Let me start by saying a few words about the circumstances surrounding today’s statement. We are in uncharted waters. I understand the strong feelings around the House on these important questions, but it cannot be right for a proud, sovereign democracy to ignore the will of the people. If the House votes for the Bill this afternoon, all we will be doing is delaying what the people have entrusted to us to do, and creating even more uncertainty for our democracy and our economy through a general election that nobody wants. We cannot allow that uncertainty to distract us from delivering on the people’s priorities, so today, to give certainty where we can, I announce our spending plans for Britain’s first year outside the European Union.
After a decade of recovery from Labour’s great recession, we are turning the page on austerity and beginning a new decade of renewal. A new economic era needs a new economic plan, and today we lay the foundations with the fastest increase in day-to-day spending for 15 years. The plans I announce today mean that we will be able to build a safer Britain where our streets are more secure; a healthier Britain where we can care for people throughout their lives; and a better-educated Britain where every child and young person has the opportunity to succeed, no matter where they come from or who their parents are. We will build a global Britain where we walk tall in the world with more, not less, of a presence on the international stage; a modern Britain where we embrace diversity as a strength; an enterprising Britain where we are proud of our scientists, our inventors and our entrepreneurs; and a prosperous Britain where we live within our means and growth comes from every corner of this nation. Today we lay the foundations for a stronger, fairer and more prosperous future for our great country.
It has been three years and three months since the British people gave us their instruction to leave the European Union. If people are going to have faith in the ballot box again, we absolutely have to follow through on that instruction. That is why we have set a deadline of 31 October—just 57 days away. The Government still believe that the best outcome would be to leave with a deal, and we could not be more serious about negotiating for such an outcome. My right hon. Friend the Prime Minister has set out our position, and our central ask is clear: to remove the anti-democratic backstop from the withdrawal agreement. But without the ability and willingness to walk away with no deal, we will not get a good deal.
I know that some businesses and households are concerned about what a no-deal outcome would mean for them. I recognise that, and I understand that the uncertainty around Brexit is challenging, but this is ultimately a question of trust in our democracy. In the end, a strong economy can only be built on the foundation of a successful democracy.
Points of order ordinarily follow statements, as I know the Father of House is well aware. The Chancellor’s opening remarks were, frankly, out of order. That is the reality of the matter. [Interruption.] Order. I do not need any help from anybody chuntering from a sedentary position. With the very greatest of respect, I will provide the rulings from the Chair. I hope everybody is very clear that that is the way it works in this place. The opening remarks from the Chancellor were out of order and I exercised a degree of latitude, but the right hon. and learned Member for Rushcliffe (Mr Clarke) is right that the statement should be focused on and exclusively concerning the spending round. As it is, the Chancellor consulted me yesterday because he was concerned about the length of the statement. It should not be longer as a result of remarks that do not relate to that subject. That is all I need to say; it is very straightforward, and I know that the Chancellor the Exchequer will comply with that simple stricture.
Thank you, Mr Speaker.
Let me reassure people of this: if we leave with no deal, we will be ready. Within my first few days as Chancellor, I provided £2.1 billion of extra funding for Brexit and no-deal preparedness, and today I can announce that we will provide a further £2 billion for Brexit delivery next year as well. That means more Border Force staff, better transport infrastructure at our ports and more support for business readiness. I have tasked the Treasury with preparing a comprehensive economic response to support the economy if needed, and will work closely with the independent Bank of England to co-ordinate fiscal and monetary policy.
Sensible economic policy means that we should plan for both outcomes, and we are doing so, but we should be careful not to let our focus on planning and preparedness distract us from the opportunities that lie ahead. Brexit will allow us to reshape the British economy and reaffirm our place as a world-leading economic power. We will have the opportunity to design smarter, more flexible regulation and to cut red tape that stifles innovation. We will be able to replace inefficient EU programmes with better, home-grown alternatives. Even if we leave with no deal, I am confident that we will be able to secure a deep, best-in-class free trade agreement with the EU and pursue a genuinely independent free trade policy with the rest of the world. Deal or no deal, I am confident that our best days lie ahead.
Although the immediate outcome of the talks is uncertain, there are some things that we can be certain about when it comes to the economy and our ability to set out what we can afford to spend. As we look towards our future outside the EU, we can build on some extraordinary economic strengths. At its heart, this country is an open, outward-looking trading nation. We are at our best when we look out to the world beyond our shores. That is not just a slogan. We are the No. 1 destination in Europe for inward investment. Our language, our location, our legal system and, most of all, our people make the UK a global hub for business. We are the home of world-class businesses. A stream of ideas and innovations flows from our brilliant universities and research institutes, making the UK second only to the United States in the all-time rankings of Nobel prize winners. We also have an economic landscape that has been watched over by long-standing, well respected institutions. All that will continue as we forge a new economic relationship with the EU.
But the vision of an open free-market enterprising economy is under threat, and if that threat transpires, it will have a direct impact on our spending power. It is under threat not from the people on the other side of the channel, but from the people on the other side of the Chamber. Let us be in no doubt about the biggest threat to the UK economy. The No. 1 concern raised by businesses and international investors is not the form of our exit from the EU; the real “Project Fear” is the agenda of the Labour party. If the Opposition had their way, whole sectors of the economy—
Order. This really is very unseemly, and I am sorry to have to say that to the Chancellor of the Exchequer, who has always been unfailingly courteous in his personal dealings with me and probably with everybody else. I say what I say with a heavy heart and not without reflection. There is a very long-established procedure to statements of this kind, and it bothers me greatly that the right hon. Gentleman, in the course of a statement, seems to be veering into matters outwith—not even tangential to, but unrelated to—the spending round upon which he is focused, and I know that I say what I do with the vigorous concurrence of people who have been in this House a great deal longer than he or I. I must therefore ask the Chancellor, who I am sure is fleet of foot, so to adjust his remarks from his prepared text in order that he focuses upon that which he should focus on and not upon that which is immaterial to the statement. I am setting out the position and no one, be he ever so high, is going to tell me what the procedures in the Chamber of the House of Commons are.
Mr Speaker, you will recall that when I first took my seat as the Member of Parliament for Bromsgrove, the economy was in a very difficult and different position. Since then we have had to work hard to restore the nation’s finances, and it is precisely because we have restored the nation’s finances that we can have the spending commitments that I am about to make today. I have to—if I may, Mr Speaker—set out the context of the situation then and how we got out of it, so that we can focus on how we can generate the spending power that we are able to deploy today.
Back then, our budget deficit was 10% of GDP. We borrowed £150 billion in Labour’s last year in office. It was the highest deficit in our peacetime history. We were borrowing £1 in every £4 that was spent. The Labour party lost control of the nation’s finances, as it always does, and it fell to the Conservatives to pick up the mess.
My two immediate predecessors took the difficult decisions that we needed to bring the deficit under control, allowing us to have the spending that I am setting out today. They did that not for ideological reasons, but because running an enormous deficit meant that our debt was rising at an unsustainable rate, making our economy vulnerable to shocks and passing on a huge burden to the next generation. The deficit is now 1.1% of GDP. For the first time in a generation, public sector debt is falling sustainably as a share of our national income, and we have boosted our credibility around the world and built confidence in the UK economy again. Labour left behind a bankrupt Britain, and we have fixed it.
Thanks to those difficult decisions and the hard work of the British people, we can now afford to turn the page on austerity and move forward from a decade of recovery to a decade of renewal. Our careful management of the public finances means that we can now afford to spend more on vital public services, so today I am deciding to set the real increase in day-to-day spending next year at £13.8 billion, delivering on the people’s priorities across the NHS, education and police, and giving certainty to all Departments about their budgets for next year—clearing the decks for a Government who are delivering Brexit.
I have always believed in the importance of living within our means, and—unlike the Labour party—I will not squander the hard work of the last nine years, so even with the extra spending, we are still meeting the current fiscal rules. While the biggest challenge a decade ago was getting the deficit down, our biggest challenge today is getting our long-term economic growth back to where it was before Labour’s great recession. If we can do that, we can ensure that there can be future spending increases that can also be sustainable, boosting wages and raising living standards, which have stagnated for too long, levelling up across the regions and nations.
