We need your support to keep TheyWorkForYou running and make sure people across the UK can continue to hold their elected representatives to account.

Donate to our crowdfunder

Section 5 of the European Communities (Amendment) Act 1993

Royal Assent – in the House of Commons at 4:30 pm on 26th March 2019.

Alert me about debates like this

Votes in this debate

  • Division number 377
    A majority of MPs voted not to require the publication of an assessment of the impact of the Withdrawal Agreement and the Framework for the Future Relationship with the EU on the UK’s economic and fiscal position but to support the Government's assessment of the UK's medium term economic and budgetary position for submission to the European Commission
  • Division number 378
    A majority of MPs voted to approve the Government's assessment of the UK's medium term economic and budgetary position for submission to the European Commission.

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury 4:57 pm, 26th March 2019

I beg to move,

That this House
approves, for the purposes of Section 5 of the European Communities (Amendment) Act 1993, HM Government’s assessment of the medium term economic and fiscal position as set out in the latest Budget document and the Office for Budget Responsibility’s most recent Economic and Fiscal Outlook and Fiscal Sustainability Report, which forms the basis of the United Kingdom’s Convergence Programme.

I hope, first of all, that this will be one of the last times that we talk about this subject. We do not want to be holding this debate on the convergence programme document any more. I look forward to the opportunity to move on to a period of future growth outside the European Union.

Madam Deputy Speaker, if you listened to some of the public discourse today—the teeth gnashing, the wailing, the portents of doom—you would not realise that in fact the British economy is doing rather well and that Britain is on the up. We have more people in work than ever before, the fastest wage rises in more than a decade and a record number of new start-ups. What is particularly interesting is that it is younger people in particular who are starting up those businesses. We have seen an 85% increase in the number of 18 to 24-year-olds setting up businesses in the last three years, so far from being a bunch of Starbucks-hating socialists, they are in fact more pro-low taxes and pro-enterprise than many older generations.

We are also seeing investment flooding into Britain. We have got more investment in technology than other European countries, and the latest growth forecasts show that the UK economy is set to grow faster than Germany or Japan’s. The public finances have been brought back under control after years of profligacy, debt is falling as a proportion of GDP and we are reducing the deficit ahead of our plans. Why has this happened? Well, it has not happened by accident or because the Government say it should happen. It has happened because this country has a successful free enterprise economy, and the private sector has created millions of new jobs. The Government have created the conditions to enable this to happen and built the infrastructure to help those businesses to succeed. We have cut corporation tax and other taxes so that businesses are able to invest more in training and capital investment. We have made it easier for companies to take on staff through employment reforms. We have reformed our welfare system, introducing universal credit so that it always pays to work and to move up the jobs ladder.

We are seeing the flourishing of Britain right across the country, with new businesses being established and succeeding. From Skyscanner in Edinburgh to WANdisco in Sheffield, Britain is leading the technology revolution. The sky is the limit for Britain, and there will be even more opportunities for growth and new trade around the world when we leave the EU.

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough

I remember all the dire predictions of economic meltdown if the people voted to leave. What has happened to all those predictions? What does my right hon. Friend think would happen if we were to leave with no deal on Friday? Or perhaps I should ask the jobbing Prime Minister, my right hon. Friend Sir Oliver Letwin, because he appears to be in charge at the moment. Anyway, I am interested in the Minister’s opinion about all the dire predictions of gloom if we leave with no deal.

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

The UK economy is projected to grow under all circumstances. Our future is in the hands of individuals and businesses in this country. It is those people who determine whether we will be successful or whether we will fail. I have a huge amount of respect for the entrepreneurs in this country who are setting up new businesses, growing and investing. We have a very bright future ahead of us.

The reality is that the threat to British prosperity is not our precise relationship with the European Union, but the ideas of some in this Chamber who want to limit people’s opportunities, see public spending balloon and start increasing our national debt again by £1,000 billion. And what would happen then? Taxes would go up, people would be able to keep less of their own money, businesses would not have the funds they needed to invest in the future, and our economy would decline rather than grow. That is the real threat to British prosperity. Fundamentally, we have been successful and moved on from the post-crash era because we have backed the British people and British businesses to succeed. We have not gone out there and said that business is the enemy—something that should be fought against. We have said that business is a friend of success and aspiration, and we need to back it.

This year represents a big opportunity for Britain. First, 2019 is the year when we are leaving the European Union, but it is also the year of the spending review. As the Chancellor announced in the spring statement, we will be launching the spending review just before the summer and completing it in the autumn. That spending review will set the budgets for the next three years. For the first time since the financial crash we have choices, because there is now headroom in our budget. That headroom is thanks to the fact that there are more people in work than ever before, and they are contributing in taxes.

We now have choices we can make. First, we have the ability to cut taxes, which we will already be doing this April. People will see more money coming into their bank accounts from this April onwards thanks to the fact that this Government have decided to reduce taxes for those on the basic rate and for those on the higher rate. We are also able to invest in public services. Because we have taken these difficult decisions, we have allowed the economy to grow. We have an opportunity to modernise government to make it sleeker and better value for the people it serves.

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

On investing in public services, what is the right hon. Lady going to do to invest in local authorities so that they, in turn, can invest? Coventry is a good example. Coventry has encouraged small businesses, and we have the University of Warwick science park and so forth. What is she doing to encourage local authorities to invest in their public services, as she knows that for the past few years that has been very difficult for local authorities, to say the least?

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

I was very glad to visit a successful business in the hon. Gentleman’s constituency. I know that he is very committed to the development of business in his area. It is important that money spent is raised locally as far as possible. As a Government, we have rebalanced from central Government giving money to local government to more of that money being kept locally, whether through business rates retention or council tax. That is an important principle. However, we did recognise in the Budget that local authorities were under pressure. That is why we put in an extra £650 million, which can particularly be spent on adult social care and children’s social care where there is pressure. Of course, we will look at that balance in the spending review.

