Debate resumed (Order, 27 October).
Question again proposed,
That income tax is charged for the tax year 2022-23.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
I will begin, if I may, by congratulating the Secretary of State for Business, Energy and Industrial Strategy, as it is the first time that we have faced each other across the Dispatch Box since the birth of his new baby. Many congratulations to him. If he needs some representation to make sure that he gets his paternity leave, I am available to help.
I will begin this debate on a point of consensus. We have a Government who have been in power for 11 years. They have been 11 years of low growth, stagnant wages and falling living standards. I am old enough to remember when this characterisation of our economy was seen as controversial, but at his party conference, the Prime Minister said:
“We have had…10 years of flatlining wages”.
The question at the heart of this debate is whether the Government truly recognise the error of their ways. Does the Budget help to tackle the deep inequalities we face, including the immediate cost of living crisis? Does it support our businesses so that they can deliver the good jobs and decent wages that we need? And does it create the long-term partnership between the public and private sectors to create the jobs of the future, in particular in zero carbon? I am afraid that the answer on all three counts is no.
Let me start with the immediate cost of living crisis facing so many families. Less than 24 hours since the Budget was delivered, it is unravelling because of the chasm between the claims of Ministers and the reality faced by working people. Listening to the Chancellor yesterday, it was clear that he is living on a totally different planet. He told us that he would deliver an age of optimism, but when we take off the Instagram filter, all he offers is an age of stagnation: low wages, low growth, high taxes—more lost Tory years. These are the facts that the Chancellor did not tell us yesterday, but they have emerged this morning.
This morning, the Resolution Foundation said:
“Real wages are set to fall again next year”.
The Institute for Fiscal Studies tells us that, over the next year, a median earner will find their take-home pay falling by £180 a year in real terms. Paul Johnson, the director of the IFS, says that the outlook for living standards is
“awful… High inflation, rising taxes, poor growth keeping living standards virtually stagnant for another half a decade.”
In fact, the IFS estimates that, on the numbers published yesterday, real wages in 2026 will still be lower than they were in 2008. For all the boasts of the Chancellor, the Prime Minister and others, all that the British people are facing under their Government is squeezed wages and living standards, as far as the eye can see.
My right hon. Friend is making an excellent speech. Does he agree that, on top of the trend of low wages, it is doubly hurtful that working families will be faced with increasing electricity and gas bills, with no relief on that, rising food prices, and potentially a difficult Christmas, with possible supply shortages and a lack of supply of Christmas presents?
My hon. Friend is completely right and I will come to that point in a moment. The Government will no doubt have all kinds of excuses, but this is a sin of commission, not just omission, in the sense that the Government are actually doing things to make the problem worse.
The problem is that the Chancellor could not bring himself to admit any of this yesterday. Here is the issue: it is not just that he did not say any of this, but it is like the Government actually believe their own rhetoric, and the Budget is the result. Yesterday we saw raid upon raid on the living standards of working people: council tax hikes, hidden in the Budget document—not announced by the Chancellor; a stealth raid on the self-employed worth £1.7 billion over the coming five years—not announced by the Chancellor; and of course the national insurance hike on ordinary families confirmed.
Maybe I am a bit old fashioned in this respect, but let us remember that this is a direct breach of the promise that every Conservative Member made to their constituents at the general election. What did they call it in their manifesto? Alongside a picture of the Prime Minister—drawing on his long and unblemished record of truth telling and candour—it said:
“My Guarantee… We will not raise the rate of income tax, VAT or National Insurance.”
I look forward to them all explaining at the next general election why they have broken that promise. The hon. Member for North East Bedfordshire (Richard Fuller) is nodding. Perhaps he would like to explain why they have broken their promise.
I have been goaded into intervening by the right hon. Gentleman, who asks a very direct question. I think the honesty will be that we will say that we wanted to protect the public finances, and that post covid, given the choice of either borrowing more money or asking those with the broadest shoulders to bear the burden to cover those costs, we decided that we should do the latter.
It is certainly not those with the broadest shoulders who are being affected, and I thought the reason that the Government raised taxes was for social care. It is yet another guarantee from the Prime Minister that is not worth the paper that it is written on.
The IFS tells us this morning that taxes will be £3,000 more per household than when the Prime Minister came to power. As my hon. Friend the Member for Leeds West (Rachel Reeves) said in her excellent speech yesterday, this is about the choices that the Government are making. Also buried in the Red Book is that the Chancellor saw fit to cut taxes on the banks by more than £1 billion because he was so worried about the burden they were facing, just like last year when he made the choice to cut stamp duty for second home owners because he was so worried about them. He was obviously less concerned about the burden of higher energy prices facing millions of British people, because he refused to cut VAT on fuel as he should have done.
In a way, the most shameful part of the Budget is the Chancellor’s refusal to reverse his £1,000 cut to universal credit, which hit 6 million families. For all the smoke and mirrors, this morning we know the truth about universal credit. According to the Resolution Foundation, three quarters of families on universal credit will be worse off, even after the changes to the taper. It says that the taper changes
“will be overshadowed by last month’s £6 billion cut to entitlement: three-quarters of families on UC will lose more from the £20 cut than they gain from the Budget changes. Even if we also take into account the…National Living Wage, the poorest fifth of households will still be an average of £280 a year worse off overall.”
The fact that Conservative Members were wildly cheering a policy yesterday that sees millions of working families far worse off shows, I am afraid, that they do not get it either.
When I wander down Stockton High Street, I see the signs of poverty everywhere. I see young people with no hope on their faces and no hope of getting a job. I see people who probably have to shop in the charity shops because it is pretty obvious that they have not been able to buy any new clothes for a while. I see families going discount store to discount store to buy one item because it happens to be a couple of pence cheaper than it is elsewhere. Did my right hon. Friend see anything in the Budget to correct that?
My hon. Friend puts it incredibly well. That is why the boosterism of the Chancellor saying that it is an age of optimism will ring so hollow for so many people in our country.
You cannot build a new economy when you are hitting working families with a triple whammy of higher national insurance, higher prices and cuts to universal credit. That is more of the same. It is the Conservative economic model—year upon year upon year of stagnation for the British people.
Let me next come to the question of support for business in the Budget—the direct responsibility of the Business Secretary. Our businesses have been heroic during the covid crisis, closing their doors when asked and stepping up when they needed to. But while the economy may have reopened, the crisis is not over for so many of them. They face debts incurred during covid. They face the costs of the supply chain crisis. The Office for Budget Responsibility is very interesting on that, because of course there is a global dimension to it but there is definitely a British dimension too. They face the failure to plan for the changes arising as a result of Brexit—the OBR is very informative on this—and they face the energy price crisis.
Against this backdrop, I say gently to the Business Secretary that, as he will know, many of our businesses feel that the Government are engaged in finger pointing rather than finding solutions, with haulage firms told it is all their fault, when they warned the Government for months about the impending HGV crisis; those in the manufacturing industry—briefed against, not, to be fair, by him but by the Treasury—told that they are running their businesses badly because energy costs are soaring; and exporters tearing their hair out about the red tape of the trade agreement with the EU but told they just need to get their act together. What businesses want most of all, as he will know, is not to have a war with the Government but for their voice to be heard.
To be fair to the Business Secretary, a few weeks ago he did try to act to hear the voice of those facing the most acute short-term challenge—energy-intensive industries facing the energy price crisis. He knows that this is no ordinary situation. Our industries are facing not just the normal differential of price with our competitors but differentials far, far higher. I have met the Steel Council; he has met the Steel Council. He knows how tough it is. We know that he knows how tough it is because, to be fair, he told us two weeks ago how bad things were and said that he was talking to the Treasury. The Treasury was not very polite in return. He is chuckling from a sedentary position; I am on his side on this one. The next day, having obviously decided that he did not like being briefed against, he announced—I had my dealings with the Treasury when I was in government but I do not remember ever quite doing this—that he had made a formal request to the Treasury for support for energy-intensive industries. He was taking a stand.
That was on Monday 12 October, more than two weeks ago. On that day, a source told the BBC, rather encouragingly, that
“everyone in government understands the importance of this situation. We need to solve this quickly.”
It might have been the Prime Minister, who was on holiday at the time, or somebody else. That created a real expectation that this Budget would take action on this pressing issue that the Business Secretary has been publicly championing. So where is the help for our glass industry, our steel industry, our chemicals industry and our ceramics industry? These are some of the most important jobs in our country, valued in communities across all regions and nations of the UK. Does this not speak volumes about the Treasury’s—and, I am afraid, the Government’s—wanton disregard for some of the most foundational industries in our country?
It is also important that the House remembers that 3 million people have still been completely excluded and forgotten by this Government since March last year. There was nothing for them in yesterday’s Budget. They have been neglected yet again.
That is a very important point. The championing of ExcludedUK is a very important issue, and my hon. Friend is right to point it out.
This is about choices. Amazon gets help from the super-deduction, but our energy intensives are left out in the cold. I hope that in his reply, the Business Secretary will tell us where things stand for the energy-intensive industries, because they have been in touch with me saying, “What is going on? What is happening?” There is just complete silence from the Chancellor.
Let me talk about our high street businesses, because they face higher national insurance and business rates. I welcome some of the short-term measures in yesterday’s Budget, but it is not unfair to say that fundamental reform has been ducked yet again. The CBI said this in its Budget response yesterday:
“But the hard truth is that wholesale reform to unlock investment was rejected today. The Government missed the opportunity to truly reform a business rates system that diminishes Britain’s high streets and factories.”
I was quite mystified yesterday, because the Chancellor attacked the idea of fundamental reform of business rates, a system with a genuinely level playing field between traditional high streets and internet businesses. Four successive Tory manifestos have promised precisely that reform: 2010, 2015, 2017 and 2019.
When the Business Secretary was a humble Back Bencher—I think he was writing “Britannia Unchained” at this point—he was pamphleteering. I am not against pamphleteering; I have done some of it myself. He was a Back Bencher with his ideas, and he said we need
“a system that is fair for both traditional and internet companies.”
He is now the Business Secretary. Why does he not deliver it? He knows, because he talks to the business community a lot, that this is a massive issue for our high street businesses. They rightly say, “Look at the burden on us and look at the burden on tech businesses. Look at the unfairness.” That is why my hon. Friend the Member for Leeds West is so right to champion this issue.
The longer-term issue we face is how to create the growing economy that we need. Not for the first time, the Government talk a good game. We have the branding of the Budget. We know that the Chancellor is incredibly keen on branding, and his own personal branding more than anything. The Government are a bit of a sideline. It is more Rishi branding than Government branding, I think it is fair to say. There are some knowing looks from Members on the Government Benches. The Rishi branding of the Budget is the “plan for growth”. I have to say that a plan for growth that has growth of 1.3% at the end of the Parliament is not much of a plan. Growth will be just 1.7% when the economy returns to trend. That is woeful by historical standards. It is the biggest challenge we face as a country. This is an important point, because when people wonder how the Government manage to combine the highest taxes for 60 years and public services that are creaking, the terrible growth performance of our economy is a significant part of the answer.
The hon. Lady is completely right about that. She anticipates my next point brilliantly; it is a useful segue. If we want to understand why growth is so anaemic, she is right that we need look no further than the Chancellor’s failure to seize the opportunities for green growth. This is an important point: the prudent and responsible economic call—I suspect the Business Secretary agrees—for economic growth is to invest at scale in the transition to a zero-carbon economy. Let us be honest, it is now a completely open secret that the problem is that the Chancellor is not a believer, and it showed yesterday. As we prepare to host the most important international summit ever on climate change, as delegates gather from all around the world, and as the eyes are on Britain, what did he unveil as his flagship measure yesterday? To cut air passenger duty for domestic flights. You literally could not make it up. People want good and affordable rail services, but the plan for rail seems to have been postponed again, and instead there will be 400,000 more domestic flights as a result of that decision. Once again, that shows that the Treasury is not signed up to the agenda.
I am such a nerd that I was reading the OBR report last night and there is an interesting and illuminating bit on, I think, page 176—Members can check—which says, in OBR language:
“the…costs involved in getting the rest of the way”—
to net zero—
“remain significant and their apportionment between businesses, households, and government…remains largely unclear. This leaves the costs associated with the transition to net zero as a major source of longer-term fiscal risk.”
Let me underline that point for the House. The July 2021 OBR report, which for the nerds among us is brilliant, and which I strongly recommend to Members as bedtime reading—Madam Deputy Speaker is laughing at me, or perhaps with me—warned of the danger of not acting on the climate and of debt climbing to eye-watering levels as a result. When my hon. Friend the Member for Leeds West said yesterday that debt would rise to 300%, I noticed a Conservative Member at the back look at his hon. Friend and say, “Oh that can’t be right,” but that is what it says. The interesting thing about that report is that it warns not just about the danger of not acting, but about the danger of delay. It says that delaying action on the climate by a decade will double the cost of the transition as we lock in high-carbon choices.
Does the right hon. Gentleman share my disappointment that the Budget had so little for the potentially huge industry for the UK of offshore floating wind energy? He talks about delay. If we delay, we will lose out to other countries in that race, and they will not show any mercy on that front.
The hon. Gentleman makes an important point. We have been successful in offshore wind generation, and it is right to acknowledge that. The ground was laid by the last Labour Government, but I will leave that to one side. We have been successful at generating the wind energy, but not the jobs. He is completely right that we have not delivered for many people when it comes to jobs.
As I was saying, not acting increases the cost, so the prudent responsible choice is to invest. I will mention some key sectors, because again, there has been a deafening silence. I come back to the steel industry, which is such a litmus test. It needs about £6 billion of investment to get to net zero by 2035. The view is shared on both sides of the House that it needs to get to net zero and that it is a foundational industry that we need and that is incredibly important to communities across the country. There are 20 demonstration projects around Europe but none here at the moment. It requires a partnership of the public and private sectors and needs both sides to invest. There is a crucial role for the Government in that.
We have set out a commitment of up to £3 billion over a decade to create that partnership with the steel industry so it can make the transition and we can keep those good jobs with good wages that are vital to many communities. It is a test of us as a House of Commons.
The Government talk about a £250 million clean steel fund, but even that has still not been delivered. I hope that it is still Government policy, but it seems to be in the balance and might have been got rid of. That is not good enough. The Treasury has to understand that unless we invest in steel, automotive and hydrogen, we will fall behind in the global race, as the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) said.
Order. Will the hon. Gentleman please refer to the right hon. Member for Doncaster North (Edward Miliband) as the right hon. Gentleman, not “you”? When someone says “you” in this House, they mean the Chair. We have to start getting that right; it is unprofessional not to.
That is definitely the Whips Office’s talking point. The reality is—[Interruption.] I will tell them: our last manifesto said that
“the substantial majority of our emissions reductions”
should happen by 2030, and that is absolutely right. We should be going faster and we should not be delaying. The interesting point is that delay is wrong not just for the climate, but economically. That is the brilliant platform on which my hon. Friend the Member for Leeds West, the green shadow Chancellor, is standing. We will fall behind if we do not act, and I suspect that, in his heart of hearts, the Business Secretary knows it.
On the right hon. Gentleman’s comments about credibility, I have sat on two north-east Labour councils, Darlington Borough Council and Durham County Council. When the Conservatives were in charge in Darlington, Labour wanted the target to be 2030. When Labour was in charge in Durham, it wanted the target to be 2050. Is there consistency in Labour party policy or not?
It is completely consistent, yes.
Let me turn from industry to retrofit and insulation. Of all the things that were missing from the Budget and that I thought the Treasury would have been persuaded about, the one that is as close as we can get to a fiscal, economic, climate no-brainer is a proper 10-year retrofit and insulation plan. If we invest, we cut bills and carbon emissions, make ourselves less exposed to the international gas market, and create tens of thousands of jobs. I do not get why it has not happened. All we get are piecemeal schemes and no proper plan. I will not even go into the fiasco of the green homes grant—emissions from buildings are higher than they were in 2015.
My right hon. Friend will recollect our discussions about the tremendous success of the warm zones project at the turn of the century. We went door to door, day in, day out, to install thousands of measures that saved consumers a tremendous amount as well as reducing emissions. Does he agree that we need that systematic approach if we are going to crack the problem?
I completely agree. I actually take a crumb of comfort from the Business Secretary, when he defends the sorry saga of the green homes grant, pointing to some of the money given to local authorities and what they did. That is what we need at scale—locally led, house by house, street by street. We are miles behind other countries.
On green investment, a philosophical difference is emerging. I worry that the Government will increasingly leave individuals and industries on their own to face the costs. I do not think that is true of the whole of Government, but the Treasury remains a fundamental block to the green investment that we need. There was a whole saga about its net zero review and the fact that it emphasises short-term costs rather than long-term gains. Frankly, that is a big problem for our country.
I will make some progress and finish.
Labour would deliver a climate investment pledge of £28 billion extra every year for the rest of the decade. That is an investment in bringing down energy bills; delivering affordable public transport and cleaner air; and backing British industries with a real plan for jobs and wages. That is what real action on the climate emergency and industrial strategy looks like.
Given the cost of living crisis, the immediate issues facing business, and the need for longer-term investment, this is not the Budget we require. It does not make choices to help working people; it hits working people. It cuts taxes for the banks but raises taxes for workers. It deserts key British industries and it fails to invest, as we need to, in the green transition. If the big challenge of the future is how we build an economic model that rights the wrongs of the past, this Government cannot be the answer and nor was this Budget.
It is great to see you in the Chair again, Madam Deputy Speaker. I thank the right hon. Member for Doncaster North (Edward Miliband) for his congratulations on my becoming a father for the first time at the youthful age of—well, I will not say what my age is. I am pleased that that has happened.
I am also pleased to see the right hon. Member, in his usual way, give a comprehensive speech that lasted for nearly half an hour. The downside was that I had heard it all before. I was particularly gratified to see him at Prime Minister’s questions. It was great: a trip down memory lane. I remember being a humble Back Bencher, as he put it, when he did that same thing at PMQs. There was that same litany of doom and gloom, and it will prove no more effectual in 2021 than it did in 2015, when many of my hon. Friends were returned with enhanced majorities.
The Budget was an extremely successful occasion. It demonstrated clearly that there is continuing support for the economy. It demonstrated the immense, unusual and unprecedented interventions in the economy because of the dangers we faced from the global pandemic. The right hon. Member will remember that only a year ago people were prophesising that we would have record unemployment or early-1980s levels of unemployment. What happened? Because of the Chancellor’s interventions, well-crafted policy and the plan for growth, there was no employment disaster. Unemployment is very low by historical standards. The economy is growing faster than it has done for decades, and none other than the OECD says that the UK will be the fastest growing country among the G20 next year.
May I congratulate the Secretary of State on the happy news in his family? How many businesses does he think will go out of business this autumn because they owe the Government money from covid loans, cannot pay their energy costs and are worried about the weight that the increase in wages from the national minimum wage and national insurance contributions will put on their 12-month forecasts?
I thank the hon. Lady for her congratulations. However, I am surprised that she should express concern about the increase in the national living wage. I never thought I would live to see a Labour MP denigrate and decry that. We want to see a higher-wage, higher-productivity-based economy, and we are working hard to ensure that.
Let me make some progress. To intervene so soon after an intervention is unusual. I will come back to the hon. Member.
During the pandemic, people and businesses have demonstrated remarkable levels of resilience. I fully agree with the right hon. Member for Doncaster North when he says that business has been heroic and people have been heroic. I am also immensely proud of the work done by the British Business Bank, for which my Department is responsible. Its schemes supported people and our economy to the tune of £80 billion, with Government-backed finance for 1.7 million businesses. That comes to the point made by the hon. Member for Hornsey and Wood Green (Catherine West). When it comes to the fundamentals of the economy, the Government are securing our economy and getting Britain back to work.
Contrary to all the prophecies of doom and gloom that recently came from Opposition Members, the Office for Budget Responsibility now expects our recovery to be quicker and the economy to return to its pre-covid level at the turn of this coming year. As the OECD and the International Monetary Fund show, there is considerable expectation that the UK will rebound strongly. In that context, our task turns to ensuring that our people and our businesses have ability and opportunity. They will not simply look back and complain about the situation that we have come through. They are positive and forward-looking. They believe in their country—unlike many Opposition Members, dare I say. We will achieve a strong rebound not by splashing cash indiscriminately as a number of Labour Chancellors did, dare I say, but by spending taxpayers’ money wisely to foster an environment that encourages innovation and growth.
I turn to the net zero agenda. I fully appreciate that many years ago the right hon. Member for Doncaster North was Secretary of State for Energy and Climate Change—I do not think I was in the House at that time—and I know that he shares the view that net zero is absolutely one of the most important strategic objectives of any Government.
I gently suggest that the hon. Member looks at the work of the Jet Zero Council, which my right hon. Friend the Chancellor and I have been pushing. We want the UK to be the head of very low carbon emission flying. I am very enthusiastic about that. We will be leaders in that technology, and I do not think it makes sense simply to penalise and turn our backs on aviation. We should be trying to enhance aviation and decarbonise it, and that is exactly what we intend to do.
I have to make progress. I know that hon. Members are springing up and down because they wish to make interventions, but I am sure they will be making speeches later in the debate.
We on the Government Benches understand what has sadly eluded the grasp of Opposition Members: we must create competition. We must back business and incentivise innovation in a free-market economy, not go back to a state-run, Soviet-style command economy.
The Labour party manifesto has been mentioned. I remember reading it. Like the right hon. Member for Doncaster North, I am somewhat of an insomniac—more so now, I dare say—so sometimes I have to read lots of these things. It said that we should get to net zero by 2030. As my hon. Friend the Member for Crewe and Nantwich (Dr Mullan) observed, even the unions that Labour is supposed to represent and that bankrolled it, rejected that proposal as completely unrealistic and destructive to our economy. That manifesto said not only that we should get to net zero by 2030, which is completely unrealistic, but that the state would own 51% of offshore wind farms. Imagine that. The right hon. Member for Hayes and Harlington (John McDonnell) said that, as Chancellor, he would nationalise 51% of offshore wind. I remember speaking to the industry, and it said, “Why on earth would we want to own 49% of what the right hon. Member for Hayes and Harlington owns 51%?” It was a completely absurd and unrealistic policy. On the green agenda and the net zero agenda, the Government have far more to offer the country than a souped-up, half-heated, Soviet-style approach to solving what is a fundamentally difficult problem.
For one year—so far—businesses in the retail, hospitality and leisure sectors will get a 50% discount on business rates. That is why my right hon. Friend the Chancellor decided that the business rates system should be more responsive and agile, with more frequent revaluations taking place every three years. That is a good, positive step that will give much more flexibility to the system.
I am also delighted to reflect on how the Budget told a great story about innovation. Innovation is a huge driver of productivity and progress, and unleashing innovation is a fundamental duty for my Department and for me as Secretary of State. We have launched Help to Grow, which will drive small and medium-sized enterprise productivity. We have also started a new co-investment venture capital fund that will be used to drive innovation and provide scale-up capital for businesses in need of that. The Budget confirms the eligibility criteria for our new scale-up visa, which all businesses I speak to, and small businesses in particular, say they need help in pursuing. We will unlock greater private sector innovation. We are reforming research and development tax reliefs to support modern research methods and to focus our minds specifically on the problem and challenge of innovation. Increasing R&D investment to £22 billion will confirm the UK as a science and technology superpower. We must make sure our small businesses, which after all are the heart of the British economy, have the support they need, which is why my right hon. Friend the Chancellor strengthened the British Business Bank in yesterday’s Budget, increasing its regional financing programmes to £1.6 billion and expanding its coverage, helping innovative businesses across the country get greater access to the finance that they need.
I welcome the British Business Bank and the fact that it has a regional focus, but what advice does the right hon. Gentleman have for businesses that are still in debt due to the covid loans they are struggling to pay back and therefore do not want to take on any more debt?
