Income Tax (Charge)
Debate resumed (Order, 22 November).
Question again 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.
After a disastrous election campaign and a party conference that literally fell apart, yesterday’s Budget’s sole purpose was to revive the fortunes of the Conservative party—and maybe to fend off for a time the Tory pack that has been hounding the Chancellor, week after week. But the Budget showed just how out of touch and cut-off from the real world of the economy and from people’s real lives the Chancellor and his Government really are.
Only this morning, the Chancellor said on “Sky News” that the UK economy is “fundamentally strong”. What is strong about an economy in which economic growth has been downgraded to the lowest in the G7 countries? What is strong about an economy in which productivity growth has been revised down to the lowest since modern records began; in which business investment is, to quote the Office for Budget Responsibility,
“significantly lower than…expected in March”;
and in which real pay and living standards continue to deteriorate?
The official growth forecasts from the Government’s own Office for Budget Responsibility were the worst in its history. No Government in modern times has ever presented a set of growth forecasts in which growth in every year is less than 2%. Productivity growth is forecast to have ground to a halt this year, and barely increase next year. That, too, is the worst downgrade in the OBR’s history.
The squeeze on living standards is now so great that the Resolution Foundation estimates that real pay will not return to its pre-crash levels until 2023.
The shadow Chancellor is making a powerful case. The Governor of the Bank of England has said that the last time workers suffered such wage stagnation was 150 years ago, when Victoria wore the crown, Gladstone and Disraeli were in No. 10 Downing Street, Darwin was evolving the theory of evolution and trade unions were illegal. Does the shadow Chancellor agree that under a Labour Government wages go up, but under a Conservative Government—
Order. Before we go any further in this debate, which has only just started, I should explain to the House that a great many people have indicated that they wish to speak this afternoon. Speeches will have to be time-limited and short. It is simply not fair for people to make very long interventions and possibly not stay for the whole debate. [Hon. Members: “Ah!”] I am not suggesting that the hon. Member for Birmingham, Erdington (Jack Dromey) will not. He is an honourable gentleman and knows how to behave in the Chamber. It is perfectly in order and good debating practice for the shadow Chancellor and anyone else to take lots of interventions so that we can have a debate, but interventions must be short and Members must recognise that every minute taken up by an intervention takes a minute off the speech of someone who waits all day to speak. It is a matter of being fair and decent to each other.
I will take some interventions, Madam Deputy Speaker, but I am cognizant of what you have said about the need to ensure that everyone can speak.
On the point made by my hon. Friend the Member for Birmingham, Erdington (Jack Dromey), we all knew that the election of a Tory Government would set us back; what we did not appreciate was that it would set us back a century.
Average annual pay is now projected to be £1,030 lower in 2022 than was forecast in the March 2017 Budget. It is those delivering our key services—the nurses, midwives, firefighters and teachers—who are worse off than they were a decade ago. There is nothing here that could remotely be considered strong. This is a weak economy. In terms of growth, it is now the weakest in the G7.
Let us remember that we are in this mess because for the past seven years the Government have implemented policies that have undermined and weakened our economy. The Chancellor was a key figure in all those policies. He and his colleagues were warned that austerity spending cuts would fail to bring the debt or the deficit under control, and that instead they would undermine the real economy. We were promised in 2010 by the Chancellor’s predecessor that the deficit would be cleared by 2015, yet today the debt burden is still rising. The Chancellor borrowed more in his first year in the job than any Chancellor in history.
The shadow Chancellor paints a very negative picture, but can he explain why patient satisfaction in the NHS is at its highest for 20 years, why we have the lowest unemployment for 43 years, and why we have the highest employment in our history?
There are now waiting lists of 4 million in the NHS, predicted to rise to 5 million because of the lack of investment. We welcome the increase in those in employment, but 800,000 are zero-hour contracts, and we now have more than 2 million people in insecure work. It is no wonder that people are anxious about their futures.
As I have said, the Chancellor has borrowed £145 billion —more than £5,000 per household—which is more in his first year in the job than any other Chancellor in history. The OBR now expects the deficit in 2021 to be almost three times higher than it forecast in March. It blames this deterioration on the collapse in productivity growth, but productivity growth has collapsed because investment has fallen. Government investment is £20 billion less in real terms today than it was in the last year of the previous Labour Government.
May I ask the shadow Chancellor, or indeed his iPad, how much it would cost to service the Government debt in the event that his own spending plans came to fruition?
I welcome the opportunity to respond to the hon. Gentleman. What we have said very clearly is that under our fiscal rule, unlike that of this Government, we will borrow not for day-to-day expenditure but to invest. That investment will grow the economy, and, as a result of that growth, we will cover any need to borrow. That is what any sensible Government is doing right the way across the globe, right the way across Europe. It is that attitude displayed by the hon. Gentleman that has caused our economic problems. The lack of investment over seven years has affected our productivity.
Many of the things that have been welcomed in this Budget—and some things have been welcomed—by people outside this House are measures that we have been calling for since the downturn in 2008. If those measures are right now, they were right back then, which means that it is a consequence of austerity and the economic policies followed by the Tories that has made our economy flatline for virtually seven years.
The issue is that whatever was put forward in the Budget yesterday was so trivial that it will not have the effect that is required.
Investment by businesses is the lowest in the G7 countries. The few measures announced yesterday just will not address that. They will not close the gap between the south and the rest of the country by investing in a rail project in the north-east that will receive just 2% of the total cost of Crossrail in London. Our economy and our people will only reach their potential when there is real new investment brought forward by Government on a scale that is needed to meet the opportunity. The right approach from 2010 would have been to target the real economy and real investments to produce growth and so bring the deficit into line. Because the investment that was needed then did not materialise, productivity growth has stagnated, and because productivity growth has fallen away, the forecast deficit has been widened by the OBR to some £30 billion by 2021. The Government know that austerity is not working. They have now been reduced to fiddling the figures to meet their own targets.
Let me just quote the OBR, because it is important. On how the Government will meet some of their targets, the OBR was damning. It said that
“the Government has ensured that net debt still falls fractionally as a share of GDP in 2018-19…It has achieved this largely by announcing fresh sales of RBS shares and by passing regulations that ease local and central government control over housing associations in England.”
That is creative accounting on a scale that we have not seen under any Government. In other words, the Government have met their own debt target—barely—by exploiting a reclassification of housing association debt and putting in some extraordinarily optimistic forecasts for their sale of RBS shares.
I am very grateful to the right hon. Gentleman for giving way. I am genuinely trying to find a way out of our problems that we agree exist. I accept his point that he wants to borrow more to invest. The trouble is that we are already paying in interest more than we spend on defence and the police—that is just paying interest on our debt. I understand where he is coming from, but whatever we spend this money on, the interest will still be accrued, so how will he deal with that?
Debt under the hon. Gentleman’s Government has gone up by nearly £800 billion, and it is debt to pay for failure rather than to pay for investment. If we borrow to invest, we grow the economy, which means that we can put more people to work with more skills and higher wages. They pay more taxes and it pays for itself. That is the lesson that the Government still have not learned.
The Government appear, as is demonstrated today, to be completely out of touch with the mess that our economy is in. They have no understanding of the consequences of their choices for the lives of our people. They do not seem to grasp the scale of what is happening to our people out there. The Chancellor has tried to claim that income inequality has fallen, but he does not seem to be aware that more than a million food parcels have been handed out in this, the sixth richest economy on the planet. Inequality is not falling. He may well be aware that London is home to more billionaires than ever before, but does he know that there are more people homeless than ever? How can he claim that inequality is falling when that stark comparison is made? This Government’s decisions will make the poorest poorer still. Buried away in an annex, at the very back of the Treasury’s own distributional analysis, is the truth on this. The poorest fifth are being made poorer by the changes this Government is implementing. Those in the poorest fifth will lose almost £250 a year.
The House of Commons Library has confirmed that the burden of cuts—86%—made in tax and benefits measures since 2010 have fallen on women. Is that what equality is under this Government—86% of cuts on the shoulders of women?
I will come back to the hon. Lady.
On housing, the Government’s proposed solution for the crisis is inept, and counterproductive. The stamp duty cut for first-time buyers will not bring forward the new homes that we need. No wonder the OBR expects only 3,500 additional sales to happen because of the change. It says that thanks to the price rises
“the main gainers from the policy are people who already own property.”
The problem is simple, but perhaps it needs explaining: you cannot solve a problem of housing supply by driving up housing demand. We are not the only people saying that. Conservatives Ministers reviewed a previous stamp duty reduction and said that the cut had
“not had a significant impact on improving affordability for first time buyers”.
Setting a target of 300,000 homes a year for the mid-2020s does little for a housing crisis today.
The hon. Member for Taunton Deane was first.
I was going to intervene on a previous point. The people of Taunton Deane have more money in their pockets, which is what they want. We have put up the national living wage, cut income tax by raising the personal allowance, and, again, frozen fuel duty. People actually have thousands more in their pockets than they had under the Labour Government.
I know that the hon. Lady is well intentioned, but she has displayed ignorance of what large numbers of people are experiencing. May I suggest this to her—[Interruption.] I do not wish to be patronising. [Interruption.] If that is the way it is interpreted, it is not how it is meant to be. I just say that all of us, who are on relatively high wages, need to be very careful when talking about levels of income and levels of wealth because many people, including 4 million of our children, are actually living in poverty. Two thirds of those children are living in households where someone is in work, which says something about low pay to me, as it should do to all of us.
Will the right hon. Gentleman give way?
I will come back to the hon. Gentleman.
The number of people sleeping on our streets has doubled since the Conservatives came to office in 2010. More than 3,500 people were forced to sleep on the streets last year. Some 80,000 households are living in temporary accommodation because councils simply do not have anywhere to house them. I repeat: in the sixth richest country in the world, there are more than 120,000 children without a home to call their own, living in temporary accommodation. That figure is up 60% since this Government have been in power. That means children are being brought up in places that are often not safe, having to share communal bathrooms and kitchens, and being robbed of a normal family life and childhood. We have seen this in our constituencies. Ministers do not seem to understand the strength of anger felt by many on the Labour Benches at the fact that our constituents are being forced to live in overcrowded, unsafe and inadequate housing.
The Government had the opportunity to deliver the funding that would build the homes we need. Only a third of the £44 billion announced yesterday is genuinely new, and there is no extra Government investment in new affordable homes. This Government’s record of failure on housing will continue to blight the lives of hundreds of thousands of people trapped in overpriced, inadequate housing.
I was working in the construction industry in 2008-09, so I watched its decimation at the tail end of the last Labour Government. Nobody sprang to our aid to keep people in work in the industry. This Government had to start from the get-go. We have built 217,000 houses this year, which is nearly double what was built in the last period of the Labour Government. The Labour party walked away from the industry at that time, so it is wrong for the right hon. Gentleman to stand there and say it supported us.
I ask the hon. Lady to re-examine the history of that period. I point her to the Kickstart programme, which was developed by the Labour Government to enable building to happen in the public and private sectors. I understand what she is saying; she is right that that time was an immensely difficult period for the economy, and that many people suffered, but her party supported the policies to deregulate the banks that brought about the speculation that resulted in the economic crisis in this country and elsewhere.
Thousands of people are trapped in poverty. The Child Poverty Action Group estimates that as many as 1 million children could be pushed into poverty as a result of cuts to universal credit. The introduction of universal credit has been a disaster that has pushed many thousands of people into despair and, in many cases, outright destitution. Food bank charities have reported that they have gathered an extra 2,000 tonnes of food to cope with demand as a result of the introduction of universal credit. The Trussell Trust reports that the use of food banks is up 30% in areas where universal credit is being rolled out. Yet the amendments offered by the Chancellor yesterday and mentioned in the statement today are so feeble as to strongly suggest that he and this Government simply do not grasp the scale of the problem.
Hon. Members need to know what this poverty means for children in our society. It means not having a winter coat this winter and being left behind when the rest of the class go on a school trip. Last year’s reports showed that thousands of children are going hungry during school holidays. The Chancellor did nothing yesterday for self-employed people, second earners, lone parents or disabled people, all of whom have seen their living standards suffer particularly acutely under universal credit. He failed to mitigate the £3 billion a year cuts that were slashed from the universal credit programme by his predecessor, and he failed to address the impact of the social security freeze in universal credit, due to push millions into poverty.
Will the right hon. Gentleman give way?
I will come back to the hon. Gentleman.
The additional funds put in place amount to £1 returned for every £10 that the Government are cutting from the system. This means that those claiming universal credit will now have to take their first payment as a loan, so they will face 12 months of reduced payments. What has the Chancellor offered to some of the most desperate people in the country—those who are already drowning in debt? More debt. The Chancellor had nothing to say for the people who are newly-registered for universal credit and who face destitution this Christmas. Not a single extra penny, however inadequate, will be available for the new year. Some 59,000 families will be left without any support over the Christmas period. Those families include 40,000 of this country’s children. The percentage of children living in relative poverty is the highest since records began in 1961—in the sixth richest country in the world.
Local councils are being starved of the funds they need to protect the most vulnerable children in society. Charities on the frontline are clear and report solidly that cuts to parenting classes, children’s centres, substance misuse prevention, teenage pregnancy support and short breaks for disabled people risk turning the current crisis into a catastrophe for the next generation of children and families. A record 70,000 children have been taken into care this year. One in 64 children in England is at risk of abuse or neglect. There are 1,200 fewer children’s centres than in 2010, eight in 10 schools have no funding to support children with special needs and funding for early intervention to protect children is down by 55%. There was not a single penny extra in the Budget to address this emerging crisis in our children’s services. The Chancellor and the Government are failing some of the most vulnerable children in society, and I urge the Government to look again at this emerging crisis.
It goes on. Schools are facing the first funding cuts per pupil in real terms since the 1990s. Headteachers are being forced to go begging to parents for funds to pay for basic supplies. Five thousand headteachers have written to the Government, asking just for the return of the funds that have been cut. One headteacher in the Prime Minister’s constituency is asking parents for £1 a day to help to pay for stationery.
The National Audit Office says that schools face a £1.7 billion real-terms funding cut by 2020. For younger children, there are 1,000 fewer nursery places and childminders. Eight in 10 schools have been left without the funding to provide adequately for special needs pupils. This means that our most vulnerable children are deprived of the counselling or support they need, and spend break times away from their friends, alone. Their education is being discriminated against.
I was told by a headteacher in Hull that there is not enough money for post-16 special educational needs provision, because they cannot cut the number of teaching assistants due to the ratios of staff needed to care for these children. She is looking at a situation of not being able to offer a full-time post-16 school placement for children with SEN. Does my right hon. Friend agree that that is appalling?
It is absolutely shocking when, as a society, we are looking to integrate everybody into the mainstream as best we can. It means that those children will be deprived for the rest of their lives. More than 4,000 children with an approved education, health and social care plan are still not receiving the provision they are entitled to, which confirms what my hon. Friend reports.
The Local Government Association is now warning the Government that the cuts to local government will mean schools being forced to turn away students with special needs. Yesterday’s Budget offered £177 million for additional maths and IT teachers, supposedly to make us fit for the future, at a time when just 10% of our schools offer IT GCSEs—£177 million to compensate for £1.7 billion, or £1 pound given back for every £10 taken away. Capital spending on schools is also scheduled to be cut by £600 million over this Parliament, at a time when class sizes are rising.
On the NHS, experts and health professionals are agreed that it is approaching breaking point. The NHS needs proper funding. The chief executive of NHS England has said our national health service needs £4 billion this year to prevent it from falling over. He has warned of 5 million people being left on the waiting lists if there is not additional funding.
Is my right hon. Friend aware that clinical commissioning groups in the NHS are looking to introduce new taxes on patients? Kernow CCG proposes to make kidney dialysis patients pay for transport to their dialysis. This is a death tax of £120 a month. Dialysis or death—that is their option.
Under the figures that have been announced this week in the Budget, there will be more of this. There will be more rationing. There will be more people suffering. There will be more people’s lives put at risk.
Under this Government, 4 million people are now waiting for care—the highest level in a decade. More than 100,000 patients were left waiting more than two weeks to see a specialist after being diagnosed with cancer, and more than one in 10 did not start treatment within 62 days. Only three in 10 of the most urgent 999 calls for help are answered within the targeted time. Yet, the Government have brought forward less than half the amount that is needed and that professional, sober assessments say is needed. The claim in yesterday’s Budget that £10 million in capital funding is available is totally misleading. The Government will provide less than half of that. The remainder will come from selling off NHS estates or from the private sector.
Nor has the pay cap that has driven hard-working public sector workers to despair been tackled. The dedication of the staff is extraordinary. There are nurses waiting behind after 12-hour shifts to give care to keep the system from imploding. These are the same NHS nurses who have seen their pay fall so much in real terms that one in four must take a second job to make ends meet. The Royal College of Nursing reports that nurses are even visiting food banks, such is their desperation. It is not possible to run a health service worthy of the name on the unpaid and underpaid dedication of its staff alone. The Chancellor is able to offer nothing for them.
Will the right hon. Gentleman way?
I have given way to the hon. Gentleman, and I am worried about making sure, as you said, Madam Deputy Speaker, that other people are fully involved.
The Chancellor was able to offer nothing for these staff. The cap is not being removed, because, as the Treasury briefed once the Chancellor sat down, any pay rises the pay review boards offer above 1% must be taken from existing budgets. It is a derisory offer to make after seven years of real-terms pay cuts. Worse than that, for NHS nurses, any additional pay will be linked to “Agenda for Change” modernisation, which really means threatening their working conditions—tearing up their terms and conditions of pay.
Is it not also a con, because 55% of civil servants’ pay is not covered by a pay review body?
That is exactly it. That is how the Government, up until now, have avoided their responsibility to ensure that civil servants have a proper pay rise.
For those in social care, with the system still approaching what the Care Quality Commission calls “tipping point”, the Chancellor has not offered a single penny either.
Let me turn to the environment. The Chancellor had a few choice words about electric cars yesterday—I thought a driverless car was a wonderful metaphor. However, on the bigger picture, the Budget is potentially disastrous. The fact that there will be no new low-carbon electricity levies until 2025 could spell the end of much of the low-carbon development in the UK. There was not a single mention in the Chancellor’s speech of renewables, sustainable sources of energy or investment in domestic energy efficiency. It is quite clear that, beyond a few gimmicks, this issue is not, in any sense, a priority for the Government.
The Chancellor referred extensively to technological change, which offers huge potential for our economy and our society if we are prepared to commit to the investment needed. However, it was a Conservative-led Government, of which the Chancellor was a member, that cut research funding by £1 billion in real terms. Unlike the Chancellor and his party, Labour Members know that realising the possibilities of new technology will require a Government committed to providing the funding and long-term investment needed—not a Government, like this one, repackaging existing announcements on fibre optics and 5G in consecutive Budgets, and not one who re-allocates funds they allocated a year ago in the autumn statement, claiming it is new research funding. The Government say they aim to reach the OECD average of 2.4% of GDP spent on R and D by 2027, but after years of languishing below that level, Britain should be aiming to be above the OECD average, rather than belatedly hitting it a decade from now. Even the target displays a lack of ambition and foresight.
The Government have the same problem with Brexit. They never planned for it before the referendum, and they cannot see beyond their own slogans after it. Some 17 months after the referendum result, there is not a single agreement with the EU on any point. The Government are lurching towards the hardest possible Brexit, ripping up our existing relationship with our closest trading partners, instead of trying to work to create a new relationship.
Every major business group has begged the Government to take a different approach—from the CBI to the EEF to the British Chambers of Commerce. Already, businesses are pulling back investment for fear of what might come. So this Government do not just lack ambition: they will not listen to advice and cannot seem to see just how disastrous a cliff-edge plunge out of the EU would be for our economy.
The Chancellor trailed this Budget as making Britain “fit for the future”. What it actually demonstrated, as my right hon. Friend the Member for Islington North (Jeremy Corbyn) North said yesterday, is that this is a Government no longer fit for office—too divided to deliver. The Budget demonstrated that this is increasingly a Government without purpose, divided and in disarray, whose confidence is sapped and whose time is up. I just say to them: it is better to go with a bit of dignity—just go with a bit of dignity!—rather than humiliating disintegration. Labour is ready and willing to form the Government that this country needs, rather than this shambles that cannot even be described as a Government.
It is a pleasure to respond to the Shadow Chancellor, although I am grateful that, for everything we have heard in the past half hour, he did not literally throw the book at me.
On Saturday, it will be exactly two years since the right hon. Gentleman cited one of history’s worst mass murderers in defence of his own economic policies. So let us take a look at some of the great leaps forward our economy has taken in those two years. Employment: up. House building: up. Inward investment: up. Borrowing: down. Last year, the British economy grew faster than that of any other G7 nation. This week, the CBI said that manufacturing order books have not been this full for almost 30 years. Siemens has said that it is cutting jobs on the continent, but expanding its UK operation, investing more money and creating even more jobs.