At the moment, we have a complicated landscape in the support offered to business. When there is a complicated landscape, it can sometimes be the big businesses that know how to work the system that end up getting the money. We need to move to a system where we have lower taxes and it is clearer and simpler to see where the support is. Of course, we are also investing in the infrastructure that helps business to succeed, whether it is local roads, fibre or rail. Ahead of the spending review, I am making visits around the country to hear from people on the ground to understand what the public’s priorities for public spending are. It can sometimes be easy in Whitehall to listen to the big lobby groups— the big organisations that have an operation here in Westminster—but I want to hear what people in Coventry and other places around the country think about what their priorities are. I have done a few of these sessions so far, and the topics that come up tend to be education, local roads, the NHS—for which we have already put in additional money—and police. We need very much to keep in mind what the public want to see our money spent on rather than just listening to the big organisations.

Photo of Simon Hoare Simon Hoare Conservative, North Dorset

I am delighted to hear my right hon. Friend mention education. May I press her to consider the fact that in our rural areas the funding per pupil is still not as it should be in comparison with urban schools? We have a huge number of Victorian schools, such as that which I visited earlier in the week in Motcombe in my constituency, where the maintenance of the buildings costs far more. We are therefore looking, in the comprehensive spending review, for a long-term increase in new money to deliver the first-class education to grow the entrepreneurs who will return the investment that we put into their education while they were at school.

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

My hon. Friend makes a very good point about education funding and how important young people having a good education is to the future of the economy. In this year’s spending review, we are looking not just at how investment in physical infrastructure like bridges and roads improves our economy, but at human capital—where we need to put in extra money to make sure that children and young people leave school, university or an apprenticeship with the skills that will help them to get a good job and to live a successful and fruitful life. That is very important. In the past, Governments have been more interested in spending money on things that are sexy and new—the big new pieces of infrastructure—and maintenance has sometimes taken a back seat, but it is very important to make sure that all the existing assets we have, whether roads or schools, are fit for purpose. In the zero-based capital review, we are looking at the balance between maintenance and new infrastructure investment.

Photo of Matt Rodda Matt Rodda Shadow Minister (Transport) (Buses)

I thank the Chief Secretary for giving way. Has she had any discussions with the Children’s Minister, who is currently considering the very relevant issue of investment in nursery schools, which is an obvious case of human capital investment as it has a considerable benefit for society after only a few years?

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

I have had discussions with my hon. Friend the Children’s Minister. That is one reason why we put additional funding into children’s services at the Budget. Part of the human capital review is looking at where we invest in education. As a country, we currently put more money into the later stages of education. There are laudable reasons for that, but we put more money equivalently into universities than secondary schools. We are looking at how to ensure that all children are getting the best possible start of life. There is a lot of evidence that the earlier the investment, the better.

I mentioned the zero-based capital review, which will look at all capital infrastructure to ensure that we are getting the most bang for our buck. That is an opportunity in 2019 to look afresh at our future projects and where the greatest impact can be made. We are also looking at opportunities to reform the way we do things in Government. Housing is a good example of that. At the moment, we spend £34 billion on housing through the housing benefit budget and things such as the housing infrastructure fund and Help to Buy. My question is: by liberalising planning and making it easier to build, can we reduce costs for people looking to get on the housing ladder and at the same time reduce costs for Government? We should not always assume that it is just about spending more money. We also need to think about how we reform things to do them better, to reduce the cost for people for whom housing is a big item on their household budget and to reduce the cost for Government.

In summary, 2019 is going to be a huge year for our country. The economy and the public finances are on the right trajectory, but we are not complacent at the Treasury. We are looking very carefully at how every single pound is spent. We want it to be spent as much as possible on ensuring that everybody has access to a good start in life, that our core public services are provided and that we help companies and enterprises continue to deliver the economic growth that they have over the past few years.

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury 5:13 pm, 26th March 2019

The right hon. Lady referred to the gnashing of teeth. The only gnashing of teeth going on in this country is by those people who cannot get access to a dentist because of her party’s health policy. She talked about the Tories being the party of business. She may well wish to have a word with Boris Johnson, who used an Anglo-Saxon phrase in relation to business—the second word was “off”, basically.

If education is so wonderful and marvellous and schools are in such a good state, how come headteachers marched on Downing Street and presented the largest petition about the condition of schools and education? The answer from the right hon. Lady is always more deregulation.

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury

That is what the right hon. Lady said in relation to planning law. It is deregulation—that is what it comes down to. However she wants to dress it up, it is deregulation. Deregulation has got this country into so much trouble in a whole range of areas, including banking and housing. Let us not hear any more about how deregulation is going to solve all the problems of the world. It will not.

After that, I would like to thank the Chief Secretary to the Treasury, and give credit where credit is due. In a speech given on 19 March, the Chief Secretary finally acknowledged that we will now

“throw off the constraints of the post-financial crash world”.

There it is: it is official. It was a financial crash world, not Labour’s crash. But better late than never—apology accepted.

We find ourselves in the absurd and surreal position of debating a motion to approve the Government’s programme of convergence with the EU at a time when the issue of Britain’s membership of the EU is about to bring down yet another Conservative Prime Minister, so the only convergence on the cards is the one between the Prime Minister and her P45. The theological obsession of the European Research Group, which is opposed to any convergence with reality in fact, has hamstrung the Brexit negotiations and left the majority over there—on the Government Benches—as spectators in an unfolding disaster of their own making.