The hon. Lady makes a sensitive point. Nobody engaged in business wants to take on unsustainable levels of debt, but she will appreciate that the credit was offered in totally unusual circumstances; my right hon. Friend the Chancellor had to make decisions very quickly and we used the BBB to distribute that credit. No one is suggesting—not even anyone in the hon. Lady’s party—that the interventions and credit that was provided on good terms should not have been offered to many businesspeople. I am fully aware of the nature of the debt overhang and I am engaged with trying to think of ways of softening that, but the intervention was absolutely the right thing at the time. I must remind the House that many predictions of doom and catastrophe were mercifully avoided thanks to the timely and wise interventions of my right hon. Friend the Chancellor.
As well as supporting businesses, the Budget will protect the health, wealth and livelihoods of the British public. Under this Government, the proportion of people in low-paid work has fallen to its lowest level in 30 years. That is why I was so surprised to hear the hon. Member for Leeds West (Rachel Reeves) suggest that an increase in the national living wage was something to be regretted.
The right hon. Gentleman was asked a very direct question, as he said, by my right hon. Friend the Member for East Ham (Stephen Timms). The right hon. Gentleman acknowledged two weeks ago the very difficult situation of the energy-intensive industries and said that he had submitted a formal request to the Treasury. What has happened?
They are ignoring it.
We are not ignoring anything. We are in active conversations, as we always are, on dealing with the situation. [Interruption.] Absolutely, we are completely as one on this, and we feel that, as my right hon. Friend the Chancellor said, we cannot simply bail out every single company—but we can provide a general context in which risks are mitigated.
We are not going to nationalise anything.
It is hard to follow that response from the Secretary of State; he said, “a general context in which…something, something.” Can he just answer the question: when are we going to know what help is available for energy-intensive industries, if any, and what kind of help is it going to be?
The hon. Gentleman chunters from a sedentary position. I have visited his constituency—I have seen Teesside—and the picture of gloom, misery and devastation he paints is a total rejection of the optimism, dynamism and enthusiasm I see in Teesside. His negative attitude shows precisely why my friend the Mayor of the Tees Valley got 73% of the vote in the last election. [Interruption.] I am being told I am speaking loudly, but I am outraged that the hon. Gentleman should characterise his constituency in such poor and uninspiring terms; it is a disgrace.
I am grateful to the right hon. Gentleman for giving way. He talks absolute nonsense: I have spent 11 years championing energy-intensive industries in my constituency, trying to ensure people keep their jobs. He knows that, because I have met him and talked about it time and again, and what do I see? I see very little action. It is about time he got on the right horse, got down to Ofgem and started talking seriously about how we can put things right for energy-intensive industries in my constituency.
I was not making a personal attack on the hon. Gentleman’s role. If he had listened to what I said, he would know I was not commenting on his record as an MP; I was simply saying that the tone and negativity he expressed in that particular intervention in this debate did a disservice to his constituents. I was making a specific point.
To bring my right hon. Friend back to what the Opposition spokesperson, the right hon. Member for Doncaster North (Edward Miliband) was saying about the haste with which money can go to support my right hon. Friend’s plan for energy-intensive industries, is this not the same Labour Front Bench that was urging my right hon. Friend to give money to a business that is now under review by the Serious Fraud Office? Is my right hon. Friend’s prudence not therefore wiser than the rashness of the Opposition Front Bench?
That is a very good intervention. Labour Front Benchers were urging that £170 million from the UK taxpayer be given to a business that we now know has been recapitalised, has money from private creditors and is still operating. It would have been a disaster to sign away £170 million directly in the way they urged.
In conclusion, the Budget is a blueprint for a stronger Britain: a country where those with innovative ideas will get the support they need to turn them from dream to reality; a country where those whose talent is nurtured and whose skills are honed will get support, ongoing interest and strong engagement from the Government; a country where those who do an honest day’s work will receive a decent wage. We have every right to be confident about our future. We have listened to the litany of woe and despair for too long and, as my right hon. Friend the Chancellor said yesterday, we are optimistic and excited about the future of our country. Only a week ago at the global investment summit, people from across the world were desperate to invest in the UK; they believe in their bones that the UK is a great place to do business.
Minister, my hon. Friend the Member for North Antrim (Ian Paisley) and I hope to have a meeting with you shortly on hydrogen and how it can be used to advance this great United Kingdom. Can you confirm exactly how it will benefit every part of Great Britain and Northern Ireland?
Order. I remind the hon. Gentleman that he cannot address the Minister as “Minister”; he has to address him as “the right hon. Gentleman” or say “would the Minister?”, because when he says “Minister” that is second person, vocative case. He cannot say “Minister.” Other Members might know that the hon. Member for Strangford (Jim Shannon) and I have been having this conversation now for several years and it is my ambition that he will get it right, and one day he will.
We are very grateful for the long-forgotten grammar lessons administered from the Chair.
Hydrogen is important, and we have had debates on it in Westminster Hall and this place. I look forward to engaging with the hon. Member for Strangford (Jim Shannon) on this; I am due to visit Northern Ireland and I am sure we will have very constructive conversations.
The global investment summit was a huge success, and it was proof that, contrary to the picture of devastation, gloom and pessimism painted by Opposition Members, we are open for business as a country and attracting investment to a degree we have never seen before. It showed in the Budget yesterday that, as we race towards a new and brighter future, the Government will make driving economic recovery through private investment—that is central to this—a top priority. That is something I certainly commend to the House.
It is a pleasure to see you in the Chair, Madam Deputy Speaker.
This Budget may have fallen a few days short of Hallowe’en, but for many of my constituents and people across these islands, it represents a real horror show. The past 18 months have been difficult for many people, but yesterday we saw that this Government are prepared to continue to heap misery upon misery by balancing their spending on the backs of the most vulnerable. Not even the most cynical among us could have imagined tax breaks on sparkling wine and short flights just weeks after universal credit payments were cut.
We have all seen the headlines over the last few weeks about monetary tightening, but the self-enforced fiscal tightening in this Budget is much more worrying. The Chancellor tried to fend off criticism and evade proper scrutiny by trailing Budget announcements in the press before presenting them to this House—and his sleight of hand did not stop there. He instructed the independent Office for Budget Responsibility to produce its Budget forecasts using out-of-date figures to increase his chances of being able to cut taxes before the next election. That is a cheap trick, and people should not fall for it.
It was an illusion, too, to try to make out that the Chancellor’s actions yesterday do not come on the back of 11 years of Tory austerity—11 years of the same Government on those Benches, albeit in different guises—of cuts to public spending that this Budget does not come close to reinstating, and of assumptions predicated on some iffy figures peppered through the Budget Red Book. On this Chancellor’s watch, the public are facing a Tory cost of living crisis—an energy crisis, a poverty crisis, an inflation crisis—and the people who can afford it the least are bearing the brunt of it.
The furlough scheme has now ended, and while we do not yet know the full impact of the withdrawal of that support, economists expect that there will be a rise in under-employment and a subsequent squeeze on wages. When the UK Government should be stepping up to tackle the challenge of this cost of living crisis, they are compounding matters with this spending review. It is difficult to remember a bleaker outlook.
IFS director Paul Johnson said on Twitter:
“This is actually awful. Yet more years of real incomes barely growing. High inflation, rising taxes, poor growth keeping living standards virtually stagnant for another half a decade”.
The OBR has said that since it closed its forecast, its analysis is consistent with
“inflation peaking at close to 5% next year,”
even higher than the 4% the Chancellor alluded to yesterday. That is further evidence that high inflation may not be temporary, as the Prime Minister has previously said, and that even those families who are relatively well off will feel the impact of it.
We must not be misled by this UK Tory Government. When the Tories talk of a living wage, it is not a real living wage, determined by the Living Wage Foundation; it is a pretendy living wage, and it is not enough to live on. The Government may claim that the increase to £9.50 matches the real living wage as it stands today, but in reality that is yet a further deceit, because the increase in the minimum wage will not match the real living wage by the time it is implemented. We are three weeks away from Living Wage Week, which will see the most up-to-date real living wage for the UK announced. It will almost certainly increase from £9.50, because the real cost of living pressures we face are taken into account and folded into that figure.
That pretendy living wage has age discrimination baked in, with workers who start the same job on the same day legally entitled to less if they just so happen to be younger. There is a £5,000 gap between an 18-year-old and a 25-year-old. House of Commons Library figures lay bare the difference between the wage paid to the youngest and that paid to older workers, which has grown from 20% at the establishment of the minimum wage to a staggering 97.5% in this Budget. There is absolutely no justification for that. Rent is not cheaper for young people, electricity is not cheaper, childcare is not cheaper, nor is food and nor is travel, so why have this Government decided that their labour should be?
I commend the more than 2,000 real living wage employers in Scotland and I hope that many more will join them. Of course, the minimum wage increase will be gobbled up by the Chancellor’s other monstrous policy choices—the £20 cut to universal credit and the increase in national insurance. People who are out of work or not earning very much will see no overall benefit to these changes, and those on legacy benefits, including people with disabilities and carers, are again forgotten about altogether by this UK Tory Government. Of course, some people are not even entitled to support in the first place, including those with no recourse to public funds—and the many who were excluded from support schemes completely during the course of the pandemic found that they were not entitled to support either.
Those out of work are a big and varied group, including people who have cancer; people who have disabilities; people who care for their children who have disabilities; veterans; people who have been injured at work, and people who are struggling to find a job. All of them are now flung into the Chancellor’s pile of “undeserving” universal credit claimants. That is not good enough, and he should hang his head in shame. The Joseph Rowntree Foundation has estimated that that particular group of people—those the Government think are undeserving—now has the lowest main rate of out-of-work support in real terms since 1990.
Let us look in a little more detail at the situation for those who are working. The Chancellor said that the annual increase resulting from the minimum wage increase is £1,000, but overnight analysis from the Joseph Rowntree Foundation puts that figure at an absolute maximum of £364 when the taper rate and cost of living increases are factored in. Some people on universal credit will be nearly £700 worse off. On top of that, every person on universal credit is, of course, £1,000 worse off from the scrapping of the uplift. My back-of-a-Twix-wrapper calculation says that these measures mean that the Chancellor is cutting incomes for those on universal credit by between £600 and £1,700 a year. And it is clear from page 136 of the Red Book that the Chancellor’s giveaways are being funded from the pockets of pensioners, who have lost their protections under the triple lock.
These are policy choices. They are not an inevitability of the situation in which we find ourselves. This spending review is a chance to show the UK Government’s priorities, and unfortunately, it seems that their priority is to give their friends in the City a tax cut, paid for by ravaging universal credit. It is a political choice to cut the tax surcharge on bank profits from 8% to 3%. It is a political choice for the Chancellor to tie his own hands with fiscal rules while our economy is still reeling from a pandemic that has not yet ended. It is a political choice to take food out of the mouths of children by removing the £20-a-week universal credit lifeline, to keep the appalling two-child limit and the rape clause and to maintain a five-week wait for new claimants. It is a political choice to refuse to increase statutory sick pay in line with international standards. And it has been a political choice to press ahead with Brexit in the middle of a pandemic, in the face of all reason.
The Chancellor barely mentioned Brexit in his speech yesterday, even though it is the single biggest policy change the UK has made for generations. Scotland did not vote for Brexit, yet our businesses are having to adjust and absorb the costs of this Government’s mistakes. The OBR says that the evidence so far shows that the impact of Brexit will be a 4% hit to GDP, with knock-on effects on living standards. That is bigger than the expected long-run effect of the pandemic. The OBR’s own analysis cites migration and trading issues as driving factors of the supply chain issues currently hitting our businesses, on top of debt through covid and soaring energy prices that businesses also face and will pass on to consumers.
While the EU is giving Ireland €1.05 billion to mitigate the damage of Brexit, Scotland has yet to receive a single penny piece from Westminster. We need urgent clarity that the £4.6 billion annual increase to the Scottish Budget will be new money, rather than giving with one hand and taking away with the other, as this Government so often do. The £150 million small business fund for Scotland, like the rest of the funding, should be disbursed by the Scottish Government and their agencies, not by Westminster—or, in this case, the British Business Bank, whose good work should not be politicised through this brazen Tory power grab. It is little wonder that more and more people are coming to believe that Scotland’s future will be best served by its becoming an independent European country.
The OBR also said in its outlook report that labour supply constraints are likely to suppress productivity, and it cited constraints on immigration as an example of that. It is very likely that the Government’s restrictive and arbitrary immigration rules are having a long-term negative fiscal impact. That will be of no surprise to Members across the House who proudly represent, as I do, communities with high levels of immigration. As MPs, we see daily the impact of the hostile environment—the widespread misery and harm that it causes, but also the economic impact—and it is only going to get worse. The Refugee Council, for example, says it will cost the Government £400 million more in prison costs to implement the provisions of the new Nationality and Borders Bill. That is an awful lot of taxpayers’ money to treat people so badly. Removing the right of people to work as they wait, sometimes for years, for the outcome of an asylum claim is as dehumanising as it is senseless. My constituent, Sandra, is studying adult nursing at university and is on track for first class honours. She desperately wants to work and contribute to the NHS in Scotland, but has been waiting over a year for contact from the Home Office. She does not have any faith that it will happen before she graduates. That is a shameful waste of her talent and skills, and there are many, many more like her.
Members of this Government will stand and applaud the NHS, but they fail public sector workers at every opportunity. The Chancellor talked about unfreezing public sector pay, but that is a previously announced change that will not generate Barnett consequentials and so will have no impact on the Scottish budget. It is also worth noting that ending the freeze during this period of high inflation does not go far enough. It is effectively a pay cut. If the Government are serious about levelling up, they should commit to public spending and pay public sector workers a fair wage.
The Chancellor should take a leaf out of Scotland’s book and deliver a national care service, creating jobs and increasing the quality of public services for years to come. This Government should stop talking about care as if it is a burden. The Women’s Budget Group says that a high-quality care service requires investment of £28 billion per year over and above current spending, but that that would produce 2.7 times as many jobs as an equivalent investment in construction.
The Tories promised £500 million for family hubs in England to support parents and children, including breastfeeding and mental health advice. That is welcome, no doubt, but the anti-poverty campaigner Jack Monroe perhaps put it best when she said:
“for every £1 the Tories have taken out of local council funding…in the last decade, Sunak’s budget announcement is putting 0.5p of it back and expecting us to all jump for joy at his largesse and conveniently forget about that 99.5%”.
Now, I try not to get too deeply into matters relating to England and I do not intend to do so, but in my capacity as chair of the all-party parliamentary group on infant feeding and inequalities, I congratulate the Secretary of State on his new arrival. I hope the services his family needs have been there for him. Health visiting and support services in England were lost in the pandemic in many areas, with new parents left unsupported. I urge him to put a figure on breastfeeding support specifically. An expert in this field, Dr Natalie Shenker, suggests a figure of at least £30 million to be truly transformational, covering: additional training, Baby Feeding Initiative community service accreditation, ramped up peer support, integrated specialist lactation support, and comprehensive hospital-only milk bank services. I look forward to engaging with Ministers on that and invite them to present their detailed plans to the all-party group.
In the run up to the spending review, I met business representatives from all sorts of industries, as I am sure the Treasury team did. I was impressed by the well thought out proportionate policy ideas that would have genuinely helped both individual firms and the wider economy in this difficult time, such as: the call from the Federation of Small Businesses to increase to the employment allowance to encourage firms to hire more staff and to take action on increasing energy prices; the Finance and Leasing Association’s call to extend the super deduction to those who lease equipment, which is particularly important as firms face increased costs and increased debt repayments in the coming year; the call from Scope and employers such as 4ICG in my constituency to expand the restrictive eligibility to the Kickstart scheme to support more disabled and young people to apply, because at the moment many lose out to their great loss and frustration; and an online sales tax to encourage people back to the high street.
This UK Government chose none of those things. Instead, they chose: an increase to national insurance, which is a tax on jobs; yet more Brexit red tape; and an industrial strategy that was scrapped before it could be implemented, leaving creative industries in particular without any clarity on the support they are entitled to. There is a lot of talk about science, but there is much that comes from the arts and they have been lost in that conversation. For example, the Glasgow School of Art produces exceptional graduates who should be a part of the strategy, but they do not see their place within it. The Chancellor will say that he has offered cuts to business rates, but, of course, that does not apply to businesses in Scotland, who have already benefited from the Scottish Government’s action. The Scottish Government offer 100% rates relief to retail and hospitality for a full year, the only part of the UK to do so. That was done without consequential funding from the UK Government.
I welcome the review of alcohol duty and hope it will lead to better outcomes on public health. I am concerned, however, that the measures trumpeted yesterday fail to support hospitality and tourism more widely. A few pence off a pint, sooked up by the large breweries, does nothing to support a sector hard hit by the pandemic. Retaining the reduced 12.5% VAT rate for the hospitality industry would make a significant difference as supply chain costs and prices for fuel and labour increase, and it would increase the sector’s attractiveness and global competitiveness. It baffles me that the Chancellor would ignore that call from UKHospitality. I urge those on the Treasury Bench to reconsider and see what more they can do in that regard.
All eyes are on my constituency of Glasgow Central this month for COP26. This Budget and spending review fell woefully short of the ambition required to tackle the global climate challenge: nothing for carbon capture in Scotland and nothing on our need to grow and scale up the renewables industry in Scotland, not just wind farms but tidal and wave.
Further to my intervention on the right hon. Member for Doncaster North (Edward Miliband), it is all about delay. One of the terrifying aspects of delay is that we have the skills in Scotland—welders, fabricators, pipe fitters—but the people with those skills are ageing. Every year that goes by, we are missing the opportunity to educate the next generation, the young people who came to the reception on UK renewables in the Commons yesterday. That is another reason why we cannot countenance delay at any price.
The hon. Gentleman makes an excellent point. This is an industry with a future. Climate change is the most significant challenge we face and investing in those industries now will set us up for the future. Carbon capture and storage in Scotland would have employed 20,000 people, a pipeline of jobs in an area that much needs it and a transition from the old to the new. The Government ought to be investing in that or giving us the powers in Scotland to do it in our own right.
There should have been measures to tackle energy inefficiency, such as cutting VAT on insulation and solar panels for houses. Such measures encourage people to play their own part in that effort. What do we have instead? We are cutting air passenger duty on internal flights. Manchester United were roundly condemned for taking a 10-minute flight to Leicester recently, but the Chancellor wants to encourage this! He wants more climate profligacy and that is utterly irresponsible. He could have put the money from the scrapped £20 billion Boris bridge through the Beaufort’s Dyke munitions dump into green infrastructure, but he has failed to do so.
The Tories have cut Scotland’s budget when we need to be investing more to stimulate the economy and have undercut the devolution settlement, taking powers from the democratically elected Parliaments of Scotland, Wales and Northern Ireland. The Budget is great news for the 1%, but bad news for equality, inclusive growth and the environment. Time and time again, the people of Scotland are seeing a tale of two Governments with divergent priorities: this Westminster Tory Government providing tax cuts for short-haul flights, sparkling wine and their pals at the banks; and a Holyrood SNP Government determined to stand up for people and businesses, and deliver a fairer, greener Scotland.
I look forward to the day when we do not have to live with the choices made by a UK Government that Scotland did not elect, but have a Government chosen by the people of Scotland with our people’s priorities at their heart.
The House will be aware that everybody wants to speak. We have plenty of time for the debate this afternoon, but I hope to manage it without a time limit. If everybody takes around seven to eight minutes, everyone who wishes to speak will have an opportunity to do so and we will manage without a time limit. If that does not work, later in the debate I will put on a time limit, but it is so much more dignified if we manage without one.
It is always a great pleasure to follow the hon. Member for Glasgow Central (Alison Thewliss), the right hon. Member for Doncaster North (Edward Miliband) and the Secretary of State for Business, Energy and Industrial Strategy, my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng).
I have to say that only one of those speeches was remotely optimistic and captured the positive nature of yesterday’s Budget. If we think back to the data we were given at the start of the Chancellor’s Budget speech, it is clearly excellent news that we are recovering from the pandemic faster than expected. We return to pre-pandemic levels in the economy by the end of this year. Considering the decline 300 years ago after the Great Frost, that is a remarkable achievement. Unemployment was predicted to be 12%. It is now 5.2%, which is a huge difference—that is 2 million more people in work. On the impact of the Budget on Harrogate and Knaresborough, I think it will be very helpful and very well received. I will focus on just a few areas, if I may—I am conscious of your point about time, Madam Deputy Speaker—the first of which is low-paid work.
The change to the universal credit taper is extremely positive and very significant. Not everybody knows what it is, but we in this Chamber do because we discuss it regularly. Moving from 63% to 55% simply means that people will be able to keep more of their money by not losing benefits if they earn more. That directly incentivises work and is a tax cut, and if we combine it with the increase in the work allowance, it represents a tax cut of £2.2 billion. It is easy to bandy around very big numbers, but I am more conscious about what that means to individual households: basically, it makes people £1,000 a year better off in their pockets. That is a significant figure.
Universal credit has been part of Harrogate for a considerable period. We were one of its development locations and we are the location for the managed migration pilot. I have been following it very closely during that period. I have met those implementing it at the jobcentre, those receiving it and employers, and I have absolutely no doubt that it has helped more people into work.
On the national living wage, it is very positive that we have moved to £9.50 an hour. That is a 6.6% increase and a big pay rise for 2 million people. Some sectors of the economy will be more exposed to this than others. Harrogate and Knaresborough has a large hospitality, retail and care sector, which will benefit disproportionately from the increase in the national living wage, and I welcome that.
Cutting business rates by 50% for 90% of the businesses in hospitality, retail and leisure is also significant for Harrogate and Knaresborough. We are one of the top 50 constituencies in the country for the hospitality sector. North Yorkshire will be particularly affected by this measure; in the top 10%, we also have Thirsk and Malton, Scarborough and Whitby and York Central. To use figures from UKHospitality from the 2019 general election—in other words, before the pandemic—nearly 9,500 people in Harrogate and Knaresborough worked in the hospitality sector. They have had a very tough time. This measure will help those businesses continue to invest and stay strong and will therefore be very welcome in the sectors affected. We have a strong, high-quality retail offer—not just in Harrogate and Knaresborough, but in much of the north—with a large number of independents across a number of different sectors, so I welcome these measures, as it has been a tough time.
On business rates more broadly, I welcome the points made about the frequency of revaluations, but business rates need reform in the longer term. This is an analogue tax in a digital economy. It is still clumsy and it does not reflect how the economy works, but the measures that are being taken are positive and I welcome them.
Turning to alcohol duty, in Harrogate and Knaresborough we have one vineyard, two distilleries and five breweries—we are obviously very thirsty—and just outside the area we have many more. The number of businesses involved is therefore high, as is the number of workers in those companies as a result. We have quality producers. Yorkshire beer is famous, and rightly so. It is positive that we are seeing the 3p cut in duty for draft beers. Pubs have also had a grim time over the past few years. They have a social function in our communities that is not easy to quantify, but we all know that pubs are at the heart of village and town life. The cut is therefore helpful for the on-trade.
The small brewers relief, which has been a feature of the industry for a while, is being extended to cider. Let me give a slight hint of a warning: the small brewers relief has had a disincentivising effect on investment and growth in the beer industry. I discovered that early on in my time in the Treasury. I clearly saw businesses that had stopped growing—in fact, they directly told me that—because they had reached the top of the tax breaks. That is clearly disincentivising. When we have a tax structure that disincentivises growth, it needs to be reformed. The Treasury has been doing that. I started the review—I have been followed by many others since—but we now need to press on with that. I am absolutely sure that we have the correct policy, with a tapered effect, but we need to implement it. We need to make sure that as the relief is extended to cider, we do not delay implementation or make the mistakes that we have seen with beer.
I am conscious of the time, Madam Deputy Speaker, but let me say a few words on levelling up. Communities have been left behind in our country for far too long. We in this House have often talked about things such as the north-south divide or the northern powerhouse, but this issue is far broader in scale than just north-south. There are communities all over the UK that have been left behind, even in the most affluent areas. I like the focus on levelling up, but we must also recognise that this is a long-term issue and that the situation is hard to change. Governments of all colours over many years have tried to make progress on that and not succeeded sufficiently. There are a number of different elements that can make a real difference, such as infrastructure, skills and devolution.
