I beg to move,
That this House has considered social mobility and Treasury reform.
It is a pleasure to serve under your chairmanship, Mr Robertson. I called this debate because I passionately believe that this country’s most powerful and most important resource is its people, and it is simply unacceptable that in the 21st century we still do not have equality of opportunity for people in Britain.
I am someone who knows what it is like not to have all the opportunities you want on the doorstep and not to be connected to those opportunities. I came into politics to get change on the ground for people, not just to debate what needs to happen. That is why about a year ago, with the Harrison Centre for Social Mobility, I established the social mobility pledge—to get action on the ground, working with businesses.
Hundreds of businesses have now stepped up to the plate to provide more opportunity for more young people, by getting into schools and helping to raise aspiration, talking about careers, allowing young people to come into the workplace to get work experience or apprenticeships and, crucially, looking at recruitment practices. Those companies are making sure that their approach on recruitment means they are open to all the talent out there. Hundreds of companies are involved. Already, social mobility pledge companies collectively employ more than 2.5 million people.
That work has taken me all over the country, from Sunderland to Hull, from Bradford to Manchester. With those companies and organisations, we are a coalition of the willing. We are finding out what works on the ground and are then spreading that insight and knowledge further and faster and creating a race to the top. The social mobility pledge is doing practical work to get more opportunity to millions of young people. I thank the businesses and organisations that are part of it, and part of this push.
This is a debate about social mobility and, of course, I noticed the announcement from the great leader, Jeremy Corbyn, at the weekend, ditching improving social mobility. I am sure the shadow Minister will want to respond on that, but clearly social mobility is just a distraction from the class war that Corbyn’s Labour party is engaged in.
Order. Could the hon. Lady please refer to Members by their constituency?
Of course. The right hon. Member for Islington North (Jeremy Corbyn) has the sense, I think, that aspiration is a dirty word and is therefore not something that other people should feel is a good thing. That is wrong.
I was going to wait until my contribution to respond to the right hon. Lady, but it is quite clear that that is not the policy of the Labour party or of my right hon. Friend the Member for Islington North (Jeremy Corbyn). We want as many people as possible to do well, not just a chosen few in a grammar-school society of the type the right hon. Lady proposes.
I thought the hon. Lady would probably say that. Unfortunately, that illustrates that the Opposition have not understood what social mobility means. It means equality of opportunity. It would probably be better—this is why I raised the point—if we stopped arguing about semantics and started talking about finding common ground on how to get change for the better for millions of young people and communities currently disconnected from opportunity or too far from it. If this just becomes a debate on semantics, which is what I worry the right hon. Member for Islington North is trying to turn it into, we will not get anywhere fast. I will come on to why that is a problem, but the topic of this debate is that, while there are broader problems around how we debate achieving social mobility, which is why it has not happened, there is a bigger problem, which is about how the Government approach social mobility and the Treasury’s place within that.
Let us be absolutely clear: achieving social mobility means we achieve equality of opportunity for everyone in our country, irrespective of where they start, who they are and what their background is. It is not—I repeat, not—just about the gifted few.
I want to see system change. I have talked about the practical work I am doing on the ground with businesses and organisations through the social mobility pledge, outside of the Government, but if we are to finally crack the nut—unlike the Labour party, I do not believe we should give up trying to achieve social mobility—we have to ensure change inside the Government. To my mind, that starts with the Treasury, and that is why I called this debate.
After eight years in government, overwhelmingly as a Cabinet Minister and running three different Departments, my conclusion is that we effectively need to abolish the Treasury in its current form. What we have right now is dysfunctional and not fit for purpose. It does not achieve the transformation in opportunity and social mobility that Britain needs.
I congratulate the right hon. Lady on securing this debate. She has a long interest in the topic. She referred to the abolition of the Treasury. Has she indicated that to the 10 Conservative hopefuls for Prime Minister?
I will set out my wider strategy on why I think the Treasury in its current form is not fit for purpose. I hope in holding the debate that some of the arguments will get cut-through. If we are here to improve lives, for young people in particular, and to connect those young people to opportunity, things have to radically change, including in government. We need fundamental change in how the Government look at and invest taxpayers’ money, and that means the Treasury.
I congratulate my right hon. Friend on securing this debate and on her work on social mobility over many years. I think, like me, she was comprehensively educated—like many on the Conservative Benches—and joined the Conservative party precisely because we are the party of opportunity and aspiration. On the point raised by the hon. Member for East Londonderry (Mr Campbell), does she agree that we need to put pressure on the Conservative candidates to make sure that investment in education, which is a key enabler of social mobility, is a hot topic and something that every single one of them should have as a top priority should they become leader?
I agree. I am setting out how to fix the underlying problem of why we are underinvesting in people in our country and their potential. That starts with the Treasury. In my view, the Treasury has a twofold problem—first, how it operates across Government and, secondly, its policy approach.
On how it operates, it starts going wrong with the Treasury—UK plc’s finance department—having its own separate strategy from the Prime Minister, the chief executive. We have seen this down the years. It is traditional to see Chancellors at loggerheads with their Prime Ministers. We would never see a finance director able to countermand the CEO and undermine their strategy in any other organisation, yet that is exactly what we see, year to year and day to day. It has happened under Governments of every colour with the Treasury, as it is currently set up. Time and again, we end up with a Prime Minister, who is meant to be running the country, with one strategy, and a Chancellor with a different one, and both at loggerheads and going nowhere fast. It is no wonder that Prime Ministers do not get to deliver their strategies when the finance Department has an entirely separate one.
Parliament has a Budget speech every single year; it is essentially the Government’s strategy statement to Parliament and MPs for the year. It is not, however, the Prime Minister who delivers the strategy statement; it is the Chancellor. That does not make sense at all. Of course, these Budget statements are traditionally packed with politically driven, willy-waving, “look-at-me” projects for the Chancellor. Most are not even Treasury ideas. The best ideas are hoovered up from every other Secretary of State running Departments across Government, and they are generally not even the Treasury’s. Worst of all, most of these excellent policy announcements—for example, the one that we made a couple of years ago on vocational education and T-levels—are held up in order to wait for the Chancellor to announce them in a Budget statement. That is entirely dysfunctional, and it has to stop.
We should abolish the Budget statement in its current form, as delivered by the Chancellor. By all means, let us downgrade it and have it as a very important, but functional, annual presentation of the nation’s finances. Why do we not replace it with a Queen’s Speech update? This could be a proper strategy speech for Parliament every year, delivered by the Prime Minister. There is no reason why a Queen’s Speech update—a strategy speech—could not introduce a Finance Bill. I have listened to enough Chancellors effectively introduce other Departments’ Bills on social care and all sorts of things over the years. There is no reason why a Prime Minister giving an annual update on the Queen’s Speech progress could not set out the key terms of a Finance Bill. The Chancellor could fill in the details later.
