Budget Responsibility Bill
Tuesday 30th July 2024
(3 months ago)
Commons ChamberRead Full debate Budget Responsibility Act 2024 Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Chief Secretary to the Treasury (Darren Jones)
I beg to move, That the Bill be now read a Second time.
I congratulate you and welcome you to your place in the Chair, Madam Deputy Speaker. It is a privilege to open this debate in my first appearance at the Dispatch Box as a Minister in this new Labour Government.
At the general election, the British people voted for change, and this new Labour Government began work immediately to deliver on that mandate. Sustained growth is the only route to the improved prosperity that this country needs and to improve the living standards of the British people. After 14 years of Conservative failure, this work is urgent—it is now our national mission. To deliver on that mission, as my right hon. Friend the Chancellor set out days after taking office, we must fix the foundations of the economy and restore economic stability. She emphasised that commitment to delivering economic stability by meeting with the Office for Budget Responsibility soon after becoming Chancellor.
Under the legal framework we inherited from the Conservative party, there is no requirement on the Treasury to subject fiscally significant announcements to independent OBR scrutiny. We all experienced what happens when huge unfunded fiscal commitments are made without proper scrutiny and key economic institutions such as the OBR are sidelined. The country cannot afford a repeat of the calamitous mini-Budget of September 2022, when Liz Truss and Kwasi Kwarteng’s reckless plans unleashed economic turmoil that has loaded hundreds of pounds on to people’s mortgages and rents. Conservative Ministers put ideology before sound public money and party before country.
This Labour Government are turning the page: we will always put the country first and party second. Our commitment to fiscal discipline and sound money will never waver. That is why we are firmly committed to the independence of the OBR, and to the important principle that in normal times, the announcement of a fiscally significant measure should always be accompanied by an independent assessment of its economic and fiscal implications, in order to support transparency and accountability. That is why we made a commitment in our manifesto to strengthen the role of the OBR, and it is why we have acted quickly to deliver on that commitment today.
This action will reinforce credibility and trust by preventing large-scale unfunded commitments that are not subject to an independent fiscal assessment. As Richard Hughes, the chair of the OBR, reiterated in his recent letter to the Chancellor,
“it is a good principle of fiscal policymaking that major fiscal decisions should be based upon, and presented alongside, an up-to-date view of the economic and fiscal outlook”.
In line with this, the Chancellor yesterday commissioned a full forecast to accompany our Budget on 30 October, following the important principle that significant fiscal policy decisions should be made at a fiscal event and accompanied by an independent OBR assessment. That fiscal lock is an essential part of our mission to deliver economic stability. It is one of our first steps towards fixing the foundations of the economy, and it is our guarantee to the British people that this Labour Government are a responsible Government who will never play fast and loose with public and family finances, as the Conservative party has done before.
The Bill sets the legal framework for the operation of the fiscal lock. It builds on the Budget Responsibility and National Audit Act 2011, which established the OBR. In line with that, the technical detail underpinning the fiscal lock will be set out via an upcoming update to the charter for budget responsibility. The charter sets out the Government’s fiscal framework, including guidance on how the OBR performs its duties within that framework. To support scrutiny of the Bill during its passage through Parliament, the Treasury has published a draft of the relevant charter text, which will make clear exactly how the Government plan to implement the fiscal lock. A full update to the charter will be published in due course, and Members will vote on it in the usual way.
The Bill itself does five things to ensure that proper scrutiny of fiscal plans will take place. First, it requires the Treasury, before the Government make any fiscally significant announcement in Parliament, to request that the OBR presents an assessment taking the announcement into account. This builds on the usual process whereby the Chancellor commissions the OBR for an economic and fiscal forecast to accompany a fiscal event. It guarantees in law that, from now on, every fiscally significant change to tax and spending will be subject to scrutiny by the independent OBR.
Secondly, the Bill gives the OBR new powers to independently decide to produce an assessment if they judge that the fiscal lock has been triggered. If a fiscally significant announcement is made without the Treasury having previously requested a forecast from the OBR, the OBR is required to inform the Treasury Committee of its opinion and then prepare an assessment as soon as is practicable. That means that, come what may, the OBR, through Parliament, will be able to hold the Government to account.
Thirdly, the Bill defines a measure, or combination of measures, as “fiscally significant” if they exceed a specified percentage of GDP, with the charter then setting the precise threshold itself. Setting the threshold in this way provides clarity for both the OBR and external stakeholders about what constitutes a “fiscally significant announcement”—that is, when the fiscal lock has been triggered—and it ensures that the Government can set it at the right level going forward, recognising economic conditions. The threshold level will be set at announcements of at least 1% of nominal GDP in the latest OBR forecast. As an example, this year the 1% threshold would be £28 billion. This will ensure that we properly capture any announcements that resemble the growth plan of former Members Liz Truss and Kwasi Kwarteng in 2022, with the broader risks to macroeconomic stability that this entailed.
Fourthly, the Bill ensures that the fiscal lock does not apply to Governments responding to emergencies, such as the covid-19 pandemic. The Bill does so by not applying in respect of measures that are intended to have a temporary effect and which are in response to an emergency. The charter will define “temporary” as any measure that is intended to end within two years. This recognises that it is sometimes reasonable—for example during a pandemic—for the Government to act quickly and decisively without an OBR assessment, if that is needed in response to a shock. Of course, in emergencies it may be appropriate for the Chancellor to commission a forecast from the OBR to follow measures that needed to be announced or implemented rapidly, and that would happen in the usual way. Alongside any such announcement, the Treasury will be required to make it clear why it considers the situation to be an emergency. As set out in the updated charter, the OBR will have the discretion to trigger the fiscal lock and prepare a report if it reasonably disagrees.
