I know that the whole House will join me in sending our warmest congratulations to Prince Harry of Wales and Meghan Markle on the announcement of a union that will make the royal family even more global, and Britain more global than ever before.
I am delighted to open the Budget debate. The driving purpose of this Government is to strengthen Britain’s global role, to raise our level of national ambition and to prepare for the opportunities before us when this country regains the power to decide our trade policy and strike our own trade deals. As that moment approaches, the House should focus on the salient fact that 80% of the global economy and 90% of world economic growth lies outside of the European Union. The countries of Asia and the middle east have been increasing their relative weight in the global economy for decades, so that the great arteries of world trade are thousands of miles from our continent. Every day, fleets of supertankers carrying 17 million barrels of oil ply the strait of Hormuz, and a quarter of the world’s maritime trade passes through the strait of Malacca in south-east Asia.
As I am sure the hon. Gentleman is about to remind us, we are going to create a new, deep and special partnership with our friends and partners in the EU, but Britain is uniquely placed to thrive and prosper in a globalised economy.
I think that most hon. Members who are listening to the exordium of my speech will appreciate that that is an entirely ludicrous question, since I pointed out, just as the hon. Gentleman rose to his feet, that we are going to make a new, deep and special partnership with our friends in the European Union in addition to the exciting growth opportunities that await us around the world. By history and by instinct, Britain is an outward-looking and free-trading nation, and all we need to flourish is the determination to grasp the opportunities around us. This Budget is designed to equip a global Britain for that challenge.
In terms of grasping opportunities, does my right hon. Friend acknowledge that one in 12 people on this planet is an Indian under the age of 28? Does he agree that that is where the future lies, that that is where the opportunities for this country lie and that we can forge a trade relationship with those people only outside the customs union?
My hon. Friend is absolutely right, and I might point out to him as well that India is just one of 52 Commonwealth nations that together comprise 2.4 billion people and some of the fastest-growing economies in the world, with whom we can now do free trade deals, as he rightly says, outside the customs union. We will be strengthened in that endeavour by being able to build on the success—
I will give way in a moment, as I am sure the right hon. Gentleman will want to hear these points.
We will be able to build on the success of an economy that has grown for 19 quarters in a row, contrary to what the right hon. Gentleman prophesied, with unemployment that has fallen to its lowest level for 42 years and with 3 million new jobs since 2010—one of the best records in the whole of Europe—and we are forecast to create another 600,000 by 2020.
This Budget will take forward our national success by helping Britain to compete in the industries of the future —robotics, artificial intelligence and self-driving cars. My right hon. Friend the Chancellor is overseeing the biggest increase in science and innovation spending for 40 years, investing another £2.3 billion to keep Britain at the forefront of the technological revolution.
On the subject of something the Foreign Secretary can realistically achieve in the Budget, will he set out for the House when he is going to deliver on his promise of £350 million a week for the NHS—[Interruption.] They do not like hearing it, do they?
With pleasure. As the right hon. Gentleman knows full well, when we leave the European Union, there will be at least £350 million a week, of which we will take back control. As he knows full well, substantial sums from that funding will be available for use in our national health service. If he seriously believes that money should be squandered on ill-audited projects around Europe, he is not expressing the will of the British people.
If I may, I will make a little more progress.
The right hon. Gentleman will be pleased to know that a new tech business is being created in Britain every hour, and we are dedicating another £500 million to initiatives ranging from 5G mobile communications to full fibre broadband networks.
This Budget presses on with the most ambitious renewal of our national infrastructure in living memory, including the biggest programme of improvements to our road network since the 1970s and the biggest expansion of our railways since Victorian times, with Crossrail comprising the largest construction project in Europe, to say nothing of High Speed 2, the second biggest.
But we cannot prosper at home unless Britain plays our indispensable role in maintaining the stability and security of the world. It is the right thing to do, but it also means that global Britain is of direct benefit to all our constituents. Millions of British jobs depend on the benign and transformative power of free trade. Last year, we sold goods and services worth almost £100 billion to the United States. Our exports rely, therefore, on other countries being rich and peaceful enough to buy our British products.
When the Department for International Development invests £4 billion in development in Africa, we do this, and we are proud to do this, because it is right in itself and also because 70% of Africans are under the age of 25, the population of their continent is set to double to 2.4 billion by 2050, and these are the great markets of the future.
Last week I returned from the border of Bangladesh and Myanmar, where I heard of unspeakable crimes being committed against the Rohingya people. At this crucial time, the Foreign and Commonwealth Office has had its budget slashed, and I am worried about the effect this will have on our ability to prevent future crimes against humanity. I would like to share my findings with the Secretary of State, so will he kindly agree to meet me to discuss the evidence of genocide in Myanmar?
I must, I am afraid, correct the hon. Lady. The budget of the Foreign Office is rising from £1.2 billion to £1.24 billion, and including our ODA—official development assistance—spending, it is going to be well over £2 billion every year. There has been no cut in Foreign Office spending whatever; I am afraid that that is absolutely untrue. We are seeing our spending increased rather than the reverse. I have had the opportunity to discuss the crisis in Rakhine and the plight of the Rohingya not just with my right hon. Friend the Secretary of State for International Development, who was there at the weekend, but with many hon. Friends across the House.
May I invite the hon. Lady to write to me about the matter and I will certainly do my best to give her a full answer? [Interruption.] I am afraid that, as she can imagine, my diary is very heavily congested. [Interruption.] She importunes me for a meeting. It would be wrong of me—[Interruption.]
Order. Hon. Members must not shout at the Foreign Secretary. He has given an answer to a question. People might not like the answer, but he has given an answer, as it is his duty to do, and it does not work to shout at him.
It pains me to give any kind of negative answer to the hon. Lady, but I must tell her that my diary is very busy. I have had many meetings on the crisis in Rakhine and the Rohingya, and I am not at this stage able to consecrate the time that she wants from me. May I invite her to write to me and I will do my best to help her?
The reason the UK is one of the biggest donors to Bangladesh and to the solution of the crisis in Rakhine is that Burma, one day, will have a great future and we—our country—will be part of that future. When our soldiers and development experts are deployed in northern Nigeria—I have seen for myself the great work that they do—to help defeat the barbaric terrorists of Boko Haram, they are also helping to bring stability to a country rich in natural resources that will, by the middle of the century, have more people than the United States. When we strive to get girls into school in Pakistan, to unite the world behind Ghassan Salamé’s plan for a peaceful Libya, to improve the resilience of Bangladesh to flooding, to help Kenya to beat corruption, or to help tackle the problems of Somalia—all areas in which the UK, global Britain, is in the lead—we are doing the right thing for the world, but we are also investing in countries with huge potential, filled with the consumers of the future.
Our exports rely on shipping lanes and clear international rules enforced with rigour and fairness. We will not be so foolhardy as the Leader of the Opposition, who apparently believes that all this can be taken for granted and left to the good will of foreign powers.
I am concerned that the Foreign Secretary might be moving on from the aid budget without mentioning a very good project that we are involved in—a finance initiative for women entrepreneurs that is helping women in the developing world to set up businesses, not only providing security and stability but enabling them in future to become trading partners with us.
I am delighted that my hon. Friend has made that valuable point. The emphasis that she places on women’s commercial potential and ability to drive the economy is absolutely right, and it is one of the reasons why all UK overseas effort is focused, above all, on the education of women and girls. I believe that that is the universal spanner that unlocks many of our problems.
We believe that the international rules-based system, on which our safety and prosperity depends, must be defended and upheld. To that end, my right hon. Friend the Chancellor has ensured that Britain has the biggest defence and overseas aid budgets in Europe. The Foreign Office, the Ministry of Defence, DFID and our intelligence services will have a combined budget of £51.2 billion this year, allowing Britain to devote more resources than any other European country to safeguarding our interests and projecting our influence worldwide.
Today, the UK accounts for 13% of the EU’s population but 16% of its GDP, 21% of its defence spending and 25% of its spending on development aid. None of that will be lost to our European friends after we leave the EU, because, as the Prime Minister has said, our commitment to the defence and security of Europe was unconditional and immovable long before we joined the EU, and it will remain equally resolute after we leave.
As the hon. Gentleman knows full well, we are one of the few countries in Europe, or indeed in the world, committed to spending 2% of our GDP on defence. We are increasing our defence spending year on year, as the Chancellor confirmed in this Budget.
We are demonstrating our commitment by deeds as well as words. At this moment, Britain is providing almost a quarter of the troops in NATO’s “enhanced forward presence” in the Baltic states and Poland. I visited them in September, and I suggest that the hon. Gentleman does likewise. He will see a battlegroup of 800 personnel in Estonia, and it will make him proud. It was extraordinary to see the gratitude of the Government and the people of Estonia, because they see what Conservative Members understand: the people of Tallinn, Riga, Warsaw and Vilnius enjoy just as much protection from NATO as the residents of Berlin, Paris or London. It is right that they do, and they have an equal right to live in peace and freedom.
I say again that not only is a global Britain in our national interest, but we have an obligation to promote the general good. It is an astonishing fact that, when we include our overseas territories, this country is responsible —in addition to all the other aspects of global Britain that I have described—for 2.6 million square miles of ocean. That area is more than twice the size of India and 30 times bigger than the UK. Britain is responsible for a greater expanse of the world’s oceans than are Brazil, Canada or even China. It is possible that some hon. Members are unaware that one third of the world’s emperor penguins are British.
I refer my hon. Friend to the answer I gave a moment or two ago in respect of the colossal investments that the Government and the country are making in our defence and armed services, of all kinds. We are spending 2.2% of GDP on defence, and very few other countries can match that record. I do not know whether my hon. Friend has noticed, but this country has only recently commissioned two of the biggest warships—each of them is longer than the Palace of Westminster—that this country has ever produced, which is a demonstration of our commitment to the Royal Navy.
I will, if I may, complete my point about the penguins. The penguins have their British status by virtue of their residence in the British Antarctic Territory. We have the fifth biggest maritime estate in the world, giving us a special role in conserving the biodiversity of our seas.
My right hon. Friend is making some extremely important points, particularly about the Antarctic and the Southern ocean. Will he commit the Government to paying particular attention to marine protected areas around the Antarctic coast, which I think he strongly espouses, as do close relations of his?
My hon. Friend brilliantly anticipates the point I was going to make. As he rightly guesses, the Government’s policy is to encircle or, I should say, to engirdle the planet with a blue belt of marine protected areas embracing 1.5 million square miles of ocean by 2020.
The House will know that the careless disposal of plastic waste poses one of the gravest threats to marine life. That potentially lethal material, which is carried by the currents, is choking seabirds and imperilling whales. In 2015, the Government introduced a charge on plastic carrier bags, cutting their use in the UK by 80%, and avoiding the disposal of 9 billion carrier bags, many of which might otherwise have ended up in the oceans. From
A global Britain is a safer Britain and a more prosperous Britain. It is profoundly in our interests that we should play the role of helping to guarantee the safety of countries far from our shores—
With great respect, I will not give way.
As well as taking such actions, we should invest in the development of nations that may be poor today, but will be thriving markets for British exports. I venture to say not just that such an outcome will be good for those countries or for our country, but that the fruits of such investment by a global Britain will be good for the world. I commend this Budget to the House.
I am delighted to join the Foreign Secretary in congratulating Prince Henry of Wales and Meghan Markle on their forthcoming marriage. However, I was disappointed that the Foreign Secretary did not feel it appropriate to acknowledge a recent sad event. I want to ensure that all of us in the House join in sending our thoughts to the families of all of the hundreds killed, including 27 children, and injured in Friday’s horrific terrorist attack on al-Rawda mosque in north Sinai. It is a brutal reminder that by far the biggest targets and the highest number of victims of jihadi terrorists are people of the Muslim faith, and that the inhuman evil that is Daesh, which worships no gods but death and publicity, must be wiped from the face of the earth.
For reasons lost in the past, Budget debates have often been the occasion for some degree of light-hearted exchange over the years. However, not least in the light of the events in Egypt and the serious situation in which we currently find ourselves as a country economically, diplomatically and militarily, I do not believe that levity is in order today. Especially when it comes to the Foreign Secretary, all the jokes have worn just a bit thin of late.
I am nevertheless glad that the Foreign Secretary is leading today’s debate. Back in March he acknowledged how rare that was, because never under David Cameron’s Government did a Foreign Secretary lead a Budget debate. In the first two Budgets under the new Prime Minister and Chancellor, however, the Foreign Secretary has been given that honour. Perhaps this is their way of dipping his hands in the blood, as the economic impact of his Brexit plan becomes ever clearer, or perhaps, to be slightly less Shakespearian, it is their way of rubbing the nose of a wild, carefree puppy in the mess he has made.
Of course I welcome that, but I am concerned that we still have no answer from the Government on what will happen to the European body that currently regulates pharmaceutical trade across Europe. With no answer on that, it is difficult to be able to look at a long-term plan in that regard.
I was talking about the mess. We saw that mess last week in the Office for Budget Responsibility’s latest projections. Growth in the UK, which was already projected to be the lowest of all major economies, has now been cut again, in one of the biggest downgrades in our economic history. The truth is that it could be much worse. Let us face the reality. The OBR’s forecasts last week were still based on an optimistic assumption of Brexit.
The OBR said:
“Given the legal requirement for the OBR to produce its forecasts on the basis of current Government policy, we once again asked the Government to provide us with any detail on post-EU exit UK policies in relation to trade, migration and EU finances.”
Let us note two points about the OBR’s language, because Robert Chote is not one to use his words loosely. He said that he had “once again” asked the Treasury for its Brexit plan—presumably, he has been making that request for many months now. What he asked for was very simple but very shocking: he asked the Treasury for “any detail” about its plan. What did the Treasury do in response? According to the OBR, the Treasury sent it a copy of the Prime Minister’s Florence speech. How utterly pathetic. That was followed up with a bunch of documents full of aspirations and pipe dreams, with no detail and of no practical worth.
The OBR was left to conclude:
“We were not provided with any information that is not in the public domain.”
In other words, the organisation whose legal responsibility it is to forecast the future state of the British economy asked the Government what their plan was for Brexit and was treated just as dismissively as every Member of this House has been treated for the past 17 months. As a result, the OBR concluded:
“Given the uncertainty regarding how the Government will respond to the choices and trade-offs it faces during the negotiations, we still have no meaningful basis on which to form a judgment as to the final outcome and upon which we can then condition our forecast”.
Seventeen months on from the referendum, the OBR still has “no meaningful basis” on which to make a forecast about what Brexit will mean, either because the Government refuse to tell them, or because the Government cannot decide what kind of Brexit they want.
However, let us be absolutely clear about one thing: as dreadful as the OBR’s forecast for growth and the public finances is, it still assumes that there will be a deal on future trading arrangements between Britain and the EU. It has not even attempted to look at the consequences of a no-deal outcome on trade, employment and growth. Therefore, when the Economic Secretary to the Treasury responds at the end of the debate, will he address one specific question? The Government have said that they will conduct precautionary preparations for the prospect of a no-deal, cliff-edge Brexit. Can he please reassure the House that, as part of those preparations, the OBR will be asked to assess the likely economic and fiscal impact and to publish that paper as soon as possible, so that Parliament and the British public can fully understand the costs of that scenario?
I will of course give way to the right hon. Gentleman, but I wonder whether we could do it this way: if he has a question for me, I have a question for him. Of the 32 taxes listed in the Red Book’s table of current receipts, which one is forecast to take in less money year on year over the next six years?
If the right hon. Lady wants me to become her adviser, I am very happy to do so, although of course that has a cost attached: I would advise her to leave her position at once. Can she answer a very simple question? During the election, her party made it very clear that it would have Britain leave the customs union and be outside the single market, and it said that again after the election. Then her party began to drift, and the other day Barry Gardiner, now sitting on her right-hand side, said, “Actually, we could remain in the customs union and the single market.” While she is interrogating the Government, perhaps she would like to make clear what her party’s position is on leaving the European Union.
Order. I stopped people shouting at the Foreign Secretary, and I will stop people shouting at the right hon. Lady. Listen to her answer.
The table on page 82 shows that only one of the 32 taxes listed will fall, and that is the bank levy. That tells us all we need to know about the Government’s priorities in the Budget.
As for what the Government’s plans are and what they are doing to the country, let me turn to the substance of the Budget and today’s theme of global Britain. In recent years the Treasury has taken great pleasure in writing a section of the Red Book entitled “The Global Economy”, which is usually used to trumpet the fact that Britain’s economy was the envy of the western world.
I am not going to.
In 2016 that section of the Red Book ran to a full 10 paragraphs, beginning with the boast that:
“Britain is forecast to grow faster than any other major advanced economy”.
Well, what a difference a year makes. Now that section runs to just one measly paragraph, on page 13, and it does not state how much Britain will grow compared with the rest of the world. For that comparison, we must turn to the OBR, which has stated:
“The pattern of strengthening growth across the other major advanced economies this year contrasts with the slower pace of growth in the UK.”
While it has slashed its forecast for UK growth up to 2022, it has upgraded its forecast for the rest of the world. George Osborne used to boast in every Budget that Britain was winning “the global race.” We now have a Government lagging along at the back of the global field and falling ever further behind. So much for global Britain.
If anyone thinks that growth figures are just numbers on a spreadsheet with no real-world implications, they should turn to two areas where the downgrading of Britain’s growth is already having direct and immediate effects: our spending on defence and on development.
Is my right hon. Friend aware that in the past 35 minutes the Secretary of State for Exiting the EU has written to the Select Committee to say that the reports being provided are not complete and do not actually contain anything that might be commercially sensitive, thus adding very strongly to the point she is making? The Government are taking on the most significant economic challenge the country has faced since the second world war without a modicum of the basic detail they need to take on the task. Does it not shame the Government and Parliament that we are facing this kind of catastrophe without any serious information?
My hon. Friend makes a very serious and important point. It is a shame that such an important and serious contribution is met by laughter on the Government Benches.
Let me turn to defence. It is not often that I find myself in agreement with the right hon. Members for Mid Sussex (Sir Nicholas Soames) and for Bournemouth East (Mr Ellwood), but I absolutely agree with them that the Government’s proposals to reduce the size of our Army to below the 70,000 mark, a cut of 12,000 from current plans, is nothing short of a scandal. Nor would it be acceptable to cut still further our naval capabilities by taking the amphibious ships, HMS Albion and HMS Bulwark, out of service.
We all heard the International Trade Secretary say yesterday that the Government would attempt to reach “some sort of compromise” on these cuts. Well, I have to say to the Government that there is no basis for compromise here. We should not even be having this discussion. Our armed forces are stretched to the limit as it is and they cannot take another round of cuts, so when we hear from the City Minister later on this, who himself served with such distinction as a young man in the Royal Regiment of Fusiliers, I hope he will make it clear, on behalf of the Treasury, that there will be no cuts in the size of the Army and no cuts in the Navy’s amphibious assault ships.
I have already made my point about the armed forces, and in that sense I agree with the right hon. Lady, but does she not realise that the cost of the national debt in interest alone is the equivalent every year of 10 Queen Elizabeth aircraft carriers? I am sure she would agree with me that the way to solve the problems with the MOD budget is to not increase the national debt.
The national debt, as I understand it, has more than doubled under this Government, so we take no lessons from them. Surely it is important to borrow to invest in order to grow our economy. It is, essentially, a different attitude to economics.
Let us hope the Minister goes further and corrects one major omission from the Budget on the issue of spending. On the Labour Benches, we welcomed last week’s guarantee that the increase in nurses’ pay would be funded through additional money from the Treasury with no cuts elsewhere to the NHS budget. We will hold the Government to that guarantee. Can we have the same assurances over the much needed and long-overdue increases in paying for our armed forces? It would be entirely wrong and self-defeating if those increases were to be paid for by further cuts in personnel, equipment or living conditions, so I hope the City Minister will be able to give us an assurance on that.
Does my right hon. Friend believe that the Government are doing enough, as set out in the Budget, to tackle tax avoiders and tax evaders, some of whom are resident in British overseas territories and dependencies, to ensure that the Treasury has enough resource to pay nurses and others?
In the past, it has been possible to make common cause between the Government and Labour Benches on the need to secure the future of the nuclear deterrent. Can we now make common cause on a recognition that the bare minimum of 2% of GDP is simply not enough, bearing in mind the fact that for several years after the cold war, in 1995-96, after we had taken the peace dividend, we were still spending 3%, not 2%, of GDP on defence?
I am grateful to the right hon. Gentleman for that question and I will come on to answer it if he will give me a moment.
Beside the specific proposals, there is a wider point of principle on defence spending, which takes us back to the question of falling growth. We on the Labour Benches have long argued that the way the Government meet the target to spend 2% of GDP on defence is wholly inadequate. Defence spending should mean spending on defence, not on Ministry of Defence pensions, as the right hon. Gentleman and the Select Committee have pointed out, or on any other items that the Government simply lump in to meet the target. We need to ensure, at a time when growth is being downgraded—we are dangerously close to a period of falling GDP—that the Government do not use that as an excuse to cut the armed forces budget, in effect treating the 2% figure not as a target but as a cap. If anyone thinks that is a fictional risk, let us take a look at the budget for international development.
I am told this is different but I believe it is not. The Budget speech in March this year was one of the first I can recall since coming to this House, under Chancellors from different parties, that made no mention of international development and our obligations to the poorest in the world. I believed at the time that it was a temporary aberration, but sadly it happened again last week. This time, the omission was far more serious. Say what you like about George Osborne—and I am sure the Foreign Secretary frequently does—at least when he used to cut the international development budget and keep it capped at 0.7% of GDP, he would stand in front of this House and announce that decision publicly. It is a disgrace, by contrast, that the Chancellor last week chose to cut £900 million from the overseas aid budget over the next two years but did not think it worth mentioning in his speech, let alone detailing exactly which projects and programmes will be cut in the world’s poorest countries as a result of the Government’s failure on growth.