We need to improve our productivity—the amount that is produced every hour worked. That is not just a technical term. Slower productivity means lower wages and uneven growth across the country. If productivity had continued to grow at its pre-crisis levels, then average annual wages would be £5,000 higher. That pressure on people’s pay packets speaks to a wider sense of disillusion and unfairness, especially in so many towns and cities outside London and the south-east. Even as the economy has grown, and people have worked hard, not everyone feels they have benefited. There is a real sense of anxiety that has emerged over the years: a sense that politicians are not listening and that the system is not working; that the free market model is not living up to its promise. We are seeing divisions emerge throughout society between regions and communities, rich and poor, rural and urban, young and old. Addressing those concerns will be a serious effort, and that is what will be shown in these spending plans today. We will develop a new economic plan for the years ahead—a plan that moves beyond the last decade of economic recovery and looks forward to a decade of renewal; a plan that invests more in the future growth of this country.
We can afford to invest more because our economy is growing and our public finances are strong. We are also deciding on our fiscal approach at a time when the cost of Government borrowing is at record lows. Interest rates have been low for many years, and in recent weeks the cost of Government borrowing has fallen below 1% across all maturities. In the years after the financial crisis, many expected interest rates to swiftly rise to pre-crisis levels, but structural factors have kept interest rates low, not just in the UK but across the developed world, increasing our confidence that we will be able to continue to see low rates for a number of years. So it is my judgment today that with a strong fiscal position and record low cost of borrowing, we can invest more in our growing economy.
That does not mean that we can borrow more for ever and ever. The sustainability of our public finances depends on wider factors, not just the cost of borrowing: our population is ageing; the global economy is slowing; the challenge of decarbonisation is real. So we will not be writing blank cheques, unlike Labour. We will not be able to afford everything, and we will need to prioritise investment in policies that deliver real productivity gains and boost economic growth in the long term. We will still need to make difficult choices about our national priorities, within a clear set of rules, to anchor our fiscal policy and keep control of our national debt. So today I can announce that ahead of the Budget later this year I will review our fiscal framework to ensure that it meets the economic priorities of today, not of a decade ago.
The first priority of our new economic plan will be to rebuild our national infrastructure. High-quality and reliable infrastructure is essential to how we live, work and travel, but the truth is that across many decades Governments of all colours have underinvested in infrastructure. The quality of our infrastructure means that we have fallen behind our competitors. We are the fifth largest economy in the world. It is not good enough that we are so far behind on infrastructure. It is not good enough that so many commuters spend their morning staring at a “Delayed” sign at their train platform. It is not good enough that our small business owners waste so much time because of slow internet speeds and poor mobile communications. We are going to change that. We want faster broadband for everyone in the country, quicker mobile connections and better signal coverage, cleaner energy, greener transport, and more affordable fuel bills for our homes and offices. We want more trains and buses to connect the great cities of the north. We want to build world-class schools and hospitals. We want to push the frontiers of science and technology and turbocharge our ambition on research and development. We want to build and invest in every region and every nation of this great United Kingdom. From the motor highway to the information highway, we will settle for nothing less than an infrastructure revolution.
To keep spending under control, we will of course set a high bar for funding projects. They will have to show real value for money with credible delivery plans and budgets, starting with the Government’s rapid review of HS2. We will target that investment at national priorities like regional growth and decarbonisation. Let me take this opportunity to thank my hon. Friend the Member for Chelmsford (Vicky Ford) for her tireless work as chair of the all-party parliamentary group on infrastructure. So yes, we will use the Government’s resources to kickstart the infrastructure revolution, but we will also do more to give private investors the confidence to back these projects too. We want all this to be underpinned by strong, independent institutions. We set up the National Infrastructure Commission in 2015, and we will continue to rely on its expert advice as we look carefully at other institutional reforms that might be needed. So our infrastructure revolution will be strategic and carefully planned.
Speaking of revolutionaries, let us contrast that with Labour’s approach. I will invest in new infrastructure that will grow the economy, and Labour will borrow hundreds of millions to renationalise unproductive assets and then run them into the ground. The choice for the country is clear, between a wasteful ideological Opposition with outdated ideas and a Government who will kick start a decade of renewal for this country.
Today we lay the foundations of a new economic plan. We are turning the page on a decade of necessary work to fix the public finances and writing a new chapter in our public services. Health and Education are not just the names of Departments; they are lifelines of opportunities, just as they were for me when I was growing up: the teachers and lecturers who persuaded me to study economics in the first place—[Interruption.]
Health and education are lifelines of opportunities, just as they were for me when I was growing up: the teachers and lecturers who persuaded me to study economics in the first place; the police officers who kept us safe when the street I grew up in became a centre for drug dealers; the NHS that cared for my dad in his final days. These are not just numbers on a spreadsheet; these are the beating heart of our country, and we invest to support them today.
As I turn to the details of today’s announcement—[Hon. Members: “Hooray!”] Wait—it is coming. Let me first thank the dedicated officials in the Treasury for all their hard work delivering what I am told is the fastest SR in history. Let me particularly thank the Chief Secretary to the Treasury, my right hon. Friend Member for Richmond (Yorks) (Rishi Sunak), who takes the approach to spending you would expect from an adopted Yorkshireman. He has displayed his typical mix of energy, courtesy and rigour. Let me just say that there is no productivity problem in the Chief Secretary’s office.
Next year, I will add £13.4 billion to the plans for total public spending, including £1.7 billion pounds added to capital spending. These extra funds take the real increase in day-to-day spending to £13.8 billion pounds, or 4.1%. That means I am delivering the fastest increase in day-to-day spending for 15 years. That funding allows us to start a new chapter for our public services and to fund the people’s priorities. Our decisions today have been guided by our ambition to build a safer Britain, a healthier Britain, a better educated Britain and a more global Britain.
My family grew up on a road in Bristol that a national newspaper described back then as Britain’s most dangerous street, but to us it was just home. After we left, my brother became a policeman and has been in the force for over 25 years. I have seen the impact the job has on the lives of those who are courageous enough to do it. So today I pay tribute to the bravery, courage and dedication of our hard-working police officers. As Home Secretary, I saw first-hand how the demands on our police forces are changing and increasing. Yes, traditional crime is down by a third since 2010, but the threats from terrorism have escalated and evolved. The internet is changing how criminals operate and break the law, and we have seen too many horrifying stabbings on Britain’s streets. With our frontline officers reporting that they are overstretched, it is clearly time to act and do more.
Today I can announce a 6.3% real-terms increase in Home Office spending—the biggest increase in 15 years. That means £750 million to fund the first year of our plan to recruit 20,000 new police officers, with an extra £45 million this year, so that recruitment can start immediately, getting the first 2,000 officers in place by the end of March. Let me thank my hon. Friend the Member for South West Bedfordshire (Andrew Selous), my right hon. Friend the Member for Wokingham (John Redwood) and my hon. Friends the Members for Isle of Wight (Mr Seely), for Nuneaton (Mr Jones) and for Telford (Lucy Allan) for championing the police and police resourcing,
The threats facing our police officers are evolving too, so the way we resource them will have to evolve in three areas. First, serious and organised crime is the most deadly national threat faced by the UK, costing the nation at least £37 billion a year. The scale and complexity of this threat means that we need to do more to develop our response, so I am announcing today a formal review to identify the powers, capabilities, governance and funding needed ahead of a full spending review next year.
Secondly, this year sadly has seen more attacks on places of worship, including mosques and synagogues. That is unacceptable in a diverse, open, tolerant society like ours. To protect our religious and minority communities, I am announcing today that I will double the places of worship fund next year. I thank my hon. Friends the Members for Hendon (Dr Offord) and for Finchley and Golders Green (Mike Freer) for their tireless work in combating hate crime. I am also today announcing £30 million of new funding to tackle the scourge of online child sexual exploitation.
A better resourced police force will deliver better outcomes for the British people, and it will increase the demands on our already overstretched criminal justice system. So today we invest more in our criminal justice system to manage that increasing demand, with a 5% real-terms increase in the resource budget for the Ministry of Justice, an increase in its capital budget to £620 million next year and an extra £80 million for the Crown Prosecution Service. Taken together, today’s spending round will dramatically improve the functioning of the criminal justice system, with more prosecutors, a reformed probation system, better security in prisons and funding to begin delivery of 10,000 new prison places.
