occasions. We are very clear that in relation to the movement of people, the common travel area will continue to operate, as it has done since 1923. On trade, and the movement of goods and services across the border, we will not see the introduction of a hard border. We have been very clear that we will not put physical infrastructure at the border.
Yesterday, the Foreign Secretary said:
“There can be no hard border. That would be unthinkable”.—[Official Report, 21 November 2017; Vol. 631, c. 848.]
Maybe, but the Government have had 17 months to come up with an answer to this question, and there still is no answer, because they have not engaged with the negotiations properly.
There is another person who does not think that the negotiations are going too well: the right hon. Member for Wokingham (John Redwood). He was a very enthusiastic campaigner for Brexit, but he also—he is a busy man—finds time to be the chief global strategist for Charles Stanley investments. He recently advised clients to invest elsewhere, as the UK is hitting the brakes. Does the Prime Minister take advice from the right hon. Gentleman, and does she agree with him?
On the first issue that the right hon. Gentleman raises, we have been engaging fully in the negotiations in relation to Northern Ireland and other issues, and indeed significant progress has been made. That is why, for example, I have said that we have got agreement on the operation of the common travel area for the future. He says that we have not put out any ideas about the border, but I have to say to him that we published a paper back in the summer on possible customs arrangements. We are very happy to move to further detailed discussions of the customs and trading relationship that will exist not just between Northern Ireland and the Republic, but between the United Kingdom and the European Union. That does mean moving on to phase 2, so the question for the right hon. Gentleman is: if he thinks that is so important, why did his MEPs vote against it?
The EU’s chief negotiator said this week that the UK financial sector will lose its current rights to trade with Europe. It seems as though neither EU negotiators nor the Government have any idea where this is going. Last week, the Brexit Secretary said that he would guarantee free movement for bankers post Brexit. Are there any other groups to whom the Prime Minister believes freedom of movement should apply? Nurses; doctors; teachers; scientists; agricultural workers; careworkers—who?
I am very interested that the right hon. Gentleman has found that his appearances at Prime Minister’s questions have been going so well that he has had to borrow the question that the leader of the Liberal Democrats asked me last week. Perhaps the Leader of the Opposition should pay a little more attention to what happens in Prime Minister’s questions.
We have been absolutely clear that we will introduce new immigration rules. As we introduce those immigration rules, we will take account of the needs of the British economy. That is why my right hon. Friend the Home Secretary has asked the Migration Advisory Committee to advise, as it always does, on the areas in which we need to pay particular attention to migration into the United Kingdom.
We want to get on to deal with the question of our future trading relationship with the European Union. I am optimistic about the opportunities that will be available to this country and about the deal that we can get from the negotiations. The right hon. Gentleman cannot even decide whether he wants to be in the customs union or out of it, and whether he wants to be in the single market or out of it. He needs to get his own act together.
In April, the Brexit Secretary was confident that the European Banking Authority would be staying in London; now he cannot even guarantee that banks will have a right to trade with Europe. Last week, the Government voted down Labour amendments to protect workers’ rights. The Foreign Secretary has described employment regulation as “backbreaking”, and has repeatedly promised to “scrap the social chapter”. Why will not the Prime Minister guarantee workers’ rights—or does she agree with the Foreign Secretary on these matters?
The record is clear: this Government voted down our amendment to protect workers’ rights. The Environment Secretary said he wanted a “green Brexit”, but yet again Conservative MPs voted down Labour amendments to guarantee environmental protection.
On 5 December, the European Finance Ministers summit will address the issue of tax dodging, as exposed by the Paradise papers. There are three proposals on the table: blacklisting tax havens like Bermuda; new transparency rules for tax intermediaries; and mandatory country-by-country reporting for profit. Will the Prime Minister back those proposals, or is she still threatening to turn Britain into a tax haven?
I will take no lectures from the Labour party on dealing with tax avoidance and tax evasion—£160 billion more has been taken as a result of action taken by Conservatives in government; there are 75 new measures to deal with tax avoidance and tax evasion; and recently, I am pleased to say, Her Majesty’s Revenue and Customs won an important case on tax avoidance in the Supreme Court, which means a further £1 billion coming to the United Kingdom. The right hon. Gentleman may talk about tax avoidance and tax evasion; it is this Government who take action and make sure we collect it.
Order. Far too many Members on both sides of the House are gesticulating in a frenetic and, frankly, outlandish fashion. [Interruption.] Order. I say to the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) that he should seek to imitate the Zen-like calm and statesmanship of the Father of the House.
I have much in common with Zen, Mr Speaker.
Seventeen months—[Interruption.] I understand that these days the Tory Whips are choreographing who shouts at whom in the Chamber—they are making a very bad job of it.
Seventeen months after the referendum, the Government say there can be no hard border, but have not worked out how. They say that they will protect workers’ rights but then vote against it. They say they will protect environmental rights but then vote against it. They promise action on tax avoidance, but vote against it time and time again. Once again, the Foreign Secretary has offered his opinion, as has the Environment Secretary, saying that “insufficient energy” is going into these Brexit negotiations—their words, not mine. Is not the truth that this Government have no energy, no agreed plan and no strategy to deliver a good Brexit for Britain?
The right hon. Gentleman talks about voting against tax avoidance measures, but it was the Labour party that refused to allow tax avoidance measures to go through in a Bill before we called the general election, so he should look at his own record.
The right hon. Gentleman talks about people having different opinions. I might remind him that on Monday, in the Bill—[Interruption] Perhaps the shadow Chancellor would like to listen to this. On Monday, when we were putting through that important piece of legislation on customs, taxation and Europe, 76 Labour MPs voted in a different Lobby from his and the Leader of the Opposition’s Front Benchers. The party in this Commons that has no clue on Brexit is the Labour party. But week in, week out, the right hon. Gentleman comes to this House and talks down our country and is pessimistic about our future. Well let me tell him that I am optimistic about our future. I am optimistic about the success we can make of Brexit. I am optimistic about the well-paid jobs that will be created. I am optimistic about the homes we will build. That is the Conservatives building a Britain fit for the future—all he offers is a blast from the past.
I am happy to give my hon. Friend that commitment. As she and others will know, we already have some of the highest animal welfare standards in the world, and as we leave the EU, we should not only maintain, but enhance them. We have already set out our proposals to introduce mandatory CCTV in slaughterhouses; to increase sentences for animal cruelty to five years; to ban microbeads, which damage marine life; and to ban the ivory trade to help bring an end to elephant poaching. We also recognise and respect the fact that animals are sentient beings and should be treated accordingly. The Animal Welfare Act 2006 provides protection for all animals capable of experiencing pain or suffering which are under the control of man. But I reaffirm to her that we will be ensuring that we maintain and enhance our animal welfare standards when we leave the EU.
Of course, we are seeing those two agencies leave the UK and go elsewhere in the European Union. The right hon. Gentleman talks about the number of jobs being created, and under this Government we have seen 3 million jobs being created. That is a record I would have thought even he would be willing to welcome.
But of course the Prime Minister refused to answer the question. Let me tell her, just so that she is aware of the cost of the hard Tory Brexit, that losing the EMA and EBA means losing more than 1,000 jobs. The Bank of England has told us that the City will lose 75,000 jobs. Jobs are already gone and jobs are going; Brexit is already biting. Will the Prime Minister recognise that exiting the EU is losing jobs and sector excellence from the UK?
I recognise, as I said, that those two agencies are leaving the UK. The right hon. Gentleman talks about numbers of jobs being lost, so I repeat: since the Conservatives came into government 3 million jobs have been created—that is 3 million more people in work. That is 3 million more people able to provide an income for themselves and their families.
My hon. Friend raises an important point. He has campaigned strongly on the whole issue of housing, and on homelessness in particular. That approach is already taken by housing associations. As they are non-profit organisations, their surpluses are reinvested in the business, often in the next year. For example, in 2015-16 their investment in new and existing properties was more than double the surpluses they generated.
I recently announced an additional £2 billion of funding for affordable homes, including those for social rent. Last week, housing associations were reclassified to the private sector, taking £70 billion of debt off the country’s balance sheet and meaning greater certainty for housing associations in getting on with the job that my hon. Friend and I both want them to do, which is building more homes.
That is an important point for people not just in my hon. Friend’s constituency but elsewhere. We do want more homes to be built, because I want young people to have the prospect of the future that their parents and grandparents were able to have through owning their own homes. We will go further in building more homes, but she is absolutely right that, as we do that, we need to make sure that the infrastructure is in place. We are putting in billions of pounds from central Government for economic infrastructure in every year up to 2021. That includes transport projects and fibre broadband connections. We recognise the importance of making sure that homes are supported by the right infrastructure.
Far from the way in which the right hon. Lady has portrayed the situation, since 2010 we have seen 600,000 fewer people in absolute poverty—a record low—300,000 fewer working-age adults in absolute poverty, and 200,000 fewer children in absolute poverty. We have also seen families getting into work: there are nearly 1 million fewer workless households as a result of the actions of this Conservative Government.
I am very happy to confirm that to my hon. Friend. She will know that we are making progress on this in Scotland, but we need to go further. Programmes such as local full fibre networks and 5G will allocate funding directly to local projects, based on the quality of the bids put forward. The Minister for Digital, my right hon. Friend the Member for West Suffolk (Matt Hancock), recently confirmed in the House that we will deliver the next generation of technology directly to local authorities in Scotland, rather than going through the Scottish Government. We will make sure that Scotland is not left behind.
I know this is an issue that a number of Members have been concerned about and I recognise that the result of the review was not what some Members and families were hoping for. It was a comprehensive, independent scientific review of the available evidence by experts. All the meetings of the expert working group were attended by Nick Dobrik, as an invited independent expert from the Thalidomide Trust and at the request of the patient group, the Association for Children Damaged by Hormone Pregnancy Tests. I am informed that the overall conclusion is that the scientific evidence does not support a causal association, but that does not detract from the very real suffering experienced by the families. I recognise that these conclusions are hard to accept, but the Department of Health is focused on implementing the review’s recommendations which will strengthen detection and better communicate the risk of medicines during pregnancy.
My hon. Friend raises an important issue. I set out in my speech in Florence that the UK will honour the commitments we have made during our period of membership. We do not want our European partners to fear that they will have to receive less or pay more during the current budget plan as a result of our leaving the European Union, but we can only resolve the financial implications of the UK’s withdrawal as a part of the settlement of all the issues I spoke about in Florence. Once that is done, of course, the days of Britain paying vast sums of money to the EU every year will end.
The British Prime Minister does not appoint judges to the International Court of Justice. There is a process that is undertaken in the United Nations. We wish all the judges who have been appointed by the votes through the United Nations to the International Court of Justice well.
The point my hon. Friend raises is very important. Scotland had a referendum in 2014. That referendum was legal and fair, and the result was decisive: the people of Scotland voted clearly to remain part of the United Kingdom. At the election, they sent a message that they did not want a second referendum on this issue. I say to the Scottish Government, as we prepare to leave the EU, that they should be working with the UK Government to get the right deal for the whole of the UK, not taking Scotland back to the divisive constitutional debates of the past. I agree with my hon. Friend that the SNP should take its unwanted proposal off the table once and for all.
The hon. Gentleman raises an important point about steel. Of course, the Government have done a considerable amount over the last few years to support the steel industry here in the United Kingdom, and I was very pleased earlier in the year to visit and meet steelworkers to talk about the prospects for steel in the UK. We will, of course, look carefully to ensure that the arrangements in place are in the national interest, and we have supported steel in the past.
May I take my right hon. Friend back to the question from the hon. Member for Bristol West (Thangam Debbonaire)? Quite apart from commending the quality of the BBC programme she mentioned, may I draw my right hon. Friend’s attention to the fact that global policy on drugs prohibition is beginning to change, in the face of the evidential failure of the policy since the 1961 UN single convention on narcotic drugs? Will she look at the evidence that will emerge from the United States and Canada on the legalisation and regulation of cannabis markets there, as well as decriminalisation in Portugal and elsewhere—
When I was Home Secretary, work was undertaken by the Home Office on the experience in a number of countries and the different ways they approached the issue of drugs, but I am afraid that I have a different opinion from my hon. Friend on drugs, as would those dealing with people affected by drugs. I think of my constituent Elizabeth Burton-Phillips, who set up DrugFAM after the suicide of her son, who was a drug addict. I think of the work she is doing with families affected because a family member is on drugs, and of the incredible damage it can do to families and the individuals concerned. I am sorry but I take a different view from him. It is right that we continue to fight the war against drugs.
