House of Commons
Tuesday 13 March 2018
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
Business, Energy and Industrial Strategy
The Secretary of State was asked—
My ministerial colleagues and I have regular discussions with our counterparts in the Welsh Government on all aspects of the industrial strategy. Last week, my officials were in Cardiff to discuss with the Welsh Government the proposed Swansea bay tidal lagoon.
At the heart of the industrial strategy is spreading prosperity across the whole of the United Kingdom, and working with devolved Administrations in our nations and regions will help to achieve that. The Welsh Government are working with practical developers—Minesto, an international company, and local company Morlais—to develop marine energy in my part of the world. The Secretary of State mentioned the Swansea bay tidal lagoon. Will he now make a decision and work with the Welsh Government and with developers so that we can roll that out, maximise our potential, and spread prosperity in this part of the United Kingdom?
I share the hon. Gentleman’s enthusiasm for green energy, as he knows, and I am proud of our achievements. Since 2010, we have quadrupled the proportion of our electricity that comes from renewable sources. However, as the hon. Gentleman understands from being on the Select Committee, we also have a responsibility to minimise the impact on consumers’ bills. The Swansea proposal was very much more expensive—more than twice as expensive—as the Hinkley nuclear power station, for example. As I said, though, we are in discussions with our colleagues in the Welsh Government. I do not want to close the door on something if it is possible to find a way to justify it as being affordable to consumers.
I, too, say to the Minister that making a decision on the Swansea bay tidal lagoon is important for Wales as a whole. There is huge potential for future lagoons around Newport following the Swansea pathfinder. It is really important that we do not pass up these opportunities.
I take the hon. Lady’s point. I think that everyone recognises these issues. In fact, the First Minister wrote to me yesterday and acknowledged the
“genuine challenges in…considering a proposal involving untried technology with high capital costs and significant uncertainties.”
That is why the best way to do this is to explore all the possibilities and to recognise the constraints. That is what I have committed to with colleagues in the Welsh Government.
Government research on consumer satisfaction published in August last year shows that satisfaction with smart meters is high. Eighty per cent. of consumers are satisfied with their smart meters and 80% would recommend them to friends and family. Smart Energy GB found that nearly 90% of people with a smart meter made energy savings and changed their behavioural patterns.
I thank the Minister for his response. It is good to hear that so many people are reaping the benefits from smart meters. No system is ever perfect, however, and that is the case for a small number of customers such as a club in my constituency, Killamarsh juniors athletics club, which is now on its third smart meter and is getting really unhelpful responses from its electricity provider. Can he provide any advice to the club in my constituency?
My hon. Friend has made a point about the Killamarsh juniors club in his constituency. I would be very happy to meet him on that specifically. However, I have not found this generally to be the case. The roll-out of smart meters is a very important national modernisation programme that brings major benefits to consumers generally and to his constituents specifically.
Smart meters are good for consumers and suppliers alike, but the roll-out relies on there being a good mobile phone signal for them to be effective, and in many parts of rural Scotland that is simply not the case. Can the Minister reassure me that he is working across the Government and with relevant stakeholders to ensure that residents in rural areas benefit from smart meters?
Does the Minister accept that his statistics are based on surveys that are carried out about 10 weeks after installation? My own survey found that 54% of constituents would currently refuse a smart meter, 97% want to see the costs of the programme shown on their bills, and 74% said that receiving one had not yet made any difference to the size of their bills. Will he also take those findings into account?
The hon. Gentleman knows me well enough to know that I am very interested in anything he has to say. He contributed a lot to the passage of the Smart Meters Bill in the House of Commons. I would be very interested to receive those statistics, but we do receive them from quite a few different places, and I do not just quote one sample.
I am sure the Minister is speaking in good faith, but I have come across constituents who find that bills are not reducing, but increasing. Has he had discussions with the utility companies about keeping an eye on this and making sure that the effect of smart meters is to reduce costs for constituents, many of whom are poor, not raise them?
I am very surprised to hear what the hon. Gentleman says. As he said—I am grateful for it—I am talking in good faith; I know he is too. I would be pleased to hear of those examples, but I cannot quite understand why bills would go up, because nearly 90% of people with smart meters say that it is changing their energy patterns and that bills are going down.
As my hon. Friend, who also contributed a lot to the passage of the Bill, knows, SMETS 2 is the newer type of meter which at the moment is in its trial phase. As the months go on, SMETS 1 meters will be converted through software that is being developed by the Data Communications Company, and all new meters will be SMETS 2.
As I explained, the software that is being developed now and will be in place shortly after the summer will ensure that that does not happen. The comparatively small number of SMETS 1 meters that do not operate as smart meters when suppliers change will suddenly become compliant, and they will all be able to speak to one another electronically, which is what we all want.
Carbon Reduction Targets
We should all be proud of the progress the UK has made in meeting its carbon reduction targets. The current statistics show that we have met our first budget, are on track to exceed our second and third budgets and are 97% and 95% of where we need to be to meet our fourth and fifth budgets—[Interruption.] I hear groaning, but I think those are decent numbers, given that we are 10 and 15 years away from achieving those budgets.
The lack of commitment, focus and ambition from this Tory Government mean that we are set to miss our legally binding carbon targets. Three easy wins could be to repeal the ban on onshore wind, prioritise energy efficiency measures and zero-carbon homes and commit to the Swansea bay tidal lagoon. When are this Government going to get their act together, demonstrate their commitment to future generations and get on with it?
I think the hon. Lady perhaps wrote that before hearing my answer. Let me share two facts with her. First, Britain has led the world in decarbonising our economy while growing it at the same time, not delivering carbon cuts with recessions, as other parties would like. Secondly, there are two countries in the world considered to be doing enough to meet even a 2° C target, and those are China and the UK. We have set out what has been described as the most ambitious set of policies and proposals ever seen from a Government in the clean growth strategy. We are bringing that forward, and it would be nice to feel we had a cross-party consensus on doing something that is so vital for both this country’s future and the future of the world.
I was interested to hear the Minister say that we are on target for three carbon budgets but will miss the fourth. The Committee on Climate Change said that the fourth carbon budget will not be met unless policies are supplemented by “more challenging measures”. She spoke about ambition. Can she tell us what those challenging measures will be?
As I answered before, the calculations for the fourth and fifth carbon budgets—which, I repeat, end in 10 and 15 years’ time and which we are 97% and 95% of the way to meeting—are based on an analysis of only 30% of the policies and proposals in the clean growth strategy. [Interruption.] My right hon. Friend the Secretary of State says he thinks that that is quite good; I agree.
We are bringing forward further work on those policies and proposals and also spending an unprecedented amount on research and development in this space—more than £2.5 billion over this Parliament. I am extremely confident that we will meet our budgets, with our ambitious policy, the ingenuity of British businesses and the science base, the strong campaigning and the structure of the Climate Change Act 2008—the Act that we were the first country in the world to pass.
My hon. Friend led an excellent debate on this in Westminster Hall, where we had a very strong outbreak of cross-party consensus. I entirely agree, and that is why we have set our home efficiency targets at band C for 2035. We are keen to do that in a cost-effective way, and I will shortly be bringing forward the consultation on ECO—the energy company obligation—and how to target it at fuel-poor households. In addition, we need to create a route to market for some of our best British technology to solve that problem.
As the hon. Gentleman knows, making these long-term decisions and creating costs for consumers over decades—whether in tidal lagoons or in nuclear—are matters that we have to take extremely seriously. We have to reduce the carbon emissions of our power supply, cut costs for consumers and create innovation that we can export around the world, and all of those considerations are being taken into account.
To meet carbon reduction targets, the Government will need to support, among other technology, offshore wind projects. In Scottish waters, Dounreay Tri, Kincardine and Forthwind are working to deliver first generation projects with an immediate value of £200 million for jobs and the supply chain, yet due to factors outwith their control, they will struggle to hit the UK Government’s October deadline. Will the Minister meet me to discuss how we might support these projects in making their contribution to carbon reduction?
We have worked very hard on the wind industry in Scotland—the hon. Gentleman and I both welcome the recent announcement about remote island wind, which is a really positive step forward—but the challenge is that the phasing out of the renewables obligations was set over four years ago. People have been fully aware of them, and we are currently not intending to extend the length of the grace periods. However, as he knows, I am always happy to try to build cross-party consensus on this vital agenda for this country.
I am sure it is absolutely not the intention of the Minister to mislead the House in any way, but her statements about our being 96% of our way towards meeting our fourth and fifth carbon budgets need to be put in the context of the fact that we are committed to reducing CO2 emissions by 225 million tonnes, but the Government proposals will reduce the amount by only 116 million tonnes, which is only just over half the requirement between the fourth and fifth carbon budgets. What are the Minister’s proposals under the clean growth plan to make sure that we reduce the amount by the outstanding 109 million tonnes?
The hon. Gentleman is a clever scientific fellow, and he knows that those numbers refer to the baseline numbers of 1990. I would be very happy to sit down with him and go line by line through the carbon budgets and the policy proposals. Again, he and I both need to be absolutely clear that regardless—[Interruption.] There is an awful lot of shouting from the hon. Member for Blyth Valley (Mr Campbell), who wants to bring back coal. Regardless of what this and future Governments do, those budgets must be fit for purpose, and we have to be absolutely clear and transparent about how we are going to meet them, and that is exactly what the clean growth strategy has done.
Electric Vehicle Charge Points
Britain is building one of the best charge point networks in the world, and our £400 million charging infrastructure investment fund, announced at the Budget, will see thousands more charge points installed across the UK.
Yesterday, the Business, Energy and Industrial Strategy Committee visited the London Electric Vehicle Company in my constituency. The Secretary of State will remember opening it a year ago, and it is great that we are now seeing electric taxis on the streets of London. We also went to the Electric Vehicle Experience Centre in Milton Keynes, where we heard concerns about the fact that the lack of compatibility between chargers and connectors is in danger of putting people off buying an electric car. What will the Secretary of State do to encourage the industry to adopt a standard?