The Budget is strong on investment in infrastructure, with £35 billion for rail infrastructure, which includes opening some of the closed lines, and £31 billion for roads, to remove bottlenecks. We can add to that the investment in broadband, so infrastructure will clearly get a significant benefit. One issue that does not get quite so much coverage is bus networks, to which we are seeing big changes around the UK. In implementing the Bus Services Act 2017, we are seeing people move towards enhanced partnerships or possibly franchising. We have seen Budget funding go towards zero-emission buses. These are very positive developments. They are about connecting people to jobs, making it much easier for larger cities in particular to develop sustainable transport plans, which we all know is the right thing to do, and making it easier overall to move people and goods around the UK.
The infrastructure provisions are positive. However, having spent much of my time here talking about infrastructure and being at the Department for Transport, I actually think that skills policy is the most significant thing that we can use to improve the levelling up around this country. That is how we will improve the productivity of our nation. Big changes will be required in the skills environment. Our economy is going digital, and that trend has been compounded by the pandemic. We are transforming our economy as we go to net zero. The number of jobs required in new industries will be fantastic, so this is a transforming moment. It is also clear that the Secretary of State for Business, Energy and Industrial Strategy, the Chief Secretary to the Treasury and the Chancellor clearly recognise that, which is why we are seeing a 26% overall increase in the skills budget across this Parliament. Other areas matter for levelling up—we have discussed the levelling-up funds—but all these measures add up to a strong performance on a difficult issue.
There are other areas of interest in the Budget, but let me highlight what I consider to be a risk: we are very exposed to changes in interest rates on our public borrowing. Yesterday, the Chancellor quantified that by saying that a 1% increase would lead to a £23 billion cost, so we are exposed, and we are greatly sensitised to change. That means two things: the pressure must be kept up to keep inflation down, and we must make every effort to reduce our borrowing. I thought the positive words from the Chancellor about fiscal conservatism at the end of his speech yesterday did that very well. The good management of our economy has meant that we will also meet the criteria for returning to spending 0.7% of gross national income on overseas aid in 2024. I was very pleased to see that.
Overall, this Budget is positive. It is optimistic. It is a direct contrast to the messages from the Opposition parties, giving us their customary mixture of unfunded spending promises and, “Vote for us—the future’s gloomy”. That strategy has not worked for them, but they have not learned. This is about making our country better. The prospects are brighter. The Budget showed that in the data that the Chancellor highlighted, and it will only make the situation even better.
It is a pleasure to speak in this debate and a pleasant surprise to be called so early, Madam Deputy Speaker.
It appears that this Budget is more notable for what is not included than what is. In February last year, in reply to me at Prime Minister’s questions, the Prime Minister pledged that money would “be passported through” to Wales to deal with the unprecedented damage caused by flooding as a result of Storm Dennis. Despite the estimated cost of alleviation work across Wales, which is upwards of £150 million, the Government have been reluctant to engage meaningfully with the Welsh Government. Instead they have tried to brush it aside as a “devolved matter”, and there is no signal in the Budget that they are serious about dealing with the issue.
I am also deeply disappointed that despite calls from the Welsh Government in preparation for the Budget, the UK Government seem unwilling to work with them to resolve the remediation work required to make Wales coal tips safe. Last Thursday, I attended a service with families and local residents in my constituency to mark the 55th anniversary of the Aberfan disaster. I believe that there is no greater example of the failure to address coal tip safety.
It is simply unacceptable and breathtakingly arrogant for the Government and the Treasury to ignore the very real concerns on the issue. In Merthyr Tydfil alone, we have 59 tips in the most serious categories, D and C—a cause of concern to many residents. In Caerphilly county borough, too, there are far too many examples of blights on our communities from the legacy of an industry long gone.
The legacy of the coal tips predates devolution. The export of coal from the south Wales valleys and elsewhere helped to create the wealth that built this country, and indeed what was the British empire. Responsibility for the issue therefore transcends the devolution arrangements. Wales is affected disproportionately by the legacy of coal mining in the UK, but the existing devolution settlement and broader legal arrangements fail to recognise that.
The Welsh Labour Government have set in train a wide programme of work to improve the safety of coal tips in Wales, including by changing the law, but they cannot do it alone. They need the UK Government to share responsibility for the legacy of coal mining in the UK and provide a long-term funding settlement to make the tips safe and prevent another tragedy. However, the UK Government have so far refused to fund the long-term costs, washing their hands of their coalmining past and of their responsibility to clean up after their industrial past.
As I said, the Welsh Government have offered to work with the UK Government on the issue, so my question today for the Treasury is why it has not stepped up and stood by its responsibilities. The shadow Secretary of State for Wales, my hon. Friend the Member for Llanelli (Nia Griffith), has raised the issue with the Secretary of State, but unsurprisingly she has received no response. The Government’s current stance is simply appalling.
Applications to the levelling-up fund and the community renewal fund were submitted in mid-June. Now, four and a half months later, approvals are being issued. I hope that grants from the community renewal fund will be out the door very soon, because they have to be spent by 31 March 2022—a totally unsatisfactory timescale. The failure to deal with initial applications in a timely fashion demonstrates that the Treasury simply does not have the capacity to deal with such a level of applications. How, then, will it be able to manage the levelling-up fund applications? It is clear that decisions about managing the funding should be devolved to the Welsh Government and to other nations and regions of the UK. The top-down approach from Whitehall simply will not work.
It would be good if the Government provided more clarity on the shared prosperity fund. The House has been waiting since 2018 for clarity on the fund, which is meant to match the significant EU structural funds that have been lost. Shared prosperity funding was meant to be in the region of £1.5 billion, to match EU funds, yet the figure in the Budget for next year is just £400 million.
If the Government are already struggling to manage the levelling-up fund, how can we believe that they will manage applications to the shared prosperity fund, let alone the project monitoring and evaluation that will inevitably be needed? The UK Government are keen to allocate funding through those funds in areas of the Welsh Government’s responsibility, but they will not fund areas that predate devolution, such as responsibility for coal tips.
The Government and the Chancellor have talked in recent weeks about strengthening the Union. I have some sympathy with that, but in my view they are going the wrong way about it. It is clear that HS2 primarily benefits England; as a north-south spinal scheme it will clearly benefit Scotland, too—much more than Wales. The Select Committee on Welsh Affairs recently recommended that Wales receive the same Barnett consequential share of HS2 as Scotland. Simply put, as a proportion of population, Scotland gets 91.7% of its share of the costs of HS2. If Wales got 91.7% of our 5% share of the total cost—let us call it £100 billion, for argument’s sake—we would get something in the region of £4.6 billion. I would be grateful if the Treasury outlined whether it is willing to consider the Welsh Affairs Committee’s recommendations.
The rising cost of fuel is crippling many families who were already struggling under this Government. Yesterday, Paul Johnson of the Institute for Fiscal Studies said that the outlook for living standards is
“actually awful… High inflation, rising taxes, poor growth keeping living standards virtually stagnant for another half a decade”.
In-work poverty has reached record levels under the Tories, with 2 million more people in working households living in poverty now than in 2010.
It is clear that the Government are out of touch with ordinary people across the UK. The Budget did not address the huge inequalities in our country. After taking £6 billion out of the pockets of some of the poorest people, the Government are expecting them to cheer for £2 billion in compensation. You really could not make it up.
We are clearly in very difficult and unprecedented times. It is a therefore a huge challenge for any Government, of any political persuasion, to decide exactly how to deal with the economy. We do not have a crystal ball and we cannot foresee what will be. It has been difficult for the Treasury to take a decision to increase taxes, but that is what it has done. It is not something that I am in favour of—I believe that productivity and boosting business are not helped by increasing taxes—but, as I say, these are challenging and difficult times.
The key for me is that to the extent that we raise taxes, there must be a clear plan of action. I do not believe in money for money’s sake, which is why when the Government brought forward a plan to increase national insurance, I did not support it. It is not that I think that the health service and social care do not need the money; they absolutely do, but I want to see a specific plan, particularly for social care. I do not believe that social care can wait three years for an injection of cash, although I am pleased that this Budget includes a contribution in that direction. Overall, I think the measures are balanced in these difficult times. As a non-economist, I do not think I can advise how we might have done it better.
From my constituents’ perspective, much of what the Chancellor said yesterday is very positive. My constituency in the heart of Devon is very rural and heavily dependent on tourism, and wage levels are very low. Much of what the Chancellor announced will help tourism and help people on some of the lowest wages in the country. On balance, I think people in Newton Abbot, Teignmouth, Dawlish, Kingsteignton and the 30-plus villages and hamlets that I represent will see it as a win.
Business rates have always been the biggest issue that my local businesses bend my ear about. Other hon. Members have said that business rates need proper reform, and the case is well made; it needs to be a priority for the Chancellor and his team. Too many Governments have consulted and too few have actually acted, but I am pleased with the creativity that has been demonstrated, at least for the short term. The 50% business rate cut for leisure and tourism is extremely welcome, but I ask that it come sooner, not later, and that it be for more than a year. The multiplier being frozen is brilliant; it will make a huge difference overall, along with the revaluation changes.
It is no surprise that my wonderful area has lots of village pubs, and indeed some vineyards. Much of what we have, including the small producer relief, will therefore be very welcome. Ashcombe, as it crushes its apples, will be absolutely delighted, and as the tax on English sparkling wine falls, the vineyard in Bishopsteignton will be smiling. As for draught relief, goodness me! It is great for the pubs, but it is also great for the village community, where the pub is at the heart of it all.
It may not surprise the House to learn that my constituency area is also a great centre of culture. I am sure that the tax relief extensions for museums and galleries will be welcomed by Newton Abbot Museum, among others, and the Teignmouth theatre will definitely enjoy the double tax relief for orchestras, theatres and museums.
Of course, at the heart of any community are its families, and I pay tribute to my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) and her diligent work to persuade the Government to consider more support for the very young at the very start of life, which is an extremely challenging time for parents. The start for life programme is one of the best things to come out of the Budget. The new network of family hubs is welcome, as is increased funding to allow more childcare provision and more training for those who provide childcare. I have always felt passionate about the supported families programme; funding for it has ebbed and flowed over the years, so I am pleased that this year there will be more.
Support for young people does not stop there; it goes on at schools, where the rise in the pupil premium is welcome, and the tripling of special educational needs places is a particular benefit. May I suggest, however, that we not only provide money and create places, but consider how to use them better? I have a wonderful SEN institution in Dawlish, Orchard Manor School, which currently has places unfilled because of all the challenges, debates and arguments about who should take up those places within Devon County Council. That cannot be right.
The catch-up fund is fabulous news, but one of the comments I heard from my local schools was that while the money is very welcome, the fact that there are so many constraints on how it can be used is not so welcome. The support for lifelong learning, with a 26% increase in skills spending, is also fabulous, but could we focus not just on colleges but on sixth forms? A number of headteachers have told me that funding for sixth forms, as opposed to colleges, has been going down rather than up, so I hope that some of the funding will be going in their direction. Of course I welcome the news of more T-levels, more traineeships and more apprenticeships, but can we have more degree-level apprenticeships? At present, there are too many aspiring young people coming out the grammar schools just outside my constituency who leave, because there is no opportunity to do more.
The rise in the national living wage is particularly good news for working people in my constituency who are on very low wages, and the reduction in the universal credit taper rate is very welcome. Of course, in rural areas people have to travel to work, so reducing their burden by freezing fuel duty and providing more money for roads and dealing with potholes, as well as more money for buses, is absolutely what rural constituencies need. In addition, there is to be a proper public sector pay review.
It is good that there is £150 billion more, before 2024, for the public services that have served us so well during the pandemic, but local government has borne much of the brunt. The £1.6 billion is very welcome, but can we ensure that it is given flexibly, so that local authorities can use it in the way that best meets local need rather than simply being told, “This must be spent in this way by centrally produced providers”? As for housing, I was pleased to receive a letter yesterday saying that my constituents would be given a piece of the brownfield land release fund.
I look forward to working with the Government, Devon County Council, Teignbridge District Council and the community, and discussing how we can increase productivity and improve the quality of life across Teignbridge.
It is a pleasure to follow the hon. Member for Newton Abbot (Anne Marie Morris).
Today my husband Ray would have been 75, and he would have been glued to the Parliament channel, not only looking out for me on the green Benches—hopefully —but, more importantly, following the Budget debate and scrutinising the Chancellor’s announcements, because as cabinet member for finance on North Tyneside Council, he would have wanted to work out just what the Budget meant for our borough and the people of his Camperdown ward. I know that his successor, cabinet member Councillor Martin Rankin, will be doing just the same.
Having missed out on freeport status in March, I hoped to hear of some direct benefit for our green industries and other businesses on the Tyne in the Chancellor’s statement, but once again it seems that for some—known—reason, Teesside has the Chancellor’s favour. The Chancellor can be sure that I will keep banging on his door and those of his Cabinet colleagues asking for help for the Tyne’s industries to compete on a fair playing field, nationally and internationally, until we get what we need.
I congratulate those involved in the North East Homeless hub and the Whitley Bay Big Local community building, which have been granted £300,000 each from the community ownership fund. The North East chamber of commerce has commented that the Budget contains some welcome announcement for businesses in the north-east, but
“substantial longer-term strategies like the levelling up White Paper, the integrated rail plan and details on how the Shared Prosperity Fund will work, have yet to see the light of day. Without these plans it is difficult to judge how much of a long-term impact the levelling up agenda will have on our economy”.
It has taken me a while to dig out the quotation with which I wanted to intervene when my hon. Friend mentioned freeports. Bristol’s freeport bid was also rejected. According to the OBR’s document, published yesterday, the primary function of freeports is
“to alter the location rather than the volume of economic activity. So the costs have been estimated on the basis of activity being displaced from elsewhere.”
That feeds into our biggest concern about freeports—that they do not boost economic growth and performance overall. It is just a case of taking those from one area to another, and it means that areas like ours will miss out even more.
My hon. Friend is exactly right. That was one of the biggest fears about freeports, and it is why we so desperately needed them to be close to each other.
With inflation set to rise, taxes being increased and the cost of living soaring, there is little comfort for my constituents, especially those on the lowest incomes, who are worried about how they will manage their own budgets. Moreover, there is no certainty about what the public sector pay rise will mean in real terms. It was very worrying to learn that, this very morning, the Northumbria police and crime commissioner, Kim McGuinness, resigned from her national role negotiating pay deals for police staff in response to what she has described as the grossly unfair pay offer made to police staff and officers. She has said that if Ministers will not stand by our workers, there is no point in negotiating with this Government.
Unions across the public sector agree that the Chancellor must allocate extra money to Government Departments to fund pay rises. He must put his money where his mouth is. Data shows that real wages have fallen in every region in England over the last 10 years, by more than £23 per week on average. When we add to that the fact that more than 11,000 households in North Tyneside claimed universal credit and more than 4,700 of them were working people, only a third of whom will benefit from the taper rate, things are looking very bleak for many of my constituents.
North Tyneside Council has suffered Government funding cuts amounting to £127 million since 2011. When my Ray delivered his budget speech to the full council in February this year, he announced that the Labour Cabinet under Norma Redfearn, our elected Labour Mayor, had worked to fill the £6.3 million gap in funding and protect services, including the council’s poverty intervention fund, which has been a lifeline for many people during the pandemic. No doubt there will be many calls on the fund in the coming months.
However, the Local Government Association has pointed out that among the announcements for councils, the spending review makes no mention of whether local government will receive a three-year financial settlement, or whether and when local government reforms will be implemented. In recent years, settlements have been published in draft form very late in December, after the stated target date of 5 December. The LGA rightly says that this target should be met and that councils should receive early certainty with a three-year local government settlement.
Whether it is in public services, local government, household budgets, the environment or business support, there remain so many ifs and buts in this Budget that I am afraid we may need heavenly help if we are to get anything worth while or concrete from our Chancellor.
It is a pleasure to follow the hon. Member for North Tyneside (Mary Glindon). I am sure that her late husband would have been pleased to see her banging the drum for her constituency.
I want to speak in this debate because I want to make two points: the first is about levelling up; the second is about the impact of the spending review on the Foreign, Commonwealth and Development Office budget. First, however, it would be appropriate to reference my own constituency, which, outwith the highlands of Scotland, is the largest constituency in the United Kingdom. It is therefore extremely welcome news that fuel duty is to remain frozen, especially just now when family budgets are already under so much pressure. Over the past 12 years, since the freeze on fuel duty was introduced, I have argued for its extension. It currently saves the average driver £10 every time they fill up, compared with how the escalator would have operated. In a rural area, fuel costs are always higher, so the further freeze announced by the Chancellor will be welcomed across my constituency.
The Chancellor’s announcement of a £150 million fund to help thousands of small and medium-sized Scottish firms to recover from the pandemic is also good news. The UK Government’s furlough scheme helped to save hundreds of thousands of jobs during the pandemic, and this fund will now help small businesses in Scotland to grow back even stronger. I hope to see it benefit companies across my constituency when the full details are announced.
It is particularly welcome that, through the Barnett formula, the block grant to help support public services in Scotland is to increase by £4.6 billion. As we have heard from the hon. Member for Glasgow Central (Alison Thewliss), this is not welcome. We know that, however much money there might have been in that Barnett increase, it would never have been enough for the Scottish Government. Some grievance would always have been manufactured, however the funds were deployed. On this occasion, however, I want to express my own grievance, and it is about the way in which the Scottish Government allocate funds within Scotland. The south of Scotland is systematically starved of resources, and my constituents feel that, because we are not a nationalist-supporting area, we do not see resources coming into the south of Scotland.
The right hon. Gentleman is making an interesting point. I wonder whether he has spoken to his colleague, the Secretary of State for Scotland, because I understand that the Boris bridge would have left from Stranraer in his constituency, and there will now be a loss to that constituency. Perhaps the Secretary of State could speak to the UK Government and ask for the £20 billion from the imaginary bridge to come back to his constituency.
Madam Deputy Speaker, it will not surprise you to learn that, when a fixed link from Scotland to Northern Ireland was proposed, SNP Members opposed it. They were absolutely and completely opposed to it. Now that it is confirmed that it is not going ahead, they are demanding the money instead. That is just so typical of their approach.
I want to see some of this £4.6 billion coming to the south of Scotland. Many important projects that are within the responsibilities of the Scottish Government could be carried out there. We do not have levelling up in Scotland. Instead, we have areas that are deprived of resources, as the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) has pointed out, and that continues to be so.
In relation to levelling up, I want to make what I regard as an important point to the Treasury, and I hope that it and other parts of the Government will take it on board. I welcome the levelling up funding and the approach of the shared prosperity fund and the community regeneration fund, but we have to acknowledge that smaller and rural local authorities and organisations operating in those areas are not always fully resourced to put in bids of the calibre that the Treasury and others are looking for. It is important, if we are going to proceed on this basis and achieve levelling up, that we do not allow only those who are the most professional at putting in bids and ticking the boxes in central Government to succeed. If levelling up and the shared prosperity agenda are to achieve what is being sought for them, we have to support rural and smaller local authorities and others in putting forward those bids. In that regard, I hope that the system can be changed.
I raise my second point in my capacity as the co-chair of the all-party parliamentary group on nutrition for growth. Along with Lord Collins, the co-chair, and Congressman Jim McGovern, the chair of the House hunger caucus in the House of Representatives in the United States, I am writing to the Prime Minister and the President ahead of the Tokyo summit on nutrition for growth to ask the United Kingdom and the United States to come together and demonstrate world leadership in taking forward the nutrition agenda.
I commend the right hon. Gentleman’s speech, particularly in relation to nutrition and the way those issues affect the developing world. Lord Collins has worked on global health, and particularly on malaria and other neglected tropical diseases. Does the right hon. Gentleman agree that these are the key issues that we need to keep on the agenda? We welcome the announcement that there will be more money for this in two or three years’ time, but we must not lose the momentum that has been gained as a result of the historic role that the UK has played in that arena.
On this occasion, I am able to agree fully with the hon. Lady. I particularly commend the work of Lord Collins, who has kept these issues on the agenda in the other place.
The covid pandemic has unfortunately led to an increase in malnutrition, and hundreds of thousands—indeed, millions—more children are being affected by that. There is an opportunity to do something about it at the summit, which will take place in Tokyo after a year’s delay. I hope that the United Kingdom will be there at the highest level and make it absolutely clear that, along with the United States, we are renewing our commitments to nutrition. The spending review, on my reading of it, would allow us to do so, and I hope that that opportunity will be taken.
It would be churlish of me not to refer to the good work of the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) on nutrition for growth. The House will not be surprised to learn that I did not agree with some of his other comments, however.
I would describe the Chancellor’s Budget statement as failing real people, especially those with disabilities. Likewise, after the past 18 months, my constituents in Motherwell and Wishaw, and indeed people across Scotland, have very little to celebrate. An increase in the living wage is welcome, but it will be denied to workers under the age of 23. An hour’s work is an hour’s work, regardless of the age of the person doing it. In the main, living costs do not differ by age. The Tory party claims to be the party of opportunities, but it is denying those under 23 the opportunity to earn a dignified wage.
Pensioners who have worked hard all their lives have been denied a triple lock on their pension. Pensioner poverty has recently risen to a 15-year high of 18%, meaning that around 2.1 million pensioners across the UK are now living in poverty. They have been utterly let down by the UK Government. The state pension is the primary source of income for most pensioners, and they will find it difficult, if not impossible, to find another source of income.
Reducing the taper on universal credit is welcome, but it does not come close to balancing the cut of the £20 universal credit uplift or the onslaught of rising costs of living. Hard-working families have been an afterthought in this Budget. It looks like a long, hard winter for so many people, who must now choose between heating and eating.
The Chancellor was also silent on introducing viable statutory sick pay for all. The UK has one of the lowest sick pay rates in the OECD. The current rate of £96.35 a week is wholly inadequate, and one in five workers is not even eligible. The TUC estimates that more than 2 million low-paid workers are excluded because they do not earn enough to qualify. This is another hit for those in insecure work and will disproportionately affect people with disabilities and long-term health conditions.
The SNP has repeatedly called on the UK Government to increase SSP in line with the real living wage, to make it available to everyone by removing the requirement to be a qualified worker and the earnings requirement, and to extend it to 52 weeks from 28 weeks. This is another missed opportunity where, yet again, the UK Government have let down sick and disabled people. After a global pandemic in which the health and livelihoods of the entire country were at risk, it is unforgivable for sick pay to remain so low.
Disabled people have been especially let down. According to the Disability Benefits Consortium, the financial situation of 78% of disabled claimants has worsened since the start of the pandemic. More than half said this was partly due to the increased cost of living, from rising utility bills to the cost of food shopping. This Budget does absolutely nothing to address those issues.
Inflation is set to rise—Huw Pill, the Bank of England’s new chief economist, thinks it might hit 5%—which will only increase the misery for millions. The Resolution Foundation has found that four in 10 households on universal credit in the UK face a 13% rise in energy costs in the same month that their income is cut by £20 a week. Experts warn this will push an extra 150,000 Scots into fuel poverty.
It is beyond belief that the Chancellor did not introduce an emergency energy payment to help those struggling to pay their energy bills. He has failed to tackle the cost of living crisis in order to give a tax cut to bankers that is paid for by slashing universal credit, ending furlough and keeping poverty-inducing policies that push people into further hardship.
We have a steelworks in my constituency of Motherwell and Wishaw. We are a proud steel town, and we have been let down by the Chancellor. There is no mention of help for energy-intensive industries in this Budget. In my more than six years in this place, Tory UK Governments have dragged their feet and still have no discernible plan for steel.
The Chancellor had a real chance to vastly improve the lives of the most vulnerable, but instead he has acted true to type by reducing tax on prosecco and cutting the levy paid by banks. Those experiencing in-work poverty and earning poverty wages will not be cheering the Budget as the £20 a week cut to universal credit bites but, with the duty and levy cuts, bankers quaffing champagne and prosecco on planes will certainly be cheering. The Poverty Alliance said:
“We want to see the benefits of the economic recovery from Covid-19 going to everyone, and unfortunately this budget just doesn’t do that.”