We spend more than £50 billion a year on benefits to support disabled people and people with health conditions—that has increased by more than £7 billion since 2010—and spending on disability benefits will be higher in every year to 2020 than in 2010. As regards universal credit, as I have said in the Chamber before, it is a simpler, more straightforward system, but, crucially, it is helping people to get into the workplace and making sure they keep more of the money they earn.
Will my right hon. Friend join me in congratulating the Leigh-on-Sea branch of the British Legion and local artists Beth Hooper and Mary Lister on using a lottery grant for school children in Southend to make 7,500 ceramic poppies and displaying them on Southend’s cliffs? Does she agree that that is a further good reason to make Southend-on-Sea a city?
I am very happy to join my hon. Friend in congratulating the Leigh-on-Sea branch of the Royal British Legion on its work in ensuring that young people recognise the importance of remembrance and the sacrifices made by previous generations for our safety and security. As to his second point, he puts in a very interesting bid. I know that Southend-on-Sea is close to his heart and that he champions it all the time. I am sure that his bid will be looked at carefully.
My constituent Hayley Crawley is receiving palliative care for bowel cancer, and she needs a specialist cancer drug that is available for other cancers. She waited for months to hear that her case for funding had been rejected by NHS England, and we are now waiting again for a reply to her appeal. Please will the Prime Minister write to NHS England to ensure that Hayley’s case is treated as a priority?
Obviously I am aware that that will be causing distress to Hayley while she is waiting for the appeal decision, and I am sure that the Secretary of State for Health will look closely at the case that the hon. Lady has raised. We were of course able to introduce the Cancer Drugs Fund, which has allowed some patients to have access to drugs that would otherwise not be available, but I recognise the concern and distress from which the hon. Lady’s constituent will be suffering while she waits for the decision.
The Prime Minister will be aware that under President Mugabe, British citizens living in Zimbabwe, especially landowners, suffered considerably. Can she assure the House that as we see a new regime coming to Zimbabwe, the British Government will do all they can to persuade that new regime to treat British citizens living lawfully in that country with respect, and to give them the safety and security that they should have, along with all other Zimbabwean citizens?
My hon. Friend has raised an important point as we see that change taking place in Zimbabwe. I think that the resignation of Robert Mugabe gives Zimbabwe an opportunity to forge a new path, free from the oppression that has characterised the past. We want to see a democratic, free, secure Zimbabwe, where people across communities throughout Zimbabwe are able to lead their lives without fear and oppression, and we want to see the country rejoin the international community. We have obviously given Zimbabwe some support in the form of UK aid, and, as the country’s oldest friend, we will do everything we can to support its change into a country that is free and democratic, and free of all oppression for all communities.
Clean Air Bill
Presentation and First Reading (Standing Order No. 57)
Geraint Davies, supported by Hilary Benn, Eleanor Smith, Tim Farron, Derek Thomas, Wera Hobhouse, John Mc Nally, Mr David Lammy, Sir Edward Davey, Rosie Duffield, Chris Evans and Preet Kaur Gill, presented a Bill to require the Secretary of State to set, measure, enforce and report on air quality targets; to make provision about mitigating air pollution, including through the use of clean air zones; to make provision about vehicle emissions testing; to restrict the approval and sale of vehicles with certain engine types; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 1 December, and to be printed (Bill 130).
Ways and Means
Before I call the Chancellor of the Exchequer, I remind hon. Members that copies of the Budget resolutions will be available in the Vote Office at the end of the Chancellor’s speech. I also remind them that it is not the norm to intervene on the Chancellor of the Exchequer or the Leader of the Opposition.
I report today on an economy that continues to grow, continues to create more jobs than ever before, and continues to confound those who seek to talk it down: an economy set on a path to a new relationship with our European neighbours and a new future outside the European Union—a future that will be full of change, full of new challenges, and, above all, full of new opportunities. In this Budget, we express our resolve to look forward, not back; to embrace that change; to meet those challenges head-on; and to seize those opportunities for Britain.
The negotiations on our future relationship with the European Union are in a critical phase. My right hon. Friend the Prime Minister has been clear about the fact that we seek a deep and special partnership, based on free and frictionless trade in goods and services, close collaboration on security, and strong mutual respect and friendship; and, as Chancellor, I am clear about the fact that one of the biggest boosts that we can provide for businesses and families—one of the best ways to protect British jobs and prosperity as we build that new future—is to make early progress in delivering my right hon. Friend’s vision, with an implementation agreement that allows businesses to plan and invest with confidence. This Government will make the pursuit of that progress a top priority in the weeks ahead.
While we work to achieve this deep and special partnership, we are determined to ensure that the country is prepared for every possible outcome. We have already invested almost £700 million in Brexit preparations and today I am setting aside over the next two years another £3 billion. I stand ready to allocate further sums if and when needed. No one should doubt our resolve.
But this Budget is about much more than Brexit. The world is on the brink of a technological revolution—one that will change the way we work and live, and transform our living standards for generations to come. We face a choice: either we embrace the future, seize the opportunities which lie within our grasp and build on Britain’s great global success story; or, as the Labour party advocates, we reject change and turn inwards to the failed and irrelevant dogmas of the past.
We have no doubts. We choose the future. We choose to run towards change, not away from it, and to prepare our people to meet the challenges ahead, not to hide from them. And the prize will be enormous because, for the first time in decades, Britain is genuinely at the forefront of this technological revolution—not just in our universities and research institutes, but this time in the commercial development labs of our great companies, and on factory floors and business parks across this land. But we must invest to secure that bright future for Britain, and at this Budget that is what we choose to do.
We are listening and we understand the frustration of families where real incomes are under pressure. So at this Budget, we choose a balanced approach—yes, maintaining fiscal responsibility as we at last see our debt peaking, continuing to invest in the skills and infrastructure that will support the jobs of the future and building the homes that will make good on our promise to the next generation, but crucially also helping families to cope with the cost of living.
As we invest in our country’s future, I have a clear vision of what that global Britain looks like: a prosperous and inclusive economy where everybody has the opportunity to shine, wherever in these islands they live and whatever their background, where talent and hard work are rewarded, and where the dream of home ownership is a reality for all generations; a hub of enterprise and innovation; a beacon of creativity; a civilised and tolerant place that cares for the vulnerable and nurtures the talented; an outward-looking, free-trading nation; and a force for good in the world. That is the Britain that I want to leave to my children—a Britain we can be proud of, and a country fit for the future. I know we will not build it overnight but we will lay the foundations in this Budget today. [Interruption.] Mr Deputy Speaker, I am being tempted with something a little more exotic here, but I will stick to plain water. I did take the precaution of asking the Prime Minister to bring a packet of cough sweets, just in case. [Laughter.]
I shall first report to the House on the economic forecasts of the independent Office for Budget Responsibility. This is the bit with the “long, economicky words”. Once again, I thank Robert Chote and his team for their hard work over the last few weeks. I believe passionately that the best way to improve the lives of people across the length and breadth of this country is to help them get into work. I am acutely aware that 1.4 million people out of work is 1.4 million too many, so today I welcome the OBR forecast that there will be another 600,000 people in work by 2022. I am immensely proud of this Government’s record in having created over 3 million new jobs since 2010—incidentally, a rather far cry from the 1.2 million job losses that the right hon. Member for Hayes and Harlington (John McDonnell) predicted in 2011—but let nobody be in any doubt that this Government will continue their relentless focus on getting more people into work, giving them the security and peace of mind of a regular wage.
I also want work to be good quality and well paid, and regrettably our productivity performance continues to disappoint. The OBR has assumed at each of the last 16 fiscal events that productivity growth would return to its pre-crisis trend of about 2% a year, but it has remained stubbornly flat. So today it revises down the outlook for productivity growth, business investment and GDP growth across the forecast period. The OBR now expects to see GDP grow 1.5% in 2017, 1.4% in 2018, 1.3% in 2019 and 2020, before picking back up to 1.5% and finally 1.6% in 2022, with inflation peaking at 3% in this quarter before falling back towards target over the next year. I reaffirm the remit for the independent Monetary Policy Committee and its 2% CPI inflation target.
We took over an economy with the highest budget deficit in our peacetime history. Since then, thanks to the hard work of the British people, that deficit has been shrinking and next year will be below 2%. However, our debt is still too high and we need to get it down, not for some ideological reason but because excessive debt undermines our economic security, leaving us vulnerable to shocks; because it passes the burden unfairly to the next generation; and because it cannot be right to spend more on our debt interest than we do on our police and our armed forces combined. So I am pleased to tell the House that the OBR expects debt to peak this year and then gradually fall as a share of GDP—a turning point in our recovery from Labour’s crisis. Apparently not everyone shares the view that falling debt is good news. I have heard representations from Labour Members suggesting increasing the debt by £500 billion, taking us back to square one and wasting an extra £7 billion a year on debt interest. If they carry on like that, there will be plenty of others joining Kezia Dugdale in saying, “I’m Labour, get me out of here.”
I have rejected these representations, and instead I reaffirm our pledge of fiscal responsibility and our commitment to the fiscal rules I set out last autumn, but now I choose to use some of the headroom I established then, so that as well as reducing debt, we can also invest in Britain’s future, support our key public services, keep taxes low and provide a little help to families and businesses under pressure: a balanced approach that will prepare Britain for the future, not seek to hide from it.
Today, the OBR confirms that we are on track to meet our fiscal rules. Borrowing is forecast to be £49.9 billion this year. That is £8.4 billion lower than forecast at the spring Budget. After taking account of all decisions since the spring Budget, the OBR’s GDP revision and the measures I will announce today, borrowing will fall in every year of the forecast, from £39.5 billion next year to £25.6 billion in 2022-23, to reach its lowest level in 20 years. As a percentage of our GDP, it falls from 2.4% this year to 1.9% next year, then 1.6%, 1.5%, 1.3% and, finally, 1.1% in 2022-23. The OBR forecasts the structural deficit to be 1.3% of GDP in 2020-21, giving £14.8 billion of headroom against our 2% target. Debt will peak at 86.5% of GDP this year and then fall to 86.4% next year, then 86.1%, 83.1%, 79.3% and, finally, 79.1% in 2022-23—the first sustained decline in debt in 17 years. Under Conservative-led Governments, the hard work of the British people is steadily clearing up the mess left behind by Labour.
At the heart of a global Britain must be a dynamic and innovative economy. On Monday, the Prime Minister set out the key elements of our modern industrial strategy—a strategy to raise productivity and wages in all parts of our country and to guarantee the brighter future we have promised to the next generation. My right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy will present a White Paper to the House in the next few days. This is not just an economic plan; it is a key part of our vision for a fairer Britain—a Britain where every one of our citizens can contribute to, and share in, the benefits of prosperity. The key to raising the wages of British workers is raising investment, both public and private, and we are investing in Britain’s future: half a trillion pounds since 2010; the biggest rail programme since Victorian times; the largest road building programme since the 1970s; the biggest increase in science and innovation funding in four decades; and the two largest infrastructure projects in Europe—Crossrail and HS2.
When I took this job, I committed to making the battle to raise Britain’s productivity, and thus the nation’s pay, the central mission of the Treasury. Last autumn, I launched the national productivity investment fund to provide an additional £23 billion of investment over five years to upgrade Britain’s economic infrastructure for the 21st century. Today, I can announce that I will extend the fund for a further year and expand it to over £31 billion, meaning that public investment under this Government will, on average, be £25 billion higher per year in real terms than under the last Labour Government. We are allocating a further £2.3 billion for investment in R and D, and we will increase the main R and D tax credit to 12%, taking the first strides towards the ambition of the industrial strategy to drive up R and D investment across the economy to 2.4% of GDP.
Britain is the world’s sixth largest economy. London is the No. 1 international financial services centre. We have some of the world’s best companies, and a commanding position in a raft of tech and digital industries that will form the backbone of the global economy of the future. Those who underestimate Britain do so at their peril, because we will harness that potential and turn it into the high-paid, high-productivity jobs of tomorrow. Others may choose to reject the future; we choose to embrace it. A new tech business is founded in Britain every hour, and I want that to be every half hour, so today we invest over £500 million in a range of initiatives from artificial intelligence to 5G and full-fibre broadband. We support regulatory innovation with a new regulators’ pioneer fund and a new geospatial data commission—[Interruption.] Opposition Members should listen. The new commission will develop a strategy for using the Government’s location data to support economic growth.