The spending round is delivering on the people’s priorities, and there is no higher priority than the NHS. Last year, we increased NHS spending by an extra £34 billion a year by 2023-24. That was the single largest cash increase in our public services for more than 70 years. Today, we reaffirm our commitment to the NHS with a £6.2 billion increase in NHS funding next year. We are investing more in training and professional development for our doctors and nurses, and over £2 billion of new capital funding, starting with an upgrade of 20 hospitals this year, and £250 million for groundbreaking new artificial intelligence technologies to help solve some of healthcare’s biggest challenges today, such as easier cancer detection, discovering new treatments and relieving the workload on doctors and nurses.
We cannot have an effective health system without an effective social care system too. The Prime Minister has committed to a clear plan to fix social care and give every older person the dignity and security that they deserve. I can announce today that councils will have access to new funding of £1.5 billion for social care next year. Alongside the largest increase in local government spending power since 2010, and on top of the existing £2.5 billion of social care grants, that is a solid foundation to protect the stability of the system next year and a down payment on the more fundamental reforms that the Prime Minister will set out in due course.
But that is not the only action I am taking today to support vulnerable people. On any given night, there are too many people sleeping rough on our streets. The human cost is too high. Today we do more, with £54 million of new funding to reduce homelessness and rough sleeping, taking total funding to £422 million next year. That is a real-terms increase of 13%. I thank my hon. Friend the Member for Harrow East (Bob Blackman) for his tireless work in fighting homelessness.
A healthy environment is a precondition for a healthy population, and that is why we have set out an ambitious 25-year plan for the UK’s natural environment. Today we go further. Leaving the EU provides an opportunity to set world-leading environmental standards, and we are giving the Department for Environment, Food and Rural Affairs £432 million of funding to do so. We are providing £30 million of new money to tackle the crisis in our air quality and another £30 million for biodiversity, including the expansion of our Blue Belt programme—a vital part of our campaign to protect precious marine species such as turtles, whales and seabirds. We are stepping up our leadership on climate change, with new funding for the Department for Business, Energy and Industrial Strategy to develop new programmes to help meet our net zero commitment by 2050, and we will set out further details of our plans for decarbonisation in the infrastructure strategy later this year, keeping our promise to be the first Government in history to leave our environment in a better condition than we found it.
Alongside providing for the health of our population, the most important task of a Government is to educate the next generation. Education and skills are at the heart of our vision for national renewal. The economy is not just about GDP or PSNB—there are many broader tests that matter too. Are children growing up to be better off than their parents? Do hard work and talent matter more than where you are born? A good school and inspirational teachers are the most effective engine for social mobility. That is why today we are delivering on our pledge to increase school spending by £7.1 billion by 2022-23, compared with this year.
Next year, we will make sure that day-to-day funding for every school can rise at least in line with inflation and rising pupil numbers, with the schools that have been historically underfunded benefiting the most. Every secondary school will be allocated a minimum of £5,000 for every pupil next year, and every primary school will be allocated at least £3,750 per pupil, on track to reach £4,000 per pupil the following year. This funding will mean that teachers’ starting salaries can rise to £30,000 by 2022-23, so that we can attract more of the best graduates into teaching. We have allocated nearly £1.5 billion per year to contribute to teachers’ pensions, and we are providing over £700 million to give more support to children and young people with special educational needs—an 11% increase compared with last year.
Nearly every other Department I am announcing today will be funded for just one year, but we recognise the importance of schools being able to plan, so we are announcing today a full three-year resource settlement for schools, levelling up education, improving standards and giving every young person the same opportunities in life wherever they live in our great country. Let me particularly thank my hon. Friends the Members for Bexhill and Battle (Huw Merriman), for Cheltenham (Alex Chalk) and for St Albans (Mrs Main) for championing schools.
The education system is about more than just schools. For too long, further education has been a forgotten sector. Over 1 million young people continue their education beyond the age of 16 at colleges or sixth-forms—and I know because I was one of them. I went to my local FE college. If I had not had the teachers and the lecturers that I did, I would not be standing here today as Chancellor. Further education transformed my life, and today we start transforming further education, with a £400 million increase in 16-to-19 education funding next year. The base rate will increase to £4,188, a faster rate of growth than in core school funding. Let me congratulate my right hon. Friend the Member for Harlow (Robert Halfon) and my hon. Friend the Member for Harborough (Neil O’Brien) on their representations on further education.
The Government will also increase early years spending by £66 million to increase the hourly rate that is being paid at maintained nursery schools and other childcare providers that deliver the Government’s free childcare offer. I want to thank my right hon. Friend the Member for Chipping Barnet (Theresa Villiers) for raising this issue with me.
Our young people deserve high-quality services and support even after the school day is over. Earlier this year, following a recommendation from my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith), I visited the fantastic OnSide youth zone in Barking. It was a brilliant example of how much Britain’s network of youth centres adds to their local communities, getting young people off the streets and changing lives for the better. Today, I am asking the Department for Digital, Culture, Media and Sport to develop proposals for a new youth investment fund, and to set out plans to build more youth centres, refurbish existing centres and deliver high-quality services to young people across the country.
Better schools, higher pay for teachers, more youth centres—that is how this Government will improve social justice and create opportunity for all, but our ambitions for a truly national renewal do not stop there. We are a one nation party and this is a one nation Government, so at the heart of our new economic plan is the need to level up across this country. Every region and nation in the United Kingdom will benefit from the new funding I am providing today for the police, schools, health and social care, and much more. Today, we confirm funding of £3.6 billion for the new towns fund, providing a wave of investment to our regions and places, and better transport links across the country will be a crucial part of levelling up across the nation. We have already allocated a total of £13 billion for better transport across the north. We will fund the Manchester to Leeds route of Northern Powerhouse Rail, and we will set out more details—far more details—in the autumn on our new infrastructure strategy.
Mr Speaker, you may not know this, but my dad was a bus driver. Having watched him work, I know that local buses can be a lifeline for many communities. Today, we put the wheels back on the great British bus, with more than £200 million to transform bus services across the country. We are funding ultra low emissions buses, and we will trial new on-demand services to respond to passenger needs in real time. We will set out more details of our new buses in due course—once my right hon. Friend the Prime Minister has finished painting models of them.
Our new economic plan will not stop at the borders of England; it will be a plan for all the nations of the United Kingdom. In Scotland, decisions taken in today’s spending round will provide over £1.2 billion of extra funding for next year. We are taking a further step today to support Scottish farmers. In 2013, when the UK Government allocated common agricultural policy funding within the UK, Scottish farmers lost out. Today, we correct that decision, making available an extra £160 million for Scottish farmers—something I know my hon. Friends from Scotland on the Conservative Benches will be pleased to hear. I would also like to take the opportunity to thank my friend Ruth Davidson for everything she has done for that great nation.
In Wales, today’s spending round means an extra £600 million of funding for the Welsh Government. In Northern Ireland, we are providing an extra £400 million from today’s announcements. I welcome the case that has been made by the DUP for improved hospice care and for support for those who have been tragically wronged in the contaminated blood scandal. Those are rightly devolved matters, but I sincerely hope that the Northern Ireland Administration will use some of the new funding that we are providing today to address those issues. Taken together, today’s announcements will give the devolved Administrations the biggest spending settlement for a decade.
Throughout our history, Britain has always been at its best when we are open, global and outward looking. Trading with the world beyond our shores has always been key to Britain’s economic prosperity. As we seize the opportunities of Brexit, we can establish new partnerships and trade relationships across the globe. For too long, we have let those trading relationships wither. As my right hon. Friend the International Trade Secretary would be the first to acknowledge, this is a disgrace. Today, we invest in securing Britain’s influence in the world. We support diplomacy, with £90 million of funding for 1,000 new diplomats and overseas staff, and 14 new and upgraded diplomatic posts. We will boost trade with £60 million to extend the GREAT campaign for next year.
If hon. Members are in any doubt about Britain’s important role on the world stage, they should just look at the bonanza of international festivals and events that I am funding today. In December, we will welcome the NATO leaders meeting. Next year, we will host the COP 26 discussions, if our bid is successful, thanks to the leadership of my right hon. Friend the Member for Devizes (Claire Perry). In 2021, we will host the G7, and in 2022, we will host the Commonwealth games in Birmingham. Today, I can confirm the Government’s total commitment to this celebration of sport will be over half a billion pounds. The games will be a huge boost for the west midlands, and I would like to congratulate Andy Street on the leadership he has shown in that region.