I gave way to the right hon. Gentleman once before. I am sure he will be able to cover any points he wants to make in his speech.
Across the world, this is a precarious time for investment in international development. The US Congress is battling to limit Donald Trump’s proposed cuts to foreign aid and the global fight against malaria, but still the only question is the size of the eventual cuts, not whether they will go ahead. Closer to home, the EU’s proposed 2018 budget includes a 6% cut in development spending, a cut that dwarfs any proposed increase in spending on humanitarian aid.
I am a little bit concerned that the right hon. Lady might be misleading the House. The 0.7% figure is enshrined in law, and surely she recognises the extra funding placed not only with the World Service but the British Council, which does a huge amount of work on human rights and education, and deals with some of the trickiest countries around the world. We should not dismiss this country’s commitment to international development.
I simply refer the hon. Lady to the Red Book, where she will see that there is less money being spent on international development. It is a great worry to us all and I know it will be a great worry to her. I therefore hope she will join us in speaking to the Chancellor about our responsibilities, because we are at a time of great difficulty internationally. As I have been attempting to outline, there are cuts not only from the United States but the EU. If we are, in effect, spending less money, too, at such a precarious time, that should cause us all concern. It was extraordinary that the Chancellor of the Exchequer chose not to mention it at all in his speech.
Does my right hon. Friend agree that what the Government and the Conservative party do not recognise is that the commitment is to 0.7% of GDP, so when GDP falls, as we learned it did in the Budget, the amount of money going to international aid also falls? The Chancellor should have made that clear last week. [Interruption]
So in conclusion, here we are debating Britain’s place in the world, in respect of a Budget that could not bring itself to mention how we are ranked globally on growth; here we are debating defence, in respect of a Budget that did not once mention defence spending or armed forces pay or disclose the Government’s secret plans to cut the size of our Army to below 70,000; here we are debating international development, in respect of a Budget that is scandalously silent on the issue, even while raiding almost £1 billion from its budget.
If that is what the Government mean by “global Britain”, I would hate to see their vision of isolation. We might see it soon enough, however, because there is one thing that sums up the Budget and the giant mess the Government have got us into: the great flourish with which the Chancellor turned, for approval, to the Foreign Secretary and announced that he would be spending £3.7 billion on preparing for a no deal Brexit—£3.7 billion of taxpayers’ money just to prepare for failure. That is exactly 100 times what the Foreign Secretary wasted on his ludicrous vanity project, the garden bridge, and 110 times what the Chancellor set aside to help the NHS cope with the upcoming winter crisis.
That is the price we are all now paying—literally—for a Government who have spent the 17 months since the referendum fighting among themselves and fighting for position, instead of fighting to get the best deal for Britain—17 months in which, as the OBR report said, we have been given absolutely no detail of the Government’s plan for trade, migration or EU finances; 17 months during which the prospect of no deal has gone from being a straw man used to threaten the EU in negotiations to being a realistic and increasingly inevitable outcome. And all this is because of the Government’s utter failure to agree on what they want and the Prime Minister’s total inability to show any leadership, whether to her Cabinet or her Back Benches. That is why we are in this mess, why our growth figures are in the global toilet, and why we are wasting £3.7 billion preparing for failure and short-changing the NHS, threatening to cut the Army and raiding the budget for the poorest in the world to pay for it.
The Government are not turning us into a global Britain; they are turning us into a global laughing stock—a global example of bad government, hopeless leadership and a useless Budget. For all their talk of a global Britain, the Government are driving the country at breakneck speed off a cliff, at the bottom of which lies ever greater isolation and ever deeper economic misery. The Budget was one of the Government’s final chances to apply the brakes, but instead they are spending £3.7 billion simply greasing the wheels. It might have saved the Chancellor his job, but it was a shameful dereliction of his duty.
Order. It will be obvious to the House that this is a very popular debate, with well over 50 colleagues having indicated to me that they wish to speak, so we have to have—[Interruption.] Order. It would be as well to listen. We must have an immediate time limit of four minutes.
First, I wish to take a brief moment to correct the record: the economy is growing, unemployment is falling, our friends are investing, and the country is doing well. Opposition Members will be astonished to hear that, however, because all we see from them is darkness, while all we on the Government Benches can see is light. Still, ’twas ever thus.
While we are on the subject of light, perhaps I could point to a few things the Budget has done well. First, it has recognised investment in foreign affairs. My right hon. Friend the Foreign Secretary highlighted that clearly when he spoke about the budgets for the intelligence services, defence, DFID and the Foreign Office as being in many ways linked—which, of course, they are. It is not possible to think about the defence of the United Kingdom, its protection, its influence, or its help to others without wrapping them all together, and that is why I am pleased the Government are bringing them together so much more strongly than ever before. The fact that my right hon. Friend Alistair Burt and my hon. Friend Rory Stewart sit as Ministers in both the Foreign Office and DFID shows very clearly the link between the two.
I would be grateful to hear a little more from the Foreign Secretary about a few areas. On the European lay-down, it is important to maintain our friendship with the EU. He was clear that although we will be looking for opportunities elsewhere, we on the Government Benches believe in opportunities everywhere; one of those places, of course, is among the 27 members of the EU. I am keen, therefore, to hear a little more from the Government about how we see the lay-down of embassies and partnerships under the common foreign and security policy, the common security and defence policy, the Political and Security Committee, and perhaps even in terms of permanent structured co-operation. Will he talk to us a bit about that?
It is through these established orders that Britain has made herself strong. It is not by accident that we have become a trusted partner and a feared adversary over these past few hundred years; as the Foreign Secretary again said—I find myself in unusual times when I agree with most of the things he says—it is because of the international rules-based system: a system that we helped to write. It is important that we remember our role not just in its formation, but in its maintenance, which is why I urge him to talk a bit more about those areas.
When we talk about maintenance, we mean not only our diplomatic network but areas such as GCHQ. Just as the Navy guarded our sea routes and communications throughout the 18th and 19th centuries, hanged pirates and kept the Malacca straits open, so GCHQ deals with pirates today—okay, it is slightly different: a little less of the hanging; a little more of the hacking.
Does the hon. Gentleman accept that while the Government have shown generosity towards the other European nations in assuring them that we will continue in that role, they have not shown the same generosity in the trade negotiations?
My hon. Friend—I do consider him a friend—will know extremely well that I think the UK’s generous position towards the defence of Europe is not only important, but a matter of our own self-interest. Our frontier should start not at Dover, but at the furthest extents of our allies and ships. In ensuring that we have a continuous at-sea nuclear deterrent and that our submarines and ships are under way across the globe, we ensure that we push our borders out from our own shores and that our people are safer.
My hon. Friend mentions the continuous at-sea deterrent. Given the necessary upfront investment in new submarines, what does he make of the idea put about on the Government Benches that perhaps this major investment should be met from the Treasury reserve?
My right hon. Friend knows extremely well that before 2010 that was exactly where it was met from, because it is an ongoing operation. I urge the Treasury to look very hard at doing so again to ensure that the flux in funding that comes with an expensive programme such as the nuclear deterrent is maintained by the whole of Government. It is, after all, a strategic programme, not a military programme in the standard sense.
There is so much more that we can do. It is not just about the lay-down of defence, although we have spoken about that; it is about the lay-down of our diplomats and aid workers. I am keen that over this coming period we look very hard at this and focus on our strategic priority. Too often we hear about “priorities”—in the plural—and this leads to a deception that one can have more than one; all that tells us, of course, is that we have none. The priority for our country must fundamentally be on the rule of law, on the maintenance of the international rules-based system, and on helping our friends to develop those rules that make us all prosper.
Let me give just two examples that have made a huge difference. The first is the transformation in China of the adherence to intellectual property. Over the last 20 years, that change has enabled Chinese businesses to grow prosperous on the back of their own intellectual strengths, which is brilliant not only for them, but for the whole world, because it prevents piracy and encourages wealth development.
On a more prosaic note, land rights in various African countries have started to be guaranteed. That is a huge advance, because it enables small farmers—smallholders —to own capital, to trade, to develop and to invest. Again, we have an opportunity to promote the international rules-based system, the rule of law, and, indeed, British values.
Let me begin by associating myself with those who have sent messages of congratulations to Prince Harry and to Meghan. I also offer warm congratulations to all the young couples who have today declared their undying love for one another, particularly those for whom marriage would have been unlawful just a few short years ago.
Let me also—along with, I am sure, all other Members—associate myself with what Emily Thornberry said about the appalling tragedy that took place in Egypt a few days ago. It was, I think, a reminder that although the first priority of our defence and security policies must be to defend and protect us, we also have an obligation to protect anyone who needs to be protected. We should never believe that because the threat of terrorism begins to retreat from our shores, we have no responsibility to continue to support those in Egypt and elsewhere who need to be helped to rid themselves of the scourge of terrorism within their own boundaries.
When I came into the Chamber, I had a feeling—it has been confirmed by what I have heard so far—that the Government’s definition of “global Britain” and where Britain’s place in the world should be is very different from where I want my country to be, and from the role that I want it to play in the world. People may regard my country as Scotland, as I do, or they may insist that it is the United Kingdom. Regardless of that, I simply do not recognise the Government’s direction of travel as being towards the place that my constituents, and indeed my compatriots, want the United Kingdom to head for. Perhaps this is the simplest way of describing the problem: in a headline debate on Britain’s place in the world, neither the opening speech nor the winding-up speech is being made by an International Development Minister. What does that tell us about where international development really lies in the Government’s priorities?
When I think about where Scotland’s place in the world should be, I think of organisations such as Mary’s Meals, which was set up 25 years ago in a tiny village in Argyllshire. I suspect that most people could not even pronounce the name of that village, let alone find it on the map, but it is called Taynuilt. Mary’s Meals now provides free school meals for more than a million people in the world’s poorest countries, and recently, just before celebrating its 25th anniversary, it reached the extraordinary milestone of providing its billionth meal. Those 1 billion meals have not only provided nourishment, but helped to support the education system in Malawi and elsewhere.
I think of the efforts of two of my constituents a few years ago in response to the refugee crisis in the Mediterranean. Lauren Daly and Lewis Cunningham issued an appeal for any donations that might help the refugees. Two days later, they issued an appeal for a lorry, because they had already collected enough to send to the refugee camps. A few days after that, they issued an appeal for a warehouse to hold the tons and tons of stuff that had been donated.
I think of the actions of people in my former parish of St Columba’s in Cupar and in St Matthew’s in Auchtermuchty, in the constituency of my good and hon. Friend Stephen Gethins. Over a number of years, they have provided a huge amount of infrastructure for a school in an impoverished part of Uganda, including science teaching laboratories, accommodation blocks, a water supply and school kitchens. All those things have helped the school to become one of the best performing schools in the area. I have no idea what percentage of GDP or what percentage of the income of those volunteers was contributed. Much more important than thinking about percentages is thinking about the impact that their actions are having.
With all three of those examples, I am immensely proud of people’s efforts to help others in the world’s poorest countries. They did that not because it looked good on a CV and not because it would earn them brownie points in the House of Commons or elsewhere, but because it was the right thing to do. When I think of where Scotland wants to be in the world, I think of Mary’s Meals, of Lauren and Lewis, and of St Columba’s and St Matthew’s. I am sorry, but when I think of where the Government appear to want to take Britain in the global world, I think of the ethnic cleansing of the Chagos Islands, and of £2 billion of arms sales to a country that is accused of more than 150 counts of crimes against humanity in Yemen. I have to ask whether those two directions of travel are at all reconcilable; as we say in Fife, I hae ma doots about that one.
I am genuinely grateful to the hon. Gentleman for giving way. Scotland is part of the United Kingdom, so it has access to the Foreign and Commonwealth Office, its embassies—there are hundreds across the world—and the Department for International Trade, which ensures that Scottish fish products are sold in China and Vietnam, and that Scottish whisky is on its way to markets in India. Is that not a great direction of travel for Scotland in the United Kingdom?
I suspect that I have much more confidence in the world-class quality of the food and drink that is produced in Scotland than the hon. Gentleman. I do not believe that Scotch whisky really depends on the Foreign Secretary to become a world leader, and I do not believe that the world-class food and drink that we produce in Scotland really depends on gunboat diplomacy to make people throughout the world understand. What it does depend on is barrier-free access to markets, and it is a bit rich for those who support the removal of our barrier-free access to the biggest single market on the planet to claim to have a monopoly of wisdom about how to develop our international trade.
Let me say once again that I do not accept the argument that the sole purpose of foreign policy is to benefit wealthy investors and bankers in these islands. The most important part of the foreign policy of any developed and wealthy nation is to ensure that its wealth is distributed so that terrorist attacks such as the ones that we have seen in Egypt recently, and the starvation that takes the lives of thousands of children every day, become things of the past. If I have to pay a wee bit more income tax, or any other tax, to make that happen, I for one am more than happy to dip into my pocket.
The hon. Gentleman referred to the intervention in Yemen in a castigating way. Will he at least acknowledge that many Arab countries are involved in the war in Yemen, and that they are trying to avert a humanitarian crisis and deal with the difficulties in that country that are a direct result of Iranian intervention in support of the Houthi rebels? The situation is much more complicated than the hon. Gentleman is trying to suggest.
I entirely agree that it is more complicated than it is often presented as being. I have not said that Iran is entirely innocent, but Iran is not buying £2 billion-worth of weapons of war from the United Kingdom, and Saudi Arabia is. Saudi Arabia stands accused of war crimes. Until those allegations are investigated, I do not think that we should be selling weapons to those who may be committing crimes of mass murder, and I do not consider the question of whether or not they are using our weapons to commit those crimes to be relevant.
When I looked at the timetable for our Budget debate, I saw “Monday: global Britain”, and thought, “That’s not going to take very long, is it?” The fact is that even the Government’s own misguided ambitions for Britain’s place in the world, which I believe are still based on the fanciful belief that we are somehow entitled to retain an empire and colonies, rather than a simple acknowledgement that the world has moved on since the days when any nation could claim the right to colonise any other nation—
No, I will not give way just now.
When we look at Conservative Members’ responses to statements by the sovereign Government of Ireland over the last couple of days, we have to wonder whether they recognise that that country’s Ministers have not only the right but an absolute responsibility to speak in the interests of their citizens. If what they say happens not to coincide with the interests of citizens in the rest of the British Isles, that might be something for negotiation.
Even despite the Government’s misguided ambitions for the role that they think Britain is entitled to play, that role is being catastrophically undermined by the shambles—“shambles” is as strong a word as I can use in the Chamber—of Brexit. Nor is it helped by the fact that we have a Foreign Secretary of whom people in the west of Scotland might say, “You cannae take him anywhere,” to which the response would be, “Or you have to take him twice—the second time to apologise.” When the Foreign Secretary assured us that he had had a number of meetings on the Myanmar crisis, I could not help wondering how many were required for him to apologise for the crassly insensitive and offensive way in which he referred to the people of Myanmar in one of his official pronouncements. We can joke about the buffoonery of the right hon. Gentleman, who is no longer in the Chamber. Everybody can say things that are stupid and wish that they had not, but if they start to make too much of a habit of it, especially if they hold as important and sensitive a position as Foreign Secretary, the time comes when the Prime Minister has to start asking whether she has the right person in the job.
We have heard a lot from Conservative Members during our Brexit debates about how leaving the European Union will open up all these wonderful markets for the United Kingdom. It might open up the American market, if we comply with the requirement announced two weeks ago by the American Secretary of Commerce to drop our opposition to genetically modified foods and chlorinated chicken. That is too high a price to pay, so I hope that the Treasury Minister who sums up today’s debate will confirm that if that is the requirement, there will be no deal with the United States of America.
I remind the House of a report published in the last Parliament by the Select Committee on Exiting the European Union on the Government’s negotiating priorities, particularly in the context of global Britain. Paragraph 170 says:
“The Government should seek a UK-EU Free Trade Agreement…which covers both goods and services and retains the mutual recognition of standards and conformity assessments.”
“The Government should maintain the maximum possible flexibility in its negotiating approach to achieve these outcomes.”
I am not quite sure how unilaterally deciding that the customs union and single market are off the table counts as flexible or anything like it.
Paragraph 198 says:
“The Government must provide more clarity as to the features of its preferred customs arrangement with the EU and how it will differ from a customs union.”
That report was published months and months ago—certainly before the election—but we still do not have that clarity from the Government. We hear the same platitudes, the same soundbites and the same slogans, but we still have absolutely no firm and concrete proposals, even for how they are going to square the circle of the border that runs across the island of Ireland, never mind how they are going to reconcile the irreconcilable and maintain full access to the single market when those who set it up made it perfectly clear that countries can be in or out, but cannot have full access without being members.
Madam Deputy Speaker—[Interruption.] Mr Deputy Speaker, I realise that there has been a sex change while I have been on my feet; I apologise to both of you. We hear the Government talk about prioritising the rule of law—the previous speaker referred to that. That is an excuse for turning a blind eye and a deaf ear to the brutality of the Spanish police against some of the citizens of Catalonia.
Why is it that we have annual state visits and state banquets for a Prime Minister whose Government act unlawfully in their occupation of the sovereign territory of Palestine? The UK Government believe that Israel is breaking the law by doing that, so why do they continue to have official state visits for the Prime Minister of a country that the Foreign Secretary believes is acting unlawfully, if the rule of law is so important to Her Majesty’s Government?
We often hear that the wishes of residents must be paramount. With regard to the residents of the Falkland Islands and Gibraltar, I agree with that 100%. What account have the Government taken of the wishes of the former residents of the Chagos islands, whose treatment by previous UK Governments could properly be described as ethnic cleansing or indeed abduction? By today’s standards it may well fall under the UN definition of genocide, which includes the forceful or fraudulent removal of a population. What account has been taken of their wishes? It seems to me that if we steal something from someone, the only way to make an apology seem sincere is to offer to hand it back. Having stolen the islands from their population, no apology can be sincere unless the Government are prepared to offer to hand them back.
No. Time is short and I do not want any other hon. Members to miss a chance to speak. [Hon. Members: “Give way!”] If the hon. Gentleman has put his name down to speak, he will get the chance; if he has not, it is unfair on those who have done and who may have prepared speeches.
The debate so far confirms that the direction in which the Government intend to take all four of these nations is very different from the direction that the people of Scotland have made it clear that they want to take. The United Kingdom Government’s vision of their place in the world is very different from how the people of Scotland see our place in the world—I suspect it might be very different from how a lot of the ordinary people of England, Wales and Northern Ireland see their place as well. If the Government believe that Scotland has no option but to follow their lead and be dragged into fulfilling a role in the world that is not the one we want, they are making a mistake as monumental and momentous as any in the catalogue of disastrous misjudgements that we have seen by Ministers in this Government over the last two years.
It is very difficult to follow that speech, but on an upbeat note, I welcome this measured, balanced and forward-looking Budget, which, coupled with today’s industrial strategy, looks beyond Brexit with optimism and realism. Alas, the same cannot be said of the Momentum alternative from the Opposition. Only the shadow Chancellor, or perhaps Paul Daniels, could possibly have the chutzpah to claim that spending commitments of £330 billion already racked up, resulting in debt interest payments of £270 billion over the next Parliament—as predicted by the very forecasters whom Emily Thornberry was so keen to quote earlier—would amount to nothing and pay for itself.
We cannot be complacent, and I certainly welcome the renewed urgency in tackling the productivity deficit and the industrial strategy, which concentrates on smart technologies, clean technologies, fast technology and preventive technology, because that is key. This year alone, China and India will each produce 1 million engineering graduates, many of them working in manufacturing and service sectors in high-tech industries. In 20 years, many of the growth jobs will be jobs that do not exist today, so education is key. That is why I welcome the investment in research and upskilling that is a hallmark of this Budget and today’s vote of confidence by the pharmaceutical companies in this country’s future in that area.
I welcome the help for business and the end of the staircase tax, which was feared. I welcome the help for small house builders in particular, with the extension of the home building fund to help more house building projects on small sites. I also welcome the commitment to more homes. We need to build more homes, as well as more new towns, so I welcome the stamp duty exemption for first-time young buyers. There are some unintended omissions. People will not qualify if buying a property jointly with somebody who has previously owned one or even somebody who has made a loss on previous properties. There are also question marks over how shared ownership is treated, but the principle is absolutely right.
However, we need to be more imaginative in promoting rent-to-buy schemes and creating incentives for the three quarters of a million empty properties that we still have in this country. There is also the bigger issue of fairness in stamp duty. The average price of a house in my constituency of Worthing is £327,000, while in Wrexham it is just £179,000 and in Wakefield it is £186,000, but the rate of stamp duty is the same. Should it not be based on size rather than price, depending on what part of the country people live in? We need to incentivise downsizing by older people to free up family homes, and they would still have to pay stamp duty under the current regime. We need to think smarter about incentivising imaginative intergenerational developments that encourage and enable families to stay closer to each other, rather than being priced out of the area where they grew up.
As chairman of the all-party parliamentary wine and spirit group, I should like to cite one world-beating industry: the wine and spirit industry. It supports 554,000 jobs in this country and generates £50 billion for the economy.
As my hon. Friend might know, the Foreign Office has 274 posts in 168 countries, and they are perfectly placed to export or promote English sparkling wine, specifically from my constituency of Wealden, as outlined in my ten-minute rule Bill, which he supported earlier this year.
