Immediately after this urgent question the Prime Minister will make a statement, and following that the Secretary of State for Work and Pensions will set out the Government’s position on personal independence payments and the welfare cap. For the rest of the day the debate on the Budget will continue, and tomorrow it will conclude with the Chancellor of the Exchequer responding. The House will therefore have three opportunities to discuss these issues before voting on the Budget tomorrow. I am grateful for the opportunity to talk about how this Government, through our long-term economic plan, are creating growth, generating employment, cutting the deficit, and securing long-term prosperity for the people of this country.
The Budget delivered last week by my right hon. Friend the Chancellor of the Exchequer set out how we are taking more people out of income tax, supporting small businesses, encouraging investment, tackling tax avoidance, helping young people to save, and investing in our education system, all while restoring the public finances. That is what the British people voted for last May, and that is what we are delivering.
Thank you, Mr Speaker, for granting this urgent question. I asked it because the Budget process is in absolute chaos. It is unprecedented for a Government to have withdrawn a large part of the Budget and accepted two Opposition amendments before we have even reached the third day, and from what we have heard from the Chief Secretary to the Treasury today, we are little wiser. I have some sympathy for the hon. Gentleman, who has been sent out yet again to defend the indefensible, while the Chancellor insults this House by his refusal to attend.
This whole debacle started two weeks ago when the Government announced cuts of up to £150 a week in personal independence payments to disabled people. By the day of the Budget last week, we discovered that those cuts to disabled people had been forced through by the Chancellor to pay for cuts in capital gains tax for the wealthiest 5% in our society, and for cuts in corporation tax. I agree with the former Work and Pensions Secretary: such cuts are not defensible when placed in a Budget that benefits high earners.
How can the Chancellor any longer suggest that we are “all in this together”, when the Institute for Fiscal Studies confirmed today that poorer working age households with children will be the hardest hit? Will the Minister rule out any further cuts to support for people with disabilities in the lifetime of this Parliament? Over 600,000 disabled people and their families have been caused considerable distress over the last week, and they need the reassurance that their benefits are safe. If the PIP cuts are not going ahead, the money required from the Department for Work and Pensions still sits in the Red Book.
Will the Chief Secretary tell us which other vulnerable groups the Chancellor is considering targeting for cuts? If the Chancellor halts the attack on disabled people, a £4.4 billion black hole is created in the Budget. Add to this the billions of unidentified cuts, and the amendments on the tampon tax and solar power that we have won today, and within five days an enormous hole has appeared in the Budget. Is not the prudent thing for the Chancellor to do to withdraw this Budget and start again? I say that this is no way to deliver a Budget and no way to manage an economy.
First, may I thank the shadow Chancellor for promoting me to Chief Secretary to the Treasury? Secondly, may I just make this point about disability benefits? There is no question of this Government cutting disability benefits to the level we inherited in 2010. Spending on disability benefits has gone up by £3 billion in real terms. Thirdly, does the shadow Chancellor really want to talk about fiscal black holes? Does he really want to do that? [Interruption.]
Last week the Chancellor of the Exchequer reported on an economy set to grow faster than any other major advanced economy in the world. With wages up, the deficit cut by almost two thirds and 1,000 more people in work every single day, our economic plan is delivering for Britain. It is a Budget that continues this economic recovery, a Budget that takes us into surplus by the end of this Parliament, a Budget that backs British businesses, protecting jobs in difficult economic times, a Budget that helps more people buy their first home or save for their retirement, a Budget that builds our young people’s skills and invests in educating the next generation, and a Budget that helps to close the gaps between rich and poor and between north and south, because we believe in helping people to succeed wherever they come from. Since 2010, inequality is down, child poverty is down, pensioner poverty is down, the gender pay gap is smaller than ever, while the richest—[Interruption.]
