Income Tax (Charge)
Debate resumed (Order, 1 November).
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.
In 2019, we made a promise. We promised to give the people of this country world-class public services and to strengthen the entire fabric of this country so that everyone benefits. Everyone is entitled to have access to the same opportunities to make the most of their lives, whether they are at school, at work or whatever their personal circumstances. That is what we meant, and what we mean, by levelling up: making this country fairer for all who live in it.
Respectfully, it is quite the opposite. I will get to that point later. Schools will be £1,500 better off per pupil than in 2019-20—not even 2010— but we will return to that subject in a moment or two.
I was getting to the point about those who are more vulnerable. For those who are most vulnerable, levelling up means that extra support will always be there for them. The covid virus has put enormous pressure on all our public services, and I know the whole House will want to join me in again thanking our magnificent public heroes—our nurses and doctors, our teachers and nursery workers, our care home staff and our delivery workers—for how they have helped us all to weather the pandemic storm.
The national health service has been the frontline of this pandemic and we must build up its resources after an unprecedented 18 months. We are committing £5.9 billion to tackle the NHS backlog of non-emergency tests and procedures, which will include £2.3 billion for ensuring that there are at least 100 community diagnostic centres where people can get health checks, scans and tests closer to their homes.
Digital technology is transforming every aspect of our lives, so the package includes £2.1 billion over the next three years to support its use in hospitals and other care organisations to improve efficiency, freeing up valuable NHS staff time and ensuring the best care for patients, wherever they are. There will also be £1.5 billion from that package over the next three years for new surgical hubs, increased bed capacity and equipment to help elective services to recover, including surgeries and other medical procedures.
We have promised an overhaul of our adult social care system, improving social care outcomes through an affordable, high-quality and sustainable system. We are therefore allocating £3.6 billion for local government to reform adult social care provision, including capping personal care costs at £86,000.
I thank the Secretary of State for giving way; he is always very generous. I draw his attention to the letter from the East Riding of Yorkshire Council, a Conservative-led authority, to the Secretary of State for Health and Social Care, stating that,
“the council has 302 assessed individuals requiring 4,114 hours of home care per week that we are currently unable to provide.”
The letter was dated in October. It identifies extra money that the Government have given, but says the council still does not have the funding needed to care for the people who need help in the East Riding.
I am grateful to the hon. Lady, and I am sure the Secretary of State for Health and Social Care will take a careful look at her letter and respond in good time.
Nevertheless, it is this Government who have grasped the nettle of adult social care and will deliver on capping personal care costs, which can be so debilitating, at £86,000. While £1.7 billion will improve the wider social care system, including the East Riding of Yorkshire, as announced in September, at least £500 million of that will go towards improving qualifications, skills and wellbeing across the social care workforce.
Is it not the case that the additional money for adult social care is on a promise that might come along in a few years’ time, and that most local authorities will not see a penny immediately to tackle the immediate problems that they have in adult social care? That is why I tabled my amendment; it was quite rightly not selected, but it would have brought in £15 billion extra and not harmed anyone earning under £50,000. Why will the Government not just make national insurance a flat rate for everyone?
I am grateful for the hon. Member’s question. I think he may have missed, while trying to catch your eye, Mr Speaker, what I just said about the £1.7 billion to improve the wider social care system that was announced in September. The additional £3.6 billion to local government that was announced in the Budget is more money. This is not an arms race on how much we can spend; this Government are interested in delivering outcomes. Covid has, no doubt, added extra challenges to our reforming agenda, but it has not deflected us from delivering our promises; it has made our commitment more focused as we deliver and build back better. For me, that means skills, schools and families.
I detect a hint of complacency on funding for social care. The Secretary of State mentioned £500 million to go towards workforce issues. That is nothing; it is a drop in the ocean for the issues with the social care workforce. There are more than 100,000 vacancies in social care and turnover is 30%. The money just will not touch the sides. The reaction to the Budget from the social care sector, which I hope to speak about today, has been one of profound disappointment and disbelief, really, that the Government do not understand what a crisis the sector is in. I really think it is about time for the Secretary of State to change his tone on that.
I have to respectfully disagree with the hon. Lady. In my time as vaccines Minister, I saw the social care sector rise to the challenge and deliver. I opened my remarks by reminding the House of that and thanking the workers on the frontline. Of course, money does make a difference, including the £500 million announced to make sure that we retain and inspire the social care workforce.
I thank the Secretary of State for giving way; he is being very generous with his time. He talks about the investment in social care, but does he not agree that there will still be a gaping hole of over £500 million in disabled children’s social care support?
I will return to children’s social care later in my speech. Mr Speaker, you will, I hope, recognise that I have given way several times. I would now like to make some headway in my speech and return to my theme, which hon. Members will hear from me and my team and from across Government: skills, schools and families.
World-class public services demand world-class skills, and in this country we are entering a new era—the era of the skills economy. We are investing over £3.8 billion over the course of this Parliament in further education and skills to make sure that people have access to the kind of high-quality training and education that will open the doors to good jobs, which in turn will boost productivity and support levelling up. For too long, employers have complained that young people just do not have the skills that their businesses need, particularly in science, technology, engineering and maths. For too long, students have studied subjects that will not result in a meaningful or satisfying career. That mismatch is not just bad for students; it is bad for business and it is catastrophic for our economy, especially as we try to rebuild after the pandemic.
We need people with the skills for tomorrow’s industries, so we are making the largest investment in skills in a decade, and it is going to deliver the technical education our economy needs. Our skills economy will power innovation and growth, and we will all feel the benefit.
Yesterday I was speaking with members of the tech industry, and they were lamenting the fact that there is only one hour a week for computing in secondary schools. Our growth will be in the technological sector. What will the Government do to improve computing education in schools?
I am grateful for the hon. Member’s question. I know that he cares passionately about this subject and the overhaul of information and communications technology in the curriculum. I think an £83 million investment in that is a signal to the sector of how important it is to the UK economy. I saw at first hand at Barnsley College how T-levels in technology are delivering for young people. We will invest £2.8 billion of capital funding in skills and further education, including to further expand our new T-levels, which are set to offer a new gold standard in technical education and will be more than a match for A-levels.
I recently visited the university technical college in Warrington, which is a great example of skills-based education, linking with employers such as Sellafield. Does the Secretary of State agree that that is exactly the sort of education we need to see across the UK?
My hon. Friend is absolutely right that the UTC and the work it is doing with Sellafield is exactly the sort of high-skilled, high-ambition, career-developing education that we need, giving those young people, when they become young adults, a real outcome. Of course, higher wages and a more successful economy will be by-products of that, but the real outcome is that rounded adult who has a real career path in the economy.
I welcome what my right hon. Friend is saying. Can he confirm that there is a 42% increase in the skills budget in cash terms? Does he not agree that if we spend that money right, we will create, for the first time, a parity of esteem between skills and higher education, and that rather than just “university, university, university”, our mantra should be “skills, skills, skills” and “apprenticeships, apprenticeships, apprenticeships”?
There is no greater champion of this agenda than my right hon. Friend, the Chairman of the Select Committee on Education. “Skills, skills, skills” runs through his veins, and I thank him for that point. I absolutely agree with him on the uplift in the investment that we are making.
I would like to take a moment to tell the House all about the visit I made to Barnsley College just a week or so ago. The college was the first in South Yorkshire to roll out T-levels. While I was there, I met several of its students, including one whose name is Greg. Honestly, I have rarely met a more inspiring individual. He told me that with his T-level—I will quote him word for word:
“I’m looking at unis now and thinking, ‘Which one am I picking?’ not ‘Which one of them is picking me?’”
Greg is living proof of the transformative effect our skills programme is having.
The same is true for apprentices. Apprenticeships funding will increase by £170 million to £2.7 billion, alongside other improvements to support more small businesses to hire new apprentices.
I want to make sure that others get a chance to participate in the debate, so I will make some headway. I hope that the hon. Lady will forgive me; I beg her indulgence.
These investments are putting employers at the heart of our skills economy so that education and training respond to local business needs. In this way, we will not only build one of the best technical education systems in the world, but drive local prosperity and levelling up.
Of course, we know that skills training is not just for the young. As technologies change and develop and businesses adapt, so people will find that they will need to reskill or retrain throughout their lives. Globalisation and automation are changing the modern workplace. Jobs and industries that are flourishing now might not be in five or 10 years. Our skills economy must be sufficiently agile to flex not just for today but for tomorrow and long into the future.
With our “Skills for Jobs” White Paper, we are committed to boosting the job prospects of adults across the country by making sure that they can get the training they need to adapt to a changing workforce. A total investment of over £550 million will make sure that adults at any age can retrain or upskill, and that is part of our national skills fund commitment. We will be investing more in boot camps, which offer free flexible courses of up to 16 weeks, giving people the opportunity to build up specific skills with a clear route to a job at the end. We are also investing more to help adults in England take advantage of our free courses for jobs offer. There are now more than 400 courses to help more adults gain the skills they need to boost their career prospects. There will be opportunities for adults across the whole of the UK to develop their numeracy skills through the multiply programme the Chancellor announced, funded by another £560 million through the UK shared prosperity fund. That means that wherever people live and whatever stage they are at in life, they will be able to access training and education that gives them the skills employers want and which can lead to good jobs and career progression.
This is a national effort. A lot of attention has quite rightly been placed on the areas in the north of England that are targets for levelling up, but will my right hon. Friend confirm to the House that levelling up is a national agenda and that there are poorer areas in the south of England and London that will receive priority funding from the Government?
Levelling up is at the heart of the Government’s agenda. Levelling up means empowering local leaders and communities to drive real change: boosting living standards, particularly where they are lowest; spreading opportunity and improving public services, particularly where they are weaker; and restoring local pride across the United Kingdom. Every local authority across the UK is eligible for the levelling up fund. In line with the Government’s mission to level up, it is right that we have prioritised areas that have been objectively assessed as most in need of the kind of investment that the levelling-up fund provides. That includes areas in the south of England which are most in need.
Schools are equally important and they have done well in the spending review. One of the biggest challenges we currently face is helping the young people who have suffered so much disruption to our schools during the pandemic. Those young people have been foremost in my mind and are central to the significant investment we announced this week. We know that world-class public services will help to turbocharge our economy. They will give us the skills, knowledge and technical excellence to drive productivity and growth. To deliver them, we have to begin with our schools.
All of us here, without exception, will owe a great debt to a teacher—maybe more than one—who helped us to get to where we are today. Colleagues will be aware that I have more reason to be grateful than most, having arrived here at the age of 11 as an immigrant without a word of English. I will always be grateful to the teachers who helped me on my way, which is why it gives me particular pleasure today, as Education Secretary in Her Majesty’s Government, to say that we are going to increase our spending on our country’s schools. Core funding will rise by £4.7 billion in 2024-25, building on the largest cash boost for a decade provided in the 2019 spending review. That equates to a total cash increase of £1,500 per pupil compared to 2019.
I will make some headway. I have taken many interventions.
Let us not forget that these are not normal times for any of our schools and colleges. The task in front of them, helping every young person to get back to where they need to be, requires all our teaching and education staff to continue to deal with the fallout from the pandemic. To reflect that, we will be allocating nearly £2 billion extra to support young people who are struggling to catch up on missed learning, following the existing investment in tutoring and training for teachers.
The Institute for Fiscal Studies has described the increase in education funding over the past decade as the worst for 40 years. The Secretary of State says he is increasing funding for schools, but by next April, 12 years on, we are only about to achieve the same level of funding that existed in 2010. That is a damning indictment of the Conservative Government over the past decade. Why have young people in our schools been forced to pay the price of Tory austerity?
I am grateful to the hon. Gentleman for that question, but respectfully he is completely wrong. It is not the same level of funding as 2010. Let me try to explain it to him and his constituents. The £1,500 per pupil extra by 2024 is £1,500 more than in 2019-20. That is a significant investment in the future of this great country.
To reflect that, we will allocate—as I was saying on recovery—£2 billion extra to support young people who are struggling to catch up on missed learning, following the existing investment in tutoring and training for great teachers. That is in addition to the 6 million tutoring courses and 500,000 training opportunities we have already made, which takes overall investment specifically dedicated to pupils’ recovery to almost £5 billion. That includes an additional £1 billion of catch-up funding that goes direct to schools so that they can best decide how to support education recovery for those of their pupils who most need it. Teaching unions wanted that additional flexibility—I thank them for that—and I listened to them and made representations to my right hon. Friend the Chief Secretary to the Treasury. As they told me, this funding might pay for specialist small groups, or hiring staff to lead extra-curricular activities outside the school day. In that way, an average secondary school could receive about £70,000 a year in additional cash. That is money that can make a real difference to young lives. Evidence shows that the pandemic has had a significant impact on older pupils who have the least time left in education. We will be investing £800 million in extending the time they spend in colleges.
It is no secret that the most important person in any classroom is the one standing at the front of it, which is why this settlement enables us to raise teachers’ starting salaries to £30,000. We promised that in our manifesto and we are delivering on that promise. That is in addition to a salary boost of up to £3,000 tax free to teach maths, physics, chemistry and computing, which we have already announced, to increase the number of teachers in subjects that are facing the greatest shortfall. It will also build on our groundbreaking teacher recruitment and retention reforms. We want our brightest and best graduates to be queueing up to be teachers. We now have far more compelling reasons for them to do so.
As a former families Minister, I care passionately about giving children a great start in life. That means giving families every support. I have seen for myself on many occasions the incredible effect that our investment can make on helping struggling families. Around 300,000 of our most vulnerable families will be supported with an extra £200 million boost to the Government’s flagship supporting families programme, which supports families through complex issues that could lead to family break- down. That is an approximately 40% real-terms uplift in funding for the programme, taking total planned investment across the next three years to nearly £700 million. As I said, we are being driven by three things: skills, schools and families.
I welcome my right hon. Friend’s commitment to the supporting families scheme. The certainty around that for the long term will be very beneficial. He will recognise, as a former families Minister, that the big pressure on local government budgets is not social care—I wish I could spend the money, but I cannot employ anybody—but children’s services. The cost is growing exponentially. We need to move to more proactive preventive services, such as supporting families. Will he make a commitment to ensure that the transition in local government to preventive services will continue beyond this Budget? It is very welcome, but it has to be a long-term trend. Will he commit to supporting local government to do that?
My hon. Friend is absolutely right and I thank him, not least because of his deep experience in local government. We will continue to engage with the MacAlister review and we will take very seriously the points that my hon. Friend made about the pressures on local government.
As I said, this is about skills, schools and families, which is why we are setting aside £50 million over three years—
Let me make some headway, because hon. Members might find this interesting: we are setting aside £50 million over three years for parenting programmes to help parents and carers build positive relationships with their children and around £80 million to create a new network of family hubs—a one-stop shop where families can get help and support services when they need them in 75 local authorities across England. Almost half of local authorities will have a family hub. I will give way to the hon. Member for Denton and Reddish (Andrew Gwynne).
I am grateful to the Secretary of State. I welcome the Government’s new-found conversion to something that sounds particularly like the Sure Starts that we had in 2010, but I want to ask him about a practical point. The fact is that in large parts of the country—usually where the facilities are needed most— the Sure Start centres are just not there physically in the community, because of the reductions in the revenue support grant to local government. They have been subsumed into schools, removed or sold. Will he prioritise areas such as Tameside so that we can build back this network of family support in our communities? We do not have the Sure Start centres; we need capital funding to bring them back.
The hon. Gentleman will know that, as Children and Families Minister, I tried to follow the evidence, and I will do the same as the Secretary of State. I will always be evidence-led. My difficulty with his statement about Sure Starts is that when we look at the evidence, we see that much of the investment went into buildings rather than to the families that we really needed to access those services. The difference here, as I saw through the evidence from family hubs in Harlow and elsewhere, is that with this multi-agency, wraparound approach, we can get to the families that need to access the service. I am glad to hear that he welcomes this announcement, because I know that he will probably be an outlier in his party in wanting to work constructively to get the 75 centres up and running.
We also continue to invest in early education, with around £170 million every year—the sector was slightly confused, but I know that the Children and Families Minister, my hon. Friend the Member for Colchester (Will Quince), set them straight—to increase the hourly rate for free early education entitlements, supporting families with the cost of childcare. As we would expect from a Government who are as committed to levelling up as this one, much of our focus is on those who need additional help, especially the most vulnerable in society.
Indeed, Mr Speaker. We are investing £2.7 billion of capital funding to improve provision for pupils with special educational needs and disabilities. That funding represents a significant investment in high needs provision and will help to deliver tens of thousands of new places for some of the most vulnerable children in our country. Over the next three years, we will provide £259 million to expand the number of places available in secure and open residential children’s homes. That will provide high-quality, safe homes for some of our most vulnerable children and young people.
We will also support families through our adoption strategy. That will go a long way to improving the process of matching children who need a home with the adopters who are desperate to provide one for them. That means encouraging all those who can provide a loving home to come forward, not just those from a narrow, rather middle-class demographic. We will, in due course, see more centres of excellence for our regional adoption agencies.
Every child deserves to grow up in a secure and loving home and every single one of us, young and old alike, deserves to live in a community where we feel safe. The whole country has been shocked to the core by the recent violent attacks on people who have been walking home or out enjoying themselves, especially vulnerable young women. This is simply unacceptable. We promised to recruit an extra 20,000 police officers in 2022-23 and we are putting an extra £540 million into recruiting a further 8,000 additional police officers. We are allocating £42 million for new crime and drugs programmes. That will help to fund our Safer Streets programme and will help more people to improve home security, especially in areas that have a high incidence of burglary, car theft and robbery. We have always taken a zero-tolerance approach to crime, and tackling drugs is a priority, especially through our county lines programme. We will set up a national crime and justice lab to analyse crime reduction and prevention data.
Part and parcel of keeping our streets safe is making sure that those who threaten that security are dealt with quickly and efficiently through our criminal justice system. The covid pandemic has had a massive impact on this, so we are making an extra £2.2 billion available to manage the increased number of offenders being brought to justice and to reduce backlogs in criminal courts. There will be an extra 20,000 prison places, which builds on the additional 18,000 prison places that we announced at the last spending review, plus a further 2,000 temporary places. That represents the largest prison-building programme in a generation.
For those people who have been victims of crime, we will increase our support services to over £185 million a year. Security, safety and support are going to underpin our public services, but we must also take a proactive approach to make sure that all our communities are vibrant, resilient places where people can live, learn and work. One of the chief ways to make sure that everyone can get from A to B smoothly and efficiently is through world-class public services, and we will need world-class local transport systems. The investment there makes a huge difference across the board.
I know that you are anxious about the time, Mr Speaker, so I will conclude. This Budget will provide billions of pounds to deliver the public services that the British people deserve. It puts skills, schools and families at the centre of everything we do and it embeds levelling up throughout all our services and our national infrastructure. The Budget is a clear statement of intent: world-class public services backed by £150 billion a year in cash terms.
It is a great pleasure to follow the Secretary of State in today’s debate. Our public services keep the nation going. In the last 18 months, we have relied on them more than ever: on nurses, doctors, NHS and care staff, who have looked after us in the most difficult conditions; on police and the emergency services; on transport staff; and, of course, on teachers, lecturers, school and college leaders, early years, childcare and education support staff, who have kept children safe and learning. It is because of their dedication and the importance of the services that they provide that we needed a serious plan in this Budget to rebuild the services that the Government have cut to the bone in the last 10 years, and a plan to remake Britain. Instead, we got a high-tax, low-growth Budget that hits working people with a £3,000 hike in their tax bills; a Budget that did nothing to reduce living costs, tackle soaring energy bills or support working families this winter; and a Budget that failed to address the deep-rooted pressures on the public services on which we all rely.
Over the 74 years of its existence, the NHS has been a source of huge pride to this country. However, under the Conservative party, life expectancy among the poorest has fallen and health inequalities have widened, so measures to tackle that state of affairs were very much needed. Instead, we got the Chancellor pretending that a new wing or new unit somehow counts as a new hospital. We got a sticking plaster for social care, with local authorities having to levy their residents to pay for it. Incredibly, after the 18 months we have all been through, the Government failed to prioritise public health, which has suffered a 24% cut in real terms since 2015-16.
In the Treasury Committee yesterday, we heard evidence from the Office for Budget Responsibility, which predicts that 95% of councils will raise their precept to the maximum to cover social care—another thing that will have an impact on the cost of living. The letter that I quoted from earlier, which was written to the Secretary of State for Health and Social Care not by me, but by the leader of Conservative-led East Riding of Yorkshire Council, says that adult social care is in crisis.
My hon. Friend is absolutely right. The levy to fund social care is one more tax that will hit hard-pressed families in the spring and will do nothing about the deep-seated need to address the social care crisis and the increasing pressure from an ageing demographic—it will not even touch the sides.
The hon. Member may not remember the Dilnot plan, which had cross-party support until Conservative Members torpedoed it. He may not have read the five principles that Labour has set out to underpin our approach to social care, including preventive investment to keep people at home and living independently for as long as possible, as we all want to. We have a plan that would invest in the workforce. It is not enough just to wish for better social care; the people have to be there to deliver it. That is Labour’s plan, and if the hon. Member would like more details, I am very happy to send them to him.
Despite 1.6 million people waiting for treatment, there was no guarantee in last week’s Budget that mental health will receive its fair share of NHS funding. Health stakeholders were most critical of the lack of a workforce strategy or a multi-year funding settlement to support it. We cannot deliver world-class healthcare if we do not invest in recruitment, retention and staff development. It is no wonder that the NHS is struggling when the number of adult health and care students declined by 15% in the three years before the pandemic.
The pandemic also shone a light on the problems that our schools, colleges and early years providers were already facing. No doubt it exacerbated them, but it did not create them. Last week, the Chancellor set out a £3 billion investment in skills, and the Secretary of State claimed that it was the biggest in a decade—but it comes after a decade of cuts to post-16 provision. The Learning and Work Institute calculates that funding over the spending review period will still amount to only 60% of the 2010 figure.
It is astonishing that at a time when our economy has to adapt to the challenges that the Secretary of State referred to—globalisation, digitisation and climate change in the post-Brexit environment—investment in skills remains so lacking. Four in 10 young people are leaving education without the level of qualification they need, the number of apprenticeships has fallen by more than 40%, and 9 million adults lack basic skills in literacy or numeracy. No wonder the Chancellor can promise only a paltry 1.5% increase in growth in the final three years of the forecast period.
At the same time that it is talking up the importance of vocational education, the Department for Education is scrapping most BTECs—well-recognised and respected qualifications that give opportunities to hundreds of thousands of young people.
I am grateful to my hon. Friend for raising the importance of BTECs, because for many young people and indeed many adults, BTECs are the route through the education system. As somebody who has a BTEC national certificate in business and finance and a higher national diploma in business and finance, I know that—it was my route through the education system. Let us make sure that we keep it open for future generations, too.
My hon. Friend is absolutely right. Again and again, I have met people who have described their learning journey from BTECs to university and an excellent career. Of course we want T-levels to succeed, but there is no reason to remove other qualifications that provide a different route that is more appropriate for some young people. Under Labour, every young person will receive education that is appropriate to them, whether that is an apprenticeship, technical education or university, and will leave it ready for work and life.
If my hon. Friend will forgive me, I will make some progress.
OECD data show that the UK has some of the world’s highest childcare costs—the cost of nursery provision for a one-year-old increased four times faster than wages between 2008 and 2016—but despite the high costs for parents, many early years providers are struggling to stay afloat. This year alone, nearly 3,000 childcare and early years providers have closed their doors. This Budget could have been an opportunity to put provision on a sustainable footing, reduce costs to parents and invest in quality, making a real difference to millions of families, but the announcements that we got were inadequate.
Don’t get me wrong: any investment in families with young children and in support for new parents is welcome, but the family hubs project is a pale imitation of what the Conservatives inherited in 2010. [Interruption.] “Nonsense,” says the Minister, but let me tell him that when Labour left office, there were 3,500 Sure Start centres delivering support to more than 2.9 million children in every local authority in the country. Since then, 1,000 children’s centres have closed. A moment ago, I think the Secretary of State was promising new family hubs in only half of local authorities. Can he tell me how many family hubs in total will be created as a result of the spending announcements?
By the 2021 summer term, children had missed an average of 115 days of schooling, and on 21 October, just before the half-term break, 248,000 children were still out of school as a result of covid, yet the Government’s response falls well below the scale of ambition needed for children’s educational recovery. The extra £1.8 billion announced by the Chancellor last week brings the Government’s recovery plans up to a total of £5 billion—far short of the £15 billion that their own expert adviser said would be needed to ensure that children make a full recovery from the pandemic.
Labour, by contrast, remains committed to our £15 billion children’s recovery plan. Whereas the Government will provide tutoring to just one in 16 pupils this year, Labour’s plan would resource schools to deliver tutoring to all who need it. We would deliver universal catch-up breakfast clubs and extend the school day for additional activities—I noted that the Secretary of State seemed to be in favour of that at Education questions yesterday, but he got nothing from the Chancellor. We would invest in training world-class teachers and teaching assistants and in supporting the early years sector, schools and colleges with an education recovery premium. We would prioritise young people’s mental health, giving every school access to a professional mental health counsellor.
I have totted up all Labour’s uncosted spending plans to about £400 billion. From what I can see, Labour is proposing about £5 billion of extra taxes. Can the hon. Lady explain where the extra money will come from? Is it not still the case that Labour is the party that cannot be trusted to run the economy?
I have absolutely no idea where that £400 billion figure comes from. The hon. Member says that it is uncosted, but there is no such uncosted plan; he needs to check his figures. The £15 billion costed plan—a plan advised by the Government’s own expert adviser—will, of course, be covered by the covid funding pot that the Government themselves admit has to be set aside to meet the costs of the pandemic. If the hon. Member cares to examine the tax burden from the Budget, he will see that it is not Labour that is increasing taxes on hard-pressed families. Taxes will hit families by an extra £3,000 as a result of his Chancellor’s Budget.
My hon. Friend makes the case.
Labour’s plan would deliver the wellbeing and academic support needed to meet the scale of the challenge and ensure that all children can reach their potential. That is the level of the investment that the Government should have been making in the nation’s children.
When we look at overall school spending, the picture does not get much better. The Chancellor announced a 2% per annum real-terms increase in school budgets over the next three years. I want the Secretary of State to listen to this very carefully, because we are messing around a bit with figures here. That increase will finally return school spending to 2010 levels, in real terms, in 2025. As Paul Johnson, the director of the Institute for Fiscal Studies, has said,
“To have no growth in 15 years in such an important part of public services is unprecedented’’.
This means that 732,000 children in state-funded reception classes in 2010 have seen their whole school careers affected. A whole generation of children has been failed by consecutive Conservative Governments.
The Secretary of State spoke of a cash increase in school spending as a result of the Budget, but schools are facing a host of rising costs to set against that: covid costs, energy bills, and employer national insurance contributions. The ending of the public sector pay freeze is overdue, but it is schools that will have to fund the teacher pay settlement.
The impact of this underfunding is plain to see. Some 200,000 children are growing up in areas with not a single primary school rated good or outstanding. Forty per cent. of young people leave compulsory education without essential qualifications. By the time they finish their GCSEs, pupils from poorer families are 18 months behind their wealthier peers in terms of attainment, and a third of teachers leave our schools within five years of qualifying. Last week’s Budget was an opportunity to fix those deep-rooted problems, but the Chancellor failed to do so.
Youth services help to equip young people with the skills and confidence that they need for life. They provide careers guidance and mental health support, they are one of the most effective ways of tackling the root causes of crime, and they help to build community cohesion. However, although they have already experienced a decade of cuts, last week’s Budget went on to inflict on them the single biggest one-off cut in youth services for a decade, leaving a £470 million hole in the youth budget. The Chancellor’s boasts of investment cannot disguise this crippling cut. Under the last Labour Government, youth services were accessible to people whatever their background; today, they are a patchy postcode lottery.
I am about to finish my speech, so I hope my hon. Friend will forgive me if I do not.
This Budget failed to address the challenges facing our education system—from early years to schools and from skills to higher education, about which the Chancellor said almost nothing last week—just as it failed to address the challenges facing the country. There was no plan to tackle the growing cost-of-living crisis, no plan to remove the enormous tax burden that the Conservatives have placed on working people and businesses, and no plan for growth, which is crucial to boosting our economy. This is not a Budget for the stronger economy of the future about which the Chancellor boasted; it is a Budget that lets down business, lets down our public services, and lets down the British people. They deserve better from this Conservative Government.
Order. I am going to try not to impose a time limit, at least at the beginning, but I will give an indicative time limit. If Members speak for about six minutes, including interventions, they will not be going far wrong. As the House knows, that is a luxury by today’s standards.