My hon. Friend anticipates my next point. I am delighted that the Chancellor chose to freeze the duty on wines and spirits, but the duty on a bottle of wine is still £2.16, and the duty on a bottle of sparkling wine is £2.77. In France, the duty on a bottle of wine is 2p. Surely, after Brexit, we can give a boost to the English wine industry, which will be producing 10 million bottles, to allow our quality wines to compete even more on an international level. English sparkling wine beats French champagne hands down in blind tastings throughout the world. Also, why should there be a higher rate of duty on sparkling wine, when it is of a lower alcoholic strength than still wine? Surely that point has been conceded, given the action that is being taken on white cider.
Britain is producing excellent white wine, but there is a real problem with increased alcoholism and liver disease. Does my hon. Friend think that the solution would be to introduce unit pricing, to try to freeze young people out of the market for very high-alcohol drinks?
No, I think the answer is to encourage people to drink wisely and in a balanced and responsible way, and to drink higher value and higher quality English and British products.
I also welcome the extension of the rail discount card to those aged between 26 and 30. However, there is a flaw in that arrangement because the cards cannot be used at peak times, when many people need to travel to work. A bigger problem is the fact that many 16-year-olds who have to get to school or college or to their jobs often qualify for adult rate fares on buses and trains. I urge the Chancellor to have a look at that as well. I also urge him to look again at the case of the WASPI women, who continue to suffer the biggest injustice as a result of the change in pension ages. Perhaps at the very least he could extend the free bus pass to those women who would have qualified for their pensions at an earlier age.
Finally, one area that does not get much of a mention in the Budget relates to families and early intervention. I know that the Chancellor sympathises with this issue. Family breakdown in this country costs £49 billion a year and it is also one of the sources of the housing shortage, with families living in fragmented circumstances. We need to invest much more to deal with the problems of broken and troubled families, as well as with perinatal mental health and with child neglect, which alone costs this country £15 billion a year. Just as the Chancellor invests in roads, infrastructure and business in order to boost the economy, so we should invest more in our young children, as they represent the most valuable future of our nation and our economy.
Order. Before I bring the next speaker in, it might help those who are higher up the list to know that if they intervene on others, they will go to the bottom of the list, because all they are doing is taking minutes off the others. I am sure that everyone will want to accommodate one other.
Over the past 50 years, the United Kingdom has had a proud history of leading the world in protecting and advancing the cause of humanity. We have vaccinated millions against diseases, given more than 5 million children around the world an education, and fought off fascism on the continent. Our ability to do all that is one of the key reasons that this country has been a beacon for people around the world. There was a time when the Foreign Office exerted a positive influence globally, but I worry that it has now lost its standing on the world stage and that it is afraid to intervene when necessary. What does that tell the world about our poverty of ambition for what the UK can stand for in the future? I worry about what that means for the future generations around the world who will need our Government to step in at times of crisis. I worry about the unnecessary suffering that will go unchallenged, and about the stateless refugees who have fled state-sponsored violence with no hope of returning home. And yes, at this moment, I worry about those Rohingya refugees in border camps who now fear forced repatriation after fleeing persecution and violence.
I recently visited the border of Myanmar and Bangladesh to treat patients in a clinic and hear the testimonies of the Rohingya people, a million of whom have fled torture and persecution in Myanmar. I returned from there last week. When I was there, I met and treated refugees who recounted their harrowing journey and their experiences back in what they had called home. What was most striking was that 80% of those in the camps were women and children. One man recounted a night when the Myanmar army arrived in his village. He described how the entire village of 3,000 people was razed to the ground. All the menfolk were dismembered and murdered, and the women were dragged by their hair and gang raped. Children who were fleeing were dragged back to the village and thrown alive on to burning fires. For the military, age was no barrier. They threw babies on to the fires. I held those charred babies in my arms last week.
I welcome the efforts our Government have made to provide aid and assistance—I really do—but if our efforts are not to be in vain, we need to take firmer action to prevent further atrocities. The extra aid package announced by the International Development Secretary today is a welcome step, but thus far, our action equates to giving a gunshot victim a sticking plaster while allowing the shooter to roam free. The Bangladesh and Myanmar Governments have struck a deal to send the Rohingya back to Myanmar. Our Government must, with international partners, ensure the protection of the Rohingya by preventing forced repatriation, as well as by providing the essentials they need to survive and by guaranteeing their safety if they do go back.
My biggest worry so far is that no external organisations have been allowed access to Rakhine state. The UK must use all its leverage power to get access, and send a ministerial delegation to the region to investigate. As permanent members of the United Nations Security Council, we have the power to act. Our failure to act in the face of genocide goes against everything it means to be British: we must be courageous, compassionate and generous. We have to ask ourselves: will we be on the right side of history? The suffering of the Rohingya people is another opportunity for us to prove that the human capacity for good will always trump that for evil.
There is much to praise in this Budget. It contains something like 300 measures, many of which focus clearly on the future and on the nation’s potential and creativity, including those on artificial intelligence, driverless cars and fibre broadband, and on enhancing our science, technology, engineering and maths—STEM—skills base. We are already one of the world’s most advanced digital nations, and many of the measures in the Budget will enable us to secure that digital leadership for many years to come. I also warmly welcome the increase in spending for the NHS, for housing and for infrastructure, as well as the additional changes to and money for universal credit.
Of course, the Government are able to spend money only because of the hard work and effort of the British people. There is no such thing as Government money; it is taxpayers’ money, and public debt is merely deferred taxation. We must be careful never to forget that. We are slowly but surely putting the age of austerity behind us, and I hope that in the next few years we will see further increases in spending on health, education, social care, the police and our armed forces. Those are the things that the British public say they want us to spend money on. They are not stupid, however, and they know that when times are tough, the Government need to tighten their belt in the same way as they do in their own households.
It is telling, however, that the British public’s attitude is changing. They are confident that this Conservative Government spend their hard-earned money wisely, and opinion polls are showing that there is a greater willingness to accept increased taxation. We might need to consider that at some point. However, they would be willing to pay more tax only if they had absolute confidence that the money would be spent carefully, and that is something that the Conservative party—and only the Conservative party—can deliver. We are rightly and instinctively the party of low taxation. We will dive into people’s wallets only if there is an absolute necessity to do so. We would prefer, instead, to chase after tax dodgers and close loopholes so that normal hard-working families do not have to pay more tax.
We are also spreading the tax burden fairly. The tax gap is at an all-time low, corporation tax is increasing, and the top 1% of income tax payers pay 28% of all income tax. At 45%, the top rate of income tax is higher now than it was for 99.7% of the last Labour Government, during which it was 40% for 13 years. In 2010, the tax-free allowance was a measly £6,475; it is now £11,500, and I am pleased that it will go up to £11,850 next year. That has enabled us, the Conservatives, to take 4 million of the lowest paid out of income tax altogether, with the average taxpayer saving £1,000 on their tax bill every year. That is important for the lowest paid in society. Furthermore, the Conservatives have increased the minimum wage. It was £5.93 in 2010, but the living wage is £7.50 today, and both the living wage and the minimum wage get inflation-busting increases in this Budget. While the Opposition may talk about helping the least well-off in society, it is the Conservatives who act, and long may that continue.
As a Labour MP who wants to leave Europe, I am a rare animal. I am a non-believer in the undemocratic way that the European Union has been run for many years, but I do get a bit worried when I think about how we are going to pay £40 billion to leave the place. It beggars belief, and I wonder what is going to come next. Are we going to agree to the rules for another two years? Things keep on coming along.
I want to talk about my constituency and what is happening there, especially to the police. We have had seven years of austerity, and I do not believe that it has come to an end, as Nigel Huddleston said. We are not getting any further forward with austerity; we are in the same place as we were before the Budget was presented.
Northumbria police have had the biggest slice taken out of their budget of any police force. It has been reduced by 37%, or £124 million, and any authority that takes that sort of cut—be it the police or whatever—will lose. Its reserves have been reduced from £71 million to £11.9 million. I hear a lot about authorities having to use their reserves, local government in particular, but they cannot use them all the time. Reserves have to be kept for a reason. The number of police officers in Northumberland has fallen by 900, from 4,187 to 3,283—a reduction of 22%.
The number of police community support officers has been reduced by 244 over the same period. The number of police staff has been reduced by 279, and police stations have closed. It is worrying. We are taking the biggest police cut in the country, and we are getting concerned. I am sure that all the other Members for the area would agree with me, and I hope that they will get up and mention it. We cannot take any more cuts, but I understand that another £51 million of cuts is to come by 2020, when I should imagine we will have no police at all.
On housing, the situation is interesting in Northumberland. We had a core strategy that was put through by the previous Labour council before the elections in May this year. The plan took six years, and we got it in place, but then the Conservatives got in power and scrapped it. It is now a free-for-all in Northumberland, and people can build anywhere they want. When the Conservatives said that they were going to build so many houses in Northumberland, we asked the question and, lo and behold, they are only going to build them on the green-belt areas in my constituency and in that of my hon. Friend Ian Lavery. As for Berwick, Alnwick, Hexham or Ponteland, they are not going to build on the green belt there—oh no—just on the green belt in our constituencies. They will have to start building more schools if they want that many houses built in my area, because we do not have any room in our schools, so I do not know what they are going to do for the pupils in my area.
Coming at a time when we are exiting the EU, this is a prudent Budget. Obviously, we would have liked to see more of our own special things in it, but that is the nature of a Budget. The problem for the Opposition is that, despite stresses in some areas, the British economy is performing pretty well on the whole, which is why the polls show that, even at this stage, the Conservative party is either level-pegging or ahead of the Opposition, which is a real problem for them.
Leaving the EU presents the United Kingdom with an opportunity to think about itself, to redefine itself and to decide where it wishes to go. It was US Secretary of State Dean Acheson who, in the aftermath of the second world war, famously said:
“Great Britain has lost an empire and not yet found a role.”
That was true. When we think about our withdrawal east of Suez and about throwing our lot in with the EU, an individual British role was in a sense submerged by those events, but it is now incumbent on us to talk Britain up and our constituents want us to do that. It may be a difficult challenge for some and, judging by some of the contributions from the Opposition tonight, that is not their inclination, but people want us to talk Britain up and to think about how we can reinvigorate our advantages. With one of the best militaries in the world, we have hard power. We are committed to NATO, and we encourage others to spend the amount of money that we are spending. We are a permanent member of the UN Security Council. Those things give us real global influence, and we should be proud of them and guard them jealously.
Increasingly, our soft power cannot be divorced from hard power; we need to use them both at the same time. We have our values, our parliamentary system, the work of institutions such as the British Council, our culture and our royal family. I say that at a time when the world is yet again focused on us due to the engagement of Prince Harry and Meghan Markle.
My hon. Friend is absolutely right, and I will come to that in a minute. When I used to travel around the world on behalf of the Foreign Office, it was fantastic to have the GREAT Britain campaign branding everything that the UK was doing.
On the subject of the Foreign Office, I note that the budget will be £2 billion in 2017-18 and then £1.2 billion in the subsequent two years. I have some nervousness here. I understand the arguments about official development assistance, but let us compare that with the Department for International Development’s budget in those years: it goes from £7.6 billion to £8.2 billion—I cannot quite understand how Emily Thornberry, who speaks for the Opposition, managed to regard that as a cut. I believe that the Foreign Office should own what the UK does abroad. There are too many departments in capitals around the world that do not dovetail with what the FCO is doing. I will leave it until another time to make the point again that the more closely integrated DFID is with the FCO, so much the better.
The Foreign Office needs to expand. We are obviously withdrawing from the European External Action Service—the Federico Mogherini-led overseas diplomatic corps of Europe—so we need to think about where we are going to re-resource our posts around the world. I believe in an international, rules-based system, and I believe in Britain’s role in it. I would also like the UK Government to lead on a new financial architecture. The Bretton Woods system is outdated and fails to recognise the emergence of countries such as China.
I want a properly resourced military that retains our amphibious capabilities and our peacekeeping role. I want the UK to engage better with the Commonwealth, and what better opportunity is there to restate our commitment to it than the Commonwealth Heads of Government meeting in London next April? I want the UK to recognise and recommit to our responsibilities to our overseas territories. I ask the Foreign Secretary whether we can press the OECD harder to look at the redefinition of aid and to consider why we cannot provide more aid to the overseas territories. Some of the calculations on middle-income countries are fallacious. Financial services are counted in those calculations, but the money does not go to individuals in those countries—the money often flows in and out. We should be able to fund our overseas territories properly.
I would like us to engage with the neglected markets of Latin America. I would like British companies to take advantage of China’s one belt system. My hon. Friend Ms Ghani referred to scholarships, and we should boost the Chevening, Marshall and Commonwealth scholarship programmes, possibly bringing them together as one scholarship programme. We can continue to lead on climate change and on protecting vulnerable states—
The future of global Britain will start with Britain facing greater isolation in the world. We are taking a begging bowl around the world and pleading for trade deals to give our nation a future beyond Brexit, and it is not going well. Sadly, the Chancellor’s Budget has nothing to ease the way. Yes, he has set aside £3 billion to help us over the shock, but I remind him that it cost £1 billion just to buy off the Democratic Unionist party to prop up a weak Government. No one should be in any doubt that, although countries may want special trade deals with Britain, they will exact a challenging price. Two examples: the USA wants us to drop our food safety standards, and India suggests that the UK must be prepared to allow more immigration if it is to agree a deal.
The Government must change course. They must end the public sector pay cap, introduce further controls on high interest, bring forward investment in infrastructure, reverse the planned tax giveaways for the super-rich and reject a deregulated, no-deal, race-to-the bottom Brexit.
Living on industrial Teesside, I am well aware of the international status of many of our companies, from CF Fertilisers, Lotte and Chemoxy to Quorn, Fujitsu and Greenergy—they are all striving to be internationally competitive while sustaining investment and jobs. They have done a grand job until now, but the uncertainty surrounding them has resulted in very real concern that frustrates local managers as they compete with their international owners’ other plants abroad for investment in the UK.
Those companies are anxious about Brexit, and they are looking for even greater Government assurance that they will not simply be left to wither but will have a business environment in which to thrive. They want to see the retention of the regulations on the registration, evaluation and authorisation of chemicals for British companies post-Brexit, as exercising common standards with the EU will ease their ability to trade on the continent. I see nothing of that in the industrial strategy.
A few weeks ago, the Government woke from their deep slumber on carbon capture and storage with much trumpeting of the £100 million to be invested in demonstrator projects. That is a positive step, but it is only a tiny step when we need huge leaps to make Britain a world leader.
Teesside got a specific mention in the Budget speech, in which the Chancellor appeared to announce a major investment in the former SSI site in Redcar. He announced £123 million of funding, but the reality is that the Government are giving themselves the cash to fulfil a funding commitment that had already been made to keep the site safe. That means we will get just £5 million.
I share the deep disappointment that there is nothing to improve public sector pay. Replacing Conservative Members’ heartfelt and passionate speeches in support of our police, our health staff, our council workers and our prison officers with hard cash to give them a pay rise would go some way to helping those people to meet increased inflation.
The Government cannot starve a system of funds, watch it start to crumble and then half-heartedly try to inject some money and claim they are rescuing it. The NHS asked for an extra £4 billion a year, and instead it got a promise of £350 million for this winter and £10 billion over the course of the Parliament for capital projects.
This is my seventh speech after a Budget, and it is the seventh time that I remind the House that in 2010—seven years ago; three sevens, maybe my luck will be in—the hospital for Stockton was cancelled. Ever since we have faced the looming threat of the closure of the accident and emergency department either at North Tees or Darlington, which will force people to travel further for emergency treatment. I represent an area where unemployment remains more than double the national average, where health inequalities are part of everyday life and where our businesses seek real assurances from the Government that there is a future out there. I still feel pessimistic after this Budget.
There is much to welcome in the Budget, not least when we talk about Britain on the global stage. Infrastructure investment in this country will be important in raising our productivity and making us fit for the global stage. With that in mind, the £300 million to link other infrastructure improvements to the HS2 project is important to me, not least because it will link the HS2 station at Leeds to the main line, an idea raised by Transport for the North. That means there is now no need for a mile-long viaduct over Swillington in my constituency. It is not just about saving money on the project; the money should be reinvested in local trams and trains to ease congestion in the city of Leeds. We cannot be truly globally competitive if we are not working efficiently. It sucks away the productivity of this country if people lose a lot of time getting to work.
I was frankly appalled to hear the comments of Peter Grant, the foreign affairs spokesman for the Scottish National party. He said that Britain has no role to play in the world, which is simply not true.
I do not remember saying that Britain does not have a role to play in the world. What I said, and I will say it again, is that the role in the world the UK Government appear to have decided for Britain is not a role that the people of Scotland will be comfortable following. Nobody would deny that any country in the world has a role to play. If the Official Report shows that I said anything different, I will withdraw it. [Interruption.]
Order. The Front Benchers have had a good go tonight. If they are going to intervene, it has to be with very short interventions. I am very sorry but, if people give way, others might fall off the list.
My Conservative colleagues simply do not recognise what the hon. Member for Glenrothes has just said as a fact in Scotland. There is only one party on the rise in Scotland, and it is not the SNP.
The reality is that our country and this Government can stand proud of our work on the world stage. I pay tribute to Dr Allin-Khan. The whole House recognises that she is a credit to the medical profession, and it is a credit to this House that she took time to go out to see the Rohingya crisis at first hand—it is a terrible situation. I recognise what she said about babies, as I heard the reports on “From Our Own Correspondent”. I cannot imagine the pain she must have been through. I pay tribute to her, because she is a credit to this House and to her profession.
That represents what this country is good at, which is helping in the world. I am proud that more money has been spent by Britain alone than by all the other European countries added together to help the Syrian refugees in Lebanon, Jordan and Turkey. We have been taking refugees, too—not to the extent that other nations have, fair enough, but we have been doing our bit. More importantly, we are putting resources on the ground. I simply do not recognise the view that this Government, however people want to describe them, are setting this country out as a place with which nobody wants to be associated, because that is not true.
It was the Royal Navy that was in the hurricane-torn areas of the Caribbean. Going back a few years, it was the Royal Navy that sorted out the Ebola crisis in Sierra Leone. This Government have committed to raising the defence budget by 0.5 percentage points over inflation year on year, because we recognise the need to invest in our armed forces.
Yes, only a few nations spend 2% or more of GDP on defence, but we are one of even fewer nations to spend more than 20% of our defence budget on capital infrastructure within our armed forces. That shows the renewal of our Royal Navy under this Government and our investment in other areas of defence. There is much on the global economy and global Britain of which we can be proud.
We have heard many people, and we will hear more this evening, talk about Brexit and where Brexit is, but Labour Members cannot carry on talking about Brexit without coming to one fundamental decision: we cannot nationalise if we are in the single market, so for Labour Members to say that they feel the Government should maintain our membership of the single market is totally at odds with the manifesto they stood on. I do not think we should be nationalising, which is looking backwards, but the reality is that we simply cannot nationalise under state aid rules if we are in the single market. I therefore seek some clarity tonight. Is it the Labour party’s position that it definitely wants to leave the single market?
Unlike my hon. Friend Alex Cunningham, this is my first Budget speech in seven years, so I shall enjoy myself in making it. In his great roman à thèse on the situation of Britain, “Sybil”, written in 1845, Disraeli referred to the two nations: the nation that was growing in prosperity—the bourgeoisie, the landowners and professional classes; and the wage slaves in the factories and those who eked a bare existence on the land. Unfortunately, if Disraeli were to come back today, he may see the similarities, rather than the differences. We are quite simply talking about two nations here.
In my short Budget speech, I wish to draw attention to a number of issues that highlight those two nations, the first of which is housing. Although the £44 billion is a welcome figure, we need to boost local authority housing—what we used to call “council housing”. The only reference to this in the Red Book, on page 63, states:
“The Budget will lift Housing Revenue Account borrowing caps for councils in areas of high affordability pressure, so they can build more council homes.”
That takes effect only in 2019-20, so we already have to wait a year, and we are talking about £1 billion. My simplistic calculation leads me to believe that that may allow us to build a few hundred homes, but we have a crisis in social renting and it needs crisis finance. We are not providing that.
Other areas are simply ignored in the Budget—for example, the care sector. Much of my local care sector is in crisis; there is not the money to provide any decent quality of care. Renewables are flatlining. If we are to go towards the carbon-free economy, we have to boost renewables, yet aside from a brief mention there is nothing about them in this Budget. Likewise, we are not trying to do anything other than offer placebos on education. Sadly, the national funding formula, which many of us who have supported the f40 campaign have long awaited, has not improved the funding of many of our schools. Indeed, things are worse for many of our schools because of the way in which the Government have, by a clever trick, now conflated the special educational needs budget into the base budget. That is a tragedy because it is our children who will be suffering.
I welcome the comments in the Budget on what we intend to do about plastics, but we need to go much further in tackling waste. We need to boost the way in which we deal with food recycling, recognising that there is an alternative to incineration, which seems to be how the Government Front Benchers see us dealing with waste. In a time of air quality problems, that is exactly the wrong direction to go in. I welcome what Tim Loughton said about the WASPI women. I had a short meeting with them on Saturday and it was one of the most moving meetings I have ever sat in, just because they feel that they have been robbed. To me, all those issues are clear dividing lines. We live in a country where we do not want those dividing lines. We need to bring it back together and I hope that a future Government will—
I sat in this House for 13 years when the Labour party was in government and listened to many speeches by the right hon. Gordon Brown, including a number in which he said he would abolish boom and bust. That was before we had the most almighty bust in 2007-08—
Well, you were the people who regulated the banks and you were the people in charge for 13 years. Before we hit the crisis, you had a 3% deficit and you were too reliant on bankers’ bonuses and the City to provide money. The problem with that was that the deficit spiralled up to £160 billion. The then Labour Chief Secretary to the Treasury left a note saying that there was no money—and there was no money. When I look at the Red Book today, I see that the deficit for the foreseeable future is less than £50 billion. That means we have reduced it by well over £100 billion, which is a remarkable achievement. While doing that we have upped the income tax allowances from £6,000 to £11,500; increased the minimum wage and the living wage; kept up our commitments to the third world with the 0.7% foreign aid commitment; kept the economy growing; taken 4 million people out of tax; and created more than 3 million jobs. What’s not to like about this Government’s progress over the past seven or eight years?
