House of Commons
Wednesday 13 March 2019
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
Cabinet Office and Chancellor of the Duchy of Lancaster
The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster was asked—
Leaving the EU: No Deal
If you will indulge me for 30 seconds, Mr Speaker, I would like to apologise on behalf of my right hon. Friend the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office for his absence from the Chamber. As I think you know, he has a commitment that means that I am taking his place today.
I say to the hon. Member for Sheffield, Brightside and Hillsborough (Gill Furniss) that we have published over 300 items of no-deal content and we have broadcast across some 200 commercial radio stations. The Cabinet Office is facilitating the redeployment of staff between Departments, and it is co-ordinating contingency planning through established structures.
It was announced overnight that the Government plan to slash tariffs on the majority of products imported from outside the EU in the event of a no-deal Brexit. Such a move would mean cheaper steel imports, with business saying that that could destroy our steel sector and our manufacturing sector more broadly. What consultation did the Government undertake with the steel sector before the announcement?
This morning, right hon. and hon. Members and I were serving on a statutory instrument Committee. Along the Committee corridor, there are SI Committees almost every day, preparing not only for a deal-Brexit but for a no-deal Brexit. Can I tell my right hon. Friend that we are prepared, in my view?
My hon. Friend makes a very good point. As the Government have said consistently over the past couple of years, we are working so that we are prepared, whatever the outcome. The legislative default for this Parliament is to leave without a deal, if we do not agree a deal.
The country is hanging on to a no-deal cliff edge. Today, we read about the Government’s latest brilliant idea: a ludicrous TV advert telling the public, from Friday onwards, “Don’t panic”, which is a bit like Corporal Jones in “Dad’s Army”. However, this is not the Home Guard in the 1940s, and the prospect of thousands of job losses and shortages of food, medicine and so on are no joke. We can prevent this. Today, the Commons will take control from the Government to prevent such a disastrous scenario. Will the Minister join us?
I find it somewhat ironic that the hon. Gentleman, along with his colleagues, is talking about preparation—the previous question was about preparation too—but complains that we are preparing the public for what may happen on 29 March. The simple answer is that he and his colleagues should have voted with us last night to make sure that we left the EU with a deal.
Civil Service Pay
The Chancellor of the Duchy of Lancaster and I regularly engage with unions on a range of civil service workforce issues, including pay. I most recently met union representatives across the wider public sector last month, and I will meet civil service trade unions on pay for 2019 very shortly.
Since 2010, wages for workers in the civil service have fallen 10% to 13% behind workers in the NHS, local government and the education sector. Despite that, the Cabinet Office has confirmed that any pay rise above 1% will have to come from further cuts in jobs, and in terms and conditions. Is it not time that the Government backed up their claim to be ending austerity by ending it first for their own employees?
As the hon. Gentleman acknowledges, we have removed the 1% pay cap, and it is up to each Department to find efficiency savings and better ways of working to pay for greater pay rises. That is exactly what we have seen. For example, the Foreign Office agreed a deal of 4.6% on average over the course of two years, giving a pay rise but funded properly by efficiency savings.
Will my hon. Friend say whether in the discussions he has been having he has reflected on how much the national living wage will increase from next month, and how many workers that will benefit?
Can the Minister confirm that permanent secretaries agreed a 1% pay offer across the board in Departments last year? Does that not make a mockery of the fact that the Government have 200 separate pay negotiations across the civil service?
As the hon. Gentleman is aware, in respect of lower grades—those below the senior civil service—there is a delegated pay process. The overall framework is set by the Cabinet Office and the Treasury, and it is for individual Departments to decide. We will go through the proper process, and no final decisions have been taken.
Election Candidates: Disabilities
I thank the Minister for that answer. In the past, I have been a trustee of SHIELDS—Supporting, Helping, Informing Everyone with Learning Disabilities in Southend. What plans do the Government have to engage people who have learning disabilities in the electoral process?
I congratulate my hon. Friend, as I know he works hard in supporting what SHIELDS does. It is clearly doing positive work for people with learning disabilities in Southend. We are committed to supporting people with learning disabilities in participating in democracy. We are working, to that end, in partnership with the Royal Mencap Society, including, for example, through facilitating a meeting between Mencap and political parties on the provision of easy-read manifestos.
Perhaps I should declare an interest, in that my wife is disabled and I have been glad of her support in my elections in the past. At the recent snap election, we faced an issue with access to voting stations; sometimes a school would be declared unsuitable because repairs were being carried out and another place had to be found for a voting station. Sometimes disabled access was an issue. What are the Government doing to make sure that it is made as easy as possible for disabled people to get in there and cast their vote?
The hon. Gentleman makes a good point. We are working with returning officers on this issue, and there is the wider issue of engaging with people with disabilities to address. All of us, in all political parties, can do more about that. We should be looking at what we can do to encourage people to get involved. That is why I am so proud of being part of the Conservative party whose Conservative Foundation does exactly that.
Leaving the EU: Civil Service Responsibilities
The Government are equipping themselves with the right people and the right skills to deliver the UK’s exit from the European Union. We now have more than 14,500 people working specifically on EU exit-related policy and programmes across government. Workforce plans will continue to be reviewed to ensure that the civil service can always respond to emerging capacity and capability requirements.
We have more than 400,000 civil servants across Departments and across the country, many of whom have areas that cross over with the work they are doing on the EU. We work with Departments to ensure that we are using the right skills in the right places to make sure that we are prepared to leave the EU in a good and orderly fashion.
Obviously, as we leave the European Union, the civil servants who have been focused on those issues will continue to do the work they need to do that relates to the EU. Where that work ceases, they will be moved back into the relevant civil service areas, as is required, across Departments.
At a meeting of the Cabinet Office in December, it was reportedly agreed that all non-essential Government business is to be suspended so that civil servants can concentrate on no-deal planning. Can the Minister confirm whether the Government consider the housing crisis, resourcing the Home Office to process settled status applicants, the failure of universal credit and the delays to HS2 to be essential or non-essential business?
The best advice I can give the hon. Lady is not to get tempted to believe rumours of Cabinet leaks that she reads about in the newspapers. If she looks at the Government’s track record, she will see that we are delivering record employment levels and record low unemployment, that we are improving wage levels for people who work for the Government, and that we are delivering for people, with good and outstanding education continuing. I am sure she will look forward to hearing more about that in the spring statement later today.
Work has continued over the past two years. As the hon. Gentleman may recall from answers I have given at the Dispatch Box over the past year or so, the number of civil servants focused on this policy area has changed and increased as required, so that we are ready to leave the European Union on 29 March.
It is clear, is it not, that Brexit will mean a lot of change, upheaval and uncertainty for ordinary civil servants throughout the country. I was therefore genuinely astounded to learn last week from the general secretary of the Public and Commercial Services Union that not a single meeting had taken place with national officers of that union to discuss Brexit. When will the Government start to discuss these matters with representatives of the workforce they depend on to deliver services throughout the country?
We have a robust legal framework for money in elections, to ensure that elections are free and fair. Donations to political parties of more than £500 must be from permissible donors, which include individuals on a UK electoral register, UK-registered companies and trade unions, and UK political parties. Responsibility for regulating that sits with the independent Electoral Commission.
Even this week, hundreds of thousands of pounds of dark money is being spent on social media adverts by a pro-Brexit organisation warning MPs not to “steal Brexit”. There is no information in the public domain about who is funding these ads, which are being so heavily promoted at a critical time in the Brexit process and are clearly aimed at influencing it. There is no place for dark money in British politics. The Electoral Commission has been calling on the Government to take action for years; why have the Government failed to act?
A number of recommendations have been made in this and related policy areas—for example, by the Electoral Commission and the Digital, Culture, Media and Sport Committee. As would be expected, we are considering them all together and will respond in due course.
This matter really is first-order business for the Government. Our electoral system has always been something of which this country has been proud. I urge my hon. Friend to push ahead with the steps needed to control this activity, because it is clear that on these big issues it is very bad news if people believe that the electoral system has been corrupted.
My right hon. Friend makes a weighty and important point. He is absolutely right that we should not be complacent about the way our electoral system runs. We have already taken forward a series of measures to ensure that it is secure, and we will do more of that to ensure that our system is good for today and fit for tomorrow.
The hon. Gentleman will have noticed the written ministerial statement that I published only last week, which outlined the steps that the Government have already taken and will be taking to reduce intimidation in public life. It has to be a collective job, though, and the Committee on Standards in Public Life was right to ask various organisations, including the social media companies, on which I know the hon. Gentleman does some work with one of his all-party groups, to take action.
Government Departments: Living Wage
We are addressing this issue through the application of the statutory national minimum wage and the national living wage, based on the advice of the Low Pay Commission. From April, the national living wage will rise again, from £7.83 to £8.21 per hour, handing a full-time worker a further £690 annual pay rise.
The real living wage is £9 an hour, and, in terms of paying it, Scotland is already the best performing part of the UK. Over the next three years, the Scottish Government will be lifting more people— 25,000 more people—out of poverty and on to the real living wage. When will the UK Government follow Scotland’s lead in paying the real living wage, not the bogus national living wage?
I am sorry to hear the hon. Lady referring to the national living wage as bogus. It is a very proud achievement of this Government and it is actually rising faster this year than the real living wage. Over the past three years, since it was introduced, the national living wage has handed the lowest paid workers a pay rise of almost £3,000.
Our world-leading national cyber-security strategy, supported by £1.9 billion of transformational investment, sets out the steps that we are taking to defend our people, deter our adversaries, and develop the skills and capabilities that we need. Our vision is that, by 2021, the UK is secure and resilient to cyber threats and prosperous and confident in the digital world.
I was concerned to read that three quarters of FTSE 350 companies are not aware of the risks associated with businesses in their supply chain, particularly with businesses with which they have no contact. What steps are the Government taking to ensure that their own suppliers understand these vulnerabilities?
As ever, my hon. Friend is absolutely right to raise this very important issue. Companies must do more to understand their supply-chain risks. Our cyber essentials scheme extends our influence to organisations that provide products and services to Government; it specifies standards that will improve their cyber-security. We use contractual arrangements to ensure that they help those in their supply chains, often small companies, to be more secure.
Technology can help deliver public services which are better, smarter, more tailored and put people in control, but that requires investment in people, processes and equipment. The 2017 WannaCry attack on the NHS was a consequence of a lack of investment in all three. What is the Minister doing specifically to give local authorities and other public service deliverers the resources and the skills that they need to ensure secure digital public services?
The hon. Lady is absolutely right to raise the challenge of cyber-security, but we have responded to that challenge. That is why we have created the National Cyber Security Centre, funded by £1.9 billion of additional money. On the WannaCry incident, we have learned the lessons since that attack and we are, for example, rolling out Windows 10 across the NHS.
We know that 43% of businesses experience cyber-security breaches each year and, as we have just heard from my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah), we know that half of all local authorities in England still rely on unsupported server software. We know from the Minister himself that the Government have no idea how many cyber-attacks hit Government. Does the Minister accept that we need a new approach? We need to look at how we foster cultural cyber-change and we need to look at how we put the public good rather than private interest back at the heart of Government cyber strategy.
The hon. Lady says that we have no idea of the level of attacks. I am happy to set out the number for her. We have already managed more than 1,100 major incidents through the National Cyber Security Centre. The national cyber security strategy is delivering, for example, the removal of more than 4.5 million malicious emails every month, and the taking down of 140,000 fraudulent phishing sites. This strategy is bringing together the commercial side and the Government side and it is delivering.
Intimidation in Public Life
The increasing prevalence of intimidation in public life can seriously damage our democracy, as we have already just discussed. The Government are taking a range of actions to tackle this problem, including a consultation on a new electoral offence of intimidating candidates and campaigners.