It is apparent now more than ever that the only way for Scotland to have a Government and a Chancellor who can meet the needs of Scotland’s people is through independence. At election after election and Budget after Budget, Scotland is being denied the Government that it votes for. Whether it be a dignified wage for young workers making their start in life, reasonable energy bills for working families who do not want to choose between heating and eating, or elderly pensioners who want to enjoy their retirement with the peace of mind that their pension is triple locked, these basic necessities are available in so many other countries but Tory Governments in the UK continue to deny them. I am truly convinced that, sooner or later, the people of Scotland will have their say and will vote to determine their own future.
What an honour it is to speak in this debate, and what a fantastic Budget, too. I am a locally focused MP, and the Budget will help constituents in Don Valley and across Doncaster. In particular, businesses across the borough will be relieved following the announcement of the 50% business rates cut, with the cut totalling £7 billion.
Equally, the additional money for the Best Start in Life programme that my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) has championed and the increased support for family hubs, for which I have campaigned throughout my time as an MP, will do a great deal of good in helping families in Don Valley and across the north of England.
There is much to celebrate in this Budget, not least the fact that Doncaster has been successful in securing money from round 1 of the levelling-up fund, which, hopefully, will open a gateway to more private investment in this great historic town and soon coincide with a new hospital being built in Doncaster. I apologise to no one for mentioning the hospital.
Despite everything that has occurred since March 2020, the Government have continued to invest in our people and businesses, which is what I am most pleased about. During my many hours of research ahead of my Westminster Hall debate on artificial intelligence last week, the importance of funding for research and development and for innovation projects was brought up time and again by policy papers and stakeholders.
I firmly believe we can award ourselves the title of “Great Britain” because we continue to punch well above our weight, and this Budget will help us to continue to do so. After all, even before the Chancellor’s statement, the UK ranked third in the world for artificial intelligence investment. As the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Mid Norfolk (George Freeman), told me last week, this is not a baton we should drop. I look forward to welcoming him and his Treasury colleagues to Doncaster to show them the fantastic artificial intelligence investment opportunities in my borough.
The Chancellor’s statement means we will increase research and development spending to £22 billion by 2026, with a considerable amount of that funding going to support priorities such as a national science and technology council and artificial intelligence. This ambitious spending commitment, coupled with the additional money for families, schools and further education, will undoubtedly give young people across the country the skills and tools they need to help ignite the new green industrial revolution, about which this Government are so passionate.
It is clear that this Budget puts the levelling-up agenda at the heart of decision making. No longer can levelling up be accused of being a mere slogan. Instead, thanks to the £22 billion of R&D investment, industries will be created directly out of the net zero fund, the future fund and the R&D tax credits regime, to name just a few. This will ensure quality jobs are provided to people across the country, not just down in the south-east. As much as I want Oxford, Cambridge and London, the so-called golden triangle, to continue to succeed and be a beacon of innovation, it is time for a new golden triangle in the north that connects not just our great northern cities but our ambitious northern towns, such as Doncaster, to opportunity and investment. With the multifaceted packages of support provided to businesses, communities and educational institutions yesterday, the creation of a northern powerhouse is a real possibility.
The only way that a person can grow is through everyone around them sharing knowledge. Companies can grow by sharing knowledge, and the only way that a country can grow is by doing the same. Consequently, I shall carefully follow the research and development projects that continue to engage with businesses in places such as Doncaster and Sheffield. There are already fantastic processes that can be built on. For instance, Sheffield has made a great start in utilising R&D projects, and the University of Sheffield’s advanced manufacturing research centre is now home to the biggest names in the industry, including Rolls-Royce, Boeing, McLaren and many others. I thank Steve Foxley and Simon Collingwood from AMRC for their continued support for my mission to get children and young people in Doncaster an AMRC in their town. These two individuals share my dream, and good business sense, that our future lies in our children’s hands and that, with strong local educational institutions, they can help to do great things.
As much as I am, as a result of the Budget, excited about our future, I am concerned about the future impact of AI, as it will be a revolution like we have never seen before. We cannot stop it—and neither should we want to—so we must embrace it. That will involve using R&D funds wisely and involving individuals from all aspects of society. In other words, the R&D investment mentioned in the Budget concerns not only the young but those aged 40-plus, so let me speak directly to that demographic.
They say that life begins at 40 and, having come to this place at 47 years of age, I can certainly attest to that. If I can start my new career at 47, we should be able to help constituents in their 40s to retrain, skill up and start a new career, too. If individuals at this age are happy doing what they are doing, that is great, but if furlough has got them thinking that they can live on less, or that they have nothing more to offer, we should encourage them to think again. Perhaps they do not have the right skills or, as the Chancellor rightly pointed out yesterday, sufficient numerical skills, yet it would be a travesty to give up on people who are only halfway through their lives. I was therefore delighted that the Budget confirmed continued support for the lifetime skills guarantee, along with the new £500 million Multiply programme. From meeting community groups in Don Valley, I know that the programme will ensure that individuals can get the support they need to improve their livelihoods and better look after their families. If that is not levelling up, I do not know what is.
Before I finish, let me express my gratitude to all the businesses out there—from the white van man to the entrepreneur; from the young people setting up a start-up to the loyal employee of a private enterprise; from the chief executive who is sweating about his next board meeting, to the salesman who has just lost or won their latest order. This is not some cheap talk from a politician: I know what it is like. I have been there: no days off; sleepless nights worrying about getting paid; fretting about being able to pay staff; the thought of reading that tax bill. I know that literally thousands of people have those thoughts on a regular basis, and they are members of our business community. We must not forget them, and neither must we forget to thank them for all the work they are doing to prop up this great country and help to fund the services that we hold so dear.
I certainly do not forget, so I end by thanking businesses throughout the UK, not least in Doncaster, for staying strong during this incredibly difficult time. After all, we rightly clap for our NHS, yet there would be no NHS without businesses. I and my colleagues here would not get paid without businesses. In fact, the entire Budget would not be possible without businesses. So, tonight, I shall clap for every business, and for as long as I am here I shall remind those on the Front Bench at every Budget to remember what businesses enable Governments to do for the benefit of everyone in our country.
I am in the same place as my right hon. Friend the Member for Doncaster North (Edward Miliband): we do not know what planet the Chancellor is living on. But we do know that he urgently needs to get back in touch with reality. In yesterday’s Budget, he kept referring to the biggest investment changes in a decade and spoke of an “age of optimism”; I remind him that the only reason his investments look even remotely positive is that the past decade was defined by the devastating cuts and under-investment from Conservative Governments who have driven public services into the ground. Even if he was talking about new money, particularly for public services, it would replace only a fraction of the huge cuts over the past 11 years.
The truth is that this Budget is an underwhelming and uninspired response to the anxiety inducing cost-of-living crisis that our constituents face. Tax cuts for champagne and domestic flights will not go far to offset the difficulties of the long hard winter ahead. Over the next five years, real household disposable income is expected to grow by only 0.8% per year—far below the historical average. It is worth repeating what Paul Johnson, the director of the IFS, said:
“This is actually awful. Yet more years of real incomes barely growing. High inflation, rising taxes, poor growth keeping living standards virtually stagnant for another half a decade”.
The rising cost of living is biting hard in my constituency and the Budget does nothing for those hit the hardest. Figures published yesterday by the financial management company Aryza showed that the average personal debt in Teesside stands at £19,345—the second highest average in England—yet a recent report from the North East Child Poverty Commission revealed that in the north-east, spending to support people in financial crisis fell by 78% in the decade from 2010 to 2020, and the number of local welfare assistance awards made in the region fell from more than 16,000 to just over 12,000.
I have seen local Conservatives spin the Budget as one that is good for the Tees valley, but that simply is not true. Once again, the Tees freeport has been trumpeted, but the actual forecasted benefits are extremely limited. As my hon. Friend the Member for Bristol East (Kerry McCarthy) mentioned, the OBR’s October fiscal outlook notes that
“given historical and international evidence, we have assumed that the main effect of the freeports will be to alter the location rather than the volume of economic activity, so the costs have been estimated on the basis of activity being displaced from elsewhere.”
We have been promised tens of thousands of jobs, but now it appears that the Government’s own Office for Budget Responsibility suggests that that is nonsense.
That point about freeports ties in with the Government’s approach, which seems to me to be that they want announcements that get them photo opportunities and good press releases, and the MP who managed to get the freeport can then put that on their leaflets. But freeports contribute nothing at all to the overall picture; they just take from one area and give to another, which is no way to run the economy and to try to stimulate economic growth. We need a strategy by which everyone is helped to level up.
My hon. Friend is totally correct: the Government rely on picture opportunities and short slogans to run our country. That is not the way forward.
We have had promises of jobs in the future that simply do not materialise. We do not want other people’s jobs: we want real, new jobs, not recycled ones. If it was all as grand at the Tories tell us, we would not still have around 10,000 more people unemployed across the Tees valley than there were in March 2020 and an unemployment rate 50% higher than the national average.
There was some good news in the Budget for the Stockton borough, but for me it was tarnished. I would not deny leafy Eaglescliffe and Yarm their success in being awarded levelling-up funding, but it was disappointing to see Billingham miss out once again, especially as it is in much greater need of levelling up. It just goes to show that the Tories like to talk a good game on levelling up—it is further proof that it is just an empty slogan.
As was mentioned earlier, the Budget contained nothing to address the high costs for energy-intensive industries, even though just weeks ago the country was on the brink of being plunged into a CO2 supply crisis when CF Fertilisers in my constituency had to cease ammonia production because it was not economical. Energy-intensive industries, like many in my constituency, face a triple whammy of unsustainable costs. The sectors have been left reeling by the combination of sky-high gas, electricity and carbon prices that is damaging their ability to compete in international markets and risks domestic supply chains. While I, of course, welcome the announcement that a deal between CF and its CO2 customers will see production at its Billingham plant continue until January of next year at least, industries such as these need longer-term support, including urgent reforms to the short-haul gas tariffs and progress at pace on carbon capture, use and storage.
There was not much at all on energy in the Budget. Companies such as Kellas in my constituency, which I visited a couple of weeks ago, would have hoped for clarity on hydrogen production and the potential balance between blue, green and pink varieties.
Once again, we saw nothing of the support that we need to tackle the health inequalities in my area. Stockton-on-Tees is often used as a case study to highlight health inequalities in the UK. Men who live in the town centre ward are expected to live 18 years fewer than their peers just a couple of miles down the road. In every Budget speech that I have made for the past 11 years, I have called on the Government to fund the new hospital that Stockton desperately needs. I am, however, pleased that my neighbour, the hon. Member for Stockton South (Matt Vickers), seems to have joined my campaign around North Tees Hospital and has secured today’s Adjournment debate to talk about that very topic. I look forward to hearing more from the Minister later on today. I have also tried to enlist support for a new hospital from other north-of-Tees MPs, and I sincerely hope that they will lend their voices to the campaign, which would benefit all of our constituents hugely. They will have found it just as galling as I do that just a fraction of the billions of pounds wasted on a failing test and trace system could have built us a new hospital.
This Government have not spent public money wisely, and they cannot be trusted with the public purse. The Tees Valley needs systematic and long-term investment that is controlled at a local level by local people and local councils, that will make sure that families have enough to live on, and that will free our children from poverty. We also need a plan that will stop firms such as Cleveland Bridge and Engineering Company and local steel firms going bust. We need to save and retain existing jobs as we await the promises of the future to be fulfilled. Once again, the Tories have failed to deliver anything like that. The Chancellor’s small-fry solutions will do little to help working families in our areas who are facing hikes in their Bills and lower take-home pay as we head into that long, hard winter.
Yesterday, the Chancellor said that it was a tall order to complete the spending review, and that the Chief Secretary to the Treasury, the right hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) was just the man for the job. Sadly, he and the Chancellor have given the people of my constituency and the entire country short shrift.
It is a pleasure to follow the hon. Member for Stockton North (Alex Cunningham) and to hear his observations on the Budget for his constituents.
If I may, I will summarise what I believe are the views of my constituents in North East Bedfordshire. Bedfordshire is probably able to speak for much of the country. My first observation is that this was a fair Budget. In very difficult times, there was a tremendous risk that the Budget could be mispositioned, misplaced, or perhaps focus on the wrong priorities. My right hon. Friend the Chancellor demonstrated a fairness in his Budget and that, I think, would be reflected in the views of my constituents. They would also say that it was a very thoughtful Budget. Although I have not done a survey—I know that others have—I am reassured in my thoughts that the Budget was fair and thoughtful, because the latest opinion poll shows that the majority of voters think that, too. Indeed, a majority of Labour voters approved of the Budget as well.
Some measures were very relevant to my constituency. There is a great interest, for example, in support for buses, and rural bus services in particular. This is especially true in Stockfold and Arlesey, and the additional funds will be welcome. There is a great interest in and support for active travel networks—for cycling and walkways—particularly in the new developments between Sandy and Potton and Biggleswade, and for additional resources for special educational needs provision. There is a lack of SEN provision in my constituency and I look forward to working with Central Bedfordshire Council on a proposal so that we might benefit from that additional funding.
On balance, my constituents would also say that taxes are too high and that they need to come down. Looking at the Budget report, it was interesting to see what this Government are doing. Some reports say that there has been some largesse in spending, but if we look at the period of spending from the 2020-21 out-turn to 2024-25, we see that, in real terms, current expenditure is pretty flat. It is into the investment side of public services where this Government are putting additional resources. Before the pandemic, public expenditure as a percentage of our overall economy stood at 39.8%.Yes, it has grown now to what I would suggest is an unsustainable 53.1% of the economy in 2020-21, but by 2024-25, it will go back down to 41.9%. We will be on the right trajectory to get back to where we were before the pandemic, but with an emphasis on investment rather than current expenditure. Those are worthy points to make and support the fact that taxes will come down, as the Chancellor has said.
Every Budget must be presented within the context of what is going on, and none more so than this one. We are coming through the covid period and through the Brexit transition. Even today, a French Minister has said that the only thing the British understand is force. That is unwelcome language. We do not want to have opposition from France or from any other member of the EU, but there will be issues about the Brexit transition that will affect the economy. We have spoken a lot today about climate change, but not so much about the changing relationship with China and what that does to supply chains. The other contextual factor is the OBR forecast itself. It is ambitious in its forward growth projections in the near term. All of those issues provide the context for the Budget.
What we should really focus on is the purpose of the Budget. One of the great advantages of being given the honour to return to Parliament as the representative of North East Bedfordshire was to support our Prime Minister in setting our country’s strategy post our departure from the European Union. That, ultimately, is the purpose of this Budget; it is to marshal the talents and the resources of our people to create a successful, global Britain on this new international basis. This Administration under this Prime Minister have the opportunity to become one of the great reforming Administrations of our country. The purpose of this Budget is to provide the confidence to investors, to the public and to the Government themselves that they can take those major steps to ensure the long-term strategic success of our country in that new direction. I think that it does that very well indeed in very difficult times.
It is important though that we cast a critical eye over some aspects that have the potential to knock the country off course. The first is on capital markets. The Bank of England has indicated that it has intentions to stop repurchasing and quantitative easing when interest rates hit 0.5% and then potentially to start restricting the money supply by making additional repurchasing if interest rates hit 1%. That could have a significant impact on the cost of Government borrowing, which is why the Government are right in this Budget to chart a downward course.
On labour markets, we should remember that the United Kingdom with its flexibility has one of the best labour markets in the world, in large part due to reforms undertaken by Conservative Administrations, but the Government must make sure that they achieve their increases in productivity targets.
We should also cast a critical eye over public sector efficiency, particularly in relation to health. If I could say also to the Minister that a further critical eye should be cast over the accounting of public sector pensions, which has been the subject of many questions. We went through tremendous changes in public sector pensions a decade ago, but as the Institute of Economic Affairs paper pointed out just last week, there is much ambivalence and discretion over the way in which the Government are currently accounting for public sector pension costs. The estimated under-reported cost is of the order of £57 billion. That is not a slight accounting error, but a very major difference in costs, which is caused by the way that the Government sort out how they account for public sector pensions. It is worth their looking at that seriously and it is worth consideration by the Treasury; I hope that they will look into it.
Let me close on three points. First, as the Chancellor said, the Conservative party has demonstrated that it is the party of public services, although I would say that that is demonstrated not by how much is spent, but by the quality and efficiency of the services delivered to the public.
Secondly, the Conservatives are the party of low taxes. That must mean that the Chancellor will fulfil his promise—I believe he will—to reduce taxes, because taxes are too high and an unsustainable burden on enterprise. However, we all have to recognise that any tax reductions in this Parliament will mean that choices will have to be made, and they should be focused on improving the efficiency and enterprising part of the economy.
Thirdly, the Conservative party is the party of work. As I listened to Opposition Members, I reflected on the questionable negativity of the Opposition to many of the measures that have dramatically changed the importance of work in this country over the last decade. It was the Conservatives who introduced the living wage. It was the Conservative party and the coalition that did so much to increase the personal tax allowance. It was the Conservative party and the coalition that did so much to reform the benefits system that was a restriction on people’s willingness to work. It was the Conservative party that introduced the universal credit system. And it is this Budget that has introduced the taper relief at the original level that was set by my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith).
All those points indicate that this was—as I think the people of North East Bedfordshire believe—a fair, thoughtful and reasonable Budget.
It is right that we view this week’s Budget in two contexts: that of the pandemic, which is still very much with us, given the high case rates across the UK; and that of the political decisions that have been made by this Government over the past 19 months.
Time and again, the political choices that have been made by the Conservative party have been economically and morally adrift. As my hon. Friend the Member for Leeds West (Rachel Reeves) rightly said yesterday,
“we have a Government who are a byword for waste, cronyism and vanity projects.”—[Official Report, 27 October 2021; Vol. 702, c. 290.]
We should not forget that it was this Government who awarded hundreds of millions of pounds in personal protective equipment contracts to a pest control firm and to a Florida jewellery firm that had no experience of public contracts, as well as £150 million to a company that produced 50 million face masks that the NHS could not use over safety fears.
All too often, the decisions were made before financial and company due diligence was applied. Seventy-one contracts, with a total value of £1.5 billion, were awarded to suppliers before the financial and company due diligence processes were completed. Some £2 billion of contracts were awarded to businesses with direct links to friends or donors of the Tory party. The Public Accounts Committee highlighted this yesterday in its report on Test and Trace, which showed that £37 billion was spent. It said that “eye watering…sums” of taxpayers’ money were spent that failed to achieve the ambition of the project. That is the context of this Budget. That taxpayers’ money could have been spend much more wisely elsewhere. The Government would have done well to have looked at the Welsh Government’s actions in the pandemic for a good demonstration of political choices, under the sensible, steady and evidence-based leadership of Mark Drakeford.
My constituents have not been shielded from the Tory Government’s cut to universal credit this month; 8,630 households in Newport East have lost out as a result of the Government’s decision to remove the £20 uplift, which has made such a difference during the pandemic. The cut, coupled with the rise in national insurance, which will disproportionately impact those on the lowest incomes, falls in the middle of a cost of living crisis that this Budget does so little to address. The reduction in the taper rate is modest, and the Resolution Foundation highlights that about 75% of the 4.4 million households on universal credit will still be worse off as a result of decisions to take away the £20 a week uplift. This is made worse by the fact that the prices of so many everyday essentials, from food and fuel to gas and electric bills, have skyrocketed. No support was announced in the Budget for soaring household energy bills—and 3p off a pint in two years’ time may be welcome, but it is no help for families today.
I very much praise the work of Newport and Monmouthshire citizens advice, which has highlighted that the country faces a perfect storm of household debt, with an estimated 2 million households across the country already behind on paying their energy bills. This Budget presented the Government with an opportunity to take action on the issue. Indeed, the Opposition called on Ministers over recent months to remove VAT from domestic gas and electricity bills—a policy that I know some Government Members would have supported—but that was rejected.
On the theme of missed opportunities, with COP26 beginning on Sunday, there was little in the Budget to suggest that the Government are willing to invest in tackling the climate crisis. Climate action must start at home, and Britain’s credibility as holders of the COP presidency rests on the example that we set. There was little in the Chancellor’s speech to suggest that the Government will invest in delivering the benefits of the green transition to households and to industry, and certainly nothing to match Labour’s ambitions and the achievable demand for an investment of £28 billion every year until 2030 to tackle the climate crisis.
Crucially, as other hon. Members have said, there was nothing in the Budget this week for steel, an industry that would be a beneficiary of and contributor to the creation of a net zero economy. My right hon. Friend the Member for Doncaster North (Edward Miliband) set out that case brilliantly. Steel should be at the heart of the green recovery from the pandemic, and I say that as the Member representing Tata’s Llanwern site and Liberty Steel in Newport. UK Steel has rightly said that this Budget is a “triumph of complacency” and “a missed opportunity” ahead of COP26. Indeed, in the Chancellor’s statement, there was no hint of action on the sky-high industrial energy costs.
We heard a hugely weak response from the Secretary of State earlier in the debate that will deeply disappoint the industry, when he said that he is “in active conversations” and “watch this space”. We have been talking about this for many years. It is a really big burden on our industry that holds back British steel manufacturers against continental competitors. There was also no allocation of funding to the clean steel fund or wider decarbonisation support for the sector. The steel industry has highlighted that, of the 10 points in the Prime Minister’s plan for the green industrial revolution, eight relate to industries or goods that depend on steel or support the decarbonisation of steel. Either the Chancellor has forgotten that or the Government’s industrial strategy was not worth the paper that it was written on in the first place.
The Prime Minister has said:
“It would be crazy if we were not to use this post-Brexit moment to use the flexibility we have to buy British steel.”
It is one of the very few times that I can kind of agree with him. But this Budget was not the vote of confidence in our industry that it needs and deserves. That will need to come, especially if the Government are serious about converting their rhetoric around levelling up into action for an industry that is so well placed to be at the heart of that agenda. The fact that the UK currently imports 60% of the steel that it requires remains an environmental and economic own goal. We have a highly skilled and passionate steel workforce here in the UK, including in Newport East, who are ready to play their part in a green industrial revolution if the Government will just let them.
Yesterday, the Government boasted of recruiting new or extra police officers, but, as the chair of the Police Federation has highlighted, the new recruits, while welcome—I very much welcome those joining Gwent police—are only a partial replacement for the 21,000 officers and thousands of police staff lost over the last decade. Forces such as Gwent, which faced a 40% cut to its budget from 2010 to 2020, deserve a fairer funding settlement from the Government to deal with the many challenges they face, from rising antisocial behaviour in our communities to new and emerging forms of organised, violent and cyber-crime. From speaking to constituents, councillors and local community groups in Newport East, I know that tackling crime is a pressing priority for them. They want our police to be properly resourced to protect us. Sadly, there was nothing in the Chancellor’s statement to suggest that the Government are serious about giving the police the support that they need and deserve.
On public sector pay, as Unison has pointed out, there is no guarantee that it will rise above inflation. Wage rises below the cost of living, when taxes are going up and universal credit is cut, are, in effect, a pay cut.
Finally, of the 10 Welsh projects earmarked to benefit from the first tranche of levelling-up funding, half fall within marginal Conservative-held seats, although I congratulate my hon. Friend the Member for Pontypridd (Alex Davies-Jones) on her allocation. There are just three beneficiaries in south Wales and none in the entire Gwent region, which means that the excellent cross-party bid for the regeneration of the leisure centre and town centre in Caldicot in my constituency apparently fell on deaf ears, which is disappointing. The Chancellor talked about beer barrel politics yesterday but this actually seems to be a classic case of pork barrel politics from the Treasury.
On that theme, yesterday the Government announced Restoring Your Railway funding for a bidder from north Wales. I ask that the Government now make progress on other bids in the Restoring Your Railway funding pipeline, including the excellent application for a walkway station for Magor in my constituency, which has enormous local support in the community and would bring economic and environmental benefits to the area. I look forward to pursuing this yet again with Ministers in the light of yesterday’s announcement for north Wales.
