The Chancellor of the Exchequer (Rishi Sunak)
I am pleased to speak today in support of the Queen’s Speech and the measures it contains to make the United Kingdom stronger, healthier and more prosperous than before. Let me first warmly congratulate and welcome the hon. Member for Leeds West (Rachel Reeves) to her new position on the shadow Front Bench. Her predecessor and I often had robust debates, but always in the right spirit, and I am sure that that will continue with the hon. Member.
While there is much to debate, the fundamentals of our economic recovery should be a point of consensus in this House: one of the quickest, largest and most comprehensive economic responses to the pandemic anywhere in the world; continued agility throughout the crisis, making sure that, where we can, support gets to those who need it; and now, with our economy reopening, I can say with full confidence that our plan for jobs is working.
Chris Bryant (Rhondda) (Lab)
How on earth can it be fair for somebody employed on a long-term contract to be fired and then immediately rehired?
Rishi Sunak
The Government and I strongly believe that firing and rehiring should not be used as a negotiating tactic by companies; that is absolutely right. The hon. Gentleman will know that the Secretary of State for Business, Energy and Industrial Strategy has asked ACAS to look into this matter. It is currently doing so, and we await its findings.
Gareth Thomas (Harrow West) (Lab/Co-op)
Will the Chancellor of the Exchequer give way?
Rishi Sunak
I will make some progress.
Before I turn to the details of the Queen’s Speech, let me first update the House on the improving economic context. A year ago today, I stood at this Dispatch Box and told the House and the country that I and this Conservative Government believe in the nobility of work, and that we would stand behind Britain’s workers throughout the crisis and beyond. Judge our commitment to those values by our record. When the furlough scheme ends in September, we will have helped to pay people’s wages for a year and a half, supporting, at its peak, the jobs of almost 9 million people. We have protected the incomes of more than 2.7 million self-employed people; backed businesses to keep people in work with tens of billions of pounds of loans, grants and tax cuts; and supported the most vulnerable through the crisis with a strengthened safety net, increased funding for local authorities and public services, and help for the charity sector.
Gareth Thomas
I notice that the Chancellor of the Exchequer did not mention young people. Recent figures reveal that the kickstart scheme is helping only 5% of unemployed young people who were made redundant during the financial crisis. Given that there are over 600,000 young people out of work at the moment, why did the Queen’s Speech not contain more measures to help tackle youth unemployment? Did he just forget?
Rishi Sunak
With the greatest respect, I am only one minute into my speech, so perhaps the hon. Gentleman will forgive me for not mentioning everything in the first 30 seconds. I completely agree with him. As I have said repeatedly from this Dispatch Box, not only are jobs my highest economic priority, but I have, from the very beginning, highlighted the particular impact that this crisis has had on young people because many of them work in the sectors that are most affected, particularly in the hospitality industry, which is why the Government have taken steps to support that industry. As I will come on to say later, the kickstart scheme is a key part of our way to help those young people find work. It is one of many things we are doing, whether it is traineeships, apprenticeships or the Prime Minister’s lifetime skills guarantee, and we will continue to focus on that.
Mr Toby Perkins (Chesterfield) (Lab)
Will the Chancellor of the Exchequer give way?
Rishi Sunak
I will make a tiny bit more progress.
Taken together, over the last year and this, our plan for jobs is providing over £407 billion of support for British people and businesses—a historic package of economic support unmatched in peacetime—and the evidence shows our plan is working. GDP statistics published only this morning show that the economic impact of the lockdown at the start of the year was less severe than had been expected and that there are clear signs that we are now on our way to recovery. The Bank of England said last week that it now expects the economy to return to its pre-crisis level by the end of this year—earlier than it previously thought.
Mr Andrew Mitchell (Sutton Coldfield) (Con)
My right hon. Friend has just given us the excellent news that the economy should have rebounded by the end of this year. He and I have discussed on a number of occasions the importance of international development. In view of that, can he confirm to the House today that he will restore the 0.7% target at the end of the year when the economy has so recovered?
Rishi Sunak
I appreciate all the constructive conversations my right hon. Friend has had with me on this topic, which I know he feels passionately about. As he will know, while our economy will have recovered its pre-crisis levels, the damage to our public finances is much longer-lasting. That is what led the Government to make the difficult but I hope understandable decision to temporarily divert from the 0.7% commitment, with a full intention to return to it when the fiscal situation allows, but in the meantime to remain one of the leading donors to the causes that both he and I are passionate about.
