Income Tax (Charge)
Debate resumed (Order, 31 October).
Question again proposed,
That income tax is charged for the tax year 2019-20.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
I inform the House that I have selected the amendment in the name of the Leader of the Opposition. As I intimated earlier, approximately 77 Members want to speak and I know that the Front Benchers will do their best to tailor their contributions to take account of the extent of interest in the House.
This week’s Budget was a Budget for our proud public services, jobs, housing, opportunity and enterprise, and a brighter future for every part of our country. Above all, it was a Budget dedicated to the British people and their tireless efforts to rebuild the economy and to bring it back from the brink and the chaos under the last Labour Government. Let us not forget what a mountain we have had to climb.
Thanks to the Labour party, we are running the highest budget deficit in peacetime, with the Government having to borrow £1 for every £4 they spent. It has been difficult to turn that around, but the families and communities that make up this great country can be confident that their hard work and the Government’s balanced, long-term approach have paid off.
I strongly welcome the measures in the Budget, particularly those to help small shops on our high streets—they will transform our high streets. Will my right hon. Friend set out what the Budget and the Government are doing to ensure that we have more affordable and social housing?
I am grateful to my right hon. Friend for his early intervention. I intend to cover several housing announcements, but he rightly underlines the Government’s commitment to build the homes that our country needs. We want councils, housing associations and the private sector to build, thereby meeting the challenges and problems that the broken housing market has presented. The Government are determined to fix that.
If the Secretary of State is serious about house building, where is the funding in the Budget for the Bakerloo line extension, which would provide not only vital transport infrastructure for south-east London, but bring with it house building—private house building as well as 5,000 social housing homes and 2,000 genuinely affordable, London living rents?
I am grateful to the hon. Gentleman for highlighting transport infrastructure. The additional £500 million that the Chancellor announced for the housing infrastructure fund is firmly about investing in that infrastructure to deliver the housing agenda. I will come on to an announcement in the Budget about London and investment in transport infrastructure. It may not be the one that the hon. Gentleman was looking for, but support for the docklands light railway, unlocking housing growth in that part of London, was an important announcement.
The results speak for themselves: the economy has been growing for eight years, over 3.3 million more people are in work, wages are growing at their fastest pace in almost a decade, the deficit is down, national debt is falling, and the number of households where nobody works is down by almost 1 million. Those are huge strides that we risk at our peril. It has taken eight years to secure those hard-won gains, and it is clear that the Labour party would undo all that good work.
The Government are not content with just clearing up Labour’s mess. We have to live within our means, but we have bigger ambitions. We want to build a country in which there is opportunity for all and no one is left behind.
The Secretary of State repeated what the Chancellor said on Monday—that the wage growth enjoyed in the past year was the best in the decade. Does he accept that that is easy to say, given that the past decade has been the worst for wage growth in 210 years?
I underline to the hon. Gentleman that we have seen that wage growth but there has also been employment growth. Three million jobs have been created under the Government and the Red Book forecasts the creation of 800,000 more.
The important measures in Monday’s Budget that backed our public services, including the NHS in its 70th year, that cut income tax for millions and increased the national living wage, and that ensured that we are open for business and investing in our future, deliver our promise. The Budget delivers for families and communities and provides a major boost for the quality local services on which we all depend.
When I was appointed to this role, I said that I could not be more proud to represent those communities and the dedicated people working so hard on their behalf in local government, and I meant it. I am under no illusion about how challenging it has been for councils to deliver in recent times as they contributed to helping us to put the economy back on its feet. In recognition of that, we have given local authorities more control over the money they raise, for example, through our plans for increased business rate retention from 2020. We know that the pressures on services have been growing, including around social care.
I want to take the Secretary of State back to what he said about the position the Government found themselves in in 2010, when of course, his former right hon. Friend, George Osborne, promised to eradicate the deficit by 2015. They failed to do that, and now there is no target date at all in the Budget for eradicating the deficit. Why that dramatic change?
I have to say in the nicest possible way that it is a bit rich for the right hon. Gentleman to make that point. Labour’s spending plans would cost £1,000 billion. It is an extraordinary sum of money, and all the people up and down the country would bear the cost of the debt for borrowing.
My right hon. Friend is making a typically powerful speech. Will he tell the House how the measures in this Budget will help young people on to the housing ladder, particularly as since 2001 home ownership levels have halved for people aged between 16 and 35?
My hon. Friend makes an important point. The steps under this Government have led to an increase in home ownership, and the first time buyer rate has started to increase under this Government. This has been a challenge and initiatives such as Help to Buy have been important in realising that ambition and the aspiration for people to be able to own their own home. There is also the investment in social and affordable housing through our specific £9 billion programme, which is firmly focused on that.
I want to come back to my point about local government and the pressures we recognise have been growing especially around social care. That is why I am delighted that the Chancellor committed around £1 billion of extra funding for local services, with a strong focus on supporting some of our most vulnerable groups. That includes £650 million for adult and children’s social care; £240 million of that will go towards easing winter pressures next year, with the flexibility to use the remainder where it is most needed for either adult or children’s services. That is on top of the £240 million announced last month to address winter pressures this year.
In addition, the Budget pledged an extra £84 million over the next five years to expand our successful children’s social care programmes to more councils with high or rising numbers of children in care, and an extra £55 million is being made available for the disabled facilities grant in England in 2018-19. This new funding will allow councils to take immediate action to deliver the services their residents need while protecting them from excessive council tax bills.
As a member of the Housing, Communities and Local Government Committee and having been an elected councillor for the last decade, I have become all too aware of the devastation wrought on local government by the continuing cuts in previous Budgets. Does the Secretary of State not agree that the Chancellor has missed a massive opportunity to reverse those cuts so that local government can provide those much needed services?
If the hon. Gentleman looks at what the Budget is delivering—I have already referenced the additional funds being provided around social care, which we have seen as one of the pressures—over the last two years the budget has been going up in real terms. [Interruption.] I hope that, as a member of the Select Committee, he would recognise that. I pay tribute to the work local government has done up and down the country in delivering quality local services, against the backdrop of the challenges we have had to deal with as a consequence of the actions of the last Labour Government, and there are serious—[Interruption.]
Order. Does the House not want to hear the Secretary of State? [Hon. Members: “No.”] I thank hon. Members; that is a straight answer. Hon. Members do not want to hear the Secretary of State, but I tell them that while I am here this will be done fairly and everyone will get a chance to be heard, even the Secretary of State.
Thank you very much, Madam Deputy Speaker.
There are serious long-term decisions to be made about the social care system and how we place it on a sustainable footing, not least how we ensure that health and social care are better aligned. I am working closely with the Health Secretary on this and we will be publishing our Green Paper on the future of social care shortly.
The Budget also provided a further £420 million to help councils to carry out repairs on our roads—money that will help to improve access to workplaces, high streets and other community facilities. I will have more to say about overall funding for local government when I publish the provisional local government finance settlement later this year.
I thank the Secretary of State for giving way, just as I was grateful to him for meeting my constituents from New Ferry, but when they heard the Budget on Monday and heard about the investment he is talking about for potholes, they felt abandoned once again. There was nothing in the Budget for the people in New Ferry, who face absolute devastation, as the Secretary of State knows well.
I am very conscious of the particular issue the hon. Lady highlights to the House, and indeed I greatly appreciated the opportunity I had to meet her constituents, to hear their stories and to hear about the impact the devastating incident has had on that community. I am still considering what the options are, to see how the regeneration can be provided and work can be conducted with the local authority, so I very much look forward to continuing to remain in discussion with the hon. Lady on what I know is a very serious and significant community issue.
Obviously the £650 million for social care is welcome, but does the Secretary of State accept the Local Government Association figures that the gap next year is actually £2.6 billion? Has he any concerns at all about comments from leaders in East Sussex, Surrey, Somerset and Lancashire, all Conservative county councils, that they are facing a cliff edge that they are likely to fall over at some stage unless the Government take more dramatic action?
There has been a recognition of the important step that has been taken in the Budget with the additional funding provided for adult and children social care and how that will make a difference. I will of course look carefully to the future in discussions I will have, through the spending review, on long-term financial support for our local government sector, the innovation and real value I see in local government—what it delivers for our local communities—and I will remain a proud champion for local government. But, as I said, local authorities also have a huge role to play in helping us to build the decent, affordable, secure homes that families and communities so desperately need and deserve. As the Prime Minister has said, this is our biggest domestic priority.
As I said at the outset of my speech, we have had to make those difficult decisions and I know so many people have contributed to this—the British public up and down the country. This Budget is indicating how we are now turning things around and looking positively at what our country can be and what it can do, and how we should be optimistic about our future.
I look forward to welcoming my right hon. Friend to Solihull on Friday. Has he seen the report in today’s Times that there has been a surge of activity in UK house building over the last three months, with the greatest number of new homes signed off since the global crash? Is the truth not that Britain is building again, and just because of this Government’s policies?
The National House Building Council figures published today are very encouraging about the levels of building activity. We must build the homes our country needs, and we are firmly putting in place a number of steps and measures to help deliver on that. I know there is more to do, but we should recognise that progress is being made. We need to continue to see everyone building across the economy, because as a country we have failed to build enough homes over the decades under successive Governments. As a result, the most basic of needs—a place to call home—is out of reach for many, particularly our young people.
That is changing, thanks to this Government. Since 2010 we have delivered more than 1 million new homes and helped nearly half a million families get on to the housing ladder through Help to Buy and the right to buy, and we are taking action to ban the unjustified use of leaseholds on new homes, crack down on rogue landlords, ban unfair letting agent fees and cap deposits, and end rough sleeping for good.
We should contrast that with the record of the Labour party; not only did housing become more unaffordable under Labour, but under the current Labour leadership it has consistently voted against the reduction in stamp duty, which has helped more people get on to the housing ladder.
A key part of the housing market is the second-hand market, of course. First-time buyers are now making a strong comeback because of the brave measures we took in relation to buy-to-let landlords—changing the stamp duty and the way we treat interest—which means that first-time buyers are now not only on a level playing field but in many parts of the country have the upper hand again.
My hon. Friend highlights some of the important steps that have been taken and the impact that they are starting to have, but we know there is much more to do. We know that we need to be bolder and much more radical if we are to fix our broken housing market, make it fairer and match Harold Macmillan’s record by delivering the 300,000 homes a year that families and communities need. That ambition was set out back in 1951, and we will do it again.
This Budget does that and more. By building on the Chancellor’s commitment last year to a five-year, £44 billion housing programme, it reaffirms this Government’s commitment to restoring the dream of home ownership, most notably by securing the future of Help to Buy past 2021 and ensuring that the new scheme is targeted at first-time buyers, who need it most, and includes regional property price caps through to 2023. With most first-time buyers now exempt from paying stamp duty following last year’s Budget, benefiting more than 120,000 buyers so far, this year’s Budget went a step further by extending that relief to all first-time buyers of shared ownership properties worth up to £500,000 and making it retrospective. That is good news for anyone who aspires to own their own home.
Ultimately, however, there is no way we can help more families to get on to the housing ladder without getting Britain building and getting local authorities to play their part. That is why the Chancellor’s confirmation that we are removing the biggest barrier—the Government cap on how much councils can borrow to build more—is such a game changer. It will free up councils to deliver around 10,000 homes a year. It has been great to see how warmly this has been welcomed by councils up and down the country, and how ambitious they are about making the most of this opportunity to deliver the next generation of council housing. We are also supporting housing associations to deliver at scale and pace, with the Chancellor’s announcement of the next wave of deals with nine housing associations, worth £653 million, which will deliver a further 13,000 affordable housing starts by March 2022.
Will the Secretary of State acknowledge that if we are really going to address the housing crisis we need to build between 50,000 and 100,000 new social homes for rent, and that this Budget is not delivering on keeping that promise? Will he consider giving councils the first right of refusal on public land and allowing them to purchase it at current use value rather than at the development price?
I am sorry if the hon. Lady does not recognise the important steps that are being taken in the Budget, including allowing councils to borrow in order to invest in new housing growth, our commitment to our affordable homes programme and our long-term deals with housing associations, all of which are making a difference.
My right hon. Friend will be aware that we are attempting to build three new garden communities across north Essex. That will necessitate building the infrastructure to go with them. What is he doing to assist us in that endeavour, which will of course supply some of the houses that are needed in north Essex?
I very much welcome the authorities that are coming forward with ideas for garden towns and villages, which will be an important part of the vision of a home becoming a reality for more people and of meeting our intent to provide 300,000 new homes per year. I would point my hon. Friend to the housing infrastructure fund, which is focused on delivering the infrastructure and support that allows housing growth to take place. It is important to recognise the additional support that the Chancellor has provided for that initiative in the Budget.
Councils and housing associations undoubtedly have a lot to contribute when it comes to helping us to build more homes more quickly, as do our small and medium-sized builders, which is why Monday’s Budget bolstered continuing efforts to support their revival and market diversification with £1 billion of new guarantees implemented by the British Business Bank. I am grateful to my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) for his review of the vital issue of build-out rates, which was published on Monday. He has not found evidence to suggest that our large house builders are engaged in speculative land banking, but he recommends reforms to the planning system on very large strategic housing sites. I look forward to studying his report in more detail, and I will respond more fully in the new year.
Whether through further reforms to planning or securing the future of Help to Buy, we are helping families, communities, buyers and renters in the private and social sectors, both now and in the long term, and in the process we are changing lives. As I have said before, this is not just about building more homes; it is about building stronger communities. Those communities need to know that the right infrastructure, transport links and other essential services are in place to support new developments. It was therefore great to see the Budget boosting the housing infrastructure fund by £500 million, bringing the total funding to £5.5 billion and potentially helping to unlock 650,000 homes. It was also great to see the Budget providing £291 million of grant funding for vital infrastructure on the docklands light railway in east London, which will ease pressure on existing services in the area and generate more than 18,000 homes.
The Secretary of State mentioned communities. One of the greatest threats to our communities right across the UK is the continuing closure of bank branches, and I am disappointed that that was not addressed head-on in the Budget. Nevertheless, I give credit where it is due: the Budget did mention the decaying of our town centres. Will he tell us whether Her Majesty’s Government will give a fair wind to the Private Member’s Bill introduced by the hon. Member for Ochil and South Perthshire (Luke Graham) to tackle the banking issue?
I will certainly refer that private Member’s Bill to the colleagues who have direct responsibility for those issues. I think the hon. Gentleman’s broader point was about the vibrancy of our high streets. Banks, post offices, shops and other businesses are intrinsic to creating the sense of a community hub. Our high streets are the heart of our communities, and they are greatly valued. We need vibrant high streets where commerce and communities meet and where people from all backgrounds can come together. I think that is recognised across the House.
It is concerning for many people to see our high streets struggling as shopping habits change, which is why this week’s Budget made it a priority to champion them and help them to adapt, with a significant £1.5 billion package of support. That includes a cut to business rates for small retailers worth almost £900 million over two years, reducing their bills by over a third and amounting to an annual saving of up to £8,000 for a wide range of independent shops, pubs, restaurants and cafés. But we are not just providing short-term relief for our retailers; we are also setting out a long-term vision for our town centres, with a £675 million future high streets fund to help councils transform their high streets by making the necessary improvements to infrastructure and transport and by redeveloping underused retail space into homes to help to secure their future.
The Secretary of State is laying out his plan for towns, but does he not agree that the plan needs to be inclusive and give young people something positive to do? Youth services have seen massive cuts of more than 60% in real terms since 2010. This Budget does not seem to be investing in young people. Should it not be doing so?
I certainly acknowledge the need to ensure that we are inclusive and that we are thinking about the next generation, and there are opportunities for that in what we are seeking to achieve on our high streets and in the creation of jobs, growth and opportunities. A sense of aspiration and ambition resides firmly at the heart of our approach as a Government. We are seeing youth unemployment coming down, and we are creating a sense of ambition and opportunity. I want to underline the huge benefits that the Government are delivering.
The Secretary of State makes a powerful point about maintaining our communities, and he will know that this Budget contains the starting elements of the arc between Oxford and Cambridge via Milton Keynes, which has the potential for more than 1 million houses being built across that swath of middle England. Does he agree that, in building those 1 million homes, we must be cautious that we do not sacrifice fragile environments such as the Chilterns area of outstanding natural beauty, which could easily be buried under concrete if the project is not planned exceedingly carefully and the necessary protections are not put in place?
I am grateful to my right hon. Friend for underlining that arc of opportunity between Oxford and Cambridge—I know that it is very relevant to her and her constituency. We are giving the matter careful consideration and working with colleagues in the Treasury and the Department for Transport on bringing it together. This is about how we can unlock opportunity, about creating transport infrastructure and housing, and about jobs and growth, but it is also about doing it carefully, thoughtfully and sensitively. I understand the relevant point that she has raised, and we will obviously continue to do that work as we look to unlock the area’s potential in a thoughtful way.
I am confident that the measures for the high street, which include a relaxation of planning rules to support mixed-use businesses and extra support for local leaders, will see our high streets flourishing again at the heart of our communities.
We have come a long way since the dark days of Labour’s great recession. With this Budget, we are seeing the hard work of the British people paying off and paving the way for a better future. As the next chapter of our islands’ story unfolds, we will be free to chart our own destiny and seize the opportunities that that brings. We will be delivering on the things that matter most to our families and communities: more homes, world-class public services, help for the most vulnerable, and hope for our high streets. Our best days lie ahead of us. It will be a positive future that is not for the few or for the many, but for everyone.
Order. Before I call the Opposition spokesman, I say to Members that it will be obvious that more people are indicating that they wish to speak than there will be time for this afternoon. We will start with a limit of seven minutes, but that will be significantly reduced as time goes on. However, the limit does not apply, of course, to Mr Andrew Gwynne.
I beg to move an amendment, after “tax year 2019-20” insert
“provided that the condition in paragraph (2) of this resolution is met.
(2) The condition in this paragraph is that the Chancellor of the Exchequer has, no later than 5 April 2019, laid before the House of Commons a distributional analysis of—
(a) the effect of reducing the threshold for the additional rate to £80,000, and
(b) the effect of introducing a supplementary rate of income tax, charged at a rate of 50%, above a threshold of £125,000.”
We have had the fiction and now it is time for the fact. It is a pleasure to open the final day of the Budget debate for the Opposition. This Budget was sold as ending austerity, but it does not do that remotely. It is a Budget of failure; a Budget of broken promises.
Labour is not opposed to any modest benefit—however modest that may be—for lower and middle-income earners, but that measure is the only one that puts some money in their pockets. We also need to support those who do not reach the lower threshold, which is why we support a real living wage, and the restoration of sectoral collective bargaining and trade union rights. However, putting more money into the pockets of higher earners is obviously wrong, which is why the next Labour Government will increase taxes on only the very wealthiest—people with incomes in the top 5% and the corporations that have had a tax cut under the Tories.
The hon. Gentleman was clearly not listening. It is in our amendment and was in our manifesto at the last general election. We mean the people in the top 5% of incomes, and Labour’s amendment sets out the changes to income taxation that we would introduce in order to achieve that.
Does my hon. Friend agree that the Welfare Reform Act 2012 and the Welfare Reform and Work Act 2016 caused £34 billion of cuts, resulting in 14 million people, including 4 million children, living in poverty? The Government have reduced the deficit by taking from the poor instead of from those who have much more—the wealthy.
My hon. Friend is absolutely right. Whatever this Government say, austerity is far from over for the people who require our help through the social security system.
Turning to communities, it was only a few weeks ago, in a speech that began with the Prime Minister dancing across the stage, that we were told that austerity is over. After almost a decade of cuts that have made life difficult for families across the country, I expect that many people welcomed the news coming out of Birmingham and breathed a sigh of relief. No longer would they have to visit food banks after work because they could not afford to eat. No longer would they feel unsafe in their neighbourhoods after 21,000 police officers had been cut. No longer would too many people be left shivering in the cold, unable to afford somewhere to live and with nowhere to turn. No longer would local councillors be worrying about balancing their books, about providing care for vulnerable children, or about ensuring dignity for the elderly people who need the care that their councils should be providing.
Fast-forward to the Budget presented to the House this week, and many people will have been left bitterly disappointed. This is not an end to austerity, but merely more of the same. Two thirds of the welfare benefit cuts planned by the Government will still happen, and headteachers will still be forced to write begging letters to parents to pay for the basics. No wonder that the “little extras” referred to by the Chancellor—a frankly insulting term to schools at a time when the independent pay review body has said that they do not have the resources to give any pay rises to their staff—were so badly received. Teachers’ pay is down £4,000 in real terms since 2010, and headteachers are writing to parents to ask for donations just to keep services at current levels.
This Budget has delivered a tax cut for 32 million people. Can the hon. Gentleman clarify Labour’s position, because the shadow Chancellor says that he supports that but the Leader of the Opposition says he does not? What is Labour’s policy?
Thank you, Madam Deputy Speaker.
As I was saying, £1.3 billion of cuts next year are hard-wired into the system—[Interruption.] The Secretary of State for Housing, Communities and Local Government can shake his head, but the statistics come from the Tory-led Local Government Association. The cuts will devastate councils that are already struggling. Austerity is certainly not over for local government. Councils were the first and perhaps the easiest target of the coalition Government, and they have had to endure some of the largest cuts across the public sector.
No, I am going to make some progress.