I thank the Minister very much for that reply. She may have seen the “Exposure” programme broadcast last week, which captured the abuse and threats of death that I have faced, that my hon. Friend the Member for Eddisbury (Antoinette Sandbach) has faced, and that my former right hon. Friend—still a friend—the right hon. Member for Broxtowe (Anna Soubry), has faced. There was also an excellent response from the Speaker to a point of order that I raised on the matter. Does the Minister agree that the systematic intimidation of MPs in this place on the way they vote should be a real concern to anybody interested in our democracy?
Yes, I do agree. The Government have therefore been working closely with the parliamentary security team, the police, administrators and others, because tackling this issue requires action from everyone. It also goes wider than just Members of Parliament. For example, we are helping candidates at the local elections this year to be safer with their home addresses.
The right hon. Gentleman should know that the Government cannot have such an inquiry because the agencies investigating are independent, and rightly so. I can reassure the House that we have seen no evidence of successful interference in UK democratic processes, and that is as we would wish it to be.
Last week, the Minister for the Constitution, my hon. Friend the Member for Norwich North (Chloe Smith), updated the House on the actions we are taking to tackle the inexcusable intimidation of people in public life. We have legislated so that candidates in local elections have the choice to remove their home addresses from ballot papers. We have consulted on a new electoral offence of intimidatory behaviour. It is vital that everyone in the House works together to prevent such behaviour and address this worrying trend.
My hon. Friend makes a good point. We will be looking carefully at the evaluations from the 2018 pilots and—when they come forward in a few months—the 2019 pilots to help inform our next steps and to shape how the final policy will look when introduced. We can benefit from close collaboration with local authorities, and we would welcome the involvement of Crawley as we progress.
There have been reports that the Conservative party is preparing to take part in the upcoming European elections. The Opposition have heard that on Monday, there was a telephone conference between the Cabinet Office and regional returning officers, who would run such an election, during which preparations for European elections were discussed. Are the Government saying one thing in public and another in private?
I am grateful to my right hon. Friend for raising that point. The Government continue to support that Bill and think it is the right thing to do.
As the hon. Lady would expect, we keep under review the situation in relation to all our strategic suppliers. I assure her that we take appropriate contingency measures in respect of every strategic supplier.
To date, we have already delivered almost 800 services online on gov.uk. In addition, I regularly engage with ministerial colleagues, principally through the digital implementation task force, which is chaired by my right hon. Friend, the Secretary of State for Digital, Culture, Media and Sport.
This Government do not support national pay bargaining. It has been a step forward that we tailor pay to the needs of each individual Department. But I engage with all trade unions as we set the overall delegated framework that applies to pay grades below the senior civil service.
My hon. Friend rightly raises the issue of social enterprises. That is why, earlier this week, I made an announcement that we would be consulting on how to allow social enterprises to bid for a range of Government contracts and set out a clear framework for them to do so. I am confident that we will be able to unlock the opportunities of the over 100,000 social enterprises we have in this country.
The Prime Minister was asked—
I am sure the whole House will want to join me in expressing our deepest shock and sadness at the news of the air crash in Ethiopia on Sunday. Our thoughts and prayers are with the families of all 157 who were on board, including the British nationals who were among the casualties. I have sent a personal message of sympathy to Prime Minister Abiy and extended an offer of UK assistance.
This morning I had meetings with ministerial colleagues, including my right hon. Friend the International Development Secretary, who very helpfully offered to teach me sign language. In addition to my duties in this House I shall have further such meetings later today.
I am sure all of us concur with the Prime Minister’s remarks about the disaster in Ethiopia.
Many of us recognise the Prime Minister’s efforts to secure a deal, but given that we profitably trade with the majority of the world’s GDP outside the EU on largely World Trade Organisation, no-deal terms, has the time not come to look beyond this remain-dominated Westminster bubble and for all of us to recognise that the default position of our votes to trigger article 50 is that no deal is better than a bad deal, so that we can honour the referendum and leave the EU on 29 March?
It may be to the benefit of the House, Mr Speaker, and I am sure that people will recognise this, if I try to keep my answers shorter than usual today. Let me say to my hon. Friend that I want to leave the European Union with a good deal. I believe we have a good deal. Yes, no deal is better than a bad deal, but I have been working for us to leave on 29 March and leave with a good deal.
I absolutely concur with the Prime Minister’s remarks about the disaster of the air crash in Ethiopia, and indeed the earlier crash in Asia that affected the same type of aircraft. I commend the Civil Aviation Authority and the European Union for taking prompt action about the safety of the aircraft concerned. We need to ensure that all air passengers are as safe as they possibly can be.
The Prime Minister has been stubbornly declaring that the only choice is between her deal and no deal. Last night’s vote finished off her deal. Tonight she is not even showing the leadership to whip on no deal. Just a few weeks ago, she whipped her MPs against ruling out no deal. So how will she be voting tonight?
Well, there may well be other votes, and the Prime Minister’s Brexit strategy is clearly in tatters. Her deal has been twice rejected and is now dead, and she is not even asking her MPs to support her on it tonight.
A couple of months ago, the Chancellor, who is here today—we will hear from him later—reassured business leaders that the threat of a no-deal Brexit would be taken off the table, while the Business Secretary said that a no-deal Brexit would be “ruinous” to the UK economy. Indeed, the Government’s own forecasts suggest that no deal would knock 10% off the economy, damaging jobs and industry. Why is the Prime Minister still ambivalent about the outcome?
I have been working for leaving the EU with a deal. Businesses and business organisations have been clear across the UK that they want MPs to back the deal. Yes, businesses worry about the uncertainty of Brexit, but there is one thing they worry about more, and that is a Corbyn Government.
The Prime Minister does not seem to understand. Her deal has been flatly rejected twice by this House by unprecedented majorities. Even this morning, the CBI said that no deal would be a “sledgehammer” to the economy and went on to say that there has been “no consultation with business”, adding:
“This is no way to run a country.”
The reason the Prime Minister’s deal is now dead is that at every step of the way, she has refused to listen—refused to listen to manufacturers and refused to listen to trade unions about the best way to protect jobs in this country, which is to agree a customs union. Manufacturing is now in recession. Many companies have laid off many workers. Her own deal has been decisively rejected. When will she listen to workers who are concerned about their jobs and to businesses that are concerned about their future and accept that there has to be a negotiated customs union with the EU?
The CBI said that the Labour party’s policies would lead to a drop in living standards. That is not very good for the people who the right hon. Gentleman claims to stand up and represent. He talks about a customs union, which of course was part of proposals that he put forward. That is yet another position he has taken. He has moved to being in favour of a second referendum, but I note that last night, he did not actually refer to a second referendum. He has just spoken about a deal involving a customs union—that has already been rejected, and in the past, very often rejected by him.
It would be rather reckless for the Prime Minister to rule out any option at the present time, I would have thought. I do not think her answer will help workers at Honda in Swindon, those at Nissan in Sunderland or many others who are very concerned about their future because of the danger to the manufacturing industry.
Britain’s food producers are also in despair. A coalition of UK producers asked the Prime Minister to call for tariff-free access to the single market. With her red lines now in tatters, will she back the view of UK food producers and back close alignment to the single market, to secure their industry? After all, she promised at Chequers that there would be frictionless trade.
Former Secretary of State for Environment, Food and Rural Affairs, the right hon. Member for North Shropshire (Mr Paterson), said while campaigning to leave in the referendum—this is not the kind of language I would use—that
“Only a madman would actually leave”
the single market.
The Prime Minister has previously said that we cannot just reject no deal; we need to be for something. With her own deal now so decisively rejected, can the Prime Minister inform us what she is now for? Does she recognise that the Labour alternative—the five pillars we put forward—is the credible show in town, available and ready to be negotiated? Is it not time she moved on from her red lines and faced the reality of the situation she has got herself, her party, this Parliament and this country into?
The right hon. Gentleman talks about not wanting no deal yet repeatedly votes in a way that brings no deal closer. The deal that he is proposing has been rejected several times by this House. I may not have my own voice, but I do understand the voice of the country. They want—[Interruption.]
And that is that people want to leave the EU, they want to end free movement, they want us to have our own trade policy, and they want to ensure laws are made in this country and judged in our courts. That is what the deal delivers, and that is what I continue to work to deliver. The right hon. Gentleman used to believe that too. Why is he just trying to frustrate it?
I do have sympathy for the Prime Minister with her voice, and I hope it soon recovers. I understand how painful this is.
The Prime Minister’s deal has failed, and she no longer has the ability to lead. This is a rudderless Government in the face of a huge national crisis. The hon. Member for Broxbourne (Mr Walker) recognises it, saying that the Government
“is not fit for purpose. We are not doing what we need to do, which is govern the country properly and effectively.”
Where the Prime Minister has so obviously failed, this House needs to listen to the country—listen to unions, people in work fearful for their future, manufacturers and businesses, workers, European Union citizens who have made such a fantastic contribution to our society and British citizens across Europe who are all facing uncertainty. With jobs and industry at risk and the country in crisis, she needs now to show leadership, so can the Prime Minister tell us exactly what her plan is now?
I continue to believe that the House today will have an opportunity to vote on no deal, and it will then have an opportunity tomorrow, depending on how it has voted tonight, to vote on the question of the extension of article 50. As I said last night, there will be hard choices for this House, but this House will need to determine what its view is on the way forward. As far as the Government are concerned, we want to continue to work to leave the European Union. That is what we will deliver for the people on the vote in the referendum. We will continue to work to deliver leaving the European Union, but to deliver leaving the European Union with a good deal.
As for the right hon. Gentleman, he does not agree with Government policy; he does not even agree with Labour party policy. He has nothing to offer this country.
First, I am sure that Members from across the whole House will want to join me in sending our deepest sympathies and condolences to the family and friends of Jodie. I know there is nothing that we can do or say that is going to ease the pain the family are going through at her loss.
We are very clear that judges must have the powers they need to impose tough sentences on those involved in serious violence and knife crime. The law already provides for a mandatory prison sentence for a second offence of carrying a knife, and conviction of a knife or offensive weapon offence is now more likely to result in some form of custodial sentence—and for longer—than at any point in the last 10 years. Obviously, individual sentencing decisions are a matter for the courts, but we are catching and prosecuting more people who carry a knife, and those who are convicted are now more likely to go to prison and for longer. As I set out in Prime Minister’s questions last week, both I and the Home Secretary are working to see what more we can do to deal with the serious violence and knife crime that has beset so many of our communities.
May I associate myself with the remarks of the Prime Minister on the tragedy in Ethiopia and the tragic loss of life?
On this day, we of course commemorate the sad loss of the 16 young children and their schoolteacher in Dunblane who were cruelly cut down by Thomas Hamilton. The sanctity of young life is something we remember today when we hear the news from the hon. Member for Moray (Douglas Ross) that his wife Krystle has given birth to their young son, and I am sure the whole House will want to congratulate him.
A no deal will result in unprecedented harm. Does the Prime Minister really want to be the first Prime Minister in history to deliberately plunge the United Kingdom economy into recession?
First of all, I am pleased to add my congratulations to my hon. Friend the Member for Moray and his wife on the birth of their son. I am also sure that the thoughts of the whole House are with the right hon. Gentleman in remembering the terrible loss of young life we saw in Dunblane.
The right hon. Gentleman will of course hear the spring statement from my right hon. Friend the Chancellor of the Exchequer in a short time, and I am pleased to say that it will show the strength of the United Kingdom’s economy, in which Scotland is able to participate as a member of the UK.
In 16 days the United Kingdom runs the risk of crashing out of the European Union with no deal, which we know from the Government’s own analysis will crash the economy. Why does the Prime Minister not show some leadership today, do the right thing and whip all her MPs to take no deal off the table on 29 March and forever?
