Budget Resolutions

Income Tax (Charge)

That income tax is charged for the tax year 2022-23.

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

My right hon. Friend the Chancellor of the Exchequer delivered his Budget statement against the backdrop and in the shadow of the covid pandemic, but he also did so unveiling a new era of economic optimism, as we build back better after that pandemic and secure the investment required to make sure that every part of this United Kingdom flourishes economically and every citizen has the chance to achieve their fullest potential.

It was striking that the Office for Budget Responsibility, in its assessment of the Chancellor’s response to the covid pandemic, said that he was “remarkably successful” in the steps that he had put in place. It is important, against the backdrop of the Budget statement and the spending review that accompanies it, to reflect for a second on the Chancellor’s success. The plan for jobs, which he was responsible for, has ensured that, contrary to the grim expectations that we would face unemployment of perhaps 12%, it is now expected to be 5% at most. It is also striking that the Office for Budget Responsibility estimated that the scarring effect on the economy—the drop in GDP that we would inevitably suffer as a result of the covid pandemic—would no longer be 3%, but just 2%.

Those figures, which reflect the success of my right hon. Friend’s approach hitherto, should be in our mind as we consider the approach that he is taking, because it is only as a result of success in ensuring sound money, success in ensuring an approach towards a balanced budget that commands the confidence of the markets, and success in ensuring that more of our fellow citizens can remain in employment that we have the foundations today on which to build, unite and level up our country.

The right hon. Gentleman talks about success. In part of my constituency, child poverty is something of the order of 60%. That compares with a national average of just under 20%. Is that a success because, if not, what does levelling up mean for the children in my constituency?

The hon. Gentleman makes an important point. At the heart of levelling up is a recognition, as he rightly reminds the House, that while talent is spread equally across this country, opportunity is not. There is a series of measures in the Budget statement designed to specifically attack the problem of child poverty. The creation of new family hubs is specifically designed to address that, as is the additional investment in the supporting families programme, the successor to the troubled families programme.

I should add that the changes to the taper on universal credit will also ensure, allied to the changes in the national living wage, that someone who is on the minimum wage, who is therefore in work, and who is receiving universal credit will receive at least £250 extra a year as a direct result of the national living wage increase and an additional £1,000 a year as a result of the associated changes to the taper. I recognise that eradicating poverty is not the work of one Budget, but it is only fair that everyone across the House recognises that there are measures in this Budget statement—measures being taken by this Government—directly to address the problems that the hon. Gentleman raises, because they are a scar that needs to be healed.

Will the Secretary of State tell us whether the number of family hubs will match the number of Sure Starts that have been cut since 2010? Does he regret the loss of so many Sure Starts and recognise the serious damage that has been done to a generation?

The right hon. Lady is right to point out that the Sure Start programme was always intended to help those who were most in need, but it was also intended to provide a universal offer. Inevitably, during the difficult period that we had after the 2008 financial crash, we had to make sure that we targeted resources accordingly, but after a period of retrenchment, we are now entering a period of renewal and reform. The family hubs are targeted not just at those who have children in the first 1,000 days of their life, which reflects superbly on the work of my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom); they are there to ensure that we have a comprehensive nought-to-19 offer. They go further than Sure Start children’s centres originally did—that is no criticism of Sure Start children’s centres—providing services that they did not.

Will the Secretary of State give way?

I will make a bit of progress and then try to take more interventions, if that is okay.

It is also important to recognise that the Budget statement saw a significant increase in public spending overall. It is the case that no Government can be judged purely by how much they spend. How that money is spent is critical. Additional public spending without reform and without a focus on value for money is money wasted. But I do not think that anyone across the House can deny that, with reform and with a focus on value for money, additional public spending, appropriately targeted, can help to transform public services for the better. In this Budget statement, £150 billion more will be spent over the spending review period. That is a 3.8% growth, in real terms, and in the Department for which I am responsible there is a 4.7% increase. Alongside that, there are the biggest increases in capital investment from any Government for 50 years; the biggest block grants ever given, since the dawn of devolution, to the Governments in Scotland, Wales and Northern Ireland; and an increase of 6.6% in the national living wage, which takes it to £9.50 an hour. All Governments can face criticism and all Chancellors can be attacked, but I do not think it credible for anyone in this House to say that the package that the Chancellor unveiled last week is any way not equal to the challenges that we face.

The question for Opposition Members, including those on the Front Bench, is what they would do differently. If they argue that we should spend even more, where would they spend it? Which budgets would they prioritise? If they were to spend more, which budgets would they deprioritise? What would they cut to fund the additional spending? If they would not cut, would they borrow more? If so, how much more? With what impact on our credibility in international markets, on interest rates and on our capacity to fund our debt and deficit? Let us bear in mind that debt is falling and the deficit is being reduced as a result of the Chancellor’s shrewd approach.

To get back to some serious points for a moment, UN Secretary-General António Guterres told Glasgow’s COP26 today that the world’s

“addiction to fossil fuels is pushing humanity to the brink.”

Will the Secretary of State use his planning powers to protect the beautiful parts of his own county of Surrey and prevent it from being turned into a British Texas? Why are Conservative Ministers prepared to allow new oil drilling in the Surrey hills and the north of Scotland when we are in a climate crisis?

I have huge respect and affection for the right hon. Member, but I remember when we sat in Cabinet together and he was Secretary of State for Energy and Climate Change. I remember when he spoke to the Liberal Democrat conference, when such a thing occurred —when there were enough Liberal Democrats to get together to fill a conference hall. I remember him telling that Liberal Democrat conference hall that it was time—please forgive my language, ladies and gentlemen—to get fracking. Now that he is no longer in government and is in opposition, he seems, curiously enough, to have reversed his position, an unprecedented thing for a Liberal Democrat to do.[Laughter.] Saying one thing to one constituency and another thing to another? Remarkable!

I should say that my own views on fracking in Surrey—and indeed elsewhere—are on the record, and the right hon. Member can be reassured that my opposition to fracking in Surrey, particularly in a case that came up in my constituency, is on the record; but because my views are on the record of the past, I should say no more about the future.

May I return the Secretary of State to the 3% increase in spending power for local councils? Has he seen the analysis by the Institute for Fiscal Studies? It states that the 3% includes the £5.4 billion that the Government have used from the levy, but as the way in which councils must spend it is specified, it amounts to only a 1.8% increase in money that they can choose, and the 1.8% is there only if they put their council tax up by 3% a year.

The hon. Gentleman makes an important point. Additional funding is, quite rightly, being devoted to improving adult social care, and it is also the case that the overall rise in core spending power for local government is at 3%. If we look back, we see that that is a significant increase, and it is also part of the broader increase of 4.7% overall in the spending that we are providing. Local government is not just being given more money for discretionary spending and for adult social care; we are also seeing additional spending from the Department for Education on special educational needs, we are seeing additional spending for transport, particularly in our city regions, and we are seeing the levelling-up fund as well. It is important to look in the round at the amount of money available to local government and spent in local areas.

The IFS is right, is it not?

The IFS is often—but not always—right.

Knowsley, which is one of the boroughs that my constituency covers, has gone from being the fifth most deprived local authority in 2010 to being the second most deprived now. One would have expected a Budget such as this, about levelling up, to focus particularly on giving necessary resources to Knowsley, but despite being a priority 1 area it has been overlooked for the levelling-up fund, having previously been overlooked for the future high streets fund and the towns fund. What does Knowsley have to do, now that it is the second most deprived area, to get some money from the Government so it can try to level up? [Interruption.]