Spending Round 2019

Part of the debate – in the House of Commons at 12:56 pm on 4th September 2019.

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Photo of Sajid Javid Sajid Javid The Chancellor of the Exchequer 12:56 pm, 4th September 2019

Health and education are lifelines of opportunities, just as they were for me when I was growing up: the teachers and lecturers who persuaded me to study economics in the first place; the police officers who kept us safe when the street I grew up in became a centre for drug dealers; the NHS that cared for my dad in his final days. These are not just numbers on a spreadsheet; these are the beating heart of our country, and we invest to support them today.

As I turn to the details of today’s announcement—[Hon. Members: “Hooray!”] Wait—it is coming. Let me first thank the dedicated officials in the Treasury for all their hard work delivering what I am told is the fastest SR in history. Let me particularly thank the Chief Secretary to the Treasury, my right hon. Friend Member for Richmond (Yorks) (Rishi Sunak), who takes the approach to spending you would expect from an adopted Yorkshireman. He has displayed his typical mix of energy, courtesy and rigour. Let me just say that there is no productivity problem in the Chief Secretary’s office.

Next year, I will add £13.4 billion to the plans for total public spending, including £1.7 billion pounds added to capital spending. These extra funds take the real increase in day-to-day spending to £13.8 billion pounds, or 4.1%. That means I am delivering the fastest increase in day-to-day spending for 15 years. That funding allows us to start a new chapter for our public services and to fund the people’s priorities. Our decisions today have been guided by our ambition to build a safer Britain, a healthier Britain, a better educated Britain and a more global Britain.

My family grew up on a road in Bristol that a national newspaper described back then as Britain’s most dangerous street, but to us it was just home. After we left, my brother became a policeman and has been in the force for over 25 years. I have seen the impact the job has on the lives of those who are courageous enough to do it. So today I pay tribute to the bravery, courage and dedication of our hard-working police officers. As Home Secretary, I saw first-hand how the demands on our police forces are changing and increasing. Yes, traditional crime is down by a third since 2010, but the threats from terrorism have escalated and evolved. The internet is changing how criminals operate and break the law, and we have seen too many horrifying stabbings on Britain’s streets. With our frontline officers reporting that they are overstretched, it is clearly time to act and do more.

Today I can announce a 6.3% real-terms increase in Home Office spending—the biggest increase in 15 years. That means £750 million to fund the first year of our plan to recruit 20,000 new police officers, with an extra £45 million this year, so that recruitment can start immediately, getting the first 2,000 officers in place by the end of March. Let me thank my hon. Friend Andrew Selous, my right hon. Friend John Redwood and my hon. Friends the Members for Isle of Wight (Mr Seely), for Nuneaton (Mr Jones) and for Telford (Lucy Allan) for championing the police and police resourcing,

The threats facing our police officers are evolving too, so the way we resource them will have to evolve in three areas. First, serious and organised crime is the most deadly national threat faced by the UK, costing the nation at least £37 billion a year. The scale and complexity of this threat means that we need to do more to develop our response, so I am announcing today a formal review to identify the powers, capabilities, governance and funding needed ahead of a full spending review next year.

Secondly, this year sadly has seen more attacks on places of worship, including mosques and synagogues. That is unacceptable in a diverse, open, tolerant society like ours. To protect our religious and minority communities, I am announcing today that I will double the places of worship fund next year. I thank my hon. Friends the Members for Hendon (Dr Offord) and for Finchley and Golders Green (Mike Freer) for their tireless work in combating hate crime. I am also today announcing £30 million of new funding to tackle the scourge of online child sexual exploitation.

A better resourced police force will deliver better outcomes for the British people, and it will increase the demands on our already overstretched criminal justice system. So today we invest more in our criminal justice system to manage that increasing demand, with a 5% real-terms increase in the resource budget for the Ministry of Justice, an increase in its capital budget to £620 million next year and an extra £80 million for the Crown Prosecution Service. Taken together, today’s spending round will dramatically improve the functioning of the criminal justice system, with more prosecutors, a reformed probation system, better security in prisons and funding to begin delivery of 10,000 new prison places.