To help our tech start-ups reach scale, we asked Sir Damon Buffini to review the availability of patient capital, and I am grateful to him. Today, we are publishing an action plan to unlock over £20 billion of new investment in UK knowledge-intensive, scale-up businesses, including through a new fund in the British Business Bank seeded with £2.5 billion of public money, by facilitating pension fund access to long-term investments, and by doubling enterprise investment scheme limits for knowledge-intensive companies while ensuring that EIS is not used as a shelter for low-risk capital preservation schemes. We stand ready to step in to replace European Investment Fund lending if necessary.
There is perhaps no technology as symbolic of the revolution gathering pace around us as driverless vehicles—[Interruption.] Opposition Members surely do not want me to make that joke about the Labour party again. I know that Jeremy Clarkson does not like driverless vehicles, but there are many other good reasons to pursue the technology, so today we step up our support for it—sorry Jeremy, but this is definitely not the first time that you have been snubbed by Hammond and May. Our future vehicles will be driverless, but they will be electric first, and that is a change that needs to come as soon as possible for our planet. So we will establish a new £400 million charging infrastructure fund and invest an extra £100 million in plug-in car grants and £40 million in charging R and D. I can confirm today that we will clarify the law so that people who charge their electric vehicles at work will not face a benefit-in-kind charge from next year. The tax system can play an important role in protecting our environment.
We owe it to our children that the air they breathe is clean. We published our air quality plan earlier this year, and we said then that we would fund it through taxes on new diesel cars. From April 2018, the first-year vehicle excise duty rate for diesel cars that do not meet the latest standards will go up by one band, and the existing diesel supplement in company car tax will increase by one percentage point. Drivers buying a new car will be able to avoid the charge as soon as manufacturers bring forward the next-generation cleaner diesels that we all want to see, and we will only apply the measures to cars. Before the headline writers start limbering up, let me be quite clear: no white van man or white van woman will be hit by these measures. The levy will fund a new £220 million clean air fund to provide support for the implementation of local air quality plans, improving the quality of the air in cities and towns up and down the UK.
However, air quality is, sadly, not our only environmental challenge. Audiences across the country who have been glued to “Blue Planet II” have been starkly reminded of the problems of plastics pollution. The UK led the world on climate change agreements and is a pioneer in protecting marine environments. I want us now to become a world leader in tackling the scourge of the plastic that is littering our planet and our oceans. With my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs, I will investigate how the tax system and charges on single-use plastic items can reduce waste, because we cannot keep our promise to the next generation to build an economy fit for the future unless we ensure our planet has a future.
Meeting the challenge of change head-on means giving our people the confidence to embrace it and the skills to reap the rewards from it, and we have a plan to do so. We are delivering 3 million apprenticeship starts by 2020 thanks to our apprenticeship levy, and I will keep under review the flexibility that levy payers have to spend that money. We are introducing T-levels, and today I provide a further £20 million to support further education colleges to prepare for them. Knowledge of maths is key to the high-tech, cutting-edge jobs in our digital economy, but it is also useful in less glamorous roles such as frontline politics. So we will expand the Teaching for Mastery of Maths programme to a further 3,000 schools; we will provide £40 million to train maths teachers across the country; we will introduce a £600 maths premium for schools, for every additional pupil who takes A-level or core maths; and we will invite proposals for new maths schools across England, so that highly talented young mathematicians can release their potential, wherever they live and whatever their background. More maths for everyone—Mr Deputy Speaker, don’t let anyone say I don’t know how to show the nation a good time.
Computer science is also at the heart of this revolution, so we will ensure that every secondary school pupil can study computing by tripling the number of trained computer science teachers to 12,000, and we will work with industry to create a new national centre for computing. But rapid technological change means that we also need to help people retrain during their working lives, ensuring that our workforce are equipped with the skills they will need for the workplace of the future. Today, my right hon. Friend the Education Secretary and I are launching an historic partnership, between the Government, the CBI and the TUC, to set the strategic direction for a national retraining scheme. Its first priority will be to boost digital skills and support expansion of the construction sector. To make a start immediately, we will invest £30 million in the development of digital skills distance learning courses, so that people can learn wherever they are and whenever they want.
I am pleased to be able to accept the representation I have received from the TUC to continue to fund Unionlearn, which I recognise is a valuable part of our support for workplace learning. [Interruption.] Apparently the Opposition do not know what that is, Mr Deputy Speaker. I got an email from Len asking me especially, so I couldn’t say no, could I?
Backing skills is key to unlocking growth nationally, but far too much of our economic strength is concentrated in our capital city. If we are truly to build an economy that is fit for the future, we have to get all parts of the UK firing on all cylinders. That is what our modern industrial strategy is all about. Today we back the northern powerhouse, the midlands engine and elected Mayors across the UK, with a new £1.7 billion Transforming Cities fund: half to be shared by the six areas with elected metro Mayors, to give them the firepower to deliver on local transport priorities, and the remainder to be open to competition by other cities in England.
We are investing £300 million to ensure that HS2 infrastructure can accommodate future northern powerhouse and midlands engine rail improvements. I am also providing £30 million today to trial new solutions to improve mobile and digital connectivity on trains on the TransPennine route. We are developing a local industrial strategy with Manchester, and I am pleased to announce a second devolution deal with Andy Street in the west midlands. We have agreed a new devolution deal with North of the Tyne, and we will fund the replacement of the 40-year-old rolling stock on the Tyne and Wear metro, at a total investment of £337 million.
We will invest £123 million in the Redcar steelworks site to support the ambitious plans of our new Tees Valley Mayor, Ben Houchen, and my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke), who are leading the fight for prosperity in their area. We are piloting 100% business rates retention in London next year and continuing to work with Transport for London on the funding and financing of Crossrail 2. We will also make over £1 billion of discounted lending available to local authorities across the country to support high-value infrastructure projects—a Conservative Government giving power back to the people of Britain, and driving prosperity and greater fairness across our United Kingdom.
The decisions taken in this Budget also mean £2 billion more for the Scottish Government, £1.2 billion more for the Welsh Government and over £650 million more for a Northern Ireland Executive. I can confirm today that progress is being made on city deals for Tay Cities and Stirling, and on a growth deal for Borderlands. I am getting used to the experience of having my ear bent by 13 Scottish Conservative colleagues, most recently on the issue of Scottish police and fire VAT. The Scottish National party knew the rules and knew the consequences of introducing these bodies, and ploughed ahead anyway. My Scottish Conservative colleagues have persuaded me that the Scottish people should not lose out just because of the obstinacy of the SNP Government, so we will legislate to allow VAT refunds from April 2018.
In response to yet more representations from my hon. Friends from Scotland, aided and abetted by my hon. Friend the Member for Waveney (Peter Aldous), from November 2018 we will introduce transferable tax history for transfers of oil and gas fields in the North sea, an innovative tax policy that will encourage new entrants to bring fresh investment to a basin that still holds up to 20 billion barrels of oil.
We will begin negotiations towards growth deals for north Wales and mid-Wales, and we will abolish tolls on the Severn bridge, as promised, by the end of next year. We will deliver on our commitment to review the effect of VAT and air passenger duty on tourism in Northern Ireland, reporting at next year’s Budget, and we will open negotiations for a Belfast city deal as part of our commitment to a comprehensive and ambitious set of city deals across Northern Ireland—a Conservative Government delivering for all parts of our United Kingdom.
It is only by supporting our regions and nations, dealing with our debts and investing in skills and infrastructure for the long term that we can we build an economy fit for the future. But I recognise that many people are feeling pressure on their budgets now, and because we are all in politics to make people’s lives better, in the short term as well as the long term, we will take further measures in this Budget to help families and businesses where we can.
The switch to universal credit is a long-overdue and necessary reform, replacing Labour’s broken system that discouraged people from working more than 16 hours a week and trapped 1.4 million on out-of-work benefits for nearly a decade. Universal credit delivers a modern welfare system where work always pays and people are supported to earn, but I recognise the genuine concerns on both sides of the House about the operational delivery of this benefit, and today we will act on those concerns.
First, we will remove the seven-day waiting period applied at the beginning of a benefit claim so that entitlement to universal credit will start on the day of the claim. To provide greater support during the waiting period, we will change the advances system to ensure that any household that needs it can access a full month’s payment within five days of applying; we will make it possible to apply for an advance online, and we will extend the repayment period for advances from six months to 12 months; and any new universal credit claimant in receipt of housing benefit at the time of the claim will continue to receive that housing benefit for a further two weeks, making it easier for them to pay their rent. This is a £1½ billion package to address concerns about the delivery of the benefit. My right hon. Friend the Secretary of State for Work and Pensions will give further details in a statement to the House tomorrow.
We also want to help low-income households in areas where rents have been rising fastest. In the long run, of course, the answer lies in increasing the amount of housing available, a theme I shall return to. In the meantime, the best way to help them is by increasing the rate of support in those areas where rents are least affordable. So we will increase targeted affordability funding by £125 million over the next two years, benefiting 140,000 people. We will always listen to genuine concerns and act where we can to help.
Making work pay is core to the philosophy of this Government. That is why we introduced the national living wage in 2016. From April, it will rise by 4.4%, from £7.50 an hour to £7.83, handing full-time workers a further £600 pay increase and taking their total pay rise since its introduction to over £2,000 a year. We also accept the Low Pay Commission’s recommendations on national minimum wage rates, supporting our young people with the largest increase in youth rates in 10 years and delivering a pay rise for over 2 million minimum wage workers of all ages across the country.
The facts are these: income inequality today is at its lowest level in 30 years; the top 1% are paying a larger share of income tax than at any time under the last Labour Government; the poorest 10% in Britain have seen their real incomes grow faster since 2010 than the richest 10%; and the proportion of full-time jobs that are low paid is at its lowest level for 20 years—a Conservative Government delivering a fairer Britain.
As well as making work pay, we want families to keep more of the money they earn. When we came into office, the personal allowance stood at £6,475 a year. From April, I will increase the personal allowance to £11,850 and the higher rate threshold to £46,350, making progress towards our manifesto commitments, which I reiterate today. The typical basic-rate taxpayer will be £1,075 a year better off compared with 2010, and a full-time worker on the national living wage will take home more than £3,800 extra—this Conservative Government, delivering for Britain’s workers.
I turn now to duties. The tobacco duty escalator will continue at inflation plus 2%, with an additional 1% duty on hand-rolling tobacco this year, and minimum excise duty on cigarettes will also rise. Excessive alcohol consumption by the most vulnerable people is all too often done through cheap, high-strength, low-quality products, especially so-called white ciders. I pay tribute to the campaign led by my hon. Friend the Member for Congleton (Fiona Bruce) on this issue. Following our recent consultation, we will legislate to increase duty on these products from 2019. But, recognising the pressure on household budgets, and backing our great British pubs, duties on other ciders, wines, spirits and beer will be frozen. This will mean that a bottle of whisky will be £1.15 less in 2018 than if we had continued with Labour’s plans, and a pint of beer 12p less. So, merry Christmas, Mr Deputy Speaker.
The cost of travel is an important factor for families and businesses. From April 2019, I will again freeze short-haul air passenger duty rates, and I will also freeze long-haul economy rates, paid for by an increase on premium-class tickets and on private jets—sorry, Lewis. For those who do not stretch to a private jet, I can announce a new railcard for those aged 26 to 30, giving 4.5 million more young people a third off their rail fares. I will, once again, cancel the fuel duty rise for both petrol and diesel that is scheduled for April. Since 2010, we will have saved the average car driver £850 and the average van driver over £2,100, compared with Labour’s escalator plans. Fuel duty has now been frozen for the longest period in 40 years, at a total cost to the Exchequer of £46 billion since 2010.
Our NHS is one of our great institutions: an essential part of what we are as a nation and a source of pride the length and breadth of the country. Its values are the values of the British people, and we will always back it. Dedicated NHS staff are handling the challenges of an ageing population and rapidly advancing technology with skill and commitment, and we salute them. Mr Deputy Speaker, although you would not think so to listen to the Leader of the Opposition as he regularly talks down the achievements of the NHS, the number of patients being treated is at record levels, cancer survival rates are at their highest ever level, 17 million people are now able to access GP appointments in the evenings and at weekends, and public satisfaction among hospital in-patients is at its highest level in more than 20 years.
