Income Tax (Charge)
Debate resumed (Order, 28 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.
My right hon. Friend the Chancellor of the Exchequer delivered his Budget statement against the backdrop and in the shadow of the covid pandemic, but he also did so unveiling a new era of economic optimism, as we build back better after that pandemic and secure the investment required to make sure that every part of this United Kingdom flourishes economically and every citizen has the chance to achieve their fullest potential.
It was striking that the Office for Budget Responsibility, in its assessment of the Chancellor’s response to the covid pandemic, said that he was “remarkably successful” in the steps that he had put in place. It is important, against the backdrop of the Budget statement and the spending review that accompanies it, to reflect for a second on the Chancellor’s success. The plan for jobs, which he was responsible for, has ensured that, contrary to the grim expectations that we would face unemployment of perhaps 12%, it is now expected to be 5% at most. It is also striking that the Office for Budget Responsibility estimated that the scarring effect on the economy—the drop in GDP that we would inevitably suffer as a result of the covid pandemic—would no longer be 3%, but just 2%.
Those figures, which reflect the success of my right hon. Friend’s approach hitherto, should be in our mind as we consider the approach that he is taking, because it is only as a result of success in ensuring sound money, success in ensuring an approach towards a balanced budget that commands the confidence of the markets, and success in ensuring that more of our fellow citizens can remain in employment that we have the foundations today on which to build, unite and level up our country.
The right hon. Gentleman talks about success. In part of my constituency, child poverty is something of the order of 60%. That compares with a national average of just under 20%. Is that a success because, if not, what does levelling up mean for the children in my constituency?
The hon. Gentleman makes an important point. At the heart of levelling up is a recognition, as he rightly reminds the House, that while talent is spread equally across this country, opportunity is not. There is a series of measures in the Budget statement designed to specifically attack the problem of child poverty. The creation of new family hubs is specifically designed to address that, as is the additional investment in the supporting families programme, the successor to the troubled families programme.
I should add that the changes to the taper on universal credit will also ensure, allied to the changes in the national living wage, that someone who is on the minimum wage, who is therefore in work, and who is receiving universal credit will receive at least £250 extra a year as a direct result of the national living wage increase and an additional £1,000 a year as a result of the associated changes to the taper. I recognise that eradicating poverty is not the work of one Budget, but it is only fair that everyone across the House recognises that there are measures in this Budget statement—measures being taken by this Government—directly to address the problems that the hon. Gentleman raises, because they are a scar that needs to be healed.
Will the Secretary of State tell us whether the number of family hubs will match the number of Sure Starts that have been cut since 2010? Does he regret the loss of so many Sure Starts and recognise the serious damage that has been done to a generation?
The right hon. Lady is right to point out that the Sure Start programme was always intended to help those who were most in need, but it was also intended to provide a universal offer. Inevitably, during the difficult period that we had after the 2008 financial crash, we had to make sure that we targeted resources accordingly, but after a period of retrenchment, we are now entering a period of renewal and reform. The family hubs are targeted not just at those who have children in the first 1,000 days of their life, which reflects superbly on the work of my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom); they are there to ensure that we have a comprehensive nought-to-19 offer. They go further than Sure Start children’s centres originally did—that is no criticism of Sure Start children’s centres—providing services that they did not.
I will make a bit of progress and then try to take more interventions, if that is okay.
It is also important to recognise that the Budget statement saw a significant increase in public spending overall. It is the case that no Government can be judged purely by how much they spend. How that money is spent is critical. Additional public spending without reform and without a focus on value for money is money wasted. But I do not think that anyone across the House can deny that, with reform and with a focus on value for money, additional public spending, appropriately targeted, can help to transform public services for the better. In this Budget statement, £150 billion more will be spent over the spending review period. That is a 3.8% growth, in real terms, and in the Department for which I am responsible there is a 4.7% increase. Alongside that, there are the biggest increases in capital investment from any Government for 50 years; the biggest block grants ever given, since the dawn of devolution, to the Governments in Scotland, Wales and Northern Ireland; and an increase of 6.6% in the national living wage, which takes it to £9.50 an hour. All Governments can face criticism and all Chancellors can be attacked, but I do not think it credible for anyone in this House to say that the package that the Chancellor unveiled last week is any way not equal to the challenges that we face.
The question for Opposition Members, including those on the Front Bench, is what they would do differently. If they argue that we should spend even more, where would they spend it? Which budgets would they prioritise? If they were to spend more, which budgets would they deprioritise? What would they cut to fund the additional spending? If they would not cut, would they borrow more? If so, how much more? With what impact on our credibility in international markets, on interest rates and on our capacity to fund our debt and deficit? Let us bear in mind that debt is falling and the deficit is being reduced as a result of the Chancellor’s shrewd approach.
If the Opposition were to borrow more, would they tax more? If so, whom would they tax? What credibility can they have on tax when we introduced a specific one-off increase to fund the national health service and social care—and the Labour party voted against it?
Those are all questions that Opposition Front Benchers want to avoid. To what lengths have they gone to avoid it? Well, earlier today I spent a few seconds on Twitter, not tweeting, but studying that social platform. In particular, I studied the tweets of my opposite number, the hon. Member for Croydon North (Steve Reed), who has been tweeting promiscuously and vociferously over the weekend—but what has he been tweeting promiscuously and vociferously about? Has he been tweeting about the spending review? Has he been putting forward alternative plans for local government, alternative propositions on levelling up, a new plan for housing or perhaps a new proposition on communities?
No. The hon. Member has only one tweet about the spending review. In contrast, he has tweeted five times as often about Crystal Palace football club. We are all, I think, in awe of Patrick Vieira’s success in ensuring that Crystal Palace could beat Manchester City 2-0 at the weekend, but however historic and unprecedented that victory is, I think we all have a right to ask whether, if Labour is silent on the spending review—if it has nothing to say by way of criticism or alternative—that is perhaps an indication of the success of the Chancellor in framing a Budget and a spending review right for this country.
To get back to some serious points for a moment, UN Secretary-General António Guterres told Glasgow’s COP26 today that the world’s
“addiction to fossil fuels is pushing humanity to the brink.”
Will the Secretary of State use his planning powers to protect the beautiful parts of his own county of Surrey and prevent it from being turned into a British Texas? Why are Conservative Ministers prepared to allow new oil drilling in the Surrey hills and the north of Scotland when we are in a climate crisis?
I have huge respect and affection for the right hon. Member, but I remember when we sat in Cabinet together and he was Secretary of State for Energy and Climate Change. I remember when he spoke to the Liberal Democrat conference, when such a thing occurred —when there were enough Liberal Democrats to get together to fill a conference hall. I remember him telling that Liberal Democrat conference hall that it was time—please forgive my language, ladies and gentlemen—to get fracking. Now that he is no longer in government and is in opposition, he seems, curiously enough, to have reversed his position, an unprecedented thing for a Liberal Democrat to do.[Laughter.] Saying one thing to one constituency and another thing to another? Remarkable!
I should say that my own views on fracking in Surrey—and indeed elsewhere—are on the record, and the right hon. Member can be reassured that my opposition to fracking in Surrey, particularly in a case that came up in my constituency, is on the record; but because my views are on the record of the past, I should say no more about the future.
May I return the Secretary of State to the 3% increase in spending power for local councils? Has he seen the analysis by the Institute for Fiscal Studies? It states that the 3% includes the £5.4 billion that the Government have used from the levy, but as the way in which councils must spend it is specified, it amounts to only a 1.8% increase in money that they can choose, and the 1.8% is there only if they put their council tax up by 3% a year.
The hon. Gentleman makes an important point. Additional funding is, quite rightly, being devoted to improving adult social care, and it is also the case that the overall rise in core spending power for local government is at 3%. If we look back, we see that that is a significant increase, and it is also part of the broader increase of 4.7% overall in the spending that we are providing. Local government is not just being given more money for discretionary spending and for adult social care; we are also seeing additional spending from the Department for Education on special educational needs, we are seeing additional spending for transport, particularly in our city regions, and we are seeing the levelling-up fund as well. It is important to look in the round at the amount of money available to local government and spent in local areas.
Knowsley, which is one of the boroughs that my constituency covers, has gone from being the fifth most deprived local authority in 2010 to being the second most deprived now. One would have expected a Budget such as this, about levelling up, to focus particularly on giving necessary resources to Knowsley, but despite being a priority 1 area it has been overlooked for the levelling-up fund, having previously been overlooked for the future high streets fund and the towns fund. What does Knowsley have to do, now that it is the second most deprived area, to get some money from the Government so it can try to level up? [Interruption.]
The hon. Lady has made an important point. There are specific and long-standing issues in Knowsley and other parts of Merseyside that we need to address as part of levelling up. However, I think she does herself down slightly, because I understand that thanks to her advocacy in her constituency two levelling-up bids succeeded, and although they do not affect Knowsley, they do affect Liverpool. Some £20 million has gone towards helping Liverpool City Council with regeneration, and £37 million has gone towards recovery. Those sums are not insignificant.
Nevertheless, I take the hon. Lady’s point about Knowsley. I think it important to remind her, and indeed the House, that the £1.7 billion in the levelling-up fund which was allocated by my right hon. Friend the Chancellor is just one third of the total sum allocated over the course of the spending review, and I look forward to working with her and with other colleagues to make sure that the remaining funds can be allocated effectively.
I do not know whether the Secretary of State heard this, or indeed whether the hon. Member for Garston and Halewood (Maria Eagle) heard it, but when the hon. Lady asked what her constituents had to do to get their fair share of levelling-up funding, the clear message from the Tory Back Benches was that they had to return a Tory MP. Tory MPs clearly think that it is all about putting money into Tory-held constituencies. Does the Secretary of State agree with his own MPs that levelling-up funding will be targeted at Conservative constituencies, or does he need to have a private word with them afterwards to stop them giving away party secrets?
We do not need to look into the crystal ball; we can just read the book. There are a number of Scottish National party MPs whose advocacy has ensured that they receive levelling-up funds in their constituencies. I congratulate the hon. Member for Edinburgh North and Leith (Deidre Brock) on securing £16 million for UK Government money for the Granton gasholder in her constituency. The hon. Members for Central Ayrshire (Dr Whitford), for Aberdeen North (Kirsty Blackman) and for Aberdeen South (Stephen Flynn)—and even the right hon. Member for Ross, Skye and Lochaber (Ian Blackford)—have managed to secure money from either the levelling-up fund or the community ownership fund in this Budget.
It is fantastic that we have Scottish National party MPs petitioning my right hon. Friend the Chancellor of the Exchequer to bypass the Scottish Government in order to spend UK Government money in their constituencies. [Hon. Members: “More! More!”] And indeed there will be more, because in the forthcoming community renewal fund allocations, more money will be going to constituencies represented by Scottish National party MPs. That is because, as the Chancellor of the Exchequer pointed out in his Budget speech, we are stronger, better and wealthier together. It is great that Scottish National party MPs are putting the UK Government’s money where the Scottish Government’s mouth isn’t.
Levelling up is about making opportunity more equal across our whole United Kingdom. It is a recognition, as the Prime Minister and the Chancellor of the Exchequer have said, that while talent is spread equally across the United Kingdom, opportunity is not. If levelling up is to succeed, yes, we need funds such as the levelling up fund, but we also need a systemic approach to how the Government support local government, other institutions and the private sector in order to spread prosperity.
One of the challenges that we face when it comes to levelling up is that the difference between the more economically successful areas of the United Kingdom and those that are less successful involves a kind of “Anna Karenina” challenge. In the first line of that novel, Tolstoy points out that all happy families are happy in a similar way, but each unhappy family is unhappy in its own way. We can apply that to communities that need more help. The challenges that Knowsley faces are different from the challenges that Grimsby faces. The challenges that Bury faces are different from those that Burnley faces. We need to recognise that while all the challenges faced in coastal towns, in satellite towns around our major cities and in rural areas have common features, they all deserve to be addressed in a unique way.
If we are going to improve economic productivity and wellbeing, we need to recognise—as the Under-Secretary of State for Levelling Up, Housing and Communities, my hon. Friend the Member for Harborough (Neil O’Brien), has pointed out—that for levelling up to succeed, we need to ensure that local leadership improves and that we build on the success of, for example, combined authority Mayors such as Andy Street and Ben Houchen. We also need to improve living standards where they are lower, and to improve public services, particularly where opportunity has fallen behind. We also need to play a part in helping to restore pride in place, so that communities feel in a genuine sense that they have taken back control.
The Budget succeeded in addressing many of these challenges by ensuring that the funding was there to focus on each of the ingredients that require to be in place if we are to have levelling up. One of the first and most important areas in which the Budget made provision for change was in education, particularly in further education and in skills. An additional £3.8 billion is being spent over the course of the spending review period. That is a real-terms increase for those 16 to 19-year-olds who are in full-time education, and there is additional money to ensure that our groundbreaking T-levels are more available. There will be additional hours for those in further and technical education to ensure that they get the very best tuition, and there will be skills boot camps to ensure that we can accelerate the move of people into the labour market.
There will also be eight new institutes of technology—prestige further education institutions concentrated in the areas that most need levelling up. On top of that, the multiplier programme will provide more than £500 million to improve adult numeracy across the United Kingdom. All of this comes together in a package to recognise that, as well as building on the success of our education reform programme in schools, we also ensure that adult, technical and vocational education at last receives the focus, attention and funds that it deserves.
As well as investing in skills, we are going to invest better in small and medium-sized enterprises, which are of course the engine room of our economy. That is why the Chancellor outlined plans for the British Business Bank to expand in order to ensure that SME finance is more readily available. Regional funds are being extended across the northern powerhouse. The existing success of the BBB’s Cornwall operation is being extended to cover the whole of the south-west, and there will be new branches of the bank opening in Scotland, Wales and Northern Ireland in order to build relationships with small businesses and to ensure that they have access to the debt and equity finance that they need.
Alongside that, there will be increased investment in research and development. An additional £20 billion will be spent over the spending review period, going up to hit our £22 billion target, and this research and development money will move outside the greater south-east, where so much research and development expenditure has been concentrated in the past, in order to ensure that, whether it is in Manchester or Newcastle, areas of university excellence that require additional investment to ensure the smarter diffusion of innovation into the economy are supported in the way that they should be.
On top of that, we have the global Britain investment fund: £1.4 billion that will ensure those sectors that are strong and growing in our economy get the additional inward investment they need to drive up economic growth. We know inward investment is often the route to higher productivity, and that is why there will be £1.4 billion specifically targeted on the automotive sector, on renewables and on life sciences.
I will say two things. It is great to see the right hon. Gentleman in his place. When he left as Chief Secretary to the Treasury, he famously left a note saying that “there is no money” left; now, as he can see, there is significant money available to be allocated in all these areas. I recognise that he was speaking in jest and that those words should not be taken out of context.
More broadly, we face, as indeed every country faces, a global race for talent and a global appetite for additional investment. It is because of the global Britain investment fund, because of what we are doing in research and development and because of the way we are reforming UK Research and Innovation that we will be in a position to ensure that our economy is equipped to take advantage of the opportunities that Brexit brings, and the opportunities that the Chancellor of the Exchequer has outlined. I am confident that the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) will see our exporting ability and the inward investment routes into this country grow in years to come.
I should point out that at the beginning of my remarks, I said that the initially pessimistic view that was taken of our capacity to weather the covid storm has been gainsaid by the success of the Chancellor’s approach. Again, there is no need to look in the crystal ball; the right hon. Gentleman need only look at the book. The book and the record show the success of the Chancellor’s approach.
I will try to make a little bit more progress.
It is also significant that, if we are to level up, we must ensure that we have appropriate investment not only in business itself, through the funds I have mentioned and the initiatives I have outlined, but in transport. We must ensure that the private sector is firing on all cylinders, and that means ensuring in particular that our great city regions have the transport networks required. That is why my right hon. Friend the Chancellor has devoted £5.7 billion over the course of the spending review period to supporting the ambitious plans put forward by metro Mayors and others to improve transport.
More than £1 billion has been allocated to the Mayor of the West Midlands Combined Authority, and more than £1 billion also to the Mayor of the Greater Manchester Combined Authority, Andy Burnham. Mr Burnham said last week—a point he made on Twitter and on broadcast; he was happy to comment on the spending review, unlike the hon. Member for Croydon North—that this was a “very positive first step.” He said:
“This feels like a breakthrough today…this is a big down payment”
on the infrastructure we need.
Mr Burnham welcomed that investment, and of course alongside it we had £830 million for West Yorkshire, £570 million for South Yorkshire, £710 million to improve transport in the greater Liverpool region and £300 million for Teesside. All those investments will help the Mayor of Greater Manchester, as he rightly wants to, ensure a Transport for London-style approach to the delivery of transport in that great region.
On top of that, as the Chairman of the Housing, Communities and Local Government Committee, the hon. Member for Sheffield South East (Mr Betts), pointed out, we have £4.8 billion going to local government over the spending review period. This is necessarily an injection of cash to help local government ensure it can play its part in levelling up, and to ensure that it is supported by thriving businesses. We have also reformed business rates and moved towards a three-year evaluation, relief on improvements, including improvements that will help to deal effectively with climate change, and a 50% reduction for small businesses in the most affected sectors.
All that comes alongside a commitment to additional spending from my Department to help those most in need. We also have £630 million a year allocated over the next three years—that is £1.9 billion in total revenue—to help to deal with homelessness and to eliminate rough sleeping. There is also additional capital investment specifically targeting those who have problems with drug use and those who have been in custody, to ensure that we can help them into the accommodation they need to deal with the challenges they face. Overall spending in this area is 75% higher than pre-pandemic levels.
Just before you do, may I just say to the Front Benchers that I am getting bothered, as we have a lot of Members I want to get in? I am enjoying this very much and it is great entertainment, but I am getting bothered, as this is about Back Benchers as well and so I hope we are going to save some time for them. I think we are nearly 30 minutes in.
My hon. Friend is absolutely right: those pilots have been successful. One thing we want to do is make sure we can apply their success more broadly, and further announcements will be made in due course.
Mr Speaker, I am very conscious of the fact that there is so much to unpack in the Budget and so many more people wish to speak. However, it would only be appropriate for me also to point out, before I come to my conclusion, that when it comes to housing itself—to the provision of safe, decent and affordable housing—my right hon. Friend the Chancellor has risen to the occasion, with £11.5 billion for our affordable housing programme and £1.8 billion for urban regeneration, and with a determination to ensure that we take a brownfield-first approach to the provision of new housing, recognising that what we need to do, which is right for the climate, levelling up and growth across this country, is concentrate on regenerating those communities that have suffered economically in the past and whom it is our duty to help now.
I hope the House can see that across the piece, in every area that matters when it comes to levelling up—supporting the private sector to invest and to export; making sure that local government has the tools it needs to play its part as a leader in regeneration; making sure that the money is there to help the most vulnerable, who should be our first concern; ensuring that both the funding and the reform package is in place to provide the schools of the future and the skills that we need; and, above all, making sure that there are decent, affordable homes available to all our citizens—the Chancellor’s package meets the need of the hour. That is why I commend this Budget statement to the House.
First, I thank the Secretary of State for highlighting Crystal Palace’s glorious victory over Man City—I do so with apologies to my hon. Friend the Member for Manchester Central (Lucy Powell), who is sitting next to me. In their own way, Crystal Palace are attempting to level up the premiership.
Despite that happy news, I am afraid that the grim truth is that after a decade of Conservative rule, Britain is more divided and unequal than at any time in living memory. Many of the trends that led us here go back decades, but this Government have made the situation far worse. To address the problems that caused this, we need to repair the broken foundations of our politics and our society. We must re-establish the link between hard work and fair pay; support families as the essential bedrock of our society; rebuild the fabric of our communities; and remake Britain as a country that works for everyone.
This Government will not do that. Their Budget was supposed to be about levelling up, but it did not even convince their own MPs. The previous Secretary of State, who used to sit opposite me, laid into the Government over soaring taxes. The former Brexit Secretary, the right hon. Member for Haltemprice and Howden (Mr Davis), slammed the Government’s national insurance hikes. Conservative MPs past and present lined up to denounce the Budget in the media. Perhaps most surprisingly of all, the Chancellor himself seemed strangely unconvinced by what he read out to the House last Wednesday. He left the country facing the highest level of personal taxation for 70 years and then pleaded with us, rather unconvincingly, that deep down he is a tax cutter really. The Chancellor sounded for all the world like a hostage forced by the Prime Minister to read out a script on video.
So what does this tell us about the Government’s plans for levelling up? First, the Government are deeply divided between a Chancellor who does not believe his own Budget, and a Prime Minister and, I presume, the Secretary of State, who made him read it out. They are split down the middle between blue wall, low-tax, traditional Tories, including the Chancellor, and the red wall reformers, led by the Prime Minister and the Secretary of State, who are attempting a top-down coup against their own party.
Secondly, the Government are now distancing themselves from their own record, thereby disorientating their party. The Chancellor told us repeatedly that spending was reaching its highest point since his own party started cutting in 2010—as if getting back to where we were more than a decade ago was in any way good enough. The Prime Minister and the Secretary of State are trying to present this as a brand-new Government unconnected to the previous two Conservative Administrations, of which they were senior members. This is not levelling up the country; it is covering up their record.
Thirdly, the Secretary of State does not recognise the contradictions between an economic policy based on crony capitalism and his claims about national renewal. The Conservatives cannot build a fairer country while they are siphoning off billions to their wealthy mates through crony contracts. It is that simple.
Fourthly, the Secretary of State still cannot tell us clearly what he means by levelling up. I was hoping for a clue in his speech this afternoon but, sad to say, we did not hear one. At the Conservative party conference Ministers used at least eight different definitions, and they still cannot tell us how they would measure it. Let me help the Secretary of State: levelling up should mean opening up opportunity to people and communities in every part of the country. But that is not what the Conservative party is about. The Conservatives have broken Britain and they cannot bring it back together.
The pandemic exposed just how badly the Conservatives have broken the link between work and reward. It is the workers on the frontline who care for others, empty the bins or sweep the streets who are the lowest-paid and the most neglected. They kept this country going—they are the heroes we all applauded—yet their standard of living has been falling for a decade.
When the Chancellor announced an end to the public sector pay freeze, he did not provide the funding to put wages up. Pay in the north-east is now £10,000 a year less than in London. Average wages are down 4% in the west midlands, down 5% in Yorkshire and down 6% in the east of England.
Our held-back regions desperately need a radical plan to reindustrialise around the green economy and digital technology, and to bring good new jobs to every part of the country. The shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), has announced bold plans for a green new deal to do precisely that, but the Chancellor did not mention the climate crisis even once in his speech, just days before COP26 was due to start in Glasgow.
This Tory decade has been the weakest for pay growth since the 1930s, yet now the Tories are cutting universal credit for the lowest earners, hiking up taxes on working people and eating up what is left of people’s incomes with rising levels of inflation. As my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) said, workers are facing an assault on their living standards because of this Government’s economic mismanagement. The Conservatives are now the party of high taxes because for a decade they have been the party of low growth. In the words of the shadow Chancellor:
“Voters won’t be fooled by a smoke-and-mirrors budget that is presented as being on the side of working people but hands a tax cut to banks while hiking up council tax, national insurance and freezing personal allowances.”
Families are the fundamental building blocks of our society. Any Government who want to level up the country should support families to nurture the young and cherish the old, but under this Government half a million more children now live in poverty, with the most dramatic increase in the north-east of England. The Government have provided only a fraction of the funding that their own adviser told them kids need to catch up on the education they missed during the pandemic. We cannot level up the country by denying children the chance to learn. If kids do not have the foundation of a good education to build on, their life chances are stunted right from the start. No parent can accept that.
Older people are suffering, too. The Prime Minister ignored the social care crisis for two years, then introduced a punitive tax on jobs that will provide next to nothing for social care for at least three years. By relying on council tax rises to plug some of the gap, the Government create further divides, because council tax raises more money in richer areas than in poorer areas, creating a postcode lottery on care.
With all these new Tory taxes, the Resolution Foundation tells us that families will end up paying £3,000 more tax a year by the middle of this decade than when the Prime Minister took office. Families’ disposable incomes will be lower and the public services on which they rely will be cut harder, while a landlord with a portfolio of properties, a shareholder or a banker will pay nothing more. We cannot level up the country by clobbering hard-working families while letting the rich get away without paying their fair share.
Communities are a vital building block of our country. They give us a sense of belonging. They are a rich network of relationships, associations and shared values, but the Conservatives have spent 11 years undermining them. We have already lost 10,000 shops, 6,000 pubs, 1,200 libraries, 800 youth centres and a similar number of Sure Start centres under this Government, and they are now refusing to protect our high streets by levelling the playing field on tax between independent high street shops and the online giants, which pay far less. Because the costs of social care outstrip any increase in council funding, not least because of rising demand, communities now face yet more cuts to youth services, mental health services, street cleaning, bin collections, park maintenance, social housing and the voluntary sector. We cannot level up communities if we strip out the fabric that binds them together.
I hope the Conservative council will also be opening all the Sure Start centres that were closed because of the actions of the Government.
The truth is that if we look at what the Government are doing with the towns fund, for instance, which is something that Conservative Members like to talk about, we can see that it operates in the same way as a burglar, who first strips a house bare and then expects gratitude for returning the toaster. Blackpool, Darlington and Hartlepool are all getting back barely a quarter of the funding that the Conservatives took away in the first place, but Conservative MPs have nothing whatever to say about the way that their communities have been stripped bare by this Government.
The hon. Gentleman has now been speaking for 10 minutes and I am yet to hear anything about what the Labour party would do if it were in Government and we were not. What would the hon. Gentleman cut that we are not cutting and what would he invest in that we are not investing in?
The hon. Gentleman refers to the towns fund. He will obviously celebrate the fact that Kidsgrove got £17.6 million. That means that £2.75 million can go towards refurbishing the sports centre for when it reopens in spring 2022. That sports centre had been closed by the then Labour-run borough council because it did not want to spend a single pound on it.
I am delighted that areas are getting back some of the money that the Conservative Government took away from them in the first place, but perhaps if Conservative MPs had held the Government to account a little bit harder over the past 11 years, that money would not have been stripped away from these communities in the first place.
Let us look at other pots of money that the Government are so happy to keep announcing and re-announcing. Local groups have still not been told whether they will get funding through the community renewal fund. Mid-project reviews are supposed to start this month, but many of those projects have not even started yet. Government delays mean that the jobs and investment linked to those projects are now at risk of collapse. The Secretary of State had told us in his usual courteous manner that there would be an announcement last week, but, sadly, we are still waiting. If possible, we would like to know what on earth is going on.
My hon. Friend makes an important point. One of the things that the Government have done over the last 11 years is dramatically increase levels of poverty across the country. They have not been levelling the country up at all, and now they are trying to cover up their track record since they came into Government back in 2010.
To make the situation worse, the Government’s plans to change the local government funding formula—what they call, in an Orwellian way, “the fair funding formula”—will divide communities even further. Analysis by the Local Government Association found that millions of pounds would be redirected away from poorer towns in the north of England to wealthier southern shires, and that 37 of the Conservative MPs newly elected in 2019 would see millions of pounds cut from their towns, including Workington, Sedgefield, Stoke-on-Trent, Redcar, West Bromwich, Bishop Auckland, Grimsby and Leigh. That is not levelling up Britain; it is pulling Britain apart.
Whether it is work, families or communities, this Conservative Government have made our country more unequal. They have ushered in an age of insecurity, where public services have been decimated, wages have fallen in real terms, jobs are more precarious than ever before, our high streets are struggling to survive, and British people are forced to pay the highest housing costs in Europe for some of the worst quality housing. These levels of inequality are not just morally wrong; they make our country weaker. We all pay the price of inequality, with higher levels of crime, family breakdown and mental ill health, and we pay the price a second time by denying people the opportunity to reach their full potential for themselves, their families and their communities. Levelling up must mean opening up opportunity, not closing it down in the way that this Government have done for the last 11 years.