The spending round is delivering on the people’s priorities, and there is no higher priority than the NHS. Last year, we increased NHS spending by an extra £34 billion a year by 2023-24. That was the single largest cash increase in our public services for more than 70 years. Today, we reaffirm our commitment to the NHS with a £6.2 billion increase in NHS funding next year. We are investing more in training and professional development for our doctors and nurses, and over £2 billion of new capital funding, starting with an upgrade of 20 hospitals this year, and £250 million for groundbreaking new artificial intelligence technologies to help solve some of healthcare’s biggest challenges today, such as easier cancer detection, discovering new treatments and relieving the workload on doctors and nurses.

We cannot have an effective health system without an effective social care system too. The Prime Minister has committed to a clear plan to fix social care and give every older person the dignity and security that they deserve. I can announce today that councils will have access to new funding of £1.5 billion for social care next year. Alongside the largest increase in local government spending power since 2010, and on top of the existing £2.5 billion of social care grants, that is a solid foundation to protect the stability of the system next year and a down payment on the more fundamental reforms that the Prime Minister will set out in due course.

But that is not the only action I am taking today to support vulnerable people. On any given night, there are too many people sleeping rough on our streets. The human cost is too high. Today we do more, with £54 million of new funding to reduce homelessness and rough sleeping, taking total funding to £422 million next year. That is a real-terms increase of 13%. I thank my hon. Friend Bob Blackman for his tireless work in fighting homelessness.

A healthy environment is a precondition for a healthy population, and that is why we have set out an ambitious 25-year plan for the UK’s natural environment. Today we go further. Leaving the EU provides an opportunity to set world-leading environmental standards, and we are giving the Department for Environment, Food and Rural Affairs £432 million of funding to do so. We are providing £30 million of new money to tackle the crisis in our air quality and another £30 million for biodiversity, including the expansion of our Blue Belt programme—a vital part of our campaign to protect precious marine species such as turtles, whales and seabirds. We are stepping up our leadership on climate change, with new funding for the Department for Business, Energy and Industrial Strategy to develop new programmes to help meet our net zero commitment by 2050, and we will set out further details of our plans for decarbonisation in the infrastructure strategy later this year, keeping our promise to be the first Government in history to leave our environment in a better condition than we found it.

Alongside providing for the health of our population, the most important task of a Government is to educate the next generation. Education and skills are at the heart of our vision for national renewal. The economy is not just about GDP or PSNB—there are many broader tests that matter too. Are children growing up to be better off than their parents? Do hard work and talent matter more than where you are born? A good school and inspirational teachers are the most effective engine for social mobility. That is why today we are delivering on our pledge to increase school spending by £7.1 billion by 2022-23, compared with this year.

Next year, we will make sure that day-to-day funding for every school can rise at least in line with inflation and rising pupil numbers, with the schools that have been historically underfunded benefiting the most. Every secondary school will be allocated a minimum of £5,000 for every pupil next year, and every primary school will be allocated at least £3,750 per pupil, on track to reach £4,000 per pupil the following year. This funding will mean that teachers’ starting salaries can rise to £30,000 by 2022-23, so that we can attract more of the best graduates into teaching. We have allocated nearly £1.5 billion per year to contribute to teachers’ pensions, and we are providing over £700 million to give more support to children and young people with special educational needs—an 11% increase compared with last year.

Nearly every other Department I am announcing today will be funded for just one year, but we recognise the importance of schools being able to plan, so we are announcing today a full three-year resource settlement for schools, levelling up education, improving standards and giving every young person the same opportunities in life wherever they live in our great country. Let me particularly thank my hon. Friends the Members for Bexhill and Battle (Huw Merriman), for Cheltenham (Alex Chalk) and for St Albans (Mrs Main) for championing schools.