It is central to this Government’s vision that everyone has access to the NHS, free at the point of need. That is why we endorsed and funded the NHS’s five-year forward view in 2014. But even with this additional funding, we acknowledge that the service remains under pressure, and today we respond. First, we will deliver an additional £10 billion package of capital investment in frontline services over the course of this Parliament to support the sustainability and transformation plans that will make our NHS more resilient—investing for an NHS fit for the future. But we also recognise that the NHS is under pressure right now. I am therefore exceptionally, and outside the spending review process, making an additional commitment of resource funding of £2.8 billion to the NHS in England: £350 million immediately, to allow trusts to plan for this winter, and £1.6 billion in 2018-19, with the balance in 2019-20, taking the extra resource into the NHS next year to £3.75 billion in total, meaning that our NHS will receive a £7.5 billion increase to its resource budget over this year and next.
Our nation’s nurses provide invaluable support to us all in our time of greatest need and deserve our deepest gratitude for their tireless efforts. My right hon. Friend the Health Secretary has already begun discussions with health unions on pay structure modernisation for “Agenda for Change” staff, to improve recruitment and retention. He will submit evidence to the independent pay review body in due course, but I want to assure NHS staff and patients, and Members of this House, that if the Health Secretary’s talks bear fruit, I will protect patient services by providing additional funding for such a settlement.
Just as our public services must be fit for the future, so too must our tax system. It must remain competitive to attract the brightest and the best to establish and grow the businesses of the future. It must raise the revenue we need to fund our public services and it must be robust against abuse so that it is fair to all. We have heard a lot of talk recently from the Opposition about what they would do to crack down on tax avoidance and evasion, but the truth is that they did not. It is this Government who have clamped down on avoidance and evasion; this Government who have seen the tax gap cut by a quarter since 2010, to a record low; and this Government who have raked in an extra £160 billion over seven years for our public services by collecting the taxes that are due. So I am going to take no lectures, but I will take action. This Budget continues the work of the last seven years, with a package of measures that is forecast to raise £4.8 billion by 2022-23—doing the job that Labour failed to do for 13 years in office.
Our long-term phased reduction of corporation tax has generated investment and jobs and raised £20 billion extra for our public services. We are committed to maintaining Britain’s competitive corporation tax rates, but there is a case now for removing the anomaly of the indexation allowance for capital gains, bringing the corporate tax system into line with the personal capital gains tax system. I will therefore freeze this allowance so that companies receive relief for inflation up to January 2018, but not thereafter.
I am grateful to the Office of Tax Simplification for its recent report on the VAT registration threshold. At £85,000, the UK’s VAT threshold is by far the highest in the OECD. By contrast, in Germany it is just £15,600. I note the OTS conclusion that it distorts competition and disincentivises business growth. I also note the concerns of the Federation of Small Businesses about the cliff edge of the threshold. But such a high threshold also has the benefit of keeping the majority of small businesses out of VAT altogether, so I am not minded to reduce the threshold, but I will consult on whether its design could better incentivise growth, and in the meantime we will maintain it at its current level of £85,000 for the next two years.
We cannot build an economy fit for the future without supporting its backbone: our 5.5 million small businesses, which are responsible between them for nearly half of our private sector jobs. They give our economy its extraordinary vibrancy and resilience, but I recognise that many are feeling under pressure right now. I know what hard work it is to get a business off the ground, to get it to grow, so today I want to do what we can to ease that pressure.
Business rates represent a high fixed cost for small businesses. At Budget 2016 we introduced a package of business rate relief worth almost £9 billion, with a further £435 million in the spring Budget. Today I go further. We have listened to concerns about the potential costs of the annual uprating of business rates in April next year, and today I will accept the representation of the British Chambers of Commerce, CBI and other business organisations and bring forward the planned switch from RPI to CPI by two years, to April 2018—a move worth £2.3 billion to businesses over the next five years.
I have also listened to businesses affected by the so-called staircase tax. We will change the law to ensure that where a business has been impacted by the Supreme Court ruling, it can have its original bill reinstated, if it chooses, and backdated. I hope that I can expect cross-party backing to speed that measure through Parliament.
There are three simple steps to solve the staircase tax—[Interruption.] What do they expect? It’s the tax section. To support the thousands of small pubs that are at the heart of so many of our communities, we will extend the £1,000 discount for pubs with a rateable value of less than £100,000 for one more year, to March 2019.
And I have heard the concerns about the five-yearly revaluation system. Shorter revaluation periods will reduce the size of changes in valuations, so I can announce today that after the next revaluation, future revaluations will take place every three years—this Conservative Government listening to small business.
There is a wider concern across this House and in the business community about the tax system in the digital age. Along with the innovation and growth that it brings, digitalisation poses challenges for the sustainability and fairness of our tax system. But this challenge can only be properly solved on an international basis, and the UK is leading the charge in the OECD and the G20 to find solutions.
Today we publish a position paper on the tax challenge posed by the digital economy, setting out our emerging thinking about potential solutions. But in the meantime, we will take what action we can. Multinational digital businesses pay billions of pounds in royalties to jurisdictions where they are not taxed, and some of these royalties relate to UK sales. So from April 2019, and in accordance with our international obligations, we will apply income tax to royalties relating to UK sales when those royalties are paid to a low-tax jurisdiction, even if they do not fall to be taxed in the UK under our current rules. That will raise about £200 million a year. It does not solve the problem, but it does send a signal of our determination and we will continue work in the international arena to find a sustainable and fair long-term solution that properly taxes the digital businesses that operate in our cyber-space.
Following representations from a number of my hon. Friends, we are also taking further action to address online VAT fraud, which costs the taxpayer £1.2 billion per year, by making all online marketplaces jointly liable with their sellers for VAT, ensuring that sellers operating through them pay the right amount of VAT, just as we would expect traditional retailers to do.
I want to turn to the challenge of the housing market, but before I do so I want to touch on the aftermath of the appalling events at Grenfell Tower. We have provided financial support for the victims of this terrible tragedy, and today I can announce we will provide Kensington and Chelsea Council with a further £28 million for mental health and counselling services, regeneration support for the surrounding areas and to provide a new community space for local residents.
This tragedy should never have happened, and we must ensure that nothing like it ever happens again. All local authorities and housing associations must carry out any identified necessary safety works as soon as possible. If any local authority cannot access funding to pay for essential fire safety work, they should contact us immediately. I have said before, and I will say it again today: we will not allow financial constraints to get in the way of any essential fire safety work.
I want to address the issue of empty properties. It cannot be right to leave property empty when so many are desperate for a place to live, so we will legislate to give local authorities the power to charge a 100% council tax premium on empty properties. We will also launch a consultation on barriers to longer tenancies in the private rented sector and how we might encourage landlords to offer them to those tenants who want the extra security.
I also want to say something about rough sleeping. It is unacceptable that in 21st-century Britain there are people sleeping on the streets, so we will invest today £28 million in three new Housing First pilots in the west midlands, Manchester and Liverpool, and we will establish a homelessness taskforce as part of our commitment to halving rough sleeping by 2022 and eliminating it by 2027.
I thank the many colleagues who submitted ideas on how to tackle the challenge of the housing market, including my hon. Friends the Members for North East Hampshire (Mr Jayawardena), for Eastleigh (Mims Davies) and for Weston-super-Mare (John Penrose) in particular. By continuing to invest in Britain’s infrastructure, skills and research and development, we will ensure the recovery in productivity growth that is the key to delivering our vision of a stronger, fairer, more balanced economy, and the assurance to the next generation of their economic security.
But however successful we are in that endeavour, there is one area where young people today will, rightly, feel concern about their future prospects, and that is in the housing market. House prices are increasingly out of reach for many. It takes too long to save for a deposit, and rents absorb too high a portion of monthly income, so the number of 25 to 34-year-olds owning their own home has dropped from 59% to just 38% over the last 13 years. Put simply, successive Governments, over decades, have failed to build enough homes to deliver the home-owning dream that this country has always been proud of, or indeed to meet the needs of those who rent.
In Manchester a few weeks ago, my right hon. Friend the Prime Minister made a pledge to Britain’s younger generation that she would dedicate her premiership to fixing this problem, and today we take the next steps to delivering on that pledge. By choosing to build we send a message to the next generation that getting on the housing ladder is not just a dream of your parents’ past, but a reality for your future.
We have made a start with schemes such as Help to Buy, which has helped over 320,000 people buy a home. We have increased the supply of homes by more than 1.1 million since 2010, including nearly 350,000 affordable homes. House building stands at its highest level since the crash, with the latest figures showing that over 217,000 net additional homes were added to the stock last year. That is a remarkable achievement, but we need to do better still if we are to see affordability improve.
This is a complex challenge, and there is no single magic bullet. If we do not increase the supply of land for new homes, more money will simply inflate prices and make matters worse. If we do not do more to support the growth of the SME house building sector that was all but wiped out by Labour’s great recession, we will remain dependent on the major national house builders that dominate the industry. If we do not train the construction workers of tomorrow, we may generate planning permissions but we will not turn them into homes. Solving this challenge will require money, it will require planning reform and it will require intervention. So today we set out an ambitious plan to tackle the housing challenge.
Over the next five years, we will commit a total of at least £44 billion of capital funding, loans and guarantees to support our housing market, to boost the supply of skills, resources and building land, and to create the financial incentives necessary to deliver 300,000 net additional homes a year on average by the mid-2020s—the biggest annual increase in housing supply since 1970; new money for the home builders fund to get SME house builders building again; a £630 million small sites fund to unstick the delivery of 40,000 homes; a further £2.7 billion to more than double the housing infrastructure fund; £400 million more for estate regeneration; a £1.1 billion fund to unlock strategic sites, including new settlements and urban regeneration schemes; a lifting of housing revenue account caps for councils in high demand areas, to get them building again; and £8 billion of new financial guarantees to support private house building and the purpose-built private rented sector. And because we need a workforce to build these new homes, we are providing an additional £34 million to develop construction skills across the country.
Solving the housing challenge takes more than money—it takes planning reform. We will focus on the urban areas where people want to live and where most jobs are created, making best use of our urban land and continuing the strong protection of our green belt, in particular building high quality, high density homes in city centres and around major transport hubs. And to put the needs of our young people first, we will ensure that councils in high demand areas permit more homes for local first-time buyers and affordable renters.
My right hon. Friend the Communities Secretary will set out more detail in a statement to the House in due course. However, one thing is very clear: there is a significant gap between the number of planning permissions granted and the number of homes built. In London alone, there are 270,000 residential planning permissions unbuilt. We need to understand why. So I am establishing an urgent review to look at the gap between planning permissions and housing starts. It will be chaired by my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) and will deliver an interim report in time for the spring statement next year. And if that report finds that vitally needed land is being withheld from the market for commercial, rather than technical, reasons, we will intervene to change the incentives to ensure that such land is brought forward for development, using direct intervention compulsory purchase powers as necessary.
Mr Deputy Speaker, my right hon. Friend the Prime Minister has said that we will fix this problem, and no one should doubt the Government’s determination to do so. But the solution will not deliver itself. Local authorities will need help and support. Developers will need encouragement and persuasion. Infrastructure to facilitate higher-density development must be funded and delivered. So the Homes and Communities Agency will expand to become Homes England, bringing together money, expertise and planning and compulsory purchase powers, with a clear remit to facilitate delivery of sufficient new homes, where they are most needed, to deliver a sustained improvement in housing affordability.
But Mr Deputy Speaker, the battle to achieve and sustain affordability will be a long-term one, so we also need to look beyond this Parliament, to long-term measures. We will use new town development corporations to kick-start five new locally agreed garden towns in areas of demand pressure, delivered through public-private partnerships and designed to attract long-term capital investment from around the world.
Last week, the National Infrastructure Commission published their report on the Cambridge-Milton Keynes-Oxford corridor. Today we back their vision and commit to building up to 1 million homes by 2050, completing the road and rail infrastructure to support them. And as a down-payment on this plan, we have agreed an ambitious housing deal with Oxfordshire to deliver 100,000 homes by 2031. We are capitalising on the global reputations of our two most famous universities and Britain’s biggest new town to create a dynamic new growth corridor for the 21st century.
Mr Deputy Speaker, this is our plan to deliver on the pledge we have made to the next generation: that the dream of home ownership will become a reality in this country once again. But I also want to take action today to help young people who are saving to own a home. One of the biggest challenges facing young first-time buyers is the cash required up front. We have put £10 billion more money into Help to Buy: Equity Loan to help those saving for a deposit, but I want to do more still. I have received representations for a temporary stamp duty holiday for first-time buyers, but this would only help those who are ready to purchase now and would offer nothing for the many who will need to save for years. So with effect from today, for all first-time-buyer purchases up to £300,000, I am abolishing stamp duty altogether.