I will definitely not take my full allocation, Mr Deputy Speaker. I just want to make a few brief remarks about the Budget. I want to refer to a couple of measures that I think are very positive and pay tribute to some of my Front-Bench colleagues who have worked to bring them about, to mention an issue connected with defence spending that makes me quite uncomfortable, and then, I am afraid, to talk about something a little bit ugly in relation to spending on veterans’ affairs. But let me start with the good stuff.
I warmly welcome what has been done about universal credit. As my right hon. Friend the Chancellor knows, I have campaigned for it for many years. The return of the taper rate to where it should have been when it was designed is perhaps the single biggest factor, over and above the argument about whether people should or should not keep the £20 uplift. The taper rate and the twin-track approach to universal credit have the greatest impact in communities such as mine, with a high take-up of universal credit and other benefits. I am extraordinarily grateful for my right hon. Friend’s work, and for everyone’s work, to make that a reality.
This is a good Budget for Plymouth, in terms of the levelling-up fund. We received £20 million, and we will be dualling the road from The George up to the top of town. I know that it does not mean much to people here, but many of us in Plymouth have sat for what seemed like hours of our lives in that traffic jam. It is very encouraging to see the Government pushing funds downstream towards Plymouth. The living wage is fantastic news for a low-wage economy like ours. People have spoken to me about business rates so many times on the doorstep, and as a result of the Budget, 90% of businesses will see a 50% reduction. When we express our qualms about the Government, it is important to mention what is being done right as well.
I see that the Chief Secretary is in his place. As he knows, I am a huge fan of his, but I am going to give him a slightly hard time over the Ministry of Defence budget. I do not understand why we should talk about global Britain and about record settlements for the MOD, and then reduce its budget in real terms over the current spending period. This is a reduction of 0.4%, which admittedly is not a lot, but the point is the message that it sends to those who are serving and those who want to engage with us in a global Britain to match the threats that we are constantly discussing. I am afraid that the two are not in sync. If we want to be taken seriously, we must get our message right, and it must be done with money.
However, the main issue that I wanted to talk about at a national level—I know it is terribly boring for everyone—is the issue of veterans and spending. The distribution of money for the Office for Veterans’ Affairs was mentioned in the Budget, and I am pleased about that, but the amount is £5 million. There are 2.2 million veterans in the country, and that would buy them each a pint—in Plymouth, where beer is not £6 a pint as it is in London. We need a seismic shift in our attitude to veterans.
While I have been sitting here, I have been looking at some figures. It is difficult to compare apples with apples when it comes to veterans’ affairs, because different countries do this differently, but in America, for example, £270 billion a year is spent on veterans. That includes allowances, payments for injuries and so on, but it is a lot of money. We compare better with countries such as New Zealand, with 31,000 veterans. This time last year, it spent £10 million in its office for veterans’ affairs purely on administration. The closest match, however, is probably Australia, with 325,000 veterans. It spent £11.5 billion in its Department of Veterans’ Affairs last year.
Obviously £5 million is better than not having £5 million, but I would caution against making a song and dance about what we are doing for veterans without taking account of the reality of how they feel in their communities. It is still hard for them to know where to turn for help, and it is hard for them to get on to a care pathway where someone will pull them through and care about their outcomes. Op Courage is fantastic, but far too many people do not know about it, because we have not gone out and sold it.
Australia had a problem with veteran suicides and did not know what to do about it, so it established a royal commission which looked into the facts and produced a report. As a result, it provided A$302 million in additional resources for its Department of Veterans’ Affairs. It provided A$12.1 million to support veterans and their families, and A$55.4 million specifically to tackle the issues raised.
I know that I consistently pursue this theme, but there is no point, at this time of year in particular, in taking nice photographs of us all looking sombre at memorial services and buying poppies. That stuff matters, but it does not matter to a working-class guy or girl on an estate in Plymouth, or Basingstoke or Birmingham, who does not know how to access care—who hears about all the fantastic mental health care that is available but does not know where to turn, does not know the right people and does not know about the charities. There was a seismic moment for the Office for Veterans’ Affairs to pull all this together, but it cannot do that if it is asked to reduce its budget from £5 million to £3 million in the first year.
One group of veterans whom we talk about regularly in the House—I raised this subject with the hon. Gentleman when he was the Veterans Minister—are the nuclear test veterans. I have not heard him talk about them, and he did not speak much about them in his former role. Perhaps he would like to say a little about them now.
The hon. Lady can shake her head, but I did actually review the nuclear test programme medical settlement for them, and I improved it.
Nuclear test veterans are a part of this, but no one wants more than me to get away from the narrative that we do not treat veterans particularly well in this country. We are all incredibly proud of them, but this requires action and commitment. The Office for Veterans’ Affairs gave us the opportunity to do that, and I urge the Chief Secretary to the Treasury to do it. I know that he and everyone else on the Front Bench believe in this stuff, but we have to get away from giving money to military charities as though that will make us feel better. We have to develop a professional and profoundly different level of veterans’ care in this country, working with the third sector and others, to make people feel as though things are really changing for veterans in this country. I urge the Chief Secretary to take that forward.
Politics is a remarkable thing, is it not? The theme for today is stronger public services. We had the Chancellor speaking for an hour last week and the Secretary of State speaking for what almost felt like an hour today but was in fact just in excess of half an hour, but no recognition whatsoever was given to the fact that when we talk about stronger public services, we need to reflect on what has happened over the past decade. It has been a decade of Tory austerity. As we heard earlier from the shadow Secretary of State, who made a number of excellent points, spending now will be 60% of what it was in real terms in 2010.
We know that life expectancy for the poorest in society has plummeted on the watch of this Government. They have brought the public sector to its knees. They choose to do that and they now have the gall to come to this Chamber and tell the people of Scotland and the UK that it is fine and that they are now putting more money in. Tell that to the people who have suffered so much—[Interruption.] The Chief Secretary to the Treasury shakes his head, but he can live in a parallel universe if he wants to. Alternatively, he could come to my constituency and meet my constituents who have suffered the hands of his Government since 2010. He could meet the disabled people who have been pummelled into the ground by this Conservative party. This Government might claim that they are a different Government, but they are of course the same party, and that collective responsibility belongs with each and every one of them, irrespective of whether we are talking about a stroke of the pen by George Osborne or by the latest Chancellor. They must all take responsibility for the horrific circumstances that they have caused for so many people over the course of the last 10 years.
Austerity did not just impact individuals; it also impacted the economy. We know that growth was not what it could or should have been, and the Institute for Fiscal Studies has been quite clear that by 2026, real wages—obviously accounting for inflation—will be at the same levels as they were in 2008. That is what the “party of the economy” has done over almost 20 years to the wages of working people right across these isles. If we take wages as a barometer for where the economy is at, we can see a shambolic record. But the economy does not stop there; we need to look at other things in the economy.
A word that has been conspicuous by its absence today and throughout our debates on both sides of the Chamber is “Brexit”. I do not think that the Chancellor quite promised us the sunlit uplands that appeared on the side of buses, but if we look at what the Office for Budget Responsibility says about the real world, we see that Brexit will cost the UK economy 4%. That means that our economy will be 4% smaller than it should be, as a result of an act by this Government for which they show no contrition whatsoever.
It does not take long to go out and speak to a business that is having to deal with the real-life consequences of Brexit. These businesses cannot get access to the supplies that they want, they are unable to export their goods in the same way as before, and they clearly cannot get the staff that they need. I could not believe the earlier remark by the hon. Member for Mansfield (Ben Bradley), who is no longer in his place, when, without a hint of irony, he suggested that his council needed not more money but more people. He is of course a member of the party that put up the barrier to those people coming to work in these isles.
It is not just the private sector that is suffering as a result of Brexit; it is the public sector as well. That includes care homes and our NHS. Right across the public sector, we cannot employ the people we need. The Government will talk wildly about the money that they are about to invest in the NHS, and investment in the NHS is undoubtedly a good thing, but every health board in Scotland is saying that they need staff. This will be replicated down south, and in Wales and Northern Ireland. If they do not have access to staff, the Government can throw as much money as they want at this but it will not resolve the problems. All of this is a consequence of the Government’s actions.
Let us look at the situation for those in the public sector more widely. Like everyone else, they are having to deal with the harsh reality of the cost of living crisis. The Chancellor almost brushed over this last week; I could not quite believe it. People right across the UK are having to face up to the fact that inflation will be in excess of 4%. If I recall correctly, the Chancellor said that he was working with the Bank of England to ensure that inflation was kept as low as possible, but it is still going to exceed 4%. The consequences of inflation of nearly 5% will be felt by people in Scotland, Wales, Northern Ireland and England. The price of their food will go up, as will the price of all their goods. The price of their fuel has already gone up, and will continue to do so. Energy bills are going up as well.
On top of that, according to the OBR, the Government are putting up taxes at the highest rate in 30 years. Again, we are meant to be thankful for that. The Government proclaim that it is a good thing that the people who have worked so hard to get us through this pandemic are going to have to face up to having so much less money in their pockets. What are the Government doing about that?
The hon. Gentleman is speaking eloquently about taxation. Could he just clarify whether, as a result of the firmly held views of the Scottish National party, the Scottish Government will be reducing taxes in the areas where they have tax control?
I welcome that intervention from the former Minister. I have enjoyed our previous debates on all things financial. Let us reframe that discussion by looking at what we would do slightly differently in the case of spending. As he will be aware, he has been a member of a Government who are pleading that they do not have as much money as they should, at the same time as planning to spend in excess of £200 billion on nuclear weapons. He knows fine well that politics is about choices, and his choices differ drastically from the choices that we would like to make.
That is an important point, because it allows me to come full circle to my final topic, which is the situation in Scotland at this time—[Interruption.] I hear the Chief Secretary to the Treasury saying that the block grant has gone up, but he will be familiar with page 182 of the Red Book, which outlines that Scotland’s budget is to be increased by 2.4%. I am sure he would acknowledge that that is well below the rate of inflation, and well below the spending increases across a whole host of reserved UK Government Departments. I think he should reflect on that before he chunters away from his position over there.
In Scotland, we have again been told we should be grateful about the block grant, despite the 2.4% increase. We are also told that £170 million towards the levelling-up fund is a remarkably good thing, for which we should be really grateful. In my part of Scotland alone, the Scottish Government are putting in place a £500 million just transition fund to ensure that we can make the journey to net zero without leaving communities behind. We asked the Chancellor to match fund it, but despite the fact that the Government have raked in more than £350 billion from our North sea oil and gas sector, they said no and ignored our plea for a mere £500 million. Of course, they did something much more damaging than that: they walked away from carbon capture and storage in the north-east of Scotland. [Interruption.] I hear Members saying, “Shame,” and it is exactly that—shame on the Government. They walked away from that billion-pound investment in the north-east of Scotland in 2015 and they have done the same again now. They have turned their back on the communities I represent and the needs of Scotland. We can do so, so much better, and we will do better when we have that opportunity to take our own future into our own hands. Let me tell Conservative Members that that day is coming faster than they dare think.
It is a pleasure to be called on the final day of the Budget debate. I thought it was a good Budget; not only was it a responsible and appropriate response to the economic challenges created by the pandemic and the lockdowns, but it took major steps forward to tackle some of the longer term, more deep-seated issues that have at times held our economy back in recent years. It was a Budget that is good for the whole of the UK, and especially good for my constituency. I should start my remarks by thanking the Chancellor of the Exchequer and the Chief Secretary to the Treasury, who is in his place, for including the Haverfordwest town centre improvement project in the first round of successful bids to the levelling-up fund. The bid put together by Pembrokeshire County Council, with my support, seeks to use regeneration of Haverfordwest castle and the riverside area as a catalyst to bring new opportunities and activity into the historic heart of the town.
In welcoming that project, I wish to take a moment to say something about the horrific and tragic events that happened in Haverfordwest town centre on Saturday morning, when three paddleboarders lost their lives on the river. I pay tribute to the emergency services and the speed of their response, and I wish to put on record my sympathies for the families of the victims, who are still coming to terms with the enormity of what happened at the weekend.
The project, which has the potential to renew Haverfordwest town centre, is not about nostalgia and looking to recreate a time, long since passed, when the town centre was full of shops and shoppers on a Saturday. The levelling-up fund is not about turning the clock back. We cannot turn the clock back on enormous economic forces shaping our town centres and retail environment. The levelling-up fund is all about intelligent, targeted investment that, together with harnessing local effort and determination, can make a difference in our communities, recovering some of the economic activity and civic pride that we need in all the communities we represent.
Levelling up is a mission written into the DNA of this modern Conservative party, and a continuous thread that we see throughout the Budget. Some of the criticisms of the levelling-up fund that I have read in recent days from Opposition Members have staggered me. The cynicism and churlishness about the fund shown by some demonstrate that they neither understand nor support the vision of creating a fairer economy throughout the whole country; nor do they understand this Government’s scale of ambition in terms of making a success and a reality of levelling up.
Levelling up is also about tackling poverty in this country—it has to be. If we look at the way deprivation and poverty are spread unevenly across this country, we see that levelling up has to mean tackling poverty as well. Our Government rightly emphasise the role of work and employment in tackling poverty, with work as a route out of a poverty, creating sustainable pathways to improving life chances. That approach is absolutely correct, so of course I welcome the enormous steps taken by the Chancellor in this Budget, including increasing the minimum wage, boosting the universal credit work allowance, and significantly cutting the UC withdrawal rate—the money people lose from benefit withdrawals when they move from unemployment into work. Together, those measures really improve the attractiveness of work in our economy; they strengthen the incentives for unemployed people to find work, and for people already in work to increase their hours and improve their earnings.
We have more than 1 million job vacancies in our economy, with employers in every one of our constituencies telling us that they need more staff and asking where they can hire them. With the tight labour market and the improvements to work incentives that the Chancellor has led with in his Budget, we have the best opportunity in more than a generation to really make a difference in tackling long-term unemployment in this country. About 350,000 people are long-term unemployed, and this is a great opportunity to reduce the number of children growing up in long-term workless homes. Almost 1 million children are growing up in a home where nobody goes out to work and brings home a wage. In the current circumstances, we have a great opportunity to make better efforts to reach those who are furthest from the labour market and put them on a pathway to sustainable employment. I am thinking about disabled people, lone parents, and others with caring responsibilities, many of whom want to work and to take on more hours. We have a good opportunity, if we can join up some of the initiatives in government, to really make a difference.
Of course, our Government are rightly emphasising that the days of relying on a continuous stream of migrant labour, particularly for lower skilled positions, are over. I am open-minded about people coming to this country, bringing their talents and work ethic, but given the changes that have happened post Brexit, we are in a new reality where there will be less migrant labour, so we have to find more workers from within our own potential workforce. The imperative is on the Government to make progress in improving the disabled employment rate and helping more lone parents and those with caring responsibilities into work. This is not an option any longer; it is imperative that we do it. The measures taken in the Budget provide important tools to help do it.
I welcome the Government’s recognition of the role of social security in supporting people into work. The last time we debated UC in this Chamber, on 15 September, we were debating the removal of the £20 uplift. I concluded my remarks by saying that we could not leave the issue at that point, and that we would need to come back to it and make further changes, so I am pleased that the Government have done some fresh thinking on UC and made these changes, which are absolutely welcome.
I say gently to my Front-Bench colleagues that a strategy for employment and work is not exactly the same thing as a strategy for tackling poverty. With the shadow of inflation hanging over the economy and many families on low incomes having to bear increasing living costs through this autumn and winter and into next year, we must have an honest discussion about the adequacy of welfare in this country. The £20 uplift brought in at the start of the pandemic was kind of an admission that basic levels of working-age benefits were too low. The measures we have more recently introduced to support families on the lowest incomes, and the moneys to be distributed via local authorities, are also kind of an admission that levels of welfare, particularly for working-age people, are too low. We have to come back and discuss that further, because the changes announced in the Budget do not cover everybody who was on UC. I will finish my remarks there, Mr Deputy Speaker. I am grateful to have been given time in the Chamber to make them.
Mr Deputy Speaker, in the light of the point of order from a Government Member earlier, which I thought was rather churlish, will you pass on my thanks to the Speaker, your fellow Deputy Speakers, the House of Commons Commission and the House staff for all their help and support, and the safety in which they keep us in the House?
Bootle is one of the most deprived towns in England and has five super-output areas in the lowest 1%, so how can it be right that our levelling-up fund bid has been rejected? In the light of that type of Government approach, it is becoming apparent that the Chancellor’s financial statement was pretty shallow and a sort of economic whistling in the dark. Inflation is on the rise; interest rates are on the rise; taxes are on the rise; the deficit is on the rise; the national debt is on the rise; inequality is on the rise; billionaire incomes are on the rise; profits from dodgy covid deals are on the rise; covid infections are on the rise—the Chancellor is taking the rise.
The Chancellor’s statement came three months after the Prime Minister’s levelling-up speech, in which he committed to working
“double hard to overturn…inequalities”—
inequalities that the Prime Minister and other Tory Governments have exacerbated. I am afraid the Prime Minister working “double hard” does not fill me with much confidence: 100% of nothing multiplied by two is still nothing.
What about the Government’s fiscal rules? They have missed so many targets that they have stopped counting. On 18 October, the Institute for Fiscal Studies said:
“There are currently no active fiscal rules in the UK. The fiscal rules adopted in the 2019 manifesto were abandoned just four months later with the onset of the Covid pandemic.”
The Chancellor did announce some fiscal rules, but they are unlikely to be met, like those of other Tory Chancellors, although hope does spring eternal.
How about the national debt? In May 2010, the Tories inherited a national debt of just over £1 trillion, or 63.2% of GDP; in August 2019, it had gone up by three quarters to £1.7 trillion, or 78.4% of GDP; in February 2021, just pre-covid, it had gone up again to £1.784 trillion, or 81.9% of GDP; and by September 2021, it was at £2.218 trillion, or 95.5% of GDP. So the Tories have added £16,000 for every man, woman and child in this country. That is why—to respond to the question from the hon. Member for Warrington South (Andy Carter)—you cannot trust the Tories with the economy. The party of fiscal rectitude has more than doubled the national debt in just a decade—more wrecked than rectitude.
Will the hon. Gentleman remind the House what the national debt as a percentage of GDP was in 1997 and then what it was when the financial crisis—to which Labour had allowed the country to become enormously overexposed through increased debt in the banking sector—had struck? I will tell him: it went from 46% to 84% while Labour was in government.
As the phrase goes, I will take no lectures from the right hon. Gentleman, who served on the Treasury Bench while I served on the Opposition Front Bench. He was there when the OBR confirmed that the UK was suffering the slowest recovery of any major advanced economy, with GDP at the end of this year further below 2019 levels. That was on his watch. The Prime Minister and the Chancellor do not have the self-awareness to acknowledge it, saying it is everybody else’s fault, as the right hon. Gentleman just repeated. The blame game starts and there are the usual tactics of diversion.
What is the latest diversion? Well, unlike Nelson, the Prime Minister sees ships everywhere—preferably French ones. “Vive la France!” he whispers under his breath. What about his handling of the pandemic? The time is not right, he says, to hold anyone—that is, him—to account through a public inquiry, as he needs to get on sorting out the pandemic, yet in the middle of that pandemic he initiates a major reorganisation of the NHS, so clinical and support staff, who are under huge stress, are being distracted from the real job at hand. That is the perversity of this Government.
The Prime Minister seems to forget that, in cahoots with the Chancellor, he implemented a massive cut to aid to the poorest nations during a pandemic. So much for global Britain.
How are the Government going to sort out the country’s economic travails? Another slogan will help out: levelling up. I am not sure whether the Prime Minister shared the levelling-up speech with the Chancellor; if he did, the Chancellor obviously did not bother to read it. In fact, I am not even convinced that the Prime Minister bothered to read it before he delivered it. In his levelling-up speech in July this year, the Prime Minister referred to the scale of the task that faced the German nation on reunification. Does he know the scale of the problem in this country? The Germans actually did something about it: they invested over decades. I suggest that the Prime Minister checks out what they did. Rumour has it—it is a rumour—that he is not a details person, but on this occasion he may want to make an exception.
If the Prime Minister is going to mention German reunification, he would be well advised to look at the scale of the intervention that was undertaken. The Centre For Cities analysed what putting the words of his levelling-up speech into action might mean. The analysis was entitled “What can German reunification teach the UK about levelling up?”; the answer, as it happens, is a great deal. The cost of this scale of levelling up would be at least £1.7 trillion today, which is around 75% of a year’s UK GDP. Closing the north-south divide would cost hundreds of billions of pounds over decades, if done properly. The Government have come nowhere near that level of investment or commitment.
England’s biggest cities, including Birmingham, Manchester and Leeds, have the lowest productivity and life expectancy in western Europe—on the Prime Minister and the Chancellor’s watch. In Liverpool, life expectancy is four years below the European average. All major cities outside London are at the bottom of the western European league table for productivity, after 10 years of Tory control. The evidence of social and economic inequity across the country in terms of health, education, region, environment, cities, towns, countryside, age and gender is there for all to see.
What is depressing is the insouciant—there’s the French again—attitude of the Chancellor to it all. The scale of the task that faces the country is in inverse proportion to the Chancellor’s lack of action. In sum, on the bridge, the Prime Minister sees ships everywhere; meanwhile, below decks, the Chancellor is scuttling HMS UK.
I hope the House will forgive me if I do not follow the hon. Member for Bootle (Peter Dowd) in being relentlessly partisan. We are dealing with enormously complex issues.
I listened to the Chancellor’s peroration—his hymn of praise to a low-tax, deregulated economy—and it brought a tear to the eye of a weary Thatcherite. But having sat through 50 Budgets, because there are sometimes two a year, and having listened to so many Labour and Conservative Chancellors, I know that, when one reads the small print the next day, one tends to find that the Chancellor has taken by stealth what he has given publicly.
I know that we face one of the greatest challenges in our history, with the pandemic, but the truth is that we are now taxing people higher than at any level since the Attlee Government. As we pursue levelling up, are we going to bring in ration cards on eggs and meat, as the Attlee Government did? I am looking now at the Chief Secretary to the Treasury, who I hope is listening to every word I am saying. We are—to quote the Prime Minister in another context—at “one minute to midnight” in terms of our future as a tax-cutting Government. With mortgages going up, inflation going up, and a £3,000 increase per household to fund £150 billion of spending, soon we will be paying £1 trillion in tax. Who will pay for this? It will be the people who elect us Conservative MPs and middle earners in middle Britain. Even beer will go up. Inflation may be up to 5% next year, putting at risk the forecasts of the Chancellor. We are breaking the triple lock on pensions, which I think is probably necessary, which might result in another £30 billion being taken out of the hands of pensioners over the next two decades.
On inheritance tax, we are freezing the band, so more and more people with modest homes are being brought into inheritance tax. On the health and social care levy, we might be taking up to £85 billion off older people. With the fiscal drag on income tax, we are bringing another million people into the higher tax level—and this is a Conservative Government. This is what the Chief Secretary to the Treasury must do: every time his colleagues beg him for more money for this and more money for that, he has to say no.
We should bear in mind what happened in 1945. The coalition Government during the war were the highest-taxing Government in history and the most regulating Government in history—we regulated people’s private lives more than we have ever done in the past 70 years, including during the pandemic. What was the result? It was a Labour Government. People looked at the coalition Government and they turned to what they thought would be the real McCoy, namely, a Labour Government. So get a grip. I know that we have these challenges. I probably could not do any better, but we have to get a grip now.
Will the right hon. Gentleman give way?
No, because I am only allowed six minutes.
I use the NHS. I do not have private health insurance. I do not use private health. I rely totally on the NHS. Fantastic care has been given to me by nurses and doctors, but it is a bottomless pit. The more we increase funding of the NHS above inflation, the lower the productivity. We saw that in the Labour Government under Blair and Brown and it is happening now. We are even seeing it now with GPs quite disgracefully refusing to see people. So we must grip the NHS. We heard the Education Secretary half an hour ago. His own budget now is being squeezed because of the huge increases in health spending. If we are to match the Chancellor’s wonderful peroration to create a low-tax, deregulated economy, the most important Minister from now on is the procurement Minister—the Minister who has the courage to say no.
I do not wish to sound relentlessly critical. I do not pretend that any of us could do any better, but we have to be honest and true to our Conservative instincts and tell people that they should not always rely on the state. We should help them to get out of the clutches of the state. To tackle health spending and to relieve pressure on the NHS, the Major Government allowed people of pensionable age to claim tax relief on private health insurance. That was fiercely opposed by the Labour Government. Mr Major is hardly a right-wing extremist. He was prepared to do it. He was prepared to take millions out of relying on the NHS by giving tax relief. It was a bold Conservative idea to wean people off the state.
Why are we a property-owning democracy? It is because, for many years, we gave tax relief on people’s mortgages. Families who before could only leave a few sticks of furniture to their children became property owners. As they became property owners, they became Conservatives. That is why these planning reforms are so important. That is why it is important for my children, who are in their 20s and 30s, to be allowed to get on the property ladder. By easing planning controls, we can build more and get people on the property ladder. That is a true Conservative idea. We have to have the courage to propel that view forward, whatever people might argue from a nimby point of view. I am probably as good a nimby as anyone else. We are all nimbys when it comes to our personal lives and people who want to build around us, but we have to build more. We have to help our young people—a strong Conservative idea.
Look at our tax system. We have the longest tax code in the world after India. Look at the poisoned chalice that Gordon Brown left us in the 45% tax increase. We have never had the courage to get rid of that. People are driving themselves up companies and creating wealth, but instead of flattening out taxes, which is what Nigel Lawson did, we have not yet had the courage to get rid of that higher tax burden.
When it comes to levelling up, Gainsborough South West ward is the 27th most deprived ward in the country. I am very proud of the fact that we have achieved some levelling-up funds, but the process was directed not at endless schemes or at consultants, but just at infrastructure —on repairing the historic houses in the marketplace, which is something that we could control.
As I end my speech and obey your summons, Mr Deputy Speaker, to speak for fewer than six minutes, let me say to the Chief Secretary to the Treasury: be bold, be Conservative and get people out of the clutches of the state.
In recent weeks, the Chancellor has been promising us a Budget that would look to the future, a Budget that would reshape our economy and a Budget that would level up our left-behind communities. Working people across the country hoped for action that would tackle the growing cost of living that they face each day, but what we got last Wednesday was a Budget without the vision and imagination to tackle the challenges that we face in society. We got a Budget that is stuck in the past, unable to confront the realities of the future, and a Budget that perpetuates an economy that serves the richest, while trampling over the poorest, which proves that, under this Government, levelling up is just a slogan and words, not real action.
Bradford is one of the most deprived areas and it is in the most desperate need of levelling up. All it really got from this Budget was a new sports and enterprise centre on Squire Lane, which is a project that was brought forward, developed and signed off by me years ago when I was deputy leader of the council. It was signed off and brought about to tackle the rampant health inequalities in our city, but it was starved of funds and never built because of a decade of Government austerity.
While this Government today tell us that, in Bradford, they are levelling up and giving us much-needed money for the new sports and enterprise centre, which, of course, is very welcome, the reality remains that, if they had not made the ideological austerity cuts over the last decade that devastated councils such as Bradford, we would have been able to fund this ourselves a decade ago. So I am not going to take Conservative Members telling me that they have done a huge favour on Bradford, levelled up and tackled poverty and the real issues that we face in the district.
In the time that this Government have taken to provide funds for that centre, the inequalities—particularly health inequalities—faced by those in Bradford have only grown. The life expectancy of someone living in Bradford is almost 10 years lower than in other parts of the country. Let us take a moment to look at that. If a person lives in certain parts of the Bradford district, they are likely to live 10 years less than if they lived in a leafy suburb away from Bradford. I ask Conservative Members: what does this Budget do to address health inequalities in Bradford? What does the Budget do to address the fact that up to 40% of children in my constituency will again today be denied a hot meal? What does this Budget do to address the fact that working families in my constituency will continue to use food banks? Those are the questions. It is easy to get caught up in statistics, but the reality remains that this Budget will do nothing to address those real issues in my constituency, which means that we now have to go even further and present new initiatives to tackle the widening inequalities in our society.
Ultimately, this Budget came nowhere close to what people in Bradford need. Throughout the Chancellor’s 100-page Red Book, there was no commitment to reverse the cruel cut to universal credit that will take £1,000 a year out of the pockets of some of the poorest in Bradford. There was no plan to tackle the rapid decline of Bradford’s high street by reforming and replacing an outdated business rates system that penalises small, family-run businesses to satisfy the greed of large multinationals. There was no pledge to deliver Northern Powerhouse Rail, which will run from Manchester to Leeds, through a station in Bradford city centre that would draw investment into our region and act as a firm symbol of levelling up.