Finally, my hon. Friend the Member for Stockton North (Alex Cunningham) was quite right to say that this Budget was underwhelming and uninspired.
It has been quite painful to sit through some of the speeches today and hear how negative they have been about a Budget that has been put together in incredibly difficult circumstances. It is entirely wrong just to pour negativity on it and to say that it is pork barrel politics when there are so many examples of Opposition right hon. and hon. Members whose areas are benefiting from this funding. I was pleased to see a poll in which over 50% of the public approved of this Budget and 17% disapproved. Those are very positive numbers.
What is crucial here is economic credibility. One of the problems that Labour has is a lack of economic credibility. A lot of that goes back to the note that was left saying, “I’m sorry, there’s no money left.” That is still in the minds of millions of voters up and down the country. The thing about getting economic credibility is the need to be open and honest about the fact that there are difficult decisions that have to be made. If the Opposition pretend that there are no such difficult decisions, then it will be very difficult for them to gain any kind of credibility.
The Opposition can agree to every kind of spending pledge under the sun, whether it is saying, “We don’t want to cut international aid from 0.7% to 0.5%”, or whatever else, but at no point actually prioritise and say, “We think this is particularly important, so we will make up the money in this way.”
All we get when the Opposition vote against the increase in national insurance, say, is vague strategies about wealth taxes, so we do not get any detail about how much will be raised in what way. Yesterday, the shadow Chancellor of the Exchequer went on the attack against the independent schools sector as though that alone is going to start raising the billions of extra money we need to do. That is just typical Labour class warfare to no end whatsoever.
I am not going to take any interventions at the moment, okay, so stop trying.
In terms of the circumstances we face at the moment, the right hon. Member for Doncaster North (Edward Miliband) asked why we broke a manifesto pledge on tax. The key reason was the pandemic, and actually we spent £407 billion on dealing with the pandemic. That is why we had to do what we did. It was remarkable—the furlough scheme was absolutely the right thing to do, and it was incredibly impressive how quickly it was put together and it saved millions of people’s jobs. But when we were coming to end of that scheme, I was concerned myself about what it would do to unemployment. The suggestion that it could have been 12% was not unreasonable, and I feared that it could be around that level. The fact that it is 5% at the moment is a significant achievement. Regardless of our politics, every Member in this House should be really pleased about that and the fact that there are huge numbers of people in work, in a secure job, who we feared might not be. A lot of that is to do with the ingenuity of the Treasury, the Chancellor and his team. I thank them for that because it saved many of my constituents’ jobs.
On help with the cost of living, I very much welcome the decrease in the universal credit taper by eight points. The key thing about universal credit is that it was to try to ensure that it always pays to work—that work pays. Decreasing the universal credit taper by eight percentage points furthers that aim and saves some of the people on the lowest incomes a significant amount of money. That is to be welcomed. We should probably work to try to reduce it even more in future, but in a sustainable way that matches up with being responsible with our public finances.
Freezing fuel duty is also to be welcomed, as is increasing the national living wage. Apparently we are stealing Labour’s clothes—that is what I have heard—but I would like to think we are doing so in a responsible, sustainable way. It is absolutely right that as a party and as a Government we are single-minded about trying to do everything we can to support some of those on the lowest incomes in society. Many of those people are in my constituency. They are on lower incomes but want to work to get a higher income, and want the support to do so. There is a lot in this Budget that does that.
I am very passionate about the hospitality sector in Ipswich. We have some of the country’s best pubs, and we have some great breweries in Suffolk. The biggest cut in beer duty for 50 years is to be welcomed. I was one of the 100 Conservative Members of Parliament who wrote to the Treasury requesting that this happened. Only recently I was at the Belstead Arms, with its fantastic landlord Steve, who started the pub up in January 2010 and has got through a remarkably difficult period. He, for one, is very happy about this decision, as are the other 40 to 50-odd landlords in Ipswich, some of whom I will be visiting this weekend, but not too many.
The business rate reduction is also very welcome. It is one of the biggest reforms of business rates we have seen. It is not just tinkering; it goes much further than that.
Many right hon. and hon. Members will know that special educational needs are one of the things I feel most strongly about, partly because I myself had learning difficulties. I know I am a bit of a broken record in talking about that. I had dyslexia and dyspraxia. When I was 12, I had the reading and writing age of an eight-year-old. I was very lucky to get the support that I needed, so I am acutely conscious that a huge number of young people who are in the same position that I was do not get the support that they need. Not everything about special educational needs is about money, but a lot of it is, because most of the most powerful interventions we can make in special educational needs are resource-intensive. It is incredibly welcome that that has been recognised by increasing the special educational needs and disabilities budget by £2.6 billion over the next three years, with 30,000 extra special needs places. Yes, special schools are part of this, but better provision within a mainstream setting is part of it as well.
I see extra money for SEND as an investment, whether it is for prisons, where about a third of prisoners have some kind of learning disability—I reckon it is actually more like 50% if we diagnosed everyone who went in—or for children in care, over 50% of whom have learning disabilities. There is often pressure on families when their children’s needs are not met. Recognising that is incredibly important, and that is what the Government have done.
I want to finish by talking about levelling up and whether it is working for Ipswich. I think that in many respects levelling up is working for Ipswich. When some of my constituents heard about levelling up they feared that it was all about the north and the midlands. They were concerned that deprived parts of East Anglia would be forgotten—I actually mentioned that in my maiden speech. There are many examples of where the Government do recognise that it is not just about the north and the midlands. Ipswich has received £25 million from the town deals, and there are 11 discrete projects, many of them focused on skills. They are at the heart of levelling up and they make a massive difference to the lives of many of my constituents. We have had safer streets funding—in particular, for two parts of town with the worst problems of antisocial behaviour. We have a freeport just down the road in Felixstowe—one of just eight—which will hopefully bring forward 10,000 new jobs. We also have an opportunity area in Ipswich—one of only 12.
But there is one area where I would like to see the Government go a lot further. If we are going to sort out levelling up, we need to look at the way in which we fund our public services, and more specifically the funding formulas that lie behind the way in which those public services are funded, principally in two areas: education, particularly special educational needs; and police funding, where I do think Ipswich gets a raw deal. In Suffolk, police spending per head is £114.20 while in London it is £298, but we also compare very unfavourably with similar counties.
On SEND, there is a multi-academy trust with one school in Tower Hamlets and one school in Ipswich, and spend in Tower Hamlets is four times higher for children with mild to moderate learning difficulties, two and a half times higher for moderate to significant, and two times higher for significant to severe. It does not matter where it is—whether a child with a learning difficulty is in Ipswich, Birmingham or London, they are of the same inherent worth and value. There is no reason why random historical funding formula anomalies should mean that they get less funding and support per head than any other young person. That needs to be looked at.
I welcome this Budget. It is focused on the cost of living, focused on levelling up, and focused on allowing us to recover from an unprecedented pandemic.
Despite the protestations of Government Members, this really was an alternative reality Budget, with a Chancellor living in a dream world, ignoring what is actually happening in our communities and our high streets across the country.
This Budget had nothing to fix the emptying of our supermarkets and the escalating cost of living. Cafés, bars and restaurants, including businesses in my constituency of Cardiff North, are still reeling from the pandemic and struggling to find the staff they need and to keep going. Nor did the Budget tackle the lack of rape prosecutions and the severe court delays, which are leaving victims high and dry and struggling to cope.
There was no action on escalating energy costs, whereas Labour has been clear that we would immediately remove VAT for six months, which would have an immediate impact. Data released yesterday confirmed that real wages fell in every part of the country between 2010 and 2021, by a startling £23 a week on average. The Budget did nothing to remove the enormous tax burden on working people and businesses. There was a £4 billion tax cut for banks, a £300 million tax cut in domestic air passenger duty and a £12 billion tax cut for large businesses such as Amazon. Those tax cuts do absolutely nothing to help working people who are struggling day to day.
In the week of COP, it beggars belief that the Chancellor thinks it is okay to come to this House and make domestic flights cheaper. Will he really be going to COP next week and telling world leaders in his speech that that is what he has done? What an embarrassment! They are a Government who talk the talk on climate action, but when it comes to it, they just do not deliver. Where were the announcements on tackling the huge energy efficiency crisis we are facing? We have rising energy costs, cold houses and homes, and people unable to afford the weekly shop, let alone Christmas. This Government are letting working families down. Labour has pledged £28 billion a year to climate investment right up until the end of the decade. Our Labour Chancellor would truly be a green Labour Chancellor, investing in the jobs and skills of the future.
This Tory Government have created a low-wage, low-skill and low-productivity economy, taxing working families, making millions of people pay for their mistakes and refusing to overturn the £20 cut to universal credit. Three quarters of people on universal credit are worse off from the Chancellor’s changes. With no plan for growth—just more of the same—it is working people up and down the country who are paying the price.
For Wales, there is no new investment for coal tip remediation and no significant additional funding to support rail infrastructure in Wales, even though the Welsh Labour Government highlighted those priorities again and again with this Government. It is clear this Budget does not deliver for the people of Wales. It does not deliver for anyone. There are clear gaps in funding and it takes hard-working people for granted.
This Budget showed yet again that this Government do not care about people up and down the country. There was only a passing mention of climate in the Chancellor’s speech. It is clear that the Government do not care about the future of this nation. In the week of COP, that tells us all we need to know. We must act now if we are to face up to the scale of the climate challenge. Not acting now not only risks the future of the planet, but is a major fiscal risk and a risk to our economy. I want to see a Budget that delivers, not only for working people, but for our children and our grandchildren.
It is a pleasure to follow the hon. Member for Cardiff North (Anna McMorrin). In the limited time available, I will talk primarily about infrastructure and education, but I want to cover a number of other issues, too.
I start by talking about the many small businesses we have throughout Sedgefield. I agree with my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) that a more fundamental review of business rates would be very welcome. I have everything from small cheesemakers, such as the one in Mordon, to breweries such as Yard of Ale at the Surtees Arms, and I am sure that the changes to duty will encourage them to move forward. Emma McClarkin, the chief exec of the British Beer and Pub Association, welcomed the Chancellor’s continued support of the pub sector. I hope that the many pubs across Sedgefield, from Hurworth to Thornley and Ferryhill to Bishopton, also see the benefits of simplifying duty in particular. I must give a shout out to, of all names, The Impeccable Pig in Sedgefield, which was recently awarded “AA Inn of the Year”. There are clear benefits to small businesses, but there are also benefits, as other colleagues have mentioned, from people being able to socialise in pubs. Getting away from the cheap lager from the supermarkets is a good step in the right direction.
One thing we need to remember, whatever we are doing, is that we always talk about “this place”, and place is an important thing for us all to be thinking about. We need to think about where people are coming from and what they do there. That is where the importance of levelling up comes in. It is about looking after communities, but in particular those that my all-party parliamentary group for “left behind” neighbourhoods focuses on, which can miss out because they do not have the capacity to go for the grants and support being picked up by other people. We need to encourage all our businesses to be as cognisant as they can of social impact. We need to remember that the quality of place that people are coming from is a key driver in the quality of employee that businesses will get.
The primary town in the Sedgefield constituency is Newton Aycliffe, and it has put in a levelling-up bid to for town centre recovery. That is a key thing that must happen to help us grow. We also have some fantastic businesses there, ranging from Crafter’s Companion, which has been active during the pandemic in getting people into crafting work and helping their mental health, to the likes of Hitachi. Hopefully we will see some announcements in the not-too-distant future on HS2, so that we can get some certainty. Certainty is what businesses need to move forward.
I also have 3M, whose efforts on masks through the pandemic have been incredible. We need to be careful about restructuring supply chains, because of the investment that people have needed to make. We also have lots of coach businesses. I hope the Department for Transport will continue to support our local council on a capital and revenue basis to help those businesses transition back from the depths that they have reached, so that they can get back to viability. On council funding, I want to ensure that there is proper consideration of the rurality or deprivation indices for councils. Durham in particular sometimes suffers from the way that they are used in funding formulae.
To return to business and its the social benefits, there is a company called Finley Structures in my patch. Last week, I had the pleasure of going there to see a blue plaque put up for the Aycliffe Angels—the ladies who made munitions during the war. To our delight, a 100-year-old lady called Muriel Scott turned up unexpectedly while we were there. If funding comes through from the money that has been talked about for that kind of thing, John Finley, who runs the business, wants to create a museum to show what people like Muriel Scott went through.
We need to drive science innovation. The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Mid Norfolk (George Freeman), and the Secretary of State for Business, Energy and Industrial Strategy have visited NETPark—the North East Technology Park—just outside Sedgefield, and understand its significance. If we can get the investment, we will have the north-east space hub there too. The local council is doing a good job, but we need to make sure that we pull that off.
That feeds into education and training, which are critical. T-levels have a place in the agenda, but I encourage the Government not to throw out BTECs. It is important that everyone has an opportunity, wherever they come from and whatever level of education they start from, to engage with the process and take the next step forward. That leads me to university technical colleges, of which I have one of the best in the country. Because it is linked to the likes of Hitachi and Gestamp, it attracts people from all over the north-east and Northumberland—as far away as that. Lord Baker wants more UTCs to be established, so I am hopeful that they will happen. I encourage investment in them to develop the opportunity for more people to learn technical skills and get us all into a better place.
To return to infrastructure, I have spoken many times in this place about Ferryhill station and the opportunity for it to reopen. The hon. Member for Stockton North (Alex Cunningham) referred to jobs. If that station goes in, the line will go through to Stockton North and connect to Teesside and to all the jobs being created by the Tees Valley Mayor, Ben Houchen. Like all railway lines and roads, however, it is a two-way link, so it would present the opportunity not only for my people from the Ferryhills of this world to get to Teesside and the jobs there, but for anybody in the Stockton and Middlesbrough area who wanted to come to NETPark for the high-value science-led jobs to come on the train in the other direction. It is at the evaluation stage and I am hopeful that it will come forward.
I agree with my hon. Friend the Member for North East Bedfordshire (Richard Fuller) and I think that my constituents will feel that this is a fair Budget at difficult time. Opposition Members have made a number of comments about Labour’s position on business, but I sit on the Business, Energy and Industrial Strategy Committee and I have to say that the Opposition’s presence in that Committee is lamentable. The number of times that the only Labour Member present has been the Chair is poor. How can they talk about business when they do not even turn up to the Select Committee? When we went to Tata Steel, the hon. Member for Newport East (Jessica Morden) met us there; credit to her for joining us, but she was not a member of the Select Committee.
I welcome the funding for the British Business Bank. As a last point, because I do not think anyone should forget it, climate change is important but we need to make sure that we do things in context. There is no point in stopping doing things that nobody wants to do—I will use an easy example of the Cumbrian mine—only to then import coal from the other side of the planet and pay all the carbon costs that go with bringing it in from elsewhere.
There is a lot in the Budget that I like, but there is the odd thing, such as the Leamside line that was announced this morning, that I would have liked to get through, although that is not the Budget but the Restoring Your Railway fund. We will need to come back to that and have a closer look at it. In general, however, I welcome this Budget.
The mistake with Budgets is to think that they are the beginning of a financial process. Often, they are the result of one. This Budget is the result of 11 years of austerity and under-investment. Wages flatlined, and our public services and infrastructure were ill-equipped for the pandemic and to be the engine of growth that we need to bring us out of the economic crisis it has precipitated.
The Budget is uncomfortable for Conservative Members of Parliament. No Government since the war has implemented a higher tax take from the people of this country.
I am sure that the hon. Lady will explain exactly why she is so proud of the Budget. That is her right. However, it is clear that many of her colleagues feel that it is pulling them in different directions. I will come to explain why that is the case.
As I said, no Government since the war have implemented a higher tax take from the people of this country, yet wages are scarcely where they were 10 years ago, growth in the next three years will slow to a sluggish 1.3% and our country’s debt stands at the astonishing figure of £2.2 trillion. It was notable that yesterday the Chancellor referred to underlying debt rather than gross debt. Underlying debt is still a staggering 85.2% of GDP and, on his own admission, set to rise over the next three years. Gross debt is now 103% of GDP.
What of the deficit? After the global financial crisis had seen it skyrocket from £50 billion to £103 billion in 2010, George Osborne said he would eliminate it by 2015. The deficit at its peak in 2010 was £103 billion, or 6.9% of GDP. At year end in March, the last ONS release said that the UK’s deficit was £304 billion, or 14.5% of GDP. The hon. Lady may not feel uncomfortable about that, but I think that a number of her colleagues do, yet the Chancellor had the extraordinary brass neck to the tell the House that
“it is the Conservatives, and only the Conservatives, who can be trusted with taxpayers’ money.”—[Official Report, 27 October 2021; Vol. 702, c. 276.]
The Chancellor talked about building a stronger economy. His party has had 11 years to do that and it has failed. What should be of real concern is the Budget’s lack of direction. There is an extraordinary tension between No. 10 and No. 11, which are operating like a Doctor Dolittle character, with the Chancellor pushing for fiscal conservatism and the Prime Minister pulling for a bout of sunny optimism and lax monetary control. The truth is, they are afraid of the electorate and it showed in their spending decisions.
The Government are rightly relaxing the public sector wages freeze—to the horror of their Back Benchers—but they have wrongly imposed a £4 billion clawback on the very poorest in our society who rely on universal credit. Their changes to the taper relief show only how fearful they really are, but those changes do not nullify the impact of the clawback.
The Government have no strategy to tax wealth on unearned income. It is shameful that a cleaner on universal credit doing three jobs to make ends meet pays a higher rate of marginal tax and national insurance than her landlord. It is extraordinary that, instead of working with international partners to develop a proper tax framework for companies such as Amazon, they have done all they can to block one. It is extraordinary that the Chancellor has given £1 billion of tax cuts to the banks. Working families get tax rises; banks get tax cuts.
Priorities are the stuff of politics and the Chancellor has made his party’s priorities clear. But, in addition to the wrong priorities, the Government have been incompetent and profligate. The total investment announced yesterday for the next three years was £150 billion. That same day, the Public Accounts Committee reported that, despite being allocated an eye-watering £37 billion, Test and Trace failed to achieve its objectives, failed in its key purpose and, at the most critical time, failed to disrupt onward transmission. The Prime Minister had a phrase for money wasted like that—it referred to something being done up a wall. Delicacy prevents me from saying what it was.
The past 11 years of Conservative Government have seen our economy grow at just 1.8% per annum. Even taking into account the impact of the global financial crisis, in the years from’ 97 to 2010, when Labour were in government, the economy grew by 2.3%. No wonder the only person on the Conservative Benches to look pleased at the Chancellor’s discomfiture yesterday was the Foreign Secretary. The truth is he has taxed more and more unwisely, while presiding over unacceptably slow growth.
Many of us will recall the Government’s response to Labour’s manifesto commitment to invest £200 billion in the infrastructure of the country. They called it a magic money tree, but since then they have discovered a forest, even if their £130 billion infrastructure strategy now looks scarcely adequate to turbocharge our economy in the way that is required.
Let me now turn to the way that is required. It is to be regretted that the Chancellor does not use public transport when in London. Were he to do so, he would have seen the poster campaign that says, “The world is looking to you, COP26.” One of those posters says, “Secure our priceless planet. Or argue over cost.” Yesterday, the Chancellor could truly have given us a Budget of optimism: a Budget that addressed the infrastructure needs of our country, the skills development required for a just transition to a net zero economy, and the basis for sustainable economic growth. He failed, and did so in a way that displayed such an astonishing lack of awareness of the problem and what one can only call contempt for the reality of the crisis that it appeared a deliberate provocation to all those about to meet this weekend in Glasgow for COP26.
The Chancellor referred to the tax super-deduction of 130% allowances for capital investment. He failed to mention that these have no environmental or climate filter and that some of the biggest fossil fuel companies will be able to use them to receive from the taxpayer not only the entire cost of their polluting capital investments but a bonus 30% for doing so, in projects like the Cambo oil field,. This incentivises the very behaviour COP26 is trying to curtail.
The Chancellor announced a new lower rate of air passenger duty on domestic flights and support for regional domestic airports to incentivise air travel within the UK. Other countries have banned domestic flights where a fast rail link exists and have been investing in their low-carbon rail infrastructure. It is, frankly, obscene that it is often cheaper to fly within the UK than to take the train. My hon. Friend the Member for Bristol South (Karin Smyth) earlier remarked that a flight from her constituency in Bristol to Glasgow costs just £29.99, while the train costs £97.20. The Government’s investment priorities on this are wrong. They are wrong economically and they are wrong morally.
I want to start where the Chancellor left off, by saying that I strongly believe that it is not just for the Government to fix every problem and tackle every challenge. I am a Conservative because I believe in and want to support strong families, strong communities, the voluntary sector and charities coming together to make our country a better place to live, work and raise a family. We saw that during the pandemic. The state played an enormously important role but so did families, volunteers and charities in Crewe and Nantwich and across the country, and I shall focus on welcoming the measures in the Budget that support families.
I welcome the introduction of family hubs—I supported my hon. Friend the Member for Congleton (Fiona Bruce) in campaigning for that—further funding for parenting support, more support for adopted children and their families, and the continuation of the holiday activity programme. In discussing the stability of families and poverty, we cannot ignore, and must pay greater attention to, some of the factors that make it much more likely for children to be living in poverty. Single-parent families and families with three or more children are much more likely to be living in poverty and I wish campaigners and those on the Opposition Benches would pay as much attention to these important factors as they do to the role of Government in topping up family incomes.
The emphasis on the first 1,001 days is also welcome. We are seeing increasing understanding across Government that the big impact we can have early on in terms of children and families is worth our attention and gets better results in the long run.
The Opposition too often focus purely on financial security. Of course financial security is important, but it is also important to support people to be the best parents they can be and to ensure that their children grow up with emotional security and have the kind of self-belief and aspiration that I was given by my family. Sadly, when I meet some children in my constituency, they do not have that. We have to do better at giving that to them.
As much as we argue over relatively small, albeit important, changes in the percentages and numbers of people living in absolute and relative poverty, if we take a step back and look at the big historical trends, those figures have been stubbornly in roughly the same place. I think that is because we focus too much on the money and not enough on the other factors that might lift people out of poverty and give them aspiration and opportunity.
Supporting people into work and better jobs is absolutely part of that, not just because it improves people’s incomes but because we know that work helps to improve people’s mental and physical wellbeing. I am proud that, compared with 2010, there are half a million fewer children growing up in a household that has been out of work long term. That is the kind of achievement that sustainably lifts people out of poverty.
That is why I welcome the emphasis on the changes we have made to universal credit—using the money wisely to encourage people into work and to keep more of their own money—and to the minimum wage. We need to do everything we can to ensure that the right incentives are there for people to be in work. Of course, closely tied to that are the commitments we made earlier in the year on things such as the lifetime skills guarantee and further funding to support free childcare. We need to look closely at whether we can go further when it comes to childcare. We still have historically high childcare costs in this country, and that remains a difficult barrier to work. Things such as the change in the taper would go further if childcare were cheaper.
We also need to look at child maintenance, which is another key factor in poverty. Some 60% of children living in single-parent households that are not in receipt of maintenance would be lifted out of poverty if that maintenance were received. When the restrictions and measures brought in to tackle this issue, which largely focused on things such as deduction orders for people’s earnings and court orders to seize assets, were considered, I do not think enough thought was given to the realities of using them, because most of those things make it difficult for someone to earn money, which defeats the object. Consideration was given to home curfews for people who were non-compliant with their child maintenance, but those powers were never enacted. We need to look at that again if we want to drive down the absence of child maintenance payments.