Several hon. Members rose—
Rishi Sunak
I will make a tiny bit of progress.
In the labour market, it is worth reminding the House that at the start of this crisis, unemployment was expected to reach 12% or more. It is now expected to peak at about half of that level. That means almost 2 million fewer people losing their jobs than previously feared. Our unemployment rate today is one of the lowest in the G7—lower than those of Italy, France, Canada and the United States. Our plan has protected incomes, too.
Peter Kyle (Hove) (Lab)
The Chancellor mentions countries in the G7. It is, without question, good news that our economy is back into positive growth territory, but why does he think that the British recession was so much worse than in all the countries he has mentioned and at the bottom of the G7 during the coronavirus?
Rishi Sunak
I am grateful to the hon. Member for raising this point; I have addressed it previously, but am happy to do so again. As the Office for National Statistics and others have said, is difficult to make accurate cross-country comparisons—
Rishi Sunak
It is difficult to make such comparisons on GDP figures specifically, for the simple reason that the way in which we calculate GDP in this country uses different deflators for the public sector. That has been explained by the Office for Budget Responsibility and the Office for National Statistics, and it actually means that we are disadvantaged relative to peers. If we look at it on nominal GDP, which corrects for that difference in calculation, as the ONS has said, our performance actually looks very comparable to all our major competitors. I could point the hon. Member to the box in the Office for Budget Responsibility report—an independent organisation that would verify what I have just said.
It is worth bearing in mind what I have always said—that GDP is of course important, but it is abstract. What matters to people are their jobs and livelihoods, so the fact that unemployment is as low as it is compared to the projections at the beginning of this crisis is something that everyone in this House will welcome.
Our plan has protected incomes too. The latest statistics show that real household disposable incomes in the last quarter of last year were only 0.2% below the same period the year before. Of course, many families are facing profound difficulties, but it is an extraordinary relief that in the face of one of the largest falls in output in 300 years, we could broadly maintain household incomes. In turn, that has meant that some people have saved more, with household savings last year £140 billion higher than the year before, and surveys now showing that consumer confidence is returning to its pre-crisis levels.
Jim Shannon (Strangford) (DUP)
I spoke to the Chancellor beforehand about this. During the lockdown, covid loans were made available to companies. Companies in my constituency have indicated to me that the repayment scheme is not over a flexible period of time and they have to pay back large amounts of money in one go. To ensure that those companies can survive beyond the lockdown and into next year, may I ask the Chancellor whether it is possible to make some flexibility in the repayment of those loans for those companies?
Rishi Sunak
The hon. Gentleman makes an excellent point. It is one that, I hope, we have already addressed. He is right about the importance of companies having the cash flow to bounce back strongly, which is why late last year we introduced something called “pay as you grow” to help the 1.3 million small and medium-sized companies that have taken bounce back loans. It means that automatically, at their choice, they will be able to turn those loans from five-year repayment loans to 10-year repayment loans, which almost halves the monthly repayments. Furthermore, it gives them the option to go for interest-only repayment periods of six months or for payment holidays, none of which will impact their credit rating as long as they do it in advance. That should be automatically communicated to businesses by their bank. I hope that is helpful to the small and medium-sized companies in his constituency.
Sir Edward Leigh (Gainsborough) (Con)
All the pressure on my right hon. Friend has been from one direction, so let me try to right the balance. When this is over, in terms of a smaller state, deregulation and lower taxes, are there any Thatcherites left in the Government?
Rishi Sunak
Well, my right hon. Friend and I strongly agree on the role of the private sector in driving our recovery. What is important, as the hon. Member for Strangford (Jim Shannon) said, is businesses having the confidence to invest, which is why the Government have provided support for businesses not just to get through the crisis, but, through tax cuts such as the super deduction, to help them invest and drive our recovery forward. Both my right hon. Friend and I know that the prosperity that we all want can only be created by those private sector companies. I hope that gives him the reassurance that he is looking for. I should make some progress.
Talking of those businesses, I do believe that they are also now beginning to feel more confident. Although many firms have been hit hard by the pandemic, the latest data shows that the number of businesses becoming insolvent actually fell by nearly a quarter last year compared to the year before, and in aggregate firms have been able to build up an extra £100 billion of corporate deposits since the start of the pandemic. Since we announced our super deduction tax cut, businesses now have a virtually unprecedented incentive to invest and create jobs. Bank of England surveys show that businesses expect to invest around 7% more than they would have done over the next two years, and Deloitte’s recent survey of business leaders shows that their intention to invest is stronger than it has been at any point since 2015.