In 2009, Eddie George, the then Governor of the Bank of England, said that whoever takes over this country’s economy will be ruined for a generation, yet my party has won two general elections—I admit that the 2017 one was on penalties. The reality is that this Government have been elected in 2010, 2015 and 2017, and I think that if there was a general election today, we would win, because we are more realistic and optimistic about the nation’s prospects. The country has made a decision. History will tell whether it is the right or the wrong one, but the country wants optimistic politicians who are going to go out and make a success of the decision the people have made. There is a big wide world out there. We need to have a decent relationship with our European partners, and I hope and believe we will have a decent negotiation. But it is right and proper that the Government make preparations so that if things do not work out properly, we can continue to manage our affairs.
The OBR has come up with some forecasts that are not as optimistic as they were, but throughout the time the OBR has done this, its forecasts have gone up and down and have never been right. That is because they are forecasts, and events come in. My view of life in the world over the next four or five years is a rather more optimistic one. We have relatively full employment, business is going to have to invest if it is to increase productivity, and I believe it will, and I think we are going to do well as the years go by. Clearly, there are uncertainties, and changing our relationships will cause short-term problems, but over five, 10 or 15 years, I think Britain is going to be a great success story. And I believe the United Kingdom is going to be a great success story, because the Union that is the great success for our nation is that of England, Scotland, Wales and Northern Ireland. I am therefore optimistic because the Government produced a good and balanced Budget, which has given a little bit of a tax cut and a little bit of increased spending, but which, broadly speaking, sticks to the financial plan. At the end of the day, sound finance is the only way of being a caring Government.
This is a debate on Britain in the world but, as hon. Members know, all politics is local, so I wish to focus on what is happening in my constituency and how issues in the world are affecting it. This Budget has shown me, once again, that austerity is not working, that the pain of austerity is hitting the poorest people in my community hardest, that major businesses have real uncertainty about the future because of the current EU situation, and that key industries in my area need real answers from the Government about the future of their economy in the next few weeks and months ahead.
My area in Wales has faced a 7% cut in its budget from the Welsh Assembly over the past seven years—this is real money being lost. That has had an impact on our ability to build council houses, although my local Flintshire County Council is trying to defy that by building them now, and on public services. The public sector pay cap is squeezing hard the incomes of people who are contributing to our society and working hard in their communities. We have uncertainty about the European Union, and the Foreign Secretary’s opening remarks provided no clarity on the key issues that my constituents face. We also have that squeeze on local government spending, which is difficult.
In my area, we make things. We make planes and cars, we produce steel, we do construction and housing, and we have farming and tourism. Yet all those industries, even today, face uncertainty because of the inconsequential approach of the Government to the European Union issue. Let me take Airbus as just one example. It employs 6,000 people in my constituency. It is asking for a transitional deal for two years and wants to remain in the single market. Its chief operating officer, Tom Williams, has said that the world is now a dangerous place for this successful company with high-skilled workers that produces world-class planes. Airbus exports £6 billion-worth of goods to the European Union each year as part of the manufacturing industry. Its employees make 80,000 trips each year to make those planes in France, Spain and elsewhere. This is a really important issue.
EU funds worth £680 million come into Wales each year, but I heard nothing from the Foreign Secretary about what will replace those funds. The farming industry in my area exports £250 million-worth of sheep and beef products to Europe, but we have heard nothing today about tariffs or what will happen in respect of contracts that may well be signed as early as February and March next year. We will potentially have to compete with Australia and New Zealand in the sheep and beef markets.
The right hon. Gentleman makes an incredibly important point about sheep farming and exports. Does he acknowledge that 40% of British sheep products are exported, with 90% of that going into the single market? We face a 52% tariff on those products under World Trade Organisation rules.
The hon. Gentleman is absolutely right. His is a sheep-producing area. Alongside tourism, and the production of planes, cars and steel, my area produces sheep and beef products that are exported. It is critical that we have answers on these issues. If we are to leave the EU, which my constituents voted to do, we need to understand at least what the access to markets will be, what the tariffs will be, and what future production values will be. In his response to this debate, and elsewhere, the Minister should provide some clarity on these matters so that my constituents know exactly what we face.
We face a squeeze on local government expenditure. On behalf of Labour councillors on Flintshire County Council, my hon. Friend Mark Tami and I sent a petition to the Treasury last week. We face a real squeeze at a time when we are seeing increased charges for services and cuts to real expenditure. The county council has been doing a good job in trying to manage the economy as well as it can.
With all that uncertainty, we need not only clarity from the Government, but something referred to in paragraph 4.88 of the Budget document, which says:
“The government will begin formal negotiations towards a North Wales growth deal.”
With due respect, the Chancellor promised that a year ago, and he promised it again in March this year. When he came to Mold in my constituency during the general election campaign to try to unseat me, he promised it then. He is now promising “negotiations” in this Budget, so all I ask of the Minister is that he tells us how much money is behind that plan and how long the negotiations will take. Can we ensure that, when they are finished, we will have improved infrastructure, improved transport links and improved investment in our economy to create jobs, given that jobs may well be put under pressure because of what is happening now with the European Union?
I wish to follow on from what my hon. Friend Sir Robert Syms said. This has been a good week for the Government because we are focusing on the most important thing—the Budget and the economy—rather than on ourselves.
When people start to think about what is going on in the economy, they start to wonder whether the Labour party yet has the answers. If I was a Labour MP, I would be worried that the opinion polls show us level-pegging. Why? Because the No. 1 problem that faces our economy—it is infinitely greater than so many other problems, particularly Brexit—is the size of the national debt. The question the Labour party has to answer is whether adding to that debt would solve our problems.
I sat through the speech by the shadow Chancellor, John McDonnell, so I heard him say that he wants to invest for the future. That sounds plausible, but the trouble is that it does not matter what the money is spent on—schools, hospitals, capital or revenue—because if that increases the national debt, our interest repayments increase. The problem we face as a nation is that our interest repayments on the national debt are already more than what we spend on defence, about which we have been talking, and the police every year.
The national debt is far too large. The shadow Chancellor tells me, “You’ve added to the national debt.” That is entirely true—the national debt is still rising by £186 million a day. I am allowed to speak for four minutes, during which the national debt will rise by £200,000. But would we solve our problems by adopting the Labour party’s strategy, which would add to that national debt? We are already facing so many problems in repaying it. I said that the national debt will increase by £200,000 in the four minutes of this speech, but it was increasing by £300,000 a minute when the coalition Government took power in 2010.
Yes, it was increasing by £300,000 a minute.
The central point for the Opposition is that they have to be credible, as new Labour found out in the years before it took power in 1997. The central credibility argument is whether, when the national debt is so crippling—as I said earlier, our repayments are equivalent to paying for 10 Queen Elizabeth-class aircraft carriers every year—we can solve our problems by adding to it. My contention is that that is absolutely not the case.
Well into this Parliament, the reason why the Conservative party is still level-pegging with the Opposition, who should be way ahead, is that the Labour party has no credible economic plan to try to lift us out of our national debt, except for borrowing more, spending more and raising taxes. Who would suffer in that scenario? Would it be us? No, it would be our children and grandchildren, because we would be loading that debt on to them. Of course, as the national debt increased under Labour’s plans, interest rates would rise even more and mortgages would become more expensive. Who would suffer? The young who want to get mortgages. Labour Members’ policies simply do not add up. Until they come face to face with reality, they will never become the Government of this country.
The Chancellor spoke for more than an hour last Wednesday, but he did not mention several of the most pressing issues for my constituents. Particularly notable was the lack of any mention of additional money for social care, despite the Government’s saying in the general election that they would fix social care. The Care Quality Commission has said the system is at “tipping point”, yet the Government did not allocate any more money to social care through the Budget. Funding an additional amount through council tax is simply not enough. Nor was there any mention of help for the many WASPI women in this country.
I apologise, but I am short of time and lots of people want to speak.
The theme of this debate is the UK and the world, which is apt, because the Chancellor was unable to hide how badly the British economy is doing, especially compared with the economies of our global competitors. The most recent OECD forecasts have UK GDP growth as the third lowest out of the 35 member nations. Our productivity is among the lowest, too, and that is stifling our economic growth. In recent years, productivity growth has underperformed every forecast made by the Office for National Statistics and the OBR, and last Wednesday the Chancellor was forced to admit that it has been flatlining for years. The Trades Union Congress put it really well when it said:
“Our workplaces are not fit for the future: UK productivity has flatlined for a decade, and we are ill-equipped to take advantage of new technological developments. Poor quality employment practices, weak enforcement of labour rights and low investment in training leave British companies lagging behind.”
We know what the Government should be doing to tackle the productivity crisis. They need to invest in skills and education, in technology and digital services, and in infrastructure right across the piece—everything from roads to ports to airports and housing. They also need to get companies to invest more in research and development. However, the Budget was weak on several of those issues. It is unclear whether the £20 million announced for further education colleges is new money and we do not know when they will get it. We all know that apprenticeships are a great way to upskill the workforce, but the Government’s record on them is poor. Statistics from the Department for Education show that there has been a 60% drop in the number of people starting apprenticeships.
Little new money was announced in the Budget for transport and infrastructure, especially in our regions. Most of the money is still concentrated in London and the south-east. Although we do not want to take money away from those areas, we do want the Government to recognise the very real need for additional investment in infrastructure, particularly in the north-east, so that businesses can continue to grow.
We also know that the money that was announced for housing—£7 billion of new funding—is massively short of the £50 billion that the Secretary of State for Communities and Local Government said was needed. This Budget continues the Government’s failed austerity policy and does nothing for my constituency.
This Budget is outward looking and is designed not only to weather any potential storms from Brexit, but to seize the opportunities that they may bring for us as a global-facing country.
There has been some talking down of our economy recently, and, specifically, in this Chamber today. It would be foolish and naive to oversell the economic state of the country, but it is crucial that we stop this negative Britain bashing. It is damaging our economy, our morale and our ability to attract inward investment.
Let us remind ourselves of some of the key facts: the UK has now seen 19 consecutive quarters of continuous economic growth; employment is up by 279,000 from a year ago; and another 600,000 people are forecast to be in work by 2022. In Chippenham, my constituency, youth unemployment has fallen from 7.5% in 2012 to 2.5% now. The number of VAT-registered businesses has risen by more than 2% in the past tax year alone. Yes, the growth forecast for 2017 has been reduced from 2% to 1.5%, and forecasts for 2018 to 2021 have been revised down, but the reality is that the economy is still growing. It is irresponsible and incorrect to suggest otherwise. Moreover, it is the predicted rate of growth that has been revised down. The key words there are “predicted” and “growth”. The post-Brexit figures are, in fact, far better than some have predicted. The real worry here is the productivity lag, which we need to fix. The Budget highlighted the Government’s understanding of that and the need to target it, which seems to have been omitted and overlooked by the Opposition.
We have invested half a trillion pounds in our infrastructure since 2010, and the Budget builds on that, including transport measures to help productivity. The Budget also announced the largest boost to research and development support for 40 years, with a further £2.3 billion investment from the National Productivity Investment Fund. The Budget means investment in our digital infrastructure. The increase of the National Productivity Investment Fund to £30 billion will help investment in technologies such as artificial intelligence and driverless cars. It will have an impact up and down the country, particularly in my constituency in AB Dynamics, and in Dyson, which is across the border in North Wiltshire.
Investing in and fostering skills is vital to productivity, but they have to be the right skills for our economic success, which is why the Budget’s focus on T-levels, mathematics and computer science, is so important. As an aside, I look forward to the long-anticipated publication of the careers strategy, which I hope will foster a greater link between careers advice and the labour market’s needs and predictions. By continuing to make work pay, this Budget will also help productivity. I am talking about the increase in the personal tax allowance to £11,850 and an increase in the national living wage by 4.4%
In conclusion, we are the fifth biggest economy in the world. Since 2010, we have 1 million more businesses that are creating jobs. We are the fifth largest exporter in the world and the top destination for inward investment in Europe. Let us not talk down Britain or our growing economy. As I said at the beginning of my remarks, that is irresponsible and incorrect. Yes, there is much that we need to do to foster growth, but this Budget recognises that and focuses on targeting the productivity lag. It is a plan for Britain of which we can continue to be proud.
This Budget was a huge wasted opportunity as well as an acknowledgement of failure. Those of us who listened to the Foreign Secretary’s speech today were staggered that he spent longer talking about penguins and plastic bags than he did acknowledging Brexit, the most serious threat to our economy. I was one of those MPs who campaigned for remain but found that their constituents voted leave. I am willing to go out there and say to my constituents that I will support their vote, but we need to have a sense from the Government that there is a plan and a basic competence in the negotiations that they are carrying out on Britain’s behalf. The Government need to seize the moment—as huge as it is—and show us that they are on top of the opportunities that exist. They are now making ludicrous claims, for example, that we could not nationalise the trains if we stayed in the EU. Such claims are utterly discredited and suggest that they have nothing left to say about how to make Brexit work.
I was elected in May 2010 on a programme that promised to halve the deficit by 2015 and to eradicate it by 2020. That plan was ridiculed by the Tories as inadequate—they said that it would consign our children to a lifetime of paying down debt. That now seems wildly optimistic compared with the performance of this Government. This evening, we heard Sir Edward Leigh talking about debt as though he was not a member of a party that has increased our debt by half a trillion pounds since 2010. The Government have no credibility on the deficit or on debt. In 2010, they told us that it would be gone by 2015. By 2014, it was going to be gone by 2018. Now we are told that it might be gone by 2025. I am willing to bet my house that, by 2025, this country will still have a deficit. The Tories have no credibility when talking about the deficit. Now we have a Budget that fails to address any of the key questions that might see our economy moving in a more positive direction.
There was nothing in the Budget about social care, the local government crisis, and the inadequate investment in the NHS. Schools in deprived areas are facing a real funding crisis. This Budget could have championed a real growth programme, with infrastructure investment of the sort that we will need to make Britain a more attractive place in which to invest in future. We could have had that at a time when apprenticeship starts are collapsing. The Budget has failed the test of the moment.
There was also a failure to recognise the need to make universal credit work for people who are not close to work. I welcome some of the measures that have been taken to alleviate organisational failures, but universal credit does not work for the self-employed and it is positively cruel for the disabled. In questions last week, I heard the protestations of Mr Duncan Smith, who recognises that his legacy is being tarnished. The actions on housing and homelessness were also utterly inadequate.
The tragedy of this Budget is the tragedy of this Government. They are out of ideas, more interested in their own survival than the national interest, and unable to grasp the size of the moment that a combination of the tides of history and their own ineptitude has brought upon us all. When we needed investment and innovation, we got obfuscation and confusion. When we needed decisive action to rescue universal credit, we got a partial tidy-up of failures that never should have happened. There was nothing on social care and nothing on the NHS. The Budget is a catastrophe for our schools and the deficit will now last till the end of never. This was a failed Budget from a failing Government who really have run out of ideas. It is time for them to step aside for a party that has not.
I am grateful for the chance to contribute to a debate about the kind of country that we seek to build in the exciting new era before us. Too often, Britain’s decision to leave the EU has been mischaracterised as a backlash against modernity, and the reflex of a nation still mourning an imperial past. Now is the time to counter that miserable misperception with an unashamed vigour and a sense of urgency. We shall need both UK businesses and Government to engage with one another as never before, understanding that neither the private nor the public sector alone is a panacea in addressing the challenges and seizing the global opportunities ahead. The launch today of our industrial strategy marks a positive step down that road and builds on the foundations laid by this Budget.
Last week, the Chancellor recognised that strategic infrastructure will play a critical role in unlocking housing and economic development and connecting us to new opportunities overseas. The Government have already committed themselves to delivering the lower Thames crossing, which will not only open up new pockets of housing development, but link to state-of-the-art port and logistics facilities in nearby London Gateway and Tilbury Port, and to the expanding London City airport and continental crossings in Essex and Kent. I am working with the Department for International Trade and businesses in my constituency to take advantage of these local trade routes by exploiting UK Export Finance, improving exporters’ access to capital and enabling suppliers to fulfil new orders. Meanwhile, by lifting housing revenue account borrowing caps for councils in high demand areas, my local council in Havering will be able to take advantage of Crossrail’s arrival by maximising the benefits of its ambitious housing and estate regeneration scheme.
The new spirit of collaboration extends to the increasing interaction between our schools, universities and public services, opening commercial opportunities at home and abroad. I recently returned from Guangzhou in China, where I visited a high-tech women and children’s hospital that is working with academics at the University of Birmingham in genetic research and new medical technology. Opportunities abound to build even deeper economic ties with China and other international allies in this field through knowledge transfer partnerships and our new international research strategy. The NHS’s sheer buying power, the Government’s commitment in this Budget to higher research and development spending, a large and hyper-diverse patient group in cities such as London, and collaboration between universities and health services all create the ideal environment for international investors in the UK and the potential for more exportable expertise.
I welcome the Budget’s emphasis on productivity and technology, particularly the additional resource for lifelong learning, computing and the core subject of maths. However, a number of my constituents have expressed concern that the focus on core subjects such as maths is leading to the neglect of non-core subjects in our schools such as art, design and technology, and the humanities. This could risk skills shortages in our world-beating creative industries—sectors that have benefited enormously from targeted tax credits in recent years, and from which we derive enormous soft power.
Finally, a truly competitive global Britain must be one that nurtures our competitive advantage in services. For all the promise of the EU single market, provisions for services and digital technology are far from advanced. We have an enormous opportunity, should we secure a trade deal with the likes of the United States, to set out comprehensive agreements on services that could act as a template for global standards and regulation, particularly in new technologies.
I welcome this Budget and its complementary industrial strategy for their recognition that a truly global Britain will be one that invests in the kind of collaborative partnerships that transform the knowledge of our private and public sectors into growth and prosperity for our citizens.
In 2011, the Conservative-led Government imposed a two-year pay freeze on public sector pay. In 2015, they imposed a maximum 1% rise for four years from 2016-17 onwards. The large number of letters and emails from my constituents in Slough highlight the strength of public concern. Indeed, an online petition launched by Unison calling for an end to the pay cap has more than 145,000 signatures. The Government have claimed that the pay cap has ended, yet the Chancellor announced nothing in his autumn Budget to give public sector workers the increase that they so deserve. The workers need an increase, and we all need them to have it. The Institute for Fiscal Studies has warned that if the cap remains, the public sector will
“struggle to recruit and retain the workers it needs to deliver public services, and the quality of those services will therefore be at risk.”
Seven years into the public sector pay squeeze, our worst fears have been realised. Real-terms cuts to public sector pay are not just failing workers, but everyone who relies on these vital services. The cap and funding cuts have created a recruitment and retention crisis, meaning that we will all end up paying more in the end. The Government announced the cap and they have defended it on two grounds—that public sector pay remains attractive compared to the private sector, and that it is unaffordable to providing decent pay rises. However, neither argument stands. Just over a month ago, the Treasury’s own figures revealed that public sector wages had dipped below the private sector for the first time since before the financial crisis. Data showed that workers in the public sector were paid an average of 0.6% less than their private sector counterparts in similar positions, whereas the Treasury estimated in 2010 that public sector workers were 5.8% better paid than those in comparable roles in the private sector.
Recent research from the Institute for Public Policy Research has shown that if public sector pay was raised by inflation, 43% of the cost would be reclaimed by the Treasury through taxation, lower welfare payments and higher GDP growth—a boost of £800 million in the year 2019-20. Indeed, those sums could be reinvested in public services. If all 5 million public sector workers were granted a pay rise of 3%, the extra cost to the Treasury—over and above the Government’s already promised 1%—would be just over £3 billion a year. That is not a generous pay rise, and would not compensate for years of cuts in real wages. However, it would enable public sector workers to keep up with inflation. As if the pay cap had not crushed morale enough for these vital workers, the Government’s preparations for Brexit are placing additional strains on our public services. It is predicted that the extra inflation created by Brexit will cost the average public sector worker more than an extra £1,000 in real wage losses.
The UK’s public services keep the country on the road. Public sector workers already do more than anyone could reasonably ask of them. A pay rise for nurses, paramedics, fire officers and police officers is fair and affordable. I urge the Minister to take heed and do what is necessary for our nation’s interest.
It is a privilege to have the opportunity to speak. I congratulate the Chancellor on the Budget. This is a Budget that, with one apparently small tax change—a first in the world—is predicted to inject £40 billion into our economy. That is important to the UK and monumental to the Scottish economy. Scottish Conservative colleagues and I have relentlessly lobbied Treasury Ministers on that change. Following on from my hon. Friend Sir Edward Leigh, I believe that this was a good Budget for Scotland. I am, of course, referring to transferable tax history for the oil and gas industry, the measures on VAT relief for the Scottish police and fire services, and the measures on whisky and spirits. Twelve Scottish Back Benchers, an excellent Secretary of State for Scotland and our Holyrood colleagues were very convincing—perhaps as convincing as the DUP.
I will focus on the global opportunities of oil and gas. The industry still employs 300,000 people in the UK and it has produced a staggering 40 billion barrels of oil. The oil and gas industry has been a huge contributor, and that is far from over. UK production met 79% of the UK’s oil demand and 53% of gas demand in 2016. Now, imagine how the Germans feel about being supplied with Russian gas. So it is globally significant to us that the North sea is still of such importance.
