Budget Resolutions

Kevan Jones Excerpts

Wednesday 31st October 2018 Commons Chamber

[Chi Onwurah]

My hon. Friend makes an excellent point. All our constituents have had to suffer cuts to services, so for the Secretary of State to say that austerity is over is an insult to our intelligence.

[Mr Kevan Jones (North Durham) (Lab)]

Like Liverpool, Durham County Council has lost nearly half its budget since 2010, and the cuts are still going on. This Budget contained no change to next year’s cuts in revenue support grant, so another £40 million will be taken out of the council’s budget.

[Chi Onwurah]

My hon. Friend is absolutely right. The services that make such a difference to our constituents’ daily lives face increased cuts, which is why our constituents know that austerity is not ending under this Government.

--- Later in debate ---

[Chi Onwurah]

My hon. Friend is absolutely right. He could give a lesson in basic economics to most Conservative Members.

[Mr Kevan Jones]

Is it not a fact that debt was 43% of GDP when Labour came to office in 1997 and went down to 40% by 2006? That was down to good management of the economy before the crash. Through those years, the Conservative party was not just agreeing to our spending commitments, but asking for more expenditure, so we will have no lessons from the Tory party about reckless spending.

[Chi Onwurah]

Absolutely. The Conservative party initiated and promoted the reckless deregulation of our financial sector, which contributed significantly to the financial crisis, and then failed to manage the economy in such a way as to ensure sustained, significant growth. Under this Government, we have had half the historical level of growth.

The prognosis for growth is reflected in business investment, which is the lowest in the G7. We are the only major economy in which investment is falling. Our productivity is 15% lower than in other major economies, and it has not grown this slowly since the Napoleonic wars—there is an achievement. The average real wage growth since the second world war is 2.4% a year, but under the Conservatives, pay has fallen by 3% and the UK remains the most regionally unequal country in Europe.

We needed a big Budget to rebalance our economy and to provide the industrial strategy with the backing it needs to address the serious problems, but the Budget is deeply disappointing. We got an arbitrary announcement of more funding for the national productivity investment fund, but that will be in 2023, with no information on where the money will be allocated.

On research and development, we had another repackaging of money that was announced last year dressed up as additional funding when, in fact, of the £1.6 billion cited by the Government only £180 million, barely 10%, is new. Although we are pleased that there has been a marked increase in R&D expenditure, there is still no overarching strategy for its direction or for how the Government intend to meet their target of spending 2.4% of GDP on R&D. We are a world leader in science, but, let us be clear, the Government’s 2.4% target is average when it comes to R&D spend. Labour’s target is 3% to become one of the leading nations in R&D spend.

What little information there was in the Budget again focused on sexy high-tech areas like nuclear fusion and quantum mechanics. As an engineer, I understand the desire of the Prime Minister and the Secretary of State to be associated with sexy technologies, and it is of course a vital part of our industrial strategy to support the industries of the future, but the Secretary of State has repeatedly failed to recognise that supporting our biggest sectors to improve their productivity through technology and investment is so important.

Retail is one of the biggest employers outside the public sector, and it is facing a unique crisis. Over 100,000 jobs have been lost in the past three years, and over 25,000 shops stand empty. High streets are the centre of communities, and they should and can continue to be vibrant spaces of which communities are proud, but to achieve that we need proactive policies from the Government, as Labour have been demanding for months.

The Secretary of State has been a bit cheeky and stolen a number of Labour’s policies in this area. A register of empty properties, an adjustment to business rates and a high street taskforce were just some of the policy proposals in the conference speech of my hon. Friend the shadow Secretary of State. It would be churlish of me to demand our policies back, but that is where the consensus ends.

The Government’s overall package, “Our Plan for the High Street,” simply does not do enough. Business rates relief would not have saved a single House of Fraser or Debenhams—the vast majority of retail workers are employed in such shops. The British Retail Consortium has said that the Government

“must engage in more extensive business rates reform to help all retailers and their employees through this period of transformation.”

The CBI responded:

“Smaller businesses will be relieved by the support on Business Rates… But larger retailers and manufactures—and the millions they employ across the UK—will continue to suffer needlessly until there is a full, in-depth review.”

Yet the Budget contained no commitment to a review of business rates.

The future high streets fund is yet another fund allocated out of the national productivity investment fund, and there are no details of where the money will be targeted, who will be responsible for administering it or how quickly funds will be made available. The proposals for planning reform have missed the point. It seems that the Government’s idea to save our high streets is to turn them into non-high streets. Frankly, much more work is needed if we are to protect our high streets and the millions of workers who rely on them.