I will move on to the spending review, which is also a hugely dysfunctional process—that is assuming it happens, which I will come to in a second. The spending review is essentially a strategy process for the Government, yet it is not led by No. 10 and the Prime Minister; it is led by the Chancellor and a finance Department that potentially micro-manages a wholly separate strategy from that of the Prime Minister of this country. Through this process, the Treasury has other Departments totally over a barrel. I think there would be less of a problem with how spending reviews are approached if the Treasury actually approached them effectively, but it does not. Right now, the UK has budgets set to 2020, which is next year. The country has no budgets in place for any of its spend after next year, which is wholly unacceptable.
Look at how this plays out on the ground. Last week I was up in Bradford to meet the opportunity area team, who are doing some absolutely fantastic work on the ground by connecting improvements in schools, businesses, the local authority and communities. This is a long-term—probably a decade-long—project to get structural change in a community that has bags of potential but needs its schools to do better and its businesses to connect with and develop the talent coming out of those schools. However, the team does not even have a budget after next year. How can we expect to get long-term change in our country, if budgets do not even extend beyond the next 12 months? It is entirely disconnected from the real world of how change happens on the ground. I have talked about opportunity areas, but it is writ large across virtually every single Government-delivered project that is happening on the ground to change things and improve lives.
The Treasury has just cancelled the spending review. From what I read in the papers, we will simply be rolling budgets forwards. At such a crucial time, I cannot think of a less strategic way to manage the UK’s public finances and invest in the future.
The right hon. Lady is making a compelling point on longer budgets. Does she agree that short-term budgets cause huge uncertainty for the responsibilities of devolved Administrations, who rely on knowing when the Budget will come and what the spending will be?
Indeed I do. Of course, not being able to plan ahead is a hugely inefficient way to manage resources. We spend efficiently when we can get long-term deals from suppliers and contractors, and when we can plan into the future. The inability of any of us to do this is absolutely an inefficient, sub-optimal way to manage finances. If we were to have the spending review, it would be a three-year spending review, but even a three-year or five-year spending review is not long term for a country. The companies that I spent 15 years working in did three-year to five-year spending reviews, but they were not Britain, which needs to invest for the long term.
How on earth are we going to invest long term in people and unlock social mobility if we will not even look beyond the next two or three years? If we will not even look beyond the next 12 months, it is absolutely impossible. This is a failing strategy, and a functioning department or ministry of finance should know that. The fact that the Treasury does not know that tells us everything about why it is not fit for purpose and should, as it stands today, be abolished.
The way in which that failing extends, operates and works on policy in practice—I speak as a former Secretary of State who ran three spending Departments—is that unless a departmental policy area is demonstrably and critically failing on the ground, the Treasury’s attitude is to turn a blind eye and hope that it all gets better. The Treasury’s technical explanation for this is that it hopes that that will drive efficiencies; that the system will have to work harder and deliver the same for less money. That might be true in some cases, but we are set up to fail because the Treasury has no way of understanding when that point has been long passed, and we do not have enough resources to deliver the Government’s plan—possibly the Prime Minister’s plan, but often it is the Chancellor’s plan.
Problems are not fixed early and are simply left. By the time the Treasury finally understands that it is a crisis, it is more expensive to fix it. Alongside a total lack of long-term planning, the Treasury does not fix problems early, which is hugely expensive. Departments’ spending—be it on prisons, schools, healthcare, local government or children’s and adults’ services—ends up in crisis, needing last-minute funding. That is a hugely expensive way to run the nation’s finances. Most importantly, it leads to real hardship on the ground, which is the exact opposite of what Governments of all colours try to achieve.
In my area of education, it was blindingly clear in early 2017 that, although the schools funding formula was broadly the right approach—levelling up schools that had traditionally been underfunded—more money needed to go through the formula, and the money should have come from the Treasury. That was clear to me from talking to colleagues and MPs in the House, and from talking and listening to teachers and parents, yet it was only after the election that we could take any action on that obvious problem. In fact, as everyone knows, I ended up doing my own mini-budget to release £1.3 billion to put into frontline funding. One might have expected that the Treasury would welcome a Secretary of State doing its job for it, but I had to haggle to get that agreement through the Treasury and be able to announce it. I fear that the Treasury yet again is making a similar mistake on school funding and repeating the process.
Reviews are another classic Treasury ruse. The recent Augar review managed to waste well over a year coming up with obvious conclusions about additional funding for further education, but no doubt the Treasury is delighted that it can kick the issue into the long grass for another 12 to 18 months. However, if the substance of the point is that FE needs additional funding, the Treasury has not done young people in the FE system any favours by turning its face away from the need to fund the system properly. It simply cannot be allowed to continue operating in this way.
I have talked about my experience of how the Treasury interacts with other Departments, but what about its policies? It should be managing the nation’s finances to maximise long-term value by unlocking the potential of its most crucial, precious resource—its people. It should set taxation and public investment policy to deliver that strategy for the long term. That is how to reduce the deficit sustainably. It needs to be a finance Department with policies to tackle weak access to opportunity.
For example, how do we recapitalise a generation of young people who do not have access to capital and therefore are not only disconnected from the fact that Britain is a capitalist society but cannot access opportunity? The Government and Parliament decided that they are willing to give young people access to capital if they want one kind of opportunity—a degree—but other opportunities are a wholly different matter. If young people want resources to move across the country to get the apprenticeship opportunity that they really want, to start a business, to put down a deposit on a house, or to rent a place somewhere where they can get on with their career, we do not capitalise them to do that. We should be doing that, and a functioning Treasury would look at those sorts of strategic measures to unlock a structural change in access to opportunity and social mobility in our country.
My hon. Friend the Member for Mid Worcestershire (Nigel Huddleston) asked a good question about the leadership candidates. At the moment, we are hearing only simple, tactical taxation suggestions that, frankly, would not strategically or structurally shift the dial on social mobility.
My right hon. Friend is being very generous in giving way. Does she agree that enabling young people to reach their full potential is a core responsibility not only of the Treasury but of the Government? I suspect it is one of the key reasons why we got into politics in the first place. Will she join me in appealing to the Prime Minister, before she leaves office, to make a strategic and big move on education and education funding, which would ensure that the future leader, whoever it is, is obliged to deliver incremental, significant increases in funding for education in order to deliver on the key promise that she made when she first entered Downing Street three years ago?