One of my personal highlights of the summer was meeting the England cricket team in the Downing Street gardens. That world cup winning side showed us the importance not just of talent and hard work, but of diversity—a skipper from Ireland, a bowler from Barbados and an all-rounder from New Zealand. As with our cricket team, so with our country: we are the most successful multi-ethnic democracy in the world. I am proud to live in a country where someone with my background can be Chancellor of the Exchequer. This spending round embraces modern Britain in all its diversity. We make available today an additional £10 million to continue the integration areas programme that I first announced in 2018 as Communities Secretary. That fund will continue to support thousands of the estimated 1 million adults in the UK who do not speak English well or at all.
Openness to talent from around the world matters for our economy, too. Once we have left the EU, we will be able to create a points-based immigration system that meets the needs of the UK economy and the British people. We have already dropped arbitrary immigration targets. We have recently announced a new, highly flexible fast-track visa for scientists. Today, I am putting funding in place to give victims of the Windrush scandal the compensation that they deserve. This is all part of confirming, once and for all, that Britain will always be open to the world’s brightest and best talent.
Nowhere are our values of openness and tolerance better expressed than in international aid. The UK aid logo can be seen around the world—on health clinics, school books, emergency food suppliers. Today, we protect our commitment to spending 0.7% of our national income on aid.
Global Britain is about projecting our values into the world, but we know that hard power matters, too. Britain already spends more on our defence and national security than any other country in Europe. We are one of only seven countries to meet the 2% commitment to NATO. Today, we go further still, with an additional £2.2 billion of funding for the Ministry of Defence—a real-terms increase of 2.6% for the budget next year—increasing again the share of our national income we spend on defence and national security.
This year is the 75th anniversary of the D-day landings. We pay tribute to the sacrifices of the extraordinary generation of British soldiers who fought and died during that campaign. Today, I can announce £7 million of funding for the Normandy Memorial Trust to complete its memorial overlooking Gold beach, where so many troops came ashore. We will also support the veterans of today’s wars, as we confirm the funding today for the new Office for Veterans’ Affairs. I congratulate my hon. and gallant Friend the Member for Plymouth, Moor View (Johnny Mercer) on his tireless work in championing veterans.
I have set out today a big increase in public spending that will pay for more police and safer prisons, more nurses and better hospitals, and more money for schools and further education. I now turn to the remaining Departments across Whitehall, those that have not been protected over the last decade. Investing in the people’s priorities inevitably means difficult decisions elsewhere. Every spending review presented to this House over the past 15 years has had to find cuts from those Departments. This party has never shied away from taking the difficult decisions to make sure that we live within our means. Those decisions were tough, but they have paid off, so I can announce today that no Department will be cut next year. Every single Department has had its budget for day-to-day spending increased at least in line with inflation. That is what I mean by the end of austerity: Britain’s hard work paying off, and our country living within its means and able to spend more on the things that matter.
I am delivering today’s spending round in unusual circumstances. Understandably, much of our attention and the attention of the country is focused on the important matters before the House later today, but we must not forget that Brexit is not all that matters to the British people; it is not the only topic at the dinner table. Today’s spending round ensures that if you fall ill, you can get the care and support that you need; that when you drop off your child at the school gates, you can trust that they will get the best possible education; and that when you walk down the street, you can feel safe and secure. Today, we move from a decade of recovery to a decade of renewal. Yes, we will keep control of the public finances, but we will invest, too, in the long-term growth of this country.
It was just six weeks ago today that this new Administration took office. The Prime Minister promised that we would not wait until Brexit day to deliver on the people’s priorities, and today we meet that promise with a new chapter for our public services, a new plan for our economy and a new beginning for this country. I commend this statement to the House.
I welcome the Chancellor to his new job, although, after that, I am beginning to miss the old one. I believe the Chancellor may be the first person to hold that role whose father—like my own—was a bus driver. I would like to welcome him to his new job. I also hope that what they say is true: you wait ages for one son of a bus driver to become Chancellor of the Exchequer, only for them to be followed soon after by another.
I am afraid that that is probably the end of what the Chancellor and I have in common. I thank him for abiding by the convention of providing me with a copy of his statement. It was a compendium of meaningless platitudes. I ask him to take a message back to the person who obviously drafted the statement. Could he tell Mr Cummings, the man who cancels the Chancellor’s own speeches, sacks his staff without telling him and then has them—
Mr Speaker, I believe that the right hon. Member for Uxbridge is shouting at me. The last time he was shouting at someone, they had to call the police. I do not think we need to go as far as that. Mr Cummings, who had the member of staff escorted—[Interruption.]. You might need to call the police.
Thank you, Mr Speaker. The member of staff was escorted off the premises by an armed police officer. Can I just say that that is no way to treat a member of staff? I ask the Chancellor to tell Mr Cummings, on the spending review: do not insult the intelligence of the British people. The people will see today’s statement as the grubby electioneering that it is.
This is not a spending review as we know it. This is straight out of the Lynton Crosby handbook of opinion-poll politics. The Tories have checked what the top three or four issues in the polls are and they have cynically judged how little money they have to throw around to try to neutralise those issues and the concerns of people. To come here and try to fool us with references to people’s priorities is beyond irony.
When did this extremist, right-wing Tory group ever put the people first—ever? Were they putting the people first when they froze child benefit year after year or when they introduced universal credit, a brutal regime? The result this summer, according to the Childhood Trust, was children scavenging for food in bins because they did not have free school meals in the summer holidays. Were they putting people first when they cut council budgets, and prevented 1 million elderly and disabled people from getting the social care they needed? Were they putting people first when they cut social services budgets so much that we now have record numbers of children coming into care and 155 women a day turned away from refuges?
We are expected to believe that these Tories, who for years have voted for harsh, brutal austerity, have had some form of damascene conversion. I tell you, they treat our people with contempt. Announcements have been dripped out over the last week or so, all designed to give the impression of a spending spree—announcements dictated by No. 10 and meekly accepted by a Chancellor too weak to conduct a full multi-year spending review as he should, even before the Government’s majority disappeared yesterday.
We have seen the so-called headroom, which the Chancellor’s predecessor had claimed was needed to prepare for a no-deal Brexit, spent instead on preparing for a general election. We all know that the Chancellor may not be in his job very long and maybe that is why he felt he needed to rush a spending round based on figures from March, rather than wait for the Office for Budget Responsibility to tell him officially what the rest of us have known for some time: that the economy, after nine years of Tory austerity, is in bad shape and, yes, is getting worse, stagnating.
A full fiscal event would have meant new economic forecasts and the need for a fiscal framework to give Departments security over the Parliament, allowing them to plan ahead after years of cuts. Instead we get this sham of a spending review. The Tories are claiming to be against austerity after years of voting for it. They are claiming to be using headroom, which the Chancellor knows has largely disappeared, yet they are still failing to deliver a real end to austerity.
Let us take a look at some of the announcements that the Chancellor has confirmed today. For schools, the Chancellor announced new spending of £1.8 billion next year. The Institute for Fiscal Studies has previously estimated that it would cost £3.8 billion this year alone to reverse the cuts that have been made. Was the Chancellor aware, when drawing up his spending plans, that the Department for Education budget as a whole has been slashed by almost £10 billion in real terms since 2010? The reality is this, is it not: heads will still be sending out begging letters and teachers will still be buying basic materials for their classes?
The Government have some front to mention childcare after hundreds of Sure Start centres closed on their watch, undermining the start in life for our children. They mention that £700 million was announced for children with special educational needs and disabilities. Does the Chancellor know that the Local Government Association found that councils already face a funding shortfall for SEN children of £1.2 billion by 2021? The reality is that these children will still be left vulnerable and in need, with their futures in jeopardy. That is what it means today.
Further education colleges are getting a one-off £400 million. Does the Chancellor really think that they should be grateful when he has cut £3.3 billion from them since 2010? The reality is that the economy will continue to desperately need skills and training, and our young people will still be denied them.