Even the end of a public sector pay freeze to tackle the cost of living crisis failed to acknowledge that it was this Government and their decade-long pay restraint that created a cost of living crisis for those working in the public sector in Bradford. Although investment in education and healthcare is welcome, it will fail to make up for a decade of austerity, cuts and underinvestment that has created so much pain and misery for so many across the district.
As is so often the case under this Government, the cost of the Budget’s failures will fall on the shoulders not of the Chancellor or his constituents, but of my constituents in Bradford and other places like my constituency. It is in the pockets of people in Bradford that the cost of living is being felt the most. It is my constituents—on wages lower than the national average and employed on insecure contracts—who will be hit hardest by rising food prices, spiralling energy bills, and soaring rents and mortgages, only to be hit again by tax rises that mean that households will be paying £3,000 more in tax in the next five years than when this Prime Minister took office.
Time does not permit me to go on, and I want to be fair to colleagues. The fact is that the only people levelled up by this Budget are the millionaire bankers sipping champagne on their short-haul flights. The clear conclusion is that, just as we have seen every year under this Tory Government, this is a Budget by the rich for the rich.
I very much welcome this Budget and spending review. Were the Chief Secretary to the Treasury, my right hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke), in his seat, I would be able to extend to him my warm congratulations, as I do to his new Treasury colleague, the Exchequer Secretary to the Treasury, my hon. Friend the Member for Faversham and Mid Kent (Helen Whately), on taking their places in such a fine Department and at such a difficult moment. To have delivered a spending review as a new Chief Secretary is a phenomenal achievement. I congratulate him, as I congratulate the Chancellor, on that.
Among the many good measures in the spending review and the Budget, I particularly single out—as many colleagues across the Government Benches have—the rise in the national living wage, the reduction in the universal credit taper rate, and the great emphasis placed on education and skills as the key to levelling up. I remind all colleagues, who will know this—none more so than my right hon. Friend the Member for Harlow (Robert Halfon), the Chair of the Education Committee—that education and skills are at the core of all the regeneration that we have seen over the years, not just in this country, but around the world. Education and skills, even more so than infrastructure, are positively correlated with economic growth and development, so I very much welcome their inclusion.
There is one area where I do have a concern that the Budget and spending review do not go far enough. It may appear to be a parochial constituency interest of mine, but it is actually an issue of national importance: the plans for which we requested support regarding the River Wye. The River Wye is a priceless national asset. Many Members of the House will have visited it in Wales and in Herefordshire, and seen its flow all the way down to the Severn. They will have seen this extraordinary national asset and its impact locally—not just its environmental richness, but the strength that it brings to tourism and economic development, and its central place in the nation’s cultural history.
It is easily forgotten that the idea of the picturesque—indeed, the idea of domestic tourism in this country—comes from visits to the Wye valley taken at the end of the 18th century, most notably by Admiral Nelson. That was what put the idea of tourism and the picturesque on the map, and that is the historic reason why the Wye is so central to the way in which we understand ourselves as regards the natural environment and our countryside.
As the Wye winds its way through Hay to the west of my constituency, through Hereford—which is right at the centre of it, of course, economically and culturally—and down to Ross-on-Wye, this priceless asset is being undermined by dreadful phosphate pollution. We must be perfectly clear that it is being undermined by sewage discharges, which have been discussed in the House, but also by significant levels of embedded phosphate—that is, animal waste on fields that has run off. We do not know the full scale of the issue. The best estimates appear to be that about 65% of the problem is embedded phosphate, 25% is discharge, and there is a further component because of the recent impact of chicken litter.
We need to know the answers to those issues and have a plan that addresses them, and that plan—uniquely, I think, for major rivers in this country—needs to operate across the border, because a large chunk of the River Wye is in Wales. One point that has struck me most clearly when campaigning on this issue over the last year and a half has been in the way in which the agencies —Natural Resources Wales, Natural England and the Environment Agency—have not been adequately talking to each other. We therefore put to the Chief Secretary, and ultimately to the Department for Environment, Food and Rural Affairs and the Department for Levelling Up, Housing and Communities, the idea of a cross-border, cross-agency, single strategy that is focused on a long-term approach to addressing the issue of phosphate pollution in the Wye.
The idea is a priceless opportunity for this country and the Government. At relatively little cost—through a degree of investment in measuring and enforcement; through a degree of constructive thinking about the long-term regulatory environment in which water discharges are to be managed along the Wye valley basin; and, of course, through the recruitment of citizen energies, which are already active and vigorous up and down the Wye—a great opportunity exists to bring these different resources together in a single, co-ordinated plan that is led by the Government, with the support of the Welsh Government, which I am afraid has been conspicuously lacking on the issue so far. That gives us a national opportunity to bring an end to this scourge of pollution and to restore this priceless, gorgeous, wonderful natural asset to its pristine glory.
Last week’s Budget shows just how out of touch this Government are with reality. They are completely out of step with the needs of the British people, our public services and our planet. The decisions made by this Government have let shortages and prices go out of control: gas bills are up, petrol prices are up and food costs are up. There is no doubt that many people across the country will be beginning to feel the pinch. By 2026-27, households will pay £3,000 more tax than when the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) became Prime Minister.
The Chancellor has repeatedly compared his Budget investment to that of the last decade, but no amount of levelling up or building back better can disguise the reality. While 6 million families were hit by the cut to universal credit, including 8,500 families in Battersea, less than a third will benefit from the taper reduction, leaving millions of people, including families with children and disabled people, without support and risking them being pushed further into poverty.
After 11 years of cuts and underinvestment in early years services, and the closure of over 1,000 children’s centres, the announcement of family hubs is a far cry from what is needed and does not match the offer of the Sure Start centres under the last Labour Government. The investment in youth services is a fraction of the cuts of the past decade. According to the National Youth Agency, an estimated £1 billion less is being spent on our youth services. I pay tribute to some of the amazing youth organisations in my constituency, such as Providence House, FAST, Devas Club, Caius House and Carney’s Community, who are doing a formidable thing by providing vital support to our young people in Battersea.
This Budget does nothing to address the £573 million gap in funding for disabled children’s social care services. Why is that? Hidden in the small print of the Budget is the revelation that the health and disability Green Paper will cut £70 million in funding for disability support by 2024-25. The Budget failed to mention the level of capital funding for the disabled facilities grant. Given that this grant plays such a vital role in helping disabled people to adapt their homes to live independently, will the Minister say why that is the case? I can only conclude that, yet again, this Budget is a missed opportunity for disabled people. It failed to address the shortfall in social care funding, to invest in disabled people’s economic opportunities or to ensure that the social security system works as it should—as a safety net for those people who need it. So much for the Government’s so-called vision for transforming the everyday lives of disabled people: I think not.
The Government have dragged their feet in addressing the cladding crisis. The new 4% levy on developers’ profits to help to fund cladding removal will still leave thousands of blameless leaseholders to foot a large majority of the costs. The levy charged on developers making over £25 billion in profit is not a viable solution. We need action, now. We need the Government to get serious about tackling this crisis, now.
Ultimately this Budget failed to invest in tackling the issues that matter: structural inequalities, a supply chain crisis, unsafe homes, in-work poverty, a cost of living crisis and a climate emergency that is inching closer and closer towards the doorstep of each and every one of us—and No. 10 will not be spared. The Chancellor said he wanted to build a new economy coming out of this crisis, but if he was serious about that, we would have a Budget that prioritised people, prioritised our public services, and looked after the planet for generations to come.
I commend the opening comments of my right hon. Friend the Education Secretary, particularly the emphasis he placed on skills and education, because that is our route to levelling up. I also pay tribute to the Chancellor and the entire Treasury team for the work they did to deliver the Budget last Wednesday.
We need to recognise the news that the economy is growing much faster than anybody predicted, and much faster than any other G7 country. Looking back 12 months, everybody in this House had a genuine fear about an unemployment crisis. Certainly the models were predicting a very difficult period. While we should not underestimate the challenges that many families still face, it is absolutely clear that those predictions have not come to pass. Unemployment appears to be peaking at much lower levels, largely owing to the actions taken by this Government and my right hon. Friend the Chancellor. I congratulate him on the work that he did around the furlough scheme to ensure that businesses could support their employees through that incredibly difficult time.
In general, I welcome many of the measures that the Chancellor introduced last week—in particular, the tapering of universal credit. I am also very pleased to see the national living wage being increased to £9.50 an hour, thereby, as he said, putting about £1,000 into the pockets of the lowest paid. It is good news to see the public sector pay freeze being lifted as well.
As a Member of Parliament in the north-east representing the brilliant people of Warrington South, I was very glad to see many of the announcements that will relate to the levelling up agenda in my part of the country. Levelling up is not just about bricks and mortar; it is also about our public services and how they are delivered and setting higher standards for local communities that have been ignored for too long. It is about ensuring that opportunity is spread equally around the UK, giving people the chance to realise their full potential, no matter where they come from, without having to travel to the south-east.
Talking of travel and transportation, improving transport links locally has a massive part to play in levelling up. If people cannot get to a job, it is impossible to tackle the underlying issues around unemployment. I welcome the decision to freeze fuel duty and to invest in public transport. I was struck by a conversation I had with a gentleman called Patrick in Stockton Heath in my constituency. He is a pensioner who had given up using his car and wanted to spend a night out in a village enjoying some craft beers, but because he lives outside the big city, the last bus ran at 7 o’clock in the evening, so having arrived at the pub he could not get home and ended up spending far more on a taxi than he spent drinking that craft beer. Whereas buses run 24/7 in cities around the country such as London, Manchester and Leeds, far too often in towns such as Warrington they switch off and stop running at 7 o’clock in the evening—and it is nigh on impossible to travel outside of Warrington, from Warrington to Altrincham or Warrington to Leigh. So the announcement that Warrington is to get a £20 million all-electric bus fleet, run by Warrington’s Own Buses, is of huge benefit to the town and something I really welcome. On top of that, the Government have funded a new electric bus depot at a cost of £5 million. We will be one of the first areas in the north of England to get a totally electric bus fleet, with 120 new buses being phased in over the coming year, replacing the current diesel fleet. That will benefit the environment and improve public transport options for working people, as well as reducing the cost of running the buses, which means that more can be invested into services across our town.
In terms of skills and education, and delivering public services for the future, I very much welcome the continued focus on investing in training and apprenticeships for young people. There is a need to invest in digital and cyber, in health and social care and in advanced engineering and nuclear technology, which are key for my local economy in Warrington but also across the UK. I am pleased that schools such as the university technical college in Warrington are working closely with employers such as Sellafield, Cavendish Nuclear, BAE, Rolls-Royce and the NHS to ensure that young people’s training is preparing them for the workplace of the future. I am also pleased to see the commitment to a new UK global talent network to work with research institutes and businesses to identify and attract the best global talent in key science and tech sectors that are rapidly growing in my constituency and across the north-west.
We have seen significant additional funding to help our public services in the fight against the pandemic, and the vaccine roll-out has been nothing other than phenomenal, with more money going into our booster jabs programme. Looking forward, we are also making investment in the NHS that provides a cash increase of £33.9 billion for 2023-24 and continues with our programme of hospital rebuilds. Warrington has recently submitted an excellent application for one of the eight additional new hospitals being built, and I look forward to a decision on that project being made in early 2022.
I welcome the decision to support small businesses. The temporary 50% cut in their business rates, up to a maximum of £110,000 a year, will make a difference to local businesses on my high street. In addition, the decision to scrap 2022’s planned annual increase in rates for all firms for the second year in a row is very welcome, but I urge my right hon. Friend the Chancellor to look carefully at a complete revision of the business rates system. We are faced with incredible challenges on the high street, and we need to support SMEs as they help the economy recover. We are delivering on a central mission of levelling up for every single person, no matter their background and no matter their circumstances. It is the right Budget at the right time in our economic cycle, and I congratulate the Chancellor on the work he is doing to take this country forward and on levelling up.
One of my favourite quotes of all time is from Henry Kissinger to, I think, the US press corps. He said:
“Does anyone have any questions for my answers?”
That has always tickled me. I looked at the Budget headings, and I wondered, “Do the Government have a Budget debate heading for my speech?” Unfortunately, they do on public services.
Sometimes in a debate, it is important that we try to get to the detail and the truth, if you will, of the matter. In this one, the issue is public services. My first point is one that has been discussed before, and I will discuss it again briefly: this is not a massive investment in our public services, relatively speaking. It does not even catch up with the past decade of austerity, and I will talk about that in a bit more detail. The other thing, though, is that spending is not being funnelled entirely into the public sector. Increasingly, it is being funnelled into the private sector, and from there it is going offshore and elsewhere, and I want to look into that as well, because I am suspicious about this Government’s new-found devotion to investment in public spending. I think there is something behind it that we need to look into.
The overall picture is that this is not a reversal of the deep cuts of the past decade. The Resolution Foundation has said that
“only one-third of the cuts to real day-to-day spending per-capita in unprotected departments since 2009-10 will have been reversed by the middle of the decade.”
Let us take for example the NHS, which this Government have made a great song and dance about. The British Medical Association has said that the previously announced £10 billion is not fully adequate to deal with the still-growing backlog of care. The Health Foundation has said that £17 billion is needed to clear the backlog. What do we get? Ten billion. That is a shortfall of £7 billion. We have the sheer brass neck of the Government telling the people of this country, “Look what we are doing. Look what we are spending”, but in relative spending terms, they are taking away from the public realm. We on the Opposition Benches know that, but I am not sure whether some of the Government Members understand that or believe or know what this Government have actually done.
Let us look at the NHS, because one thing I want to talk about is where the money is going. We know that the Health and Care Bill will increasingly privatise decision making on where NHS resources go. Increasingly, if corporations and big business are deciding where the tens of billions of pounds are going, you can bet your bottom dollar they will be going to the corporations, the private sector and shareholders and not being reinvested in public services. There is an issue here, which is democracy within our public services.
Let us take social care, for example. Some 83% of care home beds are owned by the private sector. If money was being reinvested into care beds and paying staff decent wages, I could understand why that was happening, but it is not. We know what is happening to vast amounts of money, which is going from the public purse into these so-called public services that are being run by vulture capitalism. The money is being sucked out and going to shareholders and offshore. That is where the money is increasingly going, and that is why this Government are so keen to spend billions of pounds handing out money to their friends who then recycle it and invest in the Conservative party. That is what is happening.
Let us look at the energy system, which is critical given what is going on up in Glasgow at the moment. Analysis by Common Wealth on the diversion of wealth from public to private has shown that, in the past five years, just under £10 billion in dividends has been paid to shareholders in the big six. That is six times larger than their tax payments of £1.52 billion. It found that
“the average firm within the Big Six has, over the past ten years, awarded their highest paid director almost fifty times the pay of the average worker in the company, and forty-five times the average income in the past five years.”
No wonder those on the Government Benches are so keen, after 10 years of austerity, to start pumping money to their friends in the big six and beyond.
Let us have a look at the Environment Agency. We know that it has said that there were 400,000 raw sewage discharges into coastal waters and rivers in England last year from private water companies. That is a tidal wave of turds that has splashed across this country on this Government’s watch. Professor David Hall from Greenwich University has said:
“Since privatisation companies have given out almost half as much for shareholders as they spent on upgrading and maintaining water and sewerage systems…£57 billion compared to £132 billion.”
This Government have the brass neck to tell this country that we cannot expect the privatised water companies to invest in a Victorian sewage system because they cannot afford it, but they can afford to give £60 billion of public money to their shareholders. Those on the Government Benches know that. No other country allows private companies to own and run regional water and sanitation systems. That is a fact.
While the Government talk about spending more on public services—we know that relatively speaking they have not, but when they do spend more, increasingly they are not public services as we on the Opposition Benches would recognise them, but public services run by and for private corporations that siphon off vast amounts of public wealth into their own bank accounts and coffers. I will conclude by saying that the answer is quite simple. When we on the Opposition Benches talk about public services, we are talking about universal basic services that are democratically controlled and owned and transparent and accountable to the people of this country who pay for them. That is the difference.
I strongly welcome this Budget. We should acknowledge that over the past 18 months, this country has faced a national emergency comparable only to the outbreak of the second world war. We have already spent £407 billion supporting schools, businesses and industries in my constituency and across the country to tackle the impacts of the covid-19 pandemic, without which we would have had destitution on the streets. I recognise the economic and financial challenges that the Government are facing. We have a national debt of over £2.2 trillion, equivalent to around 100% of our gross domestic product. That is why the Government are doing everything possible to square the circle in terms of spending on public services and dealing with the deficit and debt. It is not an easy task.
My two passions in politics have always been championing education and skills, and cutting the cost of living. I support this Budget because despite the circumstances I have just set out, the Chancellor has tried to address both. This is a true worker’s Budget in many ways, because there is a strong desire across the country to improve the cost of living and for low taxation. I previously supported the temporary £20 uplift to universal credit payments, but I genuinely think that the Chancellor’s decision to decrease the universal credit taper rate and uplift the work allowance is a better solution in the long run, because it gets people out of the poverty trap and incentivises more people into work. That will both boost people’s income and earnings and help reduce unemployment as we move into a high-productivity and skilled economy.
In addition, we have the £500 million invested in families and early years intervention, helping those who are struggling the most. We have the record 6.6% rise in the national living wage, which I campaigned hard for the Cameron Government to introduce, to £9.50. We have the fuel duty freeze—something I have campaigned for, probably to the annoyance of the Treasury—continuing for the twelfth year in a row, saving motorists £15 every time they fill up. That is what makes a difference to those who are just about managing. I hope that the Government will do much more to cut the cost of living. We should cut taxes for lower earners as soon as economic conditions allow and we should look at ways to further reduce energy bills. Cutting the cost of living must be the Government’s central mission.
On education, the Budget’s focus on skills, schools and families, as described by the Secretary of State for Education in his opening remarks, should be welcomed. Education and skills are the most important rung on the ladder of opportunity. They are the golden thread that tie together all our investments and our futures.
The outbreak of coronavirus was nothing short of a national disaster for our children. The four horsemen of the education apocalypse came galloping towards young people to create a widening attainment gap, worsening mental health issues, an ever-increasing number of safeguarding hazards, and a challenge to their skills development and life chances. We should never again fully close the schools in the way that we did.
The Budget showed a real recognition from the Chancellor and the Education Secretary that those challenges can be overcome through family hubs, the catch-up and education recovery funding, and the rocket-boosting of skills. Not much has been said today about the extra £2.6 billion of funding to strengthen the provision for children with special educational needs, but it is important and will be welcomed by parents across the country.
The lifetime skills guarantee announced last year created the blueprint for the skills funding package, which provides an extra £3 billion for T-levels and adult skills, among other things. That is a 42% increase in skills funding in cash terms, which will put vocational and technical education on a par with traditional academic learning and give financial teeth to the skills agenda.
I absolutely believe that BTECs should not go until T-levels have fully come on board. As a hard-working former member of the Education Committee, the hon. Lady will be pleased to know that I hope to question the Secretary of State about that subject tomorrow morning when he appears before the Committee.
As I have mentioned, the £2.6 billion of funding for children with special educational needs is extraordinary, but we need the urgent publication of the special educational needs review to move forward at light speed. Although lots has been done to provide the key components of a long-term plan for education, we are not there yet. The cogs have started to turn, but the machine is not yet as well oiled as it might be. We need a long-term plan for education and a secure funding settlement, just as the NHS and the Ministry of Defence have long-term plans and a secure funding settlement and a strategic review respectively.
As Members on both sides of the House know, I have long advocated the extension of the school day. The Education Endowment Foundation says that pupils can make two months’ additional progress per year by extending the school day, or three months for disadvantaged pupils. Some 39% of academies founded pre-2010 have lengthened their school day, as I have seen done successfully by the NET Academies Trust in my constituency. The Department for Education and the Treasury should fund pilot projects, perhaps in some of the most disadvantaged areas of the country, to evaluate what the impact could be alongside the catch-up programme.
To conclude, I heartily welcome the Budget targeted towards skills, schools and families. I have been campaigning for more skills funding for a long time so I welcome what the Chancellor has done. It has been a difficult year and a half for all Members and for the constituencies we serve, but the steps outlined in the Budget will go a long way to support our nation’s recovery as we try to level up and build back better.
It has been a good Budget for Beatles’ fans with the Chancellor’s £2 million for preliminary work on the Fab Four attraction on the Liverpool waterfront. But if it is “Here Comes the Sun” or “Good Day Sunshine” for them, it is more like “A Hard Day’s Night” for the millions of ordinary people who have suffered greatly in the pandemic and can gain little comfort from the Budget, because it hit the less well off the hardest.
We are not all in it together. The increased debt burden has disproportionately affected young people, disabled people, black, Asian and minority ethnic people and those who rent. More than 11 million people have built up £25 billion of arrears and debt to pay and 14 million people have suffered an income shock during the pandemic, with almost half turning to crisis borrowing for essential costs.
Those groups will also suffer disproportionately from rising prices, because they spend more of their income on essentials. The rise in wholesale energy prices, when it filters through to bills, will hit them particularly hard. For many this winter, it could come to a choice between putting food on the table or turning the heating on. Many advice agencies forecast that a huge rise in unmanageable debt is just around the corner.
There is some good news. I welcome the £65 million of rent arrears support, which might reduce the immediacy, but much more will be needed to turn the tide on the £360 million backlog of rent arrears built up during the pandemic. I welcome the increase in the national living wage and the improvement to the universal credit taper, but that does not do anything for people in receipt of universal credit who are out of work and looking for a job or for the 1.7 million people unable to work because of disability, health issues or caring responsibilities. About 5.8 million people are on universal credit, at least 2.5 million of whom will not benefit at all from the changes to the taper rate.
Lower income households are still likely to be worse off than they were before the temporary uplift with the increased national insurance contributions looming for many households from next year. A local secondary school head in my constituency told me that last Christmas, they did not give hampers but paid for a weeks’ essential shopping for struggling parents. This year, they are doing the same but are having to budget for double the amount of recipients. Those are parents in many different circumstances—some are working full time, some are sick and some are disabled—but what they have in common is that they are struggling to pay their bills and put food on the table.
Much more needs to be done if our poorest families are not to face a bleak future. We need to revisit social security levels to ensure that the system is truly a safety net. People on universal credit were struggling even with the uplift. We need a major rethink of the basic level of benefits, and we need to ensure that deductions from benefits are affordable and do not undermine claimants’ ability to meet their basic costs.
We need to look at the move towards decarbonisation, which will create additional problems for people in low-income groups, who will struggle to meet the inevitable higher costs without help. Net zero should be seen as an opportunity to help the poorest. As the Resolution Foundation said,
“Reducing the number of families living in fuel poverty should be the lens through which the Government addresses both the immediate gas price crisis, and future plans to decarbonise our homes as part of the UK’s net-zero transition.”
In practice, that means more direct help with energy bills beyond the warm home discount and the cap, including backing a social tariff that is linked to income, so that no one pays more than a percentage of their disposable income on energy.
The pandemic made the lives of the less well off in our country worse. More people are struggling to pay bills and are building up personal debt, none of which is their fault. The Budget was an opportunity to ensure that all people are better able to recover and place their finances on a sustainable footing, and to tackle the poverty premium. It lacks the vision or the policies to deliver that.
I welcome the opportunity to speak in the debate and endorse everything said by my right hon. Friend the Member for Harlow (Robert Halfon) about schools and education. On those issues, he is always bang-on. Since the Budget, I have had positive conversations in particular on the transition between BTECs and T-levels that I hope will be reflected by the Secretary of State’s comments tomorrow. There are many opportunities there.
I welcome the many positive announcements in the Budget, which has been largely well received by residents. It set a good and clear direction to help take the country forward post covid. In particular, I welcome the business support measures, business rates cuts, changes to alcohol duties, the freeze on fuel duty and other measures that will impact on the cost of living and support businesses to grow and innovate. At some stage, we will have to reform business rates fundamentally. The measures announced in the Budget are positive and will support businesses—high street businesses in particular—but business rates are not fit for purpose. I had positive conversations last week on that with the Financial Secretary to the Treasury, and I understand that a review is to take place. I look forward to seeing that in due course.
I also welcome the personal support for the lowest paid, with a £1,000 pay rise and a tax cut for working people on universal credit. The average wage packet in Mansfield is way below the national average, and thousands of people will benefit from those changes. I am grateful for those announcements.
I welcome the significant capital commitments on transport and infrastructure, although I am slightly concerned that it seems that only areas with combined authorities and devolution deals are eligible to get the best of that support. We have some positive announcements for Nottinghamshire: Mansfield will submit a bid for the next round of the levelling-up fund, as will Nottinghamshire County Council, and we look forward to positive news, hopefully. There was a huge multibillion pound investment in devolved mayoral authorities. However, the east midlands does not have that, so the area that historically has had the lowest level of investment misses out.
Do not get me wrong—I am not moaning. I think that passing powers down to local level and giving capital funds to accountable local leaders is a good thing. If I do have a moan, it is that we do not have one, and we want one in Nottinghamshire. We have a plan for that, and I want the Government to get on and give Nottinghamshire a county deal so that we too can benefit from such support. I remind Ministers of the fantastic levelling-up package that the east midlands offers with our freeport, our development corporation and our huge plans around Toton supported by the integrated rail plan. Altogether, that is more than 100,000 jobs and £5 billion in gross value added. The plan exists and is all on track, and a devolution deal for Nottingham—which, by the way, is a bigger geography than the Tees Valley Combined Authority or the Cambridgeshire and Peterborough Combined Authority—would give us huge economic clout. It is a chance to invest for us, to get on a par with other parts of the country. We want a deal, we have the unanimous support of local leaders who have all made significant resource commitments for that, and we have a plan to deliver better public services. I will keep banging on about it until we get one—I am sure that Ministers will indulge me.
I turn to public services, which are the theme of the debate. There was positive news in the Budget, with £4.8 billion in grant funding to local authorities both very welcome and perhaps more generous than many had expected. That will help us to tackle things such as the cost of the minimum wage rise for care staff, which runs into the millions. I also welcome the commitment to new family hubs and the Start4Life programme that will benefit children and families who really need it.
I said in an intervention that certainty for the supporting families programme and investment in the development of early years staff is fantastic. In particular, early years staff development has been a problem for a long time, so the more we can do to support that sector, the better. We must continue the commitment to proactive and preventive services. In truth, children’s services, not social care, are causing every upper tier council leader in the land the biggest headache on budget setting. There are many challenges in social care, but, if I had loads of money, I could not spend it because I cannot recruit the staff. The challenges there are deep and long term.
The problems with recruiting were raised by East Riding of Yorkshire Council, and one reason why it is asking the Government for more money is that it wants to be able to offer higher wages to try to compete with organisations such as Amazon, which attract workers who would previously have worked in care.
I thank the hon. Member for that intervention, which pre-empts something I will come to. In effect, I will make the same point later in my speech. The truth is that next year we will underspend on social care, because we cannot recruit the staff to pay them, even if we had the money. In children’s services, demand is growing exponentially. The complexities and costs are becoming increasingly difficult. There are also significant additional needs for school places for children coming from Hong Kong, and significant care issues for asylum-seeking children. The children’s budget of every council in the land is overspent.
I therefore welcome measures focused on early intervention. I would love to talk to Ministers about supporting the transition towards a set of more preventive services. I welcome the announcement in the Budget, but we must continue the trend of having a better attitude to risk management and how we support families in their homes before we get to that acute stage. That change of approach and culture will save money in the end, but it will require more up-front resource.
The Government could support Nottinghamshire and the whole country by letting us pilot new proposals and ideas in the space through a county deal. We have thoughts about how we might like to do that, working with organisations such as the National Youth Agency, the charitable sector and our great Nottinghamshire universities to change the game and learn some lessons. I would welcome conversations with Ministers about that.
On social care, and the point made by the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy), councils need teeth to get the money. More funding is welcome, but at the minute that funding is going to the NHS, whose backlog is in large parts due to the limits of social care. We cannot get people out of hospital and into appropriate homes or care packages, and we cannot offer sufficient preventive interventions. People end up in hospital, which is not the best place for them, because social care does not have the resources to provide emergency support or to fetch Mrs Miggins and put in place a care plan for her; instead, she ends up going off in an ambulance.
The Government could help tackle the NHS backlog by backing social care. As it stands, it appears that we must go with our begging bowl to the integrated care system to ask for funding from the national insurance rise for services such as supporting hospital discharge or response teams that can offer care in the home rather than an emergency response. The funding is aimed at the NHS backlog and, although it needs to fund those social care interventions to be successful, we seem to be at the NHS’s mercy on whether it gives us that funding. I hope that Ministers will tackle that imbalance in the White Paper. It is hugely important to the transition and new approach to social care that we get that right, because the two are not separate services; they interlink closely.
