David Rutley: I completely agree. The hon. Gentleman and I have been involved in numerous debates about promoting outdoor recreation and physical activity—for older people as well as young people—and the levy is a

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positive step further forward. I pay tribute to the Government for taking forward its sport strategy and to the Under-Secretary of State for Health, my hon. Friend the Member for Battersea (Jane Ellison), for her work in taking forward a very proactive public health agenda.

On other areas of the Budget, I felt that the Chancellor set out a clear, strong package of measures to help go on delivering the long-term economic plan and to make Britain the best place in the world to start up and grow a business. I have long talked about the importance of an enterprise economy. To achieve one, we need to focus on some key groups of people who make that happen: the entrepreneurs, the exporters, the employers and, of course, the employees who help put the pieces of that jigsaw together to create the enterprising economy that we want to see in Macclesfield, Cheshire and right across the country.

In recent years, I have also been campaigning hard on behalf of the self-employed. It is fascinating to see how self-employment is moving forward. I have been working with Demos and the RSA on various policy initiatives in this area, and it is clear that there is a long-term trend towards more self-employment—4.6 million, up from about 4 million in 2010. It is clear from the RSA’s own work that the pull factor is bringing more people into self-employment; there is not just a push factor. On the back of that, it is important that we welcome the Chancellor’s announcement on abolishing class 2 national insurance completely, to simplify the tax system for the self-employed.

The Chancellor also talked a lot about productivity, which the Government are absolutely committed to improving. For decades, the UK’s productivity has lagged behind that of other major economies. We need to address that. As a result of the drag from the financial crisis, the OBR has forecast lower productivity in the UK, as the OECD has done in the vast the majority of countries. That is why the Chancellor is absolutely right to keep an unrelenting focus on productivity and to take the strong action we need to take to bolster our economy now and for the next generation.

Colleagues should turn to page 61 in the Red Book to see the vast array of activity being taken forward to encourage more investment: lower taxes to boost enterprise, investment in infrastructure, as called for by Opposition Members, and a strong focus on science and innovation, which I believe is vital for the country and certainly for Cheshire.

I join the long list of colleagues on the Government side—and, I hope, Opposition Members, too—who welcome the fact that the Chancellor has set out that business rates will be reduced, which will have a huge impact on many small businesses. Capital gains tax has been cut; corporation tax has been further reduced to 17%. Stamp duty is to be reformed, not just in the residential sector, but in the commercial sector. These are vital steps in ensuring that we improve opportunities for investment. When we drive productivity further forward, it means more jobs and more skilled employment, which, when combined with the national living wage, will lead to higher wages, too.

Siobhain McDonagh (Mitcham and Morden) (Lab): Is the hon. Gentleman aware that, as a result of the introduction of the living wage, most high street chains and supermarkets will cut their long-term staff salaries?

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David Rutley: These are challenging issues. Clearly, there needs to be discussion between the employers and employees. The Government have made it clear that they will name and shame to highlight the organisations that are not going forward with the national living wage. We will have to wait and see, but it is a positive direction that the Government have set out, providing real opportunities to grow wages further beyond the 2% that we have seen in the last year.

The key to the long-term economic plan and the rebalancing of the economy is to ensure that we rebalance geographically as well. This Chancellor and this Conservative Government have set out a very clear narrative for the north—the first in decades. As with the long-standing challenges with productivity, we need to measure our expectations of what can be achieved now, and we should be resolutely ambitious about what can be achieved in the future.

The Treasury analysis of the opportunities from rebalancing the economy and putting more focus on the north suggests an additional £56 billion going into the northern economy over the next 15 years. That is a prize worth having, and a prize in which this Government are willing to invest. Of course the Chancellor and this Government have championed city deals and growth deals across the country, particularly in the northern powerhouse, and they have done the same today. This is a fundamental part of the Government’s reform agenda.

Local leaders and local partnerships are creating strategic partnerships, which are empowering a new scale of activity that is required to achieve the growth across the country that we want to see. Ambitious measures are being taken forward. For example, the creation of a northern transport strategy is vital. Within just two years, we have seen a fundamental transformation of our ambitions for the north—not just economically, but in terms of civic renewal.

Transport for the North will be put on a statutory footing, with a £50 million budget to 2020. There will be smart ticketing across rail services in the north, with £150 million promised for faster and more frequent train services with greater capacity. Strategic investment in High Speed 2 will have a huge impact on Crewe and Cheshire East, as well as on the north-west as a whole.

Today we heard more from the Chancellor about better links among the individual cities of the north that need to get better connected. That includes trans-Pennine rail services, better road links and making the M62 a smart motorway. There is talk now of building a case for a trans-Pennine tunnel between Manchester and Sheffield. These are fundamental and ambitious schemes. They are not just about Government funding, because private investment is being leveraged in as well. It is fantastic to know that Manchester airport has now had planning permission to take forward its £1 billion investment in a 10-year transformation programme that will be welcomed across the north-west.

Work is being taken forward to help create this northern powerhouse with the infrastructure and devolution that is required. It will connect northern cities to ensure that the sum is greater than the individual parts. In doing so, we can make sure that we create a globally significant economic entity. We hear of Randstad, Amsterdam, Rotterdam, The Hague and Utrecht working together,

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and the same applies to the Rhine and Ruhr, with Koln, Dusseldorf and Dortmund. They are stronger because they are better connected—and we have the same ambition for the north.

Success will not only be about infrastructure or devolution. We must ensure that we back the sectors that can help to drive our economic strength. That is why life sciences are so pivotal—not just in Macclesfield or Cheshire, where we are seeing an emerging life sciences corridor, but in helping the UK to continue to be a world-class centre of excellence in a leading role, creating clusters of high-skilled and high value-added jobs, as we are doing in Cheshire. I hear that clusters are likely to form in some other places down south. Oxford and Cambridge, I understand, also have some claims to be pretty good at science. The fact that we are taking scientific initiatives is critically important.

We are performing well according to a number of key output measures. We are producing 16% of the top-quality published research findings on the basis of just 3.2% of the world’s R and D expenditure. That is a sign of strength in the sector, and it is important for the Government to get behind that sector as part of their ambitions for the northern powerhouse and for our long-term economic plan. They have an important role to play as a champion of science, a funder of science, and a facilitator of scientific endeavour. I welcome recent announcements, in the spending review and confirmed in the Red Book today, that the science budget will be protected in real terms until the end of the decade. As a result, we shall have a £6.9 billion research infrastructure by 2021, which means crucially that our party can deliver on its manifesto commitment to achieve record investment in the country’s scientific infrastructure.

Of course, funding and spending are not the only drivers of success. The lesson that we can learn from the last Labour Government is that it is important for Governments to spend well, and to encourage businesses in the private sector to invest too. That does not mean recycling old policies and adding shiny new words. Over the weekend, we heard the shadow Chancellor talk about the “fiscal credibility rule”. Within a matter of minutes, it was deemed by many members of his own party to have a complete lack of credibility, so I am sure that businesses will not be fooled. They recall the size of the deficit that was inherited in 2010, and they recall that corporation tax stood at 28% and national insurance was set to increase. They will not be fooled by the soft words of the hard left which is currently running the Labour party. This Government are absolutely committed to increasing productivity, focusing on science, and rebalancing our economic geography in favour of the north.

4.32 pm

Chris Evans (Islwyn) (Lab/Co-op): When the Chancellor of the Exchequer was appointed to his post nearly six years ago, he was faced with several challenges: a record deficit, an increasing number of welfare claimants, and the fallout from a banking crisis of a scale that had not been seen since the 1930s. Along with each of those challenges, the Chancellor was faced with an opportunity. He could have reformed the tax system, changed the terms of welfare forever, and restored confidence to our banking system. However, he wasted each of the opportunities that accompanied those major challenges.

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For a start, the Chancellor failed to tackle the deficit by 2015, although in 2010 he had confidently predicted, at the Dispatch Box, that he would. The plan, we were told then, was to start paying off the national debt by the end of the last Parliament. In the emergency Budget statement that he delivered to the House on 22 June, he went so far as to claim:

“The formal mandate we set is that the structural current deficit should be in balance in the final year of the five-year forecast period, which is 2015-16 in this Budget.”—[Official Report, 22 June 2010; Vol. 512, c. 167.]

Here we are at the beginning of 2016-17, and the budget deficit stands at £72.2 billion. Now the Chancellor tells us, in all hope, that he will turn that into an absolute surplus of £10.4 billion in 2019-20. It is Cheltenham week, and I wonder who will win the wager that he will achieve that.

The only conclusion that can be reached is that austerity has failed to produce the growth and the tax receipts that we need if we are to end the deficit and begin to pay off the national debt. I believe that there are two solutions. We need tax reform in the short term to ensure that tax is collected efficiently and effectively, and we need to radically increase long-term investment in new and emerging businesses. The Chancellor is intent on cutting public services by £8.1 billion by 2020-21, but what is he doing to ensure that the large multinational companies that do business in our country pay their fair share of tax? Is it fair for a small business to face demands and eventual court action for non-payment of tax while a corporate giant like Google can negotiate with HMRC? Of course it is not.

The cases of Google and Facebook demonstrate that corporation tax has had its day. The UK Government raise about 7% of their revenue from corporation tax, but much of that would be collected as income tax on dividends even if corporation tax did not exist. Taxing companies locally on a fraction of their worldwide income calculated by reference to their domestic activity could be one solution to this issue. Alternatively, the Government could be bold and radical and abolish all tax incentives and other loopholes, making it almost impossible for anyone to avoid paying their fair share of tax.

The Chancellor should look at ways of spreading wealth to the regions that are traditionally reliant on the public sector, such as the north-east, Northern Ireland and, yes, Wales. As someone who travels across the Severn bridge on a weekly basis, it would be churlish of me not to welcome today’s announcement of the halving of the Seven bridge toll. However, I must qualify my welcome by saying that I wish the proposal had been the maintenance-only toll for which my hon. Friend the Member for Newport East (Jessica Morden) has been campaigning for years. We look forward to hearing the details, but I really wish that, rather than the cut being introduced in 2018, businesses could benefit from it this evening or tomorrow.

HMRC estimates that in 2015-16 there are 3,000 additional rate taxpayers in Northern Ireland, 4,000 in the north-east and 5,000 in Wales. In Wales, additional rate taxpayers pay £302 million in income tax. I urge the Government to look at regional tax rates tailored to encourage people to start up businesses in areas such as

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Northern Ireland, Wales and the north-east. That would also encourage wealth creators to relocate to those areas.

However, tax reform will go only so far towards paying down the deficit. Whether the Government like it or not, they have to put their money where their mouth is. In the future, we will face challenges ranging from ageing to climate change to antibiotic resistance, and it will be our researchers and innovators who are at the forefront of sustaining our way of life, as the hon. Member for Macclesfield (David Rutley) has just mentioned. We have a responsibility to safeguard both the quality and the productivity of our science base to ensure that we are in a position to meet those challenges. In our increasingly knowledge-based economy, the pursuit of excellence in research and innovation will be at the heart of effective strategies for sustainable growth, increased productivity, competitiveness and the creation of high-value jobs. This is the nation that broke the Enigma code and discovered DNA. Our competitors across the world recognise the value of the knowledge economy and are investing heavily in science, technology, research and education. If we want to remain world leaders in tomorrow’s knowledge economy, it will not be enough to ring-fence the science budget. We need to increase it and invest more in it.

I turn now to the final challenge. Despite being given a mandate to reform welfare, the Government have failed to grasp the problem. Focusing on jobseeker’s allowance, they have peddled the myth that most of the money goes on unemployment or incapacity benefits. In fact, 47% of UK benefit spending—£74.22 billion a year—goes on vital state pensions, which is more than the £48.2 billion that the UK spends on servicing its debt. That is followed by expenditure on housing benefit of £16.94 billion and on disability living allowance of £12.57 billion. Jobseeker’s allowance is actually one of the smaller benefits, with £4.91 billion being spent in 2011-12, an increase of 7.6% on the previous year. We can no longer tinker around the edges of welfare reform. The budget is getting too huge. We need a cross-party report that all the major parties can sign up to—a modern-day Beveridge report, if you will—to seek solutions to how benefits can be delivered in a way that reflects the modern world.

Nothing rouses the anger of the British public more than the banks. Following the financial crash of 2008, banking reform was at the top of the agenda. Sadly, this Government have been found wanting. Just this week, HSBC announced plans to close its local branch in Risca in my constituency. Already, hundreds have signed a petition expressing their anger at the closure. On four occasions over the past five years, that bank has threatened the Government that it will leave this country, yet it does not even think it important to consult the local community before closing a branch.