--- Later in debate ---

[Mr Davis]

Shadow Secretary of State, yes. I do not think my right hon. Friend the Secretary of State requires any help in recovery. He is a formidable champion for business, as I know, sometimes to my cost, from my old job. He has been a brilliant exponent and driver of the enabling of the modernisation of the British industrial estate. I wish to pick up on one point made by the hon. Lady. She talked about the treatment of employees, the so-called “gig economy” and so on. My right hon. Friend was the one who brought us the Matthew Taylor report, with all of its innovative ideas to improve the protection of employees in our country and at the same time not destroy the jobs that they enjoy. That is pretty formidable in its own right, so I commend my right hon. Friend for that, although I do not intend to take us down that route today.

I have only three quick points to make. I shall be brisk and I probably will not take any interventions. Traditionally, the Budget is dominated by the technical metrics of growth rates, inflation rates, taxation, deficits, debt levels and spending. All those things are incredibly important issues. Indeed, one reason why it would be a disaster to have a Labour Government is that they would ignore all those things and deliver us into national bankruptcy, with the economic crisis and the social crisis that would follow. What is important is to understand that a Conservative Government do take all those things seriously, as they are the box in which we deliver the Budget. The Budget is about improving people’s lives and delivering the best outcome for our nation. As Conservatives, we believe in a narrative of a property owning democracy encompassing opportunity, personal responsibility, economic freedom, fairness and social mobility. For most of my colleagues, our view of the right sort of society for us is one where there is no limit to which anyone might rise and a limit beneath which no person may fall.

With that, I want to measure this Budget against the aspirations of our citizens: does it meet their aspirations to have a good university education; to get a job and build a meaningful career; to buy a home and raise a family? Those are aspirations that everyone shares, across the House and across the nation—we share them with all our constituents. Everyone should have the opportunity to pursue them.

All political parties talk a good story when they are trying to persuade people that they are on their side, but it is what Governments do, not what they say, that matters to the people. Nowhere is that more true than in the Budget; the language of public finance is the language of priorities, which is why this is so important. Starting with the definition of a decent society, both the ladder of opportunity and the social safety net are determined for the least well-off by the benefits system—by the welfare system. That is the key that underpins the opportunities and security for all the least well-off.

For decades, the British welfare system has been a nightmare of complexity in which hard work was in effect penalised, sometimes to the point of it being not worth while at all from an economic point of view, although work is always worth while from a moral point of view. The coalition Government started the necessary reform by introducing the universal credit system. Much has been said about it—it has been controversial—but the whole system is a significant step in the right direction.

The tax credits and benefits system introduced by Gordon Brown all too often trapped people in a cycle of dependency, which was not unforeseeable. I was the Chairman of the Public Accounts Committee when he introduced that system, which he copied from a system in America that was already failing, and it was clear what was going to happen. Many people who made the effort to go out and find work faced an effective tax and withdrawal rate of up to 95%.

A benefit system should seek to aid people’s return to work, not trap them in unemployment. Universal credit seeks to correct that problem by helping more people into work and enabling them to keep more of what they earn, but it absolutely has to be properly funded. I therefore welcome the most important part of the Chancellor’s Budget: his announcement on universal credit. We must make sure that those in most need, including single parents—those who know me will know that single parents are of particular importance to me—couples without children, and those who should not be economically dependent on their partners, are not left wanting by subsequent changes. Universal credit will need further funding beyond what is promised in the Budget, and I shall certainly watch out for that. Nevertheless, the Chancellor has taken excellent action, for which I commend him.

The next most important way to help people make the most of their lives is through education and training, which the Secretary of State has been a great exponent of in his role. However, today, the cost of getting a university education, plus the confusion around financing, act as a disincentive to getting one. I am afraid the policy on student loans has failed. Almost half the loans will never be repaid. They are a falsehood in the national accounts. Crucially, the loans system has failed to deliver a market in university education—[Interruption.] The hon. Member for Stalybridge and Hyde (Jonathan Reynolds) should not be smiling: Labour basically invented the system and created the problems that I am about to talk about.

The loans system has failed to deliver a market in university education, with the least valuable courses at the worst universities costing precisely the same as the most valuable course at the most prestigious university. That is not a market. At least some of the money has gone not into world-class research but into overpaying some pretty second-rate vice-chancellors. The whole system needs to be revamped and turned into a proper graduate-contribution system with honest accounting, clear rules and no retrospective changes to the interest rates or other terms. In the long run, we should move away from loans all together; that would have a liberating psychological impact on young people.