We will meet a cliff edge in a few weeks, when the requirement for care staff to be vaccinated begins. I have raised that issue a few times. In Nottinghamshire alone, 1,000 staff or more could be no longer eligible to work in a sector that already has a 12% vacancy rate. Is it riskier to have an unvaccinated care worker or not to have a care worker? We may face that challenge. I know that there are financial mitigations to try to help, but, as I have said, we cannot recruit. We do not set the wages—largely, services are commissioned from private providers—and people can get £1.50 an hour more at Amazon than working in the care sector. I have said to Ministers before that we need to consider carefully whether it is right in effect to force a lot of people out of a profession that is already struggling with recruitment and with getting the right staff in the right places.
That said, there are many fantastic interventions in the Budget. I touched on many of them. However, those challenges will not go away. I therefore look forward to conversations about them with Ministers across various Departments in due course. There are real positives to take, with the Government continuing to support jobs and individuals. The OBR tells us that the interventions throughout the pandemic made a huge impact on protecting people and keeping them in work over the last 18 months. The plan for jobs has been incredibly successful so far, and I trust that that will continue. I welcome the many measures in the Budget that will impact positively on my constituents and look forward in due course to discussing in more detail with Ministers some of the challenges that I raised.
I would like to comment on some of the points made in the debate so far.
We all support levelling up—in fact, it was a Labour party policy announced in 2016—but let us talk about levelling back, because £100 billion of central Government funding has been taken from local government since 2010. With this Budget telling local councils that they can have spending power but not the resources to back it up, we know what will happen. Local councillors of all political hues will be blamed for either the cuts forced on them, or the council tax increases. It is predicted now that council taxes will increase by at least £400 by 2026.
What we need now is what we have been promised for a decade: reform of local government finance that provides an independent, adequate resource for local authorities. That includes the reform of business rates. On capital investment, it is now estimated that it would take £30 billion of investment a year to level up the regions to the investment levels of London and the south-east. In this Budget, there is nowhere near the amount needed to tackle that issue.
I say this to anyone entering government: whatever the quantum, the system of distribution must be seen to be fair. To have a Chancellor stand up and list the towns and areas that will be showered with his or her beneficence is not good enough. What we need is a system that is open, fair and transparent. In the distribution of resources across the UK to Scotland and Wales and so on, there is a Barnett formula. We should introduce a Barnett formula for this that is open and transparent, otherwise, there will be accusations of pork-barrel politics that will stain all our politics, not just this current Government’s.
On pay, let me be clear: for most of my constituents, pay has been frozen for 10 years. The Government are telling people that the freeze is now ended, but not allocating the resources. Do not insult people’s intelligence —they know that is a con. In the Government’s pay remit to Departments, we must make it clear to those Departments that all pay rises must at least match inflation, that there should be an element of catch-up because of the freeze and the pay cuts over the past 10 years, and that those Departments will be given the resources to enable that to happen.
On the minimum wage, can we just stop the Orwellian language? This is not a living wage. That is a con. If we are to have at least some semblance of a living wage, why do we not just allocate its distribution to those who assess the real living wage? We also need a transition to better wage levels in this country. Two thirds of children living in poverty—my hon. Friend the Member for Makerfield (Yvonne Fovargue) spoke about this—are in families where someone is in work. What does that say about wages?
We promised to introduce a £10 an hour minimum wage two years ago. Because that has not happened, people have lost out on £2,500 each. That is a lot of money that could have lifted people out of poverty. I want to see the living wage now at £10 an hour, and I want to see it progress towards £15 an hour by the next general election at least.
On universal credit, let us be clear that the taper, which my hon. Friend spoke about, still means a tax rate of 55p in the pound. That is more than the Prime Minister pays, and 70% do not benefit now from the improvement to the taper. Yes, we need to restore the £20, but why do we not think about what Barbara Castle put forward: ensuring that benefits are linked to earnings so that we all share in the growth of the economy?
We all agree that we are at one minute to midnight on climate change, but in this Budget I was hoping we would see a radical response to that—just the basics. No: I think at the last estimate, the Chancellor was introducing at least £54 billion of tax reliefs. Why do we not at least ensure that none of those tax reliefs go to companies promoting the use of fossil fuel, or that none of those tax reductions are linked to operations that increase emissions? In this instance, of course, I refer to the shocking announcement about the support that domestic flights will now get.
It was mooted at one point that we would see some radical changes in this Budget with regard to pensions tax relief. I hoped, and it is not too late, that when it came to the Finance Bill there would be a link between pension tax reliefs and ensuring that pension funds provide us with their strategies for removing their investments from fossil fuel—over a two-year prospect would be realisable.
Finally, let me say something on taxation. I was hoping we would see something at beyond just words about fair taxation. Fair taxation means not cutting tax on the bankers who caused the crisis of 2008, and it means fairer taxation of wealth—that is capital gains—and of the wealthiest. It is time that the City started pulling its weight. That is why the financial transaction tax, newly designed over the last month by the Robin Hood campaigners, could be a realistic way for the City to make a better contribution to our economy overall. I also expected significantly more in this Budget, after the Pandora papers, about tackling tax avoidance in British overseas territories funnelled through the City of London, along with the money laundering that is taking place on a criminal scale.
The Chancellor said that this was a Budget for an era of optimism. I warn him that it will create crushing disappointment, which will tarnish our whole politics. That crushing disappointment will come out elsewhere—on picket lines and in demonstrations and occupations—as people’s anger is fed by the disillusionment caused by this Budget.
It is a pleasure to speak in this debate and to commend the Budget to the House. I think it is a good Budget for my constituency—indeed, for all the constituencies of this country. In particular, I know that my pubs, restaurants and retailers will be very happy with the business rates cut, although I echo the remarks on both sides of the House that we need a longer-lasting solution to business rates. I think everybody recognises that they are not an optimal tax and that we can do things a bit better.
In the brief time allotted to me, I want to talk about financial services and about growth more generally. First, on financial services, the right hon. Member for Hayes and Harlington (John McDonnell), for whom I have deep respect, made the point that the City should pull its weight, or something to that effect. I would argue that the financial services sector is pulling its weight. It employs over a million people and generates over 7% of UK economic output and almost 13% of tax revenue. I would argue that that is pulling its weight.
I welcome the Chancellor’s decision to reduce the bank surcharge. It was introduced in the aftermath of the financial crisis, over 10 years ago. The planned increase in corporation tax to 25% would result in this country’s bank taxation becoming completely uncompetitive compared with other leading financial services sectors, and that would have a detrimental effect on those million people the sector employs and that 7% of economic output and almost 13% of tax revenue that it produces. I therefore really support what the Chancellor has done; indeed, I even wish he had gone slightly further. It is also worth making the point that, in his measure on the bank surcharge, the Chancellor increased the annual allowance to £100 million, thereby ensuring that small challenger banks benefit the most.
The Chancellor and the Treasury have also recognised the need for reform in the financial services sector. We have had the Hill review and the Kalifa review; indeed, we have had the wholesale markets review, looking at the whole way in which regulate the financial services sector. I urge the Treasury to continue the dialogue that it has with me, in my role as chair of the all-party parliamentary group on financial markets and services, and with many other Members to ensure not only that we get the best regulatory environment as a result of those reviews, but that we really look ahead at the next five or 10 years and think, “What is the optimal regulation for this critical sector?”
The second thing that I want to say, which is perhaps even more important, is about growth. Without growth in the economy, none of the things that we talk about in this House is possible. The OBR estimates that after we come out of the coronavirus pandemic fully—we hope—our growth rate will settle at about 1.7%. Before the financial crisis, our medium-term growth rate, if we take out the three years of recession from 1980, was about 2.8%. In effect, since the financial crisis, we have lost a significant amount of growth. We are somewhere between 30% and 40% poorer than we otherwise would have been each year. That matters because it means we are not as prosperous as we should be. Not only is increased prosperity important for the livelihoods of every single person in this country, but it helps to pay for the public services that everybody in this House talks about and rightly champions.
The Chancellor has done a remarkable analysis, as have many think-tanks and other outside bodies, of the problems of our economy. We know what they are: low private investment, which is why the Chancellor has brought in measures such as super-deduction; poor skills, which is why in the Budget we increased the skills budget hugely; poor management in both small and medium-sized enterprises and middle management in large companies, which is why the Help to Grow and Help to Grow Digital schemes have been put in place; poor transport systems, which is why we are investing in local regions; and the regional imbalance in our economy, which is the essence of why we are levelling up and why it is such important mission for the Government.
Something is missing, though. It is not just about measures or policies; we need to rediscover the importance of values and purpose in economic policy making. We cannot treat the economy like a machine, where we press a button and something comes out, and pull a lever and something else comes out. The essence of why economies grow is not just what policies come from the Government. The economic historian Deirdre McCloskey, who is a genius, has done a huge amount of work on why the industrial revolution started in this country and why it was so successful. Her analysis, backed up by that of many others, shows that it was about a change in mindset, a change in culture, and a change in the way we viewed economic innovation and dynamism in this country—and we did that here before anyone else.
I argue to those on the Treasury Bench that we need to rediscover that spirit and thinking. We could link it to the green agenda, giving purpose to the many people who want to see what they can do to help. They should not just think, “We need to give to charity here or give money to this or that group.” We do need to do that, which is what the Prime Minister and various other people are doing at COP26, but we should also champion the nobility and virtue of wealth creators, and actively argue that more economic innovation is a social good, because that is what enriches our society. I do not believe that those values are inherent to this country alone, but our growth rate over the last 30 to 40 years has not been as strong as it could be, and it has not been for want of trying by either the Conservatives or Labour in government.
We need to be thinking about those sorts of ideas underpinning all our policies in the Budget. We need to think about how we deal with Government policy as a whole and to say that the primary goal of Government policy is to push forward growth. Let us push for green growth. Let us think about the honours system and champion people who create wealth and sustainability for their local communities. Let us think about the national curriculum and how we talk about creating sustainable and ethical businesses. If we do that not only will people be better off but our society as a whole will be enriched in lots of different ways.
I think the right hon. Member for Harlow (Robert Halfon) summed up the issues for many of us. The Budget should be an opportunity to reflect on the cost of living, but when we consider the reality of this Budget for many of our constituents, seeing how young people and low-income families have been hit, we see that it unfortunately misses the target.
Before I come on to my main points, I will talk briefly about the Ministry of Defence budget, which has been hit with a cut to day-to-day spending until 2025, a decrease of 1.4% in average yearly real-terms growth. We know who will bear the brunt of that: personnel. It is their salaries, their pensions and their family support that will be hit hardest. As we approach Remembrance Day, when we commemorate the sacrifice of so many, it is disappointing that the Government are failing to support those who are serving now.
More widely, the Budget is devastating to families up and down the country. It fails to reverse poverty-inducing policies that are pushing people into hardship. Although I welcome the changes to the universal credit taper, they do not go far enough to make up for the cut of over £1,000 to the incomes of universal credit claimants. As has been mentioned, the taper rate reduction will help only those who are in work, not those who cannot work through no fault of their own—because they are carers, because they have disabilities, because they are not able to access the job market.
Although the Chancellor acknowledged in the Budget that every child has the right to succeed, he missed yet another opportunity to address poverty, which remains the single biggest barrier to success in education. Without expanding the eligibility for free school meals, removing the two-child limit on tax credits and improving access to childcare, many children will sadly fail to reach their educational potential.
The Scottish Government, meanwhile, have introduced a number of pioneering measures, such as the Scottish child payment, free childcare for low-income families before and after school, and free breakfast and lunch for all primary school pupil. The difficulty is that the Scottish Government are giving and the UK Government are taking away. At the start of the debate, the Secretary of State for Education mentioned teachers’ wages. It is worth noting that even with the uplift, which will no doubt be welcomed by teachers in England, they will still be £3,000 less well off than their counterparts in Scotland.
I turn to the Government’s statement on research. I am sure that the commitment to increase public research and development spending will be met with some relief from many in the sector, but we have had no clarity on Horizon Europe. We have had nothing on how we will increase the opportunities for our young people to move to or work in Europe, or for European young people to come here. That is what the research and development sector needs most of all: access to talent at all levels, not just those who meet particular arbitrary salary thresholds.
There is no mention of tuition fees in the Budget. In fact, there is only one brief mention of the Augar review and no mention of the report’s recommendation that the
“cap on the fee chargeable to HE students”—
“should be reduced to £7,500 per year”
by this academic year. The Government seem to have conveniently forgotten about it. They like to remind us about their economic prowess, but what is happening is that massive student loans are putting young people into incredible levels of debt, and the Government are simply shifting their fiscal responsibilities to a Government 30 years down the line, when these young people cannot pay them back. It is simply a fiscal fudge and the burden has been dumped on the next generation.
Finally, as Glasgow hosts COP over the next two weeks, many of us would have hoped to see some strong statements in the Budget about climate change, but the Chancellor has not even paid token consideration to climate or the environment in this Budget. The latest Intergovernmental Panel on Climate Change report provided a stark warning that the climate is changing in an unprecedented and damaging manner. We all know what our responsibilities are, but we are not seeing enough action. When our children and grandchildren ask us, “When COP was held in the UK, in Glasgow, what big steps did you take? How did you make changes that would make a difference to us?” I am afraid that we will look at this Budget and answer, “Not very much.”
Perhaps you will indulge me, Mr Deputy Speaker, and cast your mind back to the last Budget in March. You may remember that I spoke about the Chancellor walking a tightrope, having to balance providing support to people and businesses with beginning the process of building back better.
The Budget that we are debating today demonstrates just how far we have come since March. It is full of optimism, investment and growth, levelling up every town, region and industry across the United Kingdom. Of course, I cannot talk about it without first mentioning one of the big successes for my constituents in Milton Keynes North: the announcement that Milton Keynes will receive our share of £70 million for a fleet of more than 50 new zero-emission buses as part of the Department for Transport’s ZEBRA—zero-emission bus regional areas—scheme. Having lobbied the Government with my good friend and colleague, my hon. Friend the Member for Milton Keynes South (Iain Stewart), I am delighted that my constituents will not only benefit from improved connectivity, but be part of the Government’s ambitious net zero strategy.
While it is vital that we continue to invest in the physical infrastructure to boost our communities, I firmly believe that when we talk about levelling up, we must start with investment in people and in their future. That is why I am pleased to see a real commitment to improving accessibility and opportunities in skills, with overall skills spending increasing by more than £3.8 billion over this Parliament. From additional hours in the classroom for up to 100,000 T-level students to expanding the lifetime skills guarantee so that more people can access level 3 courses, the investment in skills will boost not only the productivity of our economy, but the wages in people’s pocket, with level 3 qualifications resulting in a 16% boost in average earnings.
Given the Government’s emphasis on skills and education as we build back better, it is a huge disappointment to me that the proposed university in Milton Keynes, MK:U, was not included in last week’s Budget. One of the main values of the Conservative party, and indeed of this Government, is that we want to empower people by giving them the tools and skills they need to succeed, and that is exactly what MK:U would do. With backing from businesses such as Santander and BT and from academia, including the world-renowned Cranfield University, MK:U is a shining example of how we can address the critical shortage of skills and apprenticeships in sectors such as cyber-security and data science and create a high-skills, high-wage economy in Milton Keynes, the south-east and the whole United Kingdom.
If the Government are serious about improving access to technical education, as I believe we are, and if we are to show that we are serious about apprenticeships and investing in digital and science, technology, engineering and maths, I urge my Treasury colleagues to consider again the case for MK:U. I see the Chief Secretary in his place; I believe that the ball is in his court.
Ultimately, this is a Budget with a huge amount that I can get behind and a huge amount for the people of Milton Keynes North. There is an additional £640 million to tackle homelessness and rough sleeping, an increase in the national living wage, £5 billion for Project Gigabit—the list goes on. With that in mind, I thank my right hon. Friend the Chancellor and the whole Treasury team for making the difficult decisions back in March that ultimately put us on the right path and in a position to invest now in growth to keep unemployment down and employment up. However, I say again that if the Chancellor and the Government are truly committed to upskilling our domestic workforce and levelling up in Milton Keynes North, MK:U has to be the next step in our ambitious plan to build back better.
It is a pleasure to follow the hon. Member for Milton Keynes North (Ben Everitt), and I wish him well in his campaign for the university in Milton Keynes to be recognised and supported. I hope he will forgive me for picking up only that part of his speech, and focusing on some equally important but none the less parochial examples of my own.
The Grange Farm estate is just half a mile from probably the most famous establishment in my constituency, Harrow School, but the world in which the people on the Grange Farm estate live is very different from the world that the Harrow School students come from. However, I am pleased to say that the estate has secured funding and, through a programme of investment by Harrow Council, is being rebuilt. Members are therefore entitled to wonder why I should raise it in the context of a Budget debate. On the estate at the moment, because it is being rebuilt, a series of vulnerable families are living in the temporary accommodation that is now available there. Many of them have spent all their time in temporary accommodation, moving from one not very suitable house to another even less suitable house. As they face the prospect of being evicted, for understandable reasons—so that the rest of the programme of rebuilding works can be completed—they are wondering, not unreasonably, when, if ever, they will have the chance of a permanent social home.
While there are one or two examples of positive progress in the Budget in terms of funds to tackle homelessness, there is no sense of any recognition in the Treasury of a national need for investment in social housing. I hope that Members with constituencies outside London will forgive me for making the fairly obvious point that London remains the epicentre of the housing crisis. It has the severest homelessness rates in the country: there are more than 165,000 homeless Londoners living in temporary accommodation, representing two thirds of the homelessness in the UK overall, and some 250,000 Londoners are on waiting lists for council housing. Given that, according to an analysis carried out by the Local Government Association, those who are managing to live in social housing face a £2,000 lower housing bill than those who live in the private rented sector, we can understand why there is still so much support for investment in more social housing.
Harrow Council, which I think does a very difficult job as well as it can in managing the housing shortfall, desperately needs still further funds to invest in social housing. I hope that some of those funds will eventually become available, so that those vulnerable families who are facing eviction—many have recently come out of care, some have experienced domestic abuse in the past, and many are single-person households in work who are looking after children but facing the prospect of having to up sticks and move again at a cost to themselves, and who will face the same prospect yet again in three or five years—will finally be given hope by a significant social housing programme.
Apart from a very brief reference in the Secretary of State’s speech, there has been no mention of police funding. While it is good that police officers are being recruited, when the recruitment programme that the Government are funding comes to an end, we will still have fewer officers in the UK than we had in 2010. The number of police community support officers has fallen by about 40%, and those missing officers are not being replaced. What that means in practice for the communities in my constituency is that the local police team that they had become used to at the end of the last Labour Government—a sergeant and, usually, three police constables and four PCSOs for each ward in our borough, a highly visible police presence—has been cut to just one PC and one PCSO, and that is in no small part due to the efforts of the current Mayor of London. We need to see much more investment in the Metropolitan police, notwithstanding the significant need for reform that has again been revealed as a result of the Sarah Everard case and the cases of Bibaa Henry and Nicole Smallman. We are desperate to see a dedicated police team once again in central Harrow, and the British Transport police desperately need more funding, not least in my constituency, to improve safety on the tube network for women and girls. That issue has been raised at a number of meetings with the police locally.
I want to lament the fact that there seems to be nobody in Government who is seriously committed to the co-operative movement. Sadly, no investment in support of more co-op housing was announced in the Budget, and there is no sense of the need to give consumers more power. Many hon. Friends on this side of the House have rightly described the huge windfalls that the shareholders in water and sewerage companies have attracted over the years, and it is surely high time for consumers to be given significant power to decide when a discharge should take place, for example, or whether a chief executive’s pay should rise. That should be the most urgent consideration before a change of ownership takes place, and it would be good to see that happen.
Finally, Ministers have promised many times that there would be new investment in credit unions and a programme of legislative change to help to drive a significant expansion of that sector. There is still no evidence of when that programme of legislative change will happen. If there is anything that the Chief Secretary to the Treasury can do today, it would be lovely to have a date for when that legislative package might come forward.
I want to start by paying tribute to my right hon. Friend the Member for Gainsborough (Sir Edward Leigh), who is no longer in his place, for making the strong case for why low-tax conservatism is the right way forward. Everyone on this side of the House can definitely agree with that, but we obviously have to face the reality that we are living in unprecedented times and that covid has had an enormous impact. On those grounds, I think that the Budget that was announced on Wednesday was really fantastic, and I want to go through some of the really positive things that were announced.
The first, which was also raised by my hon. Friend the Member for Plymouth, Moor View (Johnny Mercer), is the universal credit taper. Changing that to the 55% limit that it was originally destined to be is a really positive step forward in terms of not just the buzzwords of making work pay, which we Conservatives always talk about, but what that actually means for the single mum who knows that she can pick up a few more hours at work without losing a high proportion of her benefit. This has real-world implications for people, and it is a really positive step that this Conservative Government are taking.
I also want to focus on criminal justice, which is an area incredibly close to my heart—
I will not, because I have moved on from that point.
I particularly want to look at what the Conservative Government are doing to tackle the courts backlog. The courts have been really damaged by covid and it is absolutely right that we are putting so much emphasis on this: not just on the courts backlog in and of itself but on extra funding for rehabilitation and for our prison services, as well as for victim support, which again is an area close to my heart.
Another area that is close to my heart, colleagues across the House will not be surprised to hear, is the hospitality sector, which has faced a crippling 18 months so far. It has had unprecedented support from the Government through business grants and the VAT reduction, and one of the things that is going to do wonders for the sector as it bounces back is the further reduction in business rates to be rolled out over the next 12 months. That is a really positive step that I am incredibly pleased to support today.
Something that I know caused vast cheers on Wednesday was the fact that we are finally seeing substantial changes to the alcohol duty system. This is long overdue, not just because it is going to help the brewing sector and the hospitality sector but because it is a form of tax simplification, which is something that I, as a low-tax Conservative, am wholeheartedly for. My inner low- tax Tory let out a massive cheer when I learned that fruit ciders were going to see a reduction in duty as well.
I would say that it is a good thing to be cutting tax in general, but that has to be alongside a proper public health strategy to ensure that we are tackling issues associated with alcohol abuse across the board and, in particular, among young people.
My being low tax does not mean that I do not think spending is necessary, because spending in the right areas absolutely is necessary. There are two key things we can focus on. The first is spending on places, by which I mean some of the areas that have been left behind for far too long—for generations. I am thinking of places in Bishop Auckland. One thing I was delighted to see in the Budget on Wednesday was the levelling-up fund, which is going to see three key projects delivered in my area: we will be connecting communities through the Toft Hill bypass; we will be connecting communities through the repairs to the historic Whorlton bridge; and we will have the extra works for Locomotion in Shildon to improve heritage and tourism in my area and create jobs for the future.
My hon. Friend the Member for Milton Keynes North (Ben Everitt) stole a bit of my speech, because he talked about the importance of investment in people and I could not agree with him more on that. For me, that investment takes two forms. The first is investment in good-quality healthcare, and the settlement the NHS is getting thanks to this Budget is astonishing. However, one thing I hope I can work with Treasury and Health Ministers on is finally getting the accident and emergency reinstated at Bishop Auckland Hospital. I have been campaigning on that for two years solid and I have no intention of stopping now. However, the billions of pounds to tackle the backlog in elective surgery is the right step forward, as is the emphasis on early diagnostics through 100 new community diagnostic centres. Those are positive things coming out of this Budget.
Investment in people also means investment in skills, and we are seeing £4.8 billion being invested in them. This is also about policy, and things such as university technical colleges and the move to T-levels. I must say that I agree with the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) that we need to slightly rethink our policy on BTECs. We need to make sure that our young people have the skills they need, but we also need to make sure that BTECs are phased out in the most proactive and positive way, so that that will not have a negative impact on the education of our young people.
One thing I am passionate about is the lifetime skills guarantee, which is making sure that as our economy changes and we have become more technologically focused, people have the skills they need to get on in any future career, not just the one they are in now. Excuse my enthusiasm, but I used to work in research and development and one thing I am really enthused by is the Government’s focus on that. This is not just about R&D spending, finally introducing the Advanced Research and Invention Agency and R&D tax credits; it is also about the super-deduction scheme. The Government get slagged off all the time for supposedly reducing taxes on business when it is not the right time to do so, but this is incentivising investment in R&D. It is incentivising businesses to improve their productivity, and not just to create good, high-quality, skilled jobs which all our constituents can take up to give them a better life, but to grow our economy. As Conservatives, we know that the best way out of any economic crisis is growth, not spend, spend, spend—it is all about growth. The Chancellor has put a lot of emphasis on our future growth statistics. He also highlighted the fact that he remains a low-tax Tory. I am really trusting in him to stick to his word as we move out of this crisis.
It is a pleasure to follow the hon. Member for Bishop Auckland (Dehenna Davison), but I am sure she will agree that this Budget is a wasted opportunity. It is a missed opportunity because the Chancellor did not focus on an ambitious future for our country and for those on the frontline during the pandemic. This is a conflicted Chancellor, who is giving money to bankers by cutting the surcharge on bank profits from 8% to 3%, but has nothing on tax evasion or avoidance. Welcome relief is being provided for theatres and galleries, and I hope that that means the new art gallery in Walsall will not have to scrounge and scrabble around for money every year. Of course, we also have the 50% business rate discount for businesses in leisure, hospitality—an area the hon. Lady mentioned—and retail, and the benefit change.
However, this is a contradictory Chancellor. He said he wanted to support the imagination and drive of entrepreneurial people, but the 3 million self-employed and small entrepreneurs who did not qualify for covid relief—the excluded—still do not qualify for any other support. He is the Instagram Chancellor—the Insta Chancellor, although none of the money is coming instantly, as he said himself. Everything is going in in 2024-25, before the next election, but we need something now, and I want to focus on three areas: young people, communities and the climate emergency.
First, on education, I am sorry to say that the Government lack ambition for our children. Walsall schools have been suffering: they have been on the frontline for the past two years, making sure that the children of key workers, and other children, are educated. The recovery package for children is so bad that the Government’s own commissioner had to resign. Sir Kevan Collins asked for £15 billion but was allocated £5 billion, spread across 8.2 million children—that is less than £500 per pupil. Members can compare that with the Netherlands, which is spending £2,100 per pupil.
The Chancellor has rejected the idea of extending free school meal provision for three years, thereby affecting the health and wellbeing of millions of children throughout the country. He should have supported parents and teachers by facilitating a nurse or counsellor in every school, to help with children’s mental health. Or he could have funded a tutor or two, targeted at each school, to help teachers and classroom assistants. That would be a catch up, but 60% of schools have not even recovered from using their budgets for covid, and there is nothing for them. Schools in my constituency have had to get food bags ready for their pupils.
What are family hubs when we had Sure Starts? Sure Start Palfrey was rated outstanding by Ofsted twice, yet it is now closed. The National Youth Agency found this year that local authority annual expenditure on youth services has dropped by £l billion. Children in affluent areas of England are twice as likely to have access to youth clubs and other out-of-school activities as children in poorer parts.
The youth service in Walsall had a building on the Narrow Lane site in Pleck, but Walsall Council has now pushed through a Traveller transit site at that location. A better site was identified in the site allocation document. Worse still, in the Black Country plan Walsall has 23 permissions or allocations of land for Gypsy, Roma and Traveller communities, whereas Dudley has only two. Instead of investing in young people, the council has chased them off the site, to waste money right in the heart of the community in Pleck.
What about communities and local economies? Of the towns fund recipients announced in spring this year, 39 out of the 45 were in tier 1 Conservative constituencies. I do not recall the Chancellor namechecking any Opposition constituencies in the Budget speech.
The UK shared prosperity fund does not deliver the £1.5 billion a year until—wait for it—2024-25. Funding for next year is just £400 million, so the Government are failing even to replace the EU funds.
What about our high streets? There has been no support for retail and supermarket workers—those on the frontline who worked during the pandemic to keep the country fed. To ensure that work pays, the minimum wage should have been raised to at least £10 an hour and there should have been an end to insecure contracts. Or perhaps there should be a real living wage that people can live on once the basic living costs are taken off.
If the Chancellor wanted to regenerate our high streets, he could have closed the loophole in respect of online sales taxes to help high street retailers, just as the French are doing to support their bookshops.
What about climate change and the climate emergency? This week, the most dramatic thing is happening in Glasgow—COP26—but there was no mention of it in the Budget. It is not about us; it is about future generations. Even now, the Government are rowing back on their 1.5° commitment. This contradictory Chancellor lowered air passenger duty for short-haul domestic flights, but there was no mention in the Budget of alternatives such as public transport and no mention of High Speed 2 or the integrated rail plan.
Perhaps the conflicted Chancellor should have listened to Insulate Britain instead of the airlines. The Government said there would be extra money for heat pumps for 600,000 homes a year, but no—money has been allocated for just 30,000 a year. That is one in every 250 households.