The Financial Conduct Authority launched a review into banking culture, but it has now been scrapped, despite the fact that customers and taxpayers are still paying the price for the failed culture in the banking sector that has been widely attributed as being among the main causes of the crash and the scandals over LIBOR and price fixing. We need to introduce competition into the banking sector to finally challenge the dominance of the big six banks. A start could be made with real-time data sharing to help consumers and promote

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competition. It is vital that better and more accurate information is shared more quickly and that banks’ current account and credit card account data, which are currently excluded, should be shared if consumers want them to be. Banks have an incentive to stop those improvements. The case is strong for regulation to make safe and effective sharing happen.

As we have seen across the world, such as in the rise of Donald Trump and Bernie Sanders in America, the public desperately want change. The Government’s response, which has been the same since they were elected, is business as usual. To people all over the country, business as usual is just not good enough any more. The system has a sense of inherent unfairness. People who are not on benefits or rich enough to pay their way out of the system are fed up with the same old slogans. They are angry and they want change. This Budget is the latest in a long line of wasted opportunities. In light of all the evidence, it is time for the Government to rip it all up and start again.

4.41 pm

Mr Jacob Rees-Mogg (North East Somerset) (Con): In broad terms, the Budget is extremely welcome. It continues the extremely sensible policies that the Chancellor set out as long ago as 2010, the essence of which is on page 127 of the Red Book, which sets out receipts and expenditure as percentages of GDP. Tax receipts will run at 35.7%, 36.3%, 36.9%, 36.9% and 37% of GDP over the next few years, which is in accordance with the normal long-run averages. Only in the highest years of tax receipts, going back to the 1970s, has taxation in this country managed to get as high as 38%. That sets out a limit for public expenditure if there is to be a balance, which it is obviously important to achieve when the economy is going well. We therefore see that public expenditure will be managed in line with the receipts that will come in, so that expenditure will be less than receipts by the end of the period.

That is absolutely what the Chancellor promised all those years ago when he said that he would mend the roof when the sun was shining. A glimmer of sun has come through the clouds of international crisis and the Chancellor has been busy on his ladder fixing the roof with his nails, his hammer and his wood. The process is now nearing completion, for which he deserves a great deal of credit.

Turning to the details of the Budget, the Chancellor also deserves much credit for his reforms of corporate taxation. It was Napoleon who first called us a nation of shopkeepers, and I noticed that the Chancellor quoted Napoleon in his speech. That may say something about his European ambitions, with which I am in less agreement, but we are indeed a nation of shopkeepers. Reducing the burdens of rates, VAT and bureaucracy is only to be welcomed and is thoroughly desirable. Ensuring that multinationals pay taxation according to law is also desirable, but it is always worth remembering that tax avoidance is perfectly legal. If tax is being avoided, it is for this House to change the law so that tax must be paid. It is not some moral virtue to pay more tax than the law requires, so removing loopholes is to be much commended.

I fully support the broad thrust of what the Chancellor is doing. He has got it right, and most of his tax measures are welcome, particularly his changes to personal

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taxation, an area in which I would like him to go further. Having made £8 billion from cutting the top rate of income tax from 50p to 45p in the pound, he should go further in an exuberant, Laffer-like fashion and cut it back to the rate at which Gordon Brown had it throughout his period as Chancellor.

The area with which I find the most disagreement is found on page 19 of the Red Book, which sets out the economic opportunities and risks linked to the UK’s membership of the European Union. [Interruption.] I am delighted that the nationalists, who so crave independence for themselves, none the less wish to be shackled to the European Union—it is one of their idiosyncrasies that many of us find so charming. If I may, I will deal with that extraordinarily tendentious page, strewn with errors, overstatement and over-egging of pudding. Let us start with the very first line, which states:

“Membership of the EU has increased the UK’s openness to trade and investment”.

That is entirely disputable. In fact, all our membership has done is put us in a customs union with very high levels of regulation and a high external tariff. The tariff on dairy products coming into this country is 42%, much to the disadvantage of our friends in New Zealand. So EU membership has not made us more open; it has closed us to some areas.

Page 19 continues with the statement:

“The UK’s full access to the single market…clearly increases the openness of the British economy”.

There is a word for that, and it is “balderdash”. What access to the single market does is put the dead hand of regulation on the 95% of British businesses that never trade with the continent. They are suffering from that regulation, and their business is made harder to do. This has nothing to do with openness; it is to do with burdens.

Then we get to a bit that I think shows the Chancellor’s wonderful and sophisticated sense of humour. He says:

“At the February 2016 European Council, the Prime Minister secured a new settlement for the UK in a reformed EU.”

It has to be said that the EU was most certainly not reformed at that Council, and our settlement in it was so small as to be hardly noticeable. At the same time it gave away our ability to veto any treaty for fiscal union to follow the monetary union. We said we would do nothing to obstruct that, so we gave away our strongest negotiating hand for nothing—for thin gruel.

Jim Shannon: It is always a pleasure to listen to the hon. Gentleman’s contributions in the House—we enjoy them very much. Does he agree that one thing the Prime Minister did not secure was anything for the fishing sector, and that he also secured very little for the farming community? Does he agree that the Prime Minister should have tried to get a settlement with those two things at the forefront of his agenda, to try to achieve things for those sectors? Those were just two sectors that he neglected.

Mr Rees-Mogg: I agree with the hon. Gentleman entirely that fishing and farming—the common fisheries policy and the common agricultural policy—are two of the great disasters of the European Union. The fact that they are not reformed and take so much of the budget—40% in the case of agriculture—is a considerable disgrace.

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Mark Pritchard (The Wrekin) (Con): I was listening to my hon. Friend and waiting for farming to come up. Is he aware that the National Farmers Union in Shropshire and the NFU nationally want to remain in the EU, believing that being an active member of the EU is actually very good for British farming?

Mr Rees-Mogg: Oh the great panjandrums, all with glee, merrily gather to support the Government, in the hope of their knighthoods, their peerages and so on. But when I speak to Somerset farmers, the finest farmers in the land, I see that they value the independence of their nation above a cheap ride from Brussels. Furthermore, we pay into the CAP almost double what we get out, so our farmers could have more money if we were independent.

Mark Pritchard: Will my hon. Friend give way?

Mr Rees-Mogg: I will not give way again, because I do not get a bonus minute for doing so and I need my minutes in this particular debate.

I want to get on to the third paragraph on page 19 of the Red Book, which talks of the “profound economic shock” that would be created by leaving. There is the over-egging of the pudding to which I was referring. The OBR is characteristically measured, saying that in the timescales with which it deals it is not possible to model any changes from leaving the European Union, but the Red Book says otherwise. It states that there will be years of uncertainty, but that assumes that our partners in Europe will lie and cheat. But they are our friends, or so the Government will have us believe, and article 50 of the treaty on the functioning of the European Union provides for a very straightforward two-year process for extracting ourselves, which my right hon. Friend the Prime Minister has said he will exercise if Brexit is successful. Again, what the Red Book says is exaggerated, wrong and bordering on the hysterical. It then goes on to talk about the single market in services, but that has still not been completed. It was something the Prime Minister was arguing for and did not get in the rather hopeless renegotiation he tried in Brussels not so long ago.

The final paragraph of page 19 states:

“Remaining in a reformed EU will make the UK stronger, safer and better off.”

[Interruption.] The Solicitor-General cheers from a sedentary position, as he has cheered these points since he was speaking to Edward Heath many years ago and thought that that was the way forward.

The EU fails in all that it does: it fails in the common agricultural policy; it fails in the common fisheries policy; and it fails in migration policy. The euro has been ruinous for those member states that have joined it. The idea that we are richer and securer with this disastrous project is cloud cuckoo land stuff. It is broad sunlit uplands for the UK economy if we deregulate, if we trade with the rest of the world, and if we look beyond this narrow European focus.

You will remember, Madam Deputy Speaker, that when Gordon Brown was Chancellor of the Exchequer, Conservatives complained that the Red Book, instead of being the austere document that set out the facts of the economy, was used to spin the Government’s view of the world. What a pity it is that this Red Book is following the Gordon Brown model of Red Books, rather than that higher tone that previous Tory Chancellors have followed.

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I want to finish with one point on which I disagree with Her Majesty’s Government even more than I do over Europe—[Hon. Members: “Surely not!”] Surely, yes. I am talking about the outrageous proposals to bring my county of Somerset under the yoke of Bristol in this devolved metro Mayor system that none of my constituents want. We admire Bristol. We think Bristol is a fine and fabulous city, but it does not need to have Somerset money to subsidise it. It can live off its own. We tried all this with Avon. What Avon meant was that Somerset paid and Bristol spent. I am glad to say that the unitary authorities of the west of England area—what used to be known as Avon and will be Avon again if the Government have their way—will each individually be able to vote down this proposal. I will urge councillors in north-east Somerset—I know that councillors in north Somerset have previously rejected the same idea—to stand firm and not be bullied by the Government. They should not be seduced by £30 million a year, which is considerably less divided by four than the cuts that they have successfully implemented over the past six years. They must be bold and independent. I want independence for my nation, and I want independence for my county.

Alison Thewliss (Glasgow Central) (SNP): Join us!

Mr Rees-Mogg: I am not Scottish, otherwise I hate to think what I might be saying in that regard. I am a Briton, and I am for the Union because my country is the United Kingdom. I want freedom for the United Kingdom and freedom for Somerset. I say no to devolution and no to European tyranny.

4.52 pm

Alison McGovern (Wirral South) (Lab): A “Just say no” speech then from the hon. Member for North East Somerset (Mr Rees-Mogg)!

I want to begin my comments not from where the hon. Gentleman finished his speech, but from where he began when he read out the figures that will get us to the promised surplus, which, according to the Chancellor ages ago, we should have reached. He said that we will get to the “sunlit uplands”, or, in the words of that great song:

“The sun will come out tomorrow.”

However, there is a pretence. The Chancellor is not the austerity iron Chancellor that we have been led to believe he is. He is a rule-breaking, U-turning, target-missing chancer, who is living on the never-never and who never passes his own tests. That is why I want to make my contribution today not on economics, but on cynicism. I am talking about the cynicism that people in this country will feel when they realise that this is a sham. In fact, my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) made the point quite well, too. She talked about how people had been promised a living wage, but how, in their pocket, there will be nothing of the sort.

That is not the only place in which the Chancellor has said one thing and done another. He told us that he had three targets in the last Parliament and they were all missed except one—the debt target. He said that debt would be falling, not rising, by the end of the last Parliament. Well, it was. Debt was falling, but only because he flogged off some assets to make it so.

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Margaret Ferrier (Rutherglen and Hamilton West) (SNP): The Chancellor opened his Budget speech by telling the House that he is acting now so that we do not pay later. The UK is paying in the region of £37 billion a year in debt interest alone, greater than the entire Scottish block grant. Does the. Lady agree that although the Chancellor believes that that deficit will soon be eliminated he has conveniently ignored the massive public debt that has been racked up?

Alison McGovern: I thank the hon. Lady for that intervention. I have asked the Chancellor in this House on a number of occasions whether he believes that he will ever see a surplus, not a deficit, before he leaves the Treasury for the last time. I have never had an answer.

On debt, in the last Parliament we were told that it would be falling by the end of the Parliament and, technically, it was. That was the fig leaf that saved the Chancellor’s shame as he sold assets to ensure that the debt fell. In fact, the OBR made it clear in July that this fire sale would make the difference between debt rising and falling as a share of GDP in 2015-16. What we have heard today is the Chancellor’s most significant next failure, because it finally removes that fig leaf. He has failed all the tests he set himself.

This is not, as I said, about economics. It has nothing to do with whether I think that the Chancellor picked the right debt target. This is about what he promised the British people. I ask Ministers not to deal so lightly with the promises they make to the British people. The British people deserve better than that.

On the deficit, we should be cynical about the Government’s claims. They swept to power in 2010, saying that they could easily close the budget gap in one Parliament. It has not taken them one and it looks set to take them two, but here is the detail we can see in the Red Book. My hon. Friend the Member for Nottingham East (Chris Leslie) said earlier that these were heroic assumptions, and they are, because 60% of the surplus the Government say that they can get comes from just changing the timing of corporation tax arrangements. This is a fiddle and a fix and the British people will be deeply cynical of a Government who come to this Dispatch Box and say that they have fixed the roof while the sun shone when they have done nothing of the sort. Why should we ever believe them again? They have breached the welfare cap that they said they would stick to; they lost our credit rating.

