Contribution
My hon. Friend has made his point well. Let us hope that is read into the record. Currently, 13% of 16 to 24-year-olds are not in employment, education or training. We should be focusing relentlessly on creating opportunities for young people and supporting businesses that employ them. Sadly, this Budget does not do that. When sickness benefits pay more than the minimum wage, what is the incentive to work? Sectors such as tourism and hospitality that provide opportunities in every part of the country and in every constituency, but especially in rural areas, face significant economic pressure, and nationally, at least one pub is closing a week. The rates relief offered by the Chancellor in this Budget may help by a minuscule amount, but that is unfortunately offset by the increase in the minimum wage, and the VAT costs that those businesses face.
I want to turn to the kernel of what the Defence Secretary was saying, and to defence. It was solemnly promised by this Prime Minister and the previous Prime Minister that we would not only quickly get to spending 2.7% of GDP on defence, but would have a path to 3%. There is no path to 3%. The only path I can see is that departmental budgets will be cut, and it has not yet been tied down what services will be cut to pay for that 2.3% real cut in Departments. There was no clarity on this in the Budget yesterday. Surely if the Labour party and the Government keep boasting that they will go to 3%, the least they owe the British people is a path to get there—and it is not only the 3%, but the 3.5% in the following Parliament, which is a great deal of money.
Importantly, as General Sir Richard Barrons said recently, we do not own the clock. In other words, we do not know when our adversaries are likely to launch some form of attack on us, and we know that the Ministry of Defence is not able to place the orders it needs. To take the bigger equipment, when will the F-35s come? The Defence Secretary shakes his head. They are still in the queue; they cannot be manufactured for us because we have not given a solid commitment on when we want them. Those delays in procurement particularly affect some of our smaller defence companies, because they do not have the cash flow.
I mentioned artificial intelligence in an intervention yesterday. One of the most important things the Chancellor could have done for this country yesterday was provide a proper path to how every single Department will operate digital and AI more effectively, so that he could increase productivity. The machinery of government changes that the Government have undertaken in the last year do not give the Public Accounts Committee, which I chair, any confidence that the Government have a real policy on digital and AI, and how they will produce mechanisms for using this technology properly.
A year ago, digital policy was in the Cabinet Office. It was then transferred to the Department for Science, Innovation and Technology, but DSIT was abolished. Now it is in the Department for Digital, Culture, Media and Sport—the Department which historically has been used to dealing with sport and culture, not the important matter of AI. Without this priority, it is difficult to see how the Government will make this digital policy work.
When my right hon. Friend the Member for Godalming and Ash (Sir Jeremy Hunt), as I said in an intervention yesterday, gave in his Budget a significant sum of £3 billion to the Department of Health and Social Care—the Defence Secretary’s former Department—to transform their digital equipment, that was the start of what we should have been doing for every single Department. I do not know how the Government will meet their efficiency targets unless they start to introduce proper AI and get rid of some of our legacy equipment, which, as the Defence Secretary knows only too well, is more vulnerable to cyber-attacks.
I turn to local government reform. I was pleased by the announcement this morning that Gloucestershire will be one unitary authority—that is good news—but our local authority will only get any increase in finances if we can come up with devolution. There was no link to how Gloucestershire will move from local government reorganisation into a strategy authority, and we need to have that. Otherwise, we will not be able to take advantage of some of those financial benefits.
On the civil service pension scheme, there is a good news story for which I praise the Government. We have had five hearings on the Public Accounts Committee into the dreadful mess that Capita has left that scheme in—five hearings where every single deadline has been missed. That is not good enough for the poor 1.7 million members of that scheme. The Government have done a good thing. Last week, I wrote to the Pensions Minister about a problem: if Capita did not pay out a lump sum within two years, scheme members would be taxed on that sum at the highest rate. The Minister met me fairly quickly, I raised it on the Floor of the House on Monday and—bingo!—I got a letter yesterday saying that the law was going to be changed in the Budget. I pay tribute to the Government and the Pensions Minister for that quick action. That was the just thing to do. Those pension scheme members will not have to keep worrying about whether they will get their full lump sum.
In conclusion, this is sadly a wasted opportunity, and we look forward to future Budgets actually giving us a path to a better economic future. One of the economic forecasts we had in the Budget yesterday was growth of 1.2%, which all the Government and the Chancellor are crowing about, but historically 1.2% is not enough to keep spending at the rate the Government are. We need more measures to help business and a proper taxation policy, and then this country will start to grow.