Order. When the Minister is addressing the House, he is entitled to be heard. I know the Minister is raising his voice, but there should be no requirement to do so. Experience shows that all sides of the argument will be heard. Members need have no worry on that score. In the first instance, the Minister must be heard.
The richest 1% are paying a greater proportion of income tax revenue than in any single year of the Labour Government. This is the Government that introduced the national living wage, the Government that increased the personal allowance—in a year’s time, a typical basic rate taxpayer will pay over £1,000 less in tax than they paid in 2010—and the Government that are helping to generate record numbers of jobs, helping young people get on the property ladder, increasing spending on health and education, and disability benefits too, and protecting pensions and helping people achieve their aspirations at every stage of their lives. Delivering for Britain, creating economic security, jobs and growth—that is the record of this Government and the record of this Chancellor, and it is a record to be proud of.
Does my hon. Friend the Financial Secretary agree that the first duty of a Chancellor and his Treasury team when preparing a Budget is to have regard to the medium-term national interest and to provide sound finances for the benefit of our businesses, our investments and our employment? If we now have a situation in which Chancellors are expected to produce, on every occasion, popular spending commitments and popular tax cuts, while there is a failure to control out-of-control Budgets, we will have the sort of economic performance achieved by the recent Governments of Greece, Italy or the United Kingdom under Gordon Brown.
I entirely agree with my right hon. and learned Friend that it is the long-term approach that he took as Chancellor of the Exchequer that we are now taking forward so that we can secure prosperity and economic security for the British people.
We are shortly to hear a statement from the Department for Work and Pensions, and if rumours are correct, it will announce a substantial change to the Budget announcements that we heard only last week. That is likely to result in either substantial extra borrowing or a requirement for substantial extra taxes or, potentially, the shredding of the fiscal charter rules. In any case, there is likely to be a substantial change to last week’s Budget. It is not good enough to announce that in a quick statement; surely it should require a supplementary corrective Budget. Let me ask the Minister whether his right hon. Friend the Chancellor has pencilled in a date for a summer Budget—and if he has not, may I suggest he does so now?
As the hon. Gentleman says, there will be a statement from the Secretary of State for Work and Pensions, and we also have two further days of Budget debates. As for changes to the fiscal position, in view of the oil price changes of recent months, I think we should look at the consequences for Scotland if it had been independent.
The decision was taken some weeks ago not to proceed with any changes to VAT on energy-saving materials in this Finance Bill because new evidence had emerged and we no longer believed that we needed to go ahead with what was previously suggested. It is also the case—the Prime Minister will say something about this later—that because the European Commission and other member states are willing to agree to our arguments about the need for greater flexibility on VAT rates, we do not believe that these changes will be necessary.
Five days ago, the Chancellor stood at that Dispatch Box and published the Budget scorecard with a £4.4 billion cut to PIP. Where is the revised scorecard without it? Is it true that this cut will instead come from elsewhere in the DWP budget? If the Chancellor is too scared to answer questions in this House on the issue, he is not fit to do the job.
The Chancellor will debate the Budget resolutions tomorrow evening, and he will be the first Chancellor of the Exchequer to have done so since my right hon. and learned Friend Mr Clarke. In 11 Budgets, Gordon Brown never once participated in the debate on the Budget apart from in his initial speech. As far as the public finances and compliance with the welfare cap are concerned, we will set things out at the autumn statement. Let us be absolutely clear that with the Labour party appearing to be upset about the public finances, Labour Members should listen to what they have been saying for the last six years.
My hon. Friend will know that members of the armed forces are sadly not immune to mental health problems and that, even more sadly, some of them take their own lives. As a member of the advisory board of the Samaritans, may I thank the Minister and my right hon. Friend the Chancellor for the £3.5 million given to the Samaritans to assist military personnel who are suffering in this way?
The Minister has to accept that there will be a serious problem with the votes on the Budget resolutions tomorrow. How on earth is the House supposed to make a judgment when page 103 of the Red Book has been totally ripped up and changed? We are none the wiser about the contents of that section. Will he just answer one question? On a scale of one to 10, how embarrassed is he today?