I have set out why we should be deeply cynical about what the Chancellor said today. It gives me no great pride to encourage people to be cynical about what politicians say; our democracy is one of the best in the world and people should be able to believe what we say. However, worse than what the Chancellor did say was what he did not say. He left out of today’s Budget some profoundly important subjects. First, on banks, would it surprise this House to realise that as we speak important financial institutions such as building societies are still being hammered by the bank levy when they did absolutely nothing to cause the crash and should be the future of financial institutions in this country?

On the Women Against State Pension Inequality campaign, there was nothing at all. Deathly silence for the thousands of women in this country who fought for everything in their time at work and are now being hammered as they retire. There was not a single word

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from the Chancellor about the WASPI campaign, despite the fact that my hon. Friend the Member for Pontypridd (Owen Smith), the shadow Secretary of State for Work and Pensions, generously proposed cross-party arrangements for transitional payments to those women.

On the NHS, I am equally worried. There was no mention at all of record deficits in the NHS. We should be worrying about not just the budget deficit that but the deficit in trusts up and down the country that make me fearful about whether we can keep the doors of A&Es open. People believed the Tories when they mounted that NHS campaign. They believed that they had changed. I think we know now that they have not changed at all.

On that subject, the Chancellor made not a single mention of child poverty today. When the Tories backed the Child Poverty Act in 2009 and 2010, did any of us really think that just five years later, they would try to rip it from the statute books? Did any of us think that politicians could be so cynical as to turn their backs on children in poverty—to tell parents they were going to get a national living wage but remove the support, through the social security system, that goes to families that makes sure no child in our country is poor? I really do not think the British people thought that when the Tories told them they had changed, they would so quickly turn their backs.

I believe it is a disgrace that the capital gains tax cut that will hand out money to the rich is worth more than the pledge that the Tories have made on childcare. Even though they came to the country in May and said, “Never mind what the Labour party has done, providing support for childcare for the first time in our country’s history; we can better that,” at the first opportunity, in their Budget, they are prepared to spend more money on making rich people richer than on helping get families to work. That is a disgrace, and it will make people wonder what they voted for.

I am sorry to make a speech not about the economics, or about whether we should invest, or about what particular part of our economy could improve its productivity. I am sorry not to be here talking about the brilliant opportunities our country has, whether they are in science, or in our young people’s learning and the businesses they will run in future. It pains me that our democracy is reduced to this kind of spin. But the Chancellor, unfortunately, has given me no choice. I read that Red Book and I remain very cynical.

5.1 pm

Mr Alan Mak (Havant) (Con): I support this Budget. It puts the next generation first, it gets Britain fit for the future and it protects our economy against the numerous economic headwinds in the global economy. It is a Budget that is good for Britain and that is good for the Havant constituency.

This Chancellor has presided over the fastest-growing economy in the developed world. The deficit has been cut by two thirds and we have low and stable inflation and interest rates, and record employment. In my constituency, the number of jobseeker’s allowance claimants has fallen by over 50% since 2010. To put it simply, the long-term economic plan is working in this country.

Those strong fundamentals are all the more important in a world where the economic headwinds are facing our country. Asia faces a slowdown, the eurozone suffers from systemic weaknesses and the middle east and

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north Africa still face elements of turmoil. Those are real and credible threats to our economy, and this Chancellor has presided over a resilient, strong and growing economy.

But at the heart of our economy are not just numbers and statistics, important though they are. What is at the heart of our economic success story since 2010 is people—hard-working individuals, families, entrepreneurs, savers, strivers; all the great people we see in the towns, villages and cities represented across this House. All those groups are helped by the Budget. I particularly welcome the rise in the tax-free personal allowance to £11,500 by April 2017. That is a tax cut for 31 million hard-working people and helps them keep more of the money that they work hard to earn and save.

The higher rate threshold for income tax is also rising to £45,000, which will mean that middle-income earners in the Havant constituency and across the country will benefit. It is actually a £400 tax cut for those taxpayers. I also welcome the fact that fuel duty is frozen for the sixth year in a row, and as Members know from the Chancellor’s speech, that is a £270 duty cut for every business and a £75 cut for every driver. That will help the manufacturing businesses, the drivers and the hauliers in my constituency, at Langstone technology park, at New Lane and beyond.

Havant is also home to a wide range of small businesses and entrepreneurs—self-made people, who are the backbone of our local economy. Whether those people are in Hayling, Havant, Emsworth, Bedhampton or any other part of the Havant constituency, the small business reforms in this Budget will help them to make a more secure and prosperous future for themselves.

I declare an interest and refer the House to my entry in the Register of Members’ Financial Interests as the founder of two small businesses. I am a passionate supporter of small businesses, both in my constituency and across the country. For that reason, for example, I launched the first-ever Havant small business awards, and I welcome the support that Ministers have given me in doing that.

Small businesses in my constituency and self-employed people in Havant and across the country will benefit from the reforms announced by the Chancellor today. I particularly welcome the fact that corporation tax will be cut to 17%. That will support massive job creation both in my constituency and across the country. I welcome also the permanent doubling of the small business rate relief and the increase in the maximum threshold for relief. That means that 600,000 small business across the country will no longer pay any business rates at all. That is a welcome move for our economy at a critical time in our recovery. I welcome the abolition of national insurance for self-employed people. That is a £130 tax cut for the 3 million self-employed people across our enterprise nation in my constituency and beyond.

All the measures that I have mentioned and all those announced by the Chancellor this afternoon will help to attract new businesses to the Havant constituency. We are very lucky to be going through a period of rapid regeneration in Havant and I look forward to welcoming new businesses to Market Parade, Dunsbury Hill Farm,

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the Solent retail park and Langstone technology park. All those areas of strong economic activity will be booming as a result of the Chancellor’s Budget today.

Not only will the measures announced in the Budget help my constituency, but they will help this Government reach one of their major targets, which is to get our country into the top five in the world for doing business. We are already up to sixth place in the world in the World Bank’s ease of doing business index and in second place in the global innovation index, ahead of our major competitors, Germany, France, Japan, Australia and all the other countries that we are running against in the global race for success. Today’s Budget is welcome for small businesses, the self-employed and our country in the global race for success.

Finally, I draw the attention of the House to the measures in the Budget that help young people. This Budget truly puts the next generation first. I wish to highlight three measures in particular—first, the lifetime ISA, which will encourage a new generation of savers. As hon. Members will have heard in the Chancellor’s speech, for every £4 that a young saver under 40 deposits in a bank, the Government will top that up with another £1. That is good news for savers under 40, whether they are new graduates, apprentices, young professionals, young entrepreneurs or anyone who has just started a family. That will be a welcome top-up, helping to boost our savings culture across the Havant constituency and across the country.

Secondly, I welcome the Chancellor’s commitment to fairer school funding. Hampshire has traditionally been an underfunded local authority. I look forward to responding to the Government’s consultation. Many of the schools in Havant have received good Ofsted ratings in the past year, such as Purbrook Park School, Havant College, Havant Academy and Crookhorn College. Those schools will be helped by the increase in funding and I look forward to working with the Government to ensure that we get our fair share in Hampshire. The increased funding for schools in Havant will mean that social mobility is increased. As we run the global race for success, the most important thing we can do for our young people is give them a fantastic education. In the global race for success we cannot afford to leave behind the talents of any young person, and I am delighted that the increased funding that we will receive in Havant for our schools will help our young people achieve their potential.

Finally, I welcome the sugar levy. Before I came to this place, I had the pleasure of being involved as a trustee of one of Britain’s leading school breakfast club charities. I know that the hon. Member for Ilford North (Wes Streeting), who is no longer in his place, has supported the same charity. Together we have been working with some of Britain’s most deprived communities to try to tackle the obesity issues that some of those communities face. I look forward to the sugar levy playing a role in that. Encouraging more school sport and healthier lifestyles for young people is one of the benefits of this Budget.

In conclusion, this is a Budget that has strengthened Britain’s prosperity economy and boosted Britain’s opportunity society, helping our country get fit for the future. Because of those tough decisions that the Chancellor has taken, we have strong public finances, a growing economy and an entrepreneurial mindset. These Budget

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measures reinforce the success that this country has achieved since 2010. I particularly welcome, as I mentioned, the tax cuts, the lifetime ISA and the fairer school funding for Havant and other communities. I therefore join other hon. Members and the Chancellor in commending this Budget to the House.

5.9 pm

Tim Farron (Westmorland and Lonsdale) (LD): My party—the Liberal Democrats, or those of us who are left—still feels very proud of the part it played in getting this country this far. The Chancellor said he wanted to abolish the Liberal Democrats, and given that he has failed to meet every other Budget target, that is the best news I have heard in months. In his more generous moments—I am sure he has some—he will acknowledge that Britain is in a stronger economic position today because of the choices we made.

Britain is now at a crossroads. The structural deficit will be gone next year, so the Chancellor is choosing to make unnecessary cuts to meet an unnecessary target. It is his choice to remove support from people with disabilities. It is his choice to cut universal credit. It is his choice to stand by as child poverty increases. The Liberal Democrats got this country to the crossroads, with the Government now, but the Chancellor has chosen the path into the mire.

An awful lot of what the Chancellor said today we have heard before: big promises from the Dispatch Box that are never met—less long-term plan, more short-term scam. This is a microwave Budget reheated again. We have transport projects delayed and abandoned, and housing projects stalled and unfunded.

Not only are flood-hit communities such as mine left desperately holding out their hands for urgent support, but the Chancellor is asking flood victims to pay, through their premiums, for the defences he should have built in the first place. Actions speak louder than words.

The cost to Cumbria of the infrastructure destruction from the floods in December is £500 million—the Government have given £2 million. The main road that connects the whole Lake District is still closed. Never mind that it costs small businesses and big businesses across the Lake District £1 million every day the A591 is shut—this Government care little about the north. They will make grand announcements, but they will achieve nothing.

Not a penny of the £125 million in EU solidarity funding the Government were dragged kicking and screaming to apply for has been dedicated today to the north or to any of the communities that are reeling and recovering from the floods that hit us in December. There has been no mention at all of fully funding any of the flood relief projects mentioned in the Chancellor’s speech.

The Chancellor says that this is a Budget to help young people. He says he wants to increase the length of the school day, but what good is a longer school day when there is no one at the front to teach? Those of us who do not have tens of thousands of pounds to send our children to private schools have more sympathy for those working in the state sector—more sympathy for the teachers who teach our children. I do not want my children’s teachers to be put under ever greater pressure. I want more teachers. I want them to be paid a fair wage. I want them to have the time and the space to

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create, to inspire and to teach. If the Chancellor wants schools to lengthen the school day, he must give teachers the money they need to do that properly.

This is a repeat of the seven-day-a-week NHS. What the Health Secretary is doing to junior doctors, the Chancellor now wants to do to teachers—teachers who are underpaid, overworked and undervalued by the Government. Every school knows that there is a massive recruitment and retention crisis, which is absolutely and totally ignored by the Chancellor.

Mr Mark Williams (Ceredigion) (LD): As a former teacher, I agree very much with what my hon. Friend says. How will the drive towards academies enhance teacher confidence and, indeed, standards in schools?

Tim Farron: My hon. Friend makes an excellent point, based on real, first-hand experience. We know that the drive to compulsorily move all schools to academies is about centralisation, not localisation; it is about changing the deckchairs, making life harder for headteachers and teachers, and listening to special advisers, rather than teachers. It is hugely damaging for our educational system and our children.

The fundamental problem in schools across the country at the moment is the recruitment and retention crisis, and the Government are today choosing to put teachers under extra pressure. Instead, the Chancellor should pay our teachers more.

Perhaps the Chancellor knows young people who have the ability to save £4,000 a year, but I do not, so let me enlighten him: the lack of an ISA scheme is not the reason young people are not saving; it is the debt and soaring house prices that he is heaping on them.

This Chancellor’s ambition is not to devolve power but to devolve debt. His decision on business rates is a good one for business and one that we have been calling for, but he refuses to pay for the devolution of business rates, and that will be disastrous for the communities in which these businesses are located. He is moving his tough decisions on to local government. Social care, local transport and rubbish collections will all be under much greater threat. With his changes to public sector pensions, our schools and hospitals face a further bill of £2 billion. That is a stealth tax on education and health—not a headline for the Chancellor but a massive headache for headteachers, doctors, and nurses.

This is the Chancellor’s sweet and sour Budget. He makes bold claims that never materialise, masking real pain. There is no serious immediate investment in transport, broadband, housing or green energy, just far-off plans that exist only on a Whitehall spreadsheet—plans written by political advisers no doubt high-fiving each other in the boardroom over grand announcements that will never actually materialise, ignorant of their impact on real people.