It is, of course, going to take this country and the whole world a long time to recover fully from the shock that saw the largest fall in output in 300 years, but although our recovery will be long and difficult, it is beyond doubt now that our plan is working. We will, however, never be complacent. Eight hundred thousand people have lost their jobs through this crisis, and no Chancellor could guarantee that there will not be more jobs lost. People losing their jobs is the thing that weighs most heavily on me. Work is the best route out of poverty. It brings people financial independence. It improves long-term outcomes for families and children. Work is not just another economic variable—it provides us all with purpose and fulfilment. That is why every job lost is a tragedy. That is why jobs are our highest economic priority. That is why we have a plan for jobs, and that plan is working.
Karin Smyth (Bristol South) (Lab)
The right hon. Gentleman may have noticed that we recently elected a new Mayor of the West of England region who has pledged to commit to jobs, green jobs and bringing people together across the west of England. Will the right hon. Gentleman commit to working with the new West of England Mayor to deliver that promise, because no one from the Government has currently been in touch to ensure that that promise is delivered on?
Rishi Sunak
The Government believe in devolution and have worked successfully with Mayors across the country. I have a very productive relationship with Mayors. I commend all Mayors who have recently been re-elected, particularly Andy Street in the west midlands and Ben Houchen in the Tees Valley. I believe that all leaders want to drive jobs and growth in their areas. I look forward to working with anybody who shares that goal, and I look forward to working with that new Mayor.
When it comes to supporting work, what also matters is that we reaffirm our commitment to ending low pay by increasing the national living wage to £8.91, an annual pay rise for someone working full time of almost £350. We are providing targeted support to young people, who, as has rightly been identified, have been hardest hit in the pandemic. The £2 billion kickstart scheme will create hundreds of thousands of jobs for 16 to 24-year-olds who would otherwise be at risk of long-term unemployment.
Mr Perkins
The kickstart scheme is not reaching nearly as many people as the right hon. Gentleman suggests. Labour has proposed an apprenticeship wage subsidy funded by the underspend in the apprenticeship levy, which would ensure that companies that took on young people would be putting a lot more into them than under the kickstart scheme. Rather than continually pushing the kickstart scheme, which is much more expensive than the apprenticeship wage subsidy, why will he not adopt the apprenticeship wage subsidy that Labour has proposed?
Rishi Sunak
The kickstart scheme has now created almost 200,000 job placements for young people in record time, given that the scheme was only announced in July last year and operational in autumn. Its ramp-up compares very favourably with the future jobs fund, which preceded it, and with which the hon. Member will be familiar. Now that the economy is reopening, many more young people can start those placements over the coming months. I commend all people both at the Department for Work and Pensions and at the thousands of companies involved for their participation in a scheme that will transform the opportunities of young people up and down the country.
With regard to apprenticeships, we already have an incentive for employers to take on apprentices. In the crisis, the Government introduced a £3,000 hiring subsidy for small and medium-sized businesses to take on a new apprentice—a significant 35% subsidy, I think, of an apprentice at the apprenticeship median wage. It also pays for 95% of all training costs for apprentices employed by SMEs, as well as improving the quality of those apprenticeships. I agree with the hon. Gentleman that apprenticeships are important, but we took action in July last year.
To help people of all ages to get back into work, we have doubled the number of work coaches in jobcentres and provided over £3.5 billion to help people to search for work or retrain, and we are launching the restart programme, with £2.9 billion to provide intensive support to over 1 million people who are long-term unemployed. This Queen’s Speech goes even further to turbocharge our economic recovery and get people into decent, well-paid jobs. The plan set out in the Queen’s Speech creates more jobs, and jobs where people live. The levelling up White Paper will set out bold new interventions to improve livelihoods and opportunities. We are strengthening the Union with record investment in new infrastructure, such as road, railways and broadband. We are turning Britain into a science superpower, with our plan for growth making this country the best place in the world for inventors, innovators and engineers.
Kevin Hollinrake (Thirsk and Malton) (Con)
First, may I wish the Chancellor a very happy birthday? The scale of his ambition on levelling up is absolutely right, but the scale of the challenge is also huge. The economic gap between London and the south-east and the north-east, in relative terms, is as great as it was between East Germany and West Germany prior to reunification, and it took 30 years to narrow that gap. Does he agree that it will take more than one Parliament and more than the significant investment he has already committed to truly to level up this country?