The sector has contributed massively to our engineering skills and has huge global opportunities. The UK continental shelf is one of the most challenging offshore basins, and UK technology has spread throughout the world. In my constituency, we have STATS Group, which is a pipeline intervention company based in Kintore; Hoover Ferguson, which is now a global company; and Wood Group, which started in the north-east and has now become a £5 billion company following a merger with Amec Foster Wheeler. The Treasury has helped to create the most fiscally attractive place to produce oil and gas. That is recognised by Shell and BP, as well as newcomers such as Chrysaor, which recently invested $3.8 billion in the North sea. Do not believe the myth that it is all over for the North sea.
Transferable tax history for the oil and gas industry could be a game-changer. Those who depend on oil and gas for their livelihoods will be celebrating. They are not the fat cats portrayed by the Labour party, and they are all too often overtaxed by the Scottish Government. Decommissioning is tax deductible, so the measure is transformative. The relief is from November 2018. I have spent my entire working life immersed in corporate finance, so I know that getting this right is very important. The Treasury must be commended for not acting too quickly. The industry has turned around its record on safety and the environment, and it is important that we recognise our continued dependency on the oil and gas industry because it is playing its part in decarbonising the UK and the rest of the world. Oil will also continue to dominate transport.
What is important about this investment is that it is leading growth. New players can improve productivity, which that investment ushers in. The investment is also a boost to the industry’s global reach and to Britain’s global reach, and it boosts inward investment.
At this time, during the Brexit negotiations, the oil and gas industry should be a beacon to British industry. It is global Britain at its best.
Today’s debate on the Budget started with a focus on foreign affairs but, in the light of the fact that we are watching our economy rapidly contract as a result of the chaotic Brexit this Government are presiding over, it is right that I focus on the NHS, not least due to the Foreign Secretary’s failed promise that the NHS would receive £350 million every week—he even had the nerve to come to my constituency with that bus to announce that, but my constituents had the good sense to ignore him.
The unravelling Budget statement has demonstrated that the Chancellor’s insistence, despite seven years of economic failure, on continuing with austerity, which continues to fail services and communities, is staggering. Growth—down. Productivity—down. And wages—down. Austerity is hurting so many people: wage cuts for our public servants, social security cuts for disabled people, and 4 million people living in poverty, including children. Many of them are without a home, many are on the streets, and far too many children and adults are suffering mental distress—and there was nothing in the Budget to support them.
York is particularly hard hit. Rocketing house prices mean that people need nine and a half times their wages to buy a property, and average wages fall far below the national average. Buying a house has now been made worse by this Budget. Renting privately is out of reach, and the number of homes for social rent is falling, while homelessness is rising.
I must ask why York schools have moved from being the seventh worst funded to the very worst funded, and why the most economically deprived areas in York are receiving the greatest cuts—yes, less money. York kids deserve the very best, and I will fight for their futures. As for jobs and infrastructure, the scale of private and public sector cuts is hurting York. I urge the Government to intervene: stop the closure of our barracks as a first step—there are 1,600 jobs there that we urgently need.
I also have to ask those on the Treasury Bench what happened to the business rate consultation we were all promised at the last Budget. While York traders work hard, we cannot ignore the severe challenges that business rates present. It is a broken system, and page 188 of the industrial strategy does not assist.
Now, back to the NHS. The Government have placed York in the capped expenditure process. There needs to be an acknowledgment that the funding formula, historically and currently, leaves a £20 million to £25 million funding gap in the health economy. That is after severe rationing, smart prescribing and a move to non-hospital patient case management. The leaders in the health economy have done everything to stem the costs, yet, before the winter, the money has run out, and the trust is in the distressed cash regime, having to take out a loan, with interest, to pay back who knows when or how. We need to make sure this issue is addressed because, under the NHS constitution, they cannot make further cuts. The issue in York is an ageing demographic with co-morbidities—frail people needing vital urgent care. Will the Minister use some of the paltry £2.8 billion announced for the NHS in the Budget to address this crisis?
There was no mention of social care last Wednesday from the Chancellor, when 1.9 million older people are living in poverty. Economic and health inequality are linked. Please take care of our older people; it is a national scandal that, in the sixth richest country in the world, more than 40,000 older people are dying each year of the cold. These precious lives, well lived, have paid into the system. These lives could be saved.
If this Government have no capacity to help the poor and the vulnerable, or to meet need and to invest in our services and our economy, there is one answer: Labour.
Global Britain can be built only on the foundation of sound public finances. That is why, for me, one number above all in the Budget stood out: next year, our debt percentage will start falling. Finally, we can see through to the time when the country will stop borrowing and live within its means again.
Fiscal responsibility is not just an ideological pursuit. Without a prudent approach to borrowing and debt, ordinary people pay the price. They pay it through slower growth, less fiscal resilience and interest rates that begin to climb. Let me start with growth.
As Government borrowing grows, it crowds out the lending available to British businesses to expand and invest. The results of these things around the world are clear. On average, economies with debt exceeding 90% of GDP grow 1 percentage point slower than those where it is between 30% and 90%, and 2 percentage points slower than those where it is below 30%. If it were not for the actions of this Government, our nation’s debt would already have spiralled well beyond 90%. Although a 1 percentage point hit to growth does not sound like a lot, it would be £100 billion in GDP, and £40 billion less to the Treasury’s coffers.
If the argument on lower growth was not enough, higher borrowing has other costs too. Unless we build resilience in public finances, the economy will not have the flexibility to respond to future economic slowdowns. The consequences could be severe. Italy entered its recession with debt at 100% of GDP. Since then, its defence budget has been cut by 12%. Portugal’s debt was 70% of GDP. In the last five years, education has been cut by 16%. And then there is Greece: its debt was 100% of GDP, and the result was a health budget cut in half. In Britain, we are investing record amounts in our schools, our military and our NHS. If we do not get debt under control now, while the economy is growing, we will not able to maintain this record when the going gets tough again.
I turn to interest rates. In modern times, the average 10-year gilt yield has been 5%—four times higher than what we are currently paying to borrow. This situation will not last forever. Also, the more we borrow, the less confidence markets might have in our ability to repay, and the faster those rate rises will come. We already spend more on debt interest than we do on the police and our armed forces combined. As our interest rates rise, that means less for schools, hospitals and welfare. But it is not only the Government who pay when rates go up—it is ordinary people, with their mortgages, their credit cards and their bank loans. A 1 percentage point hit means £1,000 on mortgages a year.
This is a disciplined Budget delivered by a Chancellor who believes in the importance of fiscal responsibility, and I commend it to the House.
I would like to return to a subject very much on the minds of my constituents: the vexed and highly emotive one of Government funding for retrofitting sprinklers in high-rise flats, which I feel is being sidelined. It is being decided on a case-by-case basis, and we understand that many councils are being refused this vital funding.
What kind of future are we planning for our children? What kind of society shovels money into the overseas accounts of the tax-dodging wealthy while refusing a safe home to those who create that wealth? This is the world our local poet Potent Whisper calls “Grenfell Britain”. In this Grenfell Britain, we give tax breaks to the rich for their empty investment flats, all fitted with sprinklers, but there is barely a penny towards retrofitting sprinklers in fully occupied high-rise homes that house those who are the engine room of our economy.
In this Grenfell Britain, this Government continue to find ways to avoid their responsibilities. For four years, the Government ignored the recommendations of the Lakanal inquest, after six people perished—11 pages that could have saved 71 lives. They are continuing to ignore the pleas of survivors, evacuees and other affected families for them to provide safe homes for everyone, even after 71 of our neighbours died in the most horrific circumstances—many in front of our eyes. Altogether, that is 857 people made homeless.
What am I to tell Hamid, who is thankful that his 90-year-old mother, whom he cares for, was with relatives that night? Both were made homeless by the fire. What can I say to this proud, hard-working man, who had his business and was proud to say that he paid his taxes and paid for himself and his mother’s care? What can I tell this man who saved the life of his neighbour, a good friend of mine who had predicted the atrocity? Hamid and his disabled mother are still living in a hotel after five and a half months. Most recently they were offered a flat five storeys up, when he had expressly said that, owing to trauma, he must have a ground-floor flat. Instead, he was offered a flat with one staircase and one lift—a brand-new flat with no sprinklers.
What am I to tell the father of two little girls, both lost in the fire along with his wife? The loving father who was determined to say goodbye to his children, who opened those little white coffins to say goodbye to a few tiny remains—what do I say to him: that they died in vain? What do I say to the family who dragged their disabled relative down innumerable flights of stairs past their neighbours who had collapsed there, to the woman who lost her baby, or to the one who had had her baby, back in temporary accommodation after her return from hospital?
What do I tell the people who survived this atrocity and fear for the lives of others? “No change. The Government will not take responsibility. Tax breaks for the rich; no sprinklers for the rest”? This Government need to understand that decent people who pay their taxes—across Kensington and across the country, of all political parties—are disgusted by the shameful and inadequate response to the ongoing humanitarian disaster at Grenfell Tower, and by the shameful refusal of the Government to adopt recommendations to fit sprinklers and to fund it. Shame on this Government. Listen to the people; find your humanity. Grenfell Britain is your legacy—let us change it.
I am pleased to be able to contribute to tonight’s debate on the Budget. I want to highlight three main areas: the support for electric vehicles; the additional funding for STPs—sustainability and transformation partnerships—and the NHS; and the funding for HS2 infrastructure.
First, I welcome the Government’s ambition for the UK to be world leader in electric cars, thus contributing so cleverly to the global Britain. It is a great ambition. However, a local independent garage owner in my constituency, Jonathan Wright, shared with me the level of concern that he is hearing from other garage owners about the cost of retraining their mechanics in the new technology of hybrids. I ask the Minister to consider what measures could be put in place to plug the black hole in hybrid technology training, not just for the new apprentices coming through but for the existing workforce who are going to be so crucial if we are to move forward at the rate that we expect with new technology for our vehicles.
No, because I am short of time.
Secondly, on health and social care, I, like other Conservative Members, welcome the £2.8 billion of additional resource funding for the NHS in England. I was saddened by the comments of the hon. Members for City of Durham (Dr Blackman-Woods) and for Chesterfield (Toby Perkins), who are no longer in their places, and Rachael Maskell, who still is. I ask them to read the Chancellor’s speech, because he committed £2.6 billion to sustainability and transformation partnerships—programmes that help people to stay in their own homes and in the community, and try to keep them out of hospital. That, to me, is social care. Just because we have not labelled it as social care does not mean that it is not social care. I am delighted that the Chancellor took on board my submission for the additional STP funding. We can only make the desired switch from the acute setting to the community setting with the appropriate transitional funding. I am sure that the additional £2.6 billion of funding that has been allocated will be well spent. This principle of providing care in our communities makes me believe that Derbyshire County Council’s threat of closure of Hazelwood care home in Ilkeston in my constituency is completely wrong. Ill-thought-through actions such as closures of care homes threaten the viability of STPs and must not be allowed to happen. STPs are a crucial part of our future.
Thirdly, I want to touch on the £300 million support for infrastructure for HS2. Again, I am delighted that the Chancellor recognised my submission on this. Only by investing in more than just the train line itself will the true potential of HS2 be unlocked. I would appreciate more details on this funding. With Erewash and, in particular, Long Eaton, Sandiacre and Stanton Gate being dramatically impacted by HS2, I could spend the whole £300 million in Erewash alone, but I am sure that I will not be allowed to. My shopping list for this money is quite long. It includes acquiring land for business relocation, acquiring land for new homes where those made homeless by HS2 can be rehoused, a new motorway junction at junction 25A of the M1, and improving the existing road infrastructure to ensure that it can cope with the additional traffic that HS2 will undoubtedly bring to the area. I welcome the measures in the Budget and commend it to the House.
It never ceases to amaze me just how complacent many Government Ministers and those in the political leadership of this country appear to be with regard to addressing the underlying economic catastrophe that the country is facing. To paraphrase Kipling, “If you can keep your head when all around you are losing theirs, you probably don’t appreciate the seriousness of the situation.” There is now an amazing disconnect between their arrogance and glibness—and in the case of the Foreign Secretary, bombast and pomposity as well—and the real economic facts on the ground that are shaping the lives of millions of citizens of this country. This is not so much about driverless cars as a driverless Government.
We look now at the global dimension of this Budget. The first thing we should consider is the image of this country in the world. What does this Budget say about our character? How will others judge us for it? How will they judge a country that now lies 31st of 34 OECD countries in the economic growth table? How will they judge a country where, by their own admission, the Government say that by 2022 real wages will not be back up to the level they were in 2008? There has been a decade and a half of wage stagnation in this country: a decade and a half of austerity, adversity and struggle for many working people in this country trying to make ends meet and seeing their own hopes and those of their kids dashed because they cannot do so.
Does my hon. Friend share my disappointment that the Budget did very little on pay for those who are under 25? Indeed, the rate of pay for apprentices rose to a meagre £3.70 an hour.
Indeed I do. That was the third observation that I wanted to make about how people might see us—how we treat our own people.
Let us remember that this Budget does nothing to cancel the attacks on the poor that have been contained in the past few Budgets. We still have the bedroom tax. We still have the cuts to employment and support allowance. We still have, albeit with some mitigation, the roll-out of universal credit and the visiting of penury on the poorest and the most disabled in our country. Any country will rightly look at us and judge us according to how we treat those who are least able to defend themselves. When they look at the record of this Government, I think they will judge them harshly.
Brexit clearly overshadows the whole debate about Britain in the global economy. I remind colleagues that we have not left the European Union. We have not even begun to leave the European Union. Indeed, we do not, as of today, yet have a plan to leave the European Union. All we have is a stated intention—the idea of Brexit, and already the idea of Brexit is having a material effect on the ground. I refer Members to page 14 of the Red Book, where paragraph 1.19 is a harbinger of what is to come. It points out that the drop in the projected growth in GDP is not just because of the per capita drop but because fewer people will be contributing to the economy due to a net drop in migration of 20,000 people. This is only the beginning. If we tell young people from Poland, Spain and Greece that they are not welcome to come and live and work here, not only will our public services be in jeopardy but we will not be able to collect their taxes, and that will have an economic effect on paying for those public services in the first place.
Already the European Medicines Agency and other institutions are leaving just because of the idea of Brexit. Not a mile away, across the City of London many financial organisations are preparing to make an exit and shift their European regional headquarters to another place. The effect of that will be dramatic, and it is irresponsible in the extreme for the Government of the day to come to the House and present a Budget that has no contingency whatsoever for those possibilities. The Government are planning for a series of options on Brexit, one of which is a hard Brexit with all the attendant tariff controls and trade barriers, and yet they have made no contingency for what might happen. That is the height of irresponsibility.
In the final 20 seconds, I want to mention the situation in Scotland. We welcomed the Government’s decision to scrap VAT for police and fire in Scotland, but if it was the right thing to do today, it was the right thing to do a year ago and the year before that. It is intellectual banality for the Government to base their policy on who makes the argument rather than the content of it.
I am grateful for the opportunity to make a brief contribution on the Budget, which sets out that we have a strong economy that is showing remarkable resilience. Of course, there are Labour Members who would talk Britain down. We expect Oppositions to oppose—that is what they do—but usually they set out what they would do instead and, crucially, the cost implications of their plans. Many Members are former councillors, and most councils are offered an alternative budget at the time their budgets are set. Where is Labour’s alternative? How much would Labour spend? Where would it spend the money? What taxes would it raise to pay for its proposals, and how much extra would it borrow? Those are all legitimate questions, to which the shadow Chancellor’s answer is that that is all on his iPad. That is what advisers are for.
The Opposition like to claim that they are a Government in waiting, but in reality the country is waiting for answers and for a credible alternative from the Opposition. The British people see an Opposition with no financial credibility who would, if they were in government, saddle our children and grandchildren with crippling debt, raise taxes, punish businesses and destroy jobs. They then see a Conservative Government with a proven seven-year track record who have created 3 million more jobs, cut taxes, taken 4 million people out of tax altogether and made Britain a great place to do business once again. The shadow Chancellor may not do numbers, but we know it is the British people who would pay the price if Labour was ever allowed to implement its reckless plans.
This Budget and the ones before it have laid the foundations for our future. In terms of global Britain, we have always been a country that has taken the lead, and I believe it was on that basis that the Chancellor made his remarks about single-use plastic items, which are littering our planet and oceans. It is important to investigate how charges and the tax system can reduce waste. The measure is not intend to raise revenue or to contribute to funding our public services. As someone who spent 30 years in the plastic food service industry, I know that the industry will respond positively to the calls for evidence. Any intervention must be effective and evidence-based. It must maximise rates of recycling and minimise the amount of valuable and recyclable material that is lost to the environment. A key question will be: will this reduce plastic in the ocean? I fear that such measures will make little difference, because just 2% of plastic waste in our oceans originates in Europe and the US, and about 0.2% is litter that originated in the UK. This issue needs to be tackled globally, and we need to address the areas of greatest leakage.
In that context, I want to pick up the point that the Chancellor made about incentivising cleaner air through changes to vehicle excise duty to encourage people to switch to electric vehicles. That will be important in urban areas. In my constituency, we are building the new electric version of the traditional London taxi, following a new £350 million investment. I note the Chancellor’s proposal to exempt those vehicles from the VED supplement from April 2019, but there is a strong case for bringing that measure forward. It would save drivers £1,550 over five years and provide an important reward to those who adopt the new technology early.
We have a strong economy and world-class public services. The Budget builds on the successes of the past seven years.
Whatever else we might have expected in the Chancellor’s Budget statement, the significant infrastructure investment that we need to enable us to compete on the world stage post Brexit would have been welcome. The private sector is not set up to invest in our transport infrastructure, so if the Government will not do that, British industry and trade will continue to be hampered by poor communications and logistics. On the other hand, a really radical level of investment in our roads and railways would not only provide the stimulus that our construction sector needs, but make it physically possible for British firms to transport their goods to market at a reasonable rate.
More than 4 million 20-foot equivalent container units go through Felixstowe port every year. It handles 40% of the country’s container traffic and is by far the biggest port. Sixty per cent. of the trade through Felixstowe comes from the midlands and the north, so any Government who were serious about enabling trade with the rest of the world would ensure that the transport connections to Felixstowe were as modern and effective as possible.
The A14 around Cambridge and Huntingdon is in the process of being completely rebuilt, at a cost of around £1.5 billion. That is very welcome, but there are various other weak points along the A14 that the Government are not addressing, and they ought to be. The junction between the A14 and the A12 is not fit for purpose and we urgently need a fully grade-separated junction at that point. Above all, when the Orwell bridge has to be closed, thousands of articulated lorries are forced through Ipswich town centre, sometimes taking in excess of three hours to traverse the town. Quite apart from the terrible disruption to the life of my constituents whenever that occurs, can we begin to imagine the cost to business of having all those lorries and goods sitting idly in traffic jams in Ipswich? It is time for an Ipswich northern bypass, which would enable trade to continue to flow freely to our most important port. That is not just a parochial ask; it is about our nation’s ability to trade.
If the road route to Felixstowe is unsatisfactory, the rail route is seriously wanting. Various improvements have been made to it over the years, but it should be the premier rail freight line in the country. Hutchison Ports has made great strides in trying to get as much of its freight on to rail as possible, but it is constrained by the state of the line. It sends around 30% of its containers by rail, but it could double that if the line were up to scratch. Significant parts of the line are single track. There are several unsatisfactory junctions, especially at Haughley, Ely and Leicester, and the whole line is operated by diesel-hauled locomotives, which are more expensive to run than electric ones and far more polluting of the environment. I have been told by rail freight experts that if that one line were electrified, it would provide the kick-start needed to convert our rail freight to electric haulage, and to make a step change in the economic viability of rail freight.
Because the line is so unsatisfactory, a significant proportion of the freight between Felixstowe and the midlands has to travel into London, round on the north London line and out again. It would cost around £1 billion to have a first-rate rail line linking our main port to the midlands, which is in contrast to the 50 times as much that is being spent on HS2. Whenever such proposals are raised, however, the response is always, “Ah, but there is not enough money.” We cannot afford not to invest in transport, and we particularly cannot afford not to invest in our rail freight. It is time for comprehensive investment in our transport infrastructure, but the Budget provides only enough funds for tinkering at the edges.
The delivery of the British Budget is one of the most important political events of the year. As an accountant—I refer to my entry in the Register of Members’ Financial Interests––and a new MP, I was extremely humbled to witness its delivery at first hand from these Benches. The Budget is even more important considering Britain’s place in the world, the advent of Brexit, the pace of technological change, and the geopolitical shifts that we have witnessed from America, the middle east and China. There is a disturbing rise in negative politics. With divisive referendums, resurgent nationalism and challenges to the western model of economic management, there is a feeling that we are stepping backwards. We are naive if we think that such discourse has an impact only on politicians, as was illustrated on my recent trip to Lornshill Academy in my constituency, whose students talked about how Donald Trump’s views had started to shape debate in their school—and not for the better.
That is why the cautiously optimistic Budget delivered by the Chancellor is so important. As many colleagues will appreciate, a Budget is not just an accounting exercise; it is a statement of political intent. I believe that this Budget speaks volumes. It commits the Government to raising the national minimum wage, especially for younger workers. The increase by 5% for such workers is the largest in 10 years.
The Budget has introduced a new railcard for 26 to 30-year-olds, helping those already in work and progressing their careers. It also addresses some of the issues raised by me and other hon. Members about the implementation of universal credit. It builds on the Government’s record on jobs and our success in lowering corporation tax, which has encouraged businesses while bringing in a record £55.6 billion to use in tackling the deficit and investing in our public services.
The Government’s action on tax evasion and compliance has been furthered in the Budget. As a member of the Public Accounts Committee who sat through its hearing on VAT fraud, I welcome the Chancellor’s measures to extend HMRC’s powers to make online marketplaces jointly and severally liable for the unpaid VAT of overseas traders on their platforms. That move that will bring about greater equity for British traders and increase our tax take.
