Budget Resolutions

Ed Davey Excerpts

Tuesday 30th October 2018 Commons Chamber

[Matt Hancock]

I pay tribute to my hon. Friend, who has worked so hard to get that hospital back on track. It is now being built because we have put in the capital—it is in the NHS budget. We had to rescue it from the failed private finance initiative that was invented by the Labour party. It is only because we have a strong economy that we can give the NHS the longest and largest cash injection ever in its history—

[Sir Edward Davey (Kingston and Surbiton) (LD)]

rose—

[Matt Hancock]

If the right hon. Gentleman will welcome that injection, I will give way to him.

[Sir Edward Davey]

The right hon. Gentleman is talking about the rise in health spending. He is Secretary of State for Health and Social Care, so can he tell us by how much social care expenditure is going to rise over the next five years?

[Matt Hancock]

Yes, I am going to come on to social care. Yesterday, we put a further £650 million into social care, and we are coming forward with reforms to social care to put it on a sustainable footing for the long term.

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[Kirsty Blackman (Aberdeen North) (SNP)]

It is an honour to speak for the Scottish National party on the second day of the 2018 Budget debate.

Ten years ago last month, Lehman Brothers collapsed. Excessive risk-taking by financial institutions created an international banking crisis, and a global downturn followed. Since then, people and families across the UK have had to pay for the fall-out. There has been a decade of wage stagnation, a decade of cuts and a decade of the most vulnerable in our society being hit the hardest by Tory austerity. Looking forward, we are staring into the abyss that is Brexit. Mark Carney says that Brexit has already cost householders an average of £900, and the Fraser of Allander Institute estimates that leaving the single market and customs union would cost 80,000 Scottish jobs. After a decade of austerity, households cannot afford to lose £900 each, and they certainly cannot afford a Tory Brexit.

The reality is that the people of Scotland are badly served by Westminster. We did not vote for a Tory Government and we did not vote for Brexit. I cannot think of a time in the past when a country has committed such a foreseeable act of economic self-harm. The Chancellor does not believe that we will be better off after Brexit. Even the Prime Minister does not believe that we will be better off after Brexit. We were promised £350 million pounds a week for public services. We will not be bought off with a commemorative 50p coin.

[Sir Edward Davey]

The hon. Lady is making an excellent start to her speech. Does she agree that, after a decade of Lehman austerity, we could be facing a decade of Brexit austerity?

[Kirsty Blackman]

I absolutely agree. An economic catastrophe is coming down the line as a result of Brexit. It does not matter what kind of Brexit there is; any Brexit is bad for the economy. Staying in the EU is the best possible option for the economy. If we cannot stay in the EU, staying in the single market and the customs union is the second best option.

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[Mr Marcus Jones (Nuneaton) (Con)]

This is my ninth Budget in this place, and the majority of them have been framed by the fact that my party has had to clean up the mess left behind by the previous Labour Government in 2010. They have been framed by the comments of the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), who wrote:

“I’m afraid there is no money. Kind regards—and good luck!”

That was the position that the country found itself in. I feel that yesterday’s Budget was a turning point and we are now starting to see light at the end of the tunnel. We need to give great thanks to the people of this country for their hard work and their determination to see the course through. Yesterday’s Budget means we are now starting to repay the faith of the British people.

I want to focus on three areas, the first of which is public services. The Chancellor was clear yesterday—he was right—that local government had made a significant contribution to tackling the deficit. I firmly believe it needs to be recognised for that, and we need to make sure it is properly funded. I welcome the £650 million package for social care that was announced yesterday, and the £420 million for roads and potholes that will be going to local government.

I also welcome the fact that for probably the first time ever road tax will be paying for our roads rather than being spent on other things. As a consequence, the budget for Highways England will go up by 40%. It is great to see my right hon. Friend the Secretary of State for Health and Social Care in the Chamber because I warmly welcome the additional £20 billion that this Government are committing to our NHS each and every year. I look forward to seeing the 10-year plan for the NHS and, within that, the use of the £2 billion for mental health services, which are crucial. Mental health provision is important because the mental health challenges we are experiencing underpin many of the social challenges that we face in this country, so it will be great to see his proposals.

Security is the most important thing for and the first duty of any Government, so I really welcome the extra £1 billion for our armed forces and the £160 million that is going into counter-terrorism policing. I noted that the Chancellor referred to the police and the challenges our forces face in his Budget statement, so I hope that when the police settlement comes forward early next year, we will see positive progress. My local Warwickshire force is taking on additional officers, but it also faces challenges down the track, such as the pensions revaluation. I sincerely hope that that will be reflected in the policing settlement.

[Sir Edward Davey]

While the hon. Gentleman is talking about police funding, can he explain why he thinks the Chancellor did not announce any extra money, beyond the counter-terrorism policing increase, for community policing yesterday?

[Mr Jones]

Clearly the police have been given access this year to an additional £450 million, and an extra £160 million was given to counter-terrorism policing. I am sure the right hon. Gentleman, who was part of the coalition Government, will recognise that a process needs to be followed and that the police funding settlement will come forward in a few months’ time.