The Chancellor talks about fixing the roof when the sun is shining. There are 0% interest rates. The sun is shining yet he chooses to knock holes in the roof. This would be the moment to be ambitious and to invest in the infrastructure for the long term economic future of our country. On the one side, we have a Government choosing to attack the very fabric of our communities, and sadly, on the other, an Opposition too focused on themselves to be able to stand up for the real people in

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this country. We owe our constituents, and we owe Britain, better than this. It is time that we had a Government who showed a little more respect to the people in this country who care for us, who teach our children, and who keep us safe. Britain deserves better.

Several hon. Members rose

Madam Deputy Speaker (Natascha Engel): Order. Before I call the next speaker I am going to have to drop the time limit on speeches to eight minutes, with immediate effect.

5.16 pm

Robert Jenrick (Newark) (Con): I rise to support today’s Budget. Early in the life of the previous coalition Government, the Chancellor chose to address four central pillars: first, making addressing the deficit mission-critical to this country; secondly, reducing taxes on businesses and individuals by as much as we can afford, given the poisonous legacy of the previous Labour Government; thirdly, investing in the infrastructure and skills that we need to position the United Kingdom for success in the future; and fourthly, cutting the size of government and repositioning ourselves as a competitive economy driven by the private sector so that all of us, and all our children, can face the future with confidence.

Those principles have served the Chancellor well and served my constituents in Newark and Nottinghamshire well, and we heard him address them again today. Let me deal with each in turn. First, on addressing the deficit, the Chancellor continues to make this difficult task mission-critical to himself and to the Government. I was delighted to hear that he remains committed to producing, and is on target to produce, a surplus at the end of this Parliament. It came as no surprise to me to hear that had a Labour Government won the general election in 2010, we would have been £930 billion more in debt. There would have been £930 billion more cumulative borrowing if we had followed Labour’s plans. Though the task ahead remains difficult, we all know what the alternative would have been.

It is rare that I compare the Leader of the Opposition to one of my heroes, Ronald Reagan, but today he reminded me of one of my favourite Reaganisms when the late President said:

“I’m not worried about the deficit—it’s big enough to take care of itself.”

It is not too large to take care of itself—it has to be the central objective of this and any future Government. I am one of those MPs who would place a deficit or national debt clock on a wall of the House of Commons instead of our current one so that all Members and all Chancellors could remember how important it is. Nevertheless, the deficit is falling.

I strongly welcome further, fairly modest, efficiency savings in Government Departments. Anyone who has worked in a business knows that each and every business, like every Government Department, can and should constantly be looking to make modest and sensible efficiency savings. The Department in which I have a small involvement, the Ministry of Justice, is looking to deliver 50% savings in its back-office functions while delivering—I think to almost universal applause across

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the House—an important and, I hope, successful reform agenda in our prisons and justice system. That can and must be done.

We have to remember that we are not primarily reducing the deficit through such savings. By the end of this Parliament, we will be spending more every year than was spent in the last year of the last Parliament, and there was a rise in public sector spending in the last Parliament. The deficit is falling—and it will continue to fall—not primarily through spending cuts, but through increases in tax revenues from a more prosperous and growing economy, which is being delivered by this Government.

When it comes to reducing taxes on business and individuals to the extent we can afford, given the economy we inherited, I strongly welcome the further reductions in corporation tax. In April 2020, it will be extraordinary to have a highly competitive international corporation tax rate of 17%, compared with 28% when the coalition Government took office.

I welcome allowances for new entrepreneurs and those of our constituents who take part in Airbnb, eBay and Uber. They are the vanguard of free enterprise—the hard-working men and women of this country who are going out there, using disruptive technologies, providing good services for consumers and trying to make a living for themselves. They should be, and are being, supported by this Government.

As a Member of Parliament who represents many small market towns, I also welcome changes in small business rate relief. More than 50% of my constituents who are of working age work in small and medium-sized businesses, so that is extremely welcome.

Contrary to comments made by a couple of Opposition Members, I also welcome the reduction in capital gains tax, which was high in this country by international standards. Although it was low for entrepreneurs who made use of, for example, the entrepreneurs’ allowance, it needed to be reduced to make this country competitive. That is not a tax cut for the rich; it is a tax cut to drive investment in small, medium and large businesses in this country, to create jobs for all of our constituents. Some of our competitors—this country’s real competitors —such as Singapore have 0% capital gains tax. This essential change will make sure that we remain a highly competitive country and back the productive parts of our economy, by which I mean not those people who speculate on buy-to-let properties, but those who use their post-tax income to invest in businesses to create the jobs of the future.

On investing in infrastructure, I welcome further investments to drive the productivity that this country desperately needs. In particular, I welcome the major announcement in the Red Book that the Chancellor will bring forward the feasibility study and planning for a major £150 million bypass around Newark. I cannot imagine why anyone would want to bypass Newark—a surprisingly large number of Members have come to know Newark over the past few years—but that will address the appalling gridlock there and make a huge difference to my community. Investment in flood defences is also very important for us in Nottinghamshire, building on previous investments in the past.

Last week I visited a business in Newark that has 1,400 employees and a turnover of £150 million but only one apprentice, so the apprenticeship levy will

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make all the difference. That company is already planning the way in which it can build on its record and create new apprenticeships, which is highly welcome.

I also welcome the tax break for museums; I played a small part in persuading the Chancellor to do that. It is designed not to help the big national museums in the likes of London, but to give them extra resources and incentives to get out of London and take culture to the regions, provinces and rural areas of the United Kingdom where people of all incomes, particularly disadvantaged people, do not have the same access to arts and culture as those who have the privilege of living in central London. That will make a huge difference in creating the cultural powerhouse that we all want the midlands and the north to be in the future.

I strongly support today’s Budget. It builds on the Chancellor’s very strong track record on the four pillars I have mentioned, and continues to reduce the size of government and to back free enterprise and private businesses to build the jobs and investment of the future.

5.24 pm

Jonathan Edwards (Carmarthen East and Dinefwr) (PC): Diolch yn fawr iawn, Madam Deputy Speaker. It is a pleasure to speak in the debate, and to respond to the Budget on behalf of Plaid Cymru. Of all the commentary I have read in the weeks leading up to the Budget, the piece that by far most struck a chord with me was the article by Paul Mason in The Guardian. As we are all aware, the economic skies are darkening, and the Chancellor admitted as much in his statement. In my view, we are in the third stage of the great recession that hit the global economy in 2008. First came the banking crash in 2008, followed by a crisis in the eurozone, and now we face a major slowdown in the emerging economies, which will prove to be a massive headwind for the global economy.

It is no wonder, therefore, that the Chancellor’s prognosis is far darker than that in his autumn statement of only a few months ago. If a week is a long time in politics, three months is clearly a very long time in economic forecasting. In the OBR’s report, the very first point in the executive summary, point 1.1, states:

“In the short time since our November forecast, economic developments have disappointed and the outlook for the economy and the public finances looks materially weaker.”

That sums up this Budget in one small point. The Chancellor’s economic strategy since 2010 has been built around monetary expansion by the central bank to counteract his fiscal contraction. The major consequence of that has been a failure to rebalance the economy on a sectoral basis. We are even more reliant on consumer spending than we were before 2008; it accounts for two thirds of UK GDP. We are also facing another obvious bubble in house prices.

What we needed in the Budget was an emphasis on exports and business investment. Exports, according to the BBC in the lead-up to the Budget, are 6% down on 2014. Chart 3.35 of the OBR report forecasts that exports will be 36% lower than the UK Government’s aspiration in the 2012 Budget of an increase in their cash value to £1 trillion by 2020. Thirty-six percent below projections is an incredible figure. Business investment, according to the OBR, fell by 2.15% in the last quarter of 2015, and EEF, the manufacturers’

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organisation, notes that investment confidence is plummeting. Productivity is chronically low compared with that of G7 competitors, and it is a staggering 18% below pre-recession levels. The trends have again been reversed downwards by the OBR today.

According to Credit Suisse, wealth inequality continues to grow, despite growing evidence that tackling inequality is an economic growth driver.

Margaret Ferrier: The Chancellor stated that the richest 1% are paying 28% of all income tax revenue. What he did not mention is that 26 pence in every £1 of wealth created went to the richest 1%, while only 7 pence went to the poorest 50%, or that the richest 1% increased their collective wealth by 79% over the last 15 years. With that in mind, does the hon. Gentleman agree that the Chancellor was talking nonsense when he said “inequality is down”?

Jonathan Edwards: I am extremely grateful to the hon. Lady for her intervention. We saw today tax measures that will exacerbate those growth inequalities, as highlighted by the former shadow Chancellor, my hon. Friend the Member for Nottingham East (Chris Leslie), in his contribution, which was fantastic, if I may say so. The tycoon tax cut in capital gains tax will exacerbate those differences.

That brings me back to Mr Mason. The Chancellor’s biggest crime is that not only has he failed to fix the roof, but he has failed to change the foundations on which the UK economy is built. So much for the rebalancing we were promised. So much for the march of the makers. So much for tackling geographical and individual wealth inequality. The Budget included the much-heralded extra cuts of £3.5 billion in response to the slowdown in projected growth. Those cuts are deemed to be necessary only because of the fiscal mandate and charter, which the Treasury imposed on itself. As we warned at the time, the mandate is a Trojan horse to enforce austerity, and it was very disappointing that my Labour party colleagues, even under the current leadership, supported the Tories in the Lobby on that measure. At this point, I should note that even the Institute for Fiscal Studies, in its green budget, was very critical of the mandate and its impact on fiscal policy.

The public continue to be at risk from another catastrophic failure of the banking sector. In my party, we have always maintained that we need to split retail and investment banking. It is interesting that Sir Mervyn King, the former Governor of the Bank of England, and Sir John Vickers, the chair of the Independent Commission on Banking, which was set up following the crash in 2008, have called for greater safeguards and criticised the Treasury for watering down plans to rein in the banks and reduce the risk of a future banking collapse. Given the darkening global economic skies and the possible exposure of London banks to the slowdown in emerging markets, we were very disappointed that there were no measures in the Budget to protect the public from another banking failure.

We are also very disappointed that there was no guarantee in the Budget that Welsh public sector pension assets would be pooled into a Welsh-specific fund for investment in Welsh infrastructure. We have no opposition in principle to the Treasury plans to have five sovereign wealth funds, as it calls them, out of pension assets, but our assets in Wales will clearly be less than the figure

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that it has set of £25 billion. Our assets are worth about £16 billion. There are huge dangers for us in Wales if our assets are pooled with an English region, because it would mean a lot of that investment would once again flow out of my country.

The Budget completely failed to secure parity for Wales with Northern Ireland and Scotland on fiscal responsibility. There are full corporation tax powers for Northern Ireland and full income tax powers, as well as powers on airport duty tax, for Scotland. Even Labour in Wales is now calling for the devolution of air passenger duty to my country. On two occasions, I have tried to amend the Finance Bill to devolve the tax, and I will return to that when the Finance Bill is introduced in the House. As we say in Wales, tri cynnig i Gymro—three attempts for a Welshman. I hope my Labour colleagues will join me in the Lobby in the next month or so.

The big question is: why does the Treasury continue to treat Wales as a fiscally second-class nation? We need an arm’s length body to deal with such major fiscal and funding issues across the UK. I was very glad to see the recommendations, only yesterday, of the Finance Committee of the National Assembly, under the chairmanship of my colleague Jocelyn Davies, calling for such a body to be set up so that the Treasury loses its ability to manage such vital funding decisions.

We are very happy to see the sugar tax policy in the Budget. I might add that it is a long-held Plaid Cymru policy. It was rubbished at the time by the Labour party and the Conservative party in the National Assembly. We are delighted that our project has become a mainstream one. As always, where Plaid Cymru leads, the other parties will follow.

The announcement on the Severn bridges will gain many headlines in Wales. What the Chancellor neglected to tell the House is that the bridges will of course return to public ownership in 2018. He has in effect announced today the political equivalent of taking a fiver out of somebody’s back pocket, giving them back some change and expecting them to be grateful.

Our other big demand in the Budget was to increase infrastructure spending sharply to at least pre-recession levels—the equivalent of 1% of GDP—which is about £19 billion extra per annum for the UK and £1 billion extra per annum for Wales. The lead-up to the Budget was heavily trailed with announcements about projects for the north of England—primarily HS3 and the proposed Manchester to Sheffield road tunnel, but also Crossrail 2. These multi-billion projects only go to show the Treasury’s failure to ensure fairness for Wales in relation to HS2. The statement of funding policy that came with the comprehensive spending review gave us a 0% rating, whereas Scotland and Northern Ireland both had 100%, which has set a very worrying precedent. I was extremely disappointed that rather than standing up and fighting for our country, the Labour Government in Wales decided to throw in their lot with the Tories on that specific issue, which will come back to haunt us for years to come.