After all, by cutting funding to councils, Ministers have shifted the blame on to councillors, including Conservative councillors. Councils of all political persuasions and none are now at breaking point. The effects of that on our communities are plain to see across the country. More than 500 children’s centres have shut down and 475 libraries have closed. Support for disabled children has been stripped away—for example, the transport that helped them to get to school to learn like their friends. Support for older people has been slashed, with 1.4 million older people now not getting the necessary help with essential tasks such as washing and dressing. Bus routes have been cut. Our roads are in disrepair, and before the Government laud the £420 million for potholes, I must point out the £1 billion backlog created by this Government’s cuts. Swimming pools, leisure centres and community spaces have closed. Bin collections have been reduced. Youth clubs have closed. Planning departments have been stripped out. Trading standards offices have been slashed, leaving more people at risk of fraud or dodgy goods. Streetlights have been turned off to save money.
We see the impact of all those cuts in Derbyshire, where elderly people are not receiving care packages, early help for children is being cut and libraries are threatened. Does my hon. Friend agree that the cuts are actually contributing to long-term growth in the numbers of older people in hospital and children being taken into care? The cuts are not only cruel, but a false economy.
My hon. Friend is absolutely right, because all this does is shunt costs on to other parts of the public sector. That is not a sustainable way of continuing. Sadly, I could give many more examples, yet the Government’s answer to these problems is not to drop the £1.3 billion cut to funding next year, nor to properly address the crises in social care and children’s services, but to offer mere crumbs from the table, which will do little to fix the problem that has been created.
I am listening to the hon. Gentleman’s speech with great interest, but he has not answered the question put to him by my hon. Friend the Member for Aldershot (Leo Docherty). The shadow Chancellor says that he supports the tax cut and the Leader of the Opposition says that he does not. Where does the hon. Member for Denton and Reddish (Andrew Gwynne) stand?
Let me make it very clear. In case the hon. Gentleman has not realised, this is not a Labour Budget. A Labour Budget would look very different. We will not vote today to restrict extra money for the lowest paid in our country, and when we have a Labour Government offering hope for the future, a Labour Budget will rectify the giveaways to the top.
The Chief Secretary to the Treasury believes that the Government have not cut local government budgets, but the fact is that, since 2010, spending power—the Government’s preferred measure—has fallen by 28.6%, which includes the 49.1% cut to central Government grants for local authorities. Yes, local authorities have been given new powers to raise funds, but the reality is that a 1% council tax increase in her area raises significantly more than a 1% council tax increase in mine. She can shake her head, but if she does not understand that areas whose properties are predominantly in bands A and B do not raise the same amount as areas with properties in higher council tax bands, perhaps she should not be Chief Secretary to the Treasury.
I will make the position clear, because Treasury Ministers appear to have found these calculations very difficult. The Chief Secretary to the Treasury told “Newsnight”:
“We are not making cuts to local authorities. What we have done is give them more revenue raising powers so that decisions can be taken locally.”
I am happy to give Government Front Benchers the calculations provided by the Tory-led Local Government Association and by the National Audit Office. The Institute for Fiscal Studies has gone further and provided an analysis of how the cuts have fallen across the country:
“the most deprived authorities, including Barking & Dagenham, Birmingham and Salford, made an average cut to spending per person of 32%, compared to 17% in the least deprived areas, including Warwickshire, Wiltshire and Dorset.”
These hardest-hit councils have been dealt a second blow by the Government’s reliance on council tax to fund the struggling social care sector, as they are unable to raise anything like enough through the social care precept compared with councils in wealthier areas.
The Secretary of State for Housing, Communities and Local Government can shake his head, but this year Tameside Metropolitan Borough Council, one of the two authorities that make up my constituency, has a £16 million social care funding gap. One per cent. on council tax in Tameside brings in £750,000. The Tamesides of this world are never able to fill that social care gap from council tax, and that is what is so unfair.
Instead of providing the much-needed reform of social care, this Budget has once again shown a Government committed to sticking-plaster solutions. There is no Green paper and no long-term plan. Just as the £1.3 billion cut hits next year, the Government will need to find £1.5 billion just to keep social care running. Behind these figures are real people who need help, and the Government sit idly by.
Sadly, the Government’s small contribution to alleviating this crisis will for many people be far too little, and, for many councils, far too late. One of the most sacred values and duties of any Government is to ensure that the most vulnerable in society are protected. With overspending on children’s services hitting a new high of £800 million a year, the Chancellor’s pledge of £84 million for just 20 councils—I am interested to know which 20 councils they are—comes nowhere close to addressing the national crisis. Both crime and the fear of crime are rising in our neighbourhoods, yet this week’s Budget offers not a single extra penny for neighbourhood policing. The National Audit Office and the Select Committee on Home Affairs are warning that, without funding, our police service is teetering on the edge of collapse. The number of police officers has already fallen by 21,000 since 2010, and the independent police watchdog is warning that
“the lives of vulnerable people could be at risk.”
But instead of fixing the problem, the Treasury sees fit to play fast and loose with public safety with a £165 million raid on pensions. We are now in an unprecedented situation where police chiefs are threatening legal action against this Government.
The chief constable of Greater Manchester police has warned that upcoming budget cuts could take officer numbers back to levels last seen in 1975, wiping out the 50 additional officers funded by this year’s council tax precept. Another 600 officers need to be cut, on top of the 2,000 we have already lost, because of this Government’s mess on pensions.
If Conservative Members really cared about the safety of our citizens, and about the soaring crime in some of our communities, they could have fixed it by stopping the police cuts.
The Budget shows that this is not a Government who are interested in public safety, in our children’s future, in our elderly, in our public sector workers—our doctors, our nurses, our teachers, our police officers, our firefighters—or in the disabled. Indeed, they are not interested in our constituents.
Politics is always a question of priorities, and this Government have clearly got their priorities wrong. Since 2010 they have handed out £110 billion in tax giveaways to the richest and to corporations, but the services on which most people rely have been cut to the bone and to breaking point. In the coming days and weeks—as children’s centres and libraries remain closed, as roads continue to go without repair and as crime continues to rise—people will recognise that the Prime Minister’s promise to end austerity has been broken. In fact, it was a mirage from the start.
We need a fresh approach: a real end to austerity, investment in our communities, and a Government intent on rebuilding Britain for the many, not the few.
I have listened to many Budget speeches but when I listened to this year’s I was taken by surprise, in a rather cheering way. I came here expecting that we were going to hear how the Chancellor had solved the problem of raising some taxation to help pay for the very welcome £200 billion given to the NHS. I sat there listening to him deliver an excellent speech, cutting taxation and increasing public expenditure. It was an open and expansive Budget based on a courageous Budget judgment that I had not seen coming—I welcome that and wish it every success. It was of course based on spending all the unexpected surprise of the extra tax revenues that the Office for Budget Responsibility forecasts had produced—or had already delivered—and on spending everything anticipated in the forecasts in order to keep us on track to eliminate debt.
I welcome bold decisions, and I hope this one succeeds, but I am afraid I am going to express a little caution, as someone needs to, even in the Chamber of the House of Commons. I have seen many Budgets and the reaction is quite predictable: all my right hon. and hon. Friends have joined in welcoming every piece of good news, as I do. The money for health and social care was very much needed, and I welcome what has been done for small businesses and city centres—I could go on, but my seven minutes does not allow me to cover all the good news in the Budget. But somebody has to express caution, but I do not do so as a party pooper; I am not going in for all the gloom and foreboding of the Institute for Fiscal Studies and Standard & Poor’s, the rating agency. But as the Labour Opposition are in my personal opinion so completely useless on an occasion like this—all they do is greet an expansive and popular Budget by saying, “Oh, it’s nothing compared with the vast sums we would spend in future”—it is probably as well that we do express some caution.
All I would like is for my right hon. Friend the Chief Secretary, who I believe is going to wind up the debate, to reassure me that we are proceeding with some care. Many political judgments involve taking risks. Very few political judgments and policy judgments give an obvious answer, which is fine. A courageous Minister takes some of those risks, but they do have to be aware of them and to anticipate what they would do if they started to materialise, and I hope my right hon. Friend will be able to do that.
The reasons for my reservations are, simply expressed, that the very welcome news about the tax revenues recently may not last. We have had windfall revenues in the past, and nobody quite understands why we have these windfalls now, so I think a little caution is called for before we start anticipating that they are going to carry on in that way.
As for forecasts, I never spent the money in forecasts, because all economic forecasting, at any time, is extremely fallible and extremely difficult. I do not think I know of a time when it has been more impossible than now. I have only seven minutes, so I am not going to be able to dilate about Mr Trump’s trade wars, problems of Chinese debt, the emerging problems in many emerging markets, the reckless nature of the Italian Government they have elected and, above all, the uncertainty of Brexit, which dominates us. All this makes the task of economic forecasting almost impossible, so we should not spend the money it looks as though we might be getting without having at the back of our minds some idea of what we are going to do if it does not work out.
My right hon. and learned Friend is right to pour cold water on economic forecasts. What did he think of the Treasury forecast before the referendum which warned that if we voted for Brexit, there would be an
“immediate and profound economic shock”?
The Treasury took some welcome measures to ease that shock, stepping in with an emergency cut in interest rates and expansionist measures to mitigate the problem. One problem with forecasting is timing. If we get a hard Brexit, I do not think my hon. Friend will be dismissing quite so lightly the forebodings of the Treasury. I agree that some of the leading figures in the remain campaign turned the whole thing into a bit of a farce by talking about Budgets putting up taxes and so on in two or three months’ time, but I did not echo that and nobody else did. Also, it was not as bad as most of the quite dishonest arguments being put forward by the leave campaign about the millions of Turks who were coming here, but I will leave that to one side.
The Brexit deal will have consequences for our immediate economic future. I want a soft Brexit, if we have to leave. I want no new barriers to our trade and investment and no new customs arrangements; I want regulatory convergence and open borders to continue with our major market, but we may not get there—no one knows. I have added in all the other uncertainties in the global economy at the moment. We are all being sustained by an American boom, which may be quite short lived, as these fiscally induced booms usually are. Recession is not impossible in the next two or three years, and we have to make sure, first, that we avoid it and, secondly, that we are prepared for the warning signals when they come.
So I hope I can be persuaded that the Chancellor has retained some firepower in case the economy risks going off, and I hope he will manage expectations. We are all enjoying this Budget, but the key public spending decisions are going to be in the public expenditure round in 2019 and 2020. Nobody should be led to expect that vast sums are necessarily going to be forthcoming then, and we need to manage expectations.
What slightly worried me were what I thought were presentational errors made in the run-up to this Budget. Had I been Chancellor, I would not have agreed that £200 billion for the health service should be announced on an inconsequential date a few months ago and then have been left with the Budget to explain how we pay for it. If we had put the two together, the health service spending would have been the highlight of this Budget, because it is a very welcome and very important decision. The public were braced to pay something towards it. The first reaction is that some other taxpayer should pay, but we could have given ourselves more firepower and maintained our direction on debt by raising some taxes towards it. But they are the only reservations I raise.
Budgets often are popular at first but they are forgotten by Christmas—even mine. What matters is where the economy is in two or three years’ time, and I hope the Chief Secretary will tell me that the Government have not lost sight of that.
It is a pleasure to speak for the SNP on the final day of debating the 2018 Budget and to follow the right hon. and learned Member for Rushcliffe (Mr Clarke), who is always a hard act to follow. I hope I might be able to provide some detail on the caution that he was unable to deal with in the time available to him.
Today, we focus on families and communities. Where better to start in that regard than by detangling the Chancellor’s spun lines on family budgets. Pay growth is continuing to falter. We have had the worst decade of wage growth in 210 years, making it easy for the Chancellor to say that a modest rise in regular pay rates is the highest in 10 years. Even if that level were to be sustained—and that is unlikely unless there is a significant change regarding the UK’s productivity crisis—it is unlikely that pay rates will return to pre-crisis levels until the middle of the next decade. No wonder we have growing rates of in-work poverty. This Government are failing to make work pay.
Just take the announcement on universal credit, by which I am bitterly disappointed. It did not live up to anyone’s expectations. It did not match the ambition set by the hon. Members for South Cambridgeshire (Heidi Allen) and for Plymouth, Moor View (Johnny Mercer) on work allowances alone. Like me, they wanted work allowances to be fully restored to pre-2015 levels. The Chancellor failed to do that and failed to tackle the other ways in which universal credit is failing utterly. He reinstated just half the cuts to just one part of the cash cow that is universal credit, which the Treasury has milked dry. Indeed, even the right hon. Member for Haltemprice and Howden (Mr Davis) yesterday welcomed the investment but quickly said that more will need to follow. I agree: very much more will need to follow.
I will in just a minute. I shall give way only a couple of times as I am conscious of the fact that other Members wish to speak.
Yesterday, the Prime Minister said that 2.4 million people are to benefit by up to £630 a year from Monday’s changes. That was pure spin. What she should have said is that those families will be up to £630 less worse off. The Secretary of State for Work and Pensions herself said that universal credit is costing people £2,500 a year, and the Resolution Foundation said that that figure applies to 3.2 million households. Even if we are to believe the Prime Minister’s figures, for 2.4 million people the income cut from universal credit will be reduced to at least £1,700 a year. The rest of the 3.2 million households will still see a cut of £2,400 a year.
Does the hon. Gentleman agree with the chief executive of the Joseph Rowntree Foundation, who welcomed the Chancellor’s move to increase funding and said that it would make universal credit
“a tool for tackling poverty”
and for easing the burden on low-income families?
Of course, what the hon. Gentleman does not mention is that before the Budget the Joseph Rowntree Foundation was calling for the work allowances to be fully restored to pre-2015 levels, so I shall take what the hon. Gentleman has to say with a pinch of salt.
That cut of £2,400 a year is before we look at the cuts in other areas of universal credit that will swallow up any gains made from the Chancellor’s announcements on Monday. According to the House of Commons Library, the benefit freeze is going to cost low-income families just short of £5 billion next year alone. That one-year cut via the benefit freeze is worth more than the entire work allowance investment announced by the Chancellor for the next four years, which will be worth £3.8 billion. It is your typical Tory giving half with one hand and taking back double with the other. It is not an end to austerity; it continues to ingrain austerity. Little wonder, then, that the Government’s own expert adviser on social security, Sir Ian Diamond, has said that the next phase in the universal credit roll-out could push thousands into hardship or even out of the benefits system altogether. For shame!
Given what the hon. Gentleman has said, will the Scottish National party support the Lib Dems and vote against the tax cut for those earning more than 50 k? That £1.3 billion could be put into the work allowance to make it back up to what it was before George Osborne slashed it in 2015.
The hon. Gentleman will see what we do later this evening. He will also see what we do with our reasoned amendment to the Finance Bill, which will be coming next week.
The Resolution Foundation has done a cumulative analysis of all the tax and social security decisions from 2015 to 2023. It shows that the people in the first five income deciles—the five poorest groups of people in the UK—are set to lose out by between £100 and £500 a year, on average and in real terms. Of course, some families will continue to get hammered to an even greater extent, as I have already pointed out. The top income deciles, however, will all see an increase in their incomes. So when the Chancellor chose to bring forward a tax cut that disproportionately benefits higher earners the most—instead of stopping the benefit freeze, which is the single biggest cash grab from low-income families, or stopping the most draconian cut to universal credit, which is the disgusting two-child cap, which targets children with austerity—it was clear that his priorities were skewed. He keeps up an income squeeze on the many to pay for the biggest tax cuts for the few. That might have been a line from the shadow Chancellor, but of course Labour is supporting this disgrace.
The tax shambles that Labour has got itself into was compounded yesterday by Scottish Labour putting out a statement asking the Scottish Government to do the exact opposite of what the Labour Front-Bench team here wants to do on tax. For Scottish Labour, it is the old Groucho Marx line: “Those are my principles and if you don’t like them, well, I have some more in London.” Of course, the Scottish Government are already plotting a different, progressive path on taxation, leaving 70% of all taxpayers paying less this year than in 2017-18. I am confident that that will continue in next week’s budget.
Let me return to the impact that Tory austerity is having on families. The OBR has warned that unsecured debt has risen as a share of household income. In other words, people are relying more on loans and credit cards to stay afloat. We know that from the evidence that the Trussell Trust and Citizens Advice have provided about food bank use and people seeking help. The OBR falls just short of saying that the growth outlook is dependent on an unsustainable debt-fuelled increase in consumption, but even its need to mention that in the report should be a warning to the Government and their Front-Bench team. Their squeeze on living standards and family incomes is pushing people into debt, and that has not just social but economic consequences.
Most fundamentally, we should struggle to believe that any of the Budget will be delivered anyway. The OBR has struggled to do its analysis because the Government failed to provide the figures in time. I wonder why that was the case. The Chancellor himself essentially said that his Budget was a wish list—and a wish list that is entirely contingent on Brexit. The OBR’s blue book quotes studies from the Centre for European Reform and the Centre for Economic Policy Research that say that, by the middle of 2018, the UK economy was 2% to 2.5% smaller than it would have been had it not been for the Brexit referendum. In other words, the Brexit referendum itself almost halved the already slow annual economic growth enjoyed by the UK. I doubled checked this with the Library, and UK annual GDP is around £2 trillion, so 2% to 2.5% of that is worth £40 billion to £50 billion. That is £40 billion to £50 billion lost from the UK economy thanks to David Cameron’s failed Brexit gamble and the Vote Leave campaign that broke the rules. The Schadenfreude for the Prime Minister, who claimed that austerity was over, is further compounded by the fact that the estimated cost of ending austerity ranged from £19 billion for the IFS to £31 billion for the Resolution Foundation. Had there been no Brexit, the Chancellor could have ended austerity while staying within his own fiscal rules and still had enough money to fix the roof while the sun was shining.
On Monday, the Chancellor let us all believe that the space he had to loosen the Tories’ vice-like grip on the financial purse strings was down to austerity economics. Let us have a little look at what the Chancellor did not say on Monday and provide bit of the cautionary detail referred to by the right hon. and learned Member for Rushcliffe. Many Tories point to cuts to corporation tax as the reason for greater-than-expected tax receipts. Sadly for them, that does not appear to be the case. Last year, the IFS discussed recent trends in corporation tax receipts and said:
“Weak investment post Brexit is forecast to boost receipts in the short run because it is expected that firms will make less use of tax-deductible capital allowances.”
Analysis in the Financial Times in April last year made basically the same point:
“Companies can offset some of their investments against their profits to reduce their tax bill. The idea is to give them a tax incentive to make more investment. For this reason the OBR has a rule of thumb that a 1 per cent increase in business investment leads to £50m less in tax receipts…But business investment fell by 2 per cent in 2016, according to the ONS. This was good news for the public finances, which received more in corporation tax revenue, despite being bad news for the overall economy.”
I am just about to wind up.
Business investment has continued to slow since 2016. The Office for National Statistics said it was down 0.5% in quarter 1 of this year and down 0.7% in quarter 2. What does the ONS reckon is a factor in that? Business investment is being held back because of Brexit. Of course, business investment is doing rather better in Scotland, with FSB Scotland’s quarter 1 2018 report quoting increases in business investment of 1.1% quarter on quarter. Perhaps that is the reason that the Chancellor has held back nearly £16 billion in fiscal headroom and refused to end austerity in this Budget. As the right hon. and learned Member for Rushcliffe said, the Chancellor knows that the fiscal position he has found himself in is neither intentional nor necessarily one to aspire to, because it is at least partially down to weak business investment. More austerity is not the answer. Austerity has failed and continues to fail, and as we know the Chancellor has little intention of ever creating that mythical Budget surplus.
As ever, this Budget is about choices; to govern is to choose after all. The Chancellor chose not to end austerity. Most departmental budgets are set to get hammered in the spending review. The Chancellor chose not to properly fix universal credit. Billions of pounds of cuts to low-income families will continue. The Chancellor chose not to use nearly £16 billion that he had spare; he has presumably squirreled that away as a further Brexit down payment. However, the Chancellor chose to bring forward a multi-billion pound tax cut which will disproportionately benefit those on higher incomes the most.
Now people in Scotland have their chance to choose. Can we really afford to keep ourselves aligned to this austerity-driven Brexit Britain, which is driving up poverty through this Government’s paucity of ambition for our people and isolating us from the rest of the world, or will we choose to regain the powers of independence and the power to choose the future for ourselves?
I want to refer to some of the local issues that I hope this Budget can address for my own community, with a particular focus on Putney High Street, Roehampton High Street, Southfields village and, of course, Danebury Avenue, also in Putney. I could make a long speech on my broader views on this Budget, on the need for reform of the Treasury, and on how the OBR forecast has changed so significantly. I could make a speech on the fact that probably one of the biggest challenges in British politics is the seesawing of resources in and out of public services and the resulting inability of those services ever to plan properly for the long term. However, that is probably a speech for another day.
What I want to do today is focus on the issues in my local community. It is fair to say that for most of us, the problem of rent and rates, and the impact that they have not just on local businesses but on local shops, local restaurants and bars is really acute. That is particularly true in London, where the sense is that rent and rates only ever go up during the good times, but when we hit more difficult times my local businesses never see them come down. As a result, we have inflated rateable values that then give a legacy of high rates and rents that feeds forward into the future.