The Budget was good in introducing measures to support all the regions and nations of the United Kingdom. I was pleased that the Chancellor was able to deliver approximately £35 million a year extra for police and fire services in Scotland, changing regulations to undo the damage done by the SNP, because of its obsession with centralisation, that has cost police and fire services in Scotland £140 million. It was warned and advised not to take such action, and even Conservative colleagues in Holyrood changed their position when they saw the costs of centralisation and the impact it would have on services. Despite that, it has taken Westminster to fix the problem—but that is the benefit of being four nations, but one country united together.
The Government’s central economic strategy and industrial strategy have, in conjunction with the Northern Ireland Assembly, reduced unemployment in my constituency from 5.6% to 3.4%. That is good news, and I suggest that this Government should continue to work with regional Assemblies and keep on reducing unemployment.
It is true that there has been a good story for lower unemployment, and it shows that the Government’s financial and industrial strategies compare very favourably with the SNP’s lack of an education strategy, and certainly its lack of a health strategy. Scotland has gone from No. 1 to No. 3 on education in the United Kingdom.
I was pleased to hear the Chancellor confirm the Treasury’s commitment to the Tay Cities and Stirling and Clackmannanshire city deals, which will have a transformative impact on the two council areas in my constituency. They will bring investment to South Perthshire, Kinross-shire and Clackmannanshire. I am supporting proposals from community groups and businesses to boost long-term economic activity in my constituency.
Spirits are also very significant in my constituency. I have 20% of maturing Scotch whisky in my constituency, so hon. Members might want to come and visit. Last week’s freeze in duty not only reassured the industry domestically, but signalled internationally that the UK will support its home brands and is ready for more international trade. [Interruption.] If David Linden wants to intervene, he should stand up. I believe that having Scotch whisky in the vanguard will lead to more productive trade meetings with colleagues from around the world.
Opposition Members have made increasing criticisms of the Government in virtually every area of policy. While there has been criticism, there have been very few constructive alternatives. The Budget tackles honestly some of the tough challenges we face, for example by lowering growth forecasts to face the global and domestic reality while putting in place practical measures, such as £2.3 billion for investment and research to tackle our productivity problem. All these positive measures have been constructively argued for and delivered by Conservative Members.
That is not the topic for this debate. We have seen such influence, and we have delivered. We have delivered the VAT back for the police, and we have delivered on transferable tax histories. We have done more in six months than SNP Members have managed to do in two and a half years, and certainly a lot more than the SNP has managed to do in its 10 years in government at Holyrood.
The Budget does not deliver everything, but it takes steps to address domestic challenges and to ensure that we are ready for more international competition. For the students in my constituency, it shows that a difference can be made in politics—and a positive one at that.
As I listened to the Chancellor talk about driverless cars in the Budget speech last week, what struck me was how few of his measures will help the residents in St Helens, Whiston and Prescot in my constituency. He said nothing about the fact that we are facing the longest fall in our living standards on record. A reasonably waged family in my constituency with two children will be £800 worse off every year after 2021.
There was nothing in the Chancellor’s speech about securing a long-term solution for funding care for our older and vulnerable people. There was no additional funding for care packages, and our elderly and disabled still face savage cuts from the £10 million general grant reduction announced in previous Budgets. Despite the council raising the social care precept of 3% for this year and next year, with £2.5 million from previous years, there was no additional funding to meet the ever growing demand for social care year on year. The slight increase in funding to help cope with the annual winter crisis at A&Es was welcome, but even with the pioneering work of St Helens Council and St Helens and Whiston Hospitals, it will not ward off the increase in the number of elderly and infirm people at A&Es.
I asked the Prime Minister how she would use the Budget to address police funding, but the Chancellor said nothing about funding for the police—he did not mention the police—or about how to fight the 20% rise in violent crime given the 22% cuts to frontline policing in Merseyside. He ignored the increases of 19%, in domestic abuse, of 20% in violence and of 26.5%. in rape. There are outstanding prison recalls, and gun and knife crime is increasing. There have been two candlelit vigils for murdered young people in my constituency this weekend. Merseyside exports more organised crime groups and county line issues than any other area in the country. Merseyside police dealt with 8,729 missing people, of whom 64% or 5,601 were aged 16 and under. These children and vulnerable adults are at high risk of extreme physical and sexual violence, gang recriminations and trafficking. My constituents fully support our police and are trying to rebuild their communities as safe places free of knives, guns and exploitation, and my constituents are petitioning for more police.
We need a Government who support the public and public services—a Government who care. The Chancellor said nothing about the ongoing 3% real annual cut in benefits. Of course, nothing was said about replacing the eye-watering £94 million funding taken from St Helens Council services by 2020. Yes, there is some hope for those poor individuals sleeping rough on the streets, although the money will not go that far.
The help for a few young people to buy homes is welcome, but we need to be clear that the Chancellor’s housing proposals will not work in St Helens and Knowsley. None of my people earns anything like enough to buy a property worth £300,000. The stamp duty cut for first-time buyers only works if they are one of the small number of households who can afford such a property. Help with the deposit for a mortgage is no use to people who have already bought a small terraced house that their growing family can no longer fit into. The stamp duty change will channel much of our hard-earned income to those in the south. Less than 0.5% of my constituents would be able to buy a property at £300,000, and because the Chancellor has abolished brownfield land regeneration funding, the Government are not acting now against companies that hoard building land and their advisers.
The Budget feels a bit like the Government’s new cars: driverless and heading down the wrong road and on to reckless destruction—
Britain’s future is indeed a global one. As the Foreign Secretary made clear today, we are leaving the European Union but not retreating in on ourselves; there is a whole world of opportunities that we can and must pursue. That will, in the words of the Red Book,
“see the UK becoming a world leader in new and emerging technologies, creating better paid and highly skilled jobs.”
Nowhere will that future be more welcome than in Stoke-on-Trent, and the key to our success in that global future lies in our building on the strengths of Stoke-on-Trent’s unique local history, not least as a world leader in ceramics, design, technology and manufacturing.
My constituents were very clear in the EU referendum—they voted by 70% to leave—and they think that Brexit should indeed mean Brexit; that it should mean something manifestly different from the status quo. Many people in Stoke-on-Trent South felt strongly that EU membership had not been enough to benefit traditional working-class areas, that it had not been enough to bring improvements in our quality of life, and that it had not been enough to realise the huge potential for a major revival of our world-class ceramics industry.
The Budget has a firm emphasis on skills, cutting-edge technology, infrastructure and a sustainable cost of living. I hope that the Government’s national commitment can be capitalised upon locally by existing manufacturers, and by new or even returning manufacturers, especially in our world-class household ceramics, giftware and, of course, bricks and tiles, across the Potteries.
The modern industrial strategy will mean that Stoke-on-Trent and Britain are fit for a global future. Critical to that is ensuring that Stoke-on-Trent can benefit from capital investment, with projects such as HS2 delivering lasting local benefits. It is essential to maintain our enviable connectivity at the heart of the UK as a globally important centre of manufacturing and distribution.
In Stoke-on-Trent, we make art from dirt, and we sell our incredible products right around the world. “Made in Stoke-on-Trent” and “Made in Britain” are huge marks of quality, and these back stamps can command a premium price in the international ceramics markets. They are the soft power behind hard cash. The link between industry, design and art is what makes Stoke-on-Trent such a culturally unique place. Winning the 2021 city of culture bid would transform the opportunities from these industries, promoting Stoke-on-Trent as a more attractive place to live, work and visit.
For areas that have a strong manufacturing tradition, such as Stoke-on-Trent, and not just in ceramics but in a whole number of industries, opportunities will flow from Britain’s becoming a truly global trading nation. Working in tandem with our modern industrial strategy, we can champion new trade agreements beyond our shores, with our partners in the EU and with the wider world.
By getting T-Levels and apprenticeships right, by investing in success and by ensuring prestige, we are providing clear routes to employment—tangible career paths in the global economy—and providing opportunities to our aspiring manufacturers and technicians of the future. The Government’s role as the driver of global Britain must be to open world markets to our local manufacturing excellence and to continue to push our industries to become more internationally competitive. Investing in infrastructure, skills and innovative research will mean greater prosperity, improving the quality of jobs in places such as Stoke-on-Trent.
The Government have worked hard to increase our international tax competitiveness, and to enable smaller businesses to grow and compete with the global players—
Thank you, Madam Deputy Speaker. I think this is the first time I have spoken in the Chamber while you have been in the Chair.
This Budget debate is quite rightly primarily about Brexit, and the statistics underpinning the Chancellor’s statement last week have to be read in that context. From being one of the fastest growing economies in the G7, we are now joint bottom. Indeed, over the next five years our economy is forecast to grow more slowly even than that of Greece. I could say much more about the statistics. It is of course true that our productivity gap is a major factor in our faltering performance, as it acts as a huge brake on growth. Despite this dreadful situation, investment intentions by businesses are weakening because of uncertainty about the future of the British economy in the context of a shambolic Brexit process. The situation is fragile.
The Budget is based on a positive outlook for negotiations, yet there is a lot of scope for things to go badly wrong. The biggest fear, as far as our wealth creators are concerned, is a cliff-edge Brexit, with the UK leaving on World Trade Organisation rules. That would mean, according to the Chancellor’s own forecasts, the economy emerging at 7.5% smaller by 2030 than it would otherwise have been. Even if the Government secure a Canada-style trade deal, the Treasury estimates that the country will be only around 1% better off than if we leave on WTO rules. It is hardly enticing, is it? Analysis also suggests that trade deals with other countries will add only 5% to our trade, and nowhere near compensate for the 40% reduction in trade consequent on leaving the single market.
The Government need to acknowledge the warning signs sent out by the figures underpinning the Budget. The first and most important response needs to be an acknowledgement that there is no such thing as a bespoke deal. There is only no deal, a trade deal on Canada-like terms as a third country, or continued membership of the single market and the customs union. It is that latter option that promises business certainty for the future, and which will encourage investment and improvements in the country’s productivity, giving the Chancellor—whoever that may be—more room for manoeuvre in future years. Maybe at some time in the future we will have a woman Chancellor making good on our place in the single market.
At a time when the NHS is desperate for money, it is surely madness to keep pursuing a policy that threatens to cost us dear. The truth is that we cannot end austerity without growing our economy. The Budget last week made that fact painfully clear and it is my contention that growing the economy is best secured by staying in the single market. The fear with the present course the Government are following is not only the sheer chaos of it, but the failure to accept the pragmatic view that disruption to our economy must be avoided at all costs.
It is not in the national interest to allow this to happen and the Government should and must act responsibly. Those on both the Government and the Opposition Front Benches should grasp the nettle and accept that membership of the single market and the customs union offers the best deal for Britain.
This was a good Budget: strong on housebuilding; fair to young people wanting to travel and to young families who want to own their home; credible on the debt and the deficit; and transformative for Teesside.
The north-east lies at the heart of global Britain. We are the only net exporting region of the country. For those who do not know my area, it is hard to overstate the economic and emotional significance of the Redcar steelworks. The fact that they stand cold tonight, rather than producing molten Teesside steel, has felt, for so many and for so long, to be the final indignity for an area that was brought into being to create and has instead often been synonymous with decay. Identity, cohesion and pride are pale words to set alongside overfull hearts about the consequences of what the closure has meant.
There are very few company towns and areas in our country. This was one and it is in that context that the Government’s commitment to the South Tees mayoral development corporation needs to be understood. Our mayor Ben Houchen and the mayoral development corporation board have been working overtime and there have been 60 expressions of interest in the site. This is the most exciting regeneration project in the whole country. The Prime Minister visited in August and we have now received £182 million of investment. That is why it is so powerful a signal that central Government, so profoundly mistrusted and so often derided, are opening the door to a better future so that Teesside is not a charity case, but is able to earn our future on equal terms with the rest of the world.
What cannot be excused, and what I will not forgive, is the reaction of local Labour politicians and the debate they have tried to whip up about the announcement somehow being about recycled funding. They have been so quick to downplay it, to pour cold water on this flicker of hope and this life breathed into the embers of SSI. Not only are they wrong—the fact is that this is new money, as confirmed by the Treasury—but they are damaging. What kind of signal do they send to investors? What kind of message do they send to our constituents? What kind of service do they perform to Teesside? There is an irony too bitter for words: they are the first to denounce the Government for betraying the north-east, yet when money is provided they are more interested in their own faux outrage than in furthering the area’s best interests. Bob Cuffe, an independent member on the MDC board and the north-east managing director of Trinity Mirror, tweeted:
“Breaking News. Yesterday Teesside was at risk of an outbreak of optimism and hope. Families wondering if potentially good news had broken out. Thankfully Loyal Labour Forces came out quickly with Party Gloom Blankets to try and extinguish the hope.”
The Evening Gazette has been running an excellent “Invest in Teesside” initiative. It is time for the whole area—businesses large and small, politicians of all colours and standing—to come forward and wave the flag for Teesside. It is time for optimism in our area.
The latest figures show that the north-east has just set a new record: the highest ever level of employment. Moreover, the number of unemployed people has fallen by almost 10% on a year ago. This is testament to the energy and ingenuity of all the firms I have visited across my constituency. The South Tees mayoral development corporation needs to be supported to flourish, but it is not the limit of our ambition. I have spoken already about carbon capture and storage. I could also mention the new Sirius Minerals mine or free port status for Teesport, which will create huge opportunities in a global world. That is the vision, that is the journey and, for as long as I have any part to play in the future of our area, that is what will be realised.
I wish to focus on three areas of deficiency in the Budget: education, social care and the public sector.
Many schools across the country are struggling financially. The Chancellor, while promising an extra £40 million to train future maths teachers, seems sadly to have missed the point. The Government’s ideologically driven onslaught on education has led to an exodus of teachers, and many schools are now struggling to recruit. More teachers are now leaving the profession than joining it. The Government do not fully understand the low morale of teachers and staff in schools following the underfunding of education by successive Tory-led Governments. Why would any high-calibre maths graduate now choose teaching instead of a job as an analyst in the City making large amounts of money with half the paperwork and stress?
There was nothing in the Budget for primary school funding either. In order to entice students to study maths A-level, the Chancellor has offered a maths premium of £600, but if primary schools are not properly funded, the children could be struggling at secondary school. The £1.3 billion previously announced by the Secretary of State for Education will do nothing to reverse the £2.7 billion of cuts to school budgets since 2015. The Chancellor could have addressed the fact that schools now have to pay more in national insurance and pension contributions than they once did. These are the real issues squeezing schools.
There was also no increase in the budget for special educational needs and disability funding, which has been frozen for several years. Earlier this year, the Local Government Association warned that due to the lack of funding and rising demand, SEND children were at risk of being turned away from mainstream schools. If schools and local authorities cannot meet the needs of SEND children, what are they supposed to do? The sad thing is that the most vulnerable children will suffer, which is totally unacceptable. More investment is urgently needed in this area.
While I am on the subject of the vulnerable, the Chancellor has decided to give insufficient funds to the NHS, rather than the £4 billion that the head of NHS England called for in order to meet the urgent demands faced by the NHS this winter. The Chancellor seems to think that those pressing demands end at the hospital door. He has decided to give nothing for social care, which will no doubt lead to more bed blocking and seriously affect the help that people need coming out of hospital. This is a massive snub to the elderly and those needing social care services. Social care has seen cuts of £6.8 billion over the past seven years, and there is an estimated annual £2.5 billion funding gap.
Once again, there is nothing in the Budget for local authorities, many of which are at breaking point following year-on-year cuts to their budgets since 2010. Social services is the largest area of expenditure for many local authorities, and failure to properly fund it is leading to untold damage and distress to our most vulnerable and often elderly citizens. The Chancellor and the Government seem to be willing to borrow more but not to invest it in educating children, supporting the most vulnerable or supporting local services. A sign of a civilised society is how it treats its most vulnerable citizens. Stripping the state to the bone hits the vulnerable first and hardest. The Government are failing our society.
I start by welcoming the news from India about the Chennai Six. I very much hope that those men will be home soon.
I am pleased to have the opportunity to respond to a Budget that does not shy away from the issues facing the nation but sets out a clear, sensible and pragmatic approach to how to tackle them; a Budget that creates a positive vision for the future of our country and invests in it; and a Budget that most of all delivers for Scotland.
I was sent to this place by the people of East Renfrewshire on the back of two clear promises: to oppose a second independence referendum, and to speak out for Scotland’s interests at Westminster. Since 2.38 am on
I welcome the freeze in whisky duty, the new tax relief for the oil and gas industry, the commitment to further city and regional growth deals, the clearing up of the SNP’s mess on police and fire VAT, the £2.2 million for Poppyscotland, the £3.3 million for Scottish charities from LIBOR grants, the extension of the rural fuel duty rebate scheme, and the £2 billion of extra funding that is winging its way to Scotland to be spent as the Scottish Government see fit. The truth is that, if it were not for the Scottish Conservatives, the price of a bottle of whisky would be going up. This is a major pre-Brexit boost for one of our most important industries, with exports of more than £4 billion a year. Whisky is the biggest net contributor to the UK in goods, supporting more than 40,000 jobs. I cannot think of a better example of an industry and a brand that speak to a global Britain.
East Renfrewshire is benefiting from £44 million in infrastructure funding as part of the Glasgow region city deal. I know what a difference city deals make to local communities, and I am delighted by the support that has been committed to Tay Cities, Stirling and Clackmannanshire, and the Borderlands growth deal. Those deals demonstrate that Scotland benefits when our two Governments work together, collaborating to deliver jobs and prosperity. They will empower businesses in the areas involved, enabling them to expand their horizons and attract talent from around the globe.
The provision of an additional £2 billion for the Scottish Government to spend as they consider best should be welcome news, but for the SNP, of course, there is no grievance that cannot be manufactured. If they are not complaining about not getting enough money, they are complaining about getting the wrong type of money. The truth is that the Scottish Government have always been happy to use financial transaction funding for affordable housing, business investment, and vital infrastructure projects. When the UK Government use this method, it is devilish smoke and mirrors, but when the Scottish Government use it, it is
“a half-billion pound vote of confidence in Scottish business, Scottish workers and the Scottish economy.”
Unfortunately for the SNP, Scotland sees that dishonest, hypocritical, grievance-seeking agenda for what it is. Scotland recognises that this Conservative Government have delivered for Scotland.
I welcome the increase in the national living wage, the increase in the personal allowance, the freezing of fuel duty, the transformative investment in research and development to ensure that Britain is at the forefront of technology, and the measures to support small business growth. I pay tribute to my hon. Friend Heidi Allen for the work that she has done to bring about the £1.5 billion package of improvement measures for universal credit, which have been welcomed by my local citizens advice bureau in Barrhead and by other branches and organisations throughout the country. I would love to be welcoming the increase in the higher-rate tax band, a change in the approach to business rates and the removal of stamp duty for first-time buyers, but, sadly, they will not apply north of the border—unless, that is, the Scottish Government’s Finance Minister sees some sense.
Scotland’s first Budget, delivered at Westminster, is now complete, and we await the second, from Holyrood, on
The big story from last week’s Budget was clear: there is little room for manoeuvre on the economy unless we improve our productivity. We need to spend only five minutes in the company of anyone from the Institute for Fiscal Studies to see that our downgraded productivity forecasts spell real problems for the UK, particularly as we approach the full force of the Government’s chaotic Brexit.
Britain’s influence in the world has always had at its heart a strong economy, driving trade and growth across the globe. My own constituency of Croydon developed as a town on the principal route between the south coast and London, a gateway to this country since mediaeval times. Competing on the world stage necessitates an economy that the world can work with easily and that it will look up to. Those who enjoy this sort of thing, as I do, will follow the various global country-branding matrices, which always place Britain satisfyingly near the top as a nation brand; but these things shift, and as our economic performance becomes stunted and freedoms of movement and trade are taken away, our reputation as a place in which to work and invest will suffer.
I think we would all agree that productivity holds the key to maintaining and building on our place as a world-leading economy, so how do we help our businesses, and the people employed by them, to become more efficient? There are two clear concerns that we must address before we go any further: the two pillars of education and infrastructure. The correlation between a strong education system and productivity is clear, and it was extremely disappointing to see no significant mention of education in the Budget. My borough of Croydon has the largest number of young people in London. We have 16,000 people in further education or apprenticeships, but I was devastated to hear that the number of apprenticeship starts between May and July fell by 61%.
There is a growing crisis in our schools, which threatens to undermine our local and national economy for a generation. I surveyed over 50 Croydon headteachers recently, and 93% told me that they had been forced to cut staff due to funding. Three quarters had cut teaching assistants and, shockingly, 85% said they had been forced to cut support for children with special educational needs. This is not helping our country’s productivity. In the last Parliament, the Conservatives cut adult education by 47%. This is not helping our country’s productivity. Prospective university students in England are now looking at average debts of an astonishing £50,000—higher than almost anywhere in the developed world. This is not helping our country’s productivity. The Chancellor’s Budget and today’s industrial strategy allocate some money for parts of our education sector, but to avoid real-terms cuts we need billions more in investment just to restore real-terms funding to 2015 levels.
The second pillar of productivity is, of course, infrastructure. London is our most productive location and it is where our housing shortage is most acute, yet London recently slipped to the bottom of the regional house building tables. The Mayor of London was right to say that this was the most anti-London Budget in a generation. It did not offer a single extra penny in grants for affordable housing in London, and, according to the Office for Budget Responsibility, the Government’s headline measures on stamp duty are more likely to benefit current owners than first-time buyers. The Government must change their mindset from seeing housing as a commodity to seeing it as a pivotal means of increasing our nation’s productive potential.