Whatever way we look at it, this is a Government that are getting things done—a Government that are growing the economy, and a Government that are building a Britain fit for the future. Yesterday’s Budget builds on that success and lays the way for much more to come. It is a Budget that will lead to us building more homes in the right places and at the right prices, a Budget that will protect and enhance our precious public services, and a Budget that will tackle the burning injustices that still plague too many people in this country.
First among those injustices is the state of the housing market. As I have said before, our home is so much more than just the place we go to sleep at night. It shapes who we are, provides stability and security and shapes our life chances, opening up or closing off all kinds of opportunities. A fair, affordable housing market builds strong families and strong communities. A broken one is, of course, a barrier to social mobility and a root cause of intergenerational unfairness.
The way to fix the broken housing market is to build more homes, and that is exactly what we are doing. Last year there were 217,000 net additions to the housing stock—the highest such figure in almost a decade. But we are under no illusions about the fact that there is much, much more to be done.
Labour’s answer to the housing crisis—in fact, Labour’s answer to everything—is simply to throw more of someone else’s money at the problem and hope that it goes away. The last time Labour tried that, we ended up with house building at its lowest level since the 1920s and an economy on its knees. This country needs at least 300,000 new homes a year. Do you know how many Labour started in its last full year in office, Madam Deputy Speaker? It was 75,000—the lowest number of starts in peacetime since the 1920s.
I am delighted that the Secretary of State says there will be a renaissance in house building. Can we therefore look forward to an announcement of a renaissance in council house building? Does he accept that the cost of building council houses is in large measure covered by the income generated from the rental stream? It is basically a free hit, so why will he not admit that it is important that we start to build the council houses that we need to tackle the housing crisis?
I am glad that the hon. Gentleman raises the issue of council houses, because it gives me another opportunity to remind the House that in 13 years in office, Labour built fewer council houses than have been built since the return of a Conservative-led Government. Yesterday’s measures, which I will come to in a moment, are ambitious and will lead to more council houses, which we welcome.
Can the Secretary of State explain how it is logical to cut stamp duty on houses worth less than £300,000, which will increase the price of properties, cut the tax coming in and benefit not first-time buyers but only those selling properties?
I think the hon. Gentleman should speak to the leader of his own party, who stood at the Dispatch Box yesterday claiming that it was his policy from his manifesto. The hon. Gentleman needs to go and do some homework.
When Labour came to power in 1997, the average home cost three and a half times the average wage. By the time it slunk out of office in 2010, it was nearly seven times the average wage. As for the neediest in society, Labour cut the number of social homes for rent by more than 420,000 units. That is its track record.
The Secretary of State says that we need 300,000 new homes a year to address the housing crisis, so presumably he has just committed to making sure that that many homes are built. Until he addresses the supply side of the housing crisis, he must stop fuelling demand-side pressures, which is what he has done. As the Office for Budget Responsibility has said, the elimination of stamp duty will fuel demand at a time when he is not meeting the supply pressures.
Where the hon. Gentleman is right is on the need for further planning reform. That is why the Budget follows on from the housing White Paper earlier this year with further reforms, some of which I will come to in a moment. Where he is completely wrong, like the hon. Member for Eltham (Clive Efford), is on stamp duty. He should have a conversation with young people buying their first house, who can save up to £5,000.
Does my right hon. Friend agree that what we need now is clarification from the Opposition on what they will do when it comes to a Division on the plan to scrap stamp duty for first-time buyers? Will they block those plans? If so, that says more about where they stand than any words they could ever say.
My hon. Friend will not be surprised to learn that the Opposition do not know what they would do. They have no idea, other than borrowing billions of pounds more and trying to bankrupt this country once again.
What Labour has never understood is that getting more homes built requires action on many fronts. It is the easiest thing in the world to say, “We’ll build more homes”, but it is meaningless unless we address where we are going to build them, what we are going to build and how, who is going to do the building and who is going to pay for it all.
The right hon. Gentleman makes the point about where we build homes and the need to get the people to build them. Does he recognise that providing money to create maths teachers will not help with the skills shortage that we have in the building industry so that we can create the builders we need to build properties?
First, I would have thought the hon. Lady would have welcomed the extra investment in maths. If she had been listening to the Budget, she would have also welcomed the partnership that we are beginning with the TUC and the CBI to invest in the skills of the future, and the additional funding to get more skills into the construction industry.
Our housing White Paper promised action on many fronts, and that is what the Budget delivers, with more than £15 billion of new financial support to help make it happen. Over the next five years we will commit to 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 land for building, and to create financial incentives to deliver an average of 300,000 net additional homes a year—or to put it another way, almost three times as many as the shadow Housing Minister managed when he was Housing Minister.
The right hon. Gentleman speaks about action. Why are the Government not taking action on developers who sit on land? The Chancellor spoke yesterday about a consultation, but we all know what needs to happen, so why do they not just do it?
It really bewilders me that although the Opposition Benches were full yesterday for the Budget, it seems like no one was actually listening. If the hon. Lady had been listening, she would have heard some of the measures that the Chancellor announced, including the change to the delivery test and the new inquiry, which I will come on to.
The Budget provided new money for the home building fund, to get small and medium-sized house builders building again. The Chancellor also promised £630 million for small sites to unlock the delivery of 40,000 homes; £400 million for estate regeneration; a £1.1 billion fund to unlock strategic sites, including new settlements and urban regeneration schemes; and £8 billion of new financial guarantees to support private house building and the purpose-built private rented sector.
Can the Secretary of State explain why York’s Conservative-led council submitted a local plan that seriously undershot the number of houses he is referring to? Why such a disparity within his own party?
The hon. Lady will know that we are currently consulting on how councils across the country, however they are led, should assess housing need. Once the proposals go forward, it will be clear that no council will be able to avoid building the houses it needs to.
In the areas where supply and demand are most badly mismatched, where most homes are unaffordable to most people, we will increase local authority housing revenue account borrowing caps by a total of £1 billion. That will allow ambitious councils to invest in new homes where they are most needed. We will bring together public and private capital to support the delivery of five new locally led garden towns in areas of high demand. We are committed to building up to 1 million new homes in the Oxford-Milton Keynes-Cambridge corridor by 2050, and we have agreed one of our first ambitious housing deals, with Oxfordshire, to deliver 100,000 homes by 2031.
Taunton has been made a garden town, and I am very proud to be part of it. Will the Secretary of State confirm that as well as building more homes, we are going to build homes that people really want to live in? We are going to make good communities and good places to live, with the right infrastructure and all the facilities that people want. We are going to be the Government who bring housing into the 21st century.
My hon. Friend is absolutely right. It is not just about building homes; it is about building communities. That means, among other things, supplying the infrastructure that is required, and I will come on to that.
The Secretary of State is being generous in giving way. Can he give us an indication of how many additional council houses will be built as a consequence of the lifting of the debt cap to the proposed level? I do not think it is very many—fewer than 10,000.
The hon. Gentleman keeps making that point, and I welcome it. I thank him for giving me another opportunity to remind the House that under the Conservatives, more council houses have already been built than were built during 13 years of Labour rule. How many more houses are built will depend on how ambitious local authorities are, but the objective is to ensure that thousands more are built each year by increasing the cap.
We have set out measures to support the workforce in this industry by providing an additional £34 million to develop vital construction skills such as plastering and bricklaying. As I have said, getting the country building will require more than just money. Planning reform is also required. We will focus on getting homes built in urban areas, where people want to live and where the most jobs are created. That will include making the best use of our urban land while continuing the protection of our green belt. We will focus on creating high-quality, high-density homes in city centres and around transport hubs.
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 renters. We are also launching an independent inquiry into so-called land-banking, with the promise of serious action if developers are shown to be holding back supply for financial rather than practical reasons. I am pleased that my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) has agreed to lead that work.
The Secretary of State is going on, yet again, about investment in the south of England, but he has not mentioned Yorkshire or the north of England. Will we, for example, get the electrification of the trans-Pennine rail system? We have real opportunities to grow the population and wealth in the north of this country, but the Government do not hear that message.
The hon. Gentleman will know, if he has had an opportunity to study the Budget closely, that the Chancellor referred to the housing deals that we are working on in Greater Manchester, Leeds and the west midlands. The hon. Gentleman mentioned the trans-Pennine railway, and he will know that the Chancellor offered an additional £300 million yesterday for the trans-Pennine railway. I am sure the hon. Gentleman will welcome that.
A moment ago, the Secretary of State mentioned the review into the build-out of houses. One issue in my constituency is that many planning permissions are granted, but there seems to be a delay before the houses are built. We are getting the blight but not the benefit, and therefore not the affordability. May I welcome the Secretary of State’s plans to make sure that not only are planning permissions granted, but houses are built?
My hon. Friend is right to highlight that. Many councils are, like hers, willing to take what may be tough decisions, provide the land for new homes and give the planning permissions, only to find that developers do not build those homes out at all, or that they do so far too slowly. The measures in the housing White Paper are hugely welcome and will make a difference, but I am not sure whether they are enough. That is why we wanted to have an independent inquiry, and I am sure that it will make a big difference.
The whole planning and building process will be overseen by our new national housing agency, Homes England. That agency will be based on the Homes and Communities Agency, but its remit will be far larger and will bring together money, expertise, planning and compulsory purchase orders. That will allow it to offer specific solutions to the barriers faced by different areas, maximising its impact and getting more of the right homes built in the right places.
It is no good building homes if people cannot afford them. Growing the economy and raising wages are key to that but, as I said last week, young people face a housing market that is very different from the one that their parents’ generation enjoyed. We are going to get more homes built, but that will not happen overnight. What has happened overnight is a change that means that no stamp duty will apply for the vast majority of first-time buyers. On average, a first-time buyer will save £1,600. In addition, we have provided £200 million for a pilot to extend the right to buy to housing association tenants in the midlands, allowing people to own the homes in which they have lived for many years and giving them the same opportunity as that enjoyed by council tenants.
Will my right hon. Friend take into account the fact that the stamp duty change—much as it may have been scoffed at—has given a couple in my constituency, both of whom work in the public sector, £2,500 towards buying their own home? I thank him, on behalf of my constituents, for that policy, which will have a massive impact for a younger generation that is already struggling.
I am very pleased to hear that from my hon. Friend. I, too, have received emails overnight from members of the public who have welcomed the change. I am sure the Leader of the Opposition has received similar emails, and I am sure he is all excited about sharing them with us at Prime Minister’s Question Time next week.
Not everyone is lucky enough to have a home. One person living on the street is too many, but the latest figures are simply unacceptable. It is clear to anyone who walks around any of our major cities that the current approach to tackling homelessness is not enough. It is time for a bold new way of doing things, and this Budget provides some of the resources required to do just that.
I have been a fan of the Housing First approach for some time. It does exactly what it says on the tin: it involves getting people off the street and into a safe and secure home first, and then dealing with the problems that may have forced them on to the streets in the first place. That sounds obvious, but it is a complete reversal of the traditional way of doing things under successive Governments. Earlier this year, I saw for myself how that approach has eliminated rough sleeping in Helsinki, and I want to see whether we can make it just as effective in our own country. That is why the Chancellor announced yesterday £28 million for Housing First pilots in the west midlands, Greater Manchester and the Liverpool city region.
Does the Secretary of State not realise that that is not particularly innovatory and that Labour did end the obscenity of rough sleeping in less than 10 years when we were in government? If the Government had not removed the safety net of support services and housing, we would not have had people sleeping rough on our streets in the past 10 years.
I know that the hon. Lady means well and that on this issue, at least, there is usually a welcome cross-party approach, but she is wrong to suggest that rough sleeping was ended at any time, under any Government. In fact, under the last Labour Government, statutory homelessness peaked in 2007. Since then, it is down by more than 50%. I hope that she agrees that we can all work together to do more to combat homelessness. For that reason, I hope that she will welcome the announcement of the new homelessness reduction taskforce, which will pilot a number of new ideas to help to cut rough sleeping by 2022 and to eliminate it altogether—working together—by 2027.
Homes are only part of the picture. Communities need roads, railways, schools, GP surgeries and much more besides. Investing in infrastructure can unlock a huge range of new sites and avoid putting too much pressure on existing communities that already feel squeezed. That is why we are committing a further £2.7 billion to more than double the size of the housing infrastructure fund, investing not just in houses but in the services that we all depend on.
Of course, our support for public services is not limited to new communities. We are putting an additional £6.3 billion of new funding into the NHS, upgrading facilities, improving care, improving A&E performance, reducing waiting times and treating more people this winter.
I am a nurse and I still do bank shifts at Lincoln County Hospital, and I am sorry but I really do not recognise what the Secretary of State is describing. Hospitals have got leaking roofs, with buckets to catch the water coming in, and nurses leave shifts at least an hour late, while our pay has been capped and we have lost 14% since 2010. I am sorry, but I do not recognise the NHS he is talking about.
I say gently to the hon. Lady that if this country had taken Labour’s approach to the economy, we would be heading for bankruptcy again, and there would be no new money for the NHS. I hope that she will join Members on both sides of the House in welcoming the additional £2.8 billion going to the NHS in resource spending next year and the additional £3.5 billion that has been made available for capital spending over the next five years.[Official Report, 27 November 2017, Vol. 632, c. 1MC.]
On the point about the country becoming bankrupt, will he remind the House how much extra this Government have borrowed since they came to power?
This is a timely point at which to remind the hon. Gentleman that when a Government leave this country with the biggest budget deficit of any industrialised country, there are consequences, and Labour Members have not once—I repeat, not once—got up at the Opposition Dispatch Box to apologise for what they did to this country in their 13 years in office.
The Chancellor has also promised to provide additional funding for a future NHS pay settlement, so that our nurses are properly rewarded without taking money out of patient services. We are investing more in our schools: they will get £600 extra for every pupil who takes A-level or core maths; £27 million will help to improve how maths is taught in 3,000 schools; £49 million will go towards helping students resitting GCSE maths; and £350,000 of extra funding a year will be given to every specialist maths school that has been set up across the country. That is a massive investment in numeracy—sadly, it comes too late for the shadow Treasury team—that will help to ensure our young people have the skills they need to compete in the future high-tech jobs of the 21st century.
Not all public services are the responsibility of central Government; many are delivered by our brilliant local councils, whether parishes, districts, counties, metropolitans or unitary authorities. I am well aware of the pressure that local authority budgets are under, particularly with regard to social care. That is why this year’s spring Budget provided an extra £2 billion to help to meet the immediate needs in this vital area. I remain totally committed to delivering fair, effective funding for councils at all levels, and we will obviously return to this in next month’s local government finance settlement.
In the meantime, we are pushing ahead with our pilot schemes for 100% local business rate retention, including in London, and we are reforming business rates themselves. Revaluations will switch from every five years to every three years, avoiding the cliff edge that currently confronts many businesses, particularly smaller ones. We are changing the law so that businesses affected by the so-called staircase tax decision can have their original bills reinstated and backdated. We are bringing forward the change in uprating from RPI to CPI, which will now take effect from next April, saving businesses £2.3 billion over the next five years.
One council, the Royal Borough of Kensington and Chelsea, has had to deal with an unprecedented tragedy this year. The fire at Grenfell Tower should not have happened, and it should not have been possible. Since the blaze, the people of north Kensington have shown themselves to be remarkably resilient, courageous and proactive, and they deserve the full support of this Government and this House. We have already provided financial support for the victims of this terrible tragedy. This Budget sets aside a further £28 million to pay for community mental health support and to provide regeneration support for the area around Grenfell Tower and a new space for the local community to come together.
Will the Secretary of State clarify what the Chancellor said yesterday about funds for fire safety precautions? Did he say that, where local authorities are told by an independent fire safety officer that sprinklers should be retrofitted in tower blocks, the Government will assist with paying for that to happen?
I thought the Chancellor was clear, but I am happy to help the hon. Gentleman by providing clarification. The Chancellor said that all local authorities need to do whatever is essential to keep their residents safe, which includes fitting sprinklers and anything else. If they receive such professional advice, they should of course follow it. If in doing so, they need to approach the Government for financial support, they should do so, and we will provide support.
Will my right hon. Friend confirm that the Grenfell relief fund will be available immediately and that we will not have to wait until the next Budget year on 1 April, so that the poor victims, who have suffered greatly, can get the help they need right now?
Yes, I am very happy to confirm that for my hon. Friend. The new funding that the Chancellor announced yesterday will be available immediately.
The most recent additions to the local government family are the combined authorities, led by the six directly elected Mayors. Under this Budget, they will be able to improve local transport with half a new £1.7 billion transforming cities fund. The remainder will be open to competition by other English cities. A second devolution deal has been agreed with the incredible Andy Street in the West Midlands; a whole new devolution deal has been struck north of the Tyne; and we are developing a local industrial strategy with Greater Manchester. We are investing £300 million to ensure that HS2 infrastructure can accommodate future northern powerhouse and midlands engine rail improvements.
This kind of devolution is how to deliver growth and opportunity right across the country. It is how to boost productivity and secure new jobs and increased security for hard-working people wherever they live. It underlines the fact that this is a Budget for the whole country: a Budget for the many, not the few. [Interruption.] That has woken up Labour Members, and perhaps my next point will as well. On Tuesday night, almost 24 hours before the Budget was delivered, the Leader of the Opposition emailed his supporters to call on them to oppose everything the Chancellor was going to say. I know that Marx once said:
“Whatever it is, I’m against it,”
but that was Groucho, not Karl. It is great that Labour Members have found a new source of inspiration, but their economic plans are no laughing matter.
On Sky News yesterday, the shadow Housing Minister said that people should look at what the Institute of Fiscal Studies said about the spending plans in his party’s manifesto, so I did. I took a look, and it said:
“What Labour actually want you to hear is that the spending increases they promise…would be funded by tax increases solely affecting the rich and companies. This would not happen… In the longer term, much of the cost is likely to be passed to workers through lower wages or consumers through higher prices.”
Those are not my words, but those of the independent IFS.
Is the Secretary of State aware that the IFS has just issued a press release saying that workers are now facing two lost decades of earnings growth?
I am aware—far more than the Labour party, despite its name—that what workers want is work. That is why we should celebrate the fact that we have more people employed today than at any time in our history, and we have the lowest unemployment rate in 40 years.
Labour Members talk a good game, but all they have is blank cheques they know will never be cashed and empty promises they know they will never be able to keep. Over and again, the shadow Chancellor refuses to say how much his spending plans would cost, how much he would have to borrow and how much debt he would pile on to the next generation. He says that he does not “need a number”, because that is “what iPads are for”. He even accused one reporter of wanting him to “pluck a figure” out of thin air. Well, no, we do not want him to pluck a finger out of thin air—[Interruption.] A figure, and a finger as well. He is good at putting up the finger—we know that. We want him to tell the British people how much his plans would cost. His failure to do so can mean one of only two things: either he has no idea what the cost would be, in which case he is not fit to be Chancellor, or he does know, but is refusing to share his dirty little secret because he is all too aware of how shameful it is.
I have taken a vow that I will not throw about any form of book in the Chamber ever again, but may I suggest that we send the right hon. Gentleman a copy of the “Grey Book”, which identified every policy, all costings and all funding sources—including our capital transformation fund—that would build the homes that we need and ensure a fair taxation system? That is how we would fund our policies. The only numbers in the Tory manifesto were the page numbers.
Once again, the shadow Chancellor says that he will provide the numbers, but on every single occasion he has failed to do so. He did that again yesterday after the Budget, and he will no doubt keep doing it for as long as he feels that he can get away with it. It is no surprise that, while we are building a Britain that is fit for the future, Labour is planning a run on the pound. Yesterday, the Chancellor stood at the Dispatch Box and laid out a compelling vision for housing and public services and for making this a country that works for everyone. Today, the shadow Chancellor appears, again peddling a bankrupt ideology that will bankrupt the country and take our schools and hospitals with it. His reckless plans would drive up interest rates and unemployment. He claims to be on the side of the many, but his policies would make it harder for people to pay their rent or their mortgage and harder for ordinary working people to save up for a home of their own.
Whenever the shadow Chancellor speaks, he tries to paint a picture of a fading, failing, divided nation. He talks down our economy, our prospects, our public services and our people. It suits his purpose, I suppose, but the country that he describes is not the country I recognise. When I look at the world that my parents grew up in—no electricity, no plumbing, and my mother was not even allowed to go to school—it reminds me again just how lucky I am to have been born British; how lucky we all are to have been born British.
We have one of the world’s biggest, most successful economies. We speak the language of global business, the language of the world wide web—the world wide web that we invented. We are home to more Nobel prize winners than every country bar one. Our legal system is the most respected in the world. We are unrivalled in art, culture and the creative industries. The NHS is the envy of countless nations. We have given the world everything from the steam engine to Shakespeare and even the glorious game of cricket. We may not be the biggest or the brashest, but Britain is, without doubt, the best country in the world in which to work, play, learn and live. A country with an incredible history, and an amazing future still to come. This Budget builds on that history and embraces that future. This is a country of which we should be proud, and this is a Budget that truly does it justice, and I commend it to the House.