Fifthly and finally, the Bill requires the Government to publish any updates to the detail of the fiscal lock—such as the threshold level at which it is triggered—in draft form at least 28 days before the updated charter is laid before Parliament. This is an essential safeguard in the Bill, preventing any future Government from choosing to ignore the fiscal lock by updating the charter without the consent of Parliament.
Jim Shannon (Strangford) (DUP)
The Minister is setting out the stark realities of where we are financially, which it is important that we all understand. Given that the financial positions of all of us within the United Kingdom could be fairly dramatically changed, regionally, it will be important that discussions with the Northern Ireland Assembly, the Welsh Assembly and the Scottish Parliament take place early enough for the impacts of what might happen to be better understood.
Darren Jones
I thank the hon. Gentleman for his contribution. As I am sure he knows, the Chief Secretary to the Treasury is traditionally the lead Minister in Government for relationships with the Finance Ministers in the devolved Governments. I have already met a number of times with counterparts in the Northern Ireland Executive, as well as those in Scotland and Wales. I look forward to meeting them in person in Northern Ireland, I hope in September, for further such discussions.
To conclude, people across the country are still suffering the consequences of the Conservative party’s economic experiment in 2022. Conservative Ministers took the most reckless decisions without any thought for their real-life impact on the British economy and on family finances. Astonishingly, they have still made no apology.
With this Labour Government, our commitment to fiscal discipline and sound money is the bedrock of our plans. The Budget Responsibility Bill guarantees in law that, from now on, every fiscally significant change to tax and spending will be subject to scrutiny by the independent OBR. The Bill will reinforce credibility and trust by preventing large-scale unfunded commitments that are not subject to the scrutiny of an OBR fiscal assessment. This delivers on a key manifesto commitment to provide economic stability and sound public finances by strengthening the role of the independent OBR. This is a crucial first step to fix the foundations in our economy, so that we can achieve sustained economic growth and make every part of the country better off.
For those reasons, I commend the Bill to the House.
Gareth Davies (Grantham and Bourne) (Con)
Madam Deputy Speaker, congratulations on your election. Let me take my first opportunity to congratulate the right hon. and hon. Members in the new Treasury ministerial team, who have taken up some of the best jobs in government. I loved every minute of my time in the Treasury, even when I had to come to this place to face my shadows. I will always be grateful to the officials who so ably supported me and the team.
As the Member of Parliament for Grantham, the home of our country’s first female Prime Minister, I congratulate our country’s first female Chancellor. It is right that we highlight that. While the two are not politically aligned, we can all recognise when a ceiling has been shattered and no matter who is breaking it, we certainly recognise that on this side of the House.
The Bill before us seeks to amend the Budget Responsibility and National Audit Act 2011—a Bill, introduced by a Conservative Chancellor, that created the Office for Budget Responsibility. The Bill should be understood in that context, building on a previous Bill that replaced the system where His Majesty’s Treasury would produce its own forecasts and the Chancellor of the Exchequer would essentially mark their own homework. Back then, that was an essential piece of legislation, given what had gone on before. Between 2000 and 2010 the then Labour Government’s so-called forecasts for growth in the economy were out by an average of £13 billion and their forecasts for the budget deficit three years ahead were out by an average of £40 billion. Their forecasts therefore lacked any credibility at all.
It was not just their forecasts that led to the creation of the OBR; it was their management of the economy. Much has already been said by the shadow Chancellor about the higher inflation, higher deficit and higher unemployment that the Conservatives inherited from Labour in 2010. What is, however, sometimes forgotten is that total public spending accounted for almost half the national income when Labour last left office. Welfare spending ballooned by a staggering 45%, and that runaway spending meant that we inherited the largest budget deficit of any economy in Europe with the sole exception of Ireland. The idea that Labour has an unblemished record when it comes to the public finances is, therefore, plain wrong. We Conservatives created the OBR, in Parliament, to guard against Labour’s fiscal unaccountability and recklessness with the public finances. We continue to support the role of the OBR in providing open, fully transparent, independent forecasts for all to see, no matter who is in government.
It was genuinely good to hear that the Chancellor recognised the importance of the OBR when she said that because of the OBR, in her words,
“You don’t need to win an election to find out the state of public finances.”
She was absolutely right about that. That is why yesterday’s supposed revelations simply won’t wash. In fact, if she is so supportive of the OBR, I ask a simple question: why was yesterday’s statement based on internal Treasury analysis, not OBR analysis? Surely if they are very supportive of the OBR they would have asked the OBR to conduct the analysis. The OBR has always said that it would be ready to produce analysis at any time, on short notice.
That was yesterday, and today we are here to talk about the Bill before us. While we are supportive of the OBR, we think it is right that the House should consider a number of concerns that we have, on which we will seek clarification. First, the Bill will require the Treasury to request, and the OBR to produce, a report on fiscally significant measures announced by the Government, with the exception of temporary, emergency measures. The definitions of these terms—"fiscally significant”, “temporary” and “emergency”—will be set out in a charter for budget responsibility as the Chief Secretary outlined. The draft charter text, published alongside the Bill, deems measures to be fiscally significant if they cost the equivalent of 1% of GDP in any financial year. It defines as temporary any measure intended to end within two years, and the draft charter text gives the OBR discretion to reasonably disagree with the Treasury’s interpretation of what constitutes emergency.