I am delighted that the Committee went to see the electric taxi company. The opening, at which my hon. Friend accompanied me, was a fantastic event. Having such compatibility is a very important matter. The recently introduced Alternative Fuels Infrastructure Regulations 2017 set minimum standards for publicly accessible charge points. In addition, the Automated and Electric Vehicles Bill, which is currently before Parliament, will give the Government new powers to regulate these technical standards.
Many supply companies are worried that if there is a high uptake, which I think we would all support, the infrastructure will not be there to support it. It is just not true that electric vehicles do not use a great deal of power, so there are concerns about strain on the system as a whole.
I am grateful to the hon. Gentleman for those comments. Our access to the network is one of the best in the world, especially for fast chargers. He is absolutely right that electric vehicles can contribute to the electricity grid’s resilience, because their batteries can store electricity generated by renewables for a time when it is needed, which is very much part of the smart systems plan.
Batteries, of course, are one of the constraints that people consider before buying electric cars, because of their limited range. Does my right hon. Friend therefore welcome the initiative of the Mayor of the West Midlands, along with the Government, for introducing a battery research centre in the west midlands?
Not a Question Time goes by without me welcoming an initiative from the Mayor of the West Midlands. We have worked very closely with the Mayor, and with the automotive industry, to ensure that we are investing at the cutting edge of research into battery technology, precisely so that we can build the cars of the future.
Oil and Gas Industry
The Government remain committed to supporting the industry and building on the £2.3 billion package announced in recent Budgets. My right hon. Friend the Minister for Energy and Clean Growth greatly enjoyed her recent visit to Aberdeen—as did I, when I visited—when the industry presented its initial proposals for a deal. My right hon. Friend is meeting the sector deal champion, Trevor Garlick, tomorrow.
I thank my hon. Friend for that answer. The oil and gas industry based in the north-east of Scotland has contributed over £330 billion to the economy, supports over 330,000 jobs across the United Kingdom and has a supply chain worth nearly £30 billion. With an estimated 20 million barrels of oil still to get out of the North sea, the industry has huge potential to drive this country’s growth, but of course there is still uncertainty, so I know that the Minister will welcome the response—
The UK Government have so far failed to announce a sector deal for oil and gas, and there was no mention of one in their industrial strategy. There is a need for a sector deal approach to the industry. The Scottish Government have been calling for such action. Will the Minister finally rectify this glaring omission and commit that vital support for the industry and the jobs and investment it relies on?
Electric and Autonomous Vehicles
The automotive sector deal will ensure that the UK continues to reap the benefits from leading the transition to zero-emission and autonomous vehicles. Last month that drew in £33 million of investment into the UK-based connected and autonomous vehicle programmes, with participation from across the industry.
Jaguar Land Rover recently developed the I-Pace, its first all-electric performance SUV, and, as my hon. Friend the Member for Rugby (Mark Pawsey) mentioned, the London Electric Vehicle Company has developed the world’s first purpose-built electric taxi. Will my right hon. Friend join me in congratulating those great British manufacturers on the world-leading role they are playing in the sector?
All the new electric vehicles will need batteries, of which lithium is an essential element. Recent discoveries of large deposits of lithium in Cornwall open up the possibility of the UK securing a domestic supply for this vital element. What support can the Secretary of State give to this exciting new emerging sector?
Through our industrial strategy, we have highlighted the potential for new developments in battery storage. If Cornwall can supply the lithium to power that new industry then I am delighted to hear it. I will discuss the possibilities further with my hon. Friend.
At yesterday’s Select Committee visit, mentioned by the hon. Member for Rugby (Mark Pawsey), it became very apparent that the market for electric vehicles is maturing at a much faster rate than many people realise. Is it possible that the ambition of the sector itself is outstripping the ambition of the Government, and should the 2040 target not be brought forward, perhaps even by a decade?
When it comes to the new generation of automotive technology, the ambition of this Government is not outstripped by anyone. We are working very closely—hand in glove—with the industry, through the Automotive Council, to make sure that we are the best placed in the world not only to research the new technologies, but to manufacture them in this country.
The Government’s long-term partnership with the automotive industry is an exemplar of our industrial strategy. Only a fortnight ago, I went to Derbyshire to welcome Toyota’s decision to build the new Auris in Burnaston, helping to secure 3,000 jobs between Burnaston and Deeside in north Wales.
I am sure that, while welcoming that investment, the Secretary of State will have been alarmed by the comments made by the chief executive of the PSA Group, which owns Vauxhall in my constituency, about the lack of certainty, with Brexit affecting investment decisions. Will the Secretary of State meet the PSA Group and me to give us confidence in terms of investment in the future of that plant?
I regularly meet with chief executives of car companies, including Mr Tavares. It is very clear that we are determined, as the Prime Minister set out in her Mansion House speech, to make sure that this very important integrated supply chain is able to continue to operate. It is worth bearing in mind that since my team have been in the Department every single major new model decision has gone our way. I am determined to keep up that advocacy.
The automotive sector is crucial to UK industry. It employs 814,000 people and we are all proud of British car manufacturers, including the iconic Rolls-Royce and Jaguar. In recent weeks, however, President Trump has revealed an appetite for a trade war that began with the announcement of steel tariffs and now includes threats to put tariffs on EU cars, which could hit our industry hard. Will the Secretary of State tell this House what he is doing to avoid a trade war with the US? Should such tariffs come into play, what will he do to protect our steel and automotive sector?
I am sure the hon. Lady was in her place yesterday when the Trade Secretary gave a very comprehensive statement. There was some welcome for the cross-party approach that went into defending the international system of free trade. It does no one any good if we have tariffs in place that impede trade. Her endorsement of the approach being taken by the Trade Secretary would be welcome.
The official receiver and special manager are working to ensure an orderly transition by facilitating the transfer of contracts. As of 12 March, 8,521 jobs have been safeguarded and 1,536 people have been made redundant, sadly, through the liquidation. My right hon. Friend the Business Secretary has set up a taskforce, bringing together trade associations, bankers and representatives of Government to ensure that we support the Carillion supply chain. The taskforce has delivered a range of supportive measures, including more than £900 million of support from UK lenders.
Let me seek some further clarification. If there is any doubt that TUPE applies, can the Government confirm that they will instruct the official receiver to transfer employees on private sector contracts as if TUPE applied? Will the Government also ensure that trade union recognition is transferred with those staff?
I thank the hon. Gentleman for that question and refer him to the recent Westminster Hall debate, when we discussed at some length the legal responsibilities in relation to TUPE, which do not apply in many cases during a liquidation. Transferring employers may well decide to offer terms to transferring employees that recognise existing employment rights, terms and conditions. The Government are focused on ensuring that transferred employees are no worse off, and the official receiver is doing all he can to facilitate this wherever possible.
The Carillion collapse has exposed what can only be described as market abuse by lead contractors, with subcontractors in Cheltenham suffering as a result of the failure to adhere to best practice schemes such as the prompt payment code. What steps are the Government taking to ensure compliance with the schemes and more generally to stamp out market abuse?
My hon. Friend, who has met me on a number of occasions to defend the interests of businesses in his constituency, will know that the Government had two priorities: to protect the provision of vital public services and to do what we could to protect jobs in Carillion and jobs in the supply chain. We are clear that we must learn the lessons from the collapse of Carillion. This could be a catalyst for change for the good. We are concerned to ensure that we do all we can to learn the lessons on procurement, and we also want to do more to ensure that the supply chain is promptly paid and that small businesses are paid speedily. Looking at the prompt payment code is an important part of that.
Following on from the question from the hon. Member for Cheltenham (Alex Chalk), when Carillion went bankrupt, many of the subcontractors had not been paid for 120 days. The money coming to Carillion was from the Government, so what are the Government doing to ensure that when they give contracts to big businesses, those businesses pay their subcontractors on time? Small businesses are the lifeblood of our economy and they have been destroyed by the collapse of Carillion.
I thank the hon. Lady for that question and particularly for the work that her Select Committee is doing in getting to the bottom of exactly what happened in Carillion. That is very important work. The Government are clear that with public sector contracts we pay in 30 days, and we expect tier 1 contractors to ensure that they pay their supply chain in 30 days too. We are determined to take action to ensure that this happens, and we are looking at what we can do to make sure not only that small businesses in the public sector supply chain get paid within 30 days, but that we do more to support private sector suppliers as well.
The main priority for this Government has been to protect jobs here in the UK and the continuation of public sector contracts and services. The special manager, of course, has a responsibility to wind up the business to get the best value for creditors, but he is responsible for dealing with businesses overseas.
I have met the hon. Lady several times, and I know that she is working hard to ensure that her constituents employed by Carillion get all the protections possible. The Secretary of State has had conversations with the special manager to ensure that wherever possible when contracts are transferred employees get like conditions so that they are no worse off. As she will understand, this is a very complex and complicated business, and I do not at the moment have the specific statistics she requests.
We want people to be self-employed when it is the right thing for them, which is why the Government have introduced new measures to ensure they are even better supported. These include improved support for embarking on self-employed careers, encouraging pension saving and supporting people to pay the right tax. From 6 April 2016, we have also given self-employed people the ability to build their entitlement to the new state pension at the same rate as employed people.
Morley is lucky to have a thriving high street, which matters to me as an ex-retailer. During the recent cold weather, Apollo Fisheries in Morley handed out free food to cold residents. What are the Government doing to support our businesses on the high street, and will the Minister take this opportunity to congratulate Apollo Fisheries on its fine example of Yorkshire hospitality at its best?