If I were the hon. Gentleman, I would be a little embarrassed for not being aware that there are no votes on personal independence payments in the Budget resolutions tomorrow.
Yes; my hon. Friend is absolutely right. There has been strong support from small businesses for the contents of this Budget. This is a Government who are backing small businesses and ensuring that they can provide the growth and employment opportunities that the British people need.
I regret the chaos that one tends to get with these unstable single-party Governments, but not half as much as I regret the failure of the Chancellor to be here to answer for himself. His Budget will leave the richest 10% of people £260 better off, and, until he was found out this weekend, that was going to be paid for by punishing the disabled. Does not all that conjuring just show that the Chancellor’s choices are driven by cynical politics, and not by economic necessity? Should not the fiscal charter, which is now utterly discredited, be scrapped?
Let me point out to the House that 28% of income tax was paid by 1% of taxpayers in 2013-14. Under the policies that we are pursuing, the highest earning 20% will now be paying more than half of all tax revenues. That would not have happened had we stuck with the tax system that we inherited in 2010.
Does the Minister agree that what the British people want, and what they voted for 10 months ago, is a Government who encourage growth, creating employment on a scale not seen for 30 years, and who take the low paid out of tax altogether while still focusing on investment in the health service and in mental health and other issues, making them a one nation, compassionate Conservative Government?
As the Financial Secretary to the Treasury has said, the cut in business rates has been welcomed by the small business community. In oral questions an hour ago, Department for Communities and Local Government Ministers said that local authorities would be completely compensated for that reduction, yet there is no sign of that in the Red Book either. Is this not simply another £1.7 billion black hole?
I very much support the Chancellor in wanting to live within our means and trying to balance the budget as quickly as possible. In my normal spirit of helpfulness, may I suggest that the problem is that too many Government Departments’ budgets are ring-fenced, meaning that the other Departments face cuts year after year? Is it not time to end the ludicrous ring-fencing of the international aid budget?
As always, I appreciate my hon. Friend’s spirit of helpfulness but I am afraid that I do not agree with him. It was a manifesto commitment by our party that we would fulfil the 0.7% target.
Let us be clear: this is a Government who have turned the economy round and delivered this country as the fastest-growing major western economy in 2014. We are forecast to be the fastest-growing again. We have record levels of employment. The deficit will be down by two thirds by the beginning of the next fiscal year. That is what this Government are delivering and will continue to deliver.
Actually, the figure is slightly more than that over the past five years. Disability spending has risen significantly under this Government, even though we inherited the largest deficit in our peacetime history.
Today’s urgent question is not about the Budget documentation, the EU referendum or who is going to be the next leader of the Tory party, but about the hundreds of thousands of disabled people across this country and their fate. In the absence of the Chancellor today, will the Minister take the opportunity to apologise to all the disabled people across the country who have been left in turmoil over the past few days in relation to what support, if any, they are going to get from this Government? What are the future plans for them?
This is a Government who have increased spending on the disabled. My right hon. Friend the Secretary of State for Work and Pensions will shortly make a statement on Government policy in this area.
You frequently remind us, Mr Speaker, about the people listening and watching at home—our constituents. On the second day of the Budget debate, the shadow Chancellor pledged that if the Government would look again at the personal independence plans, the Opposition would not play politics with that. Does my hon. Friend agree that this is too serious an issue to play politics with?
What is very clear from the plans that we have set out is that by the end of this Parliament we are on course to deliver a budget surplus that would have never happened if we had followed Labour’s plans.
Absolutely. I can give that assurance. This is a Government who are on the side of businesses—businesses that create the growth and jobs that we need—and the biggest threat to our recovery is the anti-business approach that we see from the Opposition.
One of the smaller, disregarded mysteries of the Budget is the announcement of the north Wales growth field, which seems to exist in name only. Will the Minister enlighten the House about its details?