5.34 pm

James Berry (Kingston and Surbiton) (Con): There is much in the Budget that I welcome. Before coming to my main point, I will mention four particular things:

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measures to reduce childhood obesity; money to tackle homelessness that shames our city and our country; a freezing of fuel duty; and the cutting of taxes for small businesses and corporation tax. I remind Opposition Members, who sometimes make crass political points about corporations being favoured over people, that it is companies that create the jobs our constituents rely on.

I welcome the funding for Crossrail 2. I campaigned in the general election, along with my hon. Friend the Member for Richmond Park (Zac Goldsmith), for Crossrail 2 to come to as many stations as possible in the Royal Borough of Kingston upon Thames. I am delighted that the plans include the intention to come to every station in our borough. Since my election, I have taken every opportunity to make sure this project is realised, but it is certainly not something I or my party have done alone. It has been a cross-party effort, and I pay tribute to the right hon. Member for Tottenham (Mr Lammy), who led the all-party group on Crossrail 2 with real aplomb.

I was delighted last week when the National Infrastructure Commission gave its backing to Crossrail 2. I am even more delighted now that the Chancellor has given it a green light in the Budget. Crossrail 2 asked for two things from the Treasury: funding for the pre-legislative work, and a commitment to introduce a hybrid Bill in this Parliament to allow the project to get off the ground. The Budget has granted £80 million, along with that commitment.

Simon Hoare (North Dorset) (Con): As well as the benefits this project will provide to my hon. Friend’s constituency and constituents, does he recognise that freeing up potential extra capacity in Waterloo station will be of huge benefit for those coming up from the south-west, particularly from my constituency of North Dorset?

James Berry: My hon. Friend is right. This is not just a London project. I heard the cat-calls from Members on the Opposition Benches saying, “What about this or that part of the country?” This is not just a London-centric project. It helps people across the south of England. Anyone coming into Waterloo will see a huge change, with a huge amount of space freed up because trains will be diverted to Victoria. Equally, people living Hertfordshire and Cambridgeshire will see much better connectivity into London. As always, my hon. Friend is right.

Helen Goodman (Bishop Auckland) (Lab): A recent ONS study of my constituents found that one third had never even been to London.

James Berry: The place my family come from is not far from Bishop Auckland. I hope they take the opportunity, which will be much improved with HS2 and Crossrail 2.

The project is not due to open until 2030. That may seem like a long way off, but we will never get there unless we do this work now. Indeed, for many of my constituents Crossrail 2 cannot come too soon. This morning, if I had not got on the 6.35 am train, I would have been on a packed carriage with many other hardworking local people. They have to pay high train fares to stand in a packed carriage on the way into London. That is just not acceptable. Network Rail’s route study shows that peak time trains from my constituency require 20% extra

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capacity just to deal with current overcrowding. By 2043, 60% extra capacity will be needed to deal with additional passengers. That would be a challenge on any route, but it is an impossibility on the south-west route into Waterloo. Network Rail’s analysis is that no further trains can go into Waterloo at rush hour and other peak times. A new route is needed and, as my hon. Friend the Member for North Dorset (Simon Hoare) said, Crossrail 2 will divert trains from Waterloo, through a tunnel currently planned to be at Wimbledon, to Victoria, Tottenham Court Road, Euston, St Pancras and on to Hertfordshire.

Every station in my constituency will be upgraded to a Crossrail 2 station. Every station will have step-free access, which is important for disabled people, people with buggies and those who find it difficult to walk. There are shockingly few stations in my constituency that currently have that kind of accessibility. Overcrowding will be massively reduced. The proposals are definitely needed and I am pleased that they have been included in the Budget. I am not saying that the plans that Crossrail 2 has laid out so far are perfect. A lot more detail is needed. I submitted a detailed response to Crossrail 2’s consultation, as did more than 3,000 of my constituents.

Local concerns needed to be addressed, but the important things today are that that did not hold up the announcement of funding, and that the Chancellor, in the Budget, has backed Crossrail 2 for London and the south with the pre-legislative funding needed and the legislative time to ensure that the project can stay on track and go forward. For that, I thank him.

5.40 pm

Caroline Flint (Don Valley) (Lab): What does a Chancellor do when his long-term economic plan is not working? We found out today: he delivers up a spoonful of sugar to help the medicine go down. In reality, growth is down, the debt target has been missed and borrowing is up—and, as for the surplus, who knows? I am not convinced by this Budget that the Chancellor will achieve his £10 billion surplus by 2019-20.

The Chancellor tried to dazzle us with the prospect of more infrastructure projects, when less than 10% of his present list of such developments is currently being built. It makes me wonder just how many energy projects, roads, rail lines and houses will be built and where the money will come from. It might be a bit innovative, but I would like the Chancellor to come to the House, at least once a year, to take us through the projects on the stocks and report on whether they will be delivered on time and on budget. That would be a worthwhile discussion to have at least once a year, because we all agree, across the House, that infrastructure, if done well, can make a major contribution to the success of our economy, including through the skills that follow on from it.

In January, I asked the Minister of State, Department for Transport, the hon. Member for Scarborough and Whitby (Mr Goodwill), when a decision would be made on the trans-Pennine link—a road tunnel that would create faster east-west travelling between south Yorkshire and Manchester. I am pleased that the Chancellor today announced a feasibility study, but it is fair to question how long that will take. Partners in my region, Doncaster and south Yorkshire, need to know whether there will be a guarantee of funding, a clear timetable and a swift process to confirm the exact route. That will give them the certainty to work together and plan for

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the future. We all know that confidence is key when private sector investment falls, as it has done—manufacturing and construction are still delivering less today than before the financial crisis. The economy is still out of balance.

I worry, too, that the stealth taxes on people’s insurance policies are just another way in which families doing the right thing are being penalised for the Chancellor’s failure to meet his own targets and economic plan.

I would like to offer the Chancellor one suggestion to improve the country’s tax take. I am talking about the light or no taxes paid by those who manipulate international tax arrangements to their own advantage but to the detriment of the countries in which they trade. Some of his suggestions are interesting—I will look at them in more detail—and could prove helpful in tackling that problem, but we do not know how a company as large as Google, with thousands of UK staff and five offices and global revenues of $74 billion in 2015, paid just £130 million in tax after a six-year investigation into what it should have paid over 10 years. The problem is not confined to Google. There is Facebook, AstraZeneca, Vodafone, British American Tobacco—the list of corporate giants with light UK tax bills goes on and on.

We might not like it, but those companies have not acted illegally. They are planning their taxes to pay less by exploiting different tax rules in different counties. Yesterday, I brought in the Multinational Enterprises (Financial Transparency) Bill—a catchy title—to ensure that important information about large companies’ revenues and tax planning is published. I am delighted to have the support of every member of the Public Accounts Committee, be they SNP, Labour, Conservative or Liberal Democrat. I have the support of more than 50 MPs from across the parties, as well as that of Fair Tax Mark, the Tax Justice Network, Oxfam, CAFOD, Action Aid and Christian Aid.

The problem that every country is struggling with, but which no one country can solve, is profit shifting by multinationals. A company doing a lot of business in the USA or the UK can transfer profits to a low-tax country, such as Ireland, where corporation tax is 12.5%, or Bermuda, where it is zero. In 2010, the total company profits reported as coming from Bermuda were 1,643% of the size of the country’s GDP. If multinationals trading in the UK pay much lower corporation taxes by transferring profits, that gives them an advantage over domestic businesses that pay what is due here. My Bill has been nicknamed the Google Bill, but it is not about Google, and it is not even about online businesses alone, because we know that the problem extends to coffee chains, oil companies, drinks companies and pharmaceuticals. What they all have in common is that they are multinationals.

For many years, development organisations felt that it was an injustice if a firm was mining or producing oil in Africa but paying no tax there. Charities say that developing countries lose more in potential revenue each year owing to corporate tax dodging than the amount given to them annually in overseas aid by all richer countries. That made me stop and think about how much more we could do to enable developing countries to prosper and be more self-sufficient through measures such as my Bill. Aid is vital to poorer nations,

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but just as important is a hand-up rather than a hand-out. This will not happen unless we force companies to come clean.

I welcome and support the Government’s action in legislating to ensure that reporting on taxes, revenues and employment, including in other countries, is shared with our own Revenue and Customs. That will affect about 400 companies here in the UK. The Chancellor has said that he supports that information being published, which my Bill would provide for, so why wait for everyone in the G20 to do that? The data are not commercially sensitive; we are not asking for companies’ whole tax return or future business plans. The principle is that publishing means that everyone gets the chance to see the bigger picture. I believe that the tide is turning against secrecy, and organisations such as Fair Tax Mark encourage companies to declare that they have paid their taxes and do not use tax havens. I want every large company to meet that test.

Kevin Foster (Torbay) (Con): As a fellow member of the Public Accounts Committee, I am delighted to support the right hon. Lady’s Bill. Does she agree that there is a role for our Government, given that many tax havens fly the British flag and subscribe to the same “Her Majesty” as Her Majesty’s Revenue and Customs?

Caroline Flint: I thank the hon. Gentleman for his intervention and for his support for my Bill as a colleague on the Public Accounts Committee. He is absolutely right; that is shameful and not acceptable. This practice has been going on for too long, and I hope that we can find different ways of attacking it on a cross-party basis. One way is the proposal in my Bill to clamp down on such activity.

I wrote to the Chancellor last week, but clearly he did not see my letter seeking his support for my proposal to go into the Budget. However, he should not worry, as it is not too late. A new Finance Bill will follow the Budget debate, and with cross-party support behind me I will seek to amend it. Alternatively, the Government could adopt the measures that I have outlined. I believe they are in the interests of social justice, fairness and good business. Publication can make a difference and put pressure on companies to play fair and pay up.

Finally, I want to say something about education. I am worried at what I believe is an ill thought out plan to force every school to become an academy under the guise of more autonomy for schools. I support tackling failing schools, I supported local community schools in becoming community-run trusts, and I have supported academies in my constituency, but I do not believe this is a policy for local autonomy.

I met parents and teachers at Pennine View School in Conisbrough, a wonderful special school with a good Ofsted rating. It is a community school with committed staff and governors. Why should that school, which does a good job, be forced to become an academy? I do not think the argument is there. What is more sinister is the insistence by regional school inspectors that single academies, often local community schools, must be forced into multi-academy trusts. When academies began, schools in the same pyramid would join as a group and support each other; the model was collaborative. Today,

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however, academy chains are becoming huge businesses, with headteachers receiving instructions from a head office 100 miles away.

I was recently at Auckley School, where I met a governor, Keith Scott, who has served that school for 14 years. It is a good school; why should it be forced into a chain? It is well run and well regarded. As more data are collected, we find that previously well regarded academy trusts have failed, and in a number of cases, the test of improved standards and outcomes is not being met. Some have suggested that the growth of academy chains has not helped.

I have never shirked from challenging those whose provision of education is not good enough, and I still will not. As an MP, though, I want to know how this new idea will ensure the accountability that there has to be for whoever is providing education for our children, and how it will help children to achieve. It is a dogmatic policy. Just as there were those who refused to acknowledge when local education authorities were not always doing a good job, the same thing applies now. Two wrongs do not make a right. I hope that the Government will look again at this experiment, as it has been called, and ensure that we do not harm the future education of our children.

Several hon. Members rose

Madam Deputy Speaker (Natascha Engel): Order. I am afraid that the time limit is now down to seven minutes.

5.49 pm

Yasmin Qureshi (Bolton South East) (Lab): They say that the first casualty of war is truth, and sadly, that seems to be the default position of the Conservative party. The country, however, has a right not to be misled by this Tory Government and by the previous Con-Dem Government, whose mantra was, to a man and to a woman, that the financial crisis had been created by the Labour party. The Government know full well that it was caused by, among other things, the sub-prime mortgages in the United States of America and the collapse of Lehman Brothers, and that many other countries faced the same financial crisis.

I hear some sighs and moans from Conservative Members. Perhaps I should take them on a trip down memory lane. When Labour came to power in 1997, the ratio of GDP to national debt was 40.4%. By 2007-08, after 10 years of Labour government, it was 36.4%. However, by 2011 it was 60%. In 1997, the total public sector debt was £352 billion. What do Conservative Members think it is now? It is £902 billion. What was the level of Government borrowing in 1997-98? It was £7.8 billion. What do Conservative Members think it is now? It is £145 billion. When Conservative Members tell us how prudent they are with the economy, that is just plain rubbish. The facts do not bear it out.