High streets are facing a significant structural challenge as they move from being, historically, transaction centres where people went to buy things to being social centres. What people and communities get out of the high street has significantly changed, and it will not change back. I particularly welcome the initial ideas that the Chancellor set out in relation to a digital sales tax, but I encourage the Treasury to bring those proposals forward sooner rather than later and to properly understand what taxation looks like in the context of the high street when we know that, in the future, high streets will be social centres rather than transaction centres.
I have a business improvement district in Putney. I am sure that the announcement of the future high streets fund—the £675 million that will be available to communities to improve and support high streets—is extremely welcome and necessary. This is not the first time that, locally, we have asked for funds to improve our high street. The council itself is putting in £640,000 of investment to improve Putney High Street, to improve the experience of shoppers and pedestrians, and to improve traffic flow. I have to say that, when we asked City Hall for investment in our local community, our bid was not seen as a high priority. I am delighted that the Government recognise that communities such as mine need investment to support the high street to keep going and make a transition. I ask the Secretary of State, or perhaps the Chief Secretary when she winds up the debate, simply to make sure that they do not make the mistake of giving any of that £675 million to City Hall. If that happened, I can only assume that, yet again, my community would be de-prioritised for investment in our local high streets. Instead, the money should be given directly to local councils to make the decisions that they know are important to improve high streets such as those around Roehampton, Putney and Southfields—the community that I am so proud to represent.
May I also ask the Secretary of State to look at whether that £675 million can be brought forward and invested sooner rather than later so that it can make an impact now, rather than in several years’ time? I have looked at the phasing of the fund, and my personal view is that high streets need support now, not later.
I do, of course, welcome the announcement that businesses whose properties have rateable values of £51,000 and lower will see business rates cut by a third. That will help 90% of properties, but, again, I say to the Secretary of State that, for those of us representing communities in London, we will have a disproportionate number of the properties in that final 10%—the businesses that are not covered by that measure. I ask him to continue to look particularly at how businesses in London can continue to thrive. We do not want to be a place where independent shops literally cannot afford to start up and survive. Even some of our high street chains are finding it hard, as we can see with the loss of Marks & Spencer in Putney.
May I also add to the communities part of this debate and say that I very much recognise and welcome the steps that the Government and the Treasury are taking on affordable credit? They are absolutely vital to help a whole generation of often young people, but also people on low incomes, to make sure that they do not pay through the nose for the kind of credit that the rest of us are used to having.
May I ask the Secretary of State to make sure that, at the very least, the Government get out of my way so that I can get my Creditworthiness Assessment Bill through this House with all-party support? Last Friday I came here to try to move my Bill on to its next stage, and it was opposed by an MP and by Government Whips. I ask the Government that, the next time I bring the Bill to the House on 23 November, Government Whips do not object to its being moved forward. It could help 15 million renters across our country get better access to more affordable credit. It is vital that the Bill is passed, as it could have a big impact.
In his opening speech, the Secretary of State set out how we want to support people who have the dream of home ownership, but if they cannot build up a credit history, even with the reliable rental and council tax payments that they make every month, it fundamentally does not allow them to make the case to lenders that they should the best credit opportunities on offer. It really is time for the Government and the House to pass a Bill that can genuinely make rent count. As someone representing a community where perhaps 50% of households rent, I can say that this is absolutely crucial to making sure that this is not just a Government who help people to get by, but a Government who help people to get on.
I am glad to follow the right hon. Member for Putney (Justine Greening). I want to focus on housing, which was where she ended her remarks. In particular, I want to focus on what the Secretary of State said in his opening speech, which is that this is the biggest domestic policy priority for the Government.
We should begin with a moment of candour. If we are looking across the piece at policy failures of Governments of both parties, we can see that this is the biggest single failure over the last generation. I am proud of some of the things that the previous Labour Government did, but we did not build enough homes, and this Government have not done so either.
I am serving on a social housing commission run by Shelter. It comprises residents of Grenfell Tower and people from across the political spectrum, such as Baroness Warsi and Lord O’Neill from the other place, and is precisely designed to try to fashion a new cross-party consensus on these issues.
Reading the Budget, I was encouraged by some of the measures in it. It mentions the broken housing market, to which the Secretary of State also referred today. I must confess that I am old enough to remember when such talk was part of living in a Marxist universe, but it is genuinely good that things have changed. It is a positive step that the Government have lifted the local authority borrowing cap, and indeed that they are providing housing associations with some money to build. They say that their measure on council house building will mean that 10,000 council homes are built each year, and that the housing association measure will lead to 13,000 being built over three years. The question at the heart of any analysis of this Budget on housing is: is that enough? I argue that it is not nearly enough.
Let me provide some context to this. The Secretary of State said that he wanted to be like Macmillan. Indeed, I think all of us can praise what Harold Macmillan’s Government did. Let me tell the House about the scale of building in that era. The 1951 to 1955 Government built an average of 193,000 social homes each and every year. That is more than this Government have built in the last seven years. Each and every year, the 1955 to 1964 Government built 116,000 homes, the 1964 to 1970 Government built 143,000 homes, and the 1970 to 1979 era saw the building of 116,000 homes. We are way off that.
I will get to the question of funding and whether it is an investment in the future. The figures I have read out are actually flattering to the era since 1979. I am genuinely saying that this a cross-party failure, because under the right to buy we have sold off 2 million homes since 1979—far more than we have built.
The question is, what do we do? My argument is that this is not just about a change in policy. It is actually about a change in the whole philosophy on social housing. I argue that there are three principles that have been in effect since ’79 and need to be replaced. These principles were brought in by the ’79 Government, but have not fundamentally changed.
The first principle is that the market will provide; the market will build. We know from experience, despite the many efforts of different Governments, that the structural barriers in the market such as developers, incentives to build for the high end of the market and the cost of land mean that the market will not provide sufficient housing at the scale and speed required. There is no historical evidence to suggest otherwise. Indeed, the figures show that it is not in the private sector that the failure to build is most pronounced compared with the 1970s; it is actually in the social housing sector.
The thing that we have all missed is that the social housing sector is the bedrock of an effectively functioning housing market. In other words, it does not just benefit those who live in social homes. It benefits everybody, because it is more likely to keep prices down and avoids some of the problems that we see in the private rented sector. The Government have to be fair and recognise—at least at the level of principle—that saying the market will build will not cut it any more, and that the Government need to play a substantial role when it comes to building.
My right hon. Friend is making a valuable point. I think it was the last Housing Minister but four—now the Prime Minister’s chief of staff—who accepted that social house building provides continuity to the construction industry, as it does not go up and down with the cycles of the private sector. That is very important for maintaining skills in the industry in the long term.
My hon. Friend makes an important point.
The second principle is that we need to acknowledge that the Government have come to see social housing as a residual for the neediest in our society, but that was not the origin of social housing. It was a tool to meet the needs of middle and lower-income families. That is particularly relevant today, given that 2016 figures from Shelter show that 78% of private renting households cannot afford to buy, even with Help to Buy. Why should the choice for those families be confined to the often substandard and highly expensive private rented sector? They should have a chance of social housing too. As one of my fellow Shelter commissioners—who happens to be a Conservative—puts it, we need to think again of social housing as meeting aspiration and need. That is a fundamental change, but it was part of the original vision of everyone from Nye Bevan to Harold Macmillan.
The third principle relates to the intervention by the hon. Member for Morecambe and Lunesdale (David Morris)—the question of where we put our money. Essentially, the choice that has been made since Lady Thatcher has been to put money into housing benefit and various subsidies including Help to Buy. What we have again missed is that investing in housing is investing in an essential part of our infrastructure. Dare I say it, it is as much a part of our essential infrastructure as transport—including High Speed 2—or schools and hospitals, and it is value for money because of the return on that investment.
In case hon. Members do not take my word for it, they can listen to Lord Porter, the Conservative chair of the Local Government Association. I have only just discovered Lord Porter—an important discovery. On Monday he proposed that we build not 10,000 but 100,000 social homes a year, saying:
“The gains are enormous. Investments in social housing could generate returns up to £320bn over 50 years, helping countless families along the way by creating local jobs and building homes people need and can afford.”
The reason I talk about those principles is that they drive the scale of the response. If we recognise the principles of the limits to the market, who social housing should be for and the that fact there is a return on investment—that to borrow to invest in social housing is a sensible move for the country—we will be led to a much bigger response than we saw in the Budget. As I said, it is good that the Government have changed course in a number of respects, but this is an era for boldness, not incrementalism, and I am afraid that the scale of boldness required is not in the Budget.
I will end by discussing why this really matters. It is actually about Brexit—I am sorry about that. The vote to leave was in part a cry of pain about the loss of hope and the loss of a sense of community. We should not idealise the past, but social housing was absolutely part of that. But this is not just about nostalgia. It is about whether people’s kids and grandkids will have a better life. And here’s the thing: in a world and a country where we seem divided on everything, this issue unites remain voters and leave voters, young people and old people, people in the south and people in the north. Whatever happens with Brexit, we need to bring the country together. I can think of nothing more likely to unite people across the divides than long-term investment in social housing, but it needs to be at scale. Incrementalism is not enough; we need a bolder offer. It is there in our history, from Bevan to Macmillan, and we need a Government who will discover it.
It is a pleasure to follow the right hon. Member for Doncaster North (Edward Miliband). He made an interesting speech, although I think he missed out one aspect that I will touch on.
I want to refer to the macroeconomic situation. The Government’s priority has been to reduce the deficit and to see debt falling as a percentage of GDP—something with which I completely agree and is definitely the right approach. We also have to recognise that the business cycle does exist, and that we are probably closer to the next recession than we are further from the previous one. We need robust finances to deal with and cope with that, as and when it comes. To a certain extent, the problem was in many respects created by the last Labour Government before the great recession when they were borrowing £40 billion a year at a time they should have been running a balanced budget. Had they actually been doing so, we would now be in surplus.
I support and encourage the Government’s aims because strong finances give a strong platform for the future. Indeed, strong finances require a strong economy. Government policy should be directed towards achieving this—it should be an economy for everyone. I will therefore concentrate on two specific things that I believe can help. First, we need to rebalance the economy and the country, which the right hon. Member for Doncaster North did not mention. The second issue is housing, which he did mention. These areas are interlinked as local government can and should play a key role in both.
The reality in our country is that we have a southern-dominated economy, and we have to acknowledge that there is underperformance by the regions to a certain extent. We do not want to diminish the success of the south—far from it, given its benefit to our economy overall—but we have to recognise that there is an underperformance in other parts of the country.
I think that my hon. Friend is talking about productivity. Does he recognise that if we are to ensure that we have sound public finances in the future and that the debt-to-GDP ratio falls, we will need to increase our nation’s productivity, which means investing in the regions so that we bring up our national wealth?
I completely agree—the central theme of my speech is exactly that. We have to recognise the success of the south of England and also make sure that other parts of the country are equally successful and drive the productivity goals that we all want.
There is a housing imbalance that we have to acknowledge as well. The south-east and the south are where we find housing pressures regarding demand and price. I shall therefore come on to how we can, I hope, address this, although I have to accept, acknowledge and support the initiatives that the Government have already brought in to help places like Carlisle. Tax cuts; raising the living wage above inflation; a job creation machine that is taking unemployment back to 1970s’ levels—these policies have helped the job security of the people of Carlisle, whose living standards have actually increased.
We have also seen the Government’s northern powerhouse initiatives. I commend the work of the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Rossendale and Darwen (Jake Berry), who is responsible for the northern powerhouse and takes a very positive and active approach to his role. The city growth deals also benefit various parts of the country. The Government’s borderlands growth initiative has been extremely welcome and well supported right across my region. Indeed, five councils are actively working together and have made a very positive submission to the Government. I look forward to reaching the heads of agreement in the new year and seeing some decent finance going into the region to help to support growth and productivity.
I believe that we can achieve so much more, however. Devolution is a Conservative principle. We want more powers devolved down to the regions—tax-raising powers, but also more responsibility for local government. We should be proactively promoting the unitisation of local government so that we have unitary authorities up and down the country. I am a great supporter of elected mayors. We have had success in that regard in the north of England, and I would like to see it spread right across the whole region. To take Cumbria as a simple example, we have seven councils and 400 councillors for half a million people, which is a completely ridiculous situation that is badly in need of reform. The difficulty is that while everybody in Cumbria recognises the need for reform, they cannot agree on what that reform should be. That is where central Government can help by giving a lead.
I want the Government to start to think more radically. Thinking about education, should we be saying to all schools in the north of England that they should become academies? We need to make sure that skills initiatives are locally based so that they are relevant to the local economy, not necessarily the national economy. The industrial strategy should be beefed up, for example so that we have a far more robust energy policy—again, that is very relevant to Cumbria. Should there not be financial incentives so that people who want to invest look to the regions and the north, rather than always to the south and London? How can we alter capital allowances, the planning laws, VAT, rates and national insurance to incentivise people to invest in the north? Of course, infrastructure spending can improve the economic performance of the regions. In my area, an application has been put in for housing infrastructure funding that would unlock the possibility of 10,000 new homes.
If businesses invest in the north, people will move to the north—they move to where there is economic activity. That would spread wealth and create a more balanced economy. People will move to the north rather than the south, relieving housing pressures down in the south. We will then have a stronger economy that produces better public services and a more balanced country. Government policy has recognised much of this, but I encourage Ministers to be more radical in recognising that local government can be a driver of change and a positive influence. I will certainly support the Government in taking a far more radical approach.
This is a Government fiddling around the edges when comprehensive reform is needed, and announcing figures with a flourish in the hope that no one will notice that the sums are inadequate.
When the Chancellor spoke of the end of austerity, my constituents across Dulwich and West Norwood wondered what he was talking about. Lambeth Council, one of the councils serving my constituency, has already lost six in every 10 of the pounds it had to spend in Government grant in 2010, but it faces a further £43 million of cuts over the next four years, which is more than it currently spends on recycling, parks, libraries, children’s centres, roads, pavements and community safety combined. Further cuts can come only from services that are already stretched to the limit. When the Chancellor and the Prime Minister speak of ending austerity but make no pledge to reverse the cuts to local government funding, it should not come as a surprise that councillors across the country of all parties, including thousands of Conservative councillors, react with total incredulity and disbelief. The Government have outsourced austerity to local government in an utterly shameful way.
Adult social care services across the country are at breaking point. The Housing, Communities and Local Government Committee has seen evidence of care home and home care providers handing back contracts to councils that they cannot afford to run, and we know that 1.4 million vulnerable people who are in need of care are not receiving any care at all. A lack of social care capacity continues to present huge challenges for the NHS, both in terms of acute hospital admissions and delayed discharge, and to create misery for countless families who are battling to secure the care that their vulnerable loved ones need. Into this system the Government have announced the injection of some short-term funding to address winter pressures, but there is no short-term fix for care homes that have closed. Dealing with that requires months of planning, refurbishment, recruitment and training, which can be delivered only if there is long-term certainty about funding.
The funding for 2019-20 announced this week in the Budget also falls far short of the £2.6 billion that is widely accepted as the funding injection required just meet current social care needs, and more funding is required to plan for and meet the expanding care needs of our ageing population. Social care funding needs comprehensive reform if we are to create a system that can look after everyone who needs care with the dignity and compassion that any of us would expect for our loved ones. It is testament to a Government mired in internal division and thinking only of how to avoid short-term defeats that they are not up to the challenge of reforming social care and can only find inadequate, piecemeal, short-term sticking plasters.
Children’s services in many local authorities are struggling to fulfil their statutory obligations, still less to proactively support families who may be at risk. There is a crisis of recruitment and retention in children’s social work because of the risks involved in working in a system that is stretched to the limit. Yet the Chancellor’s Budget speech did not even mention this vital frontline service. Schools in my constituency are making extraordinarily difficult decisions to cut teaching assistant and teacher posts in order to make inadequate levels of special educational needs and disabilities funding stretch further, and to sustain extra-curricular activities. School staff are going above and beyond every day to sustain the quality of our local schools. On the Friday before half-term, I and many other parents at my youngest daughter’s school were in tears as we said goodbye to a deputy headteacher with more than 20 years’ service who had taken voluntary redundancy because the school could no longer afford her post. When the cuts are striking at the heart of school communities in this way, the Chancellor’s announcement of a pitiful amount of funding for “little extras” is simply insulting.
Last Friday, I joined a police response team in Southwark on their late shift. We spoke of the huge challenges of increased knife and gun crime and gang violence, moped and cycle-enabled robberies, which particularly affect secondary-age children, and increased burglary. Last night there was a double shooting in my constituency. Members of the team told me how their job is being made harder by cuts in police numbers; by the closure of our local magistrates and youth court, which means that they have to travel much further to attend court to give evidence; and by the larger numbers of people in mental health crisis for whom they end up being the first port of call. Yet the Chancellor announced not a penny of extra funding for neighbourhood policing or for the criminal justice system.
Overshadowing the whole Budget is Brexit, which will create chaos for our economy, cause many businesses to grind to a halt, and drastically shrink the tax receipts that we need to fund our public services. This Budget is a cynical attempt to create positive headlines in the midst of Brexit gloom. My constituents see austerity as it is, because they are living with its consequences every single day. Saying it is over does not make it so. That will require comprehensive reform, and a commitment to empower local government and fund public services that can be delivered only by a Labour Government.
Morecambe has had more money given under this Conservative-led Government since 2010 than it has ever seen before. We have had delivered, by a Conservative-led Government and a Conservative county council, £130 million for a link road, £11 million for sea wall defences, £4 million recently for a bridge upgrade, and a collective package of upgrades to schools and NHS services that has tipped over into well over £1 billion-worth of spending in my area. That is not to be sniffed at, and it has been happening for years. Recently the Chancellor decided to award Morecambe £100,000 for a feasibility study for a new Eden project—Eden Project North—to be built there on a marine basis. That would be a huge game-changer for Morecambe. It would solve all the problems that Morecambe has, and there are very few of them left to go. This shows Government intention to invest in a seaside community that was on its uppers under a Labour Government.
My people in Morecambe are very proud of their town, and they are really happy about what this Government have done. We have 3.3 million more people in work. The UK economy has grown in 22 consecutive quarters since the great Labour recession. Some £7.2 billion has been given to first-time buyers through the Help to Buy equity loan scheme—that cannot be a bad thing—and 94,000 social housing tenants have been helped to buy their homes since 2010, which is more than in the Labour years.
There are more people in work and earning a living wage in Morecambe than Lancaster. Jobcentre workers told me recently that 87% of steady full-time jobs are now in Morecambe, compared with 72% in Lancaster. That was the other way around for many generations. We have had a port upgrade in Heysham, where I live, because the port accepts that Brexit is not a problem and that we will be getting more trade.
Universal credit was rolled out in Morecambe two years ago, and it has been very successful. Gary Knowles, the local Department for Work and Pensions manager, and his excellent team at the jobcentre have a very low percentage of problems, given the high demand from applicants who want to sign up for UC in the Morecambe area. The minimum income floor does not apply for a 12-month period under UC, and that now applies to the self-employed. As a former self-employed man, I should know what that means. The Government have given an additional £1.7 billion to increase the work allowance by £1,000 a year, which will mean an extra £630 per year for 2 million households.
I turn to the high street, and at this point I have to refer to my interest: I used to be a shopkeeper. Shops have always been sprouting up out of town, and there is a reason for that—the shops in town centres are too small for the capacity of businesses. However, niche businesses do flourish there. This Government have looked at that and lowered the rates so that shops can flourish. Again, that cannot be a bad thing.
This Conservative Government have never let Morecambe down, and this Conservative MP has never let Morecambe down. Things have got better under this Conservative MP than they ever did under the Labour Government, when money was flowing out of the coffers and my town went down the pan. Morecambe is open for business and getting better, and during my tenure we will show what the north-west is made of.
As I understand the overall spending figures in the Budget, apart from for the NHS, there is no real-terms increase in spending. If we have austerity this year and no increase in spending next year, how can austerity be ending next year? That is a fairly obvious question; perhaps someone on the Government Front Bench can answer it.
Local government has had more spending cuts than any other area of the public sector since 2010. We have a situation where the Local Government Association says there is a £2.5 billion funding gap for social care, and the Government are proposing in this Budget to put £650 million into it, leaving a £2 billion gap. In other words, constituents up and down the country will find more cuts to their social care services next year. That is inevitable.
There are not only problems with social care. Because councils are having to find more and more from their budgets to fund care for the elderly, people with disabilities and looked-after children, they are having to spend less and less on other important services—for example, parks and open spaces, which are really important, or doing food inspections of restaurants and takeaways, which some local authorities have now given up completely. The money for the high street is welcome, but where are the local authority officers who will do the local plans and the regeneration schemes that will put the money to good effect? The challenges of rogue landlords and increasing homelessness require local authority officers. Cuts are being made there, so there will be less money for those services also.
In my city of Sheffield, those national figures translate through. We will probably get an extra £4.6 million for social care on a one-off basis—it will not continue—but the current spending gap in the city’s budget for next year is £35 million. By 2020, the council will continue to have to use reserves on an unsustainable basis. Sheffield is not in as bad a position overall as many Conservative county councils, which are already saying that if something urgently is not done, Northamptonshire will be the first council to go over the cliff edge, and others at some stage will follow. That lesson really ought to be learned by Ministers.
It is not just local authorities that are left with problems in this Budget. Where is the money for schools? There is not a single mention of the revenue budget for schools. I had an email from Simon Smith, the chair of governors at Woodhouse West, which is a primary school in a relatively deprived part of my constituency. He said:
“Year on year reductions in funding, coupled with rising staff costs, are meaning that the school is moving… to submitting a deficit budget this financial year; followed by increasing six figure deficits in future years.”