It is an honour to speak on behalf of the Scottish National party on this second day of debate on the second 2017 Budget.
This Budget is no better than the last one. The UK Government are in chaos. Cabinet infighting means that they are hamstrung and unable to take even the most basic decisions. Brexit, and the likely economic fall-out, is set to have a dramatic impact on the household budgets of very many people. Unlike the Government, the Office for Budget Responsibility has taken that threat seriously and downgraded our GDP figures accordingly. That is the worst downgrade in the OBR’s projections since its creation seven years ago.
The outlook for GDP growth is worse on all counts than even the OBR’s projections in spring. GDP might seem like an ethereal concept to people, and unrelated to their daily lives, but here are the ramifications of this drastic downgrading. The Resolution Foundation has said that it equates to £1,000 a year in wages, which is £19 a week less to spend on essentials such as food and electricity. How will low-income families cope if their spending is slashed by an extra £19 a week? The TUC has pointed out that that is an £800 decrease in wages even from the prediction in March. The Fraser of Allander Institute reported that the GDP damage of a hard Brexit could cost Scotland 80,000 jobs. That is 80,000 people not paying tax to the Treasury; 80,000 folk having to struggle through the jobcentre system, and whose journey back to employment has been made even more painful and less dignified by the number of jobcentres closed by this UK Government.
The Scottish Government estimate that a hard Brexit could reduce GDP in Scotland by £11 billion a year by 2030. That is up to £3.7 billion a year less to spend on public services—£3.7 billion would pay the salary of 185,000 new police officers, 161,000 new teachers, or 168,000 new nurses, and that is only the impact in Scotland.
On the block grant, the Chancellor announced largesse for Scotland—£2 billion—but that is smoke and mirrors because £1.1 billion of that is financial transaction money. It cannot be used to pay for vital frontline public services, and it has to be paid back. If the Chancellor was going to make an announcement for Scotland, he should have made an actual announcement of real money that could be spent by the Scottish Government at their discretion on frontline services.
Between 2010-11 and 2019-20, Scotland’s budget has seen a cut of £2.6 billion in real terms. Next year, the Scottish Government will have more than £200 million less to spend on frontline public services. Over the next two years, the Scottish block grant for day-to-day services has been reduced by £531 million. Is this £2 billion more for the Scottish Government to spend? Is it tatties!
The Chancellor has announced that VAT for Scottish police and fire services will not apply as of April next year. He agreed that it was unfair to charge VAT on those services, but he has not agreed to give us the rebate that we are owed—£140 million is owed to Scotland.
Is it not a fact that the SNP Government were given good notice and warning that the impact of their centralisation of the Scottish police and the Scottish fire and rescue services would create this situation? Was it not Scottish Conservative Members who lobbied Ministers to get the SNP Government out of the mess they created?
Not long ago, Murdo Fraser, a Scottish Conservative MSP, said in the Scottish Parliament that Scotland should not have the money paid back because it was the SNP’s fault for centralising the services. The Scottish Tories supported that centralisation—it was in their manifesto. The Chancellor has agreed that the VAT was unfair and that it was taking money from front-line public services, yet he is refusing to refund it. We have raised the issue and called for the change to be made 140 times. As far as I am aware, the Scottish Tories have raised it once in this House—once! It is ridiculous for them to suggest that pressure from them has twisted the Chancellor’s arm. In fact, it that were true and if the Chancellor was willing to listen only to representations from Conservative Members of Parliament, what does that say about the Chancellor’s honour?
On money for Scotland—[Interruption.]
Order. I am listening very carefully to what the hon. Lady is saying. She is choosing her words carefully and I am sure she is not impugning the honour of any Member of this House. She asked a rhetorical question and I am sure she will not push it any further than that.
Thank you, Madam Deputy Speaker. I will not push it any further than that.
The other thing that the SNP has been calling for—the Scottish Tories have so far been unwilling to do so, it seems—is £190 million convergence uplift that is owed to our farmers. That money should go to Scottish farmers and we will continue to push for that.
If the UK Government were not in such chaos, they would have recognised the folly of Brexit. Even if they do decide to proceed with this incredibly damaging policy, there is certainty they could give now that would reduce, slightly, the economic harm we will see. They could abandon their net migration cap of 100,000 people. That would help to keep our public services fully staffed. Earlier this year, the Nursing and Midwifery Council produced its annual report on the number of registered nurses and midwives. Compared with the period from 2012 to 2016, registrations in the last year were down 46% from Ireland, 86% from Italy, 87% from Romania and 95% from Spain. These are trained nurses and midwives registered to work in the UK in our NHS, to work in our frontline services and to work to provide nursing and midwifery care for people who are in incredibly vulnerable states, and the Government are closing the door on them. They are ensuring that fewer people come. They are ensuring that our public services will be worse staffed as a result.
On housing, we need workers from the EU. In London alone, a third of construction workers are from the EU. The Government cannot say they intend to build more housing, while at the same time shutting the door to many skilled construction workers.
The Chancellor has announced a wonderful new policy of no stamp duty for first-time buyers who are buying a house for less than £300,000 in England and Wales. In time-honoured tradition, one of the Chancellor’s biggest Budget commitments has fallen apart in less than 24 hours. The OBR confirms that it expects the policy to increase house prices. Implementing the policy is costing £3.2 billion, but the OBR expects 3,500 houses to change hands as a result. That means the Government are subsidising each house by £924,000 each. One tax expert I follow on Twitter said that virtually every tax expert thinks that this policy sucks.
Would the hon. Lady care to share with the House the effects of the SNP Government’s land and buildings transaction tax, which has been an unmitigated disaster and caused untold turmoil in the Scottish property market? Perhaps she should be fuller in her disclosure to the House of the effect her Scottish Government have had on the Scottish property market.
You know what, Madam Deputy Speaker? I was just about to talk about the Scottish land and buildings transaction tax. I was just about to talk about the fact that it is way more progressive than the position put forward by the UK Government. Before I get on to that, however, I want to make it clear that the Scottish Government are investing £3 billion in affordable housing. Fifty thousand affordable homes will be built over the course of the Scottish Parliament, 35,000 of which will be for social rent—something sadly missing from the UK Government’s proposals. We are incredibly supportive of social housing, council housing and housing association housing. It is very important that there are more properties for social rent.
On the land and buildings transaction tax, those buying a house for less than £145,000 in Scotland pay no stamp duty. Buying a house for £180,000 attracts a stamp duty charge of only £600. It is possible to buy a fairly reasonable three-bedroom semi-detached house in many places in Scotland for less than £180,000. First-time buyers will pay only £600 in stamp duty and that has been in place for the past two years. Actually, £180,000 is much more realistic for a first-time buyer than £300,000. How many first-time buyers, without inherited wealth, have got £30,000 in the bank to put down for a deposit? The effect of the LBTT in Scotland was that over the first two years 93% of those buying a house in Scotland worth more than £40,000 paid either no stamp duty at all or less than they would have in England. The hon. Member for Stirling (Stephen Kerr) said that that was an unmitigated disaster. Clearly, he has not read the figures. Some 93%—a significant portion—of those buying a house over £40,000 paid less than they would down here.
The action our Government have taken was thought through, unlike the piecemeal approach the UK Government take. Successive Chancellors have insisted on the right to pull rabbits out of hats at Budgets. This has led to the drastic unravelling that occurs after almost every Budget. If the Chancellor was collegiate and consulted on measures, and if he approached issues such as stamp duty, small business taxation or income tax with the intention to review the whole system, we would see much better policy decisions being made. We need more coherence and less drama from Chancellors. They should not be trying to pull rabbits out of hats. They should be trying to create a system that works, rather than a system that will give them a big headline the day after Budget day.
Mr Deputy Speaker, if you were to ask someone under 30 whether they expect to have a pension, they will likely tell you that they do not. If you ask them whether they will be able to afford to buy a house, they will likely laugh at you. But, most importantly, if you ask them about their security, how precarious their current housing situation is and how precarious their current work situation is, they will tell you how difficult it is to save for the future. They will tell you how difficult it is to build a stable life when their landlords move them on every year and when they have to share with other people. They will tell you how difficult it is to save for the future when they are working on zero-hours contracts. The Chancellor’s pretendy national living wage is not enough to live on—it does not even apply to under-26s—and what they need is not a cut in stamp duty or to be able to save £20,000 in an ISA tax free, but for their income to be consistently and substantially higher than their expenditure. They need an increase in the minimum wage. They need a decrease in rents and a decrease in the cost of living. In the past year, the price of vegetables has gone up 2%, the price of fish has gone up 10%, the price of electricity has gone up 11%, the price of butter has gone up 12% and the price of kids’ clothes has gone up 3%. When we have wage stagnation, how do we expect people to be able to afford the most basic of essentials?
Millennials, people under 30, need a decrease in rents. The typical millennial has actually earned £8,000 less during their twenties than those in the preceding generation. An economic time bomb is ticking. Household debts continue to rise. Interest rates are going up—a major problem, given the increase in household debt. Increasing the personal allowance is welcome news from the Chancellor, but it is not enough. He is increasing it by £350. That is £350 that people will not pay 20% tax on. That is pennies in the grand scheme of things. That will not make the difference we would see with a real living wage. I have already mentioned the issues raised by the IFS, which is predicting two decades of lost wage growth.
The UK Government continue to fail. The Budget did not help. This Government are in chaos and the Chancellor has taken no real action to undo the years of austerity and wage stagnation that punishes our most vulnerable. The Government should tear this Budget up and start again: with spending commitments that increase wages and help our most vulnerable; with fairness for the WASPI women; with a U-turn on the benefits freeze; and with the devolution of powers on tax avoidance to Scotland, so we can tackle it properly. Mr Chancellor, I have a message for you: you are harming the whole of the UK, and the SNP will fight you every step of the way.
I hope to find an early opportunity to speak out on what is the right level of defence spending to meet the threats that our country faces, and to do so more freely than the constraints of government allowed, but today I want to focus on the Budget before us. It is the first Budget of this Brexit Parliament, and I warmly welcome it.
It is extraordinary that we still have no answers from Labour Front Benchers on the amount of additional borrowing they would undergo, or indeed, 24 hours later, on the amount of additional interest that they are prepared to rack up. Those are legitimate questions. This is not trite journalism. A shadow Chancellor should be able to tell the House exactly how much more he would be spending and borrowing.
I particularly welcome the additional money for the national health service and the measures for long-term investment in our infrastructure, but that long-term investment will need to be accompanied by other and deeper structural reforms. How can we be encouraged to save again rather than to spend on credit? How can we reverse some of the more pernicious side-effects of quantitative easing, which seem to benefit those who already hold significant assets?
The fall in unemployment has probably been the greatest single achievement since 2010. Unemployment has fallen not because of one single policy, but because of the cumulative reductions in taxation and regulation that have taken place over the last seven years, almost every one of which was opposed by Labour Members. The 5 million small businesses and nearly 5 million self-employed people are the real wealth creators. They are the people who work every hour that God sends, and who invest—and risk—their own money to create, in turn, the tax revenue that funds our public services. I hope that, over the current Parliament, we will continue to cut the form-filling and let them keep more of what they earn.
There are four areas in which I hope we can make even more progress. The first is low-paid work. No Government have done more for the low-paid than this Government, who have introduced the national living wage and taken so many more people out of tax altogether, but we need to keep going. Is it logical to go on raising the personal allowance but not the national insurance threshold? A full-time worker on the national living wage pays almost as much in national insurance as in income tax. Those who are working part-time—for example, 25 hours a week—and earning between £8,000 and £11,000 a year miss out as we raise the thresholds. I hope that Ministers will look at that again.
Secondly, I particularly welcome the steps to tax the global digital companies more effectively.
Will my right hon. Friend acknowledge the leadership of the Government of which he was a part in driving that particular agenda internationally?
I certainly recognise that, and it is important for these matters to be approached internationally.
Our constituents do, of course, benefit from the greater convenience and efficiency that digital retailers provide, but it cannot be right for our high streets, small shops and local businesses to bear all the pain of local rates while giants such as Amazon pay rates on a handful of warehouses. Their staff, too—Amazon staff, Google staff and Facebook staff—need well-funded schools, good local services and a proper NHS. It is right that they should pay their proper share of local and national taxes, and I applaud the steps that the Chancellor is taking down that path. One nation should mean one economy, for large and small businesses alike.
Thirdly, if we want to be one economy, more of our people should have a stake in it. In the year when Margaret Thatcher left office, 11 million adults in our country held shares. Today, although the population is significantly larger, only 8 million do so: a quarter fewer. When I privatised Royal Mail, I offered free shares to each of its 150,000 employees. Despite union advice—or possibly because of union advice—99% of the employees took up the offer. We deliberately skewed it towards small investors, and, as a result, 20% of Royal Mail is now owned by its staff and by small investors.
That is what we should be doing with all our remaining shareholdings, including the banks and the new social enterprises, and we should go further. Employee-owned companies are more productive and more profitable. Is not higher productivity the golden fleece for which Ministers keep searching? We need not just one John Lewis Partnership, but 1,000 John Lewis Partnerships across our economy. Existing schemes such as Sharesave and share incentive plans are not increasing the number of share ownership companies.
I speak with a bit of personal experience, having been a Royal Mail employee and having benefited down the line. My right hon. Friend is absolutely right: apart from than the trade unionists who drive the Royal Mail train, a huge number of workers have benefited greatly from having that share option. I pay tribute to those workers, who are doing a good job and who will be delivering our post during the Christmas period.
I echo that tribute. I should like that example of share options to be followed much more widely. Let us incentivise our companies, with a lower tax rate, to offer free shares to all their employees.
Finally, let me say something about exports. Our constituents benefit, of course, from cheap imported goods, but we are now importing far more than we export. We have run deficits of more than £30 billion in goods and services in each of the past five years, and a deficit of more than £43 billion in the last year alone—and this on an island of entrepreneurs, of engineering excellence, of innovation and of ingenuity. It is good that, according to the CBI, a quarter of manufacturers now expect an increasing order book, but the cheaper pound should not obscure the reality that outside the single market we will live or die by what we can sell to the world in goods and services.
It is not just down to this Government. There were serious deficits in the Labour years as well. Too many medium-sized companies do not bother to export at all, but, post-Brexit, we must clearly put exports at the front and centre of our economic policies. Campaigns such as GREAT and Global Britain are important, but they are just campaigns. We now need to hard-wire exporting into every British business: exporting should be a condition of all our major Government support schemes, our grants and our loans. In return, the Chancellor is beefing up our export finance, making it easier for first-time exports to take the plunge, and I fully support that.
A fairer economy, much wider employee share ownership, putting exporting at the heart of every Government industrial programme: those are some of the necessary steps towards our new economic future. Let us agree across the House, Brexiteers and Europhiles alike, that muddling along—mere managerialism—is not going to be enough. Brexit Britain demands a bigger vision: more confident, outward-looking, self-rewarding. Let us build on this successful, sensible Budget to enable Britain to be bolder still.
It might surprise some people on the Government Benches in particular to hear that I agree with several of the major themes of the speech made by the right hon. Member for Sevenoaks (Sir Michael Fallon). We have worked together on manufacturing and other matters and would agree on the need for greater expenditure on our defence sector. As a Labour and Co-operative Member of Parliament, I was surprised at his conversion to passionate advocacy of employee share ownership—I perhaps did not know about his championship of the idea. There are other matters on which we do not agree.
This is my 43rd Budget so, if I am a little cynical and pessimistic, it is because I have sat through 43 Budgets since I came to the House in 1979. Some have been amazingly bold, ambitious and brave. I remember sitting on the Government Benches during what was not a Labour party-induced economic meltdown but a banker-induced global economic meltdown, when brave men such as Alistair Darling stood at the Dispatch Box and made the right decisions about getting our country through. It is sometimes very important to set the record straight.
All Budgets are usually compared to a magician’s performance. We all know what a magician is like—they take one’s eye off the main business with nice sparkly things and rabbits coming out of hats. My experience is that we can never judge a Budget until the papers hit the doormat on a Sunday morning. That is when we get a relatively mature view of what is happening. Let me give an example. We should watch a Chancellor who switches from percentages to pounds, to billions. Yesterday, I noticed that the Chancellor of the Exchequer suddenly said that there would be £1.6 billion for the national health service, but this morning I had the House of Commons Library check what that was. It is 1.2% of the overall NHS budget. So, £1.6 billion sounds like a lot of money; 1.2% does not.
We must judge the Budget cautiously. It is the most depressing Budget that I have ever heard, and not just because of the growth figures or the dire situation that so many people in our country are still in, but because the shadow of Brexit looms over everything the Chancellor said yesterday. It could not be a Budget of passion, imagination, new ideas and real change, because he was hemmed in not only by those in the Cabinet who would not give him an inch if he made any slight mistake, but by the passionate Brexiteer majority behind him, which will not let anyone question this absolutely disgraceful decision to take ourselves out of the European Union. Not everyone on my Front Bench agrees with me, but I must confess that I will fight to the very end of the Brexit process to make sure that we stop it if we possibly can.
I want to deal with four points. First, let us start with productivity and growth. Sometimes, I hear the word productivity bandied around, and not many people know that the definition of productivity is the measure of the efficiency of a person, machine or factory system in converting stuff into useful outputs. We ain’t very good at it. Under all parties, of all Governments, we have not quite managed to become as productive as we should be.
The right hon. Member for Sevenoaks referred to managerialism in his closing remarks. That is different from competent management, and what this country needs more than anything else, in the private and public sectors—running our hospitals, our universities and our private sector businesses—is first-class management. Our universities and colleges are producing too many people with soft social science degrees and arts degrees and not enough managers who know how to run this country, run our industries and create wealth. There is very little in this Budget about encouraging managers. There are some nice things about science and maths, and I do not decry them, but we need good managers and more of them.
My hon. Friend mentions that we need skills for managers, but he will find that, ever since the right hon. Member for Surrey Heath (Michael Gove) was Education Secretary, this Government have got rid of the development of those soft skills—teamwork, leadership and oral communication—because of his ideological focus on fact retention.
My hon. Friend makes a very good point.
I want to move on to skills. We can talk about higher education. When I was Chairman of the Select Committee some people said it was disgraceful that we were going to aim to have 50% of people in our country going to university, but I was very much in favour of that move. I came into politics to give every child in this country the maximum opportunity to develop their potential to the full. Often, Members of Parliament like me, with a very successful university in their town—I am very keen on my university, which got the global award for teaching recently and is a gold standard for teaching whereas my alma mater, the London School of Economics, got bronze—find that those who train people for local businesses are the further education colleges. The local FE sector is the Cinderella of our education system.
Like my hon. Friend, I go back rather a long way. One of the problems now is the lack of security for those who are doing the teaching, both in higher and further education. Most of my friends are on short-term contracts and cannot invest in their future, let alone the future of the people they are teaching. Surely that is the wrong way to do things. Does he agree?
My old friend, and hon. Friend, is absolutely right. The percentage of impermanent and short-term contracts in colleges and universities is not good and does not bode well for a happy team delivering high-quality output.
FE colleges are vital if we are to produce the people who work in the sectors in which we must improve our productivity. There is very little sign that that is being taken seriously. My local college is brand-new, with a fine new building—an extraordinarily good building—because it invested. Why should kids going to FE college not have the nice environment that university students have? All those colleges that invested in new buildings and high-class facilities are now in deep financial trouble. They are struggling.
We must also take into account the intransigence of the Department for Education on the question of GCSEs in English and maths. There should be a practical qualification as well as an academic one, and I and many others have called for this for many months and years. At the moment, most FE colleges are warehousing tens of thousands of young people who cannot get on with their lives or start an apprenticeship because they do not have a GCSE in English and maths.
We know that some very good reforms have come out of the Sainsbury recommendations. They were a good piece of policy in many ways. The new skills levy and apprenticeship levy are excellent policies, based on getting someone who knows about that stuff to take evidence. I gave evidence. However, in the Budget the Government have not considered one of the ramifications of the policy, which is the 62% drop in the number of young people starting an apprenticeship this year. That is appalling news for the income streams of further education colleges. According to the regulators—we had the commissioner in the House of Commons only this week—many of the colleges are experiencing real problems with their financial arrangements. My own college, Kirklees College, and many others are struggling, and this Budget does nothing to help them.
My next point is on housing. I believe that everyone in this country should have the chance of a decent home, but many people cannot afford one. Let us reflect on the history of housing crises over the years. The Victorians could see the problem and, as the railways came, they established a programme for garden suburbs. After the first world war, Lloyd George declared that we needed “homes fit for heroes”, and the Liberal Government encouraged the building of council houses. What a wonderful initiative that was! Between the wars, the new towns started to be built, and after the war we had the prefabs. In every housing crisis, there has been a resolute determination to have a policy to fix it, but the policy announced in yesterday’s Budget is neither bold nor imaginative, and it will not fix the problem. As the Chancellor was making his remarks yesterday, I could see behind him rows of people who jump up and down in their constituencies and tell their constituency associations and their local electorate, “There will be no houses near you. You can have the green views and the rolling hills. No one will move in next door to you.” The nimbys rule in the Conservative party, but they should stop being so powerful.