If the Conservative party is to be taken seriously as the party of opportunity, it is important that it has a clear, articulated and well-funded strategy on developing our nation’s talents, and of course that means investment in schools. One of the problems is that, because the Treasury does not have an approach on valuing human capital, it does not understand how to look at valuing investment in schools alongside investment in physical capital. It does not have any sense of how to invest in human capital, which is perhaps the most powerful form of capital, but it is all over how to value the long-term returns on physical capital infrastructure projects, such as High Speed 2. The reality is that it is the capacity and talent of the people who get on those trains, log on to the broadband, get on the tube—like my constituents—or get into the cars that go on those roads that will determine whether Britain is successful in the future.
A functioning Treasury would understand that that is how to maximise long-term tax receipts and the effectiveness of public investment, because of course improving lives is the best way to take the pressure off public spend, so much of which is invested in lives that have gone wrong. Instead, the Treasury effectively just manages cash flow year to year—I am a chartered accountant with 15 years of experience in business, so I am as qualified as anyone to comment on this. We see reports saying that tax receipts and growth have been a bit better, so the Chancellor has a bit more money in his pocket. That is cash flow management, not managing the nation’s books for the long term. It is the polar opposite of a long-term strategy.
The fiscal rules should be scrapped and reworked on the basis of debt and deficit, how we deliver and measure long-term value and whether policy measures are creating or destroying it. In Cabinet, I regularly pointed out to the Chancellor the Treasury’s inadequate approach to valuing investment in people. An example of that is that we spend literally hundreds of thousands of pounds on the children and young people who end up in alternative provision and out of mainstream school. About 6% of them come out of alternative provision with a credible, strong or standard score in GCSE maths and English. That is no sort of strategy. A functioning Treasury would insist that it be reworked to deliver not only better lives but a smarter approach to spending. Those are some of the most challenging and vulnerable young people in our country, and they are often dealt with by children’s services. Those are the kids who have had the toughest starts and often face the bleakest futures. There is an opportunity cost to them in the failure that lies ahead of them in their lives if we do not help them get on track, and to the public finances, too. I have met lots of those young people. I have been up to the Beacon of Light—a fantastic place in Sunderland that helps young people to get on track and works with local businesses to slot them into careers. It turns their lives around and gets them on track. That is transformational not just for them but for Britain’s long-term public finances. Those young people generate more tax, which contributes to our economy and our society. The spend on welfare, the justice system and health due to continued family breakdown is less.
As Secretary of State for Education, I had those discussions regularly with the Chancellor, the Chief Secretary and the Treasury. A Treasury sensibly managing public finances for the long-term would run towards a business case that would improve those lives, but it was like pulling teeth. If the Treasury continues to see spending on health, education and prisons only as a cost, it will always try to minimise it. Instead, it should see that spending as an investment that generates a return. Changing the way the Treasury works so that it looks at early intervention and fixing problems before they become bigger would deliver long-term, sustainable and optimised public finances.
The Treasury’s strategy on taxation and spending should be looked at through a very simple lens—does it deliver improved social mobility in our country or not? Every policy should have a clear test: does it level the playing field on opportunity in the short and long terms? If the answer is no, the Treasury ought to ask whether and why it is wise to put taxpayer money against that project.
I know that the Treasury has under way some Office for National Statistics work on valuing human capital—I am pleased about that—but it is about how that capital is accounted for, and I am afraid that the work just scratches the surface of the issues that I have raised. I am talking about far more than the ONS project. I am talking about a Treasury that, in its present form, is clearly incapable of doing the job that it needs to do to manage Britain’s public finances, unlock social mobility and, dare I say, reform itself, which it will not do to itself.
We should consider breaking up the Treasury, perhaps splitting it into a Ministry of Finance and an Economics Ministry, while merging the former with some elements of the Cabinet Office and having it report properly to the Prime Minister, so that it genuinely delivers a Prime Minister’s strategy for our country. This morning, I have not had much time to do anything more than scratch the surface, but if we really want Britain to be the first country to achieve equality of opportunity, a significant part of that solution starts right at the heart of Government, by fixing the dysfunctional Treasury.
Unless we grasp that nettle, we should not be surprised to get the same day-to-day cash flow management that prioritises political pet projects, sets No. 10 and No. 11 at loggerheads with each other, which is dysfunctional for the nation, and, in the end, achieves the exact opposite of what we all want—for our children, young people and communities to have equality of opportunity, access to opportunity on their doorstep and the chance to be the best version of themselves. That unlocks the chance for our country to be the best version of Britain, too.
I thank the right hon. Member for Putney (Justine Greening) for securing this debate and for setting the scene so well. It is always a pleasure to speak on matters of such importance, and I support and sympathise with her remarks. I am pleased to see that the Democratic Unionist party is the second-largest party represented in the Chamber today, just slightly behind the Conservative party numerically.
I thank the right hon. Lady for her hard work on this issue and for the work she did as a Minister. I completely agree with her assessment of the Augar review, and I enjoyed reading her piece in the Financial Times earlier this month on that very topic—it was helpful for a better understanding of the debate, for which I thank her. Something that jumped off the screen was this:
“Its figures show that graduates going on to earn the highest salaries among their peers will see their overall repayments reduced by £18k—a third compared with now. However, for lower to middle-earner graduates, it is the opposite—Augar raises their overall repayments by £12k, almost double.”
I sincerely believe that that reinforces the view that the rich get richer at the expense of the lower class, who become stuck in a mire, as the right hon. Lady mentioned. We should also put on the record our thanks to the Library for providing a briefing pack with information and examples of the issue to help us.
It is important to look at the different opportunities for social mobility for women compared with those for men. There have been changes, which we must recognise, but later I will give an example and tell the story of a constituent who I think exemplifies the issue from a gender point of view. We must also address the fact that ethnic groups have experienced differing life chances over time. In her concluding remarks, the right hon. Lady referred to the need to give everyone the opportunity to maximise their potential, and I want to see that as well. There is also the issue of social mobility opportunities across the country in business and industry.
I am not here to play party politics—that is not my job in this place or what I am about—but it is only fair and right to recognise that Tony Blair’s Labour Government committed themselves to social mobility. At that time—before my time in the House—Blair also committed himself to addressing the issue of poverty, because social mobility and poverty were interlinked. To be fair, it is only right to recognise those commitments. The Conservative-Lib Dem coalition Government also had a clear strategy to improve social mobility. The then Deputy Prime Minister, Nick Clegg, said, “fairness means social mobility.” Clearly, he looked at that too.
The right hon. Lady referred at some length to human capital—it is important to put that on record—which I think is the crux of the matter. The Organisation for Economic Co-operation and Development defines human capital as the
“knowledge, skills, competencies and attributes embodied in individuals that facilitate the creation of personal, social and economic well-being”.
Clearly, we should never underestimate human capital if we want it to arrive at where its potential allows. In an October 2018 release, the ONS indicated that the total stock of human capital in the UK in real terms was worth £20.4 trillion in 2017, slightly down from £20.6 trillion the year before. It is good to recognise human capital.