He draws attention to the fact that the challenges are not just inside schools. More and more parents in that sort of community are coming to the school with problems and difficulties that used to be addressed and helped by other agencies, but those agencies have now also had their funding cut, so parents are relying on the school even more to help them in that situation.
Where is the money for the police? There is not a single penny for our neighbourhood policing. We have excellent neighbourhood policing in my constituency. The two inspectors who have dealt with it over the years—Dave Struggles and his predecessor, Jason Booth—have been brilliant, but they will say that with only three quarters of the officers they had in 2010, they cannot keep people as safe as they used to. That is the simple reality that we have to face up to and that the police are having to face up to.
I welcome the lifting of the housing revenue account cap. We recently had a conversation in the Communities and Local Government Committee with the Minister for Housing, the hon. Member for North West Hampshire (Kit Malthouse). The challenge for local authorities will be not merely to build the 100,000 homes that I hope we will see eventually, but to keep up the standard of homes that the last Labour Government brought in with the decent homes standard and to improve on that standard. Again, the revenue costs of that are nowhere addressed in this Budget.
The Prime Minister promised that austerity was over. The Chancellor said that austerity was coming to an end. The reality for my constituents is that not only has austerity not ended, but the end of austerity is not even in sight.
It is a pleasure to speak in this debate and to highlight the measures in the Budget that will be most welcomed by my constituents.
Many of my constituents will be thrilled by the increase in the personal allowance threshold, the higher rate threshold and the national living wage. I never tire of reminding people that I am a low-tax Conservative, and any Budget that gives 32 million people a tax break certainly gets my vote. Despite the mocking of Opposition Members, the funding for potholes is something that many of my constituents have been asking for repeatedly. The damage and cost to vehicles and the environment are enormous, and if they are not fixed soon, that will only decrease road safety and cost the Government and the taxpayer so much more later. It is right that we are spending that money.
Another issue that I must take the opportunity to highlight is crime and policing. My constituents want to see more money spent in this area, because our families and communities want to feel safe. I am glad the Chancellor referenced that in his speech, and I know that residents across Essex will be awaiting a very generous review of the police funding settlement this December.
I strongly welcome the extra £500 million for the housing infrastructure fund, so that councils can deliver 650,000 more homes. I am pleased that Chelmsford City Council is already shortlisted to receive a £5.7 million investment, to help with the Beaulieu station and north-east bypass projects, which are expected to deliver £250 million to the local economy and support more than 3,500 jobs. I pay tribute to the hard work of my hon. Friend the Member for Chelmsford (Vicky Ford). We have been working together to promote those schemes, to the mutual benefit of our constituents. I also look forward to helping Uttlesford District Council in its bid for housing capacity funding to help deliver the infrastructure we need to provide for three new garden communities in the coming years.
Last year’s abolition of stamp duty on homes up to £300,000 has led to an 11-year high in the number of first-time buyers, with over 120,000 people being helped by this measure. I welcome the fact that stamp duty is now also being abolished for first-time buyers of shared ownership, because that was the type of property that helped me on to the housing ladder. I would not have what I have today without having had a shared ownership property, and I am glad that this option is being extended to even more people. I am also glad this will be backdated to cover those who have purchased shared ownership properties since last year’s Budget. I also welcome the fact that Help to Buy is being extended by two years, up to 2023, which will help so many more young people to own their own home. As well as helping people to get on the housing ladder, this change will diversify home ownership. So many of our towns and villages will become retirement homes without an influx of younger people bringing their skills and talents to our area, and these measures are to be welcomed.
This year, like last year, I joined my right hon. Friend the Member for Harlow (Robert Halfon) to lobby for fuel duty to be frozen. I congratulate him on his tireless campaigning on this issue, and the Chancellor on agreeing to our request. In the Chancellor’s own words, freezing fuel duty again will have
“saved the average car driver £850 and the average van driver over £2,100.”
This is important because it affects not just motorists but their families, and continuing the freeze will help to keep their bills and their overall cost of living low.
Finally, I welcome the digital services tax and the way the Chancellor has chosen to implement it. A constituent who runs an online business visited me at my surgery with concerns about an online sales tax for small business trading. He felt that an online sales tax for small businesses could be very damaging for him and his family, and he was worried that start-ups run by couples from the homes where they live and work would be affected. Small businesses such as PVC Tube Online in Great Dunmow drive our local economies, and their owners face risk and uncertainty to grow their companies and to provide a better tomorrow for their families. I am therefore delighted that this digital services tax will target only the world’s wealthiest companies with global revenues of at least £500 million. The revenues raised will be money available to spend on our public services, so that families across the country can see more investment in their communities. Addressing the huge profits that the biggest companies make through their activity in the UK recognises the changing nature of the digital economy and the issues that accompany that, and this tax is a stepping stone to addressing those issues properly.
This Government are looking to the future and at how we can solve the problems of the 21st century. This is a forward-looking Budget, and I will be voting for it later today.
I want to develop a point that was made by the right hon. and learned Member for Rushcliffe (Mr Clarke), who said that for many people the Budget was actually a pleasant surprise—it has promised them tax cuts and spending increases—but that in doing so the Chancellor is taking a big risk with an economy that is not particularly strong. It is not particularly strong because, as the Treasury forecast shows, the growth rate looking forward is abysmal—it is about 1.5%, which is one of the worst in the developed world—and that is quite apart from the poor growth at the moment.
The growth rate is also based on a fundamentally optimistic assumption. Quite apart from the lag on growth caused by Brexit at the moment, the assumption in the Treasury forecast is that the Government will land a deal, and not just a deal but a good deal, with a smooth transition to a trading arrangement not greatly different from the present. Well, it might happen—pigs might fly—but it is optimistic and, if that expectation is not realised, the economy has very little resilience. We have very high public debt, as the Government acknowledged. The domestic savings ratio is appalling—I think it is the worst in the developed world and is now negative. The corporate sector is heavily leveraged, as Governor Carney pointed out the other day. All of this is reflected in the current account deficit, forecast to be 4% of GDP, which is one of the worst in the developed world. If something goes wrong, there is no longer an inflow of capital and the exchange rate falls; we have had a devaluation of 17% since the referendum and we will have another one.
The main criticism I have of the Budget is that it may have seemed comforting, but the Chancellor did not actually confront the real issue that we have to face: how do we have a mature debate about how to end austerity? That is going to involve people paying more tax, and the issue is how we do it, and how we do it in the fairest and most efficient way. As the hon. Member for Sheffield South East (Mr Betts) has pointed out, we have not really got to the end of austerity, or even to the beginning of the end of it.
For most parts of public spending, there is a continued squeeze. That is true of schools. We did partially protect them under the coalition, but that is no longer happening. Colleges, which are necessary to deliver the Government’s training and apprenticeships, have been cut to pieces. Local government is potentially in an appalling situation. That means a squeeze on social care, which means that the money going to the health service will be wasted because it will have to accommodate lots of elderly people who should be at home. Bankrupt councils, many of them Tory county councils, will be forced to raise council tax, so we will get a tax increase, but it will be a tax increase by stealth, rather than by confronting the matter openly.
On the schools point, does my right hon. Friend agree that the wording the Chancellor used in relation to money for the “little extras” was insulting to teachers, who, day in and day out, find that they have to reach into their own pockets to deliver the basics in schools?
My hon. Friend is absolutely right. I am amazed that the Chancellor is not even aware of this. Many mainstream schools have seen cuts in teaching assistants, teachers, curriculums and so on. This will be compounded because there is nothing in the spending envelope that offers any hope that the problem is going to be dealt with.
That leads on to the question about how tax should be raised. The Government have offered tax cuts in the form of lifting the tax threshold for low earners and for middle earners. In principle, lifting the tax threshold is an attractive policy. I like to think that I was the author of the one we introduced in government. It was strongly resisted by the Conservatives at the time, but they have subsequently adopted it and claimed credit for it. The attraction was not just that poorer people pay less tax, but that the marginal rate of tax is removed when they move out of the welfare system, which encourages work.
In an ideal world, everybody should have a tax cut, but there is an issue about priorities here. Extending the tax cut to the upper threshold is, frankly, something that the country simply cannot afford. At a time when universal credit is being only partially financed following the cuts made by the Osborne Budget three years ago—only about half of that cut has been reinserted—that should be the priority. It is absolutely wrong that priority has been given to lifting the upper tax threshold. Because the two proposals are amalgamated in the Budget statement, I and my Lib Dem colleagues—and, I hope, others—will vote against this.
Beyond that, what this country now needs above all is a mature, grown-up debate about how the end of austerity will be managed. It is going to involve higher taxes for almost everybody—obviously, mostly at the top end, but there is going to have to be a general increase in taxation. I am afraid that the Chancellor’s pretence that we can have our cake and eat it is not realistic. It will rebound on him and on the Government.
The test of any Budget is: does it take us closer to where we want to get to in 10 years’ time? It seems to me that one of the most important things to do over the next few years, and one of the dreams that so many Conservative Members have had for so many years, is the dream of a balanced budget. Once again, this appears to be a little bit like the apple of Tantalus. I am concerned about that because I believe, as the fiscal conservative I have always been, that we need to head towards a balanced budget.
Achieving a balanced budget has been delayed, but I am glad that we are still heading in that direction. The OBR says of the Budget policy decisions:
“Taken together they turn the £3.5 billion surplus…forecast for 2023-24 into a £19.8 billion deficit.”
It also says of the balanced budget objective:
“Had there been no fiscal loosening in the Budget, the objective would have been achieved in 2023-24.”
As it is, achieving that objective by 2025-26, it says, “looks challenging”. That is still an important aim. We must bear in mind that debt interest payments each year are about £52 billion and measures in the Budget will increase those payments by about £1 billion in future years. Opposition Members argue for ever more increases in spending, but I argue that it is better to ensure restraint, continue on our current track and aim for a balanced budget sooner rather than later.
We must also think about the kind of country we want to build. We want to build an enterprise powerhouse and a country that supports enterprise, small businesses and the self-employed. That is why it is important to make things easier for small business people and not to sandbag the self-employed with extra taxes and regulations, instead supporting them and ensuring that their enterprise is backed.
We must be the party of home ownership. Home ownership matters. As I said in an intervention, since about 2001, home ownership among people aged 16 to 34 has halved. We need to increase it. Meanwhile, the number of those renting has gone from about 10% to 20%. We must offer our young people better than a life of renting, and give them the chance to get on the home ownership ladder and build up a stock of wealth in a lower-tax country that ensures that hard work is rewarded.
My hon. Friend is right: if we cut the rate we up the take. We must support small businesses most of all because, since about 2000, small enterprises and businesses have created 4 million new business jobs. Big business has created just 800,000 jobs, so small businesses are the enterprisers and job creators that take our country forward and turbocharge our economy.
If we are to have more public spending, it is important to ensure we have public service reform. We must look at how public services are delivered and ask ourselves whether they can be delivered more efficiently. Are there activities that Government should do more of? Are there activities they should do less of? Why do we not have, alongside the Office for Budget Responsibility, an office of spending responsibility, or even a Budget committee so that the House can consider such matters and press individual Departments to embrace reform and fiscal rectitude?
We also need higher investment. It is all very well having a culture in which we get lots of people with low skills to do low-value-added jobs that lead to no productivity. Why are we not encouraging more investment in more equipment that can be operated by fewer, more highly skilled people who are better paid and drive our productivity forward?
I must take issue with the comments of the right hon. Member for Twickenham (Sir Vince Cable) about how it is all indebted and about the corporate sector—that is absolute rubbish. Some £750 billion on corporate balance sheets has not been spent. There is a conundrum as to why that money is not being invested. We must consider the possibility of time-limited, perhaps very generous, investment allowances to get those corporates to invest in our economy, and to drive the investment and productivity gains that we need.
We need more competition in this country. Why do we put up with Openreach and its appalling service? Why has it not been unbuckled from BT with a strong investment target? Why do we have an oligopoly of banks and of big energy providers, and why have we not taken action on that? We need a bit more trust-busting from the Government and a bit more backing for the consumer interest over the corporate interest.
The Conservative party should be the party of small enterprise and investment. It should be the party that champions the consumer interest and is tough on corporatism and tough on the causes of corporatism. We also need to be the green and environmental party, which is why in the spending review we need a step change in investment in electric car charging points because it is not good enough. Only when we get that straight will big corporate car fleet buyers start to buy the cars that would then go into the second-hand market, so that this country can have the electric future on our roads that it should have.
This is a deeply uncertain time for our politics and economics, and as my right hon. Friend the Leader of the Opposition said, the challenge for this Budget should be to rebuild Britain and, as the Prime Minister promised, to end austerity. We also need to heal some of the deep divides that face our country, which all of us should care about. Against those challenges this Budget fails, and I will highlight three areas in which that is the case. First, the Government—particularly the Treasury—should be more worried about what will happen to growth in our economy over the next few years. Economic growth of around 1.5% a year over the next few years is far from the 2.5% average long-term growth that we have had for 60 years, and that will have long-term consequences for the wealth that we need for public services, and for our families’ incomes. That growth is also unbalanced. The latest figures show growth of 3% in London, while the north-east economy shrank by 1%. Towns are growing at only two thirds the rate of cities, and many town economies are shrinking. This is not just about needing to invest in our high streets, it is about the jobs and investment we need in towns and communities across the country, in the north as well as in the south, at a time when the focus of major transport capital investment is stuck on Crossrail and High Speed 2 rather than being on the networks that we need around our country.
Secondly, the Budget does not end austerity, and I particularly wish to highlight cuts to policing. The Home Affairs Committee called for urgent increases in investment in policing, but instead, by failing to fund pensions increases and contributions, the Government are cutting funding for policing by about £420 million. That is at a time when recorded crime is up by a third and arrests are down by a quarter. That means that more criminals are getting off, and the consequences of failing to support our police are frankly becoming dangerous, with serious impacts on public safety, community cohesion, criminal justice and confidence in policing, which, once lost, is hard to regain.
The third area I want to highlight is the failure to tackle child poverty and growing divisions across our country, because the Budget gives half the money to the richest 10% of households in the country at a time when the poorest 10% face having their incomes cut. Ten years ago I put child poverty legislation before Parliament, and it enjoyed cross-party support as it aimed not just to halve child poverty but to end it. The Government have ripped up that cross-party consensus.
Tomorrow I will go to a café in Airedale library where councillors and community leaders are putting on free lunches for children. It is half-term, and they realised that some of the kids going to the library were ravenous when they were getting some of the café leftovers. Without free school meals, their parents were unable to put a hot meal on the table, and those children were going hungry. This is 2018, and it should shame us that that is happening in our country.
The Government are going ahead with more than £1 billion in real cuts to tax credits and benefits for the poorest families this coming year, at the same time as choosing to spend a similar amount of money on tax cuts for higher rate taxpayers, including those earning more than £100,000 a year. A lone parent with a four-year-old who works part time could be nearly £3,000 worse off after those changes, whereas high earners will end up more than £1,000 better off. As my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) said, we should support extra help for basic rate taxpayers, whether through the tax system or child benefit, but at a time like this, cutting taxes for higher rate taxpayers is the wrong approach. It means that millions of the lowest-paid workers will not benefit at all because they do not pay enough tax, while millions of the highest-paid workers will benefit the most. Hundreds of pounds are being taken from the parents at Airedale library, while hundreds of pounds are being given to people on £100,000 a year, who have benefited the most. It is simply wrong. The Prime Minister promised to those are “just about managing”:
“When it comes to taxes, we’ll prioritise not the wealthy, but you.”
She has done the opposite. It is wrong. This Budget should be about making us all stronger and the whole country better off. Instead it does the opposite.
The Budget contains many good measures for families in my constituency. I am grateful to be able to take part in this important debate, and I have listened to much of what has been said. I will try not to add to what has already been said but instead identify issues that have not yet been covered.
Families rightly want to feel secure in their homes, and I have three asks that I think could help. The first relates to the use of existing stock. It is still the case, even in west Cornwall, that many properties are not lived in. They are not second homes or holiday lets; they are literally abandoned. I would like the Department and the Chancellor to consider ways of giving councils the incentive to refurbish them to provide homes for local families and give them security of tenure.
Secondly, just before they lost the election in 2010, the Labour Government introduced the infrastructure levy on house builders. That has had a devastating effect, discouraging builders, particularly small builders, who want to provide housing. For local families, it adds a huge amount of money to the sale of a house. It would therefore be good if the Budget were able to scrap that charge imposed on both house buyers and the sector.
Finally on housing, many of my constituents appreciate the move across to universal credit from the previous set of benefits, but those who struggle to manage their budget would prefer their rent to be paid directly to the landlord. Will the Chancellor look at how that could be more easily done when it is in the interests of the tenants themselves?
Families live in communities, and parish and town councils run our local communities. The scrapping of business rates on public toilets, which Cornish MPs have fought for since 2015 when I was first elected, will be of enormous benefit to my local parish and town councils. In my constituency alone that measure will be worth £120,000, which can now be spent on local services that will benefit families and other people living in our parish and town council areas. I will play my part in making sure that that legislation goes through.
I have been calling for the rate cut for small businesses for some time, and I am grateful for the positive impact that it will have on towns in my constituency. My right hon. Friend the Member for Putney (Justine Greening) covered that issue very well, so I will not say any more about it.
I was disappointed in the Budget in one respect. It is right that families have access to good sporting facilities, so I was hoping to hear something about the stadium for Cornwall. For 10 years in Cornwall, we have worked to try to put together a scheme worthy of Government support. I believe I did everything I could, along with all Cornish MPs and others, to convince the Chancellor to provide the £3 million we need to give us a 6,000-seater stadium or the £5 million to give us a 10,000-seater stadium. Cornwall does not have a centre where sports can be played easily. Part of the proposal is to extend outreach to every corner of the county, improving the health and wellbeing of children and their families. What more can my colleagues and I do, with the people of Cornwall, to convince the Government that the money is needed and deserved, and that the scheme provides value for money? It could be that, among all the other priorities, the stadium for Cornwall slipped the attention of the Chancellor. I am grateful for the opportunity to remind the Treasury team of this worthy cause and look forward to positive guidance on how we can achieve the stadium for Cornwall.
This Budget reflects traditional Tory values that will deepen poverty and inequality and do nothing for struggling families. I will provide three examples: the Government chose to put more money into mending potholes than they granted to our cash-starved schools; they chose to prioritise the motorist over a sustainable future for our planet; and they chose to give away more in tax to those who need it least and ignored those who need most support. Labour should have no truck with that approach. We should pledge to reverse the tax and benefit changes.
Regrettably, most politicians shy away from an honest conversation about the need to raise enough money through tax to fund good-quality public services. We cannot keep promising excellent schools, effective policing and compassionate care if we refuse to raise the necessary money through taxation. We cannot keep pretending that punishing the wealthy is the solution to underfunding. We need to demonstrate value for money. We need a fair system in which big corporations do not get away with paying minimal tax on their profits. We also need a truthful conversation with voters about how much we need to raise in tax to fund public services.
I regret that the Government have not used the Budget to build on Parliament’s determination to have greater transparency in British tax havens, so that we know who owns what and where. Following the money is an essential tool to help ensure that everybody pays their fair share. MPs welcomed the Government’s concession on British overseas territories. However, we must now deal with the anomaly of Britain’s Crown dependencies. The right hon. Member for Sutton Coldfield (Mr Mitchell) and I visited Guernsey and the Isle of Man and held positive discussions with elected politicians, and we will soon visit Jersey. Our purpose is persuade the Crown dependencies to co-operate with the UK and agree to publish public registers. Should they not co-operate, however, Parliament must use its powers to insist that they do so. Parliament expressed its views on this issue clearly. We must now ensure consistency and transparency in all UK jurisdictions.
Finally, I had hoped to welcome the digital services tax, but the Government’s proposal is little more than a public relations stunt. The Red Book projects that it will be 2022-23 before we raise just £400 million from this tax. A recent Tax Watch report calculated that in 2017, Google, which paid only £49 million in corporation tax, should have contributed £356 million, and that Facebook, which paid only £16 million, should have paid £127.5 million. Just two companies, Google and Facebook, should have paid £480 million in 2017, far exceeding the £400 million the Government estimate they will get some five years down the line from all large digital corporations. Hardware companies such as Apple and Microsoft will not be covered by the tax. Video and audio platforms, such as Netflix and Spotify, will not be caught either. Airbnb and Uber will argue that their marketplaces are not online. Even Google and Facebook will be able to exclude some of their profits.
The tax gives us far too little, far too late. It is an exercise in media management designed to persuade taxpayers that we are all treated equally. It leaves undisturbed the continuing scandal of billions lost to the public purse by the deliberate actions of giant global digital companies. This behaviour is an enduring outrage, and we on the Labour Benches will continue to argue for fair taxation.
I am very pleased to be called to speak in this important debate.
I welcome the Budget very much, especially the cut in business rates, which will have a hugely positive impact on many businesses in my constituency. One such business in Aldershot is the butcher Alf Turner, a long-standing establishment founded in 1956. Madam Deputy Speaker, you will know that it is not only Budget week, but UK Sausage Week. I am pleased to report that Paul Turner, the proprietor of Alf Turner, is a supreme sausage champion, having won the UK Sausage Week award for best traditional sausage. Last night he said to me:
“The cuts to business rates from Monday’s Budget are fantastic news for local family-run businesses like mine. Keeping local shops open can only serve our local communities.”