Despite some of the rhetoric, we note that nowhere in the Bill or the surrounding documents is the OBR empowered to prevent a Government from taking fiscally significant action of any kind. The effect of this Bill is to ensure that an OBR costing accompanies any fiscally significant action the Government take—nothing more, nothing less. The way in which the Chancellor described this Bill as a so-called lock to prevent certain activity is—to be generous on my first outing—overly ambitious. The Bill is described as introducing a fiscal lock, which the Chancellor promises will prevent large-scale unfunded commitments, but that is not what it does. There is no fiscal lock, and if anything, it is a forecast lock. The potential impact of the Bill is so limited and specific as to lead some to wonder whether, for all the animated hyperbole of the Chancellor yesterday, this is the prioritisation of gimmicks over governing, despite what the Prime Minister said on the King’s Speech.
Secondly, and I say this genuinely constructively, the Government need to be better prepared to clarify what is meant by “emergency”. The draft charter gives the OBR the power to reasonably disagree with the Government’s interpretation of what is an emergency, but this raises questions about whether the OBR is equipped to make such a decision in the first place. What counts as an emergency should mostly be clear-cut, but what about instances that are less obvious, or when unforeseen circumstances come down the track? The OBR would then be straying into political decision making, which would rightly raise constitutional issues. Even if it is ultimately for Ministers to decide on such matters, any resulting disagreement between the Government and the OBR about whether the circumstances amount to an emergency could undermine the credibility of the Government, the OBR or both.
Ms Stella Creasy (Walthamstow) (Lab/Co-op)
I am genuinely perplexed whether the hon. Gentleman is with the former Member for South West Norfolk, who wanted to see the OBR abolished and not part of any decision making, or feels that the Bill does not go far enough. Either way, does he recognise and accept, as thousands of mortgage payers in this country now do, the disaster of the previous Conservative Prime Minister’s Budget, the impact it has had and the need never to go back to those days?
Gareth Davies
We support the OBR. I have been clear on that. We created the OBR, so to suggest that we do not support it is incorrect. I would just pull the hon. Member up on some economic facts. The reason interest rates were so high and mortgages went up is that we faced a global challenge, which this Government will now experience. In office, the Government have to deal with events, and what caused inflation around the world was two things: the war in Ukraine, which pushed up wholesale gas prices to record highs; and the fallout from a once-in-a-century pandemic that the Labour party seems to have forgotten about. Those two factors resulted in 11% inflation, which resulted in the Chancellor and Prime Minister at the time prioritising bringing down inflation, which we did, to 2%. We have now handed this Government 2% inflation, half the deficit we inherited in 2010, half the unemployment and the fastest growth in the G7, so it is a little bit rich to suggest that we take lessons from the Labour party on economic performance.
Our third and final concern—we have others, but I am in keeping this short on Second Reading—is that, in the event that the lock is triggered, the OBR does not need to produce one of its standard reports, even though the Treasury, under the Bill, is required to request such a report to avoid breaking the lock. The Bill creates, therefore, the possibility of an entirely new OBR report, which is not envisaged by the original Act. I would be grateful if the Exchequer Secretary explained that and what it means in practice when he sums up. Although standard OBR reports must be published, it is not clear whether that applies to other reports that the OBR may prepare. If this requirement does not apply, are the Government happy to give the OBR the power to decide whether its costings are published? That is potentially very concerning for transparency.
The official Opposition look forward to more detailed scrutiny of the Bill and its practical implications. Be in no doubt: we support the OBR, which we created to bring in much-needed transparency to our fiscal framework after years of fiscal folly and false promises by the Labour party. At the same time, let us not pretend that the OBR should be the ultimate judge of good policy, that nothing bad can happen under its watchful eye and that nothing good can happen beyond its gaze. Labour Members know this: it is precisely what they argued 15 years ago when we first debated the Bill that led to the OBR’s creation. The OBR should not become too political. It should be a referee, not a player, in the fight for fiscal accountability. In the end, we stand by the principle that the British people, through their elected representatives, should always have the deciding say on public policy. We look forward to debating this further in the months ahead. We will not be voting against this Bill on Second Reading. I look forward to the debate.
Ms Stella Creasy (Walthamstow) (Lab/Co-op)
I feel as though I am almost in Alice in Wonderland world when I listen to the Opposition response to this legislation. I certainly feel concerned that they, with the Cheshire Cat and possibly following the Queen of Hearts, might have been trying to pretend that their previous Conservative Prime Minister did not exist, or indeed that the former Member for Spelthorne was never ever the Chancellor. Those of us paying for a mortgage—and I declare a direct interest—know all too well that they were in charge and about the damage that they did with their disastrous mini-Budget, which is why this legislation is so important.
I would wager that that what their constituents would tell them if they suggested that the economic harm the previous Government did to this country, for which we will all be paying for generations to come, was solely to do with Ukraine or the pandemic. That mini-Budget was a political choice, but worse than that, it was a politically uninformed choice. The Government at the time consciously and purposefully made the decision on ideological grounds to press ahead with a Budget that cost 1% of our GDP, and to hell with the consequences, as we have all seen. That is why this legislation is so important.