Earlier, I mentioned a young lady in my constituency who I believe would fit into this category. She is an example of someone who, through social mobility, tried to advance her status and position in life, and succeeded. It is important to mention someone who achieved her potential when the regime was perhaps not set up to let her do so.
Does my hon. Friend agree that part of what we need to do is to further incentivise people, particularly young people, through the tax system, so that they can save? Personal allowances, for example, have risen in recent years, but we also need a rise in the national insurance threshold, so that people—particularly young people and those in part-time employment—can earn a higher net income, then work through the system with greater training and skills, and enter a higher earnings bracket.
My hon. Friend and colleague so often brings to debates an overarching view of where we and young people in our constituencies and across the whole of the United Kingdom need to be.
I will give an example that came my way only last week—although I know the young lady concerned—while I was researching for this debate. She has four children, works in retail, and her husband works in manual labour. Both are on low incomes and receive tax credits to supplement their income. Tax credits have been a great boost for many people. They are okay as long as they are going all right, but whenever they go wrong—if there is an overpayment, for example—they become a real noose around recipients’ necks. When done right, they are a bonus.
The young lady’s eldest child suffered a traumatic brain injury a number of years ago—he survived, thank God, although his life is altered as a result. The reason she came to my staff was to ask for help understanding the benefits system. Probably for all MPs, including the Minister, the most important issue in our constituency office is benefits—it outstrips by far all other requests to our office.
My constituent had decided that she would like to go back to college to get the qualifications necessary for her to enter higher education, with the goal of being an intensive care unit nurse providing the assistance for which she was so grateful in her life. That lady is everything that we might associate with the job: caring, compassionate, intelligent and dedicated. I believe that nursing is a calling, and she certainly has it. She just needs the opportunity—the social mobility for the human capital referred to earlier, to get the opportunity to advance herself and to do well.
In order to answer that call, however, my constituent needs to have her children minded. Her parents have passed on and her in-laws are both still working full-time. She gets tax credit for the few days that she works to help. That would all change if she became a student to provide a better life for her family. This young lady wanted to do better, but found herself in a system that almost holds her back, as my hon. Friend the Member for East Londonderry (Mr Campbell) was saying. What the right hon. Member for Putney said in her introduction is therefore exactly the issue that we have to address.
“Treasury reform” is included in the title of the debate, and clearly the Treasury has to take the issues on board—giving people opportunity and the chance to do better. My constituent, however, would have her tax credits cut if she was on a course, which she would therefore be unable to afford. That was her predicament. The system as designed does not allow for change, but ties us to where we are. Knowing the young lady as we do, she is a loss to the medical profession. If she wanted to claim housing benefit to offset the loss of tax credits, she would have to go on universal credit, and she simply could not afford the five-week lead-in because she has four children and rent to pay.
My constituent is stuck, and my fear is that the Augar review does not help people like that—the right hon. Member for Putney referred to that in her introduction, I refer to it now and others who speak afterwards will no doubt do the same. Such examples perpetuate the idea that university is only for the young and for the middle and upper classes, and that those who are called to do different things with their life cannot do it all. That frustrates me and, for the record, I would like to see the change proposed by the right hon. Lady, because it would be helpful.
My staff have made inquiries about the help available to get my constituent to the stage at which she can go into nursing with the bursary that being a student nurse brings. As for making education accessible to working-class people, however, we clearly have not achieved that. We sincerely need to work harder to do that. That is why I am supportive of my colleague, the right hon. Lady, and her desire to ensure that those in need of help and support to reach their goals can get it, regardless of the social structure into which they were born.
This debate is about giving opportunity and about ensuring that those who need help can achieve it. At the present time, our system does not help such people in the way that it should. The days of education only for the privileged are, and should be, a thing of the past, and the days of further education only for the young or privileged also need to be a thing of the past. This Government and the Minister must understand where people are coming from and help them to get to where they need to be.
My mum and dad sent me to boarding school. I know, honestly, that that was a big step for them to take. Those five years when I was in boarding school meant that my working-class family had to keep the same car for years, had no holidays, and so on. I am therefore deeply indebted to my parents for giving me that educational opportunity. They worked, scrimped and saved to make it happen. What I want to see in the society I live in and represent is everyone having the same opportunity. I do not see that now, unfortunately. That is why this debate is so important—I thank the right hon. Lady for securing it and for airing the issues so well today. By doing so, she has done a favour and sought justice for people across all of the United Kingdom of Great Britain and Northern Ireland, where opportunity and equality should be there for all.
It is a pleasure to see you in the Chair, Mr Robertson.
To my shock and surprise, I suppose, I agreed with an awful lot of what the right hon. Member for Putney (Justine Greening) said. It is just a shame that her Government have no intention of doing a lot of the things that she spoke about. There is no evidence that they will do any of those things, despite her best efforts. In many cases, indeed, what the Government have done to people across these islands is quite the opposite.
The right hon. Lady spoke about the Treasury running a separate policy to the Prime Minister and about the need for investment in the long-term rather than only year to year. I agree wholeheartedly with such things, which need to see change. Again, however, the Government seem intent on having reviews that go nowhere and on other delaying tactics, and not on investing in that long term. As I suggested in my intervention, that has a knock-on effect on the Scottish Government and their ability to do the things that they want to get on with and do.
Ongoing uncertainty about budgets, the wait or lag times between what the UK Government announce and their Budget, and then what the Scottish Government have to do with that money and the implications of the Barnett formula—whether things go up or down the UK—all determine what is left for the Scottish Government to spend. That adds to the unpredictability of the Scottish budget and the priorities within that, because the priorities of the Scottish Government are not necessarily anywhere near those of the UK Government, who set the budgets and determine how the money will flow. A huge amount therefore needs to change in how things are done in the UK. Unfortunately, however, I do not see things changing anytime soon.
The Social Mobility Commission’s “State of the Nation” reports provide a further damning indictment of the UK Government. The commission has found that social mobility has stagnated over the past four years at virtually all stages from birth to work. That is not a huge surprise to anyone, because poor social mobility has a close relationship with income inequality, an indicator that the UK has consistently failed to improve. The UK is the fifth most unequal county in Europe, according to the Institute for Public Policy Research.
Income inequality as an issue is of course not exclusive to the UK. Global trends point to inherited wealth increasing faster than earned income. Sustained efforts are required to get rid of the sticky floor, which makes it incredibly difficult for people to climb out of poverty. The OECD estimates that it will take five generations for children in poverty in the UK to reach the average income—that is a sobering statistic—and gives no prospect of things changing soon.