Secondly, on the cost of living, I am delighted that the Chancellor has chosen to freeze fuel duty again. It has not increased in this country since 2011, which is good news for motorists. In that time, the average motorist has saved £1,000 as a result of the decisions made by Conservative Chancellors. I am also really pleased that the rail companies have taken up the railcard for 26 to 30-year-olds, who will get a 30% reduction in fares.

I very much welcome the increase to the personal allowance. The lowest paid will now earn £12,500 before they have to pay income tax. That is a far cry from the £6,500 personal allowance in 2010, and it means that those people will have an additional £1,250 a year in their pockets compared with then. I also welcome the change to the 40p threshold, because although that rate is an important aspect of our tax system, many public servants, such as police sergeants and senior teachers, have been dragged into the 40p rate, as have been many tradespeople such as bricklayers. I do not think that that was ever the intention when that measure was introduced.

It is good to see the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for North Swindon (Justin Tomlinson), on the Front Bench, because I welcome the universal credit changes, which will further underpin the principle that it always pays to work. It is excellent that £1.7 billion will be put into universal credit year on year, and that is in addition to last year’s package. It looks as though tweaks are being made to the system constantly to make sure that it responds to some of the challenges. I hope that another look will be taken at the assessment period, because several of my constituents have had challenges with that part of the process.

Finally, on high streets, I am delighted that 30% will be knocked off rates bills for people who own small retail businesses with a rateable value under £51,000. Business rates are an analogue tax in a digital world, and I am pleased that the Chancellor has started to recognise that. I recognise that larger retailers occupying anchor positions in high streets and town centres will not benefit from that change, so perhaps in future we will need to consider those businesses, too. A £675 million fund for the regeneration of our high streets is a massive start to help high streets throughout the country to regenerate. We need to make sure that we preserve our high streets, but not in their current form. We need to make them fit for the 21st century because they are places of massive community value. They are the community centre of towns and cities throughout the country.

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[Yvonne Fovargue]

I absolutely agree with my hon. Friend. I also think that the rules on terminal illness should be changed.

Going back to the question of the breathing space, the devil will be in the detail. For a breathing space scheme to work well, it has to have minimum standards. It has to provide enough time for the person in debt to get advice on the best way to resolve their problem debts, to recover from temporary financial difficulties and enter a statutory debt solution, and to pay their debts at a manageable rate. There must also be funding so people can access free, independent and impartial services speedily, because when people decide they are at the end of their tether, they want to see someone quickly.

The Government suggest a breathing space of 60 days, but debt advisers need the flexibility to recommend an extension. I worry that if the arrangement is too rigid, creditors may well delay until someone gets out of the breathing space period so they can start chasing them again. Call me cynical, but that is what 23 years at Citizens Advice does.

There is clear consensus that a breathing space solution must cover all debts, including debts to the Government—household bills such as council tax and moneys owed to central Government. It must also offer protection against further interest and charges, and against enforcement action. Creditors must stop collection activities such as calls, letters and visits—that means no more bailiffs. Returning briefly to universal credit, there must be no deductions from benefits or other income to recover outstanding debts during the breathing space period, future deductions must be affordable, and—please—there must be no public register of people who enter a breathing space. Evidence from Scotland shows that that deters people from doing so. If there is going to be such a register, let us make it private between creditors and people in debt.

I welcome the announcement that the Government will look at no-interest loans, although the long timescale will allow many people to fall into debt. It is unfortunate that, despite the work of the Law Commission, Government time was not given to debate ending the exploitation of a Victorian law that was used as a vehicle for logbook loans.

I turn to education—in particular sixth-form funding, which is at crisis level.

[Sir Edward Davey]

Will the hon. Lady give way?

[Yvonne Fovargue]

I have to move on, I am afraid. There is a range of new requirements, the needs of schools and colleges have increased, and under-investment in sixth-form education is having a negative impact on the education of the young people in my constituency. That simply means the Government will be unable to meet their stated objective of having a strong post-Brexit economy and a socially mobile, highly educated workforce. That is bizarre, frankly.

At least £760 per student is required to continue providing 16 to 18-year-olds with a high-quality education, but the Raise the Rate campaign asked the Chancellor to increase national funding by a more modest £200 per student. That would at least have been a start. It is disappointing that there has been no action.

Will the £400 million to provide the “little extras” be shared with sixth-form colleges? That might have helped Winstanley College in my constituency with the little extra of providing a teacher so German A-level could be reinstated, or allowed St John Rigby College to reinstate one-to-one time to support students who are struggling emotionally or academically—it might have, had that money not been ring-fenced for building maintenance and purchasing equipment.

Let me comment briefly on the raising of personal allowances. Families on the average wage in Makerfield will gain just over £12 a month, while people on more than £50,000 per year will gain just under £40 a month. It is pretty obvious who will gain the most. It certainly is not women over 50, who are still waiting for any measure to help them.