The Secretary of State will find that he cannot fix regional inequalities because the biggest obstacle in his way is his own party’s marriage to an economic model that is based on crony contracts and waste, and that starves whole regions of capital investment. We need new institutions in our regions—such as regional banks to direct investment where it is needed most—if we want the economy to work in the interests of working people in every part of the country.
The hon. Gentleman makes some interesting debating points, but will he share with the House his view why, despite this bad news that he has shared with us, the Conservatives remain overwhelmingly the largest party in local government and made significant gains in the recent local elections, especially in areas that traditionally favoured the Labour party?
Given the Government’s announcement of their intentions to level up the country, the interesting thing will be whether those people feel that they have been levelled up at the next general election and the next set of local elections. That is the only test of what this Government are announcing that will really matter.
The Conservatives have broken the link between work and reward with a decade of stagnant wages and a tax raid on working people; they have undermined families by pushing half a million more children into poverty and refusing to invest properly in kids’ catch-up; they have ripped the fabric out of our communities instead of harnessing the innovation, creativity and compassion that they have to offer; and they have weakened our country with an economic model that has deepened the divides between regions and within communities. That is the polar opposite of levelling up.
I am listening to the hon. Gentleman’s speech and I am really interested in what he has to say, but I cannot determine from what he has said so far whether he thinks that the Government are spending too much or too little. Perhaps he could be clear with the House and let us know.
What the shadow Chancellor, my hon. Friend the Member for Leeds West, said—and I agree—was, wouldn’t it be nice if the Government asked everyone to bear their fair share of the tax burden, rather than, as this Government do, always going first and foremost to working families and clobbering them, but letting people who own assets, such as bankers and landlords, off the hook, absolutely scot-free? That is not fair. We want to see fair models of taxation.
What we need to do now is to remake our politics by tackling the power inequalities that allowed all this to happen in the first place. Labour would open up power across the country with a radical model of devolution that gets power out of Whitehall. We would give people a voice and the power to use it in the workplace, in their community and over the public services that they use. Instead of undermining work, we will respect the hard work and sacrifice that people make for their families, re-establish the link between hard work and fair pay, and invest fairly across the whole country. We will establish clear measures for levelling up to hold the Government to account for what they do or do not deliver.
This Budget is not about levelling up; it is about covering up the damage that the Government have done in the past 11 years. By deepening the divides across this country, the Government have closed down opportunity and made Britain weaker. Only Labour will bring Britain together, so that every British person, wherever they live, can reach their true potential—for themselves, their family, their community, and this country that we love.
In all my time in the House of Commons, I do not think I have heard a Labour response to the Budget that has left me, as this one does, not knowing what Labour would do, in the nightmare scenario of its coming into office. Like my hon. Friend the Member for North West Durham (Mr Holden), I am not sure whether Labour Members think we are taxing and spending too much or too little. It is an utterly economically incompetent way to approach opposition.
Since the era of Gordon Brown, we have got used to wanting to go through the Red Book to find out what we were not told, particularly on the public finances, in the Budget speech. The increases in national insurance and corporation tax will take them to 36.5% of Britain’s GDP—the highest proportion in 70 years. That undermines the tax-cutting agenda that we Conservatives have had for such a long time when in office.
I am pleased that public spending as a proportion of GDP will fall from the 51.3% that it was as a result of the pandemic. We all accept that we had to spend money in that national emergency. Had the Chancellor not taken brave and decisive measures, the impact on unemployment, and therefore the public finances, could have been substantially worse. What really disturbs me about the Budget figures, however, is that from 2024-25, public spending will stabilise at 41.6% of GDP, and that is the highest sustained level since the 1970s, when we were carrying a substantial defence burden because of the cold war. We see a shift to a bigger state, and to a bigger proportion of our spending being taken up by welfare.
I do not normally learn very much from “Newsnight”, but I was interested to find out from the Chief Secretary to the Treasury, when he was on it, that the Conservatives have changed our philosophy on economic management. I say to my right hon. Friend the Secretary of State for Levelling Up, Housing and Communities that although some in the Government may take a more social democratic approach to economic management, I certainly did not come to Parliament, as a Conservative, to see the state grow at the expense of the private sector. We need to remember what gave Britain its substantial economic strength.
However, when it comes to the economy, it is not the Budget that will affect the political weather, but inflation. In all my years in the House of Commons, and before then, politicians have been too slow to recognise the threat that inflation poses to the economy. They always want to believe that the present high level is the peak, and that they will not have to apply too much unpleasant medicine. Inflation, as we all know, is like a genie: once it is out of the bottle, it is very hard to put it back in. Let us remember the economic and social cost of inflation. It hits the poorest hardest, because a higher proportion of their income goes on non-discretionary spending—on clothes and food, for example. That is why the left’s approach to economic management, which always ends up in higher inflation, always undermines the very people it claims to represent.
Inflation also hits those with no assets. If there is the sort of inflation that there was in the past, including house price inflation, it will put getting on the housing ladder even further beyond the reach of young people. When I bought my first flat in 1988, the interest rate was 10.38%. By October the next year, it had risen to 14.88%, and the payments took almost my entire income as a junior doctor. I do not want another generation to go through the horror of inflation. People have become used to low inflation and interest rates in this country, and I do not think that the public understand exactly what the cost would be—the effect on the living standard of ordinary families—if inflation was allowed to get going.
I understand that there is a difficult choice for the Chancellor. Is inflation a short-term impact of the pandemic and of the disruption to supply chains; a system problem, too much money having been pumped into the global economy through quantitative easing for too long; or a mixture of both, which of course would be the most difficult option to deal with? The Bank of England should set a small, quick increase in interest rates—a 0.25% rise—to show that we are neither panicking nor complacent about inflation. The longer we wait to take action, the further behind the curve we get, and the greater the measures that we have to take.
A final point: let us remember the impact of inflation on our public finances. A 1% base rate adds £20.1 billion to the Government’s debt repayment. That is real money that could be spent elsewhere. A 2% base rate makes for over £70 billion in Government debt repayment; that is more than twice our Defence budget. That is the reality of where inflation can lead if we do not do something about it quickly.
It is a privilege, as always, to lead on behalf of Scotland’s national party in this or any other debate.
Anyone watching today’s proceedings or any of the proceedings on the Budget who thinks this was a sensible way to take decisions about billions upon billions of pounds of public money really needs to get out and look at what happens in proper Parliaments in proper democracies where those Parliaments are given a chance to scrutinise budgets for weeks, if not months, and where Opposition parties are invited to put in their proposals and sometimes get them accepted by the Government of the day. Several Conservative Members have demanded to know what Labour would do if this was its Budget, knowing perfectly well that it would not matter how brilliant an idea came from the Labour Benches, or any other Opposition Benches, it would not have a cat in hell’s chance of getting into the Budget, because the single criterion that matters most for the way that a suggestion is taken in this place is not how good it is but what side of the House it has come from. It is no wonder that this place is in such a mess.
Can the hon. Gentleman explain how he believes the Scottish Budget will take place this year now that his party has gone into a coalition of chaos with the Scottish Greens? Will there be a similar adoption of ideas from the Opposition parties in Scotland?
During the previous time that there was a pro-independence majority in the Scottish Parliament, that majority Government did in fact open their door to discussions with the other parties, and the hon. Gentleman’s party was quite happy to take advantage of that. He may remember, in fact, that it was an initial suggestion from his party that led to the Scottish Government introducing and maintaining to this day a record of 1,000 additional police officers compared with the maximum number that ever existed in Scotland under the previous Lib Dem-Labour coalition.
This will be seen as the year the Tories finally ditched any pretext that Budget day has anything to do with the public finances, helping the economic recovery or sustainable growth. Budget day has become purely and simply a propaganda exercise for the Government, and particularly for the Chancellor. That is what the days and days of utterly inexcusable leaks were about—leaks that until 10 years ago would have meant automatic dismissal or resignation for the Chancellor. The Chancellor seems to measure its success not by how effectively it closes the gap between rich and poor, because it does not, or by whether it delivers on any of his party’s manifesto promises—that is on the off chance that anybody can find any that havenae been broken—but on how many favourable headlines he gets in the right-wing press. It is almost as if the Chancellor has worked out how important the right-wing press is going to be in choosing the next Tory leader in a year or two’s time when the present incumbent gets fed up with being Prime Minister and goes off to do something different.
This Government have a track record of spending millions of pounds on pushing soundbite slogans that are utterly meaningless. [Interruption.] I will give way to the hon. Member for Stoke-on-Trent North (Jonathan Gullis) if he has got—[Interruption.] Okay, if he does not want to intervene he can keep his mouth shut. In 2015, George Osborne gave us a “long-term economic plan” that changed, on average, every three months until he resigned. In 2017, we had “strong and stable”, leaving Britain weaker and less stable than it has ever been in peacetime. In 2019, we had “get Brexit done”, which meant we all got done over by Brexit, and in 2019 also we had an “oven-ready deal” that left most of us feeling that we had been stuffed like Christmas turkeys. This month’s catchphrase is “levelling up”. Looking at the detail of this “levelling up” Budget, it is like claiming that you have levelled out the potholes on the road by digging a massive great hole somewhere else in the road to supply the rubble to fill in the original potholes. It is about filling in holes left behind elsewhere in our economy and in our public services by 11-and-a-half years of a failed Tory Government trying unsuccessfully to maintain a failed British state.
The Government want us to believe that they are making things better for some people without making them worse for anybody else. Some people will get a bigger piece of pie, but nobody will have to make do with a wee-er piece of pie. You cannae do that unless the pie is getting bigger, but the fact is that the pie is still much, much smaller than it was when the Tories came to power.
The Institute for Fiscal Studies said in response to the Budget:
“For most departments, the budget increases announced today will be welcome, but not enough to reverse the cuts of the 2010s.”
If the best the Tories can say about this Budget is that, with a following wind and a wee bit of luck, they might just be about be able to remediate most of the damaging cuts they have inflicted on us during their term of office, that does not strike me as a cause for celebration. That is why they will not see a great deal of positive responses to the Budget from those on this side of the House.
I understand and respect that we have political differences on our respective sides of the House, but surely the hon. Gentleman can join us in welcoming the fact that this Budget delivers the largest ever block grant to the Scottish Government in history since the Scottish Parliament was created. Perhaps he can expand on how he will be pressing the Scottish Government to spend that extra funding that we have delivered from the UK Government to Edinburgh.
The sad thing is that no matter how much anyone in this House presses the Scottish Government on their decisions, a record amount of that money coming back to Scotland has already been decided not by the elected Members of the Scottish Parliament, but by Members of the UK Parliament who could not get elected in Scotland. Record amounts of that money come with strings attached and conditions attached that tell the Scottish Government how they have to spend our money.
In response to the hon. Gentleman’s specific question about the amount, if he looks carefully, he will see that, yes, there are welcome increases for capital spend, but the day-to-day service provision budgets of the Scottish Government will continue to be under intense pressure. While we welcome the increase in capital spend, the Departments of the Scottish Government—just like the Departments of this Government and the departments of local authorities the length and breadth of England and Wales—will find that the resources to meet the ever-growing demand on their day-to-day services will be as tightly pressed as ever.
While the Government will try to pull the wool over our eyes and say, “It is all covid’s fault”, we cannot and will not let them forget that the British Government’s management of the economy during covid has been among the worst of the world’s major economies. The International Monetary Fund has predicted that the long-term economic damage from covid in the UK will be worse than in the other G7 economies. Even that does not tell the whole story, because while the Secretary of State rejoiced in the fact that we hope the long-term economic damage of covid will be restricted to 2%, he forgot to tell us that Brexit is twice as bad as that. I wonder why he forgot to mention that the long-term, self-inflicted damage of Brexit is likely to be twice as bad as the long-term damage of covid.
In talking about the self-inflicted damage from this British Government, whom people in Scotland have not voted for by majority since 1955, does my hon. Friend accept that when Government Members talk about how kind the UK Government have been in giving money to the Scottish Parliament, more often than not the Scottish Parliament and the Scottish Government are having to use their resources to mitigate bad decisions that come from this place, such as the cut to the universal credit, which renders the Scottish child payment, described by charities as a “game-changing” child payment, as utterly useless?
My hon. Friend is absolutely right. Giving spending powers and in some cases tax-raising powers to the devolved Parliaments of Scotland, Wales and Northern Ireland was never supposed to be a way of making up for the cuts to those same budgets coming through from Westminster, but all too often that has been happening.
To return to the director of the Institute for Fiscal Studies, his response to the Budget was:
“This is actually awful. Yet more years of real incomes barely growing. High inflation, rising taxes, poor growth.”
How can anyone think that is something to celebrate? The IFS also said that someone on median earnings might see their pre-tax pay just about keep ahead of inflation, but after paying the higher income tax that the Government are imposing, plus the higher national insurance tax, that median earner will be worse off in real terms. An analysis published by the Joseph Rowntree Foundation found that many of the worst off—people on universal credit who do not have a job—will be poorer as a result of this Budget. Even the reduction in the universal credit taper, welcome as it is, does not make as much difference as the Tories are claiming. For 40% of universal credit claimants in Scotland it will make no difference at all, because they have not got a job. [Interruption.]
The hon. Member for Stoke-on-Trent North thinks it is funny that many people will not benefit from the Budget. I do not see what he finds funny at all. While 40% of universal credit claimants in Scotland will get no benefit at all from the changes to the taper, 100% of his constituents on universal credit will be £1,000 a year worse off. I look forward to him defending that to his constituents—I would not try to defend it to mine.
All of that prompts a question: if people on average earnings will be worse off, and if the worst off—the lowest earners in our society—will be worse off, who really benefits from the Budget? The Chancellor’s banker buddies will benefit, thank you very much. Many of them will be raising a glass to toast a 5% cut in the corporation tax they pay, while the customers who pay their wages—individuals and small businesses alike—will struggle to cope with increased taxes. As my hon. Friend the Member for Glasgow Central (Alison Thewliss) alluded to last week, the Manchester Uniteds of this world who think it clever to take a 10-minute flight to go to a football match will gain, and the champagne quaffers in the members’ enclosure at Ascot will have something to cheer, but very few of my constituents will have anything to cheer at all.
I welcome the news that alcohol excise duties are to be reviewed at last, but let us see the result of the review before we welcome it unconditionally. As I said in a Westminster Hall debate, it cannot be right that the duty on a glass of whisky is 16% higher than the duty on a glass of wine that contains exactly the same amount of alcohol. I make no apology for reminding the House that, over the summer, all those people in the enclosures at Ascot, Henley or wherever almost certainly enjoyed the product of the skilled workforce of the Cameronbridge distillery in my constituency. It is the biggest grain distillery in the whole of Europe, and it swells the Treasury’s coffers to the tune of about £3.6 billion a year in excise duties alone. That is £3.6 billion a year from one manufacturing establishment in my constituency. The fact that for decades many people in the towns of Methil, Buckhaven, Methilhill and others have been living on or below the breadline close to a distillery that generates such massive wealth for the coffers down here in Westminster is testimony to the failure of successive British Governments to put the wellbeing of the people front and centre of their taxation and spending plans.
If the Chancellor is genuinely concerned about improving living standards for people on low incomes, he should start by reversing some of the savage cuts that he has made and reinstating the election manifesto promises that he has broken. He should reinstate the pensions triple lock, reverse the £20-a-week cut to universal credit, reverse the hike in national insurance that penalises small businesses for each and every new job they create, and scrap the two-child limit and vile rape clause. If he really believes in a guaranteed living wage for all, let us hear him—or, at least, the Minister in summing up—commit to increasing the legal minimum wage later this month and every November to match the real living wage, measured not by how much the Government are willing to ask employers to pay but by how much independent analysis shows human beings in these islands need to live on.
The Secretary of State asked what we might do as alternatives. If the Chancellor is looking for ways to save money, he could look at the gross inefficiency in the Government’s own Departments. Recent National Audit Office reports show that eye-watering sums of money have been wasted in delays and inefficiency. In the Ministry of Defence, nuclear infrastructure, Crossrail, High Speed 2 and the national criminal intelligence database, hundreds of millions of pounds—billions of pounds—are being thrown away through waste and inefficiency. He should get a grip on that; then we could improve services without necessarily having to increase taxes.
If we want to see where we could stop spending money, we could start by scrapping the programme of new nuclear power stations that are designed to rig the system in favour of nuclear energy that, when it finally comes on stream, will cost more than twice as much as offshore wind power. Sooner or later, our constituents will be forced to pay that price increase. We should scrap the monstrous white elephant that is the nuclear weapons programme: a programme whose only purpose is to commit the worst crime in the history of the planet. The Government should ditch plans to spend a quarter of a billion pounds on a new royal yacht Britannia, although, given whose ego it is clearly designed to satisfy, perhaps we should rename it the good ship Borisannia.
This is a Budget that has been imposed on Scotland by a Government we did not elect and who will never have the consent of our people to rule over us. It is partly the result of a covid pandemic, which could perhaps have been predicted, but was not. We all have to live with the consequences of that. It is largely the result of a Brexit that our people did not vote for.
The Budget seeks to level down Scotland’s status to something approaching that of a forgotten English county. I want Scotland to be levelled up. I want Scotland’s status to be levelled up to that of an equal partner of our friends in Europe and elsewhere.
The Chancellor claimed that his Budget would strengthen the Union, but what he has done is increase the pace of Scotland’s journey to a true levelling up, and bring forward the day when the sovereign people of Scotland reassert our inalienable right of self-determination, the day when our place in the world is levelled up to match that of the other prosperous, outward-looking, inclusive, democratic and independent nations. If Conservative Members think that it is not coming, why have the Government given a 20% budget increase to the Secretary of State for Scotland, whose only purpose is to peddle the myths—[Interruption.] Why do they need to spend 17.5% to 20% more on a Department, the only purpose of which is to campaign for a no vote in a referendum that they say is not coming, but that we say is coming very soon?
I want to refer to the comments made by my right hon. Friend the Member for North Somerset (Dr Fox), my parliamentary neighbour, on the level of tax because, at the end of the Chancellor’s speech, there was an extremely welcome departure, in a genuine tax cut, from the fears that my right hon. Friend expressed. It came in the form of a reduction in the universal credit taper rate, but that is effectively a tax cut. It is particularly welcome because it is targeted, laser like, on the least well-off and the lowest paid. That is genuinely a levelling-up measure because it means that the lowest paid can retain more of their earnings. It is a cut of not just 1% or 2%; the rate has been cut right down by 8% to 55%. It is a huge levelling-up measure and extremely welcome to any red-blooded, tax-cutting Conservative.
Such a measure has an impact not just on tax cutting and levelling up, but on work incentives. One of the people I admire most in the Conservative party’s long and illustrious history is Nigel Lawson. When he cut top rates of tax from somewhere around 90%, as bequeathed to us by the Labour party, to 40% or 45%, he said that there was a point about work incentives, and that we could not expect people to work their socks off, only to have the Government swipe it all because the Government believe that they can spend the money better. He was right.
Of course, if that is right for the best paid, the high earners, the most well-off, it must also be right for the least well-off. Therefore, the tax cut that I am describing—the reduction in the taper rate for universal credit—is particularly welcome because of its effect on the work incentives of the least well-off in our country. That is often glossed over, but is essential for us all to remember.
That is also fairer. As a result of the Budget measures, our system is a great deal fairer than it was. The Government have effectively reduced taxation on the least well-off from 63% to 55%, but we can—I hope we will in future—go further. If we look at the effects of other taxes, which have been in place for many years, we see that taxes on earned income are roughly between 20% and 45%, but on dividends, they are between 7% and 38%—lower than the taxes on earned income. On capital gains, taxes run between 10% and 20%, again lower than on earned income. Taxes on property gains run between 18% and 28%, once again lower than on earned income. As a result, I believe that this is a vital step in what I hope will be the beginning of a long journey towards a Nigel Lawson-esque tax system that says, “It should not matter whether you are getting money from your earnings, from unearned income or from benefits; they should all be treated the same as income.” This is a proud Conservative idea, the principle first enunciated by Nigel Lawson. This is something that we own, and we should be fearless in putting it across.
I am indeed advocating that all income should be taxed equally. It is a Lawson-esque idea; the right hon. Gentleman is absolutely right. The reason why it is so essential, and why Nigel Lawson had this right, is that the whole point of it is that it creates work incentives for everybody, because they know they are going to be treated fairly. It also means that we have a system that has legitimacy, because it does not matter who has the best lobbyists or the best campaigners; everybody knows we have a nice, simple, flat, straightforward tax system, and everybody knows where they stand. Nigel Lawson was right about this.
I hope that the Chancellor’s Budget speech last week was the first step in what I think will be a long and difficult but ultimately incredibly worthwhile journey in that respect. I hope that this is the beginning of something important, something exciting, and something that is ultimately fairer and more just but also economically far more literate, because it creates a situation where it always pays to work, it always pays to save and it always pays for people to try to get themselves out of benefits by taking extra hours if they possibly can. It creates a situation where those work incentives are always there.
Order. I just point out that the hon. Member for Weston-super-Mare (John Penrose) was a shining example of keeping to the five minutes while taking an intervention. There is absolutely no problem with interventions as long as we keep to the five minutes, in which case we might be able to get everybody in.
The Budget is the most anticipated fiscal event in our calendar. The Chancellor has limited opportunities to make his mark, so his Budget choices are not just pivotal for the economy and for living standards, but they inform our assessment of his strategy, our trust in his judgment and our verdict on his competence. Last week’s tragedy was that there was no strategy. The Chancellor squandered the opportunity to tackle the challenges Britain faces.
In all my years, I have never heard such an incoherent and botched statement. It was a Budget that ignored economics and focused on politics, proclaimed a moral mission for small government and delivered the biggest public spending programme since the 1980s, ignored the impact of Brexit, encouraged air travel rather than leading us to net zero, and prioritised cheap champagne over affordable childcare.
Our Alice-through-the-looking-glass Chancellor described his plan as heralding
“a new age of optimism,”—[Official Report, 27 October 2021; Vol. 702, c. 274.]
but the reality for exhausted working families emerging from lockdown is quite different, with prices rising and inflation spiralling, taxes climbing to their highest level since the 1950s, wage growth stagnating and at its weakest since the 1930s, and the Government’s record on economic growth just dire. Labour in government maintained annual growth rates of 2.3%. This Government are averaging 1.8%, with the OBR predicting a pitiful 1.3% in 2024, the supposed year of the next election.
A long-term vision for growth should be at the heart of the Chancellor’s plans, supporting businesses to invest, providing money for education and focusing on research, but he prioritised none of those. Instead, there was a mere 2% rise in the education budget, while the prison budget increases by 4%. There was a hefty £3 billion cut to drink duties but a miserable £300 million investment in the crucial early years in a child’s life. Labour spent £1.8 billion on Sure Start in 2009—that is £2.6 billion in today’s money—yet this Government commit a pathetic £300 million to the early years, with £82 million supporting an untested pet project of who? Another Tory donor. We know from evidence that Sure Start worked, but it has been systematically decimated since 2010.
The Chancellor has reneged further on his commitment to research and cut £2 billion from the promised increase. Instead, he talked up the discredited R&D tax credit scheme. I know from the Public Accounts Committee that, in the decade to 2015, Government expenditure on R&D tax credits increased tenfold, while company investment in R&D stayed about the same. Now the Chancellor will pour more money into those wasteful tax credits while tax-avoiding corporations such as Amazon are laughing all the way to the bank.
The political choices that the Chancellor made last week prove beyond question that he and the Prime Minister are the same old Tories. They are creating further inequality in our already unequal society, punishing the weakest and rewarding those with the broadest shoulders. Only a Conservative Government would slash universal credit for the poorest by £4 billion while, in the same breath, giving bankers a £4 billion tax cut. Only a Conservative Government would use hikes in regressive taxes, such as council tax and national insurance, to fund health and social care. Only a Conservative Government would leave capital gains and dividends taxed at a lower rate than income tax. While public expenditure has rocketed to an all-time high, public waste has gone stratospheric, with £37 billion squandered on a Test and Trace fiasco that was more about providing jobs for chums and cash for consultants than fighting the pandemic.
This Budget and spending review represent an appalling opportunity missed. The Chancellor has failed to take advantage of the stronger than expected bounce back and better than expected tax receipts. We should have seen serious investment in education, capital and research. Instead, the Chancellor peppered his statement with a series of crude political gimmicks, from a Beatles museum in Liverpool to more British-registered ships on the high seas. The shine has come off this Chancellor—a failed Budget by a failing politician. Britain deserves better.
This is the first time that I have spoken from the Back Benches in a while and the first time that I have spoken at all in this place since the reshuffle, so I have a new perspective on the Dispatch Box: it is rhetorically the easiest place to speak from in this place, but intellectually and emotionally, it is so much the hardest. I hope that it is not too glib to recognise the responsibility that Ministers bear and to say thank you, and I hope that my gratitude makes up for now pestering them so frequently and shamelessly in the voting Lobby.
The second hardest place to speak from is the Government Back Benches, because we do not have the luxury of standing up and making empty speeches and claiming that everything would be better if a different party were in power. I hope that the three things that I have to say about the Budget are heard in the constructive spirit in which they are meant.
First, it is right, as the Chancellor said, that the Conservative plan is working: unemployment is down, employment is up, growth is up, wages are up, and we are tackling the tax on work that is the taper rate and addressing the cost of living by scrapping fuel duty rises. Those are all great things, but perhaps most importantly, the Chancellor has levelled with people. I believe, in both hope and expectation, that he and the Prime Minister are low-tax Conservatives. In an age when political rhetoric has too often been a way to veil talking about the hardest choices we have to make, the Chancellor has more than justified today’s tax rates while spelling out the path to lower ones in the future.
We say glibly sometimes that to govern is to choose, but these are life-and-death decisions, and I praise the Chancellor’s honesty in saying why taxes are where they are now and laying out a path for where he wants them to fall. If I could choose three values for my kind of Conservatism, they would be: honesty with voters on the impact of policies, a social desire to live and let live; and, of course, the low taxes that come with as small a state as possible. So I support that fiscal approach.
Secondly, I want to talk about levelling up. I would like to see even more money going into research and development, but I thoroughly welcome the huge investment that is already there, particularly in infrastructure. The most consequential impact from levelling up will come from digital infrastructure—from broadband, 4G and 5G. We have just hit the figure of half the country having access to gigabit-capable connections, up from just 9% when the Prime Minister took over.
I pay tribute to my hon. Friend’s work at the Department for Digital, Culture, Media and Sport, and to everything that he did to improve the digital infrastructure across the United Kingdom. When does he expect more than half this country to have gigabit fast broadband?
I had a little to do with it, but the truth is that it was the private sector that delivered that growth, and it is the private sector that will get us to about two thirds by the end of this year. Much of that growth is in Scotland; I know that my hon. Friend will take a particular interest in it.
Digital infrastructure, more than any one road or any one railway line, has a huge impact. I will never forget a teacher in Northern Ireland telling me that she had to teach at the pace of the slowest broadband in her class. If we cannot have equality of access to everything from YouTube to the rest of the internet, teachers cannot teach equally; that is what levelling up means.
My third point is about the speed of Government and public services. Ordinarily, tax changes take a while to come in, but the taper rate change in particular is coming much faster. In part, that reflects its urgency, but it also speaks to some broader issues. Whatever we think about its tax bill, Amazon is the pace of life at which many of our constituents now live: deliveries come the following day and supermarket slots are booked for an hour.
Government has to be deliberative—of course it does—but in the pandemic we showed that we can act with real agility. Our democratic pace is sometimes out of step with the pace that our constituents want, so I welcome the huge investment in further digitising the NHS so that digitally booking an appointment might feel a little more like booking for groceries. That does not mean that the availability of appointments has to be identical, but the ease of booking them and the way in which the Government interact with the citizen have to improve.