I have raised some of the issues surrounding the tax system before in this place. The tax system in the UK is simply not fit to tackle big issues such as income inequality and social mobility. It is unwieldy, unnecessarily complex and full of holes to hide in. This UK Government have provided a catalogue of tax reliefs for those who are already wealthy. A report by the Tax Justice Network illustrates that well. It found that wealthy families substantially reduce inheritance tax obligations by invoking tax reliefs on the value of agricultural and business property. Last year, the combined cost of that particular tax relief was £930 million—equivalent to the cost of employing 23,000 NHS nurses. In fact, £930 million can buy a lot of things—it is nearly the cost of expected savings to Government of the universal credit two-child limit. It is extremely telling that this Government prioritise tax breaks for the very wealthy while simultaneously cutting support for children at the lowest end of the income scale—those who need it the very most.
The hon. Member for Strangford (Jim Shannon) was absolutely correct to point out the gender gap in social mobility, and the gap for black and minority ethnic communities. That is writ large in the statistics and in the people I see at my surgeries. He was correct that, when done right, tax credits are a great boost to many people and that those wishing to better themselves within the bizarre structure that the UK Government have put together have lost out.
In my own family, my Papa Thewliss studied, went to night school and did the best he could for his family. In essence, that is part of the reason why I am here today—my grandparents were willing to put that investment into their children, so that my parents could be the first in their families to go to university, and so I am here today. On Saturday, my gran turns 99, and it is some satisfaction that she sees what has happened in her family to get me here.
The structure has to be in place for such social mobility to happen, however. University has to be affordable and apprenticeships have to be supported and achievable. That is not always available for too many people. The points that the hon. Member for Strangford made about the accessibility of apprenticeships and other things, and that the right hon. Lady made about people being able to travel to reach those apprenticeships, are important. It is also important that apprentices can earn a real living wage, because the minimum that apprentices are entitled to is a pittance. We cannot expect people to put their lives on hold for the pittance of an apprenticeship wage. More support needs to be put into real living costs, because apprentices have bills to pay and families to support, and that needs to be part of the package.
The social contract has been ripped up for the people who need it most. Last month’s report by Philip Alston, the UN special rapporteur, stated that austerity has decimated the lives of many people and actively pushed them into poverty. The UK Government have said that that kind of fiscal discipline is vital to reduce the deficit and build a strong economy, but that need for fiscal discipline evaporates completely when it comes to tax breaks for the wealthy, spending billions of pounds on Brexit preparations or putting nuclear weapons on the Clyde.
It is not difficult to draw the conclusion that the cuts were never about reducing the deficit and are ideologically driven. We are seeing even more blatant rhetoric coming from the Tory leadership race, in which the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) has promised a huge cut in income tax for the highest earners if he is elected. The Fraser of Allander Institute at the University of Strathclyde in my constituency has hinted at the impact that that will have on the Scottish budget. Because of the devolution of income tax, the tax cut would not apply in Scotland, but the resulting budget cuts would. To pay for it, national insurance would increase, which will have an impact because it is reserved—Scotland has no control over national insurance. We would lose out on the budget because of that policy, and national insurance contributions for people in Scotland would increase.
If I had the opportunity to give an extra £6,000 a year to one group of people, it would not be those earning over £80,000 a year. It would be some of the families rendered destitute by the hostile environment policy, for whom my office has to source school uniforms, food bank vouchers and Christmas presents, year in year out in some cases; or the women who are victims of domestic abuse, who have to declare that their third child was born as a result of rape just to put food on the table; or people with disabilities, who have to be hauled through a degrading and inhumane assessment system at the risk of being threatened with sanctions. Those are the people in society who desperately who need a break and to receive that £6,000. That is a choice that leadership candidates are putting forward as something they would bring in to Government if selected.
My colleagues on the SNP Benches and I have consistently called for devolution of all welfare powers, inheritance tax and other taxes, so that the Scottish Government can get on with the job of tackling income inequality. We have created the first Scottish income tax system, which is the fairest in the UK. The system has meant that 55% of Scots pay less tax, while raising £68 million for public services. The report I referred to by the Social Mobility Commission, which was so damning of the UK Government, congratulated the Scottish Government on the work they have been doing to increase social mobility. The report says that Scotland is going against the UK trend and becoming more socially mobile.
I urge the right hon. Member for Putney to look at what Scotland is doing in that regard. A person’s socio-economic status is now less likely to be determined by their parents’ socio-economic status. The likelihood of being in a professional job for those from a working-class background compared with those from a professional background has narrowed over the past four years, from 28 percentage points in 2014 to 23 percentage points. The Scottish Government have tried to tackle the issue of people from different socio-economic backgrounds getting into university. A huge amount of work has been done to switch that trend.
I give credit to businesses, as the right hon. Lady did, that are involved in that kind of initiative. I visited Zurich in constituency, which is taking more people straight from school into the insurance sector. It recognises that having a degree is not necessarily what it needs in its business—it wants a rounded range of skills for a better business. It has found it hugely beneficial to bring people in from school.
I am sure the hon. Lady will be pleased to hear that Standard Life Aberdeen is also very much walking the walk, and genuinely making an impact that goes well beyond its employees and into the wider community.
I agree that there are great examples of businesses right across Scotland—I could stand here all day talking about them. It is good that Standard Life Aberdeen is doing that and that more businesses recognise that including a degree on job adverts and applications is not necessary in many cases. By removing that and looking much more widely at the range of skills that people can offer, rather than what degree they do or do not have, social mobility will increase, so that is to be commended.
The Scottish Government are pursuing an inclusive growth agenda and view tackling inequality and growing the economy as two sides of the same coin. I am sure that the right hon. Lady would agree with that, given her speech. It is important to think about the type of society that we are creating with economic policies, and to consider what the point of growth is, if it is built on the backs of the most vulnerable. The Scottish Government have invested in decreasing child poverty, with an ambitious target to reduce it to 10% by 2030. They have introduced a legal requirement on public sector bodies aimed at reducing socio-economic disadvantage. Fundamentally, the Scottish Government oppose Brexit, which continues to threaten hard-fought steps towards reducing inequalities.
The right hon. Lady laid out the dysfunction of the British state in great detail. That is what we see from Scotland. Increasingly, people in Scotland do not believe that the British state will work for them. We have tried, we have waited and we have looked for changes, but they have not come. In fact, from the Scottish perspective we can only see things getting worse. We have asked for more powers, so that Scotland can try to tackle these things, but we do not yet have the full levers of powers that we would have as an independent nation in which we could tackle inequality head-on, using the full range of powers of an independent country. Time and again, the UK Government have abdicated their responsibility to the most vulnerable people. If they cannot do their job, they should allow Scotland the powers to do it instead.