The Government will be engaging with the Welsh Government and local authorities on that. The future for the Welsh economy would be best pursued by electing a Conservative Government in Wales, as well as in the United Kingdom.
Does my hon. Friend agree that it is thanks to the steadfast stewardship of the economy by our right hon. Friend the Chancellor and the Treasury team for the past six years that this year we have been able to introduce a Budget that has supported small businesses, supported the motorist, supported and helped local brewers and the pub industry, and continues policies that support business and create jobs? Only steadfastness of purpose delivers that. Strength to the Treasury team’s elbow.
My hon. Friend puts it very well. This is a Government, and this is a Chancellor of the Exchequer, who have turned round the economy. We are in a position to be growing strongly compared with our international competitors, and we are bringing the public finances under control, having inherited the mess that would did in 2010.
The Chancellor made no effort to justify the cut in disability benefits in the Budget statement, beyond saying that it would save a lot of money. Yesterday, we heard from the former DWP Secretary that the Chancellor’s view is that people claiming disability benefits will never vote Conservative so there is no reason for restraint in cutting their benefits. Will the Financial Secretary respond to that allegation?
That was not even the allegation. The reality is that, if we look at spending on disability living allowance and personal independence payments, it has gone up since 2010 by £3 billion—that is not a Government who are cutting at the expense of disabled people.
Will the Minister confirm that, as well as continuing to take thousands of my constituents out of paying income tax, and as well as shifting the burden of taxation from small businesses, through business rates, to multinationals, the Government remain committed to a progressive target of halving the disability employment gap?
Indeed. My hon. Friend makes a good point, and he is absolutely right to raise that. As I pointed out earlier, my right hon. Friend the Secretary of State for Work and Pensions will address that point, I am sure, later this afternoon.
Does my hon. Friend agree that the best way to reduce the welfare bill is to create more jobs and to give people the opportunity to have the dignity of earning their own living, rather than being stuck in a life on benefits?
I am sure the Minister, like me, will see the slight irony in the fact that an urgent question on the Budget is delaying an announcement and a debate on the Budget. However, will he reassure me that the Government, in looking at Budget changes, will be more influenced by a long-term economic plan than by the thoughts of Chairman Mao?
We have a debate on the Budget today and tomorrow, and the Chancellor will respond to the debate tomorrow. In terms of any future changes of fiscal events, there will be an autumn statement in the autumn.
Will my hon. Friend confirm that the many positive things in the Budget—including the small business rate changes, which will remove a lot of business rates from independent shops in Sutton, Cheam and Worcester Park, and the tax threshold changes, which will help a lot of people who should never have been caught by the 40% tax threshold, including many public sector workers—will go ahead as planned?
Yes, I can confirm that. The changes to small business rate relief will help hundreds of thousands of businesses, particularly small businesses. We are delivering on the pledge in the Conservative party manifesto to increase the higher rate threshold to £50,000—this Budget takes it to £45,000—and we are also raising the personal allowance. The typical basic rate taxpayer is now paying more than £1,000 less in income tax as a consequence of the changes we have made.
The Minister has talked about debt and our record. Of course, the last Government borrowed more in five years than the Labour Government did in 13 years. We understand that Conservative Members are clamouring for a change to the PIP proposals, on the basis that they disproportionately hit the disabled. If that is the case, why not also reverse another measure that disproportionately hits the disabled—namely, the disgraceful and appalling bedroom tax?
Let me deal with this point. During the whole of the last Parliament, we debated in this place measures to reduce spending and the Labour party constantly opposed them. It argued that we should borrow more—I presume this is what the hon. Gentleman means from what he has just said—to borrow less. If that is the position of the shadow shadow Chancellor, it is not much of an improvement on that of the shadow Chancellor. It is right that we try to find savings in the welfare budget, and the spare room subsidy is an important part of that.