Reflecting on the first time I spoke in the debate on the Government’s convergence programme with the EU, I recall it was just before the snap election in spring 2017. I am sure we all remember that. At the time, prominent newspapers ran headlines such as “Blue Murder” in the sure and certain belief that the Conservatives would wipe out the Labour party, or “Steel of the New Iron Lady”, comparing the Prime Minister to Margaret Thatcher.

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury

The hon. Gentleman says that they are still in government, but that is a complete and utter fantasy, and even his honourable colleagues all smiled and smirked at that particular one.

Those supine, oleaginous headlines in the newspapers are gone, along with the words that dare not speak their name, “Strong and stable”. Whatever happened to that? Just two years later, those same newspapers now call for the Prime Minister to resign, stating, “Time’s up, Theresa”. This sea change among the Tories’ biggest supporters in the press sums up the failures of this Government.

While we are on the maritime theme, the Environment Secretary could not even use the limited imagination he has to think up another metaphor, and resorted to the hackneyed one:

“It’s not time to change the captain of the ship”.

What an imagination!

The Prime Minister’s red lines and her intransigence and insistence on a deal that has little or no support in the country or in this House have led us to this crisis. This weekend, we had the ludicrous spectacle—the ludicrous spectacle—of Cabinet Ministers jostling to brief the press about her imminent departure and her would-be likely successor, only to be followed by quick recants and unconvincing oaths of loyalty. It is almost Shakespearian.

The Government’s motion is based on the economic forecast provided by the Office for Budget Responsibility and the Chancellor’s spring statement—what there was of it, I have to say. I am sure all Members would agree that the work of Robert Chote and his staff at the OBR is indispensable in informing debate and offering an independent forecast of UK economy. [Interruption.] If Julian Knight wants to intervene, he should feel free to do so, but perhaps he could stop muttering across the Chamber inane comments that nobody can hear and nobody understands, and I suspect he himself does not even understand what he is actually saying.

However, it is worrying that the OBR’s recent forecast continues to be based on the UK securing a Brexit deal, which the Chief Secretary did not even mention, and a smooth transition, which she did not mention, particularly at a time when the Prime Minister continues to keep the option of a no deal on the table. It is still there; it has not been taken off. This assumption means that if the UK does leave without a deal or leaves with a poor deal, the OBR’s forecasts will be in serious need of revision.

Similarly, at the spring statement the Chancellor spoke again of this mythical Brexit “deal dividend” that the economy will receive once parliamentarians sign up to the Prime Minister’s deal. According to the Chancellor’s imagination—which is, I have to say, significantly more febrile than the Environment Secretary’s—this “deal dividend” will lead to an increase in the public coffers. However, the Chancellor’s claims have already been debunked by the Treasury Committee, which described the dividend as “not credible”, and “not fully consistent” with his own fiscal rules—yes, the rules that keep changing.

Rather than the fantastical picture that the Chief Secretary to the Treasury seeks to paint for our EU partners, I will take the opportunity to outline the real state of the UK economy and the Government’s woeful record. That is where we hear the gnashing of teeth—woeful record. Under the Conservatives, we have faced nine years of politically instituted austerity, which has weakened our economy and pushed our public services to breaking point. The Government’s austerity programme has suppressed incomes by more than £3,600 per household, costing the economy £100 billion; yet austerity is far from over. The departmental spending review that the Chief Secretary mentioned—likely to report in the autumn, as she said—will see real-terms cuts for most Government Departments. I will sit down if the right hon. Lady would like to give us some more information on that one.

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

I would be happy to. It is a 1.2% increase in real terms.

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury

I do not think that is correct. I am afraid we will have to look at those figures. We will see them and we will hold the Chief Secretary to account when she is at this Dispatch Box and I am at the Dispatch Box where she is now.

Photo of Matt Rodda Matt Rodda Shadow Minister (Transport) (Buses)

My hon. Friend makes a good point about the complete failure of the Government’s austerity agenda. Earlier, the Chief Secretary mentioned the case of nursery schools. Many school and nursery school heads are experiencing a continuing programme of austerity, which is actually due to get worse. She mentioned that she had a brief conversation with her colleague in the Education Department. [Interruption.] However long the conversation was. The message I have had from headteachers is quite to the contrary; actually, a very short stay of execution has been given, for just one year, when the headteachers that I speak to in my Reading constituency need a long-term programme of sustainable investment in nursery schools, rather than warm words.

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury

My hon. Friend is absolutely right. May I nip back to the point about the 1.2% increase, if I may beg your indulgence, Madam Deputy Speaker? The 1.2% is the overall increase. What will happen—[Interruption.] No; the reality is that some Departments will have major cuts in their budget.

Photo of Rachel Maclean Rachel Maclean Conservative, Redditch

The hon. Gentleman is referring to a number of figures that he claims show a hit to every taxpayer; but 32 million taxpayers have had their taxes reduced under this Government, so they are keeping more of what they earn and they are better off. How many of those 32 million people would see their taxes put up under his proposals, and how many would be poorer under his proposals?

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury

I will pick up some of those points later.

The reality is that meanwhile, the Government have presided over the slowest recovery since the 1920s—stubborn fact. The OBR has revised down GDP growth, and business investment is now falling. Those are not my figures; they are the OBR’s figures. What about wages? I will touch on the points that Rachel Maclean raised. Real wages are still lower than they were a decade ago, and according to the OBR,

“average earnings growth remains below the rates typical before the financial crisis”.

These are real people’s real lives—real wages are not going up. For many workers who have seen their wages stagnate, borrowing and debt has plugged the gap. Household debt relative to income is forecast to increase over the next few years.

What about transparency in Government spending? Long gone are the days when Tory Ministers hailed their Government as the most transparent in history—replaced by a culture of secrecy and a disregard for parliamentary convention that saw the Government held in contempt of Parliament for the first time in history. It is not a proud record to have.