More housing will kick-start productivity only if the right type of infrastructure supports it. Croydon Council recently gave the green light to a transformative project led by Westfield and Hammerson to bring thousands of new jobs and homes to Croydon, but we are hampered by our infrastructure. East Croydon station has the second highest number of rail interchanges in the country. The Brighton mainline, which serves Croydon and other important south London destinations, desperately needs £l billion to handle the increase in demand that it will face in the coming years. Overcrowding on the network is hampering our productivity.
To sum up, the challenges we face, from artificial intelligence to an ageing population, from climate change to Brexit, are serious, but unless we get the foundations in place to improve our productivity, we will not stand a chance.
In leaving the European Union, we are re-joining the rest of the world. Our trade with the EU is in deficit and declining, and our trade with the rest of the world is in surplus and rising. The golden opportunity presented to us by Brexit is for Britain to lead the world as a global free-trading nation, championing trade liberalisation and taking on the voices of protectionism.
My constituency is dominated by the truly global oil and gas industry, which is, to quote Oil & Gas UK’s “Blueprint for Government”:
“A global energy industry, anchored in the UK, powering the nation and exporting to the world”.
That is seen in current industry exports, which are expected to account for 43% of the UK supply chain turnover in 2017, up from 41% in 2016. To secure the industry’s global competitiveness and ensure that it captures a large share of an ever growing energy market, it is crucial that the right fiscal and regulatory regime is put in place to incentivise investment. To date, this Conservative Government have created one of the most competitive fiscal regimes anywhere in the world, by providing an unprecedented level of support for the North sea sector, with tax breaks worth £2.3 billion, the creation of the Oil and Gas Authority, and investment in the Aberdeen city region deal.
We all recognise that the job was not quite done yet, and our top ask, as a group of new Scottish Conservative MPs, was for the Chancellor to introduce transferrable tax history. I am delighted that Scottish Conservatives, engaging positively and constructively with our colleagues, have exerted influence at the heart of Government to deliver for Scotland. This policy change in the Budget can help to unlock upwards of £40 billion of new investment by allowing the transfer of tax history from the seller to the buyer when North sea assets are sold on. TTH can bring new inward investment by enabling more deals to be done on late-life assets. It can prolong the life of mature fields by many years. This highly competitive fiscal regime will ensure that the UK is a global leader in mature basin management and support the industry in meeting its vision for 2030 and its aim of doubling the supply chain’s share of the global market from 3.7% to 7.4% by 2035. This industry is one of the true global industrial success stories of the UK, and with its truly global reputation, it is a shining example of the global role that Britain can play outside the EU.
There is more to Aberdeen and the north-east than oil and gas. The region is also home to a thriving food and drink industry, and it is known for its whisky exports. That is why I am delighted that, in this Budget, Scottish Conservative MPs have delivered for the industry a further freeze on the duty on spirits, making a bottle of whisky £1.15 cheaper than it would otherwise have been since the duty rise ended in 2014. With the opportunity to forge our own new bilateral trade deals and agreements, we can take Scottish whisky to growing markets of the world such as India, and with the support of this Government, whisky will thrive with Brexit. As we have heard, there are huge opportunities for the United Kingdom. We have a new and historic opportunity to design a new trade policy and sign new deals. Let us seize that opportunity, and let us make the most of it.
The Prime Minister spoke in Florence of a
“new era of co-operation and partnership” for the UK’s international affairs. Since then we have seen Brexit negotiations falter, tension between the Foreign Office and the Department for International Development over aid spending, and now a Budget that lacks a clear vision for Britain. From an insufficient amount of new money for the former SSI site in Redcar, to just £335 million to deal with this winter’s crisis in the NHS and social care, this Budget was an opportunity missed.
The theme of today’s debate is global Britain, but the Budget had little to say on international development. We have a proud tradition of taking a lead on international development, with successive Governments committing to spend 0.7% of gross national income on overseas aid. This reputation should not be besmirched by murky deals with other nations’ militaries. We should be investing in the poorest communities, lifting people out of poverty and building local capacity to reduce long-term dependency on aid. We should be investing in conflict resolution and in growing the economies of the poorest countries of the world.
The Budget also had nothing to say about how we will finance our future relationship with the world. We will need to replace our current diplomatic relationships with nations in the EU as we withdraw, by investing considerably in a new European diplomatic corps. Extra investment will also be needed to expand our relationships outside Europe to take advantage of any opportunities that leaving the EU might bring, but this cannot be at the expense of international development. It needs to be in addition to our commitment to the world’s poorest. Global Britain will not command respect through our actions on the world stage alone; that will also depend on how our actions at home are perceived by our neighbours.
People who voted to leave the EU wanted to see healthcare improve. They expected more money to support the NHS frontline, but our staff feel demoralised and undervalued, applications from EU doctors and nurses have collapsed as uncertainty continues about their employment rights, and our waiting times for children’s mental health services are a national embarrassment. The £335 million for this winter is too little, too late to help the NHS to cope with the pressures it has now, and it is certainly a far cry from the figure plastered on the side of the Brexit bus. Yes, £2.8 billion over the next three years is welcome, but for the sustainability and transformation partnerships to be a reality, they need more resources. NHS leaders say that these amounts are not enough to sustain, let alone transform, healthcare.
The Budget also contained no new funds for social care—another missed opportunity. With our local authorities under pressure and most NHS trusts saying that their problems are made worse by the crisis in social care, we cannot afford to wait until next summer for a social care Green Paper. An offer has been made by MPs from across the House to collaborate on looking at the future of health and social care funding, and I encourage Ministers to work with all parties to deliver a sustainable solution to the care crisis. I urge Ministers, instead of focusing on Brexit battles around the Cabinet table, to focus on delivering for the British public, and to work with us to deliver the change we need to meet the challenges Britain faces.
On Friday, I was in my constituency office reflecting on a Budget that is building a Britain fit for the future. Westhill is the global centre for subsea excellence, and my office is surrounded on all sides by the headquarters and offices of American, French, Abu Dhabi and Norwegian oil and subsea engineering companies. Few other places in the country symbolise not only the global international nature of the oil and gas industry, but the welcoming and attractive nature of our country as a place to invest, do business and thrive. We can all be incredibly proud of our global reputation. Whether projecting soft power, playing host to ambassadors and leading industrialists on board one of our frigates or destroyers, working alongside our allies in the Gulf, combating piracy off east Africa or delivering humanitarian aid, I have seen with my own eyes the incredible force for good that is our Royal Navy and its sailors and marines.
We are also the cultural capital of the world. The total value of services exported by the UK’s creative industries in 2014 was £19.8 billion—an increase of 10.9% since 2013. A prime example of our cultural strength and our soft power reach is the Royal Edinburgh Military Tattoo. It could be described as the perfect hybrid of British hard and soft power, bringing together servicemen and cultural ambassadors from around the world, acting as an export catalyst and exporting the British military and its and our values on the world stage. The tattoo sells tickets in 102 countries, with 30% of its audience coming from aboard. Having already taken the show to Australia and New Zealand, the aim now is to set its sights on China in 2020, which I hope the whole House can support. I am very lucky to be married to a girl from Sweden. That means that I have of course endured my fair share of Scandi-noir over the years, and I can tell the House with authority that no country does telly better than the Brits. From “Taggart” to “Broadchurch”, “Downton Abbey”, “War and Peace” or “Blue Planet”, Britannia really does rule the airwaves, exporting more television programmes than any other country in Europe.
I am proud of our global Britain, our incredible armed forces, our unparalleled diplomatic corps and the attractiveness of this country to foreign investment, especially around my constituency. I am proud of our global cultural reach, but I am probably even prouder of the record of successive Conservative Governments, who committed to and delivered on spending 0.7% of our GNI on international aid—more than was ever managed by the Labour party. Our aid forms a crucial part of securing the UK’s place in the world and helps to put an end to disease, hunger and extreme poverty. Britain has always taken its international obligations seriously, and we will continue to do so. Britain has fought for freedom from tyranny, for liberty and democracy, for human rights and for freedom of the press around the world. We are the first to respond to the call for aid and the first to deploy our brilliant troops and aid workers in some of the world’s most dangerous and challenging locations.
We lead the word in our educational and cultural offerings and remain one of the most attractive countries in which to invest. As we stand today on the brink of a new dawn, I am proud of what this country has done in the past, proud of what we are doing today and, with this Budget, excited for what we will achieve in the future. That is why I commend the Budget to the House.
I suppose that nobody in the Chamber should be surprised that the Foreign Secretary was more comfortable talking about penguins than he was about the £350 million a week for the NHS—I guess the penguins probably reminded him of the Bullingdon Club days. Opposition Members need to remember that the Foreign Secretary is very sensitive about being reminded of his pledge, so I encourage everyone to use that at every opportunity. I wanted the Foreign Secretary to identify where in the Budget the £350 million a week was going to come from and when it was going to be available, because I was going to put in a bid for £400 million, which Siobhain McDonagh —a neighbouring constituency—will recognise as the figure required for St Helier Hospital’s improvements. However, the Foreign Secretary was of course unable to offer the £350 million that he had painted on the side of the bus.
This Budget brings the day of reckoning for the Brexiters on the Government Benches—and for some on the Opposition Benches who do not appear to be here today—a day closer. It says that Brexit, with fewer skilled workers and less investment, will hammer our productivity and damage our economic prospects, and that has already started in the automotive industry.
Many Members have quoted the Institute for Fiscal Studies, which says:
“The forecasts for productivity, earnings and economic growth make pretty grim reading… GDP per capita will be 3.5% smaller in 2021 than forecast less than two years ago… a loss of £65 billion to the economy.”
I find it bizarre that Conservative Members ask us to be cheerleaders for the Government, given the figures the IFS is reporting on the Budget’s impact on the economy. The Chancellor promised a surplus of £10 billion in 2019-20, and now he is promising that the deficit will be reduced to just £35 billion at that point.
There we have it: forecasts for productivity and growth are down; the number of apprenticeships is dramatically down; the forecasts for debt and inflation are up; and the date for clearing the deficit has been pushed back yet again. Neither the Government nor, I am afraid to say, the official Opposition have the answer to the economic calamity we are facing.
The Government’s answer is to drive the car fast towards the Brexit cliff, to invoke the will of the people and to keep their fingers crossed on the way down. The official Opposition’s position seems to be to drive the car fast towards the Brexit cliff and when it leaves terra firma, like Dick Dastardly and Muttley in “Wacky Races,” to remain poised in mid-air for two years before invoking the will of the people and keeping their fingers crossed on the way down. That is clearly Labour’s position, because the shadow Foreign Secretary, Emily Thornberry, was not able to answer the question on what her position is.
The Budget provides no answers to the critical economic challenges that the UK faces, yet the answer is relatively simple: invest in infrastructure and housing; scrap the apprenticeship levy; and stay in the single market, the customs union and the European Union. That is why the Liberal Democrats are pressing for a vote on the deal and an exit from Brexit.
It is a great pleasure to follow so many hon. Members. They have spoken on a range of topics, one or two of which I will pick out.
Contrary to what we keep hearing from the Opposition, the economic picture is very rosy. We have a growing economy and record inward investment. The deficit has come down by three quarters since 2010, and debt will be falling as of next year. There has been an extraordinary economic turnaround, given the situation the country was left in by the last Labour Government.
We have the fifth biggest economy in the world, we are the fifth largest exporter in Europe and we are the top destination for inward investment in Europe. This is a Budget that seeks to strengthen Britain’s position in the world, to confront the challenges we face with confidence, and to embrace the technological future. Britain has a unique place, positioned as it is in Europe, but with close links to the United States, the Commonwealth and developing markets throughout the world. There are a number of reasons for that, including our outlook and our industriousness. We also have enormous soft power. Our education system educates the brightest and best, and it exports our values throughout the world.
Tourism and culture are important to west Oxfordshire. My hon. Friend Andrew Bowie mentioned that £19.8 billion of investment comes into the UK. With a value of £300 million, and 4 million visits a year, tourism and culture is probably the most important thing to west Oxfordshire’s economy. Nationally, we have the BBC and a great number of other extraordinarily important cultural icons. Much of “Downton Abbey” is filmed in my constituency, and we also have Blenheim Palace, which has been a film set for everything from Harry Potter to James Bond. As we have heard, the industrial strategy builds on that through the creative industries policy and evidence centre, which will promote the inward tourism that is so important to west Oxfordshire and the country.
Exporting businesses are also important. There is incredible innovation in my constituency and throughout the United Kingdom in aerospace, information technology and manufacturing. The Federation of Small Businesses has called this Budget business-friendly—and quite rightly, too. This is a Budget that has an action plan to unlock £20 billion of patient capital investment to finance growth in just the sort of innovative firms that we have in west Oxfordshire. There will be a £2.5 billion investment fund through the British Business Bank, with private sector involvement taking the total to £7.5 billion.
Research and development is crucial, and it is getting the biggest boost for 40 years, with £2.3 billion extra investment from the national productivity investment fund, which itself has been expanded by £8 billion. This takes total direct R&D spending to £12.5 billion by 2021-22. We have heard about the investment in artificial intelligence and driverless cars. They are just the start of the emerging technologies throughout the country in which we will be able to invest, and this is of enormous importance. There must be investment in skills, too, so I am delighted to see that there is £177 million for maths teachers and computing.
In the last 30 seconds available to me, I will speak briefly about Oxfordshire. I am pleased that in addition to the investment in the companies I have spoken of, we have investment in the Cambridgeshire, Milton Keynes and Oxford expressway, an important road and rail link uniting the two great centres of learning and business with that great thriving city in the middle. This will be extremely important, and there is a Government package for investment and infrastructure of £30 million for each of the five years. This Budget ensures that this is a Britain that can face the future with confidence and thrive.
The most striking features of the Budget are the parts the Chancellor tried to ignore: growth and wages. After all we have been through, and after all the promises about long-term economic plans, austerity and building for the future, the reality is that average earnings will be no higher in 2022 than they were in 2007. We are heading for the worst decade for pay growth for 210 years. Given all the lectures from Conservative Members, it is worth pointing out that the Chancellor is now on target to borrow £30 billion more by 2020 than was predicted just a year ago. Apparently, it is okay to be in that position but still to lecture others about the dangers of borrowing to invest.
The greatest disappointment is that the Chancellor does not seem to recognise the impact of rising food prices, although 78% of my constituents who replied to my cost of living survey were worried about the failure of wages to keep pace with inflation, with 80% stressing the impact on family budgets of rising food prices. The Government also look very out of touch when it comes to funding the fight against crime, tackling social care—that was one area in which we might have expected progress after the fiasco of their manifesto—and recognising the plight of schools.
I will not, because we have only a short time left and other Members want to speak.
It is disappointing that the partial response to the problems with universal credit is being delayed. That issue was raised by 94% of people who responded to my survey. They will not understand why the Government are only cutting the waiting time to five weeks, or why we need to wait another three months for action, especially with all the pressures over Christmas. They certainly will not understand the continuing freeze on benefits. One way in which savings could be made would be to address the cost of work capability interviews for people who have long-established and well-documented illnesses that clearly leave them unable to work. Even those responsible for the assessments concede that this is a punitive and pointless exercise, with decisions often reversed at appeal after months of worry and suffering.
It is not all bad. I am hopeful about the industrial strategy and, on the back of today’s news about life sciences, I hope that Ministers will shortly come to Birmingham to announce support for Birmingham Health Partners and the Institute of Translational Medicine so that the extraordinary medical advances that are being pioneered there also become a focus for new jobs and industries. I also want more effort to boost our region’s skills base, which is crucial for the growth that our economy needs. I ask the Minister for Apprenticeships and Skills to look at how we can ensure that those making large contributions to the apprenticeship levy, such as Cadbury in my constituency, get a fair return, and at how we use the levy more imaginatively to involve the self-employed and those in microbusinesses who, if freed from bureaucracy and costs, would be in a position to offer young people high-quality apprenticeships that will lead to real jobs in emerging areas.
Robert Courts might have Downton Abbey in his constituency, but at the heart of mine, Mitcham and Morden, is one of the biggest working industrial estates in south London. It is home to dozens of businesses—from scaffolders to skip yards, and from builders to brick yards. Among the lorries, vans, skips and fumes is a converted warehouse housing 84 families and hundreds of children. Four local authorities —Sutton, Croydon, Bromley and Merton—have been housing residents in Connect House because the Government have left them unable to borrow and unable to build so that those families can have a true place to call home. The residents of Connect House are just 84 of the 78,180 families in temporary accommodation throughout the country for whom a new Budget offered some hope of a way out and a place to call home.
The impact of temporary accommodation on the education and wellbeing of the 120,170 children without a permanent home has never been calculated, but I fear that it will continue to be felt in the decades to come. On the morning of the Budget, I received a letter from Mrs Sheridan, the headteacher at Malmesbury Primary School in my constituency, regarding a pupil who lives in Connect House. Since he has moved there, the pupil has been classified as a “persistent absentee,” meaning that his attendance is at such a low level that it will, should it not improve quickly, have a significant impact on his attainment.
Like Mrs Sheridan, I listened attentively to the Budget statement to hear what hope it would offer to her pupil and his friends and neighbours who just want a place to call home. The answer in the Budget was as follows:
“Local authorities will be invited to bid for increases in their caps from 2019-20, up to a total of £1 billion by the end of 2021-22.”
The Government estimate that up to 300,000 new homes will be needed each year to combat the backlog and prevent rising unaffordability, so it is crucial to establish how many homes that £1 billion could build. The answer is just 15,000.
The last time 300,000 homes were built in one year in England was almost half a century ago, in 1969, back when councils and housing associations were building new homes. Since 1939, in fact, the delivery of more than 200,000 homes per year in England has happened only when there have been major public sector house building programmes. Let us consider what happened last year. Of the 147,930 permanent dwellings completed in 2016-17, 82% were in the private sector. Some 25,000, or 17%, were built by housing associations, while 1,840 were built by local authorities.
To meet the target for new homes we need two RTBs: not only the right to buy but the right to build—the right for local authorities to build at affordable prices. Affordable rents do not match the Government’s definition of 80% of market value, because that is not affordable to anyone. We can go on talking about this issue, but we are putting more salt into the wounds of those who do not have a home if we simply refuse to liberate the land and the money to make building possible.
I wish to use the next few minutes to set out an alternative Budget—one that the UK, as a leader of global nations, should have delivered; a Budget that works not only for the haves, but for the just about managing.
This Budget was an opportunity for the Chancellor to speak to the homeless and the sick; to the looked-after child, the disabled man, the 80-year-old with dementia and the businessman and woman; to the teacher and the nurse; and to our police and firefighters. That is who the Chancellor should be speaking to. Unfortunately, he failed to deliver a Budget for our nation.
Since 2010, tax avoidance has cost the UK economy nearly £13 billion. Imagine what that £13 billion could do for those who need our support in this country. What could we pay for if we just had £1 billion of avoided tax paid back? Well, £1 billion could fund 125 miles of railway track electrification that the Chancellor and the Transport Secretary promised my constituency of Colne Valley and those who travel between Leeds and Manchester. Once again, the Chancellor has ignored what he previously promised and instead decided to plough more money into HS2, which is already off the tracks with its spending. The Chancellor’s offer on transport was more Thomas the Tank Engine than a quality trans-Pennine rail service.
One billion pounds would also help to build 50,000 shared ownership homes or 16,600 social housing units. We need a housing strategy to build affordable and social housing like we had in the 1940s and 1950s. We need a housing strategy that puts infrastructure in place at the same time so as not to overpower local communities.
I now wish to turn my attention to something that was totally missing from the Chancellor’s Budget—social care. Frankly, I am lost for words that he did not think it was worth his time to mention social care. Was it deliberate? After all, last time the Conservatives talked about social care, they lost their parliamentary majority, and the weak and wobbly coalition of chaos was formed.
We have an ageing population and we need to make sure that our mums and dads are cared for in their old age. My local council, Kirklees, currently spends £101.8 million per year on adult social care, which is 35% of its total budget. Kirklees has had its direct funding from the Government cut already by £129 million, and a further £65 million will be cut by 2021. In addition, it is predicted that the number of people in Kirklees over the age of 65 will increase by 29% in the next 13 years. How will the Chancellor’s Budget actually help Councillor Kendrick in Kirklees to continue to provide support for vulnerable older people in Colne Valley?
My alternative budget would do the following: fund electrification of the trans-Pennine Manchester to Leeds rail route, updating trains and making the trains work for the communities that they need to serve; fund social and affordable housing for the many and not just the few; fully fund social care; reopen Sure Start; and scrap the public pay cap.
Let me return to the start of my speech. Yes, the Chancellor had some nice soundbites in the Budget last Wednesday, but we need a Budget to help those who are just about surviving, that invests for the future and future generations, and that works for the many, not just the few.
It is great to follow my hon. Friend Thelma Walker.
In the build-up to last week’s Budget, I was pleased to hear speculation that it could end the last seven years of crippling austerity, and that, following Labour’s successful general election campaign, the Government might finally listen to the suffering up and down the country. Members can therefore imagine my surprise when the Chancellor sat down at the end of his speech having failed even to mention the words “social care” let alone to propose a funding settlement to tackle the crisis. He also failed to mention policing or counter-terrorism, which are under more pressure than ever.
There is still no plan, direction or leadership from this Government to strengthen our local economies, such as that of my constituency of Leigh. Therefore, once again, the burden of this Budget will end up falling on our hard-working public services, which will be asked to take on even more responsibility without the means to do so.
To put this matter into context, my constituency’s local authority of Wigan will have had £160 million of cuts to its budget by 2020, which means that key public services, on which our most vulnerable rely, have been withdrawn. Let me inform Mark Pawsey, who is no longer in his place, that coming up with alternatives is not just something for the Opposition. Local councils across the country have warned the Chancellor that they face a £5.8 billion funding gap over the next two years. That will mean that 60p in every pound that people pay in council tax could be spent solely on children and adult care services that councils provide. That leaves hardly anything for other vital services provided by local authorities, such as cleaning our streets, running leisure centres and keeping our public libraries open. But instead of funding our local authorities, the Chancellor only heaped on more responsibility without the ability to deliver.