Mr Deputy Speaker, to ensure that this relief also helps first-time buyers in very high price areas like London, it will also be available on the first £300,000 of the purchase price of properties up to £500,000, meaning an effective reduction of £5,000. That is a stamp duty cut for 95% of all first-time buyers who pay stamp duty and no stamp duty at all for 80% of first-time buyers from today. When we say we will revive the home-owning dream in Britain, we mean it. We do not underestimate the scale of the challenge, but today we have made a substantial down-payment.
Mr Deputy Speaker, one of the things that I love most about this country is its sense of opportunity. I have always felt it, and I want young people growing up today to have that same sense of boundless opportunity. In this Budget, I have set out a vision for Britain’s future and a plan for delivering it: by getting our debt down, by supporting British families and businesses, by investing in the technologies and the skills of the future and by creating the homes and the infrastructure that our country needs.
We are at a turning point in our history, and we resolve to look forwards, not backwards—to build on the strengths of the British economy, to embrace change not hide from it, to seize the opportunities ahead of us and, together, to build a Britain fit for the future. I commend this statement to the House.
Provisional Collection of Taxes
Motion made, and Question put forthwith (Standing Order No. 51(2)),
That, pursuant to section 5 of the Provisional Collection of Taxes Act 1968, provisional statutory effect shall be given to the following motions:—
(a) Stamp duty land tax (higher rates for additional dwellings) (motion no. 35.)
(b) Stamp duty land tax (relief for first-time buyers) (motion no. 36.)
(c) Tobacco products duty: rates (motion no. 40.).—(Mr Philip Hammond.)
Question agreed to.
I now call upon the Chancellor of the Exchequer to move the motion entitled “Income tax (charge)”. It is on this motion that the debate will take place today and on succeeding days. The questions on this motion and on the remaining motions will be put at the end of the Budget debate on Tuesday 28 November.
Income tax (charge)
Motion made, and Question proposed,
That income tax is charged for the tax year 2018-19.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—(Mr Philip Hammond.)
Order. Look, if somebody wants to go for an early cup of tea, please do so—I am told there are mince pies waiting—but what I will have is the Leader of the Opposition listened to, and quietly, from the Government side, in the same way I expected from the other side of the House.
Thank you, Mr Deputy Speaker.
The reality test of this Budget has to be how it affects ordinary people’s lives. I believe, as the days go ahead and this Budget unravels, the reality will be that a lot of people will be no better off, and the misery that many are in will be continuing.
Pay is now lower than it was in 2010, and wages are now falling again. Economic growth in the first three quarters of this year is the lowest since 2009 and the slowest of the major economies in the G7. It is a record of failure, with a forecast of more to come.
Economic growth has been revised down. Productivity growth has been revised down; business investment, revised down; people’s wages and living standards, revised down. What sort of strong economy is that? What sort of “fit for the future” is that?
You may recall, Mr Deputy Speaker, that the deficit was due to be eradicated by 2015. Then that moved to 2016; then to 2017; then to 2020. And now we are looking at 2025. The Government are missing their major targets, but the failed and damaging policy of austerity remains.
The number of people sleeping rough has doubled since 2010. This year, 120,000 children will spend Christmas in temporary accommodation. Three new pilot schemes to look at rough sleeping across the whole country simply does not cut it. We want action now to help those poor people who are forced to sleep on our streets and beg for—[Interruption.]
The point I was making is that three new pilot schemes for rough sleepers simply does not cut it. It is a disaster for those people sleeping on our streets and forced to beg for the money for a night shelter. They are looking for action now from Government to give them a roof over their heads.
In some parts of the country, life expectancy is actually beginning to fall. The last Labour Government lifted 1 million children out of poverty—it was an amazing achievement. Under this Government, an extra 1 million children will be plunged into poverty by the end of this Parliament. Some 1.9 million pensioners, or one in six of all pensioners, are living in poverty—the worst rate anywhere in western Europe. So, it is falling pay, slow growth and rising poverty. This is what the Chancellor has the cheek to call a strong economy.
The Chancellor’s predecessor said they would put the burden on
“those with the broadest shoulders”—[Official Report, 20 October 2010; Vol. 516, c. 951]—
so how has that turned out? The poorest 10th of households will lose 10% of their income by 2022, while the richest will lose just 1%—so much for “tackling burning injustices”. This is a Government tossing fuel on the fire.
Personal debt levels are rising: 8.3 million people are over-indebted. If the Chancellor wants to help people out of debt, he should back Labour’s policy for a real living wage of £10 an hour by 2020. Working-class young people are now leaving university with £57,000-worth of debt because this Government—his Government—trebled tuition fees. The new Government policy is to win over young people by keeping fees at £9,250 per year—more debt for people who want to learn.
But that is just one of the multitudes of injustices presided over by this Government. Another is universal credit, which we called on Ministers to pause and fix. That is the view of this House. It is the verdict of those on the frontline.
Thank you, Mr Deputy Speaker.
Maybe Government Members would like to listen to Martin’s experience. A full-time worker on the minimum wage, he said:
“I get paid four weekly meaning that my pay date is different each month”.
Because, under the universal credit system, he was paid twice in a month and deemed to have earned too much, his universal credit was cut off. He says:
“This led me into rent arrears and I had to use a food bank for the first time in my life”.
That is the humiliation that he and so many others have gone through because of the problems of universal credit. Would it not have been better to pause the whole thing and look at the problems it has caused?
The Chancellor’s solution to a failing system causing more debt is to offer a loan, and a six-week wait, with 20% waiting even longer, simply becomes a five-week wait. This system has been run down by £3 billion of cuts to work allowances, the two-child limit and the perverse and appalling rape clause, and it has caused evictions because housing benefit is not paid direct to the landlord. So I say to the Chancellor again: put this system on hold so it can be fixed and keep 1 million of our children out of poverty.
For years, we have had the rhetoric of a long-term economic plan that never meets its targets when what all too many people are experiencing is long-term economic pain—and hardest hit are disabled people, single parents and women—so it is disappointing that the Chancellor did not back the campaign by my hon. Friend the Member for Brent Central (Dawn Butler) to end period poverty. He could have done that. Well done her on the campaign; shame on him for not supporting it.
The Conservatives’ manifesto in the last election disappeared off their website after three days, and now some Ministers have put forward some half-decent proposals conspicuously borrowed from the Labour manifesto. Let me tell the Chancellor: as socialists, we are happy to share ideas. The Communities Secretary called for £50 million of borrowing to invest in house building; presumably, the Prime Minister slapped him down for wanting to bankrupt Britain. The Health Secretary has said that the pay cap is over, but where is the money to fund the pay rise?
The Chancellor has not been clear today—not for NHS workers, our police, firefighters, teachers, teaching assistants, bin collectors, tax collectors, or armed forces personnel—so will he listen to Claire? She says:
“My Mum works for the NHS. She goes above and beyond for her patients. Why does the government think it’s ok to under pay, over stress and underappreciate all that work?”
The NHS chief executive says:
“The budget for the NHS next year is well short of what is currently needed”.
From what the Chancellor has said today, it is still going to be well short of what is needed. He said in 2015 that the Government would fund another 5,000 GPs, but in the last year we have had 1,200 fewer GPs—and we have lost community nurses and mental health nurses. The Chancellor promised £10 billion in 2015 and delivered £4.5 billion. So if he does not mind, we will wait for the small print on today’s announcement—but even what he said certainly falls well short of the £6 billion Labour would have delivered from our June manifesto.
Over 1 million of our elderly are not receiving the care they need. Over £6 billion will have been cut from social care budgets by next March. [Interruption.] I hope the hon. Member for Burton (Andrew Griffiths) begins to understand what is like to wait for social care stuck in a hospital bed, with other people having to give up their work to care for them. The uncaring, uncouth attitude of certain Government Members has to be called out—[Interruption.]
That is why social care budgets are so important for so many very desperate people in our country.
Our schools will be 5% worse off by 2019 despite the Conservative manifesto promising that no school would be worse off. Five thousand head teachers from 25 counties wrote to the Chancellor saying that:
“we are simply asking for the money that is being taken out of the system to be returned”.
A senior science technician, Robert, wrote to me saying:
“reduced by over 30%. I’ve seen massive cuts at my school. Good teachers and support staff leave.”
That is what does for the morale both of teachers and students in school. According to this Government, 5,000 head teachers are wrong, Robert is wrong, the IFS is wrong—everybody is wrong except the Chancellor.
If the Chancellor bothered to listen to what local government is saying, he would know that it has been warning that services for vulnerable children are under more demand than ever, with more children being taken into care and more in desperate need of help and support. Yet councils are labouring with a £2 billion shortfall in the cost of dealing with vulnerable children. Local councils will have lost 80% of their direct funding by 2020. The reality of this across the country is women’s refuges closing, youth centres closing, libraries closing, museums closing, and public facilities understaffed, under-resourced and under-financed—it could be so different—but compassion can cost very little. Just £10 million is needed to establish the child funeral fund campaigned for so brilliantly by my hon. Friend the Member for Swansea East (Carolyn Harris). Why could not the Chancellor at least have agreed to fund that?
Under this Government, there are 20,000 fewer police officers, and another 6,000 community support officers and 11,000 fire service staff have been cut as well. You cannot keep communities safe on the cheap. Tammy explains:
“Our police presence has been taken away”
from her village
“meaning increasing crime. As a single parent I no longer feel safe in my own village, particularly”
Five and a half million workers earn less than the living wage—1 million more than five years ago. The Chancellor, last Sunday, could not even see 1.4 million people unemployed in this country. There is a crisis of low pay and insecure work affecting one in four women and one in six men, with a record 7.4 million people in working households living in poverty. If we want workers earning better pay and less dependent on in-work benefits, we need strong trade unions—the most effective way of boosting workers’ pay. Instead, this Government weakened trade unions and introduced employment tribunal fees, now scrapped thanks to the victory in the courts by Unison—a trade union representing its members.
Why did not the Chancellor take the opportunity to make two changes to control debt: first, to cap credit card debt, so that nobody pays back more than they borrowed; and secondly, to stop credit card companies increasing people’s credit limit without their say-so? Debt is being racked up because the Government are weak on those who exploit people, such as rail companies hiking fares above inflation year on year, and water companies and energy suppliers. During the general election, the Conservatives promised an energy cap that would benefit
“around 17 million families on standard variable tariffs”,
but every bill tells millions of families that the Government have broken that promise.
With £10 billion in housing benefit going into the pockets of private landlords every year, housing is a key factor in driving up the welfare bill. There were not too many words from the Chancellor about excessive rents in the private rented sector. With this Government delivering the worst rate of house building since the 1920s and a quarter of a million fewer council homes, any commitment would be welcome, but we have been here before. The Government promised 200,000 starter homes three years ago; not a single one has been built in those three years. We need a large-scale, publicly funded house building programme, not this Government’s accounting tricks and empty promises. Yes, we back the abolition in stamp duty for first-time buyers—because it was another Labour policy in our manifesto in June, not a Tory one.
This Government’s continual preference for spin over substance means that across this country the words “northern powerhouse” and “midlands engine” are now met with derision. Yorkshire and Humber gets only a 10th of the transport investment per head given to London. Government figures show that every region in the north of England has seen a fall in spending on services since 2012. The midlands, east and west, receives less than 8% of total transport infrastructure investment, compared with the 50% that goes to London. In the east and west midlands, one in four workers is paid less than the living wage—so much for the midlands engine. Re-announced funding for the trans-Pennine rail route will not cut it, and today’s other announcements will not redress the balance.
Combined with counterproductive austerity, this lack of investment has consequences in sluggish growth and shrinking pay packets. Public investment has virtually halved. Under this Government, Britain has the lowest rate of public investment in the G7, but it is now investing in driverless cars, after months of road testing back-seat driving in the Government.
By moving from RPI to CPI indexation on business rates, the Chancellor has adopted another Labour policy, but why do the Government not go further and adopt Labour’s entire business rates pledge, including exempting plant and machinery, and an annual revaluation of business rates?
Nowhere has the Government’s chaos been more evident than over Brexit. Following round after round of fruitless Brexit negotiations, the Brexit Secretary has been shunted out for the Prime Minister, who has got no further. Every major business organisation has written to the Government, telling them to pull their finger out and get on with it. Businesses are delaying crucial investment decisions, and if this Government do not get their act together, those businesses will soon be taking relocation decisions.