Even on transactional issues, such as the regular and timely release of figures for departmental spending of over £25,000, the Government seem to have quietly backslid, in some cases releasing data series late, incomplete, or not at all. The question is: what are they hiding? The Chief Secretary has made much of the Government’s record on the deficit, yet the reality is that on her watch, and that of her predecessor, they have simply passed deficits on to our schools, our hospitals and our local councils, with departmental spending cuts of over £40 billion since 2010.

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

When we talk about more money being put into Government Departments, whether for education or the health service, we have to remember that any additional money starts from a lower base. The Government are partially replacing what they took out in the first place. People do not seem to understand that major point. They said that austerity was over, but we still have it. Yes, people are in jobs, but they are very low-paid jobs. That is not taking people out of poverty; that is keeping people in poverty. What interests me the most, however, is that nothing has been said about further education, which has had major cuts. If the Government want to continue with austerity, they have to do something about further education.

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury

My hon. Friend has obviously been reading Labour’s “Funding Britain’s Future” document, in which we picked up on that particular point. The hon. Member for Redditch mentioned tax cuts. Try telling that to people who have had 15% and 16% rises in their council tax, because the Government have shunted that on to the people. They are still taxpayers. Try mentioning to them that they have fantastic local services, when increases to their council tax do not even cover social care bills.

The Chief Secretary has bragged about the so-called “Tory jobs miracle”. However, she made no mention in the speech of the fact that it is built on insecure work, low pay and regional disparities. We have nearly 4 million people in insecure work and nearly 3 million people working under 15 hours a week across the UK. Workers in the north-east earn around £200 less than those in London, reifying the regional imbalance.

Photo of Simon Hoare Simon Hoare Conservative, North Dorset

I hate to shoot the hon. Gentleman’s unicorn just as he has started to ride it, but 90% of new jobs created are full-time jobs. This is a total myth that his party keeps peddling. It belies the hard work, initiative and enterprise of the British people. Is it not time to stop misleading?

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury

Try telling that to the 3 million people in insecure work. It is okay hon. Members jumping up and being outraged at the facts. The facts are stubborn, I completely grant them that. We are not living in the halcyon world that the hon. Member thinks we are living in. There are 3 million people living in insecure work. That is not acceptable in a modern society. The right hon. Lady the Chief Secretary has done nothing to help headteachers who having to close schools early or the 87 people a day dying while they are waiting for social care, or to assist the nurses, doctors, police officers, social workers, road sweepers, fire fighters, security services staff, civil servants or the back-office staff who keep all those services running day in, day out and night in, night out. Those are the so-called vested interests the Chief Secretary refers to in her regular speeches.

The Chief Secretary recently visited Felixstowe, Walsall and Tadcaster—commiserations to the people of Felixstowe, Walsall and Tadcaster. She said that people want

“the local roads fixed and not to have to sit in a traffic jam.”

Well, the Government are in a big jam at the moment. She went on:

“They want a less crowded commute into work. They want the basics sorted.”

This is after nine years of Tory Government! Where has she been? Did she really have to ask that question? A report today highlights that there are 2 million potholes out there with a £10 billion backlog of repairs under the Tories. No wonder people are sitting in traffic jams—they can’t get through the road for potholes. That is the reality under the Tories. Anyone with a scintilla of awareness already knows the answer to that. The good people of north Lincolnshire were certainly aware of it when I was in Crowle on Saturday, campaigning to rid them of their useless Tory council with the excellent Labour candidates. They want the Transport Secretary to do his job, and they want the Chief Secretary to do hers.

What about productivity—another abysmal failure of Tory economic policy? Productivity remains weaker than in most other advanced economies. The fact is that the Government have failed to prepare the UK economy for the future. Britain’s infrastructure ranks behind that of Germany, France, the USA and Japan in terms of quality, and its rate of public investment is among the lowest in the OECD.

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

Is it not the case that in 1997 the Labour Government cancelled the road building programme?

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury

Yes—to invest in public transport. We now have the Chief Secretary to the Treasury resorting to decisions made by a Labour Government two decades ago. That is how grim it has got for the Conservatives’ arguments—they are talking about something that happened 20 years ago.

Despite that, the Government have cut planned public sector investment. Their failure to negotiate a credible Brexit deal has already led to huge uncertainty, stifling investment and putting jobs at risk. Manufacturing is in recession, numerous employers have announced job losses, and businesses that rely on the EU supply chain have been left in confusion and despair—like most Government Members, who are in confusion and despair at the actions of the Prime Minister.

The internecine warfare within the Conservative party has paralysed the Government yet again, while the economy and many people’s livelihoods hang in the balance. It is affecting people’s livelihoods, manufacturing and business—more vested interests to be ridiculed and ignored by the Chief Secretary to the Treasury. All that while the Government are reporting to our EU partners that everything in the garden is rosy—no pun intended, Madam Deputy Speaker. Surely it is time for the Chief Secretary to acknowledge that the only Brexit that will gain majority support is Labour’s alternative plan: a permanent customs union, a strong relationship with the single market and full guarantees of workers’ rights and environmental protections.

The Government’s assessment of the UK economy is not based in reality. It does not account for the Conservatives’ catastrophic record of austerity, which continues to destroy our public services and suffocate the economy. It pays no regard to the Tory failure on wages, which remain lower than they were a decade ago. In addition to radio silence on productivity, there is little mention of the lack of public investment in our infrastructure. In short, the Government’s assessment says far more about the ideological position of Tory Ministers and their insolvent ideas than it does about the actual economy. It says more about the hubris of a Government who have stayed in office well past their sell-by date and do not recognise the experiences of ordinary people.

