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Finance Bill 2020
Madam Deputy Speaker,

I am sure the vast majority of this House believe as I do, that the security and defence of our nation must be any government’s first priority. And so while I welcome the measures announced today by the Chancellor and the Secretary of State for Defence, including an overall increase in the Defence budget, I do wonder what this budget tells us of the government’s first priority. If it was the defence of our nation, the recognition of our armed forces personnel and the procurement of technologically advanced equipment then why the modesty? When there was significant scope for decisive spending decisions based off the back of nine years of Conservative good economic governance, why did the government choose unnecessary surplus over the security of the nation? This was the once in a generation moment for any government, where the fruits of the nation’s hard work and budget tightening had well and truly flowered, yet this government chose meekness over decisiveness. They have demonstrated that they are no longer the party of unilateral disarmament, but they have sidestepped the best opportunity any Parliament has had in the last decade to make unhesitating investment in our armed services.

Both the Chancellor and the Secretary of State for Defence have highlighted the increase to the defence procurement budget, which I of course welcome, but the recent failure of the government to order anywhere near enough armoured vehicles to satisfy the Army’s requirement has been whitewashed over by the figures. Yes, the procurement budget has been increased by £1.5 billion but why have only a third of the required vehicles been ordered? Why hasn’t the government committed to future procurement of the vehicles by using a future options clause? These are questions I have asked time and time again in this House but have yet to be acknowledged. I have also sought to query what the government’s plan is for the additional cash – a not too presumptuous question considering the budget is now £11.25 billion. The Secretary of State for Defence, in his response to the Finance Bill, even said that he is ‘putting pen to paper on contracts for entirely new platforms’, but apart from under-ordering armoured vehicles, he has previously declined to outline which platforms he’s referring to. What contracts have received the mark of his pen? Which contracts is he hovering over? Which other contracts has he improperly managed? I can only hope that the SDSR is better considered than the government’s approach to Defence procurement has been so far.

I have previously asked the Secretary of State for Defence about the government’s policy towards building our presence in Far East Asia and so I welcome his brief reference to expanding our basing capacity in the region, a policy championed by this side of the House. But the government should be wary of formulating policy and strategy which loses the wider perspective and context of global events. Yes, it is good that the government is increasing spending on foreign basing to reflect their interest in the Far East but they cannot expand presence there in isolation to the rest of the World. There needs to be real consideration about what the government wants to spend, what our armed forces are capable of undertaking and the threats they face and are likely to face in the future. There is much more to consider than simple basing arrangements.  I hope that this budget and their subsequent strategy papers are fully aligned.

The increase to support to veterans is welcome, particularly to those who are making that huge transition into the civilian world. I do believe though, that this budget was the budget that should have been bold on veterans affairs, there is scope for far more, closer to double the amount offered.

Madam Deputy Speaker, this budget introduces some welcome additional support to our armed forces, but where great scope exists for decisive investment in Britain’s defence capabilities, the government has chosen a path of modesty and unnecessary surplus.
Harry De Santis MP

Shadow Secretary of State for Foreign and Commonwealth Affairs
Shadow Secretary of State for Defence Tom Tugendhat (NPC)
Conservative Member for Totnes
Madam Deputy Speaker,

I should like to begin by thanking my Rt Hon Friend, the Chancellor, for his excellent work in preparing this budget. It does a great deal towards accomplishing the challenges we laid out upon taking office: rebalancing our economy, rebuilding our public services, and restoring our commitment to our fellow man and woman. This is, Madam Deputy Speaker, an aspirational budget to its core: a budget that will help every person in the United Kingdom realise their aspirations. It is a budget that will move us towards our goal of a more United Kingdom.

Madam Deputy Speaker, just a few short weeks ago when I stood before Number 10, I made clear the challenges that this nation faces. We are the most regionally imbalanced economy in Europe. We are only just emerging from the greatest squeeze in living standards in modern history. We inherited public services that were cash strapped and in need to serious investment. We face growing threats to peace and security at home and abroad. No budget will be a panacea given all that we were confronted with. But this budget does put the United Kingdom very much on the right track.

The Opposition will no doubt rise and say that “these investments are only possible because of Conservative austerity”. That is poppycock. Since 2016, the Conservative Party did not need to continue their austerity agenda: they did it because they could. Deficits rose and deficits fell in that time; fiscal rules and targets were rewritten and thrown out time and time again. Yet the government remained committed to austerity. That was a choice. And it was a bad one. From 2018, the former Chancellor of the Exchequer and former member for Runnymeade and Weybridge repeatedly said that “austerity was coming to an end” only to be contradicted over and over again by the nonpartisan Institute for Fiscal Studies. Claiming to end austerity without actually ending it was a choice.