The Chancellor talks of trying to cut the national debt. It currently stands at £1.5 trillion, which is 82% of GDP. So much for the Government’s economic competence. Again in pursuit of a falsehood, the Chancellor said that the United Kingdom had the fastest-growing economy in the world. Absolute rubbish. The IMF has said that the economies of the USA, Spain and Ireland have grown the fastest. One reason why they have grown so

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fast is the fact that their Governments invested in their economies. The USA’s financial stimulus package is worth £831 billion, so it is not surprising that its economy recovered.

Another missed opportunity in the Budget was the opportunity to help regenerate our economy. The Chancellor cut capital gains tax, but I should have liked him to put money aside for the building of more affordable homes. When Labour came to power in 1997, it inherited millions of derelict homes that were not fit for human habitation. It spent £25 billion on trying to repair those homes, which created jobs—proper, solid jobs that allowed people to pay income tax. Of course, the building of homes does not just provide jobs for labourers; it provides jobs in related sectors supplying cement, pipes, electric wiring, baths and toilets. I suppose the Government could not care less, because to them an affordable home is a home that costs about £450,000. I am not sure that many Labour Members, or many voters in this country, could afford homes of that sort.

The Government could also have taken the opportunity to invest in renewables. So much work was going on, so many companies were producing stuff, and that was creating jobs. But what did the Government do? They scrapped all that. Now they say that there is an energy crisis, and that in order to deal with it, they will start fracking all over the United Kingdom, even though it has been well established that most fracking is dangerous. Lancashire is a beautiful county, but it seems that the Government have overridden local people’s and local authorities’ objections and granted exploratory licences, so the whole of Lancashire will be wrecked. Moreover, given the geography of the county, there is a real risk that our water will be poisoned. The Government say that they are concerned about energy, but they could have taken steps that would have saved energy, and there would have been no need for the fracking that will ruin and pollute our country. But we know that a Tory politician recently said, “Go and frack in the north, where they don’t mind. Just don’t do it in my backyard in the south.”

It is reprehensible that this Government should take money from the most vulnerable disabled people while giving others tax cuts. It is surprising to see how they really do not care about the ordinary person.

There are many other things that I could say about this Budget, but I shall end with these points. Everyone knows that hundreds of millions of pounds has been wasted on academies in the past few years. Even though there are some fantastic schools, there is no record to show that academies have better standards. Even so, the Government want to force every school to become an academy. At the same time, they talk about wanting to give local people power. They say that they want to give local people a voice in their community, yet at every stage they override the wishes of local people. This hypocrisy—

James Berry: Will the hon. Lady give way?

Yasmin Qureshi: No, I am sorry; I am coming to the end of my speech.

The other fiction that exists is that of the northern powerhouse. As a north-west MP, I have not seen that. The electrification of our railways has been cancelled or delayed, and I do not see anything else happening. This Budget is all about smoke and mirrors.

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5.56 pm

Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op): It is a pleasure to be called to speak on the first day of the Budget. Every Budget debate in which I have spoken since 2010 has had one overriding theme, which is that the Chancellor has turned up to tell us that he has failed to meet his own targets. He has then had to mask that failure as best he can. This Budget is a particularly vivid example of that. Growth has been downgraded this year, next year and every year. That is the top-line message from this Budget.

Much is always made of the claim from the Chancellor, which is repeated by Conservative Back Benchers, that the UK has the fastest growing economy in western Europe. As my hon. Friend the Member for Bolton South East (Yasmin Qureshi) said, however, the International Monetary Fund tells us that economies of the USA, Spain and Ireland are all forecast to grow faster than ours this year. I know that we are all worried about Donald Trump, but we still have to consider the US a major western economy, at least for now.

Our deficit is just below 4%, or £74 billion a year, and debt is not falling as a percentage of GDP; it is rising. So the Chancellor has broken his fiscal rule on debt almost immediately after we had the row about it. He has done that after already breaking his rule on welfare spending just after we had the row about that. The obvious conclusion is: so what? This surely proves that those rules are fairly absurd. At the very least, it proves that they are all about politics and not much about economics—which, to be honest, is a fairly apt description of the Chancellor himself. From the figures that we have had so far, the Budget appears to add up as a result of a £3.5 billion cut being made to Government Departments by 2020. However, as no details have been given, that is a purely illusory budgeting cut.

The remaining fiscal rule—that we must hit a surplus by 2019-20—seems fairly ludicrous. Indeed, it seems already to have unravelled. The Chancellor appears to be saying that he will borrow £40 billion more until 2018-19 and then, as if by magic, he will borrow £30 billion less the following year. Already it appears that most of that is a result of messing around with the accounting figures relating to the receipts of corporation tax. Frankly, if a Labour Chancellor had made such a claim in a Budget, they would have been destroyed in the papers the following day. This Chancellor deserves no less.

When we are discussing debt and the deficit, I always like to remind Conservative Members—or at least the ones who turn up on the first day of the Budget—that Harold Macmillan, Edward Heath, Margaret Thatcher and many other Conservative Prime Ministers all ran deficits. It is a fallacy that the Conservatives run surpluses while in office. In fact, the surpluses that we have had since the war have usually been under Labour Governments —although frankly that was by chance. There is nothing wrong with the principle of running a deficit so long as our creditworthiness is such that our interest payments are manageable and that the return on our investment is greater than the cost of borrowing.

That brings me to the set of sensible fiscal rules proposed by the shadow Chancellor, which are to balance day-to-day spending over a period of time while retaining the freedom to invest in our economy to make it more prosperous. They do seem like the same fiscal rules we

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had at the election, but let us pass over that. Considering all aspects of our economy, transport and energy in particular, the need for substantial investment in order to sharpen our competitiveness is undeniable. From what I see in my constituency surgeries, the situation regarding funding for social care is as dire as it could be. The cut in employment and support allowance to fund this Budget’s giveaways is unconscionable, even for Conservative Members, to tolerate. My local council’s budget has essentially halved since 2010, and I cannot believe that the declining percentage of GDP that we are spending on the NHS is sustainable with an ageing population.

It is, however, not all bad. I welcome the Chancellor’s pro-EU tone. Looking at the challenges he set out, who on earth would add greater uncertainty in these conditions? The sugar tax is interesting, but it feels like a distraction when compared with the top-line economic news. Small business assistance is also welcome, but, as the income from business rates has already been devolved to local authorities, is that not a further cut in funding for public services? We need more detail on that.

Returning to investment, the Government really do not have an energy policy. They have a project in Hinkley Point C that will never be brought online in time. Nuclear power is essential, but the project will not do us much good because of the incredible underlying economics. The Government have undermined renewables and abolished carbon capture and storage for UK, which is incredibly short-sighted. They should be looking to cut UK energy consumption radically through energy efficiency measures, which are readily available and do not need to be invented and which, frankly, just need Government funding. We could then further protect energy prices for industry to ensure that manufacturing is still strong and to reduce our emissions. We could also reduce bills. It would require a much less burdensome amount of new capacity to be brought online. All that requires investment, which could strengthen our economy and help to reduce debt.

On transport, I like many of the things that the Conservative Government have tried to bring online, but such infrastructure clearly requires funding and fiscal rules to proceed. Under this Government’s tenure, infrastructure spending as a proportion of GDP has declined starkly, but I want the projects to go ahead and if the Government are serious too, they must provide the necessary fiscal framework. I am particularly pleased about the money that will allow the trans-Pennine tunnel scoping study to go ahead, because the project would not only massively reduce congestion in my area, but bring about enormous economic benefits by linking greater Manchester with south Yorkshire in a way that is mutually beneficial for both economies.

To conclude, I want a Government who not only believe in public services and public infrastructure and honestly and genuinely care about inequality, poverty and life chances, but understand markets and how to foster innovation and appreciate the contribution that business can make. That would be a real long-term economic plan, but it is clear that it is not available from this Government. I hope that the Opposition will be able to offer the alternative that the country sorely needs.

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6.3 pm

Siobhain McDonagh (Mitcham and Morden) (Lab): In last year’s summer Budget, the Chancellor said that he was committed to a higher wage economy:

“It cannot be right that we go on asking taxpayers to subsidise…the businesses who pay the lowest wages.”

When he introduced the national living wage, he said that

“Britain deserves a pay rise and Britain is getting a pay rise.”—[Official Report, 8 July 2015; Vol. 598, c. 337.]

He promised that the change would have only a fractional effect on jobs. He said the cost to business would be just 1% of corporate profits, a cost which he offset with a cut to corporation tax.

Today, the Chancellor said that he wants to help low-paid workers to save with a savings bonus, but how exactly does the Chancellor think low-paid workers can afford to save anything when thousands nationwide will be taking home less money after the national living wage is introduced next month? National employers are using the introduction of a higher minimum wage to reform their reward structures, which is a euphemism for cutting staff pay. The new £7.20 hourly rate should be boosting people’s pay packets but, as the Chancellor knows, the opposite is happening in practice. B&Q has cut staff pay by changing all staff members’ contracts, forcing them either to accept the unfavourable new terms and conditions by the end of this month or lose their jobs. The new B&Q contracts are designed to offset the cost of the new national living wage and save the specialist retailer money without touching shareholder pay. The contracts strip low-paid staff of extra pay for Sunday and bank holiday working; eliminate summer and winter bonuses; and cut London weighting right down.

These workers are non-unionised, represented only by B&Q’s “national people’s forum”, which sounds like something that might have existed in the USSR. The so-called “people’s forum” had a very brief “consultation” on the proposed changes—there was no real negotiation whatsoever. Subsequently, these workers have no one to speak up for them—I say to this House that it is our job to speak up for them. Worse still, they have been told by B&Q management that they will be sacked if they come forward with their story to the press. B&Q staff will be worse off after the national living wage is introduced, as the specialist retailer saves money. The impact on low-paid workers, particularly loyal, long-standing staff who have worked at B&Q for decades, is devastating. Many cases have been reported to me and I have to be careful not to identify the people involved, because they could be sacked. However, let me give the example of just one of them.

Mr Jones, as we shall call him, works at a B&Q store in the south-east, where he has been employed for more than 15 years. He has a family—two children—and is the sole wage earner in his household. He works hard, but works part-time because he is disabled. He works every Sunday he can, as well as all the unsociable hours on offer. But from April, under the new contract he has been coerced into signing, he is going to earn £1,000 less—and he is not alone. If I had the time, I would tell the House about workers—

The Minister for Small Business, Industry and Enterprise (Anna Soubry): Will the hon. Lady agree to meet me, in confidence, in relation to all these people? As the Minister responsible for retail, I undertake to take this up directly

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with B&Q. May I ask that she also speaks to the right hon. Member for Doncaster Central (Dame Rosie Winterton) about this, because I think that between us we could do something about it?

Siobhain McDonagh: I would be delighted to accept that offer, and I will show my right hon. Friend all the emails I have received about people in desperate situations. These people are ones who political parties say they are there for: the hard workers—the people who believe it is their job to support their families and who just get on with it. But they are not able to get on with the living wage because their pay is going to be cut.

I was going to come here and say today, “Look it doesn’t have to be this way. Some of these companies just need to pass on a hit to their shareholders. Some of them need to improve productivity and staff training.” But I did not know then that what the Chancellor was going to announce was a further cut in corporation tax. He has given these companies the opportunity to get out of these appalling contracts and give people £7.20 an hour, on top of the benefits they already get. I ask the Chancellor and his Government to make it unquestionably clear that they expect, and we expect, that the honour of the national living wage will be a reality. We are not talking about small companies living on the margins; these are some of the most famous names on our high street. They are currently getting away with murder, and they can because these people have nobody to speak for them.

I may just be a lowly Opposition Back Bencher, but if I can help any of those staff get a decent result on what should rightfully be theirs—this is not because they do not try; it is because of their direct effort—I will be doing my job. I ask everybody in the House to join me in standing up to these companies and saying, “Put the money you’ve got in today’s Budget in the hands of those people who have worked longest and hardest for you.”

6.9 pm

Tom Elliott (Fermanagh and South Tyrone) (UUP): It is interesting to witness the Budget unfolding in the Chamber today, because, in years past, I have watched the Chancellor deliver his speech from the comfort of my own home, or read about it in the papers the next morning. There is almost a sense of anti-climax this afternoon. I remember huge controversies around the Budget, particularly some years ago when there were huge increases in income tax, but I do not see that so much now, as we seem to have a slightly more settled economy. We have seen much less controversy in the Budget not just for this year, but for the last number of years, and if we look at some of the empty Benches in the Chamber, we can see that perhaps there is something in that. Like all financial statements, there are some good parts and some bad parts, and that has been recognised even on the Opposition Benches.