You can only take no deal off the table by doing one of two things: either revoke article 50, which means betraying the vote of the referendum; or agree a deal. If the right hon. Gentleman wants to take no deal off the table, he should have voted for the deal.
I fully appreciate the concern that my hon. Friend, our hon. Friend the Member for Romford and others across the House have shown on this issue. The most recent statistics show that 82% of offenders received a custodial sentence for repeat possession offences. Obviously, as I have said, sentencing decisions are a matter for the courts, but the Government regularly look at ensuring that the powers are there to allow tough sentences to be imposed on those involved in knife crime.
I will ensure that Ministers in the Department for Education have heard the hon. Lady’s request, but let me just remind her and Members of the House that the schools budget this year is £42 billion, which is the highest it has ever been—[Interruption.]
I am grateful to my right hon. and hon. Friends for the spirit in which they have sought to broker a compromise in this House. The amendment has four propositions. The first is that we should publish our day-one tariff schedules; we have done so this morning. The second is that we should seek to extend the article 50 process; we remain committed to giving the House the opportunity to debate and vote on that tomorrow. The third is that we should unilaterally guarantee the rights of EU citizens resident in the UK; I am pleased to reconfirm that we have done that. The fourth is to seek to negotiate an implementation period in return for a financial payment but without the withdrawal agreement that we have agreed. The EU has made it clear that there will be no agreement without a withdrawal agreement, and that includes what we have already negotiated on citizens’ rights, a financial settlement and a Northern Ireland protocol. The plan that exists and has been agreed is, obviously, the deal that was put to the House and rejected by it last night. As I have said, the EU has made clear that it would not accept elements of what is in the current withdrawal agreement without them being in a withdrawal agreement.
I thank the hon. Lady for raising this issue. I am sure that the whole House will want to join me in sending our deepest sympathies and condolences to the families and friends of those affected by that terrible tragedy. I am pleased to say that our health and safety record for mines has improved greatly since 1979. That improvement has resulted from learning from previous incidents such as the Golborne tragedy and preventing as far as possible disasters like it. As the hon. Lady may know, in 2015, following an extensive review, the Mines Regulations 2014 replaced all previous legislation relating to health and safety in underground mines. They provide a comprehensive and simple goal-setting legal framework to ensure that mine operators provide the necessary protection for mine workers and others from what we all accept are inherent hazards in mines. I assure the hon. Lady that we will continue to review safety regulations so that we can make sure that a tragedy like this never happens again.
I continue to believe, as I have said in this House before, that the best route out of poverty is through work. The hon. Lady refers to figures that I quote. I also quote figures, which I have to say are very important for this House, regarding the reduction in the number of children living in workless households. There is very clear evidence of the advantages of children being brought up in a house in which there is work. Universal credit is encouraging work. It is delivering on ensuring that we see more people in work and able to provide for their families.
I thank my hon. Friend for raising this important issue and for bringing her successful experience as an entrepreneur to the House. I am happy to join her in welcoming Alison Rose’s review. We are setting out our ambition to increase the number of female entrepreneurs by half by 2030 in various ways. The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Rochester and Strood (Kelly Tolhurst), will sponsor an industry-led taskforce alongside Treasury Ministers that will drive forward work to encourage greater investment in female entrepreneurs by all types of finance providers, including the banks.
I set out last week steps the Government are taking to increase our work on knife crime. I understand that my right hon. Friend the Home Secretary met the west midlands chief constable at the end of last week to discuss policing there. The hon. Lady refers to decisions taken by the Government in 2010. Yes, those were tough decisions in terms of public sector funding, but they were taken because of the appalling circumstances of the economy left by Labour.
I thank my hon. Friend for his question. I was tempted to start by saying that I suspect his mother and I were at the school at a different time—[Interruption.] Oh, he says it is true. Good.
I recognise that we have asked schools to do more. We have responded with £1.3 billion extra investment in our schools this year and next, so the core schools budget will rise by around £2.6 billion in total, and the Government are protecting overall per-pupil funding in real terms. Every school is attracting at least 1% more per pupil by next year, and thousands of schools will attract significantly larger gains of up to 3% per pupil per year.
That investment will mean more children having the chance of a better future, but the quality of education also matters. I commend my hon. Friend’s mother, who I understand was a teacher, for the work she has done in education. I say thanks from the whole House to all our teachers up and down the country for the work they are doing in education.
I am sure that everybody across the House sends their sympathies and concerns to the family of Maryam. We recognise that this must be an incredibly difficult time. Decisions on such matters are rightly taken not by politicians but by clinicians. I understand that the hon. Lady recently met my right hon. Friend the Health Secretary, and as she says, NICE considered the relevant information and recommendations at its appraisal committee meeting on 6 March. It is right, however, that the benefits and evidence in relation to new medicines be properly considered by the experts and clinicians in the field. The Department of Health and Social Care is working with NICE on this issue.
My constituent Nicola Morgan-Dingley is a wife and mum. She was just 36 when she was diagnosed with triple negative breast cancer, the most virulent form, and, sadly, at 38, she has a terminal diagnosis. Nicola has asked me to ask three things today. First, will the Prime Minister consider publicising the fact that women should never miss a mammogram and the importance of attending? Secondly, will she consider lowering the age at which women can seek a mammogram so that more women are not missed out? Thirdly, there are some immunotherapy trials taking place across the country that could offer a lifeline to Nicola. Will she consider expanding those trials so that Nicola can get the help that could save her life?
I am sure the whole House shares my hon. Friend’s concern for his constituent Nicola. Our sympathies are with her and her family and friends. She asked about three things. On the age at which a screening becomes available or is required, that matter has been considered previously and I am sure will be considered again as part of the long-term plan, but I understand that the decision is based on the evidence of the benefits of screenings at certain ages.
My hon. Friend referenced immunotherapy. To date, the National Institute for Health Research has delivered 64 studies of immunotherapy for women with breast cancer, 28 studies are being opened up to recruitment and 14 studies are currently in set-up, but I will ask the Department to respond to him on the specific case of his constituent. On the third point, Nicola is absolutely right. I would urge all women to attend their mammogram appointments—they are vital: they could save your life.
The hon. Gentleman heard my response earlier. We are putting more money into our schools and ensuring that overall per-pupil funding is protected. Yes, we have asked schools to do more, and I recognise the pressures on them, but the Government have responded with more funding.
I send my deepest sympathies to all those who work in, and indeed who visit, the observatory. As the right hon. Gentleman says, the fire will have been devastating for the local community. I also offer my praise to the local fire and coastguard services for all their efforts in bringing the blaze under control. I understand that investigations to establish the cause are ongoing. The right hon. Gentleman’s question gives me an opportunity also to thank the firefighters who dealt with a fire in my own constituency of Maidenhead yesterday, in the town centre.
I understand that the building to which the right hon. Gentleman has referred was comprehensively insured and the owners are not seeking additional funding at this time, but I will ask a Minister from the Scotland Office to meet the right hon. Gentleman to see whether any further support could be provided.
On 29 January, the House—including virtually the entire Conservative party, Brexiteers and remainers alike—voted for the Brady amendment, with the strong encouragement of the Government. The amendment was designed to facilitate the so-called Malthouse compromise. We do not yet have the Speaker’s selection of amendments for the debate, Prime Minister, but if he is minded to select amendment (f)—which is the Malthouse compromise—one, will there be a free vote, and two, how will you personally vote on it?
I referred to the elements of that amendment, which refers to one part of what became known as the Malthouse compromise, in response to an earlier question from one of my hon. Friends. As I said, the Government have already addressed some of those issues. However, my right hon. Friend referred to the amendment tabled by my hon. Friend the Member for Altrincham and Sale West (Sir Graham Brady). That was about alternative arrangements replacing the backstop, and my hon. Friend also indicated other ways in which concern about the backstop could be dealt with. What we have agreed with the European Union, in a legally binding character, is that commitment to ensuring that alternative arrangements are indeed available by the end of December 2020, so that they can do what that amendment required and replace the backstop.
The hon. Gentleman is absolutely right to raise this appalling case, and our thoughts and sympathies are with Ms Whiting’s family at this time. As he said, it has been identified that there were mistakes in the handling of her case. The Department has apologised for its failings, and is providing compensation for the family. That, of course, can never bring Ms Whiting back.
The point that the hon. Gentleman made is that we need to learn from this case, and that is why the Department is looking at it to ensure that we never see such failings happening again and leading to such a tragic consequence.
The Prime Minister has rightly made it a priority to deliver more homes, so will she welcome the great work of pro-growth Rugby Borough Council? It is currently providing new homes at more than three times the UK average rate: 739 were built last year and 860 are now under way, with four house builders at Houlton.
I am happy to commend the work of my hon. Friend’s local council in providing more homes, which is very important. I am also pleased that last year, under this Government, more homes were built than in any of the last 30 years bar one. That is a record of which we should be proud, and obviously the hon. Gentleman’s council is very helpfully contributing to it. I am sure that it will continue to help to meet the real need to ensure that we have sufficient homes for families up and down the country.
You will know, Mr Speaker, that West Dunbartonshire has two notable anniversaries this week. First, today is the 78th anniversary of proportionally the worst aerial bombardment in the history of the United Kingdom, the Clydebank blitz, and I am sure the Prime Minister will wish to be the first ever British Prime Minister to note it. Secondly, on Monday my constituent Jagtar Singh Johal will have been incarcerated for 500 days without trial and has suffered trial by media—sanctioned, some would say, by the Indian state. I appreciate that Ministers are working very hard, but can the Prime Minister now say this to their own Foreign Secretary: no guilt has yet been established and there has been no trial, so why will Ministers not meet with myself as the constituency MP and the family to hear what impact this incarceration is having on them?
First, I recognise the point the hon. Gentleman made about the aerial bombardment all those many years ago and the impact that had on the local community.
On the specific case, Ministers are dealing with this; they have been actively involved in it. Obviously the Foreign Secretary has heard the hon. Gentleman’s request for a specific meeting; I believe one of the Ministers is dealing with this case and will, I am sure, be pleased to meet with him.
The media have started calling this place a failing Parliament; there was nothing failing about this place three weeks ago when we unanimously voted to protect the rights of citizens—British and EU nationals here. Aside from the letter the Secretary of State has written to Michel Barnier, can the Prime Minister update this House on what she has personally done? For example, has she phoned Merkel or Macron or President Tusk to help protect British citizens in the EU and EU nationals here?
Yes, I am happy to tell my hon. Friend that I have spoken to a number of EU leaders about the desire that we have for UK citizens in their countries to be fully protected were there a no deal, and to be protected on a reciprocal basis. Some countries have already published legislation; we want to make sure that the basis on which they are providing guarantees for UK citizens is the same as the basis on which we are providing guarantees for EU citizens here.
I am acutely conscious of the fact that the House has other pressing matters on its mind today, and to avoid making this statement any longer than necessary, I am tabling a written ministerial statement that contains additional announcements and provides further details of those that I will make.
Last night’s vote leaves a cloud of uncertainty hanging over our economy, and our most urgent task in this House is to lift that uncertainty. But the economy itself is remarkably robust: it has grown for nine consecutive years, with the longest unbroken quarterly growth run of any G7 economy, and is forecast to continue growing in each of the next five years. It is an economy that has created over 3.5 million net new jobs under Conservative-led government, that has almost halved Labour’s shocking legacy of youth unemployment, that has seen female participation in the workforce increase to record levels and that is now delivering the fastest rate of wage growth in over a decade.
It is an economy that has defied expectations and will provide the solid foundation that Britain needs to seize the opportunities that the future offers—a far cry from the eight recessions and mass unemployment predicted by the House’s very own Nostradamus over there, the shadow Chancellor. Perhaps he is not so much an astronomer as a man living in a parallel universe.