Those are the choices that this Government is making differently. Austerity is over. And we’re putting our money where our mouth is and actually ending it. Now, I’ve come to understand that the Opposition feels differently about this spending package. Indeed, they feel that we are, somehow, taxing too much, spending too little, and creating a deficit that is too large. They ask why we haven’t launched, by my latest estimate, well over £12 billion in new spending between their comments in Parliament and the press. Madam Deputy Speaker, the answer is simple: just because we don’t view debt as inherently bad, doesn’t mean that debt and deficits don’t matter. Rather, they do. And that is vitally important.

The notion of a “significant surplus” that the Opposition keeps mentioning must be addressed, Madam Deputy Speaker. The Opposition acts like a surplus in day to day spending is an overall surplus. It is not. And we acknowledge that. The Opposition acts like a day-to-day surplus is carte blanche to spend, spend, spend. It is not. What a day-to-day surplus means is that we aren’t issuing debt to pay the basic bills: salaries, pensions, and basic programs. To use a cruder analogy, Madam Deputy Speaker, if one eliminated all capital spending from a department, that department could still function. Services would certainly become worse – but the whole department would not all fall apart. A day-to-day surplus means that the basic functioning of government is financially sound. That is absolutely a good thing, as my Rt Hon Friend the Chancellor of the Exchequer noted. But there is more than that in the budget.

What we add to our day-to-day spending, Madam Deputy Speaker, is capital spending and investment. That is the money that makes government work better. Those are the new schools that are essential for lowering class sizes. Those are the new hospitals and clinics that will enable more patients to be seen. Those are new tools that our men and women in uniform – be it police or the Armed Services – will use to protect us at home and abroad. And, since I know this is of great interest to the Opposition, those are the Dreadnaught-class submarines that will serve as the nuclear deterrent in ten years’ time. And the Government has increased investment by £30 billion this year alone. However, Madam Deputy Speaker, the financing of investment takes the day-to-day surplus that exists because of decisions taken by this government and leaves the total budget with a £63 billion deficit – not an overall surplus. As I outlined just moments ago, we believe that the combination of low interest rates and inflation that is higher than the main interest rate, but lower than the Bank of England target, allows us to pursue borrow in this way.

As my Rt Hon Friend the Chancellor noted, we are able to borrow to invest today because of low interest rates and inflation that, functionally, ensure that the debt we take on today is less expensive in the long run for the government. So we are borrowing to make long-term investments that will boost the capacity of our health system, improve productivity around our nation, and invest in our schools. However, these investments are long term, not just in their benefit, but also in their fiscal cost. Take High Speed North – this is a vital project that will take at least ten years of financing to implement. In order to finance this project, we must establish a fiscal strategy that allows us to take advantage of low interest rates not only today, but also in the next year, and the year after that. The vastly expansionary policy that we are being criticised for not pursuing runs the risk of impairing our fiscal health in the long run.

Now, Madam Deputy Speaker, the Opposition might wonder why I am forced to sit here and lecture on economics. It’s because the Opposition can’t seem to grasp that there is a deficit. They keep asking why we did not hire more doctors, teachers, or soldiers. They keep asking why we did not build more schools, homes, or hospitals. Why don’t we just splash the cash around here, there, and everywhere? It is because there is a deficit. And just because we say we will borrow to invest doesn’t mean that we can borrow whatever we like. I trust, Madam Deputy Speaker, that most members of the Opposition have had a credit card at some point in their lives. To make a simple analogy, just because one can max out the £10,000 limit on their credit card doesn't mean one should - the money still has to be paid in the long run. And when we’re dealing with matters the size of an economy, we must maintain a favourable fiscal environment for several years – not just this one. High speed rail networks don’t get built in a single year. Schools need to be built every year because the number of students increases every year. I could continue on and one on these points, Madam Deputy Speaker, but I imagine it would be tiring for all involved.

A sound macroeconomy is critical to continued investment, not just in leveling up our country and solving the productivity crisis, but also in bringing austerity to an end, combating the climate crisis, and rebuilding our social security system. And it is our intention to be responsible stewards of the economy over the long term. The Shadow Chancellor and his ilk may feel that the damage of nine years of austerity can be undone in one year – we take a more long-term view. And this budget reflects the fact that we cannot do everything at once. Not if we want to remain on sound macroeconomic and fiscal footing.