Before I became a Member of Parliament, I was one of the dwindling number of self-employed people in this country. The self-employment sector now numbers 4 million-plus. Does my hon. Friend agree that we have cut back on red tape on self-employment and put more money into the self-employed, which is more than the Labour party did in 13 years? I was a self-employed person, so I can speak with authority on that.
My hon. Friend brings much expertise to this issue, and I know that he is very pleased that one of the things we were able to do in the Budget was to finally remove class 2 national insurance contributions. That was a tax on the self-employed and it was also a significant administrative burden, so I am pleased that we have been able to remove it.
May I express the shock and sadness in my constituency at the loss of life of a family from Derry in Buncrana last night?
How can the Financial Secretary continue to talk about a long-term economic plan when he is describing what are increasingly ephemeral Budgets? Will the Government finally end the error of their ways in relation to the welfare cap and stop using it as a search engine for benefit cuts?
First, may I associate myself with the hon. Gentleman’s remarks and, through him, express the condolences of the whole House to the family who suffered so grievously last night?
On this Government’s approach, we believe that it is in the interest of the whole country that the public finances are on a sound footing. Reducing the deficit from a record level to surplus is a significant challenge, but it is one that we have to meet as a country, and we have to be willing to take the decisions that that involves. That is what this Government were elected to do in 2010 and what we were re-elected to do in 2015, and that is what we will do.
Will my hon. Friend confirm that there has been no change in the Budget commitment to tackle homelessness with a record boost of some £115 million, which is on top of the protection for the homeless prevention grant? That very much shows this Government’s credentials in protecting the vulnerable.
My hon. Friend is right to highlight that measure, which was announced last week. This Government are taking the issues of homelessness seriously and an important set of policies was announced last week.
Given that the Chancellor has been warning us all about the so-called global cocktail of risks, and given that we learned from the Budget statement that our growth forecasts are down, as are those for our productivity, which is fast reaching crisis point, what possible justification can the Minister offer, considering all the other changes that have already been made to the Budget, for retaining the substantial cut to capital gains tax, which disproportionately benefits the better off and is simply a cut that, at this point, we do not need?
One of the important challenges that we face is improving productivity in this country. If we want to improve productivity, we want more investment. If we want more investment, we do not want high rates of tax that discourage investment. May I point out that in terms of capital gains tax, the rate is still higher than the one we inherited in 2010?
Last week, I met two constituents. One of them, Mark, was unemployed for five years from 2007. He has now got a job in security through DWP funding for a Security Industry Authority course. Another, Luke, who has significant disabilities, has been helped by a specialist agency called Pluss to get a good job with B&M. Both those constituents of mine have benefited hugely from the compassionate conservatism that has driven our financial policy. Will my hon. Friend confirm that that will continue and that people such as Mark and Luke will continue to be helped?
I am very grateful to my hon. Friend for highlighting those examples. He puts the point well. There is something compassionate about having a society where there are plenty of jobs, and I am pleased that we as a Government are delivering that type of economy.
In the Chancellor’s speech last week, he referred to £20 million being given to build houses in the south-west of England, and said that that was
“proof that when the south-west votes blue, their voice is heard loud here in Westminster.”—[Hansard, 16 March 2016; Vol. 607, c. 961.]
Does that not prove that this was not in the national interest; it is all about the political and personal interest of the Government and the Chancellor?
I remind the hon. Gentleman that there have been a number of city deals done with authorities in the north-east of England, and a number of deals done with Labour authorities around the country. The employment record in the north-east of England is extremely strong.
My hon. Friend reminds me about 2007 and 2008. There is a distinction between the two Governments: whereas Gordon Brown doubled the tax rate on low earners, we have abolished tax for low earners.
Does my hon. Friend agree that the Government’s positive track record of tackling unemployment and creating apprenticeships clearly demonstrates their commitment not only to enterprise but to improving life chances?