It is an absolute privilege to serve under your chairmanship, Mr Robertson. This has been a good debate; it is nice to watch friendly fire and I enjoyed listening to the right hon. Member for Putney (Justine Greening) make an excoriating attack on the Treasury. I will come to her comments about social mobility later, but the fundamental truth is that when she talks about the current Tory Treasury, she is absolutely right. This Government do not treat spending on social infrastructure as the investment in our future that it should be. Unsurprisingly, as she says, this Government have failed to invest in our children, our young people and in all of us.
During the last year of the Labour Government, we spent almost 6% of our GDP on publicly funded education and training. By last year, that had fallen to just over 4%—a cut of more than a quarter. Given the challenges we face, we clearly need far more investment in skills and knowledge, to transform our economy, to deal with the climate crisis and to make the fourth industrial revolution prosperous and fair. Instead, as we know, during Tory rule school funding per pupil has fallen by 8% in real terms.
The consequences are blindingly obvious. More than 1,000 schools have had to rely on crowdfunding for basics such as pencils and textbooks. At least 26 schools are closing their classrooms early because they do not have the money to keep teaching. The proportion of pupils in supersized classes with more than 31 pupils to a single teacher is at its highest level for 36 years. The number of pupils doing a GCSE in music has fallen by almost a quarter since 2010, just as industry is asking us for more creativity and collaboration in education, because those are skills needed. Can the Minister honestly say his Government have put in the investment that our schools need?
Our further education providers have been cut by even more: sixth forms by 21% and colleges by 8%. The Social Mobility Commission found that 41% of FE providers had reduced their careers guidance and 48% their mental health support. In its report, it also cited evidence that 51% of colleges had stopped teaching modern languages courses. What about the notion of a global Britain post Brexit? Some 38% of schools and colleges have dropped courses in science, technology, engineering and maths—the courses our economy needs to prepare for the fourth industrial revolution. It is jaw-dropping that schools and colleges have been forced into that.
We have a recruitment crisis in nursing thanks to the Government’s scrapping of bursaries. We have a productivity crisis linked to a skills deficit and a lack of progression during people’s careers. Surely, the Government must have invested in adult education, given that we know people have to change course in their careers—nobody goes into a job at 18 and stays till they are 67 any longer—but no: that has been cut almost in half since 2009-10. Apprenticeship spending has fallen by 44%. The Open University, which has given a second chance to millions of people, is on its knees because of the Government’s tuition fees regime. It could not be clearer that older and part-time learners are simply scared off by the level of debt they are now expected to take on if they want to improve their education and change their course in life.
That is the situation in schools, colleges and adult education—cuts, not investment. What about early years? Sure Start has been cut by two thirds since 2010, with 1,000 centres closed. We know about the amazing benefits of Sure Start—we heard about them again this month—so it is not that the Government do not know about Sure Start’s value to society and the economy. Children are almost 20% less likely to be hospitalised by the age of 11 if their family has access to a Sure Start centre—that is massive—and the most disadvantaged children benefit the most. The impact on the NHS of fewer children being hospitalised is enough by itself to pay for 6% of Sure Start’s costs, and it is one impact among many.
The 2010 evaluation of Sure Start found that access to Sure Start increased children’s physical health, including their chance of being a healthy weight. We all know that childhood obesity, apart from causing misery, costs the state money. The 2012 evaluation found improvements in parenting and the home learning environment. The 2015 evaluation found improvements in children’s behaviour and more. All those evaluations were funded by the Government, but this Government have not learned that investing in Sure Start saves money. It pays off. Even looking at it from this Government’s ideological position, it saves money. It does not just improve lives.
The story is the same with youth centres, which have been cut by 40% on average across the country and by as much as 91% in some places. I understand that Tory Treasury Ministers might not understand that making a bat and a ball and a table tennis table available to young people creates wealth; it is hard enough to get them to understand that that is what happens when they open a Sure Start centre or invest in teachers in our schools. When investment in youth services is taken away, young people are far more likely to have their lives blighted and their potential wasted by becoming victims of exploitation.
In east London, we know that only too well. Youth centres and youth workers provide young people with spaces away from the county lines groomers on our streets. Youth centres are places where young people know they can find an adult to talk to—somebody who can listen to their problems, offer them real resilience against the troubles on our streets and point them towards opportunity. What is so essential is not the bat and ball and the table tennis table in the youth club, but the professional who stands by the young person’s side and can give them different ways of dealing with the man on the street who offers them chicken to be a lookout for him while he sells his drugs.
Good youth work stops children being groomed, stops children’s potential being wasted and stops children’s future contributions to our economy and our society being stifled. Ultimately, it stops the young people I have been speaking about ending up in prison, which I am sure the Minister knows is massively expensive—more than £3,000 per prisoner per month.
If we had invested earlier, how many of the lives that have been blighted by county lines exploitation could have been saved, and how much money would the Treasury have saved? How much more would have been contributed to our economy? Investment in social infrastructure benefits our economy and our society in so many ways for decades into the future. This pro-austerity Tory Treasury just does not get it. It is a barrier to the investment our communities need. The right hon. Member for Putney knows that from her first-hand experience as Education Secretary.
The situation is no different on other issues, such as the climate change crisis: the Chancellor is still trying to obstruct the green investment we need. Thankfully, the right hon. Member for Runnymede and Weybridge (Mr Hammond) will not be at the Treasury much longer. Unfortunately, the reckless, regressive and plain idiotic pledges of the Tory leadership contenders do not inspire confidence that anything will change. It is a great pity that the right hon. Lady did not throw her hat in the ring. I have watched what she has been doing over the past few months—I have even watched her videos online—and I thought she might be building up to a bid, but sadly not.
Instead, we have the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), who has promised £10 billion of tax cuts. That money would pay for more than 400,000 new teachers, but of course it is not teachers or nurses who would benefit from those tax cuts. More than 80% of the financial gains would go to the highest earning 10% of families. It is clear where his priorities lie, and it ain’t in investing in our children.
A Labour Treasury would be totally different. At the last election, we committed to providing over £6 billion more for schools and over £5 billion more for free childcare, as well as nearly £14 billion for post-school education, including free further education and higher education tuition. But this is not just about individual pledges; it is about how we will work across Government to ensure that our investments build social justice as we rebuild Britain.
We will support cumulative impact assessments of our Budgets to ensure that they help the many and not the few, and we will adopt the Select Committee on Education’s recommendations for reform of the Social Mobility Commission. The right hon. Member for Putney will know that that Committee is chaired by one of her hon. Friends. I have not seen him of late; I wonder whether he, too, is suffering from friendly fire. I share that Committee’s diagnosis of the problem. We have had many years of initiatives to improve social mobility that simply have not succeeded. I think the right hon. Lady agrees that sometimes, in the case of opportunity areas, those initiatives have been just a bit too small. At other times, they have had to fight against the headwind of austerity Budgets that have increased poverty and inequality while cutting the public services that protect us from them. Even when Budgets have been progressive and investment significant, focusing on social mobility has not made our country just, because the aim has been to help only a few to get on, and not to make our country fairer for all.