On the NHS, the announcement of £1.8 billion spending for the NHS has already been exposed as largely a reannouncement of existing money. There is no mention, is there, of the £6 billion backlog in the maintenance we need in our hospitals? Our hospitals are still using buckets to catch water coming through leaking roofs. Operating theatres are closed because of the lack of maintenance over the past nine years of austerity. The Government mention GP waiting times. Any announcement on GP waiting times is likely to turn out to be totally undeliverable. Why? Because we have just lost 600 full-time equivalent GPs over the past year. They are just not there because of nine years of lack of investment.
On local government, any new money for local government today will be a drop in the ocean compared with the 60% funding cuts that councils have suffered in recent years. What effect does the Chancellor estimate his announcement today will have, for example, on the crisis in children’s services that we have highlighted at every spending review and budget over the past two years? There has been a 29% drop in Government funding after eight years and as a result vulnerable children are left at risk.
On homelessness, the Chancellor mentioned £54 million of additional spending to tackle homelessness. There has been a 160% increase in people sleeping rough. In the past two years, people have died near the doors of Parliament. The LGA says that there is a £100 million spending gap just to get by. The most vulnerable in our society have been put at risk as a result of the Government’s austerity over nine years, and he expects us to celebrate an inadequate attempt to plaster over the problems we have.
On bus services, the Chancellor mentions £200 million allocated to them. That is a third of the £645 million that has been cut from bus services since 2010.
The Government seem to forget that they cut 20,000 police officers. The Chancellor expects us to celebrate what he has announced today, when we now know that at best there will be only 13,000 on the streets. Can he tell us how many will be frontline? We will support him in the investment to protect religious establishments and communities, and we will support him in tackling the problem of protecting young children from online abuse—of course we will—but the real protection comes from the safer neighbourhood teams that we constructed under Labour and that we had in every one of our wards, with a sergeant, police officers and police support officers, all of whom have been wiped out. [Interruption.] An hon. Member shouts, “Not true.” He needs to go out into the community and talk about the increase in violent crime in our communities as a result of what has happened.
The Chancellor spoke of money to create another 10,000 prison places. Can he just tell us: are they the same 10,000 prison places promised by previous Justice Secretaries in 2016, 2017 and yet again in 2018? Can he answer how many suicides and how many assaults on staff have taken place because of the Government’s cuts to prison staff over the past nine years? Will he, or someone in the Government, ever apologise to the Prison Officers Association for ignoring its warnings about the effect of staff cuts on safety in our prisons?
Those are just some of the announcements we heard today, but there are many that we have heard very little about. What about those who have been effectively forgotten in the Chancellor’s opportunist, one-year spending round? What about real structural reform to address the social care crisis, which we have been waiting for, for how many years—three, four? All we have now is a sticking plaster of £1 billion, which will leave this sector in the same sorry state as it is in now. What does that mean in real terms? It means 1.4 million people not getting the care they need and 87 people a day dying before they get the social care they need to support them.
I understand that the Chancellor’s mates, the bankers, were pushing the other day for more tax cuts and less regulation. I suppose they think they have a soft touch in No. 10 and No. 11. I hope he sent them packing. When we compare how much has been cut from the basic social services that we and vulnerable people need for support, with what is calculated to be, by the end of the next couple of years, £110 billion given out in tax cuts to corporations, we can see why people do not believe the Government have any concept of social justice or equality. Does the Chancellor have any words for the thousands suffering—[Interruption.] The right hon. Member for Uxbridge and South Ruislip (Boris Johnson) said, “Pathetic.” I’ll tell you what develops real pathos. Many of us in our constituency surgeries are having to deal with people who are dependent on universal credit. Yet the Chancellor did not have any words for the thousands who are suffering from the brutal roll-out of universal credit—the people we represent who are now queueing up at food banks as a result of the cuts. Traditionally, the spending review concentrates on departmental expenditure limits, rather than social security. I appreciate that. But there was no reason why the Chancellor could not have signalled the Government’s intent at least to end the misery and hardship that their policy is causing and to end the roll-out of universal credit as it now is.
Most shockingly, the Chancellor has given no sign that he understands the scale of the climate emergency facing us and the urgency of the significant Government response that is needed. He mentions the climate but allocates minuscule amounts of funding to address an existential threat to our society. I hope that in the next few weeks Members will remember those who got no comfort from today’s announcements, if the Government push ahead with their plans for tax cuts that mainly benefit the wealthy, as is widely rumoured. I hope that Members will remember all those individuals and services that were deemed too unimportant by the Chancellor to address today. I tell him that whenever that election comes—in any election campaign—he can be sure that the Labour party will remind those people and the voters what nine years of austerity have done to them, and of today’s failure to act. The opportunity was there today really to end austerity—to start reversing austerity—and to give people some hope. What a missed opportunity.
We remember when we were told that there was no alternative, and that there was no money. We all know the lines—we have heard them enough times. They were not true then and they are not true now. The majority of economists have always agreed that there was another approach that the Government could have taken, rather than austerity, and we always argued—and we were right—that austerity was a political choice, not an economic necessity. As recently as March, the Conservatives ploughed on, saying that there was no alternative. Look at them now suddenly proclaiming an end to austerity—after 125,000 excess deaths as a result, after £100 billion has been taken out of the economy, and after the worst decade for wage growth since the 19th century—just because there may be an election around the corner. After all that, to deliver a pathetic sum to spending Departments, who are on their knees at the moment, is just adding insult to injury.
This is a Government that is not just callous and uncaring, but hypocritical as well. This is not a Government—it is a racket. They pretend to end austerity when they do nothing of the sort. They pretend to plan ahead while they plot a no-deal Brexit that would devastate parts of our economy. They are a Chancellor and a Prime Minister, as my right hon. Friend the Member for Islington North (Jeremy Corbyn) said yesterday, with no mandate, no morals and no majority. They are trying to distract us from the crumbling public services and stagnating wages that they have created after a decade in charge. It is almost as if they forget they have been in government for nine years. They seek to fool the British public with fantasy promises of a Brexit deal that they knew they could not deliver and they were not even trying to negotiate. This short-lived Government will go down in history for its unique combination of right-wing extremism and bumbling incompetence. This is a Government that betrays the people it is meant to serve—a Government that will never be forgiven, but will soon be forgotten.
At least the shadow Chancellor did not try to throw a little red book at me this time. He attacks the decisions that were made over the last decade to restore the nation’s finances. He attacks the same free enterprise system that has delivered the prosperity that our nation enjoys. He refuses to understand that a strong economy is absolutely necessary to pay for public services.
Why have we made these decisions over the last decade that get us to where we are now, where we can properly end austerity for good? Labour trashed the economy the last time it was in power, like it always does. The shadow Chancellor talked about cuts that were made to public services over the last decade. Let us just remember what we inherited—the absolute mess that we inherited—in 2010: a deficit that was 10% of GDP, with £150 billion in borrowing in that year. It was the biggest budget deficit in our peacetime history and the biggest budget deficit of any large industrialised nation. Labour was borrowing £5,000 a second. There was the deepest recession that we had seen in almost 100 years. The shadow Chancellor talked about the bankers. Which Government gave us the biggest banking bailout in global history? It was the last Labour Government. That was our inheritance.
It was absolutely clear that had that unsustainable rate of spending continued, with no link between what was coming in and what was going out, the country would have gone bankrupt, just like it did with Labour in the past, when we had to go cap in hand to the International Monetary Fund. That is the legacy of every Labour Government. It took Conservatives to clear up Labour’s mess, bringing the deficit under control, bringing debt under control—having it falling for the first time in a generation in terms of the proportion of national income—reducing taxes for 40 million people and backing millions of businesses. And we have had a jobs miracle, with more people employed today in Britain than at any other time in our history and the lowest unemployment rate since 1975.