Rishi Sunak
I thank my hon. Friend for his warm words, and I agree with him. This is the task that this Government will meet head-on, and it is right that it needs to be an ambitious goal that we set ourselves to meet. Like him, I share an eagerness to get on with it and keep going—and he will know, like me, that we are already doing it. Indeed, we are making the most of our new-found Brexit freedoms to launch freeports, for example, creating jobs and growth in innovative new industries in places such as Teesside, which both he and I know very well.
Ian Paisley (North Antrim) (DUP)
Will the Chancellor give way?
Rishi Sunak
I must now make some progress, because I am running out of time.
The Queen’s Speech gives people the skills they need to get good jobs and progress in their careers. Right now, 11 million adults in this country, nearly a third of our entire workforce, do not have a level 3 qualification. The Prime Minister’s lifetime skills guarantee will change that, giving every adult flexible access to fully-funded, high-quality education throughout their lives, and this will have a transformational impact on people’s lives and livelihoods.
This Government believe that we should value equally every path to a good career, not just a degree, so the Queen’s Speech provides landmark reforms to post-16 education and training. As I have mentioned, we have doubled to £3,000 the incentive payments for employers to hire new apprentices, and we are reshaping the system around the needs of employers so that people can get training in the skills we know the economy will need now and into the future.
This Queen’s Speech delivers two critical pieces of Treasury-sponsored legislation. The National Insurance Contributions Bill will introduce new reliefs to encourage employers to employ veterans, to incentivise regeneration and job creation in freeports, and to provide relief on NHS Test and Trace payments. The public service pensions and judicial offices Bill will make sure that dedicated public servants are fairly rewarded for their service, while making sure that the system is affordable and sustainable into the future.
Rishi Sunak
I am just going to wrap up.
In conclusion, it is apt that today the Opposition broke with a minor tradition, choosing to debate economic matters first, not last, and specifically to cite jobs as a focus—not the wider economy, as is the norm. I have been saying for over a year, since the very outset of this crisis, that protecting jobs and livelihoods was this Government’s No. 1 economic priority. It has shaped my decisions and actions and I have said it over and over again, to leave the British people in no doubt that this Government are on their side.
Last week’s results showed that, from Hartlepool to Harlow, the people heard us, so I cannot welcome enough today’s debate to share with the Labour party our plans to continue protecting the jobs of the British people and to defend a record that has seen millions of livelihoods protected and hundreds of thousands of businesses supported, and has created the conditions for one of the strongest economic recoveries anywhere in the world. We have a plan, and that plan is working.
Madam Deputy Speaker (Dame Rosie Winterton)
I remind hon. Members that there is a five-minute limit on Back-Bench contributions.
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
I was struck by the speech from the right hon. Member for Doncaster North (Edward Miliband). He said at one point that the Government had not changed; in fact, the one thing that had not changed was the right hon. Gentleman. I listened to his speech and was taken back to when I was a Back Bencher in 2014 and he was the Leader of the Opposition—he could have said exactly the same thing. It is always the same thing: he does the country down and says that we always talk about austerity. How can he talk about austerity when he himself acknowledged that the Chancellor has spent £350 billion on unprecedented support—on furlough and for British business? The world that he describes is the world of his tenure as Leader of the Opposition—there may well be a vacancy; who knows whether he could come back?—but it is not a world that many millions of people in this country recognise.
We continue to protect the lowest-paid workers: we have raised the national minimum wage and again raised the national living wage—having been the first Government to institute it, we raised it only in April, but perhaps the right hon. Gentleman forgot that. He has certainly forgotten the immense help and the grants that have supported businesses that would otherwise have closed. The bounce back loan scheme has approved more than £46 billion of loans for 1.5 million businesses. As we follow the Prime Minister’s road map out of lockdown restrictions, new recovery loans and restart grants will help businesses in urban areas.
The country that I see is completely different from the gloom and doom that the Leader of the Opposition—forgive me; the right hon. Gentleman is not the Leader of the Opposition any more, although he may be in future—paints. It is not recognised by millions of our fellow subjects. The Queen’s Speech builds back better and delivers on real people’s priorities. We are embracing a green, vibrant economy. It was extraordinary to hear the right hon. Gentleman again denigrate our achievements in the green industrial revolution. Only a month ago, John Kerry said to me—and he was good enough to say this publicly—that the efforts of this Government and this country had been extraordinary and we were world leaders in the fight against climate change. That is acknowledged. The right hon. Gentleman cited the United States: their target is a 50% reduction by 2030 from the 1990 level; our target for 2030 is a 68% reduction. It is far in excess of the United States’ target, yet the right hon. Gentleman once again points to other countries with the assumption that here in Britain we are terrible and everybody else is doing it better, whereas in fact the reverse is the case. It is Britain that people look to as leaders on climate change. Inwardly, the right hon. Gentleman probably acknowledges that.