I think the House will recognise that I am no stranger to a fish supper, and I would like to join my hon. Friend in congratulating Apollo Fisheries on the community spirit it showed. It clearly demonstrates that businesses contribute not just to the economy but to our society. The future high streets forum provides joint business and Government leadership to enable our high streets and town centres to adapt and compete in the face of changing consumer and social trends, but we want to go further, so last week I announced the establishment of the Retail Sector Council, which will bring together leaders in retail to help to develop policies and support for the vital retail sector.
We all want self-employment to grow, but we also want to crack down on apparent self-employment, where people are forced to become self-employed by exploitative employers who then save on national insurance contributions while putting all the risk of that employment on often vulnerable individuals. What are the Government doing about that?
I am sure the hon. Lady will be delighted to know that the Government are taking forward the proposals set out by Matthew Taylor. We recognise that employment status—whether workers are employed or self-employed—is key to their getting not only the payments but the protections they deserve. That is why we have embarked on a full consultation with the intention of clarifying the status of workers, giving them extra protections and ensuring that if it looks like work and feels like work, it is work and they are paid properly.
The Government’s response to the Taylor review did virtually nothing to tackle the challenges and insecurity that self-employed people face. Equally poor was the Government’s response to the treatment of gig workers.
“Don has died and they should be making changes”.
Those were the words of DPD gig worker Don Lane’s widow, Ruth. With this in mind and with Matthew Taylor himself last week rating the Government’s response to the Taylor review a shocking four out of 10, what score would the Minister give himself?
Seven weeks in, I think I would give myself 10 out of 10. The hon. Lady quotes Matthew Taylor. He has said quite clearly that this is a complex and complicated matter. He wants us to get the definition of status right, because the rights of thousands of gig workers depend on it. That is why in the passage the hon. lady quotes he also said that when we have finished our consultation, if we deliver what we have promised he would give us seven or eight. I want to go further; I want it to be 10.
Ten out of 10 indeed! The Chancellor today might attempt to laud employment figures as positive news, but he will fail to state that over 3 million people are in insecure work, and, according to a recent report by the Centre for Labour and Social Studies, over a third of all workers do not even earn enough to live. There are also real fears, despite the Prime Minister’s assurances, that the quality of work will worsen still, with reports that the Foreign Secretary and other Ministers are pushing for major employment law deregulation. Will the Minister confirm whether his Department is carrying out any work looking at the deregulation of certain employment rights?
The hon. Lady must have missed the intention behind what the Government were doing with the Matthew Taylor report. Not only are we committed to continuing the existing employment rights and protections, but we are going further and faster than anyone else—further and faster than our European colleagues—to give gig workers and others in vulnerable conditions, such as agency workers, greater protections than ever before. We are not just talking about it; we are protecting those workers.
Small Business Sector
Apologies, Mr Speaker. I was congratulating myself too much!
The Government-owned British Business Bank provides £4 billion to support more than 60,000 UK small and medium-sized enterprises. We plan to unlock more than £20 billion of investment in innovative and high-potential businesses, including a new £2.5 billion investment fund with the British Business Bank. The Small Business Commissioner helps with payment issues, dispute resolution, and the sourcing of advice throughout the UK. Through the industrial strategy, we are continuing to invest in 38 growth hubs across England, as well as the business support helpline.
Of course I join in the congratulations to the Minister, but he will know that one of the crucial requirements for the success of the small business sector is access to and understanding of finance, and there is considerable evidence that there is currently a knowledge gap in the market. What are the Government doing to address that?
My hon. Friend has hit the nail on the head. We are concerned by reports that businesses, particularly small businesses, are reticent about coming forward to access finance that could help them to invigorate and grow. That is why the British Business Bank produces “The business finance guide”, in partnership with the Institute of Chartered Accountants in England and Wales and industry bodies. The guide explains the different sources of finance that are available to smaller businesses, and is also published online. The British Business Bank will launch a new digital platform in the spring to raise awareness even further.
Small businesses in Cumbria, particularly those involved in farming and tourism, were integral to the Lake district’s gaining world heritage site status last summer, a designation that could lead to a massive increase in the number of visitors to what is already Britain’s second-biggest visitor destination. Will the Government back those small businesses with the infrastructure investment that they need in order to cope and to grow? Will they, for instance, electrify the Lakes Line?
I am delighted to support the small businesses to which the hon. Gentleman has referred. He will be pleased to know that we are boosting infrastructure, including digital infrastructure, with more than £1 billion of public investment, including £176 million for 5G and £200 million for local areas to encourage the roll-out of full-fibre networks. I should also be delighted to meet him to discuss what more we can do for lakeside businesses.
Hitchin and Harpenden, which are both small towns, have a thriving independent retail sector, but in recent months they have reported that things are getting harder for them. Will the Minister reassure me that the Government are doing everything they can to help independent small retailers in thriving market towns?
As the retail Minister, I recognise the real challenges faced by our high streets and, in particular, by independent businesses. In his spring Budget statement, the Chancellor announced a package of measures for business rate relief, including a £1,000 discount for pubs with rateable values below £100,000, £300 million for local authorities to fund discretionary rate relief, and a cap on rate increases, which means that businesses that lose their small business rate relief will not see their bills increase.
The Minister should stop being quite so complacent. Carillion was a signatory to the prompt payment code; Interserve still is. Carillion suppliers were paid on terms of 120 days, while Interserve subcontractors say that they are being absolutely hammered by late payment. Yesterday the Federation of Small Businesses again highlighted the damage done to growth by late payment. When will Ministers support smaller firms in the public sector supply chain, and enforce the prompt payment code?
We are certainly not complacent, which was why we set up the trade body group to assess the impact of Carillion. The hon. Gentleman will be delighted to know that yesterday I spoke to Phil King, who runs the prompt payment code, and I will be meeting him later this week to discuss how we can tighten up the code and give it real teeth. We are determined to help small businesses.
Local Enterprise Partnerships
We remain firmly committed to local enterprise partnerships. As announced in the industrial strategy, we are currently reviewing the roles and responsibilities of LEPs so that they are able to play an important role in developing local industrial strategies and driving growth across the country as we prepare to leave the European Union.
Hertfordshire LEP has been a disaster for Stevenage people. Does the Minister agree that it is shameful that growth deal round 1 money is being used to build new council offices and sell off public sector land for developers to build luxury flats, with less than 10% being affordable homes?
Some £15 million of growth deal round 1 money has already been invested in Stevenage, and that has helped to leverage a commitment of £350 million of private investment into the town. My hon. Friend raises an issue of concern, and I urge him to speak to the Secretary of State for Housing, Communities and Local Government to resolve it.
May I invite the ministerial team to step out of its bubble by coming to Yorkshire and talking to our local enterprise partnerships to respond to their pessimism that while London and the south might survive post Brexit, the midlands, the north and the regions will be in bitterly disappointed territory?
I know that the hon. Lady has a keen interest in this subject, and we have met to discuss the impact on many of her constituents working at the Culham Centre for Fusion Energy. As she knows, our assessment was detailed in the “Nuclear Sector Report” at the end of December last year, and in an impact assessment for the Nuclear Safeguards Bill, which was first published on 18 December. We continue to engage with stakeholders, and the hon. Lady knows that my door is always open if she wishes to discuss this matter further.
I thank the Minister for his response. We know that the Government are seeking a close association with Euratom, but with just 109 days until Austria takes up the presidency, Oxfordshire needs clarity now to plan for the future. Can the Government categorically say they are seeking an associate agreement, and can they guarantee that they will kick-start the process before 1 July?
Since our last questions, Toyota has announced, as I said a few moments ago, that it would build its new model in Derbyshire, with most of the engines coming from the Deeside factory in north Wales. We also published our response to the Taylor review on modern employment practices. A million more vulnerable consumers will be protected by the extension of the Ofgem safeguard tariff cap and, as Members know, the Domestic Gas and Electricity (Tariff Cap) Bill has been introduced into Parliament. Yesterday, as part of our industrial strategy, we announced a major £300 million research programme into technologies to serve the ageing population and to ensure that we can benefit from this encouraging global trend.
My hon. Friend is a champion of this sector. The Under-Secretary, my hon. Friend the Member for Watford (Richard Harrington), has met the vice- president of Brookfield and expressed our continuing support for Springfields to have a future in providing fuel for plants in this country and overseas.
GKN was forged in our country’s first industrial revolution. It built the tanks used in the D-day landings, and its innovative battery technology will power our future economy. The Government’s industrial strategy identifies batteries as a key technology and manufacturing as a priority sector, yet the Secretary of State has nothing to say about the hostile takeover of that great firm. Why is it that all too often, as with Arm and Unilever, his industrial strategy seems to leave great British success stories less great or less British?
I would have thought that the hon. Lady would have informed herself as to the responsibility of Ministers under the Enterprise Act 2002. That Act, which was passed under the previous Labour Government, states that Ministers can intervene only in mergers that raise public interest concerns on the grounds of national security, financial stability or media plurality. She should know that the Government’s corporate governance reforms have ensured that GKN had longer to prepare its defence, preventing the kind of smash and grab raid that Cadbury’s was subjected to under the previous Government, and that provision has been made for legally binding undertakings to be given in takeover bids. Those are intended to be used, and I would be surprised and disappointed if any bidder did not make their intentions clear, extensive and legally binding.
It is said that I am no stranger to the fish supper, and I also have knowledge of the Cornish pasty and, indeed, Cornish clotted cream. All those products will achieve UK geographical indications and will continue to be protected in the UK after our EU exit. As negotiations are ongoing, I cannot give my hon. Friend a cast-iron assurance right now that UK products will remain protected in the EU after exit, but I can categorically state that that is the Government’s clear objective.
I assure the hon. Gentleman that we are acting right now; a consultation is under way with regard to the Swedish derogation. Firms and businesses should be in no doubt that this Government expect everyone to be paid either the national minimum wage or the national living wage. That is why we have doubled the amount of enforcement and protected the pay of 98,000 workers. We are absolutely committed to everybody getting paid the national minimum wage.