First, let me highlight some of the significant investments that are going into the English regions. I guess that much of that will not be a huge benefit to Northern Ireland, or indeed to Scotland or Wales. Of course, those regions are getting some of their own financial benefits as well.

One aspect that I have been looking at is the £700 million that has gone into flood defences in England. I just wonder whether there will be Barnett consequentials around that for Northern Ireland, or indeed for Scotland or Wales, as those regions have suffered significantly

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from flooding as well. In my constituency of Fermanagh and South Tyrone, one person sadly lost their life in the flooding this winter. Many people in my constituency were severely affected by the flooding, and I am sure that it was equally as bad in other areas. I am keen to know whether there will be Barnett consequentials around that £700 million that will come to the Northern Ireland Executive.

Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): The hon. Gentleman raises a good point. The Barnett consequentials are a consequence of a need in England. If there is a need in Northern Ireland, Wales or Scotland, the Treasury does not react to that need. We have to wait until there is a need somewhere else before we get the money. It is our taxes as well. When we have a need, we should get the money. If there is a need in Northern Ireland, the consequentials should follow to the other nations, but that never happens. It is always about need in England, and the rest will take what comes of that.

Tom Elliott: I appreciate the hon. Gentleman’s intervention. Perhaps he is explaining some of the Treasury’s rationale on this. I do not know whether there has been any co-operation on this, but he does seem to be offering some kind of explanation.

The devolution of corporation tax to Northern Ireland has been a live issue for at least eight years, perhaps even longer. I assume that the proposal for a reduction in corporation tax to 17% in the UK, will mean that, with our 12.5% rate in Northern Ireland, we will have a lower overall reduction in our block grant. Some argue that if the UK decides to leave the European Union in the forthcoming referendum there may not be any reduction at all in the Northern Ireland block grant to reflect the fact that our corporation tax is devolved, simply because the Azores ruling does not come into effect. I am interested to hear the debate about that, because it is an issue that we have already raised with the Prime Minister.

One measure that I really welcome for Northern Ireland is the £4 million investment in an air ambulance. I have personally lobbied for that for quite a long time. Northern Ireland is the one region in the United Kingdom that does not have an air ambulance and that support mechanism. I thank the Treasury for that. It will be a great memorial for the family of the late Dr John Hinds who lost his life campaigning for an air ambulance. He was a great motorcycle enthusiast, and his campaign will hopefully now come to fruition. It is also good news for those currently involved in the air ambulance campaign, including my constituent, Mr Rodney Connor, who has been a great campaigner in that respect.

Pat Glass: It is really good that there will be an air ambulance supported by Government money in Northern Ireland, but does he not agree that the same should apply to all other regions? In my area, the north-east, the air ambulance service is funded entirely by charity.

Tom Elliott: Perhaps we in Northern Ireland have done a better job of lobbying the Government than the north-east has, and it is entirely up to the hon. Lady to take up that challenge. I am proud of what we have done in Northern Ireland and I thank the Government for that.

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I also welcome the freeze in fuel duty, which affects Northern Ireland greatly. I know that there has been an argument for some years about the devolution of corporation tax levies in Northern Ireland, but I believe that an equally important duty that we could have devolved to Northern Ireland is that on fuel, for a number of reasons. As we have a land border with another European nation, the Republic of Ireland, a huge amount of fuel is purchased in the Republic and the UK Treasury and Government lose that tax because it is not coming into our economy. The second and more important point is the level of fuel laundering in Northern Ireland in the border regions. The fuel that is laundered is sold at a much cheaper rate, and sometimes even at the same rate, as proper fuel. That is having a huge impact on our vehicles and our economy and also means a huge loss to the Treasury.

I want to see more effort, particularly from HMRC. We received a response to a freedom of information request that showed that in a short period almost 500 fuel filling stations in Northern Ireland were found to be selling illegal fuel. Not one of those filling stations has been named, not one has been charged or convicted of any offence, but if some poor person has bought some of that fuel and is found to be carrying it, they will be fined immediately. There are on-the-spot fines. A huge wrong is being committed and I want the Government to take that up. I have tried earnestly in Northern Ireland to rectify the situation through HMRC, but there appears to be a reluctance to deal with it. Decommissioned laundering stations have been found many times, but they have been operational for many years and it seems that as soon as they are reported, they are decommissioned. HMRC cannot get to the bottom of that. That is one point on which I would appeal and it is why it is important that fuel duty in Northern Ireland has not been increased.

I welcome the opportunity to speak in the debate and genuinely and earnestly thank the Government for their support on the few issues I have described, but I want them to consider the Barnett consequentials to support Northern Ireland and the other regions as they are supporting the English regions.

6.17 pm

Wes Streeting (Ilford North) (Lab): It is a privilege to speak on the first day of the Budget debate. This has been a fascinating journey, following the Chancellor as he has brought us to this point. Following the Chancellor on the economy has been a bit like following a drunk driver on the road, swerving all over the place as his description of the state of our economy has moved from the sunny uplands that lie ahead to the stormy weather of the global economy. Instead of focusing on the long road ahead to our national recovery, he seems to be more interested in the short walk next door to No. 10. So keen is he to avoid any focus on his record as Chancellor for the past six years that we have been reduced this afternoon to talking about fizzy drinks. Like the very worst fizzy drinks, this is full of fizz and leaves us with a bad aftertaste.

Let us start with the Chancellor’s own performance. Who would have thought that six years into his term as Chancellor, growth would be being revised down,

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national debt would be continuing to rise and he would have failed to meet his targets for deficit reductions once again?

Mr MacNeil: The hon. Gentleman talks about growth, and it is interesting that the Chancellor has talked about major advanced economies as though that was a very narrow club. Our neighbours in Ireland have growth treble that of the UK and those in Iceland have double that growth, so the Chancellor is not performing well at all, even by his own measurements.

Wes Streeting: I certainly agree with that assessment. This year, growth has been revised down from 2.4% to 2%. It will be down next year, the year after that, the year after that and the year after that. We were promised that he would eliminate the deficit during the course of a single Parliament, but he is doing nothing of the sort. In fact, it is very hard to imagine how we will eliminate the deficit by the end of this Parliament. A close look at the figures produced by the Chancellor in his Red Book shows that in order to achieve his forecast surplus in 2019-20, he would rely on moving from a £21.4 billion deficit in one year to a £10.4 billion surplus the next. These are fantasy figures, which possibly explains why he has failed to meet them every other year—debt revised up every year during the course of this Parliament; £40 billion more borrowing over the course of this Parliament.

On productivity, once again the outlook has been revised down, and productivity is still below pre-crisis levels. The Chancellor has been in office for six years—what on earth has he been doing? Maybe we should start looking at his productivity to explain why the productivity of the economy is still so weak.

I welcome the investment in Crossrail 2, but net public investment will fall during the course of this Parliament to £32 billion by the end of the decade, when we should be investing if this were genuinely a long-term economic plan. Exports are falling and nowhere near hitting the Chancellor’s £1 trillion target. Although he prides himself on being the low-tax Chancellor, the tax burden, at 36.3% of GDP, is higher than at any point during the last Labour Government. So it seems we cannot even rely on the Tories to cut tax any more.

I very much welcome what the Chancellor said about Britain’s membership of the European Union and all the benefits it brings, but the Chancellor has a problem because, right as he is on that issue, he cannot carry his party with him. In fact, even as the Governor of the Bank of England has remarked that leaving the European Union is Britain’s single biggest domestic risk, of the Tories that have bothered to turn up this afternoon—they have run out of speakers to talk up the Chancellor’s Budget—many have turned up to trash the Chancellor on Europe. [Hon. Members: “Where are they?”] Indeed, where are the Conservatives flocking to defend the Chancellor’s position on Europe? In fact, to borrow a phrase, the fact that the majority of the Conservative party would take us out of the European Union makes them a threat to our economic security, our national security and “your family’s security”.

Let us look at the impact on households. Almost half of the gains from income tax cuts in this Budget will go to the richest fifth of households. The amount that the Chancellor is cutting in capital gains tax would offset the cuts that he is imposing on disabled people in this very Budget.

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The Chancellor claims to be helping the next generation. This is a Chancellor who trebled university tuition fees, abolished the education maintenance allowance, cut student grants, imposed tuition fees for student nurses and midwives, and proposes to scrap the NHS bursary, and look at the state of careers education in our schools. Even with the measures in this Budget to encourage saving and home ownership, we should listen to Brian Berry, the chief executive of the Federation of Master Builders, who says:

“We are nearly 12 months into the current Parliament and the Government is already falling well behind on its targets”

to build new homes. He also says that,

“these announcements are limited in scope and won’t signal the…change…we need to see.”

In fact, the Office for Budget Responsibility has revised its forecasts to show an increase in house prices as a result of the introduction of the new lifetime ISA, which will fuel demand, but lower projected investment in new builds because of the impact of Budget measures on housing associations. I think it is cruel to encourage people to own their own homes but not provide the investment, the support and the economic plan to ensure that those homes are in plentiful supply, and that people from ordinary backgrounds can get on the housing ladder, rather than Conservative MPs who are using the Help to Buy ISA not only to buy their first home but also, it seems, to buy extra homes for members of the family as well.

Finally, I want to talk about the Budget’s impact on local government. For the past six years, local government has been absolutely clobbered. These are not just any services; they are front-line services. The majority of my council’s public funding from central Government has been lost. When the Conservatives talk about a tax on sugar to encourage fitness, they should explain why they have cut public health funding in-year and time and again. If they want a healthier nation, they must invest in tomorrow today.

We should look at the other services that are being cut and the tax rises that are being imposed by the Chancellor, such as the new social care precept. As my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) pointed out, even an increase in social care funding through the precept will barely cover the cost of introducing the national living wage and certainly will not meet the social care crisis. That is why so many councils are struggling and so many councillors have to vote to put up council tax. Even in Labour-run Redbridge, the Conservative Redbridge opposition voted in favour of a 2% increase in council tax through the social care precept, and also for an increase of just under 2% in council tax, because they understand the pressure that this Government are piling on to local authorities. The Government went even further today by cutting business rates, knowing full well that that will not be the Chancellor’s headache—it will be the job once more of local councillors to balance the books because we are paying the price for his failure.

So I am not impressed by today’s Budget. It is nothing like a long-term economic plan. It is long-term fantasy figures from what will prove to be a short-term Chancellor, and I certainly will not be supporting it.

6.26 pm

Mr Adrian Bailey (West Bromwich West) (Lab/Co-op): We have got used to missed targets and U-turns in the Chancellor’s Budgets. I fear that this may be the quickest

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U-turn ever. This could well be known as the lame duck Budget. The Chancellor let the cat out of the bag when he was expressing his support for the EU, which I thoroughly share. All the predictions on which the Budget is based assume our continued membership of the EU. I marvel at the Government’s sheer lack of leadership in projecting their long-term economic plan and basing successive Budgets on it, then subjecting the core of their future economic strategy to a political process that puts it in jeopardy and exists only to satisfy the internal politics of the Conservative Government.

I support what the Chancellor said, but what he referred to has not just occurred over the past month or so. It has been the case for years. Had there been the necessary leadership from the Government, the issue would not be the subject of debate now and we would not risk the damage that the outcome could do to our economy and our future economic projections, and we would not potentially be facing another Budget in a far more pessimistic economic scenario in a few months.

Many speakers have pointed out the Chancellor’s missed targets and the failure to deliver on his early promises. The march of the makers has been talked about at great length. Sometimes when I look at Government policies and manufacturing production, I think it should have been called the ides of the march of the makers. This is the source of all the Government’s current difficulties. Our failure to invest in manufacturing has resulted in the current very low levels of productivity, which are undermining our economic growth and our export performance. Until we have Budgets which put this at the centre of Government policy, the problems outlined in every Budget, and re-addressed because of the failure to deal with them in previous Budgets, will continue.

I would like to have seen in this Budget measures on business rates. We have the most incoherent business rate regime imaginable. The Chancellor spoke today about reducing corporation tax. That may be an element that business favours, and it may help business. On the other hand, what happens under the business rate regime to a manufacturing company that invests in new machinery so that it can increase productivity and export? The business rate goes up, and the company gets penalised. In the context of business policy, it is no good looking at one element of the taxation regime without looking at the others. The Government need to look at the whole package if businesses are to have a basis on which they can invest without being penalised, producing all the economic benefits that will play such an important part in the future growth of our economy. The Government have signally failed to do that, and we might say that some of their measures amount to just trying to mend the roof while the rain is pouring.