It has been easy to make those constructive criticisms, because I do not have to implement them, but Ministers do; Back-Bench MPs of the governing party are on the hook for delivering them, too. This has been a Budget that gets things done: it will fund better roads in my constituency, whether that is through the levelling-up fund or through the towns fund, and it will tackle the climate emergency as we find the path back to 0.7% and invest in some of the countries most affected by climate change. I look forward to the promise of lower taxes stimulating growth and helping around the world
What we say in this place matters. Budget debates, perhaps even more than Opposition day debates, often degenerate into Members on one side saying that everything is terrible and Members on the other saying that everything is perfect. Voters understand the immensely difficult choices that the Government face; I think perhaps we could sometimes level up the standard of debate in this place by acknowledging that.
The Budget proved one thing about this Conservative Government: they are totally out of touch. They are out of touch with the cost-of-living crisis: despite people struggling with rising heating, food and mortgage bills, the Conservatives’ response is to raise their taxes. They are out of touch with the crisis facing our children: despite the dramatic loss of learning, thanks to covid, the Conservatives plan to spend less than a third of what their own catch-up expert recommended. They are totally out of touch when it comes to climate change: despite the Budget taking place on the eve of the most important set of climate talks ever, the Chancellor had literally nothing to offer on positive action for the climate. Instead, he offered tax cuts for people using fossil fuels, not least on short-haul flights.
It was such a missed opportunity and such an own goal. Does my right hon. Friend agree that there were other things that the Government could have done, such as the electrification of east-west rail, which would have affected my constituency? That would have shown that the Government were serious about decarbonisation, but what they did was encourage people to fly when they should not be flying.
My hon. Friend is a real campaigner when it comes to the environment and climate change, and she is absolutely right. I make a prediction to her: this continuing concerted love-in with fossil fuels will be seen by our children as criminally negligent.
Let me be crystal clear about the Glasgow COP. Having led the UK delegation to three past COPs—in Doha, Warsaw and Lima—when I was Secretary of State for Energy and Climate Change, and having prepared the UK’s negotiating position ahead of Paris, I desperately hope that Glasgow succeeds. But when I see the Government’s gross diplomatic mistakes ahead of COP26, and when I hear a Budget speech that does not even mention climate change, I fear for the outcome of Glasgow, and I am angry with this Government.
I regret to say that, as I watched the Prime Minister pose in Rome’s Colosseum, he reminded me less of Emperor Augustus than of Emperor Nero. He talks about ending coal use across the globe, while refusing to stop a new coal mine being opened in Cumbria. He asks world leaders for the political will to act on climate change, while allowing new drilling—new drilling!—for oil on land in Surrey and offshore in Scotland. With the Secretary of State for Levelling Up refusing to use the planning power that he has for climate action, I fear that the only levels that will go up under his leadership are the sea levels.
I have to say to the Secretary of State that I am proud to be the Minister who passed the regulation that did more to stop fracking under this Government and I am proud that I passed it under his own nose in the Cabinet. He was one of the people urging me to go on to fracking but, because I fooled him, I managed to make renewable energy the watchword of the Liberal Democrats in power. We nearly quadrupled renewable energy. We made Britain the world leader in offshore wind power, despite opposition from the Conservatives. I am so proud that it is the Liberal Democrats who were responsible for cutting coal use in this country more than any other party.
By failing to take tough action on fossil fuels, the Government have missed an opportunity to help people who are struggling with heating bills, and to help Britain’s industries which are struggling with high energy costs. Here is what the Liberal Democrats would have done. We would have brought in a one-year windfall tax, on the gas producers making an absolute killing with the rise in global gas prices. We would have used that windfall and shared it with Britain’s fuel-poor and with Britain’s struggling energy-intensive industries. We would have used the cash from our fossil fuel windfall tax to target help on low-income households having to choose between heating and eating. For this, we would have more than doubled the warm home discount, and doubled the number of people who benefit from it.
In a second.
We would have matched that immediate help with heating bills with a massive programme of home insulation, where this Government have so spectacularly failed. As I give way to the Secretary of State, I hope that he will say what investment there is under this Government for people to insulate their homes. The answer, by the way, is none.
The right hon. Gentleman boasted that he had deceived members of the Cabinet, raising questions, inevitably, about the reliability of any Liberal Democrat promise. In 2013, he said this:
“Shale gas represents a promising new potential energy resource for the UK. It could contribute significantly to our energy security, reducing our reliance on imported gas, as we move to a low carbon economy.
My decision is based on the evidence. It comes after detailed study of the latest scientific research available and advice from leading experts in the field.”
He also said that the US’s economy had benefited greatly from fracking, and that was why we could benefit here. Which of those words does he now enjoy eating?
The Secretary of State is known very well for his debating skills, but he is also known for his political skills. My political skills were shown in my ensuring that his Ministers, and he, believed that we were taking real action on fracking when I was passing the regulation that did more to stop fracking—let him hear this. We did more to stop fracking than any other group of politicians. I am really proud that the Liberal Democrats did more on renewable energy—
I am very happy to debate fracking, and my record and the Government’s record on it. Thanks to the tough environmental regulation that we passed, particularly the seismicity regulation, we in the Liberal Democrats did more to stop fracking. I had Conservative Ministers shouting their case, day in and day out, saying that I should go faster, but I slowed it down and it is not happening. The record will show not only that there is no fracking industry in the UK but that there is a massive renewables industry, and that is thanks to the Liberal Democrats.
As we debate the need to level up—[Interruption.]
Conservative Members do not like it, Madam Deputy Speaker, but they are going to have to learn to live with it.
As we debate the need to level up, anyone would have thought that the Government would want to save jobs in our energy-intensive industries, most of which are big employers outside London and the south-east. But no; there was no help at all in the Budget for the energy-intensive industries. The Government could have used money from a windfall tax on gas producers, as we would have done, to help those industries to decarbonise and to invest in the technologies of the future. This is yet another missed opportunity on climate change from the Conservatives. We can have a greener and fairer society, investing in climate action and helping the fuel poor, but we will not get it with this Conservative Chancellor and this Conservative Government.
That last speech demonstrates what I have always believed: the Liberal Democrats will say one thing to one person and completely the opposite to other people.
I welcome the measures in the Chancellor’s Budget that pertained to local government spending, including the additional funding of £1.6 billion a year for adult social care. The reality is that most of the people who work in adult social care are on the lowest possible wages, so the increase in wages that they will receive and the opportunity to earn more money are good news, and I am glad that the Government are funding this appropriately. However, it is important for the Government to spell out the full detail of how adult social care will be funded not just for this year but for the years ahead. That is vital.
We know that as a result of the pandemic, an estimated 300,000 people who are renting privately are in serious arrears and at risk of losing their homes. The key here is the funding programme for housing, and particularly the affordable housing programme. I am delighted that we will see 1 million new homes created. I hope that it will be 1 million new houses, instead of multi-storey high-density flats that are unacceptable for people with families to live in. I also want to see the Government build 100,000 new homes for social rent, so that people can afford their rent rather than having to rely on benefits. The corollary of that is that we should reboot the right to buy, so that when people move into those homes, they are given the opportunity to buy them at the price that applies on the day they move in, however long it takes them to be able to afford to buy their own home.
The Government are to be commended for their work on combating rough sleeping. The Everyone In programme was a remarkable achievement, but we must ensure that we build on that and end rough sleeping for good by 2024. After all, that is the Government’s commitment. As I have said, Housing First needs to be funded and rolled out right across the UK. The reality is that every case of homelessness is unique, and everyone will need particular help and guidance. Some people just need a pointer in the right direction; others need a network of help and support to rebuild their lives.
I also welcome the confirmation of the £5 billion for replacing unsafe cladding. However, I remind Ministers that there was a promise not only of the £5 billion but of the details of the forced loan scheme for those people in low-rise blocks. We have still had no answer from the Chancellor as to how that funding will be made, the conditions that will be imposed or the mechanism by which it will take place. While the funding is welcome, and so is the tax on developers, it will not raise sufficient money to combat the amount of money that is having to be paid out. Equally, people still face the challenge of receiving huge bills for the replacement of unsafe cladding, and there is a huge backlog of that work still to be done.
I will raise two other matters before I sit down. The first is my disappointment that, after much lobbying, the Chancellor has still not seen fit to put right the long-term problem of refunding Equitable Life policyholders, who are still owed more than £2.8 billion. This issue is not going to go away; we will campaign on it until such time as the Chancellor comes up with the money that was promised in the first place.
Finally, I will just mention one tax increase in the Budget that is extremely welcome: the tax on tobacco. Often, we do not hear that announced from the Dispatch Box, but I am glad the Chancellor went there, increased the tax and carried on with the escalator. The fact is that smoking-related diseases cost the national health service £2.6 billion a year and the care budget £1.2 billion a year. I would like to see a levy put on the profits of the tobacco companies and the money put into smoking cessation services. That would be a welcome tax, and something we could do because we now sit outside the European Union. We would not have to pass that tax on to the smokers; we would hit the profits of the big tobacco companies.
First, I associate myself with the comments of the hon. Member for Harrow East (Bob Blackman) about the need for more money for social housing and cladding and the importance of dealing with the issues of rough sleeping. We have dealt cross-party with those matters on the Housing, Communities and Local Government Committee.
Generally, I am supportive of the whole idea of levelling up, but I must say to the Secretary of State that I could be a lot more enthusiastic if I knew what it meant, how it would be achieved and how success would be measured. The recent report by the Business, Energy and Industrial Strategy Committee said that, for all the current documents, levelling up was
“a wide ranging and disjointed programme of random policies…it is difficult to see how they all tie together under one over-arching strategy.”
I think that is a fair comment on what exists now.
Presumably, it is the job of the Secretary of State, with his new responsibilities, to produce that overarching strategy and to tie together all these disparate funding streams. I presume we will see all that in the White Paper, which is hopefully coming shortly, and no doubt we can explore that further with him when he comes to the HCLG Committee next week.
However, as well as having an overarching national strategy, councils need the ability to plan and have a local strategy. That means doing away with all the disparate pots of money they have to bid for. The Local Government Association last calculated that there are 117 different pots of money that councils have to bid for. I am not making a party political point here; if we go to Conservative leaders of councils, they will be just as strident in their criticisms as Labour council leaders on this. Will the Secretary of State please look at that as a major issue?
I see the Secretary of State nodding, so hopefully we might be able to get some change there.
The Secretary of State is right to emphasise the importance of transport. Yes, the South Yorkshire region got £600 million, but its bid to the levelling up fund for transport expenditure got turned down completely. When councils look at their local plans, there is a levelling up fund, a bus service improvement plan, a city region sustainable transport settlement plan and a zero emission bus regional areas fund to bid for. That is four different pots of money that councils must bid for to fund local transport services and that they must try to tie together, in the hope they may get some of them. That is really no way to enable our city region Mayors to plan the transport for their areas—no way at all.
That, of course, is against the background that in the Sheffield city region, expenditure on buses is £5 per head of population. It is £70 per head of population in London. That really needs to be addressed in levelling up.
I welcome the successful levelling-up fund bid from Sheffield for the regeneration—or the beginning of the regeneration—in Attercliffe in my constituency. I also welcome the £1.8 billion for brownfield sites, which is really important. Peter Freeman, the chair of Homes England, came to look at Attercliffe and the sites there, and I say to the Secretary of State that some changes to the way Homes England distributes its money are needed. First, we need to do away with the 80:20 rule, whereby Homes England is obliged to spend 80% of its money in the south-east—that simply cannot be right. We must look again at the Green Book evaluations of spending on housing sites, which are totally biased towards uplift in land values. There is bound to be a bigger uplift in land values on a greenfield site in the south than on a brownfield site in the north, and that needs addressing. We also need to look at the no additionality rule; where a derelict site with 100 old homes is cleared and 100 new ones are put in, thus really regenerating the area, Homes England funding cannot be got towards that. Those three issues do need addressing.
Finally, we had a discussion about the Institute for Fiscal Studies analysis of local government spending and what that meant. I say to the Secretary of State that in the past 10 years local government has been the major subject of austerity cuts—it has had bigger cuts than anywhere else. Those cuts have fallen disproportionately on the poorest areas; it has not been levelling up, but a major exercise in levelling down. The very areas that he says he now wants to help have had the biggest cuts to their funding in the past 10 years. This Budget will probably stop the cuts getting worse, but it is not seriously going to reverse them. There is a Government policy on levelling up, an aspiration and even a Department and a Secretary of State with “levelling up” in the title. I look forward to him actually showing us what levelling up means, and producing the policies and a coherent strategy that actually deliver it.
Levelling up is not about geography, it is about opportunity. When highlighting the deficiencies and challenges of a place, it is a tricky balancing act. When bidding for funding it is necessary to highlight the weaknesses, and when encouraging businesses to locate or relocate we emphasise the strengths.
Southampton has many strengths: it has historic medieval walls and one of the busiest ports in the country; it is home to the iconic Spitfire; and it is from Southampton that the pilgrim fathers set sail to the new world more than 400 years ago. The Port of Southampton and Carnival cruises are large private sector employers, and we benefit from a healthy public sector too, with two world class universities, the National Oceanography Centre, a renowned specialist hospital and a Premier League football club. On the face of it, it all sounds rosy, but if we scratch beneath the surface, we see a different picture. The city and my Southampton, Itchen constituency have some of the most deprived wards in the country. We have too many children in care, our schools underperform and we have generations in the same family who have never worked. The city had a proud shipbuilding and aviation heritage. It produced the famous Ford Transit van until 2013, and was home to Pirelli Cables and British American Tobacco. Those blue-collar jobs have mostly all gone; all too frequently, they have been replaced with jobs in retail, hospitality and leisure, with few, if any, prospects, no job security and notoriously low pay.
If the city is to thrive again, we need to create jobs with security, career prospects and good rates of pay. Our reliance on retail and hospitality was brought into sharp focus when covid arrived. When the country shut down, Southampton and, in particular, its young people, bore the brunt. Construction was quickly back and the port carried on, albeit somewhat differently, but hospitality and retail could not reopen and thousands found themselves either furloughed or redundant. With our major manufacturing gone, Southampton is like any post-industrial city of the north. Where once 4,500 people were employed in the Ford factory alone, and thousands more in Vosper Thornycroft and Pirelli Cables, now we have few manufacturing jobs and few with the job security that our former manufacturing base provided.
Levelling up is not about geography, it is about opportunity. In the first round of the levelling-up fund, Southampton City Council, then controlled by Labour, did not even bother to bid. Thankfully, in May they were kicked out of office and were ably replaced by a dynamic Conservative council, led by Councillor Daniel Fitzhenry and his deputy, Jeremy Moulton. We can be sure that Southampton will bid for the next round of the levelling-up fund in the spring.
To create more secure jobs, we need infrastructure. I agree with the direction of travel on net zero and clean air, but that does not mean that vehicles will not need to access the city—we just need cleaner, greener ones. Our port welcomes 2 million cruise passengers per year. It is the busiest car-export port in the country and the second-busiest container port. More containers and cars are going by rail, but it will never be all of them that do so, or anything like it.
As the Government look north to the red wall seats so dreadfully served by Labour for decades, they must remember to look south to those cities that fared little better from years of Labour representation. Levelling up is not about geography; it is about opportunity. If we do not understand that, we are likely to sleepwalk into a situation in which the rush to level up north will leave the south as left behind as it always was. We simply cannot allow that to happen.
I am grateful for the opportunity to speak in this vital Budget debate.
After nearly two years of boosterism and bluster, last week’s Budget was yet another opportunity missed by the Government to finally spell out how they are going to level up left-behind communities throughout the country. The Prime Minister and the Chancellor boast of bringing about a low-tax, high-wage economy, yet the Conservatives are increasing the tax take to its highest level in 70 years. In fact, according to the Resolution Foundation, the Government’s tax rises will cost British households an extra £3,000 by 2026-27. The Government could choose to use that money to help Britain’s poorest families during the worst energy price crisis in a generation, or to reverse the universal credit cut that is needlessly forcing millions into poverty; on the contrary, the Conservatives have handed tax cuts to the likes of Amazon and the banks, to the tune of £12 billion and £4 billion respectively. They are levelling up some of the pandemic’s most profitable companies at the people’s expense, yet they have no plan to remove the enormous tax burden they have placed on working people and small and medium-sized businesses.
Although the Government have provided some welcome relief for the retail, hospitality and leisure sectors, which are so critical to my community in Ealing, Southall, they must go much further to fix the broken business rates system and truly level the playing field between the high street and tax-avoiding tech companies.
At a time when families are suffering from a cost-of-living crisis brought on by the Government’s incompetence, they should not be punishing poorer families for their lack of luck. The cost of heating bills, food shops and fuel are all rising at a staggering speed. This winter, millions of families on universal credit will be forced to choose between eating and heating. If the Government were serious about levelling up, they would reverse the sickening cut to universal credit that is hurting millions of working families. The Government cannot claim to be levelling up while they chip away at the lifeline of some of our most disadvantaged.
As a result of the Government’s failure to properly pay and recognise professionals in nursing and midwifery, the NHS is now short of almost 40,000 nurses. The Chancellor offered no detail on how the Government plan to recruit or train more doctors and nurses, and there was no workforce plan for the NHS, only vague commitments yet again.
I urge the Government, instead of papering over the cracks as the Budget does, to actually help desperate families during their time of need, to protect and empower small and medium-sized businesses and to give NHS staff the pay rise that they truly deserve. Only then will the Government be able to say that they are truly committed to levelling up our society and economy and ensuring that no one, regardless of their wealth and background, is left behind.
I thank the Secretary of State for Levelling Up, Housing and Communities for an excellent speech. I make no apology for raising what I consider—he might agree—to be several points of minutiae in respect of the levelling-up agenda.
The first such point is the line in the Budget papers about the delivery of £750 million over the spending review period to carry through devolution. We have all become familiar with the county deals and the appearance of mayors, but beyond all that I recommend an aspect of devolution at a much lower level: neighbourhood plans, which have proved to be an enormous success. They have transformed how villages and rural parishes look at themselves and plan for the future and, of course, they have delivered more housing than the targets set by district councils in the first place. Neighbourhood plans have been a great success in rural areas, but I anticipate that we will need to work to make sure that cities, and areas within them, accept neighbourhood plans as a way forward to see for themselves how their neighbourhood can be changed for the better.
Secondly, the community ownership fund is incredibly important for rural areas such as my own. We have lost a tremendous amount over the years, including many pubs, as has been pointed out, and many villages have lost sports facilities. The community ownership fund can be used to try to put some of those things back, because where there have been developments, the developers have not seen fit to work with communities to put many of those things back into communities.
Thirdly, I encourage people to look at the permitted development rights in respect of towns and cities to make sure that they are genuinely applicable to rural areas. Many of them, particularly those that deal with high streets, are not applicable in rural areas. It would be useful to have a distinction between the two.
Lastly, I welcome the £1.8 billion that is to be spent on housing, particularly on brownfield sites. The national planning policy framework clearly set out a brownfield-first presumption in the planning system—we have said that on many occasions—and I know because I helped to write it into the national planning policy framework. The £1.8 billion shows that we are prepared to put money where our mouth is and will deliver a lot of affordable houses on brownfield sites, which I fully support and recommend.
The Chancellor has promised us a post-covid “age of optimism” and claims that the Budget will deliver it by levelling up the life chances and prospects of those in the north, like my constituents, who have been clobbered disproportionately since 2010 by Tory austerity and cuts that have adversely affected their chances to improve their lives and prospects. I wish the reality met that promise, but Ministers in this Government increasingly seem to promise the opposite of what they then actually do.
According to the Office for Budget Responsibility, the Government’s choice to pursue a very hard Brexit is on track to cut long-term GDP by 4%, and the covid pandemic will cut the size of our economy by another 2%. That is a 6% permanent cut in the size of our economy. That means less money to deal with the big problems that we face as a nation over the next 10 years —in particular the zero-carbon transition and adapting to the information revolution to create the economy of the future, while tackling inequality and improving living standards for all.
The Tory years have seen much slower growth in incomes than was the case prior to the Conservative election in 2010. Income growth is one of the ways in which families judge their wellbeing and decide how optimistic they feel about the future. The OBR has forecast that real wages will fall next year with consumer prices index inflation of 4% and expected wages growth at 3.9%—so much for the end of the public sector pay freeze. Workers will feel cheated if the end of the pay freeze still results in real wages falling. They will not feel like they have had a pay rise or that they are living in an age of optimism. In fact, real wages have risen by a meagre 2.4% in total since the 2008 financial crisis, according to the Resolution Foundation. The OBR expects only a 1.5% increase a year, which is pretty low, and much less than the 2.5% a year increase that was the norm before this Government came into office.
As well as stagnating wages, the Chancellor is delivering huge increases in tax, although he said little about that in his speech, preferring instead to give a homily to his worried Back Benchers, some of whom we have heard from today, about how much he aspires to cut tax. That is another example of Ministers doing the opposite of what they say. He is in fact putting up taxes to their highest level since 1950, when the Attlee Government were rebuilding Britain after the war. So, we have slow growth in incomes and huge increases in tax at the same time as rising inflation caused by big increases in household bills for energy, food and fuel. The Resolution Foundation has calculated that the average household will be £3,000 a year worse off. That is not likely to engender optimism from my constituents.
What are we getting by way of levelling up? Well, in the Knowsley part of my constituency, the answer is not a lot. Improving educational opportunity is one of the best ways of levelling up. Young people in Knowsley already have to leave the borough to study A-levels. The Chancellor promised that, at the end of this spending-review period, he will put per pupil funding back to the levels they were at in 2010—before his party came into office. That is 11 wasted years, and three more to come before we are back to where we were without the damage having been mended—back to where we were in 2010! That is not a triumphant achievement.
In Knowsley, my constituents are seeing a cut equivalent to £485 per person, against an English average of £188 per person, with none of Knowsley Council’s bids for the Government’s levelling-up funds having been successful—this is in the second most deprived borough in the country. That is not what I call levelling up.
In essence, this Budget contains three themes. The first is restarting the process to ensure that our public finances are put back on a sound footing. Therefore, the two new fiscal rules that underline that public sector net debt as a percentage of GDP must be falling and that the state must borrow only to invest in our future growth and prosperity, with everyday spending paid for by taxation, are undoubtedly correct. May I urge my right hon. Friend, the Chief Secretary to the Treasury not to follow the example of the previous Labour Administration in abandoning rules when they were inconvenient.
The second point is that we are here to deliver stronger public services. As a former Health Minister, I welcome the 40 new hospitals, particularly the plans that could see the refurbishment of St Helier Hospital—those plans are in the Treasury waiting to be rubber-stamped. I also welcome and applaud the changes to business rate revaluation and the new business rates relief, which, undoubtedly, will help a number of businesses in my constituency.
As COP26 starts today, one can only applaud the ambitious net zero strategy, the issuance of green bonds and the incentives for renewable growth. I have long campaigned for the changes that will allow pension funds to invest in long-term projects. All of that is welcome as is the new investment in public services. As my right hon. Friend, the Secretary of State for Levelling Up, Housing and Communities said, it is not only how much we spend, but how we spend it and how we pay for it. It is key, therefore, that the Government do not, in their quest to work out how to pay for investment, become boxed in with the false choice of higher taxes or higher debt. Higher debt leaves the economy open to the ravages of inflation and higher interest rate costs, which only hit the poorest in our society. With experts at the moment predicting inflation to be 4% at the end of the year and possibly rising to 7% next year, any headroom that the Chancellor has created to invest more in public services will be eaten up by debt service payments. Therefore, as my right hon. Friend said earlier, we must attack inflation.
The choice now surely is for us to go for faster and more sustainable growth. Therefore, the third theme in the Budget was the Government starting to support all of those factors that can drive higher economic growth. We must not be left with a low- growth, stagflationary economy. I particularly welcome the tax relief for creative industries, more generous investment in economic infrastructure, and spending on research and development. However, the Government do not have the monopoly on wisdom in those areas and, particularly in the areas of infrastructure and skills, we should be much more open to using the innovation, the initiative and the help that the private sector can provide,
Beyond the measures that were announced in the Budget, may I say that, if we really want to achieve growth, we need to make sure that business succeeds. In terms of regulation, I urge those on the Treasury Front Bench to consider recommitting to the one in, two out —in fact one in, three out—rule. That would send the message to business that this is a Government who have changed their philosophy and mantra from eff business to love business, for we need to love business if we are to grow our way in the post-covid recovery.
Finally, let me say this to those on the Front Bench. Just as my hon. Friend the Member for Southampton, Itchen (Royston Smith) said, levelling up must not be about just geography; it must be about opportunity. Please can we ensure that we do not create a left-out London? Let us not forget that levelling up in one area must not mean levelling down in another, and I hope that the Budget will support that.
The one thing that delighted me about the Secretary of State’s speech is learning that he has been a secret Manchester City fan all these years. I look forward to him joining the all-party group on football, ably chaired by the right hon. Member for Staffordshire Moorlands (Karen Bradley) in the weeks and years to come. However, little else impressed me.
Aviation communities have been particularly hard hit, as we all know. Manchester airport in my constituency is the international gateway to the north. The impact of the pandemic on its operations—going from 28 million passengers to 2.8 million passengers—has been devastating. That has resulted in job losses and significant knock-on impacts on sectors and businesses that support the operation of the airport. There is precious little in the Budget to support those aviation communities up and down the land.
However, in my constituency, we have other wider regeneration opportunities, championed by the local Labour authorities in Manchester City Council and Trafford Borough Council. We have a series of oven-ready schemes to drive genuine regional growth and economic development across Greater Manchester. The airport city masterplan includes the first phase of the Hut Group’s £1 billion business campus, which will support up to 10,000 jobs. A new £250 million hotel district is also gathering pace. Plans for a MediPark at Wythenshawe Hospital are well-advanced, with significant life science and health innovation businesses linked to the hospital and Manchester Airport.
We have also recently completed a masterplan for Wythenshawe Hospital. It is a plan that would: transform the hospital; create a world-class research and health facility; create a sustainable campus; and ensure a diversification of uses. The delivery model proposed for the development of the Wythenshawe Hospital site is for a financially driven, phased construction approach using a blended funding model. This funding solution could leverage in many commercial and health and social-related investment opportunities. However, to realise this, Government support is needed to unlock a technical solution to the current NHS capital regime. We have not stopped there though. There are exciting plans for the levelling-up bids for Wythenshawe and Sale town centres, and we eagerly await news on the timing of round two and the guidance on joint bids.
HS2 and Northern Powerhouse Rail are vital. We need the HS2 station at Manchester airport. Currently, it is unfunded in the proposals. If the Government really want to level up the north, why do they not put spades in the ground going south today? That would certainly help with the levelling-up agenda. We need platforms 15 and 16 across the constricted centre of Manchester to ensure that the northern hub means that train services across the north can operate effectively.
The Office for Budget Responsibility has revealed anaemic medium-term growth forecasts, with growth falling to an average of just 1.5% a year in the last three years of the forecast from 2024 to 2026. We need many things in our constituencies, but the Government’s various regeneration schemes do not come close to making up for the £15 billion of Conservative cuts since 2010. If the Government are serious about levelling up, they should work with Manchester, Greater Manchester and authorities across the north to ensure that we can deliver on the plans that have huge economic and social benefits to our people and our regions.
I am delighted to be standing here today to celebrate the fact that the “great city of Stoke-on-Trent”, as the Chancellor named it and I certainly call it, received not one, not two, but three fantastic levelling-up fund regeneration bids, bringing £56 million to our city. The city centre regeneration zone will get £20 million. The Goods Yard site will get £16 million to unlock £55 million of private capital investment. There will be £20 million for the heritage high streets, covering Longton, Spode and the great town of Tunstall, which I am proud to serve in Stoke-on-Trent North, Kidsgrove and Talke; that funding will enable us to refurbish, repurpose and reuse Tunstall library and baths for a better future, while ensuring preserving its beautiful heritage.