The education system is about more than just schools. For too long, further education has been a forgotten sector. Over 1 million young people continue their education beyond the age of 16 at colleges or sixth-forms—and I know because I was one of them. I went to my local FE college. If I had not had the teachers and the lecturers that I did, I would not be standing here today as Chancellor. Further education transformed my life, and today we start transforming further education, with a £400 million increase in 16-to-19 education funding next year. The base rate will increase to £4,188, a faster rate of growth than in core school funding. Let me congratulate my right hon. Friend Robert Halfon and my hon. Friend Neil O’Brien on their representations on further education.

The Government will also increase early years spending by £66 million to increase the hourly rate that is being paid at maintained nursery schools and other childcare providers that deliver the Government’s free childcare offer. I want to thank my right hon. Friend Theresa Villiers for raising this issue with me.

Our young people deserve high-quality services and support even after the school day is over. Earlier this year, following a recommendation from my right hon. Friend Mr Duncan Smith, I visited the fantastic OnSide youth zone in Barking. It was a brilliant example of how much Britain’s network of youth centres adds to their local communities, getting young people off the streets and changing lives for the better. Today, I am asking the Department for Digital, Culture, Media and Sport to develop proposals for a new youth investment fund, and to set out plans to build more youth centres, refurbish existing centres and deliver high-quality services to young people across the country.

Better schools, higher pay for teachers, more youth centres—that is how this Government will improve social justice and create opportunity for all, but our ambitions for a truly national renewal do not stop there. We are a one nation party and this is a one nation Government, so at the heart of our new economic plan is the need to level up across this country. Every region and nation in the United Kingdom will benefit from the new funding I am providing today for the police, schools, health and social care, and much more. Today, we confirm funding of £3.6 billion for the new towns fund, providing a wave of investment to our regions and places, and better transport links across the country will be a crucial part of levelling up across the nation. We have already allocated a total of £13 billion for better transport across the north. We will fund the Manchester to Leeds route of Northern Powerhouse Rail, and we will set out more details—far more details—in the autumn on our new infrastructure strategy.

Mr Speaker, you may not know this, but my dad was a bus driver. Having watched him work, I know that local buses can be a lifeline for many communities. Today, we put the wheels back on the great British bus, with more than £200 million to transform bus services across the country. We are funding ultra low emissions buses, and we will trial new on-demand services to respond to passenger needs in real time. We will set out more details of our new buses in due course—once my right hon. Friend the Prime Minister has finished painting models of them.

Our new economic plan will not stop at the borders of England; it will be a plan for all the nations of the United Kingdom. In Scotland, decisions taken in today’s spending round will provide over £1.2 billion of extra funding for next year. We are taking a further step today to support Scottish farmers. In 2013, when the UK Government allocated common agricultural policy funding within the UK, Scottish farmers lost out. Today, we correct that decision, making available an extra £160 million for Scottish farmers—something I know my hon. Friends from Scotland on the Conservative Benches will be pleased to hear. I would also like to take the opportunity to thank my friend Ruth Davidson for everything she has done for that great nation.

In Wales, today’s spending round means an extra £600 million of funding for the Welsh Government. In Northern Ireland, we are providing an extra £400 million from today’s announcements. I welcome the case that has been made by the DUP for improved hospice care and for support for those who have been tragically wronged in the contaminated blood scandal. Those are rightly devolved matters, but I sincerely hope that the Northern Ireland Administration will use some of the new funding that we are providing today to address those issues. Taken together, today’s announcements will give the devolved Administrations the biggest spending settlement for a decade.

Throughout our history, Britain has always been at its best when we are open, global and outward looking. Trading with the world beyond our shores has always been key to Britain’s economic prosperity. As we seize the opportunities of Brexit, we can establish new partnerships and trade relationships across the globe. For too long, we have let those trading relationships wither. As my right hon. Friend the International Trade Secretary would be the first to acknowledge, this is a disgrace. Today, we invest in securing Britain’s influence in the world. We support diplomacy, with £90 million of funding for 1,000 new diplomats and overseas staff, and 14 new and upgraded diplomatic posts. We will boost trade with £60 million to extend the GREAT campaign for next year.