This Government have long talked about the integration of health and social care, yet the Budget has done nothing to address the matter. The Government fail to recognise the huge impact of the underfunding of social care on our NHS, local authorities and communities. The same is happening in children’s services. The cuts to local authorities, Sure Start centres and early intervention and prevention grants, and the failing 30 hours’ free childcare policy are putting more vulnerable children at risk. The story of this Budget is therefore one of failure and neglect—failure to address the country’s long-term economic needs, to invest in our future and to fund our public services, which have been neglected by this Government for too long.
Britain deserved a bold, comprehensive and ambitious Budget that funded public services and protected local authorities. Instead, we got a threadbare Budget from a Government clinging to power, who choose to ignore the deep crisis we face in society. Those issues will not simply disappear. We must therefore confront them with the strength, resolve and determination that only a Labour Government can provide.
It is an honour to follow my hon. Friend Jo Platt.
This Budget will forever stand as a reminder of why we should never trust the Conservative party with the economy. Its mismanagement of fiscal policy since 2010 has led us to the longest fall in living standards for 60 years, and that looks set to continue well into the next decade. The deficit will not be eliminated for at least another 16 years. Growth is below 2% in every forecast year for the first time in modern history, and annual pay will not return to its 2008 peak until 2025, all because of an austerity programme that has bought so much pain with no gain. This Budget gives us nothing but more of the same—more austerity, and more attacks on the poor and vulnerable. It also gives us the same tired solutions, with a few scraps here and there for the NHS, hints that nurses might get a pay rise and changes in stamp duty for first-time buyers that are more likely to drive up prices in an already inflated market. All these sticking plasters just go to show that the Government have no idea how hard it is out there for people who struggle to make ends meet on wages that have not increased for years while inflation and living costs continue to rise.
Public services and public service workers are on their knees, but their desperate cries for more pay have been largely ignored: NHS staff have been all but ignored; teachers and pupils—ignored; firefighters—ignored; the chief constable of Bedfordshire police, who said publicly that he no longer has enough police officers to protect the public, has been ignored; local authorities—ignored; social care recipients—ignored; and mental health sufferers—ignored. That’s a Conservative Government for you.
The east midlands rail franchise threatens a poorer service for Bedford rail users, who have been let down by the Government’s cancellation of their plans to electrify the line from London to Sheffield, leading to slower and less environmentally-friendly trains. And talking of broken promises, it is now time for this Government to tell the nation the truth. Brexit is hurting our economy. That is not just because of the fall of the pound or because we are now the worst-performing advanced economy in the world, but because this is costing us a huge sum of money before we even leave—£3 billion, just to prepare for Britain’s exit on top of the £700 million that was already put aside. Hidden in the Red Book was an extra £3.5 billion every year to the EU after Brexit, even after transition. Just imagine how that could transform our NHS.
This is no Budget for the future, this is not prosperity and this is not progress—and it certainly does not reveal a nation ready to take on the challenges of the uncertain future Brexit brings.
I would like to take this opportunity to raise transport and housing budget-related issues.
I was extremely disappointed that the Chancellor has chosen to make little headway in addressing the north-south divide that continues to prevail in our country. The fact remains that we have greater gaps between our regions than any other OECD country, and this Government are simply not doing enough to address that.
Infrastructure is key to the development of the northern powerhouse the Government hope to build. They have introduced yet another toll in the north-west. It will cost my constituents and other residents in the region in excess of £1,000 a year to cross the new Mersey Gateway toll bridge. Many of their journeys will be made simply to travel to work or to attend hospital appointments. I urge the Government to reassess that situation and to use the next Budget to find the funds to scrap these tolls and to alleviate that burden on my constituents and on businesses. It is about time the Government began to invest properly in northern infrastructure.
Let me move on to housing, the green belt and air quality. In constituencies across the UK, including mine, there is a huge shortage of affordable homes. Under Conservative-led Governments, we have seen homelessness double, ownership fall to a 30-year low, the lowest number of social rented homes built since records began, and the number of new affordable homes fall by half since 2010. There was no new direct central Government investment in affordable housing in the Budget. Many of the houses that have been built are simply not affordable, leaving families, first-time buyers and many others unable to step on to the property ladder.
I welcome the Chancellor’s commitment to continue the strong protection of our green belt, but this Budget remains a missed opportunity to strengthen the protections and to enshrine a brownfield-first approach to development. The Government have so often been strong on words but weak on action, so it is no surprise that, despite strong protections, evidence collected by the Campaign to Protect Rural England shows that there has been a 54% increase in the number of homes being built or that have been planned to be built in the green belt in the past year—the biggest year-on-year increase in two decades. There is increasing evidence that local authorities are turning to development in the green belt as a result of mounting pressure from the Government to meet housing targets and to produce local plans. These councils are responding to a series of national messages and policies that are forcing many of them to release green-belt land to receive financial incentives and avoid sanctions.
The Government must do more to address the housing crisis, to protect our green belt and to improve air quality.
I am not sure what briefings Government Members are reading, but all the ones I have read have made it clear that the message from this Budget is dire. Economic growth—downgraded. Productivity—down. And the potential of a pay rise apparently on ice for anything up to 17 years. That is all in the face of an ever-increasing burden of Government debt, fuelled by the persistence of a failed austerity-first economic policy.
Britain has gone from being one of the fastest-growing economies to one of the slowest. It is blindingly obvious that the main reason is Brexit. Yet I come to this place every week to be told that it will all be fine. It clearly is not fine. The Budget shows that this remarkable period of Brexit self-harm is causing pain to our country and to my constituents, not just now but for generations to come.
Britain maintained its post-imperial standing in the world due to its thriving economy, its ability to build consensus in the European Union while influencing policy in the United States, and the strength of our military. Yet today we are in the relegation zone of the league of major global economies. We are pulling out of the European Union while the President of the United States pulls away from everyone else. We have brewing rebellions over a lack of investment in our armed forces. We are telling the world that Britain is closed. We have decided to hide from the challenges and the opportunities of globalisation. We are hoping that if we keep our heads under the union flag-branded pillow, with “Rule, Britannia” on loud enough in the background, everything will be okay.
In Bristol North West, we have one of Europe’s largest hospitals; workers and supply chain businesses for advanced manufacturing at Airbus, GKN, Rolls-Royce, Boeing and the Ministry of Defence; world-leading researchers and academics at Bristol University and the University of the West of England; one of the largest digital economies in the UK outside of London; a port managing imports and exports across the world, including tens of thousands of motor vehicles each year; and 40,000 homes, 35% of which are owned with a mortgage and 35% rented. In the face of a hard Brexit, the economic reality for my constituents is a disaster. We will see delays at Bristol port causing gridlock on our roads, with re-directed car imports and exports due to leaving the customs union; waiting times rocketing due to departing EU doctors and nurses; clinical scans and cancer treatments potentially postponed due to impending deadlines on importing medical isotopes from the continent; the loss of investment and jobs due to the possibility of advanced manufacturing leaving the UK; and families left with little money each month due to increases in rent and mortgage payments following Bank of England increases in the base rate to try to control Brexit-induced inflation—all this, alongside no additional core funding for our schools, our police or our social care at a time when Brexit is costing billions and billions.
There is one positive that I could be told by this Government to give to my constituents in Bristol North West. I would put the national interest first, revoke article 50, and stop this Brexit period before it causes any more damage—something that the Government are empowered to do. At the very least, I would commit to staying in the single market and the customs union to protect jobs, investment, standards, and the value of the pound. We need to wake up and deal with this Brexit disaster. That is the elephant in the room in this Brexit process and in the industrial strategy announced today—not just for the British people but for Britain’s standing and her role in the world. This Budget fails to do that. I hope that this Brexit Parliament can show that it is up to the challenge of putting it right.
Each year during the September recess, I conduct a community consultation over three weeks, with about 40 meetings. This provides a really valuable snapshot of people’s top concerns. This year, right across the constituency, the common theme to those concerns was antisocial behaviour and low-level crime chipping away at the quality of people’s lives and undermining our communities: growing homelessness, street begging, people on motorbikes terrorising neighbourhoods, drug debris in playgrounds, and addicts openly injecting in parks.
There are some really great people in voluntary organisations, in the local authority and in the police trying their very best to tackle the issues, but their hands are tied behind their backs by the lack of resources. We are seeing the cumulative impact of cuts over the past seven years, and not just in statutory services. There is a vital relationship between the voluntary and statutory sectors, which work together to make a difference on drug and alcohol abuse, getting rough sleepers’ lives back on track, or addressing disengaged young people. The voluntary sector relies on local councils for much of its funding. Councils have been cut more than any other area of public spending, and because of the way that the formula has been adjusted, they have been cut most in towns and cities such as mine, where the need is greatest. Since 2010, Sheffield City Council has lost 45% of its grant from central Government—£195 million. Now, with all the pressures of social care, we are facing £60 million of further cuts in the year ahead. We are not alone. Even the Conservative-led Local Government Association said of the Budget that it
“offered nothing to ease the financial crisis facing local services…The money local government has to run services is running out fast and councils face an overall £5.8 billion funding gap in just two years”,
as my hon. Friend Jo Platt pointed out.
Like towns and cities across the country, Sheffield is at a tipping point. In such situations the pieces are often picked up by the police, who are doing a tough job that is made tougher by these cuts. In South Yorkshire, frontline police are down 18%, and we have lost almost one in five officers. Police civilian staff are down 24%, and their roles are key, too. Police community support officers are down 27%, in roles that have been vital to building the relationships that cut crime.
The Chancellor needs to reflect seriously on the perfect storm that the Government’s policies are creating in communities up and down the country, and he needs to address it in the local government and police settlements. It is not just the sustainability of our councils and our police forces that is at stake, but the sustainability of our communities.
The global theme of today’s Budget debate has enabled the House to examine the impact of the Chancellor’s statement on Britain’s place in our world and our readiness to respond to the global challenges we face. Many of those challenges have been referred to by hon. Members. The whole House was shocked by the attack on the al-Rawda mosque, in which 305 Sufi worshippers, including 27 children, were slaughtered. The threat of terrorism is global, and although this particular atrocity was perhaps symptomatic of the metastasis of the cancer that is Daesh and a result of its military defeat in Raqqa, we must understand the implications for the strength of our military.
Many hon. Members on both sides of the House, including my hon. Friend Wayne David and the Chairs of the Foreign Affairs and Defence Committees, have warned that cutting our armed forces by a further 12,000 will seriously undermine our global capacity. Recently, Government Back Benchers have reportedly engaged with their Treasury colleagues on this subject in the fashion of an English wicketkeeper greeting an Aussie batsman. The depletion of our armed forces capacity in an uncertain world is something that the Government contemplate at their peril.
Another challenge, which was raised powerfully by my hon. Friend Dr Allin-Khan, is the appalling suffering of the Rohingya people who have fled from Myanmar’s Rakhine province. Their plight moved the new Secretary of State for International Development to tears on her visit over the weekend to Bangladesh, and she is reported to have said that it appears to be ethnic cleansing. I think that most hon. Members in this House would simply say, “Yes, it is.” But I pay respect to her for going so quickly to apprise herself of the situation there and in the Caribbean. I trust that she will be a strong advocate for her Department’s financial needs against the siren voices in the Conservative party who wish Britain to downgrade its 0.7% commitment or to circumscribe our aid budget in such a way as to refocus it away from poverty reduction, disaster relief or sustainable development. My hon. Friend Dr Blackman-Woods was shouted down by Government Members when she pointed out that, as page 22 of the Red Book sets out, ODA budgets will be adjusted to reflect the OBR’s revised GNI forecast. They will, therefore, be cut by £375 million in 2018-19 and £520 million in 2019-20—a reduction of almost £1 billion.
There have been 17 named storms in the Atlantic hurricane season this year, many of them at category 5. That has made the season the costliest on record, with an estimated $367.5 billion of damage. Harvey, Irma and Maria have not just cost dollars; they have devastated the lives of our friends and Commonwealth partners throughout the Caribbean and beyond. UK assistance has been vital to many of those countries, and we welcome the £5 million that was made available to Dominica, as well as the additional funding announced from DFID when the Prince of Wales visited Antigua and Barbuda last week. But perhaps the Foreign Secretary should reflect on the 10% cut in the financial support for our overseas territories and consider reversing it.
Disaster relief is not the answer to climate change, which is one of the central challenges facing the international community. With the UN climate conference having just finished in Bonn, the opportunity provided by the Budget should have been used to make key policy announcements on policies that would mitigate climate change. Instead, we find that there will be no new low-carbon electricity levies until 2025, and there is nothing for renewables or investment in domestic energy efficiency, or for the necessary transformation of our grid structures to bring on new localised production, microgeneration and supply. Instead, there is a clean growth plan—six years late—that will not even meet the target set in the fourth carbon budget, never mind the fifth carbon budget.
No international debate should or could have taken place today without reference to the appalling war going on in Yemen. Yesterday’s Financial Times leader on the looming famine in Yemen is one of the finest editorials I have read. It refers to the risk that allies of Saudi Arabia face in being complicit in the use of starvation as a weapon of war. It is chilling. It says that the conflict has
“descended into a new circle of hell after Saudi Arabia committed its air force to defeating Houthi rebels” earlier this year, and began destroying bridges, roads, markets and container ports. The infrastructure breakdown means that food is reaching the hungry “fatally slowly”, and that was before the Saudis decided to block even humanitarian aid in reprisal for a missile fired at Riyadh earlier this month. Seven million people are now on the brink of famine, according to the UN.
The relation of this tragedy to the Budget becomes clear when we look at the OBR projections for trade growth. Globally, world trade is set to grow year on year by approximately 4%, but the Government’s own projection of the contribution trade will make to our own domestic growth declines to zero by 2019, and stays at zero for four years throughout the life of this Parliament. It is no wonder that the Government have been reluctant to jeopardise the £4 billion deal to sell Saudi Arabia British fighter jets. Human rights must not be regarded as a commercial inconvenience. If our country wishes to stand tall in the global community, we must do so on the basis of our values. We need to ensure that we do not end up pawning our democratic values to boost our failing economy.
The central facts of the Budget determine how our country is able to respond to all these international challenges. I agree with Sir Robert Syms who said that sound finance is the only basis for a caring Government. We need a strong economy, and the Budget figures did not show that. Growth has been revised down by 0.5%, productivity by 0.7% and investment by 1.5%. This Budget admits that previous Treasury promises have not been met, but it has failed to set out a vision to take our country forward.
Business growth and trade are crucial to our capacity to act and to lead in the world. My right hon. Friend David Hanson posed the key questions on which businesses need certainty if they are to lead the economic revival we so desperately need: what tariffs and quotas will they face, and what will our future trade relationships look like—the no deal Brexit my hon. Friend Angela Smith warned about, or the deal that the Brexit Secretary once upon a time boasted would give the UK the “exact same benefits” that we currently possess as members of the single market?
The Chancellor told the nation what he thought was more likely when he announced the £3 billion to prepare for a no deal Brexit. It is therefore no wonder, as my hon. Friend Toby Perkins pointed out, that the Foreign Secretary spent more time talking about penguins and plastic bags than about Brexit. My hon. Friends the Members for Stroud (Dr Drew), for Colne Valley (Thelma Walker), for Leigh (Jo Platt), for St Helens South and Whiston (Ms Rimmer), for Stockton North (Alex Cunningham) for Stockton South (Dr Williams) and for Enfield, Southgate (Bambos Charalambous) spoke powerfully about the Budget’s failure to address the needs of our health service: £4 billion is needed next year; £1.6 billion has been provided. They highlighted the irony that social care, which was a defining issue in the general election, got scarcely a mention.
In a brilliant speech, my hon. Friend Sarah Jones not only exposed the anti-London nature of this Budget, but highlighted the total lack of any stimulus to housing supply, as indeed did my hon. Friend Faisal Rashid. My hon. Friend the Member for Croydon Central highlighted the fact that the need for the productivity growth on which depend our country’s future prosperity and successful engagement on the international stage. Productivity will depend on the two pillars of education and infrastructure investment, so it is not coincidence that these were the two key offers that the Labour party made in our manifesto at the general election, with our national transformation fund and our national education service.
It would be tempting to claim that this Budget proves that the Government have lost their way. The truth is that they never had a direction in the first place. The Prime Minister is a prisoner of her Cabinet, and her Cabinet is divided against itself. Sooner or later, the electorate will put them out of their misery and we will have a Budget for the many, not the few.
I thank my right hon. Friend the Foreign Secretary for opening the debate. He spoke with customary élan about how the Budget will ensure that Britain capitalises on the industries of the future—robotics, artificial intelligence and self-driving cars. He was right to highlight that a new tech business is created every hour in Britain, powered by a workforce who have seen 3 million more jobs created since 2010 and unemployment at its lowest level for 42 years. He set out our ambition to be global and outward looking, to protect maritime and environmental standards, and to use our defence, overseas aid and intelligence capacity to project influence around the world.
The debate has benefited from a wide range of contributions. The Chair of the Foreign Affairs Committee, my hon. Friend Tom Tugendhat, spoke about the effectiveness of soft power and described the Foreign Office and DFID working to project that power in order to promote international rules.
Peter Grant gave the powerful case study of Mary’s Meals, which shows not just Scotland’s reach around the world, but that of the United Kingdom. I think that his pride in the good work done by that charity was shared on both sides of the House.
My hon. Friend Tim Loughton highlighted how much the Opposition would increase debt. He mentioned the specific measures in the Budget to help business, such as the staircase tax, as well as the importance of building homes, which is a key measure in the Budget, including the abolition of stamp duty for the vast majority of first-time buyers.
Dr Allin-Khan spoke about her recent experiences in Myanmar in a way that I think touched all Members of the House. She spoke of the tragedy she saw unfolding there and explained the important treatment she has been able to offer those fleeing persecution.
My hon. Friend Nigel Huddleston correctly highlighted that 4 million people have been taken out of tax entirely by this Government through the increase in the personal allowance.
Mr Campbell, who is no longer in his place, spoke in a way that I think many Government Members welcomed, highlighting the importance of honouring the vote to leave the European Union, as his constituents voted to do. He also talked about the importance of housing, which is at the centre of the Budget.
My right hon. Friend Sir Hugo Swire spoke about the importance of soft power, as well as hard power, and the value of the Commonwealth.
Alex Cunningham said that his Budget speech was the seventh he had made, and I fear that it was no more positive than the previous six. That characterises the difference between the optimism on the Government Benches and the pessimism on the Opposition side.
Dr Drew accepted the £44 billion commitment on housing but failed to recognise the £1.3 billion put into school funding earlier this year.
My hon. Friend Sir Robert Syms reminded the House—should we need reminding—that the previous Labour Government left a note stating, “There is no money left,” because Labour always goes too far. His optimism reflects the optimism of this Government.
My hon. Friend Sir Edward Leigh highlighted that debt interest remains a bigger expense than the defence and policing budgets combined and how, under the previous Labour Government, £300,000 was added to our debt Bill every minute.
My hon. Friend Michelle Donelan highlighted the 19 consecutive quarters of growth and the increase in employment, and my hon. Friend Julia Lopez recognised the value of strategic investments in infrastructure unlocking much needed housing.
My hon. Friend Colin Clark flagged up how it was a good budget for Scotland, reflecting on the convincing representation of Scottish colleagues—we have certainly come to see that in the Treasury. My hon. Friend
My hon. Friend Maggie Throup highlighted the funding for electric vehicles and the scope of the UK to be a leader in that new technology. My hon. Friend Mark Pawsey highlighted the absence of any credible alternative Budget from the Opposition.
Sandy Martin valued the stimulus of investment in infrastructure and gave credit to the Government for the £1.5 billion upgrade of the A14, but seemed to omit the Government’s commitment to upgrading Ely junction. My hon. Friend Luke Graham flagged up the increase in the living wage and the Government’s lowering of corporation tax, and how that is boosting business.
Tommy Sheppard spoke about the importance of migration. The Government recognise the benefits of migration; we just want to control it, rather than leave it uncontrolled.
My hon. Friend Jack Brereton highlighted the importance of investing in skills and the value of open markets for quality design, technology and ceramics. Angela Smith spoke of the importance of productivity. My hon. Friend Mr Clarke flagged the exciting regeneration projects in his constituency and his optimism in the Budget.
My hon. Friend Paul Masterton highlighted the difference that Scottish Conservative MPs are making in the Government. My hon. Friend Ross Thomson highlighted the benefits to the oil and gas industry from measures in the Budget. My hon. Friend Andrew Bowie spoke about the force for good provided by the Royal Navy and the value of cultural exports in projecting soft power.
My hon. Friend Robert Courts talked about the impact of patient capital and how that will be a stimulus for growth. Jo Platt appeared to think her party had won the general election. I am sorry to break the news to her, which I am sure will come as a shock.
This Budget builds on the heavy lifting the Government have done to bring down the deficit by three-quarters since 2010 through delivering 19 consecutive quarters of growth. It ensures we remain on track to meet our fiscal targets, while continuing to invest in our core public services. It expands the national productivity investment fund by a further £8 billion, meaning that in real terms the Government will spend £25 billion a year more on infrastructure than the average spending under the last Labour Government.
This is a balanced Budget, in contrast to a Labour Opposition who always go too far. They would borrow £500 billion and burden the country with huge debt interest payments. This is a Budget that ensures Britain is fit for the future.
Ordered, That the debate be now adjourned.—(Mike Freer.)
Debate to be resumed tomorrow.