I draw attention to that because the real point is that Paul’s business is successful not because the Government are helping it, but because the Government are letting it get on with what it does best: making great sausages. It creates a superb product that local people choose to buy and is now available nationally. The lesson is the importance of choice. When freedom of choice is allied with the free flow of capital and labour, and protected by property rights and the rule of law, we have a flourishing free market. That is the great genius of our economy and many economies in the west.
I am grateful to my hon. Friend for that intervention. The wholesale economic devastation that would be the consequence of Labour’s nationalisation plan—I do not know whether it has a plan to nationalise sausage production, but I hope not—would be clear. We have to make the case for the free market. In this day and age, it is astonishing that Labour Front Benchers espouse an ideology that totally opposes the free market.
The shadow Chancellor is a self-declared Marxist. The House will know that in 2006 he said:
“I’m honest with people: I’m a Marxist”.
He said of the 2008 crash:
“I’ve been waiting for this for a generation”.
In 2017, he stood in front of Communist flags at a May Day parade in London, and just this year he attended the Marx 200 conference in London, at which he claimed:
“Marxism is about the freedom of spirit”.
I am very grateful for that intervention. Absolutely—it puts those two sets of values into stark and very worrying contrast.
The free market is not an ideology but an inevitable human condition, which Conservative Members rightly espouse. We must call out at every turn the Marxist ideology of Opposition Front Benchers, and we must also reflect that those who had the unpleasant experience of living in countries with the devastating experience of the doctrine of Marxism being applied in reality, such as the Soviet Union, have bitterly regretted it. Shadow Front Benchers and the shadow Chancellor would do very well to read the moving autobiography of Elena Gorokhova, “A Mountain of Crumbs”, which describes the devastating famines of the 1920s and the wholesale shortages of foodstuffs in the Soviet Union in the 1980s, which meant that when she went to the United States, she was simply amazed by the range and variety of foodstuffs on the shelves of the supermarkets there.
Before I conclude, I would be happy to take an intervention from an Opposition Front Bencher if they wish to deny that the shadow Chancellor is a self-declared Marxist. There is no movement from them, so the record will show that they are happy to confirm this depressing fact. We must reject the Marxist ideology of the current Labour party and rejoice in the bright future of the free market that we have in our country, burnished by free choice, a growing economy and the freedom to choose.
It is a pleasure to follow the hon. Member for Aldershot (Leo Docherty). I think it would be fair to describe his speech as a bit of a mixed grill, but perhaps I should move on.
In a Westminster Hall debate on Tuesday, the Under-Secretary of State for Housing, Communities and Local Government, the hon. Member for Richmond (Yorks) (Rishi Sunak), talked about local government cuts since 2010. He said that they had been mitigated by what he referred to as “core spending power”, which had gone up by 2% this year and over previous years. He went on to say:
“The idea that the funding formulas do not take account of deprivation or the differing ability of areas to raise council tax is totally erroneous.”—[Official Report, 30 October 2018; Vol. 648, c. 332WH.]
Note that he said not just “erroneous”, but “totally erroneous”. I want to spend a moment looking at the veracity of that statement. He must know that the Government’s grant cuts since 2010 have hit those councils with the greatest need the hardest. Knowsley’s cut to “core spending power”, as he puts it, amounts to £485 per person, compared with the average for England as a whole of £188.
Knowsley is one of the most poorly resourced areas in the country. Indeed, it suffers from one of the highest levels of income deprivation. Does my right hon. Friend agree that the impact on the streets is dangerous and sickening?
I very much agree, and if I have time, I will come on to say more about that.
This is not just about what I or those in local government are saying about why the Under-Secretary’s comments were—I was going to use the word “misleading”—an example of sophistry. Independent analysis from the University of Cambridge says that there are
“significant inequalities in cuts to council services across the country, with deprived areas in the north of England and London seeing the biggest drops in local authority spending since 2010.”
As councils all point out, that is because—again I quote from the study—
“These local authorities tend to be more reliant on central government, with lower property values and fewer additional funding sources, as well as less ability to generate revenue through taxes.”
It would not be permissible for me to say too much more about the effect of what the Minister said, but the truth is that it was not a proper portrayal of what is taking place, and his analysis of the grant system was plain wrong.
In the time that remains, let me say a few words about the consequences of this situation in the Liverpool city region, starting with Knowsley. The impact for the people in Knowsley, which has been the hardest hit of all local authorities anywhere, is that we have had our grant cut by £100 million since 2010. Children’s social care needs are rising faster than the resources for dealing with them, with a £3 million gap currently projected, and the increases announced last week barely scratch the surface of that gap. The same applies to adult care, for which demand is growing, yet the resources are just not there to meet it.
Since 2010 in the Merseyside police force area, we have lost 1,000 police officers. As the chief constable said, the service is reaching breaking point—it is a chief constable saying that. There has been a 14% rise in crime over the last 12 months. Similarly, 50% of the grant for fire and rescue services has been taken away since 2010. The number of firefighters has fallen from 927 to 580. Fire deaths are up by 10%.
The worst aspect of these cuts in services, as the Minister was unwilling to concede on Tuesday, is that the people who can least bear the brunt of them are among some of the poorest in the country. Frankly, what the Government have done to public services in the Budget is shameful.
It is a pleasure to speak in the debate. First, I would like to address the measures in the Budget that relate to the digital economy, including the digital services tax. I declare an interest: I am a former corporate lawyer —I was even more fun when I was doing that. Someone who deals with international transactions and contracts learns that international tax treaties are very complicated and were designed for a time before the current technological revolution. The UK Government are leading the way in clamping down on the admittedly difficult and perhaps unsavoury practices of multinational tech firms. Of course, the digital services tax will not deal with that completely, but it is a step in the right direction. As I say, we are one of the first Governments in the world to do anything like this, and I commend it to the House.
Turning to my constituency, I want to address the measures relating to the high street. We all know that the high street has been under significant pressure over the past few years. Whenever I speak to the owners of small independent shops in both Hitchin and Harpenden, they say that business rates are a significant problem, so I look forward to telling them this weekend about the cut of a third in their business rates, if their rateable value is under £51,000. That measure will be of huge benefit to my independent shops and I commend it to the House.
Even more important than the cut in business rates is the £675 million future high streets fund because it will help to enable our local authorities and local areas to take leadership and act on their own initiative to reshape their high streets to deal with the modern world and its challenges. I urge the Chief Secretary to the Treasury, who is sitting on the Treasury Bench, to make sure that this money gets to local councils as soon as possible so that we can get on with making improvements.
I thank my hon. Friend for that intervention. I was coming to tax cuts because, particularly in relation to the high streets, they are a classic piece of positive Conservative economics that will increase demand and help consumer spending, and thereby help the high street. I commend the Chancellor and the Treasury team for putting the policy forward in the Budget.
On tax cuts more broadly, if someone is one of the 1.74 million people who, in only the last two years, the Government have taken out of tax altogether, that side is against them; this side is for them. If someone is one of the 25 million basic rate taxpayers who have saved more than £1,000 in real terms since 2010, that side is against them; this side is for them. If someone has the temerity to want to earn over £50,000—yes, there are people who want to do that—that side is against them; this side is for them. The Budget not only backs the NHS with the biggest cash increase in its history, not only backs the high street and not only backs working people up and down this country, but backs Britain. This party backs Britain; the other side does not.
Order. As colleagues will have noticed, there have been a number of interventions, which have extended people’s time. When that happens, it prevents others from speaking, and I am afraid that after the next speaker, I will have to reduce the time limit to three minutes.
It is a privilege to speak in this Budget debate and to represent my constituents in Barnsley and right across the Sheffield city region. I am proud to represent these communities, but I have come to learn that it is not in the halls of Westminster or the corridors of Whitehall that decisions on many of the issues that affect our communities should be made. Decisions on important issues, such as our public transport system, on how our schools, colleges and universities work together and on where best to invest in our infrastructure, should, where possible, be made locally.
Through devolution, it should be a collective endeavour between the Westminster national Government, combined mayoral authorities and local authorities across our country to work relentlessly together to prepare our people for the challenges of the 21st century. The world has never been more challenging. It is fraught with risk and complexity, but at the same time it is full of opportunity. Technology now connects the far reaches of the planet in ways unimaginable just a generation ago. In reality, however, this is a country where too many of our communities do not believe their best days are in front of them, where too many believe they are being failed by cuts to their vital public services, and where many of our communities feel as though they are ignored because of where and who they are. That is a tragedy. It is also a waste of the ingenuity and potential of so many people.
Along with many others, I am working to grow our economy and connect our talented people to opportunity. With Brexit on the near horizon, in the Sheffield city region, this work is taking shape, and we are making progress. A story is emerging in south Yorkshire that shows that ours is a region that is resurgent, which is hugely significant because for far too long it has been an area characterised by the decline of heavy industry. Now, for the first time in a generation, we are witnessing a growth in advanced manufacturing and highly skilled engineering jobs.
It is this spirit of endeavour and innovation that underpins our work to develop a global innovation corridor to connect our businesses, researchers and urban centres and our international airport in Doncaster to create transformational economic growth, but we are doing it with our hands tied behind our backs. We are served by an outdated and antiquated transport network of trains, buses and trams. The north has so much potential, but it needs the Government to realise and unlock that potential. The northern powerhouse offered a framework to do this, but it requires all of the Government to strain every sinew to reduce the inequalities that exist between north and south.
The Government’s commitment to develop new local industrial strategies is welcome, but to tackle the structural inequalities locked into the regions of this great country, we must make structural changes to the way we prioritise investment. In short, actions speak louder than words, and sadly the Budget is yet another missed opportunity.
The Budget of Monday past has been welcomed by many but clearly not by all. I have been asking myself: what will it do for the constituents of Ayr, Carrick and Cumnock? It contains a range of measures that will benefit not just my constituents but the whole of Scotland. The Scottish Government will benefit from a funding boost of almost £l billion. I know my constituents will welcome this increase, and I am sure they will keep a weather eye on how it is spent by the Scottish Government. I hope it will be spent on people projects and not pet projects. Indeed, by 2020 the Scottish Government’s block grant will have grown to over £32 billion before adjustments for tax devolution—a real-terms increase over this spending review period.
Those of my constituents who, like me, enjoy a dram will very much welcome the freeze on spirit duty. I was pleased to see the concerted efforts of Scottish Conservatives and others recognised by the Chancellor. Indeed, he was listening—I am sorry for doubting him. I know that the industry in Scotland will welcome the freeze.
I also know a few individuals in Ayr, not least Messrs Brown and McLoughlin, who enjoy a wee dram and I am sure that they will raise a glass as a result of the freeze on spirit duty. I am not linking the two measures in drinking and driving, but the freeze on fuel duty will always be most welcome, particularly in the rural areas of Scotland.
The national living wage, introduced by a Conservative Government, will now increase to £8.21 per hour.
Thank you, Madam Deputy Speaker. The measure is very much to be welcomed and, thanks to an earlier than planned increase in the personal allowance, the average Scottish worker will enjoy a £130 tax cut.
I know that, like me, some hon. Members were concerned about the transition period for households moving on to universal credit, and I very much welcome the financial support that the Budget delivers. I sense in the House today that not everyone is entirely happy with that, but again, the Chancellor has been listening.
Tax barriers have been removed in the North sea oil industry to allow further investment, and our fishing community will get the welcome, albeit rather small, £10 million as we move forward and improve our fishing industry post Brexit. However, I would welcome further investment in the fishing industry to improve the quality of the fleet in Scotland as we leave the European Union.
There are many good things in the Budget that will help us. We have the small business bonus scheme in Scotland, but that could be improved. We need to address the problems of our high streets: we can no longer watch buildings decaying year after year. We need earlier interventions to prevent the decay of our high streets, which are part of our future. We will not stop change: the internet and out-of-town shopping are here to stay, but I welcome the Chancellor’s recognition of the need for support for the high street.
The hon. Member for Ayr, Carrick and Cumnock (Bill Grant) touched on universal credit and I want to focus my remarks on that. There were significant changes in the Budget, which go some way to repairing the great damage of George Osborne’s 2015 cuts. Those changes will make a big difference particularly for families with children who rent their home.
However, the Budget does not affect those features of universal credit that plunge people into debt, forcing them to get behind with their rent and compelling them to use food banks at the start of their universal credit claim. The biggest of those factors is still the five-week delay between applying for universal credit and being entitled to benefit. Ministers can defend that gap only in the case of people who have a month’s salary cheque in the bank just before they claim.
The latest annual survey of hours and earnings shows that almost one in seven employee jobs are paid weekly. On top of that, there are fortnightly-paid jobs. What are those people supposed to do during the five weeks when they are waiting for their universal credit to be paid? I have asked Ministers that question repeatedly, but they simply do not have an answer.
It is extraordinary that it has been proposed to apply the five-week gap to people who are being migrated from existing benefits to universal credit. They do not have a salary cheque in the bank, but have been dependent on benefits, perhaps out of work on ill health grounds, claiming employment and support allowance, for a long time. They will be migrated on to universal credit, and it has been proposed that they too will have a five-week gap when they get no support at all.
The Chancellor announced a two-week run-on for previous benefits. That will not apply to tax credits and, particularly for those on ESA, there will still be a three-week gap. What are people supposed to do in that time? The Government are saying to them, “We’re changing the system and, as a by-product, you will get no help at all for three weeks.” Where can that idea have come from? How can Conservative Members, who, I am sure, meet—as we all do—people struggling to make ends meet from one payment period to another, have come up with the idea that people get no help for three weeks? Ministers need to address that urgently.
The Budget is tactically clever and, indeed, wise, but it may be strategically dangerous. That is where I join the right hon. Member for Twickenham (Sir Vince Cable) and my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke).
Of course, we all have our own priorities for Government spending. I have campaigned for the Ministry of Defence and I support the measures in the Budget for that. There have been local campaigns on potholes, particularly in a rural county such as Lincolnshire. We have been campaigning for more money for schools, and we all welcome the announcements on that.
However, by 2023-24 the Government will be spending another £30 billion a year. Indeed, by the end of the Parliament the Government will take 38% out of the economy, which is exactly what Gordon Brown took out of the economy at the end of his Chancellorship.
I might be the last Gladstonian Liberal left in this place, or indeed one of the few Thatcherites left in it, but I do believe that the way to deal with the economy and provide for everybody is to try and bring down the deficit and start to repay debt. I want to hear from the Chief Secretary when she sums up the debate that we have not reneged on our promise—the Conservative promise—to start repaying debt, and I would like to know from her when she is going to start doing it.
Whatever we spend, the Labour party will of course always promise to spend more, and I was amused that the shadow Chancellor thinks that the rich now earn just a bit more than he earns. We are never going to set the economy right, particularly in the context of Brexit, unless we fix the roof while the sun shines. We do not want that jibe turned on us; we do not want people to say in future “Yes, the economy was doing fairly well, you were creating a record number of jobs—particularly youth jobs—and all these good things were happening and all the prognoses about Brexit were not proved correct, but when the sun was shining, did you fix the roof?” So I want to be assured by the Government that they are going to get this right. Unless we do this, we could be in severe difficulties, because all economies are cyclical.
Frankly, I do not think the main problem facing the economy is Brexit. I think it will be alright on the night; we will sort it, and some deal will be achieved. We will achieve some sort of free trade area. I do not believe that the prophets of doom about Brexit will be proved correct, but I do believe that we have to get the economy right, and that in terms of health spending—I use the national health service, like everybody else—we cannot just bung ever more tens of billions of pounds into it. We have to ensure that there is competence and efficiency in our public services, so we need a good strong, free enterprise, low tax, deregulated Conservative economy.
The Tories have a habit of announcing policies that are backed by arguments that, in a sentence, quite often can sound reasonable. However, the minute we scratch beneath the surface we see that every policy is soaked in ideology and backed by mistruths that are unrecognisable in the real world. I want to give a few examples.
We have had umpteen debates in this House explaining in great detail why universal credit is not fit for purpose as it stands. Even this month I have had constituents live off nothing but £70. The Chancellor has announced a boost to the work allowance as an answer to these problems, and he expects credit for that, but, again, if we scratch beneath the surface, we find that this boost only reverses half of the cuts that were made in the 2015 Budget.
Secondly, Tories often say that the best way out of poverty is through work. They preach that they were the Government who introduced a “living wage” and they arrogantly pat themselves on the back for raising it in this Budget. Again, if we scratch beneath the surface we discover they have introduced nothing of the sort. They have slightly increased the minimum wage, which still does not meet the cost of living. No amount of rebranding will make anyone forget that. Further, we see nothing in this Budget to address the age discrimination that is entrenched in the minimum wage structure.
In the Budget the Government have managed to increase the minimum wage for apprentices to just £3.90 an hour. Given that that lot on the Conservative Benches will not do anything on this, will my hon. Friend join me in making sure they devolve relevant legislation to Scotland so we can deliver a fair day’s work for a fair day’s pay?
Funnily enough, I could not agree more, and I have to say as a 24-year-old that I would challenge any Member to justify why I should be paid less than anyone else in this place. If the law does not apply to me, why should it apply to anyone else out there?
My third example is the two-child cap. This is the claim that really sticks in my craw. If it were true that the Chancellor is supporting families, he would not make women prove they were raped in order to get benefits for their children. I see that not many Tories are giving me eye contact at the minute. Over 73,000 households are receiving less tax credits than before and the Government’s response was that people on welfare need to make decisions about the number of children they may or may not have. That statement is as barbaric as it is downright stupid; it is nothing more than an ignorant, cruel and deliberate misconception to hide behind.
I will not.
Life does not happen like that. There is no telling how or when an individual’s circumstances will change, and this Government know that. It is children who are paying the price.
I want to mention the very people I am sure the Chancellor would love to forget—those WASPI women who refuse to disappear quietly. I have noticed that any time we on these Benches highlight problems such as WASPI or universal credit, we are told to use our shining new powers in the Scottish Parliament to fix them. Let us take universal credit as an example. The Scottish Government listened to the experts who said that fortnightly payments would be much more flexible for claimants. We used the little influence that we have to at least try to make the system slightly better for people. Actually, few people are aware that the Scottish Government have to pay Westminster for the luxury of trying to protect people from the very worst of these policies. So I am afraid that I will take no lectures from the Conservative and Labour parties, which fought tooth and nail to make sure that Scotland did not get the powers required to fix these problems. We were told that employment law and pensions were too important to be devolved and that we were better together, so do not dare to turn around and say that Scottish people should fork out more money to plug holes in policies they did not vote for in the first place.
Let us be clear that this Budget delivers austerity and simply gives it a different name. If this is “better together”, then the Scotland I want to live in is, and deserves, better than this.
It looks like our economy is once again defying the naysayers. UK growth has an inexorably upward direction, which is to be encouraged, and debt as a percentage of GDP is down, thanks to the hard work and perseverance of the British people. The deficit is at its lowest level since 2001, and productivity growth has accelerated and is now running ahead of the forecasts made in the spring statement. It is growing at its fastest rate since 2016. In spite of this, however, productivity is still below the average seen in the financial crisis.
We all know that infrastructure is vital to supporting jobs and economic growth and to improving people’s quality of life. That is why I am delighted that this Budget sets aside £28.8 billion for the biggest ever strategic investment in roads, and I want to see our share of that coming to Clacton-on-Sea. This is in addition to the £740 million for the nationwide roll-out of digital infrastructure, which means that by 2021 the Government will be investing £9 billion a year more in infrastructure than they were in 2015. The old saying, “Down good roads wealth flows” still holds true even when those roads are increasingly electronic. While celebrating that achievement, however, I am concerned that there was no new money in the Budget for rail. That is disappointing, because one of the most pressing issues in Clacton is the dreadful rail service there. My constituents want to see a service that is regular, quick and clean.
Let me move on to some of the other issues that the residents of the constituency of Clacton raised with me before the Budget. The introduction of the digital services tax, which I support, has been a prominent issue. As a member of the Digital, Culture, Media and Sport Committee, I know that these huge corporations make massive profits, and it is right that they should pay a fair share for our public services. It is wrong that previous Governments did not get a grip on this.
I thank the Chancellor for the ongoing freeze on beer duty—I am probably not alone in that—but I am somewhat disappointed, having joined my constituents in campaigning for a cut in the duty. I recognise that a freeze is better than an increase, but I will continue to lobby for a reduction, in order to protect pubs as vital community centres.
It should be borne in mind that the pub is part of the great British way of life, and a great place to share and enjoy company. Loneliness is one of the burgeoning issues that we face today, and I would argue that the demise of so many of our treasured village pubs across the country has contributed to this blight. People do not have to drink alcohol when they go to pubs—they can drink anything they like—but they are a place to go to. A problem shared is a problem halved. The pubs in Clacton receive plenty of support from me personally, but one man can only do so much! There is certainly much greater scope for the Government to intervene in this sector.
After listening to the rosy picture painted by the Secretary of State for Housing, Communities and Local Government when he opened today’s debate, I had to wonder what planet he is living on, because austerity is definitely not over for my constituents and my city. It is not even close to coming to an end. In response to the Budget, the director of the Institute for Fiscal Studies said:
“If I were a prison governor, a local authority chief executive or a headteacher I would struggle to find much to celebrate. I would be preparing for more difficult years ahead.”