I am conscious that Department for Business, Energy and Industrial Strategy colleagues are leading today’s debate, so I want to mention an area that will be important for job opportunities in Crewe and Nantwich, which I have been talking to the Secretary of State about—the geothermal industry. We saw earlier in the year the difficulties of over-relying on solar and wind power when it comes to our renewable energy drive. Geothermal is an under-utilised opportunity in this country. Unfortunately, earlier in the year, just as the industry wanted to invest, we removed the tariff that would give it a guaranteed return. That has obviously had a devastating impact on investment in geothermal. We see it rising across Europe and across the world, but it is not rising in this country because we do not have that guarantee. I will continue to work with BEIS colleagues to see whether we can do something about that.
Levelling up is important to us all. It is no good encouraging families and encouraging ambition if opportunity is not spread evenly around the country, as colleagues have mentioned. Yesterday, we saw the announcement of hundreds of millions of pounds of investment through the levelling-up fund. Through the impact of the £22.9 million Crewe town deal that we were awarded earlier this year, I have seen the real, tangible difference that those projects can make—led by local MPs, working with local authorities and, importantly, picking projects that are important to local communities across a whole range of issues. I look forward to us making a levelling-up fund bid in future funding rounds.
I am afraid that we have heard the usual today from those on the Opposition Benches. Labour Members want to tell everyone that there are no difficult decisions. There is never a request for more benefit spending that they say no to. There is no problem to which their answer is not just “tax the rich”, despite the increasing proportion of our tax bill being paid by the wealthy. Some 30% of income tax is paid by the top 1% of earners. I am not quite sure where Labour Members want that figure to be before they will accept that those with the broadest shoulders are carrying the biggest burden, and I do not think it is sensible in a global economy to further discourage wealth creators from living in this country.
Labour Members know that their rhetoric on taxing the rich does not add up. That is why, despite all the talk, they have outlined only one measure, which—along with all the measures they have talked about but failed to detail—they know full well does not come close to meeting their continual spending commitments. For example, they wanted us to spend not just £6 billion on retaining the uplift on universal credit, but £2 billion to extend it to those on legacy benefits, and £1 billion to extend it to those on tax credits. They wanted £2 billion to scrap the two-child policy; £2 billion to turn advances into grants—I could go on. They never explain how they would pay for that, besides broad discussions about taxing the rich. [Interruption.] The hon. Member for Easington (Grahame Morris), from a sedentary position, talks about champagne. It is classic Labour to misunderstand what it means to be aspirational. The people I know who want to buy a glass of champagne are not wealthy; they are people from ordinary families who maybe have a wedding or another special occasion and want to enjoy themselves. The hon. Gentleman’s disdain for that measure just shows how he does not understand the people he is supposed to represent.
Absolutely. That is the kind of thing that the Conservative party understands when it comes to aspiration, but those on the Labour Benches simply do not.
I want to pick up on some of the comments made by my hon. Friend the Member for North East Bedfordshire (Richard Fuller). We cannot underestimate the real economic risks we face at present. We must be extremely careful. We have talked about how slight changes in interest rates and inflation can have a huge impact. The amount of money that we had to spend to get the country through the pandemic—of course, the hon. Member for Brent North (Barry Gardiner) wanted to criticise the Government for creating that level of debt—would have been even higher had the Opposition been in charge. Despite spending £407 billion, it will never be enough for those on the Labour Benches. We cannot pretend it will all be smooth sailing. There will still be difficult decisions to come. We will need to say no at certain points. The Conservatives are trusted repeatedly on the economy by our voters because we understand that.
I want to pick up on the usual lines about the cuts we have made. Opposition Members have tried, again and again, to win elections by convincing the public that we made those choices freely and happily, but the public understand that we had no choice, given the economic mess we inherited. I encourage the Opposition to think about a new line of attack and perhaps they will have better success with it in future.
Difficult times ahead—and a difficult Budget. It is not risk free and we may still need to make difficult decisions, but the emphasis on families, early years, people in work and getting on in life is a direction of travel I welcome. In that regard, I support the Budget and support the Government in their attempts to get us back on track.
Diolch, Mr Deputy Speaker. It is a pleasure to follow the hon. Member for Crewe and Nantwich (Dr Mullan). To start on a point of consensus, I agree that these are very difficult times and I, for one, do not envy the Chancellor for having to navigate some of the large events on the horizon.
In the course of the debate so far, a couple of themes have emerged as ones that we all want to highlight, but on which we perhaps have different points of view: climate, the cost of living crisis and levelling up. I hope to be able to comment on each in turn in the time that I have.
On the climate theme, I echo and share the bemusement of the right hon. Member for Doncaster North (Edward Miliband). In his opening remarks, he called into question the Chancellor’s commitment to net zero and the decarbonisation of the economy. In response, the Secretary of State referred the House to the net zero strategy that the Government announced last week as evidence of the Chancellor’s credentials. However, questions remain unanswered. The Institute for Government has suggested that the net zero strategy lacked detail on who will pay and offered only vague hints about a tax strategy to support the transition to net zero. In advance of COP26, we had hoped to see a bit more of that detail in yesterday’s Budget, but we did not receive it.
My hon. Friend the Member for Glasgow Central (Alison Thewliss) spoke eloquently on another theme that hon. Members have touched on: the cost of living crisis. She made a very good argument about how rising costs of living on the one hand and relatively low wage growth on the other have produced a situation where households are struggling. Government Members will perhaps accuse me of being negative or pessimistic, but we might agree that some of the OBR’s analysis is quite staggering. Real household disposable incomes across the UK are expected to grow by only some 0.8% over the next five years, and if we look at next year, we see that the OBR suggests that net inflation will peak sooner than expected and that growth will be only about 0.3%.
I do not think that I am being too negative and pessimistic, but if I am guilty of that, it may well be because—unless my accent has not already betrayed me—I represent a constituency in Wales. In Wales, gross disposable household income in 2019 was already only 80.5% of the UK average—the second lowest in the UK—so households in Wales, in particular, have experienced a longer-term cost of living crisis, which hon. Members from across the nation were very keen to see some action on in yesterday’s Budget.
I cannot deny that the announcements on the minimum wage and improvements to universal credit were welcome steps in the right direction, but welcome though the change in the taper rate and the working allowance were, they come on the back of about £6 million being taken from families in Ceredigion through the removal of the uplift.
The Chancellor and the Government were correct to remove the cap on public sector pay. Plaid Cymru has championed that for several years so we were very glad to see it included in yesterday’s Budget statement. However, questions need to be answered that will determine how much of a difference it will make to people in the public sector. Ceredigion has a high number of public sector employees, so an important question for us is: how much will public sector wages increase and how will that compare with inflation? That is not my being pessimistic; we just need to bear that concern in mind when we talk about whether some of these policies will be transformational and make a real difference to people’s pockets.
Let me focus on the rising costs of living. Energy bills have been mentioned and I agree with some of those concerns. Something that particularly affects rural areas such as Ceredigion is the price of fuel, and several hon. Members have spoken very effectively about that topic. The hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones), the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) and the hon. Member for Newton Abbot (Anne Marie Morris) mentioned how the fuel duty freeze helps somewhat to insulate rural households against the rising cost.
We all acknowledge that the freezing of duel duty—I might even get plaudits for this from those on the Treasury Bench—is an incredibly expensive policy. We cannot deny that and it is reasonable to suggest that, in the not-too-distant future, we may need to reconsider whether the fuel duty policy is sustainable, not least for financial reasons, but also given our decarbonisation commitments. Should we come to that politically prickly and technical discussion, we should perhaps look to extend schemes such as the rural duty relief scheme so that those living in rural areas, who, at the moment, do not have the benefit of a sophisticated public transport infrastructure, should not have to shoulder the burden of unrealistic costs. That would also perhaps introduce an incentive, for areas that have the luxury of fantastic public transport, to choose to use public transport more often than cars. In rural areas, however, as I think hon. Members would acknowledge, there is not that level of choice at the moment, and, sadly, using a car is still a necessity. Whether they are nurses working in hospitals or teachers going to school, people need to use cars. In approaching the big questions of decarbonisation, we need to think about how to ensure that there is investment in public transport in rural areas so that abandoning cars is an option, but for the time being, 80% of commutes in Wales are still by car.
Another pressure that I hoped would be addressed yesterday is the added burden on small businesses from next year’s increase in national insurance contributions. When I speak to businesses in Ceredigion, they are grateful to the Treasury for VAT reductions; they have told me, especially in the hospitality sector, that they have been able not only to invest savings in their business to improve productivity and improve their offer, but to increase wages for staff. If we are serious about moving to a higher-wage economy, perhaps we could return to that point. It could be considered a missed opportunity in yesterday’s Budget, so I encourage Members on the Treasury Bench to think about it for the future.
The Federation of Small Businesses has asked for an increase in the employment allowance for small businesses and simplification of the process of making tax digital, both of which are concerns that businesses in Ceredigion have raised with me. Any movement on those fronts would be welcome: they would not only support employment and reduce the risk of higher taxes being passed on as higher prices, but offer much-needed support to our high streets.
I would like us to return to the discussion about retrofitting homes. It was a missed opportunity yesterday not to look at improving the energy efficiency of our housing stock. A report by the Future Generations Commissioner for Wales suggests that a commitment from the UK Government of some £360 million a year would go a long way towards bringing the quality of housing stock in Wales up to, I think, energy performance certificate rating C. The benefits are evident: it would not only create much-needed skilled jobs, but improve the efficiency of homes and reduce household bills by some £418 per year once the work was completed. It would also be good for the environment, of course.
I will leave it there, because I have run out of time. Thank you, Mr Deputy Speaker, for calling me so soon in the debate.
Thank you, Mr Deputy Speaker, for calling me to speak in this important debate. I thank the hon. Member for Ceredigion (Ben Lake) for what I see as a perfect model of constructive opposition. He gave a thoughtful, considered and helpful speech; I hope that the Treasury takes up some of the points that he raised. I thank him for making that contribution to the debate.
I am extremely grateful to the Chancellor for supporting businesses in my community throughout the pandemic and protecting jobs. There is no doubt that there is still a very challenging and difficult environment for businesses, so of course I welcome all measures in the Budget to support business. I pay tribute to the many businesses that have struggled and struggled, but succeeded in getting through the pandemic with the help of the Chancellor. They have my full support as we move forward in what will continue to be a challenging time.
I would like to congratulate Mr John Ellis, a publican in my constituency. John, who runs the Elephant and Castle in Dawley and the Crown Inn in Oakengates, has campaigned for his sector harder than any constituent I have ever met. Throughout the pandemic and in the prelude to the Budget, he wrote letters to me and to the Chancellor; he met me; he bought me pints of beer. He gave me a full insight into the very serious challenges that the pub sector faces. Mr Ellis may not be 100% satisfied with the Budget and its measures for supporting pubs and hospitality, but I know that he will be delighted by many measures in it.
I am extremely proud of this Budget. I am proud of it because it is a Conservative Budget—a Budget that supports families and incentivises and rewards work.
Like all other Members—whether they will admit to it or not—I am delighted that this Budget puts more money into the pockets of the lowest-paid constituents in Telford, and specifically provides support for the struggling families whom we must support if we want to create opportunity for young people. As we all know, whether we admit it or not, these measures will make a real difference to the lives of our constituents, particularly those who struggle the most.
At the heart of the Budget are incentives and rewards for those who work The universal credit policy that we now have is by far the most effective tool in helping people back into work. We on this side of the House do not agree with disincentives to work and keeping people trapped on benefits, and I know that many on the other side also believe in helping people back into work. The incentives in the Budget are welcome because a job gives people so much more than a route out of poverty. It gives them a sense of identity and of belonging—they are part of a community—and of personal responsibility, and they are surrounded by a support network which is particularly helpful in tackling the mental health issues that so many people have experienced during covid. That is why I am so grateful to the Chancellor for, since the start of the pandemic, prioritising jobs and skills as key to our economic recovery.
I particularly want to draw the Chancellor’s attention to the fantastic work being done at Telford College in my constituency in respect of skills such as engineering, HGV training, digital and maths. In almost every sector one could think of, the college is delivering opportunity across our community, and, vitally, providing local businesses with the skilled people whom they need in order to succeed. I invite the Chancellor to come to see this inspiring college for himself: I know how impressed he will be by students and teachers alike.
I must also thank the Chancellor for the levelling-up money that has been coming to Telford. Earlier in the year we were awarded £22.3 million, and an additional £1 million for an exciting programme of projects that will build opportunity across our community. The jewel in the crown was a digital and maths hub to provide access at every level to all who want to improve their skills. My thanks must go to the town deal board for its work on this, and to our excellent council officers, who are as dedicated as I am to Telford’s future. The Budget has also confirmed the provision of a diagnostic health hub at the Princess Royal Hospital to tackle the backlog. That is desperately needed. While the health challenges that face Telford are perhaps a subject for another debate, there is no doubt that this will change lives, and we are truly fortunate to have been selected as one of the areas to receive such a hub.
Let me sound a note of caution. My constituents understand full well that getting the NHS back on its feet will take time. They understand full well that it will cost money, and they understand full well that they must make their contribution and share the pain of paying for it. My constituents are reasonable people who want the NHS to succeed. However, they want to know that their money, the levy money, will be spent wisely. I hope it will feature clearly on payslips, so that people have an understanding of the significant contribution that they are making to healthcare and social care. I want it to be spelt out, because I think that that will help to bring greater accountability to health trusts and boards to ensure that they deliver good-quality healthcare for my constituents and their families, rather than spending money on shiny projects such as state-of-the-art specialist units to which local people may never need access. We have seen that happening in Telford: having already been given £312 million for a specialist unit upgrade, the health bosses decided to put in a further bid for £560 million.
I understand that we all want to invest in better hospitals, but this really is not about buildings. As we emerge from the pandemic and try to recover and ensure that the NHS gets back to functioning at full capacity, I urge the Chancellor not to give money to those kinds of projects but to invest in tackling our backlog, as he has done in this Budget, and in ensuring that people can access their GPs and get through to them on the phone. That is what local people really want. They want better healthcare that they can access.
I would like to end by saying that sometimes it is good to say thank you, as I have been doing throughout my speech. There are those who say that the money is never enough, that things are never good enough and that Telford is missing out, and my local Labour council is never satisfied, no matter how much money comes to Telford. It very nearly scuppered the Telford levelling-up bid by saying that it had been cancelled. This upset not only the towns fund board but many people who were invested in that project. It is important to recognise when things are going well, and to look at what is getting done despite the extraordinarily challenging circumstances.
All of us in this House know that Ministers have given their all to get us through the pandemic and out the other side and to rebuild our economy, and I am grateful to every single one of them, whether or not I agree with everything they say and do. They have tried their best and given their all, and we all owe them a debt of gratitude. My constituents are grateful to the Prime Minister. On that note, Mr Deputy Speaker, I would like to thank you for including me in this debate, which I much appreciate.
I am the only speaker for my party in this debate, so I hope that the House will forgive me if I adopt a slightly winding-up tone. I want to put on record what a pleasure it has been to take part in the debate after the long time we have spent dealing with covid. We are not out of its shadow yet, but hopefully we are on our way. How nice it is to be back in this Chamber speaking in debates in our normal way.
I do not think that I am known for having a pop for the sake of it in this place, and if the Minister were still here, I would thank him for the excellent work that has been done on the space launch front. That is very enthusiastically supported in my constituency. However, I am bound to make two points, the first of which is a national issue.
As the House will be aware, as my party’s Defence spokesman, I have made the point in recent times that I am particularly perturbed by the reduction in the numbers of our armed forces personnel, particularly in the British Army. Two points arise from that. The first is that if—perish the thought—we had to mount some sort of operation similar to the one in Afghanistan, I worry that the size of the British Army would not be sufficient to do that. Secondly, I believe that when it comes to recruitment, if the British Army gets below a certain critical mass, the brightest and best of our young people who might want to join our armed forces would take a look and say, “It’s too small. It’s beginning to look like a sunset industry. I’ll go and do something else.” That worries me about recruitment, because it is an issue for the British Army.
Returning to the Budget, I am deeply perturbed to see that there will be a cut of 1.4% in Defence spending over the next four years. I want to put on record that that is a dangerous cut, and I am surprised to see it in the context of what is a tax-and-spend Budget. We could debate the rights and wrongs of such a Budget, but I will not do so today. For those who have not seen it, I draw the House’s attention to the editorial in The Times today, which states that the Chancellor runs the risk of stoking inflation. If we take a tax-and-spend Budget and add it to the increase in the price of commodities in the world—the price of fuel has been mentioned, and we have to consider the ramifications of covid and Brexit—we could, perish the thought again, have inflation on our hands.
I am the oldest member of my parliamentary party at the august age of 67, so I lived through the horrors of inflation in the 1970s. I was working in the oil sector on a smallish wage, and during the year my wages started not to meet the costs of the bills I had to pay. Inflation is a bad, bad thing. I hope it does not hit us, but I fear it might.
This morning I telephoned a friend of my daughter—they were in the same class up in the highlands. I spoke to her and another friend, both single mothers living in council accommodation, and I asked, “What concerns you about the Budget?” Members might think that perhaps they did not take a big interest, but they did. One lady said to me, “It is the cost of the bills I have to pay. I am concerned that I may not be able to afford them.” The other young lady said, “I am concerned about education. I am concerned about special needs assistance for my child.” I believe they speak for a lot of people, as other hon. and right hon. Members have touched on.
These worries are out there. When we think about how inflation would add to those worries, it becomes scary. When we think about what inflation would do to our hard-pressed frontline services, it becomes very worrying indeed. I put down those two markers at national level.
I end on a point that might not ingratiate me with SNP Front Benchers. The right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) mentioned the great jug of money called Barnett consequentials that is poured out towards the Scottish Government after passing through a sieve. I think he was referring to the fact that in some parts of Scotland the sieve seems to have a hole, and in other parts of Scotland it seems to have a very fine mesh. What we in the highlands fear, with all due respect to my good friends in the SNP, is that the money rushes through the hole to the central belt and does not come to more rural areas. That is the challenge the right hon. Gentleman posed to the Scottish Government.
I have spoken many times in this place about maternity services in the far north of Scotland and how pregnant people have to make a return journey of 200 miles to give birth. There are so many pressures because of rurality, distance and sparsity of population. With the best of intentions, I sincerely hope that the Scottish Government will address those inequalities with the moneys they are being afforded through the Barnett consequentials. I live in hope, but there is a nagging doubt at the back of my mind.
I am pleased to follow the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone). I attended the reception he hosted yesterday for young people working in the renewable energy sector. He mentioned the reception in a couple of his earlier interventions, and I agree with those points.
I congratulate the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), on her assured response to yesterday’s Budget statement. I am not sure how much notice she had, but I do not think it was very long—perhaps half an hour. She had to put up with some very ill-mannered barracking from two or three Conservative Members, but she seemed, if anything, to relish it and she set out a compelling case that the heart of the problem is the poor record on growth over the past 11 years. Her commitment to abolishing business rates has clearly rattled the Chancellor, and there is a compelling case for fundamental reform given the dramatic shift to online shopping, as a number of Conservative Members have said. Until the shadow Secretary of State for Business, Energy and Industrial Strategy, my right hon. Friend the Member for Doncaster North (Edward Miliband), told us at the start of the debate, I did not realise that a promise to do that has been included in every Conservative manifesto since 2010. I do not know why, 11 years on, the Government are still nowhere near doing it.
The Secretary of State for Business, Energy and Industrial Strategy told us today that yesterday’s announcement about business rates meant that they would be “more responsive and agile, with more frequent revaluations”; I do not think there is anything very fundamental there. In making the case for fundamental reform, my hon. Friend the shadow Chancellor is absolutely right. That is the kind of bold change that is needed.
It is striking that Ministers currently do not seem to be taking much notice of UK businesses. They got into the habit of ignoring all businesses’ fears about Brexit, so they seem to feel they should continue to ignore their views now. From what I can tell, businesses are currently getting a hearing from the Labour Front-Bench team that they are not getting from Conservative Front Benchers. The argument made by my hon. Friend the shadow Chancellor—that the central problem has been weak economic growth since 2010—is very persuasive. We have a difficult winter ahead and the appetite for an approach different from the Government’s may well be rising rapidly next spring, with real wages due to fall again in the next year.
We all understand why the tax burden is high coming out of the pandemic, but there seems to have been no attempt to share that burden fairly. It is all being borne by working families, what with the national insurance increase—the jobs tax—and the Chancellor’s evident delight in cutting the duty on champagne then seemed to be rubbing salt in the wound.
I welcome yesterday’s announcement of the reduction in the universal credit taper and the increase in the work allowance. Those are significant changes that are large enough to be worth while, and they will help low-paid working families to get over the £20 a week cut and will increase work incentives—those are positive things—but they will do nothing at all for unemployed families and people who cannot work because of ill health, all of whom have suffered the £20 a week cut to the rate of universal credit.
Benefit support for unemployed families is now at its lowest level, in real terms, for more than 30 years. In those 30 years, GDP has increased by more than 50% in real terms, but support for unemployed families is no bigger at all than it was 30 years ago. It is now at the lowest level ever as a proportion of average earnings. In fact, according to the House of Commons Library, support for unemployed people is now at a lower level, as a proportion of average earnings, than it was when Lloyd George introduced unemployment benefit in 1911. These are historically low levels of support.
When the Minister responds to the debate, will she give us some explanation of why unemployment support has been cut so low? We have had no explanation at all. I have pressed Ministers on the issue at the Work and Pensions Committee but they cannot give any justification for why this has happened. Social security has a job to do; we cannot have successive Ministers simply dipping into it to fund other things. At its current level, particularly in some parts of the country, it has been cut below the level at which it can any longer do its basic job. People cannot focus on getting a job if they are worrying about whether they can pay for their children’s next meal.
We have just had 18 months in which people who were unable to work—unable to do their jobs—have had to live not on £75 a week but on 80% of their in-work earnings, up to a maximum of £30,000 per year. That is an approach to supporting people who are not in work that is very different from the one provided by social security in the UK. Perhaps we can learn lessons for the future from the success of that most recent approach. The Work and Pensions Committee is going to conduct an inquiry on this subject over the coming year, to look at what the level of support for unemployed people should be and to consider the approaches being taken elsewhere and the evidence on the effectiveness of those different approaches.
The analysis published yesterday by the Institute for Fiscal Studies shows that the running cost budget for the Department for Work and Pensions has been one of the most deeply reduced in Whitehall since 2010. That is no doubt one of the reasons for the serious problems in the state pension service at the moment. Very large numbers of people—well over 100,000 people now, according to the Department—have not received the correct amount of pension over a period of 30 years or more, with older women particularly hard hit. Just in the past few months, there have been very large numbers of people having to wait a long time to get their pension after applying for it. The reduction of the running cost budget for the DWP must be one of the reasons why those things have gone wrong.
I do hope that the very modest increase in the Department’s running-cost budget will allow some modernisation of the very old computer systems on which the state pension benefit and some other benefits are run. There has been a meeting this morning of the Public Accounts Committee with the permanent secretary, in which questions were asked about how things have gone so badly wrong with the state pension, particularly in these past few months.
By contrast, the universal credit system, which is modern, did a very good job during the pandemic in getting support to a large number of people efficiently and well in a short period of time, but too many of the Department’s other systems, such as the state pension system, need urgent investment.
I note from the Budget document that the Government are planning for the universal credit roll-out, which we were initially told would be complete by October 2017, but which we are now told will be complete by March 2025. The OBR has always and rightly been sceptical about the Department’s forecasts on this and expects it to take 18 months longer. I think that it is likely to be proved right.
I warmly welcome the case that the shadow Chancellor and her team have set out in response to the Budget. The heart of the problem has been this weak economic growth over the past 11 years. I hope that, between us, we can come forward with some compelling proposals for how that failure can be reversed in the years ahead.
It is a pleasure to follow my right hon. Friend the Member for East Ham (Stephen Timms). I agreed with much of what he said, particularly with regard to state pensions. It was disappointing yesterday not to hear anything in support of our 1950s women who have been betrayed by this Government, as have our miners whose pensions have been completely neglected for many, many years. As always, it is a privilege to speak in the debate today, and I am grateful to be able to raise the concerns on behalf of residents and businesses across Pontypridd and Taff Ely.