And thanks to the difficult decisions that we have taken in the past nine years and the hard work of the British people, I can also report today on public finances that continue to improve, so that, provided we do reach a deal to leave the European Union with an orderly transition and provided we avoid the disaster of a Government led by those now on the Opposition Front Bench, this country for the first time in a decade will have genuine and sustainable choices about its future.
Today’s Office for Budget Responsibility report marks another step on Britain’s journey out of austerity, and I should like to thank Robert Chote and his team for their work. Despite the slowing world economy, the OBR expects Britain to continue to grow in every year of the forecast: at 1.2% this year, with both the International Monetary Fund and the OECD forecasting the UK to grow faster than Germany; then 1.4% in 2020, as forecast at the Budget; and 1.6% in each of the final three years. This represents cumulative growth over the five years now slightly higher than the Budget forecast.
Meanwhile, Britain’s remarkable jobs story is set to continue. By 2023, the OBR expects to see 600,000 more new jobs in our economy. Despite the constant attempts from those on the Opposition Front Bench to talk down our remarkable achievement on jobs, the fact is that last year 96% of new jobs were full time. There is positive news on pay too, with the OBR revising up wage growth to 3% or higher in every year. With inflation now around the target throughout the forecast period, that means real wage growth in every year of the forecast. A growing economy, a thriving labour market and inflation on target—a solid foundation on which to build Britain’s future.
There is good news on the public finances as well. Borrowing this year will be just 1.1% of GDP—£3 billion lower than forecast at the autumn Budget—and a staggering £130 billion lower than in the last year of the Labour Government. But what is really staggering is that the shadow Chancellor’s critique of that Government was that they did not spend enough. Looking forward, borrowing will fall from £29.3 billion in 2019-20, then £21.2 billion, £17.6 billion, £14.4 billion and finally £13.5 billion in 2023-24—its lowest level in 22 years.
We remain on track to meet both our fiscal targets early, with the cyclically adjusted deficit at 1.3% next year, falling to just 0.5% by 2023-24, and with headroom against our fiscal mandate in 2020-21 increasing from £15.4 billion at the autumn Budget to £26.6 billion today. Less borrowing means less debt—now lower in every year than forecast at the Budget, falling to 82.2% of GDP next year, then 79%, 74.9%, 74%, and finally 73% in 2023-24. Our national debt is falling sustainably for the first time in a generation. This is a major milestone on the road out of the crisis we inherited from Labour, and a key dividing line today between a shadow Chancellor whose plans would send debt soaring above 100% of GDP and a Conservative Government committed to delivering world-class public services and keeping our national debt falling.
Since 2010, we have been steering the country on a journey of recovery from Labour’s recession. Back then, the most important task was to get borrowing down to manageable levels. But when I became Chancellor in 2016 I recognised that, with the progress we had already made, as well as getting Britain’s debt down, our continued success as a nation would depend on investing in our future, supporting our vital public services and keeping taxes low to attract talent and investment. I called it a “balanced approach”, and it is delivering, with the highest sustained levels of public capital investment in 40 years, cuts in income tax for more than 30 million people in three weeks’ time—cuts that Labour voted against—and debt on a sustained downward path for the first time in a generation.
I have made over £150 billion of new spending commitments since 2016, and I announced at the Budget that the long, but necessary, squeeze on current public spending would come to an end at the upcoming spending review, setting out an indicative five-year path of 1.2% per annum real-terms increases in day-to-day spending on public services compared with real-terms cuts of 3% per annum announced at SR 2010 and 1.3% at SR 2015. We have made our biggest choice on public spending to put the NHS first in line, as the British public would expect, with my right hon. Friend the Prime Minister’s announcement of £34 billion of additional funding per year by the end of the period—the single largest cash commitment ever made by a peacetime British Government—to support our long-term plan for the NHS. It will deliver improved cancer and mental healthcare, a transformation of GP services, more doctors, more nurses and better outcomes for patients.
Now we need to address wider departmental spending for the next review period. I can confirm today that, assuming a Brexit deal is agreed over the next few weeks and that the uncertainty that is hanging over our economy is lifted, I intend to launch a full three-year spending review before the summer recess, to be concluded alongside an autumn Budget. It will set departmental budgets beyond the NHS to reflect the public’s priorities between areas such as social care, local government, schools, police, defence and the environment, and it will maximise value for taxpayers’ money through a renewed focus on high-quality outcomes.
If we leave the EU with a deal and an orderly transition to a future economic partnership, we will see a deal dividend: an economic boost from recovery in business confidence and investment, and a fiscal boost from a reduction in the minimum necessary level of fiscal headroom once the risk of a no-deal exit is removed. That will give the nation real choices as we use the spending review to decide how much of the deal dividend we can prudently release, and how we would share it between increased spending on public services, capital investment in Britain’s future prosperity and keeping taxes low, while always continuing to keep debt falling. Real-terms increases in public spending, record investment in Britain’s future, more jobs than ever before, higher wages and lower taxes, meaning increased take-home pay, and, for the first time in a generation, our debt going down—that is what I mean by an end to austerity delivered by a Conservative Government.
The progress that we have made will be at risk if we cannot secure a smooth and orderly exit from the EU and a transition to a new partnership that protects the complex trading relationships that businesses have built up over 45 years and on which so many British jobs depend. I had hoped that we would do that last night, but I am confident that we, as a House, will do it over the coming weeks. Leaving with no deal would mean significant disruption in the short and medium term and a smaller, less prosperous economy in the long term than if we leave with a deal. Higher unemployment, lower wages and higher prices in the shops are not what the British people voted for in June 2016. That is why we all have a solemn duty in the days and weeks ahead to put aside our differences and seek a compromise on which this House can agree in the national interest.
The Government also have a duty to plan for every reasonably foreseeable contingency, and we have done so. First, we have plans in place to minimise disruption to our financial system, and the Bank of England judges that it is resilient to any likely no-deal shock. Secondly, we have worked across Whitehall to put in place mitigations at our border, although we cannot regulate how the EU will operate its border following a no-deal exit. Thirdly, we have published today our temporary UK no-deal tariff schedule, carefully balancing the needs of producers and consumers in the context of the pressures that the no-deal economy would face. Fourthly, the Treasury and the Bank of England together have all the tools of fiscal and monetary policy available to us, including the fiscal headroom I have held in reserve.
I need to be straight with the House: a no-deal Brexit would deliver a significant short to medium-term reduction in the productive capacity of the British economy. Our economy is operating at near full capacity, so any fiscal and monetary response would have to be carefully calibrated not to simply cause inflation, compounding the effect of any movement in the exchange rate on the price of goods in our shops. While fiscal and monetary intervention might help to smooth our path to a post-Brexit economy, both could only be temporary and neither would allow us to avoid the effects of a relatively smaller economy nor the pain of restructuring. The idea that there is some simple, readily available fix that can be deployed to avoid the consequences of a no-deal Brexit is, I am afraid, just wrong.
I am confident that we are going to do a deal, and when we do, the British people will fully expect us to fire up our economic plan to seize the opportunities as confidence in our economy returns, but it is not just the spectre of uncertainty that we need to overcome to restore confidence and unlock a brighter future, because while we Conservatives will always be the party of business, and small business especially, the shadow Chancellor identifies business as “the enemy”. A Government led by the Leader of the Opposition would
“chill the very marrow of our economy, destroying jobs and stifling innovation”.
Those are not my words, but those of the hon. Member for Penistone and Stocksbridge (Angela Smith), a former member of the Labour party, and she is right.
Our task is to demonstrate to the British people that, working with business through the mechanism of a well-regulated market economy, our plan will deliver a brighter future for them, so that they are never ever tempted by the empty promises and dangerous rhetoric of Opposition Front Benchers. The plan will make the most of the opportunities ahead as we make our own way independent from, but in continuing partnership with, the European Union. It will embrace the technologies of the future and equip British workers to use them, back the enterprise and ambition of British business, support our world-leading entrepreneurs, creators, innovators, inventors and discoverers, and build on the UK’s fundamental strengths and competitive advantages so that we can slay, once and for, all the twin demons of low productivity and low wages and build an economy that works for everyone.
The only sustainable path to higher wages and rising living standards is to boost productivity. To do that, we are investing in infrastructure, skills, technology and housing under our plan for Britain’s future, with £37 billion in the national productivity investment fund, the largest ever investment in England’s strategic roads, the biggest rail investment programme since Victorian times and a strategy for delivering a nationwide full-fibre network by 2033. At SR 2019, we will set multi-year capital budgets following a zero-based review, protecting our record levels of capital spending, while ensuring that investment is focused to deliver the greatest impact on productivity.
Our investment strategy is benefiting the whole the UK. I can announce today up to £260 million for the innovative borderlands growth deal, covering the border regions of England and Scotland, which comes on top of the £100 million housing infrastructure funding already announced for Carlisle. Negotiations are progressing on future deals for mid-Wales and Derry/Londonderry, and I reiterate our commitment to the Northern Powerhouse Rail project and look forward to considering Transport for the North’s business case ahead of the spending review. We will publish the updated national infrastructure strategy alongside the spending review, and I am publishing today a consultation on our approach to supporting private infrastructure investment once we leave the European Investment Bank and now that we have retired Labour’s discredited private finance initiative.
Raising our productivity is not just about investing in physical capital—it is also about investing in people. The Augar review will be published shortly and will represent an important contribution to our overall plan for post-18 education. The Government will respond later in the year. We are committed to returning technical and vocational skills to the heart of our education system, with the new T-level system on track to deliver the first three routes in 2020; the first phase of the national retraining scheme starting this summer; and the apprenticeship programme rolling out 3 million new high-quality apprenticeships. To help small businesses take on more apprentices, I can announce that I am bringing forward the £700 million package of reforms that I announced at the Budget to the start of the new financial year in April.
The productivity agenda is above all about increasing the wages of the lowest paid, and the pay of a full-timer on the national minimum wage has risen by £2,750 a year since 2016. We have confirmed the Low Pay Commission’s remit for the national living wage to reach 60% of median earnings by 2020, but later this year we will need to set a new remit beyond 2020. We want to be ambitious, driving productivity across the income distribution, with the ultimate objective of ending low pay in the UK.
We also want to take care to protect employment opportunities for lower-paid workers, so we have asked Professor Arin Dube, a world-leading expert in the field, to undertake a review of the international evidence on the employment and productivity effects of minimum wage rates. This study will support the extensive discussions that we will have with employer organisations, trade unions and the LPC itself over the coming months, starting with a roundtable that I will chair next month. While the Opposition Front Bench grandstands, this Conservative Government are delivering sustainable pay rises for millions of British workers.
Alongside our commitment to giving British workers the skills that they need is a commitment to maintaining the openness of our economy to talent from around the world. As we leave the EU, free movement of people will end, and we will take back control of our borders. My right hon. Friend the Home Secretary has set out a framework for a future immigration system in the immigration White Paper, focused on attracting those with the skills we need in the UK economy, no matter where they come from. We have committed to consulting business to ensure that the new system supports the needs of our economy, and as we do so, I can announce that from June we will begin to abolish the need for paper landing cards at UK points of entry and we will allow citizens of the USA, Australia, New Zealand, Canada, Japan, Singapore and South Korea to start using e-gates at our airports and Eurostar terminals, alongside the EEA nationals who can already use them. Our ambition is to be able to go further in due course—a signal to the world of our commitment to global Britain.
Another key pillar of our plan is backing Britain to remain at the forefront of the technology revolution that is transforming our economy, and to support that ambition from this autumn we will completely exempt PhD-level roles from the visa caps. Since 2016, we have launched our modern industrial strategy and committed an additional £7 billion to science and innovation—clear progress towards our target of total research and development spending reaching 2.4% of the economy.