I will always welcome a sinner who repenteth, so I am pleased that the shadow Minister recognises the value of independent scrutiny and, indeed, urges us all to go further. We will always welcome such an approach, because it is right and because our constituents deserve better, because we can see how bad things are and how broken this country is. What this Bill has at its heart are the funds to repair the damage done by the previous Administration. That is why the Chief Secretary to the Treasury is here today with this Bill to be clear with us about why it matters, why we put things on the books and why sound money is at the heart of it.
The markets did not react by accident and put up all our mortgages; they saw with terror the damage that bad leadership in the Treasury can do and have accordingly asked us to meet that challenge. Frankly, there is nothing progressive about crashing the economy, and that is exactly what the previous Government did. By putting on the record the need to report independently on fiscally significant measures, we are starting with a clean sheet and saying that we will not take such a reckless approach with other people’s money. At the end of the day, that is what this is: the tax revenues that are generated are the moneys of our constituents, and it is therefore right that we are careful about how we administer them.
However, I recognise that there are challenges in this legislation. I am speaking today because I hope to hear from the Ministers on the Front Bench further clarity about the concept of “fiscally significant”. As somebody who has always liked to be hawkish about public money, I think it is important that we are clear where we are investing, and I very much urge the Treasury to think about investing to save. I see in our broken society the damage that is done by poverty, poor public services and the higher costs that come with that, so I want us to be clear about the funding we have, where it is coming from and why every penny matters.
Mr Mark Francois (Rayleigh and Wickford) (Con)
As the hon. Lady knows, the new Government have intimated that they may decide to mirror much new EU legislation, which could well have budgetary consequences. She and I have not quite always seen eye to eye on Europe, but does she agree, in that context, that it is actually a bad mistake to do what the Government want to do tonight and abolish the European Scrutiny Committee?
Ms Creasy
The right hon. Member pre-empts many of my concerns. There is a very strong story to tell about good fiscal discipline, but it is not possible to do that independently in a modern, global economy, so the scrutiny that we can provide in this place of a whole range of regulations does matter. Those include financial regulations—I think particularly about the City and issues around a financial transaction tax, for example. I have not yet convinced him of the merits of working more closely with Europe, but I am confident that one day we can do so. I agree with him, however, that this House should be fully part of that, just as I believe in the principles behind the Bill—that disinfectant comes from transparency and our ability to see what is going on. That is why the Government are so right to bring this legislation forward.
Let me move on to some areas where it is right to ask what we mean by fiscally significant. The right hon. Member and I might disagree about the deal we do in resetting our relationship with Europe, but there can be no doubt that that will have a clear economic impact on this country. I think of the hauliers who are considering whether they will give up bringing goods to the UK because of the Brexit border tax. The previous Government admitted that that measure was inflationary and could have a significant impact not just on our food security, but on our economy, pushing up the cost of living. Many of our constituents know that there is still too much month at the end of their money, and we should challenge any measure that makes that harder. That will also inflect our tax take.
The point I am getting to is that if we are talking about measures that are so fiscally significant that they count for 1% of GDP, a trade deal would easily meet that criterion. We need to be clear in the Bill what we ask of the Office for Budget Responsibility—which, after all, has provided evidence on the impact, for example, of leaving the European Union—and whether we consider its role in such matters. If we are going to put everything on the books, let us make sure that the public understand fully the decisions that we make and where the information comes from.
Another area in which we as a House need to act is our outgoings, especially when we are being asked to make very difficult choices about some of the most vulnerable in our communities, such as people who rely on welfare, or pensioners who rely on the winter fuel payment. We have to be honest: this country is pretty much bankrupt as a result of the previous Administration. If somebody in that dire financial position came into one of our surgeries, we would sit with them and talk about a debt relief order. We would look at their costs and particularly at consolidating the debts that they may have.
Many colleagues here will know that for many years I have been concerned about legal loan sharking. That is not just in people’s private lives, but in the public sector, and I consider the private finance initiative to be the legal loan sharking of the public sector. If we are talking about fiscally significant measures—measures that meet the test of £28 billion—we should consider that we have £151 billion of outgoings committed to private finance companies in this country, against £57 billion-worth of assets. Most people can see that those figures do not add up.
Local authorities spend around £18 billion every two to five years on PFI repayments, of which about £4 billion is interest costs. That would suggest an average interest rate of around 35%. If somebody came into a surgery with a loan at a 35% interest rate, we would encourage them to go to a debt relief order. Our country is no different, and this matters because, individually, local authorities might not meet that fiscally significant threshold, but collectively, they will for us. We are not going to let hospitals and schools go bust and go out of business. Parklands high school in Liverpool was built under PFI. It was closed because there was not a demand for the places, but Liverpool city council is still playing £12,000 a day for that closed school. It has repayments of £42 million left and the company that owns it is making a profit of around £340,000 a year from the scheme.
Private finance companies are on our books, and they should be on our books nationally. They should be considered fiscally significant. We can do things to consolidate those loans and to reduce the outgoings that will come. My contribution to the Bill and the amendments that I might table, depending on what Ministers say, will relate to the fact that I think we need to be clear that everything that is fiscally significant—decisions that we might not proceed with and ones that we do—should be subject to that level of scrutiny.
The National Audit Office has given us plenty of information about the poor value for money of private finance initiatives. Many Members who have these schools and hospitals in their constituencies will have seen this at first hand. There is evidence from the Department of Health and Social Care about what could be done to consolidate loans that probably would generate savings that would be fiscally significant, when we talk about the sums involved. It would be fantastic to see the Office for Budget Responsibility pick this matter up as part of our knowing how much we have to pay out as a country; how much of a contribution we need to make. This money is going to private companies that, on the whole, are not paying tax in this country, so it is not generating revenue that can go back into paying for the repairs that need to come.
