(1 year, 1 month ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)
It is a pleasure to open this final day of the Budget debate. It is a particular pleasure to be opposite my old friend, the right hon. Member for Doncaster North (Edward Miliband). It is a pleasure that both of us now—I think I can fairly say as elder statesmen of our respective parties—have a chance to be taken around the parade ring one more time in front of everyone. There is a difference, however, between me and the right hon. Gentleman. I went from rising hope to elder statesman without an intervening period of achievement, whereas he was a very distinguished Energy Secretary and Leader of the Opposition. It is a pleasure to see him in his place.
The fact that we are both in the Chamber today also demonstrates the wisdom of one of the Budget measures. In the Budget, the Chancellor of the Exchequer made it clear that he wanted to bring people who had been dropped from the frontline of the workforce back into the frontline if they still had something to contribute. It is welcome to see not just both of us here, but, within days of the Budget, someone of real talent who had been retired from the frontline coming back: I am referring, of course, to the news that broke just an hour ago that Roy Hodgson has returned as manager of Crystal Palace.
I am conscious that this is not the most significant political or parliamentary event this week. All of us will this week be thinking of another political figure—a blond titan who divides opinion, a figure of undoubted achievement who defied the then Prime Minister over Europe but whose passion for Britain and especially for overlooked and undervalued communities cannot be denied. I am referring, of course, to the former Member for Henley, Lord Heseltine of Thenford, who is 90 today. I hope I speak for the whole House in wishing Lord Heseltine many happy returns. He is a personal hero of mine, although we do disagree on some things. He is that rare thing—a Conservative who has been given the freedom of the city of Liverpool—
Michael Gove
He was against Brexit, that is true. We all have our flaws, myself included. I am pleased to say that many people were in favour of Brexit, including well over 70% of the members of the constituency of the right hon. Member for Doncaster North. Brexit has been delivered by this Government, Brexit is a settled fact and we are all committed across this House to making Brexit work.
Lord Heseltine set an example of leadership: pro-enterprise, compassionate and inclusive in the best traditions of one nation conservatism, which are being carried on by my right hon. Friends the Prime Minister and the Chancellor of the Exchequer. Look at what the Prime Minister has already achieved this year. In the early weeks of this year, he issued a section 35 notice with the Secretary of State for Scotland in order to uphold the principle that the Equality Act 2010 should be a shield and not a sword. As a result, women’s rights were protected across the United Kingdom. Shortly after that, he concluded the Windsor framework, which further strengthened our United Kingdom and ensures a closer and more effective relationship, not just within these islands but with our neighbours and friends in the European Union. He then concluded the next stage of the AUKUS defence pact, which means that the waters of the Pacific will be patrolled and democracy will be defended by submarines built here, in Barrow-in-Furness on the shores of the Irish sea, securing jobs and investment for thousands of talented young people for decades to come.
Shortly after that, we had legislation to control illegal migration and a concordat with President Macron, with money being spent in order to ensure that the French police are supported in making sure that illegal people smugglers are dealt with effectively. After that, we had steps to ensure that tech firms were protected in this country from Chinese takeover, and we also had the rescue of the UK branch of Silicon Valley Bank. We also had the establishment of a new Government Department, the Department for Science, Innovation and Technology. That innovation was called for by William Hague and by Tony Blair—remember him?—and it reflects what every world-leading jurisdiction is doing, ensuring that more research and development investment is directed to where we need it.
All this time, as the Prime Minister and the Chancellor were recording those achievements, what has the Leader of the Opposition, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), done? Well, he has been energetic in expressing profound concern about the presenter rota on “Match of the Day”. While our Prime Minister has been a new statesman, I am afraid that the Leader of the Opposition has been a mere spectator. While our Prime Minister has been shaping global events, the Leader of the Opposition has been furiously scrolling through his Twitter feed. While our Prime Minister has been halving inflation, reducing debt, growing the economy, cutting waiting lists and stopping the boats, I am afraid that the Leader of the Opposition has been reduced to an irrelevance on the bench. We in this Government are delivering impactful, progressive government, while Labour can only look on in consternation and admiration.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
Before the right hon. Gentleman gets too excited, the Office for Budget Responsibility’s report provides a rather sobering analysis about economic stagnation for the duration of the forecasting period. That is predominantly down to the same old problems, including low productivity—according to the OBR, productivity has halved since 2010. Business investment has stagnated since 2016. Why have successive Governments and Chancellors failed to get a grip on these issues?
Michael Gove
The hon. Gentleman raises an important point, which goes to the heart of what the Budget addresses. It is the case that there is a productivity challenge that has bedevilled Governments of different colours for years now in this country. Whether Labour Governments, coalition Governments or Conservative Governments, we have all in different ways recognised that productivity has been too low in too many parts of the economy, particularly the overlooked and undervalued communities of the north, the midlands, and indeed south Wales.
But that is what this Budget addresses directly, through a series of labour market and supply-side interventions that are explicitly designed to raise the trend rate of growth of the British economy. We have welfare reform to support those who have been disengaged from the labour market. My right hon. Friend the Secretary of State for Work and Pensions has introduced a groundbreaking White Paper to help those people—they may be struggling with mental health or other difficulties—who need to be re-engaged with care and thought, so that they can again contribute to the economy and enjoy pride and purpose in their lives, as well as contribute to growth.
It is also the case that my right hon. Friend the Secretary of State for Education and the Minister for Children and Families, my hon. Friend the Member for East Surrey (Claire Coutinho), have brought in groundbreaking childcare reforms. These reforms are a win-win-win. They ensure that men and women can return to the workforce at an earlier stage to contribute economically, they ensure that children can have the best care and support, so that they can arrive at school ready to learn, and they contribute to making sure that we are both family-friendly and pro-growth. These are exactly the sort of supply-side interventions that will contribute to not just a growing economy, but a fairer society.
Tim Farron (Westmorland and Lonsdale) (LD)
Like the two gentlemen on the Front Benches, I was also the future once. The point that the Secretary of State makes about labour market reforms is extremely important; in the lakes and dales of Cumbria, 63% of our employers are operating below capacity because there are not enough workers in the area. The big problem for us, which I know the Secretary of State is seeking to tackle, is the collapse of the long-term private rented sector into Airbnb. Could he give me some assurance of when this Government will change planning law to allow communities such as mine to control our housing stock, so that there are enough homes affordable and available for local families and local workers?
Michael Gove
The hon. Gentleman makes a very good point: whatever our other disagreements, he is absolutely right to focus on that issue, as so many others have done. Of course we want to have a labour market that works, and of course we want to have a tourism sector that works, but there is a problem in the private rented sector, particularly in beautiful parts of our country such as those he represents, where homes are being turned into Airbnbs and holiday lets in a way that impedes the capacity of young workers to find a place where they can stay in the locale that they love and contribute to the economy of which they wish to be part. We will be bringing forward some planning changes to the Levelling-up and Regeneration Bill, which are intended to ensure that we have restrictions on the way in which dwelling homes can be turned into Airbnbs. I look forward to working with the hon. Gentleman and other colleagues, including my hon. Friends the Members for North Cornwall (Scott Mann) and for North Devon (Selaine Saxby), to make sure that those reforms will work.
Barbara Keeley (Worsley and Eccles South) (Lab)
The Secretary of State talks about childcare measures, but when it comes to people with caring responsibilities, childcare measures are not enough in themselves. Some 1.7 million people are economically inactive because of caring responsibilities, and there was no support for unpaid family carers in the Budget. Caring responsibilities are a major reason for people not being able to work or having to cut back their hours, and this Budget was a massive disappointment to those people.
Michael Gove
I appreciate the point that the hon. Lady makes, and she is right to draw attention to and thank those who exercise caring responsibilities. The family is the foundation of our welfare society, even before the creation of the welfare state, and we need to work in partnership with carers everywhere. I know that she and others—including, if I may say so, the leader of the Liberal Democrats, the right hon. Member for Kingston and Surbiton (Ed Davey)—have come forward with proposals to ensure that we can better support carers. It is the mission of the Secretaries of State at the DWP and the Department of Health and Social Care to see what more can be done, particularly in the wake of the covid pandemic, which has placed particular pressures on some of the most vulnerable in our society.
Sir Desmond Swayne (New Forest West) (Con)
Where families make a choice that one parent will remain at home for full-time childcare, their tax treatment is much, much less eligible than for couples where both parents work. If we are to have true freedom of choice in childcare arrangements, there is an agenda on taxation that we need to address.
Michael Gove
I know that my right hon. Friend and other Members of this House, including my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates), have raised interesting questions about how we can better support families overall. Both the Prime Minister and the Chancellor of the Exchequer are absolutely determined to explore what more we can do, but tax changes are, and always have been, above my pay grade. They are a matter for the Chancellor of the Exchequer in consultation with the Chief Secretary to the Treasury, and I know better—particularly after recent weeks—than to try to guide their hands.
Jeremy Corbyn (Islington North) (Ind)
Will the Secretary of State give way?
Mr Deputy Speaker (Sir Roger Gale)
Order. The right hon. Gentleman is giving way. That is his prerogative, but it has not escaped the notice of the Chair that the right hon. Member for Islington North came in late.
Jeremy Corbyn
I missed the first two minutes of the speech, and I apologise. Following on from the point that was raised by the hon. Member for Westmorland and Lonsdale (Tim Farron), the issue of the private rented sector is devastating in inner-city areas such as mine, where private rents are now going up—the worst I have heard is an 80% increase—because of the end of restrictions on them. Will the Secretary of State take some action to bring about a rent freeze in the private rented sector? It is devastating, particularly for young people looking for flats in London, to try to find anywhere to live. They are spending a vast proportion of their income on rent, which is simply wrong and not fair. We need rent control in the private rented sector.
Michael Gove
I am very grateful to the right hon. Gentleman for his intervention. No one can doubt the sincerity of his concern and care for people, both in the private and the social rented sector—standing up for them has been a consistent theme of his time in this House—but I respectfully disagree with him. I think there are legislative changes that we can make in order to help those in the private rented sector, including the abolition of section 21, but if we want to ensure that there is a pipeline of affordable private rented homes for people, there are two things that we need to do. First, we need to improve supply, particularly in London, and to do so in partnership with the Mayor of London, who has not always been as energetic as his predecessor in bringing forward new homes. The other thing we need to do is make sure there is fairness in the tax treatment of landlords and others. I look forward to working with the right hon. Gentleman and others on that. A rent freeze, while often attractive, has the effect, as we have unfortunately seen in Scotland, of reducing the supply of rented homes. Although I know his heart is in the right place on this issue, the methods he proposes run counter to what we both want to see.
I was talking about supply-side reforms earlier, and I briefly mentioned pension reforms. It is important we recognise that the pension reforms unveiled earlier in the debate by my right hon. Friend the Chancellor of the Exchequer have been widely welcomed, including by the British Medical Association, the Royal College of Surgeons, the leaders of police and crime commissioners everywhere and, most conspicuously, the hon. Member for Ilford North (Wes Streeting), the shadow Secretary of State for Health and Social Care. He called some time ago for a change. He said that he recognised it may not be “progressive”, but that it was “pragmatic” to introduce a pension change that will see more doctors coming out of retirement and on to the frontline, ensuring that more patients are treated more quickly, that fewer people are in pain and that our NHS is there for those who need it.
This wholly welcome change to pensions was addressed in Treasury questions earlier. Labour Members had an opportunity to express their dissatisfaction with that change, but not a single Labour Back Bencher did so. I know that the measure is a source of synthetic and confected rage from elements of the Labour Front-Bench team, but this initiative will cut waiting lists, has been welcomed everywhere—from the shadow Health Secretary to Labour Back Benchers, and from the BMA to the Royal College of Surgeons—is progressive and is in the country’s best interests.
Other changes made in the Budget also contribute to economic growth and social justice. The full expensing of capital receipts is a way of ensuring that our companies address what is, as the right hon. Member for Islington North (Jeremy Corbyn) rightly pointed out, one of the long-term property problems in this country. We have not always had the level of business investment—this runs across Governments of all colours—that we need to ensure we have high-paying jobs and the capital required to take advantage of the technological changes of the future. The full expensing proposals, amounting to a tax cut of some £9 billion, are a pro-business tax cut, and they also mean we maintain not just one of the most competitive corporation tax regimes, but the most competitive business environment in the G7.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The right hon. Gentleman must know by now that the measures taken on the annual allowance and all the rest of it were a sledgehammer to crack a nut. It did not need to be a full £4 billion package. In terms of growing the workforce, when he was having his cross-party summit to discuss Brexit problems, did they discuss the problems that ending freedom of movement has caused in the health and social care, hospitality and agricultural sectors? If they did not, why not?
Michael Gove
The hon. Gentleman makes an important point about freedom of movement. If we want to have the benefits of freedom of movement within the United Kingdom, and if we want to ensure that talented people across the United Kingdom can go to the jobs where they are needed, the one thing we need to avoid is a divisive debate focused on separatism, which he and his party have been leading. There is no more expensive and harmful intervention to the economy of this country and that of Scotland than a perpetuation of an obsession with independence.
I am grateful to the Member of the Scottish Parliament for Skye, Lochaber and Badenoch for how she has made it clear that the SNP needs to address its mediocre record in government, get rid of politically correct obsessions and focus once more on partnership with the UK Government in order to generate economic growth. If the hon. Lady wins, I hope we can work together in the interests of everyone in Scotland. If it is one of the other candidates, I am afraid that the SNP will continue on the vortex of decline, which I know will be a source of sadness to the hon. Member for Kilmarnock and Loudoun (Alan Brown) but a relief to many of the rest of us.
The other key changes that I want to mention in the context of improving productivity were the changes on regulation, particularly of the Medicines and Healthcare products Regulatory Agency. Those are coming about as a result of Sir Patrick Vallance’s review of how we can better regulate the science and tech sector outside the European Union. Then there is the investment in energy. I know that we are not going as far as the right hon. Member for Doncaster North wants—indeed, he is not even being allowed to go as far as he would want by the shadow Chancellor, the right hon. Member for Leeds West (Rachel Reeves)—but with our investment in Great British Nuclear and carbon capture and storage, we are ensuring that we move towards net zero in an environmentally and economically sustainable way.
One key point of distinction between those on the Government Benches and those on the Opposition Benches is that this is the Government who legislated for net zero and who introduced the 25-year environment plan. We have been the greenest Government ever. We are also the Government who believe in moving to net zero in a sustainable way. If we are to do that, it is vital that we continue to have the means, through oil and gas from the North sea, to have a just transition. Jobs in the north-east of Scotland need to be protected, as do jobs in Middlesborough, Tyneside and Humberside. It is those on this side of the House who believe that we can have sustainable and prudent new exploration and new drilling. The message from those on the Opposition Benches, whether SNP, Liberal Democrat or Labour, to the north-east of Scotland and to workers in Aberdeen, Middlesbrough, Tyneside and Humberside is, “We put our ideology ahead of your jobs and growth.” Those of us on the Government Benches will not stand for it.
Several hon. Members rose—
Michael Gove
I look forward to the intervention from the hon. Gentleman who represents the energy-intensive steel town of Port Talbot.
Stephen Kinnock (Aberavon) (Lab)
I thank the Secretary of State for giving way; he is being very generous. He talks about the importance of jobs and energy-intensive industries. Is he aware that Labour has committed to a steel renewal fund, which will facilitate the transition from blast furnace technology to electric arc furnace technology, which is vital for the future of the Port Talbot steelworks in my constituency? Can he set out whether his Government have anything like that sort of plan? Is he aware of the fact that Tata Steel has said that if the Government do not make up their mind as to whether they will support our steel industry by July, it will close down one of the blast furnaces?
Michael Gove
First, the hon. Gentleman is a fantastic advocate for his constituency and the steel sector. Secondly, as far as I know, the Labour proposals that have been put forward, which we welcome, are not funded. [Interruption.] No, I do not believe they are. Thirdly, it is the case that if we are to have a sustainable steel industry, we need to move towards its decarbonisation and a bigger role for hydrogen, but no scientist and no one in the steel industry thinks that will be an answer tomorrow.
As has been pointed out, we will need, alongside the development of those technologies, to ensure diversity of supply of the different types of energy needed in steel production. That is why the independent planning inspector said to the Government that we should go ahead with a new coalmine producing coking coal in Cumbria, and it is why the Opposition, without even having read the planning inspector’s report, once again put ideology before jobs and growth in rejecting it. I will always listen to the hon. Gentleman when it comes to the steel industry, but I will not take lectures from Opposition Front Benchers when they set their face against precisely the type of jobs that will help sustain steel for the future.
Several hon. Members rose—
Michael Gove
I will give way to the hon. Lady, and then I will try to make a little progress.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Does the Secretary of State want to comment on the CBI report on climate change and the relative investment of different countries, including the UK? It puts us below Germany, France, the US, the EU and the World Bank for investment through public spending on climate change.
Michael Gove
It is the case that this Government have seen a massive uptick in solar power—I think more than 90% of the increase in solar panels and solar power generation in this country has occurred under this Government. It is also the case that this country is the world’s favourite destination for offshore wind investment. It is also the case that with our investment in carbon capture and storage and in nuclear power, as I have mentioned, we have exactly the diversity of supply required.
Could this Government do more? Could any Government do more? Yes, but it has to be paid for. I am afraid that Labour’s position, with the commitment to spend £28 billion on a green new deal, is unfunded. Not a penny has been allocated by the shadow Chancellor to pay for that. Do not just take it from me. Take it from the former shadow Chancellor, Ed Balls, who pointed out on Channel 4 that we have to make sure, if we are governing the economy well, that debt as a proportion of GDP reduces every year. He pointed out explicitly that the unfunded £28 billion green new deal was only going to be funded, and could only be funded, by borrowing. He explicitly pointed out that if the plan put forward by the right hon. Member for Doncaster North for unfunded, borrowing-financed investment goes ahead, he runs exactly the same risk as others have in the past of tanking the economy, pushing up interest rates and having the bond markets catch fright. It was not a voice of reaction making that point, but the man who the right hon. Gentleman thought should be Chancellor of the Exchequer.
Mr John Baron (Basildon and Billericay) (Con)
We should also remember that no Labour Government have left office without unemployment being higher than when they came to power. Does my right hon. Friend accept that small and medium-sized enterprises employ by far the largest number in the private sector, and that in order to help them we perhaps need to take a fresh look at the amount of regulation they have to abide by? It needs to match the complexity and size of the company in question. Perhaps we should place greater emphasis on, say, a small firms regime that actually addresses this point head-on.
Michael Gove
My hon. Friend makes an important point. People will know—particularly readers of the Investors’ Chronicle, in which he writes a regular column—that there are few keener students of exactly how we can make changes to the supply side in the labour market in order to drive growth. The point he makes about SMEs and, indeed, microbusinesses is one that I know the Chancellor of the Exchequer, as a former small businessman and entrepreneur himself, takes very seriously, so I am grateful to my hon. Friend for making that point.
Anna McMorrin (Cardiff North) (Lab)
Yesterday, the Intergovernmental Panel on Climate Change issued its most damning report yet. This Government go around the world telling other Governments not to open coalmines, yet that is exactly what this Government are doing. They are also issuing new oil and gas licences, yet not investing in the most efficient and cheapest renewable energy of all, which is onshore wind. Will the Secretary of State at least admit that this Government are not doing anything to commit to ensuring that our next generation has a future linked to the economy, and a more sustainable future at that?
Michael Gove
I am very grateful to the hon. Lady, who is a brilliant advocate for the environment. Some of the arguments she has made in this place have weighed with me, and she has helpfully corrected me in the past when I have been in the wrong, but on this occasion I have respectfully to disagree with her. I cannot see how we can have an effective and just transition to a net zero future—not a total zero future, but a net zero future—without oil and gas playing a diminishing but significant and strategic part.
If there are people in this House—and there are on the Front Benches of almost every other party—who believe that we should get rid of oil and gas like that tomorrow or overnight, let them say so. If there are people who think that there should be no further exploration or drilling of our own domestic oil and gas resources, let them go to Aberdeen, Middlesbrough or Grimsby and say so, but I do not think they will receive a warm welcome from the voters there or from the investors. On the point about the coalmine, again I am restricted in what I can say because I have merely followed the advice of the planning inspector. The planning inspector was very clear that both the net zero and downstream emissions as a result of this change would actually contribute to a stronger environmental posture for the UK, not a weaker one.
I want to turn to the area of renewable energy, which the hon. Member for Cardiff North (Anna McMorrin) mentioned. She, like me, is a fan and an advocate of renewables. Let me take her on a journey—a journey to Teesside. I would invite her to join me in visiting Teesport, in the constituency of my hon. Friend the Member for Redcar (Jacob Young). I would like her, and indeed everyone in the House, to join me in seeing what Ben Houchen and the Tees Valley Combined Authority have done there; to see the way in which turbines are assembled there; and to see the way in which the investment secured through the freeport there is providing high-quality, high-paying jobs in green technology, at the cutting-edge of the future, alongside hydrogen work.
I am sure the hon. Lady would want to applaud what Ben Houchen has done, because she is an enlightened and thoughtful Member of this House, but I have to tell her that not every member of the Labour party has been supporting Ben Houchen in bringing high-quality green jobs to working class areas in Teesside. Recently, when the Mayor of Teesside was creating a new development corporation to bring new jobs and new investment into renewables, Middlesbrough Labour councillors voted against it. When the freeport was being debated recently, Labour activists sought to undermine the efforts of Ben Houchen in bringing jobs into that area. The economic policies of those on the Opposition Front Bench that would undermine what is being done.
Teesside has been transformed thanks to Conservative leadership, and in the Budget most recently, Eston—which for 20 years Labour had promised it would invest in, but where it never spent a penny—secured £20 million to see that community at last given the money it needs, so that people’s pride in that place can be supported by central Government. For decades, Teesside was neglected and overlooked by Labour, and it is still being undermined and attacked by Labour, but it depends on Conservatives for its future. That is levelling up in action.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I would be delighted if the Secretary of State could demonstrate that his Department knows where the places are that he is talking about. Is he aware of Government advertising boasting about levelling-up funding for the Grainger market in Newcastle that was advertised in Newcastle-upon-Lyme?
Michael Gove
I think it is Newcastle-under-Lyme, not Newcastle-upon-Lyme, but as someone who lived in Gosforth for five happy months, I am always happy to talk about Newcastle with the hon. Lady.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
Will the Secretary of State give way?
Michael Gove
However, I am even happier to give way to my right hon. Friend.
Mr Clarke
My right hon. Friend is exactly right in what he says about the recent vote at Middlesbrough Council. Does he agree that effective devolution to the structures of local government, which can deliver change most effectively—including, in Middlesbrough’s case, a development corporation led by the Mayor, but with full democratic accountability ensured by its membership—is the right way to make sure that left-behind communities in towns such as Middlesbrough are not ignored and forgotten, as they were for far too long?
Michael Gove
My right hon. Friend is absolutely right. All the communities of Teesside—Redcar, Normanby, Eston, Middlesbrough, Stockton, Darlington—are benefiting as a result of Conservative leadership, but in particular, the development corporation that the Mayor is bringing forward is the right thing to do.
I must draw my remarks to a close in a minute, but before I do, because I think it is always right to offer praise to members of other parties who have done the right thing, I want to thank all those across local government who have contributed to the extension of devolution that we saw in the Chancellor’s statement. I have known the Chancellor since we both entered the House of Commons in 2005, and he has long been a champion of devolution, decentralisation and empowering local government. It was thanks to his leadership and the support of the Chief Secretary to the Treasury and the Prime Minister that we were able to secure two significant trailblazer deals with the Mayors of the West Midlands and of Greater Manchester. We hope to emulate that by having further powers devolved to Mayors in mayoral combined authorities across the United Kingdom.
Of course, the Chancellor of the Exchequer is underpinning that investment with the money that he has secured for innovation accelerators in Glasgow, Manchester and Birmingham, and through the eight investment zones designated for England and the four in other parts of the United Kingdom. However, today I want to thank the Mayor of Greater Manchester, Andy Burnham, who has signed a devolution deal—a new trailblazer deal. Mayor Burnham says that this deal marks
“a new era for English devolution”.