[Mr Kevan Jones]

Will the right hon. Gentleman give way?

[Mr Davis]

No, I will not give way on this issue.

[Mr Jones]

I wonder why.

[Mr Davis]

I will tell the right hon. Gentleman why I will not give way: because he was part of the Government who invented the system that created this crisis in the first place.

We need to do more on housing, which is an issue of utmost importance. Home ownership levels are plummeting, and many young people believe that they will never have a home to call their own. As a party of aspiration, we must do better. Help to Buy is failing: it is not increasing the supply of housing; rather, it is increasing the cost of new homes by 15% and inflating developers’ bonuses. It should be scrapped immediately. We need to increase the supply of new homes dramatically and to make those homes attractive and affordable. Perhaps the best idea that is being mooted—forgive me if I go off piste for a second, Mr Speaker—is that of garden towns, garden cities and garden villages. Garden villages of between 1,500 and 5,000 houses will be big enough to justify schools, shopping centres, buses and so on.

The landowners where such developments are created make spectacular windfall gains—in the south of England, they make as much as £1 million an acre—which is where the Treasury comes in. There is no reason why half of such gains should not be funnelled in a way that reduces the final price of the house. That way, when we create affordable housing, it will be proper affordable housing, of a decent size—it will not be a little box, a progressively shrinking option. That is how we will get the affordable houses that we need. However we do it, we in the Conservative party have to grasp this problem and solve it. This party has for more than 50 years been the party of the home owning democracy. We need once more to make home ownership available to a whole new generation.

Since the Gordon Brown crash—I was going to call it the 2008 crash—we have heard a lot about the threats to capitalism, which are of course real in, for example, the personality of the Leader of the Opposition. The simple truth is that free markets, free trade, property ownership and social mobility have delivered improvements to the lives of billions around the world. Capitalism has taken people not just in Britain but around the world out of poverty and given them a future. The best defence of capitalism in this country is to deliver those benefits to a new generation of young people. Britain is an aspirational country and we are an aspirational party; we need to deliver on that.

The first step is the economy’s fantastic jobs performance. The Opposition never like to speak about the fact that we have the lowest unemployment in my adult lifetime and the highest employment ever in this country. That is a remarkable achievement given the mess we were given when we came into office. The right hon. Member for North Durham (Mr Jones) intervened on the shadow Minister earlier to say that when Labour came into power in ’97, the debt was such and such, and so on. When Labour came into power in ’97, the chief economic adviser to the then Prime Minister Tony Blair said publicly, “This is the best economy any Government have ever inherited”—

[Mr Kevan Jones]

rose—

[Mr Davis]

No, I am not giving way; I am coming to the end of my speech.

We have never, ever inherited such an economy from any Labour Government in history, and there is a good reason why that is the case.

[Mr Jones]

On a point of order, Mr Speaker. I do not want to interrupt the right hon. Gentleman’s leadership speech, but this is supposed to be a debate. He referred to something that I said earlier in the debate and would not let me come back on it. Is that in order?

[Mr Speaker]

I do not think the Chair is the arbiter of normality. Sometimes the Member on his or her feet gives way, and other times not. The right hon. Gentleman is experienced enough in this House to know that. He has registered his mild irritation, but the right hon. Member for Haltemprice and Howden (Mr Davis) has adhered to the rules today, as on previous occasions.

--- Later in debate ---

[Mr Kevan Jones (North Durham) (Lab)]

The Prime Minister said in her conference speech that this was the end of austerity. The Chancellor had an opportunity on Monday to make that a reality, but it did not happen.

The Secretary of State for Business, Energy and Industrial Strategy relied on the usual Conservative mantra, which is that austerity is all Labour’s fault. I remind Conservative Members that up until 2007, they did not complain about our spending; they said that they would match it. In some areas, they wanted more expenditure. They wanted less regulation of banks, not more. If we had done what the Conservatives suggested we did with the banks when they crashed, we would be in a worse state now. My hon. Friend the Member for Glasgow North East (Mr Sweeney) is correct: the economy was growing in 2010. It was the reckless emergency Budget in 2010 by the incoming coalition Government that crashed the economy, and it is that austerity we are suffering from now.

The Secretary of State said that Labour is anti-business. I am not anti-business. Business is very important for my constituents and the health of the economy, but strong local government and strong communities are also important for that. The Government have a role in ensuring that we have economic prosperity.