The previous Government started to look at these issues and then walked away. I know that this Government, with their commitment to fiscal discipline and fiscal transparency, will want to be open about the benefits, costs and fiscal significance both of the trade deals that we might make and of private finance initiatives. I look forward to hearing from Ministers about that. This is a very different world—[Interruption.] The shadow Minister is smiling. I am sure that he misses his colleague from Spelthorne, but I know he will not miss the opportunity to say sorry to all our constituents for the mess we have been left in and the reason why we need this legislation on the discipline of the OBR, and for the failure to tackle the long-term problems that have left legal loan sharks and poor trading opportunities for our constituents, because they are going to pick up the pieces for generations to come.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
Sarah Olney (Richmond Park) (LD)
It is a pleasure to see you in the Chair, Madam Deputy Speaker; congratulations on your election.
The Liberal Democrats understand the importance of a stable economy to the wellbeing of our nation, and we will support the Bill as it makes its way through Parliament. We have seen the effects of the chaos and uncertainty wrought by the previous Conservative Government in their horrendous mismanagement of the economy, and we know that future prosperity can be built only on a firm foundation.
The former Member for South West Norfolk may have intervened to prevent officials from using the phrase “disastrous” mini-Budget in the King’s Speech document, but this was a disaster for which many millions across the country continue to pay the price. Liberal Democrat MPs have been returned to this House in greater numbers than ever before, because we understand how much our constituents have suffered from the increase in mortgage payments, higher fuel bills and escalating food prices that resulted from the disastrous mini-Budget. We will do all we can to tackle the cost of living crisis being felt by so many, and we welcome the new Government’s commitment to building a strong platform for economic growth. We welcome the Bill as a symbol of strengthened fiscal responsibility and transparency, which we hope will prevent a repeat of the Conservatives’ disastrous mini-Budget under Liz Truss from ever happening again. After the turmoil of the outgoing Conservative Government, we welcome the seriousness of intent from this Government as they rebuild trust with the financial markets and the business and financial sector as a whole.
The financial irresponsibility and unfunded tax cuts in the mini-Budget sent mortgage rates soaring and continued a pattern of low growth, falling living standards and business uncertainty under the Conservatives. Millions of people across the country continue to see the devastating impact of their disastrous governance in their food and energy bills and to feel its heavy burden in their personal finances.
A recent report from the Institute for Fiscal Studies shows that 320,000 people have been pushed into poverty because of mortgage interest rate rises caused by the incompetence of the previous Conservative Government. It has been devastating to hear the stories of so many households dragged into poverty, and to know that so many families are struggling under the worst cost of living crisis in a generation. It is painful to reflect on the thousands of people who were hoping to make progress in their life and improve the circumstances of their family, but find themselves pulled backwards by the weight of the costs now piled upon them. The IFS report tells us that the number of adults unable to keep their home warm enough increased from 1.8 million in 2020 to 4.6 million in 2023. The IFS attributes that increase to the rise in mortgage interest rates during that period. The statistic lays bare in shaming detail the enormous and ongoing impact that the Conservatives’ disastrous mini-Budget had on all our lives.
The positive responses that this Bill has evoked from the broader business and finance sector are indicative of the desire for industry stability. We welcome the engagement from economists and industry experts, who advise of the Bill’s beneficial impact on confidence in public finances. Even the former Chancellor, the right hon. Member for Godalming and Ash (Jeremy Hunt), has acknowledged that he is minded to support the Bill. We will carefully scrutinise its details to ensure that it will achieve its intended aims. In particular, we will look closely at the threshold for fiscally significant measures, set out in the legislation as measures worth at least 1% of GDP or approximately £30 billion, and will consider whether that provision could be circumvented by Government announcing major changes just below that threshold.
The proposed terms set a substantial threshold that would have to be reached before the OBR could insist on intervening. That raises questions about how easy it would be for a Government to skirt the rules and avoid scrutiny from the watchdog. We understand that the bar has been set relatively high to prevent a large-scale irresponsible fiscal event, such as the disastrous mini-Budget, but we are aware of the limitations that places on the Bill. In particular, an announcement could have a largely indirect fiscal effect—it could have an impact on the economy, but come at a small up-front cost to the Government—and therefore not trigger the fiscal lock. We therefore ask the Chancellor: can a GDP measure alone adequately capture the impact of a spending or taxation measure on the economy? Should the Government examine the possibility of using additional criteria in establishing the threshold?
We must consider the wider context in which the Conservatives’ damaging mini-Budget came about to determine whether the measure that we are debating would be sufficient to prevent such a disaster ever happening again. The Conservatives’ period in government, and the last two Parliaments in particular, were characterised by a distaste for the institutions that provide checks and balances on power, and efforts to actively undermine them. Throughout the past few years, we have seen attacks on the judiciary, the civil service, the BBC, the Bank of England, the EU and any British citizen who dared express the view that the Government’s botched Brexit deal was doing enormous damage to our economy. We have seen the provisions of international treaties airily discarded. Conservative Ministers even illegally prorogued Parliament. Even now, in the Conservative party leadership contest, it seems that the one thing all candidates agree on is a promise that the UK will leave the European Court of Human Rights.