Let me move beyond the histrionics of the right hon. Gentleman’s speech. We have laid legislation for the UK’s sixth carbon budget which, I am delighted to say, proposes a target that would reduce greenhouse gas emissions by 78% by 2035 compared with 1990 levels. It is by far the most ambitious reduction plan in the G7 and the right hon. Gentleman knows that. He knows that the 10-point plan has been acknowledged throughout the world as a world-leading and world-beating proposal. [Interruption.] They scoff and laugh, as they scoff and laugh at their own voters. They scoff and laugh at the country endlessly, and I am afraid they have suffered from their scoffing and mocking attitude.
The right hon. Gentleman was good enough to mention the EU’s proscriptive state aid regime, which we have jettisoned, and welcomed the fact that we have a subsidy control Bill that will create a new domestic subsidy control system. He accepted that, which did require a measure of realisation that we are moving on from the EU. I am delighted that, among his colleagues, he at least accepts that Brexit is finished and that we can move with confidence beyond EU membership. I very much welcome that but, again, to hear his speech one would think that the United Kingdom was a place of irredeemable squalor and poverty, when in fact the opposite is the case. When people look at the Oxford-AstraZeneca vaccine and the way in which we have conducted the vaccine roll-out, they see a country that has been extremely successful. Only today I was speaking to Ministers from Japan and Italy, who mentioned, without any prompting whatever, the extraordinary work that our scientists, nurses, health service and, in fact—dare I say—our hard-working Ministers and civil servants had put in to effect a successful roll-out. People are looking at Britain and they see a successful country that is regaining its place in the world.
This country is home to a powerful combination of elite research institutions, thriving life sciences companies, superb research charities and, of course, an excellent national health service. This winning combination has led the world’s fight against covid and saved many thousands of lives while creating a high number of high-quality jobs across the United Kingdom. These are things of which we should be proud and which our Government are hoping to—and will—build on. Yet the right hon. Gentleman is looking back to the past, simply repeating all the tired old phrases of five, six or seven years ago.
The ARIA Bill, which will become an Act in this Session and formed part of the Queen’s Speech, is a world first. It is a great innovation. The Department is delighted to have introduced this Bill to create an Advanced Research and Invention Agency, which will fund high-risk, high-reward research with the potential to produce new technologies, new industries and new jobs. ARIA represents the very best of British ingenuity and creativity, but the right hon. Gentleman and his friends wish to pretend that we are the very worst—that nothing we can do is any good and that nothing we can do can compete with France, Germany and all the other countries that he mentioned. In fact, in science and innovation the opposite is true. The Ministers from the countries I mentioned were actually saying the opposite of what the right hon. Gentleman is saying.
I see a huge difference between Government Ministers and MPs and our people across the country, and the Opposition—a fundamentally different outlook about the future and possibilities of this country. Time and again as a Minister and even as a Back Bencher, I have heard nothing from the Opposition but a litany of complaint and, frankly, a dirge of abuse about the country. The Government have huge optimism and belief in the abilities of this country and of our people to overcome difficulties—
Kwasi Kwarteng
I am not going to take any interventions. All I hear from the Opposition is scoffing, mocking and abuse. The truth is that across innovation with the vaccine roll-out, across net zero with the 10-point plan and the opportunities for COP26, and across enterprise, we have a Government who are committed to bringing progress and driving success across the entirety of the United Kingdom.
It would be indecent of me not to mention the latest addition to our parliamentary forces, my hon. Friend the Member for Hartlepool (Jill Mortimer). Consider this, Mr Deputy Speaker: this was a constituency that had never returned a Conservative Member of Parliament. Indeed, a former Labour Member of Parliament who is not so popular on the Opposition Benches these days, Peter Hartle—I can’t even remember his name! Peter Mandelson, now Lord Mandelson, said quite clearly that this was a seat that would never vote Conservative, but of course it did. And why did it vote Conservative? I suggest that, listening to the dirge-like pessimism of many Members of the Labour party, the people of Hartlepool took a different approach. They believe in the future of the country and of their community. We as a Government are determined to repay their faith in their country and their hard work, and to ensure that we not only level up but build back better.
Ordered, That the debate be now adjourned.—(David T.C. Davies.)
Debate to be resumed tomorrow.