But technology does not stand still, and neither can we. To maintain the UK’s technological edge, we will invest £79 million in ARCHER 2, a new supercomputer to be hosted at Edinburgh University. I am told that it is up to five times faster than the current generation of supercomputers, capable of a staggering 10,000 trillion calculations per second. I am told that with the right algorithms it might even be able to come up with a solution to the backstop.
I am allocating £45 million of the northern powerhouse investment fund to the European Bioinformatics Institute, ensuring Britain’s continued lead in genomics research. I will guarantee our commitment to the UK’s funding for the JET—Joint European Torus—nuclear fusion reactor, whatever happens with Brexit, and invest £81 million in a new extreme photonics centre in Oxfordshire to develop new types of laser— literally the cutting edge of technology. [Hon. Members: “Oh!] Sorry about that.
The digital economy presents enormous opportunities, but enormous challenges as well. I have already responded to concerns about unfairness in the tax system with a new digital services tax so that digital platform companies pay their fair share, but we also need to adapt our regulatory environment to ensure that competition works for consumers in the digital marketplace, as it does in the real marketplace. I asked Professor Jason Furman, Barack Obama’s former chief economist, to review competition in the digital market. I welcome his report, published today, in which he sets out far-reaching recommendations, including new powers for consumers and an overhaul of competition regulation, updating our regulatory model for the digital age. As a first step towards implementing reforms, I am asking the Competition and Markets Authority to undertake a market study of the digital advertising market as soon as possible.
The UK will remain a great place to do digital business, but it will be a place where successful global tech giants pay their fair share, where competition policy works in consumers’ interests, and where the public are protected from online harms. Under this Government, Britain will lead the world in delivering a digital economy that works for everyone.
We on this side of the House, and many on the Opposition Back Benches, understand that a well-regulated market economy is the best—indeed, the only—way to deliver a brighter future for our country. Our challenge is to demonstrate to the next generation that our market economy can fulfil their aspirations and speak to their values, so before I finish I want to talk about two subjects dear to them: housing and the environment. Last year, housing delivery exceeded 220,000 additional homes—the highest level in all but one of the past 31 years. Our ambitious plan to restore the dream of home ownership to millions of younger people is already delivering: planning reform to release land in areas where the pressure is greatest; a five-year, £44 billion housing programme to help raise annual housing supply to 300,000 by the mid-2020s; the Help to Buy equity loan scheme; and the abolition of stamp duty for first-time buyers, which has so far helped 240,000 people on to the property ladder and restored the proportion of first-time buyers to above 50% for the first time in a generation.
Today I can announce a new £3 billion affordable homes guarantee scheme, to support the delivery of around 30,000 affordable homes; the launch next month of the £1 billion Enable Build SME guarantee fund that I announced at Budget; and £717 million from the housing infrastructure fund to unlock up to 37,000 new homes on sites in west London, Cheshire, Didcot, and Cambridge, the last two being at opposite ends of the Oxford-Cambridge arc, for which I am publishing a new vision statement today.
As with the challenge of adapting to the digital age, so with the challenge of shaping the carbon-neutral economy of the future. We must apply the creativity of the marketplace to deliver solutions to one of the most complex problems of our time—climate change—and build sustainability into the heart of our economic model.
The UK is already leading the world, reducing the carbon intensity of our economy faster than any other G20 country, with ambitious and legally binding targets for the future. Today I can announce our next steps: first, we will publish a call for evidence on whether all passenger carriers should be required to offer genuinely additional carbon offsets, so that customers who want “zero-carbon travel” have that option and can be confident about additionality; secondly, we will help small businesses cut their carbon emissions and their energy bills, publishing today a call for evidence on the business energy efficiency scheme that I announced at the Budget; thirdly, we will publish proposals to require an increased proportion of green gas in the grid, advancing the decarbonisation of our mains gas supply; and, finally, we will introduce a future homes standard, mandating the end of fossil-fuel heating systems in all new houses from 2025, delivering lower carbon and lower fuel bills, too.
Climate change is not our only environmental challenge. We are already consulting on new tax and regulatory measures to tackle the scourge of plastic waste defacing our countryside and choking our oceans. Now, for the first time in 60 million years, the number of species worldwide is in sustained mass decline. The UK’s 1,500 species of pollinators deliver an estimated £680 million of annual value to the economy, so there is an economic, as well as environmental, case for protecting the diversity of the natural world. So, following consultation, the Government will use the forthcoming environment Bill to mandate biodiversity net gain for development in England, ensuring that the delivery of much needed infrastructure and housing is not at the expense of vital biodiversity.
But this is a global problem, so later this year, the UK Government will launch a comprehensive global review of the link between biodiversity and economic growth. This is to be led by Professor Sir Partha Dasgupta, Emeritus Professor of Economics at Cambridge. We in this House should be proud that the UK, with its overseas territories, has already declared more than 3 million sq km of marine protected area. Today, I can announce our intention to designate a further 445,000 sq km of ocean around Ascension Island as a marine protected area. This Conservative Government are taking action today on our pledge to be the first in history to leave our environment in a better condition than we found it.
Before I conclude, I have three further short announcements to make. First, in response to a rising concern among headteachers that some girls are missing school attendance due to an inability to afford sanitary products, I have decided to fund the provision of free sanitary products in secondary schools and colleges in England from the next school year. I congratulate those hon. Members, in all parts of the House, who have campaigned on this issue, and my right hon. Friend the Education Secretary will announce further details in due course.
Secondly, I announced a year ago that we would take definitive action to tackle the scourge of late payments for our small businesses. A full response to last year’s call for evidence will be published shortly, but I can announce today that as a first step we will require company audit committees to review payment practices and report on them in their annual accounts. My right hon. Friend the Business Secretary will announce further details in due course, and I congratulate the Federation of Small Businesses, in particular, on its tireless campaign on this issue.
Thirdly, the recent surge in knife crime represents a personal tragedy for the scores of families of victims, and I know I speak for the whole House when I offer my deepest sympathies to them. We must, and we will, stamp out this menace. Police funding is due to rise by up to £970 million from April. Many police and crime commissioners have already committed to using this extra funding to recruit and train extra police officers, but that takes time and action is needed now. So the Prime Minister and I have decided, exceptionally, to make available immediately to police forces in England an additional £100 million over the course of the next year, ring-fenced to pay for additional overtime targeted specifically on knife crime, and for new violent crime reduction units, to deliver a wider cross-agency response to this epidemic. Ahead of the spending review, my right hon. Friend the Home Secretary will work with the police to consider how best to prioritise resources going forward, including newly funded manpower, to ensure a lasting solution to this problem.
To be frank, last night’s events mean we are not where I hoped we would be today. Our economy is fundamentally robust, but the uncertainty that I hoped we would lift last night still hangs over it. We cannot allow that to continue. It is damaging our economy, and it is damaging our standing and reputation in the world. Tonight, we have a choice: we can remove the threat of an imminent no-deal exit hanging over our economy. Tomorrow, we will have the opportunity to start to map out a way forward, towards building a consensus across this House for a deal we can, collectively, support, to exit the EU in an orderly way and to a future relationship that will allow Britain to flourish, protecting jobs and businesses. We have huge opportunities ahead of us: our capital is the world’s financial centre; our universities are global powerhouses of discovery and invention; our businesses are at the cutting edge of the tech revolution; and we have shown that we are not shy, as a nation, of the tasks that lie ahead.
We are addressing the environmental challenges that threaten our planet; we are building the homes that the next generation desperately need; and we are investing in our future, tackling the productivity gap and embracing technological change—rising to its challenges and seizing its opportunities. Our potential is clear. Our advantages are manifest. We are the fifth largest economy in the world. We are a proud, successful, outward-looking nation, with no limit to our ambition and no boundaries to what we can achieve. A brighter future is within our grasp. Tonight, let’s take a decisive step towards seizing it and building a Britain fit for the future—a Britain the next generation will be proud to call their home. I commend this statement to the House.
Let me thank the Chancellor for providing me with an early sight of his statement, no matter how heavily redacted. We have just witnessed a display by the Chancellor of this Government’s toxic mix of callous complacency over austerity and their grotesque incompetence over the handling of Brexit. While teachers are having to pay for the materials their pupils need, and working parents are struggling to manage as schools close early and their children are sent home, and as 5,000 of our fellow citizens will be sleeping in the cold and wet on our streets tonight, and young people are being stabbed to death in rising numbers, the Chancellor turns up today with no real end to or reversal of austerity. He threatens us—because this is what he means—saying that austerity can end only if we accept this Government’s bad deal over Brexit.
Let us look at some of the claims this Chancellor has made. He has boasted about the OBR forecast of 1.2% growth this year, but what he has not mentioned is that this has been downgraded from 1.6%. Downgrading forecasts is a pattern under this Chancellor. In November 2016, forecasts for the following year were downgraded from 2.2% to 1.4%. In autumn 2017, forecasts for the following year were downgraded from 1.6% to 1.4%. Economists are warning that what little growth there is in the economy is largely being sustained by consumption, based on high levels of household debt.
On the public finances, the Chancellor boasts about bringing down debt. Let me remind him that when Labour left office—having had to bail out his friends in the City, many of them Tory donors—the nation’s debt stood at £1 trillion. The Government have borrowed for failure and added another three quarters of a trillion to the debt since then. That is more than any Labour Government ever.
The Chancellor boasts about the deficit; he has not eliminated the deficit, as we were promised by 2015. He has simply shifted it on to the shoulders of headteachers, NHS managers, local councillors and police commissioners, and worst of all on to the backs of many of the poorest in our society. The consequences are stark: infant mortality has increased, life expectancy has reduced and yes, our communities are less safe. Police budgets have faced a £2.7 billion cut since 2010. Nothing that the Chancellor said today will make up for the human and economic consequences of those cuts.
The Chancellor talks about a balanced approach; there is nothing balanced about a Government giving over £110 billion of tax cuts to the rich and corporations while 87 people a day die before they receive the care they need. The number of children coming into care has increased every year for nine years. Benefit freezes and the roll-out of universal credit are forcing people into food banks in order to survive. Let me give the Chancellor a quote:
“Sending a message to the poorest and most vulnerable in our society that we do not care”.—[Official Report, 20 October 2015; Vol. 600, c. 876.]
That was the hon. Member for South Cambridgeshire (Heidi Allen) referring to the cuts to tax credits in 2015.
The number of pensioners now officially living in severe poverty, in the fifth largest economy in the world, has reached 1 million. We have a Government condemned by the UN for inflicting destitution on its own citizens. There is nothing balanced about the Government’s investment across the country. There is nothing balanced about a Government investing more than £4,000 per head for transport in London and only £1,600 per head in the north. There is nothing balanced about the fact that a male child born in Kensington in Liverpool can expect to live 18 years less than a child born in Kensington and Chelsea.
On employment and wages, this is the Government who have broken the historic link between securing a job and lifting yourself out of poverty. The Chancellor has referred to a “remarkable jobs story”; what is remarkable is that this Government have created a large-scale jobs market of low pay, long hours and precarious work. More than 2.5 million people out there are working below 15 hours a week. Some 3.8 million people are in insecure work. The Chancellor talks about pay; average wages are still below the level of 10 years ago. So it is hardly surprising that 4.5 million children are living in poverty, with nearly two thirds of them in households where someone is in work.
The Chancellor has bragged about his record on youth unemployment. Let us be clear: youth unemployment is 7% higher than the national average, it is higher than the OECD average, and it is at appalling levels for some communities. Some 26% of young black people are unemployed and 23% of young people from a Bangladeshi or Pakistani background are unemployed.
The Chancellor has claimed an advance with regard to women’s unemployment. What he does not say is that women make up 73% of those in part-time employment and are disproportionately affected by precarious work. Let me give one example: by 2020, the income of single mothers will have fallen by 18% since 2010. According to the much-respected Women’s Budget Group, women are facing the highest pay gap for full-time employees since 1999. All that on his watch.