I want to finish by mentioning the north-south divide. There was little in the Budget about the north of England, and there was precious little about Yorkshire. When I asked the Secretary of State whether the Budget would give us the money to electrify the Pennine rail link, he would not answer, because the money is not in there; we have not got it. This country has greater gaps between its regions than any other OECD country. If only the Chancellor had grasped the real chance he had in the Budget to invest in the northern regions, he could have given us great transportation and great communications. He could have invested in the north, rather than investing in London and the south all the time. We will fight this Budget. We will fight it for Yorkshire and for working people, and we will change it when there is a Labour Government.
Order. Many people want to speak, and I ask colleagues to be considerate of others, otherwise we will not get everybody in. I am going to have to impose a five-minute time limit, and I remind colleagues that interventions will make it more difficult for others to get in to speak.
After 13 minutes of what I am sure we all agree was pure gold from the hon. Member for Huddersfield (Mr Sheerman), I am going to make a more focused and narrow-cast speech. I particularly welcome this opportunity to follow a fellow graduate of the London School of Economics, although before he started slating soft social science degrees, he might have declared his own interest, in that he wrote a book about Harold Laski, who probably did more damage to the world economy through the people he taught over 50 years than almost any other human being alive. I should like to declare my own interest, in that I am a member of the right to build taskforce, which was referenced in the White Paper. I thank the Secretary of State for seconding Mario Wolf, an official from the Department for Communities and Local Government, to run the taskforce. I should also like to thank the Nationwide Foundation for funding it for the next three years.
I welcome this Budget. It is a Budget for housing, and I particularly welcome the announcement that my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) is going to carry out an urgent review into why there is such a gap between extant planning permissions and actual build-out of housing. This is a complicated subject, but it is not that complicated. The real reason for the gap is that house builders have no incentive to build more houses than they can sell. The Home Builders Federation, the trade body for the volume house builders, did a study entitled “Why buy new? Home buyer intentions and opinions”. It was commissioned from YouGov, a professional opinion poll firm, and its conclusions were startling. It found that 67% of people would prefer not to or were unlikely to buy the product of the volume house builders—in other words, a new home. If 67% of people do not want to buy your product, you might consider changing your product, but that would involve severe risks for volume house builders, because they already face a welter of planning conditions before they can even start.
We have a broken housing market in which demand cannot sufficiently influence supply and drive volumes. I therefore particularly welcome the housing White Paper, because it offers the first explicit acknowledgement that we have a housing model that is broken. The precondition for solving our problems is that we acknowledge the existence of those problems, and Government policy is now to acknowledge that we have a broken housing model and that we need to fix it. This Budget takes many good steps in that direction.
It is my fundamental belief that the only way to make “development” a good word—it is often seen as a pejorative term, and the word “developer” is often viewed as a swear word—is to have good development. At the moment, however, most people feel that they have no say over what gets built, where it gets built, what it looks like or who has the first chance to live there. We need to change all that. We need to change the conversation. Development should be about making well-designed, well-built places that are well connected, well served and well run with good governance. They should be environmentally sensitive places where green is normal, and with a thriving economy offering local jobs. They should be active, inclusive and safe, and fair for everyone. In other words, we should separate the business of place-making—which is what all those things are about—from the business of home building.
All those things that I have just described are part of the public weal. They are part of the public responsibility to make great places. That is why the people who work in the planning profession go into planning, but when they get there they often find that they are unable to achieve those things, and end up being the person who says no. The way to separate place-making from home-making, and to make home-making available for everyone, is to have large numbers of serviced plots at scale, and thanks to the Self-build and Custom Housebuilding Act 2015, which is now on the statute book, that is now going to be easier than ever before.
People sometimes think that this is a minor obsession of mine, and they would be right, but it is for a good reason. There is no area of public policy that this does not touch on. Under that Act, it is not only individuals who can register for the chance to get a piece of land; associations of individuals can also do so. It is tenure neutral. Those associations of individuals could be the governors of a high school looking to fill difficult-to-fill teaching posts; they could be the directors of a social services department trying to recruit new senior social work managers to difficult-to-fill positions; they could be the Ministry of Defence looking to retain military personnel; they could be the Royal British Legion seeking to look after veterans better; and they could even be ex-offenders. I was pleased to have had the chance last week to brief the Secretary of State on the right to build taskforce’s latest proposals, and the Lord Chancellor has now invited me to do the same in relation to ex-offenders, because there is so much more that this policy could do.
The spin ahead of yesterday’s Budget announcements kept repeating that the Chancellor had no wriggle room, but why, after seven years, have the Government got no wriggle room? The Conservatives cannot keep blaming the Labour Government—not that they ever should have done, given that we had just come out of a global financial crisis in 2010 and that the UK came out of that global financial crash in better shape than many other countries. But here in the UK the Conservatives blew it all away with their fiscally illiterate austerity policy, which hampered the country’s growth and damaged our public services.
Seven years later, wages are down and growth is down. We now have the lowest growth of all the G7 countries. Productivity is also down—it is embarrassingly poor compared with that of our competitor countries—and borrowing and debt are up. Yesterday, we saw the further downgrading of growth projections and of productivity, thanks to the disaster that Brexit is to our economy. In seven years, cuts have had to be made to virtually all our public services, and there are deeper cuts still to come. Over 80% of the burden of those cuts has fallen on women’s shoulders. What of the little titbits on welfare benefits, housing and other public services that the Chancellor dropped into yesterday’s Budget? They make big headlines, but small beer.
Given the pressure on time, I will address just a few of the Chancellor’s proposals. Housing policies need to be evidence-based. All policies should be evidence-based, but never are they less so than in the bit about housing in the Chancellor’s Red Book. It states:
“The government is determined to fix the dysfunctional housing market, and restore the dream of home ownership for a new generation.”
That is fine, but in my west London constituency many people just dream about having a home, let alone owning one. Young and even not-so-young people are unlikely to be able to leave their parents’ homes. Families are in poor-quality temporary accommodation that they can hardly afford, and they are always at risk of having to move—often for years on end. There is no hope for them. The Red Book correctly goes on to state that average house prices in London are 12 times the average worker’s salary, but then it says:
“The only sustainable way to make housing more affordable over the long term is to build more homes in the right places.”
There is not a jot evidence to show that building more homes in London would bring prices down in the current distorted housing market. Even if it did, shaving a few thousand off the asking price of a new home would not help my constituents earning less than £100,000 or who do not have a six-figure deposit from the bank of mum and dad.
The Chancellor expects to provide at least 25,000 new affordable homes through the affordable homes programme. Does he mean affordable homes, or does he mean homes for social rent? That is a drop in the ocean. Hounslow Council alone has 10,000 families registered as needing affordable homes, and most of them can afford only a social rented home. The last time that this country built more than 250,000 homes a year was in the 1970s, and 40% of them were council homes. We need to aspire again to building good-quality homes that are affordable to all, providing stable homes, a reduced benefit bill and help for productivity.
The Chancellor’s Red Book says that councils will need support to ensure homes get built as soon as possible. If he is serious, a monetary figure needs to be attached to that. He can start by making the lifting of the borrowing cap applicable to all authorities without them having to go through as-yet-unspecified hoops to be allowed to invest in new council housing and give them the ability to reinvest receipts from council house sales into building new council homes.
The £3.2 billion stamp duty giveaway will benefit 3,500 buyers by about £2,000—nice for them—but that is a cost to the taxpayer of £924,000. How many council homes would that money buy? It puts up prices for those struggling first time buyers; it mainly benefits those already on the housing ladder; and it will not help anyone earning less than £150,000 in west London.
In conclusion, the Budget only scratches the surface of the issues of those who are struggling as a result of the Government’s failed fiscal policies over the past seven years. It does nothing for those on low wages or insecure zero-hours contracts, nothing for those who need substantial growth in council house building and nothing for our councils and other local services or for those who work in them. The Chancellor brought little or nothing for the many and took nothing away from the few.
It is a pleasure to be called to speak in this important debate and to follow the hon. Member for Brentford and Isleworth (Ruth Cadbury). I want to focus my remarks on housing and the direct impacts on my constituency, but I will digress slightly on to how some other elements in the Budget will affect my constituency.
The hon. Member for Huddersfield (Mr Sheerman) said that Government Members were nimbys, but I often took the view during my time on Cornwall Council that we needed more houses in Cornwall, so I was pleased to hear the announcement of the target to deliver 300,000 houses for working people across this great country. Several factors have stopped our housing supply chain, and we need to meet those challenges to support the people who need houses. The supply of land and land banking have been particularly big issues not only for us in Cornwall but for people around the country, so I welcome the review that will be carried out in the spring by my right hon. Friend the Member for West Dorset (Sir Oliver Letwin). Whether with the carrot or the stick, or the brick and the bat, I hope that we can find some practical solutions to deliver homes on sites that have been approved in the past. Several developers have been hamstrung by planning conditions, but some are land banking, and it is about time that that issue came to the fore.
With local and neighbourhood plans allocating land for delivery, we have seen many large housing developers making applications in Cornwall. While small builders have been busy picking up conversions, extensions and single dwellings, they have not been able to upscale to deliver multiple-house sites. I therefore welcome the new home building fund and the small sites fund, and I hope that many of our hard-working builders and their subcontractors—plumbers, electricians and roofers—will also benefit. However, will the Government use some of that home building fund to support the community self-build projects referred to by my hon. Friend the Member for South Norfolk (Mr Bacon)? I welcome the measures to charge 100% council tax on empty properties instead of the current 50%, which will be good news for councils such as Cornwall, leading to revenue increases and unused homes being brought back into use.
One of the biggest wins for Cornwall is the roll-over of the second homes stamp duty, which was set at 3% last year. Some £20 million was allocated to the south-west, and Cornwall benefited to the tune of £5.11 million, freeing up 1,000 affordable houses in Cornwall for local people. I look forward to seeing how that money will be spent and to working with the Cornwall Rural Housing Association, registered social landlords and Cornwall Council to see that transformational money delivering for people who are looking to get into the housing market in Cornwall.
I welcome the announcement of the abolition of stamp duty for first-time buyers, which will take thousands of pounds off the cost of purchasing a first home. That might not be such a big measure on its own, but in conjunction with the lifetime ISA and the rise in the personal allowance, the Government are putting together a package of measures to support people who are trying to do the right thing. The welcome increase in the personal allowance will put £850 of extra money into the hands of the people who need it most.
Moving on to the tech sector, as vice-chair of the parliamentary internet communications and technology forum, I welcome the news about the investment in 5G and electric car charging points. We have to be a world leader in getting the right regulatory framework for our start-up and tech companies. Furthermore, I welcome the tripling of the amount of computer science courses and the new national centre for computing, which is great news for our young people. Cornwall has become one of the fastest-growing tech sectors outside London over time, which is fantastic news for our industries.
I only have 47 seconds left, but I welcome the increase in duty on cheap, high-alcohol cider. We campaigned for that in the previous Budget and it will discourage consumption. I also welcome the concessions on universal credit. I am pleased that fuel duty has once again been frozen, that T-levels are being introduced and that 26 to 30-year-olds will be able to get a third off rail fares. We have seen changes to income tax and to national insurance exemptions for our armed forces, so that they can rent in the private sector. Importantly for my constituents, we are seeing investment in the fabulous Shared Lives service. All in all, I will be supporting this Budget, and I look forward to voting for it soon.
It is a pleasure to follow the hon. Member for North Cornwall (Scott Mann). I will be making just one argument today on the behalf of steelworkers in south Wales and across the country, because this is a live issue that needs ministerial action. The pension freedom laws are proving to be a money-spinner for the Government, with the OBR forecasting that the Government will raise over a billion pounds in taxes on withdrawals in this financial year. However, right now in South Wales, a pension problem is developing in the steel industry—one that we cannot ignore in the race to raise funds.
Around 130,000 members of the Tata retirement fund are facing a December deadline for one of the most important decisions of their lives. Their British Steel pension funds, usually worth between £300,000 and £500,000, could soon be transferring to the Pension Protection Fund or the British Steel pension scheme 2, but for members yet to claim their pension, there is a third option. Since April, the fund trustees have received requests for about 11,000 quotes for pension transfers, and 1,700 have actually transferred their benefits. I have constituents not sure what to do with their hard-earned pension pot, and some have complained about unclear guidance and poor administration.
There are concerns that some advisers, knowing that workers can now withdraw their pension pot, are suggesting transferring money to higher-risk or badly performing schemes, all the while raking in hefty administration fees. The situation has been described in the Financial Times as a “feeding frenzy” for unscrupulous advisers. It would be heartbreaking if, facing the pressure to make a decision, workers were pressed into life-altering decisions that destroy their futures—futures in which they wanted to enjoy the fruits of their labour or need help with the costs of care.
I have written to the Financial Conduct Authority, which has already sent supervisors to the region to see what can be done to protect these workers, but I am also asking the Government what they can do to avoid potential disaster for many. I want to ask the Minister some questions.
He’s not listening.
He isn’t, is he?
Have the Government assessed whether the independent financial adviser provision close to these steelworks has the capacity to deal with the demand? If it has not, can the Pensions Advisory Service help if there is a problem? Now that the FCA has visited Port Talbot, have the Government received evidence of financial sharks at the site, so that action can be taken? Given that these stories have broken so close to the deadline, do the Government think that the deadline is now appropriate and has any consideration been given to its possible delay? These pension law changes look set to provide a Treasury income stream for the years ahead, but there is a duty of care on us to make sure that this freedom of choice is backed up with guidance and support for these workers. Otherwise, I am afraid for the future of poorly advised steelworkers across the UK for the years ahead?
It was a pleasure to be in the Chamber to hear what I think was the first Back-Bench speech from my right hon. Friend the Member for Sevenoaks (Sir Michael Fallon), who is not in his place any more—and what a wise contribution it was!
I welcome the measures in the Chancellor’s Budget: big investment in the NHS; additional improvement to the universal credit programme; a stamp duty cut for first-time buyers; investment in our economy secured; and the Government delivering on their commitment to build a country fit for the future. I shall focus on what I want to achieve in rolling out these policies in North Devon and the wider south-west, and I will start—unashamedly—with the jobs and employment situation there.
If there is one measure of the success and strength of an economy that we ought to look at it is employment levels, and here are some figures from my constituency. In 2010, when the Conservative Government came to power, unemployment in North Devon was more than 1,015—that was the number of claimants—or 2.3% of the adult population. Today, it has more than halved to 505 claimants, or 1.1%. The figures for youth unemployment are even more impressive: in 2010, the figure was 290, or 4.2%; now there are 115 youth unemployment claimants, which is less than 1.8% of the population. That is a remarkable achievement. There is still more to do, but those figures show the underlying strength of the economy that Conservative Governments have presided over. I welcome the fact that this Budget continues that trend.
The first issue I want to briefly cover in the time available is the NHS. We heard the welcome announcement of £10 billion of capital investment to help NHS England implement its sustainability and transformation plans. I want to ensure that North Devon gets its fair share. Our STP review process found a clinical case for all acute services to be retained at North Devon District Hospital in Barnstaple. I welcome the £10 billion of capital investment and the £2.8 billion on top of that for general ongoing NHS funding, but we need to get our fair share in North Devon so that the clinical need identified can be properly resourced.
We have housing need in North Devon, as does nearly everywhere else, so the £45 billion package of investment is welcome. I was disappointed—if I may say so—to hear the shadow Chancellor gloss over the fact that a third of this money is brand new: £15 billion of brand-new investment in housing by this Conservative Government. It sounds like something to be glass-half-full about, not glass-half-empty.
Productivity is important. The Heart of the South West local enterprise partnership has its prospectus for productivity. It is currently out for consultation and highlights several projects to improve the regional economy. I attended a growth summit in Exeter about a month ago. There are a lot of ideas there and there is huge potential in our area. The south-west has vibrant cities, an amazing coastline, historic towns and villages, and stunning moorland, but it is about more than the environment: within that environment are people doing innovative business work and the small and medium-sized enterprises that are the driving force of the regional economy. I am delighted that the Chancellor’s Budget does so much to push that forward and support them. The LEP’s ambition is to double the size of the region’s economy to £70 billion by 2036, and it is seeking the right interventions and Government backing to achieve that. I will continue to push its case.
Finally, while we are talking about money and investment, it would of course be remiss of me not to mention one project that I am particularly passionate about: the north Devon link road linking the M5 with Barnstaple. We talk about the northern powerhouse, and in Devon the northern powerhouse is Barnstaple, but it is not easy to get there at the moment. Our brilliant local economy could thrive even more were there investment in the north Devon link road we need so much. I will continue to push that point while welcoming the Chancellor’s investment in public services and infrastructure.
In conclusion, I welcome the Budget, which rightly focuses on our national challenges, and I will continue to push the point to make sure that the money is similarly focused in North Devon.
This Budget will be remembered more for the OBR’s brutal demonstration of the failure of seven years of Tory-led austerity policies than for any of the policy announcements contained in it which were supposed to deal with the consequences of that austerity.
Having listened to Budgets since 2010, I find it remarkable that the date for the elimination of our public sector deficit, which we were told was essential for the country’s long-term prosperity, has been put back year after year. The latest OBR report demonstrates that the date has effectively been abandoned, which reflects official recognition of the consignment of the so-called long-term economic plan to a place where we all thought it was anyway—never-never land.
The report’s key finding is the damning demonstration of the decline in our growth and productivity. Growth was above 2% during the course of the Labour Government, and it is now much reduced—0.7%, if we are lucky. Productivity and economic growth are crucial to our future prosperity. They put money in people’s pockets and provide the tax payments to pay for our public services. It is not surprising that because of this Government’s failure to understand and generate economic growth over the last seven years, we are now really struggling.
This is not talking down, as the Chancellor says; it is a reflection of the experience that every MP finds in their surgeries. People come to our surgeries because they cannot get an operation in due time within their local health authority, or because they cannot get an appointment with their GP. Headteachers come to tell us of their funding problems, which are impairing the education of our children. A detective inspector came to me to say that his morale is so low that he is leaving the police: with reduced police numbers and rising crime he cannot face the fact that the police are not delivering the service he wants to provide. There is the housing shortage and the problems with the roll-out of universal credit. They are all consequences of the seven years of austerity with which we are being confronted almost daily in our surgeries.
We need a profound change in direction, which unfortunately was not evident in the Budget. That does not mean to say that I think everything in the Budget is bad. Indeed, a number of measures are to be applauded, but essentially they are too little, too late. They are not consistent; they are incoherent.
Skills are the sinews of our economy and society and generate improvements in productivity. Although the measures to improve maths teaching are welcome, the fact remains that the money taken out of the education service—money that is needed at all levels to ensure that we have a level of literacy and numeracy that enables students to make the most of the money put into maths teaching—is unfortunately not being replaced. Further education funding is peanuts compared with what has been taken out. For all the Government’s rhetoric on apprenticeships, companies are still telling me that they cannot recruit apprentices of the quality they need.
I do not have much time left but, briefly, not all the changes necessary to increase productivity involve a lot of money. We need a cultural change to oblige schools to work with industry to ensure that vocational training is much better recognised. The right hon. Member for Sevenoaks (Sir Michael Fallon) said that employee share ownership results in much higher productivity. Of course, we need change in our financial regulation to encourage long-term investment, rather than short-term investment.
I am pleased to follow the hon. Member for West Bromwich West (Mr Bailey). I welcome the many positive announcements in the Budget, which demonstrate that the Government are listening, are in touch and are acting to make people’s lives better. Some of the announcements will certainly put money in the pockets of people in Taunton Deane and improve their lives, particularly increasing the personal allowance, freezing fuel duty and, judging by the number of texts and calls I have received, extending the railcard to 26 to 30-year-olds. The extension will please a lot of people, not least my 25-year-old daughter, who was wondering how on earth she would ever be able to come home again to visit us in Taunton because rail tickets are so expensive—the railcard extension has gone down exceptionally well.
I welcome the Government’s commitment to housing. In Taunton and Wellington we are already making a major contribution to meeting national targets. Yes, there is often opposition, but there is a demand for housing. I often meet constituents who are pleased to have gotten on the housing ladder by using Help to Buy to buy their first home. The more we can help people, the better.
I am proud to say that Taunton has garden town status, which attracts funding to set up a framework to develop the kind of housing and places to live that I believe people want. It is a great opportunity to develop sustainable, energy-efficient, environmentally friendly properties with sustainable drainage in settlements that have connectivity and green spaces where nature can live among the people. If we design such places, they will inevitably be more accepted.
It is essential that we have the right infrastructure in such housing developments, and I will give an example. A planning application has just been agreed for 1,600 houses in Staplegrove, but the application is controversial because it needs a small piece of road to go through the development. The developers say they cannot afford to put in the road and the 25% affordable housing as that makes the scheme unviable, so now they are committed to just 15% affordable housing. Luckily, help is on the horizon, because the council has applied for housing infrastructure fund money, which would enable the funds to come forward for this road to be built. I make no bones about the fact that I am very supportive of that. If that money was granted, we could build the road and build the school in advance, and everyone would be happy. I believe firmly that the Government are listening on this, because in the Budget we have put another £2.7 billion into the HIF for exactly these sorts of examples. If we can get these right, people will not be averse to the building of these houses that we so need.