The Government are determined to improve payment practices, and we understand that retentions have caused problems for contractors in the supply chain. We consulted on the contractual practice of cash retention and we are now considering the responses to assess the extent of the issues and to determine what further intervention is required.
My hon. Friend is, as ever, assiduous in promoting the interests of his constituency, and I would be delighted to meet him. I should point out that the lagoon project in his constituency is currently not part of the proposal being put forward by the company promoting other tidal projects.
The Government raised business rates on rooftop solar schemes by up to 800% last year, and it now appears that on-site battery storage is likely to go the same way. Given that gas combined heat and power has been exempted from business rates, should not the Government do the same for solar and battery storage to support clean energy?
Our solar capacity has increased by more than 30% in the past two years, so we clearly are bringing forward such schemes. The hon. Gentleman will know that we are looking closely at ways of reducing some of the disincentives, particularly around on-site storage, but I am happy to meet him to discuss things further.
The south-west is indeed a great region in which to do business. Chambers of commerce including Barnstaple’s, which has been serving its community since 1911, have a valuable role to play in supporting local businesses and ensuring that their voice is heard. That is why I have met chambers of commerce 11 times in the seven weeks in which I have been the Minister for small business.
Solar power is the most popular source of clean energy and one of the cheapest, so why has it been excluded from clean power auctions for the past three years? Why oh why does it continue to be excluded, putting the industry at a clear competitive disadvantage?
We continue to look at ways of bringing forward all forms of renewable energy. Indeed, up to 30% of energy generation in this country now comes from renewables. We have not yet taken decisions about future contract for difference allocation rounds, but we intend to do so.
I pay tribute to the work of the all-party group, of which my hon. Friend is a vice-chair. I met it just last week to explore the options. I share his aim that small businesses should have an accessible and impartial forum through which to seek redress when things go wrong. There is work to be done on how that would be paid for and on whether legislation would be required, but I look forward to seeing the research and to working with him.
The 220 people who work at GKN Aerospace in my constituency produce windshields for military and commercial aircraft, so is that not another indication that the hostile takeover bid raises national security implications? The Secretary of State has the power to intervene under the Enterprise Act 2002.
I have met Juergen Maier, the chief executive of Siemens UK, to discuss that. At a recent dinner, my right hon. Friend the Secretary of State announced a “Made Smarter” commission and asked Sir Mark Walport to work with Juergen on the development of an industrial strategy challenge for the digitisation of our manufacturing industry.
The number of electric vehicles on our roads is likely to increase significantly over the next few years. What work is being done to ensure that charging points are more frequently powered by renewable sources over that period?
The hon. Gentleman makes an excellent point. Part of our industrial strategy is about bringing together the energy and automotive sectors, so that one reinforces the other. That is the Faraday challenge, which is attracting so much attention in both industries.
The Business, Energy and Industrial Strategy Committee has heard powerful evidence on why the Government should call in the Melrose bid for GKN on national security grounds, and the Secretary of State for Defence has written to the Business Secretary about the matter. Will the Business Secretary use his powers, before it is too late, to protect this great British engineering giant?
The Secretary of State has said that his door is still open to discussions about the benefits of green energy, so will he commit today to seeing Charles Hendry—the author of the Hendry review, which is still awaiting a response from the Government 14 months on—me, as chair of the all-party group on marine energy and tidal lagoons, and representatives of Tidal Lagoon Power and TidalStream?
It is always a pleasure to respond to my hon. Friend, who is an assiduous campaigner for this form of energy. We continue to commit to supporting our marine energy industry. I refer him to the answer that my right hon. Friend the Secretary of State gave at the start of questions. We continue to exchange information with the Welsh Government, and we have to understand what is on offer. We want to reach the right decision on behalf of low-carbon technologies, but also British bill payers and taxpayers.
The right hon. Gentleman makes an excellent point. It is true that the charging network needs to extend right across the country if people are to have the confidence that they will be able to recharge their vehicle, and we have the rural aspect very much in mind.
According to the press, the Secretary of State gave a presentation to a Sub-Committee of the Cabinet about the automotive sector and how important it is that we do not have a hard Brexit. That seems to have persuaded members of the Cabinet who had thought that a hard Brexit might be a good idea that it would, in fact, be a very bad idea for British business, notably the automotive sector. On that basis, will the Secretary of State make that presentation available to all right hon. and hon. Members?
It would be wrong of me to disclose conversations that took place in Cabinet—my right hon. Friend understands the requirements of collective responsibility—but it is no secret to anyone in this House that I regard the fact that the success of the automotive sector depends on integrated supply chains as good evidence of what type of trade agreement is needed. That was highlighted in the excellent speech made by my right hon. Friend the Prime Minister at the Mansion House.
I am pleased to introduce to the House the first spring statement. The UK was the only major economy to make hundreds of tax and spending changes twice a year, and major international organisations and UK professional bodies alike have been pressing for change. In 2016, I took the decision to move to a single fiscal event in the autumn, giving greater certainty to families and businesses ahead of the new financial year and allowing more time for stakeholder and parliamentary engagement on potential fiscal changes.
Today’s statement will update the House on the economic and fiscal position, report progress on announcements made at the two Budgets last year and launch further consultations ahead of Budget 2018, as I set out today in my written ministerial statement. I will not be producing a Red Book today, but of course I cannot speak for the right hon. Member for Hayes and Harlington (John McDonnell).
I am pleased to report today to the House on a UK economy that has grown in every year since 2010—an economy that, under Conservative leadership, now has a manufacturing sector enjoying its longest unbroken run of growth for 50 years, that has added 3 million jobs and seen every single region of the UK with higher employment and lower unemployment than in 2010, that has seen the wages of the lowest-paid up by almost 7% above inflation since April 2015 and that has seen income inequality lower than at any time under the last Labour Government. That is solid progress towards building an economy that works for everyone.
So I reject the Labour party’s doom and gloom about the state of the nation. Every Wednesday, we have to listen to the Leader of the Opposition relentlessly talking Britain down, and every year since 2010 we have had to listen to the right hon. Member for Hayes and Harlington predict a recession—none of which has actually happened. So if there are any Eeyores in the Chamber, they are on the Opposition Benches; I, meanwhile, am at my most positively Tigger-like today, as I contemplate a country that faces the future with unique strengths: our language is the global language of business; our legal system is the jurisdiction of choice for commerce; we host the world’s most global city and its international finance and professional services capital; our companies are in the vanguard of the technological revolution, while our world-class universities are delivering the breakthrough discoveries and inventions that are powering it; British culture and talent reaches huge audiences across the globe; and our tech sector is attracting skills and capital from the four corners of the earth, with a new tech business being founded somewhere in the UK every hour, producing world-class products, including apps such as TransferWise, Citymapper and Matt Hancock.
Today, the Office for Budget Responsibility delivers its second report for the fiscal year 2017-18, and I thank Robert Chote and his team for their work. It forecasts more jobs, rising real wages, declining inflation, a falling deficit and a shrinking debt. The economy grew by 1.7% in 2017, compared with the 1.5% forecast at the Budget, and the OBR has revised up its forecast for 2018 from 1.4% to 1.5%. Forecast growth is then unchanged at 1.3% in 2019 and 2020, before picking up to 1.4% in 2021 and 1.5% in 2022. That is the OBR’s forecast, but forecasts are there to be beaten; as a nation, we did it in 2017, and we should make it our business to do it again.
Our remarkable jobs story is set to continue, with the OBR forecasting more jobs in every year of this Parliament and over 500,000 more people enjoying the security of a regular pay packet by 2022. I am pleased to report that the OBR expects inflation, which is currently above target at 3%, to fall back to target over the next 12 months, meaning that real wage growth is expected to be positive from first quarter of 2018-19 and to increase steadily thereafter.
I reported in the autumn that borrowing was due to fall in every year of the forecast and debt was to fall as a share of GDP from 2018-19. The OBR confirms that today, and further revises down debt and borrowing in every year. Borrowing is now forecast to be £45.2 billion this year. That is £4.7 billion lower than forecast in November and £108 billion lower than in 2010, which, coincidentally, is almost exactly the total cost of the additional spending pledges made by the Labour party since the general election in June last year; it has taken them just nine months to work up a plan to squander the fruits of eight years’ hard work by the British people.
As a percentage of GDP, borrowing is forecast to be 2.2% in 2017-18, falling to 1.8% in 2018-19, 1.6% in 2019-20, then 1.3%, 1.1% and finally 0.9% in 2022-23, meaning that in 2018-19 we will run a small current surplus, borrowing only for capital investment. And we are forecast to meet our cyclically adjusted borrowing target in 2020-21 with £15.4 billion of headroom to spare, which is broadly as forecast at the Budget. The more favourable outlook for borrowing means the debt forecast is nearly 1% lower than in November, peaking at 85.6% of GDP in 2017-18 and then falling to 85.5% in 2018-19, then 85.1%, 82.1%, 78.3%, and finally 77.9% in 2022-23.
That is the first sustained fall in debt in 17 years; a turning point in this nation’s recovery from the financial crisis of a decade ago; light at the end of the tunnel; another step on the road to rebuilding the public finances that were decimated by the Labour party. And it is one that Labour would again place at risk, because under Labour’s policies, our debt would not fall over the next five years; it would rise by more than £350 billion to more than 100% of our GDP, undermining our recovery, threatening investment in British jobs, burdening the next generation and wasting billions and billions of pounds more on debt interest. There is indeed light at the end of the tunnel, but we have to make absolutely sure that it is not the shadow Chancellor’s train hurtling out of control in the other direction towards Labour’s next economic train wreck.