On infrastructure and housing, the Chancellor has been claiming that he is on the way to delivering record sustained levels of investment. Let us be clear: he is talking about wish lists; he is not talking about what the Conservatives have actually done. The UK ranks close to the bottom of OECD countries for public investment. We are 24th out of 32 countries, according to analysis done by the Trades Union Congress.
The Chancellor describes
“the biggest rail investment programme since Victorian times.”—[Official Report, 27 February 2018; Vol. 636, c. 667.]
Well, tell that to the people who faced the timetabling chaos of last year. Tell that to the rail passengers who have to deal with the incomparable incompetence of the Secretary of State for Transport.
The Chancellor has been hailing his announcement of a national infrastructure strategy. Let me remind the House that the Government announced a national infrastructure delivery plan for 2016 to 2021, and then announced a national infrastructure and construction pipeline. So, there are plans, pipelines and strategies, yet today he announced another review of the financing mechanisms, but no real action to deliver for our businesses and communities. The Institute for Government described this Government’s decisions on infrastructure as
“inconsistent and subject to constant change.”
The Chancellor made announcements on housing, again. Let us hope he has learned the lessons of the Government’s recent initiatives, which have driven profits of companies such as Persimmon to over £1 billion, with bosses’ bonuses at more than £100 million.
The Chancellor has some cheek to speak about technical and vocational skills: almost a quarter of all funding to further and adult education has been cut since 2010. The number of people starting apprenticeships has fallen by 26%.
On research and development, this Government have slashed capital funding for science across all departments by 50%.
Unlike at the Budget, the Chancellor has at last actually referred to climate change. The review of biodiversity he mentioned might, hopefully, show that the budget of Natural England, the body responsible for biodiversity in England, has more than halved over a decade. A review of carbon offsets might reveal that they do not reduce emissions, and that offsetting schemes such as the clean development mechanism have been beset by gaming and fraud. This from a Government who removed the climate change levy exemption for renewables; scrapped the feed-in tariffs for new small-scale renewable generation; and cancelled the zero-carbon homes policy. Gordon Brown pledged a zero-carbon homes policy standard. We endorsed it and celebrated it; the Tories scrapped it in 2015, just one year before it fully came into force.
Of course, Brexit looms large over everything we discuss. Even today, the Chancellor has tried to use the bribe of a double-deal dividend or the threat of postponing the spending review to cajole MPs into voting for the Government’s deal. What we are seeing is not a double dividend; we are seeing Brexit bankruptcies as a result of the delay in the negotiations. The publication of the tariffs this morning was clearly part of this threatening strategy. It is a calamitous strategy. It is forcing people into intransigent corners rather than bringing them together.
What we need now is for the Chancellor to stand with us today and vote to take no deal off the table; to stand up in Cabinet against those who are trying to force us into a no-deal situation; and then, yes, to come and join us to discuss the options available, including Labour’s deal proposal and yes, if required, taking any deal back to the public.
Outside this Westminster bubble, outside the narrow wealthy circles in which the Chancellor moves, nine years of hard austerity have created nine years of hardship for our constituents. Today, and in recent times, the Chancellor has had the nerve to try to argue to those who have suffered the most at the hands of this Government that their suffering was necessary. If austerity was not ideological, why has money been found for tax cuts for big corporations while vital public services have been starved of funding? Austerity was never a necessity; it was always a political choice. So when the Chancellor stands there and talks about the end of austerity and about a plan for a brighter future, how can anyone who has lived through the past nine years believe him?
This Government have demonstrated a chilling ability to disregard completely the suffering that they have caused. To talk of changing direction after nine years in office is not only impossible to believe, but much too late. It is too late for the thousands who have died while waiting for a decision on their personal independence payments; too late for the families who have lost their homes due to cuts in housing benefit; too late, yes, for the young people who have lost their lives as a result of criminal attack; and too late for those youngsters whose clubs and youth services have been savaged. This is the Chancellor’s legacy; it is this that he will be remembered for. He was the shadow Chief Secretary to George Osborne and designed the austerity programme. History will hold him responsible for that. There are no alibis. He is implicated in every cut, every closure, and every preventable death of someone waiting for hospital treatment or social care. It is time for change. People have had enough, but increasingly they know that they will not get the change that they so desperately need from this tainted Chancellor or from his Government. It is time for change, and it is time for a Labour Government.
We have just heard the same old recycled lines. I must be going a little bit deaf, because I did not hear any mention of record employment. Perhaps the shadow Chancellor is so ashamed of Labour’s record: no Labour Government have ever left office with unemployment below that which they inherited. I did not hear anything about rising wages; they are rising the fastest in a decade. He did not mention the extra £1.3 billion for local government, or the extra £1 billion of police funding, both of which he voted against. He did not mention the fact that we have had nine years of unbroken growth. He did not mention the fact that this economy is out-performing that of Germany this year. He witters on about manufacturing without any recognition of the global economic context in which this sits—perhaps he does not inhabit the global economy. If he did, he would know very well that the downturn in manufacturing is happening across Europe and is affecting everyone. He did not mention the remarkable turnaround in our public finances and the real choices that we have as a consequence. He just relentlessly talked Britain and its economy down.
Once again, we hear this absurd proposition that the decisions that we took in 2010 were some kind of political choice—as if we could have gone on borrowing £1 for every £1 spent indefinitely, racking up interest bills and burdening future generations with debt. No responsible politician could credibly believe that these were choices in 2010.
The shadow Chancellor talks about homelessness. We have committed £1.2 billion to tackling homelessness and rough sleeping—I did not hear any mention of that. He talks about the downgrade of the 2019 economic forecast without mentioning the global context. He confuses the debt and the deficit. The reason that the debt has risen—[Interruption.] He is not listening, but it is very, very simple. It is not even economics; it is just maths. It is very, very simple. If you have a £150 billion deficit in your last year in office, your successor will find that debt is rising, and that is what we found. I have announced, since 2016, £150 billion of additional public spending as well as getting the forecast deficit down to 0.5% of GDP. That means that we have real and genuine sustainable choices in this country for the first time in a decade.
The shadow Chancellor delivers repeated misinformation which we have heard countless times from those on the Labour Benches. Let us take transport funding for example. He knows that central Government transport funding is higher per capita in the north than it is in London and the south—that is a fact. He knows that there are 665,000 fewer children in workless households now than there were in 2010—that is a fact. He knows that public investment set out in the OBR report today represents Britain’s biggest public capital investment programme for 40 years—that is a fact. He accuses me of talking about housing again. Well, I will talk about housing again, and again, and again, because we have announced £44 billion investment in housing, and that is an awful lot of announcements that I will have to make.
The ultimate audacity is the moral lecturing tone in the shadow Chancellor’s closing remarks. I really do take exception to being lectured to by a man who has stood idly by, turning a blind eye, while his leader has allowed antisemitism to all but destroy a once great political party from the inside out. Attlee and Bevan must be rotating in their graves. People should look at what this pair have done to the Labour party and just think what they would do to our country.
Order. It might be helpful to the House if I indicate that, given the pressure of time and the importance of subsequent business—to which reference was made earlier—it will almost certainly not be possible on this occasion for me to take everybody on this statement, which, as the House knows, is ordinarily my practice. I am looking to move on at approximately 2.45 pm. It may be possible to move on before then, but I certainly do not want it to be significantly later than then.
May I sincerely congratulate my right hon. Friend the Chancellor on keeping his head while all around are losing theirs? I am sure that he would have liked to have delivered a rather different statement if the vote had gone the other way last night. Does he agree that economic forecasting is difficult at all times, particularly at a time of slowing global growth, trade war, Chinese debt problems, and, above all, the uncertainty of Brexit? Does he agree that the optimistic forecasts by the OBR are based on a smooth progression to Brexit, with no new barriers to trade and investment with our most important market on the basis that we currently enjoy under the customs union of the single market?
Finally, will the Chancellor guarantee to me that he will keep his fiscal powder dry—keep his reserves, as he may need them to avoid a recession or a financial crisis; that he will resist the irresponsible approach of the Opposition, who have the idea of spending and borrowing money only as a policy platform on every issue; and that he will resist all the other understandable demands from all parts just to spend money in response to lobbies, because he has the duty of keeping the British economy intact at a time of almost unprecedented crisis and unforeseeable problems?
I can confirm to my right hon. and learned Friend that the OBR’s central forecast is based, as before, on an assumption of a deal done with the European Union so that we exit via a transition mechanism and have a future close trading relationship with it. I can assure him—I am sure he needs no reassurance—that I will not be remotely tempted by the policies or the profligacy of the shadow Chancellor. My right hon. and learned Friend is absolutely right that until such time as we are sure that we will not exit via a disorderly no deal, I have to keep that fiscal powder dry, but no one will be happier than me when I can release some of that headroom to support public services, capital investment and lower taxes in this economy.
There is no certainty about the future health of the economy. Whatever happens regarding the Prime Minister’s deal—whether this House eventually accepts or continues to resoundingly reject it—we are still not clear about what the UK’s future trading relationship with the EU will look like. What is clear is that Brexit is bad for the economy. So far, the picture is bleak. Key economic indicators show that the UK economy grew by a meagre 0.2% in the fourth quarter of 2018. The OBR previously forecast growth of 1.6% for 2019. Even with the assumption of a smooth Brexit, it has downgraded that to 1.2%. Whatever the Chancellor’s spin, is that not the cost of Brexit?
Of course, the Chancellor predicted that himself. He told Radio 4:
“The economy will be slightly smaller in the Prime Minister’s preferred version of the future partnership.”
We now face the prospect of a no-deal Brexit, which would have a severe impact on the economy, people and businesses across Scotland. It could push the Scottish economy into a deep recession, similar in scale to the financial crash of 2008. The British Retail Consortium estimates that no deal could hike food prices by some 29%. My constituents cannot afford that. Will the Chancellor commit to voting against no deal tonight?
Given such massive uncertainty, we needed a bit more than this damp squib of a statement. It is a laudable aim to have only one Budget a year, but in these circumstances, the Chancellor should have brought forward an emergency Budget, and I call on him to do so.
We need the Chancellor to explain how he will fix the fiscal gap created by discouraging immigration. We know that the average EU citizen who chooses to live and work in our country contributes £34,400 annually to the Scottish economy. How will he plug that gap? Will he exempt those coming for PhD-level roles from the salary cap, as well as from the visa numbers cap? We need the Chancellor to provide funding to small businesses that are not prepared to cope with Brexit. Only 8% of Scottish firms feel fully ready.
We need concrete action to tackle the lack of productivity growth. It was woeful anyway, compared with our European neighbours, but over the past two years business has been so focused on Brexit damage limitation that it has lacked the resources to increase growth and productivity.
This week the New Financial think-tank said:
“Our conservative estimates show that banks and investment banks are moving around £800bn in assets; asset managers have so far transferred more than £65bn in funds; and insurance companies have so far moved £35bn in assets.”
That appears to have entirely passed the Chancellor by.
People who live in these islands have suffered through a decade of austerity. According to the Joseph Rowntree Foundation, the current benefits freeze has made life harder for more than 27 million people across the UK. It is the biggest policy behind rising poverty, costing families an average of £340 a year. If the freeze continues, by 2020 it will have driven 400,000 people into poverty. It must end now.
While the poor get poorer, the rich get richer under this Government. FTSE 100 CEO pay has gone up by 66% while the Tories have been in government, while wages for the rest have failed to reach 2008 levels. The Chancellor has had many opportunities to press his colleagues to halt the roll-out of universal credit. The system is broken and it must be fixed before more misery is inflicted. His emergency Budget should end the benefits freeze and halt the roll-out of universal credit. He has managed to find money for plenty of other things—he has allocated billions of pounds to the Democratic Unionist party to buy its support, but he has failed to allocate the £3.4 billion to Scotland that should have been our share of that largesse. Will the Chancellor ensure that the Barnett formula is properly applied to the new funding he has announced today, unlike his actions regarding the DUP deal?