Also on the housing front, I welcome the announcement that the Homes and Communities Agency is going to metamorphose into Homes England, as this will be a catalyst for bringing the right kind of housing forward and putting in money to help underwrite borrowing for developers to put in infrastructure and to work with local authorities on delivery. Before I leave the theme of housing, I would like to put in a bid to the Minister, if he is listening, for rural housing. I have met so many groups that actually want some houses in their villages; they do not want to be preserved in aspic, because if villages are to survive we need people to live in them. I ask the Minister to listen on that. I met the Blackdown Hills AONB Partnership recently and it raised this issue. We really need to pay attention, as this could help with our house building targets.
On education, I just want to praise the £20 million for the T-levels and the emphasis on maths. My maths teaching was terrible and I only hope that young people in future will have a much better maths education. This Government are putting the tools in place for that, as well as the digital skills training and the distance learning. Of course we can do distance learning only if the digital broadband and everything else is working properly, so I make a big bid for that, too.
I cannot end without mentioning the environment. It was music to my hears to hear the Chancellor say
“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.”—[Official Report, 22 November 2017; Vol. 631, c. 1050.]
He has been listening, not only to “The Blue Planet” but to lots of colleagues in here who say that we cannot have an economy that works unless the environment is sustainable. So “Hear, hear” to that, to looking into a tax on single-use plastics and to the money for the clean air scheme.
Finally, on cider, may I make a plea to the Minister? I understand why we are going to put more duty on white cider, but please can we look at the position of traditional cider makers in my constituency, who may go out of business unless we can put a different definition in place for them? On that note, let me say cheers to this Budget and all the good things I think it is going to bring.
It is pleasure to follow the hon. Member for Taunton Deane (Rebecca Pow). I would like to take this opportunity to address the need for affordable housing, which is a key issue in my constituency and many others across the country. Although I welcome the intention to build more homes, I am afraid the Budget falls well short of the major new programme of house building that is needed in my constituency and many other parts of the country. In Reading and the suburb of Woodley, many young people wonder whether they will ever be able to afford a home of their own, and significant investment is urgently needed, and not only in council house building—Reading Borough Council’s plan to build 1,000 council houses was stopped by the current Government. We also need affordable homes to buy and a fair deal for renters, as 28% of the properties in Reading are privately rented—the same is true in many other English towns. The cost of housing continues to rise, not least in my constituency, where prices have at times risen faster even than those in London. For many people, this is mixed with wage stagnation. It is clear that this Government should be prioritising the construction of affordable housing as a result, yet last year they built the fewest affordable homes for 24 years.
Having dealt with the issue of housing, given the time available, I come on to discuss infrastructure. Investing in infrastructure should have been the main plank of the Budget, but the Chancellor missed a real opportunity to turn the economy round through investment. Residents in Reading and Woodley have seen the benefits of infrastructure investment, with the new Reading station and the coming of Crossrail having led to a booming of business and business investment in Reading town centre and other sites nearby.
However, the Chancellor should have announced a much bigger programme of investment in infrastructure, as the Confederation of British Industry and many unions called for. Missed opportunities to share growth through infrastructure spending include: the failure to support the full electrification of the railways; the lack of a vision for investing in the infrastructure of the north of England, which I know many colleagues are eager to mention; and the lack of investment in large energy schemes that would protect our environment for the future. As an MP from the Thames valley, I should also point out the need for medium-sized schemes such as a new bridge over the Thames at Reading, which would ease local transport congestion.
As well as failing to deal with housing and infrastructure, the Budget failed to address the crisis in our public services and the need to lift the pay cap for our many hard-working public servants. Many people in my constituency work in the public sector, for example in the health service—we have an outstanding local hospital—and teaching, including at the University of Reading. Many branches of the civil service are based locally, and we of course have the police and many other public servants. It is deeply disappointing that so many of our colleagues who work hard in the public sector will fail to get the help they need after seven years of falling incomes and deep cuts to vital and much-loved services. To make matters worse, the modest pay rises that some will be lucky enough to get may come at the expense of other workers’ jobs. That is a serious mistake that will have a terrible cost for many services.
For many families, real wages are lower than they were in 2010, and disposable incomes are falling. In that context, and bearing in mind the fact that economic growth is at its lowest since the Conservative party came to power, I wish to address the issue of universal credit. There is significant and deeply felt concern about it in my constituency, as it is due to roll out from 6 December, and delays in payment will affect residents in the run-up to Christmas in a truly Dickensian and awful way. Taking out a loan to be repaid to the Government might push residents into debt. These are deep problems for local people. Local food banks have also expressed concerns, as they have to many other MPs. The costs continue to rise, so I again urge the Government to reconsider and to pause and fix universal credit.
The failures on housing and infrastructure and to continue to support our public services, along with the continued misery of universal credit, should all have been addressed in the Budget, but sadly they were missed. The Budget has been a significant wasted opportunity. It is yet another failure from a Government who are clinging on by their fingertips.
It is a pleasure to follow the hon. Member for Reading East (Matt Rodda). On behalf of my constituents in Bexhill and Battle, I warmly welcome the Budget. I particularly welcome the additional investment in the NHS. In my part of East Sussex, being able to rely on the NHS is hugely important to my constituents, so a further £2.8 billion is very welcome indeed.
I also welcome the injection of £1.5 billion into the universal credit system. The jobs factory that has been created in the economy since 2010 has been without doubt the Government’s greatest achievement. We now have fewer people looking for jobs, and although some 1.4 million are looking for jobs, we have 780,000 vacancies. Universal credit is a brilliant way for us to tailor the package to meet the needs of those who are still unemployed and get them into the jobs system, so I warmly welcome that money, too.
I certainly recognise the challenges the Government have faced since 2010. It is welcome news that the deficit is now down to pre-crisis levels. In 2010, the deficit was at its highest level since the second world war. Nevertheless, I am concerned that the size of the debt has increased as we have had to turn this ship around. Although we are fortunate that, because of low interest rates, debt repayments have not increased despite the debt going up, I am conscious that the debt will have to roll, perhaps at higher rates in future, and, indeed, that £500 billion of it is index-linked. I am grateful that the Chancellor continues to keep an eye on ensuring that the structural deficit is fixed, because ultimately it will come down to whether or not we leave the next generation with a very large interest bill. If that bill is already greater than the education budget, it needs to be tackled before it gets ever greater.
What I really want to focus on is housing. The opportunity to own a home of their own is one of the greatest gifts that this Government can give to our young people. It is also a great investment for our public services. The reality is that when young people have the opportunity to own their own home, they will tend to earn more so that they can pay off their mortgages. As they earn more, they pay more taxes, which goes into public services and improves those as well. I am particularly encouraged by the Government’s commitment to deliver an extra 300,000 homes. I certainly support some of those being built in my constituency. I am very aware that, back in the ’80s and ’90s, one in three 16 to 24-year-olds were able to afford their own home. That figure is now one in 10. The figure for those aged between 24 to 35 was 59%; it is now down to 13%. Clearly, there is an absolute need to do more.
I also want to see my own local district council able to do more. Wealden District Council, which serves my constituency, is unable to build more homes because the habitats directive says that that would add nitrogen to Ashdown forest, a very special part of our world. If that directive stops us building more homes, which I do not believe is what the EU directive intended, local people will not be able to get a foot on the ladder. I would like us to work across parties to fix that problem.
It is all well and good for someone with the amount of grey hair that I have to talk about what this Budget can do. After all, I am in my mid-40s, but perhaps I can provide better context if I read an email from my constituent. My constituent says:
“The stamp duty break will give us £2,500. The Help to Buy ISA, which gives a 25% bonus on closure, has given us an extra £3,000. So, in total, your Government has given us over £5,000, which we would not have had, to allow us to buy our first home. Personal tax allowance movement from April 2018 gives us an extra £200 a year in our pockets as well. We have also both undertaken an apprenticeship under the Conservative Government. It is not right for the Opposition to say that there is nothing to aspire towards for young people. There is everything and more in this country to help young people to achieve. Talking everything down as the Opposition do is not going to help or inspire.”
That is the sort of constituent on whom I am particularly focused. I want to ensure that they have a home of their own and that they have the opportunity to earn more, which means that they will put more into the public services that my ageing population need. The Opposition need to take that into account and to be more optimistic. I am optimistic, and I absolutely support what this Government are doing for the economy. I look forward to supporting this Budget in the Division Lobby next week.
Thank you, Madam Deputy Speaker, for calling me to speak in today’s Budget debate.
This week, the communities of Bradford, my home city, were left bruised and battered by this country’s eighth austerity Budget in just seven years. They saw more cuts to vital local services, no help for our chronically underfunded blue light emergency services, and little or no investment in transport in the north. One critical area that this Government have chosen to all but ignore once again is our vital education sector.
Long gone are the days of an ambitious Sure Start programme under a Labour Government. We recognised that early years intervention boosts life chances, but cuts have now left prevention and early years services in tatters. Councils today, struggling to stay afloat, are being forced by this Conservative Government to cut vital services for our children and young people—vital prevention services that create healthier, stronger, more prosperous communities.
In my constituency, families are struggling to make ends meet, and they face worse education outcomes for their children through this Government’s lack of support and investment in vital services. It surely cannot be right that a child, simply because of their place of birth, is destined to have poorer educational outcomes. A postcode should not dictate life’s opportunities.
In Bradford, my local council is facing the desperate task of deciding how to cut £13 million from its prevention and early help services by 2020. Total spend in my home city will plummet by more than one third. The consequences of such cuts in funding will be appalling. The council is consulting on reducing the opening hours of three children’s centres that serve Bradford South to the equivalent of just one day a week.
The Government’s record in our schools is no better. Despite the Education Secretary’s general election-inspired U-turn on funding, school budgets still face a £1.5 billion real-terms funding shortfall, according to the IFS. In Bradford, 178 out of 186 schools continue to face budget cuts. I struggle to identify even one out of Bradford South’s 35 schools that gains from the Governments so-called fairer funding formula; that is clearly not fair. City-wide, more than £23.5 million will be lost from school budgets by 2020. This equates to £276 a year for each and every child, or the equivalent of 488 vital teachers losing their jobs.
I had the privilege last Friday of presenting two members of staff at Hollingwood Primary School with the prestigious Marjorie Boxall quality mark award from the Nurture Group Network. I was really impressed with the work done in the school’s nurture group, which provides children with the skills and resilience that they need to make the most of their learning at school. However, as budgets continue to be squeezed, it will be increasingly difficult for headteachers to afford learning opportunities that fall outside the core business of their school. Many of these types of projects add great value to school life and make a real difference to the life chances of vulnerable children, but this Government seem to favour short-term cashable savings over making a long-term investment in our children’s future.
Without a sea change in funding, a whole generation of children and young people in Bradford South will be denied the most basic right—the right to pursue their ambitions, to strive to fulfil their potential and to get on in life through educational betterment. This Budget threatens all this, as our education system is run down by grinding austerity. I urge the Chancellor to change direction for the sake of a whole generation of children and young people in my home city of Bradford.
I congratulate the Chancellor on a good Budget, elements of which may encourage more housing development. I wait with interest to see how the Government’s detailed plans will affect housing on the Isle of Wight. Although I welcome much of the Budget, I want to take this opportunity to explain why I feel that housing policy has not helped the Island and why I look forward, perhaps in hope, to this Budget encouraging a better system.
My constituency of the Isle of Wight needs intelligent, sustainable and sensitive regeneration to drive economic and social development, much of which is supported in this Budget so I thank the Chancellor. However, the system of developer-led housing is flawed. It fails to deliver the right type of housing, specifically housing for young people and people of working age on the Island, and it also fails to deliver for older Islanders. It eats into greenfield sites, damages our tourism economy and quality of life, and forces communities to accept divisive and unpopular developments. In many ways, our system is the definition of unsustainability.
I hope that the Budget will encourage the right sort of housing to be built. Too much housing being built is financially out of reach of Islanders, particularly young Islanders. Housing associations tell me that we urgently need one-bed housing, starter housing and social housing; I would add key worker housing to that list. We also need housing for older Islanders—extra care accommodation that allows people to move out of housing and, therefore, to free it up. But those are not the houses that the developer-led system wants to build. And that, combined with Island economics, means that we have to build a lot of housing that we do not want in order to get a little bit of housing that we do want. That system is not right.
As a result, young people are forced off the Island. Even so-called affordable housing is, in reality, unaffordable. I am delighted that the Conservative Isle of Wight Council is trying to ensure a change to the system, and I congratulate Councillors Dave Stewart, Chris Quirk, Barry Abraham, Stuart Hutchinson, Tig Outlaw and others for trying to improve a highly flawed system. The Island needs a different form of social regeneration—one that invests in people, not just land. The overdevelopment we face causes many problems. It is worsening our quality of life and eating into greenfield sites. We do not have the infrastructure to afford it, and we are unlikely to get that significant infrastructure because we are an Island. We have about 600 metres maximum of dual carriageway and, frankly, we are unlikely to get more. So I am waiting to find out the details of how this extra money can help us.
I am very uncomfortable with the Government’s target of over 6,000 homes in a decade. I do not believe that is sustainable, and I cannot think of any way in which I will support anything like that number, because so many of those homes will not be built for Islanders. The only target I am looking at is something possibly around half that figure, but it would be focused on the people who need those homes. I want these homes to be largely built by housing associations. Why can we not have schemes whereby housing associations can buy back property from older sellers to repurpose it? A housing association could buy back a bungalow, repurpose it, put on a first floor and create two homes, developing the homes the Government want, without eating into new land.
As part of our commitment to the future, I will seek to work with partners to develop a sustainable model of development. I hope very much that the Government will work with me on this so that we can get sustainable models of development that meet the needs of the Island as well as the needs of Government.
The only difference between this Chancellor and the previous one is that of style, not substance. Where George Osborne could best be described as a tin of gloss, superficially painting over the cracks in our broken economy, the current Chancellor is the tin of matt, hoping to hide the worst lumps and bumps with repeated applications of more of the same. Either way, they are both the same shade of Tory austerity blue, with their repeated failure to recognise that the best way to grow the economy and improve productivity is to invest, to support workers, and to listen to those on the frontline and give them a pay rise. Instead, as fat cat—sorry, executive—pay continues to soar, and the bonus culture never seems to extend to frontline workers, the measures to support working people and vulnerable people in the Budget are yet again meagre, lacklustre and dismal.
Let us start with those starting out in the world of work and take it from there. Let us look at the minimum wage rises proposed in this Budget: 15p per hour for 16 to 17-year-olds, 20p per hour for apprentices, 30p per hour for 18 to 25-year-olds and 33p for the over-25s. That maintains and widens the inequality gap for young people doing the same job as those who are 26 or over.
On public sector pay, pages 68 to 69 of the Red Book can only be described as a pathetic, poor response, especially in the light of raised expectations on public sector pay—warm words and no action, except stalling for time. Let us look at some of the facts on pay review bodies, which is where the Government are now going to park the issue of public sector pay. The Government are batting this issue into the next financial year, with reviews not pledges. There is no actual funding on the table; there is just a reference to writing to ask the pay review bodies to start the process. That is so vague as to be almost meaningless.
Some 55% of public sector workers are not covered by pay review bodies. There is no pay review body for civil service workers below the senior grades—for the avoidance of doubt, these are the very workers who collect the taxes and who try to make the benefits system and the asylum and immigration system work. They are the frontline workers the Government have a duty of care for as an employer. And that is before we even get to the emergency services, the NHS and local government.
All is far from well, though, in the private sector. The statistics may show that pay has overtaken that in the public sector—as a result of the prolonged pay cap this Government cruelly pretended to be about to lift, but instead chose to drag out to ensure a miserable Christmas for the “just about managing”—but precarious work underpins the rise in employment statistics. The Government proposed a timid report, which has now been firmly kicked into the long grass with the announcement of a further review of that review. I do love the part in the Budget report that says that the Government will publish a discussion paper and
“recognises that this is an important and complex issue, and…will work with stakeholders to ensure that any potential changes are considered carefully”—
a “Yes Minister” line if ever I saw one.
It is appropriate on this big American holiday of Thanksgiving to quote the famous song from the classic Bing Crosby film “A Connecticut Yankee in King Arthur’s Court”, which describes the Government’s approach to tackling workplace issues and in-work poverty:
“We’re busy doin’ nothin’
Workin’ the whole day through
Tryin’ to find lots of things not to do
We’re busy goin’ nowhere”.
On their journey through the world of work, many people find that their job disappears through no fault of their own, or that they have to claim benefits due to life-threatening illness or chronic conditions. Welcome to Alice in Wonderland time, as they disappear down the rabbit hole into the topsy-turvy world of a benefits system that bears no relation to the po-faced announcements about how well it is working or the good intent behind the slashing of budgets. I wonder whether every Conservative Member trotting out the Government’s line about universal credit would survive if they had to go through the process tomorrow. I am willing to bet that full service roll-out has not yet happened in their constituencies.
I note that there is to be a slowdown of a couple of months in the roll-out, but not a pause. Glasgow will be the last area in the universal credit roll-out—not least, I suspect, because some in the Department for Work and Pensions know what an unholy mess of misery the policy is.
When someone gets to the end of their working life, what happens if they are a woman born in the 1950s? I received a letter from a constituent last week that was sadly typical. Born at the end of 1954, she was a single woman who had worked her entire life in low-paid, insecure work with no occupational pension or savings. She was facing the prospect of navigating the benefits system for the first time in her life. It is a disgrace that there was nothing about the WASPI women—the Women Against State Pension Inequality Campaign—in the Budget, and I hope that the Government will sort that out and sort it quickly.
It is a pleasure to follow the hon. Member for Glasgow South West (Chris Stephens). I had the dubious pleasure a short while ago of listening to the shadow Chancellor and one of his erstwhile colleagues, Alastair Campbell.
I congratulate the Chancellor on his Budget, but we need to set in context the challenge of building 300,000 housing units a year. It has not been done since 1970, so for 47 years we have not got anywhere near the number of units that we are talking about supplying.
There has been a steady decline in the number of housing units completed over the years, but it reached its trough back in the dark days of the Labour Administration, when it went down to only 107,000 units in a single year. Before Labour Members get up and say, “What about the crash?”, I add that virtually no council houses were built during the whole period of the Labour Administration, and the number of social housing units built by housing associations dropped remarkably. Never did Labour get anywhere near the number of housing finishes that we need to keep our population safe. We need urgent action from the private sector, which at a push can probably contribute 170,000 units a year, but we also need housing associations and local authorities to step up to the mark and build new properties.
In London, as the Chancellor said yesterday, there are 270,000 planning permissions that have not been built. That is a scandal, and work on that has to be ramped up. I remind the shadow Chancellor that he bitterly opposed the Bill that I introduced on behalf of the then Mayor of London to get Transport for London land used to build houses. We also have to remember that the current Mayor of London is sitting on a record settlement of £3.5 billion for affordable housing, yet not a single scheme has been started under his mayoralty.
As I said yesterday, we need to get housing associations to build. It is no good just encouraging them to borrow, because last year alone they had a cash surplus, generated in-year, of £5.5 billion. They could build 48,000 homes with that surplus, and if the £42 billion that they have in reserves were spent over 10 years, it would mean 36,500 units every year—more than they have built in any year since housing associations were introduced. We need them to step up to the mark and play their part.
I believe that we can have a virtuous circle by ensuring that the tenants who go into those housing association properties can buy them at a discount at the end of 10 years, and the money raised from the sale can be reinvested in building new ones. Equally, if the housing associations do not use the balance of the public money that has been provided to them, it should be returned to the Treasury.
I warmly welcome the measures in the Budget to combat rough sleeping, which is a scandal. I am delighted that the Homelessness Reduction Act 2017, which I piloted through Parliament, will be in force from 1 April 2018. I hope that there will be no backsliding from the commitment to enforce the requirements on local authorities to help homeless people. The Housing First pilots represent a dramatic move forward. Housing First has worked in Finland, but we have to remember that Finland has far fewer people sleeping rough and far fewer homeless people, so it is sensible to pilot it in areas of our country first. I welcome the proposals.
The all-important factor, which I warmly welcome above all else, is the help for private sector tenants to get a deposit and the support for help to rent projects. That money, which was not mentioned in the Chancellor’s speech but is in the Red Book, will help 20,000 families a year to get together the deposit for a home of their own. That has got to be good news. Together with the £44 billion being spent on housing as a package, we have a series of measures that can kick-start the much-needed development of housing, but we need a grand plan and a grand strategy.