I should also note, Madam Deputy Speaker, that productivity demands capital – it is one of the vital pillars of productivity growth. A vastly expansionary fiscal policy would, in turn, result in higher interest rates. Not only would higher interest rates make it more expensive to service our debt – they would also reduce private investment. The Government, of course, is pursuing the opposite course by increasing capital allowances to spur productive investment in the economy. I never dreamed that a Labour Prime Minister would be the one lecturing the Conservative Party on the importance of private capital, but I suppose that the past twelve months defied convention in a number of ways.

I should also like to respond briefly to the comments of the Member for Chelsea and Fulham. Firstly, based on the figures I observe, there are fewer than one million homes valued at over £1 million in the whole of the United Kingdom. So her claim that over one million homes in London alone would be subject to the mansion tax is farcically incorrect. Second, I should like to advise her as to the imposition of the tax – and I apologise if this was not made clear in the reading of the budget, though it will be clear in the implementation. The tax will apply to the value above £1 million. So, she cites her own constituency of Chelsea and Fulham as having an average home price of near £1 million. The average homeowner then would pay no tax under this proposal. However, let us take the case of a homeowner with a £1.1 million home. This homeowner would not pay £11,000 in tax, as her calculations would suggest – but rather £1,000 in tax – or roughtly 0.09% of the value of the property. She raises a point that the finer detail of this provision may be missed and will be corrected accordingly.

Of course there is the matter of the housing market itself, which she rightfully raises. Madam Deputy Speaker, this Government is working to increase housing supply. However, we must also work to confront rising home prices. A leading cause of this is property speculation – led by individuals and firms purchasing and flipping houses for substantially more than they purchased them for. This budget works to disincentivise property speculation with a property speculation tax – a measure that will work to constrain the growth in housing prices that are keeping so many off the housing ladder.

On the topic of the housing ladder, I should like to briefly comment on the Member for North East Bedfordshire’s misplaced complaints about not doing enough to promote homeownership. Madam Deputy Speaker, the vast majority of homes purchased by first time homebuyers are already exempt from stamp duty under proposals put into place some years ago. His proposal for eliminating the first band of the stamp suty will benefit those already on the housing ladder – who already have accumulated capital and wealth, to a degree. Or it will benefit those purchasing homes well above the average home price, no matter where in the United Kingdom they are – who can, justifiably, afford to pay stamp duty. For that reason, the Government recognises his commitment to homeownership, but notes that he is a few years too late with his ideas for stamp duty relief for first time homebuyers.

As to the Member of Chelsea and Fulham’s claim that London does not get its fair share of funding – I must disagree. London has, historically, received its fair share of investment and it will continue to here. We are providing significant funding for the expansion of Crossrail and Crossrail 2. These projects will provide significant benefit to London. The Rt Hon Member for Bexley and Old Sidcup might note that our extension to Crossrail will provide significant benefit to the Borough of Bexley, and to the greater Thames Gateway area, which is a priority for redevelopment and renewal. We are providing a £400 million investment in bus services, some of which will inevitably be received by London. London has one of the largest bus networks in Europe – to think that London would miss out on investment in buses is nonsense. Of course, this perhaps points to a greater problem on the part of the Member for Chelsea and Fulham. She seems to think that unless there are brilliant flashing lights screaming “LONDON” over a particular line item of funding that London will not benefit. This is just not the case. This Government is investing in London – it is investing in every corner of the United Kingdom.

Now, where were we. Ah yes, we return to the saga of Conservative complains: “but you didn’t spend enough!” This time it is the Shadow Health Secretary who makes an appearance. I hope, unlike his predecessor, this one is willing to commit to basic public health interventions such as PrEP. But I digress, we’re here for the budget debate. He too seems to be under the mistaken impression that the budget is in surplus. Alas, details escape the Opposition over and over. Unfortunately, his entire response is based in the notion that there is a surplus in the budget, which there is not. So I’m not quite certain what he would like me to say.

As a former physician, I should like to discuss our commitment to health and social care, which received a historic spending settlement in this budget. The National Health Service has been called the pride and joy of the Labour Party – our greatest accomplishment. And I certainly believe that. Yet for years we’ve watched as performance metric after performance metric fell for the NHS. These were not just numbers: these were lives lost, diseases not treated, people that did not receive care. And that was not the fault of my former colleagues, the doctors and nurses who fight for patients every day in the NHS. It started here in Westminster. It started with the members on the opposition benches.