What about the restoration of solar panel tariffs? The Government stopped the subsidies for new applications in 2019. More than 800,000 households had installed solar panels since 2010, but the Government announced a 65% cut to the tariff.
Sadly, a new food bank has opened in the Saddlers Centre. Families have been hit hard by the covid crisis.
There is not much in the Budget for those who looked after us during the pandemic: the NHS pay rise is a paltry 3%. That is a missed opportunity to say thank you. Unison did a survey and found that 80% of NHS staff were against the 3% rise.
There is nothing allocated in the Budget so that we can learn the lessons of the covid inquiry, and nothing for our young people, our communities or our glorious planet. We have an Instagram Chancellor with no instant plan. I hope he will reconsider and make his plans more ambitious, for the good of our country.
Last week’s Budget marked an important step in preparing and supporting the UK in a post-Brexit and post-covid world. The Budget rightly focused on the Government’s commitments to level up communities and to bring economic prosperity to areas that have seen disinvestment and loss of opportunity over recent years—areas such as my own constituency of Ynys Môn.
In terms of its economic productivity, Ynys Môn—the Isle of Anglesey—has one of the lowest gross value added in the UK. In recent years, we have lost major employers such as Wylfa, Anglesey Aluminium, Octel and Rehau. During the pandemic we have seen the fragility of our tourist economy, on which so many local people depend. This has resulted in our young people having to leave the island to find good quality work, leaving behind their families, leaving behind their culture and leaving behind their Welsh language.
Last week, the Chancellor of the Exchequer said:
“There is a reason we talk about the importance of family, community and personal responsibility. We do so not because these are an alternative to the market or the state, but because they are more important than the market or the state.”—[Official Report, 27 October 2021; Vol. 702, c. 286.]
Ynys Môn is all about family and community, which is why we need to level up opportunity and provide permanent, well-paid careers on the island. Only this will drive up our economic productivity, give our young people aspiration and keep them on the island. Only by creating healthy and self-sufficient communities can we ensure that our Welsh language and culture continue to thrive.
Last week, we saw some huge numbers: £2.6 billion to the UK shared prosperity fund; £5 billion to Project Gigabit; and £1.4 billion to the global Britain investment fund. These will unleash private capital, and we on Anglesey look forward to reaping the rewards of this investment.
Ynys Môn is known as energy island, and so we particularly welcomed the announcement of £380 million for the offshore wind sector, £1.7 billion to enable a large-scale nuclear plant, £385 million towards nuclear R&D, and £120 million for a new future nuclear enabling fund. With the National Nuclear Laboratory already based at M-SParc in Gaerwen, and Bechtel, Rolls-Royce and others keen to set up at Wylfa Newydd—whether it is AP1000s and/or small modular reactors—these announcements bring hope to Anglesey. It is hope that we may once again enjoy the economic benefits of hosting nuclear.
We are also keen to see the UK’s first thermal hydraulic test facility established locally. There are currently only two worldwide: one in Italy and one in the US. To have the third thermal hydraulic test facility in the world in north Wales would be absolutely fantastic.
The people of Anglesey are already starting to see the impact of the levelling-up agenda. We have jobs and opportunities appearing as a result of the Government’s investment: more than 200 new jobs at the HMRC Holyhead inland border facility; expansion of the workforce at Orthios Eco-Park supported by Government investment; the Holyhead hydrogen hub, which was earmarked for almost £5 million in the March Budget; and, of course, as chair of the Anglesey freeport bidding consortium, I continue to press for Anglesey to become a freeport with all the advantages that that would bring.
Finally, I thank the Chancellor of the Exchequer, the Chief Secretary to the Treasury and the Secretary of State for Transport for awarding my bidding team up to £50,000 for a feasibility study on the disused Gaerwen to Amlwch line on Anglesey. This money will be match funded by the Welsh Government and allow us to fully investigate viable options and alternative uses so that we can bring this community asset back to life.
Our island used to be known as Mon Mam Cymru—the Mother of Wales. I am proud that this Government are giving Ynys Môn a hand up, not just a hand-out, so that once more Ynys Môn and its people will not only lead but roar on the global stage.
It is a pleasure to follow my constituency neighbour, the hon. Member for Ynys Môn (Virginia Crosbie). Unfortunately, we do not quite see eye to eye on everything, but it was a pleasure to hear her speak.
For Wales there are three particular yawning funding gaps in this Budget. I will only refer to those three, although I could say a great deal more. First, the arrangements for replacing EU structural funds are—to be very kind—a bit unclear. That is a worry for marginalised communities, rural communities, small and medium-sized enterprises, and the third sector. What we do know, however, is that the replacement funds will fall well short of the £375 million that we were receiving every year. In fact, the figure that has been suggested is £120 million, not £375 million. To me, that sounds like not levelling up, but pushing down.
The EU funding has in the past supported skills development, business development, decarbonisation and much else. Skills development, of course, is a particular issue this afternoon. The Education Secretary referred to it, as did many of his colleagues. Those three apparently prime targets for this Government are unfortunately going to be neglected now that the funding will be reduced, not increased. To be clear, Wales won those funds from the EU because of our relative poverty. Our poverty puts us in the same category, unfortunately, as parts of post-1989 eastern Europe. That is where we stand economically. I am afraid that that grinding poverty remains. It has scarcely been relieved, yet this Government are cutting the relief that has been available to us—so much for their golden promises about life after Brexit.
My second point is about HS2. The spending review did not reclassify HS2 as an England-only scheme. Quite apart from the well-made arguments of English MPs against HS2 on environmental and other grounds, I have to point out that HS2 literally comes nowhere near Wales, yet, unlike Scotland and Northern Ireland, we are paying for it. Were we not paying for it and instead getting a Barnett consequential, we would have received about £5 billion, which would have gone some way to redressing the chronic underinvestment in our rail infrastructure.
I have said before in the House that Wales has 11% of the rail network, yet we receive 1% of the investment in that infrastructure—a point that really needs to be addressed. Even if we only received our Barnett consequential of infrastructure investment, it would be 5% rather than 1%. As it is, HS2 is expected to have a negative impact of about £150 million a year on the Welsh economy, even though we are paying for it. This will hit the south and the south-west of Wales particularly hard, while the projected benefits—in particular to the north-east of Wales—compared to the huge spending on HS2 are, to use one of the Prime Minister’s favourite words, piffling.
Let me turn to my third point. Members may have forgotten the legacy of the Welsh coal industry—an industry that powered so much development that benefited others elsewhere and provided some individuals with almost incalculable wealth, which was spent conspicuously on personal follies such as grandiose fantasy castles. Now the coal has long gone, disappearing on railway wagons down to the east or off on ships to all parts of the world. But other legacies remain: the wrecked health, the poverty and, conspicuously, the coal tips.
There are 2,456 coal tips in Wales, which tower over former mining communities. Most are quite stable—at present, at least—but 327 are classified as high risk, and one of those actually slipped earlier this year near Tylorstown, where my own grandfather was a collier in the ’20s. Others may slip, particularly bearing in mind the increased rainfall that is inevitable with climate change. The coal may have gone and the wealth may have gone, but responsibility for the tips is now devolved—we are picking up the mess—and we will try to make them safe. However, the failure to back a long-term solution for Wales’s coal tips could create an additional financial burden on the Welsh Government, and the Welsh budget, of about £60 million per year.
Those three points convince me that the contrast between the Government’s soaring rhetoric about their plans and the reality that we are facing is breathtaking. This is not a Budget that my party can welcome or support.
It is a pleasure to follow the hon. Member for Arfon (Hywel Williams). I wish I could say I disagreed with him over HS2, but let us not go there.
I congratulate the Government on their decision to back the Isle of Wight’s levelling-up bid last week and moving it up into tranche 1, accepting my arguments. I am most grateful for that. I want to say, because we are spending an awful lot of money, that it is going to be exceptionally well spent. That £6 million is going to buy quite a few things, but most importantly it will buy the capability to be able to lift 240-tonne ships out of the water at East Cowes. It will be a massive boost for jobs and for Wight shipyards and aluminium boats. With regard to shipbuilding, there is likely to be a significant contract for border patrol vessels, I hope. The Isle of Wight may well be putting in the only UK bid, and it will be a highly competitive one. Those boats have been made in Holland before. It would be nice to see them made in the UK and preferably on the Island, bringing that wealth to the Isle of Wight and also along the south coast.
I congratulate the Government on the universal credit decision. Out of all the excellent things in the Budget—my right hon. Friend the Chief Secretary knows this as well as I do—the best is that we are enabling our constituents to make work worthwhile, getting work into families and giving them prosperity and hope. That may well be the most important thing that has come out of this Budget, and it may be influential for years to come.
I want put on record my thanks to Maggie Oldham at the Isle of Wight NHS Trust, who has taken the trust out of special measures. It is now rated as good. I am also grateful for the recent visit by the Education Ministry’s permanent secretary to Cowes Enterprise College to see an example of best practice in embedding careers into the curriculum. Getting people ready for work is clearly an important part of education.
I am delighted that the Under-Secretary of State for Transport, my hon. Friend the Member for Witney (Robert Courts), is here, because I want to talk briefly about transport, just to have a bit of a moan within a positive framework. He and I have met quite often and talked about the Isle of Wight ferries and Isle of Wight transport. I wrote to him last week. I hope we are going to look at a series of issues, and I want to put them on the public record now.
The ferry services fall down too often. If this was a multi-constituency problem, the situation with Wightlink, Red Funnel and Hovertravel would not be accepted, yet unfortunately in this case it is accepted, for whatever reason. We need to challenge that and do better, because interconnectivity is important, as Ministers know. We need to improve our connectivity between the mainland and the Island.
First, following up on the letter that I wrote, can the Government take the power to oversee ferry timetables in the same way that the Rail Minister does with rail timetables? Secondly, especially because we have a Treasury Minister here, will the Treasury support a national infrastructure bid potentially by a new ferry operator—a free-market alternative—to get a new player into the market, especially if it is a community interest company that will keep a low debt level and a more affordable price structure for Islanders? Thirdly, will the Government look at other measures and potentially take other controls over ferry firms, for instance through looking at their debt level? I do not want to sound like the right hon. Member for Hayes and Harlington (John McDonnell) or the hon. Member for Norwich South (Clive Lewis), but the privatisation of Wightlink did not work, and that company has been loaded up with debt by corporate sharks over the years. That debt gets paid for every time an Islander uses the ferry service, and it is frankly unfair. I also question whether it is right for public services, be they Wightlink or Southern Water, to be owned ultimately by companies based in offshore tax havens. It is not right and it is not good for us that that practice continues.
Fourthly, can we look at extending the EU261/UK261 regulations, which cover air travel, to cover the ferry firms? Fifthly, can we add public service obligations, either supported or unsupported by the taxpayer? Will the Government support the Isle of Wight Council or the Department for Transport taking a share in Wightlink or potentially Red Funnel? Will the Government also look at a cap on costs for those travelling to the mainland for health-related travel? Unlike the Isles of Scilly, we do not have the same beneficial arrangement, and those costs are sometimes higher than they are for other people.
I will leave it there, with one final point—I am looking to the Minister via the Speaker’s Chair. On the fair funding formula, negotiations are ongoing. The Government and the Chancellor accepted for the first time, after my pressing, that the Isle of Wight should be treated as an island and that there are additional costs in providing Government services and doing business caused by separation by sea. Those negotiations are at an advanced stage. I would be grateful, because the Government invested £50,000 to look at this with the Isle of Wight Council, if those negotiations came to a positive resolution. The amounts of money we are talking about are so small when it comes to overall budgets, but would mean a great deal to the Island. That would mean that the Isle of Wight’s additional costs caused by being an island would be recognised by Government for the first time in decades.
It is a pleasure to follow the hon. Member for Isle of Wight (Bob Seely). I echo his support for comments from those on the Opposition Benches condemning private ownership of our public services.
For my generation, this Budget offers little hope. It fails to address the climate emergency, the effects of which we must endure; it fails to tackle the poverty pay that means wages do not pay the bills; and it fails to get a grip on the housing crisis, consigning people of my generation to live in their childhood bedrooms or fork out half of their income in rent.
We are a generation that has grown up under austerity. Our entire teenage and adult lives have been lived in its shadow. The Chancellor talks about restoring spending, but the cuts continue to bite. In all but a few Departments, increases in his spending review only partially reverse cuts made since 2010. The people of Nottingham now receive more than £100 million less each year to fund local services. Thanks to Government cuts to local authorities, our city’s youth services have been cut by over 90%. When will Nottingham get the money we need to truly level up? Will the Chancellor answer honestly on why his seat, among the most affluent in the country, has been prioritised in the levelling-up fund, while 38% of children in Nottingham East are living in poverty?
The Chancellor may have ended the public sector pay freeze, but there is no certainty that wages will rise above inflation or even with inflation. The tax hikes he is implementing and the price rises he is failing to control mean that families face a cost of living crisis. Public sector workers cannot continue with more years of below-inflation pay increases, which are, in real terms, pay cuts. The Chancellor must guarantee a proper pay rise for those workers and, indeed, for all workers, whether they are care workers, shop workers or cleaners—the people who got us through the pandemic.
Days before COP26, the Budget could have announced an ambitious spending plan for a just transition to a low-carbon economy, creating thousands of jobs in the process. Instead, the Chancellor cut taxes on domestic flights and pledged just £7.5 billion of new money for climate and nature, which leaves a £55.4 billion gap in the investment we need to hit our net zero and nature targets.
Shell and BP paid zero tax on North sea oil in the last three years, and the Government have backed them with tax breaks and subsidies worth billions. Instead of bankrolling polluters, we should invest those billions in a green new deal. The Budget gives banks a £4 billion tax break while hiking taxes for working people to the highest level in 70 years.
The Budget also keeps the universal credit cut. Even with the changes to the taper rate, about 75% of the 4.4 million households on universal credit, including 14,250 in Nottingham East, will still be worse off. After more than a decade of austerity, the Budget fails to restore spending on public services to the level that we need and does not deliver the “new age of optimism” that the Chancellor promised. The glass is not half full. After 10 years of brutal Tory austerity and Government cuts, it is completely empty.
It is a pleasure to follow the hon. Member for Nottingham East (Nadia Whittome). It is fitting that she is the youngest female MP and I am the youngest male MP given the steps that we are taking to invest in the future of our young people.
I am pleased to speak in today’s debate as the Chancellor, as well as being a friend, is my constituency neighbour, as is my right hon. Friend the Chief Secretary to the Treasury. The Budget, delivered for the whole country by a northern Chancellor, certainly reflected that. It ensures that the areas that Labour forgot are not just recognised, but central to the Government’s mission for a safer, cleaner and healthier Britain.
The Budget sets us back on track, with new fiscal rules of borrowing only to invest and returning to debt falling by the end of the Parliament. While the Labour party carps about the difficult decisions that the Government have to make, we are getting on with the job. The public are backing us, too: they see the changes that we are trying to make and understand that the road to a high-skill, high-wage economy comes with initial challenges.
We voted for change, both in 2016 when 66% of people in Redcar and Cleveland voted to leave and in 2019 when Redcar elected its first Tory MP, and the Government are getting on and delivering that change. The Budget announced £310 million for transport across the Tees valley, which will mean improvements to Redcar and South Bank stations and the station at British Steel; new active travel with better cycle routes across Teesside so that people can get to work more easily without a car; the new Tees crossing, which will decongest the A19 going north; and support for the roll-out of new hydrogen and electric vehicles.
On top of that, the Chancellor cut domestic air passenger duty, which is a boost for Teesside airport. We are getting a direct train link to London from Middlesbrough next month, and next year, the TransPennine line will be extended from Manchester to Saltburn. By air, road and rail, Teesside is becoming more connected day by day, thanks to our Conservative Government.
Alongside that huge investment in our transport infra- structure, the Government made a specific announcement of a UK and world first. The UK Infrastructure Bank, which the Chancellor announced in March, has made its first investment of £107 million in the new offshore wind quay at South Bank. That will enable us to get on with the job, build out the quay, regenerate the site and create the jobs of the future on the south bank of the Tees. On that site, we will manufacture blades for wind turbines almost as tall as the Eiffel tower and huge turbines that make Big Ben look like Little Ben. They will form part of the largest wind farm in the world at Dogger Bank.
The Budget also contained Teesside freeport’s approval as a tax site and the green light for it to become operational from mid-November. I declare my interest as an unpaid member of the Teesside Freeport board. I am now almost certain that that means we will be the UK’s first post-Brexit freeport. That is a pledge that I made and a challenge that I set myself when I made my maiden speech just along this Bench 18 months ago—delivered for the people of Redcar and Cleveland.
The real icing on the cake was the announcement made by Gezza on Wednesday evening. Of course, I refer not to the right hon. Member for Islington North (Jeremy Corbyn) but to the noble Lord Grimstone, who is working night and day to make Teesside great again. He announced that Sabic is to invest £850 million in its Teesside petrochemicals site, creating and protecting more than 1,000 Teesside jobs and confirming the parable that investment in the north-east from Saudi Arabia is like buses: we wait all day and then two come along at once—apparently that is a football joke.
That investment stands at the heart of our Conservative ideology that it is not the state that delivers the jobs of the future. We deliver strong public services, we level up infrastructure, we drive forward economic growth and we support the innovators, the entrepreneurs and, yes, the lenders to ensure that those who want to build something in Britain can get on and do it. It is not the Government who create jobs; it is businesses. That is why the Chancellor is supporting them and has supported them throughout the pandemic.
Finally, I was so pleased to see the Chancellor’s backing for research and development in the Budget, taking our investment in the technologies and jobs of the future to 1.1% of GDP. However, I want to see that increase going towards the D in R&D. So many brilliant ideas are killed by their inability to be demonstrated. Redcar and Cleveland is home to two world-leading development sites: the Centre for Process Innovation and the Materials Processing institute. They are two fantastic organisations, the latter established days before D-day as Churchill’s Government prepared to have the best steel innovation available to meet the challenges of rebuilding Britain after the war.
In the March 2020 Budget—that seems like a lifetime ago—the Chancellor backed the programme of research and innovation for the UK steel and metals sector. Page 85 of the 2020 Red Book referred to £22 million for the Materials Processing Institute for innovation in decarbonising the steel sector. That funding, alongside support from Innovate UK, has created 25 high-skilled jobs. PRISM will go on to make huge strides in decarbonising our foundation industries. That is what we can achieve when we invest in research and, crucially, in development. We can create the jobs of the future, the technologies that will help us tackle climate change, and level up across the country.
While the Chancellor presented his Budget as the best Budget in 10 years, he seemed to forget what party has been in control of the country for 10 years. The reason why this miserable Budget is the best of all the miserable Budgets of the last 10 years is that a miserable party has governed our country for the last 10 years. It has cut, cut and cut every time.
We have seen £1 billion of cuts in youth services since 2010, when the Liberal Democrats brought the Conservatives into power, and we see further cuts to youth services in this Budget. I know from my work on the all-party parliamentary group on youth affairs that many Conservative Members think youth services should be invested in and that the failure to invest in them, and cuts to them, have caused many social problems in their communities. It is a shame that the hon. Member for Mansfield (Ben Bradley) is not in his place. We have done much work on youth services in his area, where I have seen really good projects. I am sure, though of course he will not say it publicly, he is disappointed that there is a real-terms cut for youth services—and if he is not, he should be looking at the small print, because that is the reality.
Even when there is investment in youth services, it is in buildings. I love a new shiny building; there is nothing better as the local MP than going to cut the ribbon, getting a nice photoshoot for our next political leaflet. However, the reality is that we do not need large numbers of new youth centres. There is a need for some to be refurbished; there is a need for some to be returned from use as government offices, because they ended up being glorified council offices rather than active youth centres. That has happened because we do not have the operating costs for those youth centres up and down the country.
When I speak to housing associations, they say, “Well, if you really need a youth centre, we can probably build that within the framework of the local housing budget we have, but we can’t pay for the day-to-day costs.” Have the Government provided any support for that? No. We see in my constituency, for example, the Conservative-controlled council writing a press release in the middle of the night to say it is going to close the 1,000 square metres main library in Peacehaven and replace it with a 35 square metres facility, because of budget cuts and other changes that the council says are unforeseen.
That is not unique. It is a great shame, of course, that a Conservative-controlled council would do that, and particularly that it would do so without speaking to the local Labour councillors, or to the local town and parish councillors who wrote to them asking for a dialogue on the matter. However, I will ignore the snub from the Conservative county council leadership and the officers there, who have shown complete disregard for Peacehaven time and again. Only last year, in the dead of night, the council filled in the local primary school swimming pool—a pool paid for by the local community. During covid, the council sent in the bulldozers and bulldozed it up, saying that it cost too much to run. We said, “Surely it costs more to bulldoze it over than to keep it and mothball it?” But that is enough about the dangers of the Conservative council in East Sussex abandoning Peacehaven. The reason the council has to do those things, even though they are the wrong choices, is that its funding has been cut to the bone time and again by this Government.
That is why I tabled an amendment today. It was quite rightly not selected, and I did not expect it to be, but I tabled it to say that the upper earnings threshold on national insurance should be abolished. That would mean that everyone who earns over the primary threshold should just pay the same percentage, which to me seems fair. Someone who earns £40,000 should pay the same percentage as people earning £60,000. At the moment, people earning £60,000 can pay 3%, while someone earning below the upper threshold has to pay 13%. That does not seem fair to me. Abolishing that upper threshold would raise between £15 billion and £20 billion. We have to put a range on these things, because of course with tax funnelling and so on, we do not know what we will actually get, but the lowest estimate is £14.5 billion.
The precept, the Government’s measures and the measure I have proposed would cover almost all the costs of adult social care that local authorities up and down this country are having to pay. That would free up our councils to do what they should be doing, which is providing libraries and youth services, and not feeling that they have to provide adult social care. That is a plan for adult social care, not the mysterious plan involving money that might come down the line in a few years that we heard from the Chancellor. That is why I tabled my amendment.
It is also important to realise that in this Budget there are tax giveaways. Who are those tax giveaways to? Not the ordinary person. There is £4 billion in tax cuts for banks in this country—banks that have made record profits in this period. We see no real action on companies such as Southern Water, which keeps pumping pollution, filth and sewage into our seas and rivers. When I met the chief executive officer of Southern Water, he said, “I don’t understand why my staff are getting such a bad time.” I said, “It might be because you’ve just awarded yourself half a million pounds in bonus while also being fined for illegal activity.”
Did this Budget tackle any of that? Did this Budget support money going in to transform our Victorian sewers or measures to repatriate the excessive profits of corporations? No, it did not. It left our seas dirty, our libraries closed and our youth services abandoned. What a shame; what a missed opportunity—but what did we expect from them?
I refer Members to my entry in the Register of Members’ Financial Interests. It is a pleasure to follow the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle). I do not always agree with him, but it is always a pleasure to listen to him.
While my right hon. Friend the Chief Secretary to the Treasury is in his place, let me say—I have already shouted at him quietly in the corridor—that we in Dorset Council are very disappointed that levelling up does not apply to us. With some of the deepest pockets of deprivation and poverty in my constituency of South Dorset, we put a huge effort into making our application to the Government. I praise all those who took part, including the business community. Regrettably, however, because we went to unitary status, we went from category 1 to category 3, which is blatantly unfair. I appeal to the Government not to forget us in South Dorset. We are getting a little tired of being forgotten.
Moving on to the Budget, I want to talk a little about our Conservative philosophy. We have had a few days to digest the Chancellor’s enthusiastic delivery of the Budget statement last Wednesday. First, let me acknowledge that we are living through unprecedented times; the financial pressures on the Government have been extraordinary, particularly now, post pandemic, when all the chickens are coming home to roost. I applaud the Chancellor’s deft handling through three controversial lockdowns, although I did not agree with them. There is no doubt that the furlough scheme saved countless jobs and is now enabling the economy to bounce back impressively.
There is a lot in the Budget that I welcome and will help my constituents, not least the funding for skills, which I absolutely endorse; the taper relief to universal credit, which will help a lot of my constituents; and of course the help for businesses with business rates, although, as many Members have said, we long for business rates to be reviewed completely.
However, alarm bells are ringing for me as a Conservative. A further £150 billion spending spree caused an intake of breath, I have to say. With the UK’s total debt now over £2 trillion and taxes at their highest for 70 years, I wonder how long it will be before the country’s credit card finally expires. [Interruption.] We hear the customary groan from those on the Opposition Benches. I expect that, because they just spend money like water.
The majority of the Budget was contrary to our philosophy of less state, lower taxes and a free market economy. It was more big state and “the Government know best how to spend individuals’ money”. They do not. Our job is simple: to create an environment where business can thrive, allowing the entrepreneurs and innovators in the UK to do what they do best while attracting the best from around the world to invest here, which, post EU, we are now in a position to do.
To that end, the final few sentences in the Chancellor’s 70-minute Budget speech, which ran counter to the first 67 minutes, gave me hope. We left the EU for many reasons, but one of the most significant was to enable us to govern ourselves and make our own laws. The vision during those torrid pre-Brexit years was of a low-tax, Singapore-style country, producing and innovating our way to a new and prosperous future. I believed in that then, and I believe in it now, but it will not be achieved if we continue to favour big state spending, establishing an irreversible trend that can only continue to rise. Is that something that we Conservatives are prepared to countenance?
What we need, and urgently, is a vision, a narrative, a plan, and the political courage to promote it and see it through. However, that will be unsellable and unworkable unless it is accompanied by radical reform. Take the NHS, for example. Do not get me wrong. I have absolute respect and admiration for the doctors and nurses who work on the frontline and they have done a fantastic job throughout the pandemic. However, one commentator recently noted that the NHS was an organisation with a country attached. It is predicted that day-to-day Government spending on this behemoth could rise to a staggering 44%. This is an altar at which the country simply cannot afford to worship any longer. Does any other country have a system like ours? They do not and I do wonder why.
When moneys are short, why are we not looking at reversing our priorities? When we consider that the private sector accounts for 85% of the workforce, why do we continue to pour good money after bad into the public sector without reform? We need a public sector, of course, and it makes a valuable contribution, but it is paid for by the hard work of taxpayers—those on the Opposition Benches simply do not understand that— who are expected to dig ever deeper into their pockets for inefficiencies in so many areas. And this under a Conservative Government with an 80-seat majority.
Some years ago, we called for a bonfire of the quangos. You may recall those days, Madam Deputy Speaker. Depressingly, I read recently that they have only increased in size and influence—the latter totally unaccountable. All Departments have done is delegate their responsibilities to those who, all too often, are pursuing a very different agenda. Do you wonder that planning, the countryside, environment, energy and health to name but a few are mired in red tape, extra cost and, all too often, controversy? While we throw billions of pounds into, a broken system is too strong, but it needs reform, we cut defence spending, an irresponsible and incomprehensible act. What on earth are we doing? This, after our armed forces so magnificently came to the Government’s rescue and did such a great job during the pandemic. Let us not forget that they were not paid £70, or whatever it is a truck driver will get now. They lived on their salaries—what they get as soldiers—and the Government got a fantastic service on the cheap.
Our first priority is the defence of our island, which we ignore at our peril. The country sits at a crossroads. Double jabbed and better protected against covid, we must never, ever, ever lock the country down again. The consequences financially, physically and emotionally would be catastrophic. We must learn to live with the disease, as we do with any other. So I urge the Government to forget every other plan—plans B, C, D and E—except the most important one, which is a return to normality. Burdened by high tax and threatened with the spectres of inflation and rising interest rates, and a consequent cost-of-living crisis, there can be no other option. We are Conservatives and this worrying lean towards a big state must end, as the Opposition will always outspend us. If we do not get a grip on all this, we will, as Baroness Thatcher once famously said, shortly run out of other people’s money.
On Wednesday, the Chancellor said in his speech that a good education is the birth right of every child. I wholeheartedly agree, yet his announcements absolutely do not live up to that commitment. The Budget and spending review should have been a children’s Budget, focusing on their recovery from the pandemic, and giving every single child in this country the opportunity to flourish and reach their full potential. Not only is it the right thing to do to provide every child with the best start in life, but children and young people are at the heart of our future economic success.
The additional education catch-up funding announced last week amounted to merely £1 per pupil per school day, whereas the tax cut for bankers in the Budget amounts to some £6 per day. I was, frankly, amazed to hear the hon. Member for Hitchin and Harpenden (Bim Afolami)—he is no longer in his place—make an impassioned case for the bankers’ tax cut and lament the fact that the Chancellor did not go further. That gives us a flavour of the priorities of Government Members. Those are certainly not aligned with the priorities of my constituents in Twickenham—I can tell him that—who want to see more spending on education and on our schools because they are scrimping and saving and struggling to get by.