This Budget offered the majority of my constituents very little hope, and hope is what is missing in our society. I am not talking it down; the grim truth is that our economy has flatlined. The cut in stamp duty is of no use to my constituents on low wages who cannot afford a mortgage, and the OBR says that without an increase in supply, the stamp duty cut will drive prices up. The public sector pay cap is alive and well for our firefighters, police, teachers and local government workers, and there is a deafening silence about the 14% drop in wages that nurses have suffered since 2010. All healthcare workers—porters, healthcare support workers and housekeepers—do a vital job, and they have all suffered under the pay cap.
What about social care? There was another deafening silence about that yesterday. Although I welcome the news that people will no longer have to wait a whole week before being allowed to claim universal credit—I think that they were meant to starve for that week—the extra money that the Government boast about putting into universal credit will not replace what has already been taken out. In Lincoln, the use of food banks has increased since universal credit was partly rolled out, and the measures in this Budget do little to reassure me that my constituents will not suffer further from the full roll-out next March.
If I look across the House, I see that some Conservative Members cannot even look at us because they know that what we are saying is true. Indeed, 25% of children in Lincoln live in poverty, and this Budget has done nothing for them. This Government boast about having a low-tax economy, and the Paradise papers a couple of weeks ago put that statement in a very clear light. If we had a fair taxation system, we would not be talking about properly resourcing public services.
Will the hon. Lady give way?
No, I will not; I am going to make some progress.
This Budget has done nothing to challenge or address the unfairness in our society, and people will feel poorer for longer. It is most definitely not a Budget for the many, and those who benefit are, without doubt, the very few. As a newcomer to the Opposition, I think that Government Members ought to hang their heads in shame, and they ought to wake up and realise what is really going on in this country. I can promise them that things are very different in Lincoln from how they are in Taunton.
It is a pleasure to follow the hon. Member for Lincoln (Ms Lee). The Office for Budget Responsibility, which has been referred to from time to time, is an extremely important institution that has come to be accepted by the whole House. In this case, it has provided growth figures that were perhaps not quite what we wanted but that are realistic, and the Chancellor has quite rightly used those independently evaluated figures. That shows how important it is to stick to independent advice and not make figures up when we are dealing with things as important as the future economy of the country.
Over all this hangs the prospect of our exit from the European Union. It is essential that the talks move on to the next stage in the coming weeks, to give assurance to businesses right across the country, including those in my constituency that admitted their great concern to me last week. At the same time, we need to be, as the Chancellor has said, fit for the future. I welcome the increase in UK export finance, which my right hon. Friend the Member for Sevenoaks (Sir Michael Fallon) mentioned in an excellent speech earlier. It is vital that we concentrate not only on exports but on outward investment, which my right hon. Friend the Secretary of State for International Trade has made a key point of his policy. Our current account deficit, at more than 5%, is one of the largest in the developed world, and if we are to bring it down, as we must, increasing outward investment will be as critical as growing our exports.
I urge the Chancellor to look at the introduction of a UK investment bank. We will no longer be a member of the European Investment Bank, and we need something to take its place. This is an opportunity to establish a world-class UK development finance institution. Such an institution does not exist at the moment, unlike in countries such as France and Germany. I very much support what my right hon. Friend the Member for Sevenoaks said about small and medium-sized businesses. They are the engine of our economy and drive the creation of wealth and employment, and employee ownership is absolutely critical to that.
I now turn to some of the measures that the Chancellor mentioned. I very much welcome the changes to universal credit, particularly those relating to housing. The ability for people to transfer their direct payments to their landlord when they move on to universal credit is absolutely critical, as indeed is the extra two weeks’ provision from next April. However, I want to mention a couple of things that need to be looked at. One is the question of having fortnightly payments, at least for a period. For people on low incomes coming off weekly payments, it is extremely difficult, even if they receive an advance, to move to monthly payments. I believe that having fortnightly payments, at least for a period, should be considered in the near future. We should also look at having an emergency fund. Such a fund used to exist, but one does not now exist in most parts of the country.
The Budget introduced some excellent measures on housing, and I particularly welcome the stress on small house builders. In Stafford, there have been some great developments by small house builders, who employ local people—local craftsmen and women. I encourage the Government to look at two other areas. The first is innovation in finance, particularly for community schemes, and backing for smaller building societies and housing finance organisations, such as the Stafford Railway Building Society in my constituency, which is one of the best in the country. The second is innovation in design, such as self-build, which my hon. Friend the Member for South Norfolk (Mr Bacon) has championed so eloquently for many years. This also covers home offices and enabling people to have their elderly relatives stay with them. It is important to make it easier to obtain planning permission for expanding a home, so that people can work from home and have relatives needing care come to live with them.
Finally, I want to mention international development, in which I have a special interest. I believe that it is extremely important that we expand the flexibility of international development. It must be for the reduction of poverty, and we must not return to tied aid. We can do so much more if the Foreign Office, the Ministry of Defence, the Department for International Trade and the Department for International Development work together to ensure the reduction of poverty globally.
It is a great pleasure to follow the hon. Member for Stafford (Jeremy Lefroy). I want to agree with the Secretary of State for Communities and Local Government on one thing. In his great peroration, he said how proud he was to have been born British. I, too, am very proud to have been born British. In fact, I am doubly blessed, of course, because I was born Welsh as well as British.
Yes, from north Wales—even better. [Laughter.] In all seriousness, one of the reasons why I feel so proud to have been born in this country is that I know the quality of our public servants across this country—the people who teach in our schools, the people who work in our hospitals, our firefighters and our police—who go above and beyond to serve us every day and right through the night. We often speak in statistics in this place, which is fair enough, but that is why we are right to feel aggrieved that there has been no real movement on the public sector pay gap. This is now as much a matter of morality as it is one of economics, and I regret the fact that the Government have not taken this more seriously.
Yesterday, I heard the very sad news of the passing of Mrs Anne Davies. She was a schoolteacher in Ponciau junior school in my constituency; indeed, she was one of my teachers. She served the communities of Ponciau and Rhosllannerchrugog with great distinction. She was a school teacher between the late 1940s and the 1980s, and I reckon she must have taught about 1,200 children. Think of the effect that one of the best teachers in Wales and one of the strongest people in those communities had on so many children. That is why the current public sector pay freeze does a grave disservice to people across the length and breadth of our country.
I agree with the Welsh Cabinet Secretary for Finance, Mark Drakeford, when he points out that the Welsh governmental budget will still be 5% lower in real terms in 2019-20 than it was in 2010-11. I feel concerned that, as the Chancellor said yesterday, we are only beginning negotiations on the north Wales growth deal. Those negotiations have been beginning for a long time, and it is time we had some action. Wrexham County Borough Council, which is run not by Labour but by a coalition of Conservatives and independents, makes that point on its website. It has already saved around £18 million in the past three years, and it thinks that it will have to find another £13 million over the next two years. It states:
“We have less and less money to spend every year”.
Yet as we hear about these great concerns, we recognise that we are now giving away £3 billion to pay for the Government’s failure in the Brexit negotiations—they never put that on the Brexit bus did they! UK national debt is now of staggering proportions. According to figures from the Office for National Statistics, debt that was £358.6 billion in May 1998 now stands at £1,726.9 billion—a staggering sum. In a phrase worthy of Jim Hacker, yesterday the Chancellor said that our productivity performance “continues to disappoint”. Had Sir Humphrey been sitting behind him, he would have said, “A brave comment, Chancellor.”
The Deputy Governor of the Bank of England, Ben Broadbent, stated:
“Productivity growth has slowed in just about every advanced economy, but it has been more severe in this country than in others.”
The Daily Telegraph, that most Tory of Tory papers, commented that “productivity growth has crashed”. The journalist Tim Wallace spoke of how the 1860s was the last decade of negative real income growth. He wrote:
“That the move to electricity did spark a resurgence in growth would provide reassurance if only we knew that the next technological revolution was sure to bring the same benefits in the 21st century”.
That is the view from planet Tory, which shows how the Government are failing. Finally, the Government really need to sort out land banking for the sake of Heol Berwyn in Cefn Mawr and other communities.
We all know, at least on this side of the House, that there are no easy answers, as do our constituents, and that the recovery from the financial crash, and from 30 years of Labour spending like there was no tomorrow when in government, was never going to be easy. However, there is no need to be quite as downbeat as many Labour Members have been today. We have the lowest unemployment since the 1970s and rising wages for the lowest paid. We have taken the lowest paid out of tax altogether, and, as of next year, debt as a share of GDP will start falling. There is plenty of good news to welcome.
I welcome the Chancellor’s Budget. It is comprehensive, balanced, good for business—especially small businesses—and for the lowest paid. It addresses concerns about universal credit, and it address costs of living such as housing, fuel and the price of beer—that is particularly welcome in my constituency because Faversham is the home of Britain’s oldest brewery, Shepherd Neame.
I particularly welcome the theme of laying the economic foundations for the future. For people in their 30s as their careers develop, for people in their 20s as they set out into the world of work, for teenagers dreaming of what life will hold, and for children like mine who are smaller still and of whom only a very few will fulfil their current life plan of being a ballerina or a footballer, the Government are investing in the economy of the future: the skills for the future, the businesses and jobs for the future, the infrastructure for the future and the technologies for the future. The Government are investing in innovative businesses, in research and development, in 5G and fast broadband, in taking Tech City UK-wide—I just need to get an outpost in Kent—and in the teaching of computer science and maths at school. All that will build the economy of the future.
The Chancellor also recognises that people in their 20s and 30s want not only jobs but homes. On housing, a raft of policies have been set out to fulfil the ambition to build 300,000 new homes a year. The abolition of stamp duty for first-time buyers will be welcomed by first-time buyers in my constituency, who are forecast to save about £2,500.
The volume of housing is a more challenging commitment for my area, which has already seen huge housing growth. For my constituents to support this ambition, a commitment to more infrastructure funding is vital. We need encouragement for more strategic planning to enable new settlements rather than urban sprawl, and to get to the bottom of the problem of the gap between planning permissions being granted and houses being built, which will be addressed in the coming review.
As well as looking ahead, the Chancellor has listened to people’s worries about the here and now, in particular on the NHS. There is extra money for the NHS this winter and over the next two years—part of the Government’s £8 billion commitment to increase funding over this Parliament—and an extra £3.5 billion of capital. In Kent, we will be bidding for our share of that for: health centres, such as the one we need in Maidstone; a contribution to a new hospital in east Kent; and a new medical school for Kent and Medway, for which a bid is going in today.
Critically, I welcome the additional funding for pay for nurses, midwives and paramedics, which is much needed. The unhappiness among nurses is not entirely about pay, but pay is increasingly becoming a factor. Too many nurses have told me that they simply do not feel valued. I say to any nurses and other healthcare professionals listening or watching today, “You are valued—you and all the other people whose jobs are to care for people.” As a society, I fear that in past years we have not valued caring and the caring professions enough. I want to make sure we end that and care for the people who care.
I am nearing the end of what I have to say, or at least my time at any rate. As I said at the start, there are no easy answers. The key to getting what we want—good jobs and excellent public services—while enabling people to keep the lion’s share of what they earn is Britain’s productivity. That is why we have to look forwards, not backwards to the 1970s. We have to invest in the economy of the future, which is why I strongly welcome the Budget for its commitment to laying the foundations for the future.
It is a pleasure to follow the hon. Member for Faversham and Mid Kent (Helen Whately). I hope the right hon. Member for Sevenoaks (Sir Michael Fallon) uses his new-found freedom on the Back Benches to join me and many other Members in calling for the Red Arrows order to be brought forward to secure jobs at BAE.
The short-sightedness of the Government’s continued addiction to austerity is astounding, and the Government clearly have little understanding of cause and effect, but I hope with this speech that I can convince the Chancellor to make a proactive decision that will save NHS England money. On 18 October, I led a Westminster hall debate on transvaginal mesh. Transvaginal mesh has been used to treat stress incontinence on the NHS for 20 years and it is the most commonly used mesh implant. More than 120,000 UK women have had this in the past 10 years. Prolapse mesh has been used on the NHS since 2002, and is placed either vaginally or through the stomach. The draft National Institute for Health and Care Excellence report, expected for publication in December 2017, announces that vaginally placed prolapse mesh must only be used in a research context. We know this is surgeons’ code for “do not use”. Mesh was ruthlessly marketed as a quick inexpensive fix. However, a recent report shows evidence that about 10% of women have suffered complications after surgery.
This week, representatives of the all-party parliamentary group on surgical mesh implants met campaigners from Sling the Mesh. During the meeting, Kath Sansom illustrated the cost of mesh failure to the NHS. Mesh-injured women face the long-term costs of pain medication and removals, but no one has yet realised the extent of the increased health costs because of our fragmented NHS. Mesh-injured women are an unplanned extra cost to an NHS budget that is already overstretched: for example, Hull and East Yorkshire Hospitals NHS Trust in my constituency has a deficit of £11.5 million.
Many mesh-injured women suffer chronic pain and urinary infections; many have leg pain, ranging from moderate to severe. Some are in wheelchairs, or are using sticks to help them to walk. Risks are serious, they are forever, and they are devastating. Many of these women claim benefits. Some work reduced hours and claim working family tax credit, while others receive personal independence payments or other disability benefits.
During the APPG meeting, Kath mentioned four women in connection with the costs to the NHS. I have just enough time to mention two. Joanne is an NHS administrator. She costs the NHS £180 a month, and in 11 years she has cost it £55,000. Jemima went from being super-fit to using sticks to walk, and is in daily agonising pain. Mesh has sliced her insides so badly that she knows that, at some point, her bowel will have to be removed. She is delaying that by using a special kit to pump herself out every day. It costs £900 a year, plus prescription medication costs of £135 a month.
In her response to my Westminster Hall debate, the Under-Secretary of State for Health, the hon. Member for Thurrock (Jackie Doyle-Price), dismissed my call for a public inquiry and a retrospective audit. She said:
“I think it is more important that we get the treatment that is needed, but I encourage everybody to report their cases through the yellow card scheme.”—[Official Report, 18 October 2017; Vol. 629, c. 317WH.]
Most women are not aware of the yellow card scheme, and have no idea how to use it.
We need a retrospective audit on mesh so that the NHS can gather the necessary evidence of the scale of the injuries suffered by those who have had mesh fitted. The refusal to fund and commission such an audit is incredibly short-sighted. More women are having this operation every day, and the level of risk is unknown. We could be adding astronomical costs to our NHS daily as a result of future mesh failure. However, the costs of mesh failure are not just to the NHS; they are to all our public services.
How can Hull City Council provide the support that is needed both by mesh-injured women and other disabled adults when it has lost 32% of its funding since 2010? Those cuts are having an impact on its ability to deliver local services, including adult social care. East Riding of Yorkshire Council faces an increase in adult social care costs of more than £21 million, without the increased budget to pay for it. Some mesh-injured women need supported housing because of their disabilities. Many of them are suffering from both depression and anxiety, which adds more pressure and demand to our already overstretched mental health services. Our councils cannot continue to foot the bill for the Government’s failure to take the action that is needed. The councils need budgets that will enable them to provide those services for everyone.
One way in which the Government could save money for our NHS and our councils would be to fund a retrospective audit for all mesh-injured women. That would save the costs of treating and caring for them in the future.
If I were starting to write the Budget and I had a blank sheet of paper, the first questions that I would want to ask myself would be “What does the country need?”, and then “What does the business community need?” and “What do our hard-pressed families need?”
Clearly, we must do nothing that would harm the business community. They are the wealth creators: they create the wealth that is used to provide our public services. As for hard-pressed families, we have done a considerable amount of work. We have frozen fuel duty, which is extremely welcome, as will be the increased living wage—especially in low-wage areas such as mine—and the increased tax-free allowances.
Let me now deal with one or two other issues that have been to the fore. I think that all our policies, but particularly our housing and planning policies, are in danger of focusing too much on what is good for London, the south-east and perhaps some of our bigger cities elsewhere. Housing issues are very different in, for instance, Cleethorpes, Scunthorpe and Hull. In my constituency in north-east Lincolnshire, the average cost of a three-bedroom semi-detached property is about £140,000. That seems an absolute bargain down here in the south-east, of course, but although I support the changes to stamp duty they mean a minimal saving for people buying an average property in my constituency.
The planning process does need streamlining. It is too slow. We all know, however, that if we trample over the wishes of local communities, it can be politically dangerous ground. We must not in any circumstances undermine the local democratic process that rubber-stamps those decisions.
I welcome the enhancements to the northern powerhouse and the various city deals that have been announced, but, as I have said on a number of occasions, the UK is about more than the big cities. We need also to ensure that something is done for our smaller provincial towns. My region has no big city; we do not have the trickle-down that some of the provincial towns neighbouring Manchester, Sheffield, Leeds and so on do. We need a process that enables us to regenerate and further develop the local economy and to permit the physical regeneration of our towns and villages.
I know that Ministers have taken seriously the proposals from the Greater Grimsby project board, which has made suggestions for a town deal. My understanding is that further negotiations are taking place. The advantage of the town deal proposed for the Grimsby-Cleethorpes area is that it could provide a template for how we go about regenerating and improving the economies of many of our small towns.
Connectivity and transport, of course, are equally important if we are to boost local economies. It is a pity that the Minister for Transport Legislation and Maritime has just left his place on the Front Bench, because if I mentioned to him the A15, M11 and A180, I would not need to elaborate; I have bent his and other Transport Ministers’ ears about that question on more than one occasion, including those of my hon. Friend who is now the Economic Secretary to the Treasury. I need not go into detail. If we are to revitalise our local provincial towns, particularly those in coastal communities, we desperately need to improve our connectivity. That means rail and road, basically.
To return to housing in the few seconds I have left, earlier today I had a meeting with the Humber Landlords Association, which emphasised how important it was that the public and private sectors work together in partnership if we are to solve our housing issues. I am very much in favour of developing social housing, whether it is council-built or funded or provided through housing associations, but let us not forget that the private sector can help to solve this problem.
It is a pleasure to follow the hon. Member for Cleethorpes (Martin Vickers).
The Chancellor set low expectations ahead of this Budget, and he certainly lived up to them. What was most interesting and telling about yesterday’s statement was not any particular measure but what the Chancellor and the independent Office for Budget Responsibility said about the state of our economy. Real wages are lower today than they were when the Tories came to power seven years ago, with disposable income set to fall further. Once we led Europe on economic growth; we are now lagging behind and it is the lowest it has been since the Tories came to office, and has been revised down in every year of the Treasury’s forecast. Productivity has also been revised down every year, as has our business investment next year and in every following year in the forecast.
Even on the Tories’ central test, the whole driver behind the seven years of austerity—the need to deal with the deficit—they have failed on their own terms. They promised to eradicate the deficit by 2015, then by 2016, then 2017, then 2020. Now they cannot even tell us when it is set to be eliminated. Seven years of pain, with absolutely no gain for the public who are paying the price through cuts to our public services. In our constituencies and in our casework, we are seeing the consequences of the Tories’ bad economic management.
Headteachers are grappling with the consequences, and they tell me that they are cutting back on the curriculum, increasing class sizes and increasingly struggling to support their pupils, particularly those with special educational needs. In the national health service, my constituents are waiting longer to get an appointment with their GP and waiting longer to have their operations. And just the other week, a teaching assistant came to see me because two primary schoolchildren in the two schools where she works had thought about taking their own lives. She said that when she referred them to the local child and adolescent mental health services, she was told that they could not see the children because they were full up. These are primary schoolchildren in desperate need of attention, but the resources and the capacity to help them are simply not there.
On policing, we see the extraordinary spectacle of London Tories—led by the Foreign Secretary, the former Mayor of London—crying crocodile tears about police station closures even though they know that the policing cuts that we are facing in London are the direct consequence of the disproportionate cuts that we are being clobbered with by central Government. Since 2010, £600 million has been lost from the Metropolitan police budget, with a further £400 million set to go by 2020-21. As those of us who are still in local government know, the Tories are remarkable anti-cuts campaigners locally, but when it comes to standing up for local government and local services in this place, we do not hear a peep out of Tory Members. Voters should remember that when they go to the polls in the London elections next year.
What was also extraordinary about this Budget was what it said about Brexit. The referendum campaign is over. We do not have to deal with hypotheticals; we are now grappling with the reality. Does it not say everything that there was more money in this Budget to deal with the cost of Brexit than to deal with meeting the needs of our public services? Thank goodness the Chancellor survived yesterday and is still in his post, because we know that the people lining up to replace him—using those “long economicky words” in Cabinet—are the same people who brought us the bus that promised £350 million a week for the NHS. Thank goodness we have Spreadsheet Phil still in place at the Treasury, because the alternatives are far worse.
I say to those on the Treasury Bench today that they have a critical job to do before Christmas if they are to give businesses the certainty that they need about what will happen on exit day in 2019 when we leave the European Union. Jobs are already being lost, and decisions about where to locate jobs and economic activity will be taken in the first quarter of next year, but the Government can currently give those businesses no certainty whatever, even about a deal on transition, let alone about a long-term deal. Members on both sides of the House have a responsibility to ensure that the minority of headbangers in this minority Government do not steer this country on a course that will make us poorer, less well-off and less prepared to weather the economic storms that lie ahead. That responsibility rests on the shoulders of the Chancellor, but it also rests on the shoulders of every Member of this House. The course that we are on at the moment will drive a coach and horses through the future prosperity of this country, and we should not let that happen.