And we are reversing that. Our funding increase for the NHS will see nine new hospitals built this year, alongside a number of clinics and village hospitals. This is capital investment, since the Shadow Health Secretary doesn’t seem to understand how spending is divided, that will make our NHS run better. We allocate £1 billion for emergency maintenance spending for our hospitals – fixing the dangerous conditions for patients and staff alike that are allowed to exist because of Conservative failures to invest in basic upkeep. It will see 7500 doctors hired and over 18,000 nurses. I am the first to acknowledge, Madam Deputy Speaker, that there is more to do. But this is a start.

And we will put the increased capacity and increased staffing to good use, Madam Deputy Speaker. We have increased funding for commissioning across the core elements of the NHS – hospital care, emergency care, primary and community care, and mental health care. This will help ensure that wait lists that grew to record levels under the Conservative Party begin to decline. We further fund increases in public health and preventative health, ensuring the we can prevent disease before it requires costly interventions.

Moving on, I think we can turn to schools. Madam Deputy Speaker, this is a budget for learners at every level. Whether in early years, primary school, secondary school, further, or higher education – this budget invests in learners in a meaningful way. And I should like to elaborate on that point.

Class sizes are one of the critical determinants of student success. This budget takes concrete action towards reducing them by building more schools and hiring more teachers. This investment will improve education quality for students across the country. And it is matched by increasing investment in education procurement by 3% above the rate of inflation. This is investment the will ensure our students and teachers have access to the lastest tools in schools- whether that is computers, lab equipment, or simply new textbooks. Moreover, we show our teachers the appreciation they deserve by taking steps to reverse the horrendous impact of the pay cap on living standards for teachers. We make a clear statement that our education professionals are just as valued as their private sector peers.

I am advised that many are briefing that our investments in per pupil funding are to become a line of attack. Madam Deputy Speaker, I agree that per pupil funding should be boosted. I agree that it will help our schools accomplish more. Which is why this budget contains a real terms increase in per pupil funding. This increase is paired with targeted investments that will help schools in need of real investment, investment that will close the attainment gap. Coming from Manchester, I am acutely aware that nearly two-thirds of students eligible for the pupil premium reside in the North. I am acutely aware that the gap in attainment between students in the North and students in the rest of England is significant. For that reason the government has opted to increase the pupil premium by over 5% - to target education spending at areas that absolutely require it to eliminate inequalities in our education system. That is investment that will make the most difference for boosting education in regions of the country that desperately need it.

Madam Deputy Speaker, we are also engaging in targeted investments to help students across the country – particularly students facing poverty – feel secure in school. Reports indicate that 1 in 10 girls in school are forced to miss school because of lack of access to sanitary products. Perhaps, Madam Deputy Speaker, eliminating the “tampon tax” would eliminate this. But my instinct is that it would not, as feminine hygiene products are priced high regardless of the “tampon tax”. What will reduce this burden is proving free menstrual hygiene products for girls in schools across the country. This budget accomplishes that. No longer will girls have to choose between health and hygiene and an education. Companion legislation mandating the provision of these products will be brought forward in due course.

Beyond that, we know that hunger is one of the leading causes of lack of educational attainment in financially insecure households. Madam Deputy Speaker, this budget confronts that legacy by ensuring that every child from a family receiving Universal Credit is eligible for free school meals. No child will face food insecurity just because their parents fell on hard times. That is an investment that will boost educational attainment for the least well-off students across the country. That is an investment that will have a far greater impact on boosting attainment for students than a simple increase in per pupil funding.

I should like to move on the higher education, where the Government is making significant changes to increase access for students from the least well-off families. Our reduction in tuition fees will, Madam Deputy Speaker, provide assistance to students from the least well-off families. More important, however, are the changes we are making to maintenance loans. Madam Deputy Speaker, the previous Conservative government mandated that all students, even the least well-off, go further into debt for simply getting by at university. That shameful record ends today. I am pleased to see the Government phasing out maintenance loans for the least well-off students and returning to a maintenance grant system. This initial shift back to maintenance grants will be directed, primarily, towards students in the greatest need of financial support. This is a measure that will truly expand access to higher education across the country.

Madam Deputy Speaker, there is much to be said for the work that the Government is doing for our students. One thing is absolutely clear: we are committed to addressing the achievement gap which sees students outside the wealthiest parts of the country struggle while those with the most resources succeed. And we will continue to push to lift up those students in the most deprived parts of the country with well-targeted investment. That is how we ensure that the next generation does not grow up in the most regionally imbalanced economy in Europe.