The Prime Minister stood up in Birmingham and made a promise that turned out to be nothing more than hollow rhetoric. For the people of Birmingham, austerity rolls on. Our city has had around £700 million cut from its budget since 2010. In fact, the Government found more money in this Budget for adult social care for the whole country compared with what Birmingham has had cut from its budget since they came to power in 2010. By 2020-21, we will have to find an additional £120 million of cuts to our budget. I do not think that my community of Birmingham, Ladywood has that much left to lose or much more that can be cut. I wonder how we are supposed to keep our city and our corner of British society functioning given the scale of cuts that we have faced. We have seen a total degradation—a decimation—of our public realm, and that has had profound consequences not just for my constituents, but for our country as a whole.
For my constituents, that degradation of the public realm has led to the removal of the things that enable a sense of human flourishment and wellbeing and things that allow a degree of comfort or enjoyment, such as libraries, leisure centres, parks, clean streets, and community and voluntary groups. The disappearance of all those things in Ladywood, which has the highest unemployment rate in the country and all the attendant problems of child poverty that follow, means that community life and individuals’ lives are reduced simply to surviving and enduring. That is unconscionable and immoral in one of the richest countries in the world, but it is entirely a result of political choices made by this Government.
The degradation of the public realm also has profound consequences for us as a country. All the things that enable people to come together and form relationships and friendships are part of our shared common life. If that is taken away, we start to tear apart the ties that bind our nation together and, in an era of anger, greater division and rising populism and nationalism all around the world, that choice is profoundly wrong. This is not just about economics; this is about the tearing apart of the things that keep our country together. We need and deserve more than this.
This Budget is good for communities and families in the west midlands. On top of the £250 million that the county has already received from the transforming cities fund, it will get another £72 million to boost prosperity and spread wealth across the region by increasing productivity. Families will also have extra money in their pockets at the end of every single month thanks to the introduction, a full year ahead of schedule, of the changes to income tax thresholds and personal allowances that were promised in our manifesto last year.
In the limited time available, I want to focus on our pubs, which was touched on by my hon. Friend the Member for Clapham—[Hon. Members: “Clacton.”] Of course, I mean my hon. Friend the Member for Clacton (Giles Watling). Despite mentioning pubs, I have not had a drink so far today; that was purely an end-of-the-week brain melt. For too long, British beer and British pubs were seen purely as part of the problem, whereas there is now an increasing recognition of their economic input. Pubs contribute £26 billion to our economy every year, and pubs across the country employ nearly 1 million people, almost half of whom are under 25. As I am sure the Chancellor will be all too aware, the sector generates £13 billion in tax.
However, the sector has been under enormous pressure. The years after Gordon Brown introduced the hated beer duty escalator saw an even higher than trend rate of pub closures and a reduction in the number of people drinking beer in pubs, rather than buying it in supermarkets.
I have only a few seconds.
The measures announced on Monday—a freeze in beer duty and a third off business rates—are expected to help up to 19,000 pubs to be between £3,000 and £8,000 a year better off. The British Beer and Pub Association reckons that will safeguard 3,000 jobs in the sector, which in turn means that more people will be earning an income and paying taxes—this will almost certainly cover the costs. This is a good Budget for beer, a good Budget for pubs and a good Budget for Britain.
At the 2010 general election, the Conservative party promised to eradicate the deficit by 2015. Now the Government have no target for getting rid of the deficit at all. Billions have been cut from our public services over the past eight years, and we still face a budget deficit of £52 billion and a national debt that has nearly doubled since the Conservatives came into government in 2010. The Government have borrowed £670 billion over the past eight years, and my local councils, the Conservative-led Lancashire County Council and Labour’s Preston City Council, are both at breaking point because of cuts.
Turning to the tragedy of universal credit, since June 2018, 71 constituents have written to me expressing the immense problems that many of them are facing due to the transition to universal credit. I will give just one example. Stuart obtained a three-month sick note from his GP due to illness. The jobcentre then started to apply for jobs on his behalf, despite his illness. He then had to wait five weeks before he received his first payment, because of the transition. That is a disgrace, and it is happening to many people across the country who are ill, disabled and, in many cases, destitute.
One of my many local food banks distributed more than 2,000 food parcels in August, up from its normal distribution of more than 1,000 food parcels. I am reliably informed that more than half of those food parcels were given out because of benefits issues, and I am also told that the majority of those issues are because of the transition to universal credit.
The Guardian reports today that my constituency of Preston is the most improved city in the UK, which is welcome. A lot of that is due to the hard work of the public and private sectors, which are working together for the benefit of Prestonians with the encouragement of the city council. However, that has happened in spite of Government policies, not because of them. Many commercial properties in the city centre are unoccupied, derelict and neglected, despite the good work of the business improvement district to stimulate the local economy. Homeless people occupy empty shop doorways, and in the past eight years I have seen a huge increase in the number of people begging on the main street, Fishergate.
This cannot continue. This is still austerity, despite the protestations of the Chancellor and the Prime Minister. It should end now.
This Budget is good news for our United Kingdom, good news for Scotland and good news for Angus, with an extra £950 million for Scotland.
Following tireless campaigning from me and my Scottish Conservative colleagues, I am pleased to see a freeze on spirits duty for the second year running, providing much support for our iconic Scotch whisky industry. It is fantastic news for distilleries around Angus, whether it is Gin Bothy in Glamis, Arbikie vodka or Glencadam distillery in Brechin.
In rural areas such as my constituency, ensuring that motoring is kept affordable is vital, because of the poor transport links. So I was pleased, as chair of the all-party group on fair fuel for UK motorists and UK hauliers, to see the Government recognise that and freeze fuel duty for the ninth consecutive year; we have saved our motorists £1,000 since 2010.
Not only have we saved people money at the petrol station, but we have saved taxpayers in their pay packet. By making changes to the personal allowance, we have ensured that basic rate taxpayers have an extra £130 in their pocket, and since 2010 they are £1,200 better off. This Government are working to ensure that those in society who need it the most are able to keep more of their hard-earned money, which, as Conservatives, we know is better in our pocket than spent by the state.
What does the hon. Lady have to say about House of Commons Library figures showing that the Conservatives have cut the Scottish Government budget by 6.9%, when over similar years the Irish Government’s tax revenue rose by 32%?
I thank the hon. Gentleman for his intervention, but it is as false as the SNP Twitter feed, because in fact if we look at the figures, we see a £552 million increase.
As I was saying, it must be noted that the change that the Government are making to the higher rate tax threshold, increasing it from £46,350 to £50,000, is not helping out those in Scotland, because of the SNP-led Government. In Scotland, those earning £50,000 will now pay at least £1,000 more in tax. We are talking here about people working in our health system, in our police and in our higher education system. SNP Members are quick to commend them but then they tax the back off them.
This Budget was welcome news also because of the £150 million ploughed into the Tay cities deal, which will benefit my constituency. It shows exactly what the Scottish people want to see: Scotland’s two Governments working together for the better of our country. I also welcome the funding going into our fishing industry. Only Scottish Conservatives are standing up for that industry; an extra £10 million is going into the technology and methodology fund. SNP Members want to drag our fishermen right back into the hated common fisheries policy.
There is nothing in this Budget that those SNP Members would have agreed to, and nothing that the Chancellor could have offered in this Budget would have allowed them to vote for it. I very much hope that when they troop through the Lobby they know that they are voting against a tax break for the hard-working, against a fuel duty freeze, against a spirit duty freeze, against £150 million going into the Tay cities region, against NHS funding and against extra funding for universal credit. They should put their constituents before their party.
Just two weeks ago, a group of Ministers sat on the Treasury Bench and launched the Government’s cross-departmental loneliness strategy. They were right to do that, because, as the Prime Minister says, this major public health issue has as big an impact as obesity or smoking, and affects up to one in five adults often or always. As part of that strategy, the Under-Secretary of State for Digital, Culture, Media and Sport, the hon. Member for Chatham and Aylesford (Tracey Crouch), promised that we could look forward to a loneliness test in respect of major decisions in future. Disappointingly, there is not one with this Budget. So I thought I would do the job for the Government and review its impact on loneliness to see whether the fine rhetoric we heard in this Chamber two weeks ago has been followed up with action.
The loneliness Minister, speaking with refreshing honesty, admitted that past cuts had “inadvertently” made loneliness worse—here is how. Since 2010, Government funding cuts have led to the closure of 428 day centres, 1,000 children’s centres, 600 youth centres and 478 public libraries. Those are all spaces where people can go and loneliness can be tackled. Government funding cuts have also led to the loss and closure of lunch clubs and befriending services; the loss of funding for voluntary and community groups and for community centres; and care visits being shortened in time and reduced in number, and being denied to 1.4 million older people. Again, those are all services that help to tackle and prevent loneliness. So has all that come to an end in this Budget, now that we have a loneliness strategy? Sadly, I do not think it has, because according to the Institute for Fiscal Studies, over the next three years we can look forward to an average cut of 3.1% each year in the local government funding from which all those services are funded. There is no end to austerity there.
While Ministers have been trumpeting £650 million extra for social care, they have neglected to point out that the previously announced £1.3 billion cut is still going ahead. Rather than more money for social care, then, we are looking forward to another £650 million cut in services.
In my borough, Croydon, we have a very high number of children seeking asylum. The Government’s severe underfunding of asylum services means that the support that those children need does not even exist yet. Isolation is of course a major problem for a child living in a country without their family or members of their social network. Even among that group, loneliness is going to get much worse.
Despite the fine words in the loneliness strategy launched just two weeks ago, the Budget will result in more and deeper cuts to all the services that tackle or prevent loneliness. I have to ask: what is the point of a cross-departmental group of Ministers sitting on the Front Bench to trumpet their new loneliness strategy if the Chancellor comes along and trashes it with his Budget just two weeks later? No wonder the Government dare not apply a loneliness test to the Budget—it is a test they would fail.
The oil and gas industry, not just in Scotland but across the length and breadth of our United Kingdom, employs hundreds of thousands of people, providing skilled jobs and contributing not only to our economy but to our nation’s energy security. The Conservative Government have already taken unprecedented action to support this crucial industry, with tax breaks for the North sea worth more than £2 billion. We now have one of the most competitive tax regimes in the world. There is an awful lot of life left in the North sea: according to a University of Aberdeen report, there are potentially 17 billion barrels equivalent of oil to extract. To maximise the North sea’s full potential, ongoing support will be required to sustain this vital industry and the thousands of jobs that depend on it.
Scottish Conservative MPs have raised the industry’s profile at the highest levels of Government. Recently, I was pleased to welcome my right hon. Friend the Chief Secretary to the Treasury to my constituency, where we met representatives from Oil & Gas UK and visited Aberdeen harbour, where the Minister was given a fascinating insight into the level of activity at the port. Thanks to UK Government funding through the Aberdeen city region deal, the harbour expansion is progressing well. This is an exciting time for the harbour, and its expansion is a clear signal that Aberdeen is open for business. It opens up huge opportunities for oil and gas decommissioning, as well as for welcoming new cruise ships to our city.
Alongside my Scottish Conservative colleagues, I have been lobbying the Chancellor and the Treasury at every opportunity, so I am delighted that the Chancellor announced in his Budget statement that he will keep the headline tax rate in the North sea at its current level, despite the oil price rising. That will ensure the highest level of support for the sector by the UK Government, which is great news for jobs, for families, for the economy and for the communities of the north-east of Scotland. As the industry emerges from the worst downturn in its history, the Budget is a vote of confidence in Aberdeen and the North sea, which is why I commend it to the House.
Just a few weeks ago, during the Conservative party conference, the Prime Minister told us that austerity was over. Like many others, I was a little optimistic, thinking that the massive cuts to and huge financial pressures on our public services and local councils were finally coming to an end. This week’s Budget demonstrates that my optimism was misplaced. This Tory Government remain out of touch with the misery that they have inflicted on public services and local councils throughout the UK. The Chancellor now tells us not that austerity is over, but that it is coming to an end. This is, indeed, a broken-promises Budget.
Since 2010, there have been huge cuts to our public services. The grant to the Welsh Government has fallen by 7.2%, which means that Wales has around £4 billion less to spend than it would have had if its budget had kept pace with inflation.
We constantly hear the Government’s rhetoric about the financial position that they inherited. They constantly try to push a myth by referring to “Labour’s great recession” or a similar nonsense term. However, unfortunately for the Government, the people of this country will not fall for that. The British people know only too well that the 2008 financial downturn was a global one and did not originate in this country. Furthermore, although Gordon Brown had influence, as indeed do all Prime Ministers, causing a global financial downturn is a little bit outside the scope of their power.
The reality is that austerity has been the political choice of this Government and the coalition Government in 2010, based on political ideology. As I mentioned, the Welsh Government have had a huge cut since 2010, and although they tried to protect Welsh councils in the early years of austerity, Welsh local councils now face a very difficult financial situation. Some £4 billion less in the Welsh budget has a drastic impact on public services and local councils in Wales. Further cuts in my area will likely mean a significant reduction in street cleansing, grass cutting and highways maintenance, as well as the closure of civic amenity sites, a reduction in the budget for libraries and youth services, a significant reduction in school budgets and school initiatives, and the closure of leisure centres and community centres.
Let us make no mistake: these cuts and many more like them across the UK are the result of this Tory Government’s austerity agenda. I was a councillor for more than 20 years, so I fully appreciate that local councils are at the forefront of service delivery in our communities. They are having to make hugely tough decisions about cutting local services, but they are decisions over which they really have very little choice, owing to the harsh austerity inflicted by this Government. The Budget does not signal the end of austerity; the only thing that it delivers for families and communities is more cuts and misery.
Before I come to my main speech, I wish to refer to some comments made by my hon. Friend the Member for Aldershot (Leo Docherty) about Marxism and sausages. During my hon. Friend’s speech, the hon. Member for Bootle (Peter Dowd), of whom I am perpetually fond, shouted from a sedentary position, “How were the sausages in Soviet Russia?” Let me tell him that they were awful—awful. They were so bad that they were made with wood chipping. It was said that the people of Soviet Russia preferred to eat sausages that had gone off because they at least knew that they had been edible at some point. That was what Marxism did to the sausage; that was what Marxism did to the people of Russia.
The truth is that it is the free market that brings prosperity to us all. There was much in this Budget to encourage and help the free market on which the prosperity of my constituency is based. We are a constituency in Essex that is built on the hard work of small and medium-sized enterprises, which will benefit greatly from measures to help entrepreneurs, the reduction of business rates by a third, and the new fund to help our high streets. This is hugely appreciated by the hard-working people of my constituency.
The Chancellor also announced some very good news that we have perhaps become too acclimatised to in this House. Employment in this country is at record levels. That is not something that we can gloss over lightly. The actions of this Government since 2010 have enabled more people to go to work and earn more money so that they can support their families, pay their taxes, and help their communities and public services to thrive. That is something of which we should be proud. The work of this Government will see the deficit reduce from over 10% to—in 2023-24—less than 1%.
Debt as a proportion of GDP is falling. One of the things that we should care about most is the legacy that we leave in the long term. When I was born, the debt-to-GDP ratio was about 35%. When the Labour party took power, it was slightly higher. By the time Labour left office, it had more than doubled. If this generation cannot reduce that figure, we are simply piling burdens on to our children and our grandchildren.
The Chancellor of the Exchequer said that his Budget was for the strivers, the grafters and the carers. As I listened to his words I thought, “This isn’t a Budget for the striving, grafting and caring women I have known in my life.” This is not a Budget for the women who make up 77% of the NHS workforce—the cooks, cleaners, nurses, midwives and doctors who struggle every day to keep the NHS running. Nor is it a Budget for the 1 million hard-working women stuck on chronically low pay whom I represented at Unison, who worry that their jobs are now insecure as zero-hours contract work increases. It certainly is not a Budget for the hard-pressed women of Wolverhampton, who come to my office with their concerns and problems, desperate for help because of eight years of austerity.
Does the Chancellor of the Exchequer realise that 87% of the impact of Government tax and benefit changes since 2010 has fallen on the shoulders of women? It is women who are most affected by austerity and whose lives are made ever harder by the Tory cuts forced on councils? It is women, along with their children, who continue to bear the brunt of this Government’s austerity. There was no mention in the Budget of the scandal that 33% of 12 million British children now live in poverty. One million of these children are in working households, and 120,000 children are officially homeless and living in temporary accommodation.
The women of this country will not be impressed by the money that the Chancellor is giving schools for “little extras”—£10,000 for junior schools and £50,000 for secondary schools, which have had an 8% cut in real-term funding and now cannot cover many basic expenses. Some 18,000 schools now face funding cuts. There was nothing in the Budget for further education colleges, where women can access an education that could give them a second chance in life. This part of our education provision is now crumbling due to the Government’s lack of support.
Finally, let me turn to the WASPI women who protested at Monday’s Budget from the Gallery—a generation of women made worse off by the former Chancellor. These women thought that they could retire after a lifetime of work but were not given any notice that equality with men meant taking money away from women. One hundred years after women won the right to vote, this Government still expect them to do as they are told and accept this unequal treatment.
Whatever the Prime Minister or the Chancellor of the Exchequer say, austerity is not over, nor is it coming to an end. Austerity will end only when we have a Labour Government.
I am delighted to support this Budget, which delivers for my constituents in the Scottish borders and all people across Scotland.
Scotland is lucky enough to have two Governments, but their economic records could not be so far apart. Others have spoken very well about what the UK Government are delivering for Scotland, and I want to focus my remarks on how the Scottish Government are failing to deliver for Scotland. The Scottish Government are completely failing to use their vast array of powers to grow the economy north of the border. The hon. Member for Airdrie and Shotts (Neil Gray) tried to put a glossy shine on the Scottish Government’s economic record, but I am going to set out some facts to the House.
Last year, the Scottish economy grew at less than three quarters of the rate of the United Kingdom’s economy. By 2022, the Scottish economy will be over £18 billion smaller as a result of the low growth under the SNP Scottish Government, and Scotland has had the slowest business growth of any country or region in the United Kingdom since 2016. Shamefully, there are now fewer businesses in my constituency than there were in 2015, and the blame for that lies squarely at the door of the nationalist Government in Edinburgh, with their anti-business policies and obsession with raising taxes, as well as the uncertainty that exists in every part of Scotland over the threat of another independence referendum, which Nicola Sturgeon, the First Minister of Scotland, refuses to take off the table. Scotland now has the highest business rates in Europe, and everyone earning over £26,000 is paying more tax than they would in other parts of the United Kingdom.
I understand that SNP Members are planning to vote against the Budget today, so let me remind the people of Scotland just what SNP Members are voting against. They are voting against a tax cut for over 2.4 million Scots; against a pay rise for 117,000 hard-working Scots on the national living wage; against freezing fuel duty for Scottish motorists and businesses; against a £200 million boost to the whisky industry secured by Scottish Conservative MPs; and against a commitment to growth deals, including the borderlands growth deal. SNP Members like to pretend they are standing up for Scotland. The Scottish Government like to pretend they are standing up for Scotland. The only people standing up for Scotland are the Scottish Conservatives in this House.
On Tuesday, I attended the Westminster Hall debate on a five-year plan for mental health, which resulted from the excellent report by and work of the all-party parliamentary group on mental health. I highlighted the fact that in Hartlepool there is currently no walk-in centre for people in crisis, and the crisis service itself is so stretched that I have heard reports that people in crisis are waiting for two hours or more to access help. Many of those people in crisis in Hartlepool are young people. I just hope that the money promised by the Chancellor for mental health services will help to provide better access to crisis services for my constituents.
That service sits alongside our local acute trust, which provides over 50 services from our local hospital and is in deficit to the tune of millions of pounds. Indeed, it has just been announced that there is a repairs backlog of £48.9 million in the trust. That is a ticking time bomb, but it is the result of an understandable focus on supporting and propping up frontline services.
Following the loss of Sure Start, an excellent pre-educational programme, children in Hartlepool lack vital support, despite the best efforts of the local council and the NHS. Sadly, we have some of the most deprived wards in the country. We have in-work, third-generation household poverty. If it were not for food banks, charities and council interventions, especially during school holidays, many of our kids would go hungry.
As for local government, the Chancellor has seemingly put extra funding into adult and children’s services and social care but, in all honesty, he continues to choke the life out of our councils and public services. This Budget does nothing to end austerity, and by promising jam tomorrow, the Chancellor only perpetuates it. There is no money for policing and no money for further education. My constituents are dogged, determined, and deserve a damn sight better.
I rise to support this Budget—a Budget that allows our country to say with confidence, after staring into the economic abyss 10 years ago, that our best days lie ahead.
We are talking today about families and communities. In that vein, before drilling into the specific measures in the Budget, it is helpful to take stock of how far we have come in respect of jobs. Why is that? It is because there are some in this House who are in danger of forgetting what unemployment means for families and communities. It means misery, lack of self-esteem and wasted potential. It means hollowed-out communities and a grinding, corrosive sense of despair. Unemployment in our country is just 4%. In Cheltenham, it is under 2%. Yet in France it is 9% and in the eurozone it is 8%. In April 2010, there were 2.5 million unemployed people in our country, over 900,000 aged between 16 and 24, with a lack of opportunity and a lack of life chances. This country is turning that around.