Scotland’s resource block grant for 2019-20 is almost £2 billion lower in real terms than in 2010-11. That is a direct consequence of the Chancellor’s continued obsession with austerity. He has created the stronger towns fund, pumping money into leave-voting areas as yet another bribe. How well did that work this week? The Chancellor has not yet announced details of the shared prosperity fund. Especially important is whether it will replace the £2.4 billion a year that communities across the UK currently receive as a result of EU structural funds. Will he provide us with full details now? Will he give a cast-iron guarantee that the Scottish Government will be treated as equals and will continue to distribute the funding in Scotland, as has been the case under the EU programmes?
Yesterday, a majority of Scottish MPs put their names to an amendment saying that the best future for Scotland would be as an independent country within the EU. With independence, we will be able to encourage immigration, recognising the benefits brought by those who come to live, love and work in our country. We will be able to reject austerity, supporting our citizens when they need it most. We will be able to increase productivity, improve participation in our workforce and encourage and support companies to grow. We will be able to trade frictionlessly with Europe, a market eight times the size of the UK. Scotland has been badly served by consecutive Westminster Governments. We need to take our lifeboat and get off this sinking Brexit ship.
I am sure it was a momentary oversight by the hon. Lady that she did not say anything about the decommissioning measures that will be so important to her local industry in Aberdeen and that are listed in the written ministerial statement. She says that no deal will be bad for the economy, and I absolutely agree, but if she understands that, why did she not vote for the deal? I have a great deal of respect for her, but I am afraid she is creeping towards the practices of those on the Labour Front Bench when she quotes the fourth quarter growth figure of 0.2% without mentioning the more recently published growth figure of 0.5% for the first quarter of this year. [Interruption.] If she does the maths, she will find that is okay.
The hon. Lady talked about the downgrade that the OBR has applied to the 2019 growth figure. We would of course like it to be higher, but she has to see the figure in the global context. I know she understands this. Germany’s economy has slowed down and France’s economy has slowed down. Across the G7, we are exactly in the middle of the pack. We will grow faster than Germany, Japan and Italy this year. We will grow exactly the same as France and slower than Canada and the US. That is a perfectly creditable performance. Would I like to do better? Of course I would. If she is going to be honest with the House, she needs to put what she says in the context of what is happening across the global economy.
The hon. Lady asked about PhD-level roles. They will be completely exempt from the visa cap. She asked about assets being moved abroad. Of course I am concerned about that, and £35 billion of insurance company assets moved abroad is £35 billion more than I would like, but she needs to understand that that is in the context of the many trillions of pounds of assets that the companies are managing in London and, increasingly, in Edinburgh. Edinburgh’s ranking in the global asset management league table has once again risen, which we are extremely pleased about.
The hon. Lady talked about pay for the lowest paid. Those on the national minimum wage and the national living wage have seen their incomes increase by an average of £2,750 a year since 2016. She asked about universal credit. Universal credit delivers. People on universal credit are more likely to be in work than those trapped on legacy benefits. I have put billions of pounds into the system over successive fiscal events to smooth the transition to ensure that the movement of people from legacy benefits on to universal credit operates smoothly.
Finally, Scotland gets its share of the increased spending on capital and resource, but precious little thanks do we ever hear from those on the SNP Benches in exchange for it.
Building on the question asked by my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), the OBR has made it clear today that it has not been able to update its forecast to reflect the current Brexit situation, saying that
“we still have no meaningful basis for predicting the post-Brexit trading relationship beyond the near term.”
I sense the Chancellor’s frustration with the House’s inability to approve the withdrawal agreement, but does he agree that this means that many of the forecasts are obviously going to have to be revisited as the Brexit scenario plays itself out over the next few months?
The Chancellor mentioned the forthcoming CSR and education spending. May I urge him also to think very clearly and closely about spending on further education colleges, which is another critical part of improving productivity in our country?
The Budget report recently produced by the Treasury Committee said that the Chancellor was effectively disregarding the fiscal objective to run a balanced budget in the mid-2020s, and the OBR has said today that the target will not be met again. So does he intend, by the next Budget, to ensure that the existing fiscal charter will be updated for this Parliament?
My right hon. Friend is right, of course, about the OBR’s Brexit assumption—I said so earlier and the OBR has said so clearly. It has to make an assumption, and until there is a new policy, that is unfortunately the way it is mandated to work. On the forecast, I have addressed this in this House many times before. The forecast is based on those assumptions. We are either going to have a no-deal exit, in which case I would expect a significantly worse outturn, or we are going to lift this cloud from above our economy, in which case I would expect a significantly better outcome. A number of important commentators, including the Governor of the Bank of England, have suggested over the past couple of weeks that there is more juice in the economy if we can just lift this cloud.
I have noted my right hon. Friend’s early bid for further education in the spending review. There will be lots to discuss as we go into the spending review, and we will ensure that there are proper, structured arrangements for Members of this House to make their views known. My right hon. Friend the Chief Secretary will be happy to engage across the House.
My right hon. Friend asked about the target for the mid-2020s. I simply do not accept that the figures published today show that it is impossible to reach a balanced budget in the mid-2020s. In 2023-24, the deficit will be 0.5% of GDP, but whether we choose to get the deficit down to zero or choose to do other things is a choice, and we are lucky to have it.
The hon. Member for Manchester Central (Lucy Powell), who is ordinarily known for her buoyant and enthusiastic smile, was gesticulating at the Chancellor to speed up. I think she was auditioning for the role of Speaker, and presumably seeking to give the right hon. Gentleman a masterclass in brevity, notwithstanding her desire often to make her own point with enormous eloquence but at not inconsiderable length—but we will see.
In today’s forecast from the OBR, GDP growth this year is being revised down by 0.4%. The largest downward revision is to business investment—a downward revision of 3.2%. Business investment is now expected to shrink by 1% this year after shrinking by 1% last year. The Federation of Small Businesses says today that confidence is at “rock bottom”. The CBI says on tariffs that there has been
“no consultation with business and no time to prepare”,
and that this is
“a sledgehammer for our economy.”
Does the Chancellor recognise that businesses are losing patience with this Government and that unless businesses invest and help to grow our economy, productivity and wages are going to stay at rock bottom? What is he going to do to reverse this incredibly worrying and dangerous reduction in business investment?
What the hon. Lady has not mentioned is that business investment recovers to 2.3% next year, and, over the forecast, recovers entirely, so this is a cyclical change, not a structural change. There are two drivers. Of course Brexit uncertainty is having a damping effect on investment—I have said that before and I will say it again. The sooner we can lift it, the sooner investment will come into our economy, with welcome effect. But we cannot ignore what is happening in the car industry across Europe. A large part of this effect has been in our car industry. That is very worrying, but it is not a UK phenomenon; it is a much broader phenomenon.
Given the fall in new car sales that followed the big increase in vehicle excise duty, other regulatory changes and the car loan squeeze, will the Chancellor now review policy towards the car industry to make it cheaper and easier to buy a new car made in a British factory?
As my right hon. Friend knows, we are not able, under the current regime, to discriminate between cars made in British factories and cars made elsewhere, but we do keep all fiscal policy under review, and I am acutely conscious of the pressures that the car industry is facing at the moment.
I am trying to find something positive to say about a rather less than earth-shattering event, but I do welcome the support for industrial strategy and innovation. I also welcome the Furman report. However, does it not rather give the game away that global monopoly abuse is being referred to the British competition authorities at a time when we are walking away from the much more powerful European Commission, which could really deal with the problem?
On growth, is it not the case that while we are escaping recession, which is very welcome, that is primarily due to continued extraordinary monetary policy and low or negative real interest rates, which cannot continue? It may have been useful after the financial crisis, but it is an addictive drug.
Finally, how on earth does the Chancellor expect this proposed surge of business investment to occur when, even under the Government’s Brexit plans, there is going to be a cliff edge in two years’ time that any business will naturally seek to avoid?
I do not know why the right hon. Gentleman would want to break the habit of a lifetime in finding something positive to say in response to a statement, but I will take him at face value. On the Furman report, I do think it is quite important that we ensure that the UK’s regulatory environment is at the cutting edge of the changes that are going on in the 21st-century economy. Regulation is one of our competitive advantages. We have excellent regulators, and there are plenty of examples of the UK being ahead of the global curve in setting regulations that can both protect the public and encourage investment.
I cannot comment on monetary policy, as the right hon. Gentleman knows—that is a matter entirely for the Bank of England—but as for a future cliff edge, it will be my fervent intention to give business the maximum confidence and clarity that we can about our future relationship with the European Union, as soon as I can.
Can the Chancellor reassure me that the very welcome consultation on future infrastructure financing will not become any reason to delay a start on some of the essential major projects such as the lower Thames crossing, which will not only relieve pressure on the Dartford crossing but will be a fundamental link between two great wealth-creating regions of our country?
I can give my right hon. Friend that assurance. I am acutely conscious of the fact that we are committed to building a tunnel under the Thames but we have not yet committed to the link roads that will link that tunnel to the rest of the road network, and of course we absolutely will do so. This is a broader-based review to look at how we replace PFI and EIB funding over the medium term.
I welcome this statement and the news that despite the best and concerted efforts of those who think that by talking the UK economy down they can somehow stop us leaving the EU, it is pleasing that employment is up, job creation is up, and the Government finances are in a better shape. That shows that we do not need the EU as some kind of economic crutch in order to enable us to stand on our own two feet. I also welcome the Barnett consequentials for Northern Ireland.
For the future, what progress has been made on the review of air passenger duty and VAT on the hospitality industry in Northern Ireland? If the Chancellor is going to help subcontractors deal with late payments, will he consider the use of project bank accounts, which have been very successful in Northern Ireland in ensuring that public sector spend on infrastructure projects actually reaches the companies that spend the money?
I welcome the right hon. Gentleman’s comments. I draw the House’s attention to the fact that one of the features of the jobs growth we have delivered is the regional distribution of it. This is not London-centric jobs growth; it is across the country. Productivity, wages and employment have grown in every region of the UK, which is very welcome.
The APD working group has been established, as the right hon. Gentleman knows, but we are not in a position to take any action in that area until there is a devolved Administration in Stormont. On VAT, as he knows, we are not able to take any action while we are members of or subject to the rules of the European Union, but we will continue to look at these issues.
Mr Speaker, you should see what the hon. Member for Manchester Central (Lucy Powell) is like in my Education Committee.
I strongly welcome my right hon. Friend’s statement. Given that there is a 10-year plan for the NHS—and rightly so—can we have a 10-year plan and a 10-year funding settlement for our schools and colleges in his statement before the summer?
Let me make this clear, for the avoidance of doubt. The NHS 10-year plan has been published, but the funding plan that we have announced is a five-year plan, and there will be a mid-point at which we fund the NHS for the latter part of the plan. We have no plans, I am afraid, to set out a 10-year funding plan for any area of our public services. That would not be prudent or sensible, given the cyclicality of the economy.
Thank you, Mr Speaker. I am reclaiming “bossy”.
Is it not the case that cuts to police, local services and schools are a false economy? We pay for the cost of failure, the cost of rising knife crime, the cost of school exclusions, the cost of rising poverty and the cost of failing families and children. Will the Chancellor prioritise in his forthcoming spending review early intervention, to support families and help children get the best start in life?
There will be many demands on the available funding at the spending review, and we intend to look at the public’s priorities in the round. Our challenge, as always, is to ensure that we direct funding in the way that most effectively delivers the end result that the public need. If I look at the knife crime debate that we have been having over the last couple of weeks, it is clear that it is not a simple question about putting more money into policing. [Interruption.] No, it is not. If the hon. Lady talks to police chiefs or school heads, they will tell her that it is a multifaceted challenge, and we need to address it as such. That is the point of having a cross-departmental spending review—we can look at our priorities in the round and decide how to allocate funding in a coherent way, to get the outcomes that the public want at the best value for money for the taxpayer.