I know that some Conservatives will not always necessarily want to hear praise for Mayor Burnham, but I think it is important that all of us across the House recognise that, if we want to see our country operate in a way that gives us truly sustainable growth, we need to empower local leaders. We need to have central Government investing in science and technology, in changes to the labour market and in our children’s future, as with the changes to childcare, education and skills that this Budget brings.
I opened my remarks by reminding us how much we owe to Lord Heseltine of Thenford. His determination to work across party boundaries and across the United Kingdom to raise the hopes and the ambitions of people in areas that had been overlooked and undervalued contributed to an economic renaissance from Liverpool to Canary Wharf. It is a similar spirit that animates our Prime Minister and our Chancellor in this Budget, and I commend it to the House.
Several hon. Members rose—
Mr Deputy Speaker (Sir Roger Gale)
Order. Looking around the Chamber, it is obvious that more than 50 Members wish to speak in this debate. I will therefore put down a marker now that with effect after the Front-Bench speeches there will be a fixed time limit of five minutes, which may well drop to four minutes in the course of the afternoon. I call Ed Miliband.
Edward Miliband (Doncaster North) (Lab)
May I return the compliment to the Secretary of State for Levelling Up, Housing and Communities and say what a pleasure it is to face him? That was a typically eloquent and entertaining speech, and he has a very happy future in opposition on the Tory rubber chicken fundraising circuit.
The defining questions at the heart of the Budget are these. Does it show a proper understanding of what is really going on in the country? Does it have the right priorities in facing that reality? Does it have a long-term plan that can tackle the deep-seated challenges the country faces?
I want to start with the alternate reality that the Chancellor described six days ago. He told us that “the plan is working.” Many will have heard that and thought to themselves, as they struggle to pay their bills and as their wages stagnate, “What planet are these people living on?” They are right to think that. The Office for Budget Responsibility says that we are in the midst of the biggest fall in living standards on record. Not a mention of that in the Chancellor’s pantomime speech. That record goes back 70 years. How can that be a plan that is working?
The Budget came a week after Which? said that one in seven people in our country are skipping meals because they cannot afford to eat, and six in 10 are cutting back on essentials, selling items or dipping into savings. How can that be a plan that is working? The OBR says that even by 2028 we will not get back to the living standards we had before the pandemic. How can that be a plan that is working?
Finally, and most damningly, the Resolution Foundation shows that even by 2024 wages will still be lower than they were in 2010. Let us just take in the scale of that failure. For all the boasts, all the promises and all the hype we have heard from the Government Benches at multiple Budgets over the last decade or more, people will be worse off at the next election than they were when the Tories came to power 13 long years ago. Because I am a bit of a nerd—[Hon. Members: “Hear, hear.”] Only a bit, thank you very much. I asked the Library when it last happened that a party in power had wages lower at the end of its time in office—
Edward Miliband
The hon. Gentleman is wrong. If he can be patient, I will give him the answer. First, the Library staff told me, “Well, certainly not under any Government since the second world war.” I asked them to go back further, and they went back to the first world war, but they said, “No, not since the first world war.” They had to go all the way back to 1855 to find that happening—before the foundation of the Labour party, I say to the hon. Gentleman. For all the enormous challenges that Governments have faced over 168 years, this Government stand out for their failure to deliver what I think all sides can agree the British people have the right to expect—rising standards of living. Throw in the highest tax burden since the 1950s, public services that are crumbling in so many areas and debt that is up, and it is no wonder that the British people are asking what they have to show for 13 years of this lot. They are being paid less and taxed more for worse quality services. Conservative Members may not like it, but it is the truth—it is their record, it is their legacy.
That takes me to the second part of my speech. Why has this happened? It is because the Government have had the wrong priorities and they have failed on growth. Let us talk about the priorities in this Budget. I welcome the fact that the Government followed our plan to stop energy bills rising even further. But let us be clear—I think this feeling is shared on both sides of the House—that £2,500 energy bills are not a cause for celebration. They are double what they were 18 months ago. The energy bills crisis is absolutely not over for families and businesses up and down this country.
Of course, when we proposed the windfall tax the Government resisted it tooth and nail. Then they were dragged kicking and screaming to do it. But here’s the thing: as they did so, they introduced a massive tax break for the very fossil fuel companies whose windfalls of war they were supposed to be taxing. It was not mentioned in the Budget, it was not even in the published OBR documents—it was in an annex—that the total cost of that loophole is £11.4 billion over the coming years. That is a tax break for companies making record profits and paying out record amounts in dividends and share buy-backs—a tax break not available to any other sector of the economy, including renewables. Think how those billions of pounds could have helped to tackle the cost of living crisis. By the Government’s choices we know their priorities, and it is not the British people.
Let us take the issue of the abolition of the pension tax relief lifetime allowance, on which we will force a vote this evening. It may interest the House to hear what a former Chancellor said about why we have a lifetime allowance. He said that
“we must demonstrate that we are all in this together. When looking for savings, I think that it is fair to look at the tax relief that we give to the top 1%.”—[Official Report, 5 December 2012; Vol. 554, c. 878.]
Who was that? Not Gordon Brown. Not Alistair Darling. It was George Osborne, in the autumn statement of 2012. Remember him? But we do not need to go back that far. I have been doing my research. What about the Budget of March 2021? I wonder who was Chancellor then—he might have gone on to higher things. The then Chancellor froze the lifetime pensions allowance for five years and said:
“It is a tax policy that is progressive and fair”.—[Official Report, 3 March 2021; Vol. 690, c. 256.]
That was the current Prime Minister. Let me explain why he said that. The reason we have a lifetime limit on tax-free pension saving is to provide some cap on the amount of pensions tax relief for the most wealthy in our society. The average pension pot in this country is £60,000. The change the Chancellor is making to abolish the lifetime limit of over £1 million is therefore about people with a pension pot 17 times the average. The Minister nods from a sedentary position—[Interruption.] He says it is all surgeons: I will come to that in a moment.
According to the Resolution Foundation, this change will give a benefit of almost £250,000 to someone with a £2 million pension. If Members vote for this Budget measure tonight, they will be voting for a tax cut of almost £250,000 for people with a £2 million pension pot. That might be the right priority for the Government: it is not the right priority for us.
The Minister for Health and Secondary Care claims, and the Chancellor says, that they are doing this for the doctors. But according to the Resolution Foundation, five in six people with the largest pension pots, who will benefit from this change, are not doctors. They are not in medicine at all. In fact—get this—one in five of the people who will benefit are in banking and finance and nothing to do with the medical profession. There could have been a bespoke scheme at a fraction of the cost, just like there is for the judges.
We have been told by Treasury Ministers that this is the “politics of envy”. No, it is not, it is about fairness. Even George Osborne agrees with that, and when you are beaten by George Osborne on fairness, you know you are losing the argument. The other argument that Government Members have been making is that Labour is somehow creating problems by opposing this measure. Let us get this straight: the Government come along with a £1 billion tax cut for the very richest in our society when everyone is struggling and they blame us! The truth is that it says so much about them, because here’s the thing: they did not even get that it would be controversial. That is how out of touch they are.
There should have been different tax choices in the Budget to fund our schools, cut NHS waiting lists and level up our country. The Government could have ended non-dom status, but they will not do that. They could have ended the tax breaks for private schools to help fund our state schools, but they will not do that either. In preparing for this debate, Mr Deputy Speaker, I came across a brilliant article for that proposal set out in 2017 in The Times, entitled “Put VAT on school fees”. It was written by a participant in today’s debate and I think it is worth quoting. The author said this:
“to my continuing surprise, we still consider the education of the children of plutocrats and oligarchs to be a charitable activity.”
I am not sure that we on the Opposition Front Bench would go that far, but there you go. [Laughter.] He went on to say:
“The prime minister, quite rightly, wants to end burning injustice...We could scarcely find a better way of doing that than ending tax advantages for the global super-rich and instead extending them to the vulnerable and voiceless. What better way to make next month’s budget a budget for social justice?”
Now, the House may be wondering who wrote that article. It was none other than the Levelling Up Secretary! I am a generous person, so I will give way to him and he can tell us whether he still believes what he wrote six years ago. Does he agree with himself? Why so uncharacteristically bashful? Why this sudden bout of monastic silence? It is so uncharacteristic. I would love for him to tell us: did he make the argument in Government in the run-up to the Budget, or did he just not bother to make the argument because he did not think he had a hope of persuading the people in charge? I think it is probably the latter, because, let us be honest, there is zero evidence that this Government will make the necessary choices. He knows it and the country knows it. The Government have the wrong priorities, which is why people are sick and tired of them.
Let us talk about the third part of the Budget, because it does not just have the wrong priorities for now, but for the future too. I want to come on to the energy transformation that the country needs. If we want to get energy bills down, there is a simple answer: going all in on a green energy sprint. We know that wind and solar are many times cheaper than fossil fuels, but the problem is that we have a Government who do not get it. The Levelling Up Secretary is a case in point. When he should be blocking coalmines he waves them through, as he has done in Cumbria. By the way, it will interest the House to know that he said it is carbon neutral, good for the climate and good for the environment. People may wonder. We have been going around the world lecturing people about getting off coal, so how have we suddenly got a coalmine that is good for the environment? Well, the answer is that in the calculations he made, he does not count the burning of the coal, just the mining of it. That is like saying tobacco does not damage your health if you do not take into account the smoking of it. He can correct me if I am wrong, but that is correct, isn’t it? Yes, it is correct.
The Levelling Up Secretary should support onshore wind, but he blocks it. The onshore wind ban is very important. It is symbolic. The Government have their fifth energy re-set coming next week, I believe, so I look forward to that. It is the fifth one in two and a half years—a sure sign that the policy is not going well. The onshore wind ban brought in by David Cameron raised bills—this is really important—by £160 for every family in the country. It did seem like good news, because the Levelling Up Secretary made some positive noises and promised things would change in December, but all the evidence is that yet again the Government will resile from taking the right position. This month, RenewableUK expressed its bitter disappointment, saying that
“Ministers are doing almost nothing to lift the draconian ban”.
The Energy Secretary, who is not here, calls onshore wind an “eyesore”. It makes me nostalgic, believe it or not, for the brief period when the right hon. Member for North East Somerset (Mr Rees-Mogg) was Business Secretary. He was an unlikely climate warrior but his proposal to bring onshore wind rules in line with other infrastructure was better than the position under the current Government. It is harder today to build an onshore wind farm—a unique category in the planning system in England, whereby, basically, if one person objects, it cannot be built—than it is to build an incinerator. That does not make any sense. Why not go for the proposal from the right hon. Member for North East Somerset? That is my injunction to the Secretary of State.
The Government have failed not just on onshore wind, but on energy efficiency. In 2010 there were 1.7 million home upgrades. Last year there were 128,000, and there was no new money in the Budget. At that rate, it will take a century to bring all homes up to an energy performance certificate C rating.
But the biggest long-term failure of the Budget is the lack of a coherent plan to compete with President Biden’s Inflation Reduction Act. This is really serious. Talk to any business today and they will say that this is a massive competitive challenge for the UK. On offshore wind, we are doing well on generation—lots of people say that it was started by the last Labour Government—but not on delivering the jobs in offshore wind. Denmark has three times as many jobs in wind energy as us, with about a tenth of the population. Then look at other areas. My hon. Friend the Member for Aberavon (Stephen Kinnock) spoke eloquently about steel: there are already 23 clean steel demonstration plants across Europe. How many are there in the UK? None. Across Europe, 40 gigafactories are expected to open by 2030. In the UK only one is certain. Alarmingly—this is the consequence of the onshore wind policy—the number of jobs in solar and onshore wind has actually fallen over the last five years in Britain because of the blockages in the system. That is why the Institute of Directors said just days before the Budget:
“The UK deserves nothing less than its own version of the Inflation Reduction Act”.
And the CBI pointed out our failure on spending.
I was very disappointed by the Budget. It was the moment to turn it around. It turns out there was no new money for carbon capture, but the promise of £1 billion some time in the future. I am old enough to remember when there was a £1 billion carbon capture and storage plan. It was announced 15 years ago by the last Labour Government, but was cancelled by this Government. The other boast was a reheated announcement of a competition for small modular reactors. We are in favour of new nuclear, but a reannouncement from 2015 will not make it happen.
There was warm praise for Lord Heseltine, which I agree with. I remember Lord Heseltine saying he would intervene before breakfast, lunch and dinner, and then wake up the next morning and intervene again before breakfast. That is not the character of this Government. What was the Government’s reaction to President Biden’s Inflation Reduction Act? The Energy Secretary called it “dangerous”, the Business Secretary said it was “protectionist”, and the Chancellor did not support it. As if crying foul is going to stop the race. It will not stop the race; it will leave us behind. I do not believe that the Government get what a modern industrial policy looks like. We needed a new national wealth fund to invest in the industries of the future. We needed GB Energy, a proper publicly owned energy generation company, to invest in all forms of low carbon generation. We need a sprint for zero-carbon power by 2030. We need a plan to insulate 19 million cold, draughty homes. We got none of that from this Budget, but that is what a Labour Government would do.
In their failure to grasp the future, the Government show why it is high time they were consigned to the past. After 13 years of their failure, the last thing we need is another five years. They have the wrong priorities. They have no proper plan for the future. They cannot provide the leadership the country needs. It is time for change.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
The shadow Secretary of State, the right hon. Member for Doncaster North (Edward Miliband), said in his speech that by their choices you will know their priorities. He was absolutely right. The Chancellor showed last week that his priorities are the priorities of Teesside. The Secretary of State for Levelling Up, Housing and Communities, my right hon. Friend the Member for Surrey Heath (Michael Gove) said in his speech that he would take anyone who wanted on a tour of Teesside to see our freeport and the fantastic progress being made there. Many Opposition Members would benefit from such a tour, because they would see the transformative impact of the carbon capture and storage investment that the Chancellor reaffirmed last week.
Contrary to what the shadow Secretary of State said in his closing remarks, Net Zero Teesside is a reality. It is going up as we speak, backed by Shell, Equinor and BP—real companies investing in a real project that is transformational not just for the industries of the future, but our existing industrial base in steel, chemicals, plastics and all those industries which emit carbon dioxide as an intrinsic part of their production, not just in terms of the emissions released as part of energy generation, but as a by-product. That is why carbon capture is so vital. That is why it was so welcome that it was backed strongly in the Budget last week. We had a welcome decision on new nuclear and its classification as a sustainable technology, which is absolutely right and vital for the future. I welcome warmly the position to keep Hartlepool nuclear power station producing for two more years.
Critically, there was direct investment in our communities—£20 million secured by my hon. Friend the Member for Redcar (Jacob Young) for Eston Square, which my right hon. Friend the Secretary of State rightly celebrated in his remarks. That follows the £15 million for Guisborough in my constituency, the £6 million for Loftus and the £36 million for the Middlesbrough town deal. That is investment in the economic drivers of growth and in the communities that need it. By the time we go to the polls in 2024, the Government’s levelling up plan will have transformed people’s lives—that is a good sign.
There was much else to welcome in the Budget including, critically, the announcements on childcare—something that the group Next Gen Tories has been campaigning hard for. We all know across this House that the cost of childcare is unsustainably high and deeply unfair. The campaign group Pregnant Then Screwed has reported that for two thirds of families, childcare costs are as much as their mortgage. That is totally unjust and clearly an obstacle not just for the economy but for our having the children we need as a society. It is right that the Chancellor has taken bold action to address it.
I also welcome the abolition of the lifetime allowance on pensions, which will have a major impact on our retaining the doctors we need. The response of the British Medical Association says a lot more than that of shadow Front Benchers, who we have seen in complete chaos, with the shadow Chancellor and the shadow Health Secretary utterly at odds about this important measure.
As we heard from my right hon. Friend the Secretary of State, there is bold action on worklessness. The OBR estimates that 110,000 more people will be supported into the workplace by 2027-28. That is exactly what we need—the combination of challenge and support that people across the country want from the welfare state and our excellent jobcentres. It is an absolute scandal that too many people have their lives written off as economically inactive owing to health conditions, when they could work. There is all the support and ingenuity that can be deployed available to help with that vital process. All that was to be welcomed in the Budget.
There were some aspects of the Budget that I wish had been different. I have made no secret of my deep concern about the decisions surrounding the future of our corporation tax increase. I think that we have seen the consequences already with the decision of AstraZeneca to choose the Republic of Ireland over the UK for its next investment. I welcome the offsetting benefits of the full expensing that the Chancellor announced. If that is to work, it is vital that it is a permanent decision rather than simply a temporary relief, otherwise it will have a distorting effect on business investment. I very much hope that the Chancellor will make that permanent if the headroom is there to enable it, as he said he would. That will be vital to ensure that the measure is a success.
It will not surprise Members across the House that I believe that we need to do more on the generators of growth more generally. I point out the importance of housing, which my right hon. Friend the Secretary of State mentioned. In the end, the only sustainable way to improve our economic activity in this space—and the social justice of our housing debate—is to build more homes, addressing the challenges of nimbyism and nutrient neutrality. I hope and believe that there will be more progress on that in the months ahead.
Mr Deputy Speaker (Sir Roger Gale)
I call the Scottish National party spokesperson. No time limit.
Alan Brown (Kilmarnock and Loudoun) (SNP)
This Budget follows on from the autumn statement, when the introduction of the energy profits levy and the electricity generator levy provided an additional £75 billion of predicted income to the Treasury. That money mostly arose from Scotland’s energy sector. In this Budget, the Government chose to increase the tax rate on whisky by 10%. What does Scotland get in the Budget? Acorn was overlooked once again, but we are expected to be grateful for £320 million of Barnett consequentials over a two-year period. Only the Scottish Tories can think that is a fair return.
One thing is for sure: this Budget is not about the Tories trying to help grow the Scottish economy. We have the highest energy bills in the UK, but we do have our fair share of the biggest cut in living standards since the 1950s and of Brexit’s 4% cut to GDP. Are we supposed to be grateful for being part of the broad shoulders of the UK when that is what being part of the sharing process looks like? There is £65 billion of additional income from oil and gas revenues, yet the UK Government will not even match the Scottish Government’s £500 million just transition fund, even though the Secretary of State was talking about the need for a just transition in the oil and gas sector.
Nothing sums up Tory pork barrel politics more than the fact that three out of the five community projects in Scotland have gone to the constituency of the leader of the Scottish Tories. That, plus £1.5 million for a bridge to be repaired that the local Tory council thought was too low a priority for them to bother with. What the Treasury does not say is that the whisky distillers in Speyside alone will be handing over more additional duty to the Treasury than the pennies that it is giving back in community projects. Where is the Scottish Tory leader on standing up for the whisky industry against the 10% duty rise? Is he pointing out the fact that 75% of the cost of a bottle of whisky is now tax to the UK Exchequer, or that draught beer, wine and cider are to be subsidised while 99% of spirits are excluded from the scheme? Let us not forget that distillers are excluded from the energy intensive industries support scheme, while other alcohol producers receive support. Instead of trying to grow the whisky industry, it is clear that the UK Government are treating it unfairly within the overall alcohol production sector.
When it comes to energy considerations, it seems that the intention is to sabotage the good work that has gone on in the renewable energy sector. While the United States has the Inflation Reduction Act, the Tories have given us the energy generator levy, but with no corresponding renewable investment allowance to encourage reinvestment. We had an announcement of £20 billion in funding for carbon capture and storage, but Acorn did not even get a mention in either the Budget book or the speech. That is shameful given the history of pulling funding from Peterhead.
Paragraph 4.99 of the Budget document mentions track 1 expansion later this year. Is that a realistic prospect for Acorn? If not, what is the timescale for announcing the track 2 processes? Not only is Acorn the most advanced cluster and the easiest to deliver, its progress is needed to address greenhouse gas emissions from Scotland’s two biggest polluters. It is the only way that Scotland can meet its 2030 commitments. The next time that Scottish Tories complain about Scotland possibly missing emission targets, they had better look in before they look out, and question the decisions made down here.
On storage, we have well-established pumped storage hydro technology, which is suited to complementing renewable energy. It uses spare energy to pump fill reservoirs and can generate electricity when there is peak demand. Coire Glas has been consented since 2020. SSE has £1.5 billion of capital available to invest in it. Just today, it has announced a £100-million commitment for site investigation and advance design works. It would be the first pumped hydro storage scheme to be constructed in the UK in 40 years, and would double the capacity of pumped storage in the UK while creating 500 construction jobs in the highlands. It will be able to power 3 million homes continuously for 24 hours. No subsidy is required; it is not looking for a regulated asset base model or even for taxpayers to share the risk. All that industry is asking for is a cap and floor mechanism to stabilise the price received for electricity generation.
I have raised this issue countless times over the years. The previous Secretary of State for Business, Energy and Industrial Strategy let his guard down by calling it a Scottish technology. That really does show the motives for the UK Government not to move forward with it, but they really need to revisit it. On the possibilities for pumped storage hydro, Drax has submitted a planning application to more than double the capacity at Cruachan dam, to take it up to 1 GW of generation capacity. Those are exactly the type of schemes that should complement intermittent renewables and take us towards the construction of a stable, low-carbon, truly renewable system. In contrast, National Grid ESO spent £4 billion to turn off wind turbines due to grid constraints. We need a better way of managing the grid system though a whole system approach, otherwise we are throwing money away.
If we are looking at a truly green system, the Budget document is notable for not using the phrase “green hydrogen” once. Are the UK Government now content to fall behind other countries? What is the real scale of their ambition? The day after the Budget, we had the updated allocations for the next renewable energy auction for assessment report 5. So despite rampant inflation and despite some projects struggling against the strike rates agreed for allocation round 4, the Government have decided to cut the overall budget by 30%. It is madness, and that needs to be revisited urgently.
Then we have tidal stream. Scotland is genuinely leading the world. MeyGen in the Pentland Firth is the largest consented tidal stream site in the world. It has generated 75% of the world’s tidal stream energy to date, but has seen a 50% cost increase since securing its allocation round 4 contracts for difference because of external inflation factors. The project can still go on and deliver against that, but only if it secures enough money going forward to be able to scale up. Instead of increasing the ringfenced budget for the tidal scheme, the UK Government have halved it, which puts the project and that technology at risk. Again, I ask the Government to revisit how they are doing this, because the project is an opportunity to grow our technology with a UK-based supply chain and then export that knowledge and technology around the world.
We have come to one of my hobby-horses: the UK Government have absolutely no problem with throwing money and promises at nuclear energy, with a £700 million stake in Sizewell C and the creation of Great British Nuclear, which is an oxymoron if there ever was one. The simple facts are that there is not yet a successful EPR nuclear project anywhere in the world. The only EPR station generating electricity to the grid is Taishan in China, but even that had one reactor offline for a year with damaged fuel rods, which is a possible inherent design flaw in EPR design. Olkiluoto 3 in Finland is 14 years late. It connected to the grid last March, but a year on it is still only in trial operation mode. The EPR in Flamanville, France, is four times over its original budget and a mere 10 years behind schedule.
“Now but,” they tell us, “all the lessons have been learned from these projects in time for Hinkley Point C.” However, Hinkley Point C was estimated to cost £18 billion in 2016, but it is now estimated to cost £33 billion, and guess what? It is running years late. Yet the collective madness from the Tory Front Bench, encouraged by the Labour Front Bench, says, “Let’s not worry. We will sort out the problems and we will learn the lessons for Sizewell C. What could go wrong?”
Even if they believe Sizewell C will cost less in relative terms than Hinkley Point C, given that Hinkley Point C is already estimated to cost £33 billion and that construction inflation and material costs are increasing all the time, Sizewell C will cost upwards of £35 billion, without any shadow of doubt. How can they talk about reducing debt when they want to put a further £35 billion of debt on our energy bills? It makes no sense.
And then we have the insult of passing that as a green technology. If we look at the costs of the existing nuclear waste legacy we see that the Nuclear Decommissioning Authority estimates it is going to cost us £235 billion to clean up. There is no solution yet for dealing with radioactive waste other than burying it for thousands of years, so why do we want to pass that as a green renewable energy system?
I am sure others will touch on this, but we have one other great hope for nuclear: small modular reactors. The reality is that there is not even a regulator-approved design in the UK for an SMR yet, but somehow Rolls-Royce says it could have them operational by 2029. It is the same rhetoric and the same mistakes, over and over again. In reality, each SMR will cost roughly £2 billion, so they are hardly a cheap alternative source of energy generation. If SMRs are so attractive, why is the taxpayer being asked to pay half the cost of a prototype and then sign up to a 35-year extortionate deal in terms of strike rates? It makes no sense, if it was so commercially viable.