With close to a billion days of face-to-face schooling lost over the pandemic, the Government’s education recovery tsar set out the need for some £15 billion of investment in education recovery, yet even with last week’s announcement, this Conservative Government’s commitment is only a third of what Sir Kevan Collins recommended. It amounts to only £490 per pupil in England. Compare that with the Netherlands, where they are spending £2,100 per pupil on education recovery, and the US, where they are spending some £1,800 per pupil. Where is the ambition to address the lost learning? Where is the ambition to address the social and developmental impacts of being locked up at home and away from friends for months? Where is the ambition to stem the huge tide of mental health needs and poor wellbeing among children and young people?
The Education Policy Institute estimated that each child could lose up to £46,000 in earnings over their lifetime as a result of the impact of the pandemic. The Institute for Fiscal Studies estimated that the long-term impact to the economy of lost learning could be around £350 billion, yet the Treasury has committed to just £4.9 billion for school catch-up, while giving tens of billions to other sectors of the economy. As the former Children’s Commissioner put it earlier this year, this shows an “institutional bias against children”.
Liberal Democrats are calling for the Government to honour Sir Kevan’s recommendation, giving £10 billion directly to schools for a holistic package of support. But critically, we propose that £5 billion should be put directly into the hands of parents and carers in the form of catch-up vouchers to be spent on tutoring and extracurricular activities, such as sport, art, music or counselling support, depending on what each parent or carer knows and thinks their child needs. Every child would benefit, but the poorest children, those with special educational needs and looked-after children, would get more.
The latest survey from Parentkind, the charity that champions parental involvement in education, shows that one of the top priorities for parents for additional education spending is children’s mental health and wellbeing. I know from talking to headteachers and school governors at schools across my constituency that that is their top priority, too. Child and adolescent mental health services are overwhelmed with children experiencing a mental health crisis, often ending up in A&E and then unsuitable general paediatric wards, or with school staff having to manage conditions that they are simply not trained for.
NHS data confirms that the number of children and young people with a probable mental health condition has jumped from one in nine to one in six between 2017 and 2021. Referrals to mental health services between April and June this year were close to double that in the same period in 2019. Social isolation, uncertainty, grief and trauma have all taken their toll on children’s wellbeing, yet there was nothing announced for children and young people’s mental health in the Budget.
Alongside boosting acute service provision, we need to focus on prevention and good mental health support in schools as well as in the community. All the research shows that it is difficult for children to learn if they are struggling with their mental wellbeing. Ministers need to accelerate the roll-out of mental health support teams in schools. A target of 35% of schools by 2023 is simply not ambitious enough; our children deserve and need better. I suggest that the Government look very seriously at—I have called for this before—the proposals from YoungMinds and other charities on early support hubs: a one-stop shop in the community where children can get all sorts of support for their mental health, help from sexual health services and employment support. This has been proven a success elsewhere in the world.
Children and young people are our future. The former Children’s Commissioner, Anne Longfield, laid down the gauntlet to all politicians. She said that
“these are your children now. You have a chance to put them centre stage. When you do build back better, make sure you do it around them.”
This Budget fails to do so. I and my Liberal Democrat will keep fighting their, and their parents’, corner.
The subject of the River Wye has already been raised by my right hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman). There is no advantage in my repeating all he said; suffice it to say that there is not a cigarette paper between us in our agreement on that vital subject.
The Budget comes at the tail end of a once-in-a-century pandemic, the sharpest financial hit in more than 300 years. Despite what others may think, our finances were in good shape before the pandemic hit. That allowed us to keep the country running, so we should be grateful to the local authorities and all those who played their part and mended the roof while the sun shone.
Now, as we make our way out of the pandemic, it is encouraging to see signs of our economy recovering at a great pace: record numbers are in work, job vacancies are at a record high and we have the fastest-growing economy in the G7. We should not forget that that is largely thanks to £280 billion-worth of support from the Government, the taxpayer and our Chancellor, keeping businesses afloat and helping families to weather the storm. This Budget means that we can stay in the lead, helping industries such as the hospitality sector and the hop and cider industries in my constituency.
The cider industry in Herefordshire is said to produce most of the cider consumed in the UK. Cider apple growing is worth only about £24 million to farming annually, yet UK cider production comprises 39% of the global market, and the industry pre-pandemic was worth about £3.1 billion to the UK economy. However, it has taken a significant hit during the pandemic.
Cider is now worth £2.1 billion—a decrease of 32.1%. That is why the Chancellor’s announcement about alcohol tax and duty will have a significant impact on producers based in my constituency. The 15 alcohol duty rates will now be reduced to six—a simplification that was a long time coming—and cider duty will see its biggest cut since 1923. Having always been at a 2p disadvantage to beer, cider will now finally be treated as equal.
The alcohol by volume of most ciders is between 4.5% and 7%, which is similar to beer, excluding the low-alcohol versions. Some 47.8% of all households, up from 45.5% last year, now regularly buy cider. I think that that is fantastic. Apparently, the average UK household takes home 33 litres each year—it must be good for them.
Over the past year, cider sales online saw a growth of 81.4%. Cider occasionally wins a share from beer during the summer months, going from 10.5% of market share to 12%. It is easy to see why this should have happened. I welcome the Chancellor's announcement because it will promote job stimulation in the sector. At present, just 11,500 people rely on the cider industry for employment, yet UK cider producers sell to more than 50 countries all over the world. My constituency is home to some of the finest and best-known cider manufacturers not only in the UK, but in the world, and they will truly benefit from the Chancellor’s announcements.
We have a burgeoning craft cider sector as well. Approximately 80% of Britain’s cider makers are small producers; the small producers relief is fantastic news to those entrepreneurial cider makers. It is my hope that the simplification will allow small producers to become more profitable and expand their market share. Currently, hundreds of producers make cider up to the 70-hectolitre limit, but produce no more because they cannot afford the tax burden of going over the threshold: as soon as they produce 7,001 litres, they have to pay the current duty on their entire quantity at the same rate as a multi- national corporation that produces 1 million hectolitres. The new changes are important; I look forward to seeing the detailed plans to support small local producers when they are released.
I also welcome the benefit that this Budget will have for the hop-growing industry. Just over 50 British farmers grow hops in the UK, of which about half are in my constituency. The relationship with the crop goes back centuries: the first reference to hop growing in Herefordshire was made in 1577. Herefordshire is one of only three major hop-growing regions in the UK, alongside Worcester and Kent. Over recent years, there has been an explosive rise of craft brewing that has revolutionised the British beer industry. As a result, demand for local hops has grown, and it is my hope that demand will only increase as we promote brewers and their fare.
As we all know, the hospitality sector took a massive hit during the pandemic. According to figures from the Office for National Statistics, consumer spending on hospitality started to increase in May 2021, but remains at less than 70% of pre-pandemic levels. It is therefore encouraging that 90% of retail, hospitality and leisure businesses will receive at least 50% off their business rates bills in 2022-23. That will be a huge relief for the pubs that struggled so much that they were forced to close their doors.
Post-covid tourism within this country is expected to grow as well. When that is teamed with the biggest cut in beer duty for 50 years, we are looking at boosting British pubs by nearly £100 million a year, which has to be a good thing. Collectively, we expect to reduce the burden of business rates in England by more than £7 billion over the next five years, and the freeze in alcohol duties for the third year in a row will translate to a tax cut worth £500 million every year for families. The duty on draught beer and cider served from containers of over 40 litres will be cut by 5%, which will encourage drinkers to return to pubs after the pain of the pandemic and give the pubs the boost that they need. However, Ministers are due to hold a consultation on the size of kegs eligible for the tax relief. Many of the craft brewers and cider makers that we are trying to boost use 20 or 30-litre kegs. Unless the consultation shows some sort of sympathy towards them, I expect that that will change fairly rapidly.
We must be careful not just to help the big producers, but to do the Conservative thing of encouraging the entrepreneur. However, as Nik Antona, the chairman of CAMRA—the Campaign for Real Ale—rightly said after the announcement, the Chancellor’s budget shows that
“pubs are a force for good in our communities and should be supported to help them survive and compete with the likes of supermarkets.”
I truly believe that the Chancellor agrees with that statement, and I commend him for all he is doing for the sector.
This Budget was never going to be an easy one, and I have my concerns about some aspects of it, such as NHS reform along with value for taxpayers’ money. I would of course have liked to see more taxes reduced, while recognising that the armed forces who have played such a crucial role need to be increased. With such large expenditure announced for our public sector, it is only right that we expect a modicum of reform, and the way in which it spends taxpayers’ money must be scrupulously rigorous. However, we are faced with recovery from an extremely sharp economic decline, not just nationally but internationally.
Crucial aspects of the economy are growing and giving everyone the leg up that they deserve. I look forward to seeing how these changes continue that help for individuals and, especially, businesses in my constituency.
It is a pleasure to follow the hon. Member for North Herefordshire (Bill Wiggin). I think that must have been a record for the number of times cider has been mentioned in a Budget speech.
In November 2010, I was outside this place in Parliament Square. Alongside tens of thousands of students, I was marching in protest against the coalition Government’s decision to raise the cap on tuition fees to £9,000 a year. Our march on that day was the first of many demonstrations, rallies, and direct actions to protest about first the coalition’s and subsequently the Conservative Government’s austerity agenda. That agenda set fire to our public services, and led to stagnating wages and an explosion of low pay, zero-hours jobs. It is the reason we were so poorly placed to weather the economic storm unleashed by the pandemic, and it is why the UK suffered the deepest recession in Europe.
However, I am also talking about 2010 because I think that the Chancellor and I may share a love of 1980s movies. When the Chancellor spoke about public services in his Budget last week, I felt like Marty McFly in the film “Back to the Future”. On health, the Chancellor told us that
“the health capital budget will be the largest since 2010”.
On housing, he told us that we would see
“the largest cash investment in a decade”.
On education, he told us that he would
“restore per-pupil funding to 2010 levels”. —[Official Report, 27 October 2021; Vol. 702, c. 277-78.]
However, the issue is not only public services but wages too. The Institute for Fiscal Studies tells us that in real terms, wages will continue to stagnate at the same level as they were in 2008. The only difference between now and then is over a decade of Conservative Government and economic vandalism.
This is a “Back to the Future” Budget, but on some things we are not even going back to 2010. Take childcare: the Government have now realised that the first 1,001 days of a child’s life are the most important, but after shutting 1,000 Sure Start centres, they have announced funding for only 75 new family hubs. The same is true for youth services. The Chancellor told us that he would provide £560 million for youth services, but according to the YMCA, since 2010 when we began our protests against the coalition, youth services have been cut by £959 million —nearly £1 billion.
As in 2010, people are marching in the streets, but today it is not Parliament Square; it is Glasgow, and they are marching for action on the climate emergency. Rather than action, this Budget offered them tax breaks on domestic flights and the Government are giving them another coal mine in Cumbria and an oilfield in Shetland and financing gas in Mozambique. They are not building anything back better; in some cases, they are building back far worse. The Chancellor has fired up the DeLorean and taken us back to 2010, when what we need is an economy fit for the future. And no, I am not talking about hoverboards or flying cars.
This was a chance to meet the challenge of the climate emergency with a radical green new deal. It was a chance to offer a real deal on wages, rather than giving with one hand and taking away with the other. And it was a chance to reverse the crisis in our public services, to put more money into our schools and hospitals and to invest in our children. Looking at the Members on the Conservative Benches, I am reminded of the uncomprehending faces of the 1955 audience as they look up at Marty McFly playing Chuck Berry on the guitar. To them I can only quote Marty:
“I guess you guys aren’t ready for that yet. But your kids are gonna love it.”
It is a real pleasure to follow my hon. Friend the Member for Sheffield, Hallam (Olivia Blake) and her incisive comments. I grew up in a council house in North Kenton, in Newcastle. I went to excellent local state schools, and the NHS made me well when I was ill and saved my mother’s life when she had cancer. I start with that to acknowledge the personal debt I owe to public services. It is a debt that we surely all feel all the more deeply, given the dedication of public service workers during this pandemic, but apparently the Chancellor does not. Yes, he talked about public services. Indeed, he mentioned them 13 times, but unfortunately this Budget is all talk, smoke and mirrors from a Government with no plan to address the three critical crises we are facing: the cost of living crisis, the climate crisis and the covid crisis. There is so much wrong with this Budget, but in the short time I have today, I will highlight five areas: universal credit, science, transport, local government and protecting our communities.
Last week, the Chancellor tried to present a benefit change as a tax cut, as he was no doubt embarrassed at imposing the highest tax burden in 70 years. But the Resolution Foundation calculates that three quarters of the 4.4 million households on universal credit will be worse off due to the Chancellor’s choices, including taking £20 per week away from each and every one of the 16,000 families on universal credit in Newcastle Central. And that is with real wages having fallen in every region of England by over £23 per week on average since the Tories came to power. That is all we really need to know about this Government: they are making the poorest poorer while cutting taxes on Amazon and champagne. Fortunately, in Newcastle, we have generous Geordies who will support our local food bank, but they should not have to.
We do not generally think of science as a public service, but it is certainly a public good and the foundation of our future economic prosperity and global competitiveness. The Chancellor echoed the Prime Minister’s talk of a science superpower, but he went quickly over the bit where he actually broke the Prime Minister’s commitment to doubling the science spend by 2024-25, delaying it by two years at a cost of £8 billion in private sector investment. In science, as elsewhere, levelling up is nothing but a slogan. The Chancellor’s £1.4 million global Britain investment fund purports to spread economic opportunities across the UK by investing in life sciences, the automotive industry and manufacturing. Those are all sectors the north-east has considerable strengths in and they are critical for addressing climate change. Yet, for example, Government investment in life sciences is just £22 per person in the north, which is two fifths of the £55 per person invested in the south—in the midlands, it is just £16 per person. How will we deliver good, green, sustainable jobs across the north-east, and indeed in all our regions, without investment in science?
The north-east also lost out on transport. I have said many times in this House, and I will say it again, that it costs more to go four measly stops up the West Road in Newcastle than it does to traverse the whole of London on a bus. Lucy Winskell, the chair of the North East local enterprise partnership, was clear that
“government has announced significant transport investment across the rest of the North but not in the North East”.
Communities in Newcastle expect to feel safe and protected—this is the first duty of a Government—yet even when the Government’s promised police officer recruitment is completed we will still have fewer officers than we did in 2010, while police community support officer numbers have fallen by 40%. This Budget did nothing to make our communities safer by tackling the root causes of antisocial behaviour, which mars the life of so many of my constituents. Youth services are still waiting for the £500 million funding they were promised more than two years ago, which is leaving frontline youth services on their knees and young people without vital support and guidance that they need.
However, the Chancellor expects council tax payers in Newcastle to pay more, having cut central Government funding for Newcastle City Council in half. This council tax rise, made in Whitehall, will not begin to make up for the impact of inflation, never mind a decade of austerity and the demands of the social care system. All this comes while across Newcastle children play in litter because the Government will not take plastic pollution seriously or give our council the powers it deserves.
The Tories came into power in 2010 and wrecked our recovery from the financial crisis in the name of austerity. This Budget is an attempt by the Chancellor to position himself for the next Tory leadership election, claiming the credit for repairing the damage of his Tory predecessors while actually entrenching inequality and further neglecting the north. But the north will remember.
As politicians, we should always try to understand the argument from the other side. On that basis, at great risk to myself, I will try to look at the Budget and recent announcements through the prism of a Scottish Tory. That means, first, that I have to ignore the 2014 promises on pensions, when it was said that voting no on the referendum was the best way to protect your pension. It means ignoring those promises and then voting for what is now going to be a £6 billion-a-year clawback from pensioners. As the Red Book shows, £30 billion over the next few years is getting taken from the pockets of our pensioners. It seems the Tories are not content with just ignoring the WASPI—Women Against State Pension Inequality Campaign—women but are determined to make what is already one of the worst pensions in the developed world even worse.
If I am a Scottish Tory, I need to ignore that, and I need to ignore the £20-a-week cut to universal credit, but I will take great delight in demanding to know what the Scottish Government will do with the £41 million household support grant Barnett money that came our way after the universal credit cut. Let us put that money in context: each UC claimant is losing over £1,000 a year. The £41 million that comes back to Scotland, if distributed on a per capita basis, equates to a one-off payment of £85 per claimant. Yet we are supposed to be grateful for a £500 million cut being offset with £41 million.
If I am a Scottish Tory, I need to ignore the fact that as a group the Scottish Tories secured absolutely nothing from the Chancellor in the Budget. Instead of asking hard questions about why the Scottish carbon capture and storage cluster was overlooked again, I have to pretend I am really happy that the Scottish cluster is now a reserve. If ever there were a metaphor for the Union, the fact that Scottish Tories are happy for the Scottish cluster to be classed as a reserve is it. That is our place in the Union as it is.
The Scottish Tories have always been silent on the fact that Scotland has the highest grid charges in Europe. They have been silent about the £350 billion of oil and gas revenues that the broad shoulders of the UK have helped to spend without creating a sovereign wealth fund. They are silent about nothing being added to the Budget that matches the Scottish Government’s £500 million low-carbon just transition fund for the north-east of Scotland.
Because of the higher oil and gas prices, the Treasury is getting an unexpected windfall from the oil and gas revenues accrued. The Red Book confirms that, by the end of this financial year alone, the Treasury will have banked an additional £1.1 billion compared with the forecasts from March this year. Why is that extra money not being reinvested where it was generated? Compared with the March 2021 forecasts, the Chancellor now expects an additional £6 billion of oil and gas revenues over the lifetime of this Parliament. That means that, yet again, oil and gas revenues are paying for the Chancellor’s giveaways elsewhere. The reality is that with the extra oil and gas revenues, the extra petrol duties accruing from forecourts and the extra VAT from our soaring energy bills, the Budget was an opportunity to mitigate the cost-of-living crisis—an opportunity that has been ignored.
On the national insurance tax that has been imposed on us, Scottish Tories say, “Don’t worry—Westminster will give you back some money that you’ve already paid to Westminster.” Why are we supposed to be grateful for that?
Another fact about the energy sector in Scotland is that the Treasury has blocked the concept of ringfencing a pot of money for wave and tidal projects in the forth- coming contracts for difference auction. Such a concept would not even need a fiscal Budget line, and not ring- fencing that money could prevent world-leading technologies from scaling up and expanding all around the world. That is yet another matter on which the Scottish Tories and the Scottish Secretary of State are silent.
I have trimmed my speech and have just trimmed that point out a wee bit, so I thank my hon. Friend for getting that on the record.
Let me return to energy. There is nothing in the Budget on pumped storage hydro—on which, again, the Scottish Tories have been silent—but hurray: tomorrow we get the Nuclear Energy (Financing) Bill. No doubt the Scottish Tories will troop through the Lobby to support that.
Let me turn to the levelling-up fund. Yet again, Scotland gets a cut of that, so let us get the Union Jacks out—“Hurray: we get a cut of the levelling-up fund!” The reality is that our cut is, in effect, based on the Barnett formula. When the Chancellor said last week that in the first round of funding Scotland is getting more than its Barnett share, all that means is that there is less money in the ringfenced pot for Scotland going forward, because it is all based on Barnett anyway. But as a Scottish Tory, I do not care, because I revel in the fact that the Scottish Government are being bypassed and there are small projects that we can put a Union Jack on.
As a Scottish Tory, I never acknowledge that the SNP has been in power for only 14 years. The Union has been in existence for more than 300 years, yet somehow every shortfall has happened only in the past 14 years. We must have quite a talent in reverse. The Budget still does not tell us what the shared prosperity fund will look like. It is supposed to replace the vital European funding streams that all the areas that have been overlooked by Westminster relied on to access vital funds for transport and infrastructure—and the Government talk about levelling up. We are currently losing out on funding and we do not know where the future shortfall is coming from, yet the Chancellor uses the phrase “levelling up”.
In conclusion, the Budget does nothing for Scotland. We have already seen, post Brexit, the damage that has been done to the fishing industry and to our farmers, despite the promises. More and more people can see that Westminster cannot be trusted, and it really is time that Scotland took full control of its own decision-making process.
It is a pleasure to follow the hon. Member for Kilmarnock and Loudoun (Alan Brown). I agree with the point that he made about the shared prosperity fund and the need for it to be announced quickly so that we can get the funding that we need in all areas.
I do not want to be too negative, Madam Deputy Speaker, but I was a little disappointed when, in the Treasury Committee, I raised concerns about debt advice directly with the Chancellor and he did not seem to be fully aware of the situation, so I hope that, today, those on the Front Bench will take this point really seriously.
Hull has been named one of the debt capitals of the UK. We have double the average number of people unable to service their debt levels. At the moment, a face-to-face service is provided by the Money and Pensions Service. I am aware that that does not operate directly through the Treasury, but I am also aware that policy decisions relating to debt are informed by the Treasury. What I am asking for is an assurance that that face-to-face advice service remains, because what the service is proposing is to move towards regional call centres where people can access debt advice remotely. I am sure that everybody here, including, hopefully, Conservative Members, will acknowledge that if a person is in a desperate situation—they are saddled with debt, have perhaps not been opening their bills, and are incredibly worried about the situation that they face—the idea that they can go through all the issues on the telephone with someone is simply unrealistic. That is ignoring the fact that some people might have autism or learning disabilities or be in an extremely distressed state. I do hope the Treasury will take that point really seriously and speak to the Money and Pensions Service.
Let me turn now to the Budget. I had six clear asks of the Budget to provide what I believe was needed by the people of Hull West and Hessle. One was on fuel poverty. I support the Labour party’s call for the ending of VAT on domestic fuel as one way to try to alleviate the problems. This really lovely lady told me that she was worried about the issue. She is a pensioner and reliant on her pension. She likes to be warm, as elderly people often do—when people get older they like to keep their homes nice and warm. She is at home all day, so is extremely concerned about the rise in fuel costs, telling me that her bills have gone up by more than 40%. This is an area that needs a lot more Government action, because the problem will not go away; it will continue. I hope the Government will put party politics to one side and review a sensible proposal from the Labour party to look at cutting VAT on domestic fuel.
I raised the issue of adult social care in interventions on the Secretary of State and on my own shadow Front Bencher. I also raised it at the Treasury Committee. The issue has nothing to do with the type of council in control, or the political party that represents it. My constituency is in the East Riding, and it is also in Hull. Hull is urban and a Labour authority. East Riding is rural and a Conservative authority. Both councils have come to me and said that, as the local MP, could I do everything possible to lobby the Government for support for adult social care. In fact, the Conservative-run East Riding of Yorkshire Council has just passed a motion in its council chamber on this matter.
This should not be a political issue. The situation is a crisis. I said in an intervention on the Minister that East Riding council is unable to provide the amount of care hours that constituents need. It has admitted that in a letter and has been quite open and honest with me, saying that it simply cannot provide the service. Its solution is to tell families that they will either have to take care of the person in need themselves or that person will have to go into residential care. That is not a choice that we want people to have to make, so the council has asked me to lobby the Government for increased funding for adult social care, because it says that it is unable to compete with companies such as Amazon, which is offering £11 an hour, because all that it is able to offer is the minimum wage. It told me that it is facing budget pressures of £1.4 million with the national minimum wage increase that the Government have already announced. Of course I support the national minimum wage increase—in fact, I believe that it should be more, as I think all Labour Members do—but we have to acknowledge that the cost has to come from somewhere, and if it is coming from the adult social care budget, it is not going on providing the hours that are needed. The letter has been sent to the Health Secretary. I hope that he reads it, acknowledges it and sends us a reply.
My own council in Dorset tells a similar story. Does the hon. Lady agree that it would be helpful if when we were talking about adult social care, particularly in the media, we did not just concentrate on those who are older, but remember the complete age range of people who require daily support from our local government? I agree with her entirely that the local government family, which is hardest hit in hard times, really should be the beneficiary of extra cash as the purse strings loosen.
I absolutely agree; the hon. Gentleman is completely right. We do often forget all those people with learning difficulties and adults of all ages requiring support. He is correct to draw attention to that point.
The situation really is one of crisis. Yesterday I was talking to the OBR—again, in the Treasury Committee—and it said that it believed that 95% of councils are going to raise their precept to the maximum amount. That is another tax increase that is not being mentioned by the Government and we are not talking about. It is another impact on the cost of living, and councils are having to do that because they simply cannot afford to cover social care as it is.
I want briefly to mention universal credit. Even with the changes to the taper and the other changes that the Government have introduced, a lone parent who is working part-time on the minimum wage still loses £361. All the time throughout this Budget, it seems that people on lower pay are paying more in taxes. That just does not feel right.
I often hear Government Members say, “Well, where would you find the money? What are you going to do with it?” It always comes down to choices; in politics, everything is about choices. We have a certain amount of finance and then we make a choice. My personal priority would be not to give more money to whisky price cuts and tax cuts than I would give to children needing educational catch-up. That is just a principle that I have: children before whisky—call me radical! I would also not spend £5 billion sending a rocket up into space funded by the British Government, when we have lots of children here on earth who might require that money a little bit more. Again, it comes down to choices: rockets and whisky, or kids.
We also need to look more seriously at business rates. Interestingly, Government Members talked about a whole radical change to business rates, which I support. This is a disappointing Budget, filled with many issues that need resolving. I hope that the Government will finally do something about them.
As my hon. Friend the Member for Sheffield, Hallam (Olivia Blake) said earlier, we have heard an awful lot about cider today. Given some of the things that I have heard from the Government and from the Chancellor himself, I almost feel that I need to invest in a whole flagon of cider; after some of the things I have heard, it is really going to need that much booze to take the edge off just how bad things are.
This was a Budget for the Government to deliver on their promise to build back better for our country, to lay the foundations for economic growth, and to provide investment and support for businesses, workers and the most vulnerable across our country. It was a Budget that could have transformed our economy in the face of the impending climate crisis. Instead, we heard nothing beyond the rhetoric that could meet the reality that our country and our burning planet faces. Many people in the diaspora communities in my constituency of Ilford South have family who are already facing the impacts of catastrophic and deadly climate change.
Beyond the spin, the painful reality is that real average weekly earnings will not return to pre-financial crisis levels until 2022. Recent analysis by the TUC has revealed that this will result in the worst pay crisis since Napoleonic times, with real pay far from rising and instead falling by 0.1%—years of real incomes barely growing, coupled with the cost of living crisis, high inflation, rising taxes and poor growth that will keep living standards virtually stagnant for another half a decade. The worrying reality is that millions of people will be struggling to makes ends meet.
Meanwhile, the Institute for Fiscal Studies has pointed to Whitehall Departments such as Transport and Justice seeing steep, real-terms cuts relative to 2010. Far from being the much-heralded payday that the Chancellor tried to present this Budget as, in reality it is yet another austerity Budget that will herald the biggest wage squeeze in British economic history, leaving the average worker almost £13,000 a year worse off by the middle of this decade. For those who are already desperate and looking to this Government to use this opportunity to provide urgent help, the Resolution Foundation found that a staggering 75% of almost 4.5 million households claiming universal credit will now be worse off, despite the tweak the Chancellor announced. The Trussell Trust summed it up perfectly when it said that
“there just wasn’t enough for some of those in our society who need it the most”
and food banks will have to “pick up the pieces”—as they are in Ilford South, with another four or five food banks springing up just in the past year.
What shall I tell my constituents in Ilford South who are now faced with such hardship? I certainly will not be reassuring them with news about the Chancellor slashing taxes on sparkling wines and cutting air passenger duty for domestic flights. As my hon. Friend the Member for Leeds West (Rachel Reeves) made clear in this place last week,
“bankers on short-haul flights sipping champagne will be cheering”.—[Official Report, 27 October 2021; Vol. 702, c. 288.]
No one in Ilford South is cheering at this Budget, I can tell you that. It is another example of this multimillionaire, out-of-touch Conservative Cabinet looking after its own, not really doing things that will lift people out of poverty and get them back into work. I contrast that with the situation in my Ilford South constituency, where almost 19,000 families are currently in receipt of universal credit or working tax credits, and more than 11,000 of those have children—53% of all the families with children in my constituency. They now face a total of almost £20 million of cuts. This Budget has done absolutely nothing to address the catastrophic impact that will have on those families, the vast majority of whom will be forced into debt and further below the poverty line.
For those with their own businesses, who are the backbone of our local economy in Ilford South, I will do what I can by launching things like my new MP business awards that will support and highlight those businesses, but the reality is that we needed the Government to step in. By refusing to step up and finally deal with the business rates fiasco, the Government have completely failed them, and many will be forced to close or make redundancies. Is this really what the Government believe will enable our country to build back better and emerge from the pandemic stronger?