The disastrous mini-Budget emerged from the philosophy that the power of central Government, exercised by successive Conservative Prime Ministers, can trump that of other vital independent institutions, and it is precisely that philosophy that we must never again see from Government. The ongoing failure of the former Member of Parliament for South West Norfolk to apologise for the disastrous mini-Budget underlines the fact that she thinks she was both entitled and correct to unleash it on an unsuspecting country that voted for neither it nor her.
Truly addressing the causes of the systemic failure that led to the disastrous mini-Budget will take a great deal more than this Bill. It requires the Government to work alongside institutions that exist to support and challenge their decision making. It requires the Government to submit their proposed measures to parliamentary scrutiny. The Liberal Democrats think that reforms devolving power to local bodies to decentralise decision making would also strengthen our ability to take long-term decisions in the national interest. This Bill and other measures are encouraging signs of this new Government’s intention to ensure that those in power act with more integrity and transparency, but ultimately, unless all Governments are committed to upholding the principles of fiscal responsibility, transparency and sound governance, the risk of future disasters such as the mini-Budget will remain.
In our general election manifesto, we set out the need for every fiscal event to be accompanied by an independent forecast from the OBR. More broadly, we wish to see the Government foster stability, certainty and confidence by managing the public finances responsibly, getting national debt falling as a share of the economy and ensuring that day-to-day spending does not exceed the amount raised in taxes. We must make the tax system fairer by asking some of the wealthiest companies in the world to pay their fair share—the big banks, the oil and gas producers and the tech giants—instead of adding even more to the burden on hard-working families. To improve stability and growth, we need to fix our broken trading relationship with Europe and set up an industrial strategy, helping to make Britain one of the most attractive places in the world for businesses to invest. We must work in partnership with responsible, sustainable businesses to tackle the climate emergency, and spur the growth that is needed for investment in health, social care, education and other essential public services.
Responsibly managed public finances are essential if we are to have the stability, certainty and confidence that drive economic growth, and they are vital in getting mortgage rates under control, too. Under the outgoing Conservative Government, we found out just how much pain and damage can come from fiscal irresponsibility. The Liberal Democrats want a thriving British economy that provides jobs and opportunities and is attractive to businesses and investors. We welcome this Bill as a useful step in that direction that will help to improve long-term stability and responsible economic management.
Richard Tice (Boston and Skegness) (Reform)
On a point of order, Madam Deputy Speaker.
Madam Deputy Speaker (Ms Ghani)
Does the point of order relate to the business being discussed right now?
Madam Deputy Speaker
Just for reference—I know that this can be tricky for new MPs—points of order must be relevant to the business under way, or be made during the transition between items of business. However, I know that that is not easy for new MPs, and I am grateful to the Member for giving notice of the point of order, so he may proceed.
Richard Tice
Thank you, Madam Deputy Speaker. We are hearing a lot about transparency, accountability and scrutiny, but the business of the day, proposed by the Leader of the House, includes a plan to abolish the European Scrutiny Committee. When this country voted to leave the European Union, we voted to take back control. How can we scrutinise the Government’s activities and negotiations with the European Union if the Government abolish the European Scrutiny Committee? Surely that is completely in contrast to what the Government proposed in their manifesto, and to these discussions about scrutiny.
Madam Deputy Speaker
Once again, I am grateful to the Member for giving us notice of his point of order. It is for the Government to decide what motions should be tabled and whether there should be consultation. Any Select Committee can scrutinise matters within its remit, which may include matters relating to the European Union. The remit of the European Scrutiny Committee, as defined in Standing Order No. 143, is to examine European Union documents—broadly speaking, proposals for European Union legislation or policy. It is for the House, not for the Speaker, to decide whether the Committee still fulfils a useful function, now that the UK is no longer a member of the EU.
I call Martin Rhodes.
Martin Rhodes (Glasgow North) (Lab)
Thank you, Madam Deputy Speaker, for calling me to make my maiden speech during this debate.
I moved to Glasgow in 1992, expecting to stay for three years. Now, over three decades later, I am pleased to say that I made it my home. For more than 30 years, I have lived in the north of the city, so it is a great privilege and a great responsibility to have been elected to serve the constituency of Glasgow North. It is a constituency of huge variety and diversity. At its northern boundary, there is farmland north of Summerston, and at its southern boundary, at the River Clyde, there is the Scottish Event Campus, the Hydro venue and the city centre. There is the West of Scotland science park at its western boundary and the Glasgow Tigers speedway track towards the eastern boundary. Of course, there is a lot more in between, including Firhill, the home of Partick Thistle; the Kelvingrove art gallery; Possil marsh, a site of special scientific interest; Glasgow Caledonian University; the University of Glasgow; the Glasgow School of Art; the Royal Conservatoire; the Queen’s Cross church of Charles Rennie Mackintosh; the Forth and Clyde canal; the River Kelvin; Ruchill, Maryhill and Dawsholm parks; Kelvingrove park; and the botanic gardens.
Most of all, and far more important than those key landmarks, there are the communities that make up Glasgow North, many of which have faced and still face significant challenges, and have sought to do what they can to support each other in the face of those challenges. Resilience is a thread that runs through the diverse communities of Glasgow North. It is an area that I am pleased to call home and am now privileged to represent in this place.
I wish to recognise the work of my predecessor, Patrick Grady. In his time here, he was chair of the all-party parliamentary group on Malawi. He has a long interest in development issues, which I am sure he will continue to pursue outside this place.