In reality, nuclear means billions of pounds of increased debt added to our energy bills and future generations paying for decommissioning and handling of waste, no matter the pretence that that is somehow included in upfront estimates. It means years of further delays, when that money could and should be invested in renewable energy, storage, green hydrogen and, of course, in energy efficiency upgrades.
When people talk about the job creation that comes from nuclear, well of course spending £35 billion will create some jobs. The important thing is the cost-benefit ratio in terms of job creation, which can be done much better through alternatives.
It is clear that within the UK, Scotland has a drag on its economy and energy policy. We might be expected to doff our caps because of the £320 million of Barnett consequentials we are getting over two years, but I would argue that that, in the words of the Chancellor, is the very epitome of dependence, rather than independence, and I look forward to working with the Chancellor to secure the latter.
Kit Malthouse (North West Hampshire) (Con)
I draw attention to my entry in the Register of Members’ Financial Interests.
It was a good Budget, a fine Budget, filled with lots of delights, with something in there for everybody. In deference to the Opposition Front Bench, it had Osbornian overtones, filled with smart, clever tactical manoeuvres to fan the flicker of growth that there is in the economy, hopefully into a flame.
There are three areas that I want to raise with the Minister in my five minutes. While we have made some progress, we need to go further and do some thinking before the autumn, and indeed the Budget next year.
First, on childcare, in my brief time at the Department for Education, I was pleased to put together some options that were going to form what we were calling “a childcare big bang”. I was happy to see a number of those appear in the Budget, not least the expansion of the provision of free hours of care for under twos. However, I am sure the Chief Secretary to the Treasury, my right hon. Friend the Member for Salisbury (John Glen), recognises that the system is still very complicated and still has a number of anomalies in it, not least the £100,000 threshold, which keeps a lot of highly productive women out of the workforce who are punished for going back by having their free hours withdrawn.
In addition, there are seven different ways for childminders to receive payment for the care they give. Given that the Government are putting lots of money in at the front-end of the equation, they need to think carefully about supply. I urge my right hon. Friend to look at what more we can do to expand childminder agencies in particular across the country as they are the only proactive tool we have for recruiting childminders. I also urge him to think more flexibly about what we can do to allow families to choose for themselves what kind of care they want to give.
I urge my right hon. Friend to consider conflating the childminding budget, which now rises to about £9 billion, with the child benefit budget, which is now £12 billion although that is falling, and other ancillary budgets, into one huge budget that would allow us to think carefully about what reform we could put in place to support families, not just in looking after children but encouraging them to have more children. As my right hon. Friend will know, we are not replacing ourselves in this country. We have a demographic problem and we have to encourage those who want to have children to do so. More thinking in that area would be great.
The second area that I wish to raise is corporation tax. I concur with my hon. Friend the Member for Stockton South (Matt Vickers) in wanting corporation tax to be lower, not least because I believe in the Laffer curve; I do not believe that we will necessarily raise that much more by raising corporation tax rates. It raises a question in my mind about how we tax companies and why we continue to chase them for corporation tax when we know that the international and online nature of business makes it very difficult to tax such organisations.
When he was the Chancellor, the Prime Minister put us into an international cabal of minimum corporation tax chargers across the world in an attempt to track all these companies down and tax all their profits, but if we went for a sales tax—if we focused on consumption and on those businesses’ sales—their domicile would be irrelevant, because the tax would relate to where their transactions had taken place. The huge international businesses that operate online and that we are currently chasing around the world would come into our taxation envelope, and we would find it easier to collect tax from them.
The third big area is, in many ways, the missed strategic move in the Budget. It did not address one of the fundamental problems with the operation of our economy, which is the nature, spread and dynamism of capital within it. Happily, the Government have talked expansively about science, technology and innovation; they obviously recognise that we are on the threshold of the fourth great advance in human understanding and ingenuity. Our country caught the first two advances—the industrial revolution and the industrialisation at the turn of the 20th century—but we broadly missed the advance that took place in the 1960s and ’70s. That was largely because our economy was sclerotic, but, critically, it was also because we had forgotten a basic tenet of capitalism: if we want the private sector to weigh in behind science, technology and advancement, we have to let capital rip. We have to deregulate it. We have to make sure that profit can be made from taking risk.
Critically, we also have to allow capital to spread into as many hands as possible. We talk a lot about housing in this country, and about putting houses in the hands of young people, but we never talk about putting shares in the hands of young people and encouraging them to own shares in the businesses for which they work and to participate in a capitalist economy.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. To fit everybody in, I am going to reduce the time limit to four minutes after the next speaker.
Valerie Vaz (Walsall South) (Lab)
Thank you, Madam Deputy Speaker. It is a pleasure to follow the right hon. Member for North West Hampshire (Kit Malthouse).
We have had plenty of Budget debates, but this Budget has not fixed anything. The Chancellor stood here, in the middle of the strikes and the collapse of the Silicon Valley Bank, and said nothing about those events in his speech—just like an avatar Chancellor. For months, the unions asked to meet, but the Government refused, hoping to break them. The unions were not moved, except to make a concession, but, like President Zelensky, their cause was right. Worst of all, as a former Secretary of State for Health, the Chancellor knows the cause of the junior doctors, because he picked a fight with them, allowing a few senior doctors to top up their pension while denying the many junior doctors a decent pay rise. We need to be able to recruit and retain our brilliant staff who take care of the country when we need it most: the public servants, like the late Ruth Perry.
I agree with the Chancellor on something—getting rid of local enterprise partnerships, which are totally unaccountable—but he is placing his faith in the Mayor, who is so far removed from my constituents. There was a press release in my inbox at 8.30 am on 14 March, the day before the Budget, crowing about the west midlands being an investment zone. I thought we had to hear about it here in the House first.
The Chancellor set out his Es. We know what happens to people who have too many Es, but this Budget was not hyperactive. It fixed nothing, not even the economic injustice of non-dom status. Nor did it impose a further windfall tax on the huge profits of energy companies while people need support with their heating bills. There is £10.4 billion on the table.
There was nothing about the problems that local authorities have faced over the years. In Conservative-controlled Walsall, we have an abandoned town hall with no one there. The former police station on Green Lane is a pile of rubble. Nothing has changed. Jack Lowe, who was 18, Bailey Atkinson and Akeem Francis-Kerr were murdered in and around the town centre. On Milton Street, there are prostitutes and drug dealing—shopkeepers are saying they are tired of seeing young people with money in their pockets. I thank the Police and Crime Commissioner Simon Foster and Chief Superintendent Phil Dolby for meeting me on Friday to discuss the situation.
Our Sure Starts, an important focus for families, are gone. Palfrey Sure Start was rated outstanding. There is a lack of health visitors to support families. There is no investment in schools; Blue Coat Church of England Academy is still waiting for money to fix its heating. There is no direct support for children or for those who have been excluded from school. The Chancellor talks about childcare, but his policy will not come into effect until 2024. And what about social care? There is nothing. This Budget fixes nothing. It does not invest in people.
The Chancellor wants to get people with disabilities back into work, but we cannot even get a lift to help people with disabilities or parents with pushchairs to access Bescot Stadium station. I wrote to the Minister, who told me to write to the Mayor; the Mayor told me to write to the Minister again. He said that there was no money, but he has £70 million of unspent Commonwealth games legacy funding. My constituents cannot wait until 2029 for access.
The Chancellor said that he wants us to be the best place to do business and work and the best place for research and development, but what about other research? It cannot all be about digital and computers. He truly is an avatar Chancellor. There was no explanation for the return to the Treasury of £1.6 billion that should have been allocated to Horizon Europe. Is that what is holding us back from joining Horizon? Will the Chief Secretary to the Treasury please ensure that it is paid over so our scientists can collaborate on their research?
There is a democratic deficit. I have outlined the stuff of life that keeps people in our communities going. The Chancellor missed out an E—E for excuses—but so far the country has given him an F for failure. He is failing our constituents, our communities and the country. There is an alternative. It is time for change, and only Labour can bring that change.
Anthony Browne (South Cambridgeshire) (Con)
Thank you, Madam Deputy Speaker—and thank you, colleagues. So much to say, so little time to say it.
I agreed with the opening comments of the shadow Secretary of State, the right hon. Member for Doncaster North (Edward Miliband): we do have a problem with economic growth in the UK. Economic growth is incredibly important—it creates more jobs, it creates better-paid jobs, it helps with the cost of living crisis, and it helps to raise the taxes that we need to pay for public services—but it has been too slow over the 15 years that have elapsed since the financial crisis. What he failed to point out, however, is that this has been a problem across the developed world, and is not unique to the UK. The global economy has been hit by the triple whammy of the financial crisis, the covid pandemic, and the cost of living crisis that has resulted from the invasion of Ukraine. It has been like being hit by a hurricane, a tornado and an earthquake back to back, and it is not surprising that the entire world economy is feeling battered.
If the right hon. Gentleman wants to pin the blame on the Conservatives, which is what he was trying to do, what matters is how the UK has performed in comparison with the rest of the world. As I have said in the Chamber before, according to the International Monetary Fund, we had the fastest-growing economy in the G7 last year and the year before, but what is our record since 2010, when the Conservatives were elected? According to the IMF, the UK economy has grown by 21% during that period, which, although too low, compares extremely well internationally. In fact, the UK has had the fastest-growing major economy in Europe. Since 2010, we have grown faster than Germany, France, Italy, Spain and almost every other euro area country apart from the fast-growing economies of eastern Europe, and we have grown far faster than Japan. We have a track record that really holds its head up, and criticisms of Conservative Government policy really do not bear examination.
Anthony Browne
Absolutely. Our unemployment has gone down dramatically, and has halved since 2010. This has been an astonishing performance. Given the economic troubles that we have experienced since the pandemic, it is amazing that unemployment has not risen more than it has. Our unemployment rates compare very well with those in most other countries. This illustrates dramatically the point that we keep making about the Labour party: every time it has been in power, it has left office with unemployment higher than when it arrived, whereas with us it is the other way round.
So how do we achieve economic growth? That is the key challenge. There are two main steps that we need to take. First, we need to increase the participation rate of workers and, secondly, we need to increase business investment to improve productivity. Many of the measures in the Budget, which I highly commend, will increase the participation rate of workers—notably the childcare reforms, which many others have mentioned, and the abolition of the lifetime allowance for pension contributions, which the Backbench Treasury Committee, which I chair, recommended to the Government. The allowance is clearly a hindrance that prevents a great many people in a great many sectors from continuing to work, given the punitive tax penalty that they incur when their pension pot reaches £1 million. The Labour party has tried to bring the politics of envy into play, saying that it is a tax for the rich, but about half those involved work in the public sector—they are not just doctors, but senior civil servants, senior police officers, senior military personnel, air traffic controllers, Government scientists and so forth. Are all those the unacceptable 1%? It is a very ill-informed attack from Labour. This measure also constitutes a dramatic simplification of the system, which means that many more people can understand it and gauge what is best for their pensions.
As for increased business investment, that too was proposed by our committee, although we never dreamt that the Government would be courageous enough to go the whole way. Full expensing is far the most generous tax relief for business investment in any developed country. There was a tax penalty for business investment, but it is now the other way round. I would prefer not to see corporation tax rise to 25%, but that is still the most competitive rate in the G7, and full expensing goes a long way towards reversing its effect.
Given all these different policies—and I will not go through them all—I think that this is a powerful Budget which should go a long way towards promoting economic growth, and the Office for Budget Responsibility, in its analysis, has raised its economic growth forecast as a result of it. I strongly commend it to the House.
Several hon. Members rose—
Madam Deputy Speaker
Order. There is absolutely nothing wrong with interventions, but we are so pressed for time that speakers should bear in mind that if they accept an intervention, I would appreciate it if they nevertheless stuck to the time limit. Those who intervene on others and who are still trying to catch my eye will move further down the list, because they will have had one chance already, and it means that someone else loses a minute, if not more.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I will be very brief, Madam Deputy Speaker. According to the British social attitudes survey, what most people want to see is fairness in our society. They want to see fairness in rewarding hard work, in how our policies and laws are applied and in the dignity and respect that we show our vulnerable citizens, whether that is older people, sick and disabled people or people who become destitute, of whom we increasingly see too many. So, in relation to the Budget, fairness for me is about reducing the structural inequalities in income, wealth and power that saw us have one of the highest death rates in the developed world during the pandemic and that, in particular, have driven the largest fall in life expectancy since world war two. As my right hon. Friend the Member for Doncaster North (Edward Miliband) said, fairness is at the heart of what we are about and what our constituents are about.
In relation to the Budget, though, we see that the OBR is still forecasting historically large reductions in living standards this year after adjusting for inflation. If we look at the fairness aspect of that, although we see direct taxes particularly affecting high-income groups, indirect taxes are having a really detrimental effect on groups on lower incomes. On public spending, it looks good when we consider the end of this financial year, but there is no real-terms investment in public services, as my right hon. Friend the Member for Walsall South (Valerie Vaz) said. We are seeing this in our constituency casework in relation to social care, and that is going to be the case for the next two years, with no real-terms investment in public services.
On social security, I was deeply disappointed to see the emerging rhetoric from the Chancellor in the Budget concerning the reasons we have seen a dip in economic activity. He and others have started to assert that the reason there are fewer people in work at the moment is that it is too comfortable on social security, hinting at the workshy and the shirkers and scroungers narrative that we have heard in the last 10 years. There is absolutely no evidence to support that. First, if those people are economically inactive, they are not claiming social security. There are myriad reasons that they are not in work, including sickness. We have 2 million people who are still living with long covid, for example, and an army of family carers is needed to look after them.
I was pleased to see the changes to our childcare system, which has been so poorly funded, but it has taken 13 years. This should have happened before. And what about elder care? What about flexible care from work? The Government should look at those problems and stop scapegoating sick and disabled people and those people who are claiming social security. I worry about those who are not well and who are barely clinging on. All this talk about a tougher sanctions regime will send people over the edge. So I would like to ask the Minister what assessment he has undertaken of the deaths of vulnerable claimants as a result of increasingly punitive sanctions.
Andrew Jones (Harrogate and Knaresborough) (Con)
In the many forecasts that we receive in the Budget, there was one that particularly pleased me. That was the projected fall in inflation to 2.9% by the end of this year. Tackling inflation means tackling its underlying causes, and that means boosting supply in a way that does not drive inflation. I believe that improving productivity is central to this—a point that was made eloquently by my hon. Friend the Member for South Cambridgeshire (Anthony Browne).
When we discuss productivity, we must be clear about what we mean and what we do not mean. It does not mean working harder; rather, it means working smarter so that there is more output for the same input. I therefore strongly welcome the Budget change in capital allowances, which will mean that companies can get up to 100% tax relief on investments in plant and machinery and on upgrades to IT equipment and production lines. The OBR suggests that this measure will increase business investment by 3% per year. The Treasury forecasts suggest that that measure is expensive, costing up to £25 billion, but it is also critical for international competitiveness. This decision makes the UK the only major European economy with full expensing and gives us, jointly, the most generous regime of any advanced economy.
Other measures in the Budget boost supply, but the supply of people and skills are critical in building capacity and longer-term growth. Recruitment challenges are the challenges most frequently raised with me by businesses in Harrogate and Knaresborough, which echo the comments of businesses I meet through the all-party parliamentary group on infrastructure, which I chair, and are backed by the data on the number of vacancies in the economy. I am pleased to see the measures to boost work participation: reforming universal credit, expanding childcare and abolishing work capability assessments. Each is to be welcomed.
One measure I particularly welcome has already received some comment, and that is the measure on pensions. I recently had a conversation with a doctor in my constituency who told me that he is leaving the NHS due to pension issues, as he would literally have to pay to go to work, which is a ridiculous position. He is a senior brain surgeon in his early 50s, doing important work that he loves. Our conversation was one of sadness and regret. The lifetime allowance change makes his problem disappear, and I hope this most expert and most pleasant constituent will now reconsider his life plans. People know there is a problem to solve on pensions, particularly in the health service and the public sector, and they want it tackled. It is good policy to encourage people to make provision for their future, and it is good policy to make things simple and transparent.
This Budget, as a whole, is about getting the wiring of our economy right and solving problems. In a different, post-pandemic world, it is about making the UK a better place to do business and supporting people through difficult times. The Budget is not showy, but it addresses long-term competitiveness and productivity issues, the fruits of which will address growth, inflation and debt in the longer term. I am particularly pleased to see supply-side reforms across a number of sectors.
The energy market will be a future area for attention. New technologies and new opportunities require new Government and regulatory responses, but this is future work. The Budget shows the direction of travel and where work should be focused. With its much more encouraging forecasts, this Budget shows that the plan is working, and it puts in place the framework for future progress. I commend my Treasury colleagues for all they have achieved.
Douglas Chapman (Dunfermline and West Fife) (SNP)
“Growth” is fast becoming a word with no meaning in relation to our economy, thanks to the ever-increasing financial and fiscal fiascos racked up by this UK Government. Just as the Chancellor delivered his Budget last week, the OECD announced that Britain will be the only economy to contract this year. It will be an outlier, the worst performer among the wealthiest countries. Is this the good news the Chancellor wanted from his four E’s mantra of “enterprise, education, employment and everywhere”? You can fool some of the people some of the time, but you cannot fool all of the people all of the time.
Hard-working families and individuals cannot make it to their next pay cheque without visiting the multitude of food banks that have popped up throughout the country after 13 years of Tory austerity and mis-management. Levelling up is yet another misleading and meaningless mantra to add to the list.
The Chancellor has admitted that there are quite a few other E’s, and these need to be examined more closely if we are to find the truth of this Budget. One of them is “eating,” because extraordinary levels of inflation have pushed grocery bills well above record highs, affecting families’ ability to afford adequate food.
There is another E to add to this sorry tale of fiscal mismanagement, and that is for “extreme poverty.” It is not even five years since the UN special rapporteur on extreme poverty, Professor Philip Alston, described the “systematic immiseration” of the British people through Tory austerity, creating “workhouse” conditions for the working poor and the destitute.
What about that big E—“Europe”? The Resolution Foundation has pointed out that our household incomes are falling even further behind those of our European neighbours. Ours are a grand total of £4,000 less than those of our German counterparts, and we are a staggering £11,000 worse off thanks to Brexit and other pay cuts. The Resolution Foundation also reported that the wage stagnation we are experiencing in the UK is “unprecedented”. It says we have
“a toxic combination of low growth and high inequality”
and that that
“is what failure looks like.”
The E there would be the “epic failure” that has built up over these successive disastrous Tory Governments. That is not an E anybody would want to boast about. When a Government are failing on this scale, it is time to do some soul searching, but that can be done only if big truths are faced, however uncomfortable.
The truth is that Brexit remains the big E in the room; it is a continuing kamikaze catastrophe for citizens and businesses alike. It is hard to grow an economy when you have cut yourself off from your largest market, and other countries across the world seem none too fussed about partnering up with a splendidly isolated old Blighty.
To make matters worse, this Chancellor has thought it wise to slap a hefty tax burden on our biggest export—another E. I am referring to Scotch whisky, an export that was previously so badly wanted in the UK that the Union Jack was even stuck on all the packaging.
Finally, let me say that there is one E we can agree with the Chancellor on, and that is the “expression” he used during his Budget speech: “independence is far better than dependence”. That may have been the only true E muttered by a Tory Minister in the past 13 years, and the sooner that Scotland is independent, the better it will be for everyone.
Jack Lopresti (Filton and Bradley Stoke) (Con)
I will focus my brief remarks on supporting the announcements made in the Budget relating to the Government’s commitments on defence spending, and on how the Budget also underpins the UK’s place in the world and supports our veterans.
Defence of the realm and the security of our people is the first responsibility of any Government. However, as the Chancellor has stated,
“our return to growth has direct”—
positive—
“consequences for our role on the global stage.”—[Official Report, 15 March 2023; Vol. 729, c. 844.]
The £11 billion increase in our defence budget over the next five years is a significant investment to ensure the protection of our values of freedom, democracy and an international rules-based order. That £11 billion comes on top of the record £24 billion increase announced in 2020, which was the largest increase since the cold war. This funding will enable us to continue to modernise our military and help ensure that our armed forces have the resources they need to meet the evolving threats we face today. The package of funding for the Ministry of Defence includes an additional £2 billion next year and £3 billion the year after. This funding will also help to replenish and bolster vital ammunition stocks, modernise the UK’s nuclear enterprise and fund the next phase of the AUKUS submarine programme.
Although I am delighted with the increase in defence spending, I join some of my colleagues in urging the Government to commit to spending even more on defence in due course. I understand the budgetary constraints, especially after the support we gave during the pandemic and the help we have given to deal with the rise in energy costs, but I saw for myself only a few weeks ago in Ukraine some of the destruction inflicted by the Russians, so I can say that deterrent is cheaper than conflict and then reconstruction.
I am pleased to see our Government leading Europe in supporting Ukraine with military aid, with at least £2.3 billion this year, at least matching what we spent last year. We are providing more military support to Ukraine than any other country in Europe, and this is support that Ukraine desperately needs. The UK remains the second largest spender on defence in NATO, after the United States, and we were the first large European country to commit to spending 2% of GDP on defence. The proposed increase to 2.5% shows our continued commitment to being a leading defender of democracy and providing help to people who are standing up to those who threaten it.
I welcome the package of £30 million to increase the capacity of the Office for Veterans’ Affairs, which will help veterans with injuries returning from their service and increase the availability of housing for veterans. It will help to ensure that our veterans receive the support they need to transition back into civilian life and live their lives to the fullest.
The impact of all this investment on the broader economy is huge. The commitment to increase defence spending will create much more certainty for the 390,000 defence jobs across the UK, many of which are high paying and highly skilled, in places such as my constituency. The MOD is the largest provider of apprenticeships in the country. It supports more than 90,000 apprenticeships in subjects as diverse as cyber, engineering and healthcare. I support the introduction of a new kind of apprenticeship known as a “returnership”, targeted at the over-50s who want to return to work. Returnerships will operate alongside skills boot camps and sector-based work academies. They will be incredibly useful for those who wish to change career and in encouraging some of our over-50s back to the workplace.
The Budget not only increases our ability to defend ourselves, sustaining our credibility and our place in the world; it will also help to create many more high-tech, high-skilled jobs, so that we can continue to preserve and enhance our sovereign defence manufacturing capability as well as defending ourselves.
Barbara Keeley (Worsley and Eccles South) (Lab)
In the Budget, the Government missed an important opportunity to support unpaid carers. There was also no mention of social care and there were no measures to fix the current crisis, which is increasing the workload of unpaid carers.
On Budget day, which was also Young Carers Action Day, members of the all-party parliamentary group on young carers and young adult carers met to hear from young carers. One was Rochelle, who has been a carer since the age of 12. She told us that her mother had bipolar disorder—type 2—and was sectioned. Rochelle said that she had no interaction with the mental health professionals who supported her mother despite the fact that she saved her mother’s life twice through her knowledge of first aid. Rochelle’s mother lost £20,000 of her savings through fraud by someone who befriended her. Rochelle told her teachers at school about that, but they did nothing to help.
Rochelle got no help as a young carer until she went to Kingston University through the KU Cares programme. The good news is that she is now studying law part time while working as a full-time member of staff at the university on work to recognise and address the unique challenges and structural disadvantages that some groups of students face. Rochelle won an award for charity and third sector work presented at the House of Lords in December 2018, and she shared her story with the charity Our Time to encourage other young carers.
There are 800,000 young carers like Rochelle who need better support. One young carer told the Carers Trust that:
“Being a young carer feels like we have been forgotten. There is not enough support to help us.”
A recent survey by the Carers Trust showed that the situation for young carers is getting worse. The majority of young carers now spend more of their time caring than they did last year, and around half of young carers care for more people. In a Budget that claimed to be about getting people back to work, there were no significant measures to help the many unpaid carers who cannot work or have to reduce their hours due to caring.
The Work and Pensions Secretary referred briefly to carers in his speech, when he said that
“we know that 1.7 million people say they are economically inactive because they have caring responsibilities.”—[Official Report, 16 March 2023; Vol. 729, c. 1015.]