In summary, economic growth stands at 1.2%; productivity is 35% below the Germans’; household debt as a proportion of income is set to rise from 139% to 143% by 2024; the national debt still stands at 82% of GDP—the Conservatives have doubled the national debt —and the deficit is £22.8 billion. That is the Conservative Government’s record after nine years of economic incompetence. That epitomises why the country needs a Labour Government that will put jobs and our economy first, and invest to rebuild Britain for the many, not the few. I urge Members to reject the motion.

Photo of Simon Hoare Simon Hoare Conservative, North Dorset

I mean the shadow Chief Secretary. [Laughter.] Of, course, it is a pleasure to follow the Chief Secretary to the Treasury. It is a greater pleasure to follow her shadow, the emphasis being on the word “shadow”—it is sort of me and my shadow. I call him a friend; I think we get on pretty well when we have a gossip in the Tea Room. He is known for his great sense of humour, and it was deployed beautifully in his speech, which started as a serious attempt and then descended into some sort of 1890s music hall act slightly on its way out—rather like the Labour party and its economic manifesto. I am sorry he did not talk about the need to ring-fence anything in the Budget for the re-education of Treasury officials, which the little red book and Chairman Mao will doubtless be planning the curriculum for even as I speak.

I rise to make a few points to the Treasury Bench. This is a key time in our national economic affairs. The challenge/opportunity of Brexit, including the need for a deal to ensure an orderly withdrawal from the EU, will provide a fundamental foundation for maintaining economic growth and jobs, as my right hon. Friend referenced. From those jobs, of course, come the taxes that pay for the nurses, the doctors, the teachers, the roads and any other project the Government wish to support. We are approaching, if we have not already arrived at, that opportunity which comes with having fiscal headroom and permits choices to be made.

In the last few years—let’s be frank—it has been economic management by necessity. We have been trying to deal with the task that we were bequeathed, not by choice, but which the electorate trusted the Conservative party to resolve. Treasury Ministers past and present deserve the nation’s thanks for facing into those difficult decisions. It is all too often characterised, sometimes by Peter Dowd and his colleagues, as an ideological pursuit by the Conservative party that in some way engenders jollity and laughter. I believe that all politicians enter public office and service to improve lives and the lot of our constituents. More and more of our constituents, as they get older, look to public services, and it should always be a matter of pride for a Conservative Government with a sound record of economic stewardship to deliver quality public services as efficiently as possible.

The end of the legacy of the crash and everything that flowed from it now provides that opportunity for choices. I would characterise those choices as needing the striking of a balance that is both sensitive and sophisticated. With my right hon. Friend the Chief Secretary and my right hon. Friend the Chancellor at the helm of the Treasury, I think we have both those characteristics, although I will not say which of them is sensitive and which is sophisticated—probably they will meld into the two. That is important, though, because we now have an opportunity to choose.

My right hon. Friend the Chief Secretary and I are very much children of the 1980s—our views and thoughts were shaped by the economic miracle that Mrs Thatcher and Geoffrey Howe worked—but we must appreciate that times have moved on. I am very struck by the fact that people in an earning bracket such that 25 or 30 years ago they would have looked to private health provision and education now look to and use state provision. I applaud that. I used the NHS. I had an operation at Dorchester last week, and I use my local education service—we have three girls in our local primary school. It is important to bear that in mind.

My right hon. Friend is right to point to the need for competitive taxation, whereby we can take people out of tax such that they have more money to spend, and it is absolutely right that our policies focus on those on the lowest incomes, but it is also right, in a fair and equitable society, that those who can should shoulder the burden, in a competitive way, to make sure we can deliver those services that people are looking for. I think it is too easy a prescription merely to say that we must pursue an agenda of tax cuts, as if British society had not evolved since 1985, 1986 or 1987. That is where the balance needs to be struck. It may be the balance between a liberal Tory and a more Thatcherite Tory—I do not know—but it needs to be struck.

As other Members have pointed out, as a result of a period of austerity we are now in a period in which the fiscal headroom allows for additional investment. The spring statement was helpful, and what my right hon. Friend the Chief Secretary has said about an average increase of 1.2% in departmental expenditure was also welcome. However, we would be foolish to ignore the fact that we are now having to claw our way back from a period in which spending has been—albeit quite justifiably —capped.

Any Member whose constituency contains a prison will notice that the fabric of the prison estate has deteriorated. Some people might say that that is a good thing because we are talking about prisoners, but I am inclined to think that if we are serious about bringing people back into society—the redemption strategy—we need to provide a satisfactory prison environment.

In an intervention on my right hon. Friend the Chief Secretary, I mentioned schools and the need for the long-term provision of new money in the comprehensive spending review. It is great that we are offering the widest and deepest range of free-at-the point-of-use educational opportunities in our country, and when T-levels come on stream it will become even wider and even deeper, but it is folly to suggest that we can continue to provide that, and can make the necessary investment to deliver a happy, educated, productive next generation, with the fiscal envelope currently enjoyed by the Department for Education.

Photo of Matt Rodda Matt Rodda Shadow Minister (Transport) (Buses)

The hon. Gentleman is making an interesting and thoughtful speech. Has he considered the Government’s policy of placing additional pension demands on schools in an unfunded way? If so, what does he think of it?

Photo of Simon Hoare Simon Hoare Conservative, North Dorset

In an intervention on the shadow Chief Secretary, the hon. Gentleman referred to something that I am sure we have all heard from headteachers in our constituencies. Whether we are talking about national insurance, about pensions or about the demands of special educational needs, although increased DFE expenditure is going into most of our schools, it is nowhere near enough. We are asking schools to do more for more pupils with not quite as much money as they need. That is why I make the distinction. I welcome the increase, but new money is required, particularly as the range and the choice become wider and deeper.