I warmly welcome the big improvements in the public finances, particularly those as a result of the last spending review in 2015, but the Chancellor has a problem with stamp duty. Today’s report says that the forecast has “deteriorated significantly” since October, when it was already £4 billion short. Receipts fell 9.8% in 2018, which is a new £2.7 billion shortfall in the scorecard. Transactions in my constituency are down 31% since the reforms. That is something he will need to look at and propose reforms for in due course, perhaps in November. Would he like to comment on the latest deteriorating numbers?
Yes. My right hon. Friend—perhaps unsurprisingly, given his constituency—is very interested in these issues, and I would be happy to meet him to go through the numbers. There are a number of moving parts underneath the headline number. Stamp duty in Wales has been devolved, which takes a significant chunk out of the total number. There is an overall slowdown in the market, which has an effect. We have also exempted first-time buyer purchases from stamp duty, which is a considerable chunk of the reduction he refers to, but I would be happy to talk him through the details.
It is a fundamental mistake for the Chancellor to underestimate the impact of Brexit on his future forecasts. To dismiss the 3.2% collapse in the forecast for business investment is a strategic error that he is making for the future. We hear the Chancellor talk about a “deal dividend” and the shadow Chancellor talk about a “jobs-first Brexit”, but that is a mythology. Brexit in all forms will hit our business investment and our tax revenues and create austerity for a decade. Can the Chancellor and the shadow Chancellor stop treating this as business as usual?
While the hon. Gentleman is entitled to his point of view and often makes a valuable contribution to the debate, he has to be careful that he does not accidentally veer off-piste into “talking Britain down” syndrome. He talks about a collapse in business investment, but I hope he would agree that this is likely to be a cyclical reduction in business investment. If he talks to businesses, they will tell him that they are postponing investment decisions until they have greater clarity about the future. I agree; we cannot keep them hanging there forever. We need to give them clarity and certainty as quickly as possible. I believe we will do that in this House over the next few weeks, and when we do, I believe that the great majority of that investment—postponed, not cancelled—will flow back into our economy later this year.
I am delighted at the Chancellor’s announcement about the borderlands growth deal, which is welcome news for the area. Will he confirm that Departments will move to an early discussion about details of the various projects with the local authority, so that it can get on with implementation as soon as possible? Would he like to visit Carlisle and the borderlands, to see those initiatives in action?
I can confirm that we want to move ahead as quickly as possible with agreeing the individual projects and getting disbursement under way. I would be delighted to visit Carlisle, to see not only the effects of the borderlands growth deal but the £100 million housing infrastructure fund investment that we are making to facilitate a major expansion of new build housing in the area.
Many Members on both sides of the House have expressed worry about the slowdown in growth forecast, but all of us see that there is some growth. Given that the economy is growing, albeit too modestly, will the Chancellor look at the £1.4 billion of cuts that will be made to benefits through the benefit freeze in three weeks’ time, which means that he is taking money away from those who are least able to afford it? All economic theory shows that those who are on very low or modest incomes spend money that is given to them, which will stimulate our economy some more. Will he get up at the Dispatch Box and tell us that he is going to end the benefit freeze, which is due to hit all those people in three weeks’ time?
The hon. Lady talks about reductions in economic forecasts. It is actually one year—[Interruption.] I will answer the question in my own way, if the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) does not mind. It is only one year for which the OBR has downgraded the forecast. In two further years, it remains unchanged, and in the fourth year, it increases.
The hon. Lady asked about the benefit freeze. That has been one of the many difficult decisions we have had to take. Under the last Labour Government and Gordon Brown’s stewardship, the welfare budget increased by 65% in real terms, getting it completely out of kilter with wages and making it unsustainable. That, combined with the fiscal pressure we faced in 2010, made it inevitable that we had to take action, but we have made it clear that we have no intention of repeating the current freeze. When it is over, increases in benefits will resume in line with CPI in the normal way.
I welcome the Chancellor’s announcements, particularly on investments in science and infrastructure and, seeing as the workers’ party has not welcomed them, the rise in the national living wage, the £700 pay rise for the lowest-paid and the tax reductions, with 32 million of our lowest-paid receiving a tax cut. You would think the Labour party would cheer that. I also welcome the fact that the Chancellor has reminded British business that if Brexit is a threat, the shadow Chancellor, who is still a Marxist, is an even bigger threat.
On growth, 1.2% is too low a figure. May I urge the Chancellor to use the comprehensive spending review to make sure that, as well as increasing spending on services, we incentivise really bold public sector leadership for innovation and enterprise, and make sure we get this economy growing at 3% again?
Nobody shares my hon. Friend’s ambition to see faster growth more than I do. There are many ways we can deliver that, but it has to involve raising productivity in both the public sector and the private sector. We are taking initiatives, with the National Leadership Centre, on public sector leadership to enhance productivity in the public sector, and we are taking action to reinforce leadership among smaller and medium-sized enterprises in the private sector to ensure that productivity is driven, technology is taken up effectively and we are all better off as a consequence.
I have more respect than many in this House for the work of economic forecasters, but let us be honest: what we have today is a big long sum predicated on the idea that Brexit will be fine. However, surely the events of the past 24 hours demonstrate to us that Brexit is not going very well, is it? Things are not going well in the country either. Last year, the Trussell Trust gave out nearly 1.5 million three-day food parcels, which is a massive increase on last year. When will the Chancellor admit that Brexit is a massive distraction for our country, and that it is about time we got back to tackling what the public really care about—rough sleeping, poverty and the position of the worst-off in our society?
I have never been afraid to acknowledge that, as far as the economy is concerned, Brexit uncertainty is a distraction, and it is something we need to get lifted as soon as possible. I think I said that at the beginning of my statement. The sooner we can do that, the better. It will help us to grow faster, and it will help us to raise productivity more quickly, and that means higher wages across the economy.
On the issues that the hon. Lady mentions, we are putting £1.2 billion into addressing homelessness and rough sleeping. We are consulting on an additional 1% stamp duty levy on properties bought by non-UK resident owners, with the whole of that money ring-fenced to address the rough-sleeping challenge in our cities. In relation to poverty, she knows the figures. We have over 3.5 million more people in work, with 665,000 fewer children living in workless households. However much Opposition Members may not like it, it remains the case that work is the best sustainable route out of poverty.
I congratulate the Chancellor on his statement. If we do get the orderly Brexit that I know he and I want, may I urge him to consider schools funding in the spending review? Schools in my constituency are doing enormously important work, but they are facing increased challenges, particularly with pupil volatility, pupil complexity and rising demands. They are having to do more, and I invite him to ensure that they have the resources to match.
As my hon. Friend knows, we put £1.3 billion into the schools budget in 2017, and we have protected per pupil real funding since then. He will also know that there is a significant variation in the level of funding between schools and authorities across the country, which is now being addressed through the fair funding formula. I understand that there are pressures in the system until we have that rolled out and operational, having delivered the result throughout the system. However, I can confirm to him that schools funding will be considered in the spending review, along with all other areas of departmental spending in the round.
To follow up on that question, I am sure the Chancellor has noticed that there are children all over the country, including in the Prime Minister’s constituency—and among those children are my children—who will no longer be able to go to school all day on a Friday. My son’s school is going to shut at 1 o’clock, like 15 other schools in Birmingham and hundreds of schools across the country. They have been getting in touch with me, including those in the Prime Minister’s constituency, and I am sure they will be writing to her, because they are certainly writing to me. What has he offered today for the Government to do the most basic thing, and keep my children in school? What is being given today and what will be given in the CSR? I hope he is looking forward to seeing my children, because I am bringing them to be looked after by him every Friday at 1 o’clock.
I shall look forward to it.
Today is not a fiscal event, and the opportunity to look at spending priorities in the round will happen at the spending review. What I have described today is a world where improving public finances mean that, if we can lift the Brexit cloud from our economy and get that certainty restored, we will have choices. Frankly, that is something we have not enjoyed in this country for a decade now, because of the consequences of the crisis under the previous Labour Government.
If the hon. Lady wants to talk to me about schools, I am happy to talk about our record on schools, with the attainment gap narrowing, record rates of disadvantaged 18-year-olds going to university, and 84% of children being taught in good or outstanding schools compared with 66% in 2010. Those are outcomes of which we are proud.
May I ask the Chancellor’s view on the question of poverty? Under the previous Labour Government, we saw 1 million men and women thrown on the dole. Under this Government, unemployment is down to its lowest rate for 40 years. Yet we hear the argument from the Opposition that work is not the way out of poverty; only spending ever more on benefits is the answer. Am I correct in noting that, in reality, when a workless couple move from being out of work into full-time work, their chances of being in poverty drop from 38% to a negligible less than 1%, so work is the way out of poverty? What assessment has the Chancellor made of the combined effects of cutting taxes for the lowest-paid, reducing unemployment to the lowest level for 40 years and the new national living wage, and what assessment has he made of his intention to go further today in boosting the proud achievement of the national living wage of reducing poverty further?
We have seen the proportion of people on low pay falling to its lowest level in 20 years. I have already mentioned the statistics on the number of people in work, and I agree with him that being in work is the only sustainable way out of poverty. He is right: the previous Labour Government left 1.4 million people languishing on out-of-work benefits, and anyone who thinks that that is a good outcome—[Interruption.] Absolutely true: they should be ashamed of themselves. I can assure my hon. Friends that this issue is high on our agenda, and that we are looking at ways of maintaining the record we have built up, which is exactly the one I want to deliver.
Will the Chancellor confirm that many millions of pounds more are being cut from the police budget than the £100 million he has put in for overtime to support our hard-pressed police officers? Will he confirm something in particular? In his statement, he said that the £100 million is for England. When I was a Home Office Minister with responsibility for the police, Home Office funding was for England and Wales. Has Wales been left out again?
I believe—[Interruption.] I am aware of what the right hon. Gentleman is saying. My understanding is that the funding figure is for England. [Interruption.] Sorry; my hon. Friend the Member for Bexhill and Battle (Huw Merriman) is telling me it is for England and Wales. I apologise to the right hon. Gentleman if the statement misled him, but I am told that the funding is for England and Wales.
I welcome the continued improvement in the public finances, which is due in no small part to the continued resilience and innovation of our businesses, some of which the Chancellor met when he recently opened the University of Gloucestershire’s new business school. What a symbol of change that is, because only nine years ago we lost 6,000 business jobs in Gloucester, thanks to the disastrous policies of the Labour party, and youth unemployment was four times higher than it is today. My right hon. Friend knows the extraordinary enthusiasm on both sides of the House for continued funding for schools and, from my letter with 165 colleagues from four different parties, for improved funding for further education colleges. Will he therefore look at those priorities very closely in the spending review?
I very much enjoyed my visit to the University of Gloucestershire and was interested to see the innovative work going on there. The improvement in the public finances, to which my hon. Friend referred, is being driven by increased business tax receipts, partly as a result of the Government’s relentless clampdown on opportunities for tax avoidance and evasion and partly as a result of the very significant increase in employment. Some 3.5 million more people in work is very good news not just for 3.5 million households, but for the Exchequer, the public finances and, ultimately, our public services.
Is it not true that poverty in this country increasingly wears a working face, that we now have the highest ever proportion of families in poverty who are in work, that a family of four with two people working full time on the national minimum wage will be £600 a year worse off by 2020, thanks to the Chancellor’s benefit freeze, and that, because he will not tackle the benefit freeze, including on in-work benefits, families in that condition will see absolutely nothing as a consequence of today’s statement?