In autumn 2016, I changed the fiscal rules to give us more flexibility to adopt a balanced approach to repairing the public finances. We are reducing debt not for some ideological reason, but to secure our economy against future shocks, because we in the Conservative party are not so naive as to think that we have abolished the economic cycle, because we want to see taxpayers’ money funding our schools and hospitals, not wasted on debt interest, and because we want to give the next generation a fair chance. But I do not agree with those who argue that every available penny must be used to reduce the deficit; nor do I agree with the fiscal fantasists opposite who argue that every penny should be spent immediately. We will continue to deliver a balanced approach. We are balancing debt reduction against the need for investment in Britain’s future, support to hard-working families through lower taxes and our commitment to our public services.
Judge me by my record. [Interruption.] We will see whether the Opposition have done their homework; they might be surprised. Since the 2016 autumn statement, I have committed to £60 billion of new spending, shared between long-term investment in Britain’s future and support for our public services, with almost £9 billion extra for our NHS and our social care system. There is £4 billion going into the NHS in 2018-19 alone and, as I promised at the autumn Budget, more to come if, as I hope, management and unions reach an agreement on a pay modernisation deal for our nation’s nurses and “Agenda for Change” staff, who have worked tirelessly since the autumn, in very challenging circumstances, to provide the NHS care that we all value so highly. There is £2.2 billion more for education and skills and £31 billion to fund infrastructure, research and development and housing, through the national productivity investment fund. That takes public investment in our schools, hospitals and infrastructure in this Parliament to its highest sustained level in 40 years.
At the same time, we have cut taxes for 31 million working people by raising the personal allowance again, in line with our manifesto commitment. We have taken more than 4 million people out of tax altogether since 2010. We are freezing fuel duty for an eighth successive year, taking the saving for a typical car driver to £850, compared with Labour’s plans, and raising the national living wage to £7.83 from next month, giving the lowest paid in our society a well-deserved pay rise of more than £2,000 for a full-time worker since 2015.
Since becoming Chancellor, I have provided an extra £11 billion of funding for 2018-19 to help with short-term public spending pressures and to invest in Britain’s future. In the longer term, I can confirm that, at this year’s Budget, I will set an overall path for public spending for 2020 and beyond, with a detailed spending review to take place in 2019 to allocate funding between Departments. That is how responsible people budget: first, they work out what they can afford; then they decide what their priorities are; and then they allocate between them. If, in the autumn, the public finances continue to reflect the improvements that today’s report hints at, then, in accordance with our balanced approach and using the flexibility provided by the fiscal rules, I would have capacity to enable further increases in public spending and investment in the years ahead, while continuing to drive value for money to ensure that not a single penny of precious taxpayers’ money is wasted. We are taking a balanced approach—getting our debt down, supporting our public services, investing in our nation’s future and keeping taxes low—as we build a Britain fit for the future and an economy that works for everyone.
There is much still to do. Since autumn 2016, we have set out our plan to back the enterprise and ambition of British business and the hard work of the British people. It is a plan to unleash our creators and innovators, our inventors and discoverers, to embrace the new technologies of the future and to deliver the skills that we will need to benefit from them. It is a plan to tackle our long-standing productivity challenges and to say more loudly than ever that our economy will remain open and outward looking, confident of competing with the best in the world.
We choose to champion those who create the jobs and the wealth on which our prosperity and our public services both depend, not to demonise them. The shadow Chancellor is open about his ideological desire to undermine the market economy, which has driven an unparalleled increase in our living standards over the past 50 years. We on the Conservative Benches reject his approach outright. The market economy embraces talent, creates opportunity and provides jobs for millions and the tax revenues that underpin our public services, so we will go on supporting British businesses. We are reducing business rates by more than £10 billion, and we committed at autumn Budget 2017 to move to triennial revaluations from 2022. Today, I am pleased to announce that we will bring forward the next business rates revaluation to 2021 and move to triennial reviews from that date. We will also launch a call for evidence to understand how best we can help the UK’s least productive businesses to learn from, and to catch up with, the most productive, and another on how we can eliminate the continuing scourge of late payments—a key ask from small business. We are the party of small business and the champions of the entrepreneur.
Since the Budget, we have made substantial progress in our negotiations with the European Union to deliver a Brexit that supports British jobs, businesses and prosperity. I look forward—[Interruption.] I do not know what the hon. Member for Wansbeck (Ian Lavery) does, but I look forward to another important step forward at the European Council next week. We will continue to prepare for all eventualities. Today, my right hon. Friend the Chief Secretary is publishing the departmental allocations of over £1.5 billion of Brexit preparation funding for 2018-19, which I announced at the autumn Budget.
Our modern industrial strategy sets out our plan to keep Britain at the forefront of new technologies with the biggest increase in public research and development spending for four decades. Much of this new technology depends on high-speed broadband, and today I can make the first allocations of the £190 million local full-fibre challenge fund announced at the autumn Budget and confirm £25 million for the first 5G testbeds.
As our economy changes, we must ensure that people have the skills they need to seize the opportunities ahead, so we have committed over £500 million a year to T-levels—the most ambitious post-16 reforms in 70 years. From next month, £50 million will be available to help employers to prepare for the roll-out of T-level work placements. Last week the Education Secretary and I chaired the first meeting of the national retraining partnership between the Government, the TUC and the Confederation of British Industry. I can reassure the House that there was no beer and no sandwiches—not even a canapé—but there was a clear and shared commitment to training in order to prepare the British people for a better future ahead. Next month our £29 million construction skills fund will open for bids to fund up to 20 construction skills villages around the country.
The Government are committed to delivering 3 million apprenticeship starts by 2020, with the support of business through the apprenticeship levy, but we recognise the challenges that the new system presents to some small businesses looking to employ an apprentice, so I can announce today that my right hon. Friend the Education Secretary will release up to £80 million of funding to support those small businesses in engaging an apprentice. We publish a consultation on improving the way in which the tax system supports self-funded training by employees and the self-employed. Because we currently understand more about the economic payback from investing in our infrastructure than we do about investing in our people, I have asked the Office for National Statistics to work with us on developing a more sophisticated measure of human capital so that future investment can be better targeted.
We are undertaking the largest road building programme since the 1970s. As Transport Secretary in 2011, I gave the green light to fund the new bridge across the River Mersey, and I was delighted to see it open late last year. The largest infrastructure project in Europe, Crossrail, is due to open in just nine months’ time. We are making progress on our plans to deliver the Cambridge-Milton Keynes-Oxford corridor. We are devolving powers and budgets to elected mayors across the northern powerhouse and midlands engine. We are in negotiations for city deals with Stirling and Clackmannanshire, Tay cities, borderlands, north Wales, mid Wales and Belfast. Today we invite proposals from cities across England for the £840 million fund that I announced at the Budget to deliver on their local transport priorities as part of our plans to spread growth and opportunity to all parts of this United Kingdom.
At the heart of our plan for building an economy that works for everyone is our commitment to tackle the challenges in our housing market, with an investment programme of £44 billion to raise housing supply to 300,000 a year by the mid-2020s. Today I can update the House. The Housing Minister is working currently with 44 authorities who have bid into the £4.1 billion housing infrastructure fund to unlock homes in areas of high demand. We are concluding housing deals with ambitious authorities that have agreed to deliver above their local housing need. I can announce today that we have just agreed a deal with the West Midlands Combined Authority, which has committed to deliver 215,000 homes by 2030-31, facilitated by a £100 million grant from the land remediation fund. My hon. Friend the Housing Minister will make further announcements over the next few days on the housing infrastructure fund.
We will more than double the size of the housing growth partnership with Lloyds Banking Group to £220 million, providing additional finance for small builders. London will receive an additional £1.7 billion to deliver a further 26,000 affordable homes, including homes for social rent, taking total affordable housing delivery in London to over 116,000 by the end of 2021-22.
My right hon. Friend the Member for West Dorset (Sir Oliver Letwin) has outlined his initial findings on the gap between planning permissions granted and housing completions in a letter that I have placed in the Library. I look forward to his full report at the Budget. I am delighted to inform the House that an estimated 60,000 first-time buyers have already benefited from the stamp duty relief that I announced at the autumn Budget. I remind the House that the Labour party voted against this.
In the autumn we published a paper on taxing large digital businesses in the global economy. Today we follow up with a publication that explores potential solutions. I look forward to discussing this issue with G20 Finance Ministers in Buenos Aires at the weekend. We also publish a call for evidence on how online platforms can help their users to pay the right amount of tax, and we will consult on a new VAT collection mechanism for online sales to ensure that the VAT that consumers pay actually reaches the Treasury. We will also call for evidence on how to encourage cashless and digital payments while ensuring that cash remains available for those who need it.
The Government are determined that our generation should leave the natural environment in a better state than we found it and improve the quality of the air that we breathe, so we will publish a call for evidence on whether the use of non-agricultural red diesel tax relief contributes to poor air quality in urban areas. Following our successful intervention to incentivise clean taxis, we will help the Great British white van driver to go green with a consultation on reduced vehicle excise duty rates for the cleanest vans.
We will follow up on the vital issue of plastic littering and the threat to our oceans with a call for evidence to support us in delivering on our vow to tackle this complex issue. It will look at the whole supply chain for single-use plastics, and at alternative materials, reusable options and recycling opportunities. It will look at how the tax system can help to drive the technological progress and behavioural change that we need—as a way not of raising revenue, but of changing behaviour and encouraging innovation. We will commit to investing to develop new, greener products and processes, funded from the revenues raised. As a down payment, we will award £20 million now from existing departmental budgets to businesses and universities in order to stimulate new thinking and rapid solutions in this area during the call for evidence.