I challenge anyone who represents a rural constituency, as I do, not to share my views on rural schools. I was delighted when the Chief Secretary took my point about the needs of maintenance. The costs of heating and running a whole estate of Victorian primary schools are greater than those in new build, perhaps in an urban setting, although that is not to say that there are no Victorian schools in urban settings. Such schools do not provide a good learning environment. Last month I visited Motcombe primary school in my constituency. In a small classroom, one child is effectively being fried against a not particularly adequate heater, because the school does not have enough money to replace the heating system.

We must make a balanced judgment: we must aim to take those at the lowest end of the earning spectrum out of taxation, while also investing properly. We must strike that sensitive and sophisticated balance. My right hon. Friend was absolutely right: it is not just the big and sexy that we must consider, but schemes for local roads such as the C13 and the A350 in my constituency, and support for those who wish to remedy the rural broadband and mobile blackspots, which could become engines of economic growth and entrepreneurialism.

That takes me to my closing point, to which the hon. Member for Bootle alluded. Some of our recent debates appear to have pitted my party against the Government. I am sorry—I meant to say “against business”. [Laughter.] That was not a Freudian slip—or perhaps it was.

Business is the engine that generates the tax that delivers the services. We cannot have a hostile viewpoint; we cannot have a hostile environment for UK business to flourish. Without a flourishing business sector, without the freeing up of the entrepreneurial spirit that underpins the British character, the proceeds of growth—

Photo of Simon Hoare Simon Hoare Conservative, North Dorset

I am drawing to a conclusion.

Without that, the proceeds of growth and the investment in our public services which all want to see is required.

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Treasury), Shadow SNP Spokesperson (Housing, Communities and Local Government) 5:45 pm, 26th March 2019

I beg to move amendment (a), in line 1, leave out from “House” to end, and add

“declines to approve for the purposes of section 5 of the European Communities (Amendment) Act 1993 the Government’s assessment of the medium term economic and fiscal position as set out in the latest Budget document and the Office for Budget Responsibility’s most recent Economic and Fiscal outlook and Fiscal Sustainability Report, because it does not contain detailed analysis of the impact of the Withdrawal Agreement and the Framework for the Future Relationship with the EU on the UK’s economic and fiscal position;
and calls on the Government to publish an assessment containing that analysis immediately.”.

I was curious to hear the Chief Secretary to the Treasury start by saying she is so glad that this is the last statement she will ever have to make to the EU. I cannot agree, and the Scottish National party cannot agree either. It is surreal to be standing here days from the original day of departure from the EU attempting to fulfil this legal obligation as though things were business as usual. These past few days prove beyond any doubt that we could not be any further from business as usual in this House; we are absolutely through the looking glass. Events are developing every day around what kind of country we are going to be left with; there are grave concerns about the future from every aspect of civic society. So I certainly do not share the Chief Secretary’s optimism that there is a bright future ahead.

The Chief Secretary talked about young people. Young people are the most pro-EU group in this country, and it is their future that this Government want to take away, so shame on her for not recognising the limitations that young people will face when they want to set up businesses, when they want to trade with the EU, when they want to travel and advance their education and opportunities in life.

I do not wish by way of proposing the amendment to diminish the work that the Office for Budget Responsibility does. My colleagues on these Benches and I will always welcome efforts to make public accounts more transparent and independent. The OBR has conducted this analysis rightfully and properly within its remit, but unfortunately this is precisely the reason why the SNP cannot support the approval of this statement tonight: because the OBR can only make forecasts on the basis of stated Government policy regardless of whether the policy is likely to be achieved or, as Simon Hoare said, whether it is his party against the Government, or whether in fact Sir Oliver Letwin is now the Prime Minister, because who knows? It is a Dorset thing; Dorset is leading the rebellion against their own Government. That is very interesting—and I see how happy the hon. Member for North Dorset is to be doing so. It is an absolute shambles when a Member who ought to be supporting the Government ends up leading the charge against them—although that is not at all uncommon these days; it is part of the whole madness of this Government.

The latest OBR fiscal sustainability report was published on 17 July 2018. It does not reflect the reality of the Prime Minister’s proposed deal, which was published much later, on 25 November 2018. In the OBR’s outline of the assumptions made in its economic and fiscal outlook, it is clear that the terms of the UK’s departure from the EU are unclear and that there is “no meaningful basis” on which to predict the nature of the relationship between the UK and EU. That is the situation in which we have we remained.

I checked and I have £3.52 in my purse and I would be as well throwing it down the stank as putting it on any outcome of the UK leaving the EU, so it would be an understatement to say that I could find it risky to endorse a fiscal spending plan based on one assumption of our future relationship with Europe. It is ludicrous for MPs to be asked to approve this motion without having any sight of any analysis of the Prime Minister’s deal. It is our job in this place as MPs to scrutinise the UK Government, but we are not being given the opportunity to do so effectively.

The Prime Minister has said that such an analysis of her deal does exist. She confirmed it in a letter to my colleague, Ian Blackford, so why will the Prime Minister not share the details of that analysis with the House? Is it because she knows, as we all know, that the economists are right and her deal will be bad for GDP, public finances and the living standards of all our constituents?

GDP growth has gone from being the highest in the G7 before the EU referendum to the lowest today. Imports have been slower than for other G7 countries, despite an unprecedented drop in the value of sterling, and it is interesting that for some time now the exchange rate on the cash machines at Glasgow airport, which I see when I come down to London every week, has been taken off, because nobody would take any money out if they saw how dreadful it was.