The shadow Chancellor talked about the impact of our policies on economic growth. Let me tell him about the impact on economic growth: since 2010, since the Conservatives were back in office, our economy has grown by 18.7%—faster than the economies of France, Italy and Japan. I will tell him about the risk to the economy—the only risk to the economy is from the shadow Chancellor, his policies and the entire Labour party. They have a tax hike for everyone. They have a tax hike if you happen to own a garden, if you want to give a gift to someone, if you want to go on holiday, if you own a home—whoever you are, they have a tax hike for you. They want to raid private pensions. Just this week, we learned more about their plans. They want to confiscate 10% of almost all our large companies. That is £300 billion that they want to confiscate from pensioners’ private plans. They also want to renationalise industries—is it seven, eight or nine? I do not know how many industries they want to renationalise—
Order. Please resume your seat, Chancellor of the Exchequer. I gently point out that there is a difference—long understood and observed—between a debate, in which there is a free play of arguments, ideas and commentary on policies, and a statement. The Chancellor, with a little encouragement from me, delivered a statement and he has been questioned on the statement. To the questions, he is supposed to provide replies. This is not an occasion for a general political debate—[Interruption.] No, I know exactly what the situation is and I have very much more experience of these matters than some of the people who think that they can criticise, so I do know what I am doing. The answer is to provide the answers to the questions—[Interruption.] Order. Provide the answers to the questions and then other colleagues will have the opportunity to question the Chancellor. It requires just a little versatility on one’s feet.
I have to say, Mr Speaker, I did not detect many questions, so I will finish very quickly to give an opportunity for Members to ask proper questions.
The simple truth is that Labour is unfit to govern. It would not deliver Brexit. It would wreck our economy over again. Hard-working families will pay the price and we will not let it happen.
I genuinely welcome my right hon. Friend to his appointment and congratulate him on it, and I sincerely wish him every success in carrying out his extremely important duties. I also welcome the many spending announcements he made. In particular, I single out further education, to which successive Governments have been trying to give better priority for the last 30 or 40 years. I hope that it shows in effect. Will he reassure me that the announcements that he has made are consistent with the fiscal rules of his predecessors, that we are still subject to the same limits on the deficit that were laid down, and that he is still aiming to achieve year-by-year reductions in debt as a proportion of GDP? If he can give me those assurances, it demonstrates what he has just said: that he is able to make these welcome announcements because austerity has been brought to an end by the achievements of his two predecessors over the last nine years.
I welcome the warm words of my right hon. and learned Friend. I remember all the excellent work he did when he held this position and I hope that I can learn from the way in which he performed his duties as Chancellor.
My right hon. and learned Friend asks me a specific question about the fiscal rules. This spending round is within the current fiscal rules. According to our forecasts, we expect to meet both the key rules of borrowing staying inside 2% of GDP and seeing a further fall in debt as a proportion of GDP. I would, however, point him to some of the other comments I made in my statement about looking again at the fiscal rules, particularly with an eye to taking advantage of record low interest rates and investing more—credibly—in an infrastructure revolution.
I thank the Chancellor for advance sight of the statement.
The gimmicks and gems the Chancellor has presented today are nothing more than an effort to distract us from the crippling crisis that the Government are dragging us into. If that was meant to be a pre-election Budget, if I was a Back-Bench Tory I would be quaking in my boots right now. In less than two months, we could face a no-deal Brexit, unless that threat is removed today by the House of Commons supporting the cross-party Bill to secure an extension. The threat cannot be underestimated. We are standing here facing increased uncertainty due to Brexit. The outlook for our economy and for public finances remains extremely uncertain. The economy has already taken a hit, as we saw GDP contract 0.2% in the second quarter of 2019. As Paul Johnson of the Institute for Fiscal Studies put it in The Guardian,
“Making big fiscal announcements in a period of great economic uncertainty means we will have little idea how sustainable or costly decisions made this week will be. The risks are exacerbated by not having up-to-date forecasts from the OBR.”
While the Chancellor has announced increased spending today, this will not help to end austerity; it will only pause some of the hardship in the short term. Meanwhile, Brexit will bring lasting and long-term damage to our economy, and to our citizens’ livelihoods.
With the economy already faltering, the Chancellor’s predecessor has warned that a disruptive no-deal Brexit could have a £90 billion hit on the Exchequer and suggested there would be no money available. A no-deal Brexit would be devastating for Scotland, with the potential to destroy 100,000 Scottish jobs and cost every person the equivalent of £2,300 a year. Brexit caused UK manufacturing activity to contract in August for the fourth consecutive month to the lowest level since 2012. According to the BBC, sterling fell below $1.20 on 3 September to its lowest since October 2016. The Chancellor pretends his Government are putting people first, when in reality they are putting the cult of leave campaigners and their Brexit obsession before the interests of the economy and citizens.
Yesterday in Scotland the First Minister announced our programme for government, putting tackling climate change, protecting our economy and reducing inequality at the heart of our policy-making agenda. Here we are talking about food and medicine shortages, reducing opportunities for our young people and complete Brexit chaos. For the people of Scotland, this is a tale of two Governments, and only the SNP Scottish Government are acting in our interests.
The IFS is clear that pre-election bribes do not mean an end to austerity—that decade of austerity that cumulatively cut the Scottish block grant by more than £12 billion in real terms, left people having to choose between heating their homes and feeding their children and reduced social security payments for disabled people four times faster than the cuts for others.
If the Tories seriously wanted to make life better for citizens, they would give Scotland its fair share. This means the Chancellor should repay the £140 million of VAT owed to Police Scotland in refunds. We have been arguing for years for the convergence uplift moneys to be returned. There are 50 mentions of it in Hansard, 45 of them from the SNP, and most of the others in response to SNP questions. I am pleased with the pressure that we and our colleagues in the Scottish Government have brought to bear on this Government. It also means that Scotland must get its £3.4 billion share of the DUP’s dirty deal Brexit bung. Will the Chancellor rule out any new confidence and supply agreement with the DUP that would give them more money before we get the £3.4 billion we are owed?
Furthermore, it would appear that the Chancellor will overshoot his Government’s borrowing targets. Will he confirm that, and will he tell the House what borrowing rule changes he will introduce in the Budget? Will he guarantee that Scotland will not lose any of the EU funding it currently receives? The UK Government must, at the very least, match the compensation scheme already put in place by the EU and the Irish Government for the beef and suckler sectors in Ireland.
Finally, the Government must scrap the proposed £30,000 salary limit on foreign nationals entering the UK. Scottish Government analysis has found the average EU citizen in Scotland adds £10,400 to Government revenue and £34,400 to GDP each year. The proposed £30,000 salary limit on foreign nationals to the UK has been shown to be unworkable and should be scrapped. While the Tories balance the books on the backs of the most vulnerable and disadvantaged, the SNP Scottish Government are leading the way to deliver a fairer Scotland.
The hon. Lady complains about the settlement with respect to Scotland. I remind her that, under the Barnett block grant, Scotland will see an increase of £1.2 billion in its spending power next year. On top of that, it will receive an additional £160 million for Scottish farmers, thanks to the representations of Scottish Tory MPs, who seem to actually care about Scottish farmers. Despite that, she complains.
The hon. Lady talked about uncertainty. I would have thought, therefore, that she would have welcomed today’s statement. I think she referred to it as a Budget. First, there is a spending round, which is focused only on spending, not taxes or capital investment, and designed to give certainty to all Departments across Government on funding for the next year. Without it, they would not have that certainty. She claimed that Brexit uncertainty was damaging the economy. Need I remind her that, since the referendum, we have had record growth in British businesses, record growth in jobs—almost 1,000 new jobs created a day, with more people employed today than ever before—and record inward investment? If she wants to end uncertainty, she should support this spending round and make sure we leave the EU on 31 October.
Order. There is extensive interest in the Chancellor’s statement, but I remind the House that there is a ten-minute rule motion to follow and other important business that must come onstream absolutely no later than 3 o’clock, and that therefore there is a premium on brevity from Back and Front Benches alike. I also make the obvious point that realistically lots of people who want to contribute will not have the opportunity to do so.
Wokingham and West Berkshire Councils need money for social care and schools. The current funding is not adequate. I am grateful to the Chancellor. This is very welcome. Does he agree that, at a time of world slowdown, led by a manufacturing recession in several leading countries, a boost to the economy is much needed here and that this is part of that boost?
The Chancellor claims that this is a boom in public spending, but we all know how big the bust has been, and nowhere has it been bigger than in DWP spending. Its spending will see a real-terms rise of 1.9%, which is welcome, but I ask the Chancellor: taking into account increases in the state pension and population increases, will he commit to no further cuts within that budget to working-age benefits?
The hon. Lady will know that this spending round covers day-to-day departmental spending and that the vast majority of DWP spending is not covered by day-to-day spending. So, when we get to a Budget, we can say much more about DWP spending. She will also recognise that this spending round will help more vulnerable people by protecting our economy and making sure it continues to grow and to generate jobs, which is the best way out of poverty.