We truly are in a cost of living crisis. The long-term problems caused by this Government’s inaction on our crumbling economy are severely impacting working people. Fundamentally, it is working people and our businesses up and down the country who are paying the price. Along with so many colleagues on the Opposition Benches, I have spoken passionately and at length about the need to support people through what will inevitably be a difficult winter. And how do the Government respond? By piling costs on working people and businesses at the worst possible time, hitting them with tax rises and a cut in universal credit while of course giving breaks to bankers and big companies such as Amazon. This is an absolute car crash of an attempt at economic recovery, all at a time when our taxes are at the highest they have been since the war, but with even less than ever in return.
The sheer irony of the Chancellor standing in this place announcing billions of pounds of investment at a time when his Government voted for the devastating cut to universal credit only a few weeks ago certainly is not lost on me or on the residents in my area. Indeed, I had hoped that, in the previous Budget, the Chancellor was at last understanding the fundamental impact that a broken welfare system is having on people, when he finally admitted that the previous levels of universal credit simply were not enough for people to live on. Once again, though, I am disappointed, but ultimately not surprised, by the Chancellor’s actions in recent weeks.
With that in mind, it would of course be remiss of me not to make reference to the devastating knock-on impact that this Government are having on people living in Wales. Put simply, this Budget simply does not deliver for Wales or the United Kingdom. It does not deliver on vital funding priorities, such as the long-term funding required for urgent work to repair Wales’s coal tips. Indeed, only earlier this week the Welsh Government published data showing the true extent of Wales’s challenge in increasing safety around coal tip sites. The Welsh Government have identified 2,456 tips across Wales. Although I welcome the joint approach by the UK Government and Welsh Government to set up a coal tip safety taskforce, it is clear that we still have some way to go on long-term investment. Despite a cross-party joint letter endorsed by all 22 council leaders in Wales, requesting funding from the UK Government, we see no commitment to an ongoing programme of funding, even though the issues with coal tips predate devolution in Wales.
This Budget, along with pleas for help and support, finally provided an opportunity for the Government to give some much-needed reassurance to communities such as mine in Pontypridd, and across Taff Ely and Rhondda Cynon Taf, that remain in the shadow of their industrial legacy. My hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones), who is a good friend, reminded Members that only last week we commemorated the 55th anniversary of the Aberfan disaster. That catastrophic collapse of a colliery spoil tip, even years down the line, serves as a poignant reminder of how dangerous coal tips can be. Although I recognise that safety measures have vastly improved since that horrendous disaster, it is only with long-term, sustainable financial support that the issue can truly be tackled at its root. With that in mind, it is extremely disappointing that despite having the opportunity to make a positive change, the Chancellor has once again failed people in our coalfield communities, with no money for the coal tips and no justice for miners’ pensions.
I welcome the announcement of funding for our community arts centre in Pontypridd and the dualling of the A4119 at Coedely in my constituency. I commend the outstanding RCT County Borough Council and our leader, Andrew Morgan, for all the incredible hard work they have put in to ensure that our levelling-up bids were successful. But let us not forget that although this money is welcome—and we are grateful—the £120 million for Wales is actually a £255 million cut on the promise to replace the EU funding. The failure to accept the responsibility for coal tips will cost Wales £600 million. Wales will get no consequentials for transport infrastructure, and the universal credit cut will do nothing to tackle poverty, including in-work poverty. This is Wales not levelling up, but being short-changed by the Budget.
If the Business Secretary were in his place, I would take the opportunity to congratulate him on becoming a father and on the birth of his child. I am extremely passionate about an affordable and flexible childcare system that works for us all. Time and again, I have raised the injustice of the paltry parental leave allowances currently on offer from this Government, and that extends to neonatal leave. Although I was pleased to see the Government announce plans to introduce neonatal leave that will cover up to 12 weeks when a baby is receiving neonatal care, the policy simply does not go far enough. The changes announced are unlikely to come into force until 2023 at the earliest, leaving around 300,000 families with babies who will be spending time in neonatal care in the next three years forgotten and left behind once again. Once again, I find myself urging the Chancellor to be bolder in his commitments to parents who are going through what can only be described as absolute hell on earth.
Ultimately, I fear that this is a half-baked Budget, with hundreds of thousands of people being left behind once again. At the last Budget, I urged the Chancellor to learn from previous mistakes and rapidly to learn some lessons from the pandemic. Instead, we are seeing the same age-old policies, which will have a huge impact on working people. I urge him and the Financial Secretary to take these concerns seriously, and to act reasonably and responsibly. Diolch.
I congratulate my hon. Friend the Member for Pontypridd (Alex Davies-Jones) on a powerful and excellent speech. As a representative of a coalfield area myself, in County Durham, I express my solidarity with colleagues from Wales who have raised the issue of unsafe coal tips and the need for funding. It is poignant that my hon. Friend the Member for Pontypridd mentioned the terrible disaster at Aberfan. I know that it touched many hearts throughout the nation, including that of our sovereign. It was the most appalling tragedy. We must never, ever forget the debt of honour that the nation owes the coalminers and their families and communities. Although it is not the focus of my speech, I am also disappointed by the failure of the Chancellor to address the historic injustice of the mineworkers’ pension scheme. It is not a case of demanding more public money, as the hon. Member for Crewe and Nantwich (Dr Mullan), who is no longer in his place, claimed. This is the miners’ own money. That this historical injustice has not been addressed cuts to the quick those of us with mining connections.
The broad theme of this debate is people in businesses. I will confine my remarks essentially to cancer, which is the most dreadful business. I know that the Treasury Bench is populated by Ministers with a background in science, innovation and workforce skills, and I hope they will relay my comments to their colleagues in the Department of Health and Social Care. I declare an interest as vice-chair of the all-party parliamentary groups on cancer and on radiotherapy. Access to cancer services is an issue that has touched me personally and about which I care passionately. About 50% of us will suffer and battle against cancer at some point in our lives.
A week ago, I joined my hon. Friend the Member for Gower (Tonia Antoniazzi), my right hon. Friend the Member for Alyn and Deeside (Mark Tami), and, from the other place, Baron Fox of Leominster, and representatives from national cancer charities, cancer survivors and the cancer workforce, to deliver a petition and a letter to No. 10 Downing Street. The petition was signed by over 53,000 people. The letter, sent on behalf of a coalition of national cancer charities, patient advocacy groups, 64 MPs of all parties, peers and APPG chairs, called on the Government to invest urgently in our vital cancer workforce ahead of the Budget. A few months earlier, just before the recess, I presented to Downing Street a petition set up by Catchup With Cancer which was signed by over 370,000 people. That campaign was launched in conjunction with Craig and Mandy Russell, to whom I pay tribute. Tragically, they lost their daughter to bowel cancer at the age of just 31. Her life expectancy was drastically cut short after her cancer treatment was stopped as a direct result of the covid-19 response.
Even before the pandemic, at 62 days, we had the worst cancer waiting times on record and worrying variations in cancer services across the United Kingdom. The pandemic has not just laid bare the terrible strain on the cancer workforce, which has been happening for a number of years, but has driven cancer services to crisis point. It is reported that significant numbers of nurses are leaving or planning to leave our NHS following the pandemic. One in four NHS staff in England say they are now more likely to leave their job than was the case one year ago. In addition, long-standing unfilled vacancies and high staff absence and sickness levels continue to constrain cancer services. I am a great admirer of Professor Patricia Price, who appeared before the Health Committee earlier this week and spoke of
“the biggest cancer crisis in living memory”.
To give credit where it is due, the emphasis on cancer diagnostic services in the Budget is welcome. It matches the ambitions set out in the NHS long-term plan of diagnosing 75% of cancers at stage 1 or 2 by 2028. The projections are that 55,000 people each year will survive for five years or more following their earlier cancer diagnosis. However—I must regretfully, with due respect, take issue again with points raised by Conservative Members—we need greater clarity on exactly how the money is to be spent. Unless the boost in cancer diagnosis is matched by an equal boost in treatment services and investment in the workforce to deliver those services, they will continue to fall far short of the Government’s stated ambition. The future of the workforce is now the most significant threat facing the NHS today. We need investment in equipment needed for treatments such as advanced precision radiotherapy, which I have benefited from and which plays a vital role in cancer care and has continued to be the stand-out cancer treatment during the pandemic.
Make no mistake, the cancer backlog is a huge issue. Without a fully funded plan to increase the number of skilled staff and train the future cancer workforce, more patients will see their treatments unnecessarily delayed. Investment in cancer treatment services and the cancer workforce needs to be expanded to match investment in cancer diagnosis. The two are hand in —two wings of the same bird.
Precisely. We must ensure that people living with cancer get the support they need and deserve now and in the future.
The specifics are that according to the cancer charity Macmillan, we are 2,500 specialist cancer nurses short in England. Macmillan is urging the Government to take action and create a nurse cancer training fund, which could be set up with a modest investment of £124 million. That would train 3,300 specialist cancer nurses. When we think about the many billions spent on the test, track and trace system, the investment of a fraction of that sum in cancer treatment—modest as far as the budgets are concerned— would command majority support, not just on the Opposition Benches, but in the whole House and the country.
Thank you for calling me in this important debate, Mr Deputy Speaker. As ever, it is a real honour to follow my hon. Friend the Member for Easington (Grahame Morris), who spoke so eloquently about cancer. In the Budget, there was not a word about the call from the Association of Medical Research Charities to have a medical research charity partnership fund to fund vital medical research. Charities have been so hard hit during the pandemic, yet there was not a whisper from the Government yesterday.
The people and the planet will pay for yesterday’s Budget. While the Chancellor’s job is to positively spin each announcement, it is what is not said that exposes the economic reality and fragility. We must remind ourselves, after more than a decade of economic regression, that we are in this place because of the mismanagement of the pandemic. The Government were ill-prepared, despite warnings. They ignored those warnings, then were slow to act.
Inflation rises are costly, and they hit the poorest hardest. The Office for Budget Responsibility predicts that inflation could rise to 5% or even more. Inflation will really hit the poorest people in our constituencies, with energy, food and housing costs soaring. That will mean that family budgets will rapidly move into the red because of the contents of the Chancellor’s red box. Inflation will mean that many more families will visit one of York’s 16 food banks, 15 of which are in my constituency, and that many more will go without. That process will be accelerated for those who have just had £20 a week stripped from their working tax and universal credit payments, including 7,850 people in my constituency, at a time when the Government have also announced increases in national insurance contributions. Those in my constituency are living in a place where house prices and rents are rising more sharply than just about anywhere else in the UK. That £20 cut embeds inequality and injustice, yet the proposals from Government keep driving inequality through housing. There was not a word yesterday about how to fix that or the homes that people live in, so many of which are damp and overcrowded, with families struggling in them.
While York’s Poverty Truth Commission will unveil the depth of this crisis, the Chancellor failed to bring fresh thinking to his Budget. A wealth tax, as many in business now call for, would have seen redistribution and been a first step to tackling entrenched disparity. With York as one of the most inequitable cities in the UK, we need to see that change.
While underemployment and underpay in York make living there more expensive than most places in the country, the relief for the hospitality sector will act as a sticking plaster to address some of the issues that it is facing, yet not all. Staff shortages are pressing down on the hospitality sector and making many businesses so unviable that they can open for only a few days a week—we see the notices going up in their windows. What was missing yesterday was how we are going to not only address that issue, but transition to secure and better jobs for our future economy. Of course any wage rise helps, but when the pressures are escalating disproportionately on the least well off, a £10 minimum wage was needed as a starter. As the Labour conference determined, it should rapidly rise to £15 an hour.
When we talk about the current staff recruitment challenges, we need to understand the pressure that is putting on our private sector businesses and our public sector. For example, there is a deficit in people providing the care services that are vital to address some of the challenges facing the wider NHS. If we cannot care for people in our communities, we need the Government to step in, yet we heard no response from the Chancellor yesterday as to how that crisis will be addressed.
On business rates, we again saw sticking plasters coming out of the Chancellor’s pockets to cover the wound, but there is still a gaping hole and we need more innovation to address those rates. A property related tax belongs to a different era. As the hon. Member for Harrogate and Knaresborough (Andrew Jones), who is no longer in his place, said, we cannot have an analogue tax in a digital economy. That is why we need reform. I have talked to businesses in my constituency, 65% of which are independent and innovative in what they are doing. They are calling for a tax that looks at profit and turnover to address their contribution proportionately. We need to address those issues because, time and again, we have seen offshore landlords not paying attention to what is happening on our high streets. It is about time that they were held accountable.
Most seriously, the Chancellor’s silence on support for local authorities to run good local services was telling. Our City of York Council’s leader has squandered public funds on pay-offs, but my constituents should not pay a heavy price. They deserve decent services, but the Chancellor failed to say how they will be provided without cuts and rises in council tax. For example, how will the cost of repairs be met for schools such as All Saints Roman Catholic School, which desperately needs a new school estate, or Tang Hall Primary School, which is so cold in winter that children wear hoodies to keep warm? That is the reality facing us, and it has to change.
There are other issues, such as the Sure Start programme. Yesterday, we heard a big brag from the Government about putting £500 million into 150 new family hubs, but we must remind ourselves that £974 million and 1,400 Sure Starts have been cut, which means that, for many years, many families did not get the support that they had had. On family hubs, the voluntary sector is expected to be a partner, but again that sector is really struggling and there was nothing from the Chancellor.
Although, obviously, I welcome the reannouncement of the funding for the National Railway Museum, as I have welcomed it each time the Chancellor has mentioned it, we need more investment in our city. That is why I was disappointed that York’s response to the green new deal, BioYorkshire, did not get a mention yesterday. It would bring forward, ahead of COP26, a proper green new deal and transition, as well as vital regeneration and crucial jobs for the future to my city.
As our planet continues to melt and burn and flood, the Chancellor failed to mention its fate. Holding down road and air travel costs will only accelerate its demise, not stem it. In just five years’ time, the UK will have spent its carbon budget. The Budget made the wrong calls. We just do not have time on our side, yet the Chancellor did not address that crisis. I am perplexed as to why, when the economic Budget is announced, the carbon budget is not addressed at the same time. They should be addressed together, hand in glove.
As the Chancellor stalls on funding for the poorest on our planet by suppressing overseas development aid until 2024-25, he also suppresses the green transition they need to make. Famine and droughts, conflicts and floods are forcing 80 million people to leave their homes and land to eat and live. Opposition Members cannot cheer the Chancellor with his veil of optimism, because we know that our constituents are not fooled. They see the trail of devastation that the Government are leaving for Labour one day to mop up. The Chancellor who said he would do “whatever it takes” left 3 million people stranded during the covid crisis. Yesterday, he abandoned not just the people but our precious planet.
It is a real pleasure to follow my hon. Friend the Member for York Central (Rachael Maskell), who made important points on the inequality that exists. Her constituency has similarities with mine. Indeed, as my right hon. Friend the Member for East Ham (Stephen Timms) said, an enormous number of people are still on benefit, yet, at the same time, the wealth tax list published by The Times shows that 23 more billionaires have made money just from the covid crisis.
We have not talked much about waste this afternoon. The debate has to be considered in the context of the cross-party investigation on the covid crisis led by my hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier) and how much money was given out in a haphazard way. Had that money not been wasted, it would be available now to assist our constituents, who are feeling the pinch with autumn on its way and with inflation affecting food and fuel bills as well as clothing, shoes and everything that we purchase.
If my reading of documentation from the OBR and IFS is correct, there has been a 2% reduction in GDP as a result of the scarring from covid and a 4% reduction owing to Brexit. Trading with our European partners has gone down from about 63% to 60%. That may not sound like that much in percentage terms, but it actually represents quite a reduction in trade with our main trading partners. We face an autumn of many difficulties on many fronts—it makes one feel nostalgic for the last time we had a surplus Budget, which I believe was when Gordon Brown was Chancellor, which was quite some time ago. Since then, we have had deficit Budgets under Tory Administrations.
I want to highlight the increased tax burden on many people who do not earn very much money at all. The jobs tax increase of over 1% on employees and employers that will come in next April will lead to a sense of less money in the pocket. There is still much uncertainty at this time about covid and a question mark over whether we will need increased restrictions in the autumn. It feels like a bit of a gamble in terms of how much of a burden it is placing on working people to carry the can for Government mismanagement, waste and increased taxes.
Many hon. Members have mentioned the missed opportunity on climate ahead of COP26. We could have seen much more funding for basic measures: for example, we could have asked local authorities to retrofit homes and provide state-of-the-art new boilers. That could have provided the opportunity to train up the 180,000 workers we will need to install heat pumps. Our local authorities would have been grateful for the opportunity to do their bit; instead, they are still scrimping and saving, despite the small increase in local government funding. Much more could have been done.
We have the tax cut for flying between Manchester and Heathrow—should we be encouraging that in this day and age? When we look back at various green schemes—the green new deal introduced as a sort of payment on homes back in 2010 by Greg Barker, now in the other place, or the green homes plan, which ran out of steam—we see that time and again the Government have missed the opportunity to ask local authorities to deal with their own localities. Green schemes work best when operated at local level.
We all of course think day in, day out about the productivity puzzle. We know that, unless we spend more on education, we are not going to see long-term improvements in our economy. I welcome the work and report on early years by the right hon. Member for South Northamptonshire (Dame Andrea Leadsom), but I do not think £500 million is going to do what Sure Start did. Many of us have had a number of Sure Start children’s centre closures over the years and this is reinventing the wheel and too little too late.
The Chancellor talked yesterday about tutoring. I am a big believer in tutoring, but it often implies that the hours a young person spends in school are not productive. How do we use the hours when children and young people are in school in a better way? My survey of schools shows the teaching staff to be exhausted and morale to be quite low, and I hope that, after the pay review body does its work, teachers will get a proper increase for their daily work. Why does this need to be a question of either tutoring or increasing the time young people can spend in school? We should be looking at both.
Further education spending has been cut by 50% since 2010. I am pleased that there are some bootcamps and there are new and different ways to spend the apprenticeship levy, but we need to think much more carefully about what works and increase investment in training, career development and the whole area from early years through to FE and adult education.
Sir Kevan Collins, who was the education tsar under the Government, has written in today’s Times. He thinks that the £5 billion is only a third of what is needed to bring our education system up to the required level. We all want our workforce to be more skilled and the productivity gain that would bring, but if Kevan Collins, the expert who was commissioned to look into this, says this falls far short, we need to believe that and do more about it.
I am very proud of my busy London high streets, but I was sad that the Chancellor did not even mention the word “London” yesterday; it seems to have gone out of vogue but, as those of us who are based in our wonderful capital will know, we need quite a lot of levelling up ourselves in London. The high street in Wood Green, where I am the MP, has a number of people walking up and down but businesses say that, although there is plenty of footfall—people are still there—the amount they are spending has dipped right down. Since 2010, the number of transactions and payments to small businesses and the chains in our mall have dropped considerably. That reflects Institute for Fiscal Studies analysis showing we have had negative growth, or tiny bits of growth in our local areas. A lot of that is down to these patches where we have high unemployment and not much at all in our pockets.
Our small businesses are very disappointed that, despite promising it for years now, there was not a proper review of business rates. The Labour proposal to take more as a digital tax from Amazon and to top up small business relief is a neat solution and I ask the Government to look at that again. They are letting down small businesses, which are the lifeblood of all our communities.
We are experiencing problems related to lack of occupancy of shops on our high streets. I am particularly cross with the banks. The week before last, I presented a petition about the closure of the NatWest branch in Crouch End, and then, lo and behold, as I sat down we learned that the Lloyds in Muswell Hill is closing. Not only is that a terrible waste of the lovely space that those banks were taking up on the high street, but often there is no guarantee that they will replace those branches with an ATM—a hole in the wall—which means that people will not even stop to buy a sandwich and get some cash out at the cashpoint. That is the least the Treasury could be doing.
I believe that there have been hundreds of bank closures since 2015. I would like the Treasury to show a bit of muscle and go back to the banks and say, “Okay, you’re closing a branch, so what are you giving us back?” Why do we not make them work for the tax cut—the £4 billion—that they got from the Treasury yesterday and say, “In return, every time a bank is closed on the high street, put in an ATM so that at least we can get cash out and our high streets are not deserts”?
We know that many of our small businesses really do it for the love. I am thinking of small shops such as the Pretty Shiny Shop in Stroud Green ward and Dunns bakery in Crouch End. They are fantastic local employers —that is the thing. They often have young people working after school, or women whose caring responsibilities work around the different shifts. They are doing their bit to keep our high streets going, and I would like to see the Treasury respond in kind to keep them going.
I want briefly to talk about the vibrant restaurant sector, which will benefit from some of the minor adjustments that the Chancellor announced yesterday. I am very grateful for that. I could not quite follow all the changes to alcohol, I am afraid—he lost me a bit—except that I think champagne is going to be cheaper, but I am sure you know that, Mr Deputy Speaker; I am sure you were taking notes, as somebody who likes a tipple.
However, some people do not drink—let us not forget that—and we could have spent that time talking about something that mattered more, such as fuel bills, how expensive childcare is, and the fact that people who are carers and do a job do not get any recognition for that in our taxation system. There are so many more things that we could have spent time talking about. Instead, I understand that yesterday’s announcement was followed by a very funny outing to a brewery, where the wrong prop—the wrong keg of beer—was used. I am sure that the shadow Minister, my right hon. Friend the Member for Wolverhampton South East (Mr McFadden), will refer to that in winding up.
This has been an excellent debate. There is a lot that we have in common, but we face a number of challenges. I would like us to be much more focused on how we can help our constituents through this very tough and uncertain period. Autumn will lead to a Christmas of shortages, of very high fuel bills, of expensive food, clothing and shoes, and of looking at a very modest increase to the minimum wage, which could really be a living wage if we tried harder and made it a real £10 an hour. I hope that the Treasury will look again at making some announcements this weekend when COP is in town, so that we can be even more pleased to be in a leadership role there, and that it will look specifically at the role of local government in day-to-day measures to improve our environment.
May I first say a big thank you to the Prime Minister, the Chancellor and the Government for all the help that they gave us—I say “us”; that is the United Kingdom of Great Britain and Northern Ireland—during the covid crisis? The moneys that have been spent are enormous—we know that—and they are the reason why many of the businesses in my constituency are here today. Help was given at the time that it was needed. This Budget follows that, and every one of us has to recognise what has happened before and what happens now.
I was thinking beforehand about how I would refer to the Budget and I was reminded of a saying that I have probably used before in this Chamber. The Budget is a bit of a curate’s egg: good in parts. I am a person who eats two eggs in the morning and two eggs at night, so I know how to eat me eggs. You have to eat the yolk and you have to eat the white as well, because they are both part of the egg. Now, what is the best of the egg? It is the yolk. I am going to speak about the best parts of the egg, but there are also parts of the egg we may not enjoy as much and we should recognise that. [Interruption.] I hear from a sedentary position, “Don’t eat the shell.” [Laughter.]
I chair the all-party parliamentary group on respiratory health, so I want to talk about some of the good things in relation to respiratory health. I was delighted to hear the announcement in the Budget that money has been set aside for community diagnostic centres. The Government announced that 40 new community diagnostic centres are set to open across England in a range of settings, from local shopping centres to football stadiums, to offer new and early diagnostic tests closer to patients’ homes. To roll out the strategy, the new centres will be backed by a £350 million investment and provide around 2.8 million scans in their first full year of operation. They are designed to assist with earlier diagnosis through faster and easier access to diagnostic tests for symptoms, including breathlessness, cancer and ophthalmology. The Chancellor also announced, through the health budget, additional moneys to tackle the backlog of diagnostic tests to deliver more checks, scans and treatment.