Crashing out with no deal and turning Britain into a tax haven would damage people’s jobs and living standards, serving only a wealthy few. It is not as though this Government are not doing their best to protect tax havens and their clients in the meantime. The Paradise papers have again exposed how a super-rich elite is allowed to get away with dodging taxes. This Government have opposed measure after measure in this House—their Tory colleagues have done the same in the European Parliament—to clamp down on the tax havens that facilitate this outrageous leaching from our public purse. Non-paid tax and clever reinvestment to get away with tax hit hospitals, schools and housing, and they hit the poorest and most needy in our society. There is nothing moral about dodging tax; there is everything immoral about evading it.
Too often, it feels as though there is one rule for the super-rich and another for the rest of us. The horrors of Grenfell Tower were a reflection of a system that puts profits before people and that fails to listen to working-class communities. In 2013, the Government received advice in a coroner’s report that sprinklers should be fitted in all high-rise buildings. Today, once again, the Government failed to fund the £1 billion investment needed. The Chancellor says that councils should contact them, but Nottingham and Westminster have done so, and they have been refused; nothing was offered to them. We have the privilege of being Members of Parliament, in a building that is about to be retrofitted with sprinklers to protect us. The message is pretty clear: this Government care more about what happens here than about what happens to people living in high-rise homes, in effect saying that they matter less.
Our country is marked by growing inequality and injustice. We were promised, with lots of hype, a revolutionary Budget, but the reality is that nothing has changed. People were looking for help from this Budget, and they have been let down by a Government who, like the economy that they have presided over, are weak and unstable, and in need of urgent change. They call this a Budget fit for the future; the reality is that they are a Government no longer fit for office.
Thank you very much indeed, Mr Deputy Speaker, for calling me to take part in a Budget debate for my first time as Chair of the Treasury Committee. If media reports are to be believed, I am not the only former Education Secretary who is using “long, economicky words” at the moment. At this point in the debate, my predecessor as Chair of the Committee would always congratulate the Leader of the Opposition on making the most difficult speech of the parliamentary year. I am happy to continue that tradition, although much of the Leader of the Opposition’s speech appeared to have been written in advance, and I suspect he will want to look at more of the detail of the Budget and to find more to welcome in the remarks of my right hon. Friend the Chancellor.
Today, it was perhaps the Chancellor who had the hardest task. Beset by demands for more public spending, rising economic uncertainty and downgrades in forecasts, he has taken a common-sense approach that will no doubt displease many on both sides of the Chamber. We have to remember, however, that it is only thanks to seven years of common sense and concerted efforts by Conservative-led Governments to reduce the deficit and restore credibility to the public finances that the UK has the resilience necessary to face the challenges ahead.
The reclassification of housing associations might have given the Chancellor some timely room for manoeuvre, but it does not alter the underlying picture or the risks in the outlook, and those risks could grow. Although the OBR has made a more negative assessment of productivity, it still forecasts a relatively benign Brexit—a smooth adjustment to the new trade arrangement, with no cliff edge in March 2019. But that cannot be guaranteed, and even though a transitional arrangement that would allow for such a smooth adjustment is manifestly in the interests of both the UK and the EU, it might, of course, not happen. The Treasury Committee will be looking closely at the consequences of failing to reach a deal on transition and expects to make a report to the House in the coming weeks.
Beyond the public finances, household balance sheets are also under pressure. Rising interest rates, high inflation, lower wage growth and a working-age benefits freeze all stand to put pressure on ordinary households. My right hon. Friend the Chancellor has set out two important principles for Conservative-led Governments: first, work should always pay; and, secondly, people should keep more of the money that they earn. I am happy, as I think all Conservative Members are, to support him on those two principles.
The pressures on household finances—the Committee is looking at them as part of our inquiry into household finances—will be exacerbated, particularly for the younger generation, if action is not taken to tackle long-standing problems in the housing market, as my right hon. Friend said. I therefore welcome the measures on housing. He has announced a comprehensive package on skills, land availability and financial incentives to get Britain building. I also welcome the review that will be chaired by my right hon. Friend the Member for West Dorset (Sir Oliver Letwin). We always know there is a problem when my right hon. Friend is sent for to solve it. He will look at the gap between permissions granted and houses built, and why it exists.
I also hugely welcome, as I think all Conservative Members will, the stamp duty cut for first-time buyers. As the Chancellor said, it will make home ownership a reality for more young people. The Committee intends to hear from housing experts as part of our Budget scrutiny, and we will investigate whether the rousing wartime rhetoric of my right hon. Friend the Secretary of State for Communities and Local Government matches the reality of what has been announced today.
Of course, pressures on the public finances and on household balance sheets can be alleviated in the long term only if, as the Chancellor said, productivity growth improves. I welcome very much his further investment in the national productivity investment fund, and he was right to emphasise the challenge regarding productivity in the UK, which is now the weakest in the G7. The average UK worker has to slog from 9 until 5 to produce the same value of output that a worker in Germany produces between the hours of 9 and 3. The regional disparities in the UK are even greater, so I welcome what the Chancellor said about more devolution. I do not know where the Leader of the Opposition got the idea that Conservative Members do not take seriously the northern powerhouse and the midlands engine. I can tell him, as a midlands Member of Parliament, that we take them very seriously. We believe in devolution.
There are no easy solutions to the UK’s weak productivity, but we can do two things to help with the productivity puzzle. The first is better infrastructure, including digital infrastructure. The chair of the National Infrastructure Commission told the Treasury Committee recently that the big political divide in infrastructure policy is not between the parties, but between action and inaction. The Chancellor must act on the commission’s recommendations when they are published, and I welcome his commitment today to implement its recommendations on the Oxford-Milton Keynes corridor. I also welcome the proposal for discounted lending to local authorities so that they can invest in infrastructure.
The second response on productivity is to retain the UK’s historical commitment to openness to trade, investment and migration. Global Britain must be a reality, not just a slogan. The economic case for leaving the EU has always rested—and continues to rest—on openness, and we must not allow the Brexit process to mark the start of a descent into economic nationalism. It is only through productivity growth that households can be weaned off consumer credit without cutting their consumption and reducing their living standards. It is only through productivity growth that the Chancellor has any hope of meeting demands for additional spending—on welfare, social care, prisons, the NHS, public sector pay and Brexit contingency measures—without damaging the Government’s hard-won reputation for fiscal credibility.
For the avoidance of doubt, let us for the thousandth time dismiss the idea that a Brexit-induced fiscal windfall will relieve the pressures on our health service. There are no easy choices and there is no pot of gold under the Brexit rainbow. Those who persist with this myth may win short-term approval from certain quarters of the media, but only at the cost of long-term damage to trust in politics.
On the industrial strategy, the Chancellor is absolutely right to have identified the technology revolution and to say that Britain is at the forefront of it. He is right to identify the need for more young people to learn maths and computer science to a higher level. We have to find a way of exciting everyone in this country—the next generation, and their parents and grandparents—about the technology revolution. We need them to be confident that they have the skills that will meet the demands of the future labour market, rather than frightened by change in the 21st century. This key part of our plan for a fairer Britain will unlock prosperity.
May I pick up the point about education funding? The Government proposed £3 billion of cuts, which was reduced to just under £2 billion, but that means that there is still a £2 billion gap in our education funding system, and the Chancellor said nothing about how schools will cope with that. Does the right hon. Lady agree that there ought to have been some thinking about investment in our schools to prevent the reversal of the progress that has been made?
First, I can say to the hon. Lady—I am pleased to serve with her on the Treasury Committee—that educational standards have actually improved dramatically in this country during the past seven years. I do not recognise her figures. The Secretary of State for Education announced an extra £1.3 billion for schools in July, and this Government are spending more on schools than any previous Government. If the hon. Lady is really concerned, she will want to deal with the debt that this Government are still paying off, given that we spend almost as much as our schools budget on paying debt interest.
The Chancellor announced a number of new tax measures. I was pleased that he said that our tax system can help to protect our environment. That is an important signal to send to those who are particularly concerned about the environment and to the next generation.
I welcome the exemption on the vehicle excise duty supplement for new zero-emission-capable taxis, so I thank the Chancellor for listening to representations. Through the right hon. Lady, may I urge the Chancellor to bring forward that measure so that it will kick in earlier than April 2019, because many such vehicles will be on the road from next month and we will want drivers to be able to take advantage of these new zero-emission-capable and environmentally friendly taxis?
It is also a pleasure to serve with the hon. Gentleman on the Treasury Committee. I am sure that the Chancellor will have has heard what he said. I am also sure that the Chancellor is looking forward to appearing in front of the Committee on 6 December, when we will be able to ask him such questions directly.
Hidden in the Budget book is the really terrible news that no new money is available for renewables until 2025, but at the same time the Chancellor is giving away yet more tax breaks to oil and gas. How on earth is that compatible with a forward-looking country that is serious about climate change?
This Government have done incredibly well in supporting the renewables industry. The renewable energy industry in the midlands is thriving. Again, however, the Committee may well want to take that up with the Chancellor.
I welcome the move on business rates—the change from RPI to CPI is very welcome—and I particularly welcome the move on the staircase tax, about which the Chancellor was asked when he appeared before the Committee recently. The approach builds on the evidence he gave, and I hope he is right about the cross-party support that the measure will be able to receive.
Does my right hon. Friend agree that the changes to business rates will be particularly valuable for shops, restaurants and office premises in outer London, which are squeezed between the bright lights of central London and large out-of-town shopping centres, and for which the fixed cost of business rates is particularly heavy?
That is an excellent point. Of course I agree with my hon. Friend.
I was just coming on to the Chancellor’s measures on taxing digital businesses, which is also very important for bricks-and-mortar retail businesses. Although the change is perhaps modest, an important principle has been established about the taxation of digital businesses that do business in this country. I welcome what the Chancellor has said about tax avoidance and evasion measures. I think he said that we will spend £155 million on HMRC’s revenue-collecting ability in order to collect £2.3 billion. That sounds very encouraging, but the Committee will of course probe those estimates.
I commend my right hon. Friend for continuing the practice of publishing a distributional analysis showing how the Budget affects households in different parts of the income distribution. That analysis, which provides an unprecedented level of transparency about the consequences of the Budget for ordinary people, emerged only as a result of pressure by the Treasury Committee over the previous two Parliaments, and there might be more work for the Committee to do in this one. What is not yet included in the Treasury’s analysis is an assessment of the gender impact of the Budget—an analysis of how much men and women stand to gain or lose from the Chancellor’s decisions. It will not surprise Members to hear the first female Chair of the Treasury Committee saying that my Committee will take written evidence, including from the Women’s Budget Group, on the merits of such an analysis.
Before I conclude, I want to remind the House about the Treasury Committee’s role in scrutinising the OBR and upholding its independence. There is widespread agreement across the House that the creation of the OBR vastly improved the credibility and quality of economic and fiscal forecasting, and empowered Members of Parliament to hold the Government to account on their fiscal policy. However, in this febrile political atmosphere, we must remember that the OBR is still young, so its hard-won reputation could be fatally undermined if the motives and good faith of its leadership are impugned by those who disagree with its findings. The OBR has a powerful line of accountability to Parliament, thanks to the Committee’s statutory veto on the appointment and dismissal of its senior leadership. We will seek assurances that the OBR has done its work without political interference, we will subject its forecasts to critical scrutiny and, if necessary, we will defend its integrity. As I have said, the Committee looks forward to hearing from the Chancellor on the Budget measures, and the economic and fiscal outlook, when he appears before us in two weeks’ time.
The UK faces many challenges. Brexit hangs over this place and the UK like a cloud. Some people think there is a silver lining; others think there will be more rain and fog. It was therefore important that today’s Budget showed that the Government are determined to do more than just negotiate our path out of the EU. I believe the Chancellor has more than achieved that with everything he announced today.
I want to wish the Chancellor all the best. He talks about preparing for the future, but let us look at the reality of the figures contained in the OBR book. We are faced with the United Kingdom falling to the bottom of growth in the G7. When we look at GDP per capita for the years 2019 and 2020, we see that the OBR has reduced its forecasts from 1.7% to 0.7% for 2019 and from 1.9% to 0.7% for 2020. That is what post-Brexit Britain is going to look like—an absolute shredding of growth forecasts for the next three years. The OBR talks about GDP—
No, I will not, because this is the third party speech and the practice is that it is not to be intervened on.