As my right hon. Friend the Member for Delyn (David Hanson) said, austerity clearly has not finished in the Home Office, and it has not finished in local government. The one-off proposals show that Durham County Council, which has lost £200 million in grant over the past eight years, will lose another £14 million next year, because the revenue support grant has not been changed. There is no change—communities and councils up and down the country will still face austerity, so the idea that austerity has somehow finished in this country is complete nonsense.

On strong local communities, I welcome the commitment in the Budget to £2 billion for mental health, but the Government have got it wrong, because the investment needs to go into local community services. We do not want people to get to A&E. It is great having a psychiatric nurse or professional in A&E, but we have failed if people get there in the first place. Likewise, I welcome the proposal to put mental health workers in schools, but many of the young people we are talking about do not attend school. We need investment in local communities’ support network.

We must also ensure that we have the mental health professionals in place, because there is a crisis with them that we need to address. That is where the money needs to go. We need to hardwire mental health into Government policy making and not have this ridiculous situation where policies such as cuts to local authorities and universal credit lead to a mental health crisis. We need to address the core problem, and this Budget is not doing it.

I want to briefly touch on defence, which Members will know is another one of my interests. Great play has been made of the extra £1 billion for defence, but we must remember that in the past eight years, the coalition and Conservative Governments have cut 16% of the defence budget. I asked yesterday what the extra £1 billion will be spent on, but the Government cannot say. I suspect that it is not new money, but rather drawdown from the money already committed for the nuclear deterrent, so this will not be a bonanza for defence and will not meet the £20 billion black hole in the defence budget.

Likewise, I welcome the fact that the Chancellor announced £10 million for the Armed Forces Covenant Fund Trust to support veterans’ mental health, but is that new money or existing money? If we look at the covenant report, there is already £10 million in that budget annually. If there is an extra £10 million, that is good, but we do not need a sticking plaster. We need to mainstream veterans’ mental health in the health service and do what I suggested in 2010, which is to ensure that we have veterans’ tracking in the health service. We announced that in 2010, and the first thing the coalition Government did was to stop it and not replace it.

This Budget is a missed opportunity. Communities are going to suffer, and if we get what we have had from this Conservative Government in the past few years, even where there is extra money, it will be doled out like a pork barrel to areas that support the Conservatives. Other areas that they do not really care about will get nothing. We only need to look at the north-east to see that that strategy is continuing with this Budget, and it is an absolute disgrace.

--- Later in debate ---

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

This Budget demonstrates yet again that careful stewardship of the economy and meeting serious challenges in a serious way, thereby creating an environment for wealth creators to succeed, is always the right course. Now, the hard work of the British people is paying off. We see that in the record numbers in employment, with 3 million more jobs since 2010. We see it in rising real wages, with the fastest rises in real pay among the lowest paid in society. Above all, we see it in our strengthening public finances.

We see in the Budget how a stronger economy enables us to support the NHS, which will receive, as my hon. Friend the Member for Chelmsford (Vicky Ford) said, that record-breaking £20.5 billion real-terms per-year increase. Furthermore, a stronger economy has enabled us to cut taxes and to freeze the important duties—whether on fuel, spirits or beer—so that millions of people throughout the country can enjoy more of the money that they have earned. Those achievements did not fall into the Government’s lap—apologies to the Chief Secretary—they were hard won by the people of this country, and we will not be complacent. This is an optimistic, future-facing Budget, and a Budget for economic growth.

Having listened to much of the past three days of Budget debate, I could summarise the contributions from Opposition Members as wanting more spending and higher taxes. With some notable exceptions, they have had very little to say about how we grow the economy and create wealth. When asked recently, the shadow Chancellor, the right hon. Member for Hayes and Harlington (John McDonnell), could not name a single businessperson whom he admired. We on the Government Benches understand that behind every business is a story worth knowing—that cafés and gyms and restaurants do not come out of nowhere. We respect and admire these people, and this Budget is for them.

The Federation of Small Businesses, the CBI, the retailers, the convenience stores, the pubs, the oil and gas industry that supports so many thousands of jobs in north-east Scotland, and the manufacturing groups such as the EEF all support the Budget. Of course there are challenges. Of course we are in a moment of high uncertainty as we enter a pivotal stage in the Brexit negotiations, but each of those groups—and more—that I have spoken to since the Chancellor sat down believed that we were listening to them and acting. We are delivering for businesses and job creation throughout the country.