We are delivering on our plan with a balanced approach, restoring the public finances, investing in our economy and our public services, raising productivity through our modern industrial strategy, building the homes our people need, tackling the environmental challenges that threaten our future, embracing technological change and seizing the opportunities ahead as we build our vision of a country that works for everyone and an economy where prosperity and opportunity are in reach of all, wherever they live and whatever their gender, colour, creed or background, where talent and hard work alone determine success, as a beacon of enterprise and innovation and an outward-looking, free-trading nation, confident that our best days lie ahead of us, a force for good in the world and a country that we can all be proud to pass on to our children. I commend this statement to the House.
I thank the Chancellor for providing me with early sight of his statement, but I have to say that his complacency today is astounding. We face in every public service a crisis on a scale that we have never seen before. Has he not listened to the doctors, nurses, teachers, police officers, carers and even his own councillors? They are telling him that they cannot wait for the next Budget. They are telling him to act now. For eight years they have been ignored by this Government, and today they have been ignored again.
The Chancellor has proclaimed today that there is light at the end of the tunnel. This shows just how cut off from the real world he is. Last year, growth in our economy was among the lowest in the G7—the slowest since 2012. The OBR has just predicted that we will scrape along the bottom for future years. Wages are lower now, in real terms, than they were in 2010—and they are still falling. According to the Resolution Foundation, the changes to benefits due to come in next month will leave 11 million families worse off—and, as always, the harshest cuts fall on disabled people.
The gap in productivity between this country and the rest of the G7 is almost the widest for a generation. UK industry is 20% to 30% less productive than in other major economies—and why? In part, the reason is that investment by the Government, in real terms, is nearly £18 billion below its 2010 level. This is a Government who cut research and development funding by £1 billion in real terms. Business investment stagnated in the last quarter of 2017. Despite all the promises, the Government continue to fail to address the regional imbalances in investment. London will, again, receive five times more transport investment than Yorkshire and Humberside and the north.
How dare this Government speak on climate change? This is a Government who singlehandedly destroyed the solar industry, with 12,000 jobs lost as a result of subsidy cuts. The Chancellor talks about the fourth industrial revolution, but Britain has the lowest rate of industrial robot use in the OECD. The Government have put £75 million into their artificial intelligence programme—less than a tenth of what the US is spending.
The Tories can shout all they want and they can make their snide remarks, but people out there know about the crisis in our communities.
The Chancellor has made great play this week of reaching a turning point in reducing the deficit and debt. That is a bit rich coming from a party that has put £700 billion on the national debt over the past eight years. It is worth remembering that this is a party that promised us that the deficit would be eliminated completely by 2015 and then 2016. Bizarrely, his predecessor, now ensconced in the Evening Standard—or Black Rock, the Washington Speakers Bureau, or whatever number of jobs he now has—has been tweeting about achieving, three years late, a deficit target that he actually abandoned himself.
The reality is that the Chancellor and his predecessor have not tackled the deficit: they have shifted it on to the public services that the Chancellor’s colleagues are responsible for. He has shifted it on to the Secretary of State for Health and the shoulders of NHS managers, doctors and nurses throughout the country. NHS trusts will end this financial year £1 billion in deficit. Doctors and nurses are struggling and being asked to do more and more while 100,000 NHS posts go unfilled. Does the Chancellor really believe that the NHS can wait another eight months for the life-saving funds it needs? How many people have to die waiting in an ambulance before he acts? He has mentioned the pay offer to NHS staff that we are expecting shortly. That was forced upon him by campaigns against the pay cap by the Labour party and the trade unions. Taking away a day’s holiday from those dedicated staff is mean-spirited. I ask him now: will he drop this miserly act?
The Chancellor has also shifted the deficit on to the Secretary of State for Education and head teachers, with the first per capita cut in schools funding since the 1990s. Today the Government are even trying to deprive 1 million children of a decent school dinner. I am asking the Chancellor, and I am asking every Conservative MP —[Interruption.]
I am appealing to Tory MPs today, if they are serious about ending austerity, to vote with us this afternoon to give those children the free school meal they are entitled to.
The Chancellor has shifted the deficit on to the Home Secretary and the Justice Secretary. Crime is rising, yet he has cut the number of police officers by 21,500 and the number of firefighters by 8,500, and our prisons and probation service are in dangerous crisis.
In shifting the deficit on to the shoulders of the Secretary of State for Housing, Communities and Local Government, in reality he has shifted the burden on to local councillors—Labour, Lib Dem and Conservative councillors alike. I raise again the stark reality of what that means for the most vulnerable children in our society. There has been a 40% cut in early intervention to support families. The result is the highest number of children taken into care since the 1980s. Children’s charities—not us but children’s charities—are saying that this crisis could turn into a catastrophe without further funding. Last year, 400 women seeking refuge were turned away because there were no places available for them in refuges. There are now nearly 5,000 of our fellow citizens sleeping rough on our streets—more than double the number in 2010. Tragically, one of our homeless citizens died only feet away from the entrance to Parliament.
The Chancellor mentioned additional housing funding in London. The additional housing funding announced for London today is not a new announcement: this is money already announced. Any new funding is welcome, but it is simply not enough and it represents a cut in London’s budgets compared with the money that Labour allocated in 2010. One million vulnerable older people have no access to the social care they need. Conservative Councils are going bust. Many will be forced to hike up council tax. Councils are running out of reserves, as the National Audit Office explained to us. I ask the Chancellor: will he listen to Conservative council leaders, such as the leader of Surrey, who said:
“We are facing the most difficult financial crisis in our history. The government cannot stand idly by while Rome burns”?
How many more children have to go into care? How many more councils have to go bust? How many more have to run out of reserves before the Chancellor wakes up to this crisis and acts?
Today’s statement could have been a genuine turning point but it is, depressingly, another missed opportunity. People know now that austerity was a political choice, not an economic necessity. The Conservatives chose to cut taxes for the super-rich, the corporations and the bankers, and it was paid for by the rest of us in society. They even cut the levy on the bankers in the Finance Bill. We were never “all in this together” as they claimed—never. They cut investment at the very time when we should have been developing the skills and infrastructure needed to raise productivity and grasp the technological revolution with both hands. And when they had a responsibility to meet the challenge of Brexit, we have a Chancellor who this weekend admitted he has not even modelled the Government’s options.
Today we have the indefensible spectacle of a Chancellor congratulating himself on marginally improved economic forecasts, while he refuses to lift a finger as councils go bust, the NHS and social care are in crisis, school budgets are cut, homelessness has doubled and wages are falling. This is not a Government preparing our country for the future; it is a Government setting us up to fail.
The right hon. Gentleman supported the switch to a single fiscal event, and now he is complaining that I have not delivered a mini Budget today. I am not surprised that he cannot quite understand anybody passing up the opportunity to introduce some new taxes, because that is what a Labour Government would be doing, not once a year or twice a year but every other week.
I heard the right hon. Gentleman referring to some of my hon. Friends as “Tory bully boys”. I remind the House that this is the man who still refuses to apologise to my right hon. Friend the Secretary of State for Work and Pensions, so I do not want to hear anything about bullying from the Labour Benches. The public will draw their own conclusions.
The right hon. Gentleman knows his Lenin, of course. The task is to win power, and that is why we see from him the smooth reassuring mien of the bank manager, but every now and again, the mask slips, and we get a glimpse of the sinister ideology that lies beneath—an ideology that would wreck our economy if he ever gets anywhere near the controls, threatening confiscation, dismissing property rights, undermining the cornerstones of our economy and the basis of our freedom and prosperity.
The right hon. Gentleman talks about political choices. Let me tell him the political choices we have made. We have closed the tax gap to one of the lowest in the developed world. We have raised £175 billion by 100 measures against tax evasion and avoidance. We are collecting 28% of all income tax from the richest 1% in our country—a higher percentage than in any year under Labour. He says that real wages are falling. I have good news for him: the OBR expects real wages to rise from quarter one 2018, which, in case he has not worked out, starts in two weeks’ time.
The right hon. Gentleman talks about spending on the disabled. Well, I have good news for him again: spending on the disabled will be higher in every year of this Parliament. He talks about research and development to support our economy. Research and development spending is at a record high.
The right hon. Gentleman reels out the same old bogus statistics on regional distribution; I think he has got the briefing from Russia Today. Let me tell him this: the Infrastructure and Projects Authority has published figures that clearly show that the highest per capita spending on transport infrastructure investment is in the north-west region, not, the last time I checked, one of the southern regions. All regions have benefited from the boom in employment. All regions will end this Parliament with lower unemployment and higher employment.
The right hon. Gentleman talks about £700 billion of increased national debt. We have had to deal with the legacy of Labour’s meltdown in 2009 because they did not fix the roof while the sun was shining. Our historical function is to clean up Labour’s mess, and my report today shows that we are doing it once again.
The right hon. Gentleman talks about funding for the NHS. I have put £9 billion into the NHS since autumn statement 2016. He talks about school budgets. School budgets are increasing per pupil in real terms. On children’s services, he must know that Department for Education research shows that spending on the most vulnerable children has increased by around half a billion pounds in real terms since 2010. We have committed £1 billion to tackling rough sleeping and homelessness and made a manifesto pledge to eliminate rough sleeping by 2027 and halve it by 2022.
No one watching our exchanges today can be in any doubt that Britain faces a choice. We have a plan to get our economy growing. The shadow Chancellor says it does not matter whether GDP grows or not. We have a plan to get people on the housing ladder, while the shadow Chancellor does not want “to get bogged down in property rights”. We have a plan to deal with our debts. The shadow Chancellor wants to send debts soaring because he fantasises that he can borrow for free.
The choice is clear: our vision of a dynamic, modern economy, or the Labour party’s vision of an inward-looking, narrow-minded country. We have to win this argument, because if we do not, it will be ordinary people—not the rich and the powerful and not the globally mobile—who pay the price, as they always do for Labour’s failings.