The boundaries of the constituency are different from what they were in previous Parliaments; the constituency now includes parts of the city that were previously in Glasgow North East and Glasgow Central. I know that my hon. Friend the Member for Glasgow North East (Maureen Burke) will want to recognise the former Member for Glasgow North East, Anne McLaughlin, in her first speech, so with no disrespect to her, I will keep my comments to the former Member for Glasgow Central, Alison Thewliss. As Glasgow Central no longer exists, I want to ensure that we as a House do not miss the opportunity to recognise her commitment and work. In her time in this place, and before that, when she was a city councillor in Glasgow, she showed her commitment to serving those she represented.
There is one other former Member for Glasgow North to whom I would like to pay tribute today. Ann McKechin served in this place from 2001 to 2015. She has been a friend and a giver of wise advice for many years. In and outside this place, she has shown her continuing commitment to public service.
All of us here want to ensure that we represent the people we are elected to represent. We recognise across the Chamber all Members’ aspiration to serve, but we need to ensure that this mutual recognition does not blind us to the challenges of politics and public service. A number of events not too long ago have added to and encouraged distrust not just of politicians but of politics itself. The turnout at the general election in my constituency was just over 50%, and across the country it was only around 60%. There are many reasons for that. Certainly, in constituencies such as mine, the large amount of student accommodation lying empty because of the summer break counted towards lower turnout. The fact that the election was held at the start of the Scottish school holidays may have reduced turnout across Scotland, too. However, we should not let those contributory factors hide the clear opinion of many that politics is a self-serving occupation—and people demonstrate their indifference, distrust or disdain for it by not using their vote.
For too long, government and politics have often allowed themselves to be characterised by posturing and positioning, rather than the serious work of analysing problems, assessing solutions and delivering change. The empty charade of superficial posturing can initially seem to excite and engage, but the lack of substance, delivery and integrity can so easily tip the balance from excitement to disillusionment and a sense of betrayal. Thorough analysis, serious discussion and honest decision making must be the basis of politics if we are to rebuild trust. Financial responsibility and transparency are a key part of that.
It is our challenge across this Chamber over the course of this Parliament to rebuild trust in political institutions and processes. We need to show to people out there that politics is acting in their service, and that it can make real and positive changes to their lives and communities. That is the challenge for all of us, and one that I hope that I can meet during my time in this place.
Dave Doogan (Angus and Perthshire Glens) (SNP)
I am very pleased to follow the hon. Member for Glasgow North (Martin Rhodes), who just delivered a textbook maiden speech, and negotiated his way around the fairly awkward changes to the Glasgow constituencies. Judging by the unanimous reactions in the Chamber, the two former servants of his constituency that he saluted were hard-working representatives in this Chamber. I would like to reciprocate. He mentioned the former Labour Minister in the Scotland Office Ann McKechin, who invited me to her constituency office in Glasgow when I was a mature student around 2010-11. She gave me a good hour of her time, which I then thought was fairly generous. As an MP, I now realise just how generous that was to someone who was not her constituent and who, within two or three minutes, clearly demonstrated signs of a particularly different political outlook. I congratulate the hon. Member.
I welcome the Bill and commend the Government on introducing it. I am not certain that it is what they say; I will develop that point in a wee moment. Who among us could forget the aftermath of the Truss-Kwarteng debacle, which plunged businesses and households across these islands into chaos? The pair of them then disappeared off into the sunset, leaving us here to pick up the pieces of their arrogant and economically illiterate fiscal experiment while in government. If anyone has forgotten, it is not mortgage payers up and down these islands, who are still paying the price of that Tory Government misadventure. Mortgage rates spiked at 6% after the mini-Budget. Figures out last week from Moneyfacts show that the average rate for a two-year fixed deal is still 5.79%.
We in the SNP warned at the time that the mini-Budget would lead to economic chaos, so we can only support the measures in the Bill to help ensure that there is never a repeat of that ridiculous performance.
An independent assessment by the OBR for major and permanent fiscal interventions is welcome. It is responsible and the SNP supports it, but to be clear it is no silver bullet. It will not fix the economy, and nor will it prevent fiscal incompetence from the current or future Chancellors, their officials or junior Ministers. It will not fix the credibility of Chancellors who, for example, on taking office say they did not know about the £20 billion black hole in the previous Government’s fiscal plan that they were adopting, even though they were warned about it repeatedly and in public by the SNP, the Institute for Fiscal Studies and others.
The SNP welcomes efforts at increasing economic transparency, but the truth is that Labour has also been substantially short of honest with the public in this area. The new Government are seeking to create a counter-narrative or counter-reality to uphold the belief that the cuts and tax hikes that Labour will soon visit upon businesses and communities across these islands have been done to Labour by the Tories, rather than done to the people by Labour. That is the truth of the matter. If Labour is serious about restoring faith in, and the growth of, the economy, much more action is needed from the Government. No economy ever cut its way to growth; rather, growth is a function of investment.
In closing, I greatly fear that the new Labour Government are getting a bit carried away with their own success and are sailing off from reality at some knots. I cite the nauseating “Government of service” hyperbole, the Potemkin energy company that is GB Energy, which is abject nonsense, and now the “fiscal lock” set out in the Bill. An assessment by the OBR is not a lock on anything. It does not enable or prevent anything. It does not confine, nor does it decide anything. Parliament will never allow it to be used as a shield for the Chancellor. From its beginning to its end, it is simply an impartial assessment leaving the hands of the Chancellor of the day free to prosecute whatever plan they wish, consistent with the OBR’s assessment or not. And so it should be, because Parliament is here to hold the Government to account—as are the people across these islands, which we have seen recently.