The Government’s record is that, again and again, we have taken steps to improve the life chances of the British people. It also helps, in the long term, the life chances of the British people to have public finances under control. Only a Conservative Government will deliver that.
Let us be clear about this Government’s record, and let us put this in the context of what the Government have done. As a consequence of the policy changes that we have pursued, it will now be the case that the highest-earning 20% will pay more than half of all taxes. That would not have happened had we stuck with the policies we inherited.
The Financial Secretary to the Treasury will have noticed today that the new financial discipline of the shadow Chancellor has not lasted long, because speaker after speaker has promised to spend more and more money without any idea how they are going to pay for it. Will my hon. Friend pass on some thanks from me to the Chancellor, who found £2 million to start a new children’s hospital in Southampton? That will greatly benefit thousands of young people across the south and has nothing to do with the party politics that we are seeing in the Chamber this afternoon.
We on the Scottish National party Benches agree that the deficit must be cut and that we must control the debt, but that that should not be done on the backs of the poor. With the disability cuts and the £3.5 billion of cuts to come in 2019-20, and with corporation tax cuts, capital gains tax cuts and an increase in the income tax threshold, does the Minister really believe we are all in this together?
I am pleased to hear that the hon. Gentleman believes we have to get the deficit and the debt under control. He will be aware that an independent Scotland, given what has happened to the oil price, would face the biggest deficit in the western world.
Does the Minister agree that it would have taken real courage for the Chancellor to come here today, and that in failing to show that courage he has shown he is not fit to lead his party? His failure of courage is not only that, however. It is a discourtesy to this House that renders us incapable of properly examining the Budget, because we do not know how the Chancellor proposes to meet his fiscal targets.
One of the best ways to improve the life chances of those who are either able-bodied or disabled is to invest in education. Does the Minister agree that the £1.6 billion investment set out in the Budget will help the next generation to get the best start in life?
This was an excellent Budget for education; it was an excellent Budget for the next generation. If we are going to have the prosperity and economic security the country wants, we have to have a world class education system. That is exactly what the Government are in the process of delivering.
Is it fair to make £4.4 billion of cuts to disabled people through the personal independence payment when they are twice as likely to live in poverty, and at the same time give tax breaks in corporation and capital gains tax?
As I say, there will be a statement on personal independence payments later this afternoon. In the past six years, we have seen a significant increase in real terms spending on the disability living allowance and PIP. We also need to ensure we have a productive economy that creates wealth in the first place. I make no apologies for our wanting to have a competitive tax system.
One notable point in the Budget was that self-employed people got some help. They can often be the unsung heroes of our communities and they play such an important part in local business. Does the Minister agree that by helping them the Government are really demonstrating that they understand what makes the economy work, and, ultimately, what will benefit so many more people?
My hon. Friend is absolutely right. The Government are backing the 4 million self-employed people we have in this country, whether through help with business rates or help with national insurance contributions. We are on the side of those who are going out, taking a risk, working for themselves and creating wealth for the British people.
Nearly 7,000 people with disabilities across Cardiff and the Vale of Glamorgan would have been hit by the cut to PIP. The Minister has not answered these questions, so I will ask them. Where is the Chancellor and why he is not here to apologise? Secondly, how will the £4.4 billion black hole be filled?
The Chancellor has worked tirelessly to turn the British economy around, and he is continuing to do that. In terms of a black hole, I just point out that every single day we hear proposals from the Labour party to oppose some spending item or tax cut—more borrowing, borrowing, borrowing.
This welcome Budget for Cardiff is delivering the Cardiff city deal, in stark contrast to the Labour Assembly Government, which is the most centralising Government in western democracy. Businessmen and women welcome the business rates relief, and the localism in the Budget is incredibly popular. Would my hon. Friend encourage the Labour Assembly Government to follow our lead and empower businessmen and women?
If the Welsh Assembly Government are to follow our lead, they need to change their leadership, and there will be an opportunity to do that in just a few weeks.