We also got support from the restoring your railway fund to look at ideas for reopening the Stoke to Leek line, a campaign backed by my hon. Friends the Member for Stoke-on-Trent South (Jack Brereton) and for Stoke-on-Trent Central (Jo Gideon), and my right hon. Friend the Member for Staffordshire Moorlands (Karen Bradley). With that £50,000 of funding, we can conduct a feasibility study on restoring passenger services, which have not been along the line since the 1950s. With a connected station at the great village of Milton, young people could get into the city centre to shop or learn, and people could go to the fantastic tourist destination of Leek. This is especially important because 30% of the residents of Stoke-on-Trent do not have access to a car, so public transport is vital.
What else? The national living wage increase to £9.50 means that constituents will be £1,000 a year better off. The universal credit taper rate means making work pay and a tax cut for 2 million of the lowest earners in our country. In a place like Stoke-on-Trent, where people get £85 less per week on average than in other parts of the United Kingdom, that will be extremely important.
There is also the change to the draught beer duty rate—a campaign run by my hon. Friend the Member for North West Durham (Mr Holden) and pushed by Keith and Dave Bott, the owners of Titanic brewery. I look forward to having a pint of plum porter in the Bulls Head in Burslem to celebrate that fantastic achievement, which is ultimately a good step in the right direction.
The 50% business rates reduction for hospitality, retail and leisure, along with the 12 months of rates relief for those investing in properties, will allow our high streets to regenerate. I will hold to account those private property owners in Tunstall to ensure that they invest in their shops, tidy them up, look after our high street and ensure that people feel better.
I have already written to the Minister for Children and Families, the Under-Secretary of State for Education, my hon. Friend the Member for Colchester (Will Quince), saying that Stoke-on-Trent wants its family hub. I will be demanding that, because in Stoke-on-Trent once we have had a little bit of the pie, we want the whole thing; we will not be stopping there.
Let us look at Labour’s record of levelling up in the city of Stoke-on-Trent, and in Kidsgrove and Talke. Stoke-on-Trent, Madam Deputy Speaker? Labour Members are still trying to find it on their Ordnance Survey map! Captain Hindsight sent out a search party, but they got stuck in north Islington having chai latte and avocado on toast, while we—the people in Stoke-on-Trent, a Conservative-led council, Conservative MPs and a Conservative Government—are delivering for the people of Stoke-on-Trent. We are ensuring that we do not waste money on vanity projects such as £40 million for new council offices and that we do not spend only £15,000 over six years on Kidsgrove, which is the second town in Newcastle borough. We are not the ones who, for a single pound, let the sports centre close because we could not be bothered to save it.
We have: a £17.6 million Kidsgrove town deal; 550 brand-new Home Office jobs; £29 million through the transforming cities fund; £56 million through the levelling-up fund; £7.5 million to refurbish Middlehurst School to be a new special educational needs and disability provider; and £5 million for the children’s A&E at the Royal Stoke—a hospital built by the Labour party, with a private finance initiative, stealing £20 million a year from the frontline and built with 200 fewer beds in it than the facility that was there previously. We have also gone and got more money to improve our buses and are bidding through the bus back better strategy. This is a Government delivering for the people of Stoke-on-Trent North, Kidsgrove and Talke.
I declare an interest, as a metro Mayor.
The UK is more centralised than most other developed countries. In the north, we feel that acutely. Regional inequality afflicts every aspect of our lives: trains—slower; wages—lower; life expectancy—shorter. The Government were elected, in part, on a promise to rebalance the scales by levelling up the north. It is an ambition that I share and have long championed. Frustratingly, however, two years on we still have no working definition of levelling up, no measurable goals, and no sign of the transformative level of investment that the north needs and deserves. Invariably, no strategy leads to no success. I am aware that a White Paper is forthcoming, perhaps by Christmas—we will see—but it cannot come a moment too soon and it needs to be developed in close co-operation with leaders across the north.
I am proud to say that in South Yorkshire, we are not waiting to follow, but are already leading the way. We have established an ownership hub to support worker buy-outs and co-ops. We are working to confront the climate emergency, with a plan to reach net zero carbon emissions, and we are developing a pioneering strategy to reduce flooding. Through our innovative working win programme, we have supported thousands of people with physical and mental health conditions. The same is happening across the north in West Yorkshire, Greater Manchester, North of Tyne and the Liverpool city region: Labour Mayors drawing on the industrial heritage of the past, the dedicated workforce of the present, and the cutting-edge innovation for the future, to transform our communities for the better. With the right backing, we can unlock the huge potential in the north and level up our country, but to do so in full we need the Government to play their full part.
Last week was the moment for the Government to show that they were serious about levelling up the north, turning slogans into substance and delivering policies that will make a difference to our people. Instead, the Chancellor barely mentioned the north. Nothing announced last week will reduce regional inequality, and levelling up remains under-resourced, undefined and over-centralised. Take transport, for example, which is a key part of the levelling-up agenda. South Yorkshire, like everywhere, deserves a world-class public transport network that is fit for the 21st century. Although I welcome the money that was provided under the city region transport settlement, where was the clarity on Northern Powerhouse Rail and HS2—projects of huge scale that are now under a cloud of uncertainty?
The same applies to our levelling-up fund bid—the Government’s flagship programme, which regrettably delivers less money than its predecessor, the local growth fund. Our mayoral combined authority proposal is a great example of how to rebalance the scales. The bid, which I personally submitted and has the backing of all our local leaders, targets investment in our bus services. It is not a massive amount of money, but it will help us to drive towards net zero—an objective to which levelling up must be inextricably linked. On Wednesday, we received word from the Government: a hugely disappointing, “No.” I urge them to take another look at our bid during the next round.
Those are just two of the many examples of how last week’s Budget and spending review failed the north. It is only with real investment, a real plan and real control that we will tackle regional inequality. Only then can we end this harmful, needless and unhealthy divide in our country. The message from the north is simple: give us the tools and we will do the job.
From a Waveney, a Suffolk and an East Anglian perspective, this Budget is very much a step in the right direction, but there is a great deal of work that remains outstanding and some anomalies that need to be corrected. Much good work is already under way. In Lowestoft, construction has already begun on two vital infrastructure projects—the Gull Wing bridge and the Lowestoft flood defence scheme—and East Suffolk Council is busy working out the details of the various projects that are included in the successful towns fund bid that was announced in the March Budget.
From a Suffolk perspective, the headline from the Budget was £1.7 billion of new, direct Government funding to enable a large-scale nuclear project to proceed, and they very much have Sizewell C in mind. This funding is linked to the Nuclear Energy (Financing) Bill, which has its Second Reading on Wednesday. Subject to the development consent order being granted, construction will begin next year on the project, which could bring enormous benefits to Suffolk people and businesses. It is vital that once the 12-year construction period has ended, we leave a lasting legacy of knowledge, skills and infrastructure.
Investment in infrastructure is important, but to achieve meaningful levelling up, we need to invest in people, so that they have the skills to secure the well-paid, exciting jobs that are emerging in the green economy and new technologies. It is welcome that the Government recognise that, are funding the lifetime skills guarantee, and are continuing to provide an education recovery fund. However, I have some concerns. There is no commitment to increasing per-student funding for adults. By the end of 2024-25, it will not have gone up for 14 years. There is also a worry that there is a lack of support for level 1 and 2 qualifications. Level 3 qualifications and T-levels have an important role to play, but we need to put these rungs on the ladder if as many people as possible are to embark on that lifetime learning journey.
In the short time remaining to me, I will briefly highlight two barriers that need to be removed if we are to deliver meaningful, enduring levelling up in the east of England. It was disappointing to learn that the New Anglia local enterprise partnership’s proposal for a regional fund had not been accepted. Along with the south-east and London, from which we are very different, we are now the only area in the UK without such a facility. In the same vein, it is concerning that page 56 of the Red Book explicitly states that the Government will invest in research, development and innovation outside London, the south-east and the east of England. Speaking from an East Anglian perspective, I strongly urge the Government to review that, as Suffolk and Norfolk are very different from London and the home counties. Failure to recognise that will undermine levelling up, particularly in coastal East Anglia, which I represent.
I rise to speak in today’s Budget debate in disappointment, because I have campaigned to bring Northern Powerhouse Rail to Bradford city centre for six years. I have raised the issue of Northern Powerhouse Rail many times in this place, in many Budget debates—perhaps even as many times as the Government have made their many announcements on it. Among the avalanche of leaks from the Treasury, I was really hoping to hear some positive messages about Northern Powerhouse Rail, but there was nothing. Then I hoped that the Chancellor would pull something out of the hat on Budget day, but again—nothing. I trust that if the Government had positive news for Bradford, they would not keep it secret—they would not be quite so shy or blushing about it—so I can only conclude that the rumours are correct, and that there is to be a drastic scaling back of Northern Powerhouse Rail, with no city centre stop in Bradford.
My constituents got little from the Budget, or the spending review. We still have no firm date for when the integrated rail plan will be published. Despite the Government’s promises, they seem happy that transport spending is set to continue to be disproportionately centred on London and south-east England. I have no doubt that more promises will come forward, but I fear that we will be asked to settle for just an upgrade of the existing train line, which will be rebadged as Northern Powerhouse Rail—more smoke, and more mirrors. Bradford needs and deserves more than that.
I am asking for fairness in funding, and a rebalancing to ensure that the economies of the north are no longer held back by under-investment. Specifically, we need a trans-Pennine route upgrade; we need High Speed 2’s eastern leg in the north; and we need a new Northern Powerhouse Rail line, with a city centre stop in Bradford. Those are not either/or options, because Bradford matters. The north matters. It is time for the Government to stop the endless rhetoric of levelling up, and to deliver some real infrastructure investment in the north.
What is more, Northern Powerhouse Rail would support carbon-free, sustainable travel, and would contribute to the next era of carbon goals, not just for northern cities, but for the whole UK. One of the biggest city-to-city journeys to work in the country is between Bradford and Leeds, and it is done mostly by car. At scale, Northern Powerhouse Rail would support a 400% increase in rail travel, and it would take 64,000 car trips per day off the road.
Time and again in this House, I have raised the north-south economic imbalance, and time and again Ministers have responded with warm words, but nothing concrete. Let us have no more shallow promises. It is time to deliver.
It is a pleasure to speak in this debate. I start by saying that I very much welcome the Chancellor’s Budget statement. I look forward to levelling up the north, south, east, west, south-west, and particularly Devon, which is the centre of the universe; there is no doubt about that. I cannot imagine that there has ever been an easy time to be Chancellor, but the challenges that the economy has faced in the past 18 months make it especially difficult now. That being said, we are in a better place than expected, and I am pleased to hear that the economy is on track to return to pre-pandemic levels by the end of the year.
There was a lot that I liked in the Chancellor’s Budget, and a lot that will be welcomed in Devon. In particular, many of my constituents will be delighted to hear that they will get cheaper pints of cider, even if only by 3p. Indeed, patrons will be cheering all the way from the Culm Valley Inn in Culmstock to the Masons Arms in Branscombe. It is not just the patrons who will benefit; as the Chancellor said, local pubs do a lot of their trade on draught, so the cut to draught beer and cider duty will make a huge difference to these pubs. The reform of alcohol duty is long overdue, and I commend the Chancellor on making it happen.
Pubs will also benefit from a huge cut to business rates, as will small businesses across the retail, hospitality and leisure sectors. I look forward to hearing more detail about the planned small producer relief, which will help many small cider producers in my constituency, such as Norcotts Cider in Honiton.
As well as supporting businesses, the Chancellor is rightly providing extra funding for public services, including the NHS and schools, both of which have been badly disrupted by the pandemic. The extra £6 billion for the NHS to tackle the backlog of checks, scans and surgeries is very welcome. So is the cash boost for schools. It is absolutely right that funding should be set aside for catch-up training for students whose education has been disrupted, but schools can also expect a £1,500-per-pupil boost over the next three years, which is very welcome indeed. We talk about levelling up, and having a high-wage, high-skilled economy, and that starts with education. We need to be sure that we give the next generation of workers the skills and qualifications that they need. We also need to invest now in the infrastructure that they will be using in the years ahead, so I support the levelling-up agenda.
I am particularly delighted that the Chancellor has given the green light to £5 million of development funding to progress the plans for Cullompton station, and Wellington station in the constituency of my hon. Friend the Member for Taunton Deane (Rebecca Pow). My neighbour and I have long worked for this, and we are really happy to see the Devon and Somerset Metro Group come to fruition. Cullompton is a town set for expansion, and we need to be ready for that, as well as tackling the challenges we face now. The extension of the Devon metro will help cut congestion on our roads, slash commuter time for students, and create exciting new opportunities for local business. Construction is set to start in 2024, and with this funding, the project is on track for great success, if you will pardon the pun, Madam Deputy Speaker. I hope we will not have to wait too long for extra levelling-up funding.
Finally, I am glad that the Chancellor announced that the commitment to spending 0.7% of gross national income on foreign aid will be back on the statute books by 2024. If the economy improves more than expected, I hope we can put that right in ’23, because that 0.7% is absolutely essential for the rest of the world.
Levelling up, in itself, is about as close to an acknowledgement as we are ever likely to get from Westminster and, in particular, this Conservative and Unionist Government, that there is a huge gulf in access to wealth and opportunities in the UK. This is not a new thing; it has continued throughout the 21st century. The rich are getting richer and the poor are getting poorer.
At the start of covid, I wrote that we were not all in this together and that the poorest and those living in the areas with the worst deprivation would suffer most and experience a higher mortality rate. Unfortunately, I was right. Six out of 10 people who have died of covid-19 are disabled, and those living in a deprived area are more than twice as likely to die from covid. The chief executive of health thinktank the Health Foundation, Jennifer Dixon, said:
“Covid-19 is not a great leveller—the pandemic is having an unequal impact on our already unequal society.”
Therefore, it is clear that this great act of benevolence, “levelling up”, is long overdue and is required because large areas of our society have been neglected for a long time. Areas such as my constituency of Inverclyde have suffered long before the shipyards closed under Thatcher: all she did was pile misery on top of despair. The labour-intensive industries paid poorly and worked men and woman into early graves, and as those industries died we never adjusted to develop employment that was rewarding either financially or for our wellbeing. As a result, inequality remains rife, and patching will not fix it.
It should come as no surprise that many people believe that levelling up is no more than a bribe to endear the Government to the electorate prior to the next general election, which is currently scheduled for after the new boundaries are put in place. Of course, with his old powers reinstated, the Prime Minister can effectively call a general election anytime he likes. Buying seats is one way to prop up a Government.
As MPs, we will look at our constituencies and always be able to find ways of investing in and improving them. Some constituencies will need more than others, which is why the funding should go to the most in need. Some people, including the Secretary of State for Levelling Up, Housing and Communities, have questioned that I, as an SNP MP, am willing to appeal to Westminster to fund projects in Inverclyde: does this not prove that we are better together? It is really very simple—we have been paying into Westminster for all these years while our industries were left to wither and die, and it is high time we got something back.
In Inverclyde we have two excellent projects for which I will pitch for funding. The first is a culture quarter that will host artists, creatives and artisans. It will be close to the ocean terminal, where we welcome 150,000 cruise passengers every year, and it will save two existing buildings of incredible heritage from destruction. Inverclyde council will also be looking for funding to improve the transport system around the town centre. I could of course be petulant and turn my back on these opportunities, but my heart is in Inverclyde and the prosperity of the people, and I will not miss out on any opportunity that can improve Inverclyde. Councillor Liz Robertson reminded me of a story about General Booth, the founder of the Salvation Army, who, when he was asked about dubious funds being used by his charity, is reported to have said, “I shall take all the money I can get, and I shall wash it clean with the grateful tears of widows and orphans.” The shame is that 155 years later we still have such inequality in our society, and that runs throughout this very disunited kingdom.
It is a pleasure to speak in this Budget debate and I would like to congratulate the Chancellor on a truly inspiring Budget.
Many of my constituents think that this Conservative Government are profoundly different from any Government who have ever gone before, and listening to the Chancellor’s speech it is easy to see why. It would be unthinkable only a few years ago to hear a Conservative Chancellor delivering such a Budget. The fact that this has happened only goes to underline both how much our party has changed and how much we seriously value our commitment to the new voters who put their trust in us only two years ago in places such as Blackpool South.
NHS funding will rise by £44 billion throughout this Parliament, demonstrating that we are the real party of the NHS. Blackpool has some of the poorest health outcomes in the whole country. When the Prime Minister speaks of levelling up, people expect to see real change in their lives, and this unprecedented investment in our NHS will help to deliver just that, with thousands more GP appointments for my constituents, a £13 million pound upgrade to my local A&E, and a commitment like we have never seen before to close the unacceptable differences in life expectancy between central Blackpool and other parts of the country that have persisted for a generation.
In the same vein, there was a huge increase in our schools budget. This will help to narrow the educational differences that have existed across our nation for far too long. Why is it that a white working-class boy in Blackpool has statistically lower life prospects than any other person in the UK? This is an appalling statistic and a damning indictment of all Governments who have left white working-class communities at the bottom of the pile. If we are serious about levelling up in educational terms, there is no better place to start than in schools in Blackpool.
However, the Chancellor saved the best announcements until last. Increasing the national living wage by 6.6% will deliver a £1,000 pay rise to thousands of my constituents in low-paid jobs: a Conservative Government delivering on our pledge to make sure that work truly pays. Then there is universal credit. I have to confess that I was slightly uneasy at the £20 uplift being taken away. It is easy to give out money but often very difficult to take it back. However, the changes announced in the Budget more than make up for this. Reducing the taper rate from 63% to 55% is a massive step forward in ensuring that work truly pays. It focuses our welfare system on those who are willing to meet the state halfway by working hard. This is exactly what a Conservative Government should be doing. These changes mean that a single mother with two children who works full-time will be £1,200 better off every single year. While the Opposition talk the talk on making sure that work pays and helping those on low incomes, it is the Conservatives who truly deliver. I cannot thank the Government enough for making this change that sends out this clear message to those on low incomes: if you do the right thing and are willing to work hard, this Government will support you all the way.
It is a pleasure to follow my Select Committee colleague, the hon. Member for Blackpool South (Scott Benton), even if we might disagree on our interpretation of the Budget.
Living standards are below where they were before the global financial crisis, spending on education is back to 2010 levels when Labour left office, and today a quarter of children in Barnsley are growing up in poverty. As we head into a difficult winter, with energy bills rising and inflation soaring, this Government have refused to take important steps to support working families, such as removing VAT from home energy bills. Instead, the measures in this Budget leave the vast majority of my constituents worse off, with taxes up, inflation up and universal credit cut. Yet this Government have found money to cut taxes for bankers, champagne and domestic flights. Those might be the Government’s priorities but they are not the priorities of people in Barnsley. We have had some of the worst cuts in the country. Barnsley Council alone has lost £150 million from its annual budget. Our local services have been devastated by austerity. The Government’s money for so-called levelling up will go nowhere near to compensating for these devastating cuts. No levelling up money will be invested in Barnsley despite two applications, both rejected. This Government cannot claim to be serious about levelling up for as long as they continue to ignore areas like mine.
Most of all, the Government cannot claim to be serious about levelling up while they continue to betray the “categorical” promise that the Prime Minister made to my constituents. During the general election, the Prime Minister pledged to end the theft of miners’ pensions, saying that
“we will make sure that all their cash is fully protected and returned, I have looked into it and we will ensure that’s done.”
The Business, Energy and Industrial Strategy Committee, which has a Conservative majority, backed our campaign to end the miners’ pension rip-off. The Government should now implement the Committee’s recommendations, and the Budget was an opportunity to do just that. The average miner receives a pension of just £84 a week, with many on a lot less. Ending the theft of their pensions would not only be the morally right thing to do, but it would provide an immediate boost to miners’ pockets to deal with spiralling living costs and to spend in coalfield economies, but the Government are refusing to act, just as they have refused to act in this Budget.
As the cost of living spirals, all our communities needed a Budget with the right priorities, but, much like with the miners’ pension scheme, when our communities most needed a helping hand, they have instead found the Chancellor’s hand in their pocket.
The Chancellor’s Budget is good news for my constituents. In fact, a number of priorities that I have either worked on or took particular interest in saw light in this Budget. The most obvious was the £48.4 million for the sea link between Penzance and Scilly. For years, I have been working with others to find ways to deliver improvements to Penzance harbour and harbours on St Mary’s, along with securing the funds to replace the ships that serve the islands. In 2018, I set up meetings between the then Transport Minister, my hon. Friend the Member for Wealden (Ms Ghani) and her staff and leaders on Scilly, leading to the reform of the local transport board, which I now chair. Last year, the board battled to save the transport system itself once lockdown had kicked in, successfully securing nearly £10 million to keep various transport operators afloat. That was because tourism, which is the mainstay of the islands’ economy and the source of the lion’s share of income for transport operators, was shut down at the very eve of the season’s start.
Recognising that resilient and affordable transport was a critical issue for everyone on Scilly, Whitehall saw fit to include Scilly as a category 1 area for levelling up funding. The council and local transport board, whose membership represents businesses, stakeholders and the community, worked like billy-o to complete a comprehensive submission for the fund in June. It was a remarkable example of nearly everyone putting their differences aside and knuckling down to deliver what the islands most need: an improved, resilient and affordable method of handling freight and transporting passengers. The work we do with this money, along with money announced as part of the Penzance towns fund early this year, will be a welcome and much-needed improvement to harbours and deliver a far greener and accessible link to Scilly.
Further to that, all six Cornish MPs have been working to secure continued investment in Cornwall and Scilly from just weeks after the Brexit referendum. I remember that we met the then Chancellor, Philip Hammond, at the start of the Government of my right hon. Friend the Member for Maidenhead (Mrs May), to explain why money we received via the EU for Cornwall would still be needed once we had left the EU. Soon after, the idea of shared prosperity was announced and I am pleased that the Chancellor confirmed last week that Cornwall and Scilly would continue to receive the same level of funding for the life of this Parliament. I expect shared prosperity money to impact more households more positively than the EU funding did.
Other initiatives I have taken a keen interest in for some time include the first 1,000 days, led by my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom), which looks at how we can best support a young life from the very start. There is also the role of family hubs promoted by my hon. Friend the Member for Congleton (Fiona Bruce). Both initiatives received cash boosts as part of the Budget, and Cornwall is well placed to use that cash to transform the life chances of our constituents.
The cut in business rates and changes to VAT for retail and hospitality are good news, and we must not underestimate the positive impact of the increase to the lower rate income tax threshold, the rise in national living wage and the changes to the taper for universal credit. The rising cost of living must be brought under control, but these changes will help many families in Cornwall and on Scilly.
Match funding to build the stadium for Cornwall was not forthcoming. The stadium we envisage will house the UK’s first concussion unit and additional facilities for Truro and Penwith College, be the home of elite rugby and football and have a state-of-the-art pitch for grassroots football and rugby. Cornwall has a population larger than Iceland, but no stadium or facility of that scale. We must persist, and there is absolutely no reason why the stadium cannot secure shared prosperity funding, if Cornwall Council and the local enterprise partnership are minded to see it through.
I am an optimist by nature. While I do like an occasional glass of prosecco or bottle of fruity cider, I have struggled to find that much to be optimistic about following last week’s Budget in terms of the impact it will have on my constituency. It therefore came as no surprise to me to read in the excellent Yorkshire Post this morning that in a survey conducted as part of the “Hopeful Towns” project by HOPE not hate, with which I have worked previously to explore how we build strong, resilient and well-connected communities, three quarters of the British public have no faith in the Prime Minister’s promises on levelling up.
Indeed, my constituents in Batley and Spen have a healthy scepticism about political promises generally. I summarise their view of so-called levelling up as, “We’ll believe it when we see it”, and I am not sure that there was much last week to give them confidence that there will be very much to see in the coming months. What they do see is roads badly in need of repair, high streets crying out for investment and a desperate lack of amenities, especially for young people.
Councils urgently need clarity about how services will be funded over the next three years, and the absence of a multi-year funding settlement means they still cannot plan effectively to meet the needs of our communities. This lack of forward planning by the Government, on top of a decade of cuts to local authorities, means more frustration for councils and a knock-on impact on the people they serve. We could see increases in council tax effectively forced on councils by this settlement. As the Local Government Association has warned on levelling up funding:
“The competitive bidding process means that scarce council resources have been diverted at a time when local capacity continues to be stretched by multiple pressure in local areas.”
My other key concerns about last week’s announcements, which I share with others, include the lack of funding for education—we know it is now only back to 2010 levels—meaning a lost decade for our children, our most precious resource; a lack of investment to deal with the immediate needs of the crisis in our social care system, which, along with the NHS, is on its knees; and a lack of support more broadly for our young people, who have lost a big chunk of their lives to the pandemic and many of whom are facing deeply concerning issues with mental health.
Indeed, it is significant that 71% of people questioned in the “Hopeful Towns” survey were concerned about the lack of opportunities for young people. That brings me to another report out today, from the National Youth Agency. This survey, part-funded by the Department for Digital, Culture, Media and Sport, found that children in affluent areas are twice as likely to have access to youth clubs and out-of-school activities than those living in poorer areas. Youth groups across my constituency, from Birstall to Hightown, are working hard to support young people, but they are often run by volunteers who need greater support, funding and resources to continue their important work.
That lack of facilities is in my view inextricably linked to the increased risk of young people being exploited by criminal gangs or getting diverted into antisocial behaviour because of boredom and a lack of meaningful ways to channel their energies and frustrations. Let us be clear, that is not an excuse for crime or antisocial behaviour, but only the wilfully ignorant would deny it is a contributory factor. If we want strong communities where people are supported in working together to address the problems we face, levelling up has to be more than just words in places like mine.
I will end on a broader point. We have talked a lot in recent times about the need to restore trust in politics and to give the people who put us here faith that we mean what we say and say what we mean. Fine-sounding words have to be translated into improvements in people’s lives that they can see with their own eyes. I genuinely want levelling up to become a reality. If it does, I will be more than happy to say so, but for now, like my constituents, I am still looking for the reality behind the Budget headlines, and I am struggling to find it.
The Budget and the contents within it for Wales bring together an ambitious programme of renewal that will generate jobs and level up local communities. Going forward, Wales will see a record £18 billion a year, the largest annual funding settlement since devolution began, helping to level up across the whole United Kingdom. Wales will also benefit from UK-wide support for people, businesses and green jobs, and investment to level up all the opportunities before them. There will also be targeted UK funding to support local infrastructure improvements and investment in communities in the form of the £121 million outlined in the allocation of the levelling up fund, with further rounds to follow. I remain hopeful that the Labour-run Flintshire County Council, the local authority area in which Delyn sits, will have prepared a bid for the next round of funding, having decided not to bother with applying for constituency-level funding in this round.
Infrastructure improvements will hopefully include a new train station at Greenfield. That was a key pledge during my election campaign in order to level up the Holywell area of Delyn and would bring constituents there closer to the job opportunities that exist in the wider north Wales and north-west of England economic region. The Chancellor set out a plan to deliver the priorities of the British people by investing in stronger public services, levelling up opportunity, driving business growth and helping working families with the cost of living and owning their own homes.
In calendar year 2019, the average UK constituency built 246 new properties; in Delyn, the figure was 29% lower. In 2020, the average constituency built 189 new properties; in Delyn, the figure was 34% lower. So far in 2021, the average constituency has built 180 new homes; in Delyn, just 74 have been built, which is almost 60% less than the average. The Welsh Government Minister told me that housing is her top priority. With figures demonstrating that it is only getting worse year on year, I hate to think what the details look like for things that are not her top priority. Hopefully, with the Welsh Government having significant new funding available, they will up their game and be as ambitious as the UK Government.