I congratulate my right hon. Friend on his very forceful statement based on competent government and grown-up politics, which are worlds that the shadow Chancellor will never enter. When my right hon. Friend comes to prepare his Budget for November, I am sure he will be looking for any new source of taxation that may be needed to put even more money than he already has into the NHS and social care, which are facing vast increases in demand.
May I suggest that my right hon. Friend looks at some of the extraordinary anomalies he has inherited in the tax treatment of older prosperous people in full-time work in this country? [Laughter.] Well, I think I am perfectly well placed to make my point and cannot be accused of personal bias. It is absurd that older employees pay less tax on their income than their younger colleagues because they do not pay national insurance. It cannot be right that people in large houses enjoying capital gains from the housing market have those disregarded for means test purposes if they ever need certain types of social care. As the early Budgets in a Parliament are a time for tough and difficult decisions, will my right hon. Friend let me know that he will be looking at those much overdue anomalies, which need to be addressed? Some justice between the generations, I think, is being demanded by our constituents.
I am a great fan of the concept of intergenerational fairness. My right hon. and learned Friend will know, as a former Chancellor of the Exchequer, that all Chancellors look at all options in the run-up to every Budget. I can undertake that I will do so in the run-up to Budget 2018. In the meantime, I can tell him that there is a mechanism for voluntary donations to Her Majesty’s Treasury, and in case he has mislaid it, I will send him a copy of our bank details.
I have to say, that was much ado about nothing. The real tragedy is that we are 10 years on from the financial crisis, but austerity is still with us, and there was a lack of hope given to the people of the United Kingdom from the statement today.
At the weekend, we saw the hon. Member for Moray (Douglas Ross) at the Glasgow Celtic versus Rangers football match, in his other job as a linesman, waving his flag and enthusiastically calling for a red card. If anybody deserves a red card today, it is the Chancellor of the Exchequer.
We hear the Chancellor proclaiming that we have had consistent economic growth since 2010 and that we can look forward to continued economic growth over the course of the coming years. The reality is that in 2019, when we are supposed to be leaving the European Union, the OBR predicts that growth will be a measly 1.3% and is forecast to remain at around 1.5% over the coming years, significantly below the historical trendline of growth for this country.
When I hear the Chancellor talking about wage growth, he ought to reflect that we have had a lost decade of wage growth in the United Kingdom. Let me prick his balloon on this one, because the OBR book is very clear that real earnings growth will “remain subdued” for the next five years. That is the reality, and perhaps the Chancellor should stop spinning and be honest with people about what is going to happen. The Chancellor talks about light at the end of the tunnel. Let me tell him that the light at the end of the tunnel is a hard Brexit and the impact of lower growth, which is going to cost jobs and prosperity in this country.
Slow earnings growth, higher inflation and cuts to the benefit system are resulting in falling incomes for the poorest households and in rising inequality. Once again, the Chancellor has failed to bring his Government’s disastrous austerity programme to an end. Worse still, he has his head firmly in the sand over Brexit.
This Government are going ahead with a devastating cut to Scotland’s budget. [Interruption.] I hear the Scottish Tories shouting “Rubbish”. Perhaps they could join those of us on the SNP Benches and defend Scotland’s interests. Let me explain the reality: over the decade from 2010-11 to 2019-20, Scotland’s block grant has been cut by £2.6 billion in real terms, which is an 8.1% cut. [Interruption.] The people of Scotland should watch the Scottish Tory MPs who are calling out: once again, they are failing to stand up for Scotland’s interests. [Interruption.] Let me say respectfully that these Tory MPs have been here for quite some months, and they should understand that if they want to speak, they should try to catch your eye, Mr Speaker. It is undignified to call out in the way they are doing. [Interruption.]
Order. There is much excitable gesticulation taking place on both sides of the House. I urge Members to keep their Order Papers to themselves, and not to lash out with their hands, gesticulating in all sorts of directions. They are in danger of becoming rather eccentric denizens of the House.
Thank you, Mr Speaker. These are, after all, serious matters. The extent of the block grant reduction is highlighted by the Fraser of Allander Institute, which has noted:
“By 2019/20 the resource block grant will be around £500 million lower than in 17/18”.
I pay tribute to my hon. Friends on the SNP Benches who fought so hard on behalf of their constituents to have Police Scotland and Scottish Fire and Rescue Service VAT scrapped. That was a fantastic result. However, the reality is that Scotland has suffered under this policy for the past five years. Will the Chancellor be bringing forward plans to return the £175 million that has already been paid? VAT should never have been charged: it was a vindictive measure imposed on Scotland by a Tory Government. Give Scotland back the £175 million to invest in our frontline services. Will Scottish Tory MPs join the SNP in standing up for Scotland, or will they remain silent on the cash grab we have seen from Westminster?
This Tory Government’s austerity policies disproportionately affect the most disadvantaged individuals, while giving tax breaks to the better-off in society. The Resolution Foundation recently estimated that the Government’s austerity programme will leave the poorest third of households an average of £715 a year worse off by 2022-23. In Scotland, we have a new progressive income tax policy. [Interruption.] I can hear Conservatives saying, “Up”, but the reality is that for most people in Scotland tax is lower. The Scottish Government are able to reverse this year’s real-terms budget cut inflicted by this Tory Government, and ensure that the majority—I repeat, the majority—of taxpayers in Scotland pay less than in the rest of the UK.
However, Scotland’s new taxation powers should not exist simply to mitigate UK Government austerity. In Scotland, the SNP Government have gone further to support those on low incomes. In the recent budget at Holyrood, a package was secured that raises the threshold of a guaranteed 3% increase for those earning up to £36,500, benefiting up to three quarters of Scottish public service workers—a Scottish Government on the side of hard-working public sector workers.
As we near the EU summit at the end of this month in Brussels, the progress of this Government in readying for Brexit has been nothing short of shameful. The UK Government’s own analysis tells us that, under all scenarios, Scotland would suffer a relatively greater loss in economic output than the United Kingdom as a whole. A no-deal scenario would be significantly devastating, threatening to reduce growth by a massive 9% over 15 years.
Make no mistake: a hard Brexit is going to hit the pockets of families and lead to a loss in tax revenue expectations, and is therefore going to affect spending on public services, yet the Chancellor is silent on the risks to our economy—risks to our economy when the stresses and strains of a near decade of austerity are hurting. The fact is that Scotland is shackled to a sinking ship.
The Scottish budget passed last month illustrates the real divergence in political choices across the UK. In Scotland, we have chosen to stand by our outstanding public sector staff and give them the pay increase they deserve. We continue to mitigate the worst atrocities of this Government’s ideological austerity agenda. We will continue to press for nothing less than continued UK membership of the single market and customs union to prevent the economic catastrophe of an extreme Tory Brexit. We will never stop fighting to get justice for the 1950s women, whom the SNP are so happy to support.
In conclusion, the choices are clear and the opportunities obvious. The Chancellor must wake up to the economic injustices he has overseen, and he must tell this House as a matter of urgency how the economy will stand a hard Brexit.
Probably a matter of rather more immediate urgency for the people of Scotland is how their economy will withstand the highest rates of taxation in the United Kingdom—an economy that, under the SNP Government, is already growing more slowly than the economy of the United Kingdom. I do not know about a sinking ship; I suggest to the right hon. Gentleman that this is about keeping afloat.
The right hon. Gentleman talks about earnings. I suggest that he looks at real household disposable income, which, as I am sure he knows, is now 4.4% higher than at the start of 2010. We have cut taxes for 31 million people across this country, at a time when his Government are putting taxes up. We have taken 4 million people out of taxation, improving the ability of people to retain their hard-earned incomes.
The right hon. Gentleman talks about Brexit, spreading alarm, but he knows very well that my right hon. Friend the Prime Minister is working tirelessly to deliver a Brexit that will secure British jobs, British businesses and British prosperity. We would be aided in that enterprise if he and his Government worked closely with us to deliver an outcome that is good for the whole of the United Kingdom.
The right hon. Gentleman talks about Scotland’s budget and the block grant, but of course Scotland now has its own tax-raising powers, and the people of Scotland know how he intends to use them. Perhaps he has forgotten, but I will try to help him with his short-term amnesia: at the autumn Budget in 2017—just four months ago—Scotland received an additional £2 billion of funding as a result of the measures announced then.
As for the VAT on police and fire services measures being vindictive, the Scottish National party Government were told explicitly that it would not be possible to refund VAT if they went ahead with the police reorganisation, and they decided to do so anyway. He may use the adjective “vindictive”, but I suspect my right hon. and hon. Friends will be able to think of another adjective to describe a Government who pursued such a ridiculous course of action.
I congratulate the Chancellor on his balanced approach. He and the Prime Minister have rightly identified housing as an economic and social priority. He will be aware that the Treasury Committee’s report on his autumn 2017 Budget recommended that the housing revenue account borrowing cap could be lifted to allow local authorities to play their part in building the right homes in the right places. Is that something he will consider?
The light that the Chancellor can see at the end of the tunnel is the Brexit locomotive barrelling headlong towards him, and towards our schools and hospitals. What will he do to prevent that free trade agreement-style scenario, which his own Treasury officials say will leave a £55 billion train wreck in our public services?
As the hon. Gentleman knows, I am committed to delivering a Brexit that protects British jobs, British businesses and British prosperity, and I spend a significant amount of my working time ensuring that that is the route we follow. I expect that we will make further progress at the March European Council. I understand the concerns that he expresses on behalf of British businesses, but I talk to businesses all day, every day, because that is my job—[Interruption.] The shadow Chancellor says so does he, so he will know this already. Business is concerned about what the consequences of a bad Brexit deal could be, but business is much more concerned about the consequences of the policies advanced by his right hon. Friends on the Opposition Front Bench.