The right hon. Lady disagrees with that as a definition of social mobility, but from what she has said in the past about how we have never actually had social mobility in this country, I do not think she disagrees with that as a description of reality. I agree we should not get too caught up in semantics, but talking about social justice does not do that. Instead, it expands the debate back out to where we both agree it should be.
When I introduce myself I do not know what title to use. I say, “I’m the shadow Minister for social mobility, kind of against social injustice. I’m anti-poverty and for social justice.” I do it all the time because we do not have a term that adequately explains where we think we should be going. I do not want to argue about words with the right hon. Lady. I think we should focus not just on narrow, voluntary programmes that are based in the Department for Education, but on joined-up strategies to transform our country and make it fairer and more just for all. That should be backed by the investment that only the Treasury can provide.
Labour would appoint a social justice Minister, despite the problems that the definition of that term might cause, and we will ensure that that Minister co-ordinates action across Government, drives forward our social justice agenda, and ensures it is matched by needed investment. The Treasury must properly support all the actions that should be taken by Departments—not just the Department for Education or the Department for Work and Pensions, but the Department of Health and Social Care, the Ministry of Housing, Communities and Local Government, and even the Department for Digital, Culture, Media and Sport—so as to tackle the injustice and poverty that this Government have effectively created through their austerity measures. That new Minister will have the full support of the Treasury because they will be based there. There will be no separation between the wider Labour agenda and Treasury strategy, such as that described by the right hon. Lady. We are talking about serious investment and long-term commitment to social justice, and that is what Labour will offer.
It is a pleasure to serve under your chairmanship, Mr Robertson, and I am grateful for the opportunity to make my parliamentary debut as Financial Secretary to the Treasury and Paymaster General by discussing social mobility, which is an issue of great importance to the House, as today’s interesting debate has demonstrated. I have a certain degree of nerves, however, because if in my first debate a former senior Treasury Minister contemplates the abolition of the Treasury, I shudder slightly to think what my second debate may lead to, but I will take it for what it is.
I thank my right hon. Friend the Member for Putney (Justine Greening) for her fascinating and thought-provoking contribution, and I congratulate her on securing this debate. A Putney debate on social mobility is becoming an important part of the Treasury calendar—perhaps it should be counted as a fiscal event, along with other events of more familiar coinage. I very much congratulate her on her long-standing commitment to improving the life chances of people from disadvantaged backgrounds. That was a hallmark of her time in government, and I respect and applaud her tenacity in pursuing the issue now, as well as her work on social mobility more widely, which includes the social mobility pledge that she highlighted in her speech.
If I may, Mr Robertson, I will briefly canter through some facts about what the Government are doing in this area, and then come to the contributions that have been made, in particular that from my right hon. Friend. The Treasury’s record on social mobility is a good one. There may be plenty of work to do across Government, but the Treasury has had 35 new apprentices in the last financial year, and it offers internships and insight days to students from diverse backgrounds. It was ranked 34th on the Social Mobility Foundation employer survey last year. The Treasury is rightly seeking to make headway in this area, as should the Government as a whole.
The wider point is that social mobility is a force not just for social progress but, as has been highlighted, for economic progress. If one were to use philosophical terms, we should seek to create not merely negative freedom but positive freedom. We need not just relief from the things that constrict and impede human potential but active empowerment and support for people from every background in this country. Supporting social mobility is not only right but it is in the public interest, as it means that our culture, national conversation, politics and economics will benefit from the widest possible range and diversity of voices. It is also wise in a more directly economic sense because, as the global economy’s centre of gravity moves eastwards in the 21st century, the UK’s strength will lie in not merely the size but above all the quality of its workforce. Social capital and investment in human capital is vital to those things. It is therefore in our national interest to encourage and nurture people to achieve their best, because we need their talents and skills.
The Government’s record is a good one. They have achieved higher employment in every region of the UK, and introduced and increased the national living wage. They have taken millions of the lowest paid out of income tax altogether. That can, of course, only be a staging post, and the Social Mobility Commission’s report, published at the end of April, demonstrates that there is plenty of work still to be done. Importantly, however, we understand the magnitude of the task.
For many people, the yardstick for social mobility is home ownership, and as a result of Government policy, 80% of first-time buyers pay no stamp duty at all—that is one reason why the number of first-time buyers is reaching its highest level for 11 years. The Government have also made a real impact in education, which was in part due to my right hon. Friend’s time in government. A combination of the free schools programme and a reformed curriculum has narrowed the attainment gap between disadvantaged pupils and others at every stage, from early years to secondary school. Ninety-five per cent. of all early years settings are now rated good or outstanding. That is up from 68% in 2010 and means that a record proportion of children start year 1 with a good level of development.
The Government have backed schools with £1.3 billion of extra investment and protected the pupil premium, with 1.9 million more children in good and outstanding schools. However, that funding will not get to the heart of improving social mobility unless we also tackle geographical inequalities. That is why, as my right hon. Friend rightly highlighted, it is important to make school funding fairer and more consistent.
The Department for Education provides roughly £25 million every year through the national funding formula to assist the smallest and most remote schools, and in the last Budget it was announced that rural primary schools would benefit from a £200 million programme for fast and reliable internet access across the country. The apprenticeship funding model is designed to support individuals from disadvantaged areas, by providing cash payments to providers for training apprentices who live in the top 27% of deprived areas. The Government have awarded the first 11 Institutes of Technology across England, so that even more students can access an excellent technical education.
My county of Herefordshire is something of a social mobility cold spot, and I am particularly grateful to my right hon. Friend as she was Secretary of State when the Department for Education approved the New Model in Technology and Engineering in my constituency. That was the first new university in this country for 40 years, and it is a specialist tech and engineering institution that focuses specifically on a 50:50 gender balance, open access, and the kind of empowerment that is characteristic of social mobility around the country. It will make a huge difference not only in Herefordshire, where social mobility is much lower than it should be, but elsewhere around our nation.
The Government have invested in 12 coastal, urban and rural opportunity areas, where young people face entrenched challenges, to bring together local and national partners to work with local communities and bring about lasting change. Education must ultimately equip young people to make a successful transition into employment and life as a whole. Employment is obviously important, and people should have choices as they reach adulthood. That is why technical education is so important. The transformation is now under way through T-levels, which will mean that young people have the knowledge to get the highly-skilled, well-paid jobs of the future, and through continuing work on the apprenticeship programme, which will try to create more diverse opportunities; over 1.7 million people have started apprenticeships since 2015. As my right hon. Friend will be aware, in higher education we have record rates of disadvantaged 18-year-olds getting into university. There has been an increase in the take-up of degree apprenticeships, and we have been specifically encouraging bids to improve access to degree apprenticeships for disadvantaged and under-represented groups.