I welcome the increase in defence spending, which is well justified by the increase in the threats that the country faces. However, can my right hon. Friend reassure the House that any revision of the fiscal rules will never make the Government vulnerable to the charges of fudged targets, reference periods and spending classifications that characterised the last Labour Government?
I thank my right hon. Friend for his support for the increase in defence spending and I can give him that assurance. When the fiscal rules are looked at in time for the next Budget, that will be done openly, transparently and clearly, which is exactly what is needed to maintain market confidence.
I welcome the Chancellor to his post, but is it not the case that headteachers, chief constables and NHS managers simply cannot rely on his fancy figures if Britain crashes out of the EU?
The independent watchdog, the Office for Budget Responsibility, said just two months ago that a no-deal-Brexit would add £30 billion a year to public borrowing for the next four years. What insurance has the Chancellor taken out against that massive risk to his spending plans? Is this not just a con?
The real revolution that Britain needs is a revolution in social mobility and equality of opportunity. I welcome the announcement of investment in schools, but may I encourage the Chancellor to revisit investment in children’s services if he really wants to close the opportunity gap? May I also encourage him to look at reform closer to home, in his own Department? The Treasury is simply not fit for purpose when it comes to understanding how to invest in Britain’s biggest asset, which is its human capital—its people.
My right hon. Friend speaks with great experience and is right to highlight issues relating to children’s services. I can assure her that in the numbers that I have given today she will see, beyond the excellent investment in schools, investment across the board that will benefit children, especially vulnerable children, through social services in particular. She also made a good and valid point about human capital and the need to view it in a different way, and that is something that I am very interested in pursuing in the Treasury.
If Dominic Cummings had not sacked his special adviser, he might have come up with a better speech.
I note that the Chancellor did not mention the growth figures, which is not surprising given that our economy is shrinking and every major sector of it—services, manufacturing, construction—is struggling. Is it not the case that, whether we are talking about the future of those industries or the spending plans that the Chancellor has set out today, every single promise is at risk from the no-deal recession that his Government are pursuing with their reckless no-deal policy?
The hon. Gentleman claimed that I had not mentioned growth figures. There are no new growth figures today because there is no OBR forecast, but I did refer to growth: in fact, I drew attention to the IMF forecast that we would grow faster this year than France, Italy and Japan.
The hon. Gentleman also talked of the risk to the economy. The risk to the economy is the uncertainty of not leaving the EU, and we must leave by 31 October. If he wants to end that uncertainty, he knows what he must do tonight.
I warmly welcome the spending review. I welcome the extra £1.2 billion for Scotland and the extra £160 million for our farmers, and I was delighted to note the increase in Ministry of Defence spending. I urge the SNP Scottish Government to spend that money on education, health, policing, and connectivity in my constituency. Does the Chancellor agree that what we should be doing—what the SNP should be doing—is welcoming this extra investment, which shows the strength of being part of our United Kingdom, and removing the threat of independence, which would unleash the economy in Scotland?
I agree wholeheartedly. Let me take this opportunity to thank my hon. Friend for—along with other Conservative colleagues—helping me to focus on the issue of Scottish farmers, which has helped to secure the £160 million. She is also right about the extra £1.2 billion for Scotland. It is a huge amount—a record amount—but, unfortunately, one thing that we can be sure of is that the SNP will waste it.
Notwithstanding the best efforts of some Opposition Members to talk the economy down, I am glad that the Chancellor has been able to make these announcements. I welcome the £400 million for Northern Ireland, which will help us to recruit police officers, reduce waiting lists and give some relief to school budgets. Does he recognise, however, that, if he is to realise his goal of levelling growth across the United Kingdom, much more still needs to be done to ensure that resources are sent to Northern Ireland and other regions of the United Kingdom to ensure that growth is experienced equally across the UK?
My right hon. Friend has made an important point. I thank him for his welcome for the extra £400 million for Northern Ireland, and also for his reference to levelling growth across the country. In my statement, I referred a number of times to the need to ensure that we have growth in every part of our great United Kingdom. That will require infrastructure investment and I hope that, when I set out the infrastructure strategy later this year, he will welcome it for those reasons.
Let me take this opportunity to thank my hon. Friend for all the work that he has done in relation to self-build homes and more generally, in promoting easier access to homes for everyone. We are discussing that issue with the Ministry of Housing, Communities and Local Government, but I will pursue it further and get back to him.
I am surprised that the Chancellor has the cheek to call this a spending review because it is nothing of the sort. It is no surprise that the Office for Budget Responsibility did not dignify it with its own economic and fiscal analysis, as normally happens with spending reviews.
When the Chancellor made his three-year commitment to school spending, he said that he recognised the importance of schools’ being able to plan. May I ask him whether local authorities should also be able to plan for the future when investing in social care and youth services and tackling homelessness? If he thinks that they should be able to do that, why did they not get a three-year settlement as well?
Let me first say gently to the hon. Lady that this is a spending round. I have not referred to it as a spending review. As she may know, a spending review normally covers a number of years, whereas a spending round covers a single year. She said that I had not “dignified” it with an OBR forecast. No spending review or spending round comes with an OBR forecast; that is normally the case with a Budget, and there are two forecasts a year. I thought that she might already know that, but I am happy to let her know now. She also talked about the funding of sectors such as social care and youth services. I did refer to those: I set out plans for next year, but also plans for the future involving, for example, the new youth investment fund.
The Chancellor clearly recognises the importance of growing the economy, because it is through a growing economy that we can afford public services. I understand that, with a view to achieving growth—particularly in the north—there have been discussions about the possible creation of free ports in the north of England. Carlisle Lake District Airport, which is owned by the Stobart Group and which commenced commercial flights recently, has the ambition to create an airport free port. Would the Chancellor support that?
Instead of wasting £4 billion on no deal, can the Chancellor just spend some money in the Rhondda, please? Just 2% of that figure would pay for finishing off the Rhondda Fach relief road, rebuilding Llyn-y-Forwyn school, buying new trains, which might actually be clean and run on time, for the Treherbert line, providing a new home for the Rhondda sea cadets, and paying for a new PET-CT scanner for south Wales.
The good news is we do not have to choose between investing in leaving the EU and investing in Rhondda or anywhere else in the country, and the reason is that, under the Conservatives, we have a strong economy. But if the Labour party were ever in charge, we would not have the money to invest anywhere.
I thank the Chancellor for his statement and particularly the focus on rebuilding our infrastructure. Of course he is right to ensure that it delivers value for money. May I therefore ask that he has another look at the lower Thames crossing to ensure that it is delivering value for money and that it delivers its primary aim of relieving congestion at the existing Dartford crossing?
The general point my hon. Friend makes about infrastructure and value for money is of course absolutely right, and as we spend more on infrastructure we must make sure that that principle is always maintained. He has invited me to take a further look at the lower Thames crossing. I will be happy to do that and to discuss it with him.
The Chancellor tells us that the challenge of decarbonisation is real, as if he has only just discovered it. But we face a climate emergency, so why have we not had a spending round that would actually match that climate emergency? Green groups are urging him to commit at least 2% of GDP on immediate climate action. Is he going to do it, or is this just going to pile up with all his other broken promises?
This spending round is focused on day-to-day resource spending. The hon. Lady may know that some very important investments that will need to be made on decarbonisation will be capital investments and that is just not covered today, but that does not mean to say it is not going to happen and is not taken seriously. However, one step that we have taken today is to provide more funding to the Department for Business, Energy and Industrial Strategy to work with the Treasury on the decarbonisation plan to meet the net 2050 targets; there is additional funding of £30 million to work on that programme. There are also other measures I have announced today that would help—for example, the £200 million on ultra-low emission buses. I hope the hon. Lady would welcome that, too.
I welcome the Chancellor to his position. The leaders of Conservative-led Blaby District Council and Harborough District Council, both in my South Leicestershire constituency, would greatly welcome a meeting with the local government finance Minister. Will the Chancellor help to organise that, so that the Minister can discuss the additional funds that the Chancellor has announced today?