I am delighted to have this opportunity to speak in the Budget debate. I am quietly satisfied to have been found guilty by no less a personage than the Chancellor of bending his ear. I have no hesitation in saying that my Scottish Conservative colleagues and I have indeed been bending his ear, and we will continue to bend the ears of any and all colleagues in the best interests of Scotland and the people of Scotland. Further, I have no hesitation in saying that we on these Benches have achieved more for Scotland in the five months since we entered this House than Scottish National party Members have achieved in the past two and a half years, if not longer.
I wanted to hear a responsible and measured Budget that will continue to tackle the deficit and the debt while making properly considered investment decisions that will create the right conditions to produce prosperity in our country. The cost of servicing the national debt is now an extraordinary burden on the public finances, and it is surely immoral to pile up such a debt and leave it to our children and grandchildren to pay it down later. I hope that all seven—it is soon to be eight—of our grandchildren will be glad of this Conservative Government’s fiscal responsibility and the part that their grandfather played in sustaining it. Without fiscal responsibility, we cannot afford defence, health, education or any other of our immensely valuable public services on which the Government spend taxpayers’ money.
I congratulate the Chancellor on his forward-looking positivity. He described a future full of change and challenges, yes, but also opportunity. His Budget speech presented a picture of a Government who are getting on with the business of governing and bringing about the change that our country needs as we embrace the future, including the fourth industrial revolution, with all the opportunities coming in its wake, and of course Brexit. I welcome the much needed investment in R and D and the necessary investment to prepare for our departure from the European Union and to make plans for all possible outcomes, including the possibility that few of us would prefer: no deal.
The Budget clearly shows the value of Scottish Conservative Members to this House. Scotland was at the heart of the Budget, and Scotland is at the heart of the Union. We have a Budget before us that is good for Scotland, and we engaged positively with the Budget process to secure our city deals and tax changes, to bring about a resurgence of activity in the oil and gas sector in the North Sea and to allow Police Scotland and the Scottish fire and rescue service to receive VAT refunds. That all goes to show what can be achieved when Scotland’s place at the heart of the Union is embraced rather than scorned.
I am pleased by and welcome the universal credit reforms, and I was grateful for the news on fuel duty and spirits duty. As an aside, I was also grateful to hear my right hon. Friend the Prime Minister give my hon. Friend the Member for Angus (Kirstene Hair) a clear indication yesterday that the next phase of the broadband roll-out of local full-fibre networks and 5G in Scotland will be delivered in partnership with local authorities instead of the Scottish Government, who have gone about the first roll-out phase extremely slowly.
As we begin the implementation of the Stirling region deal, 2018 will be a seminal year for Stirling. We have a transformative vision for Stirling, including the creation of a national aquaculture innovation centre to build on that growth industry, and by enhancing the UK’s position as the world capital of fashion by creating a UK tartan centre to leverage this great iconic product across the world. We will see improvements in rural and urban infrastructure to enhance economic conditions and economic prospects right across Stirling.
How does the hon. Gentleman feel about his neighbouring city of Dundee no longer being able to be a European city of culture because this Government are dragging us out of the European Union?
The Government are not dragging us out; the people of this country voted in the referendum on the UK’s membership of the EU.
There are many questions that could be asked of the SNP Government. For example, will the Scottish Government lift their broadband tax? In England, new broadband infrastructure will attract tax relief, so we are waiting for the Scottish Government to act. Will the SNP Government match the Chancellor’s commitment to remove stamp duty for first-time buyers by removing said buyers from having to pay the discredited land and buildings transaction tax? We will wait and see. Will the SNP Government continue to make Scotland the highest taxed part of the United Kingdom? Will they press on with their plans to increase personal taxes for everyone in Scotland earning over £24,000 a year, which is the average income in Scotland? It is a disgrace. It is hardly progressive politics. The SNP want to foment grievance, and the people of Scotland are seeing through that. We need a Conservative Government in Holyrood with Ruth Davidson as First Minister. That is the only way that we will be able to realise the full benefits of Scotland’s place at the heart of the United Kingdom. I am proud to be present in the Chamber for my first Budget debate as Stirling’s Member of Parliament, and I welcome this Budget.
It is a pleasure to follow the hon. Member for Stirling (Stephen Kerr). He described Scotland as being at the heart of the Budget, so if one travels as far away as possible from the heart of the Budget, the destination would be the far south-west. Why was the far south-west so ignored in this Budget?
I am disappointed that the Budget did not help us with our key asks. Members may have seen that people were able to play Budget bingo on my Facebook page with Plymouth’s nine key asks. I was hoping to announce a winner for a line, or even for every single ask. On behalf of Plymouth, I was asking for help with social care and the NHS; for support for our armed forces; for a reversal of the cuts to HMS Albion and HMS Bulwark; and for £30 million for our vital upgrade in Plymouth. But I am afraid that there were no winners in the Plymouth Budget bingo this time round. The Government ignore the far south-west at their peril. Ministers have taken our region for granted for far too long. It is now a region full of marginal seats, and if Ministers want to keep drawing their ministerial salaries, they would be wise to listen to both Labour and Conservative MPs for the far south-west, who were so ignored in the preparations for the Budget.
There is widespread awareness in Plymouth that we get a raw deal from the Government. There were plenty of mentions in the Budget of the north, the midlands and Scotland, but very little about the far south-west, despite our having a very clear case for investment: the lowest per-head education spend in the country—£415 per head less than in London; just one third of the public health spending in London—£668 less per head; one third of the transport spending in London; an NHS in crisis and a hospital in a near-constant state of black alert; and a social care system in crisis. This is not because of the hard work of our public servants, who are working their socks off, but because of a lack of funding. The Government could have addressed that in the Budget but chose not to do so.
On transport, our case for investment was compelling, but there was no extra money for our precarious south-west rail link, despite the cross-party campaign. Labour has promised £2.5 billion for our investment fund to upgrade the far south-west train line. The Peninsula Rail Task Force, backed by Conservative councils and MPs, is supported by a Labour Opposition but not a Conservative Government. We asked for £30 million for track straightening so that we could improve our journey times between Plymouth, the far south-west and London. It was to be the start of the process of reducing journey times to London from Plymouth by an hour. There is £55.7 billion for HS2, but the Government could not even deliver the £600,000 we need to complete the study into the work or the £30 million it requires to complete the work next year.
People across the far south-west are asking what they have to do to be listened to by the Government. That is really important. Our transport network in the south-west is a totem for our region. The Minister might be aware that in the last couple of days CrossCountry trains has ended its service from the “heart” of the Budget, in Scotland, down to Exeter in the far south-west, because its trains cannot go through Dawlish when there are storms—they short-circuit, block the track and cut our region off. That is simply unacceptable. No other part of the country would accept this poor deal on transport, and neither should the far south-west.
Plymouth needs better road, rail and air connections. We need Government assistance to help us fund that fast and resilient train line and to back the campaign that I and the Conservative-run Plymouth City Council have announced to extend the M5 from Exeter to Plymouth. On air transport, the Government must be ready to support us in reopening Plymouth city airport.
On defence, there is a key ask as well. I know that Ministers were being lobbied by both Labour and Conservative MPs to stop the cuts to HMS Albion, HMS Bulwark and the Royal Marines. It is unthinkable in the 21st century, with Russia rising as a threat, that we should get rid of our amphibious assault capabilities and the ability to deliver humanitarian assistance.
My hon. Friend is speaking with characteristic passion and clarity, but is not the lesson of the defence cuts over the last seven years that once we have lost a capability it takes a huge amount of time, energy and investment to get it back, and this is a capability we cannot afford to lose?
I absolutely share that concern, and I know that Government Members do as well.
Many Tory Members were pinning their hopes on extra money in the Budget and on the Chancellor correcting the mistakes he made in his former role as Defence Secretary, but that money has not come. The current Defence Secretary is in Plymouth today learning about the Royal Navy. I wish him well in his endeavour and I hope that after his familiarisation with the Royal Navy and the Royal Marines he will not be supporting cuts to amphibious forces.
By next year’s Budget, I ask those on the Treasury Bench please to initiate the following campaigns and proposals: to fund our train line properly; to respect our armed forces and the threats they face by not cutting our amphibious capabilities; to address the school funding shortages in the far south-west, which have seen subjects lost, teaching assistants sacked and people with special educational needs suffer the most; to address our crisis in the NHS and fund social care properly—considering how big an issue social care was in Plymouth and across the country at the general election, its absence from the Budget is telling; to cut tuition fees; to raise the minimum wage; and, importantly, to give hope to the 8,000 WASPI women in Plymouth who are looking for support from this Government.
The Budget did not name-check the south-west; neither did it name-check south-west MPs and their successful campaigns—we need those name-checks. The far south-west needs to be taken seriously by the Government, and I encourage them to listen to the campaigns raised by Labour MPs and Conservative MPs to fund us properly. The message from the Budget is clear, and Plymouth deserves better.
I welcome the Budget, particularly on R and D, the enterprise investment scheme and small and medium-sized enterprises, which I hope to be able to address next week.
Today I will concentrate on housing. I am encouraged by the ambition we showed yesterday, and now we need to focus on delivery. It is a sad fact that the average age at which people now enter the housing market is 37, and half of people in their 30s do not expect to own a house like their parents have, so there is work to do.
Some 217,000 houses were built out this year, compared with the woeful 75,000 built out during the last year of the Labour Government, but arguably this is not about more council houses, more of this and more of that; it is about the industry, about housing authorities and about all of us working to deliver what people want, which is homes. No matter a person’s tenure, they want a roof. The important thing is that we get the right homes for people, that we get the right quality of homes and that we get homes where we need them. I am pleased to see that we are looking for density, particularly on urban sites, because that makes a great deal of difference in ensuring that people in cities are near their place of work.
I am also pleased to see that the Homes and Communities Agency will become Homes England, and the £44 billion of capital funding, loans and guarantees is most welcome. The acknowledgement of the importance of small builders is also welcome because they have largely disappeared from the construction industry. Their need to be able to access finance has been acknowledged with a further £1.5 billion for the home building fund and £630 million for the housing infrastructure fund.
We want homes to have quality and to be well designed. We would also like homes to have electric charging points, which the Chancellor spoke about. We want to use R and D and innovation in building. There is no reason why we should not be using robotic bricklaying machines and modular builds, where accessible and appropriate, to ensure that we get on with delivering these houses in a smart way so that we put roofs over people’s heads.
More houses should not mean lower quality. The all-party parliamentary group on excellence in the built environment is considering the possibility of a new homes ombudsman, because 98% of all houses that currently come to market have some sort of snagging issue. I hope to talk to Ministers about that as the idea develops.
There is also £170 million coming into the skills agenda through the industrial strategy, which is most welcome, with another £34 million going into innovation and training. It would be great to see construction colleges at every large construction site, with large house builders basing a training centre at the centre of each large site that could later be redeveloped and used as a community centre.
We need all sorts of approaches to development if we are to build this number of houses. Construction is now a high-tech industry, and it should not be thought of as the preserve of boys at the back of the class who perhaps cannot add up. I would like to see a higher degree of attention on delivering quality training in this area.
We need road and rail infrastructure to connect new housing developments. Overspill from the west-east Oxford-Cambridge corridor will undoubtedly come upon us in Bury St Edmunds. Houses are very expensive in my constituency, and they are often out of reach of people in an area where average wages sit below the national average. I would like us to concentrate on having a planning system that looks across the piece. The current two-tier system is not helpful. Bringing empty homes into use is something we are concentrating on in St Edmundsbury, but the problem is often about discovering ownership, rather than applying the council tax. I do feel, however, that applying the council tax levy will certainly add a bit of weight to encourage people to consider whether their house should be empty or not.
Given that we have little time left, let me end by thanking the Exchequer Secretary, my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) for listening to me and my young constituent from the Suffolk Accident Rescue Service, and examining the accident rescue charities grant scheme. We were most grateful for being able to retrieve—
Order. I call Alison Thewliss.
I am delighted to be able to speak in this Budget debate on the issues of public services and housing, both of which are intertwined in defining quality of life. They are key aspects of what should have been a Budget for people and prosperity. Unfortunately, this chaotic Tory Government just limp on in crisis and have failed to deliver on either.
One way to inject further funds into public services in Scotland would be to pay Police Scotland and the Scottish Fire and Rescue Service in full the £140 million they are due in backdated VAT. I welcome, of course, the announcement that the Chancellor made yesterday, but if the logic of the argument is true today and yesterday, it must have been true in 2015, when we submitted it as an amendment to that Finance Bill, and it must have been true when the Scottish Government made numerous and lengthy representations to the UK Government on this matter prior to, during, after and since the implementation of the single services. I have read those representations, and it is absolutely clear that discretion has always rested with those who make the rules: the UK Treasury. We see that in the announcement yesterday. The Government could have saved not only money, but a good deal of civil service time and effort if they had conceded this point six years ago. The Tories and Labour in Scotland have supported the establishment of Police Scotland and the Scottish Fire and Rescue Service in their manifestos. Support for the principle of single services is not a matter in dispute.
In October, Chancellor stated:
“We discussed this with the Scottish Government before they made the decision to unify the police, we warned them that under EU law they would not be able to recover VAT if they made this move, the Scottish Government told us that they had calculated that the savings they would make would be sufficiently great that even with the loss of the VAT recovery ability it was still a sensible thing to do—that’s their decision, a decision which they made, and we are now constrained by the VAT rules that are in place.”
Was the Chancellor misleading the public when he stated that to drop the VAT would break EU law?
Moreover, Murdo Fraser MSP, who was clamped gloriously today by Nicola Sturgeon, stated that
“because both Police Scotland and the Scottish Fire and Rescue Service are not part funded through local taxation, there is no justification for a VAT refund.”—[Scottish Parliament Official Report, 31 October 2017; c. 77.]
It seems entirely unclear as to why the Scottish Conservatives believed that there was no justification to scrap the VAT then, even a few weeks ago, yet now advocate it and actively celebrate it.
I also noticed, buried away on page 39 of the Budget Red Book—it is getting shorter, because the Government used to hide things on page 88 back in 2015—that there is a change relating to VAT for combined authorities and fire services in England and Wales. This is very interesting. At the top of page 39, under the heading “combined authorities” it states:
“Through Finance Bill 2017-18, legislation will be amended to ensure UK Combined Authorities and certain fire services in England and Wales will be eligible for VAT refunds.”
How curious! Could it be that the Chancellor realised that he could not possibly make these changes for English bodies without accepting the logic for changes in Scotland? If so, claims of influence from the baker’s dozen on the Benches across from me have less substance than a cream puff. This UK Government, having accepted the logic as they did for Highways England, the Police Service of Northern Ireland and academy schools, must now make good their mistake and backdate the VAT.
There is a gaping hole in this Budget where there ought to be a commitment from the Chancellor to scrapping the public sector pay cap. Public services workers have, for years, been asked to deliver more for less, all the while seeing the cost of living increase. The Scottish Government are the only Government on these islands committed to scrapping the cap. I had hoped that, given the demonstrations, the pressure, the commitment and the U-turns, the Chancellor would have been bold and put a figure on this, rather than giving us what was in his mealy-mouthed speech yesterday.
Is my hon. Friend as concerned as I am that the UK Government’s approach to public sector pay is such that those in male-dominated workplaces will get a pay rise but those in female-dominated workplaces will not?
As on so many related issues, my hon. Friend is absolutely correct. The UK Government should commit, as the Scottish Government have, to paying the real living wage—not the pretendy living wage, not the living wage that does not apply to those under 25, not the in-built age discrimination that they continue to perpetuate, but the real living wage as defined by the Living Wage Foundation.
We cannot hide from the fact that workers need a pay increase, because prices are up in a range of areas. The price of basics like bread and butter have increased—bread by 5% and butter by 12%—since the Brexit vote. This is just another example of the Government forcing people to spread too thinly—literally—to get by. The London School of Economics estimated this week that the average household has lost £7.74 per week because of the higher prices in shopping baskets. Ask anyone at the supermarket and they will tell you the same, and it feels like an awful lot more to many people.
I note from the Red Book that that the full basic state pension will rise by only £3.65 per week and the full new state pension by only £4.80 per week. That hardly seems enough to meet the increase in the cost of living caused by the Government’s chaotic Brexit obsession. Contrast that with the £82.2 million in sovereign grant funding going to two pensioners and their hingers-oan who live along the road from this building, and it is clear that unfairness is rife in this country. The impact of a no-deal Brexit and the lack of single-market membership will only make things worse.
We cannot deliver the public services on which we all rely without well-paid and well-motivated public sector workers. We must end the pay cap and deliver pay certainty for public sector workers right across the board, not just for those in the NHS, because as hard as they work, there are many others who work just as hard.
We must see appropriate consequentials. I mentioned the money the Chancellor trumpeted for the NHS—some £300 million. If the Government were being fair, Scotland should have had £30 million, but we are getting only £8 million. That is jiggery-pokery of the highest order. We have also lost £600 million for our trains in the Tories’ great train robbery. I ask for that to be put right as soon as possible.
Yesterday’s Budget was supposed to be “the housing Budget.” It was a crucial opportunity for the Chancellor to fix the country’s housing crisis. I listened carefully to the Chancellor’s speech, and it contained not a single mention of social homes for rent. That is the area where the biggest pressures are. A combination of factors has meant that the social housing stock has fallen dramatically and very little new social housing has been built. The figures are stark: 32,000 new social homes were built in 2011, but just 5,000 were built in 2016.
In the past few years, local authorities have been encouraged to transfer all their housing stock into local housing associations, to wipe historic debt off the housing revenue account. The Chancellor announced that he will lift the borrowing cap for local authorities in high-demand areas, but that is not enough. It does not address the problem in areas where housing stock has been transferred and, if anything, it should be applicable to all local authorities. There is no need to restrict councils at all. All that does is to make it more complicated for councils and potentially delay the delivery. Why does it apply only from 2019—why not straight away?
The housing stock of my local authority, Bath and North East Somerset Council, is now held by a housing association. It needs traditional subsidies to build new social homes for rent. Let me give an example: Foxhill is a big housing estate in my constituency that is in need of regeneration, but it has to be completely self-financed and the housing association has to operate like a private house builder. Some 75% of the new homes built will be sold privately, and the overall number of social homes to rent on site will not change. The housing association has not been able to access any funding to build new social homes—and not for lack of trying or lack of will. The devil is in the detail. Will the Minister clarify exactly what has changed and how housing associations will now be able to access funding to build new social homes for rent?
On affordable housing, houses built and sold by the private sector are no longer affordable for an increasingly large number of people. The problem of affordability is not going away without a big change in housing policy. The Chancellor has talked about the problem of land-banking. This is hardly a new problem, and the announcement of a review is very small fry. The Government have had years to conduct a review and act on it. I can tell the Chancellor without a review that the problem most likely lies with the big house builders with deep pockets who can afford to sit on valuable land for years and build on it only drip by drip, to maximise profit. One solution would be for Government to parcel up public land into smaller pieces and to give small and medium-sized house builders a chance to purchase the land to build on immediately—and they will build on it immediately.
Government could go even further and sell their land at a discount with the guarantee that the homes will be affordable or for social rent and will be built immediately. My measure is about building more social homes for rent, because that is where the problems are the deepest and most urgent—I am talking about people on universal credit who can no longer rent privately; people who become homeless; and people whose mental health suffers because of the difficulty of finding somewhere they can call home.
I see many desperate people on a weekly basis at my surgery. We cannot turn a blind eye to their tragedies. This whole matter goes to the heart of whether we believe in a shrinking state or a caring state that helps the just about managing. The private sector has not solved this problem, and will not do so in the future. We have had years of an ideology of replacing public ownership with private home ownership. The two can go together, but there must be a place for social housing. Let us get building social housing again.
Yesterday, I had desperately hoped to hear about a breakthrough in funding for local government, which is currently on its knees; to hear that we would end the homeless crisis in our cities and towns next year—not in 10 years—and to hear that we would start a national house building programme to stop the scandal of thousands of children living in over-priced and poor-quality emergency accommodation. Unsurprisingly, I was bitterly disappointed. Instead, we heard that councils could borrow an extra £1 billion for home building, even though £20 billion would be available if the cap was scrapped; that we would remove stamp duty for people who can afford houses—nice if someone has the money to start with, but no help if people are just about managing to get food on the table—that the Government would build new garden towns, a policy that has been announced three times already, and people are still waiting for their homes to be built; that we would see estate regeneration, but no requirement to give tenants a say on how their estates are redeveloped; and that we would halve rough sleeping by 2020, but with no idea of how, apart from setting up three measly pilot schemes.