There is a notion, Madam Deputy Speaker, that the more money you throw at something – splash the cash is the term that is often used, the better the results will be. I disagree with that. Yes, there are some areas where this is true: if you hire more doctors and increasing funding for commissioning, then more patients will be seen and wait lists and times will decline. Yet there are other areas where it is not. Increasing per pupil funding is something that we must do – and we do that. But in a time when students in the North face an education system on life support while those in the South perform well, we must prioritise targeted investment the reverses inherent imbalances in our education system. That is what we are setting up the system to do – though we still invest in schools in the South. We will continue, year on year, to increase the pupil premium. We will announce, in due course, new investments in rebalancing our education sector to ensure that every child has the chance to receive a high-quality education – not fall victim to a postcode lottery.

I know, Madam Deputy Speaker, that I have been speaking for some time already, so I shall try to wrap up – but there are more points to make.

The Hon Member for Totnes comes here again talking about a surplus that doesn’t exist. Not in the overall fiscal picture anyway. He, of course, does reference the day-to-day surplus. Since he too seems to not understand the concept of the day-to-day surplus and criticises for not spending more on procurement, I thought we could engage in a little thought exercise. Madam Deputy Speaker, the Hon Member for Totnes would find that, if we increased the Procurement Budget of the Ministry of Defence by £30 billion this year, the day-to-day surplus wouldn’t change by a single pound. What would change quite dramatically is the deficit, which would be £30 billion larger. Now, let’s think about something like defence research, which the Government does increase funding for. But there’s room for more, says the Shadow Foreign Secretary! So let’s splash the cash and add £1 billion to the research budget. The current surplus goes down by a £1 billion – it’s still a surplus though, so that’s good. But look at the overall deficit, that’s climbed another £1 billion. So when he asks why we aren’t spending more of this alleged surplus, it’s because if you step back, there is not a surplus.

What this budget does do, Madam Deputy Speaker, is prudently invest in defence. The investments made will be part of a multi-year package that will be announced in due course. It’s not just defence though, Madam Deputy Speaker, we invest more in promoting democracy abroad and in international assistance. Of course, I find it curious to note that the Hon Member did not mention two critical components of his brief. I suppose it tells you just what the Conservative Party values.

Madam Deputy Speaker, I began my speech talking about the overall fiscal approach that this Government is taking. I find it prudent to end by returning to that point. This budget, the work that my Rt Hon Friend the Chancellor of the Exchequer and his team have put into it, represents a balanced fiscal approach for the United Kingdom. Yes, there is a deficit. But at current interest rates and inflation rates, it is a manageable one. And we shall continue to take this approach to public finances.

This budget sets Britain on course for rebalancing our economy so that no region is left behind. Yes, London received investment. But so too do other regions. The North will be better connected than ever before. The Midlands will see the benefits of improved transit. The South West will see a renewed focus on connectivity. Our investment in high speed rail will see a truly national network brought into service in the next decade. Many of the investments we make outside of high-speed rail explicitly, such as upgrading the Birmingham-Rugby line, are critical components of the high speed rail plan. Our investment in physical infrastructure will not crowd out investments in digital infrastructure – where resources like the Towns Fund will ensure those that lack high speed broadband gain access to it. Combined with our investments in skills and education, we will get to work on making Britain a more productive nation.

This budget puts Britain on track to tackle our climate crisis, in line with the recently passed Climate Change Act. Our investments in transport will bring emissions down across our transport sector. Our green investment package, to be detailed by the Environment, Energy, and Climate Change Secretary in due course, will dramatically increase our investments in green energy and climate change mitigation.

Our investments in public services and social security, detailed previously, will put Britain on track to end the public services and social security crises that we faced upon taking office.

These are the right moves for our nation, Madam Deputy Speaker. These are the right investments for our nation. And for that reason, I am proud to commend them to the House.
Caroline Blakesley MP DCB
Prime Minister (June 2019-)
MP for Manchester Central (2015-) | Labour
Traits: Fundraising Extraordionare, Campaign Guru, Media Darling, Constituency Pariah
Bill -kOreilly to be on Leno NBC tues nite to discuss his new JFK assassination book. As you prolly know, he published, many years ago, a pro-conspiracy book. Course Leno wont bring up the differences, Illl bet. Prolly doesnt even know. Might be a hoot.

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