He went on to talk about childcare but said nothing about support for carers.
Worse still, the Health Service Journal has reported that the Government are set to cut planned spending on the adult social care workforce and on reform and integration by at least £500 million. The workforce funding announced in December 2021 would have invested in
“knowledge, skills, health and wellbeing and recruitment policies”
in social care. That money is sorely needed in a sector with a 10% vacancy rate, but it is now expected to be halved. The same reports suggest that the already miserly funding pot of up to £25 million in funding for carers will be cut to nothing, as will £300 million earmarked
“to integrate housing into local health and care strategies”
to improve supported living. Leaders across the sector have rightly criticised those cuts, because this is no time to cut social care or, even worse, to cut the existing pitiful level of Government funding of support for carers.
The Budget missed the opportunity to do something about the crisis in social care, but the Government cannot keep ignoring it. The system has already eroded to a level that fails patients, staff, families and unpaid carers, and the impact of that failure will be serious and far-reaching for both social care and the NHS.
Simon Fell (Barrow and Furness) (Con)
I will speak briefly because I know that many Members want to speak. There is much to like about the Budget, which is focused on growth, getting people into work, incentivising investment, driving down inflation, and providing people with security on energy costs and the future of their energy needs. I will touch on three areas that I think are the most important: energy support, energy security and the environment.
The illegal invasion of Ukraine has layered stresses on a global economy already weakened by covid. Food and fuel shortages have led to global inflation and the pressures we all face now. Two ways to resolve that are support in the here and now, and planning for the future so that we are not exposed next time round. The £94 billion cost of living package, one of the most generous in Europe, is a remarkable intervention by the Government and will continue to shield families while the market stabilises. Continuing the energy price guarantee, freezing fuel duty and ending the premium on prepayment meters are interventions that will make a genuine difference to people’s lives, and I support them wholeheartedly.
The other side of the coin is energy security. I particularly welcome two measures announced in the Budget, categorising nuclear as environmentally sustainable and launching Great British Nuclear. Crucially, changing how nuclear is categorised means that pension funds and asset managers under pressure to make green investments are now in a position to do so. Great British Nuclear and small modular reactors are also crucial to unlocking the UK’s potential in capacity and resilience, and offer huge opportunities for the Cumbrian coast at Sellafield and Moorside.
It is worth noting that those SMRs, in which the Government have already invested £210 million, power an existing nuclear fleet as the engines of our submarines. One reason such programmes are costly and fragile is the infrequency of their production; not having a common nuclear energy fleet layers complexity and cost on the roll-out of nuclear power. However, given the security in the submarine programme through Astute, Dreadnought and SSN-AUKUS, the drumbeat of production and the progress of the submersible ship nuclear replacement programme, that symbiotic relationship should bolster the defence of our realm and our energy security.
The Government’s commitment to carbon capture and storage in the Budget is a welcome push for that industry and will inspire confidence in market participants that the Government are serious about achieving their target of storing 20 to 30 megatonnes of sequestered carbon by 2030. I declare an interest, because in Morecambe bay we have a cluster with the potential to store a gigatonne of CO2 and will provide long-term decarbon-isation solutions to businesses across the whole UK, creating thousands of jobs in industrial heartlands. My right hon. Friends on the Front Bench are welcome to visit at any point.
I welcome this Budget for the clear emphasis it places on growth and delivering against the people’s priorities of halving inflation, growing the economy and reducing debt, all in aid of creating better-paid jobs and opportunities across the UK and in constituencies such as mine in Barrow and Furness.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
This year has been one of profound difficulty and hardship for many of my constituents, and in many areas the Budget will fail to allay their fears.
I want to cover a few issues, starting with small and medium-sized businesses. While the Chancellor could have used last week’s Budget as a means to rebalance the scales in favour of the small businesses that form the backbone of the Welsh and UK economies, many SMEs will feel that instead they have been short-changed and overlooked. My constituency, like many others, is filled with dynamic, vibrant and resilient small businesses, which are integral to this country’s recovery from the pandemic, to the economic growth that appears to have eluded seven Tory Chancellors, and to the long-term prosperity of our country. I recently met many local SMEs with my constituency colleague, the Minister for the Economy of Wales Vaughan Gething, and they raised many issues with me, from energy costs to recruitment and skills and the importance of infrastructure.
However, the Government’s priorities in no way reflect that picture. I agree with the criticism from the Federation of Small Businesses that small business owners,
“will be wondering why the choice has been made to overlook them.”
We have seen £27 billion directed at big business, with small and medium businesses being told that their role is insignificant in comparison. On the Opposition side of the House, we know the value of small business: we would cut business rates for small firms, give grants to go green and tackle late payments from big businesses.
The Chancellor also brushed over the contribution the co-operative sector makes to our economy—here I declare an interest as a Co-operative MP and draw the House’s attention to my past interests. There are currently 7,000 co-operatives in the UK and this critical sector contributes £40 billion to the economy each year. Co-operatives are ambitious, with 61% expressing ambitions to grow compared with 53% of small businesses generally, but co-ops and mutuals are struggling under this Government. The recent crisis at John Lewis, which faces the prospect of having to dilute more than 70 years of a tradition of collective ownership, is a symptom of the Government’s refusal to make sensible changes, such as introducing permanent capital to enable mutuals to access new funding without having to change their status.
The creative industries are absolutely critical in my constituency. They are worth £115.9 billion in gross value added, and make up 6% of the economy, employing 2.3 million people, including many of my constituents. Although we welcome the audio-visual expenditure credits, which are replacing the tax relief, they stand in contrast to the cuts that could be made to the BBC orchestra and singers. Indeed, my constituents have raised with me not only the cuts to those organisations but the impact of energy costs on grassroots music venues—one is closing every week across the UK, but the Chancellor has failed to heed the evidence submitted by the Music Venue Trust and others about the crisis that they are facing.
Steel and green steel, which have been raised by other hon. Members, are absolutely critical in my constituency and crucial for our construction industry and many key infrastructure projects, but the Government have lacked a clear industrial strategy on steel. The Labour party would invest in green steel and have a steel renewal fund. The UK public are with us on that: 70% said in a recent poll that the Government should intervene to provide competitively priced electricity to the UK steel industry.
Pensions have been a core issue. Although the Government have been happy to provide support for the pension pots of the richest 1%, constituents of mine who lost their Allied Steel and Wire pensions, and who were part of the financial assistance scheme, are still being short-changed. Indeed, some are now receiving 40% less than they should because of a lack of index linking and a lack of action. We met the former Pensions Minister, the hon. Member for Hexham (Guy Opperman) back in 2021, but two years on, I have yet to hear what answers he has to the serious questions that those pensioners are raising. There is not a lot of joy in this Budget, and there are some serious questions for the Government.
Elliot Colburn (Carshalton and Wallington) (Con)
I congratulate the Chancellor of the Exchequer and the Treasury team on delivering a Budget that tackles cost of living pressures, takes steps to continue our economic recovery and, ultimately, places our constituents at the heart of the Government’s priorities.
We should be under no illusion that high inflation, spurred on by the illegal invasion of Ukraine and the economic fallout of the pandemic, is the greatest threat to the prosperity of the UK right now. My Carshalton and Wallington constituents come to me to share their stories. Parents—particularly women—are forgoing employment because childcare is unaffordable, elderly people are worried about energy prices, businesses are struggling because their customers are tightening their belts, and pretty much everyone in between is affected. High inflation spares no one. That is why I am so pleased that the OBR forecast states that we will more than meet the Government’s pledge to halve inflation this year. The Budget also builds on the work that the Government have already undertaken to cut inflation, and takes decisive action to support the people who are currently impacted by inflation.
I will touch on a few key measures, particularly the introduction of 30 hours’ free childcare per week for children aged nine months to four years old. I pay tribute to my hon. Friend the Member for Stroud (Siobhan Baillie) for her doughty campaign in that incredibly important space. I cannot begin to tell the House how many young parents—again, particularly women—have met me to discuss the cost of childcare. I am grateful that the Minister for Social Mobility, Youth and Progression, my hon. Friend the Member for Mid Sussex (Mims Davies), came to my constituency last week to visit Bright Horizons nursery and pre-school, where we discussed some of those priorities. Not only are the measures good for the wider economy, good for enabling new parents to return to work and good for those parents’ personal budgets, but they will give back to many of the young mothers whom I have met an important part of their lives: the opportunity for independence and professional aspiration.
I am also glad about the other actions that the Government are taking to support all people facing cost of living pressures, particularly by extending the energy price cap and ending the premium paid by the more than 4 million households that use prepayment meters, ensuring that energy bills become fairer across the board. Of course, there is always more work to be done, and I would like the Government to spend more time looking into the impact on people whose homes are heated by district energy networks, such as those who live in New Mill Quarter in Hackbridge. It is not entirely clear what the energy bills discount scheme means for them. Indeed, that extends to local businesses as well. I thank the Minister without Portfolio, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), for coming to Carshalton last week to visit businesses, particularly Village Bakers, to discuss their energy bills.
Shortness of time prevents me mentioning many other measures, such as the frozen fuel duty, so I will wrap up by highlighting the major advance in healthcare. I welcome the move on pensions: as chair of the all-party parliamentary group on cancer, I know that much of the cancer workforce was leaving because of that issue, so I am grateful for the change. I never forgo an opportunity to mention the upgrade to St Helier hospital in the London Borough of Sutton, so I thank the Government for reaffirming those pledges. I commend the measures in this Budget.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
It is an honour to follow the hon. Member for Carshalton and Wallington (Elliot Colburn), a fellow member of the Petitions Committee. After the chaos of the past few years, the Budget was the Government’s chance to show that they would govern for everyone and end the divisive rhetoric and politics that hold our country back. Sadly, it was an opportunity missed, because although some of the biggest challenges—the need to reform childcare and get Britain working again—were acknowledged, the Government have proved incapable of fixing them.
Across the north-east, 38% of babies, children and young people are growing up in poverty, overwhelmingly in working families. In Newcastle, that figure is 42%. It is only set to get worse, with 1 million more children expected to live in poverty in the next year. That is the reality: more children growing up in households without the very basics, whether that is food in their stomachs, heating in their homes, clothing on their backs or something as fundamental as a bed.
In December, as chair of the Petitions Committee, I led a debate on child bed poverty. I can scarcely believe that bed poverty is a real problem in 21st century Britain, but it is, yet we only saw complacency in the Budget. The squeeze on living standards has left working people £104 a month poorer and wages are set to remain below 2008 levels until 2026. That is not growth. Everyone is running faster but they are slipping backwards. People are still paying more for their mortgages after the kamikaze budget, but, against that backdrop, the Chancellor’s choice was to give a tax cut to the richest 1%. That is the wrong priority at the wrong time.
Since 2019, the Petitions Committee has received many childcare petitions, signed by more than half a million people, on extending free childcare, on the childcare ratios and calling for an independent review of the childcare sector. I am heartened that the Chancellor has started to listen to those concerns, but the solutions will not meet the challenge. Increasing the number of children entitled to free childcare places while continuing to supply inadequate funding will mean that childcare providers will increasingly be forced out of the market. They have made that very clear.
The Government have also neglected to follow the evidence on ratios. It was presented very clearly to us in a powerful petition led by Zoe and Lewis Steeper, who sadly lost their son in a tragic accident at nursery. The Early Years Alliance describes relaxing ratios as a
“ludicrous, pointless and potentially dangerous policy”.
It just will not work. Some 70% of childcare providers have said that the Government consultation will not make them review their provision. Pregnant Then Screwed warn that such a change will be “detrimental to staff retention”, with a survey showing that 75% are likely to leave if ratios are relaxed. We are asking these very low-paid workers to do more with even less, and that will exacerbate existing problems. It is not just about safety. We know that smaller numbers mean better quality childcare, and that matters to our families, our children, our childcare workers and our economy.
I could have talked about so many issues today—our crumbling transport infrastructure, our wavering commitment to international aid, defence spending or the failure of the Government’s so-called levelling-up agenda—but time simply does not allow it. What worries me is that this Budget is an attempt to paper over the cracks of 13 years of failure, and we cannot afford any more precarious growth. The Budget is a deafening wake-up call to the British people that unfortunately this Government are out of ideas, out of road and need to make way for a Government who will take the country forward.
Siobhan Baillie (Stroud) (Con)
Small businesses and families are the “force” in workforce. It is fantastic that the Chancellor of the Exchequer has recognised that, and it is also not rocket science to know that the country’s finances are going to be stretched at a time when we have spent £400 billion on the pandemic and are dealing with a war. However, Stroud people can see that the Budget is making sensible and realistic changes to help with fuel and transport, energy costs and pensions; to ease recruitment pressures for businesses; and to take action on beer duty, potholes and leisure centres.
We have had a huge team effort on this side of the House to make the case for putting parents and the early years workforce front and centre in the Budget. I am not sure that the Chancellor or the Prime Minister has had a breakfast or a meeting recently without that issue being mentioned, and they have definitely listened. Reforming and stimulating the early years and childcare sector is not just some fluffy woman’s issue: it helps the country threefold. It gets parents back into work and working at full tilt; it gives businesses the workers that they desperately need at the moment; and the childcare and early years sector is a skilled workforce in itself. These people are looking after the most precious things in our lives, and it is really hard graft. I come to work for a rest from my kids; I could not do what those workers do. We have to value them, train them, and pay them more. It is well known in this place that I think there is more work to do on hourly rates for the childcare sector, but we have made massive strides in the Budget.
The Budget is also a good reminder to the country that the free hours are not free. They are paid for by the taxpayer, and we need to use them judiciously: we need to think through who are the best people to use them. I think there should be changes, but again, I think we are getting there. I met some Stroud childminders recently, which reaffirmed to me how special these entrepreneurial businesspeople—mainly women, but businesspeople—are. They can do an awful lot for families, but they can also do a lot for families with children with special educational needs and disabilities, and I think we should lean on them more.
I do want to make a political point now: I think the Chancellor of the Exchequer has blown the Labour party out of the water on childcare. Labour Members have gone on and on about this—I have been shouted down—but they have not come up with a plan. We have had speech after speech; we have had flying around the world, using lots of air miles and upsetting the environment, but they have not come up with a plan. They have misled parents and mismanaged expectations. They have talked about universal free childcare; they have talked about having a new system like the rebirth of the NHS, as per the article in The Times, but behind the scenes, they have realised that that is not affordable, realistic, or sustainable for the country. I do not accept that they could not come up with a plan because they are waiting for the elections and want to get all the good stuff out then.
Siobhan Baillie
No, we are not taking interventions, but I would love a conversation about this, because I would have liked to see the ideas. Unfortunately, that plan has not been forthcoming, but other plans have been. We have seen ideas about cars from the Opposition, but not about childcare and not for families. The Government have made childcare and the early years sector not just about infrastructure, which Opposition parties have been asking for. They have recognised parents and the early years workforce as key to growing the country—key to the economy. That is absolutely integral to making the families of this country feel valued and part of getting involved in this country’s success. I am very grateful for that.
In my final seconds, what I would say to the people who are worried about there being too much focus on getting parents into work is, “I hear you.” It is right that we should have parental choice, but given the financial constraints on this country and the current workforce issues, it is also right that the Chancellor has done what he has with the Budget.
Carolyn Harris (Swansea East) (Lab)
While the Chancellor seemed to think that last week’s Budget was an opportunity to celebrate the fact that the country had narrowly avoided entering recession, the fact remains that the UK will be the weakest economy in the G7 this year, and the only country that will see negative growth. True to form, when the Government came to choose who to give additional support to, it was the richest 1% and their pension pots when they abolished the £1 million cap on how much an individual can build up in their private pension before they pay additional tax. If, as the Chancellor suggested, the reason behind doing so was to keep doctors in work to boost our struggling NHS, that clearly could have been done through a tailor-made amendment to pension rules.
While the Government are helping the rich to get richer, there are people in my constituency and right across the country who cannot even dream of paying into a pension, let alone saving on the money they have to pay on it. We have families who cannot afford to put food on the table, working people queueing at food banks and children going to school with empty bellies, yet the Government’s response was to bolster the pensions of those who already have more than they will ever need. That is very wrong.
We all want to keep people in work, but to do that we need to help them by offering them the support they need, rather than just offering financial incentives to a tiny elite group. There are women who have worked all their lives, mostly on salaries, where a £1 million pension pot will never trouble them. They hit the perimenopause, and they become engulfed in self-doubt and in need of some minor adjustments to their working conditions, but at the moment, even though we have started to see a breakthrough, not enough businesses have that support in place. Some 10% of menopausal women are leaving jobs. One in four is reducing hours and thousands more are avoiding promotion.
Women are claiming benefits for the first time in their lives simply because nothing was done to help them remain in work, but by leaving work earlier than planned, their national insurance contributions may not reach the threshold for the full state pension, so they may well end up claiming pension credit. There are employers that have taken that on board and implemented changes that have been instrumental in retaining staff, and I welcome the development of a new standard on menopause in the workplace that will be launched by the British Standards Institution later this year. I am absolutely delighted that the Opposition have committed to improving menopause workforce support when we have a Labour Government, because we understand that it is the millions we need to be helping, not the millionaires.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
This is an excellent and very important Budget for people in Runnymede and Weybridge and across the country. There is lots to talk about in it, but I want to focus on a couple of key points that are maximally important in tackling the challenges we have today—the need to halve inflation, grow the economy and reduce debt—and some of the interventions that this Budget makes to drive that forward.
The first thing I want to talk about—No. 1—are our reforms and improvements to childcare. I have an interest of sorts to declare, as I am a recipient of 30 hours of subsidised childcare and a user of the tax-free childcare scheme. Childcare is one of the biggest issues that comes up on the doorstep in my constituency. It is clearly a barrier to parents—mums and dads—returning to work, and the interventions we are making to increase the number of hours and improve the rate and the supply-side reforms will make a big difference. I have had meetings with many of my early years providers and nurseries, and they have raised just how challenging it is and how challenging the rates are in particular. These reforms and changes will make a huge difference. There is also a recognition in the measures being brought forward that supply-side provision will be difficult. In bringing the policy forward, there will be challenges in growing the workforce, and that is why it is being introduced in a sensible, staged way.
My second point is the investment in science. In Runnymede and Weybridge, we are proud to have the SuperFab quantum lab at Royal Holloway. I have visited it, and it is absolutely brilliant. It is an awesome high-tech research lab. The quantum strategy we have announced, with £2.5 billion going into it and a 10-year plan going forward, is critical for UK science. It will help the quantum ecosystem and it will continue to consolidate our position as world leaders in science, which is so important for the medium to long-term ambitions of our economy as we move more towards a high-skill, high-tech economy. We very much see that in Runnymede and Weybridge and the businesses we have locally.
I speak to businesses all the time, and I say, “Why did you set up originally in Runnymede and Weybridge?” They talk about proximity to an international airport—Heathrow—and to motorways, the commute time into London and of course being in Surrey, a wonderful place to live and work. Through that, we have a whole host of big life science and high-tech companies located in my constituency. I am working to drive forward further investment to consolidate us as a world-class location in which to invest. So I say to those watching at home, “If you’ve got a company that is in the tech and life science sector and you want to invest in Runnymede, come on over.” We are a fantastic place to set up, and the Government’s reforms will help consolidate that even further.
While I am on a roll, in my last 30 seconds I am going to talk about the Animal and Plant Health Agency, which is in my constituency. In the first Budget I was at as a new MP, the Government committed £1.4 billion towards it, and I am looking forward to seeing that being delivered as we go forward. It is critical for our security in defence against zoonotic diseases and for our trade. It underpins the Northern Ireland framework, or what I would like to be called the Runnymede agreement, as it was actually signed in my constituency, and on that, I will finish.
Angela Crawley (Lanark and Hamilton East) (SNP)
The cost of living crisis is far from over and, sadly, this Budget offers very little to the people in Lanark and Hamilton East. Energy bills remain high, mortgage rates remain high and child poverty remains high, so if this is the best that the Chancellor can offer during a financial crisis of his own Government’s making, it demonstrates how perfectly out of touch Westminster is with the needs of Scotland.
The Chancellor spoke of ramping up welfare conditionality. This will only force more people into insecure work, offering no stability for future planning, and it is not enough to lift them out of poverty. The reality is that this has resulted in a series of punitive sanctions in relation to the administrative earnings threshold on universal credit. Does the Chancellor really believe that the solution to bringing about growth is to hammer down on sanctions?
The gender pay gap is still very much apparent, and this Budget will do nothing to address it. I fear that women are bearing the brunt of the cost of living crisis, and this is fundamentally unacceptable in 2023. Calls to reintroduce gender pay gap reporting and to include ethnicity and disability pay gap reporting have all but been ignored. So can the Chancellor really claim that this will achieve economic growth and be truly inclusive, as the Conservative Government appear to believe it will?
While I welcome an increase in the national minimum wage, it is not a real living wage. It will not be enough to cover the cost of living, and it will not be enough to lift people out of poverty. It will not be enough to give people financial freedom to meaningfully contribute to the economy. When will the Chancellor listen to the overwhelming calls from stakeholders to completely commit to fully implementing a real living wage?
The one policy I will welcome is on childcare. We all accept and understand that good-quality, well-funded childcare is imperative to drive the economy, to get women and parents back into work, and ensure that those who are in work stay in work, as well as to tackle things such as pregnancy and maternity discrimination and the bias against women within the workplace who are assumed to bear the brunt of childcare, but this is simply not good enough. I recognise that it enables parents, particularly mothers, to contribute to the economy, but lip service to childcare is not good enough. This could be a truly transformative policy: it could achieve real economic change, reduce discrimination, reduce in-work disparity and level the playing field for the gender pay gap, but this policy does not go far enough. I hope the Government will consider that it is a great policy, and let us drive it further.
I want to make a final point about the Government’s record in the last 13 years. Their dogmatic commitment to Brexit has cut Scotland off from our largest international trading partner. It has cut us off from access to the EU labour force, and businesses in Scotland can no longer afford the labour shortages they have been hit with in the last 12 months. The reality is that the cost of living crisis is not over. I am calling on this Government to listen to the SNP, accept the Migration Advisory Committee’s recommendations for a rural visa pilot, and allow those who want to come here to work and contribute to our economy to do so.
The reality is that this Budget has only further deepened the isolation that people feel. It has pushed low-income households into further poverty, created hardship even for those in well-paying jobs and forced people to sacrifice their basic needs to stay afloat. It has exacerbated the mental health crisis and pushed businesses to the brink of collapse. It has encouraged people into debt and forced pensioners to turn their heating and electricity off in the depths of winter. I know that this is the reality for many of my constituents across Lanark and Hamilton East and across the UK, and I am calling on the Chancellor to make—
Mr John Baron (Basildon and Billericay) (Con)
I refer Members to my declarations in the Register of Members’ Financial Interests.
I very much support this Budget, which has many commendable aspects: the expansion of free childcare, the extension of the energy price guarantee, the increased expenditure on defence, the continued fuel duty freeze and the extension of the 5p cut are all welcome. But I want to take the opportunity to bend the ear of Ministers on a couple of issues that may have been overlooked and may even threaten the long-term potential growth of the economy. They may not have been adequately addressed in the Budget.
The Chancellor rightly focused on five key growth areas, and one of them is financial services. The City of London generates more than 10% of the UK’s GDP, but I suggest to Ministers that that is under threat, and I am not convinced that the full scope of the Edinburgh reforms go far enough to address the problem. Many people pooh-bah the stock market, but it is only part of the Square Mile and it acts as a gateway to many other financial services, such as derivatives, trading, insurance, legal services and so on. A healthy stock market is therefore essential, but it is ailing. We just have to look at the computer chip designer Arm and the building materials giant CRH shunning the City for US listings. Those two companies in aggregate account for £80 billion of market worth.
A key problem is that the reaction after the financial crisis—and the Government were involved in this—was to encourage pension fund investors, some of the big beasts in the City, to adopt a more risk-averse approach to investment. Over the long term—and pension funds are about long-term investment—a more risk-averse approach means lower returns. Some pension funds have reduced their allocations to UK equities by up to 90%. The Government need to think outside the box to reverse that trend. They should consider tax incentives to encourage longer-term investment to foster investment in our technology companies, and ending tax penalties associated with equity financing. The Hill review, which is now two years old, has still hardly been properly addressed and it should be revisited.