As part of the spending plans, there is on average a 2.6% rise in the Welsh Government’s budget each year. With the Welsh Government set to receive about £120 a head for every £100 of per-person equivalent UK Government spending in England, the old Labour argument that “Westminster does not send us enough money”, which was questionable before, is downright ludicrous now. That is another of Labour’s excuses for poor Government in Wales out the window.
I echo the Chancellor’s sentiments and it is worth quoting them:
“we have a choice: do we want to live in a country where the response to every question is ‘What are the Government going to do about it?’, where every time prices rise, every time a company gets in trouble, every time some new challenge emerges, the answer is always that the taxpayer must pay? Or do we choose to recognise that Government has limits?”—[Official Report, 27 October 2021; Vol. 702, c. 286.]
I could not have been happier to hear that from him.
Given not only the economic challenges of the past 18 months but the ongoing societal challenges, perhaps it is time to revisit the traditional three Rs of education. Of course, we still need reading, writing and arithmetic, but I venture that to build back better from the pandemic both financially and in terms of community coherence, we need a focus on a new set of three Rs: respect, responsibility and resilience. The Budget has the potential to help the people of Delyn and north Wales enormously, and it will undoubtedly help the United Kingdom to build back better as a strong Union of equals.
After the austerity decade, Brexit and nearly two years of covid, the Budget heralds a vicious spiral of low growth, high tax and a cost of living crisis for the working poor. Most concerning is the laser-like focus on squeezing real incomes by increasing unreformed, regressive taxes such as national insurance and council tax. So the poor are keeping the poor, as George Lansbury would have observed.
From Lord Heseltine’s 2012 report “No stone unturned: in pursuit of growth”, it was clear that we needed to boost UK GDP growth by taking pressure off the congested south-east and regenerating the north. However, nine years after that report, seven years after the northern powerhouse was launched and two years after a general election where levelling up promises were made, Hull and our Humber energy estuary awaits the transformative actions needed to deliver those promises. Sadly, the Budget is no game-changer for Hull, and there is certainly no sign of a London docklands experience for the Humber docklands.
I welcome Hull getting some levelling up funding for city centre sites at Whitefriargate and Albion Square, where retailers suffered so much in the austerity years, but—let us be honest—£19.5 million does not claw back the £131 million of core Government funding removed from Hull City Council between 2010 and 2019. My hon. Friend the Member for Sheffield South East (Mr Betts), the Chair of the Housing, Communities and Local Government Committee, said that the poorest areas saw the biggest cuts in those austerity years and, as the all-party parliamentary group on “left behind” neighbourhoods pointed out, what most needs levelling up is social and physical infrastructure outside city centres, such as in Bransholme and Orchard Park in Hull North. I am disappointed that the all-party group’s idea to use nearly £1 billion of dormant assets to create a community wealth fund for such neighbourhoods at no extra cost to the taxpayer has not been taken up. Moreover, there is only a third of the £15 billion education recovery funding that Sir Kevan Collins recommended, a three-year wait to return to 2010 per pupil funding and a cut-down version of Sure Start—certainly not levelling up.
On transport, we heard about £50,000 for a feasibility study on reinstating the Hull-Beverley-York rail line. However, if the Government were truly levelling up the Humber with London, we would see a much bolder plan to revive disused Beeching lines, with perhaps a Humber version of the docklands light railway connecting communities. We still await the integrated rail plan, where we will learn whether our freeport city will get rail electrification within the next 20 years—Ministers blocked it five years ago—whether there will be high-speed rail coast to coast across the north and whether HS2 will have any tangible benefits east of the Pennines. They are essential for levelling up the north.
With the Chancellor congratulating himself so warmly on an economic plan that he says is working so well, we can assume that the Government face not as severe an economic challenge as the 1945 Labour Government, which set up the NHS and the welfare state. Why, then, are they failing to invest in levelling up in the north, and in Hull and the Humber in particular? For the communities that I represent, the Chancellor served a dish with a very large bill but hardly any ingredients.
I welcome the Budget’s investment in people, families, education and skills, and jobs, which are all vital for combating poverty and levelling up. For too long, many of the worst-off people and places across the UK have been left behind by uneven economic growth and fewer opportunities. Levelling up means that everyone gets an equal opportunity to unleash their potential to make a difference. That will help to combat poverty. Poverty does not make the most of a person’s potential and deprives our society and economy of the skills and talents of those who have meaningful contributions to make.
Levelling up is important to my beautiful constituency of Hastings of Rye: a coastal community with so much potential to be unleashed, if given the opportunity. We have fantastic contributions to make as individuals and businesses, with huge potential for growth in, for example, culture, tourism and manufacturing. I am delighted that Hastings was successful in its towns fund bid, with £24.3 million awarded and another £85 million leveraged to invest in the town through its investment plan. However, I will highlight Professor Chris Whitty’s recent report on health disparities in coastal communities and his recommendations.
While I welcome the new Office for Health Improvement and Disparities, Professor Whitty highlights the clear commonality in the drivers of poor health, which include deprivation, poor housing, alcohol and/or substance misuse, low educational attainment, poor transport infrastructure and connectivity, and a lack of diversity in jobs and local communities. Will the Minister consider those common factors in strategies for levelling up coastal communities during the Parliament?
I welcome the Chancellor’s focus in the Budget on helping working families to meet the cost of living and helping to support more vulnerable families. Poverty reduction comes through well-paid jobs, but more money for universal credit—an in-work benefit—is essential in enabling people to work and get the financial support that they need. By reducing the taper rate from 63% to 55%, millions of people will be able to keep more of their income—it is a tax cut for the lowest paid. As my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), who pioneered universal credit, said:
“More money for Universal Credit is vital to support the conservative ideals of hard work and determination.”
I also welcome the rise in the national living wage, which will help working families to meet the cost of living and help to level up.
Investment in people continues with investment in education and improving skills. It is fantastic that we are increasing skills funding by 42% in cash terms, meeting our national skills fund commitment. The new numeracy programme will help to tackle poor numeracy skills, improve basic maths skills and therefore improve people’s earnings and employment opportunities. Again, that is levelling up.
I welcome the funding boost in our primary and secondary schools, but I would like to see the opportunity area funding that supports social mobility and levelling up in some of the most disadvantaged areas extended to more left-behind places, and especially coastal communities. Hastings and St Leonards schoolchildren and teachers have hugely benefited from that targeted funding for the past five years.
The continuation of the holiday activities and food programme is very welcome. To coin the words of my hon. Friend the Member for Chelmsford (Vicky Ford) when she was children’s Minister, the HAF programme is a living, breathing example of levelling up in action.
I have got so much more to say, but I have to cut it short. The Budget is very welcome.
It is shame that the hon. Member for Wimbledon (Stephen Hammond) is not in his place because he put his finger on the nub of the debate. A strategy for growth should have been at the Budget’s heart, yet the International Monetary Fund and Office for Budget Responsibility took one look at the Budget and downgraded our growth forecast. Our long-term growth is something like two thirds of what it used to be.
The IMF, which has looked out over the next four years, says that we in the UK, for all the Chancellor’s measures, will have the worst recovery from covid in the G7. It is not surprising. While other countries around the world invest in science-led growth, what did the Chancellor do last week? He chose that moment to defer science spending by two years.
While other countries around the world are going for trade, the OBR looked at the magnificent new global Britain fund that we have heard about and downgraded our trade forecast. The current account deficit, which has been about 3% to 3.5% for some years, is now forecast to be 4% to 5% or 5.5%. A red-tape Brexit has ensnared our traders in so much bureaucracy that exports to the EU will fall by 15%.
Because growth is bad, taxes are up—we have the largest tax rise since the 1950s. In a couple of years, the average family will pay £3,000 extra in tax, thanks to the Prime Minister. Taxes are going up, not fairly, but affecting ordinary working people and we therefore have flat living standards. This decade is now the worst for pay rises since the 1930s. Of course, because we have a Tory Government, the poorest will be hit hardest. What we have heard today about the universal credit taper cut making up for the removal of the £20 uplift is absolute nonsense. The poorest people in this country will be £280 worse off as a result of the Government’s decisions. That is the reality.
The net sum of the measures is a catastrophe for social mobility in this country. Once upon a time, the Conservative party boasted about its social mobility credentials; not any more. It now takes five generations for someone born in the poorest cohort in this country to rise up and make even average wages. The gap between private school and public school funding is now so big that it would take £55 billion to fix it. The Conservative party should never again be trusted on social mobility.
My final point is about the west midlands. The Mayor of the west midlands, my friend Andy Street, is down with covid at the moment. We wish him a speedy recovery. However, many of us were pretty sick when we looked at the settlement for the west midlands. The budgets for the levelling-up fund and the towns fund put together give us the fourth worst settlement in the country—£217 million behind the north-west. In the levelling-up fund announcement last week, £33 a head for the west midlands is the fifth worst settlement in the country. Our transport budget is a £1 billion less than we asked for—one of the worst per capita settlements in the country, as the West of England Mayor was quick to point out.
This was a Budget for anaemic growth, rising prices, rocketing taxes, record debt, red tape that ensnares our traders, flat living standards and increased poverty. After all the agony of loss that the country has been through, we deserve better.
I was elected almost 18 months ago on a platform of levelling up. I therefore relish the challenge when we are asked what levelling up is. In the Chamber, we talk about levelling up as opportunity of policy, place and people. That is all very well, but people from Bosworth are pragmatists and they want to know what that means, so I will explain very simply what levelling up looks like for the people of Bosworth.
On policy, we talk about the green revolution. That is 60,000 green jobs in the freeport just up the road from Bosworth. We talk about investment, and we won an Israeli investment from REE of £250 million, which will bring 300 jobs to MIRA technology park, leading the automotive industry in the heart of the midlands. Britishvolt has put its HQ in MIRA. Although it is building in Blyth Valley, its high-end HQ will be based in my constituency. Amazon is investing in Hinckley, bringing 700 new jobs. We have got £400 million through the Midlands Engine Investment Fund to add to the £300 million private investment for small and medium-sized enterprises to grow. As has been pointed out, that is the way out and the Budget has provided a framework for that.
We should remember that the measures are based on covid support for our businesses, which meant bounce back loans for 1,869 businesses in Bosworth, amounting to £55 million, and 104 businesses taking up the coronavirus business interruption loan scheme at £29 million. That was to get them through so that they could survive and now thrive.
What do I mean by place? In the road investment strategy—RIS2—there is £20 million to improve the A5. Millions of pounds of investment has gone into Hinckley Academy so that we have quality education at the heart of Hinckley. We have had £28 million of investment in Leicestershire broadband to see the likes of Sketchley Brook finally get its service. There is £1.8 million in the high street heritage action zone for Hinckley high street. What about healthcare? There is £250 million for Leicester Royal Infirmary and £3 million for George Eliot Hospital, where 30% of my constituents go. What about rail? In the levelling-up bid, £17.6 million has gone to Leicester to improve the train station, and there is £50,000 for the Ivanhoe line to look at opening the line that would go straight through my constituency. I have not even got to the jewel in the crown so far—Twycross Zoo, which has been given £19.9 million. That is levelling up typified: conservation, growing tourism, and providing high-end STEM jobs in our region.
Finally, in the last minute of my speech, we must not forget people. We must not forget the 15,000 people in my constituency who were given furlough support during the pandemic. Unemployment in Bosworth is 3.4% when the average is 5%. We must not forget the £3.5 million of the £500 million household support grant for the most vulnerable. That matches the minimum wage of £9.50 and the reduced universal credit taper from 63p to 55p. In Leicestershire, we also have 227 new police officers to keep us safe. I could go on, but the key thing to remember is that although the job is not done, there is hard evidence of the difference that we are making, which is tangible, palpable and visible. That is levelling up.
Nothing typifies the difference between the Pollyanna view of Conservative Members and the more realistic view of the Opposition than the conversation about the Chancellor’s brave decision, as he described it, to cut the universal credit taper from 63p to 55p. Had the Chancellor been brave enough to put a 55p tax rate on high earners, I would have applauded because it would have been legitimate to raise it from the 47p in the pound that high earners pay, compared with the 55p in the pound that the poorest people in our society have to pay. That is the difference between the values of this Government and those of my constituents and the overwhelming majority of people in this country.
The Budget did nothing about the environment. We saw a decrease in air passenger duty and fuel duty, and no investment in heat pumps, insulation for our homes and all the things that we know we have got to do. Where was that investment?
The Chancellor cut bankers’ tax, and he cut Amazon’s tax, I think by a total of £15 billion. I could have found better ways of spending £15 billion. I would have spent it on the things that matter to those on universal credit, for example, because they are our fellow citizens and they are in need. He should come to my constituency—to a constituency that is poor. It is not poor across the piece —there are people there who do well enough—but in the worst wards, 60% of children are living in poverty. That is a disgrace to this country of ours and it is a disgrace to this Government, because it has got worse consistently, year by year, since they came to power in 2010.
Look at the pay of the public servants that even the Conservatives now say they value. Someone working as a medical secretary, for example, is 5% worse off today than they were in 2010. A paramedic is 7% worse off, and people in other industries are even worse off. The Chancellor’s lifting of the pay restraint on those in public sector services will not go a long way, frankly.
Let us look at the question of growth. We know that this country has a productivity crisis. We know that there are things that we have to invest in for the long term rather than engaging in short-term tinkering as the Chancellor did. That long-term change will require investment in health so that, for example, my constituents in the worst wards do not die 10 years younger than constituents in the City of Westminster. That is another disgrace in modern Britain.
We also need investment in education. Again, young people in my constituency see less spending and bigger cuts to education than those in other parts of the country. We have had 8% cuts over the last 10 years, compared with 4% nationally. Are we going to see that money put back with the new investment in education? I hope so, but I do not rely on this Government to do that. We have seen cuts in further education. We have seen cuts in our sixth-form colleges, which are so important to young people in towns such as Rochdale. When will we see that money back?
There is real anger in my constituency. This Budget is not disappointing; it is a waste of time. It was an opportunity to make real change—an opportunity that a tinkering Chancellor used to put himself forward to be leader of the Conservative party, not for the country.
It is a pleasure to contribute to this Budget debate. Fortunately, the Government were in a position to provide unprecedented assistance throughout the height of the pandemic to support individuals and businesses across the UK. As a result, our economy is recovering quickly, with growth forecast at 6.5% for 2021. Fears of widespread unemployment have proven unfounded, as analysis confirms that peak unemployment will reach 5.2%, down from the 12% predicted in July 2020. That means that we can focus on the ambition to level up our country and the communities in it.
In his Budget, the Chancellor made a number of long-term commitments that will support north Wales in a sustainable way. I have been working hard to ensure that the region benefits from Sir Peter Hendy’s soon-to-be-published Union connectivity review, and it is pleasing that an additional £22.5 million is being made available for the development of transport projects, including along the north Wales corridor.
I am also very encouraged by the first levelling-up fund allocations. Since March, I have been working closely with Denbighshire County Council, residents, businesses and voluntary organisations to prepare the Vale of Clwyd bid, which the council intends to submit shortly. Projects in our bid will benefit all parts of the constituency, reinvigorating our communities, our economy and our culture.
Throughout the pandemic, our reliance on telecommunications has increased, and it has been concerning that so many properties in north Wales have poor broadband connections. I have been working hard with Openreach to address that, and I was pleased last week to hear the Chancellor express his continuing commitment to this agenda through Project Gigabit.
Levelling up also requires the Government to help people into work and to ensure that work always pays. I am therefore extremely glad that the universal credit taper rate has been cut by 8%, which I have been pushing for. Together with the £500 increase to the work allowance, that means that thousands of those in lower-paid jobs in the Vale of Clwyd who rely on universal credit to top up their earnings will now have more money in their pockets.
Similarly, with the boost in the national living wage to £9.50 an hour, more people will be better off. The end to the public sector pay freeze will be hugely beneficial to my constituency, where public sector employment is significant. The UK-wide Multiply programme will also help residents who are keen to develop essential numeracy skills, which can boost the employability of those who are currently economically less active.
When it comes to crime, it is often the most deprived communities that suffer most, so the commitment in the Budget to press ahead and fund 20,000 new police officers is very welcome. Since September 2019, 147 police officers have been recruited in north Wales, bringing the total to 1,654, virtually on a par with the highest headcount on record, 16 years ago.
In England, a temporary 50% discount on business rates for retail, hospitality and leisure premises has been announced, along with more frequent revaluations and improvement relief for changes to premises. Those are important measures, but the Welsh Government must ensure a level playing field for businesses in Wales.
This Budget delivers for the people and businesses in north Wales, and I am delighted to support it.
The message from the Budget was clear: the Conservatives are now the party of low growth and the architects of the highest sustained tax burden in peacetime. The aspiration of Margaret Thatcher; the delivery of Ted Heath.
We are told that this change of philosophy is temporary —that the virus has infected our economic growth and the growth of developed nations around the world—but the simple fact is that Britain has suffered the worst economic hit of any major economy, coupled with the highest death toll in Europe. The national insurance hike alone will cost a care worker £140 a year, a nurse £310 and a paramedic £420. Meanwhile, banks, which have recorded record profits, are set to save £4 billion in taxes by 2027. In the words of my late mum, is this not just another example of “much gets more”? The cost of living is rising at its fastest rate for 30 years and the tax bill is £3,000 per household higher than when the Prime Minister came into post. There is no hiding place. This is Conservative economic mismanagement, and it is working people who are paying for it.
The Chancellor delivered most of the Budget in advance through co-ordinated announcements to the press, but after hearing it in full, I am amazed that he had so many announcements to leak. This Budget offered so little to so many. Universal credit was slashed, pushing thousands of the poorest people in our society even further into poverty at a time when their energy bills are about to soar. There was barely a word on connectivity and closing the digital divide, which is vital for levelling up and pivotal for the technology-reliant society we now live in.
With 200,000 children transferring from primary school to secondary school this year, we were asked to celebrate a boost to the schools catch-up fund despite that support providing just £310 per pupil, a third of the amount the Government’s own education tsar stated was required before he resigned and only one tenth of what the Dutch Government believe their children deserve.
However, Budget announcements cannot be considered in isolation; to understand the impact of spending increases, it is important to consider what has been cut in turn. The final totals are revealing and clear. This is a Government who ask the poorest people in our country to celebrate £2 billion from one hand while taking £6 billion with the other, to be thankful for small wage increases that are negated by higher taxes and inflation, and to watch their taxes rise while banks have theirs cut. That is not what I understand by “levelling up”.
To truly level up, we must address many aspects of people’s lives by implementing measures that contribute to equality of opportunity and of health and wellbeing, and, of course, deliver the benefits of prosperity for all the country. I am delighted that the Government and the Chancellor have so thoroughly addressed these things with a range of initiatives and investments in the Budget that will enable us to truly build back better post-pandemic.
Our home lives and the environment in which we live impact us all greatly. The Government are investing unprecedented amounts of money in housing, including in the new £11.5-billion affordable housing programme, as part of the ambition to deliver 300,000 new homes a year by the mid-2020s. Alongside that, the Government’s 95% mortgage guarantee scheme goes further still, to help first-time buyers secure a mortgage, with a deposit requirement of just 5%. That will enable many people to buy their own home who were previously unable to. Opportunity, aspiration and social mobility go right to the heart of the values and principles of my party.
Even though we have reduced rough sleeping by a third, we must do more. The additional funding of £640 million a year represents an 85% increase compared with 2019, enough to make sure that fewer people are sleeping rough than at any time in the past decade.
On brownfield sites, I was also very pleased to see the £300-million locally led grant funding to unlock smaller brownfield sites, including the £75-million brownfield land release fund to help to unlock locally authority-owned land. Some £57 million of the fund has recently been allocated, with my council, South Gloucestershire Council, receiving £2 million and Bristol City Council receiving just under £200,000. To complement these new communities, the Chancellor also announced a £1.5 billion regeneration fund to improve transport links and other community facilities.
The Chancellor’s announcement in the Budget that the retail, hospitality and leisure sectors will benefit from a 50% discount on business rates will be music to many people’s ears. That will incentivise and assist this important sector of our economy, culture, recreation and overall wellbeing. Although this will be very welcome across the whole of the UK, it will certainly complement a number of developments and regeneration projects in my Filton and Bradley Stoke constituency, including, for example, the impressive YTL arena complex and the new Filton north railway station which collectively will provide a 17,000-capacity concert area, leisure facilities and other employment opportunities, and is due to open its doors in 2024.
Such regeneration projects not only demonstrate the Government’s commitment to building back better and improving transport and connectivity, but play a key part in improving overall wellbeing and enhancing equality of opportunity and aspiration across the country. I am proud that my constituency contains some of the world’s leading defence and aerospace companies, such as Airbus, Rolls-Royce and GKN, so I was delighted by my right hon. Friend’s Budget statement, which confirmed that the Government recognise the need for and benefit of investing even more in innovation and maintaining the target of £22 billion investment in R&D.
I am delighted by the announcement that we will have major transport infrastructure improvements in my constituency and that the west of England will benefit from the £540-million investment in local transport projects. My right hon. Friend stated in last week’s Budget:
“Infrastructure connects our country, drives productivity”—[Official Report, 27 October 2021; Vol. 702, c. 279.]—
That will enable us to level up.
This Budget demonstrates that, on the Government side of the House, there is a commitment and a determination to deliver the people’s priorities and enhance aspiration and opportunity, which will deliver prosperity, social mobility and wellbeing across our whole nation.
I love the enthusiasm among Government Members, but it reminds me of that story about the emperor’s new clothes, with them all simpering over the Chancellor while ignoring what is before their eyes. I understand why they want to believe in levelling up, but after 11 wasted Tory years, they are not levelling up. Our economy and public services are facing terminal decline. After 11 years, households across the country are facing a collapse in living standards. High inflation, rising taxes, low growth, falling living standards and crumbling public services are not indicators of levelling up; they are evidence that the Government have lost the plot.
This Budget does not address the childcare crisis. It disproportionately penalises women. It continues to ignore those self-employed who have been excluded and cast adrift. It punishes those working hard by crippling them with national insurance increases, council tax rises, unaffordable mortgages and a combination of shortages and higher food bills.
We need to grow our economy if we are ever to pay properly for decent public services without taxing people out of existence, but the Chancellor’s ambition is to return education spending to the level that he inherited in 2010. He is taking us back, not forward, wasting time when we should be taking the necessary steps towards a high-value, highly skilled, productive and green economy. As those missed opportunities mount, so the façade becomes harder to maintain. The Chancellor and the Prime Minister have hit on a good slogan, but they are completely naked when it comes to taking the necessary action.
I know that time is tight tonight, but I cannot let the speech from the hon. Member for Glenrothes (Peter Grant) go without some response. It was lacking much coherence and any credibility. We heard from him that the covid-19 pandemic should have been predicted. His party have been in government in Scotland for almost a decade and a half, and I do not remember at any point, prior to covid hitting, warnings about that pandemic.
As for credibility, I would have had a little bit of support for the hon. Gentleman if he could at least recognise that this Budget delivers £600 million of additional funding to the Scottish Government this year; and that, for the next three years, it delivers an additional funding pot of £4.6 billion each year for the Scottish Government added on top of what they already have, making it the most generous settlement since devolution in 1999. The SNP now has more money to spend as a Scottish Government than any of their predecessors, and it has to recognise that this has been a very good Budget for Scotland.
The hon. Gentleman spoke about a local distillery in his constituency and how the Government should look at the taxation scheme to support the employees in that distillery. I hope that he considers that when he goes to the SNP conference later this month, because a motion is laid down in its conference papers right now calling for his party to look at “raising additional revenue by taxing the significant profits of the Scotch whisky industry”.
Does the hon. Gentleman accept that the SNP policy is that spirits should be fairly taxed regardless of how they are produced, unlike the system that has been maintained in the United Kingdom since the day alcohol taxation was first invented? Does he accept that that is the SNP’s policy as of now?
I will come on to taxation, because the Exchequer Secretary is sitting on the Front Bench and I want to make my own comments about that. However, there was nothing from the hon. Gentleman, leading the SNP in the response to the Budget debate tonight, about what his party are putting forward for debate at its conference later this month, which would see taxation on Scotch whisky go up. What we have seen from this Government is a fifth successive UK Government Budget that has frozen taxation on Scotch whisky, and that is something that I welcome for the many distilleries in Moray and across the country. There has been nothing from him or any SNP representatives so far tonight about the £172 million being invested by this Government on levelling-up projects across Scotland. From the borders to Edinburgh, from Ayrshire to Aberdeen, those projects will get funding from this Government.
The hon. Member for Inverclyde (Ronnie Cowan), another SNP speaker today, used a quotation to suggest that he would wash the money coming from the UK Government to deliver these projects. These are projects that have been outstanding in Scotland for years. If the SNP Government had acted to deliver them, they would not be looking for investment from the UK Government, but because we have devolution and Scotland has two Governments, we are seeing the UK Government delivering these projects where the Scottish Government have failed.
Finally, I want to comment on the duty freeze on spirits, which is very welcome in Scotland. We know that there is a wider review of alcohol taxation in the United Kingdom; the Prime Minister announced it at Roseisle distillery in 2019 on a campaign visit to Moray. While the Exchequer Secretary is on the Front Bench, will she reassure the distilleries in my constituency and the Scotch Whisky Association that this Government will be true to their word? In their briefing notes on the Queen’s Speech after the 2019 election, they said that the review would
“ensure our tax system is supporting Scottish whisky and gin producers and protecting 42,000 jobs supported by Scotch across the UK.”
That is what I will be holding this Government to. I hope to see a very good response in the near future.
This Budget should have been first and foremost an opportunity to address the very serious cost-of-living crisis that is now affecting an increasing number of families across the country. Instead, the Government’s decisions have made things worse. There is now immediate pressure on all our constituents from rising energy bills, fuel bills and food prices.
Last month, I launched a cost-of-living survey in my constituency. Three quarters of my constituents told me that their wages have either flatlined or fallen in the past two years, and that their main concern is the spike in gas and electricity bills. Does my right hon. Friend agree that a much-needed solution in these difficult circumstances is to cut VAT on gas and electricity bills this winter from 5% to 0%? Surely that is a glaring gap in the Chancellor’s Budget.
My hon. Friend is right that there was action that the Government could take to address the cost-of-living crisis. Instead, the Resolution Foundation has said that we have the weakest pay growth since the 1930s, with little prospect of things improving.
The Government have failed to take action to ease the bottlenecks that are pushing up inflation. They have failed to boost the productive capacity of the economy, so that when demand rises, prices rise too. Even worse, they are still going ahead with the £20 cut to universal credit and are increasing national insurance contributions and tax on low-paid workers at a time when costs are going up.
I am glad that campaigning pressure has forced the Chancellor to change the taper rate and take some measures on universal credit, but the reality is that that is not enough to stop people facing huge pressures this winter. It is not enough to stop many families losing hundreds, if not thousands, of pounds. A constituent of mine who has got in touch is in his mid-60s. He has just lost his job and is struggling to find new work: because he is so close to retirement, he cannot find an employer to take him on. He has paid taxes for nearly 50 years and has worked all his life, but is now worried that he will not make his remaining mortgage payments. He is seeing his income hugely cut this winter at a time when he is worried whether he will be able to pay his fuel bills. It is deeply unfair.
Underpinning the cost-of-living crisis is the fact that the Government could have taken other decisions. They could have cut VAT on fuel, as my hon. Friend the Member for Coventry North West (Taiwo Owatemi) says; they could have raised national insurance thresholds to ease the pressure on lower-income workers; they could have gone further in increasing the minimum wage—but they chose not to.
It is not just about the choices that the Government have made. Underpinning those choices is the real story of the Budget, which is that the Conservatives have become the party of low growth. We have had a decade of weak growth in national income, in productivity and in real wages, which is why the Government are now putting up taxes.