This Budget was equally bleak for those in the transport sector. Having already faced a sharp drop in revenue for the best part of two years, and with passenger numbers far off pre-pandemic levels, the transport sector needed a lifesaving shot in the arm to enable it to survive. Instead we Londoners heard not a single word, let alone got a pound sterling for Transport for London, when we know that every pound spent in the capital creates jobs outside it. Capital spending announcements for the transport sector across the piece were at their lowest level for half a century. I fear announcements that I think will come this week confirming the scale of job losses across Network Rail and many parts of our rail sector—good jobs that could be lost but should be there to get people out of their cars and travelling on public transport, so that we can really start to tackle the climate crisis. This is a dire state of affairs in a sector that is crucial for keeping our country moving and enabling us to recover as quickly as possible.
The Chancellor can claim that the Tories are the public service party, but as always the devil is in the detail of his Budget. He and his party have overseen more than a decade of austerity that left us woefully underprepared to tackle the current crisis. The fact that in some areas the Budget has only raised spending back to pre-2010 levels shows how economically illiterate the austerity decade was. With so little support offered by this Government, once again, we are now facing one of the worst winter crises in living memory, alongside a catastrophic climate crisis that is growing worse every day.
Now was the chance to make the kind of real radical change that is so desperately needed—that people are crying out for. There is an alternative—one that puts everyday people and our planet at the heart of our economy. Labour would forge a green industrial revolution and a new deal for workers, and would properly back our public services to give them the support they so desperately need. But we saw none of that; instead we were presented with tax cuts for mega-rich global giants such as Amazon and incentives for gas-guzzling flights. It is a champagne Budget for the rich, devoid of any meaningful support for millions across our country. It is another smoke-and-mirrors trick from the Gordon Gekkos of the green Benches. Our country deserves better and I cannot wait for a Labour Government to deliver it.
You would not know from the Budget that our health and care system is in crisis, made worse by the fact that we are still in the middle of a pandemic that claimed 1,097 lives last week. One of the key factors in coping with the crisis caused by the covid pandemic has been the commitment of our health and care staff and the dedication of unpaid carers to support their family members, yet the Budget contained no costings for training and education budgets for the NHS workforce, no extra resources to improve support for unpaid carers, and no extra investment to meet the immediate needs for funding to relieve the crisis in social care.
The response to the Budget from the social care sector has been damning. Care England, which represents care providers, said there
“will be serious and far-reaching consequences”
from the lack of measures in the Budget to support adult social care. The Care and Support Alliance said:
“If the Prime Minister’s ambition to ‘fix social care’ is ever to be realised Rishi Sunak has to play his part by providing enough funding to make it happen. He hasn’t done so and therefore, unfortunately, the future of social care remains as uncertain as ever”.
There are now more than 100,000 care jobs vacant and continuing pressures on care providers, who are struggling to recruit enough staff to keep care facilities open.
The Care Quality Commission recently warned of a “tsunami of unmet need” in social care, which will in turn heap more pressure on the 13 million unpaid carers who give up so much time and energy to care for their family members, with little recognition or support. There is cross-party consensus that we need far more than the funds announced in the Budget to deal with this crisis in social care. The Health and Social Care Committee recently repeated our call for at least £7 billion a year of extra funding for social care to cover demographic changes, to uplift staff pay in line with the national minimum wage and to protect people who face catastrophic social care costs. What the Government have announced is that additional money from the health and care levy will only fund the cap on catastrophic care costs and some of the consequential costs of that, and the cap only starts to apply from October 2023. Although the Chancellor announced £4.8 billion of extra grant funding for local councils over the next three years, that is not ringfenced for social care, leaving councils to decide how to allocate it across all their cash-strapped services.
The Association of Directors of Adult Social Services said the Budget and spending review were “deeply disappointing”. It looked at the £1.6 billion a year extra and said
“it will do little more than meet the costs of the rise in the national living wage for care workers from next April.”
The Local Government Association told the Select Committee recently that the funding gap for adult social care was £6.1 billion and that this underfunding puts the workforce and unpaid family carers under further strain, creating unmet and under-met need.
For years, all we have had are sticking plasters from the Government in response to this ever-worsening crisis in social care, rather than recognition of how serious the underfunding issues are. The Budget missed an opportunity to do something about the crisis. The impact of that failure will be serious and far-reaching in social care. We have just heard my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) raising that issue, and there will be more of us standing up here, week in, week out, describing the situation she has described in her local council areas. It will be all of us.
We need immediate investment to ensure that care staff are paid a proper wage that will compete with better rates paid in retail and hospitality. What are we doing when people can be paid more for flipping burgers than for looking after an elderly person, perhaps with dementia? We need investment so that unpaid carers get the breaks and support they need after 18 months that have very much broken them, and we need investment to address that tsunami of unmet need. It is shameful that we have not paid, as other countries have, a bonus for health and care staff. Indeed, the Minister for Care and Mental Health recently said, when asked about vacancy issues, that they can work millions more hours, just as they did during the pandemic.
I have outlined the failure of the Government to put the needed investment into social care, but the final point I want to make is about the failure of the Chancellor to reverse his £1,000 cut to universal credit, which will do so much damage this winter. Three quarters of families on universal credit lose more from the £20 cut than they gain from the Budget changes. The Resolution Foundation points out that the poorest fifth of households will still be an average of £280 a year worse off overall. One constituent told me that they, like many others, had been hopeful that the cut would be reversed in the Budget. They are now fearful that throughout this winter they will have to keep choosing between heating their home and eating. They have lost £80 a month due to the cut, but their energy prices have already risen by £95 a month. It was a callous and cruel cut to make in the middle of a cost of living crisis, and a shameful aspect of the Budget.
It is a pleasure to follow my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley). Unsurprisingly, I have a slightly less rose-tinted take on last week’s Budget than Conservative Members. I see a Budget constructed by a Government who do not care about the hardships that the 15 million people and rising in poverty face.
This Budget comes from a multimillionaire Chancellor with a personal housing portfolio so large that he could potentially solve the country’s housing crisis. To him, the word “hardship” means not having a pool in his country mansion, something that he took decisive action to fix over the summer. Unfortunately, he failed to take similar decisive action for the nation in the Budget. He did not fix the issues facing millions: insecure work, an insufficient welfare safety net, low pay, a lack of safe and affordable housing and rising utility bills. They are fuelling the huge inequalities that we see in 2021.
Let us look at what the Budget means for my constituents. The average state pension is £8,000 a year, which is the lowest in the industrialised world. With the suspension of the triple lock, it is expected to rise by 3.1% from April 2022—an increase that is wiped out by inflation. The Government have refused to honour the triple lock, and the old adage “Never trust a Tory” will ring true for many pensioners.
A 1.25% increase in national insurance from April will remove between £16.7 billion and £18.2 billion a year from household budgets. The universal credit cut will leave 4.4 million families worse off by £4 billion a year, and there is still no justice for the people receiving legacy benefits who were denied the £20 uplift. The people who can least afford it will bear the brunt of the Budget while the bankers receive £4 billion in tax cuts.
My city of Liverpool continues to suffer from £500 million of cuts since 2010, which the Budget does nothing to address. Tory austerity has caused real misery in my city. A £2 million empty trinket thrown to tee up a hollow PR exercise by the Minister for the Department for Digital, Culture, Media and Sport means nothing to the many in my city who see it for what it is and who remember what the coalition Government started in 2010.
Professor Ian Sinha, a paediatrician from the fantastic Alder Hey Children’s Hospital in my constituency, points out that a train journey of 15 minutes on Merseyrail through our city region represents a 15-year difference in life expectancy. That encapsulates the inequality and its consequences that we saw even more starkly in the teeth of a pandemic. The Budget does nothing to fix them.
There are no long-term funding promises to help to combat those inequalities; indeed, further austerity is being forced through by the Government, with another £33 million of savage cuts mooted in Liverpool. Austerity is a Tory decision and a political choice that keeps people in poverty—and poverty kills. More than ever, post covid, we need the ability to invest in our infrastructure and in our social care, mental health and domestic abuse services to rebuild our communities. To tackle the health and social economic inequalities we face, we need council housing, Sure Start centres, libraries, leisure centres and education facilities fit for the 21st century, not further austerity. We need a real levelling-up, not weasel words.
Why did the Chancellor, in his much-lauded levelling up agenda, not choose a different path? Lord Prem Sikka, my good friend in the other place, has outlined an alternative vision. By taxing capital gains at the same rate as earned income, some £17 billion a year could be raised. By extending the 12% rate of national insurance to incomes above £50,000, £14 billion could be raised. Of course, a wealth tax could also raise up to £304 billion over five years. What a difference a Chancellor who followed that ideology would make to so many lives and to the future generations of our nation.
Last Saturday marked five years of Fans Supporting Foodbanks collecting food outside football stadiums in communities across the UK.
A fan who donates religiously asked me to pass on this message to the Chancellor:
“Seeing as he likes quoting the Beatles, how about this from the great John Lennon? Imagine a country where no child goes hungry. Imagine a country without food banks. Imagine a country with fairness at its heart, not inequality. Imagine a country governed for the many, not the few.”
It is always a pleasure to follow my hon. Friend the Member for Liverpool, West Derby (Ian Byrne). Since the Chancellor delivered his sprightly Budget, promising a real-terms rise in overall spending for “every single Department”, the emerging details have given us no cause for optimism. More money for public investment, for which my Labour colleagues and I have been asking for over a decade, is welcome. However, that every announcement was for the biggest sum in a decade only exposes how the Tories have starved every element of the public sector every year since they came to power.
My constituents have not forgotten the decade of Tory decimation of our public services. Although the Chancellor may finally have come around to Labour’s way of thinking, all his funding announcements have achieved in real terms, whether on education, local government or justice, is to take us back to pre-Tory Government spending levels. Despite his promises, public services will still be underfunded and under pressure. Given the Government’s habit of handing out profitable contracts to the private sector with little, if any, scrutiny or accountability, we cannot assume that any increases will ever reach frontline services.
The pandemic exposed how fragile local government services have become since 2010. From the public’s perspective, every public service is in crisis. Whether someone is trying to get a doctor’s appointment or a hospital appointment, trying to access the courts system, trying to get the police to come out to a burglary or anti-social behaviour in their community, or trying to access social care or council housing, the lack of investment in local government and public services has decimated communities and damaged the social contract between government and citizens. Taxes continue to rise, and people know that they are getting less in return.
The Chancellor promised bold action to address some of the problems caused by his Government, but the £5.4 billion from the health and social care levy will not kick in for three years. The social care crisis needs addressing now. The end of the public sector pay freeze is totally offset by the spectre of rising inflation and the looming cost-of-living crisis, with tax hikes for workers and tax cuts for banks and big business. What the Chancellor gave with one hand, he took away with the other, and the majority of us will take the hit for both.
One of the most astonishing aspects of the Budget was that, just days before the most important climate conference in a generation, the Chancellor failed to mention “climate” or “environment” once. Green transport is key to reaching our net zero targets, and a green rail network must be part of that ambition. The Treasury will continue to plough billions into the UK’s rail network to help train operators to cope with a fall in passenger numbers because of covid-19, but the funding falls way short of what is needed to level up local economies and decarbonise the transport system.
What a wasted opportunity it is that the Chancellor refused to commit to electrifying new rail infrastructure such as East West Rail from day one. Instead of encouraging domestic clean-energy rail use, he cut passenger duty on domestic flights and froze fuel duty. The Budget was a wasted opportunity to build a truly optimistic, sustainable future and meet the future needs of the country.
Last week, the Chancellor came into this Chamber with great optimism, but many of us needed to hear much more than just hot air. Instead, we ended up with a Budget that the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), has described as offering
“no plan to tackle the growing cost of living crisis”,
and doing nothing to remove the enormous tax burden that the Government have put on working people.
More than 13,000 families in my constituency have just been hit by the devastating cut to universal credit, taking £1,000 out of their pockets. While we welcome the fact that the Government have followed Labour’s lead and reduced the taper rate, the Chancellor will know that nearly one quarter of universal credit claimants cannot work because of disability or caring responsibilities. What does he have to say to them as they face an incredibly difficult winter off the back of the biggest ever cut to our social security system?
The Joseph Rowntree Foundation estimated that the changes to the universal credit taper rate would fail to cover the rise in energy costs, national insurance and inflation for many families. Can the Minister tell the House how many children will be pulled into poverty thanks to his Government’s £1,000-a-year cut to universal credit? Even before that cut, one in eight working households lived in poverty in the United Kingdom.
The Resolution Foundation found that taxes on working households would increase by £3,000 or more after this Budget compared with when the Prime Minister first entered office. Yet bankers get tax relief, and the grossly undertaxed Amazon and online retailers escape again. This Government do not care about the growing cost-of-living crisis. The Chancellor gleefully boasts about how his economic policies are working, but I want him to tell that to the families in Bolton who are struggling to make ends meet after the £20 cut to universal credit, or the nurses who will be hit by a pay cut as inflation rises.
The money for local government is meagre compared with the £15 billion of cuts to local authorities since 2010 and the punishing effect that that will continue to have on social care, blocking more NHS beds as care homes close. What about the other, less visible services, such as those covering squalid prisons, delayed courts, excluded children and those children who cannot get to child and adolescent mental health services? Working families needed a plan to boost pay across the whole economy, but instead, after 11 years of this Government, they got a triple whammy of tax hikes, fast-rising energy and food bills, and a universal credit cut that was tweaked, not reversed.
I welcome the fact that the Chancellor has listened to the campaign from me and my university for priority funding to be given to the Bolton College of Medical Sciences partnership bid, which will add a huge amount to our local economy and provide jobs. However, £20 million was only half the bid. We asked for £40 million. I must declare an interest here, since the University of Bolton is in my constituency and this year awarded me an honorary doctorate, but that is not why I am pushing for the money—this is something I have been campaigning on for many years with the university. I remind the Chancellor that the towns fund gives back only a tiny proportion of what this Government have stripped away in cuts to our councils, which has seen spending cuts of £16 million over the past 11 years for Bolton Council alone.
While we sit here in the Chamber, in Glasgow, we are hosting the world at COP26. Yet the Chancellor did not mention climate change once in his speech—neither its impact abroad nor its impact at home. Where is the commitment to funding flood defences? In my constituency yesterday, the Environment Agency issued a flood warning. These communities have suffered year on year and they live in abject fear of flooding.
I have raised this question in the House for a number of years. I brought a petition to the House, I went to the Prime Minister—to 10 Downing Street—with a petition, and I have asked Ministers in the Department for Environment, Food and Rural Affairs to come to see the area in my constituency that gets flooded. To date, no Minister has bothered to attend my constituency to see that, and no money has been given. We are told that some money will be given, but when I last spoke to the Environment Agency locally, it said that there has been no firm commitment. We need £5 million to build flood defences in Bolton, and I ask the Chancellor to consider providing that.
There are many other things that I could say about the Budget, but I will end with a short plea. Many Members will know that for the last nine years I have campaigned for the victims of the hormone pregnancy test Primodos and their families. Their battle has been long, and they are often compared with the forgotten thalidomide victims. Last year, an independent review by Baroness Cumberlege, a former Conservative Minister, found that victims of Primodos, mesh and sodium valproate had all been negligently harmed by their medical treatments. The review recommended that a redress scheme should be set up to compensate the families. To date, the Government have not done that.
The Chancellor has constituents affected by this issue; many years ago, when he was not a Minister, he approached me to register his interest in the all-party parliamentary group on hormone pregnancy tests. The Prime Minister has constituents affected by it, too, as do Mr Speaker and the Leader of the House. Will those Ministers work with the Department of Health and Social Care to set aside funds for a redress scheme?
These people have suffered for decades, through no fault of their own but because of Government negligence and cover-ups—I do not mean this Government; successive Governments have failed to deal with the issue since the ’60s, ’70s and ’80s—and there is now an opportunity. The review was set up by the former Prime Minister, the right hon. Member for Maidenhead (Mrs May). It clearly recommended redress for these families—for all three groups of victims—yet, to date, the Department of Health and Social Care has done nothing and the Treasury has done nothing. I ask the Chancellor to consider this issue. It is time we did the right thing and supported these people.
It is a pleasure to follow my hon. Friend the Member for Bolton South East (Yasmin Qureshi).
Let me start by talking about the impact of the Budget on Leeds, and particularly Leeds City Council, which has seen a £328 million real-terms cut in its budget compared with 2010, the last year of the Labour Government. That is £328 million cut from frontline services for the people of our city. I was pleased when the Chancellor announced an increase in local transport funding for Leeds and West Yorkshire, but on closer inspection, it is clear that the money that is promised will do very little to plug the funding black hole created by 11 years of Conservative cuts.
For Leeds, the Chancellor’s statement was marked more by what was not said than by what was. There was no mention of the integrated rail plan for the north, now 10 months overdue, and no mention of the infrastructure needed to connect our towns and cities. Unsurprisingly, my call to electrify the Leeds to Harrogate rail line, which has been announced twice and revoked twice by successive Conservative Governments and which I would describe as a golden opportunity to level up communities up and down the line between Leeds and Harrogate and up to York, to get the city moving and get workers into jobs, was missing yet again.
The claim that there will be a real-terms rise in core spending power is interesting. After a decade of slash-and-burn austerity, Leeds—like many other towns and cities, as we have heard—is in desperate need of funding at least on a par in real terms with what we saw in 2010. However, the Chancellor has been very light on details. There is barely any indication of how much new money councils will receive for services, or how much will be given to cover the deficit caused by a decade of Tory rule.
That is compounded by the fact that councils could not furlough their workers during covid. Those workers worked on the frontline, with no additional funding, because of the cost pressures that councils were under. There are now significant cost pressures on Leeds City Council, and a further loss in frontline workers. Frontline workers who worked to save lives during covid are being repaid by cuts, which means that their jobs will go.
I would also like to comment on the lack of announcements regarding tourism and hospitality. Tourism to the UK is down 97% compared with before the pandemic and is the second-worst-hit sector in terms of unemployment, yet the Chancellor did not mention tourism once in the Budget—not once. Time and again, I have stood in this House and asked the Chancellor why his business rates relief scheme fails to extend to huge parts of our tourism industry. Last Wednesday, I came in hope of hearing something different. My hopes were dashed. The Chancellor has not listened to the industry. Thousands of businesses, and millions of workers whose livelihoods are at stake, were not being supported that day.
I was hopeful that the Chancellor would change the reductive eligibility criteria for business rates support, criteria that deny crucial support to tourism businesses without physical customer premises. I was hopeful that travel agents, coach operators, fairground operators, language schools, tour guides and event organisers—groups that the pandemic and Government restrictions have absolutely devastated—would finally receive some good news. The continuation of the business rates relief scheme, albeit at a reduced rate of 50%, provides a degree of reassurance to some businesses, but the fact is that 600 English language schools, 900 tour operators, 2,125 coach operators, 300 event organisers—I could go on and on—will continue to be denied support. The implosion of international tourism made those businesses vulnerable, far too many to the point of collapse, and the Government failed to provide them with vital support.
It is not just business rates, however. The Chancellor’s Budget failed to make any mention of retaining the current VAT rate for tourism and hospitality businesses in the UK, an ignorant oversight which serves only to compound the struggles that the tourism industry and holidaymakers in the UK are currently enduring. It is also about climate action. Supporting domestic tourism means fewer people flying longer distances. Make no mistake, the cut to air passenger duty on domestic flights is not about supporting British tourism or British tourists. It is not ordinary people who take unnecessary short-haul flights in the UK, but business executives and occasionally the Prime Minister, who, it transpires, is flying back from COP26 in Glasgow to London, rather than taking the train like the rest of us.
The Government claimed to support business, promised to deliver recovery and committed to net zero emissions, but—I apologise for what is now a tired cliché—actions speak louder than words.
It is a pleasure to follow my hon. Friend the Member for Leeds North West (Alex Sobel). I am grateful for the opportunity to speak briefly in the final day’s debate on the Budget 2021. Sadly, the Budget does little to help the hard-pressed communities in Newport West who are suffering from the worst effects of more than a decade of Tory austerity. This is not a Budget for working people; it is a budget for the banks and the bankers—or, otherwise put, those who fund the Tory party. Thousands of working people in Newport West will be forced to fork out for the national insurance tax hike next year, but the banks, thanks to this Prime Minister and this Chancellor, are getting a £4 billion tax cut.
The people of Newport West, like many across the country, are facing a cost-of-living crisis now, but there was nothing in the Budget to address the crisis. There was nothing to help people with heating their homes, nothing to help people with filling their cars and no help for people with feeding their families. That is why Labour in Government would cut VAT on energy bills for at least six months and that is why we would tackle the cost-of-living crisis from day one.
The spending review makes provision for an extra 8,000 police officers, as part of the overall commitment to hire 20,000 new officers. Yes, that is to be welcomed, but even if the Government meet their target, police officer numbers will still be lower than they were in 2010, as over the last 11 years the Tories have cut police numbers by 21,000. Now, I am not a mathematician, but even I know that that is an overall net loss.
I am not even going to begin to talk about the pay freezes and below-rate-of-inflation pay awards to our hard-working public sector staff. So much for recognising and rewarding our amazing key workers.
It is, frankly, a disgrace that online giants such as Amazon will get a £12 billion tax cut when some of the poorest in our country are forced to pay more. People with the broadest shoulders should be paying their fair share of tax, not the hard-working people who will end up paying an extra £1.7 billion over the next five years under this Tory Government.
Like many local people in Newport West, I am desperately concerned that there was no real attempt to address the impact of the cruel Tory cuts to universal credit, which was the biggest overnight cut to welfare since world war two. Millions of people, including over 9,000 families in Newport West, have had their universal credit cut, which has had a devastating impact on families here and across Wales. We will not let the Tory Ministers forget that. Although I welcome the decision to cut the universal credit taper rate from 63p to 55p, it still means that a single parent claiming universal credit on the minimum wage will lose an estimated £361 next year. That is unacceptable and I say to the people living in Newport West: I will keep fighting to cancel this cut.
There was little in the Budget to help the poorest in the world. There was little action to preserve our planet and protect our environment, and there was nothing to mitigate the worst impact of the failing and unravelling Tory Brexit deal. I am proud that Labour would take a fairer and wiser approach to our public finances, not wasting billions of pounds of taxpayers’ money by handing out dodgy PPE contracts to mates and contacts on WhatsApp. After a decade of faltering growth and broken Tory promises, Labour would get the economy firing on all cylinders and get our country back on track.
This Budget was a big disappointment for the millions of people who are worried about the cost-of-living crisis. It failed to provide sufficient funding for public services that have been devastated by over a decade of Conservative austerity, and it failed to address the climate emergency.
The Office for Budget Responsibility warned that the cost-of-living crisis could rise at its fastest rate for 30 years, yet the Chancellor failed to raise the minimum wage to at least £10 an hour, which the Labour party committed to do by 2020 back in 2017. He could have kept the £20 uplift to universal credit in place, helping 6 million households across the country, but he chose not to. Instead, he gave a £4 billion tax cut to banks and a £12 billion tax cut to online giants. Numerous charities and civil society organisations, including the Joseph Rowntree Foundation, the Child Poverty Action Group and Action for Children, campaigned for the £20 uplift to remain in place. Labour won two votes in the House earlier this year calling on the Government to cancel the cut. Shamefully, on both occasions, the Government whipped their MPs to abstain.
The Government will point to changes to the work allowances and the taper rate, but the Disability Benefits Consortium pointed out that
“nothing is done at all to help disabled people who are not in work”—
and this is
“particularly concerning, given that employment rates are much lower for disabled people than for the general population, while for many, their disability or health condition mean that paid work is not a realistic prospect.”
Let us not forget, too, that 6 million households have been hit by the Conservatives’ cut to universal credit, but less than a third of that figure—just 1.9 million households—will benefit from the changes to work allowances and the taper rate.
The Government are failing schools, too. The National Education Union has described the additional money for education recovery—just £1.8 billion of new funding —as “completely inadequate”, while the Government’s former education recovery commissioner, Sir Kevan Collins, called it “incredibly disappointing”. He said:
“The short-term saving offered by a limited recovery programme will be dwarfed by the long-term cost of successive cohorts leaving education with lower skills, an effect that will be most apparent in our poorest communities.”
The Chancellor announced that, coupled with spending increases announced in 2019, the extra money for school funding would
“restore per-pupil funding to 2010 levels in real terms”—[Official Report, 27 October 2021; Vol. 702, c. 278.]
However, as the National Association of Head Teachers rightly pointed out, this merely
“represents a failure to invest in children’s futures for over a decade.”
When it comes to local authorities and the provision of essential services, it is a similar story. Conservative austerity has taken its toll on Wirral. Between 2010-11 and 2019-20, it cut central Government funding for Wirral Council by 85%. According to the Local Government Association, the funding for local authorities announced in the Budget will not help councils to meet all the extra cost and demand pressures they face just to provide services at today’s levels. The LGA has also expressed disappointment that there is no additional funding
“to address existing pressures on adult social care services”
and that public health funding has not been increased. The LGA is among those to have pointed out:
“The potential rise in local government core spending power over the next three years will also be dependent on councils increasing council tax by 3% per annum”—
so local people will again feel the effects of central Government cuts, the burden of which the Government are passing on to councils.
The crisis in adult numeracy and literacy skills must be addressed as a matter of urgency. Although the Chancellor partially acknowledged that with the announcement of a new UK-wide numeracy programme to improve basic maths skills, the funding fell well short of what is needed. On its Twitter account, the Treasury posted that it would
“help up to 500,000 adults improve their numeracy”,
which falls far short of meeting the needs of the 17 million adults in the UK who the Government’s own figures suggest have the numeracy level expected of primary school children. And where were the funds to address the adult literacy crisis? The National Literacy Trust estimates that more than 7 million adults—16.4% of the adult population—have very poor literacy skills. Where is the Chancellor’s ambition to help them?
With COP26 under way at a critical moment for our planet, the Chancellor announced, astonishingly, that he would cut taxes on domestic flights—an irresponsible act that particularly insults young people and those who are most affected by climate change around the world. The OBR has estimated that it will result in 410,000 more passenger journeys a year at the very time when our Government should be showing leadership on the international stage. The Chancellor also failed to increase international aid to 0.7% of gross national income, once again letting down the world’s poorest people.
Although there was extra money for the NHS, what the Chancellor failed to mention was that if the Government’s Health and Care Bill becomes law, from next April the structure of the NHS will fundamentally change. Instead of a national health service run as a public service in England, there will be approximately 42 local health and care systems, each based on a business model, with major opportunities for big business to take over the delivery of services instead of the NHS. If that is allowed to happen, we will increasingly see large amounts of public money that should be spent on public care going into the pockets of shareholders, as my hon. Friend the Member for Norwich South (Clive Lewis) expressed so eloquently. We will also see increasing numbers of health service staff no longer able to work for the NHS and thus ineligible for “Agenda for Change” rates of pay.
This Budget fails to give local councils the funding that they need to deliver crucial public services after over a decade of Conservative austerity. It fails to tackle the growing cost-of-living crisis and fails to address the urgency of the climate crisis. The Chancellor talked of
“a new age of optimism”—[Official Report, 27 October 2021; Vol. 702, c. 274.]
It might be, for him, but for far too many, this Budget fails to deliver.
It is an honour to follow my hon. Friend the Member for Wirral West (Margaret Greenwood).
This is a Budget that has nothing to do with levelling up or building back better; it is the same old Tory economic policy that will squeeze people on middle incomes while giving a tax cut to the super-rich. How can the Chancellor justify cutting taxes for the super-rich while increasing national insurance contributions? The consequence will be that a person on an average income can expect their real income to fall next year once tax increases and inflation are taken into account. Alongside falling incomes, there will be rising energy prices, rising council tax, the withdrawal of furlough, continued use of the disgraceful practice of fire and rehire, and the axing of the £20 universal credit uplift.
This Budget does nothing to mitigate those issues. It risks leaving the vast majority behind in pay and in the public services that we all rely on. We should have seen reforms in it to create a fairer tax system in which the wealthiest in our society pay a fairer share through a wealth tax that helps to fund public investment to create good green jobs and a net zero economy. Instead, we have seen no action on the climate emergency—in fact, the Chancellor has opted needlessly to cut taxes on domestic flights. In the week of COP26, that is just astounding, as is the Prime Minister’s decision to fly to Glasgow rather than use the rail network.
Although there are some changes in the Chancellor’s Budget—such as the reduction in the universal credit taper and the rise in the minimum wage to £9.50 an hour—that will have some impact on incomes, sadly they will not be enough. The public sector pay freeze should be truly ended with an above-inflation rise and the minimum wage should be lifted to the level of a real living wage that people can survive on.