I would briefly mention two other elements of productivity the Government have failed to address: skills and construction infrastructure. We have had boasts of millions of pounds being invested in apprenticeships and the academisation of schools, but the outcome is that there are still acute skills shortages in science, technology, engineering and maths-based subjects, which are central to the capability of our manufacturing industry to develop, grow and export. Something is going wrong somewhere, and I saw nothing in the Budget that would address that.

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The other issue is infrastructure. I welcome the proposed infrastructure projects, but I would have more faith in their ability to impact on our productivity if infrastructure investment had not dropped by nearly half over the last five years. The Government have started to deliver on only 9% of the projects they have in the pipeline, and those projects that there are are heavily concentrated in London and the south-east. I am not knocking any particular programme there, but the fact is that London and the south-east have had the highest economic growth, compared with the rest of the country.

Mike Wood (Dudley South) (Con): Will the hon. Gentleman give way?

Mr Bailey: No, I will not give way, because I respect the ability of others to have time to make their points as well.

The Government have simply moved from a short-term, politically expedient solution, subjected it to political window dressing and then had to explain its failure in a subsequent Budget. This is a Government of missed targets, U-turns, incoherence and, quite frankly, incompetence.

6.32 pm

Callum McCaig (Aberdeen South) (SNP): It is a pleasure to speak in this Budget debate. After close to a year of asking for action on oil and gas, it would be churlish of me not to welcome what the Chancellor has announced today. However, it is important to take that in context: we have seen significant movement, but essentially we are back to what Oil and Gas UK says is the tax level from 2003.

There is positive movement on the supplementary charge, but to suggest that the tax has been cut in half is a bit of the smoke and mirrors that we are used to. Although it has been cut in half, from 20% to 10%, oil and gas fields will still pay 40%. If we compare that with the announcement of 17% in terms of corporation tax, we see there is a stark contrast.

The effective abolition of petroleum revenue tax is perhaps more welcome. It will affect fewer fields, but by virtue of their age and their important infrastructure, those fields are vital to ensuring the continuing success of the North sea. If they lose out and that infrastructure is decommissioned, the potential domino effect could drastically reduce the profitability of the North sea.

I welcome the proposed manoeuvring of decommissioning allowances, allowing changes between the companies that would and would not have the decommissioning liability. That is fundamental. The Red Book talks about encouraging new entrants into the industry. It is very important for the future of the industry to have new capital, new expertise and, above all, new ideas and new ingenuity coming in and not to be burdened by artificial barriers in relation to decommissioning. What has been announced is very helpful, but in and of itself, it is not enough. This will not be the end of the requests from industry, from trade unions, and from me and the SNP, for further action to support this vital industry.

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We have missed out on anything relating to fiscal support for exploration. The support for seismic surveys is welcome, but beyond that more action needs to be taken. There is also nothing in terms of—

Mr Speaker: Order. I am extremely grateful to the hon. Gentleman for his contribution. I think Mr Tommy Sheppard wishes to speak. No?

Tommy Sheppard (Edinburgh East) (SNP): The clock has not been working, Mr Speaker.

Callum McCaig: The clock did not start, Mr Speaker.

Mr Speaker: Well, continue to orate, man.

Callum McCaig: I will continue to orate, and I will be as brief as I can to allow my hon. Friend the Member for Edinburgh East (Tommy Sheppard) to get in.

There is nothing on exploration, beyond seismic. There is nothing about removing the fiscal barriers for enhanced oil recovery. The activity of enhanced oil recovery will count as operational expenditure; it does not count towards the tax allowance that can be offset against income. Such a simple fiscal measure would allow these activities to happen to a far greater extent, and then everyone would be a winner.

On the effective tax rebate rate for onshore oil and gas, tax allowances for that sector are 75%, whereas the effective rate for offshore oil and gas is 62.5%. I see no reason why there should be such a difference in the investment allowance. The North sea is a far more harsh environment in which to carry out this kind of exploration activity, and I do not see why it should be penalised vis-à-vis onshore oil and gas.

There has been nothing on loan guarantees for the oil and gas sector. The Prime Minister has talked about building the bridge to the future of oil and gas. Access to finance is vital in this regard. Companies are being turned away by banks, which see the industry as something they do not wish to invest in. I hope that the measures announced today will go some way towards allaying the concerns about finance, but more can and should be done. Lots of companies have the ability, expertise and imagination to drive the innovation that the oil and gas industry will require. If they cannot access the funding and finance that is required to develop these ideas, it will be incredibly difficult for them to bring their skills and expertise to the marketplace to benefit the industry and secure the innovation and cost reductions that it has been pursuing.

While this is a welcome step, it cannot, in and of itself, be the last thing that the Government do to support the oil and gas industry. The industry has produced £300 billion in tax revenue; it contributes immensely to the UK’s balance of payments. We may not be seeing the astronomical tax revenues from oil and gas that we did before, but we cannot overestimate the importance of the role that the industry has to play for the United Kingdom and my neck of the woods in particular, in future.

6.38 pm

Tommy Sheppard (Edinburgh East) (SNP): I would like to start on a positive note by welcoming the Chancellor’s statement on the sugar tax. He may well want to consider

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whether he needs to wait a full two years to bring it in, but none the less it is a welcome start, and I commend him for it.

I am afraid that is where my generosity towards the Chancellor, his Treasury team and this Budget must end, because I see the rest of it in exceptionally negative terms. This is a Chancellor, after all, who is making a career out of failure. He has failed every one of the macroeconomic targets that he has set for himself. If we were to score him on a report card, we would have no option but to give him an F-minus. I think that when he began to prepare this Budget he was looking at failing in his final objective, which was to create a budget surplus by 2019. I would like to pause to ask what that is actually about, because a surplus in Government finances is quite a strange thing. It means that the Government are spending less on this country’s public services than they is taking in taxes from the people who depend on them. That is a strange thing to aim for.

I wonder why the Chancellor is so concerned to have a £10 billion nest egg in 2019-20. It would not have anything to do, would it, with the proximity of the 2020 general election and a Chancellor who is determined to see a longer career for himself in this House, perhaps in a different position? In fact, I wonder whether the Chancellor has less of a long-term economic plan for the country and more of a long-term political plan for himself. In order to get the £10 billion surplus, he has decided that he has to have another range of cuts, with £3.5 billion being taken out of non-protected Departments. I dread to think what that will mean when we work through the detail.

We have to ask ourselves: is there no alternative to this austerity being piled on top of austerity? There is an alternative. We said during discussions on last year’s Budget—and we will say it again this year—that rather than cut back on public spending, a prudent Government should have a slow, sustained increase over the lifetime of this Parliament in order to use the public sector as an engine for economic growth to raise revenues, eradicate the deficit and drill down on the debt. That is received economic wisdom in most of the world, including most of our competitor countries, most of the members of the European Union and the United States of America. It is only the City of London and the United Kingdom Treasury that are blinkered to that very obvious approach.

This is also a Budget for inequality. If we look at the middle income age, we will see that someone who earns £35,000 will benefit by about £180 a year from the increase in the threshold for the basic rate of income tax. However, someone who earns £45,000 will benefit by £580 a year—more than three times as much. In what parallel universe could that approach be described as removing inequality in our country?

And that is only if people are lucky enough to be earning enough wages to be taxed in the first place. Even with the Chancellor’s pretendy national minimum wage, if someone is earning £7.20 an hour over 30 hours a week, they will not meet that basic income tax threshold. This Budget does nothing for the millions of people who are in that position. It does nothing for the people who are on fixed or low incomes, or for those who, because of their situation, have to rely on state benefits.

Is not the cruellest thing of all that, while tax breaks will be given to people who can afford to pay their taxes, there will be miserly and parsimonious cuts to the

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benefits of the most vulnerable in our community? The Department for Work and Pensions is preparing for a £1.2 billion cut in the personal independence payment programme. That will involve assessing 640,000 claimants, 200,000 of whom will be removed from the benefit altogether, while the rest will have their benefits reduced from £85 to £55 a week. What a miserly, mean-spirited, mean-minded approach to providing a welfare system.

The Chancellor has made much of this being a Budget for business. Before I came to this House, I started and ran a successful small business. I welcomed the day that it did well enough to pay corporation tax, because it took a few years to get there. The Chancellor talks about this being a nation of shopkeepers, but there are plenty of shopkeepers in my constituency who are less worried about the rate of corporation tax than they are about whether enough people are coming through the shop door with enough money to buy their products and to keep them and their employees afloat. Rather than tinkering, it would be better to consider a programme for economic growth and regeneration.

Let us not kid ourselves that it is small businesses that will benefit from the one-size-fits-all business tax approach. A business that makes a £20,000 profit pays the same rate of tax as a business that makes a £20 million profit. That means that most of the £15 billion that is being given back in the business tax cuts is being given back to large multinational corporations that are the friends of the Conservative party and of the Chancellor.

David Morris (Morecambe and Lunesdale) (Con): Will the hon. Gentleman give way?

Tommy Sheppard: I will not give way, because I have a minute left and others want to come in. I say to the small businesspeople of this country: “Be very wary about what is being done in your name. This is not the way to make your business successful; it is a tiny little bribe.”

I am out of time, but I want to finish on the Chancellor’s suggestion that this is a Budget for the next generation. God help us if he really believes that. The next generation have just had the remaining grants for education removed from them. They are faced with living with their parents well into their 30s and 40s because their housing options have gone, and they are now being told that they may have to work until they are 80 years old. I do not think that those people will thank the Chancellor for this Budget. They will expect the Government to do an awful lot more to provide them with the future that they require.

6.45 pm

Helen Goodman (Bishop Auckland) (Lab): I am pleased to follow the hon. Member for Edinburgh East (Tommy Sheppard), and I agreed with much of what he said about equality. Everybody understands that the Chancellor was in a tight spot when he came to construct the Budget, but it is difficult to feel very sympathetic towards him, because he has constructed that tight spot. He drew up fiscal rules to bring the budget into balance without taking account of the economy’s need to invest in capital infrastructure, and that is why he is in a tight spot. The Treasury Committee took evidence from a whole range of economists, and we did not find one who agreed with the Chancellor’s approach to fiscal policy.

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Another problem is that the Chancellor’s focus has been very short-term, and he has failed to do the things that need to be done for the long term. He boasted that unemployment in the north-east had fallen rapidly recently, but that has to be set in the context of the fact that it is the highest in the country.

Many hon. Members have talked about the productivity problem. Productivity fell in all the major economies when we had the big crash in 2008, but whereas in America and the other G7 countries it is back above where it was before the crash, we are still just about reaching that level. The Chancellor highlighted the economic headwinds coming from the international economy. However, the downgrading of productivity, which is the reason why his growth forecasts are down, is solely due to domestic factors. We cannot blame other countries if we have not invested enough in our infrastructure and skilled our workforce adequately. Those are the things that we need to do more of.

I have a couple of questions for the Exchequer Secretary to the Treasury, and I hope that I will get answers to them.

Mr Speaker: Order. It is very important that our proceedings should be intelligible to all those who follow them, and I just remind the hon. Lady that there are no Front-Bench wind-up speeches tonight. Answers may or may not be forthcoming, but they will not be forthcoming from the Dispatch Box this evening. I am sure that the hon. Lady is a notably patient person.

Helen Goodman: I do not mind whether I get the answers today, next week or even in a letter from the Treasury. One of my questions is about infrastructure in the north. The increase in spending on that infrastructure is only £300 million. We see in the Budget:

“£75m to fast-track development of major new road schemes including…the…A66”.

When is the A66 going to be widened? I am not talking about getting some little feasibility study done. When will we actually get a change to the infrastructure, which is so essential for people who make things in the north-east and sell them to the rest of the country?

David Morris: Will the hon. Lady give way?

Helen Goodman: I would rather not take another intervention, because I am running out of time.

On the skills gap, there is no evidence that changing the governance status of our schools will make any difference to their effectiveness. In four academies in my constituency, GCSE scores have fallen in the past three years. At one point they achieved a figure of 66% of children getting five A to C grades, but last year they were down to 50%. There has been no analysis of such falls.

It is regrettable that the Chancellor has not produced any distributional analysis along the lines of what we on the Treasury Committee have repeatedly asked for—in other words, an analysis of the impact by decile of tax and benefit changes in this Budget. It is absurd that we have to wait for the IFS because the Treasury is trying to hide the impact of the measures in the Budget.