There is no true economic strength without fairness too. It was the right decision in the Budget to raise the national living wage, which will go up by nearly 5% to £8.21 per hour. That will deliver an extra £690 to a full-time worker, while ensuring that businesses can thrive and expand. Raising the personal allowance one year early to £12,500 will save a typical basic rate taxpayer £130.
Stronger families mean healthier families. We should be in no doubt about the steps that this Government have taken to invest in the NHS. The figures are stark, and they are so great that it is sometimes hard to take them in. Some £122 billion is spent annually today, but by 2023 that figure will go up to £149 billion—the largest peacetime investment in history. In Cheltenham, that is over and above the £39 million capital investment in Gloucestershire’s hospitals.
Stronger families need good housing too. That is why I welcome the measures in the Budget to help turn derelict retail outlets into homes. Before carving up the countryside, we should look to meet as much of our housing need as possible from brownfield sites. With every challenge comes an opportunity, if we have the vision and energy to seize it, and that is the opportunity that arises from the changes in retail. We can consolidate our shopping districts, rebalance our town centres and make them vibrant and prosperous.
On education, there is more to say and much I want to discuss. At the comprehensive spending review, we need to look at how we can support those with the greatest needs. But overall, the careful stewardship of this economy and the hard work of the British people mean that tough decisions have been made—the right ones—and the future for our country is bright.
The thing that struck me while listening to the Chancellor on Monday and to Government Members today is the yawning chasm that exists between the picture they paint and the reality for my constituents—the people who come to my office for help day in, day out. The reality of their lives is illustrated as well as anything else by the numbers who are currently turning to food banks.
Several food banks serve my constituency. The biggest, the B30 food bank, is run by the Trussell Trust. It distributed 7,501 emergency food parcels in the last year, which is up by a third from the year before. This is a picture that led the Bishop of Birmingham, the Right Rev. David Urquhart, to comment two months ago:
“In one of the richest countries in the world, it is a scandal that people go to bed hungry and families have to choose between eating and heating.”
That is the reality of too many people living in Birmingham today.
Around a third of the people who come to the food bank are in work, but their incomes mean that they cannot make ends meet. In work, on a low income or out of work, 54% have had to turn to the food bank because of delays and changes in benefits—yes, this is an area where universal credit is live. I want to echo the powerful points made by my right hon. Friend the Member for East Ham (Stephen Timms). He talked about not only the problems with the delays built into the universal credit system, but the way that the system interacts—or rather, does not interact—with legacy benefits, which means that more and more people are coming off legacy benefits, with their claims cancelled, and yet are not receiving any support under universal credit for weeks. That spirals them into debt, and the consequence of that can be seen in the figures for those using food banks.
In the short time I have left, I want to say one further thing. It is not just a failure to fund public services that is the problem; it is the fact that the advice and support that have been there in the past from the statutory sector and the voluntary sector for people in need are simply not there any more. Without that lifeline, what could be a problem is becoming a crisis for too many families in this country. That is why I appeal to the Chancellor and those on the Treasury Bench that if they really want to bring austerity to an end, they need not just to fund our public services properly—important though that is—but to ensure that they fund the advice and support mechanisms in our voluntary sector and our statutory sector, so that people get the support they deserve.
This is a Budget that delivers: it delivers for the country, for the people of West Oxfordshire and, most importantly, for the communities and families living in West Oxfordshire. I mention those communities and families simply because those people will judge the success or failure of this Budget or any other Budget not on the GDP figures or the facts in the Red Book, but on their actual lived experience and the difference the Budget makes to their lives.
When we look at the background this Government have managed to create and the foundations that this Budget lays, we see that they are very promising. We have employment at the highest level since 1975, with 3.3 million more jobs since 2010 and unemployment falling by a third. There are record numbers of new businesses, which means more jobs and more wages, with all of the hope and the promise that they bring. We also see borrowing at its lowest level for 20 years and the national debt falling. This is all underpinned by the favourable business and taxation policies that this Government have made possible.
When we look forward to the future, we must look at an economy and a Budget that will increase growth. In the future, as we leave the European Union, the decisions we take will be in our hands, and the decisions we take here will govern the success or otherwise of this country in the future. Because we will be responsible for our own decisions, we can have great hope in looking ahead—hope that we will have higher wages, more cash in families’ pockets and more money for the public services we all value so much.
Housing and homes are a major issue, and I will dwell on them very quickly, if I may. The stamp duty cut has already raised the threshold to £300,000, which has helped 121,500 more people to get the homes they want and to get themselves on the housing ladder. I welcome the measures in this Budget that will extend that to shared ownership for properties up to £300,000, which will get even more people on the housing ladder. I would like to go further and have more reforms of stamp duty to ensure that people can downsize if they so wish, and to untie the housing market so that people can move and have the homes they want so much.
I wish that I had longer than three minutes to expound on the good things in this Budget. There is so much good stuff—[Interruption.] I am glad to see that everybody on the Labour Benches agrees. Ultimately, there is a choice: between the jobs and the work that this Government are offering and mortgaging our children’s future with a trillion pounds of debt, as the Labour party is offering. I welcome this Budget.
The hon. Member for Brighton, Pavilion (Caroline Lucas) has already pointed out that the environment rated no mention at all from the Chancellor. I would add that, as ever, Wales remains an afterthought, and it was hardly mentioned in the Budget. Our planned transformative and green infrastructure projects—rail electrification, opening old lines, and tidal power generation—have all been swept away, while the entire Welsh Government roads budget has been blown on a 12-mile stretch of motorway through the precious Gwent levels. The word “austerity” may have been scratched out of the Prime Minister’s dictionary, but the people of Wales will be feeling its impact for years to come, and over everything looms the cloud of Brexit.
The figures are hugely worrying. In 2016, gross value added per head in Wales was 72.7% of the UK figure—in fact, the lowest figure in the UK—and between 2014 and 2017 the proportion of people on relative low income was highest in Wales, at 20%, while the lowest figure was in the south-east of England, at 12%. Above all, the fact that over a third of our children in Wales are living in poverty is a continuing national disgrace. The gross disposable household income per head in Wales was £15,835 in 2016, which was 81.5% of the UK average. Between 1999 and 2016, Wales had the third lowest percentage increase in gross disposable household income per head of all the UK countries and regions—in other words, we are falling behind.
Universal credit is only partly in force in Wales, at 11% of potential claimants. I note, however, that it has not been rolled out in the most intensely Welsh-speaking areas, such as my own. In fact, the wonderful universal credit system just cannot cope with treating our two languages equally. According to Community Housing Cymru, tenants on the new system now owe more than £2 million in unpaid rents, even though a quarter of those now in arrears were managing to keep up with their rents before they were transferred to universal credit. Changes to personal allowances have already been discussed. The Welsh economy is badly skewed towards the low-wage sector, so the Chancellor’s kindly treatment of higher rate tax payers will have a more limited effect on incomes in Wales, and will potentially have a huge effect on the Welsh Government’s new tax-raising powers. Given the gross national and regional disparities and inequalities in Wales and the UK there is much uncertainty ahead, and we can expect little from this Budget and this Government.
As you return to your Chair, Mr Speaker, I return to the 1950s. There has been a lot of talk about austerity, but when our historians speak about austerity they focus not on public spending but on living standards and wages. In 1950, we spoke about the fact that there was rationing and people had low disposable incomes—we did not focus only on levels of public spending. Indeed, in 1950 we spent 6% of GDP on defence. The point is what is happening to living standards where it really matters.
Just before the Budget we heard the fantastic news that this country is now experiencing its fastest wage growth for almost a decade. [Interruption.] The hon. Member for High Peak (Ruth George) chunters, but if she reads coverage of those wage statistics in The Guardian, she will see they have been analysed to see why that is happening. The conclusion is that it is due to competition between firms for workers—in other words, wage growth is coming from the unemployment miracle that we are delivering. Indeed, in the Budget the extra money that the Chancellor was able to deploy comes from the fact that the OBR has revised employment figures up for this country. That is not a magic money tree—that is literally the hard work of the British people paying off, and more tax revenue coming in to support higher spending.
In a country which, compared with other similar northern European countries, has not had as high an average GDP per head as it could have had, what can we do to sustain those higher wages in the years to come so that we can in turn sustain higher public spending in the only way possible? The answer is competitive taxes, so that we do not eat into people’s take-home pay, we have sensible levels of public spending, and above all, we keep borrowing and debt under control.
If we followed the Labour party we would decimate that growth in wages because taxes would surge, eating into take-home pay. Investment would fall as businesses would be less confident if faced with a return to ’70s-era socialism. Above all, my biggest problem with what Labour Members offer with their increase in debt is that if they push up public spending as they promise, yes, public spending austerity will fade briefly, but it will return as we go from feast to famine, as we have done so many times before through boom and bust. What will happen to austerity? It will be forced on the next generation with higher debt. That is a gutless and cowardly approach to public finances. The right approach is sensible, prudent, conservative economics, based on markets and a sensible balance between low taxes and targeted public expenditure on priorities such as the NHS, and that is why I will be voting for the Budget tonight.
I speak as co-chair of the cross-party drugs, alcohol and justice group, and as a member of the all-party group on alcohol harm. With dozens of alcohol-related deaths across the UK every day, those two groups decided that, rather than wait ages for the Government’s alcohol strategy, we would launch our own alcohol charter that advocates achievable steps to improve support for those in need, protect public health, and cut crime and disorder. It has the support of 30 relevant organisations, and I urge hon. Members to add their support by signing early-day motion 1682.
Despite the Chancellor’s claims of record funding for the NHS, I was disappointed that he failed to take the opportunity in the Budget to reduce alcohol harm. Instead, it seemed that he had been wooed by pre-Budget pleas for him to cut beer duty, such as the claims plastered on Westminster tube station that such a measure would protect our pubs. Cuts in duty do not benefit pubs because supermarkets continue to undercut pub prices, and big brewers retain the savings. We do not protect people or pubs by allowing supermarkets to sell alcohol more cheaply than water for vulnerable people to drink at home alone or on our streets.
Colin Shevills of Balance North East highlighted the fact that cheap alcohol places a huge burden on our communities, the NHS and our public services in our north-east. He also referred to the findings in a survey by north-east pub landlords, which found that cheap supermarket alcohol, rather than alcohol taxes, is the main reason to blame for the closure of our local pubs. It is particularly alarming that in the past five years cuts to alcohol duty have cost the Treasury about £4 billion. The Government estimate that the cost will rise to £8 billion during the next five years. That money could fund 34 million emergency ambulance call-outs or over half a million social care packages. Furthermore, figures show that, if the level of alcohol consumption remains unchallenged, it is set to cost the NHS £17 billion in the next five years.
From pub landlords to health organisations, there is strong agreement that we need a minimum unit price to help to combat the sale of cheap alcohol in shops and the impact that has on our communities. The Chancellor needs to listen to those groups and cross-party advice, and rethink his strategy on alcohol to support our great local pubs and to prioritise alcohol harm reduction.
I rise to support the Budget. I will start with two points on the criticism and rebuttals we have received from the SNP.
First, universal credit has received a lot of criticism. I think every single Member knows that there are improvements to be made to universal credit. That is what the Budget does. It allocates more money to universal credit. It puts the SNP at odds with the chief executive of the Joseph Rowntree Foundation and the Trussell Trust, who both recognise the improvements to universal credit, which will help to tackle poverty more effectively.
Secondly, on tax, where the SNP tax changes delivered £20 a year for the most vulnerable, a pathetic 38p a week, our Budget delivers £130 a year, which is £1,200 for the basic rate income taxpayer, helping people who need it most.
The SNP talks about having a different path and attracting more people to Scotland, but here is the interesting thing. They want to bring more people in. I will give them a hint about how to do that: do not tax our doctors, our teachers and our servicemen and servicewomen more than everywhere else in the United Kingdom.
What does the Budget deliver for Scotland and for Ochil and South Perthshire? It gives £950 million extra for the block grant, which is a real and cash increase. It delivers a spirits freeze, which helps companies in Menstrie, Madderty and Kinross in my constituency. It delivers £550 million more for the NHS, which even the SNP recognises is a positive thing and, if devolution works correctly, there will be £43 million more for business rate relief to help our high streets in Crieff and Alloa, £41 million to improve roads across Perth and Kinross and Clackmannanshire, and £87 million more for social care. Those are positive steps in the Budget, and that is before I even mention the £150 million of new money that is being allocated in the Tay cities deal. The Budget will also deliver a crackdown on tax avoidance, including VAT, and measures on the hidden economy and on offshore tax compliance.
Some of the smaller measures in the Budget have been lost. It expands the operations of the British Business Bank in Scotland by allocating personnel on the ground to help our businesses to access more patient capital. In addition, it allocates £1.6 billion to strengthen science innovation, with £235 million for quantum technologies and £20 million for fusion power, which is a subject very close to my heart.
We on the Government Benches want to empower people. We do not want to tie them to dependency. The Budget provides more support for the most vulnerable and more opportunity for all. That is why I support it in this House.
A lot of Opposition Members have talked about how austerity is not over and about how the Government’s rhetoric on that is empty. I would say something different: how can the Government claim that austerity is over, is coming to an end or whatever it is they are saying, when they do not even know what it is? After the Prime Minister told us that austerity is over, I asked the Chancellor what his Department’s definition of austerity is and how his Department measures austerity. I was keen to ensure that she was referring not just to halting her Government’s devastating cuts to public services, but to their huge social security cuts, which must be ended and reversed if austerity is really to be ended. The reply from the Treasury simply stated:
“The Chancellor will set out the government’s plans for the economy and public finances in detail at Budget.”
But he did not explain what austerity is. Far from clarifying what it is, he did very little to back up the Government’s empty words on ending it. So if they cannot even define what they mean by austerity, let alone make any significant steps towards ending it, that is just further proof that the Budget is empty rhetoric.
However, let me tell the Government what austerity means to my constituents in Midlothian. For young workers, austerity from this Government and the Scottish Government is going to mean further decimation of their services. Yes, the Government recently made small increases to the national living wage, but it is not a real living wage. Pay for 16 and 17-year-olds is being raised from £4.20 to £4.35, yet they are still doing the same job as people who are older than them and getting paid much less for it.
If paid employment is to provide a reliable route out of poverty for women in my constituency, action must be taken to address the continued gender inequalities in the labour market. Nothing from the Chancellor in his Budget was aimed specifically at improving the position of women in the economy. We had the WASPI campaigners in here because they were completely overlooked. I am fed up of listening to the Scottish Conservatives today, who have gone on and on about their representations to the Treasury and their standing up for Scotland, when they have done absolutely nothing about split payments, which I have raised time and again. It is an absolute disgrace.
I will not be supporting a Budget that does nothing to tackle the urgent issues of climate change and homelessness, has nothing for the WASPI women, youth services or the decimated women’s services, and does nothing to tackle period poverty.
It is a pleasure to be called early in the debate, Mr Speaker—or at least a little earlier than I thought I might be called. The right hon. Member for Twickenham (Sir Vince Cable), who is no longer in his place, seemed to have a bit of a downer on optimism. As I feel powered by optimism, I felt affronted by that idea. In the west midlands, we voted for Brexit because we are completely optimistic about what the future will hold for us, and I completely endorse the Budget, because it puts us on a great footing to make the most of those opportunities when we leave the European Union.
One thing about Conservatives is that they invariably poll high in people’s consideration of who is best to run the economy, because we do it so well. That is not just because of the things we see in this Budget. If we look back to 2010 and compare it with 2019, we see that there will be a 93% increase in the tax-free allowance, which will have gone from £6,475 to £12,500—when you represent a constituency with an average income of £27,000, changes like that are significant. People are not continuing to vote Conservative because of what we do in a single Budget; they are continuing to do so because they see a trajectory and they see us making life better for them year on year.
Why I am optimistic about the future? Because this Budget allocates £1.6 billion to ensuring that this country stays at the cutting edge of technology and innovation. I went to see Professor Kai Bongs—clever guy, clever name—at the University of Birmingham. He is leading on quantum technology. His team are working on gravity sensors. This might seem a bit abstract, but gravity sensors will help us to see beneath the ground for construction projects. Invariably, people do not get price certainty with construction projects because they do not know completely what is in the ground. Imagine if this country developed technology that allowed for that certainty and then created products that were sold throughout the world. We did it with DNA—identified at the University of Leicester and now used in 120 countries for DNA profiling. We can do it again with other technologies because we believe in our country. We know we have the people to lead us into the future, and it is tiring and depressing to hear people on the Opposition Benches talk down this country, when I know that our future is bright.
It is a pleasure to follow my parliamentary neighbour, the hon. Member for Walsall North (Eddie Hughes), though he will not be surprised to learn that I take a slightly different view of the Budget.
The backdrop to the Budget was a singular political claim made a month ago at the Conservative party conference that austerity was over. Every Government is responsible for the consequences of its policies, but with that claim the Prime Minister and her Government took particular responsibility for every closed library, every universal credit rent arrears, every service denied to people.
Let us look, then, at what the Budget really did. The Chancellor used an unexpected increase in tax revenues to fund the health service for the next few years—I welcome extra money for the health service, of course, although by historical standards the rate is unexceptional —but he did not end austerity in other services. Let us take schools, for example. In the first decade of this century, under a Labour Government, there was a 65% increase in funding per pupil. Since 2010, there has been a reduction of 8%. That is a difference between a Labour Government and a Tory Government. When the schools budget is cut, it is a cut in opportunity and in social mobility, there is a reduction in the potential of people to make the most of their talents and it reinforces inequality.
The same is true of crime. The greatest freedom people can have is to go about their daily business free from the fear of crime. In the west midlands, we have lost 2,000 officers. We have seen a 21% increase in violent crime, a 17% increase in crime involving offensive weapons and a 23% increase in sexual offences, and now we are faced, because of pension changes, with the prospect of losing another 450 police officers. This is an attack on people’s freedom, and it strikes the poorest in our society more than others. So the Budget does not present an end to austerity.
There is a particularly absurd nature to the claim: it is being made as we are about to commit an act of enormous economic self-harm. The country needs hope, but the tragedy of Brexit is that, having scapegoated Brussels, immigration and others, we are, in the act of leaving, making it much more difficult to give the country that hope and a plan for the whole country.
It is a great pleasure to follow the right hon. Member for Wolverhampton South East (Mr McFadden).
I had the dubious pleasure of reporting on nearly 20 Budgets and countless pre-Budget reports in my time as a journalist. Gordon Brown used to stand at the Dispatch Box with his clunking fist and talk about golden rules, fiscal balance and investing for the long term, and the horror show was always in the Red Book. As a journalist, I knew that to see what was in the Budget I had to look in the Red Book.
For days now, journalists across the country have been poring over the Red Book looking for holes similar to those they have found in many other Budgets over the years, but they have failed to do so because the Chancellor has adopted what I would call—pardon the pun—retail policies to address some of the major issues that people in this country face. For example, in 2015 my constituency was the only place in the country with increased footfall in the town centre on the year before, but that was reversed in 2016-17. Our main shopping centre, the Touchwood shopping centre, is now having to invest in the night-time economy, and for the first time I am starting to see empty shops on the high street, so the change in business rates is hugely welcome.
Another of my local high streets, in Shirley—a long, 1960s, straight-line, very old-fashioned high street—is being redeveloped through the intermingling of community resource and people living and being brought into the local area. For example, we have extra care living and other such developments, as we look to a future that is designed not specifically around retail, but around how the high street interacts with our lives. The retail fund of £675 million is therefore hugely welcome.
The right hon. Member for Doncaster North (Edward Miliband) made a mainly good speech, which was perhaps too focused on social housing. We need to look at housing in the round. We have to increase the supply of housing in this country. For years, housing has been distended, which in many respects has damaged our economy. That will happen even more now that house prices are so high, because houses have become so unattainable. We therefore need to increase supply.
We have to admit that a deficit of 82% is still too high. It leaves us less able to face a global recession, but we made a decision in 2010 that we would basically try to follow a middle way. We get out of that through productivity—the other way would be inflation, which none of us wants. Productivity is the only way in the long term, and the Budget develops that.
Today is exactly two years after the Government promised to introduce a timetable to ratify the Istanbul convention. That important international convention aims to prevent domestic violence and, crucially, to underpin that with support services for victims. The Prime Minister has rightly prioritised tackling violence against women, but what does the Budget contain that shows a commitment to preventing violence against women and girls? Absolutely nothing. The stark evidence on the underfunding of victim services is harrowing. Rape Crisis, the largest national provider of specialist sexual violence services, has a waiting list of over 6,000 people. According to Women’s Aid, on a typical day, 94 women and 90 children are turned away from refuges due to a lack of space. A Council of Europe study shows that England provides only 67% of the recommended capacity for sexual assault referral centres, which are critical in offering services to victims.
When it comes to costing violence against women and girls, there are three areas of consideration: first, the lost economic output of women forced to miss work as a result of mental and physical injuries sustained during an attack; secondly, the cost to the Treasury of providing services that prevent and respond to violence against women and girls—for example, health, police, courts and specialist advocates; and thirdly, the physical and emotional cost to victims, which is a loss to both the individual and society.
Last month I asked the Treasury whether it had made an assessment of the cost of violence against women and girls. It never answered, but passed me to the Home Office, which said that its most recent estimate is nearly a decade old. That suggests that there is no sustained attempt to understand the economics of violence against women and girls.