Inward and outward foreign direct investment have dropped, with some analysis suggesting that the drop in inward FDI is as much as 19% compared with a no-Brexit scenario, and we are starting to see job losses on a regular basis across these islands. It is no coincidence that this is happening. The Brexit Job Loss Index says that more than 200,000 jobs have been lost already, without the UK having even left. In a no-deal scenario, Scotland can expect to lose 100,000 jobs, according to research by the Fraser of Allander Institute, which is based in my constituency. Speaking of my constituency, I recall hearing from a significant business there on Friday afternoon. It says that it is going down from a five-day week to a four-day week, that it has laid off temporary staff and that it is losing orders because of the uncertainty of this Government. It is unacceptable that businesses the length and breadth of these islands are being put into this position because of an internal dispute within the Tory party.

The OBR has not explicitly modelled the effects of a no-deal Brexit on the economy, but the London School of Economics has suggested that if the UK Government were to stick to their frankly unreasonable targets for reducing net migration, it would not be unreasonable to expect a long-term decline in output and productivity. The UK Government’s shambolic Brexit deal would also be hugely damaging, because EU nationals contribute hugely to our society and our economy. The Government’s aim to reduce the number of EU nationals here by 80% would have a massive impact on the UK’s economy, on population growth and, quite frankly, on our ability to survive as a country. The Government do not want poor people to have children—they have brought in the two-child limit—and they do not want people to come to this country and build their lives here, but we have an ageing population. Where do they think we are going to get the people from? I have absolutely no idea, and neither do they.

On top of all this, income inequality has risen since the Brexit vote to the extent that on two occasions the OBR could not predict the levels of tax that the Treasury was going to receive from the 1% in society. The tax windfall that the Chancellor is celebrating is not a sign that the economy performing well; it is a sign of deep-seated inequality, which is worsening under the UK Tory Government.

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury

I am sure the hon. Lady is aware that, according to the Institute for Fiscal Studies, an extra £5 billion will be required to maintain services in line with population growth, along with an appropriate number of people to support those services.

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Treasury), Shadow SNP Spokesperson (Housing, Communities and Local Government)

The hon. Gentleman makes an excellent point, and he is absolutely correct. Without people, the economy will falter. That is the economic reality.

The Resolution Foundation has said that the income tax take is up 8% so far this year, but that that is coming from the very highest earners. The wages at the bottom continue to stagnate. If the OBR cannot openly predict the short-term economic performance, it is unreasonable to ask the House to sign off on its guidance. It is more difficult now for families to survive on the money they have. Since the vote, the cost of bread is up 11%, the cost of butter is up 23% and the cost of milk is up 11%—and we still have not left the EU. If people cannot afford to put bread and butter on the table, this economy is heading for the drain.

It is a well-established fact that Scotland did not vote for or particularly want to leave the EU. I checked just before I stood up to speak, and 13,920 of my constituents have now signed the petition to revoke article 50. The Prime Minister has consistently ignored attempts by the Scottish Parliament to find any kind of compromise solution, such as staying in the customs union and the single market, which would limit the damage of this hard Tory Brexit. If she wants to drag Scotland out of the EU against its will, she should have the bottle to come to this House and present the analysis that she says exists. She should have the courage to tell people that it will cost jobs and businesses, and that she cannot make guarantees about the future.

If the Prime Minister does not believe that her Brexit deal can stand up to scrutiny in this House, the UK Government need to face up to reality and ditch Brexit altogether by revoking article 50. They are throwing good money after bad on no-deal planning, on fridges, on staged traffic jams and on botched ferry contracts, when they could be spending that money on lifting the awful austerity cuts that we have seen over the past nine years. The Chief Secretary to the Treasury talks about going round the country and listening to people’s public spending priorities, but I bet none of them talked about spending £33 million on Eurotunnel due to the shambles created by the Secretary of State for Transport, or about the £1 billion to bribe the Democratic Unionist party in an attempt to keep the Government in power.

Day after day in my constituency I see the impact of this Government’s callous approach to cost-cutting. I see the benefits freeze, which is expected to cost families £800 a year, on top of the £900 a year that the Bank of England says Brexit is already costing every family. I see the two-child policy, which leaves families nearly £3,000 a year worse off if they have a third child and which makes a woman with three children on a 16-hour contract work the equivalent of 45 hours to make up the difference. I also see the thousands of pounds a year being lost by the WASPI women who are no longer entitled to their side of the pension bargain, having had their pensions cruelly stolen by previous Governments and by this one as well. How can any Minister look the population in the eye and say, “There is no money for you,” when the Government are asking us to sign a blank cheque for a hard Brexit?

I am a lifelong campaigner for Scottish independence and scarcely have I seen a clearer case for it than the shambles of the Conservatives and the incompetence of the Labour party in opposing them. The UK Government’s incompetence is changing hearts and minds all over Scotland on the merits of independence, and I hope that there will soon be an opportunity for the people of Scotland to take matters into their own hands.

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough 5:55 pm, 26th March 2019

I rise to support the Chief Secretary to the Treasury, who is rather a heroine and is leading a one-woman campaign to try to keep public spending down. It is all very well to call for more public spending—I use the NHS exclusively and value the work of those who care for me and my family—but only patients would suffer were we dramatically to increase health spending in line with Labour party policy. There would be a dramatic decline in productivity and no obvious increase in good healthcare.

The shadow Chief Secretary to the Treasury spoke for nearly 20 minutes, but it was interesting that there was little about the Labour party’s plans. Although this Parliament is staring at the detail of the various Brexit solutions, all the various outcomes pale into insignificance compared with the threat posed to this country by a Government led by the Leader of the Opposition. Conservative Members of Parliament need to point the finger again and again at what will happen if this Government go and the Labour party takes over under its present management. One cannot meet a Labour MP who does not say in private that they are scared stiff by a Government led by the Leader of the Opposition.