We should ask ourselves why so many rising stars among our SMEs, especially in the technology sector and the green space, are banking with a Californian bank, Silicon Valley Bank, which needed rescuing over the weekend. It points to a wider issue.
My second point, in the minute left, is about investment and productivity. There is a severe risk that we will be squeezed between the US’s Inflation Reduction Act, worth £300 billion, and the EU’s green deal industrial plan, worth £200 billion. Subsidies and investment incentives do work: we need only look at our renewable energy sector. I suggest to Ministers that we need to follow this closely. I welcome the investment proposals in the Budget, and they will go a long way, but we need to monitor this continually, otherwise we risk losing our lead in so many areas in the green technology space. There is simply no room for complacency.
Naz Shah (Bradford West) (Lab)
Last week’s Budget was another example of sticking-plaster politics, in which once again working people paid the price. The OBR confirmed that the hit to living standards in the UK has been the highest since records began. Data from the Joseph Rowntree Foundation shows that one in five people in the UK are now in poverty. In my constituency, families are struggling to make ends meet. Over half of the children are in poverty and 22.3% of households are in fuel poverty, compared with 13.2% in the country as a whole.
The Tories will attribute their failure to the pandemic and the war, but the contrast between our economy and those of the other countries in the G7 is stark. The UK will be the only country that will see negative growth—no other G20 economy, other than Russia, is forecast to shrink this year.
The Government have neglected small businesses. There have been no plans to support them with their energy bills through this crisis, putting them and their workers’ jobs in a precarious position. I welcome the reform to childcare support, which is a significant expense to many families, but the policy does not come into place until 2025. The only permanent tax cut in the Budget, for the very top earners, might come as a shock, but it is certainly no surprise that the Conservative party remains true to its priorities: safeguarding the interests of the rich over the interests of ordinary people.
The Budget was another missed opportunity to provide support for struggling families in Bradford West and across the country. Once again, it fell short on delivering for the working people—another Tory failure to add to a pattern of 13 years of Tory economic failure. The UK and Bradford West need a Labour Government who will put working people first, promote growth and ensure that Britain unlocks its potential.
The Tory party, with no plan of its own, once again rehashes Labour’s policies, extending Labour’s plans for a windfall tax on oil and gas companies, Labour’s plans to cap energy bills for households, Labour’s plans for welfare reform, Labour’s plans to scrap extra charges for those on prepayment energy meters and Labour’s plans to scrap the rise in fuel duty. The Tory party should also consider adopting Labour’s plan for a national wealth fund. In fact, I reckon the Tories are ready for a Labour Government who deliver on Labour policies.
In conclusion, this is not a back-to-work Budget; this is the same old Tory Budget that fails my constituents and the rest of the country.
Alexander Stafford (Rother Valley) (Con)
I rise to celebrate the Budget. Madam Deputy Speaker, as a fellow South Yorkshire MP, you will know that there was joy, singing and the happy ringing of bells in Dinnington on the news that the Budget provided £12 million, under the capital regeneration project, out of a pot of £20 million given to Rotherham, to rejuvenate and revitalise our high streets.
As I am sure the House will know, the regeneration of Dinnington high street is something I have spoken about for years. Unfortunately, the Labour-led Rotherham Metropolitan Borough Council bid for levelling-up funds for Dinnington failed twice. We got £11 million, with £4.5 million for Maltby, but Dinnington was failed and let down. Our bid should never have been put in with the library in Wath; it is not the same project.
When I found out that our bid for the high street had failed, I went to the Levelling Up Secretary, the Chancellor and even the Prime Minister himself to say that Dinnington needs this money. The Prime Minister visited Dinnington last June when he was the Chancellor of the Exchequer. He saw at first hand where the money would go, the need to take out the burnt out building, and the need to revitalise the high street and open up the markets. The Government have delivered for the people of Rother Valley and the people of Dinnington.
Why could we deliver? We could deliver because of a combination of work: work by me, but also by ward councillors and other groups, such as the Dinnington St John’s Town Council, led by Councillor Dave Smith, and the Dinnington Land Trust, with David Dixon and Dave Johnston, who combined to put together a neighbourhood plan for Dinnington, so that the high street project could be looked on favourably by the Government. The reason we had not had the investment for Dinnington high street and other areas in Rother Valley for so long was that there were no masterplans for Dinnington, no masterplans for Maltby, no masterplans for Thurcroft and no masterplans for Swallownest. We were waiting and waiting and waiting for them from Rotherham Metropolitan Borough Council, but we did not get them, so we took the matter into our own hands. It was because of that that we could get the money for our high streets. When I was elected in 2019, I made a promise that I would get the money for Dinnington high street. This Budget has delivered for the people of Dinnington.
The £12 million for Dinnington is just the start. There is so much more to do on Dinnington high street—for example, reopening a police station on the high street—but we need further plans for places such as Maltby, Thurcroft and Swallownest. I want the Government to work with me to get more money for our high streets across the area, because we clearly cannot let this situation continue. We cannot rely on Labour-led Rotherham Metropolitan Borough Council to provide the plans for these areas, because it has not done them. That is why, when I had my meetings with the Chancellor, the Prime Minister and the Levelling Up Secretary, I said again and again that we needed this money for Dinnington. This Conservative-led Government have delivered for the people of Dinnington and that is so important in this Budget.
The Budget is so important for the people of Dinnington and Rother Valley. At last we have hope that our high street—the beating heart of Rother Valley—will be revitalised. It will be a long battle to get the planning permissions, the possible compulsory purchases and all the consultations. I want the Government to work with me to ensure that, now the £12 million is in Rotherham’s bank, it is spent fully on Dinnington high street and its people to truly level up, as this Government promised and are delivering.
Mohammad Yasin (Bedford) (Lab)
Like many of my constituents in Bedford and Kempston, I listened intently to the Chancellor’s Budget announcement last week. It was an opportunity for the Government to unleash Britain’s potential and realise the nation’s economic promise. Once again, the Tory Budget failed to deliver.
We should not be fooled by avoiding recession on a technicality. There is no room for boasts and bluster when we face being the only country in the G7 that will see negative growth this period. For all the bravado that surrounded the extension of the energy price cap scheme, have the Government reflected on how we got to a position where such a guarantee was necessary for struggling households across the country?
My constituents are worried about the state of the NHS, the number of police on the streets and the progress of infrastructure projects that will change the physical, social and economic landscape of our towns—issues that were all but ignored in the Budget. The Chancellor may have fudged this Budget, but he has had a long parliamentary career. Given his previous incarnation as Health Secretary, he must acknowledge the importance of health for boosting the economy. This is about not just physical health—the impact of mental health is incredibly significant. In my constituency, we are waiting for the delivery of a new mental health unit, comprising vital services and beds for both adults and young people. The project has spent years in the long grass. The site is approved, the funding is ready and there is a wealth of local support, yet we wait. Progress is blocked by the current Tory Government, who cannot resolve a bureaucratic technicality that limits capital investment, delaying a scheme that will change lives. Why will the Government not take mental health seriously?
Bedfordshire MPs from both sides of the House have raised concerns about policing in the region and how an unfair formula funds us as if we were a rural force—ignoring the many urban areas across the county, including an international airport. Our police force faces major challenges arising from this misclassification and, as a result, so do our constituents. Why did the Government think that policing was not important enough to focus on last week?
The Government have pledged up to £15 million in local capacity funding to support local authorities along the East West Rail route, which runs through Bedford and Kempston. We are told to expect a route announcement from the Department for Transport in May—one that may or may not bring an end to the years of uncertainty for residents whose homes are blighted by a current proposal that lacks any detail or clarity about alignment or scale. If the project had been a road one, residents in a similar position may already have been eligible for payouts under blight and compulsory purchase. Instead, my constituents—many of whom have a genuine need to sell—are fighting for acknowledgement from EWR and, by extension, the DFT. They were promised consultations and payout schemes that have not materialised.
There is a better way. The Government should support Labour’s plans to empower our communities, invest in our economy and fix our public services.
Simon Baynes (Clwyd South) (Con)
I warmly welcome this Budget, and I am pleased that it sets out measures to support the Government’s aim of halving inflation, growing the economy and getting debt falling. According to the OBR’s analysis, the Government will meet those targets in the medium term, which is vital for my constituency and the rest of the UK, to ensure long-term economic health.
Inflation is forecast to fall to 2.9% by the end of 2023—a figure that perhaps has not been drawn out so much from the Budget—and to fall to 0.9% in 2024, before rising again to around 2% for the remainder of the forecast period. Debt is forecast to start falling as a percentage of GDP in the medium term and the Government’s other fiscal target—for public sector net borrowing to total less than 3% of GDP by 2027-28—will also be met.
Given the massive economic turmoil that we have seen around the world, caused by the covid pandemic and Putin’s illegal war in Ukraine, these forecasts represent an impressive stabilisation and improvement in our economic prospects. That stabilisation rests, in great part, on the strong base with which the UK economy entered the covid pandemic. My hon. Friend the Member for South Cambridgeshire (Anthony Browne) has drawn out the figures about how the UK economy was 21% bigger in 2022 than in 2010, when the Conservatives came to power. I want to add to that statistic that since 2010 the UK has grown a quarter faster than Germany, nearly 50% faster than France, more than twice as fast as Spain, three times faster than Japan and 19 times faster than Italy, so this is a strong economic base.
I strongly support the broader policies outlined in the Budget. As a Welsh MP, I hope very much that the Welsh Government will match the Chancellor’s policy to extend 30 hours of childcare a week to working parents of children aged nine months to four years. I also warmly welcome the introduction of reforms to the childcare sector, including changes to the staff-to-child ratio for two-year-olds, from 1:4 to 1:5. Likewise, I hope that measure is adopted by the Welsh Government.
I believe the Chancellor got the balance right in focusing help for business by introducing a £25 billion three-year tax cut for business investment through expensing, rather than maintaining lower corporation tax rates. I speak as the Member of Parliament for Clwyd South, where the many small and medium-sized companies make up the vast majority of the business sector of my constituency. This measure to encourage investment in business will help to improve productivity, which is a key aim within the British economy. I strongly support that measure for the benefit of the economy in Clwyd South.
I also strongly support the measures to help people get back to work, particularly the more vulnerable in our society, ranging from establishing a new universal support programme for disabled people and the long-term sick, to abolishing the work capability assessment and increasing the administrative earnings threshold to 18 hours. These are vital reforms that will help many people in my constituency.
In conclusion, this is a bold and imaginative Budget that will help people across the length and breadth of the UK, and provide strength and stability for the economy after a period of great turbulence and uncertainty. Therefore, the Budget commands my full support.
Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)
“Lettuce” not forget that the chaos we are experiencing, which the Government are trying to correct, is a consequence of the short shelf-life PM who left office recently. It is the cost of chaos and the cost of greed.
Constituents who are dealing with the financial crisis come into my office daily, and the Government are simply not providing support for them. An elderly lady, who came to my constituency office last week, is rationing her energy. She has worked all her life but she is rationing her energy to a few short hours across the day, so that she can at least stay marginally warm—that is in energy rich Scotland, where we have a number of fuel-poor Scots.
This Budget barely gives Scots crumbs from the table. In Scotland we have 2.4 million homes. In a parliamentary written answer, the Minister for Energy Security and Net Zero, the right hon. Member for Beverley and Holderness (Graham Stuart), confirmed to my hon. Friend the Member for East Lothian (Kenny MacAskill) that Scotland generated and sent south 35 TWh of electricity—equivalent to 35 billion kW—in 2021. In only eight years’ time, that will have increased to 124 TWh—enough electricity to power tens of millions of homes—yet no revenue and no jobs are coming to Scotland.
The Chancellor spoke about
“enterprise, employment, education and everywhere.”—[Official Report, 15 March 2023; Vol. 729, c. 837.]
None of those opportunities is coming to Scotland. There are no jobs in construction, no jobs in the service industry for renewable technologies, and no jobs in the supply chain. The energy is cabled south by an undersea connect; it is just taken from Scotland. My constituency has Mossmorran petrochemical plant, which processes various gas components piped down from St Fergus in the north-east of Scotland. It is a strategically important place because it is an ideal test bed for Exxon, Shell and Avanti to use their carbon capture technologies, but this Government do not support carbon capture in Scotland. They do not support the Acorn project in the north-east of Scotland.
The Levelling Up Secretary harped on today about how important jobs in the north-east of Scotland are to the Scottish people. They are important, and the industry should be supported—we in Alba take a very different view of the North sea oil and gas industry—but that is not enough. It is simply unacceptable that Scotland is continually robbed of its energy resources while our people are cold and hungry. This Government will never prioritise their needs.
This Budget is yet another Budget of robbery. The exploitation of Scotland and its people must end. I absolutely oppose this Budget, top to bottom.
Laura Farris (Newbury) (Con)
Because of the restrictions on time, I will confine my comments to childcare. The main thing I want to say is thank you to the Chancellor for listening to the concerns that colleagues on both sides of the House have raised about affordability.
The shadow Energy Secretary, the right hon. Member for Doncaster North (Edward Miliband), said that we should judge this Budget according to three tests. I accept his challenge and will confine my remarks on childcare to the tests that he set.
The first test was whether the Budget shows a proper understanding of what is really going on in this country. Well, it was not the most headline-grabbing element, but the childcare announcement included half a billion pounds over the next two years to fund the free hours—more correctly, the subsidised hours—that apply currently to three and four-year-olds. I know from nurseries in my constituency, such as Ladybirds in Newbury and Hungerford Nursery School, that that provision has been under-subsidised and they have been under serious financial pressure. The amount that they are getting is equivalent to a 30% increase per hour. Most importantly, it is the sum that the sector requested from the Treasury. I think that shows that the Chancellor has the right priorities.
The Treasury has also understood that childcare costs, which have climbed by 20% in the past five years, are affecting women’s participation in the labour market. In my constituency, the cost of a two-year-old’s full-time place in a nursery is £15,000. Last year, the Centre for Progressive Policy reported that half of all mums are struggling to access suitable childcare. Of them, half again said that they were prevented from taking on more hours at work; a third said that they were prevented from taking on a new job, that it was completely out of the question or that they had had to reduce their hours; and one in seven said that the cost of childcare had forced them out of the labour market altogether. Let us be clear: women’s employment was being severely affected.
The second question that the shadow Energy Secretary asked was whether we are showing the right priorities. Let us be clear about what this is. It is tantamount to universal free childcare from the end of the protected statutory maternity period to the start of school, and then an extension of wraparound care. It has been called for, in one form or another, by the Fawcett Society, Pregnant Then Screwed, the think-tank Onward, the Women’s Budget Group—I could go on. They all seem to think it is the right priority. It helps the poorest by accelerating the payment of universal credit. It helps the mothers of older children with wraparound care. Most importantly, it puts women in a position in which they do not have to say no to that promotion, to that job or to increasing their hours because of childcare limitations. It is fundamental to ameliorating the stubborn inequalities that persist in relation to pay, promotion opportunities, pension saving and leadership in the workplace. I respectfully invite the Opposition to say why that is not the right priority.
Several hon. Members rose—
Laura Farris
I have not finished.
Finally, is the Budget a good way of meeting the long-term challenges? Obviously, it is good for growth and not just for meeting short-term labour market challenges, but it enables businesses to harness expertise with the labour market and gives them a greater chance to grow. The Women’s Budget Group has estimated that the lost working hours that women spend providing childcare have cost the economy £28 billion in lost economic output every year. I therefore respectfully suggest that the Budget meets the third test in addressing the long-term challenge.
I feel genuinely sorry for the Opposition. I feel sorry for the shadow education team, who spent so much time making noises about childcare, saying—as was pointed out by my hon. Friend the Member for Stroud (Siobhan Baillie)—that what they were proposing would be like the rebirth of the NHS. I have dug around to see exactly what meat there is on those bones, but all I have been able to find is the introduction of a breakfast club. If that is the best the Opposition can do, I am genuinely sorry for them, and I congratulate the Government on making such an important announcement in this year’s Budget.
Marsha De Cordova (Battersea) (Lab)
Thank you for calling me, Mr Deputy Speaker. It is good to see you this afternoon.
This country is experiencing the biggest fall in household living standards since records began, with weak growth, low pay and a workforce shortage. Last week’s Budget should have been an opportunity for the Government to try to unlock the potential of our great country, but, after 13 years of Tory rule, it has just shown how out of touch and out of ideas they really are. They have no long-term plan for growth, yet they still want to champion the virtues of Brexit. Wages are now lower in real terms than they were in 2010, and people will be paying more tax—but who will not be paying more tax? Yes, the richest 1%, following those pension changes.
There was nothing for small businesses such as those in my constituency: they were given no hope. There was no new investment for London, with nothing provided for housing or transport infrastructure. When will the Government understand that when London does well, the country will also do well?
Ahead of the Budget, I wrote to the Chancellor about childcare reforms, urging him to fix the broken system. There were some announcements, but it is glaringly obvious that full implementation of all the policies will not happen until 2025, so those who will benefit have not yet even been born.
The Chancellor also placed a great deal of emphasis on getting people back to work, including the ill and disabled. We know that the changes proposed in the health and disability White Paper will have a significant impact on millions of disabled people. The Chancellor ramped up his rhetoric about conditionality and more sanctions, but all the evidence shows that sanctions do not work. It is important for the Government to heed that point and follow the ruling from the Information Commissioner, who said that they must publish the results of their research on sanctions. The ruling came last week, so when will the Government publish that report?
As I said in my urgent question last week, no one is going to argue with the scrapping of the work capability assessment—it was cruel, it was inhumane, and it caused harm to people’s lives. However, relying solely on the personal independence payment assessment—another assessment that is cruel and inhumane, but whose function and purpose are totally different from those applying to someone receiving an income replacement benefit—will not work, because PIP is intended to cover the extra costs of living with a disability. It is also flawed, as is truly evident from the success rate of the appeals, which is between 70 and 80%.
I believe that when it comes to getting more people back to work, the Government must focus on some of the barriers that those people face, such as an inaccessible transport network and discrimination in the workplace. They should invest more in the Access to Work programme, which I consider to be the best form of employment support. If they do that, they will finally begin to start reducing the disability employment gap, which has remained stubbornly at 30% for more than 10 years. Investment in Access to Work is vital, as is reducing the backlog, given that more than 10,000 people are waiting for their assessments and support.
Finally, let me point out that yet again the Government have failed to publish an equality impact assessment, thus failing in their responsibilities under the public sector equality duty. It is vital that they do so now.
Selaine Saxby (North Devon) (Con)
I warmly welcome the many good things in the Budget to help cut debt and inflation, but given the time constraint I will focus on what did not make it into this Budget, as it is never too early to lobby for the next one.
My right hon. Friend the Secretary of State for Levelling Up, Housing and Communities mentioned affordable housing many times, and it is probably the biggest issue in my constituency. It impacts on our productivity, puts pressure on household budgets and makes moving into the region for work increasingly unaffordable. Some challenges of the housing situation on the south-west peninsula rest with the Department for Levelling Up, Housing and Communities and the Department for Culture, Media and Sport; others are a direct result of taxation policy and could be alleviated by changes to it. We need to level the playing field between long-term and short-term rentals within the taxation system. Both are businesses, but one enables people to live and work in an area and the other is a tourism business. The current tax system encourages short-term lets over long-term lets and needs at least levelling up or possibly even reversing.
Cornwall Council’s own data shows that more than 1,000 people in Cornwall were made homeless in 2021 as a result of landlords changing their properties into more profitable holiday lets. Many of those households are now on Cornwall’s housing wait list, which now numbers more than 20,000. Devon’s is in excess of 16,000. The situation on the peninsula is so severe that businesses are unable to open fully, which is reducing their profitability, and public services cannot recruit because there is simply no affordable housing. Long-term rentals have also collapsed, with a drop of 67% in my constituency in the past two years, making it very hard for people to move into the area. I have already written to the Levelling Up Secretary about this, but he said that he did not want to tinker with the taxation system, so I am very much hoping that the Treasury team will find an opportunity to delve into the housing market. I recognise that this might seem niche and just for tourist parts of the country, but it is now impacting hugely across almost all of Devon and Cornwall and having an impact on our workforce.
While we look to drive up productivity across the south-west, I have another small ask for the Treasury team. Will they revisit the VAT threshold? Every year in Ilfracombe, in my constituency, swathes of businesses close down for the winter rather than go through the £85,000 tax threshold. Having put a small business through that tax threshold myself, I know how challenging it is, but I hope that we can fire the ambition of those small business owners by alleviating that small threshold. I recognise that it does not raise large sums for the Treasury, so I completely understand why it was not included, but this would be an opportunity for those businesses to level up with their bigger competitors in the constituency and hopefully keep that town open and thriving throughout the entire year.
There is so much in this Budget that I warmly welcome, and I thank the Treasury team for all their engagement, and particularly for their help for potholes in Devon, but can we look at what more we can do to level up our coastal communities?
Munira Wilson (Twickenham) (LD)
Like the Chancellor, I regard education as an investment in our country’s future growth. The focus that the Budget puts on childcare is therefore long overdue, but sadly, the small print does not stand up to scrutiny. Many disadvantaged children will be left behind as the 30-hours offer is restricted to working parents. Any offer for children aged two to four should be universal. Increasing the child to adult ratios will not bring down costs, and it will put children’s safety, as well as quality of delivery, at risk. And providers will struggle. The Women’s Budget Group says that the Chancellor has underfunded the existing childcare offer by £1.82 billion, let alone this new one. Parents will not congratulate the Chancellor on continuing to do childcare on the cheap. They expect high-quality early years education that is fully funded and where staff are fully qualified.
The Chancellor boasted about last year’s spending on schools, but this has been eaten up by soaring energy bills and last year’s unfunded teacher pay rise. One school in Twickenham has told me that its energy bills are set to quadruple to over £80,000 this year. From April it will receive a Government discount of just £1,600. The Liberal Democrats would extend the existing energy bill relief scheme for another six months so that schools are not forced to slash support staff and school trips, as many already are.
The Budget also confirms that capital spending on education will be cut to £6.1 billion in 2024-25. When schools are skipping routine maintenance to balance the books, cutting capital funding shows that this Government have the wrong priorities. At least 39 schools have partly or fully shut since the last election because their buildings were unsafe for pupils, and we now know, thanks to an important investigation by ITV News, that at least 68 schools contain reinforced autoclaved aerated concrete, which is likened to an Aero chocolate bar and can collapse suddenly without warning. These schools include Priory School in Surrey and Braunton Academy in Devon, whose plans to remove RAAC have been held up by a lack of funding. Responding to a freedom of information request by ITV News, St James Primary School in Kent said that it is completely beyond the scope of the school to consider replacing its affected roof.
These schools, along with at least 20 hospitals that also contain life-expired concrete, stand as concrete signs of years of Government neglect of our public services. Ministers should visit each of these schools to witness for themselves the potential danger in which our children and school staff are putting themselves.
Finally, 800,000 children in poverty continue to miss out on a free school meal. The Secretary of State for Levelling Up, Housing and Communities, who opened today’s debate, said at the Conservative party conference last September that he agrees with the Liberal Democrats, and many celebrities, that free school meals should be extended to all families on universal credit. He said
“given the scale of the challenge we face and the benefits it brings, this is a more than worthwhile intervention.”
Well, I am afraid the Chancellor did not listen and the Budget has failed those hungry children.
Several hon. Members rose—
Mr Deputy Speaker (Mr Nigel Evans)
Order. I remind everyone that those who have contributed to the debate will be expected to attend the wind-ups, which will begin no later than 20 minutes to 7.
Jerome Mayhew (Broadland) (Con)
Thank you, Mr Deputy Speaker.
Although there are plenty of measures to help with the cost of living, which I welcome, the Budget’s real impact is much more profound. It seeks to tackle some of the structural weaknesses that have bedevilled our economy for decades, holding back growth. Page 7 of the OBR’s accompanying economic and fiscal outlook sets out a number of those factors: reduced business investment, reduced labour market participation and the conundrum of low productivity. It is through that prism that we should address this Budget.