The change in GDP that we will see in the OBR book is a cut to GDP of 2.7%—that is what this Government are presiding over. It is a threat to the wages, living standards and job prospects of people up and down the United Kingdom. This Government should be ashamed of themselves. When we look at the rhetoric of the Budget speech—[Interruption.] Conservative Members are laughing, but we see a fiscal loosening in this Budget of 0.1%. That does not take into account the reality of the risks the people of the UK face.
Let me welcome the removal of VAT on our police and fire services, but remind the Chancellor of the Exchequer that, together with his friend the Secretary of State for Scotland, he was given the opportunity to support an SNP amendment to the Finance Bill in 2015 that would have removed VAT from Scotland—[Interruption.] I can hear the remarks that are coming from those on the Conservative Benches, but I remind them that the Conservative manifesto supported the establishment of Police Scotland. It was the vindictiveness and nastiness of the Tory Government that imposed VAT on Scotland, which has ripped £140 million out of our frontline services. When the Chancellor of the Exchequer and the Secretary of State for Scotland were given the opportunity in the 2015 Finance Bill to act they failed. It is a disgrace that we have had £140 million taken out of frontline spending—
The rules are that the Chancellor of the Exchequer and the Leader of the Opposition are not to be intervened on, but the courtesies go to the leader of the SNP here. He may wish not to give way, and that is his choice. What I suggest—[Interruption.] Order. He has made it clear that he wants the same courtesies that have been established for others, in which case he will not be giving way. So it will save us a lot of time if people do not keep standing.
Thank you very much, Mr Deputy Speaker. It is about time the Scottish Conservatives showed some proper respect, not just to the SNP here, but to the Scottish Government in Edinburgh.
Let me return to my point. It is an absolute disgrace that we have had £140 million taken out of frontline spending by a Tory Government ahead of this announcement. VAT should never have been charged to the Scottish police and fire services. The sole blame for that lies with the Conservative Government. [Interruption.]
Thank you, Mr Deputy Speaker. The SNP spoke out, here and in Holyrood, 140 times before the Government finally saw sense. What about the £140 million that has been paid? The Chancellor has confirmed today what we knew all along: that it was a political choice to charge VAT on our emergency services. He has accepted that he was wrong, but I am calling on him and his friends from Scotland on the Tory Benches to make sure that we push for a refund of the VAT that has been paid over the past three years.
The Chancellor has painted a picture of a strong economy, ready for the impending economic disaster of Brexit. We all have to wonder just what planet he is on. Most workers are seeing a decline in their living standards and have done so since the financial crisis. We are living through the worst decade for wage growth in 210 years. Young people are going to be poorer than their parents. Housing has become unaffordable for many. The austerity economic model has failed millions—the Prime Minister alluded to that when she talked about those “just about managing”. Today’s Budget was an opportunity to address these challenges and make this a Budget for people and prosperity.
The reality is that nothing in this Budget deals with the challenges we face. We face the impending UK exit from Europe. We know that the Government are preparing for a no deal, yet the Chancellor made no mention of how the economy would cope with that. The cliff edge is before us and the Chancellor sits transfixed, unable or incapable of rising to the challenge. No doubt he recognises the economic self-harm that comes with leaving the single market and the customs union, but he has failed to act. Why? It is because the Brexiteers have set the agenda for this Government and the Chancellor is without the authority to challenge the madness. The Chancellor, like his Government, is in office but not in power.
We know that the Prime Minister has to present a financial settlement to the EU27 over the coming days, yet there was no mention of that in the statement—none at all. This Government have to take their head out of the sand and accept that the future indicates the likelihood of significant economic self-harm.
Before the winds of Brexit hit us, the starting position for millions of people is that by then they will have already been struggling with nine years of austerity. The cuts being imposed on public services mean impacts on service delivery, and public service workers in particular are feeling the squeeze. This Budget shows that the Chancellor is either blind to what is going on or is behaving like a frightened rabbit caught in the headlights. Either way, people are going to pay the price for his lack of leadership. [Interruption.] I can see the Chancellor saying, “An extra £2 billion for Scotland”, but let me tell this House the reality: it is a £250 million cut in real terms. That is what the Government here are delivering to the people of Scotland.
This Government used to speak of the empty rhetoric of the “long-term economic plan”, but they have failed to provide a vision and have no plan for delivering prosperity. The long-term economic plan has given way to no plan. Scratch the surface of the economy and we see a structure barely coping with the state of society: a structure that is so unfairly built in the favour of the wealthy that we have created a situation where we have the worst wage growth in 200 years and the IFS tells us that an additional 400,000 children will be in “absolute poverty” within six years due to the benefits cuts that are to come. Let us remind ourselves that there are still £12 billion of welfare cuts to come from this Tory Government.
The case is that working people are paying the price for this Government’s ideological obsession with austerity—and let us make no mistake, it is an ideological obsession. It is a pity that people watching and listening to this cannot see the Conservative Members sitting there laughing while people in our country are paying the price—those Members should be utterly ashamed of themselves. Effective stewardship of our economy has to recognise the importance of fiscal and monetary policy working in tandem to create the circumstances of sustainable and inclusive economic growth. Any disconnect leads to a failure to deliver an economy that works for all, and that is precisely what is happening. A failure to deliver a Budget for prosperity hits all workers, in particular those in the public sector.
In September, the Scottish Government became the first in the UK to announce they will scrap the public sector pay cap, as our nurses, teachers, police officers and firefighters deserve a fair deal for the future. Future pay rises will be based on the cost of living. Today, the Chancellor betrayed public sector workers by refusing to fund a fair pay rise.
It is not just the squeeze on pay that is leaving low earners struggling to get by; the UK Government’s social security cuts are specifically designed to remove the welfare state. The SNP will never accept this ideological attack on the most vulnerable in our society. The damaging and destructive universal credit system must be halted and fixed. I welcome some of the things that we have heard today, but they simply do not go far enough. The cuts to work allowances are still taking place. While young people are pushed into poverty, universal credit is not fit for purpose. The Chancellor of the Exchequer should call a halt to it today and reform the system properly.
We also call on the Chancellor to scrap the two-child policy and the immoral rape clause. According to the IFS, the two-child cap on tax credits will mean about 600,000 three-child families losing £2,500 a year on average and about 300,000 families with four or more children losing a whopping £7,000 a year on average. Most of those families are in work. If we want to make work pay, let us remove the rape clause.
There is nothing in the Budget for the women born in the 1950s who are seeing a rise in their pensionable age of up to six years, without proper notice. That is depriving millions of a pension that they have paid for and that they are entitled to. Time and again, the Government have been asked to slow down the rate of increase in women’s pensionable age. It is increasing at a rate of three months for each calendar month. Either the Chancellor decides to act now to deliver fairness to 1950s women, or he will find that Parliament does it for him. There is a private Member’s Bill that calls for mitigation to be put in place for 1950s women. I say to the Government: recognise the cross-party nature of that Bill and act, or face defeat.
While the Tory attack on benefits pushes more families into poverty, the financial squeeze on household incomes continues as Brexit bites. Today, inflation sits at 3%. Prices are rising at a faster rate than wages. The Resolution Foundation has calculated that inflation of 3% combined with the benefits freeze will impact on 7.3 million children, 2.4 million disabled people and 800,000 people looking for work. There was no answer to that from the Chancellor—there was nothing in the Budget.
Let me tell the Chancellor and those on the Tory Benches what life is like outside the gilded rooms of Whitehall: electricity bills have increased by 9%—[Interruption.] You laugh, when people in Scotland and the rest of the United Kingdom have seen electricity prices rise by 9%. [Interruption.] You really ought to be ashamed of yourself and I hope that your electorate hold you to account. I refer, by the way, to the hon. Member—the so-called honourable Member—for Ayr, Carrick and Cumnock (Bill Grant).
The price of children’s clothing has increased by 6.7% and the price of butter by 12%. Bus and coach fares have risen by 13% and train fares by 3.4%. Transport insurance is up by 12.6%, motor vehicle insurance by 13% and travel insurance by 10%. That is the reality for ordinary working people in Scotland and the rest of the United Kingdom.
While inflation is making the cost of the weekly shop soar, real wages are falling. There was nothing in the Budget to address that. The rise in inflation and the squeeze on wages are creating a crisis for low-income earners. Between 2010 and 2016, official GDP per employee had risen by 3.5%, yet real wages are 1.1% lower, when adjusted for consumer prices index inflation. If inflation is calculated to include housing costs, real wages are down by 7.2%. That is the economic record of the Tory Government. The collapse of UK productivity growth has driven low growth and stagnant wages.
While many of my constituents and families across the UK are relying on credit cards to put food on the table, a different story is unfolding in the City. Under the Tory Government, boardroom pay has soared. From 2010 to 2016, the average remuneration for FTSE 100 chief executive officers almost doubled. The average remuneration of an executive director has doubled from £1.5 million to £3.1 million.
The inequality goes much deeper. European Commission figures reveal that the UK had the biggest increase in the EU’s gender pay gap in 2015. The difference in average hourly pay between male and female workers jumped from 19.7% in 2014 to 20.8% in 2015. In effect, women are working unpaid for more than two months a year compared with men.
The Government have not only driven thousands into poverty; they have failed to invest in building an inclusive economy fit for future generations. The legacy this Chancellor leaves is an economy that works only for the rich and the reckless. We need a Government that will create the circumstances to deliver inclusive, sustainable economic growth; a Government that will encourage investment, enhance innovation and drive up productivity and living standards; a Government that recognise that monetary and fiscal policy have to work in unison. The focus on monetary policy has driven up house prices and stocks and shares, but failed to drive investment in the real economy.
Back in 2009, quantitative easing was an obvious choice as part of the attempt to restore confidence and growth, provided that it was matched with fiscal measures, such as investing in our infrastructure and building capacity in our economy, with a focus on investment to improve efficiency. There was an opportunity to invest in the economy to kick-start growth and productivity. However, under the steer of this Government, there was investment to benefit the wealthy. In the end, that has done nothing but exacerbate the gap between rich and poor.
Even the Bank of England has recognised the negative effect of this policy. In 2012, it said that although quantitative easing had increased asset prices, it had disproportionately benefited the top 5% of households. Standard & Poor’s argued that—[Interruption.] I see the Chancellor waving his hands, but this is important and something for which he ultimately has to take responsibility. Standard & Poor’s argued last year that inflating asset prices had exacerbated the gap between rich and poor. It found that the wealthiest 10% of households held 56% of all net financial assets in 2008, and that by 2014 the proportion of the nation’s wealth in the hands of the richest 10% had increased to 65%.
It is easy to see why the Tories do not want to change this policy. Reducing inequality has never been one of their aims. The evidence is stark: quantitative easing has mostly benefited those who started with considerable wealth. The FTSE 100 was sitting at 3,805 on 18 March 2009, just ahead of the launch of the QE programme. Last night, the market closed at 7,411. That is growth of 95% in just over eight years. The Government have stuffed cash into the pockets of the wealthy, while ordinary folk have paid the price for austerity. The cry “There’s no money” flies in the face of the Government’s own agenda.
A further £70 billion was invested in QE after the Brexit vote, taking the programme to £435 billion. That is £435 billion that has been put on to our debt, with no plan for how it will be repaid. We could have invested in our infrastructure, for example by dealing with the demand for housing and dampening the rise in house prices at affordable levels. We could have invested in connectivity—in transport and in digital—to allow our citizens and businesses to compete, rather than being caught in the slow lane of transport snarl-ups and fighting to get decent broadband or mobile connectivity. Such investment in our people and infrastructure would have grown the economy and tax receipts, allowing us to cut the deficit. There would have been a payback. The Government could have supported businesses at the same time as supporting people. They cannot tell us that there is no money when they can invest an additional £70 billion in QE at the drop of hat. They must take responsibility and create the circumstances for inclusive growth and prosperity. Of course, taking responsibility is not something that this Government do.
Some £6.9 billion is lost to our schools and hospitals every year because the Government have failed to tackle aggressive tax avoidance and tax evasion. I call on them to take tough new action to ensure that the richest in society and the biggest corporations pay the taxes they owe in full. They have chosen to cut public spending while protecting the super-rich—of course, the Tories are the party of the super-rich. If they will not take the action required, they should devolve the powers needed to tackle the issue to the Scottish Parliament.
When I asked the Chancellor last month about any assessment he had made of the interrelationship between monetary and fiscal policy, the answer I got was that monetary policy was the responsibility of the Bank of England. There was no regard for a link between the two. It is left to the Bank of England to shine a light on the failure of the Chancellor to engage in joined-up thinking. In written evidence to the Treasury Committee, the Bank of England admitted that the steep rises in house prices in the decade preceding the crisis, together with a fall in long-term interest rates, have led to
“a sharp rise in intergenerational dispersion of wealth benefiting in particular older people who had already entered the market before prices began to rise.”