Those are some of the good things that have happened. The Government set a target of 100 centres across the whole of the United Kingdom, so I put on record my thanks to the Chancellor for making that very welcome announcement through the Department of Health and Social Care. I understand that each of the centres will include a multi-disciplinary team of staff, including nurses and radiographers, and will be open seven days a week. If those commitments are delivered—I hope they will be and I trust the Government to do that—we will have something we can be very thankful for. The all-party group warmly welcomes the creation of the centres and the funding allocated to them. I hope they can help to address the covid-imposed inequalities that we have seen across the country in asthma and lung cancer care and treatment. They should provide additional confidence to patients, and relieve pressures on the secondary and tertiary care appointments system. We also welcome the inclusion of breathlessness diagnostics in the centres. We think it is essential that the centres will be equipped to diagnose any cause of breathlessness, whether it is cardiovascular, lung cancer, asthma or chronic obstructive pulmonary disease. We have sent some questions directly to the relevant Health Minister to follow up on that.
The hon. Member for Ceredigion (Ben Lake) mentioned the need to retrofit homes. He is absolutely right. I am also the chair of the all-party parliamentary group for healthy homes and buildings. We need to address the efficiency of older homes, but every home across the United Kingdom of Great Britain and Northern Ireland will be targeted in this energy crisis. We need a better system of retrofitting homes, making them more efficient and addressing the energy crisis. I think we can do more. That is a part of the curate’s egg that has perhaps not been addressed and I hope the Minister, in summing up, can provide some kind of indication on that.
I very much welcome the Government’s innovation targets, which the Secretary of State referred to earlier. On green energy, I made a point about hydrogen. I will be meeting him shortly with my hon. Friend the Member for North Antrim (Ian Paisley). We will put forward some ideas on hydrogen to create jobs and boost the economy, so we can look to the future. Again, those are some of the good things.
Many hon. Members mentioned air passenger duty and I have to say, with respect, that I do not agree with them. For those of us who live in Northern Ireland, I am very happy that the Chancellor announced a reduction in air passenger duty. I travel to work from Belfast to here, but it is not just me. On Monday, the plane was almost full, with very few seats left. Many of those people were also travelling to work. APD has been reduced, so there is an incentive for people in Belfast, Scotland and elsewhere in this great United Kingdom of Great Britain and Northern Ireland—money in their pockets. The planes will fly anyway, whether there are 30 or 120 people on them.
The benefit from APD is for the regions of this United Kingdom of Great Britain and Northern Ireland, and that is a method of levelling up that we can all take advantage of. We as a party have been asking, I believe, for three years for this APD measure to be brought in, so we are very pleased on behalf of our constituents and those who travel to work from Northern Ireland and to the United Kingdom. Here is something good for them.
I also welcome the £1.6 billion—my right hon. Friend the Member for East Antrim (Sammy Wilson) referred to that yesterday—that has been set aside for Northern Ireland through the Barnett formula. These moneys will be vital for the Northern Ireland Assembly, for the working of the regional Administration and to help to address the issues, shortcomings and problems with health, education, roads, policing and so on. Again, the Government have been very generous and we are very pleased to be in receipt of that £1.6 billion; it is a real increase. There is also a real increase in expenditure, as my right hon. Friend said, and those are some of the things that we will wish to keep track of. I think there may be some other Barnett consequential money coming through the health budget that was announced, so we are very pleased.
The hon. Member for Ceredigion spoke about universal credit as well—it just so happens that he and I have similar thoughts on this matter—and I was disappointed that the £20 uplift has been removed. However, given what the Chancellor seemed to indicate yesterday—if I have read it right, and I have asked people in my constituency to look at the figures to see whether this is correct—if people can still be in receipt of universal credit and earn more, that will enable some, and I hope all, of my constituents to take advantage of universal credit and, at the same time, increase the hours that they are doing. The taper rate change seems to mean that people can earn more and still be in receipt of universal credit, if I have read that correctly. I will check it out, because that only became known yesterday, but I am, certainly initially, very pleased to see that in place.
On the curate’s egg, one thing that I am disappointed is missing, which is very important to my constituents, is an uplift in the child benefit cap for those working families who receive no Government help other than child benefit and whose children will receive no help for uniform, school meals, university fees or anything else. The fact is that they are living on less disposable income, with higher gas, car and electricity costs, and I am disappointed that the child benefit cap has remained for a further year. I say respectfully to the Ministers on the Front Bench—the Financial Secretary to the Treasury and the Minister of State, Department for Work and Pensions, the hon. Member for Norwich North (Chloe Smith)—who I have the utmost respect for, that middle-class people will be squeezed. I have asked for an uplift in the child benefit cap. If that was part of the Budget, it would enable some middle-class people not to be squeezed as much, and if they were able to take advantage of that, it would definitely make a difference.
I have two grandchildren who were born during the covid lockdown, and five grandchildren in total. Many in this House have grandchildren and their own children. I believe that my covid lockdown grandchildren will be paying for this in their taxes until the end of their lives and probably until the end of their children’s lives, so I want to make sure that every penny is well spent. Although I welcome the large amount, I question the situation for middle-class families: I believe that more can and should be done to bring relief to working families who get no help other than child benefit. Their shopping costs have risen by 20% and their fuel costs have risen by 30%, yet they cannot take a pay rise of a couple of thousand pounds because they would lose a percentage of their child benefit. What they are given with one hand is taken away with the other. It would have been better to raise the child benefit cap to ensure that they, too, could get some advantage. They are no longer comfortable, but stretched: stretched in their precious time with their children, stretched in their finances, stretched in their energy. I fear that, at some stage, that stretch will lead to a break. I believe that we must do more to help them.
This is a curate’s egg Budget: good in parts. Let us enjoy the yolk and enjoy the white part; they are all good, but some parts are better than others.
It is a pleasure to respond to today’s debate on behalf of the Opposition. Although the Secretary of State for Business, Energy and Industrial Strategy is not in his place, I begin by congratulating him on becoming a father for the first time. He would not tell us his age, but if he is an older dad, as I was, I suspect that he is learning the reason that people have children in their 20s and 30s. That is a lesson that we learn when we have them a little bit older in life, so I give him my full solidarity and best wishes on his new baby.
I thank all right hon. and hon. Members for their contributions to the debate, which were wide-ranging. Several hon. Members talked about the need for business rates reform in the longer term, which the Opposition very much support. Others raised continuing issues with universal credit and made the point that the changes made yesterday will benefit only a minority of those affected by the cut of £20 a week that was implemented a few weeks ago. There were also contributions on artificial intelligence, the return of inflation, bank closures and many other issues.
Several Welsh colleagues raised coal tip safety. My hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones) rightly reminded us that it has been just over 55 years since the tragedy in Aberfan. I remember visiting the graveyard in Aberfan as a young man with my friend Huw Lewis, the former Assembly Member for the constituency: I will never forget the pictures of children on the graves, lovingly cared for and frozen in time forever. Fifty-five years on, I hope that the UK Government and the Welsh Government manage to reach agreement on securing the safety of coal tips for the future. I thank hon. Friends for raising the matter.
The Budget, like all Budgets, covered many things, but the stand-out feature was the Chancellor’s admission that taxes are set to rise to their highest levels since the early 1950s—higher than under Norman Lamont, higher than under Ken Clarke, higher than under Denis Healey, higher than under any of the Chancellor’s predecessors. Corporation tax, personal allowance freezes, national insurance, council tax—there is one tax rise after another. A new analysis today shows that the combination of them is set to mean £3,000 more in taxes per household than when the Prime Minister came into office.
The reason for all the tax rises is simple: the Tories have become the party of high taxation because they are the party of low growth. In the 11 years in which they have been in office, economic growth has averaged just 1.8%. In the previous decade, it averaged 2.3%.
If the hon. Member reads the OBR report, he will find that it says very clearly that the effect of the pandemic is smaller in the long run than the effect of the low growth over which his party has presided for more than a decade.
As I was saying, in the decade before the Conservatives came to office, growth averaged 2.3%. Let us look at what the difference between those rates means to people. The difference, added up over the years, is worth £9,000 a year to every household in the country, and from the Exchequer’s point of view, the difference would be £30 billion a year more to fund our public services. It is that more than anything—that appalling record on economic growth—which has forced the Chancellor to raise taxes. The British people are being forced to pay the price of the Government’s long-term economic failures.
The long-term effect of this lack of growth is far greater than the impact of the pandemic. When we look beyond the huge fall in GDP last year, due to the pandemic, and the bounce back from it this year and next, the growth picture does not change. The OBR is predicting economic growth averaging about 1.5% between 2024 and 2026. It is that low growth which creates the projections of real wages barely rising in the coming years. In his dreams, the Prime Minister is Winston Churchill; in his rhetoric, the Chancellor is Margaret Thatcher; but in its actions, this Government is Ted Heath.
The Chancellor and the Prime Minister have trapped the country in a vicious circle of low growth, rising inflation, stagnating incomes and rising taxes. The economic legacy of this Chancellor will be a country on the path of low growth and high taxation, but his political legacy will be as the man who buried forever the Tories’ reputation as a low-tax party.
I entirely agree with all the points that my right hon. Friend is making. The Chancellor said yesterday that in three years’ time we would still have growth of 1.3%—negligible growth. If we look back to the years of the Labour Government, we see that even in 2010, after the global recession, we still had growth of 2.3%.
That is precisely the point I am making. The long-term growth trend makes a huge difference to the Government’s choices and their power to fund public services.
In the face of that, what was remarkable about yesterday’s Budget was the total absence of any plan for economic growth, and nowhere is that clearer than in education. The Chancellor expects us to applaud a lap of honour where in a couple of years’ time, funding per pupil only just gets back to its 2010 level. Let us think about that for a moment: almost 15 years with no real increase in investment in the workforce of the future. A generation of schoolchildren will have gone through their whole education with fewer resources than their predecessors.
How can the Government talk realistically about levelling up when their record is long-term neglect of educational opportunity? What an appalling dereliction of duty to young people in this country. There can be no more short-sighted decision than to stop talent flourishing—to take away the platform from which dreams can be fulfilled. For people born without money or without means, education is the only way in which that can happen. It is the means by which people can change the circumstances into which they were born. It is the platform to ensure that the course of life is not dictated by the hand that they were dealt at birth. Yet, for 11 years, this Government have neglected it. Then, when they were presented with a catch-up plan to help children to recover from the education lost during the pandemic, they shredded it. That is not only socially unjust; it is economically self-defeating, and that record on education is a major contributor to the weak, anaemic, stunted growth that has resulted in the tax levels we are seeing today.
This was not a Budget written in a few weeks in the Treasury. These high taxes and stagnating household incomes are not the product of the short-term crisis through which we have been living. This was a Budget written over 11 long years. Where was the plan for growth? Where was the plan to back the best of British creativity and enterprise? Where was the plan to ensure that we succeed in the technologies of the future? Where was the plan to ensure that, when it comes to levelling up, it is people and the talents that they hold, not just bricks and mortar, that are at the heart of it?
It is not just our view that the Budget did not measure up. The CBI has said that it will not
“do enough to transform the UK economy for a post-covid world”.
The Federation of Small Businesses asked:
“Is there enough here to deliver the Government’s vision for a low-tax, high-productivity economy? Unfortunately not.”
The Government ditched their industrial strategy out of ideological spite. The transition plan for net zero produced just last week was a damp squib. One of the biggest challenges that we face is how to transform the heating in our homes, yet their plan would partially cover just one in 250 of the replacement boilers needed. The long-term reform of business rates, which several Conservative Members said they supported, has been ditched once again. Time after time it is ditched. And the Government have only just discovered the importance of early years education, a decade after taking a wrecking ball to Sure Start and setting back a good start in life for millions of children around the country.
It is not just the fact that we have the highest taxes in living memory; it is that those taxes are not being used for any coherent long-term plan for the country. They are being used to firefight one issue after another as it momentarily occupies the mind of the Prime Minister. There is only one plan that the Chancellor has here, and it is as clear as day. It is to hold some money back in order to offer tax cuts before the next election. If that plan succeeded and the Tories won, what do we think would happen afterwards? We know what would happen. There would be a big speech about how taxes now had to go up because we had to pay our way and could not borrow what we could not afford. And the reason for that would still be the Tories’ lamentable failure on economic growth. That is not a moral mission. It is just a Tory election plan, and it is one that has been funded by hard-working taxpayers.
There is a better path. There is a better future and a different way, and that is to put our efforts into raising medium-term growth prospects and to get out of this bind of high inflation, high taxes and poor growth that 11 years of Conservative Government have left us in. That is the better path to prosperity and security. That is the path to ensuring that talent is used and to making the most of the UK’s potential. On the Labour Benches, we want to work with business, not treat it as a scapegoat for every problem that comes along. We want a fair deal for the workers in business, with good pay and decent conditions. We want to support wealth creation every bit as much as we support fair wealth distribution. We want to invest in the skills and talents of all our people, whatever their circumstances, from the youngest age possible, and we will have a net zero plan that meets the challenge of the moment and gets the best possible economic and employment benefits for the country. That is a better plan than the high-tax, high-inflation, low-growth model that the Conservative party has been pursuing, not for two years, not for one year but for 11 long years. It is that failure that gave rise to yesterday’s Budget and the tax burden being imposed on the country by this Chancellor and this Government.
It is a privilege to close this debate on behalf of the Government. As we come out of the biggest recession in 300 years and emerge from the pandemic, it is critical that we as a Government support our people and our businesses, and this has rightly been the subject matter of today’s debate.
This is a Budget that delivers a stronger economy for the British people. It is a clear expression of what this Government stand for and what we are determined to achieve: investment in a more innovative, high-skilled economy, because that is the only path to individual prosperity; world-class public services, because they are essential to our day-to-day living; backing business, because our future cannot be built by the Government alone; help for working families with the cost of living, because we will always give families the support they need; and levelling up, because opportunity should never be limited to the few and should not depend on where a person was born or who their parents are. Our goal is an economy fit for a new age of optimism, and this Budget is our foundation.
The right hon. Members for Doncaster North (Edward Miliband) and for Wolverhampton South East (Mr McFadden) and the hon. Member for Brent North (Barry Gardiner) talked about investments over the past 11 years, stagnation and the lack of growth. I wonder whether they remember the financial circumstances in which their party left the country when it left office, as my hon. Friend the Member for Crewe and Nantwich (Dr Mullan) pointed out. As they talked about economic stability and credibility, I wondered whether they had spotted that, under its current leader, Labour has made more than £400 billion-worth of spending commitments, in opposition to the Government’s responsible decisions to pay for our plans, yet announced just £5 billion-worth of proposed revenue rises, showing that it has no plans beyond reckless spending and no plans to deliver responsible public finances. As my hon. Friend the Member for Ipswich (Tom Hunt) said, it is important that an elected Government have economic credibility, and that rests with this Government.
The right hon. Member for Wolverhampton South East said the Government’s plan will only increase taxation. I wonder whether he was listening to the Chancellor yesterday when he talked about his fiscal rules, whether he heard the Chancellor’s commitment to cut taxes and whether he heard that the first step is a cut of the taper rate for those on the lowest incomes.
A year ago this country was experiencing the deepest recession on record, but thanks to the Chancellor’s plan for jobs, which the Office for Budget Responsibility yesterday called “remarkably successful,” we are fast recovering. The OBR expects the economy to return to pre-pandemic levels at the turn of the year, earlier than it thought in March. It has revised anticipated growth up every year for the next five years, and it has revised expectations on unemployment down to 5.2%, with more than 2 million fewer people likely to be out of work than was predicted at the height of the pandemic. Wages are also rising. In other words, the decisions this Government took during the pandemic were the right ones for the economy and for the British people.
The subject of today’s debate is support for people and businesses, and that support is clear to see. I start by addressing our support for people, and particularly for those on low incomes. It was a Conservative Government who introduced the national living wage in 2016, and the Budget increases it by 6.6% to £9.50 an hour, raising the pay of over 2 million of the lowest-paid workers. The hon. Member for Glasgow Central (Alison Thewliss) said that that is not enough, but I wonder whether she realises that the rate is set by the Low Pay Commission, and that is what we have accepted.
As the hon. Lady knows, we are on a trajectory to get the national living wage to a higher rate. We need to increase the national living wage, as we have by 6.6% this time round, and it will go up again in time. She will have heard Conservative Members asking how it will work for the businesses that are paying it, so there is a balance to be struck. This Government are progressing on that trajectory to the right path.
We are also reducing the universal credit taper rate from 63% to 55%, which, combined with a £500 increase in the work allowance, means an effective tax cut worth more than £2 billion a year. The hon. Member for Glasgow Central said that that would not help families, so let me give an example: a single mum living in Darlington who works full time on the national living wage would see a £1,200 increase in her pay by December, and that would be £1,900 in April when the new national living wage comes in. My hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) acknowledged the transformative effect that the increases to the national living wage and the universal credit taper will have for many of his constituents. I am grateful for the constructive comments made by the hon. Member for Ceredigion (Ben Lake) in welcoming the national living wage and public sector pay increases.
With fuel prices at their highest level in eight years, we are not prepared to add to the squeeze on families and small businesses, which is why the Budget freezes fuel duty for the 12th year in a row. The hon. Member for Newport East (Jessica Morden) is wrong to say that we are not supporting people with their gas bills: in addition to the fuel-duty freeze, we have the warm homes discount, which supports 2.2 million people, who receive a £140 rebate on their bills. Like the hon. Member for Cardiff North (Anna McMorrin), the hon. Member for Newport East called for a cut to VAT on fuel bills—something the Labour party calls for—but what would that do? What would happen if we cut VAT on fuel? Such a cut would apply for everyone, across the board, so who would it help as well as the low-paid? It would help the wealthy. I am quite surprised to hear Opposition Members suggest that.
Does the Minister recognise that it is the poor who pay the largest portion of their disposable income in fuel costs? She is absolutely right that such a cut would, of course, be of greater benefit in monetary terms to the wealthy, who tend to spend more on energy, but in terms of the difference made to lives, 5.7% of the disposable income of the very poorest goes on energy costs.
The hon. Member makes a valid point and I absolutely recognise that, but the way to solve that problem is not to give a tax benefit to a large group of people who simply do not need it, but to give discrete, directed support to those who do need it. That is what this Government have done: the hon. Member will know that six weeks ago we announced £500 milllion to support the most vulnerable families when they absolutely need it.
Members from all parties mentioned the support for families and for family hubs and welcomed the measures in the Budget. I was pleased to hear the support from my hon. Friends the Members for Don Valley (Nick Fletcher) and for Newton Abbot (Anne Marie Morris). My hon. Friend the Member for Telford (Lucy Allan) made a good speech about how important it is to support struggling families, and I was interested to hear what my hon. Friend the Member for Crewe and Nantwich said about the importance of not only supporting young families financially—we have heard how important it is to support recent mums and dads—but giving them emotional security as well.
I was disappointed to hear the shadow spokesperson, the right hon. Member for Wolverhampton South-East, speak about our lack of support for education, because we have invested significantly in education, not only in this Budget but in previous ones. This Budget provides a wide variety of support through the education system. We are increasing the core funding for schools, with an additional £1,500 per pupil, and providing catch-up funding, with an additional £1.7 billion bringing the sum up to £5 billion, In addition, as my hon. Friend the Member for Ipswich said, we are increasing the funding for SEND provision, with an extra 30,000 places for pupils with high needs. Through our new Multiply programme, we are helping school leavers who did not get the maths skills that they ought to have got at school.
There are some really good measures in the education package, but does the Minister not accept that returning us to 2010 expenditure on education when we have more children to educate, a bigger population and a need to look at the workforce as well, does not really help us in terms of the productivity puzzle, which is key to making the Brexit challenge work?
The £4.7 billion investment in core school funding will be welcomed by schools and will enable them to support their students over the coming years. I would like to take this moment to thank all those teachers across the country who have committed so much over the course of the past 18 months in very difficult and challenging circumstances. I know that, although schools are back, students have lost time and there is a huge amount of work to do. Our one-to-one tuition and other such measures will help with that. The mark of a good Budget is one that makes a difference to people’s lives, in many different ways, and I hope that this Budget makes that difference.
Let me turn now to skills. Supporting people does not just mean cutting their tax bill. If we want to build a stronger economy and spread opportunity, we need to do more to boost people’s skills. I have talked about education, but, in addition, we are spending £3.8 billion over the Parliament, with more hours learning for 16 to 19-year-olds, expanded T-levels, more traineeships, more Institutes of Technology funding for the lifetime skills guarantee, and a large increase for apprenticeships by the end of the Parliament. I was very pleased to hear the hon. Member for Hornsey and Wood Green (Catherine West) welcoming our boot camps, which are increasing skills for people across the country.
Every Government should aspire to provide greater life chances for future generations, but this Government not only have the ambition, but have already shown through their plan for jobs that we can level up and we will continue to do so with this Budget.
I will press on at the moment.
Just as the Budget seeks to help working families, so it supports businesses as they continue to recover from the pandemic, with a particular focus on encouraging them to invest. Small businesses are the lifeblood of the British economy. Their contribution to this country, day in, day out, is extraordinary, and we want to support businesses to grow, so the Budget introduces changes such as the new 50% relief for eligible retail, hospitality and leisure properties—a tax cut worth almost £1.7 billion. The Budget also cancels next year’s planned increase in the business rates multiplier—a tax cut worth £4.6 billion for businesses. Taken together, the Budget cuts to business rates amount to support of £7 billion over the next five years. I am really pleased that that was welcomed by my hon. Friend the Member for Newton Abbot. The right hon. Member for East Ham (Stephen Timms) suggested that this was not significant support, but in fact it is the largest support by way of business rates over a period of time, save for the coronavirus measures.
I would like to address one point that was raised by the hon. Member for North Tyneside (Mary Glindon). There was a suggestion that freeports—one of our measures that significantly support business—were not generating economic activity. Let me say that we are already seeing evidence of new investments at freeports. DP World, for example, is investing £300 million at the Thames freeport.
Let me turn now to investment. We are boosting innovation by investing in our world-leading research and development sector, maintaining our target to increase annual public R&D investment to £22 billion, and spending £20 billion every year by 2024-25. On top of initiatives such as Help to Grow and the Future Fund, we are increasing regional financing to help businesses innovate and grow, and providing £1.6 billion for the British Business Bank to expand the UK-wide regional angels programme and establish new regional funds. As my hon. Friend the Member for Sedgefield (Paul Howell) recognised, it is extremely important to improve our science education and investment, and that is exactly what we are doing. We want this country to be the most exciting and dynamic country in the world for business, and it will be.
The position in relation to the devolved Administrations was mentioned by several Members, including the hon. Members for Merthyr Tydfil and Rhymney (Gerald Jones) and for Pontypridd (Alex Davies-Jones), and my right hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell). Some of them mentioned funding for the coal tips in Wales. I point out that in this Budget the devolved Administrations have had the biggest funding settlement ever, with the biggest annual block grants in real terms of any spending review settlement since devolution in 1998. I do hope, as the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) said, that that money is spent well.
The Minister mentions the block grant that is given to the devolved nations, but surely she and the Government recognise that the £600 million needed for the coal tips legacy cannot be paid for by the Welsh Government alone. It was the UK that benefited from those coal tips, so it cannot be for the Welsh Government to pay for the legacy on their own, especially when it predates devolution.
As the hon. Member knows, these matters can be dealt with through devolution. As I mentioned, there is a significant funding settlement coming the way of the devolved Administrations; obviously, it is up to them how they spend that money.
As the country emerges from the worst economic shock that we have ever seen, this Government choose to invest in people, in skills, in innovation—in our future. The Budget and spending review begin to deliver the new economy and optimism of which the Chancellor spoke yesterday, with a pay rise for over 2 million people, a £2 billion tax cut for the lowest paid, the biggest business rates tax cut in 30 years and the largest real-terms increase in departmental spending this century. This Budget levels up to a higher wage, higher skilled and higher productivity economy. It is a Budget that will be measured by the difference that it makes to people’s lives across the country. I commend it to the House.
Ordered, That the debate be now adjourned.—(Scott Mann.)
Debate to be resumed Monday 1 November.
I thank every Member who participated in the debate, because everybody turned up for the wind-ups. We will pause briefly as those who wish to leave the Chamber do so, before I call the hon. Member for Easington (Grahame Morris) to present the petition.