I do not have time to address all those factors, so I will focus on business investment. Budgets do not come in isolation. They are part of a Government’s raft of sensible economic management. If we look at the reasons behind the lack of business investment, according to the OBR, one is obviously the pandemic—we hope we have put that behind us. The second is the energy crisis, and we are dealing with that, including through the continuing measures for businesses with high energy use. The third is uncertainty on EU relations, which is an area that the Government have been addressing week in, week out. Whether it is the Windsor framework, the very positive French summit a couple of weeks ago, the restarting of talks on our involvement in Horizon or increased co-operation with the French on stopping the small boats and hosting migrant detention centres in mainland France, each is slowly increasing business confidence in the future of UK trade, even as global exports expand through the Australia and New Zealand free trade agreements and, hopefully, soon the CPTPP.
Although I accept and regret that corporation tax is going up to 25% for the biggest 10% of corporations, this is more than offset by the 100% capital allowance—full expensing—within the first 12 months, which provides an incentive for businesses to invest rather than pay dividends. A host of other tech sector improvements were set out in pages 94 and 95 of the Red Book: innovation accelerators in Glasgow, Manchester and the west midlands; £900 million for the exascale supercomputer to assist with artificial intelligence research; £2.5 billion for the quantum strategy; the implementation in full of the Patrick Vallance digital tech regulations, to improve the speed at which that sector can develop; and faster approval processes for new medicines. This is the Government being on the side of fast growth and the new economy.
This is not just about tackling business investment, as we are also addressing labour market participation. We are dealing with the unexpected reduction of the workforce by some 520,000 after the pandemic. I do not have time to deal with that, but I can say that the Budget builds on what is increasingly being described to me on doorsteps in my constituency as the “Sunak effect”. It is not flashy and there are no eye-catching initiatives so beloved of the Labour party, but instead we are getting competent, serious tackling of the big issues, one after another. It is no surprise that the economics of this country are improving, as shown in the composite PMI— purchasing managers’ index—for February 2023 of 53.1; more than 50 means economic growth. This Budget was detailed, considered and responsible and it speaks to what is behind this Government; they are not flashy and they let the work do the talking.
Alex Sobel (Leeds North West) (Lab/Co-op)
Leeds is a vibrant, rapidly developing city. We are a hub for business, finance, law, technology, and education. Major corporations have their headquarters in Leeds, and we have many universities. However, we still face significant difficulties, not least our outdated transport system, a severe lack of affordable housing and steadily rising poverty rates. Our six levelling-up bids were all rejected by this Government. The Conservative manifesto promised Leeds a mass transit system. We are the largest city in Europe without one. Mayor Brabin and our councils met that challenge and a comprehensive metro tram system has been designed, which will cost £2 billion—that is equivalent to two Northern line extensions. However, five Tory Chancellors have managed to find just £200 million for the scheme; we get the crumbs off the table, although all credit to the Mayor for pressing on with the pittance we have received.
This Budget contains no new comprehensive funding settlement for Leeds, which means that local authorities will be forced to make further cuts or spend their reserves to make up the shortfall. Indeed, the latest report from the Local Government Information Unit found that only 14% of local government officials expressed confidence in the long-term viability of their council’s finances. With no end in sight to the budget cuts, councils will continue to face impossible decisions about which essential services to reduce or eliminate altogether. The cumulative effects of austerity pose a serious threat to communities up and down the country. Rather than investing in the public services so crucial to citizens’ wellbeing, the Government’s austerity agenda rolls on, with no real plan to help cities such as Leeds, and it exacerbates the already very real impacts of the cost of living crisis. The small amount allocated for road improvements and select regeneration projects will do little to alleviate the challenges facing Leeds.
By the Government’s own admission, Leeds has a well-run council, which has been given responsibility for helping to improve other local authorities’ failing children’s services. It has also been steadfast in not cutting frontline adult and children’s services, which are needed now more than ever thanks to a cost of living crisis, exacerbated by Government policies. The council runs on low reserves, forcing all available cash to the frontline services, yet it continues to innovate on climate and infrastructure projects, showing exemplary leadership in that area. The Government, however, push that prudent and forward-looking leadership model to the brink with more and more cuts.
In his Budget, the Chancellor failed to outline any ambition for the co-operative sector, which contributes £40 billion to the economy. Businesses whose customers, employees and members have a genuine stake and say in the performance of the business are well placed to improve the UK economy. We should be supporting that, but growth will not happen by chance, and we have 288 co-ops, employing 5,000 people in West Yorkshire.
I put on record my support for the progress made in devolving powers through the trailblazer deals, which is a positive step. In West Yorkshire, we have seen the positive impact of devolution at first hand. Mayor Tracy Brabin has been doing an exceptional job in getting people back into work, creating and bringing in thousands of good, well-paid jobs to the region. I therefore urge the Chancellor to consider extending trailblazer deals to other areas in the country, particularly in West Yorkshire. That would provide a much-needed boost to the local economy.
Even when the Government do bring new initiatives to Leeds, they cannot leave London behind. We are told by the Government that the new green UK Infrastructure Bank is headquartered in Leeds. In November, I asked the Government how many staff were actually in Leeds, and was told that only 40% of staff are based there. When will the Government ensure that the vast majority of the staff are in Leeds?
Leeds has a population of over 800,000 people and contributes over £60 billion to the national economy. Investing in Leeds is investing in the future of the north of England and the country. When Leeds succeeds, it boosts the economy, creates more opportunities and helps the region to reach its potential. We have the ambition and drive to become an even more prosperous and sustainable city, but we cannot do it alone. We need the Chancellor to step up and fund our city and our region.
Paul Bristow (Peterborough) (Con)
I rise to support the Budget, because there is much in it to get excited about. Yes, it is important that we boost growth and reduce inflation, but the thing that I am most excited about is the direction of travel when it comes to levelling up and investing in parts of the country that have perhaps not had the investment that they deserve in years gone by. Peterborough is a place that provides evidence of that. In a cynical age when people are cynical about MPs and Governments, we often hear, “What have the Government done for me? What have the Government done for Peterborough? What has the MP for Peterborough done for the city?” But in a short walk from the station to the other side of our city centre, I can point to £100 million-worth of investment in Peterborough.
We will start at our university. We have £34 million to build a new engineering, technical and manufacturing university. That will create the high-skilled, high-wage economy that my city so desperately needs. It will transform the life chances of so many young people in my constituency. When they reach the age of 18, a lot of young people do what I did: they leave Peterborough. I came back, but because of this investment, so many young people will not have to leave our city. They can go on to university, get good jobs, transform their life chances and transform our local hospitality and entertainment sector. This will be a game-changer.
But guess what, Mr Deputy Speaker? There is more, because we can talk about the £23 million from our towns fund to regenerate our city centre and bring old buildings back into use, drawing people back into our city centre and creating the sort of local economy that we need.
But guess what, Mr Deputy Speaker? There is more, because we have millions to build a new pedestrian bridge across the River Nene, linking Fletton Quays with the Embankment, bringing that green and open space into better public use.
But guess what, Mr Deputy Speaker? There is more, because we are investing in our NHS in Peterborough. We are building a brand-new NHS community diagnostic centre. That is 67,000 extra tests, checks and scans each and every year.
But guess what, Mr Deputy Speaker? There is more: we have £48 million to regenerate our station quarter and to create new access, new retail and new opportunities, and to create a gateway not just to Peterborough, but to the east of England. These millions and millions of capital investment in our city are transforming the life chances of the people of my city.
So when people ask, “What has your MP done for you?”, lots of Opposition Members cannot answer that, but Government Members can talk about £100 million of capital investment in Peterborough, a place with potential. That is before—[Interruption.] They don’t like it, do they, Mr Deputy Speaker? But this is evidence of investment in a place like Peterborough. That is before I mention the changes to childcare, which will benefit so many people in my city. I declare an interest as the father of a three-year-old who is currently at nursery. Support for our pubs, through the new draught relief, will help many struggling pubs. Of course, we will make sure that we invest in places with potential, and Peterborough is at the very top of that list.
Yasmin Qureshi (Bolton South East) (Lab)
Despite all the Chancellor’s claims, the OBR downgraded the long-term growth forecasts, with downgrades in all the last three years of the forecast period. Labour’s mission is to seek economic growth. To do that, we will implement a green prosperity plan alongside a coherent industrial strategy, which is lacking from the Government, including building more homes.
As a member of Labour’s shadow Women and Equalities team and MP for a deeply deprived town within Greater Manchester, I took a special interest in the Budget to see what the Government were doing to tackle the issue of structural barriers. How many mentions of inequality or poverty were in there? Guess what? The answer is zero—there was just one reference to regional inequality.
I want to speak about a particular issue that affects my constituents, which many colleagues have already spoken about, and that is people struggling to get on in life because they are bound by their childcare and unpaid caring commitments and held back by exorbitant costs that act as a barrier. We need a national conversation on that. Can hon. Members imagine the increase in economic productivity if we had widespread and affordable childcare? The Chancellor’s childcare provision does not come in until after the next general election and the policy itself will just create a huge surge in demand without addressing the underlying issue of supply.
That brings us to nursery prices. In the north-west, our childcare prices are the lowest of any area; hon. Members might think that that would be cause for celebration, but it is not, because even the cheapest region for childcare still demands 60% of people’s weekly pay, about £400 a week. Can we just take a step back and reflect on the fact that families in Bolton, the 19th most deprived local authority and a town in economic decline according to the latest figures—I am sorry that we have not had £100 million of investment, but that could be because we are not a marginal, unlike Peterborough—are spending almost £2,000 a month on their childcare? It is truly unbelievable, and the Government’s approach is short-termist and unambitious.
Some 4,000 childcare providers have closed since this Government have been in power. The reality is that successive childcare policies have made the situation worse for parents and children since 2020, including the cut to Sure Start and the cut to the education maintenance allowance, which was a lifeline for young teens trying to get on in life.
The Chancellor has shamelessly stolen Labour’s wraparound childcare offer, supporting children with before and after-school clubs to support working parents, but has made it worse. Pathfinder care is not enough for parents—they need real support. That act of desperation by the Government shows that they are devoid of ideas and unable to implement the policy we need. It is Labour that has the solution, Labour that has the winning argument on childcare and Labour that is leading the way to answering the serious problems we face as a society.
Anna Firth (Southend West) (Con)
It is wonderful to be called so early in this debate. I rise to pay tribute to the Chancellor and the whole Treasury team for delivering a serious Budget for serious times.
This Budget will inject international confidence, credibility and stability into our economy. It lays out a plan for sustainable growth while not forgetting my hard-working families in Southend West, who are struggling with the cost of living in the here and now. It is in the here and now that I welcome the £94 billion of support, or £3,300 for every household across Southend West.
We have heard a lot of criticism that we are not helping the vulnerable and that we are not doing enough, but we are helping with fuel, with energy and with childcare. We are helping with £3,300 for every household last year and this year, which is one of the best packages in Europe. I welcome it, and my constituents in Southend welcome it too.
However, the real stand-out wins in this Budget are the predictions that we will return to growth next year and get inflation down to 2.9% by the end of the year; that is a fall of over two thirds, and we have heard that it will be into single figures after that. Conservative Members absolutely recognise that inflation is the enemy of growth and prosperity. It destroys jobs and savings, it erodes the money in our pocket, and it affects in particular the poorest and the retired—those who do not have the wriggle room to cope with it—so I welcome the Government’s laser focus on bringing down inflation.
The other problem with inflation that we do not often talk about is, of course, its effect on the power of government spending. If we allow inflation to rage at 10% per year, we will have to increase public spending by 10% every year just to keep our public sector services as they are today, and that is just not sustainable. I am very pleased that the Government are showing restraint and resisting calls for inflation-busting pay.
I do not want to go down a political rabbit hole, but this is just a fact: if we were to give in to the unions that want 35% inflation-busting pay rises for junior doctors, that money would have to come from somewhere. It would have to come from my hard-working tax-paying Southend West constituents, who are themselves struggling with mortgages, food and utilities. Giving in to every one of those pay demands would cost £28 billion a year—an extra £1,000 in income tax from each of my hard-working constituents—so I am very pleased that the Government are showing restraint and a commitment to getting back to sound money.
In the time I have left, I will rattle through and welcome the Budget’s incentives for growth. Community pharmacies, such as the brilliant Belfairs pharmacy in my constituency, will benefit from the changes in the VAT system. Nurseries in my constituency will benefit from the uplift in hourly funding. Our world-leading national theatres will benefit from increased support and higher rates of tax relief for a further two years. Our brilliant charitable sector will also benefit.
So many measures in the Budget will bring more jobs, more growth and more prosperity not just for Southend and Essex, but for the whole of the UK.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
Like a number of hon. Members, including the hon. Member for Peterborough (Paul Bristow), I benefited from the 30 hours’ free childcare when my children were in nursery. Although that is a big support for a number of working parents, I hope that those on the Treasury Bench will consider the issues that have been raised by a number of childcare providers, which are worried that there is still a big funding gap. Some 5,000 nurseries are said to have closed this year alone. It is important that the Government get childcare providers on side, otherwise the policy will not work at all.
I rise to speak on behalf of my resilient, dynamic, ambitious and diverse constituency of Vauxhall. It is a constituency filled with businesses that are deeply rooted in their community, and it has given rise to an array of nationally and globally recognised landmarks and institutions that all work happily alongside the small enterprises that make Vauxhall so unique. Having grown up in my constituency, I know that we have a lot to showcase. The constituency spans parts of London’s best known areas, including Brixton Clapham, Waterloo, the south bank, Kennington and many more. My constituents are proud of where they are from, but they have been held far back by 13 years of Tory austerity and economic stagnation.
This Budget was a missed chance to change course and empower our communities and small businesses. Instead, we are seeing widening inequality across the country, falling living standards, wages divorced from growth and too many people struggling to make ends meet in the world’s sixth richest economy. The Chancellor must rebuild a more productive and resilient economy; create decent, sustainable jobs; hardwire fairness in our community, and ensure that all the rewards are shared equitably. I am a proud Labour/Co-op MP, and our co-op values mean that we are committed to providing that—co-operation is key. Employees, consumers and communities should all be able to enjoy the profits, which are reinvested back into the community, and employees should have real influence. Productivity would increase, and wealth and power would be shared.
It was therefore disappointing that the Chancellor failed to outline a plan to support the contribution of the co-operative movement in helping our economy to grow. Co-operatives are a significant part of our economy, with around 7,000 co-ops contributing nearly £40 billion each year. We should be doing much more to support them and the Chancellor’s failed ambition for co-op growth is a missed opportunity.
One of the easiest ways to support small businesses and households would be to cut their energy bills, which are unfortunately crippling so many people. One of the main reasons that Britain has been exposed to the energy crisis is 13 years of failed Conservative energy policy. The Conservatives have banned onshore wind, scrapped home insulation and shut out gas storage facilities. All those things increase our reliance on volatile import prices. Labour would make Britain’s energy secure, with a plan for clean energy by 2030. I have just one question for those on the Treasury Front Bench. Will they support our ambition to get Britain back on track and to grow a green Britain so that everyone can thrive?
Anna McMorrin (Cardiff North) (Lab)
This is a Budget for decline and could not be further from growth. Every day, I hear from constituents in Cardiff North who are hungry, cold, in debt and fearful for the future. There is nothing in this Budget that will reassure them even a little. They have no shield from the cost of living crisis, no measures to kick-start the economy and no green agenda to build a better future. This Government continue to deny the enormity of the climate challenge. There was nothing on investing in cheap onshore solar and wind power and there was a failure to invest in green tech. The windfall tax loopholes for oil and gas companies were left wide open.
Just yesterday, the Intergovernmental Panel on Climate Change released its most damning report yet, a final warning on the climate crisis. The IPCC warned that only swift and drastic action can avert what is predicted, and I think we can all agree that this Budget is neither swift nor drastic. Without making that link between the climate and the economy, we will never be able to face the challenges ahead. Our children will remember the failing political choices of this Government.
Despite the Chancellor’s misleading claims about growth, the UK will be the weakest economy in the G7 this year and the only country that will see negative growth. It has the weakest recovery from the pandemic; the economy is smaller now than it was pre-covid. The Office for Budget Responsibility has predicted the largest fall in living standards since records began, a bleak legacy for the Tory Government. Is it surprising that one of the new policies benefits only the richest 1% and their pension pots, costing the taxpayer £1.3 billion? That is the wrong priority at the wrong time.
On fuel poverty, Friends of the Earth has just released data showing that at least 5 million households, or one in every five, are now in fuel poverty in England and Wales. My constituents are paying double in energy bills what they were paying a year ago. My constituent Lauren and her partner are both disabled and were told by Shell Energy, without warning, that they are in debt by £5,000. They are both trying to remain positive, but this has really pushed them over the edge. How many more testimonies like that must we hear before the Government develop a conscience and introduce meaningful change?
Instead, we are faced with a Government who are repairing the colossal cracks in our society with paper mâché. Meanwhile, Samaritans figures show that this January saw the highest percentage of first-time callers concerned about finances or unemployment. There is a direct correlation between increased poverty and domestic abuse, and support services are reporting increased demands on their helplines from desperate victims. Now would be a great time for the Government to introduce the long-awaited victims Bill, but, as always, we continue to wait.
This Budget fails on every level. I have constituents who have told me that they would rather die than pay the energy bills that they cannot afford, food banks in Cardiff are reporting that their users are eating dog food to survive, and the Chancellor has increased the Welsh Government’s budget by only £180 million over the next two years. This Budget is not fit for purpose. To echo the words of our Welsh First Minister, Mark Drakeford, this is a
“less than bare minimum Budget.”
Sam Tarry (Ilford South) (Lab)
This Budget follows successive Conservative and coalition Governments that have overseen the worst growth in GDP per head since records began, a sustained decline in living standards, and a disintegration of our vital public services. Worse still, a recent forecast by the IMF has said that we are going to be languishing behind even the Russian economy in terms of economic growth. That is the result of 13 years of stagnant wages and rapid inflation—what the TUC has called the worst pay crisis “since Napoleonic times”. Real income is still below the levels of 2010, the last time that we had a Labour Government. The recent collapses of Silicon Valley Bank and Credit Suisse have shown how fragile global financial regulatory frameworks are. SVB took unnecessary risks and triggered a run on its assets, while Credit Suisse accrued fine after fine, as well as the involvement of Greensill, a former Prime Minister’s employer, in damaging its capital.
Yet every time, it is my constituents in Ilford who have borne the brunt of this economic chaos. My inbox is full of desperate cries for help from people being forced into debt and even further below the poverty line. This Budget, unfortunately, was a Budget for the select few, totally divorced from the reality that so many constituents face every day. Rather than supporting ordinary people struggling to make ends meet, the Chancellor is handing billions to the wealthiest 1% through tax cuts for corporations and abolishing the lifetime pensions allowance at huge taxpayer cost. What is most bizarre is that, on the day that the Budget statement took place, 400,000 teachers, doctors, rail workers and civil servants took industrial action for better pay and conditions, yet the Budget made just one cursory reference to wages.
In the past year, public sector pay has fallen by £185 a month, with real pay being lower now than in 2008 and not expected to go back above 2008 levels until 2027. It is no wonder that, in almost every sector of the economy, workers are taking industrial action. The New Economics Foundation has warned that we are now on the precipice of the
“greatest living standards crisis on…record.”
Colleagues will undoubtedly have seen the OBR forecast that predicts a staggering 5.7% fall in real income per capita over the next two years, after what has already been a decade of decline. What that means for the lived experiences of families, especially those already on a low income, is utterly grim. By December 2024, based on estimates from the Joseph Rowntree Foundation, 43% of households will be unable to afford a decent standard of living. On average, those falling below the threshold for a decent standard of living will be short by £10,000 a year—10 grand, Mr Deputy Speaker.
Let us be clear: low pay is the cause of thousands of unfilled vacancies in key professions such as nursing and teaching. Until wages grow in real terms, there will be no long-term solution to the recruitment and retention crisis. James Meadway and Costas Lapavitsas have just launched a new book on the cost of living crisis. The language of pay restraint urged by some Government Members is out of kilter with the economic reality for so many, because there is no wage-price spiral. It is nonsense—it is economically illiterate and untrue—to say that putting people’s wages up is going to lead to inflation rises. If the Government are serious about tackling this crisis, they must provide public sector workers with the inflationary pay rise that they sorely deserve. The Government were perfectly capable of spending billions in taxpayer money to protect private enterprises during the pandemic and to bail out banks. This needs to be extended to ordinary working people.
Jeremy Corbyn (Islington North) (Ind)
I just want to set out a few points very quickly in this debate. The number of children in food poverty in this country has doubled in the past year to 4 million; the NHS is on its knees; and the richest 1% are taking home more than ever, and own 230 times the wealth of the poorest 10% in our society. Does this Budget do anything to deal with those issues? I think everyone knows the answer to that.
I will just put forward five points, if I may, the first of which is on pay. The Chancellor handed out tax breaks to the 1%. Some 700,000 workers were on strike last Wednesday. Public sector pay has risen by 2.2% on average over the past year, when inflation is running at 10%. At the very least, the Government should commit to above-inflation pay rises for health workers, teachers and public service workers, implement a £15 an hour minimum wage, and ban zero-hours contracts and all the insecurity that goes with them. The Government are not going to grow the economy if they keep so many people living in desperation and poverty. Public sector workers did not cause this inflation—inflation has been caused by greed in the private sector and profiteering.
That brings me to my second point, which is that the energy companies are making enormous profits and have done so for a very long time. There is no argument other than to take them into public ownership, so that we can control energy prices. It also means recognising the need to do far more to bring about a green sustainable economy. The United Nations report was damning yesterday—damning on increasing global warming and damning on its implications. It made the case that there has to be real investment in alternative green energy sources. That does not mean just relabelling things as green; it means actually doing it. While we have a privately run energy system, that is not likely to happen.
The third issue is one that I feel strongly about in terms of my constituency: we need an immediate rent freeze for those living in the private rented sector. Constituents are telling me that their rent has gone up by between 50% and 80% in one year as the greed and profit taking by some private sector landlords continues unabated. Young people are forced out of inner-city areas because they cannot afford to stay there, and councils have insufficient funding to build the council houses that are so necessary. If we are to deal with the housing crisis, it means rent control and investment in council housing.
The fourth area I want to mention is a wealth tax, which would help us to fully fund the national health service. Billionaire wealth in the UK has gone up by 1,000% in the past 30 years. We could save the NHS from its disastrous privatisation by taxing profits and wealth. Increasing tax on the top 1% of earners to 50% would raise £5 billion, as an example.
The last point I want to make is on the Government’s appalling strategy of divide and rule against the poorest and most vulnerable people on this planet. The national health service does all it can and public sector workers do all they can, and this Government spend their time scapegoating desperate people, such as refugees, and forcing them to Rwanda or somewhere else. These are people who want to contribute to our society. They are victims of war and oppression. Let them work, and let them make their contribution to our society as part of our common good.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
It is a pleasure to follow the right hon. Member for Islington North (Jeremy Corbyn). One policy proposal in the Chancellor’s statement leapt out at me. It was yet another one praising the efforts of small independent northern neighbours. Just before announcing a range of measures to increase childcare, the Chancellor said:
“Our female participation rate is higher than average for OECD economies, but we trail top performers, such as Denmark and the Netherlands. If we matched Dutch levels of participation, there would be more than 1 million additional women working.”—[Official Report, 15 March 2023; Vol. 729, c. 845.]
On the announcement of universal childcare for one and two-year-olds, we could say that imitation is the sincerest form of flattery, since my preferred candidate to be Scotland’s First Minister, Humza Yousaf, had already announced his intention to implement that policy in Scotland, based on our Government’s scheme—also copied by the UK Government—for three and four-year-olds. However, it was the choice of countries that the Chancellor used, and being able to delve a little into the reality behind the headline statistic, that intrigued me.
While the Netherlands and Denmark have higher female participation rates, the consequences of both are quite different. While the Dutch Government policy has encouraged more women into working, it has done a very poor job of allowing flexibility within the workplace and with childcare, resulting in the unfortunate scenario whereby Dutch women’s outstanding participation in the labour market paradoxically contrasts with them working the fewest hours of women in any developed country. The University of Utrecht calls that phenomenon the part-time trap, as women seeking to balance childcare and household commitments are forced into working fewer hours. That has a consequence for the economy as a whole, with representation for Dutch women in senior positions lagging behind that in similar states, and the resultant gender pay gap costs the country €10.8 billion annually. On a personal and social level, it means that only 64% of Dutch women are financially independent, compared with 81% of men.