It will get worse, too. The OBR forecasts growth—once we come through the bounce-back from the pandemic—of 1.3%, 1.6% and 1.7%. For all the warm words in the Budget, and for all that Conservative Members seize on particular phrases of the Chancellor’s, that is the underlying reality that they should be most worried about: weak economic growth for the future. That is what will hit our future public services and hit future living standards. We do not have the investment in regional economies, in jobs of the future or, particularly, in tackling climate change and the environmental challenges that have been highlighted so heavily this week at COP26.
Perhaps the greatest travesty of all is the lack of funding for our children’s education. Sir Kevan Collins has warned that we will pay the costs of lost learning in lack of productivity growth and lack of economic opportunity for many years to come. Not restoring the funding for our schools to the levels that we had under the last Labour Government for several more years will mean 14 years of lost investment in our schools. That is an entire childhood—a kid’s entire childhood in schools lost. The cost in lower productivity will be felt for very many years to come.
If we want an age of optimism, we have to be able to be optimistic for our kids’ future, optimistic for our towns’ future, and optimistic that our children will have a fairer, better and more sustainable future than we have. That optimism is missing; that optimism was not in the Budget; and until we can invest in our kids’ future, we will not see that optimism come back.
I extend my gratitude to my right hon. Friend the Chancellor and his team at the Treasury for their work on the Budget. As I have only a short time, I am unable to go through the many excellent announcements that he made last week, but I particularly support—and wish to discuss, if time allows—his assistance to businesses located across the country with cuts to business rates, the reduction in alcohol duties to make our drinks manufacturers more competitive, the heavy investment in infrastructure to boost our productivity, the support for those in need and the commitment to creating safer streets.
I fully support the £7 billion reduction in business rates to promote investment and business in this country. I am particularly pleased by at least a 50% reduction in rates for businesses in the retail, hospitality and leisure sectors, which have had such a difficult year but have remained resilient throughout the pandemic. As a former retail business owner, I know how vital the cuts to business rates will be for those who work and run businesses in the sector. They will enable businesses to invest in capital, innovation and, importantly, people, enabling more businesses to hire new staff.
Investment will not just benefit businesses; reducing business rates is good for consumers, too. Increasing businesses’ capacity to invest enhances competition far more than increasing Government intervention in markets, resulting in lower prices and better products for consumers. I hope that, along with tax cuts and reliefs such as extending the £1 million annual investment allowance, greater wealth creation will be achieved. Decreasing taxes facilitates the opportunity for businesses to invest and grow. After all, it is businesses that create more employment opportunities, affording every person in this country the opportunity to level up, regardless of our backgrounds.
I am also pleased to hear about the simplification of alcohol duties and the prospect that that creates for the growth of British drinks manufacturers and pubs. Pubs are at the heart of the communities in my constituency, as they are across the country, and I know that the issue of alcohol duty is important to my constituents who have contacted me. I am delighted that reducing tariffs on drinks and supporting small craft producers such as Tring Brewery through the small producers relief will result in higher profits for businesses and help to protect our pubs.
I am equally delighted by the £5.7 billion investment in infrastructure, better connecting our country and better connecting us. As society reopened this year, the importance of reliable and healthy transport for business and personal journeys became even more apparent. Investing in both our national and our local transport affirms the Government’s commitment to levelling up all regions of the United Kingdom.
I am assured that the £5 billion designated for improving the quality of local roads will be welcomed by my constituents, particularly those who live in smaller villages and rely on local roads to connect them to larger towns and onward to cities. This investment boosts our productivity, enabling faster transport times, as well as improving safety on our roads. I am dedicated to campaigning for reliable and healthy transport, for an improvement in transit times and for the frequency and safety of public transport in my constituency and further afield.
I am conscious of time, so I will end by congratulating my right hon. Friend on delivering the excellent news that we have had better economic growth than forecasted and by welcoming his commitments to creating a more prosperous country for us all.
This was a Budget that let down Birmingham and Erdington. The Government have made big promises to the country over the past two years with the rhetoric of levelling up, building back better and a high-wage, high-skills economy. The gulf between the rhetoric and the reality grows wider by the day, however.
Let me say why levelling up matters to the people of Erdington. A man who gets on a train at New Street and gets off at Gravelly Hill or Erdington is likely to live seven years fewer than he would if he continued his journey to Four Oaks in leafy Sutton Coldfield. The fact that such a grotesque comparison is possible in modern Britain is nothing short of a scandal. That is why it is so important for the Government to fulfil their promise to invest in communities such as Erdington.
Last week the Government released details of the successful bids for the levelling-up fund, and Erdington High Street submitted a bid to the fund. Like so many others across the country, Erdington is a proud community, and proud of its history as a thriving working-class community, but sadly the high street has fallen into decline, with big names leaving one by one and empty shopfronts left behind. Working with Birmingham City Council and all the key local stakeholders, the local community decided to turn that around. They submitted a comprehensive and ambitious bid to the levelling-up fund, underpinned by a solid business case and significant private sector investment. Part of the high street bid was £43 million in match funding alone, nearly double the amount of funding provided to the three other bids that Birmingham had made to the fund. However, the answer from the Government was no: there would be not one penny from them for the redevelopment of Erdington High Street.
That decision is inexplicable and outrageous. Erdington is the fifth most deprived constituency in the country. What planet are the Government living on, if levelling up means nothing—not a penny—for the most deprived communities in Britain? If it is to mean anything, surely it requires the Government to support the Erdington High Street bid.
Following the contributions from my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) and my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne), let me say this. The Government talk about a new era of optimism. What about schools and young people? We know that 42% of children growing up in Birmingham are growing up in poverty. Kevan Collins, brought in by the Government, warns of serious long-term consequences—scars as a consequence of the Government’s letting down the children of Birmingham and Britain. As for a new age of optimism more generally on the economic front, let the Government use those words to the families who will have to pay an additional £3,000 in tax. Two thirds of those paying national insurance will still have to pay the full whack.
The idea that what the Government did in the Budget was somehow to listen and learn and react to the people of Britain and their legitimate concerns could not be further from the truth. The simple reality is that we have slow and anaemic growth, an economy that is not firing on all cylinders as it needs to be to achieve recovery, and grotesque unfairness. When the Government talk of levelling up, I am afraid that there is a belly laugh from the people of Erdington, who feel badly let down.
I want to reflect on what I think was a great speech from the Chancellor last week, and another fantastic tour de force from the levelling-up Secretary today.
It is important for us to see everything that the Government are doing in context—the context of the hundreds of billions of pounds that they are putting into supporting the economy during the pandemic. We have had the furlough scheme and grants for business, support that has only been possible because of a decade of sensible financial management by the Conservative party. That is something on which Opposition Members should reflect, and it is something that they could not do after the financial crisis of 2008-09. However, as the Chancellor said in his statement, we should look more broadly at value for money in public spending, and that is certainly something that I shall be doing on the Public Accounts Committee along with the hon. Member for Glenrothes (Peter Grant).
I disagreed with the hon. Member when he said that the House was only about party politics. I have worked closely with the hon. Member for Swansea East (Carolyn Harris) on policies of hers. I have worked with her on, for example, the Menopause (Support and Services) Bill, supported by the Government last week, and the all-party parliamentary group on gambling-related harm. There is more to this House than just party politics, and we can work together on certain important matters. I hope that the hon. Member will reflect a little on his earlier comments.
Some Members, in particular my hon. Friend the Member for Wimbledon (Stephen Hammond) and my right hon. Friend the Member for North Somerset (Dr Fox), spoke of what extra borrowing at this time would mean. That was all I could really hear from the Opposition, who seemed to be saying, “We want this extra spending, but we do not want the taxes to pay for it.” Those on the Government side of the House are prepared to be honest with the British people; those on the Opposition Benches clearly are not. We should bear in mind that a 1% increase in interest rates that the Government have to pay would be the equivalent of a huge chunk of the defence budget being wiped out in interest alone. We need to think about that in a wider context, and about the sound management that the Government are delivering.
As for levelling up itself, one element in the Budget that has really hit home is the taper rate. Labour Members have said that it is not enough, but they talked about wanting to get rid of universal credit, which was introduced to stop taper rates of over 100% for working people. Now the rate is down to 55%, about half what it was for some workers before. Ours is the party that is delivering for working Britain, and we are also delivering more vacancies and more full-time jobs than ever before: even now, there are more full-time jobs than ever before in the UK. This is the party of work. Whenever Labour has been in government, it has left unemployment higher. I am delighted to support what the Government are doing.
More broadly, we are being honest with people. We are saying, “If you are to have good public services, you must be able to pay for them.” That is why I support what the Government are doing. Opposition Members all say that they want more money and more investment, but none of them can say where they would raise that money. These are the two wins of levelling up: good jobs, better paid, with people being taken out of unemployment and into work, and the delivery of great public services funded by that.
In my own constituency, I welcome the excellent news about the Weardale railway line, which I will say more about in the Adjournment debate—the House is safe for the time being—and the money for Shotley Bridge Hospital, as well as the feasibility study on reconnecting Consett and the Tyne. I thank, in particular, the Exchequer Secretary to the Treasury for the draught beer relief, and the 107 Conservative Members who supported it. However, as we are seeking to level up, I ask her to look a little at a campaign that I will be pressing on pensions. I want to see our pensions system levelled up across the country. However, I will leave that for another day, and simply thank the Government for everything that they have done so far to help level up our country.
Somewhat uncharacteristically for an Opposition Member, I will start by mentioning some of the measures in the Budget that I do welcome.
Reducing the universal credit taper rate from 63% to 55% is certainly a modest step in the right direction, as is the £500 increase in the work allowance. However, I should make it clear that wider reform of universal credit is still desperately needed—a point to which I will return later in my speech. I also welcome the freeze in duty for Scotch whisky, which has had a torrid time in recent years as a result of Brexit, the pandemic and punitive US tariffs. I shall return to that later as well.
One of the so-called flagship announcements in the Budget was the announcement of that modest reduction in the universal credit taper rate, and I do not deny that some, although by no means all, will be able to benefit from it. However, despite all the hyperbole—some of which we have heard today—we must not lose sight of the fact that the Chancellor has merely tinkered around the edges of universal credit. The stark reality facing many of my constituents in Easterhouse, and across the east end, is that a modest reduction in the taper rate will come nowhere near to compensating for last month’s £20-a-week cut in universal credit.
We should also remember that changes in the taper rate will not benefit those who are out of work or unable to work owing to sickness or a caring responsibility, or indeed those who have a disability. Those living with a disability had already been cruelly overlooked by the Government on the £20 uplift at the beginning of the pandemic, so this is arguably a double blow to a group of people who are impacted—arguably even more so—by the cost-of-living crisis. We know that only about four in every 10 universal credit claimants are in work, so this change in the taper rate will not benefit 60% claimants living in Carmyle, Craigend or Carntyne.
To be blunt, this Budget was a missed opportunity to strengthen the UK’s social security net, which too many in our communities still fall through. We should have used this opportunity to build back better by scrapping the benefit cap, ending the punitive sanctions regime, binning the two-child limit and the rape clause, dropping the five-week wait, and abolishing the bedroom tax elsewhere in the UK. Instead, the Chancellor has opted to focus on tinkering around the edges, rather than transforming the lives of the most vulnerable in our communities. By scrapping the triple lock, it is clear that the Chancellor is balancing the books on the backs of pensioners who continue to get a raw deal from a pension system that they have paid into their whole lives.
I want to raise another concern that arose from Wednesday’s statement, and I do so as chair of the all-party parliamentary group on Scotch whisky. I welcome the freeze on alcohol duty, which we know disproportionately hits our iconic Scotch whisky sector. That sector supports 42,000 jobs, hundreds of which are in my own constituency of Glasgow East. However, it is worth reminding the House that the freeze on duty only gives breathing room to an industry that already faces a 70% tax burden. It will not be lost on the Scots that the same Budget that saw duty for Scotch whisky stay the same saw a tax cut for English sparkling wine. For a Government who talk a good game on levelling up, it seems that our premium spirit is indeed missing from that all-important level—something that our Scottish Tory colleagues might want to explain in their speeches tonight. Let me say clearly to the British Government: by all means, fly in and have your photo opportunities at Speyside distilleries and announce another review on alcohol duty, but do not be surprised when there is a backlash from distillers who can see that Scotch whisky will be left at a severe competitive disadvantage by a Treasury that must do much more to support Scotch.
The theme for tonight’s debate is levelling up, but this Budget demonstrates that levelling up is all spin and no substance. The Red Book says that this Budget is about
“a stronger economy for the British people”.
In truth, it delivers more for sparkling wine than it does for social security. I can tell the House that my constituents in Cranhill will not be popping the prosecco and toasting this smoke-and-mirrors Budget.
I cannot really add to the words of my hon. Friend the Member for Vale of Clwyd (Dr Davies) and his praise for the impact of this Budget in north Wales, but I will give just one example before I turn to some of the contributions we have heard from the Opposition in today’s debate. The Wild Horse Brewing Company in Llandudno makes my favourite drink, the IPA, and it has already been talking about the impact of the small producer relief in the Budget. That is just one small thing, but it is an illustration of how the Budget has reached the parts that other Budgets have not reached before. Aberconwy is a place that has been hit first, hardest and longest by the pandemic, and we have seen the Chancellor’s typical awareness of and sensitivity to that in the support package we received and now in the Budget that he brought forward last week. I want to take this opportunity to thank him for that.
This is a debate, and I have listened carefully to what the Opposition have offered as an alternative to the Budget. Three ideas have come through. The hon. Member for Croydon North (Steve Reed) talked about radical devolution and about investment, and the hon. Member for Birmingham, Selly Oak (Steve McCabe) and many others talked about growth. I wondered what these things would look like under a Labour Government and I realised that in Wales we know exactly what they look like. After two decades, radical devolution in Wales has resulted in the centralisation of powers to Cardiff. For example, just 9% of European structural funds are decided by the local authorities in Wales, compared with 36% in England. This Budget has demonstrated that the UK Government trust local authorities and it is for all parts of the UK.
On investment, although Wales has just 3% of the UK’s population, before devolution, it enjoyed over 5% of the UK’s inward investment. After two decades, that figure is now closer to 1%. Inward investment has collapsed under the care and attention of the Labour Government in Cardiff. On growth, I was interested to hear it mentioned several times. In Wales, at the start of the period of devolution, about 20,000 jobs a year were being created by inward investment. Now, the figure is closer to 5,000 a year. It has collapsed under the Labour Administration.
This Government have invested in research and development and have promised £2 billion extra in the Budget. I welcome the insight that has come with them saying, “Let’s not take things as they are. Let’s make them different. Let’s see how we need to do things such as the introduction of the taper relief faster, and let’s see how we need to do things differently, including investing in research and development.”
I want to use these last moments to talk about something I think we can all agree on. These are words of wisdom from a resident of the King’s Road in Llandudno, who said to me last summer as we talked over their garden wall:
“Someone will have to pay for this.”
I really welcomed the Chancellor’s words at the end of his Budget when he said that we were moving towards a small-state, low-tax economy and that we had to move away from being a society in which the Government were the first resort for every problem. That is what my conservatism is to me. I welcome that, and I welcome this Budget.
There were two main challenges facing the Chancellor as he prepared for the Budget. One, on the eve of COP26, was to accelerate progress on tackling climate change, yet he had nothing to say on that. Instead, he cut air passenger duty on domestic flights, sending out entirely the wrong signal when he should have been investing in our rail services. It was clear that net zero could not have been further from his mind.
The other challenge was to take the pressure off working people. The pandemic has hit household incomes and widened inequality. The Government have also created a perfect storm of financial pressure with the universal credit cut, the national insurance rise, energy prices soaring and food prices rising at the fastest rate for more than a decade. People were looking to the Chancellor to help them out, yet, according to the Resolution Foundation, this Budget has increased the UK’s tax burden by £3,000 a year per household. The Office for Budget Responsibility has also confirmed that the Chancellor’s underlying strategy is to put even more pressure on council tax payers, with £5.3 billion more expected by 2025. The Budget is masking the fact that the Government are seeking to take even more out of people’s pockets. There is a suggestion that the average council tax bill will be well over £2,000 in the next few years.
The tax system has been rigged in favour of the wealthy, with bankers and Amazon getting a tax cut while ordinary people are being hit with national insurance. A huge opportunity to level the playing field has been missed. A survey by the Union of Shop, Distributive and Allied Workers of 2,500 low-paid workers shows that over half of workers on less than £10 per hour are having to miss meals to pay everyday bills. Working people are being asked to pay more for less, and we are all paying the price for past Government failures.
On education, we know that there are 1,000 fewer Sure Start centres now than when the Conservatives came into power. The 75 family hubs are welcome, but after a decade-long failure to invest in children’s futures, this is clearly too little, too late. It also appears that schools are expected to fund the Government’s commitment to increasing teacher starter salaries to £30,000 from existing budgets. Schools simply do not have the money to meet that commitment. Also, the trumpeted rise in the budget for 16 to 19-year-olds is no rise at all when we look at the rising student numbers in that cohort. This comes at a time when the underfunding of colleges over recent years has already forced them to narrow their curriculum and put more pressure on an already stretched workforce. St Brendan’s College in my constituency has been trying really hard not to make those cuts, but the pressure is becoming very difficult for it to manage.
I welcome the Chancellor’s announcement of an £1.8 billion fund to develop brownfield land, which, it is claimed, will bring 1,500 hectares of brownfield land into use. I hope this means that Bristol will finally get the funding we need to unlock the development of Temple Quarter in the centre of the city. That could mean 10,000 new homes and 22,000 new jobs.
Finally, I would be failing in my duty as a west country MP if I did not mention cider. However, the 40-litre threshold for draught duty relief overwhelmingly favours large breweries. So on behalf of the smaller breweries and cider producers in the area, which often supply 30-litre kegs and would therefore be excluded from this measure, I urge a rethink from the Chancellor on this. Lowering the threshold to include any container would be a simple fix with huge benefits for independent businesses, and I am sure that my constituents would raise their glasses to the Chancellor if he did that.
It seems to me that we are hearing the same old speeches from the Opposition. I want to pick up on a point made by the hon. Member for Glenrothes (Peter Grant), who is no longer in his place. We heard no mention of education in his speech, and I wonder why not. It is because in 2019 and 2020, the proportion of pupils passing three or more highers was only 43%, which is lower than any year in Scotland since 2015. It is a disgrace that the Scottish Government continue to fail the many young children growing up north of the border.
When we last debated a Budget in this place, the country was in a very different situation from the one we find now. In the middle of the third national lockdown, many businesses in Keighley and Ilkley were telling me that without further support they might not be able to open their doors to customers again. In March, I said it was essential for the Chancellor to extend his world-beating support for businesses, including the furlough scheme and cash grant payments. The Chancellor proved he was on the side of British businesses and workers then and, after last week’s Budget, as we build back better from this pandemic, it gives me great pride to say that this Conservative Government are on their side once again.
While March’s Budget was about supporting people through an unprecedented time, this Budget is all about giving local businesses the tools and the confidence they need to succeed in the post covid economy. Take small businesses, the backbone of the local economy in Keighley and Ilkley: cuts to business rates for those in the leisure and retail sector will help them to bounce back from months of closures. With the Government’s small business rate relief, £7 billion of tax cuts will be granted to more than 700,000 businesses—businesses that have shown such resilience over the past year. They deserve a Government who are on their side and will put them at the forefront of UK economic growth.
The Government are acting on another issue that is important to me and many of my constituents: the skills agenda. The Budget will bring skills spending to a total of £3.8 billion during this Parliament, and it will go directly to practical changes that will make a real difference and make levelling up a reality. The funds will introduce T-levels to our national curriculum, create more traineeships and apprenticeships, and build more institutes of technology.
On a micro level, the Government have already invested and committed £33.6 million in Keighley through the towns fund. At the very heart of that plan is a new skills hub, a new manufacturing, engineering and tech hub and a new health and wellbeing hub, all of which will be built in the centre of my town. I am pleased that the Government have already committed to 40 new hospitals, with a further eight to be announced; I made my plea for a new Airedale hospital this week, and I will continue to do so. This Government are on the side of working people, and I am proud to support this Budget.
I will keep my comments on the Budget specifically to youth work. I do so for two reasons. The first, more positive reason is that this week is national Youth Work Week, and I put on record my thanks to the youth workers in my constituency and across the country, who do a tremendous job in safeguarding, caring for and looking after our young people and guiding them through adolescence. Let us face it: adolescence is a difficult enough thing at the best of times, and in recent years we have not had the best of times, with covid, with lockdown and with education interrupted.
Secondly, youth work offers a good example of how this is a smoke and mirrors Budget. To give some context, youth work in England has seen a 73% cut in the past 11 years. That has had consequences. It has seen 940 youth centres closed and 4,500 qualified youth workers no longer working in frontline youth work—a figure that rises to about 13,000 if we take youth and community workers together. The National Youth Agency estimates that about £1 billion less per year is being spent on youth work than a decade ago.
I feel incredibly passionate about youth work, so I was glad two years ago when the Government announced a £500 million youth investment fund. The only trouble is that not a penny of that has been spent in the past two years. When the Chancellor stood at the Dispatch Box and announced £560 million for youth funding, I was immediately suspicious, because I had already heard about £500 million for the youth investment fund, which we had not seen a penny of in two years. It is no surprise that the £560 million that has just been announced included that £500 million, so we could argue it was just a £60 million funding announcement. However, it gets worse, because when we read the small print in this Budget, we discover that the National Citizen Service funding is included in that money. Once we start crunching the numbers, we soon realise that the Budget includes a £450 million cut to youth services.
Our young people will get £450 million a year less under this Budget, yet the Chancellor stood at the Dispatch Box and announced a £560 million investment. That is smoke and mirrors; it is deceiving to the young people and youth workers around the country, who have had a really difficult time over the past two years. For this to come during national Youth Work Week and at a time when the NYA has done research proving that young people in more affluent areas are twice as likely as those in poorer areas to have access to a youth centre and a youth worker shows that the Budget is not about levelling up; it is about smoke and mirrors.
If we are to do politics better, let us play with a straight bat and be honest: this Budget contains a funding cut to our young people. It is deceiving for the Chancellor to stand at the Dispatch Box and say it is an investment when it is quite clearly the opposite. I call on Government Members to be more straightforward with the voters, particularly with our young people. We need young people to engage in our democracy. When politicians stand up and say one thing, but once we look at the small print we discover that it is another thing, it gives our young people a sense that politics is not for them.
The consequences of that are far more than the loss of youth centres or youth workers—I fear that it will lead to a loss of trust among a generation of young people who have already faced 11 years of austerity and cuts to youth services, when they see further cuts. In youth services, 11 years is an entire generation. Given the scale of cuts we have seen to youth work and the 50% decline in youth work degrees, we know it will take an awful lot to build back a sector that is on its knees. We owe it to our young people to be straight with them and to be clear that this Budget contains a huge cut to our youth services.
It is a pleasure to take part in this great debate on the Budget, which gets to the heart of what this Government do —levelling up. Levelling up is so important for Rother Valley and the people living in my constituency. There has been debate about what levelling up is. To me, it is about creating opportunities. It is about the job creation and wealth that we deserve in the north, which other places in the south have historically had.
I often think we should treat levelling up as we would treat a natural disaster. We need that emergency aid pumped in—the short, sharp injection of cash—but, more importantly, once the cameras have gone, we need the long-term support of aid for skills and training. Some of my constituents have said that Rother Valley is a bit like a natural disaster, having been ruled by Labour for 101 years, but, at last, this Government, with the Chinook helicopters flying over, is coming to the aid of levelling up in Rother Valley.
I welcome this move, looking at both the short-term and long-term funding. I am incredibly pleased that this Government are investing in Rother Valley. With Rother Valley and Rotherham council, we put in two bids for the levelling up fund—divided bids, but bids that would cover levelling up—to cover both the short, sharp measures and the long-term growth measures that we needed. That follows my 2,000-person parliamentary petition, my Adjournment debate on levelling up, and the other work I have done convincing Rotherham council to invest in our area.
I am pleased to say that one of those bids was successful; we have a £4.5 million grant for Maltby Academy, which will create an incubator space for skills and apprenticeships. The Gulliver’s Valley skills village will create training and areas of accreditation in hospitality, creating jobs, and Rother Valley Country Park will be overhauled to help to create new jobs and new leisure receipts in the area.
Those are the overarching measures we need to create long-term growth. Skills and jobs: that is what the £11 million levelling up pot does for Rother Valley, and I am incredibly pleased. It is on top of all the other measures the Government have announced on long-term skills and the desire to create more jobs, whether that is the £570 million given to South Yorkshire for much-needed transport, or cutting the taper rate by 8%. That is putting more money in people’s pockets, showing them that the Conservative Government is on the workers’ side. Only by getting jobs and prosperity can we level up our areas, and this Government are doing that.
However, I must say I am mildly disappointed that our bid for £9 million for Dinnington High Street was not successful. For me, that would be the much-needed short, sharp injection of cash to the high street. When the then Secretary of State for Housing, Communities and Local Government, in charge of levelling up—my right hon. Friend the Member for Newark (Robert Jenrick) —toured Dinnington High Street with me, he witnessed the burnt-out building opposite my office. I noted in the prospectus for the levelling-up fund that there was even talk of using the money to get rid of burnt-out buildings. The fund is designed for areas such as Dinnington in Rother Valley. So I hope that, in spring, working with the Dinnington Land Trust and Dinnington’s council, Rotherham’s council will put in an even stronger bid for that money. I know that I have great guarantees already from this Government that we have had one bite of the cherry but there are two more to go. I will be working with this Government to make sure that in the next round our bid for the levelling-up fund is even stronger, so that we can have that money we so need.
Overall, this Budget is giving us long-term measures to help look after areas such as Rother Valley and areas across the north of England. I also make a plea to this Government: do remember those short, sharp injections of cash we need in Rother Valley as well for our high streets, not just in Dinnington, but in Maltby, Thurcroft, Aston, Swallownest and across Rother Valley. Together, we will overturn this natural disaster and improve Rother Valley for everyone.
I have been in this debate all afternoon, and I have to say that I am more discombobulated now than I was before I came in. I am not sure what is meant by “levelling up”; a number of attempts have been made to explain it, but I cannot understand what has happened. I do know that I would love the type of finances that have been afforded to some of the areas represented by Government Members—some of the millions and millions of pounds that their constituencies have received. Perhaps it is because they are Conservative constituencies—I am not sure—but one thing I do know is that I would not mind a portion of it for my constituency.
It is not just about shiny projects; levelling up must be about people. It must be about addressing the grotesque inequalities in today’s society. It must be about opportunity, ambition, fairness and hope for everyone. Over the past decades, from Thatcherism to austerity, the party in government has followed the same playbook: foster division, foment turmoil and attack working-class families, so that it and its social strata always benefit.
The Budget delivered on Wednesday showed once again that levelling up is nothing but rhetoric and means nothing while families are left to struggle and health outcomes are shockingly distorted. The Chancellor’s words of commitment for families and communities could not be further removed from reality. In the past five years, child poverty in the north-east has risen from 25% to 37%, whereas in his constituency it stands at 13.8%. That is where we need the levelling up. The realities on the ground are stark. Working people are hit by the national insurance rises and hikes in the cost of living, while bankers are given a generous tax cut—that is not levelling up. Thousands of people had their universal credit ripped away from them—that is not levelling up. That comes on top of a decade of austerity that has ripped a hole in the public services. How exactly is that levelling up with families and communities in mind? Schools in the Chancellor’s constituency get more block funding per pupil than they do in mine—is that levelling up? Real wages will be lower in 2026 than they were in 2008—is that levelling up? Wages in the north-east are £10,000 less than those in London—is that levelling up? A man born in Bedlington East, in my constituency, is expected to live to be 75.2 years of age, whereas the figure for leafy Richmondshire is 81.3—is that levelling up?
The Chancellor talks of personal responsibility, so let me just say something very simple: I hold him, his friends, this Government and those on the Government Benches personally responsible for the deliberate holding back of people in my community.