The Chancellor said he chose not to unveil the Budget tomorrow as he wanted to avoid Halloween jokes. It is a good job he did not wait until next Monday, as my constituents, having heard that austerity is over, may have expected a firecracker of a Budget that lit up their lives. Instead, all they got was a damp squib.

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[Sir Edward Davey (Kingston and Surbiton) (LD)]

I refer the House to my entry in the Register of Members’ Financial Interests, especially with respect to renewable energy.

This might not be a Halloween Budget, but it is yet another attempt to scare Members about Brexit and to frame the Brexit question as deal or no deal. Although the Chancellor hardly mentioned Brexit, the underlying message is that there is something for us if we back this Budget—tax cuts and something for the NHS—and more in store if we get a soft Brexit. The other message is that if we do not vote for a deal, there will be a disastrous hard Brexit.

Certainly a hard Brexit would be a disaster, but so would this soft Brexit. It is just wrong of the Government, day after day, to propose a choice between the Brexit deal that the Government come back with and a hard Brexit with no deal. The truth is that there are alternatives. When we get there, this House must debate those alternatives, not just the two that the Government keep scaring us about. It is almost like the Noel Edmonds TV game show, “Deal or No Deal”. I switched over to another channel when it came on my TV, and this Parliament could switch over and have a third choice—that choice should be a people’s vote and an exit from Brexit.

The Budget forecasts show why a third option is so important. People should look at the growth forecasts, which are seriously scary. We are going to be trapped in a Brexit low-growth economy. We have had 10 years of financial crisis austerity and, with these growth figures, we are going to have 10 years of Brexit austerity. The figures should be really scary. Our economy had near to the highest growth rate of any G7 country in the four years before the referendum, and since then we have had the lowest growth in the G7. That should worry us, and that is even before we add in the risks and uncertainties. The OBR’s economic forecast could not factor in all the risks and uncertainties; it had to assume that there would be a soft Brexit.

So even these low growth figures may well not be as bad as things turn out to be. That feeds in to the spending figures. Ministers have made much of the health figures, but when one strips out the health increase, one sees that all the rest of the Departments will, on average, see 0% growth for the next few years. That is austerity continuing—it is really scary and completely not needed. According to the OBR, Brexit has already cost £15 billion in lost tax revenue, and we hear in the Budget that even Brexit preparation is going to cost more. That is why we have to escape this Brexit trap; whether it is a no-growth Brexit or a deal Brexit, we have to have a people’s vote.

This Brexit Budget was shaped to try to buy off the Back Benchers and the Democratic Unionist party, not to try to get a proper forward strategy for this country. There were deals in there for Belfast. It may deserve that money, but the timing for it is funny, and we know what the talks have been to try to get there. We know that the Government could not put forward the tax rise needed to get the Budget into surplus and to invest in public services because they could not get that tax rise through their Back Benchers. The Brexiteer Tories on the Back Benches would not have voted for a tax rise. The hon. Member for Stafford (Jeremy Lefroy) was right: we need to get a surplus, we need to invest in our schools, hospitals and police, and we need to undo some of the damage from universal credit. We need that, but we can only do it if we have some honesty on the public finances. The reality is that this Chancellor and this Government are so weak that they cannot put through the tax measures needed to get the right economic balance in this country and the right investment in our public services.

When we look at individual public services, we see that they are crying out for investment. For example, since 2015 we have lost 4,789 full-time police officers, 2,231 community support officers and 4,334 special officers. That is more than 9,400 officers lost, at a time when crime has been going up. Knife crime has increased by 62% since 2015, firearm crime has increased by 30% and homicides have increased by 33%. The Conservatives should be ashamed of themselves for not having been prepared to invest in the security of our people and safety on the streets when violent crime is going up by so much.

I have a question for those on the Treasury Bench. We have been looking in the Red Book. The Government have announced £164 million for counter-terrorism police, which is welcome, but it does not score anywhere in the Red Book. We have been making inquiries and asking the Treasury about this, and it says that it is from the reserves. I have never heard an explanation like that. The Chancellor announces £160 million for counter-terrorism policing yet it is not in the Red Book or said to be in the Red Book. That is an insult to this House, and I hope that Ministers will have an answer by the end of the day.

My constituency is seeing school funding cut, and headteachers have been marching. They do not normally do that in the Royal Borough of Kingston upon Thames, but they were doing so recently because they are fed up with having to lose staff, cut the curriculum and cut opportunities for young people in their charge. They do not stand for it, and this House should not stand for it. It was an insult to offer less money to schools than the Government are spending on potholes. What sort of priorities do this Government have when they put potholes before our children and their futures?

Not only did the Government get the short-term spending decisions wrong but they got the long-term spending decisions and strategy wrong. Where was the investment to tackle climate change? What about the opportunity in green growth—in our renewable energy? There are huge opportunities there, but there was nothing on that in the Budget. As for social justice, it was good to see some recognition that universal credit is causing pain out there, but the Budget did not go anywhere near enough. We are going to have to revisit this as a House if we are going to make sure that the poorest people in our country share in any future prosperity.