The Government have avoided every opportunity to invest in young people. What hope—[Interruption.] The Chancellor says, “Rubbish”. I am afraid I am actually giving him facts from respected institutions, not least the Bank of England. Is the Chancellor really saying that the Bank of England is wrong as well? I think the Bank of England might have something to say about that.
What hope do millennials have to cling on to? Robbed of their housing allowance and lumbered with chronic student debt, this Government have gone out of their way to avoid investing in young people. The intergenerational wealth unfairness is creating the perfect storm for future generations. Research from the Resolution Foundation shows that today’s 27-year-olds are earning the same amount that 27-year-olds did a quarter of a century ago. A typical millennial has actually earned £8,000 less during their twenties than those in the preceding generation.
We have missed chance after chance to invest in inclusive growth opportunities. The Government have been the proverbial one-club golfer relying on monetary measures, but in a vacuum. Even the IFS has warned the Chancellor about his calculations. First of all we had George Osborne proclaim he wanted to balance the books by 2015. That did not happen. Now the current Chancellor wants to eliminate borrowing by the mid-2020s. But with Brexit set to hit the economy, even the IFS has called on him to abandon his fanciful fiscal targets. There is more uncertainty on forecasts now than ever before. The Chancellor himself told the Treasury Committee that a
“cloud of uncertainty is acting as a temporary damper, and we need to remove it as soon as possible”.
Well, there was nothing in the Budget today to remove it.
Mr Deputy Speaker, I am in a giving mood. I will give the Chancellor a bit of fundamental economic advice. End the suicidal flirtation with a no-deal scenario, give business something to invest in and work on keeping the UK in the single market. The stupidity and recklessness of some on the Government Front Bench who rode around in that famous red bus has to be the most damaging economic pledge in modern history. They said £350 million a week for the NHS. Well, they are silent on that now. The Foreign Secretary and Environment Secretary should listen up, because here are some home truths about the mess they have created: the Bank of England has confirmed that 75,000 jobs are at risk in the financial sector owing to Brexit; the London School of Economics has revealed that Scotland’s towns and cities could lose up to £30 billion over five years; the Fraser of Allander Institute revealed that Brexit would cost Scotland up to 80,000 jobs and see wages fall by £2,000 a head per year; and now the Chancellor is planning for a no deal—a complete catastrophe which is unfolding on his watch. He knows how devastating such a path would be for the UK economy. He has given Departments £250 million to carry out work in preparation. To put that into context, that would pay for 11,553 new starter nurses, teachers or police officers.
It is not just the spending to fund Brexit that is costing communities, however. Leaving the EU will cut off the financial social funds we have benefited from for so long. This will be devastating for communities where poverty and destitution at the hands of the Tory austerity policies have seen volunteers pick up the pieces. Although as the UK haemorrhages EU funding and the Chancellor proclaims austerity is essential to save, he did manage to find £1 billion for the DUP—quite remarkable. The Chancellor found £1 billion for the Northern Irish Executive to spend on devolved areas, but no additional funds were provided to Scotland or any other part of the UK. Cash for votes—not very honourable at all.
And what use are the Scottish Conservatives, who pledged to work as a bloc to protect Scotland’s interests? That was their chance to shine: a golden opportunity to show they were prepared to put politics aside and stand up for Scotland. But no, party loyalty prevailed and now Scotland is being overlooked in this dodgy deal. This money cannot be processed until the discussions have concluded on the appropriateness of the way in which the UK Government decided to provide the additional financial support. The Barnett formula rules mean that Scotland, Wales and Northern Ireland are entitled to an extra £2.9 billion and £1.67 billion respectively as a result of the deal. Where are the Scottish Tories standing up for that £2.9 billion that Scotland deserves? Where are the calls from the Scottish Tories for this UK Government to match the deal from Northern Ireland? They have been found wanting.
Year after year, the UK Government continue to let down our world-class oil and gas industry in the north-east of Scotland. Two years ago, the Conservatives boasted about the creation of a new oil and gas ambassador, who would
“promote the North Sea around the world and boost inward investment”.
How embarrassing, then, for the Chancellor that the role, two years later, has yet to be filled. It seems that the Chancellor and his Cabinet colleagues have simply forgotten about our North sea industry once again. Despite the Chancellor’s tight grip restraining Scotland’s economic potential, the SNP in Scotland has delivered for our people.
That was definitely not a point of order and the right hon. Lady knows it. She has provided a running commentary all the way through. I think I have heard more than enough for the time being and I want to get to the end of the speech by the leader of the SNP.
Thank you, Mr Deputy Speaker.
In Scotland, international exports are up 41% between 2007 and 2015. The latest employment figures show that Scotland has higher employment rates and lower unemployment rates than the UK. Youth employment continues to outperform that in the UK. The Scottish Government fulfilled their commitment to reduce youth unemployment by 40% four years ahead of schedule—that is how to make fiscal targets.
But it is not just about the ability of the Scottish Government to deliver an inclusive society that works for all; it is their vision for an economy that benefits all. When the UK Government chose the rape clause, the Scottish Government chose the baby box. When the UK Government trebled tuition fees, the Scottish Government maintained the principle of free tuition for all. When the Conservatives pushed for a dementia tax, the Scottish Government stood by free personal care for the elderly. We know that an economy is not just a tool for inclusive growth, but is central to the social fabric of the society in which we grow up. It is time for an economy that benefits all. End the damaging austerity agenda and stop the catastrophic ideological obsession with a Brexit no deal.
On a point of order, Mr Deputy Speaker. This morning in Cabinet Office questions, the First Secretary of State claimed that the consultation on the contaminated blood scandal had been extended until the end of October this year at the request of the all-party group. That is not correct. In fact, the all-party group had asked for an extension of the original date of the consultation, which was in August 2017. Many people have contacted me, concerned that this is now being used as a reason why progress has not been made on the announcement of a chair and terms of reference, and I wondered if there was a way of correcting the record.
It is a relief to rise after the speech from the SNP spokesman, which was actually longer than the official Opposition’s—and half as riveting.
Budget resolutions tend to be about figures and statements that can be quite dry and which are often leaked before the actual Budget statement, so I am delighted that one of its headline measures—the scrapping of stamp duty on properties up to £300,000—was not leaked. It was an exciting announcement.
I thank my hon. Friend for giving way—something that the SNP spokesman was not prepared to do, for whatever reason. Does she agree that the Chancellor’s announcement on stamp duty presents an almighty challenge to the Scottish Government, whose land and buildings transaction tax has been an unmitigated disaster, and does she think that the leader of the SNP in Westminster should go to the First Minister and suggest that the policy be followed in Scotland?
I am sure that SNP Members have heard my hon. Friend’s point and will take it forward—tomorrow, I would imagine.
I wish to address an issue that is very close to my heart—and actually the reason I became a Conservative MP in the first place: home ownership. We have heard today measures that amount to a revolution in house building: the target of 300,000 homes per year and the establishment of Homes England to bring together all the strands needed to meet this target. It will deal with people who land grab, the planning application process and the training of skilled artisans and workmen to build the homes. Homes England will have the authority required to drive forward that degree of home ownership.
It is sometimes easy to forget what home ownership means to many people, and we have not seen measures like these in the UK since the 1970s. I am one of those Members who understands the value of home ownership more than most. I lived in a council house until I was in my late 20s, and I was reminded of this earlier in the year while canvassing in a constituency that was not mine—it was in Luton in Stopsley ward. A lady on whose door I knocked said to me, “Oh, I know you. You’re not standing here, but I couldn’t vote for you anyway because you support home ownership.” I found that quite remarkable, because I was knocking not on a council estate door but on a private, well-appointed home.
It was a seminal moment for me. This lady said to me, “The thing is, Nadine, I’m a trade unionist, and I abhor right to buy and home ownership, because people with mortgages don’t strike.” We then discussed how people, when they buy a home, prioritise their own private capital over and above the social capital. She was a principled lady with strong views, and I never want to diminish somebody else’s point of view—it is just as relevant as mine. She can abhor home ownership as much as I adore it, although the end of our conversation was interesting. I asked her if she was in private rented accommodation, and she told me it was her own home. That was an interesting moment.
That said, I took on board this lady’s points. She said, “You should not be a Conservative. You should be a Labour politician. You come from a council estate. I know your background.” It was very interesting. Indeed, I have witnessed what happens to people when they are given the opportunity to buy their own home. I will describe what it is like not to own a home. So many people are in that position right now. On my estate, every door was painted the same colour—by the council—and the gardens on the ground floors were divided by packing cases and wooden pallets. There were no flowers and what had been gardens had become patches of mud. Life was pretty grey and people worked at the Ford’s factory and nobody had any particular aspiration to do anything else.
When people began to own those council houses, however, it seemed to change overnight. People started to paint their front doors their own colours and express their individuality. The packing cases were ripped up and painted fences would be put in their place. Flowers were planted in the gardens. People started working overtime. The very first car was bought and arrived in our road. My mother, a teacher, was giving almost nightly classes to women knocking on the door for lessons because they wanted to go out to work—I regarded home ownership as a driver of equality for women because it gave them a reason to break free from the kitchen sink and get out to work.
I saw a transformation on the estate because of home ownership. Its benefits include family stability. If a family do not own, they rent, but is the most unstable position for a family to live in, as they have to move perhaps every six months and do not get to live in the kind of properties or areas they want to live in. People who buy their own homes can decide where to live and where to send their children to school.
Absolutely. I was coming to exactly that point. I have spoken to members of staff here, and one of the most startling facts about them is that they have to wait until they are in at least their mid-30s before they can even think of putting their feet on the property ladder. I hope the measures announced today—the abolition of stamp duty and so on—will help them become homeowners.
I am listening carefully to the hon. Lady, and I have been a long-standing champion of people being able to own their own homes, but has she read what the OBR says about the stamp duty measure—that it will not help first-time buyers but push up prices by far more than people will save?
I share the desire that people be able to purchase their own home. I have a niece who lived in a council flat until two years ago. She chose to purchase that flat before the Scottish Government banned the sale of council houses, which would have denied her home ownership. In purchasing her flat, she saved herself £150 a month.
That is another illustration of how important it is that people can purchase their own homes.
In response to the hon. Member for Leicester West (Liz Kendall), I could list the measures announced today: the abolition of stamp duty and the investment of an additional £15 billion in house building, taking the total this Parliament to £44 billion. So it is not just the abolition of stamp duty; other measures are being put in place. People cannot own their own homes if there are not people to build those homes. I also welcome the review of the 270,000 planning permissions in London and why those homes have not been built—and it is not just in London; it is in my constituency and across the country.
Measures are being put in place to help councils build more. It is vital that we have more council homes and that local authorities have the powers to build them. We also need the targets for these urban and brownfield sites that have been lying dormant. We all know the areas—around Heathrow and in outer London. People work in London and want to live and be able to buy in London, rather than having to commute for two hours into London. All this is being looked at, and it will support the many young people in the capital who want to buy but have not been able to do so—and not just in the capital; in my constituency too. The complaint I get more than any other in my mailbox is from young people who want to stay and buy a home in Mid Bedfordshire but cannot and so are forced out.
I know that not everyone in my constituency will welcome my declaration that I want to see more house building, but I absolutely do. We must accept that we have reached a point at which we need to build more homes, and now is the time to do so. Throughout my 12 years in the House, I have been distressed by how little understanding there has been of the psyche of people, and how little emphasis has been placed on their need and desire to live in and purchase their own homes. I am delighted and relieved that that has finally been addressed today.
The Chancellor also announced investment in both road and rail in the east-west arc—the varsity arc, from Cambridge to Oxfordshire—which will go right past my constituency. I am delighted that that will bring high-tech jobs, build skills and infrastructure, and drive growth forward. As the Chancellor said, it means embracing innovation—embracing the future and change—and it is what we will need for a post-Brexit Britain. We need those high-tech jobs and growth corridors, as well as, in the midlands, the west-east link has been needed for so long. That investment is important; it is vital; it is essential for post-Brexit growth.
I think that we will become an island of opportunity, an island of development, an island of investment and growth. As well as the financial measures that are needed for the preparation for Brexit, I welcome all the other measures that have been announced today. I believe that, with the east-west corridor, the midlands growth engine and the northern powerhouse, we will be ready to embrace the post-Brexit world.