As my right hon. Friend the Member for Sevenoaks (Sir Michael Fallon) argued at the beginning of the debate, the Budget recognises that the UK has to pay its way in the world. It must be an attractive place for people to invest. To ensure that it is, we have cut corporation tax from 28% to 19%, and receipts have risen by 55%. We have reaffirmed the incentives for entrepreneurs that are attractive for people—including those in the constituency of the hon. Member for Hampstead and Kilburn (Tulip Siddiq)—who come here from all over the world. They are attracted here because it is a great place to create businesses, and that is driving the unicorns and tech businesses of this country.

We are extending the start-up loan scheme, and as we have already heard, we have increased the annual investment allowance from £200,000 to £1 million. We have listened to manufacturing businesses, particularly in the midlands and the north, that want to invest in plant, machinery and digital technology. This is about not just the sexy technologies that we heard about earlier but ensuring that manufacturing in this country can continue to thrive.

For working people, we are increasing the national living wage from April and thereby contributing to rising real wages, and we are giving a tax cut to 32 million people throughout the country by increasing the personal allowance and the higher-rate threshold. As we heard at Prime Minister’s questions, it is still unclear whether the Labour party supports that tax cut. The shadow Chancellor reluctantly says he agrees with it, the shadow Foreign Secretary, the right hon. Member for Islington South and Finsbury (Emily Thornberry), says otherwise, and the Mayor of Greater Manchester says that shadow Chancellor’s views send a shiver down his spine—and that was before Halloween.

We believe that everyone in this country should pay their fair share of tax. There are measures, which we have heard about from right hon. and hon. Members in this Budget debate, to continue to close the tax gap. It is at a near record low, and lower than it was in any year of the previous Labour Government. This Budget does create the world’s first digital services tax.

[Mr Kevan Jones]

On a point of order, Mr Deputy Speaker. We have had a very good debate this afternoon, and there have been some great contributions from all parts of this House. Members can call me old-fashioned, but I thought that the role of the Minister replying to the debate was to address the issues that have been raised in this debate. He has now been on his feet for nearly six minutes, and apart from some reference to two Conservative Members, he is making just a general speech, which he could have done in an opening speech.

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

The Minister has got time to address the issues, and I am sure that that is where he will take us now.

[Robert Jenrick]

That was unfair, because I am addressing the points that have been raised by Members from all parts of the House. [Interruption.] The right hon. Member for North Durham (Mr Jones) may not like the answers, but I am providing them. With respect to the digital services tax—it is a tax that has been mentioned by numerous Members across the House—we are the first major country to do this, and it will raise in excess of £1.5 billion, ensuring that, in our thriving economy, our tech-friendly economy, those who generate value from UK users will pay a fair contribution to tax. We look forward to publishing more information and to the consultation on that, which, clearly, hon. Members may wish to take part in.

We chose in this Budget to invest in the long-term economic infrastructure of the country—a subject that has been raised by a number of my colleagues—raising investment levels in this country to the highest sustained level in my lifetime. That is the mark of a mature economy, which is not just spending everything on immediate consumption, but spending money for long-term investment. Public capital investment in this country will be £460 million a week higher under this Government than it was under the previous Labour Government. We have heard some of the ways that we will spend that. We will spend it by increasing investment in our roads—in every type of road. A number of colleagues from across the House—

[Mr Kevan Jones]

Which Members?

[Robert Jenrick]

Well, there was my hon. Friend the Member for Chelmsford (Vicky Ford), for example. She made a representation for the Chelmsford flyover, and we will deliver on that. Let me say one other thing in response to the right hon. Member for North Durham: we listened to those Labour Members who came to see us at the Treasury with genuine representations to grow the economy, but they were few and far between. There was the hon. Member for Bassetlaw (John Mann), for example, and we responded to his requests—[Interruption.]

--- Later in debate ---

[Robert Jenrick]

We are investing in a whole range of different infrastructure projects, which will make a huge difference to the future of this country, from the productivity pinchpoints to investing in potholes. We did hear from a number of Members today a slightly snobbish attitude to investing in potholes, but these things matter to ordinary people. They matter to people in my northern constituency of Newark. They matter to people in Walsall, in Halesowen, in Stoke-on-Trent, in Mansfield and in towns that we have heard about here and, in fact, in towns across the whole country, including in the right hon. Gentleman’s constituency.

[Mr Kevan Jones]

Where is it?

[Robert Jenrick]

In North Durham. [Hon. Members: “Ah!”] Yes, there you go. Incidentally, the last time that the right hon. Gentleman and I sparred was over cleaning up illegal waste sites.

[Mr Jones]

You have done nothing about that either.

[Robert Jenrick]

Well, you have not read the Red Book, because we put £10 million—[Interruption.]