It will be no surprise to those who know my politics to hear me say that increased female participation in the labour market could best be achieved by following the social democratic principles that underpin the Danish childcare system, with the Dutch system—underpinned by the same imperfect patchwork of primarily private providers—rivalling the UK for its cost to families. In Denmark, this system is underpinned by local authorities helping parents to find provision, with central Government helping to subsidise costs. Of course, we all know that the real leader seems to be Finland, which provides universal, local authority-led provision from birth to six years.
The key for me is the local authority-led aspect of this. This increase in Government-funded provision will be of little tangible use if it is fed through a majority of less accountable private providers that have less bargaining power with central Government and will therefore be more vulnerable to the inevitable future squeezes in the per-place fee, passing it on to parents through other costs and making it a less attractive option for those parents who can least afford it.
However, the biggest barrier to public sector involvement in provision for one and two-year-olds will be capital expenditure for new facilities, especially as they face their own pressures—investment that I am willing to bet will not be forthcoming from a Government who are always intent on doing things on the cheap.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
Let us be clear: the message from this Budget is that long-term growth is being downgraded, household incomes are falling, public services are on their knees and families are facing the biggest hit to living standards since records began. In fact, the only surprise was a massive handout to the richest 1% of pension savers. Once again, ordinary families and businesses across the country have featured at the back of the Chancellor’s queue. The very legitimate questions that those in ordinary families will be asking themselves after 13 years of Conservative Government are: are my family and I better off, and are our public services working any better? Clearly, the emphatic answer to those questions is no.
I am pleased that my right hon. Friend the shadow Chancellor has announced that Labour will reverse the changes to tax-free pension allowances. As has been said often this afternoon, this is the wrong priority, at the wrong time, for the wrong people. The OBR tells us that the Government still have £10.4 billion left on the table from the windfall tax last year and this year. We also know that plans for a windfall tax on oil and tax producers were announced by the Labour party in January 2022, while the Government announced their policy in May of the same year. A plan to cap energy bills was announced by Labour in August, and adopted by the Tories on 8 September. The Conservatives announced Budget plans recently to scrap extra charges for those on prepayment energy meters, but Labour first called for that in August 2022. The Government have taken a number of policies from the Labour party, so why not take this one? Put a proper windfall tax in place to ease the burden on families in Merthyr Tydfil and Rhymney and across the UK who are suffering under crippling energy costs.
In my limited time, I want to highlight that this Budget will do very little to tackle child poverty. For the past 13 years, we have seen how the Conservatives have cut, cut and cut, and finally crashed our economy with a kamikaze Budget in September 2022. As Gordon Brown once said:
“Child poverty is the scar that demeans Britain. When we allow just one life to be degraded or derailed by early poverty, it represents a cost that can never be fully counted. What difference could that child have made? What song will not be written, what flourishing business will not be founded, what classroom will miss out on a teacher who can awaken aspiration?”
At Prime Minister’s questions recently, I highlighted the 800,000 children taken out of poverty by Labour Governments between 1997 and 2010, and contrasted that with the half a million children plunged into poverty since the Tories took office 13 long years ago. When I gave the Prime Minister the chance to apologise for his party’s failure, he could have jumped at the chance, but instead he gave us bluff and bluster. Compare this with the last Labour Government, who delivered Sure Start, record funding for schools, tax credits, increasing child benefit, child trust funds and introducing the UK’s first ever national minimum wage. These did not happen by accident; they happened because the people of Britain voted for a Labour Government, and those Labour Governments made eradicating child poverty a key priority, in stark contrast to what we have now.
I am also proud that the Welsh Labour Government are continuing to tackle child poverty in Wales through Flying Start, free school breakfasts, free school lunches, the pupil deprivation grant, Jobs Growth Wales and, of course, the groundbreaking Well-being of Future Generations (Wales) Act 2015. The Senedd is using the tools available to help mitigate child poverty in Wales, but to tackle child poverty in Wales and right across the UK we desperately need a UK Labour Government to get our economy back on track and give tackling child poverty the attention it so needs and deserves. So the next general election simply cannot come soon enough.
Janet Daby (Lewisham East) (Lab)
I have spoken in every Budget debate since I entered this place, and the fiscal statement under the Government of the right hon. Member for South West Norfolk (Elizabeth Truss) was the absolute worst. Thirteen years of Tory Government have brought us to a place where every public institution in our country is in crisis. We see that in strike action from civil servants to teachers and ambulance drivers—the list goes on. It tells us that the Government are consistent at failure.
Although there are some positives in this Budget, it comes across as a Tory manifesto launch that borrows much Labour policy. The Government should be concerned about the low growth of our economy. The OBR downgraded the UK’s long-term growth forecasts, and forecasts by the OECD suggest that we could be the only G7 economy to be in recession this year. In response, the Conservatives gave a £1 billion tax cut to the richest 1% of earners through changes to pension allowances.
Staying on the subject of low growth, it is undeniable that the Government’s Brexit deal has also contributed to this. The food on our shelves has become scarce, while food prices have rocketed. Work and research opportunities are under threat.
Like the Brexit deal, our immigration and asylum system is failing. The Government treat refugees and asylum seekers with contempt. The huge expense of that lies at the Government’s doorstep because they have failed to get a European returns agreement and to process asylum applications. There is still no safe route for asylum seekers.
On the subject of children and young people and the Budget, I am pleased that the Government have listened to Labour’s call for investment in childcare. However, the real test for the policies will be whether childcare is more affordable and more available, and whether they deliver the economic growth that our country desperately needs. Many headline measures will only be fully rolled out after the next election, and some not until 2026, if at all. It was also disappointing that the Government did not listen to the call for more money for school buildings. Neither did they focus on the real increases in the cost of school meals.
The Government have lacked in investment in green jobs, such as wind energy, and that is greatly disappointing. Neither have they tackled high private rents and mortgage costs, or the cost of living crisis. I look forward to the Minister’s response to the issues raised today.
Ben Lake (Ceredigion) (PC)
It is a pleasure to follow the hon. Member for Lewisham East (Janet Daby).
With living standards falling at a record rate and incomes in real terms set to remain below pre-pandemic levels until 2028, it is impossible to deny that the Budget is set against severe economic headwinds. But given the impact that rising living costs are having on households across the UK, it is disappointing that the Budget failed to take advantage of the opportunity to ease the burden of higher fuel costs. Four in 10 homes in Wales are thought to be switching off their heating because of the cost, and typical energy bills are expected to remain at historically high levels for some time to come. Additional support could be delivered immediately by extending the energy bills support scheme and guaranteeing off-grid homes an additional round of the alternative fuels payment.
It is staggering that small businesses have been left without additional support for their energy costs. I am worried that many will be forced to close when support is reduced in April if the parameters of the energy bills discount scheme are not expanded. Off-grid businesses have had to endure the rise in alternative fuel costs with paltry Government support. I should like to know how the Government justify the comparative lack of support for off-grid businesses, many of which are located in rural parts of the country such as Ceredigion. Their omission from meaningful support schemes has placed them at a competitive disadvantage to those companies located in more urban areas, which surely goes against the levelling-up agenda, about which we have heard so much from the Government.
If we are concerned about addressing the productivity problems of this country, we need to look at some of the structural issues in the way the UK economy has operated for some decades. There is no better way, in the short term at least, to address some of those structural problems and the productivity issue in rural areas than by investing in digital connectivity improvements.
Gigabit connectivity in Ceredigion stands at 27% of premises, compared with the UK average of 68%. Far too many places in my constituency, and in rural areas in general, suffer from poor connectivity and that hampers their economic development. As the Digital, Culture, Media and Sport Committee noted, the decision to allocate only 25% of the funding for Project Gigabit so far risks undermining the ambition to improve the connectivity of hard-to-reach premises in a timely manner and prevent them from falling even further behind other parts of the UK. I would therefore like the Minister, in summing up, to explain when the UK Government will release the rest of the funding. Will they commit to accelerating the timescales for the roll-out of gigabit broadband in very hard-to-reach areas, many of which often lack both fast broadband and 4G signal?
On HS2, the Chancellor could also have used the Budget to release the £1 billion or so owed to Wales in consequential funding from the £20 billion expenditure already allocated to HS2. Over the project’s lifetime, Wales could receive up to £5 billion in consequential funding to spend on improving our creaking public transport infrastructure. That sum could be transformational for areas in rural mid-Wales such as Ceredigion. Sadly, it does not seem to be coming our way.
The success of any Budget is measured in the way it addresses the immediate challenges facing the economy and whether it paves the way for future prosperity. For rural areas, this Budget sadly falls short on both counts.
John McDonnell (Hayes and Harlington) (Lab)
Often what will happen between a Budget being announced and its final debate is that the world can move on, so I have two warnings and a plea, if I have time.
The first warning is that we are making the Budget in the middle of a banking crisis and we need to recognise that. It has moved from Silicon Valley Bank to Credit Suisse to First Republic Bank. For those not in the House 15 years ago when we debated the start of the banking crisis, it started with Northern Rock. A lot of the signs that underlined the crisis then are evident now: failure of regulation, mismanagement and speculative gambling all leading to a crisis of confidence among customers and investors. It spreads very quickly, like wildfire. I hope it is not on the scale of 2008, but I just warn the House that it can rapidly get out of hand. Often what will occur is a lull and then it comes back with a vengeance.
The role of this House is to ensure that the Bank of England and the Financial Conduct Authority are not found asleep at the wheel during the crisis. I urge the Bank of England to again undertake stress tests on all the banks and financial institutions within its remit, and a stress test on the overall regulatory system, and to publish those tests. The Financial Services and Markets Bill introduces an element of further deregulation. I urge the Government to pause. Now is not the time to prioritise the deregulation of our financial system. To the Bank of England, I say that this is not the time to increase interest rates, particularly at this moment.
The other warning is on pay. The Government are seeking a settlement to the NHS dispute and the National Union of Rail, Maritime and Transport Workers has already settled with Network Rail, but they should not consider that the issue of pay is in any way going away. That is a complete misreading of the situation. Major disputes are still happening: the Public and Commercial Services Union in the civil service, the junior doctors, the universities with the University and College Union, and education with the National Education Union. In the private sector in my constituency, Unite the union is representing the lowest paid security workers at Heathrow. The Government should not underestimate in any way the strength of feeling that workers have about the pay freezes and cuts of the last 13 years. Pay settlements of 5% or 6% still mean people will be struggling to pay the rent and feed their family. The Government should not fail to understand the anger and resentment at the grotesque levels of inequality in our society.
It is interesting that on the picket lines are young people struggling with low pay. They are unable to get on the housing ladder. In addition, they are burdened with debt from qualifications obtained through higher education. These young people have had enough. I think they will increasingly react to the injustices they see in our society and I warn the Government that that ferocity of concern has not disappeared.
My final plea is to follow up on what my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) said about unpaid carers. They are living in poverty and endure hardship, and many are exhausted because of the lack of social care and financial support. They need an income to reflect the care that they provide—a real living wage—or at least a first step by increasing carer’s allowance to maternity allowance levels. Carers are saying clearly that this Government should stop taking them for granted, given the essential role that they play in our society.
Stephen Kinnock (Aberavon) (Lab)
The United Kingdom was the cradle of the first industrial revolution. The opportunity for us to be the cradle of the green industrial revolution is there for the taking. But there is absolutely nothing in this Budget that supports that goal. Labour’s game-changing green prosperity plan is the ultimate example of a policy that will deliver on that opportunity, and will pay for itself in the long term by driving growth and creating good jobs, thereby expanding the tax base. We will double onshore wind, triple solar power and quadruple offshore wind. We will launch Great British Energy, making Britain energy secure and creating as many as 1 million good jobs across the UK in the process. We will insulate 19 million homes and invest in a £3 billion transition for green steel.
The Labour party knows that every leading economy has a strong and healthy steel industry, so it is deeply concerning that of the leading economies, only Britain has a declining steel industry. It is deeply troubling that there is nothing for steel in this Budget. We know that more steel will be required in the net zero economies of the future than there is today. That creates a huge market opportunity for British steelmakers across the globe. We know that UK steel companies employ 35,000 in good, well-paid jobs well above regional pay averages, and 45,000 more in our supply chains. We know that steel underpins our defence sector and our nation’s economic resilience, in an age of turbulence where authoritarian regimes are a threat to our supply chains and our democratic values. We know that if the Government continue to sit on their hands, tens of thousands of jobs could be lost and our country’s resilience will be in tatters.
We on the Labour Benches recognise the scale of the challenge. Steel companies in Canada, Germany and Spain are receiving up to £1 billion per plant to decarbonise, yet the British Government’s offer to our steelmakers is a fraction of that. It is therefore unsurprising that Tata Steel, owners of the biggest steelworks in the UK in my constituency, has reportedly given the Government until July to approve its investment offer, due to growing concerns that competitors in mainland Europe are getting ahead of us in the drive towards green steel. If the Government continue to dither and delay, we could see the closing down of one of the blast furnaces, which would be truly a hammer blow for our Port Talbot steelworks.
Labour’s message to Tata is clear: the cavalry is coming. A Labour Government will deliver on the clean steel fund. Perhaps there is not time to wait. Our message to the Conservative Government is also unambiguous: we need action now. They must not once again betray industrial communities such as the one in my constituency. They must step up to the mark, deliver for green steel and make up their mind. Do they believe that the UK should have a steel industry, or do they not?
We need a growing economy that can deliver good jobs that people can raise a family on. We need a single-minded commitment to investing for growth and a proper industrial strategy that will enable us to stand as a country more firmly on our own two feet, rather than being over-reliant on authoritarian regimes and dictators across the world. That is how Labour’s mission-driven Government will deliver. No more sticking-plaster solutions. Our steelworkers, who make the best steel that money can buy, are just asking for a level playing field. The Government need to step up to the plate and do the right thing.
Andrew Gwynne (Denton and Reddish) (Lab)
The Chancellor closed his Budget last week proclaiming that “the plan is working”. But as has been pointed out time and again, the OECD has confirmed that the UK will be the weakest economy in the G7 this year. Living standards have taken the biggest hit since comparable records began, and the average French family are now a tenth richer than their British counterparts. None of those figures scream to me that the plan is working. Instead, they speak of a sad truth: the Tories have mismanaged our economy and have catastrophically failed to level up and invest in our communities.
I will not pretend that the new devolution deal for Greater Manchester is not welcome. The Greater Manchester Combined Authority and the Mayor’s office have been working around the clock to secure the deal, and I am pleased that they have negotiated a settlement that will assist the ongoing work in the region. I am particularly pleased to see support for the integration of the Bee Network. Transport connectivity is key to growing the economy—something the Government would do well to consider before handing another six-month contract to the failing rail operator Avanti.
While positive, the devolution deal does not absolve the Government of their failure to level up. After all, the deals for Greater Manchester and the West Midlands only grant extra powers to 9% of the population. The other 91% remain tied to the economic disaster of successive Tory Governments in Westminster.
Let us take a moment to assess whether the levelling-up plan is working. Bloomberg’s 2023 levelling-up scorecard shows that since 2019 people across Denton and Reddish have seen their salaries, access to affordable housing, life expectancy and broadband coverage all fall or remain the same. The report also shows that overall Government spending has declined in my local area. The Government can talk about growing the economy until they are blue in the face, but those words feel particularly hollow to the people I represent and the communities in my constituency. They have less money in their pockets and they are struggling to put food on the table and heat their homes.
Those words also feel hollow to me. I have tried countless times to secure levelling-up investment both for Denton and for Reddish. Most recently, I backed Tameside Council’s levelling-up fund bid to transform Denton town centre. It would have enabled Tameside Council to significantly improve Denton Festival Hall, with a new neighbourhood hub for children’s services and new NHS primary care services. As with the earlier Stockport bid for Reddish, the Denton bid was rejected. That is just not good enough, not least because my town is plastered full of levelling-up posters with nothing to show for it.
It does not need to be that way. I want to see rapid investment in good jobs for the future, and better salaries and working conditions for the people I represent. I want to see more powers handed to local communities, an end to “The Hunger Games”-style bidding process and an investment that benefits working people instead. Labour is the party that has a plan to deliver that. The Tory Budget was nowhere near bold enough. Sadly, economic growth is just another slogan for this Government.
Beth Winter (Cynon Valley) (Lab)
Last week, what we needed was a transformative Budget designed to lift incomes and living standards, deliver fair funding to level up our poorer nations and regions, and build an economy fit for future generations. We did not get that. Instead, we got the views of a multimillionaire Downing Street that is completely out of touch with the lives of people who are struggling in the horrendous cost of living crisis, including people in my constituency of Cynon Valley.
The OBR confirms the hit to living standards over the past two years is the largest since comparable records began in the 1950s. Wages are lower now in real terms than they were 13 years ago. That is why workers are being forced—yes, forced—to take industrial action, including 700,000 last week, and why it was so crucial for us to hear something concrete on pay in the Budget. However, there was complete and utter silence.
For those who are reliant on social security benefits, increasing the use of sanctions is a real concern: it will mean the demonisation of some of the most vulnerable groups and will force people further into poverty. Meanwhile, millionaires will benefit from the Chancellor’s pension allowance change, which benefits only the 1% with the biggest pension pots. Some high earners are getting a tax cut of up to £275,000. In the funding of public services, we can see the continuation of austerity: analysis by the New Economics Foundation shows a further £21.6 billion in unannounced cuts. That is not levelling up; it is trickle-up economics.
Wales is yet again being starved of funds. The Welsh Government’s budget is worth up to £3 billion less over the three-year spending review period than when it was originally announced. Wales faces a £1.1 billion shortfall in funding as a result of structural fund changes. So much for “not a penny less, not a power lost”! The problems with the structural funds will put 1,000 academic jobs at risk in Wales’s higher education sector; I worked in the sector for 10 years, and a lot of my former colleagues are at risk. I urge the Government to address that now.
The UK Government continue to benefit unduly from their share of the national mineworkers’ pension scheme. That is money they should be paying to former mineworkers and their families, many of whom live in my constituency. It is a shame on this Government that they have failed to fund the £600 million legacy costs of making the coal tips safe in Wales.
Ian Lavery (Wansbeck) (Lab)
I declare an interest as a member of the mineworkers’ pension scheme. Does my hon. Friend agree that we are seeing double standards at the highest level? The Government are refusing to allocate the £2 billion surplus to some of the poorest pensioners, but at the same time they are giving an extra £1.2 billion-plus to some of the richest pensioners in the country. How is that levelling up?
Beth Winter
I could not agree more. This was clearly a Budget for the 1%, not the 99%. Mineworkers in my constituency created the wealth of this country: they put their lives at risk over many, many years, and the wealth was extracted. Surely the Government owe them the money that they created for this country. Shame on this Government.
The UK Government also continue the lie of designating not only HS2 but now Northern Powerhouse Rail as “England and Wales” projects, which should result in a total of £6 billion for the Welsh economy. The Welsh Government are striving to chart a different path. The programme for government in Wales is a commitment to a progressive agenda: from free school meals to the universal basic income pilot, from a publicly owned energy company to tackling the climate crisis in order to secure prosperous and fulfilling lives for current and future generations.
This Budget shows how urgently we need a change of Government in the UK and a different economic approach that delivers a new funding settlement for public services and fully funded, inflation-proofed pay rises. We need the wealthiest in society to finally pay their fair share in tax. We must not only abolish non-dom status, but equalise capital gains tax rates with income tax. We need to tax the windfall gains of oil and gas giants at a higher rate and remove the loopholes that allow businesses to avoid paying their fair share.
I welcome the Secretary of State’s comments about devolving decision making and finance to the English regions. I implore the UK Government to do the same for Wales, to provide us with fair, needs-based funding and to stop riding roughshod over the devolution settlement. Diolch yn fawr.
Richard Burgon (Leeds East) (Lab)
Last Wednesday, as the Chancellor stood up to deliver his Budget, millions of people around the country will have been hoping for real action on the biggest cost of living crisis in living memory. They were disappointed. In the theatre of Parliament, with the jokes, the backslapping and the irrelevant asides, it seemed that we had very rarely been as far removed from what was going on outside. We would never have guessed from listening to the Chancellor that there is a cost of living crisis out there and that people are using food banks, are having to choose between heating and eating and are struggling to pay the bills. One would never think that it was about to get worse, with the worst fall in incomes since the 1950s. It seemed from the Budget that the Conservatives just did not think that that was a big deal. The Budget did not say enough. The Budget did not really do anything for the millions of people out there who are struggling to make ends meet.
We hear a great deal about the cost of living crisis, but it is not true across the board. Some people are doing very well indeed at the moment. British billionaires are increasing their wealth by £220 million a day, profits at the biggest UK companies are up by 34%, bankers’ bonuses are up by 28%, top bosses’ pay is up by 23%, and we even have a Prime Minister on the rich list—the richest Prime Minister in history.
The Government had a choice, and the Government failed to do what was right for the people out there. When the hon. Member for Southend West (Anna Firth) was explaining why public sector workers should not get the pay rise that they deserve, she said, “The money has to come from somewhere.” Of course the money has to come from somewhere, but the money is there; the Government just choose not to take it. Let me explain that by identifying just two policies that the Government could have adopted—two taxes on wealth that would have raised £30 billion. When I mention that sum, Members should reflect on the fact that free school meals for every child would cost £1 billion, as would an inflation-matching pay rise for all nurses, and an inflation-matching pay rise for all public sector workers would cost about £12 billion.
The first of those two policies is a 1.5% annual tax on any wealth amounting to more than £10 million, which would raise up to £15 billion a year and would affect only 0.04% of the population: the richest 20,000 individuals. The Government do not have the guts to do that, because they would be doing it to their wealthy friends. The second policy is very simple: equalise capital gains tax rates with income tax to raise up to £17 billion a year. Why should bus drivers, for example, pay a higher rate of tax on their incomes than those living on income from their wealth? It is about time taxation on wealth was equal with taxation on income, because any other system is unjust and unfair.
The results of a new poll show that the vast majority of people back those policies, but instead of making the choices that they should have made, the Government have completely failed to tackle the emergency, now. That is what they should have done, but they chose not to do it.
Helen Morgan (North Shropshire) (LD)
Let me begin by declaring an interest as a vice-president of the Local Government Authority.
Overall, this was a disappointing Budget for North Shropshire and for rural communities across the country. Instead of allocating levelling-up funding on the basis of need, councils will once again be forced to spend thousands in consultant and officer time, competing against each other for small pots of money which, ultimately, they may not win. Surely it is time to assess the needs of each area objectively and invest accordingly. Personally, I would not consider a marginal seat to be an indication of need, but Wednesday’s statement shamelessly funnelled funding into marginal seats, largely ignoring the urgent need in rural Britain for investment in public transport and key infrastructure.
I would welcome clarity from the Chief Secretary to the Treasury on the proposals for local enterprise partnerships. The LEP in the Marches covers a number of local authority areas, and has been a driver of public and private sector investment. How will its activities be effectively absorbed across a number of different overstretched councils?
The rest of the Budget was largely taking with one hand and giving away with the other. Money to repair potholes is welcome, but the entire national potholes budget would probably not be enough to repair the badly neglected roads of Shropshire, while the active travel fund, which might have brought real benefits to all areas, has been cut. The £63 million to keep swimming pools open is welcome, but it involves another largely competitive bidding process for capital investment and energy efficiency measures. Community Leisure UK still predicts that many pools will be unable to reopen without additional funding to help with the soaring energy bills that forced them to close in the first place.
The Chancellor claimed that 100% capital allowances for businesses investing in plant and machinery would offset their corporation tax rise, but those businesses have to have the cash to invest and they need to be turning a profit to offset those capital allowances against. Rural businesses in North Shropshire have told me that the astronomical cost of energy means that they are struggling to stay afloat, not turning a comfortable profit or generating cash to invest.
Wendy Chamberlain (North East Fife) (LD)
A very easy way to help small businesses to grow is to do something about the VAT tax threshold, which has not increased in line with inflation since 2017. Does my hon. Friend agree that this is preventing businesses from growing further and that the Government could have done that instead of stealth-taxing small businesses?
Helen Morgan
I thank my hon. Friend for her intervention, and I agree.