The Chancellor will know that the Select Committee on Home Affairs has called for a long time for substantial additional resources for policing and that is important, so can he confirm that the £750 million he refers to is a real-terms increase and is all central Government funding, as he will know that central Government funding for policing has been cut by £3 billion since 2010? Can he also confirm that this is not yet enough to fund the restoration of the over 20,000 police officers who have been cut since 2010, and it also does not reverse any of the cuts of 7,000 PCSOs and 5,000 specialists since 2010?
What I can confirm to the right hon. Lady, and I hope she will find this helpful, is that for the Home Office my starting point was to roll over all funding in real terms that it had received this year, so that was the baseline, which had not been done before. I added to that the extra costs that would be required, with the major cost being for the extra officers. So the real-terms increase in the Home Office budget is £800 million. That is an increase in the real-terms growth rate of 6.3%, the biggest real-terms increase in the Home Office budget in 15 years.
As we saw on the Public Accounts Committee during the Labour years, if there are rapid increases in public spending, particularly on health, they are invariably accompanied by increasing levels of unproductivity, so how is the Chancellor going to maintain his laser-like focus on economy and efficiency and ensure that a greater proportion of our spending is not sucked into administration, away from the frontline? In other words, tax and spend on its own does not work.
My right hon. Friend makes an important point. He talked about it in the context of health, but we could apply it to the spending of many other Departments. He is absolutely right that as we allocate this new spending, especially if it is multi-year funding amounting to billions of pounds, it is imperative that we make sure every penny is spent wisely. That work is done jointly with the Department, but also in a unit in the Treasury. We will have a laser-like focus on efficiency, and if we need to take action we will not hesitate.
I will say two things on that to the right hon. Gentleman. First, as I said in reply to a previous question, for welfare and the DWP today’s settlement covers only day-to-day resource spending and, as he will know, most spending on benefits is not day-to-day resource spending. Secondly, to answer his question on how this spending round will help people in such vulnerable positions, what I have announced today underlines the fundamental economic strength, and that will bring more confidence, meaning our economy can continue to grow and continue to generate jobs—and jobs will always continue to be the best sustainable way out of poverty.
I welcome the Chancellor’s statement, including the £1.2 billion extra that will be coming to Scotland, which is an increase on the real-terms increase we already received in the Budget last year. May I especially thank him for the £160 million that will be coming back to our constituencies in rural funding, which was demanded by NFU Scotland and requested by my constituents, and is delivered by the Scottish Conservatives, with his help?
My hon. Friend is right on every count; it has been delivered by Scottish Conservatives, and may I take this opportunity to thank him for all the representations that he made to me, along with his colleagues, and for achieving this result? It just shows that Scottish Conservatives really care about their constituents, unlike the SNP.
This morning I met with NHS trust leaders from around the country; they painted an absolutely shocking picture of infrastructure that is crumbling, unsafe and broken. They welcome the unfreezing of £1 billion so that they can get on and fix some of that, but it does not go far enough; there is a £6 billion backlog, and they are asking for us to reach the levels of comparable countries in spending on NHS infrastructure. Will the Chancellor meet me to discuss their serious concerns and the measures that we need to take to move this forward?
I thank the hon. Lady for welcoming one of the changes I made a few weeks ago, which was to unlock or bring forward £1 billion of new capital investment in our hospitals and an additional fresh £850 million on top of that to upgrade 20 hospitals. She makes an important point, but today’s announcement is about day-to-day resource spending whereas she is talking about another important area, which is capital. I will make sure she gets the meeting with Ministers she wants.
I very much welcome this additional investment in our vital public services. The “Britain’s Leading Edge” report that I helped launch in July evidenced an historical bias in the funding of our public services between England’s regions and major cities. Will my right hon. Friend use the spending review to end this bias, so that regions such as Cornwall can play their full part in the Treasury’s economic renewal plans?
I agree with my hon. Friend, and she has made this point powerfully on a number of occasions. In the past, for example, we talked about making sure that police funding reflects local need. I hope she will have noted that in my remarks today I talked a lot about levelling up across the country, whether in infrastructure investment or in investment in public services, and I can give her an assurance that Cornwall will not be left behind.
I look forward to sharing plans for the Southern Rail access to Heathrow, which I hope will form an important part of the Chancellor’s new infrastructure strategy.
This month, Hounslow clinical commissioning group was due to present the full business case for the planned and urgently needed Heston health centre redevelopment to its governing body. However, the project is on hold after questions about whether the local improvement finance trust scheme, which was originally advised by the Department of Health and Social Care as the best-value funding option, could still go ahead following confusion around the Treasury’s policy on LIFT schemes last year. Will the Chancellor meet me to review the situation, so that we can see whether the existing plans can be approved or whether any of the alternative capital funding he has announced will be available to enable this important and urgent development to go ahead?
I thank the Chancellor for the extra money for local government and social care, which will prove hugely impactful for East Sussex. I should like to make particular reference to the schools spending increases. The increase to £5,000 for secondary schools and £4,000 for primary schools next year will help East Sussex schools to almost catch up with some of the wealthier parts of the country. I should also like to thank the teachers, headteachers and governors who have fought their campaign, with me, with respect, reason and absolute passion to deliver the best for their schoolchildren.
I want to take this opportunity to thank my hon. Friend for his campaigning and for the way in which he has worked with the Treasury and the Department for Education on this. I think he is referring to the f40 campaign, with which I am very familiar as a constituency MP. I am pleased that we have been able to make this huge step change in school funding, which I know has been welcomed across the country.
After all the announcements over the summer, I had hoped for more detail today. The Chancellor and his Department might have a laser-like focus, but he can rest assured that the Public Accounts Committee will be delving through these figures and holding him to account.
As others have said, the Chancellor has indicated that he is going to change the fiscal rules. We already have an 85% ratio of debt to GDP. Can he advise us of the tolerance level that he would go up to in that debt level, and is he considering increases in taxation?
I welcome the scrutiny from the hon. Lady’s very important Committee. She might not have enough time, but there is a lot of detail in the book has been published alongside my statement today. She referred to a figure of 85% for the ratio of debt to GDP. I think the last Office for Budget Responsibility forecast in March had it at 82.2% and on a declining trajectory. On the changes to the fiscal rules, I have set out that I am looking at the fiscal rules in time for the Budget. There may well be changes, but I do not want to set out what they will be today, because we have not decided.
I welcome the Chancellor and his statement. Does the spending round contain any provision for the establishment of a UK development and investment bank, which I believe would be an extremely strong vehicle to make the kinds of investments that he talks about in the public and private sectors and internationally?
Today’s statement does not focus on capital, but my hon. Friend’s suggestion would certainly involve capital investment if it happened. I know that he has spoken to the Economic Secretary to the Treasury about this, and we are happy to have further discussions.
The people of Liverpool have suffered a horrific 64% cut in funding for local services. I was pleased to hear the Chancellor say this afternoon that no Department will be cut next year, but is there an absolute guarantee that Liverpool City Council will not have any real-terms reductions in its funding for local services next year? And when will he make the money available to complete the new Royal Liverpool Hospital?
The hon. Lady will know that local council funding will be a combination of grant funding and locally raised funding, so it is hard to say specifically what might happen to any particular council’s funding, as it will depend in large part on what that council chooses to do. However, I hope that I can give her some reassurance by telling her that, following today’s announcement, the core funding for local government next year across England will receive its highest increase in a decade.
In the north, there are 42,000 more people in work than there were a year ago, and 280 businesses are being supported through the £400 million northern powerhouse investment fund. I welcome the Chancellor’s announcement of the infrastructure revolution, and indeed the acceleration of the HS3 Northern Powerhouse Rail project. Will he ensure that, throughout the next year, the northern powerhouse is kept at the heart of Government thinking on the economy and on what we can do in the north to close the productivity gap and really deliver for the country?
Yes, I can absolutely give my hon. Friend that guarantee. I should also like to congratulate her on the excellent work that she has done locally to bring this issue to the attention of the Treasury, especially in relation to infrastructure investment in the north. She has done a fantastic job, and I would be happy to meet her and listen to her ideas, especially on infrastructure.
Order. I am sorry to disappoint remaining colleagues, a point of which I did give notice at an earlier stage. I should, just as a courtesy, advise the House that it is the terms of the order the House of yesterday that require me to stick to time and to move on to the next business. I am genuinely sorry that some colleagues are disappointed.