Despite the claims of levelling up, this Budget offers nothing to get our key public services back to where they were before 2010. The Government have said that spending on schools will return to 2010 per-pupil levels by 2025. That means that there has been no extra investment in our children’s education for 15 years, despite what the Secretary of State for Education said earlier today.
Even the funding planned for the NHS falls well below what has been delivered in the past and what many believe is needed now. Since 2010, the Government have put in less than half of the NHS’s historic spending growth rate of 3.6% per year since its creation. After more than a decade of cuts and the pandemic, our services are under enormous strain, and it is showing. Our public services are crucial to improving people’s everyday lives, and they are key to creating a more equal and just society.
This Budget was a missed opportunity to increase living standards for the many, to improve our public services and to invest in our communities. It does very little for the north-east and for constituencies such as Jarrow, where levelling up is still something of which we have yet to see any evidence.
I refer to my entry in the Register of Members’ Financial Interests.
After a decade of austerity, and in response to rising living costs, inflation and debt, our communities needed targeted economic support to ease the pressure, but that has not been forthcoming. Instead, workers will be asked to bear the burden of paying for the economic crisis through a rise in national insurance from next April, and through local authorities being forced by this Conservative Government to increase council tax to pay for vital local services, including social care.
Paul Johnson of the Institute for Fiscal Studies has said that the outlook for living standards is “actually awful”, with
“High inflation, rising taxes, poor growth keeping living standards virtually stagnant for another half a decade”.
It is a matter of priorities—tax hikes for workers and tax cuts for banks. It is the Conservative party helping its friends in the City, at the expense of our communities and public services. Rising inflation will exacerbate the situation: economists have stated that inflation will average 4% and could go as high as 6%. With that in mind, public sector workers, who deliver important public services and who are taxpayers, urgently need answers on what the spending review’s pay announcement actually means in practice. After 11 years of sustained pay freezes and, in effect, pay cuts in the public sector, the Government could have committed themselves to a real-terms pay increase for public sector workers to address rising inflation and the cost of living. The announcement on public sector pay is a con. By failing to commit themselves to a real-terms increase and asserting that they do not want to “prejudge” independent pay review processes, the Government caused their announcement to lose all legitimacy.
This Government have a track record of completely ignoring pay review body recommendations. Let us look at the prison officers’ situation. Last year’s recommendations from the Prison Service Pay Review Body included a £3,000 pay rise for band 3 officers on the new contracts. The Government rejected the experts’ advice, stating that it was unaffordable. That leads to the other issue: the Government do provide indicative advice on the overall remit of pay review bodies. This is all just smoke and mirrors, as it is not a case of prejudging: nothing is stopping the Government from advising that a real-terms increase for public sector workers is appropriate.
We also need to hear more from the Government on civil service pay. The hundreds of thousands of civil servants do not have a pay review body, and rely on the Treasury to determine a pay rise; but, as we all know, when it comes to a spending review the devil is always in the detail. In this case, the autumn spending review confirms cuts
“of 5% against day-to-day central departmental budgets in 2024-25.”
The Public and Commercial Services Union has expressed concern about the suggestion in the spending review that the Government want to cut
“non-frontline civil service headcount to 2019-20 levels by 2024-25”,
saying that that could mean about 32,000 jobs being cut.
Will the Minister tell us in his closing remarks how many civil service jobs are expected to be cut as Departments are forced to make 5% savings, and whether the cut in running costs and jobs will in part be used to cover any public sector pay increase? Cutting the jobs of the civil servants who work, live and spend in our communities, such as those in Luton South who work for the Department for Work and Pensions, Her Majesty’s Courts and Tribunals Service and Border Force, will hamper any meaningful strategy to improve economic growth and living standards.
The Government need to change their priorities and root the recovery in our communities and workers’ prosperity. Lifting public sector workers’ living standards will have a positive knock-on benefit, contributing to the distribution of growth across all our communities and the country. It is time to change tack, and back our public sector workers to back our economic recovery.
I am pleased to be able to speak to some of the ways in which this Budget will impact on my constituents in Rutherglen and Hamilton West. The Chancellor made some welcome announcements last week, and I would like to acknowledge them. They include the increased funding for Scotland, some aspects of the changes to the universal credit taper rate and raising the national living wage. Unfortunately, though, it is yet again the most vulnerable in society who will be feeling the deepest cuts.
The changes to the universal credit taper rate provide some support for claimants who are working and in a position to increase their working hours, but this does not make up for the removal of the £20 a week uplift, which was a lifeline for millions across the UK. Like many colleagues, I wrote to the Government several times about the uplift, and on Friday I received a response to a letter that I had sent 17 weeks earlier on 8 July, advising me that no impact assessment had been made of what that cut would mean to millions of people. Will the Chancellor instruct his officials to make that assessment now, so that we can see how it tallies up with the taper rate changes?
The change helps only a portion of claimants, so what is being done for those who cannot work, for reasons outwith their control? What about the single parents whose childcare does not stretch far enough for them to increase their hours? What about those on zero-hours contracts whose income is dependent on the whims of their employers, or those whose disabilities prevent them from working, either altogether or more hours? This is just a small sample of the situations that our constituents can find themselves in and that become barriers to work. They are no more immune to the rise in inflation and the cost of living than the rest of us.
Likewise, the rise in the national living wage is welcome, but why is it only for those over the age of 23? How much of that money will really see the inside of people’s pockets? The Chancellor made a clever decision when he announced the health and social care levy in September, negating the need for it to be included in his Budget. That will certainly eat into any gains that the wage increase provides, and in Scotland, while income tax levels are set differently from England’s, for most that will mean an additional percentage point deducted from their income. So when we consider rising inflation, additional taxes and mounting energy costs, for those in my constituency this is not the generous gift that the Chancellor would have us believe. It is less than the bare minimum he could have provided.
Speaking of energy costs, I was disappointed that no relief was offered by the Government as we move into what will undoubtedly be a long and difficult winter. It was anticipated that we would hear that VAT would be reduced on household energy bills—a move that it was in the Government’s gift to provide. Mounting costs, coupled with suppliers going bust, make this an issue that I am contacted about regularly. The VAT charged on household bills is money that goes to the Treasury, not the suppliers. I was unsurprised on Friday to read that Ofgem will be reviewing the current price cap
“to ensure that it appropriately reflects the costs, risks and uncertainties facing suppliers.”
Can we correctly assume that this will see another historic rise in prices? Will the Chancellor commit now to ensuring that any rise does not push people further into poverty?
It is not just households that are facing unaffordable energy costs. Last month, I was contacted by a constituent who owns a much-loved business in the constituency. It is so well-established that next year will mark its centenary, but my constituent is worried that the celebrations will be marred by the greatest financial risk to the company in his lifetime. He is just had to renew his energy contract, which is not capped for businesses, unlike those for households. The contract he has had to sign increases his energy bill by around £30,000 a year—a 500% mark- up—and the out-of-contract costs are even higher. What support is the Chancellor going to provide for small, family-owned businesses like that of my constituent, to ensure that they do not have to close their doors or let staff go just to keep the lights on?
I am grateful to the Chancellor for coming to the House and setting out his Budget. It is not an easy job, and it is one that I am sure most of us do not envy, but for my constituents there are still outstanding questions that desperately need answers, which I hope he will be able to give.
It is a pleasure to follow the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier). I want to make special mention of my hon. Friend the Member for Leeds North West (Alex Sobel), who made so many important points about how this Budget affects our city. We have heard so many stories of damage to communities across the country by Tory economic policies. It should not be like that, not in one of the richest countries in the world. Ours is one of the richest countries, but day to day that seems almost like a fantasy to people in my community and across the country, because they do not feel that they share in that wealth.
The aim of this Budget was clear: to make working people pay for a crisis that they did not cause. That was exactly what was done in 10 years of austerity after the banking crisis, and it is exactly what is being done now. The Government have chosen to hit working people with tax hikes and benefit cuts, while slashing taxes on the bankers. Make no mistake: this was a clear and deliberate political choice.
But there is an alternative: the Government could have chosen to impose a wealth tax, raising billions from the super-rich, who have increased their wealth by more than £100 billion during this crisis. Are we to say that it is impossible? [Interruption.] I see the Tories grinning at the prospect of making the richest people in society pay their fair share. Are we saying that that is impossible? [Interruption.] They are grinning, some of the ones who are not wearing masks, as we can see over there. Instead, the Government have chosen to stand side by side with the super-rich, who fund their party—many who lined their own pockets with corrupt covid contracts during this crisis. I want the Chancellor to be clear on something: we are going to build a mass movement for a wealth tax on the super-rich, because it is time that those who have got away with rigging the system for so long actually pay their fair share.
The second point I wish to make is that this Budget was a chance for the Government to put their money where their mouth is and fund a green transition to avoid climate catastrophe, which is the greatest example of free market failure. We needed a green new deal that created millions of decent, unionised, green jobs, transforming the basis of our economy while preparing us for the challenges of the future. Instead, the Government’s pledges fall tens of billions of pounds short of the levels of green investment we need to hit our carbon targets. So many people watching at home were shocked—they thought they had misheard—when in the Budget the Chancellor announced that he was slashing taxes on UK internal flights. People could not believe their ears. The Government are also sanctioning new oil and gas fields. We should be tackling the high-polluting lifestyles of the wealthy, which are fuelling the climate crisis. That is why I have called for a tax hike on the incomes of the richest 1%—those on more than £150,000 per year.
Just as the claims we used to hear of the “northern powerhouse” a decade ago were complete hot air, the Tories now want to fob people off in areas such as mine in east Leeds with bogus claims of “levelling up”. The Tories are not levelling up; they are not even levelling back to where we were before they took their axe to local services—to youth clubs and Sure Start centres. In my city, for example, since 2010 Leeds City Council has had cumulative cuts of more than £2 billion, and the same is happening in communities across the country. Yet now the Chancellor has refused a levelling-up bid to redevelop the Fearnville leisure centre in east Leeds to make it a wellbeing centre fit for the needs of my community. My constituency is one of the most economically deprived in the whole country, so it deserves the Government’s backing for that levelling-up bid, but they refused to back it. Instead of investing in our areas, the Government have chosen to hand out tax cuts to bankers. That is an appalling decision, but I say to the Chancellor that he still has time to change his mind on the levelling up bid for the Fearnville centre in east Leeds.
Lastly, I wish to make the point that the Government are leaving people to sink when faced with a deepening crisis. As we have heard, the Chancellor, ahead of his Budget speech, talked of an “age of optimism”. That just shows how out of touch the Government are. The IFS estimates are that over the next five years household income is expected to barely grow, at just 0.8% per year. That comes after workers have already faced the biggest stagnation of wages since the age of Napoleon. There should have been an emergency plan, to get people through the winter. That means that free school meals should have been extended.
The cut to universal credit, which affects more than 14,000 families in east Leeds, should have been restored. There should have been a windfall tax on fossil fuel companies such as BP, which today announced huge increases in profits, to fund a one-off winter fuel payment to help every household in the country through the winter.
At this Budget, the Tories had a chance to stand with ordinary people who face an unprecedented crisis. They chose to stand aside. The rhetoric of the Conservatives may have changed, but their callous disregard for ordinary people has not changed and remains constant.
It is a privilege to respond for the Opposition as we conclude our debate on last week’s Budget.
Politics is about priorities, and that has been made crystal clear in not only today’s debate but the Chancellor’s Budget. The economic recovery is far from secure; the cost of living is soaring; supply-chain chaos is putting businesses under strain; and the big challenges that face our country and, indeed, our planet need leadership.
I thank all my right hon. and hon. Friends on the Opposition Benches, who have spoken with such passion on behalf of their communities and their constituents in challenging this inadequate Budget. I thank my hon. Friends the Members for Bootle (Peter Dowd), for Bradford East (Imran Hussain), for Battersea (Marsha De Cordova), for Norwich South (Clive Lewis) and for Makerfield (Yvonne Fovargue). I thank my right hon. Friend the Member for Hayes and Harlington (John McDonnell), my hon. Friend the Member for Harrow West (Gareth Thomas) and my right hon. Friend the Member for Walsall South (Valerie Vaz). I thank my hon. Friends the Members for Brighton, Kemptown (Lloyd Russell-Moyle), for Nottingham East (Nadia Whittome), for Sheffield, Hallam (Olivia Blake), for Newcastle upon Tyne Central (Chi Onwurah), for Kingston upon Hull West and Hessle (Emma Hardy), for Ilford South (Sam Tarry), for Worsley and Eccles South (Barbara Keeley), for Liverpool, West Derby (Ian Byrne), for Bedford (Mohammad Yasin), for Bolton South East (Yasmin Qureshi), for Leeds East (Richard Burgon), for Leeds North West (Alex Sobel), for Newport West (Ruth Jones), for Wirral West (Margaret Greenwood), for Jarrow (Kate Osborne) and for Luton South (Rachel Hopkins). Sadly, it was a little bit quieter on the Government Benches today and they ran out of Members who were willing to defend their out-of-touch, high-tax, low-growth Budget.
Let me start with the verdict of Paul Johnson of the Institute for Fiscal Studies on the outlook for living standards. He said:
“This is actually awful… High inflation, rising taxes, poor growth keeping living standards virtually stagnant for another half a decade”.
As we have come to expect from this Government, Ministers fail to accept any responsibility, working harder on their excuses than on solutions. It now costs £15 more than it did last year to fill an average car with a full tank of petrol; heating bills have already gone up by £140, with more rises to come; and the cost of a typical family food shop is set to increase by more than £180 next year—assuming that people can find everything they want on the shelves. Almost everything is more expensive, yet the Budget has only made matters worse.
The Resolution Foundation has highlighted how, by 2026, taxes will reach an additional £3,000 per household compared with when the Prime Minister took office. The Chancellor could have cut instead VAT on domestic heating bills to zero for the next six months, as we urged. Labour’s retrofitting plan would have helped to bring 19 million homes up to standard, cutting heating bills by an average of £400 a year. These are practical ideas to support pensioners and families through the long winter months ahead.
We all know that Ministers are making the cost-of-living crisis even worse for 6 million people with their cut to universal credit. It is appalling to remove £20 a week from people who already have so little, yet it is also so revealing. We welcome the change to the taper rate, but let us be clear: while the Government give with one hand, they take far more with the other. Six million households were hit by the cut, yet fewer than a third of them will get anything from the change. The Budget does nothing to help millions of hard-pressed families who are working hard on modest incomes and face a cost-of-living crisis this winter, and there is nothing for pensioners who are worried about skyrocketing gas and electricity bills.
The reason why the Conservatives are increasingly a high-tax party is that they have been a low-growth Government, and that will continue. The Budget confirmed anaemic medium-term growth forecasts, with growth falling to an average of 1.5% in the final three years of the forecast. There is no plan for growth—not now, not next year and not for the past 11 years.
The Government have again missed another target on research and development spending, which is central to boosting our economy. As the OBR reported, the measures announced at the Budget make no material difference to the path of business investment. Real wages are on course to be lower in 2026 than they were even before the global financial crisis.
This Budget needed to support British businesses, as they will power our economic recovery, and this Government were elected on a manifesto committed to fundamental reform of business rates. In fact, the last four Tory manifestos have promised action on business rates, and every time they have failed to deliver. The Treasury started the review last summer and it has failed even on its own terms. Businesses were promised real change, not tinkering at the margins. The challenge facing our high streets is real and it will not disappear. In fact, it was the new Chief Secretary to the Treasury who once wrote in 2018 that he was also very frustrated by the then Conservative Chancellor’s failure to abolish business rates. He wrote:
“We need to do better, and this means the Chancellor has to up his game. Too often since his appointment, he has shown a tin ear to the concerns of precisely the sorts of people the Conservative Party ought to be championing.”
He said that the Chancellor had a duty to listen and to act. That is absolutely right. We have a new Chancellor, but the same old problem. Perhaps the right hon. Gentleman should have a word with his boss to try to sort this out. Labour will do what this Chancellor and his predecessors have failed to do: we will replace business rates with a fairer alternative fit for the 21st century, levelling the playing field with the online competitors.
Also buried in the Budget documents is a stealth raid on self-employed people, meaning that they will have to pay an extra £1.7 billion over the next five years. Let us never again hear the Tories claim to be the party of business. When the Prime Minister said, “Eff business,” I thought that it was a quip; now I know that it is Government policy. Today’s Labour party will work with businesses. This Government want to blame them. This Government are falling well short of what is needed to address the key challenges facing the country. The Chancellor spent more of his Budget talking about cider than the climate. As the OBR has revealed, stalling action in this crucial decade could double the overall cost to our economy. The insufficient action from the Government is unfathomable.
I have heard some of the contributions from the Opposition this afternoon. I just wonder what planet they are on. We were told that we would have a recession that was deeper than that of the second world war. Instead we have an economy that is rebounding the fastest in the G20. Can the hon. Lady explain how the economy is actually giving us a recovery better than any economist ever predicted?
Let me say to the hon. Gentleman that sometimes when the Whips come calling and they have a piece of paper that they would like you to read out in the Chamber, just say no. We have had far, far further to climb because of the massive hit to our economy—the worst of any advanced nation. Much of that, sad to say, comes down to the Chancellor’s resistance to adopting the measures that were necessary back last autumn to control the virus.
Labour has set out our climate investment pledge not only to get us on track with our commitment, but to avoid greater costs in the future and to ensure that we can seize opportunities, too. That means developing our domestic hydrogen sector, greening our steel industry, building the cycle lanes and infrastructure, creating new jobs to retrofit homes, ensuring that electric vehicles and their batteries are manufactured here, and that all our families can enjoy the local environment, clean air and open space. We are ambitious for Britain to lead the world with the jobs and technologies of the future, creating prosperity and opportunity in every corner of our country. Under Labour, we will work with business and trade unions to make this a reality.
Absolutely. I supported the bid, so of course I welcome it; that is hardly a revelation. I will always welcome additional investment coming to my constituency, although I notice that the hon. Member for Sedgefield (Paul Howell) is also in his place, and I am sure that, like me, he was disappointed that our restoring your railway fund bid to look at reopening the Leamside line, which would create benefits for the wider north-east, was sadly knocked back by his Government. I am afraid that it is not entirely good news for Sunderland and the north-east.
I absolutely agree that we need to take another look at the Leamside line, but I would like to come back on your comments about Labour being interested in business. [Hon. Members: “Not ‘you’.”] My apologies, Madam Deputy Speaker. If Labour Members are so interested in business, why is their attendance at the Business, Energy and Industrial Strategy Committee so woeful?
My hon. Friend the Member for Bristol North West (Darren Jones), the Labour Chair of the Business Committee, is doing a fantastic job. I see him out there all the time, championing the cause of business and seeking to ensure that we are backing innovative British firms.
I will happily give way again, but when I do, will the hon. Gentleman tell me whether he will work with me to get the Government to look again at our restoring your railway fund bid? I am sure that he was as disappointed as I was that we were knocked back once again.
While we are on the subject of railways, is my hon. Friend as frustrated as I am that we have yet to see the integrated rail plan and that there have been no announcements regarding Northern Powerhouse Rail? It was not meant to go from Manchester to Leeds; we were originally promised that it would be from Hull all the way over to Liverpool? I hope that she will put as much pressure on the Government as I will to get that delivered.
Absolutely; 60 times we have had announcements on the plan, but not a single spade in the ground. I will now make a little more progress.
The theme today is public services. I put on record again our immense gratitude to all those who have been keeping our public services going during the most challenging times over the last 18 months. There are really too many public sector workers to mention, but their contribution should be noted. The Government claim that they will give public sector workers belated pay rises, but cannot confirm whether they will be real- terms pay rises. Only under the Tories could a so-called pay rise mean that people are actually less well off.
Working people are being expected to pay so much more, but what for exactly? There are 5.7 million people on waiting lists for operations, GP appointments are harder than ever to come by and there are 100,000 vacancies in our NHS. We see falling apprenticeship starts, supersized classrooms for our children, antisocial behaviour at its highest level for years, rape convictions at record low levels, violent criminals walking free, fewer police officers and less safe communities. However, there was a vanity yacht for the Prime Minister, when he could have tackled antisocial behaviour instead. Tory Ministers have finally discovered, 11 years late, that the early years matter—who knew? But there is no apology from the Chancellor for closing more than 1,000 children’s centres since 2010. What price the unrealised potential and limited life opportunities over that lost decade?
This is a Budget with no plan for the cost-of-living crisis, no plan for fairer taxes and no plan for growth. The clocks went back an hour at the weekend, but in tax terms this Budget wound the clock back all the way to the 1950s, when taxes were last this high. It is the Conservatives’ record of low growth that has driven them to higher taxes, just as their failure to plan ahead has led to higher inflation and higher bills.
Labour would tax fairly, spend wisely and get the economy firing on all cylinders. We would cut VAT on heating bills and help to insulate homes. We would back our world-leading industries, and buy, make and sell more here in Britain. We would scrap business rates and replace them with a much fairer system that is fit for the modern world. We would secure our transition to net zero with well paid, highly skilled jobs in every corner of our country. We would not clobber working people and British businesses while online giants get away without paying their fair share. We need a Budget to ease the urgent pressure on families and businesses—a Budget to seize new opportunities and to unleash our country’s potential. We have a proud history but I believe that our best days are ahead of us. The Chancellor has made the wrong choices throughout this Budget; the Conservatives have made the wrong choices throughout the past decade. Our country deserves better.
It is a privilege to bring the past four days of Budget debate to a close. Over that time we have heard dozens of excellent speeches from across the House. I echo what the shadow Chief Secretary said in thanking all those who contributed. I express my deep gratitude to the civil service and the wider Treasury team, who have devoted long hours to preparing this Budget, working closely over the course of the spending review with all other Government Departments. I am immensely grateful for their hard work.
I also pay tribute to the Chancellor for his third Budget in 19 of the most challenging months in living memory. Winston Churchill once told this House:
“The first Budget of a Chancellor is often well received, but the third Budget is the most critical of all, because it is the heir of previous decisions”.—[Official Report, 22 September 1943; Vol. 392, c. 212.]
Well, this third Budget is a vindication. As Members will recall, over his first two Budgets, the Chancellor developed our plan to protect jobs and livelihoods and to safeguard the economy from coronavirus. In the words of the Office for Budget Responsibility, that plan has proven “remarkably successful”. The OBR’s forecasts show that our economy returned to its pre-pandemic size around the turn of the year, several months earlier than previously expected. Wages are rising, growing in real terms by 3.4% compared with February 2020. More people are in work and literally millions fewer people than anticipated last July are unemployed. Our public finances are under control and debt is under control. To echo the Chancellor: growth up, jobs up, debt down.
Just because disaster has been averted does not mean that we should take that for granted. It is the result of conscious policy decisions that have steered our nation to a safer place. Now is the time to carry this momentum through into building the economy this Government were elected to deliver, with a future of higher wages, higher skills and rising productivity, no longer based on Labour’s and the SNP’s model of low-skilled migrant European labour, but based on training and equipping our own people to succeed; and a future where our businesses flourish and drive growth and that growth is shared more evenly across the United Kingdom. We will have a greener economy. Multiple Opposition speakers, such as the hon. Member for Nottingham East (Nadia Whittome) and the right hon. Member for Walsall South (Valerie Vaz), seemed to forget the £30 billion net zero strategy announced just a fortnight ago. It will be a future where our citizens benefit from world-class public services at every stage of their lives.
I am aware that the Minister is very familiar with the area I represent, and indeed the local council, but on the issue of labour shortages I raised in the debate, and have raised in earlier proceedings, we have a shortage of adult social care workers in the East Riding of Yorkshire—a shortage so great that people cannot access all the care that they need. When he talks about labour shortages, is he going to address the shortages we have in that sector?
I thank the hon. Lady; hers was one of the more thoughtful speeches in this debate. We have committed £162.5 million as part of our winter plan to help fund the adult social care workforce. That money is exactly designed to make sure that we can attract people into this most pivotal of sectors. That comes on top of the £5.4 billion across the spending review that we have committed, thanks to the new health and social care levy, and the record funding for local government that was announced in the SR. I am always happy to work with her on this, but there is more money for this sector.
Unless there are pay increases for care staff, the small dribbles in amounts of training, and bits of this and bits of that, will not deal with this serious crisis. There are 105,000 vacancies, and people are leaving in droves to go and work in burger bars and other forms of retail.
Again, I thank the hon. Lady for raising that point. I do take this point seriously. We have committed in this Budget to the national living wage increase, which is a major increase—6.6%, rising to £9.50 an hour. That money comes as a complement to the extra funding that the Government have committed to help with labour shortages, and I believe it will make a real difference. Obviously we can continue to monitor the situation closely with the sector.
If I may make a little progress, I want to return to the core theme of today’s debate: our public services. As the Chancellor outlined last week, this Budget increases total departmental spending over this Parliament by £150 billion. That is the largest rise this century, with spending growing by 3.8% a year in real terms. We are taking forward plans to deliver more than £600 billion of gross public sector investment over this Parliament, meaning that public sector net investment will be at its highest sustained level as a share of GDP for nearly half a century. This is funding that can and will make real change possible for communities throughout the country.
Last week, my right hon. Friend the Member for Maidenhead (Mrs May) reminded the House when talking about the NHS that increased spending is not enough on its own and that we must strive to deliver value for taxpayers. I could not agree more. The measure of a Government’s compassion is not how much they spend, but the outcomes they deliver. In making these investments, the Government are committed to ensuring that every pound is spent well and makes a difference.
To take healthcare, we are building 40 new hospitals and upgrading 70 more, as well as funding 50,000 nurses and 50 million more primary healthcare appointments. We are working closely with the NHS to roll out a stream of innovative developments that will reduce backlogs, help cut waiting times and transform healthcare for good. Some 100 community diagnostic centres, rightly praised by my hon. Friend the Member for Bishop Auckland (Dehenna Davison), will help people to obtain tests close to home. New surgical hubs will cut waits for elective operations, and we are making a record investment in R&D to support the health technologies of the future.
I have listened with interest to the Minister’s points about the national health service. If the Health and Care Bill goes through, as the Government intend that it should, instead of having a national health service, we will have 42 independent systems that will all have to meet strict financial limits. The Bill also has provision to make things wide open for the private sector to start delivering care that the NHS currently delivers. What would the Minister say to those NHS workers who may not be able to secure a job in the NHS any longer, because that role has been taken over by a private company, thus losing Agenda for Change pay and terms and conditions?
This Government remain fully committed to great care, free at the point of need, which of course is the founding principle of the health service. We remain fully committed to working to ensure that our healthcare system and our social care system are properly funded and staffed for the future. Our commitment to providing world-class public services extends to people of all ages, and that is reflected in our wider work on social care.
We have pledged an extra £4.7 billion by 2024-25 for schools, and I congratulate my right hon. Friend the Secretary of State for Education on securing a good settlement that will include nearly £2 billion of new funding over the spending review period for education recovery. That brings total education recovery spending to almost £5 billion. We are also providing £500 million to support the very youngest and their carers and to invest in family help. Last week, my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom), who has been such a brilliant advocate for this cause, described those measures as fulfilling
“a fantastic pledge for every baby.”—[Official Report, 27 October 2021; Vol. 702, c. 317.]
I could not agree more.
I welcome the positive interventions in early years and for young people in the Budget in particular, which are meaningful. If we are going to support that change for the long term, we need to support local authorities to transition to that early intervention approach, as laid out by my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom). I trust that the Minister will confirm the Government’s commitment to doing that.
I absolutely will, because there is sometimes said to be ambiguity about levelling up. It is clear to me that it is about life chances through life, from cradle to grave. It is about jobs, prospects, investment in skills and jobs, and all of that comes from the start of life. I know that my hon. Friend will be doing a fantastic job in Nottinghamshire to help to deliver that.
The Government stand fully behind our youth budget. From the National Citizen Service to youth hubs, our wider work is clear. We are fully committed to ensuring that young people benefit as part of the Budget and spending review.
Meanwhile, we are spending record sums on improving connectivity and have allocated £5.7 billion to eight city regions to transform their transport systems. There is also the £4.8 billion levelling-up fund. We are taking on the criminals who make too many people’s lives a misery by recruiting 20,000 new police, providing an extra £2.2 billion for the courts, prisons and probation services, and committing £3.8 billion to the largest prison-building programme in a generation.
World-class public services are made possible only by the hard work of the private sector and the genius of the free market—a point made brilliantly by my neighbour, my hon. Friend the Member for Redcar (Jacob Young). That is why we are choosing to ignite even greater public sector success by investing in our economic infrastructure, improving skills and supporting innovation, with commitments to boost R&D funding and access to early stage equity finance.
To make sure that work pays, we are increasing the national living wage, cutting the universal credit taper rate and increasing the universal credit work allowance by £500 a year. That was the subject of a powerful speech by my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) and likewise by my hon. Friend the Member for Isle of Wight (Bob Seely).