If hon. Members are in any doubt about Britain’s important role on the world stage, they should just look at the bonanza of international festivals and events that I am funding today. In December, we will welcome the NATO leaders meeting. Next year, we will host the COP 26 discussions, if our bid is successful, thanks to the leadership of my right hon. Friend Claire Perry. In 2021, we will host the G7, and in 2022, we will host the Commonwealth games in Birmingham. Today, I can confirm the Government’s total commitment to this celebration of sport will be over half a billion pounds. The games will be a huge boost for the west midlands, and I would like to congratulate Andy Street on the leadership he has shown in that region.

One of my personal highlights of the summer was meeting the England cricket team in the Downing Street gardens. That world cup winning side showed us the importance not just of talent and hard work, but of diversity—a skipper from Ireland, a bowler from Barbados and an all-rounder from New Zealand. As with our cricket team, so with our country: we are the most successful multi-ethnic democracy in the world. I am proud to live in a country where someone with my background can be Chancellor of the Exchequer. This spending round embraces modern Britain in all its diversity. We make available today an additional £10 million to continue the integration areas programme that I first announced in 2018 as Communities Secretary. That fund will continue to support thousands of the estimated 1 million adults in the UK who do not speak English well or at all.

Openness to talent from around the world matters for our economy, too. Once we have left the EU, we will be able to create a points-based immigration system that meets the needs of the UK economy and the British people. We have already dropped arbitrary immigration targets. We have recently announced a new, highly flexible fast-track visa for scientists. Today, I am putting funding in place to give victims of the Windrush scandal the compensation that they deserve. This is all part of confirming, once and for all, that Britain will always be open to the world’s brightest and best talent.

Nowhere are our values of openness and tolerance better expressed than in international aid. The UK aid logo can be seen around the world—on health clinics, school books, emergency food suppliers. Today, we protect our commitment to spending 0.7% of our national income on aid.

Global Britain is about projecting our values into the world, but we know that hard power matters, too. Britain already spends more on our defence and national security than any other country in Europe. We are one of only seven countries to meet the 2% commitment to NATO. Today, we go further still, with an additional £2.2 billion of funding for the Ministry of Defence—a real-terms increase of 2.6% for the budget next year—increasing again the share of our national income we spend on defence and national security.

This year is the 75th anniversary of the D-day landings. We pay tribute to the sacrifices of the extraordinary generation of British soldiers who fought and died during that campaign. Today, I can announce £7 million of funding for the Normandy Memorial Trust to complete its memorial overlooking Gold beach, where so many troops came ashore. We will also support the veterans of today’s wars, as we confirm the funding today for the new Office for Veterans’ Affairs. I congratulate my hon. and gallant Friend Johnny Mercer on his tireless work in championing veterans.

I have set out today a big increase in public spending that will pay for more police and safer prisons, more nurses and better hospitals, and more money for schools and further education. I now turn to the remaining Departments across Whitehall, those that have not been protected over the last decade. Investing in the people’s priorities inevitably means difficult decisions elsewhere. Every spending review presented to this House over the past 15 years has had to find cuts from those Departments. This party has never shied away from taking the difficult decisions to make sure that we live within our means. Those decisions were tough, but they have paid off, so I can announce today that no Department will be cut next year. Every single Department has had its budget for day-to-day spending increased at least in line with inflation. That is what I mean by the end of austerity: Britain’s hard work paying off, and our country living within its means and able to spend more on the things that matter.

I am delivering today’s spending round in unusual circumstances. Understandably, much of our attention and the attention of the country is focused on the important matters before the House later today, but we must not forget that Brexit is not all that matters to the British people; it is not the only topic at the dinner table. Today’s spending round ensures that if you fall ill, you can get the care and support that you need; that when you drop off your child at the school gates, you can trust that they will get the best possible education; and that when you walk down the street, you can feel safe and secure. Today, we move from a decade of recovery to a decade of renewal. Yes, we will keep control of the public finances, but we will invest, too, in the long-term growth of this country.

It was just six weeks ago today that this new Administration took office. The Prime Minister promised that we would not wait until Brexit day to deliver on the people’s priorities, and today we meet that promise with a new chapter for our public services, a new plan for our economy and a new beginning for this country. I commend this statement to the House.