What would happen if the present Leader of the Opposition took over? I predict that there would a few months of dramatic spending increases and everybody would be happy. In the end, however, the country and the economy would be crashed. Let us remember that the present Leader of the Opposition execrated the Governments led by Tony Blair and Gordon Brown, saying that they were right-wing stooges of capitalism, and he is the man who now wants to lead us on what would be the road to ruin. He would open the gates and unleash mass immigration. In the end, we would not have a better health service, better education or better investment; we would have only economic chaos and mismanagement.

Conservative Members must look laser-like at the alternatives, but we also have to put our own house in order. My advice to my hon. Friends is, frankly, to get on with Brexit and to vote for the Prime Minister’s deal. The economic clouds would lift, the pound would shoot up, and investment would increase. The Government could then carry on to the next general election, when we could really put the spotlight where it needs to be: on the disaster that would befall this country if the shadow Chief Secretary gets anywhere near power.

Photo of Colin Clark Colin Clark Conservative, Gordon 5:58 pm, 26th March 2019

I am glad to rise to support my right hon. Friend the Chief Secretary to the Treasury. I serve on the Treasury Committee, and it is a pleasure to follow my right hon. Friend Sir Edward Leigh, who is so optimistic. I am also glad to follow Alison Thewliss, who always speaks from the heart.

Do Labour Members and SNP Members welcome the fact that, despite their concerns about Brexit, Forbes recognises the UK as the No. 1 place to do business? The UK is currently the second highest location for inward investment in the world and the highest in Europe. The market believes that the UK has a future after Brexit; Opposition Members do not.

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Treasury), Shadow SNP Spokesperson (Housing, Communities and Local Government)

Does the hon. Gentleman not agree that there is no deal as good as the deal that the UK currently has as an EU member state?

Photo of Colin Clark Colin Clark Conservative, Gordon

I do not agree with that, actually. The Treasury Committee has discussed the fact that the UK has the highest employment growth in Europe, which is an inexplicable miracle. Mark Carney, the Governor of the Bank of England, could not explain why it is happening. This country is a jobs miracle because this Government believe in private enterprise. Opposition Members do not believe in private enterprise. They believe in the crushing hand of the state, which damages business and does not build it up.

In my constituency, we have 1.2% unemployment. We have the highest employment levels we have ever had. The oil and gas industry expects £200 billion-worth of future investment because it is optimistic about business. This Government’s Treasury is supporting the oil and gas industry and backing much of the fiscal policy that is making this the most attractive place to do business.

This is so difficult because the Opposition parties simply cannot get their head around the Conservatives being the party that supports aspiration, which is instinctively what we do. Many Conservative Members are, like me, self-made businessmen. We are the party of enterprise, and I am living proof of that enterprise.

Several hon. Members:

rose—

Photo of Colin Clark Colin Clark Conservative, Gordon

We are the party of optimism and, on the subject of optimism, I will let a pessimist speak up.

Photo of David Linden David Linden SNP Whip

The hon. Gentleman spoke earlier about the UK’s high ranking in Forbes magazine. Can he tell us how the UK rates on food bank usage?

Photo of Colin Clark Colin Clark Conservative, Gordon

That is the difference between the hon. Gentleman and me, because I consider the fact there are food banks to support people to be an example of charitableness. I want to celebrate the success of this country, not the failure, and it is the Conservative party that will make sure this country is a success.

Photo of Colin Clark Colin Clark Conservative, Gordon

I will finish, because we are running out of time.

We are the party of opportunity, and they are the parties that would destroy opportunity. We are the party that wants to support everyone in society and give people a hand up, and they are the parties that would crush people with taxation. It is interesting that the hon. Member for Glasgow Central mentioned the OBR and taxation, because it was the OBR that recognised that the differential in taxation will damage the Scottish economy—and that was the Scottish Government’s choice.

This is a Conservative party building the economy, and it is the socialist parties on the Opposition Benches would crush the United Kingdom economy as we leave. I support the motion.

Question put, That the amendment be made.

The House proceeded to a Division.

Division number 377 Assessment of the impact of the European Union Withdrawal Agreement

A majority of MPs voted not to require the publication of an assessment of the impact of the Withdrawal Agreement and the Framework for the Future Relationship with the EU on the UK’s economic and fiscal position but to support the Government's assessment of the UK's medium term economic and budgetary position for submission to the European Commission

Aye: 288 MPs

No: 309 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Absent: 48 MPs

Absents: A-Z by last name

The House having divided: Ayes 288, Noes 309.

Question accordingly negatived.

Main Question put.

Division number 378 Government Assessment of Medium Term Economic and Budgetary Position for Submission to the European Commission

A majority of MPs voted to approve the Government's assessment of the UK's medium term economic and budgetary position for submission to the European Commission.

Aye: 309 MPs

No: 292 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Absent: 44 MPs

Absents: A-Z by last name

The House divided: Ayes 309, Noes 292.

Question accordingly agreed to.

Resolved,

That this House approves, for the purposes of Section 5 of the European Communities (Amendment) Act 1993, HM Government’s assessment of the medium term economic and fiscal position as set out in the latest Budget document and the Office for Budget Responsibility’s most recent Economic and Fiscal Outlook and Fiscal Sustainability Report, which forms the basis of the United Kingdom’s Convergence Programme.

Photo of John Bercow John Bercow Speaker of the House of Commons, Chair, Speaker's Committee on the Electoral Commission, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Commons Reference Group on Representation and Inclusion Committee

I have to inform the House of a correction to the result of the Division held earlier today on amendment (a) to Lords amendment 23 to the Offensive Weapons Bill. The number of Members voting in the No Lobby was 308, as previously announced, but the number of Members who represent constituencies in England or Wales and who voted No was 286, not 285. There is no change to the outcome of the Division.