I always think that pilot schemes are the path of a Government who have no conviction. In 1945, did Attlee say, “Oh, I have a good idea about health care. I’ll do a pilot scheme over the next 10 years, and if it works we’ll roll it out across the country.” Did he heck? He had the courage of his convictions. Rather than waiting 10 years to do something, why cannot we have a national homes first programme? The reason why we will not get it is that this Government have no convictions.
Although I do not begrudge Liverpool, Manchester or Birmingham projects of homes first, why can we not also put such a project in place in Westminster—the authority with the highest homeless population in the country? People only a few hundred yards from this Chamber will be freezing on the streets tonight. They will also be freezing on the streets of my constituency in Brighton and Hove, the area with the second highest homeless population. What are we to say to them, “Don’t worry, if you’re still alive in 2027 and the pilot scheme is successful you might get help—if you’re not already dead that is.”
Let me give some facts about what inequality looks like in this country. The average life expectancy of a man living on the streets is 47, and for a woman it is just 43. Homeless people are four times more likely to die of unnatural causes and 35 times more likely to commit suicide. In the autumn of 2016, there were 4,134 people sleeping rough in England, which is 50% up on 2014 and more than double the number in 2010. These are the people whom this Government have forgotten. There is barely a week that goes by when I do not read in the paper about another needless death on our beach, on our promenade or in our parks.
What about the thousands of damp, unsafe homes that are making children ill, or the bed and breakfasts, where families are squeezed into one room with only a shared toilet down the corridor? What about setting up a national scheme for decent council-run emergency accommodation? Of course that will not happen, because this is a Government with no ideas and no ambition. Well, excuse me if I do not give this Budget the fanfare that the Chancellor would like—quite frankly, it is a pathetic response from a heartless Government.
Brighton Housing Trust published an impact report this month on women and homelessness. It says:
“Many homeless women seek protection from men but…some of these relationships lead to further violence.”
The trust gives the example of Lauren, who spent three months with a male friend, but in the end she was violently assaulted and raped. She said that before she could get help she
“had to get to the point where I was black and blue and in hospital with broken ribs”.
Local authorities need funding to solve this problem. They do not need another taskforce that this Government have set up, or a renamed and rebranded Homes and Communities Agency that will do little to solve the problem.
I regard every homeless person that finds a bench, a vacant building, a sofa or a park in my constituency as one of my constituents. I say to them, “Don’t give up!” I cannot defend this Budget, but let it be known that there are people working in this place—on these Benches—who will turn back the clock of austerity and who will provide for them and for our communities.
We have all been waiting with anticipation for the sight of the red briefcase and for the Budget contained therein. It is a time when we can all be forgiven for being slightly parochial and looking at how our constituents will fare, as well as looking at the big issues that affect us all.
I welcome the Chancellor’s statement of the additional allocation of £650 million to Northern Ireland over a three-year period. That—on top of the £1.4 billion that we were able to secure in the confidence and supply deal—means that we are delivering not only for Unionists, but for nationalists and everyone across the whole of Northern Ireland. Everyone in Northern Ireland is gaining from that deal. I am pleased to see some of that money going to Departments and worthy projects such as the Ballynahinch bypass in my constituency, and I hope that we will see that project soon.
I am also pleased about the increase in nurses’ wages. The Chancellor said yesterday:
“Our nation’s nurses provide invaluable support to us all in our time of greatest need and deserve our deepest gratitude”—[Official Report, 22 November 2017; Vol. 631, c. 1054.]
The Government are delivering for nurses. The Democratic Unionist party is quite happy to be a part of that, and we have used our influence to try to make that happen. As you know, Mr Speaker, I have been in hospital three times in the past six months, so I understand just how much nurses do for us all. I should just say that the surgical gown is the most unattractive garment that any person could ever wear, and I have had to experience that three times in the past six months. Such experiences give us an idea of what nurses to do.
Fuel duty will remain the same. That will benefit my isolated rural constituents greatly, although—I have to be honest—not as greatly as a drop would. The freeze in air passenger duty will also benefit businesses and enhance our connectivity to the UK until we can scrap APD, which would greatly level the playing field for Northern Ireland businesses. I welcome the news that the high-strength ciders will see a rise in duty. However, I would have preferred to have seen a larger increase to address the issue head-on and to be more effective in tackling young people who are drinking just to get drunk.
I am pleased that steps are being taken to address the issue of digital economy royalties relating to UK sales that are paid to a low-tax jurisdiction. They will now be subject to income tax as part of the tax avoidance clampdown. This is expected to raise about £200 million a year. I think that that it a conservative estimate, as I expect the figure to be much higher. I welcome the Government’s commitment to abolishing the stamp duty on homes worth less than £300,000. That will certainly be of benefit to many of my constituents across Strangford and, indeed, to people across the whole of Northern Ireland.
We need a Northern Ireland Assembly that works. Hon. Members will understand that we do not have a functioning Assembly at this time, but we need accountable delivery. The obstruction lies, very clearly, with Sinn Féin. They are not delivering; they are not even sitting on these Benches. They are elected, but they do not come here. If we asked the nationalists and the Unionists in Northern Ireland want they want, they would say that they want effective health, effective education and effective roads. They do not want an Irish language Act.
In the remaining time, I would like to make a plea to the Minister and to the Department regarding the marriage tax allowance. Three quarters of breakdowns of families with children under five come from the separation of non-married parents. Children are 60% more likely to have contact with separated fathers if the parents were married. The prevalence of mental health issues among children of co-habiting parents is 75% higher than among those of married parents. Children from broken homes are nine times more likely to become young offenders.
I make this plea to the Minister because the key thing to recognise is that the marriage commitment is a key driver for stability, quite apart from wealth. In that context, it is entirely appropriate that our tax system now recognises marriage, but it is not right to tell a stay-at-home spouse looking after children that the unpaid work they do is not worthy of 90% of the personal allowance.
Let me quickly draw some comparisons. The income tax burden on a one-earner married couple with two children is 70% greater than the burden on a comparable French family, twice that on a family in the USA and 15 times that on a German family. The 10% marriage allowance is far too small. I ask the Minister to look at that.
The Government should introduce a fully transferable allowance and pay for it by reducing the scope of the allowance to married couples with young children. I believe that it can be done. I know that it is not something for this Budget, but I ask Ministers to consider it for a future one.
Recent ComRes polling suggested that support for increasing the marriage tax allowance is much greater, at 58%, than support for bringing in yet further increases in our personal allowances, at 21%. With that in mind, I ask the Government to consider that issue. Again, I welcome the Chancellor’s statement.
What we have seen over the past 24 hours is a great unravelling of the announcements made from the Dispatch Box yesterday. The £44 billion that was going to fund 300,000 extra houses was not £44 billion in extra spending. According to the OBR, it was £15 billion. The £1.2 billion promised to Wales—there was great fanfare from the Secretary of State for Wales—was not £1.2 billion: £1 billion of that was for capital projects, and 66% of it has to be repaid to London. The OBR said the £3 billion for stamp duty will see only an extra 3,500 new people buying houses for the first time—that is £900,000 per house. There is a great unravelling, and as my hon. Friend the Member for Huddersfield (Mr Sheerman) said, once the Sunday newspapers have crawled all over these statistics over the next two or three days, we will see further unravelling over the weekend.
I turn to Wales and the capital projects that could have gone ahead but are not going ahead. The Tories have already let us down on rail electrification from Cardiff to Swansea. They had a chance to redeem themselves by announcing the go-ahead for the tidal lagoon. The Chancellor spoke about new British technologies. We had a chance of leading the way in the whole world on tidal lagoons. Six are planned for the UK, and four of those would be in Wales. The Government patently made no announcement yesterday and let down the people of Wales.
There was an announcement yesterday on the north Wales growth fund—negotiations will begin. Well, can I inform Ministers that those negotiations started three years ago? On a cross-party basis, Tory MPs, Plaid Cymru MPs and Labour MPs in north Wales went to see the former Chancellor, George Osborne, last year. They have also been to see other Ministers. Yet, all we get is talks about talks about talks. What we want in north Wales is delivery on the north Wales growth fund. We have had the city growth programme in England and in Wales. What we want in north Wales is investment in our community.
The biggest let-down yesterday was that the Government had a chance to end the pay freeze that has frozen this country and this economy over the past seven years. That has had an effect on people from all walks of life. Some 20% of police officers have lost their jobs as a result of a lack of investment in public services. Teachers have lost £5,000 on average over the past 10 years because of the pay freeze.
Then we have the debacle of universal credit. Food banks in my constituency are running out of food because there is compassion fatigue and because there is so much austerity. We have had seven years of austerity, and all we got promised is another five years of austerity. The people do not want more misery; they want a growing economy, and all the indicators point the other way.
The Local Government Association said in its briefing yesterday that there was not one mention of replacement EU funds. Some £8.4 billion a year comes from Europe into the UK. Wales is the biggest beneficiary of EU funds, and the Brexiteers on the Government Benches—I presume there are one or two left here—made proud proclamations in Wales that it would not suffer as a result of Brexit. Wales has been given £3 billion every seven years, but after 2020 that money will not be there, and there will be no tail-off funding. There are no guarantees of funding for Welsh local authorities and universities to tap into.
The Government announced that £28 million would be made available for three pilot projects on rough sleeping, in Birmingham, Liverpool and Manchester, but there is no need for a pilot project. We know what works, because Labour did it in the late 1990s and early 2000s. It got rid of rough sleeping by putting people in proper accommodation and looking after their needs. As has been said today, rough sleeping has gone up by 100% in the past seven years. This is a missed opportunity.
Yesterday’s Budget did not deliver on the economy or on equality, and it did not deliver a vision. All it delivered was letting the Chancellor stay on his life support machine for an extra six months to a year.
The Chancellor said today in the media that the economy is fundamentally strong, but he said in the Budget statement yesterday that the economy is weakening and getting worse. That is the hard truth that confronts and challenges all of us.
This has been a serious debate, with 31 speakers, after a Budget that confirmed that these are serious times for the country. We have had growth downgraded to below 2% each year for the next five years, for the first time in recent history; productivity downgraded by 0.6% a year for the next four years, which the Office for Budget Responsibility rightly calls a “remarkable period of weakness”; business investment downgraded and subdued for the next four years; and earnings downgraded, with the Resolution Foundation showing that pay is now not set to recover to pre-global financial crisis levels until 2025—17 wasted years.
My hon. Friend the Member for West Bromwich West (Mr Bailey) was right: the big story yesterday was the OBR’s damning judgment on the economy and the Budget. My hon. Friend the Member for Ilford North (Wes Streeting), one of Labour’s strongest, clearest voices on the economy, said the same.
I wish to pick up on some of the points made today about the implications and impact of the Budget. A number of colleagues on both sides of the House spoke about the fact that the Government had raised expectations of lifting the public sector pay cap but then, after seven years of falling income for public servants, dashed those expectations. My hon. Friend the Member for Reading East (Matt Rodda) made that point, and my hon. Friend the Member for Lincoln (Ms Lee) spoke powerfully about the reality of work on the wards in Lincoln hospital. I enjoyed the comment of the hon. Member for Glasgow South West (Chris Stephens) about the Chancellor having a matt finish and a Budget that was more of the same. He also spoke about the need for a pay rise for public service workers, as did my hon. Friend the Member for Clwyd South (Susan Elan Jones), who said that the current situation does a grave disservice to public servants such as Mrs Davies who give their life to working for others. The hon. Members for Aberdeen North (Kirsty Blackman) and for Glasgow Central (Alison Thewliss), who are no longer in their places, made the same point.
The right hon. Member for Sevenoaks (Sir Michael Fallon) made a series of important points about the longer-term structural changes that are needed beyond the Budget to encourage savings, to spread the benefits of quantitative easing more widely and to reform business rates, which, as the hon. Member for Stafford (Jeremy Lefroy) said, too often still bear down too heavily on small and medium-sized firms.
My hon. Friend the Member for Blaenau Gwent (Nick Smith) talked about the problems that steelworkers in the British Steel pension fund face, with a lack of clear information or a clear guarantee for the future. I hope the Government will respond to that.
Good luck to the hon. Member for Taunton Deane (Rebecca Pow) in her bid to get traditional cider makers recognised by the Chancellor. Having been the Minister responsible for excise duties at one point, I am right behind her on that. Actually, cider duty was frozen for the first time when I was the Exchequer Secretary, and it made a big difference to cider makers in the south-west, as they will confirm.
A number of hon. Members—including my hon. Friend the Member for Huddersfield (Mr Sheerman), who is not in his place—made important points about how there was so little for the north of England, and how the greatest gaps are between the regions of this country. My hon. Friend the Member for Bradford South (Judith Cummins) spoke about the problems and pressures faced by Bradford Council. The hon. Member for Cleethorpes (Martin Vickers) quite rightly said that national housing and other policies are too often skewed towards the concerns of London. My hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) was right to ask why the far south-west was ignored in this Budget when it came to investment, the NHS and the armed forces.
The hon. Member for Stirling (Stephen Kerr) claimed that the Budget was good for Scotland, but in the end it will be the Scottish people who decide that. The hon. Member for Strangford (Jim Shannon) was quite right to argue that people in Northern Ireland need a functioning Northern Ireland Assembly to make the best of what he sees in the Budget, and to push for what is not in it. Finally, my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) made a powerful speech to back a powerful campaign against the use of mesh, and I really hope that the Government were listening carefully.
Much of the debate was about what is in the Budget and what is happening to the economy. The real question for us all, though, is: why? Why are Britain’s real wage growth, productivity levels and economic growth prospects so much worse than those of other major countries? The OBR is clear that by far the biggest contribution to the major downgrade of growth prospects is the huge reduction in productivity, equivalent to 3% of our national economic output over the next five years. My hon. Friend the Member for Huddersfield said that that is a long-run problem, and, to be fair, all Governments have grappled with it.
During the period that I spent in the Treasury, we tried to support the five drivers of productivity by encouraging enterprise, raising skills, improving competition, funding R&D, science and innovation, and boosting investment. The Government have been in power for seven years, and it is clear that many of the problems have got a great deal worse during that time.
It is also clear that George Osborne got it wrong. What he thought was clever politics trumped sound economics. He cut too far, he choked off the recovery and he undermined our economic foundations. On enterprise, he scrapped the regional development agencies, which supported competitiveness, business and skills in all parts of the country. On skills, he cut training and education budgets by 14% in real terms, according to the IFS; that was an unprecedented cut. On competition, he did nothing to deal with the industries—including house building, energy and water—that are dominated by a few big providers.
On funding for R&D and science, spending on R&D has simply flatlined; it has been well below the OECD average in the last seven years. Finally, on investment, the Government—they were supported by the Secretary of State for Communities and Local Government when he was in the Treasury—halved public sector investment as a percentage of GDP in the first years of the Parliament after 2010; it fell from 3.4% of GDP in 2009-10 to 1.7% in 2015. The hon. Member for Faversham and Mid Kent (Helen Whately) talked, in a rather gushing speech, about how the Government were investing for the future. But the Budget pushes up the level of public sector investment by only 0.1% over the whole Parliament.
We are seeing the legacy of the decisions made in 2010, with the country paying the price and the current Chancellor playing catch-up. What is needed is a deep and big change—a proper national living wage, rising to £10 an hour; a national investment bank that will back businesses right across the country; and a long-term investment plan, especially for housing.
Let me finish with some comments on housing. I pay tribute to my hon. Friends the Members for Brentford and Isleworth (Ruth Cadbury), for Brighton, Kemptown (Lloyd Russell-Moyle) and for Vale of Clwyd (Chris Ruane), and to the hon. Member for North Devon (Peter Heaton-Jones). I am sorry that I have not been able to deal with the other points on housing.
The serious problem underpinning everything in the Government’s strategy was made very clear by the hon. Member for Isle of Wight (Mr Seely). We have never built the homes this country needs because we have slashed Government capital investment in homes and outsourced responsibility for building the new homes we need to the big developers. That is the fundamental flaw in the Government’s strategy. It has been the fundamental flaw for seven years, and it is the fundamental flaw of this Budget.
If we are to build not just the number of new homes we need to fix this country’s housing crisis, but the range of new homes we need to deal with seven years of housing failure on all fronts, we must do more to bring public sector investment, effort and action alongside the private sector. The Budget confirmed that this is a Government without a plan to fix the housing crisis.
I thank all the 30 or so hon. Members who have contributed to today’s debate for their very thoughtful speeches. I will make sure that all their points, suggestions and concerns—including the specific ones mentioned by the hon. Member for Blaenau Gwent (Nick Smith), my hon. Friends the Members for Stafford (Jeremy Lefroy) and for North Cornwall (Scott Mann), and especially my right hon. Friend the Member for Sevenoaks (Sir Michael Fallon)—are raised with the relevant Departments. I gently say to the House that we have had many representations regretting what was not in the Budget, but I am not sure that we received so many in advance of it and before its details were set, even though my door was always open and I met colleagues from all parties.
I will focus my comments on housing. This is a Budget that builds a Britain fit for the future. It is one that aims to ensure that every generation prospers and can look forward to a better standard of living than the previous one. When he opened the debate, my right hon. Friend the Secretary of State for Communities and Local Government spoke very passionately about the importance of home ownership, and I simply could not agree with him more. Providing homes is key to building communities, and to giving families the stability and the security they deserve. Moreover, bringing home ownership back within the reach of first-time buyers is part of our broader intergenerational commitment to younger generations.
However, affordability is a problem. The average house price is now almost eight times the average person’s salary, compared with just 3.6 times two decades ago—in my own area, the ratio is over 14 times—and the number of 25 to 34-year-olds owning their own home has dropped from 59% to just 38% over the past 13 years.
The core of this problem is clearly a lack of supply. However, we have delivered 1.1 million new homes since 2010, including nearly 350,000 affordable homes, and the total housing supply reached 217,000 last year. It is worth noting that that was the first time in almost a decade that the 200,000 milestone had been reached. We of course need to go further, and to make sure that more homes are built. This Budget sets in train a comprehensive set of reforms to address the failure of, I must say, successive Governments to provide enough homes.
Does my hon. Friend agree that if it was as easy to go and buy a serviced plot of land on which to build a house as it is to go into a Ford dealership and buy a motor car, that would go a very considerable way towards solving the housing problem?
I simply say to my hon. Friend that I know he has worked very hard on this issue. I welcome his work, and he has made a very valuable contribution to the housing debate.
This Budget sets out an ambition to deliver 300,000 new homes every year, which is 40% more than the current output and 50% more than the target we were left by Labour.
I cited very stark figures showing that social homes are not being built: 32,000 were built in 2011, but only 5,000 were built in 2016. Will the Minister address that problem?
I point out to the hon. Lady that affordable home building has gone up by 27% in a year, and that is of course a key part of delivering a housing mix that will work for everybody. We need a series of effective planning reforms and substantial investment.
This Budget pledges more than £15 billion of financial support to boost housing supply over the next five years. It will open up new land, and get housing associations and councils building, including by lifting borrowing caps by £1 billion in high-demand areas. It will provide £400 million of funding for regeneration projects and to support SME developers. That brings the total amount of financial support available to at least £44 billion over this spending period. That support includes £40 million towards the development of the construction skills that we will need to deliver those homes.
The Budget also makes serious, sensible planning reforms to help towns and cities grow in the right way, while continuing to protect the green belt. We know that we cannot build new homes overnight, so it also introduces measures to support those who are looking to get on the property ladder now. The Budget has permanently removed the upfront cost of stamp duty land tax for all first-time buyers who are buying a home worth £300,000. That will save the average first-time property buyer nearly £1,700. That should be viewed not in isolation, but in the context of a balanced and broader package of supply and demand.
Those who wish to buy are not the only ones struggling in the current housing market, and many tenants in the private sector would like more security. We will work to understand the barriers to landlords offering longer, more secure tenancies, and then remove those barriers. There is also a £950 million budget to tackle homelessness in the spending period. Fixing our housing market is one of the most important issues that we currently face, and the Budget presents a balanced package of supply-side and demand-side reforms to do just that.
The second part of today’s debate was on public services. We have a great track record of delivering first-class public services, but in the time available I am able to comment on only two things and give two examples of such delivery. First, more than 1.8 million more children are being taught in good or outstanding schools—a significant achievement. Secondly, the NHS is treating more people every year for cancer, and the UK now has its highest ever cancer survival rate. We are doing all that while sticking to our credible plan.
I am running out of time so I will highlight one final point. We must continue to focus on our deficit, and the Budget highlights that both debt and deficit will go down in each year of the spending period. At the same time, we can expect the economy and rates of employment to grow—that is very positive. The Budget sets out how we are investing in the future. It tackles housing supply by getting Britain building, and it addresses the long-term issue of undersupply, while also providing relief in the near term for those who are struggling to buy now. It also backs our public services.
Yesterday, my right hon. Friend the Chancellor spoke about the opportunities and optimistic vision that lie ahead for our country. I will say just this: Britain’s future is bright, and this Budget makes it even brighter.
Ordered, That the debate be now adjourned—(Andrew Stephenson.)
Debate to be resumed tomorrow.