However, there is more recent research by Professor Sylvia Walby. Taking her 2014 research and adjusting for inflation, the cost of violence against women and girls in this country stands at £23.7 billion per annum. From that we can extrapolate the cost per constituency of not preventing violence against women and girls. In my constituency, the cost is £32.7 million every year. In the Chancellor’s constituency, it is £39.1 million every year.
If the Chancellor looks carefully at the research, he will see that we can do more by investing in support services. Thereby we do the morally right thing, but also the economically right thing. Will the Government please put their money where their mouth is and ensure that all Departments prioritise this?
It is a pleasure to follow the hon. Member for Rotherham (Sarah Champion), who made a powerful speech.
I welcome many elements of the Budget: the relief for business rates; the reduction in tax on the personal side, and help for coalfield communities such as mine. Those sorts of changes and the economic environment that the Government have created in the past eight years have allowed us to become so attractive that even in a historically challenging part of my constituency like Barrow Hill, there is now the opportunity for Spanish train manufacturers to come and open factories that could create hundreds of jobs. I very much welcome what the Government have done in this and previous Budgets.
Today, we have talked a lot about the challenges in our fiscal policy and the problems in our budget. I would like to draw attention to several points made by my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) and by my hon. Friend the Member for Gainsborough (Sir Edward Leigh), who is not in his place. The macroeconomic indicators are moving in the right direction. Our deficit is reducing and our debt is finally going down, but by the end of the period covered by the predications in the Red Book we will still be spending more than we take in as a country, and we will have done so for 20 years.
The challenge we face in western democracies such as ours is that we spend in the good times, we spend in the bad times and we spend in the in-between times. Whatever our views are about spending—I recognise that there are respectful and different views in all parts of the House about the levels of spending we need—we cannot continue to spend in the way we are without paying for it. We are writing cheques in this House without any responsibility for how we are going to cash them. We talked a moment ago about the morality of some of the decisions we have made here. I think the morality before us now is that of not continuing to load problems on to our children and our grandchildren.
The hon. Member for Birmingham, Northfield (Richard Burden) is no longer in his place, but he made a powerful speech about the yawning chasm between certain elements and communities in our country. In my view, there is a yawning chasm between what we are deciding to do here and now, and the money we are choosing to spend, and the people who will have to pick up the tab and pay for that in 20 or 30 years’ time. In the limited time I have left, I would like to draw attention to a number of countries that have decided to say, “Wherever we are and whatever Government we have, we should put in place fiscal rules that mean that should not happen.” Chile did it, the United States tried to do it—not very well, honestly—and Switzerland has done it through its debt break. We should consider fiscal changes that ensure we do not load a lot more debt on to our children and grandchildren in years to come.
I am pleased to follow the hon. Member for North East Derbyshire (Lee Rowley).
This Budget is a missed opportunity. It does not even offer key services the respite they need from relentless cuts, let alone the investment they need to redress the damage done by eight years of austerity. We need to put the record straight: Labour paid off more debt than any previous Administration on record. Capitalism fuelled the global financial crisis; it was Gordon Brown who saved this country from recession. We were on our way through the recovery route, but this Government chose the austerity route to pay off the debt, with ordinary people paying the highest price. Is it paid off? No, and as it slips it grows for the next Budget. The Chancellor says that if there is a no-deal Brexit there will be a need for another Budget, and the blame will shift to the EU. What is the cost of Brexit to date? Centre for European Research analysis shows that it is already costing the public purse £500 million a week, and the economy is already 2.5% smaller than it would have been if we had chosen to remain.
The Budget is a wasted opportunity. The invaluable emergency and life-saving services such as the fire service and police have been stripped to the bone. By the end of this decade the Tories will have inflicted a 50% real-terms cut on the Merseyside fire and rescue service since 2010. As a result, we have gone from having 1,000 firefighters to having 620 across Merseyside—the fire service is stretched beyond limits. The Government need to stop and evaluate the magnitude and impact of the cuts today. They need to be halted; they are dangerous.
The National Audit Office says that Merseyside police numbers have been slashed by 31%. Merseyside has been the third worst hit force under this Government. We are seeing crimes spike and charges plummet around the country as our police struggle to keep up with the demand for their services and the justice system creaks. The chief constable for Merseyside has stated this week that the impact of the cuts will be “crippling”. The Government need to listen and act. The British justice system, acclaimed the world over, is creaking.
The Government are hacking away at our public services in a way that is without precedent: families suffering, wage stagnation, cuts to benefits, 40% of universal credit recipients in work. My constituency ranks high in income deprivation, mortality rates for 29 to 44-year-olds are growing in comparison with those of other age groups, and suicide rates are the highest in the country. We need a Government who care, who invest in people, and who are prepared to accept responsibility and meet needs first.
I should like to speak about the Budget by referring to a number of tests. The first test is to ask what it will do for growth in this country. Even the Office for Budget Responsibility expects growth of only 1.6% by 2023, which would be the lowest medium-term growth rate since records began and a historically low growth rate for this country even since world war two.
The second test is to ask whether the Budget is a spending splurge, as the Government keep suggesting. Well, it certainly is not. As many of my hon. Friends have said, if we strip the extra NHS spending out of the Budget, we can see that all the other departmental budgets are either flat or going backwards in real terms. The Institute for Fiscal Studies has also said that if we strip out spending on the NHS, we see that the Budget does nothing to reverse any of the cuts that we have seen over the past eight years.
That leads us to the claim that austerity is dead. Is this indeed the end of austerity? It is not. It is the start of the Government saying that it is the end of austerity. This is the same Government who said in 2010 that the deficit would be removed by 2015, so we can believe the Prime Minister saying that. However, the Prime Minister saying that this is the end of austerity means that she is admitting that austerity existed. As my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) said, every cut that we see across the country now lies at the door of this Prime Minister and No. 10.
Let us look at the priorities being given to tax changes. The Government could easily have brought forward the personal allowance extension for the lower paid and left the upper end as it was, but they have chosen to spend the majority of that personal allowance extension on the very richest in society. That was the wrong thing to do at a time when the deficit looks as though it will never be eradicated under the Government’s long-term plan. Let us also look at the corporation tax cuts. The Government could have said that they would not take forward the 2p corporation tax cut that they announced in the 2017 Budget, because they already have the lowest corporation tax in the G7 and do not need to take that money. It could have been put towards truly ending austerity.
Let me finish with the biggest lie in Budget history. There is no Brexit deal dividend in this Budget. That was a lie by the Chancellor. Even Standard & Poor’s has said that if there is a no-deal Brexit, unemployment will double, every household will be £3,000 a year worse off, inflation will peak at 5% and the recession will be as long as the one that followed the financial crisis. That is not a Brexit deal dividend. That is the Government’s dereliction of duty towards the economy of this country.
The Chancellor spoke—I hope that this was a throwaway phrase—about “little extras”. For me, the Budget is about the little extras that he could have introduced but chose not to. For instance, when announcing the increase to the national living wage, he could have chosen to extend it to the 1.9 million under-25s who are unable to claim it. That would have put more money in their pockets that could be spent on the high street to help the ailing shops that are struggling under this Conservative Government.
The Government could also have chosen to give a little extra help to local authorities, such as my own in Stoke-on-Trent. We have lost on average £653 per person over the past eight years. Compare that with the figure for Cheshire East Council, which is just £120. There is a massive disparity between rural counties and the cities, which need more help. The Government could also have chosen to address the chronic underfunding of our further education system. The deputy principal of Stoke-on-Trent College was outraged at the fact that the Chancellor did not even mention higher or further education in his speech. The funding cap of £4,000 means that the services provided for many of the pupils in my constituency simply cannot continue.
Those little extras pale in comparison with what I think is the most rancid part of this Budget, however. As my hon. Friend the Member for Edinburgh South (Ian Murray) pointed out, if the Government had wanted to, they could have decoupled the increase in the personal tax allowance from the threshold for the personal allowance for higher earners. Instead, we have had a piece of parliamentary sleight of hand. This is economic blackmail, and it is downright wrong. It is absolutely wrong that my constituents will benefit by about £10 a month—frankly, that will get wiped out in the next round of council tax increases that will be needed to fill the budgetary black holes left by this Government—while we in this House will vote ourselves a tax cut of about £500 this evening, and people earning more than £90,000 will find themselves almost £1,000 a year better off. That is not economic literacy; it is economic devastation for this country.
The Chancellor said on Monday that this was
“an economy working for everyone.”—[Official Report, 29 October 2018; Vol. 648, c. 654.]
But the facts tell a different story. Families up and down the country—families who have been at the sharp end of cuts to our public services—know the cold, hard truth of the past eight years of Conservative rule. The richest 10% are set to gain 14 times more in cash terms next year than the poorest 10% of our households. Growth is set to be below 2% in every forecast year—that is almost unheard of—and the figures for the UK are now 60% below the G20 average. UK manufacturing has fallen to its lowest level since 2016 and is well below the pre-Brexit forecast.
What about children and young people? Some wards in my constituency now have 40% of children growing up in poverty. This year, 3.1 million children with working parents will be below the official breadline, and much of the 1 million increase since 2010 is due to the Government’s benefits policy changes. The cuts’ impact on children was brought home to me when over 100 teachers from Hounslow visited Parliament a few weeks ago. When they were asked what issues were having an impact on attainment in their schools, two thirds said mental health, over half said food poverty, and many referred to difficulties at home. That shows the stark reality of families under strain, and children are now feeling that strain due to not having a decent place to live, the resources with which to study, food to eat, or time with parents who work shifts day and night to make ends meet.
The value of child benefit has fallen by 17% since 2009 while the value of the state pension has risen by 54%. Some estimates suggest that up to 1,000 Sure Start centres may have been shut since 2010, with bigger cuts in disadvantaged areas. The hit goes further than schools and is affecting young adults. Last year, around 2.2 million learners aged 19 or over participated in some form of Government-funded further education, which is a decrease of 29% since 2011. Children and young people are now being hit hardest by the Government’s choices. The test of an economic policy is about both who wins and who loses and, as the Government win plaudits from the wealthiest, it is our job to speak for the those who cannot speak for themselves and to call for a fairer future for the next generation.
When the Prime Minister addressed the Conservative party conference, she said that austerity was over. On Monday, the Chancellor said that the
“the era of austerity is…coming to an end.”—[Official Report, 29 October 2018; Vol. 648, c. 653.]
We can argue about the semantics, but the reality was captured by something the Prime Minister said some time ago: “Nothing has changed.”
We have also seen little to undo the cuts that have stripped away local services in our communities. Having been a councillor during some of the worst years of this Government’s austerity, I can tell the Chancellor that there is no more fat to trim in local government and no more “efficiencies” to be found. This Budget does little to reverse almost a decade of underinvestment that has brought councils to the brink, including Tory-run Northamptonshire County Council, which has been pushed into bankruptcy.
This is a broken-promises Budget, with its most reassuring moment being the WASPI protest in the Gallery. Those women should not have to protest in Parliament; the Government should be listening to them. I have been working closely with 1950s-born women in my constituency over the past few months, and I have heard some heart-breaking accounts, including stories of women who have died while waiting to receive their state pension. However, I have also seen steely determination and their unwavering commitment to continue fighting for what is rightfully theirs. The issue is not going away and these women are not going away, and the Government had better listen sooner rather than later.
Of course, many WASPI women will have to turn to universal credit while they wait for their state pension. The Chancellor completely lacks contact with reality on that issue, as does the hon. Member for Ochil and South Perthshire (Luke Graham). He pointed out that more money has gone in, but there is not enough money. What do the Chancellor and the hon. Gentleman expect me say to my constituents on universal credit who come to my surgeries, struggling to get by? Do I tell them that is all right, and that more money is going into universal credit and austerity is coming to an end?
We heard the chorus of Tory MPs chanting along with the Prime Minister at yesterday’s PMQs as she rhymed off things that have gone up under her Government, but I noticed a few things missing from the list: child poverty up; food bank use up; and homelessness up. This Budget does absolutely nothing for my constituents and I cannot possibly support it.
The Chancellor had the opportunity to strengthen the economy, invest in jobs and guide us towards a brighter future. What did we get? A wasted opportunity, a timid response and an overwhelming feeling of, “Really? Is that all?” This is a broken-promise Budget that prolongs austerity.
We have seen wages continuing to stagnate for most workers and falling for the lowest-paid workers. Let us not forget those long years of the public sector pay freeze, when nurses, police officers, firefighters, teachers and the rest of our public service heroes were treated so contemptuously by Ministers. For all the Chancellor’s boasting about the number of jobs in the economy, the reality is that there is an explosion in low-paid jobs, insecure jobs, part-time jobs and jobs with zero-hours contracts. That is what people in Slough tell me every week.
Behind the economic figures lies the human cost. The price of austerity is not paid by Ministers; it is paid by the poorest and most vulnerable members of our society. Look at the growth of food banks, which provide emergency food aid to people in desperate need. In my constituency, volunteers provide food for people in Wexham, Cippenham, Langley and central Slough. They are supported by the generosity of people across the constituency, including through supermarkets, schools and faith-based institutions. I applaud that spirit of altruism and humanity, but why should anybody in modern Britain need emergency food aid?
In Slough we have a Labour council, which has managed its budgets well. It seeks to provide excellent services and to protect those most in need. Our Labour councillors in Slough do an excellent job, and they are dedicated public servants, but they are not magicians. They cannot magic up money from the magic money tree when the Chancellor and the Government have made it vanish.
Back in December 2010, the BBC reported that Slough Borough Council would be the hardest hit of all the neighbouring—predominantly Tory—councils in Berkshire. Since then we have seen increasing pressure on budgets, particularly in social care, and an increase in child poverty. According to the charity End Child Poverty, there are more than 11,000 children in poverty in Slough—one in three local children—and that child poverty is rising.
Slough councillors tell me that, by March 2019, the number of people in temporary accommodation will be 70% higher than in April 2018. We have seen a 300% increase in people living in temporary accommodation since 2014. The good people of Slough would be forgiven for thinking that the Chancellor is all smoke—
I rise primarily to raise on behalf of my constituents a glaring injustice: the lack of funds for rebuilding New Ferry. Members will remember the horrific explosion in my town in March 2017. To date, the Government have not committed anything like the funds they have handed over to Salisbury, or anything like the funds they have handed over to Belfast for the destroyed Primark. The people of New Ferry are bitterly angry, and their voice must be heard by Ministers on the Treasury Bench.
I listened to what Conservative Members said about tax cuts, and I recognise what is happening. This is just what the American Republicans do. They want big tax cuts for the wealthy, so they choose some so-called middle class profession and, as part of their package of big tax cuts for the wealthy, put in a nugatory amount for those who seem to be in the middle. They persuade the nation that we should have tax cuts on that basis, and they hide what they are doing—handing back huge amounts to the already wealthy—by dressing it up as money for the middle class.
In this Budget we are talking about pennies a week for people on average incomes, and when that is seen alongside the impact of universal credit, everything gets worse for people in the middle. It is not good enough to say that we cannot do better on universal credit when we are giving away £2.8 billion in one year, 84% of which goes to the top half of the distribution, with 34% of that going to the top 10%. That is a regressive measure, and if we believe in progressive politics, we should stand against it and say that what we need is a truly progressive tax system and proper funding for our public services.
Austerity is not over for those who are terminally ill. Those with pancreatic cancer, three out of four of whom will die within a year, and those with motor neurone disease, one third of whom will die within a year and half of whom will die within two years, cannot access terminal illness benefits under the current regulations until a doctor decides that they have six months or less to live—that is nonsense. Universal credit, employment and support allowance, and personal independence payments are a nightmare to negotiate for people who have a short time left to live. My ten-minute rule Bill will address this anomaly. It was supported by the Conservative party in Scotland and it will come before this House on 23 November. I hope we will finally make sure that those who are terminally ill have a chance of justice and of dignity as they head towards death. I hope we will ensure that they have a chance to put in place the things that will allow them to stay and live at home with their family, so that they have a chance of dignity in dying, which this Government seem determined to prevent them from having. I recognise that others want to get in at this late stage, so I will stop at this point.
Thank you very much, Mr Speaker. In the short time allocated, I will focus on the universal credit side of the Budget. In 2015, George Osborne made a dreadful mistake, cutting out from universal credit £3 billion per annum from the work allowance. Since my re-election in 2017, I, like my Lib Dem colleagues, have constantly been advocating a restoration of that work allowance element, so that work really does pay—it would not do so without that. For a year and a half, the Conservative party has been constantly pushing back to say, “Work does pay. We do not need to restore the work allowance.” I am glad that finally, on Monday, the Chancellor listened to us and restored £1.7 billion, albeit not all the work allowance that George Osborne had cut.
A number of Opposition Members have discussed this, but I say to the Conservatives that rather than give a substantial tax cut for those at the top end of salaries, people like us and many others, why not put that £1.3 billion, which is the equivalent in respect of the people earning over £50,000, £60,000, £70,000 and 80,000 a year, back into the rest of the work allowance so that it restores what George Osborne catastrophically cut all those years ago? That would mean, first, that work would pay properly within UC, which the Lib Dems agree with—even Labour did years ago, when I was in coalition. Most importantly, it would mean that people earning under £15,000 a year, who were shockingly ignored by this Government in the Budget on Monday, would get some of the tax cut that would be part of the larger work allowance. I believe this House would support that. If the Government do not do that, the Lib Dems would certainly be voting against them on this. So I say to the Chancellor and to the Conservative party: fully restore the work allowance to what it originally was by not giving the extra £600 or £700 a year to the highest paid in this country. That is the right thing to do and I urge the Chancellor to listen.
I am glad to see the Chief Secretary to the Treasury in her seat today, as she could not get one on Monday. I wish to comment on what a number of Members have said. The right hon. and learned Member for Rushcliffe (Mr Clarke) asked, in a rather perplexed way, why the Government were spending all the headroom. The answer is: because they are up the creek. My hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) talked about the problems her local authority has because of the Government’s austerity plans. My hon. Friend the Member for Sheffield South East (Mr Betts) spoke similarly, as did many other Members.
The hon. Member for Dover (Charlie Elphicke) said young people need to be better off; well, that is why young people are voting Labour. Rather bizarrely, the hon. Member for Aldershot (Leo Docherty) talked about sausages and Marxism; I hope his sausages are more sizzling than his speech was.
My hon. Friend the Member for Barnsley Central (Dan Jarvis) made the case for devolution. My right hon. Friend the Member for Wolverhampton South East (Mr McFadden) talked about how women have been most affected by austerity. [Interruption.] Conservative Members may want to laugh at that sort of thing, but we take that very seriously. My hon. Friend the Member for Rotherham (Sarah Champion) made a similar case. The theme was there throughout the debate: austerity has not ended and will not end under a Tory Government.
When I entered Parliament, I believed that a primary role of this House was to hold the Government to account. I looked at the parliamentary website to check out my assumption, and found that it says:
“Parliament works on our behalf to try to make sure that Government decisions are…open and transparent”—
that is a foreign land for this Government—
“by questioning ministers and requesting information”
“workable and efficient”—
not a concept routinely associated with this Government—
“by examining new proposals closely and suggesting improvements”.
However, the Government have systematically treated the House in the most contemptible way. All Members should be worried. First, the Government stitched up Committees with a Tory majority, even though they are a clapped-out minority Government who are not fit to govern. Secondly, they have obstructed substantive scrutiny of three Finance Bills in a row by not permitting any amendments to the law, which is unprecedented. Thirdly, behind closed doors they agreed a billion-pound deal with another minority party, without proper parliamentary scrutiny or the signatories to the deal being held to account by this place. Fourthly, without precedent they did not provide my right hon. Friend the Leader of the Opposition with the traditional advance copy of the Budget statement. That is wrong. Fifthly, the Chancellor did not even have the courtesy to attend the House when my right hon. Friend the shadow Chancellor opened the debate on Tuesday afternoon. That is simply disrespectful, not to the individuals but to the protocols of the House.
The power grab by Ministers continues in the Budget resolutions—for example, in resolution 79, which is worryingly designed to give Ministers the ability to amend key tax legislation ahead of Brexit without parliamentary oversight. That is unprecedented and wrong and we will vote against it. We will continue to raise this egregious contempt for Parliament through any means we possibly can.
As for the Budget itself, the Prime Minister offered an end to austerity, but the promise has turned out to be as hollow as a Halloween pumpkin. The Chancellor claimed it would be a Budget for
“the strivers, the grafters and the carers”—[Official Report, 29 October 2018; Vol. 648, c. 653.]
but the spectre of austerity continues to haunt the country, and will do for many years to come.
No, I will not.
There is nothing in the Budget for teachers, police officers and local government workers. There is not a penny for most frontline services, while local council funding is being cut by £1.3 billion next year alone. The Government have broken all their economic targets. They keep setting their own work, but they are marked an F grade every single time. Economic growth has been sluggish and is set to stay below 1.6% for the next five years. Productivity remains 15% lower than in other developed economies and the Government are doing nothing about it. Regional economic disparity is vast. Public sector investment is more than £18 billion lower than in 2010—[Interruption.] The hon. Member for Aldershot talked about Marxism and brutal regimes. This is a man who has been to Saudi Arabia many times. That is the sort of brutal regime that he should be worrying about. It is an absolute disgrace.
Public sector investment is more than £18 billion lower than it was in 2010. That is not talking down the economy; that is talking up the truth. If austerity is over, why then is the Chancellor pressing ahead with a further £7 billion of social security cuts? The Health Foundation says that th