I am delighted to speak in the Budget debate today on the theme of levelling up. In the short time I have, I want to focus on Stoke-on-Trent—or, to quote the Chancellor in his recent speech, the “great city” of Stoke-on-Trent. We have had £56 million of levelling-up funding for Stoke-on-Trent, which represents the biggest Government investment in my home city for 50 years and demonstrates the Government’s commitment to supporting our ambitions as a city.
When I was elected in 2019, I listened to those who said that Stoke-on-Trent had been forgotten and nothing could be done to change that. I made a promise to them that this would change, and I am glad that it has. Stoke-on-Trent is now recognised in Westminster as the litmus test for the Government’s levelling-up agenda. Pre-pandemic, the city was undergoing the most remarkable economic transformation, driven by our excellent location and resurgent manufacturing economy. However, Stoke-on-Trent is still the fifth most deprived city in the UK, so this investment is crucial for boosting local growth. The city needs help with its brownfield sites because of its industrial past. Subsidence has been an issue in Stoke-on-Trent for many years, and it will be for many to come, due to the former North Staffordshire coalfield, with more than 8,000 disused shafts, many ancient workings, and a huge and intricate web of tunnels beneath the city. Water is another issue. It was pumped out of the mines to extract the coal, but now the water level has risen again and is causing erosion and further subsidence. The prospect of harnessing this water and the power of geothermal energy to heat our city is an exciting one that needs Government support.
Transport also plays a huge role in levelling up, so I welcome the £50,000 awarded through the restoring your railway ideas fund for the Stoke to Leek line, to level up opportunity for our local communities. I will continue to make the case for a new station in Etruria to replace the one closed in 2005. Its location, next to our most successful enterprise zone, makes it a wise investment in an area where air pollution makes improved public transport options essential.
Levelling up is also about owning the challenges we face as a city and at community level, and owning the solutions. It is about asking Government for help, but not asking them to deliver everything, so I support trusting the people and investing in our social fabric, to empower communities with the delivery of innovative solutions to problems they understand better than anyone. The shared prosperity fund must be targeted at our community development, rather than capital funding, repurposing existing buildings and investing in youth workers, volunteer leaders, community champions and the multitude of very localised activities that need long-term support to ensure that services are sustainable. Levelling up must address such grassroots challenges, found in every village, town and city throughout our four nations.
The Budget provides the investment needed to power up key sites in Stoke-on-Trent, and nationally it strikes the right balance between fiscal responsibility and backing the UK to continue to recover, grow and prosper. It has my full support.
I refer the House to my entry in the Register of Members’ Financial Interests, particularly to my position as chair of the Public and Commercial Services Union parliamentary group, as I shall focus my remarks on public sector pay.
The true test of a Budget is whether the political position holds in the days after or starts to unravel within minutes, which is what happened with this Budget. It did not take very long—indeed, the suggestion that we should all drink sparkling wine is unravelling as we speak, as wine experts cast their eyes over the Budget. We can see the Budget unravelling in no area more than the much-promised pay rise for public sector workers. It turns out that even the Treasury leaks were not accurate, because the Budget provided little or no comfort for civil servants who work for UK Government Departments.
In the past few days, the Chancellor has said in many interviews that pay is a matter for pay review bodies. If someone happens to be a civil servant who works for a UK Government Department, they will discover that their pay is not covered by a pay review body. Treasury money is needed to fund their pay rise. For those who, along with many, have helped to keep the economic wheels turning—who have, for example, processed and paid universal credit payments for a record number of claimants—and who have been subjected to 11 years of pay cuts and pay freezes, there is no clarity at all as to whether they will receive either a real-terms pay cut or a real-terms pay rise. As the hon. Member for Wansbeck (Ian Lavery) said, that is not levelling up.
Added to that is the fact that civil servants continue to overpay their pension contributions by 2%—of course, the Budget said nothing about that—so the Budget does not mean much at all for public sector workers who work for a UK Government Department. Inflation is over 3%, meaning that most have suffered a real-terms pay cut with this year’s pay freeze, and the predictions are that inflation will rise to perhaps 4%, with some even suggesting 6%. We need a commitment from the Government that civil servants will be rewarded.
As always with Budgets, the devil is in the detail. The Chancellor indicated that the Government want to cut jobs to 2019 levels. That would equate to 32,000 jobs leaving UK Government Departments. We have seen the benefits of the public sector and public sector employment, and the need for world-class public services, but the Budget does little to reward those who have kept UK Government Departments going and supported so many people. The Government have a duty and a responsibility to reward handsomely those who work for them.
The Budget will deliver a stronger economy for the British people, and it has certainly delivered for the great city of Stoke-on-Trent. This has been possible only through Conservative MPs and the Conservative-led city council working together to secure the investment we need.
The £56 million promised for realising our levelling-up schemes comes as a welcome addition to £40 million from the transforming cities fund to improve local bus and rail, as well as the millions secured through the housing infrastructure fund, heritage actions zones and many other schemes. Our successful levelling-up bids focus on making the city even more inviting and an even more attractive place to live, work, study, visit and invest. The historic Spode and Tams factories, which were left to rot by Labour, will receive investment. The arson-prone Tams Crown Pottery in Longton, which has been derelict for more than 15 years, will see 64 modern apartments achieved. With all that combined with the heritage action zone and partnership schemes in conservation areas, we are levelling up Longton back to where it should be. We are breathing new life into and increasing residential footfall for our high street and the much-loved Victorian market hall.
The need to level up is certainly pressing. Three wards in my constituency are identified as left-behind neighbourhoods by the all-party parliamentary group for left-behind neighbourhoods—40% or more of households in those wards do not have a car—so the combination of levelling-up schemes with the TCF and, crucially, the reverse-Beeching schemes is the right one. Labour left our local rail network to rot, just as Labour left our potteries to rot after the disaster of the 2008-09 financial crash and the loss of a huge part of our local industry in the late ’90s. We have changed that: we have rebuilt our local economy to become one of the fastest-growing cities in the country. Thanks to the TCF, the restoring your railways fund and—I might say—my relentless campaigning, Longton station is to be refurbished; Stoke station is to be an intermodal transport hub; Meir station is progressing from the ideas fund to the advanced-project stage of RYR; and, thanks to the Budget, our plans to reopen the Stoke-Leek line have won funding. I should stress that Stoke-on-Trent does not have a working-from-home economy, so commuter transport is needed, reducing congestion for everyone. The scale of bus decline locally is concerning. It is the second highest of anywhere in the country. Only recently Onward identified Stoke-on-Trent as one of the worst areas of the country for access to employment opportunities by public transport.
Alongside TCF, the Government must fund the improvements that we want to see through the bus service improvement plan, including the possibility of franchising for the Potteries. After years of decline, many manufacturers, including our ceramics industry, are enjoying a resurgence. The gross value added of the UK ceramics sector has more than doubled in 10 years—from £419 million in 2009 to £1.2 billion in 2019. My own ambition is for a £1-billion ceramics economy in Stoke-on-Trent alone. While demand is high for our excellent products, energy price fluctuations continue to be a serious concern for both ceramics and other high energy intensive users. Given the prevalence of small and medium-sized enterprises, it is vital that the sector is supported through a larger share of UK R&D investment if it is to transition to cleaner, more efficient and resilient technologies.
Connectivity and regeneration are key to opportunities for good jobs, good pay and access to education and skills. The job now is to deliver locally what we have won funding for nationally.
This Budget comes on the back of a lost decade for many of my constituents—a decade of lost investment, a decade of lost opportunity and a long decade of crippling cuts to essential services. This applies no more so than for our further education colleges and sixth forms across the country, and that is the topic on which I shall focus in the short time that I have available this evening.
The Chancellor announced that schools funding for up to 16-year-olds will eventually match the per-pupil levels of the previous Labour Government, but adult skills and 16-19 further education miss out by an estimated £4.8 billion. The Government talk about levelling up and putting skills centre stage but, in reality, the swingeing axe of austerity still falls.
Tracey Aust, principal of West Thames College in Isleworth, told me that, by 2024, per-student funding at her college would not have gone up for 14 years—14 lost years. The current per-student funding is just £1,050 per annum, compared with £6,600 per university student. That has meant cuts in the college year on year: less choice of courses; less career advice; fewer opportunities to link with local employers; and less mental health and welfare support. Furthermore, vocational courses cost more to deliver than desk and whiteboard courses. Together, these two factors make it much harder for this excellent college to provide world-class education and the skills that our economy needs in the future.
West Thames College’s principal also said that replacing BTECs with the new T-levels would risk more students falling through the gaps, as the T-levels require level 2 and above entry requirements. The Department for Education’s own equality impact assessment on T-levels said:
“Those from SEND backgrounds, Asian ethnic groups, disadvantaged backgrounds and males are disproportionately likely to be affected.”
That is yet more levelling down.
Colleges such as West Thames College have done amazing work, ensuring that young people get a world-class education and the skill that they need for later life in the jobs that need doing. Yet they are being held back by a Government who spout warm words about skills and retraining, but then offer virtually no support.
With the climate crisis hardly getting a mention in the Budget, nothing was said about green skills. FE colleges are critical in this regard. They provide the essential learning that will be needed, including designing, installing and maintaining heat pumps, solar panels, wind turbines, electric cars and better insulation; and rewilding our natural spaces. We cannot deliver net zero here in the UK if UK people do not have the green skills, and we cannot level up if people who want to work and who want to get better paid work do not have the skills that this country needs in future.
Better skills need better funding. We need to invest in people and to invest in productivity. Time and again, this Government have been warned about their inadequate investment in skills, and this Budget is just tinkering around the edges. This Budget does not make up for the lost decade that West Thames College and other colleges across England have faced. This is a lost decade that will leave a scarring impact on so many.
This Government were elected on a mandate to unite and level up, and for my constituents in Penistone and Stocksbridge this Budget will begin to close the gap. I am delighted that the Chancellor has awarded £50,000 to explore the opportunity to restore a passenger rail service between Stocksbridge and Sheffield that could reduce journey times significantly, and open up important opportunities for work, training, leisure and healthcare. I thank Chris Bell and the Don Valley Railway group, who have campaigned for this project for many years.
To create a productive, high-wage economy, we must focus on skills. The last census showed that fewer than 50% of adults in the Stocksbridge and Upper Don ward have a level 3 qualification. That is a significant barrier to progression in work. I am delighted that, in addition to the programmes already announced, the Government’s plan to improve adult numeracy skills with the multiply programme, will be a massive bonus to my constituency. I know that the outstanding Barnsley College and Northern College stand ready to deliver. This is also a great Budget for local businesses, with help for high streets in Penistone, Stocksbridge, Chapeltown, Ecclesfield and Dodworth through reduced and reformed business rates.
Even more importantly than delivering investment in infrastructure and skills, this Budget will level up because it recognises that the true birthplace of opportunity is the family. Economic circumstances can create a framework for opportunities, but a child’s ability to grasp those opportunities depends for the most part on their family circumstances. It is families that offer children security, and teach them the values and virtues that they need to flourish. That is why the Chancellor rightly says that families and communities are
“more important than the market or the state.”—[Official Report, 27 October 2021; Vol. 702, c. 286.]
The first two years of a child’s life are crucial to their life chances. I warmly welcome the £500 million start for life offer that will roll out family hubs, improve perinatal health, and invest in the early years workforce and parenting skills. I pay tribute to my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) and my hon. Friend the Member for Congleton (Fiona Bruce) for their tireless efforts in advocating for babies, children and families. This investment is desperately needed. If we have learnt anything from the mistaken decision to close schools during the pandemic, we have learnt that we are living through a crisis in parenting. I am delighted that this Budget begins to put that right, and recognises the importance of strong and confident families as the building blocks of society.
This Budget levels up by addressing the causes of inequality and creating the conditions for opportunities to grow and spread. However, I do understand the concerns of those who worry that the Government are doing too much. Big state does not create the best conditions for human freedom and flourishing. There are many problems that the Government cannot solve and the Government cannot make us good.
If the UK was a proud, old Sheffield terraced house, it would be one with some rather worrying cracks in the brickwork. However financially prudent we are as homeowners, we must spend upfront to fix structural issues, otherwise we know that the costs will spiral—in fact, we may lose our house. There are some deep cracks in our nation and we must invest now to fix those problems if we are to move towards a better future. The ambition must be to develop a new social covenant where the Government provide the framework, but where we all share the responsibility for building stronger families, stronger communities and a stronger nation.
My right hon. Friend the Chancellor has said that this is a Budget for an “age of optimism”, and I agree. We do not deny the challenges that we face, but we will not be distracted from our vision of Britain as a free, fair and independent country, setting a course towards a future of more equal opportunities and greater prosperity.
Earlier in the debate, the hon. Member for Southampton, Itchen (Royston Smith), who is no longer in his place, stated that levelling up is not just about geography. Although I am not yet clear what it is, I do agree with that. It is not just about people knowing that they will have decent schools, good hospitals, connected transport and investment in local jobs, no matter where they were born, grew up or live now; it is also about a society in which all people—no matter their situation, who they are or where they live—have an equal chance not just to survive, but to thrive. Public services and infrastructure are obviously part of that, and public services include the provision of social security.
It is not shameful to receive social security. That is important and not said enough. It is not shameful to be born without enough, for someone to lose their job, or to have health difficulties or caring responsibilities. As many in North East Fife and across the UK have found in the last 20 months, anyone can require to be in receipt of social security. The way that the Government have treated social security in the Budget suggests that they feel otherwise. Although it has taken some time, I am pleased that the Government now seem to recognise that universal credit is an in-work benefit. Yes, the taper rate for universal credit has been cut, but that restores only a third of what was taken away by the £20 cut, and it helps only those people already in work. There are thousands of other people struggling to enter the workplace, or in receipt of legacy benefits—and what about those, still predominantly women, with childcare commitments?
Research done earlier this year by the University of York found that most mothers claiming universal credit struggle to meet the work conditionality requirements because work coaches do not understand the commitments of childcare. The childcare element of universal credit barely covers costs anyway, but cannot be claimed until the end of the first month of paid work, so people are supposed to do up to 30 hours of work search each week while caring for their children. I know from experience, and I hope that anyone who has or had small children knows, that that is just not possible. Without reforms of conditionality and better access to full-time childcare, parents—particularly mothers and single parents—will continue to be left behind.
What about those who provide unpaid care to their loved ones and receive either carer’s allowance or the caring element of universal credit? Our society relies on those unpaid carers, but the Government’s refusal to uprate those benefits, or to give additional support, almost amounts to abandonment of those people, who do so much.
I could mention many more groups who will not experience a levelling up through the Budget, but I am aware of time, so finally I turn to vulnerable and homeless young people—young people starting their life with nothing but barriers before them. The Government appear to base their policies for under-25s on their own experience of being young. In response to a One Parent Families Scotland campaign that I and other hon. Members have supported on the young parent penalty, the Secretary of State for Work and Pensions has said that young people need less social security than older people because they can rely on support from their parents. How does that thinking apply to young parents who are living independently with their children, to care leavers, to homeless young people, or to those who, through no fault of their own, have no parents or care givers who can step in when things get tough?
Last week, at the launch of Centrepoint’s report on the experience of vulnerable and homeless young people in the social security system, one young person asked, “If it is not good enough for you or your children, why is it okay for us?”. I ask the Minister to think about that when reflecting on the Government’s policies. The Government can change this. By failing to even acknowledge the needs of those who provide and need support, the Government are failing to level up before they even get started.
It is a pleasure to speak in support of the Budget presented last week by my right hon. Friend the Chancellor of the Exchequer. After over four and a half years in this place, and over 10 years involved at some level or other in Scottish politics, I am used to the SNP being able to manufacture a grievance out of absolutely nothing. The hon. Member for Glenrothes (Peter Grant) gave it a good shot tonight, but I was pleasantly shocked and surprised by his contribution. Granted, there was very little mention of the £176 million that the UK Government invested directly in local communities in Scotland through the levelling-up fund, and there has been no mention from those on the SNP Benches of the domestic air passenger duty cut, which I campaigned for, and which will support regional airports in Scotland as they recover from lockdown and the pandemic, though the hon. Member for Gordon (Richard Thomson), where Aberdeen airport is situated, is still to speak. I look forward to his comments welcoming it.
There was very little mention—the honourable exception was the hon. Member for Glasgow East (David Linden)—of the spirits duty freeze, which will support the Scotch whisky industry. There has been no mention from those on the SNP Benches of the freeze on fuel duty, which will support commuters, and help people in rural Scotland more than those anywhere else. Also, there has been literally no mention of the increase in the national living wage, which will help so many people across Scotland.
What shocked and surprised me was the fact that in answer to my intervention, the hon. Member for Glenrothes actually welcomed the largest increase to the lump sum given to the Scottish Government since devolution began in 1999—£4.6 billion on top of the annual baseline figure of £36.7 billion. It is the largest annual block grant, in real terms, in any spending review since devolution was created. It is almost as though, earlier today, the hon. Member, like me, read Mandy Rhodes saying in Holyrood magazine that the SNP have to stop being the
“winner at being a sore loser.”
In that spirit of cross-party consensus, I am reaching out across the aisle and offering an olive branch to my SNP colleagues. I ask them to join the Scottish Conservatives—not in campaigning to keep Scotland in the United Kingdom; that would be too far for them. I ask them to join us in calling for the Scottish Government to spend this biggest ever block grant better; join us in campaigning for the £200 million that was promised to the north-east of Scotland to improve journey times between Edinburgh and Aberdeen in 2016. Where is that money? Join us in—
I will not because there is not much time left. I am sure the hon. Member is speaking later, if not tomorrow, and I will look out for his contribution then. [Interruption.] He has already spoken. Well, I apologise.
Join us in calling for the Scottish Government to spend more money on education so that we can shrink the now-growing attainment gap in Scotland. [Interruption.] Join us in fixing the bridges in Aberdeenshire, which the hon. Member shouts out about.
Aberdeenshire has not even applied to the levelling up fund yet—we are applying in the next round. Aberdeen city, which we have heard nothing of in this debate, has received £76 million to level up the city centre—something that I support and I really hope the hon. Member will add his support to as well. This is a Budget that levels up across the United Kingdom.
In this new age of cross-party consensus, which the hon. Member for Gordon is doing so much to undermine by shouting across the Chamber tonight, I would like to work with my SNP colleagues so that we can press the Scottish Government to spend their money better. In that way, maybe they will see that what the Chancellor said last week is true: that we truly are better, stronger and wealthier when we all work together.
I am sure I am not alone in noticing—certainly the Foreign Secretary has done—that the Chancellor seems to be a little bit too preoccupied by his own self-image and should perhaps be more concerned about the prospects of others.
The harsh reality out there is that we are facing a 1.3% growth rate versus the 2.3% that we enjoyed under the last Labour Government, which would have carried through to the past decade. The economy has been badly damaged by the past 18 months, but particularly by the past 11 years. The purchasing managers index, a true measure of confidence in the economy, shows the widest margin between services and manufacturing since 2009. Vehicle manufacturing was down by 42% last month, and that is the third consecutive month that it has fallen. We are facing a cost-of-living crisis ripping through our communities, with food inflation at 1.1% just in the month of August. As for the pay increases that the Chancellor has talked about, just remember that back at the beginning of the year he was talking about 1% for nurses, and he must have realised that inflation was going to start tearing through our economy.
This is hurting people everywhere, and not just the majority of those on universal credit—hot on the heels of national insurance increases, it is going to affect all of us. According to the Resolution Foundation, we all face an average of £3,000 in tax increases, with women, on average, £1,800 worse off over the next six years. There is an energy crisis with people facing energy poverty—the stark choice between heating or eating. The Government could have done more by capping VAT, but they chose not to. In education, just one third of Kevan Collins’, the catch-up tsar’s, budget is actually being allocated, with £10 billion missing that could have been put in. There is no mention of funding for higher education and support for students at this difficult time. We see communities and town centres decimated by the hollowing out by the likes of Amazon who are then rewarded with tax breaks. I welcome the announcement on housing support and more housing, but, like the hon. Member for Hendon (Dr Offord) and my hon. Friend the Member for Sheffield South East (Mr Betts), I want to see an absolute commitment to more social and, in particular, council housing.
There was no mention of the climate crisis, which the Chancellor failed to address. This Government are not on track to achieve the fourth or fifth carbon budget, yet they still, despite the penalties that we will face, see it as right to cut air passenger duty on short-haul flights. The reality is that we are seeing one of the major impacts of climate change—heavy instant flooding—happening in Yorkshire, south Wales, London, the midlands and elsewhere.
Let me contrast this with what Labour would promise. We have made it clear that we will not cut corners on children’s education. The full £15 billion that was called for by the catch-up tsar would be put into our schools. There would be a proper rise in the minimum wage to £10 per hour. We would cut VAT on energy bills to help families through this winter. We would remove business rates to help our businesses and secure jobs. We would deliver a green industrial revolution providing jobs and investment in every community. We would provide an industrial strategy. Just look at what Joe Biden has done in the US with his $52 billion CHIPS for America Act to secure semiconductor supplies. That is what I call a strategy. The choice is clear between the high-tax, low-productivity, low-growth model of this Government and the fair-tax, high-productivity, sustained growth model offered by Labour.
I start by drawing the House’s attention to my entry in the Register of Members’ Financial Interests as a serving councillor and vice-president of the Local Government Association. To be a Conservative in politics is about our willingness to take collective responsibility for making difficult and sometimes very tough decisions about money for the benefit that brings our communities and our people in the long term. The difficult decision was made that we would raise taxes to balance the books. My constituents in Ruislip, Northwood and Pinner are now beginning to ask how we are going to demonstrate we are spending that money in the right way—in a way that makes the difference in the policy areas we are concerned about.
In the limited time available, I will focus my attention on two aspects of a Budget that had many very welcome announcements within it: child poverty and the resettlement of refugees into the United Kingdom following commitments made by our Government after the collapse of the civil Government in Afghanistan. At a roundtable organised by the Local Government Association earlier today, which was attended by the hon. Member for Bermondsey and Old Southwark (Neil Coyle), we heard welcome feedback from local government leaders that the finance made available, underpinned by this Budget, will be sufficient to ensure we can fulfil the Government’s commitment to resettle 20,000 people into the United Kingdom, in addition to around 15,000 arriving among those who supported the allied efforts at stabilisation and maintaining the civil Government in Afghanistan. That demonstrates clearly that, while we are still waiting for the guidance about who exactly will benefit—there are logistical challenges ahead—the money is being put in place to ensure that local communities accepting those refugee families will, as was the case with the Syrian scheme, know that they do so without bearing additional cost to council tax payers, because the Government are properly funding the costs.
We have heard a great deal about child poverty in this debate from all parts of the Chamber, including some helpful and clear comments from my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates). Family hubs, additional investment in youth services and the holiday activities and food programme are all a big step forward in how we approach the issue. Those of us who have been around programmes such as Sure Start for many years will know that, while it was well liked and often well received by people who accessed those programmes, the evidence simply was not there that Sure Start was resolving the issues in communities that it was set up to do. There was the same issue in the United States, where Sure Start originated. It demonstrated the same problem. We need to recognise, for example, that the challenges a child and their family may face do not simply stop at the age of five. We need a new policy solution to these problems, and family hubs in particular are a significant step in the right direction.
In conclusion, there is an old saying that all politics is local. Those in the House who have been or continue to serve as local councillors will be aware of the challenges we face in local government. It was said by the former Prime Minister, David Cameron, that local government was
“the most efficient part of the public sector.”
Every pound spent by a local authority buys the taxpayer more value than any other part of the Government system. By investing appropriately in services that are delivered locally in this Budget, we are demonstrating confidence that our councillors—Conservatives are the largest party in local government—and local authorities with their knowledge of their communities will do the job for us in ensuring that our communities get the help and support they need.
It is a pleasure to speak in the Budget resolutions debate. Most of the time, debates in the House serve to illuminate a topic and make it clearer. The debate so far has had the opposite effect. What has become increasingly clear is that no one agrees what levelling up actually means. There are fundamental differences on the Government Benches on what levelling up is. The fact is, so much of the Chancellor’s Budget was about not levelling up but repairing damage done by the Government, replacing some—but not all—the money squeezed from public services since 2010.
Take my Slough constituency as an example. I asked the ever-excellent House of Commons Library for the facts about Slough council’s budget since 2010. The Library informed me:
“we can see that Slough’s spending power—broadly speaking, the money that the council had available for making decisions, i.e. excluding ring-fenced funding—decreased by 28.9% in real terms between 2010-11 and 2020-21.
The part of core spending power that came from central Government funding—listed by the National Audit Office as ‘Government-funded spending power’—fell by even more in the same period, with an overall 53.8% real-terms decrease.”
I am going to repeat that because it is staggering—a 53.8% real-terms cut for Slough since the Conservatives came to power.
While issues with Slough Borough Council’s finances undoubtedly extend beyond this, councils have been increasingly forced by the Government to seek more creative ways to bring in income in the face of such cuts. Councils have undertaken governance of complex company groups and investment portfolios to make up for the shortfall and protect frontline services, but they are not geared up to take such risks and operate like property development companies; they are there to provide much-needed public services within communities. In a borough where 30% of children live in poverty, the Government’s callous £20 cut in universal credit will hit those with disabilities and poor families the hardest just when fuel and food prices are soaring, taxes have been increased and winter is coming. That is the reality of the Budget: giving with the hand that has already taken away so much.
No opportunity was more missed in the Budget than investing in UK railways. I share the Rail Industry Association’s disappointment. There was no guarantee of the long-term day-to-day investment that the railway needs to survive after the pandemic; still nothing on the integrated rail plan for the midlands and the north; continuing uncertainty about the eastern leg of HS2, Northern Powerhouse Rail and the midlands rail hub; no update on the rail network enhancements pipeline two years after it was published; and still no announcement on when the western rail link to Heathrow will finally be built. With COP26 now in session, Ministers could have announced plans for a net zero railway with a huge rolling electrification programme and significant investment in developing battery and hydrogen technology, but no.
The Budget and spending review needed to do two things: give help to the poorest and most vulnerable right now, including in my Slough constituency, with real levelling up for people facing tough times rather than more meaningless slogans; and invest in a green economy, with the railway at its heart. It failed miserably on both counts.
Last week was significant for me: I got married—[Hon. Members: “Hooray!”]—and the Chancellor gave Peterborough £20 million in his Budget. As wedding presents go, it was a pretty big one.
To be strictly accurate, my wife and I finally got to hold our wedding ceremony. We had managed to get the legal bit done just before the pandemic, but then we had to wait. In fact, our wait was long enough for the Government to launch their levelling up fund and to identify Peterborough as a priority area, for me to work with Peterborough City Council and others to develop our bid, and for the council to submit the bid back in June.
I listened to the announcements, and the Chancellor had plenty of good news for Peterborough, including a cash uplift of £1,500 per pupil for our schools and freezing fuel duty for the 12th year in a row. The announcements kept coming, with a £2 billion tax cut for working universal credit claimants, making work pay; a 6.6% increase in the national living wage; much-needed support for Peterborough’s pubs; and help on business rates for 90% of our city’s venues.
But there was one thing that I was desperate to know: had we got the levelling up money? Our bid was ambitious. For those who do not know, we are developing a new university. I was shocked to hear some Opposition Members speak about the Government not investing in skills and research because the university is not any old university, but one that specialises in science, technology, engineering and maths subjects, and is linked directly to local employers. The first stages are through planning, building is under way and partners are on board. Our university project has already benefited from generous Government support, but the levelling up submission was on another level.
The application underpinned our plans to expand the new university, bring investment to the city and deliver an amazing living lab science block and an entire university quarter cultural hub. Hon. Members have to visualise it to get the points: extra teaching space, innovation and research facilities, 1,700 local students studying in STEM fields, all open to the public and attracting up to 50,000 visitors a year, and all relying on my right hon. Friend the Chancellor of the Exchequer.