Duty on draught beer has been cut, and that is obviously welcome for the pubs that sit at the heart of the communities in our towns and villages, but many small businesses were locked into gas and electricity contracts last year in a period of soaring prices as a result of the terrible invasion of Ukraine. Just this morning, I was contacted by a popular village pub to say that it was facing closure—despite always being too busy to fit me in for a table. It is facing a fourfold increase in its energy costs, but this Budget has cut the support that it is going to be offered, even while wholesale prices fall and it costs the Government less.
We all want to get people back into work, but there has been a real-terms cut to the public health budget, with nothing more for adult and children’s social care at a time when illness and caring responsibilities have placed enormous pressure on the workforce across every sector. Staff shortages underpin the crises in social care, the health service and the wider rural economy, and we feel them strongly in North Shropshire. In summary, this is a missed opportunity for North Shropshire and for rural communities across Britain.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
Welcome measures in the Budget include enhanced tax relief rates for some life sciences research and development-focused SMEs, to help incentivise investment in R&D, and the extension of the reduced fuel duty rate has been welcomed by the logistics and haulage industries. Among the not-so-welcome measures is the 10.1% tax hike on Scotch whisky, meaning that on the sale of an average £15.22 bottle, £11.40 will be taken to the Treasury through tax. This is an enormous blow for the spirits industry, significantly reducing its already tight profit margins in a move that the Scotch Whisky Association has noted breaks previous ministerial commitments to review alcohol duty to ensure that the tax system supports Scottish whisky.
In a post-Brexit context, protecting businesses and positioning them in the best possible way is of vital importance when it comes to successful trade deals. We need trade deals that will allow UK industries to prosper and thrive for the benefit of the economy and the public, but that cannot happen if domestic policies are strangling industries. On that note, I welcome the addition of several new sectors to the shortage occupation list, which will help with managing labour shortages in those areas, but reform is still needed to the scheme if it is to be as effective as we need it to be. The hospitality sector, for example, is crying out for support and it needs to be included in the scheme.
For my constituents, though, the cost of living remains the No. 1 concern. The Chancellor’s fiscal policies are still not going far enough to provide households with the support they so desperately need. While he is extending the price cap guarantee, the actual practical financial support is being withdrawn. That means that average households will see a £400 a year increase in their energy costs, which is an increase that many cannot afford. Nationally, around 30% of households could not afford to put the heating on over the winter months; in my constituency it was 45%. Someone who has not lived in poverty and faced these struggles daily cannot truly understand what that means day to day, or what worrying about how they will pay the bills, feed their children and put a roof over their heads does to a person. Statistics cannot paint the picture entirely, but they give a flavour. Nationally, 41% of people said that their mental health had worsened as a result of the cost of living crisis, and in my constituency it was much higher at 55%.
Pensioners, too, were left behind in this Budget. What is essentially a hefty tax cut for a very small number of very wealthy retirees is not enough. Although the state pension is being uprated in line with inflation, it is still not keeping up with living costs. Our main concern, though, is that the Government are considering increasing the state pension age again. Against the backdrop of all this, life expectancy is stagnating, and even falling in deprived communities. We are still waiting for justice for the Women Against State Pension Inequality Campaign, which is a perfect example of why now is not the right time to be making this change, as I hope Ministers will recognise.
We all know there is not an unlimited pot of money to finance everything we would like the Chancellor to announce in an ideal world. However, with living standards so low and with so many households struggling across Scotland and the UK, the Budget could have done more to support the public this Government serve.
Mr Deputy Speaker (Mr Nigel Evans)
We are down to our last two Back-Bench contributions, so those watching in their offices who participated in this debate should now come back to the Chamber in anticipation of the wind-ups.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Last week should have seen a Budget that embraces the idea that moving to net zero and decarbonising our economy and society is an opportunity to rebalance our economy and recognise that the old platitudes and ideologies no longer work. Instead, we saw the same mistakes, the same retrenchment and the same failures that have dragged the UK ever closer to the bottom of the pile, and the same determination to continue down a path that is disastrous not only for our society but for our planet.
Last week, England’s active travel budget was slashed to the bone. Active Travel England is being neutered before it has even begun. This financial year will see active travel spending in Scotland reach a transformational £30 per person. In contrast, England, outside Greater London, will receive less than £1 per person per year. For those sitting on the Treasury Bench who are not too good at arithmetic, that is 30 times less than in Scotland. The priorities are clear: inertia from the UK Government or investment in our communities by the Scottish Government.
Meanwhile, the UK Government pledged to drop billions into the black hole of nuclear power, surely the least sustainable energy there is. Despite the potential of fuels such as green hydrogen and tidal to reduce our dependence on fossil fuels, alongside the known quantities of hydro and wind, we will see another wave of massively subsidised nuclear power stations, all presumably to be cleaned up by our children and grandchildren. In trying to justify not giving free school meals to those in need, or slashing transport funding outside London, the Tories claim they do not want future generations to pay the price for our financial profligacy, but they are more than happy to bequeath to those same future generations the cost and danger of dealing with our toxic waste.
The Government’s desperation to cling to the past is not limited to energy, as is apparent from their attitude to the railway and the failure of their free-market doctrine, with another six-month extension for Avanti, a train operator that can barely run a train. There are five state-supported rail operators in Scotland, and two of them—ScotRail and London North Eastern Railway—are run by the state for public benefit. One more will join them in June, when the Caledonian sleeper returns to public ownership. Only Avanti and TransPennine Express, two of the worst train operators in these isles, will remain as contracted operators.
If we are serious about sustainable economic growth, we need public transport and transport infrastructure fit for the 21st century, not the 19th century. There has been a sea change in rail in Scotland since devolution, driven by Governments of all political colours, except the Tories, of course. We have seen electrification and decarbonisation right across the country, and Scotland’s rail network will be fully decarbonised by 2035, which is some achievement for a rail network that was ignored by this place for decades. In contrast, the last decade of rail investment south of the border has been a sorry tale of delay, incompetence and hard political ideology, which has meant virtually zero progress on modernising the network anywhere outside the M25.
Public charge points are being rolled out by the UK Government at a glacial pace, in a scheme ironically called Project Rapid, which has seen the Government fall 200,000 short of their 300,000 target by 2030. That target is utterly imperative. Scotland has ordered 11 times more zero-emission buses per head than England. I could go on.
Did we see any new funding or action in the Budget to show any sign that the Chancellor and his colleagues understand the gravity of the situation? Not a sniff. This Budget was another missed opportunity, following the last 13 years of torpor and decline. It shows zero understanding of the fundamental and, to be blunt, existential challenges our society faces. The transition to net zero is a golden opportunity to revitalise communities and our economy. The UK and its failed economic strategy should get out of the way of Scotland’s aspirations to be a net zero nation and a world leader in decarbonisation. It is clearer than ever that those aspirations will be met only through independence.
Margaret Greenwood (Wirral West) (Lab)
The Chancellor has given a tax break to some of the wealthiest people in society by scrapping the £1.07 million lifetime pensions allowance. We need to retain people in the NHS, but there are other ways of doing that. Let us see what he has done for the rest of society. At the same time, he has frozen personal income tax thresholds until 2028. The OBR has said that as a result wage growth over the next five years will force 3.2 million people into paying tax for the first time and put 2.1 million people into the higher rate tax band. The IFS has said that the freeze would cost most basic rate taxpayers £500 from April and most higher rate payers £1,000.
It is difficult to see how that will not have an impact on child poverty. Alison Garnham, the chief executive of the Child Poverty Action Group, has pointed out that the Budget contained
“no mention of the UK’s 4 million children in poverty”.
She called on the Government to
“expand free school meals eligibility, remove the two-child limit and benefit cap and increase child benefit. Any less and the effects of poverty will stalk millions of children from cradle to grave.”
While giving tax breaks for the very wealthy, the Chancellor announced that sanctions in the social security system would be
“applied more rigorously to those who fail to meet strict work search requirements or choose not to take up a reasonable job offer.”—[Official Report, 15 March 2023; Vol. 729, c. 844.]
So people who struggle to read and write will be punished, because for them a work search is a difficult business. Furthermore, that announcement came just a day after it was reported that the Department for Work and Pensions had been ordered to release sensitive research into whether fining benefit claimants is effective in getting them to take a job or work more hours. There is overwhelming evidence in academic research, through the welfare conditionality project, to show that benefit sanctions are ineffective at getting people who do not have jobs into work and that they are more likely to reduce those affected to poverty, ill health or even survival crime.
Speaking of those who struggle to read and write, once gain the Government have failed to provide the urgent support that is needed to the 7.1 million adults in England who are deemed functionally illiterate and who face immense barriers in life. They make up more than 16% of the adult population, yet it seems that this Government have abandoned them. The Chancellor announced the introduction of returnerships and I will be interested to see the content of those. However, they are specifically vocational and, for many people who are functionally illiterate, the idea of going straight to a vocational course can be daunting; and, of course, illiteracy is not only about barriers to work.
Over 13 years of Conservative Government, we have seen public services cut to the bone, and public sector workers and the public they serve bearing the brunt of that ill-conceived austerity. Headteachers in Wirral whom I met earlier in the year spoke of the acute financial challenges they are facing in terms of paying staff, buying resources and heating their buildings. We also know that, according to the Government, across the country, the risk of collapse in one or more blocks in some schools built between 1945 and 1970 is now very likely. All this reminds me very much of the final years of the Thatcher Government, when public services were left in ruin.
In conclusion, this Budget sidestepped the most pressing issues, including the cost of living crisis that is causing misery to millions; the running down of public services; and the failure to support more than 16% of the adult population by providing them with much-needed support to read and write.
Mr Pat McFadden (Wolverhampton South East) (Lab)
Let me begin by paying tribute to all the right hon. and hon. Members who have taken part in this Budget debate, not only today, but throughout its four days. Today, many Members from across the House, including my right hon. Friend the Member for Walsall South (Valerie Vaz), and my hon. Friends the Members for Newcastle upon Tyne North (Catherine McKinnell), for Ilford South (Sam Tarry), for Bolton South East (Yasmin Qureshi) and for Leeds East (Richard Burgon), have raised the issue of the cost of living crisis. Other Members have spoken about individual measures in the Budget, such as investment allowances and devolution deals.
Some Members, such as my hon. Friend the Member for Vauxhall (Florence Eshalomi), called this Budget a missed chance, whereas others, such as my hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones), talked about the number of Labour policies adopted by the Government in the Budget. My hon. Friend the Member for Lewisham East (Janet Daby) and the hon. Member for Newbury (Laura Farris) talked about childcare. The hon. Member for Basildon and Billericay (Mr Baron) rightly warned the Government against being left behind by the measures being taken in the US and the EU to ensure the green transition.
The right hon. Member for North West Hampshire (Kit Malthouse) urged us all to have more children. Perhaps when all other growth plans have failed, that is all that is left.
The Budget is a critical part of our economic and political framework, and I congratulate the Chancellor on surviving long enough in his post to deliver one. Here we are a few days later and he is still in his post. That is a rare achievement among Conservative Chancellors of modern times.
Outside this House—indeed, on the day that the Chancellor spoke—there is significant turbulence in the financial system. Even though we debate these measures, it is imperative that the Treasury and the regulators are alive to the risks elsewhere in the system and to what other risks may be there.
The Budget was billed by the Chancellor as a Budget for growth. He opened his statement last week by asking us to give thanks that, this year, the economy is expected to shrink, but just not by quite as much as was previously thought. A flatlining economy is now defined by the Government as success.
Stephen Kinnock
My right hon. Friend is making an excellent speech. The Secretary of State for Levelling Up, Housing and Communities said earlier that this was a Budget for growth and that it would deliver more economic prosperity, but the reality is that the OBR said that we will not see a rise in living standards for another decade. Does my right hon. Friend agree that the Government have had their chance?
Mr McFadden
My hon. Friend is absolutely right. After 13 years, there really is nowhere left to hide.
Despite the Budget being billed as a Budget for growth, the UK is still experiencing the slowest recovery from covid in the G7. All the countries that make up this group had to cope with the pandemic. All of them have suffered the consequences of Russia’s invasion of Ukraine, yet Britain’s recovery is the slowest.
What is it about Conservative stewardship of the United Kingdom that makes us stand out in this way? Is it the political chaos inflicted on the country by the Conservative party, which makes a Chancellor who gets to deliver a Budget such a rarity? Is it the fact that, since 2010, our productivity growth has been the second lowest in the G7? Is it the disastrous Tory mini-Budget last year, which they would like to bury under 10 feet of concrete, but which people will not forget? It caused borrowing costs to soar, put our pension system on life support and rocked international confidence in the UK economy. Is it the former Prime Minister’s Brexit deal, which was supposed to give us global Britain but instead gave us the problem of how to send a sandwich to Belfast?
It could be all those things, but whatever the reasons, the overriding fact for our constituents is that they are still living through the biggest fall in living standards in living memory. Their money goes less far, their incomes have been squeezed and they are living in a country that is poorer than it was four years ago.
Alan Brown
The right hon. Member mentioned Brexit. Are not some of the issues related to Brexit associated with leaving the single market, leaving the customs union and not being part of freedom of movement? That has a big detrimental impact on the economy and Labour will not change any of that.
Mr McFadden
I understand why people regret the result. What I do not understand is why the response to that should be to erect even more trading barriers inside the United Kingdom, as the hon. Member wants to do.
Even if the fall in living standards is at its most severe this year and next, it is not just a short-term dip, because since the Government took office, real-terms wages have not risen and are not expected to get to their pre-2010 levels until 2026. That is what people feel in their lives—that year after year, it gets harder to make ends meet and harder to pay the bills. The question that people are asking themselves is the one that has been posed by the shadow Chancellor, my right hon. Friend the Member for Leeds West (Rachel Reeves). Are my family and I better off? The answer is no. Are our public services in better shape now than when the Tories took office in 2010? Time after time, once again, the answer is no.
When he made his statement last week, I thought there was one significant thing about the way the Chancellor spoke: he was happy to own the whole 13 years that his party have been in office.
Mr McFadden
He confirms that now—he is proud of it. He obviously did not get the memo that says every time the Tories ditch a leader, they are supposed to pretend it is year zero. Not for him the pretence that this is a brand-new Government. Not for him the pretence that whatever was inflicted by his predecessors had nothing to do with him.
I welcome the Chancellor’s honesty about that, because that means the Tories can own the annual tax rises faced by every taxpayer over the coming years. They can own the 24 tax rises they have imposed in the last few years. They can own the NHS waiting lists of 7 million people. They can own the biggest drop in living standards on record. They can own all the waste and all the fraud. They can own the mortgage rate rises faced by hard-working families this year and next, which were driven up by their own reckless economic irresponsibility. They can own the whole cycle of low growth, increasing taxes, declining living standards and creaking public services. I am grateful to the Chancellor for his honesty and candour in embracing his party’s 13 years in power. That is a rare thing in politics these days and he deserves credit for it.
There were measures in this Budget that we liked and supported—those were the Labour bits. The extension of the energy price cap, the freeze in fuel duty, the investment allowances for industry and more help for childcare were all called for by Labour. Of course we welcome them, and we knew they were coming because most of the Budget was leaked in advance.
Several hon. Members rose—
Mr McFadden
I am not going to give way; I am going to proceed.
One thing was not leaked, however, and that was the Chancellor’s plan to abolish the pensions lifetime allowance—a £1.2 billion policy that will benefit those with the biggest 1% of pension pots. Let us be clear: there is a problem facing doctors, and it has existed for years. In the run-up to the Budget, my hon. Friend the Member for Ilford North (Wes Streeting), the shadow Health Secretary, called for a special scheme to deal with the issue facing doctors, which is forcing some of them to retire early. That call was supported by the Chancellor when he was Chair of the Health and Social Care Committee. His report said:
“The government must act swiftly to reform the NHS pension scheme to prevent senior staff from reducing their hours and retiring early from the NHS.”
That is exactly what the shadow Health Secretary proposed.
Mr McFadden
I am going to proceed.
Such a scheme already exists for judges, but when the shadow Health Secretary made that call, he was attacked by the Tories, who said it was financial profligacy and unaffordable—and let us remember that that was only a scheme directed at the NHS. A Conservative spokesman said:
“Now they announce an expensive pensions policy without pointing to how they would fund it”,
adding that the shadow Health Secretary should think about the impact on the public finances. And what did the Tories do then? They said, “Wes, hold my beer.” Just days later, having denounced a smaller NHS scheme as being completely unaffordable, they proposed to abolish the entire lifetime allowance for everyone. According to the Tory argument, it is completely unaffordable for doctors alone, so we are going to propose it for everyone.
However, that was not always the Tories’ view. They used to think that,
“we must demonstrate that we are all in this together. When looking for savings, I think that it is fair to look at the tax relief that we give to the top 1%.”—[Official Report, 5 December 2012; Vol. 554, c. 878.]
Who was the ideologically suspect pinko who said that? Who was that anti-aspirational enemy of enterprise? It was, of course, George Osborne. That is how far they have moved. They used at least to claim we are were all in this together; now they do not even pretend.
Growth is the essential challenge facing the country. We need better growth to make the country more prosperous and its people better off. Right now, in the United States, growth is being driven by the Inflation Reduction Act sucking in investment in new technologies and the green transition, and creating jobs right across the country. Europe is responding with incentives of its own. What is the Government’s position? It is that this is “dangerous”, as the previous Business Secretary said. Other countries are on the pitch; they are using the power of government to crowd in private investment. That is exactly what we should be doing. This is not about the state doing it all; it is about setting a clear, long-term direction, and asking business and employees to be partners in making that work.
Those investments will happen somewhere. The question we pose is: why not in Britain? Why not in Britain when we have some of the best researchers in the world? Why not in Britain when we have a tradition of innovation and creativity that is second to none? Why not in Britain? Because we lack a Government with the ambition to make it happen. In the end, that is what was missing from this Budget.
The Chancellor and the Prime Minister want to project themselves as the adults in the room, but with the challenges that the country faces, that is not enough. It is not enough just not to be reckless and ideological; it is not enough just not to subject the country to another giant juvenile experiment with real-world consequences; it is not enough just not to degrade the idea of public office itself; it is not enough for them not to be their disastrous predecessors. The country deserves a lot more than that. It needs a Government who will break with, not continue, the last 13 years, and who will break with the whole pattern of low growth, high tax and creaking public services. That is what we need, and that is what we did not get from the Budget last week.
The Chief Secretary to the Treasury (John Glen)
What a privilege it is to close this four-day Budget debate on behalf of the Government. I thank the right hon. Member for Wolverhampton South East (Mr McFadden) for his remarks—for someone who moved from being the high disciple of Tony Blair to sitting in a Cabinet where there was “no money left”, I think there was a lot of cheek in his remarks.
This Budget takes our collective potential and unleashes it to deliver sustainable long-term growth. We are now able to direct our attention to the future because of the difficult decisions that we took in the autumn, when we cemented stability and the prudent management of the nation’s finances, taking responsible, necessary decisions for the good of the economy—for the vulnerable, for families and for communities up and down this country. Since then, debt-servicing costs are down, mortgage rates are lower and inflation has peaked. We are heading in the right direction. The OBR’s clear assessment is that because of the action taken in the autumn, combined with the actions announced by the Chancellor last week, we are on track to meet all the Prime Minister’s economic pledges.
As has been famously said before, inflation is taxation without legislation. It makes us all poorer. That is why we said that we will halve it this year. Indeed, the OBR says that we will do more than that.
John Glen
No, I will not.
Inflation in the UK will fall from 10.7% in the final quarter of last year to 2.9% by the end of 2023. If debt is left unchecked, it acts as a ceiling on our economic potential. That is why we are bringing it down. Under this Government, we will pay our own way.
On growth—the focus of the Budget—there were those who said that we would fall into recession in 2023, but last week the OBR said that we will not enter a recession this year. Instead, after this year, the UK economy will grow in every single year of the forecast period, including by 2.5% in 2025. As we look to the future, we are now rolling out the biggest employment package ever, we are overhauling incentives to get businesses growing, and we are unleashing our green energy sector while supporting families and businesses with bills in the short term. But, contrary to the characterisation in many Opposition speeches today, there is no complacency from this Government. There will be no let-up in our relentless focus on enabling growth.
The subject of today’s debate is halving inflation, reducing debt and growing the economy. During the course of the debate, we have heard some excellent speeches from right hon. and hon. Members on both sides of the House, and I would like to respond to some of them now. I will respond first to my right hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke), one of my predecessors. Although he welcomed many measures in the Budget, he drew attention to the question of corporation tax. Let me draw his attention to the remarks of the Chancellor, who expressed his determination that the full expensing measure will be a permanent intervention of this Government.
I thank my right hon. Friend the Member for North West Hampshire (Kit Malthouse), my parliamentary neighbour, for his constructive suggestions about the simplification of childcare. I also draw his attention to the fact that this Government have committed £492 million over this year and next to ease the supply for those who will provide our child support.
I also want to refer to the speech from my hon. Friend the Member for South Cambridgeshire (Anthony Browne), who gave us a helpful contextualisation of the world economy and pointed out the fact that, contrary to what we heard in many Opposition speeches, since the Conservatives came to power in 2010 we have grown more than major countries such as France, Italy or Japan, and about the same as Europe’s largest economy, Germany. We have halved unemployment, cut inequality and reduced the number of workless households by 1 million. I also want to refer to my hon. Friend’s remarks on the pensions intervention. That was called for by many in the medical profession over many months, but our pension reforms benefit other experienced key workers as well as doctors, including headteachers, police chiefs, armed forces clinicians, senior armed forces personnel, air traffic controllers, prison governors, senior Government scientists, Government-employed vets and, yes, even senior people in the private sector who create jobs, sustaining growth across the economy.
I also thank my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones), who had a characteristically clear understanding of how economic challenges will be met. He also mentioned the support of his local brain surgeon. Many more people working in the NHS are realising that within two weeks they will be able to continue working, knowing that their pensions are safe.
I thank my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti) for his remarks on defence expenditure. I suspect that there will never be enough money for him on defence, but he shows a clear understanding of the extra commitment the Chancellor has made in the Budget to invest in continuing to support our efforts in Ukraine.
There were many other worthwhile contributions from Members on both sides of the House, and I think it is important that we recognise that one of the major themes of this Budget was levelling up across the whole United Kingdom. I welcome the contribution from my hon. Friend the Member for Barrow and Furness (Simon Fell), who drew attention to the value of the announcements on nuclear, particularly Great British Nuclear, and the transformation that will bring to his economy and to the country as a whole.
Alan Brown
On nuclear, and the fact that the Minister is talking about reducing debt, why does he think it is a good thing to sign bill payers up to £35 billion of debt for Sizewell C through the regulated asset model? Surely that is just a burden on all future generations.
John Glen
What is important is that this country knows that we have a Government who will take long-term decisions about energy security for this country.
I would like to address a number of significant themes of this afternoon’s discussions on the cost of living. Support for households with higher bills has been worth £94 billion—on average, £3,300 per household—across 2022-23 and 2023-24. That means that in this coming year more than 8 million households on means-tested benefits will receive three cost of living payments totalling £900; more than 8 million pensioner households will receive a cost of living payment of £300; and more than 6 million people on disability benefits will receive a cost of living payment of £150. Since this Conservative Government came to power in 2010, we have grown more than major countries such as France, Italy or Japan, and we are now on track.
I want to address public sector pay, which was also raised by a number of Opposition Members. Through the efficiency and savings review, Departments have reprioritised and identified further efficiencies, building on the 5% efficiency challenge set at the 2021 spending review.
We have faced a global energy crisis. We have had high global inflation. There has been a global economic downturn. We needed to bring about stability—we did. We needed sound money—we have it. We now need long-term, sustainable, healthy growth—this Budget delivers it. Many Opposition Members have asked who this Budget was for. It was for the families struggling with energy bills, the left-behind communities that will receive record investment, and the entrepreneurs who drive growth. The OBR’s forecasts show that this Budget will deliver improvements in growth and inflation, but this Government will continue to do everything we can to beat those forecasts. It is with humility, focus and determination that we tackle the challenges facing this country. We will deliver a stronger, cleaner economy for the whole of the United Kingdom, and I commend this Budget to the House.
Question put and agreed to.
Resolved,
That income tax is charged for the tax year 2023-24.
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.
The Deputy Speaker put forthwith the Questions necessary to dispose of the motions made in the name of the Chancellor of the Exchequer (Standing Order No. 51(3)).