May I say what a huge pleasure it is to hear the Chancellor so upbeat, and indeed Tiggerish? He has a right to be so, given that unemployment is at its lowest level for 40 years, and manufacturing is seeing its best performance for 50 years. Given his answer to our right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) on looking at every avenue for money, and given that we will be about four months away from our official departure date, at the next Budget will my right hon. Friend consider setting out in the Red Book what he plans to do with the money that we will no longer have to pay in contributions to the European Union?
It is always a pleasure to hear from my right hon. Friend. We are absolutely not complacent, because there are many challenges as well as opportunities ahead of us, but we have a plan to embrace the opportunities and rise to the challenges. This country has many advantages that our neighbours would give their right arm to enjoy. We must go forward robustly and in good heart to seize those opportunities and make the best of them for the future. On his specific point, of course in the forthcoming Budget we will look at taxation and spending over the future period. The OBR, of course, will decide what to present in its report to the House. He will have an opportunity to question OBR officials about their approach when they appear before the House shortly after the Budget statement.
Consumer credit has risen by 9% over the past year, and the ratio of household debt to income, at 138%, is rapidly approaching a level not seen since before the financial crisis. With interest rates now forecast by the OBR to rise faster than we previously envisaged, are we not asking consumers to keep the wheels on the road for the economic recovery? Is that sustainable, and is that the right thing to do?
The hon. Lady is right to raise this issue. It is something we keep under constant review, and I talk regularly with the Governor of the Bank of England about personal debt. She will probably know that personal household debt rose in all but one of the 13 years of the Labour Government, and it is now lower than it was before the financial crisis. The judgment of the authorities at the moment is that household debt levels are sustainable, but she is right to draw attention to it. It is something we keep under close review.
Can the Chancellor give more detail on the announcement that the Office for National Statistics will work with the Treasury on a more sophisticated measure of human capital? In a knowledge-based economy, that becomes more crucial than ever for driving our economic productivity. Can he give us more detail on the timelines and the nature of that work?
I am glad that my right hon. Friend has asked this question, because it gives me an opportunity to thank her for sparking this line of inquiry in a letter she wrote to me. I did challenge the Treasury with the idea that it is more focused on the returns to infrastructure investment than on skills investment. When we looked at it in detail, we discovered that the metrics for measuring the returns to investment in human capital are not as well developed as they should be. That is something the ONS has to take forward, but it is important, as we move increasingly into a knowledge-based economy, with a huge set of technological changes ahead of us, that we can compare appropriately and objectively investment in physical infrastructure with investment in human capital, and that is what we will be able to do if we get the new metrics right.
The Chancellor of the Exchequer is doubtless aware that the OECD this morning published its own growth forecasts, putting us at the bottom of the OECD economies, with forecast growth this year of 1.3%. It is pretty clear that there is no Brexit dividend on the scene for the British economy. It is to be welcomed that the deficit is getting back to a manageable level, but he must know—even his own Back Benchers are telling him—that extra money is needed now for our hospitals, our schools and our police. That money is not there because of previous decisions to make premature cuts to capital gains tax and inheritance tax. He must have heard the Institute for Fiscal Studies calling for increased capital investment in housing, up to 3% of our economy. Why does he not listen to the IFS?
First, the right hon. Gentleman knows, as I do, that our economy still faces uncertainty as we go through the negotiation process with the European Union. I am convinced, from every conversation I have had with business leaders and investors, that as we deliver greater clarity about our future relationship with the European Union over the coming months, we will see business investment and consumer confidence increasing. We beat the forecast in 2017. Let us beat it again in 2018. I do believe that economic growth matters. The shadow Chancellor says that it does not matter what the level of GDP is, but I do not agree—[Interruption.] Well, I will send him the quote if he cannot immediately recall what he said. I do believe that GDP matters, because it is what drives living standards. We are putting extra money into public services—£11 billion since I have been Chancellor. I agree that we have a major challenge in the housing market. We have put a significant amount of money—£44 billion—into dealing with the challenge over the rest of this Parliament, but there are significant non-financial constraints on being able to do more, such as physical bottlenecks in relation to skilled labour and materials. But it is something we will keep under review.
Perhaps the current Conservative Chancellor of the Exchequer could remind the previous Conservative Chancellor of the Exchequer that, given where our electoral support comes from, it might not be wise politics to impose a targeted new tax on our older supports. He could also remind our right hon. and learned Friend that he will be delighted to know that after we leave the EU we will be saving £12 billion a year in contributions.
The winter crisis in the NHS left us with cancelled operations, ditched targets, patients sleeping on the floor, and a public apology in the end from the Prime Minister. Neither the spring nor the spring statement has provided any easing of those pressures. Given that the right hon. Gentleman knows the November Budget will be too late to provide any additional funding that he knows both the NHS and social care will need for next year’s winter crisis—he knows this both in his heart and in his spreadsheet—will he now follow the Prime Minister and announce a public apology to the staff and patients of the NHS who are going to have to endure next year’s crisis because of this failure?
I have already made it clear that we admire greatly the work of NHS staff who, with the pressures of flu and extreme winter weather, faced extremely difficult circumstances this winter. This is a spring statement, not a fiscal event, but I have said and I will say again to the right hon. Lady that we are putting an additional £4 billion into the NHS in 2018-19, and I have committed to putting in further money in-year in 2018-19 to fund a pay settlement for nurses and “Agenda for Change” staff, if the management and the unions reach an agreement.
It is very welcome to hear from the Chancellor such good news on debt and growth, in particular their effect on the real lives of people in my constituency, where since 2010 youth unemployment is down 48% and apprenticeships are up 6,850. In continuing his successful balanced approach, will he commit to dealing with the social care sector, because we both know it will become an increasingly important issue in the years and decades ahead?
I am grateful to my right hon. Friend, who has done a great deal of work on this issue. We are absolutely aware of the pressures on the social care system. They are not short-term pressures; they are driven by the demographics of an ageing population. We have to do three things. In the short term, we have provided additional money. In the spring Budget last year, I put in £2 billion of additional support. My right hon. Friend the Secretary of State for Housing, Communities and Local Government put in another £150 million of social care grant at the local government settlement just a few weeks ago. In the medium term, we have to work to get all authorities meeting the standards of the best. There is excellent practice across the country, but it is not everywhere. The variation in delayed discharges between different authorities is completely unacceptable. In the long term, we are committed to publishing a Green Paper on social care and the future of social care, which we will deliver to the House before the summer recess.
The Chancellor says that forecasts are there to be beaten and I agree with him, so can he explain to me why, since his Budget in November, the OBR has not been able to increase the growth forecast for 2019, 2020, 2021 or 2022? It cannot be the negative impact of Brexit, because the OBR still does not have the information from the Government to be able to forecast that, so what on earth is his excuse?
I will perhaps remind the hon. Lady that the OBR’s autumn report in November was only four months ago and that in the normal course of events one would not expect, in the absence of some shock to the economy, economic forecasts to change very significantly. The front-end forecast has changed, because the outturn for 2017-18 has changed. The OBR forecast growth 0.2% lower than it turned out to be in 2017-18 and that has a knock-through effect, which has increased its growth projection for this year.
Investing in our economy creates jobs and growth, and successful businesses drive that. Will my right hon. Friend tell the House how much the corporate tax take has gone up since the cut in corporation tax? Will he confirm that he will do nothing to hinder our internationally competitive corporate tax rates?
Yes, I can. I am happy to tell my hon. Friend that since we reduced the rate of corporate tax to 19%, the yield—the amount of tax we raise for our public services, our hospitals and schools—has gone up 54%. It is clear that being one of the most competitive tax jurisdictions in the G20 is one of the determining factors in many investment decisions coming to the UK, creating the jobs and prosperity we need for the future.
The Chancellor is right to talk up the UK economy when there is good news, because there are plenty in this House who will recklessly talk it down. There was, however, one gap in today’s statement. He promised an inquiry, in time for the autumn Budget, into air passenger duty and VAT on the hospitality industry. When will he make an announcement on when that inquiry will start and on the terms of it?
May I draw the attention of the Chancellor to the recent research published by the International Monetary Fund, which shows that the choice we made in 2010 to deal with the deficit primarily by controlling spending rather than raising taxes, as the Opposition would have done, was the right choice? It meant that the economy grew faster than those of our European competitors and has put him in the position where he can deliver more money for our priorities, while reducing the debt in the balanced way he has set out.
I am grateful to my right hon. Friend. He is right: it was the right choice. Because we made that choice, throughout that period employment in this country continued to grow. We avoided the very high levels of unemployment suffered by many of our European neighbours. We avoided the catastrophic, generation-blighting levels of youth unemployment suffered by many of our European neighbours, which will be affecting their economies and societies not just for a few more years but for 30, 40 or 50 years to come. It was the right decision. We have executed our plan and we should stick to it.
I am clear—I think I have alluded to this already—that one of the factors depressing the forecast growth is the uncertainty that still exists around the economy. If the hon. Lady, like me, expects that uncertainty to dissipate over time, she should look through it to the fundamentals of our economy and its underlying strengths. This economy is in a fundamentally good shape. Once we can restore confidence and certainty about our future path, I am confident that those fundamental strengths will deliver increased economic growth.
My right hon. Friend made a fantastic statement. Does he join me in welcoming the 65% fall in youth unemployment in South Suffolk since 2010? Does he agree that while my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) is entirely right to mention inter- generational fairness, the worst form of intergenerational unfairness would have been to allow our youth unemployment to peak at socially dangerous levels, as it has in the rest of Europe?
My hon. Friend is absolutely right. I welcome the very large fall in youth unemployment in his constituency, but that will be from a base that was very much lower than what has come to be considered normal by many of our European neighbours. As he rightly says, this is not just an economic factor, but a societal factor. Persistent high levels of youth unemployment have a hugely damaging effect, as we have discovered in the past in this country to our cost. If someone is unemployed during their formative years, they are far more likely to remain unemployed and unemployable for the rest of their working lives.