I got hold of the Red Book and leafed through many pages. When I reached page 78, I saw what I wanted. There, proudly listed, was Peterborough. That is fantastic news for my city. The £20 million—the first tranche of levelling up allocations—will transform my city and we are raring to go. One reason Peterborough got the cash was our ability to complete construction by 2024. That is less time spent building the facilities than it took me to get married. I say without hesitation that last week’s levelling up funding was the best wedding present I could possibly have received.
Diolch yn fawr iawn, Mr Dirprwy Lefarydd. May I take the opportunity to congratulate the hon. Member for Peterborough (Paul Bristow) on his marriage?
The Government made a massive rhetorical commitment to levelling up Wales. We would want to support that, wouldn’t we? We would expect the Government, in fulfilling that commitment, to decentralise power from the Treasury, empower decision making closer to our communities and match rhetoric with resources. The Budget once again fails to do that. The Government scorn our Senedd, by which they snub our democracy.
The UK’s regional inequality is hardwired into the economy and the institutional decision making of the British state. While the Prime Minister has claimed that levelling up is about taking the pressure off parts of the overheating south-east, it should be about fixing the investment, income and opportunity inequalities that result in unequal standards of living. To put that into perspective, in London, productivity and earnings are between a third and a half higher than the UK average, according to the Institute for Fiscal Studies. In Wales, our productivity is at least 15% below the UK average and earnings are nearly 40% lower than those in London. In my home county of Gwynedd, local GVA per capita is nearly 30% below the UK average. We might think that that was deserving of levelling up, but Gwynedd was deemed by the Government to need no levelling up funding whatsoever.
Investment in research and development—we have heard some mention of that—which is a key driver of innovation and increases in productivity, has long been centred in London and the south-east, with expenditure per head in 2019 being £577, more than twice the amount in Wales. That inequality is not just expressed in economic terms. London and the south-east of England’s dominance is expressed everywhere, from the availability and quality of local transport links to support for local museums and galleries.
A startling statistic from the Chancellor, who doubled down on inequality in the Budget, is that between 2010-11 and 2017-18, cultural spending per head in London was £687—nearly five times the average in the rest of England, let alone Wales. Perhaps most important of all, that inequality is reflected not only in the quality of life, but in the very stuff of life itself. Those living in London can expect to live two and a half years longer than people in Wales.
Levelling up is therefore about far more than the economy; it is about improving life itself in those communities all too often dismissed and ignored by Westminster. Against a challenge of such a scale, any Government would struggle, and there were indeed several welcome measures in the Budget. It was a relief to learn that the shared prosperity fund is to happen after all, and that Wales has received investment through the levelling-up fund.
Yet the spending review also confirmed the loss of the £370 million that Wales would have received annually if we had remained part of the EU—funding that this Government are unprepared to match even though they had it in their 2019 manifesto. Sadly, the Budget also confirmed the UK’s indefensible intervention in Welsh and devolved affairs. While of course I welcome efforts to improve numeracy, such a programme, which oversteps into a devolved competency, should be achieved through devolved settlements and not unilaterally decided by one part of the UK. I remind the Chancellor that the EU worked with the devolved nations and let us, rather than some distant Whitehall bureaucrat, set our own funding priorities. We do not need Westminster to teach us that these sums do not add up.
First, may put on the record my congratulations to my hon. Friend the Member for Peterborough (Paul Bristow) on his marriage?
It is a pleasure to speak in this first Budget debate since the establishment of the Darlington economic campus, which my right hon. Friend the Chancellor has already been working in. If I needed a better example of levelling up, I would struggle to find one. This is a policy that the Leader of the Opposition described as “giving up”. What an insult to my constituents.
A child growing up in Darlington can now aspire to working in the most important Department of Government. If that child secures a degree from one of the fantastic universities in the north-east, such as Newcastle, Northumbria, Durham, York, Teesside or Sunderland, they will have the opportunity to go far but stay local. We have always known that talent and ability are spread throughout the country, but the opportunities have not been.
Indeed, the north-east has lagged behind for too long, under Governments of all colours. It may be useful to remind the House that once upon a time, Teesside and the wider Tees valley were represented by Mandelson, Milburn, Mowlam and, of course, Blair. But it is only this Government, with a northern Chancellor, who are truly delivering real transformation for Teesside.
I welcome the UK’s newest, largest freeport, launched last week—something that could not have happened without the ingenuity of our northern Chancellor. I welcome the towns fund money coming to Darlington, Hartlepool, Thornaby and Redcar. Each will also benefit from the new £310 million investment in Teesside’s transport infrastructure for buses, trains and cycling, improving connectivity. Building on the £105 million commitment in 2020 to redevelop Darlington’s Bank Top station, the gateway to our regional connectivity, we are now campaigning to ensure that the Transport Secretary chooses Darlington for the headquarters of Great British Railways. We are, after all, the birthplace of the railway—where it all began.
So, £310 million for transport, £107 million from the UK Infrastructure Bank and £20 million for Yarm and Eaglescliffe from the levelling-up fund; that is £437 million for the Tees valley. We have a saying up north: “Shy bairns get nowt”. We will keep pushing for the investment we need to ensure that we are levelled up. Mr Deputy Speaker, the buns are in the oven. As my right hon. Friend the Prime Minister’s great, great grandparents, who lived in Darlington and were bakers, would have known, they take time to rise, and the prosperity of Darlington is on the rise.
Investment is always warmly welcomed, but we must not rest on our laurels. There is still more to do. We have excellent primary schools, but more must be done to improve secondary education. I was delighted to see the increase in the earnings threshold for working people on universal credit and the much-needed reduction in the taper rate, ensuring that those who work earn more. I welcome the increase in the living wage to £9.50, the fuel duty freeze and reform to alcohol duty. The commitment to build a stronger, fairer economy is most welcome.
I am thrilled to be here delivering for Darlington as part of the transformation of the Tees valley spearheaded by our northern Chancellor and our Tees Valley Mayor.
No one doubts that the Chancellor has delivered this Budget in difficult circumstances, but this is not the best Budget for Britain. His proudest policies in it are cutting tax on alcohol and domestic flights. Do I really need to tell the House that these are not the priorities of everyday people living in Lewisham East, although I do not think that anyone will say no to paying less for a drink or two?
On a serious note, the Government have not made promises to bring people out of poverty, tackle the climate crisis, fix our healthcare system and deliver safe, affordable homes for all. That is what my constituents wanted out of this Budget, and that is what I wanted. We heard in detail about the various drinks that the Chancellor plans to lift taxes on but there was not a single mention of the climate. It is astonishing, considering we are hosting the historic COP26 summit. Are our Government more interested in supporting offshore tax havens than offshore wind farms?
Coming out of the pandemic, we need commitments on supporting green industries, which will provide sustainable energy and great new jobs. We need to lower our vehicle emissions and clean up our air. The Government started making excuses about not being able to achieve a 1.5°C global warming pledge before the summit had even started. What sort of message does that send to the world leaders approaching negotiations? It is a mindset of defeatism and not so Churchillian from our Prime Minister.
Moving on, I recently met the Lewisham refugee and migrant network and representatives of the “Patients Not Passports” campaign. They told me of vulnerable pregnant women who do not yet have settled status in our country. One woman is avoiding going to hospital because she is terrified of the charges that she will face. Traumatised families such as hers can face bills of up to £9,000 for having a baby. What country are we living in? I thought that this was the United Kingdom, not the United States. That unethical practice must be brought to an end. The Government should tax major corporations, not migrants and people seeking asylum in our country.
In addition, there is a pitiful offering in the Budget for owners of small businesses. Owners in high streets and town centres are desperate for financial support and have not been given enough. They do not just need relief from business rates; they need them scrapped and replaced. The Chancellor needs to listen to small businesses—that is what they need.
Finally, an issue that is very important to my constituents is the local housing allowance, which continues to be so uselessly low that people are sometimes forced into unfit houses in multiple occupation. Those properties can cause antisocial and chaotic behaviour in their neighbourhoods, as well as misery for some of the people living in those HMOs who do not add to that antisocial behaviour. The Chancellor must think again about the local housing allowance. It must be raised to meet the growing need. We need a Budget devoted to improving the lives of a greater number of people. It is that simple.
When the UK Chancellor of the Exchequer delivered his Budget speech last week, he said that his Budget would deliver a stronger UK
“fit for a new age of optimism”.—[Official Report, 27 October 2021; Vol. 702, c. 274.]
However, his Budget is a source of optimism for only a few people and certainly for very few people in my North Ayrshire and Arran constituency.
The International Monetary Fund forecast that the UK will suffer the worst economic damage from covid-19 of any G20 country, while ordinary citizens are left short-changed. My constituents and millions of others will face a squeeze in living standards over the coming year. Middle-income earners will see their take-home pay fall by about 1%. The tax burden is now at its greatest since the 1950s, with national insurance contributions being raised and personal income tax allowances frozen, cutting people’s disposable incomes while inflation is set to rise above 4% by April. There is no levelling up there.
While the Chancellor cut taxes on bank profits, he failed to introduce measures to help households already struggling with rising food and fuel prices. Paul Johnson, director of the Institute for Fiscal Studies, 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 Budget fails to deliver equality or fairness and fails to improve the lives of many people in Scotland. Indeed, anti-poverty charity Z2K has said that this Budget has
“absolutely nothing for the 3 million plus whose disability, illness or caring responsibilities mean they can’t work”.
Where is the levelling up for them?
With nearly one in five pensioners living in poverty—the highest rate since 2008—more than 2 million older people are struggling financially. Yet the Tories think that now is the time to end the pensions triple lock, which has been abandoned. Many pensioners will be £520 worse off next year—no levelling up for them either.
By refusing to use the Budget to reinstate the £20-a-week universal credit lifeline that was recently cut, the Chancellor has failed to protect its recipients—two thirds of whom are in work—from falling living standards. As for the national living wage increase, the new £9.50 rate does not apply to employees who are under 23 years old, and workers on the national living wage who are in receipt of universal credit will lose more than half of any wage rise through a sharp reduction in their benefits. Of course, it is not even a national living wage; it is not a real living wage; it is a wee pretendy living wage.
Hard-pressed Scottish businesses also wonder where the Chancellor’s optimism is coming from. With post-Brexit supply chain costs and disruption, labour shortages, price rises and soaring energy bills, it is difficult to see what is ahead for them.
Despite the Chancellor’s announcing an increased Scottish block grant, the reality is that the Scottish Parliament will receive less grant funding in each of the next five years than in this one, despite the continuing challenges posed by covid and the economic recovery.
No one doubts that the Chancellor has a difficult job to do. For the majority, however, he is clearly not going about it in the right way. One in three children in my constituency of North Ayrshire and Arran live in poverty. For them and their families, talk of levelling up feels insensitive and hollow. The ambition for Scotland to govern herself is therefore growing by the day.
I put on the record my role as a vice-president of the Local Government Association.
After almost two years of the gruelling covid-19 pandemic, with the economic consequences of Brexit starting to bite hard, and on the eve of the COP26 climate summit, our best last chance to save our planet from the consequences of catastrophic global warming, we needed a Budget fit for the task—a Budget to deliver a net zero economy, a just transition, skills and jobs fit for the 21st century, fair taxation and public services to provide support for everyone who needs it. The Chancellor’s Budget fell far short on every one of those measures.
First, in relation to the climate emergency, this needed to be a Budget to make tackling climate change a prism for all economic decision making and all public spending. The Government could have entered their COP presidency leading the way on a just transition to a net zero economy, harnessing the opportunities to create new high-quality green jobs and deliver better public health and wellbeing, and ensuring that no part of the United Kingdom was left behind. Instead, we have the embarrassment of a Government rushing out their net zero strategy at the 11th hour before COP26 got under way, refusing to rule out new fossil fuel extraction in the North sea and in Cumbria, lowering air passenger duty for domestic flights, and failing to invest in retrofitting at anything like the scale required to decarbonise our homes.
Secondly, while any additional funding for adult social care is welcome for a sector deep in crisis, the Government’s approach of allocating arbitrary sums without an overall plan for reform is simply not good enough. It is hard to overstate how exhausted and desperate many who work in the social care sector feel as we head into this winter. The trauma of the pandemic, endemic underfunding, low pay and the ever increasing needs of an ageing population have left social care on its knees.
The Local Government Association and London Councils are clear that this Budget will not make a substantive difference to the funding pressures on adult social care now. It will not fund a real-terms pay increase for social staff, it will not stop social services contracts being handed back to councils, and it will not ensure that the million people who need social care but are not currently receiving any support can live with independence and dignity.
The theme for today’s debate is levelling up—an incoherent, ill-defined concept that has now been honoured with its own Department. Our experience in London is that levelling up almost invariably involves cutting funding from our hard-pressed public services and from some of the most deprived communities anywhere in the country, and handing it to areas where the Tories find it politically expedient to do so. A coherent approach to levelling up would not pit north against south, or city against village. It would be underpinned by an industrial strategy and a net zero strategy for the country as a whole, and would fund and empower local councils and communities to tackle disadvantage wherever it is found.
Finally, let me say something about education. Kevan Collins had a plan for levelling up, helping children across the country to recover from the disadvantage and hardship of the covid-19 pandemic. It would cost £15 billion. Instead, the Chancellor has set out the paltry ambition to return to 2010 levels of per-pupil expenditure. While I welcome his sudden recognition that austerity has been bad for our children, is it not a terrible indictment of almost 12 years of Tory government that the only thing he has to offer them is to give back to the next generation some of what his own Government so cruelly took away from the last? For London schools, the Tories’ version of levelling up always means doing us down, snatching away resources under the banner of “fair funding”—except that it is not fair at all. The children and young people in my constituency have a right to well-funded schools, with the resources and extracurricular activities that they need, but they have suffered the worst cuts anywhere in the country, at more than £1,000 per pupil.
Our country faces very serious challenges, and this Government are simply not up to the task of dealing with them.
In the build-up to the COP26 summit, which began today, I held three climate assemblies in my constituency, and I have sent our manifesto to the COP26 President. Cynon Valley is an old mining community suffering higher than average levels of poverty and ill health. While the people of our community are ready for and want change, they are also anxious to ensure that in the future-proofing of our planet, communities such as ours are not left behind, but this Budget and spending review give me no confidence that that will be the case. Indeed, yet again, the people of Cynon Valley and of Wales are being short-changed by this Tory Government. The Welsh Government’s budget in 2024-25 will be nearly £3 billion lower than it would be if it had increased in line with the economy since 2010-11. The Chancellor’s Budget offers Wales no help to deal with dangerous coal tips, although the whole UK benefited from the coal dug out from the south Wales valleys. Must we wait for another disaster before action is taken, given that a disaster becomes more likely as the climate crisis accelerates?
There is talk of levelling up, but losing £375 million of EU structural funds and replacing it with a £120 million levelling-up fund, most of which has gone to Tory-held seats, does not sound much like levelling up to me. To add insult to injury, this Government are bypassing the democratically elected Welsh Government in making their decisions about how to spend money in Wales. For my constituents—thousands of them—the decision to withdraw the universal credit top-up has been devastating, and there is no benefit for the unemployed and the most disadvantaged. The Budget and spending review have been celebrated by Opposition Members. Some say that the Tories have “stolen Labour’s clothes”; I am relieved to say that they have not stolen this socialist’s clothes.
We urgently need to reconfigure our economy and society. We need to reverse the effects of austerity on our communities. We must act now to reduce inequalities in our society, and that is not just about levelling up; it is also about levelling back down the extreme wealth owned by such a small proportion of our population—millionaires whose wealth has grown over the time of the pandemic. We need to introduce a wealth tax, which could raise more than £300 billion over a five-year period.
That money should be invested in developing a democratically controlled green new deal, ensuring that decisions are made by local people, communities and their elected representatives who best understand their needs. It could develop the green industries that we want, creating numerous well-paid green jobs in my community. It could help to renew all the public services, and generate community wealth along with the museums, libraries and theatres that we lost because of austerity. We could at last develop the kind of green rail infrastructure that we need, and with prices at a level that people can afford. Wales has already lost out on nearly £5 billion of investment because HS2 is being classed as a Wales and England project. When is the Chancellor going to rectify that?
I am proud to be a co-sponsor of the green new deal Bill—the Decarbonisation and Economic Strategy Bill—which is relevant today. Addressing the climate crisis must be embedded in everything we do from now on. It means prioritising the future of the planet in every decision we take, including budgetary and spending reviews. We need urgent action now, and it is my sincere hope that the world will come together at COP26 to save our planet. No, this Tory Government have not stolen my green clothes at all; they have given to the rich and made life harder for the poor. That is the opposite of what I stand for, and levelling up it most certainly is not.
Thank you, Mr Deputy Speaker. There is another great advantage of speaking at this late stage of the debate, which is that I have been able to hear the contributions from Members from all parts of the House. Those contributions have been thoughtful, genuinely interesting and well delivered. I am sure that Members will forgive me if I also say that there has been a fair amount of buzzword bingo. Sadly, while there was certainly a degree of buzzword bingo in the Budget statement last week, the numbers for rural Britain did not come up. If we are talking about levelling up, which is the theme of this debate, the Government should look at those parts of the country that are suffering with peculiar problems and unique difficulties and seek to address them. However, that has definitely not been the case when it comes to rural Britain. I am a fellow Yorkshire dales MP with the Chancellor, and he has no excuse for being ignorant of some of the issues that I am going to raise, which must raise the question of how much he actually cares about rural Britain.
There are huge issues facing rural Britain at the moment, and I am going to pick just a few that the Government had the opportunity to deal with but chose not to. The first is the housing crisis. “Crisis” is an overused word, but in rural Britain, and particularly in Cumbria, the crisis of the past 18 months has become extreme and acute. What do I mean by that? Throughout Cumbria, we have communities that have a minimum of 50% second homes. In some cases, 80% to 90% of the houses in a particular village or town are not lived in. I do not need to tell you, Mr Deputy Speaker, what that can mean for a community, because you know very well that it can mean the loss of life for a community. Communities can lose their schools, their bus services and their very communities.
During the covid crisis, up to 80% of all house sales in Cumbria have been on the second home market, so a terrible problem has become disastrously worse in no time. Let us remember that the south lakes are Britain’s biggest tourist destination outside London, and we already have tons of holiday lets. In my community of South Lakeland, in one single year during the pandemic, there was a 32% rise in the number of holiday lets. Where from? I will tell you where from: hard-working local people in private lets who have been kicked out since the eviction ban. Their homes are now being handed over to Airbnb. The Chancellor had an opportunity to raise taxes in the Budget. We are criticised on the side of the House for not saying what we would do. I believe that we should double council tax for second homeowners to ensure that there is money to invest in those communities and to provide a disincentive to people wanting to buy too many second homes in those communities. We also need to change the planning laws so that holiday lets and second homes have different categories of planning use, so that local communities in the dales, the lakes and elsewhere in Cumbria can have control over their housing stock.
The consequence of this absolute catastrophe in our housing stock is local families being forced out of the area. The lakeland clearances are happening in our communities right now in this day and age, and that is having an impact on our employers in hospitality and tourism. Some 80% of the local working-age population in the Lake district work in hospitality and tourism, so the Government’s incredibly foolish, cloth-eared policies on visas mean that we are killing the tourism industry not just in the Lake district and the dales but elsewhere. Action could have been taken to prevent this.
I want to talk briefly about health and the hospital improvement programme. The Government are currently putting on the table a proposal that would close Lancaster Hospital and Preston Hospital and merge them somewhere in the middle. For people in the lakes and the dales, that will mean travelling twice as much as they currently do to reach an A&E department that is already too far away. There was an opportunity in the Budget to give money to radiotherapy satellite centres right around the country, and the Chancellor could have awarded one to Kendal, as has been proposed many times in the past. Some people have to make a four-hour return journey for their daily cancer treatment at our nearest centre in Preston. That could have been addressed, but it was not.
When it comes to dentistry, I have had constituents just in the past week being told that their nearest NHS dentist is in Doncaster, Manchester or Newcastle. These are issues that could have been focused on if the Government cared about levelling up rural Britain as well as the areas that have been mentioned.
Last but definitely not least, what about farming, the backbone of our rural communities? As the Government botch the transition from basic payments to the new environmental land management schemes system, we see farmers expected to live on half their income within three years, clearing those people from the landscape too and undermining rural Britain. I wish the Chancellor cared; he has no excuse whatsoever, given that he surely knows.
Thank you very much, Mr Deputy Speaker. In my—not as short as I thought—time, I want to focus on the majority of people who have been affected by the Budget. In the words of my right hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott), this is “a polluters’ Budget”, a bankers’ Budget and an arms manufacturers’ Budget. Thankfully those groups are not in the majority, but the majority are worse off because of this Budget.
The Conservative party has broken its manifesto pledge to maintain the triple lock on state pensions, affecting more than 1 million people. State pensions levels in this country are shamefully low and many people do not receive the full amount. Millions of households are also affected by the cut in the uplift to universal credit. They are among the poorest people in our society; a large proportion of them are in work and/or are disabled people, and millions of children are affected.
All this we know not because of the Chancellor’s speech, but from the vital analysis provided by the OBR, the IFS, the Resolution Foundation and the fantastic House of Commons Library. The Chancellor’s speech was an exercise in public relations, not a serious presentation of his own actions. He failed to mention that his own tax changes mean the average household will be paying £3,000 more in taxes per year by 2026. So much for building back better and so much for levelling up. The reality is that this is another austerity Budget from yet another Tory Chancellor.
We should not forget that the same Chancellor, in this same Budget, cut the bank levy and bank surcharges. The beneficiaries will be bank shareholders and bankers’ bonuses, which we know have always been a key concern for the Conservative party. Ordinary people are worse off as a result of this Budget, and as a consequence inequalities can only grow, but that is exactly what this Budget is—a Budget for inequality.
Among others, women will be the biggest losers from the Budget. A gender audit of Wednesday’s announcement by the House of Commons Library showed that 27 million women would be disproportionately affected. The research shows that an average British woman over 18 will be £1,800 worse off over the next six years because of the Chancellor’s tax rises, and those who are older will be hit, with £2,500 less in pension benefits. The research also shows that low-income households will be disproportionately hit and that disabled people and people from minority ethnic groups are more likely to be in lower-income households.
The Conservative party is no more the party of women than it is the party for workers; it is the party for bankers and the party for inequality. The public understand that: in a post-Budget poll for YouGov, a net 32% said they expected their household finances to deteriorate over the next 12 months, and a net 38% expected the economy to deteriorate over the same period. That is hardly a vote of confidence.
Finally, Mr Deputy Speaker, I pose a question with which perhaps you or the Clerks can help—I certainly hope the Government can. Where is the equalities impact assessment on the Budget? I do not mean the four pages out of 200 that mention inequalities, or the basic note that was recently added; I mean the full and comprehensive assessment that by law should accompany every single Bill. It is nowhere to be found in the bundle of Treasury documents. I know that what I have outlined as the substance of the Budget might be embarrassing for Ministers, but equality impact assessments are a statutory obligation, so the only question I ask is: where is it?
In the days since the Budget, we have seen it unravel. The Chancellor tried to bury the reality—or should I say Burnley?—[Interruption.] You will get that one in the end. It is less levelling up and more hiking up: hiking up taxes, hiking up the cost of living, hiking up interest rates and inflation. The only thing it is not hiking up is growth. After 10 years of stagnant growth and stagnant wages, the forecasts for the next few years make yet more sober reading, with growth downgraded to a meagre 1.3% in 2024. Taken together, the rising cost of living, along with rising taxes, inflation and interest rates, mean that families will be worse off to the tune of £3,000 a year. You simply cannot claim an agenda of levelling up while presiding over an era of no growth and ordinary working people becoming worse off. A few tiny, piecemeal pots of cash to various places will not even remotely make up for that overwhelming tidal wave hitting those on modest and low incomes. This is
“not a set of priorities that is consistent with…levelling up”.
Those are not my words; they are the verdict of the IFS. This was
“an acid test for the government’s flagship levelling up agenda—and the Chancellor has fallen short... The country is no more on track to level up than it was yesterday.”
That is not my view, but the view of the IPPR North.
As is becoming the theme with this Government, they will the ends but they have no plan to will the means —that is otherwise known as rhetoric not matched by reality. That view was echoed in excellent speeches by my right hon. Friend the Member for Barking (Dame Margaret Hodge); my hon. Friends the Members for Sheffield South East (Mr Betts), for Ealing, Southall (Mr Sharma), for Garston and Halewood (Maria Eagle), for Barnsley East (Stephanie Peacock) and for Batley and Spen (Kim Leadbeater); my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne); my hon. Friends the Members for Rochdale (Tony Lloyd), for Mitcham and Morden (Siobhain McDonagh) and for Birmingham, Selly Oak (Steve McCabe), my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper); and my hon. Friends the Members for Birmingham, Erdington (Jack Dromey), for Bristol East (Kerry McCarthy), for Lancaster and Fleetwood (Cat Smith), for Wansbeck (Ian Lavery), for Brentford and Isleworth (Ruth Cadbury), for Warwick and Leamington (Matt Western), for Slough (Mr Dhesi), for Lewisham East (Janet Daby), for Dulwich and West Norwood (Helen Hayes), for Cynon Valley (Beth Winter) and for Streatham (Bell Ribeiro-Addy).
A plan for real levelling up begins with a plan for real and sustainable growth, disproportionately focused towards the people, places and industries most in need of it. That means a programme of real investment and a strategy. I know that the Secretary of State is not here this evening, but I am pleased that, in lauding the spending increases, he has finally accepted our view that we cannot cut our way out of a crisis. If only he had realised that before 10 years of austerity, which have left a million more people in poverty and the fabric of our public services in tatters. But it is obvious from today’s debate that most behind him have not had the same epiphany.
Given that the Resolution Foundation says that this must be a decade of high investment as we transition to net zero, it is astonishing that in the Chancellor’s flurry of giveaways there was almost no mention of green investment. The huge upheaval and change that meeting our net zero targets requires is the once-in-a-generation opportunity to truly level up and to create a fairer, better distributed economy—it is an opportunity this Government are frittering away. This is about winning the green global race in the sectors that power our regions, such as steel, aerospace, wind and wave, but there was not a single mention of that in this Budget. It is also about reducing demand and, in so doing, reducing the cost of living crunch through a major drive to retrofit homes and switch to green energies, but there was not a flicker about that in this Budget. It is also about investing in people, especially those who need it the most. The Government’s own report on lost learning during the pandemic, published just last week, shows the stark regional inequalities, with children in the north-east and Yorkshire and the Humber losing 15 times more learning than those in London, but that was not referred to in the Budget. Its stark findings should be at the heart of any Budget that claims to be levelling up. The Government cannot level up without a serious programme of catch-up.
On transport, at last we see some recognition for buses, but a major test of levelling up will be the Government’s commitment to Northern Powerhouse Rail and the eastern leg of HS2, neither of which was mentioned at all by the Chancellor. The Government should listen to the excellent speeches today from my hon. Friends the Members for Wythenshawe and Sale East (Mike Kane), for Barnsley Central (Dan Jarvis) and for Bradford South (Judith Cummins), and my right hon. Friend the Member for Kingston upon Hull North (Dame Diana Johnson) on this topic.
Key to addressing the deep divides in Britain is tackling the housing crisis, which was so brutally exposed during covid. Yet again, we see lofty ambitions not met by any kind of real plan. If the Chancellor’s announcements on housing sounded familiar, that is because they are: we have heard them all before. That £5 billion to address the building-safety crisis was announced back in February. It is a lot of money, but it is not working. The huge bills for leaseholders keep rolling in, insurance costs are soaring and mortgages are still virtually impossible to get. It is not about the cash; the fundamentals need to be fixed and the Government are not doing that. It is no surprise, then, that the Secretary of State did not even mention that today.
The funding for so-called affordable housing was another recycled announcement. The Government’s spin cycle goes round more often than a Hotpoint spin dryer—