Skills remain of vital importance later in life, particularly in a 21st century in which people will be regularly re-skilling and re-educating themselves. The Government fully fund all adults to take English and maths to level 2, and from 2020 they will be funding basic digital skills. They are also establishing a national retraining scheme to support those in work, including the self-employed, to develop the skills that they will need to thrive in the new economy. To that end, the Government have pledged £100 million in funding to get the scheme up and running.
Let me pick up some of the questions raised by Members in the debate. The hon. Member for Strangford (Jim Shannon) rightly stressed the importance of sexual equality across social mobility and highlighted the complexity of the benefits system as a potential impediment to change. He is absolutely right about both those points. He may have misread the proposals in the Augar review. It is an independent report the purpose of which is not to diminish social mobility but to enhance it; it needs to be read as a whole. If the hon. Gentleman looks at the members of the panel who commissioned the report, he will see that they are all deeply committed to improving social mobility, not just through this report but in their wider lives and work.
The hon. Member for Glasgow Central (Alison Thewliss) gave a more combative speech. I remind her that the Treasury is the product of cross-party evolution; whatever its weaknesses, they are the product of historical processes. It may require radical change—I will come to that question later—but the suggestion that it is not an institution with its own ethos that has developed over many years and generations is one that any Treasury Minister would contest. If the Scottish Government are unhappy with the fiscal arrangements that they have with the UK as a whole, it is up to them to raise taxes themselves, using the new tax powers they have, and to spend that money as they see fit.
The hon. Lady was dismissive of the Government as regards inequality in different ways, including in education. I remind her that Scottish higher education policy has been regularly criticised for being regressive, that Scottish schools performed worse than ever in the Programme for International Student Assessment scores for 2016 and that it may be worth her while looking at the Scottish Government’s own record before raising these issues more widely.
The Minister is quite wrong in what he says; I ask him to correct the record, or at least to show his working. For the first time, more than 30% of pupils left school last year with a minimum of five Higher passes at a higher level, which is up from 22.2% in 2009 and 2010. The gap between those in the most and least deprived areas achieving a pass at higher level has reduced for the eighth successive year. The Scottish Government have made huge progress on education, in vast contrast to what is happening in England.
The hon. Lady misunderstood what I said. I said that the Scottish Government had been regularly criticised for having a regressive higher education policy. There is some evidence for that.
That is not true.
It certainly has been; if the hon. Lady looks at the record, she can see that. I also pointed out that Scottish schools had performed worse than ever before in the PISA rankings in 2016. She can check that; it is an objective fact, not a matter for debate. She is entitled to her views, but not to the facts.
The Opposition spokesperson, the hon. Member for East Ham—I apologise, I mean the hon. Member for West Ham (Lyn Brown); I am sure many footballers will not thank me for that. The hon. Lady mentioned table tennis tables; having been a director of the Roundhouse in London for many years, I know the value of local social involvement and engagement. I agree with it, and the Government have invested significantly in it. She seems to have forgotten that the Government will have spent almost £6 billion in 2019-20 on childcare, which is a record amount. They have doubled the amount of free childcare available for working parents of three and four-year-olds to 30 hours. The Government have a tremendous record in this area in many ways. I am glad she mentioned table tennis tables; I was playing at a free table tennis table, provided through public funding, only last weekend, in the village of Little Dewchurch in my constituency.
Will the Minister give way?
I am sorry; I have no time. If the hon. Lady had spoken for less time, I would have had more time to respond.
I will respond to the question raised by my right hon. Friend the Member for Putney. It is a very interesting attack, not just on the Treasury but on the model of Government that we have in this country. It deserves to be taken with the utmost seriousness. The point has often been made before, although not quite in the same terms. Historically, there is a tension in British Government between the Treasury as a finance ministry and the Treasury as an economics ministry; that is well understood.
My right hon. Friend’s concerns about short-termism in public policy making are also criticisms that have often been made. The extent to which this Government, their immediate predecessor and the one before that, have taken steps to attempt to ameliorate and address some of these issues is interesting. For example, we now have multi-year funding strategies for road and rail infrastructure, which we did not have before; there is a separate independent economics ministry, the Department for Business, Energy and Industrial Strategy, which is specifically designed to provide an economic counterpart to the Treasury; and, other steps have been taken to try to combat embedded institutional concerns about short-termism in public funding. Undoubtedly, there is more to do. The criticisms have weight, as has been shown by the responses that the Government have made; it is a point that the Government have well taken and are making significant progress.
There is an embedded tension between the desire for longevity in funding and the desire for democracy. If we lived in China, we would operate according to a 100-year economic plan; we cannot do that because this country has always been bound by the principle that no Government can bind their successors. It is right that we should try to build more longevity into public policy; I have touched on some of the ways in which that can be done, but I have no doubt there are many areas in which it can be done better. This embedded tension between cash constraints, managing the public exchequer, the democratic accountability of Ministers and long-term funding is one that will not be removed by abolishing the Treasury.
My right hon. Friend said that no company would ever see a contradiction between the chief executive and the financial director; I think she is mistaken. There are many companies in which the chief executive would like to spend money and the finance director, in league with the chair, prevents him from doing so. There have been many points in British government when that has been true. It is often true in a Labour Government, when the wisdom of having an independent Treasury, with a degree of control over public finances, stops a Labour Government from thoroughly spendthrift public spending policies. I close by saying that I encourage my right hon. Friend to be careful what she wishes for.
It has been interesting to hear people respond to the stark points that I deliberately made. There is more consensus on how we ought to approach investment than some of the politics suggest.
There is a tension between the fact that we really ought to be investing over the lifecycle, but in the end the electoral cycle drags our view to a more short-term basis. If Government and democracy are there to deliver for people, then we have to start addressing these issues. That does not mean removing the choice of politicians; it means helping the public understand when short-term politicians are taking decisions that have long-term costs, which the public may not want to bear.
I represent the constituency with the youngest demographic in the country, alongside Battersea. The average age of a voter in Putney is 37 to 38. Many people in my community think change is too slow. They want to see a more sophisticated strategy than, dare I say, the one that the Opposition set out. If throwing money could buy us out of the problem of weak social mobility, then the previous Labour Government would have fixed it. Clearly, it is more complex than that. We need an improved framework for investment, fiscal rules that unlock social mobility and an approach to Government finance that supports smart, long-term strategies. I am talking about a political philosophy that is ultimately driven by a belief in people and their potential, but that has to translate into practical change on the ground.
Motion lapsed (Standing Order No. 10(6)).