To be clear, this provision is certainly no replacement for the rigorous parliamentary scrutiny of fiscal policy. That is a core function of this House, which I am sure that you, Madam Deputy Speaker, agree with. In the interests of consensus, will the Minister concede this minor point of detail—that “fiscal report” is far more realistic in terms of what it actually means than “fiscal lock”, for this nevertheless welcome measure?
Madam Deputy Speaker (Ms Ghani)
I call Blair McDougall to make his maiden speech.
Blair McDougall (East Renfrewshire) (Lab)
Thank you, Madam Deputy Speaker. As I am being welcomed to my place, I welcome you to your place and congratulate you. I also congratulate my hon. Friend the Member for Glasgow North (Martin Rhodes). He spoke about the lack of trust in politics; his eloquent speech and the service he will give to his community will go a long way to help to repair that. Can I say how wonderful it is to see him as one of many Labour MPs from that great city?
I do not wish to nauseate the hon. Member for Angus and Perthshire Glens (Dave Doogan), but my speech is going to be about public duty. Apologies for that. Yesterday evening, after the Chancellor’s statement and the discussion afterwards about responsibility, duty and the legacy that people leave in this Chamber, I was standing on the banks of the river, watching the river go by as it has done for countless generations. I thought of everyone who had stood on those banks before—about the choices and decisions they had made, and how those choices had impacted on the lives of everyone who followed them.
The first and most important duty, and the duty the Bill seeks to enshrine, is to take responsible decisions that will ensure a richer life for those who follow us—for our children and our grandchildren. The failure of our age is that we departed from that purpose. In doing so, we have left people trapped in short-term lives—lives without the opportunity to learn for the future; lives without a permanent home; lives of short-term, precarious work. Falling life expectancy, a poisoned environment and a legacy of debt have been handed down to a generation.
Time and generations flow, and can change for the better or for the worse. That change happens as a result of political decisions and also as a result of personal decisions—I will talk about that aspect a little later in my speech—but the hard decisions that we make today are what create a better tomorrow. For me the Bill is about us, as political leaders, making the kind of decisions that my constituents make every single day. Passing this Bill will be a promissory note, saying that this new Parliament will do better and that this new Labour Government will reclaim the legacy and the future of an abandoned generation.
The story of intergenerational opportunity is the story of my constituency of East Renfrewshire. I am going to be very brave and not claim that mine is the most beautiful constituency, partly because, having listened to the speeches of other hon. Members over the last couple of weeks, I am quite happy for that title to rest until the next maiden speakers stand up. You certainly can find natural beauty in East Renfrewshire if you walk through Greenbank Garden, stroll through Rouken Glen or take a hike to the top of Neilston Pad, but the extraordinary thing about my constituency is not the place but the people.
Generation after generation has moved to East Renfrewshire because it offers hope for the next generation and a better life for their children. First they came for the mills, the works and the quarries—to Neilston, to Busby, to Giffnock and to Thornliebank. In Barrhead they came in great numbers for jobs at the old Shanks works, making toilets for the Titanic, for royalty and, indeed, for this place. I must admit that I feel some jealousy when I hear other hon. Members talk about the pride they feel when Mr Speaker has chosen the whisky that Members sip on, or the shortbread for the canteen that Members snack on. My hon. Friend the Member for Inverclyde and Renfrewshire West (Martin McCluskey) has told us that the seats we sit on come from his constituency. I do not want to think about what hon. Members do on my constituency’s most significant product, but I hope the relief it provides enhances the quality of debate in the Chamber.
Those industrial workers were followed south out of Glasgow by the Irish and Jewish communities, then by Muslim families, and in turn by Hindus and Sikhs. More recently we have been joined by Ukrainians and Hongkongers, who are looking not just for opportunity but for liberty. Because East Renfrewshire is somewhere people aspire to live. Parents sacrifice and strive to make the dream of living there real, driven on by the love of their families, because in East Renfrewshire we have extraordinary schools—the best schools in Scotland—with remarkable teachers who open wide the future for our children. I want to make special mention of the very remarkable Isobel Mair school, where every child with additional special needs is valued and celebrated.
Sacrificing and striving for the next generation does not stop at the school gates in my constituency; it goes far beyond that. Volunteers at NellyBoxes, the Include Me 2 Club and Back to SchoolBank work to ensure that disadvantage and disability are no barriers to a childhood of opportunity, discovery and fun. St Cadoc’s football team is typical of the sports clubs that offer our kids the confidence and comradery that comes with competition—started in 1987 by the school janny, it now has thousands of kids playing football—but I could just as easily have told the story of Giffnock Soccer Centre, Barrhead Youth football club, Neilston Wasps, GHA and Whitecraigs rugby clubs, or our East Renfrewshire cricket club. I could go on, and as this is my maiden speech I will: Harlequin Youth Theatre gives kids the thrill of performance, and our flourishing girl guides, scouts and boys’ and girls’ brigades, and our Maccabi, offer young people adventure and a taste of leadership.
East Renfrewshire is, to borrow a phrase from someone else, a constituency of joiners. That is a wonderful thing—unless you happen to be their Member of Parliament. I know from speaking to my predecessors that East Renfrewshire is not always the easiest place in the world to represent. Three different hon. Members from three different parties have won and lost my constituency in the last decade. My immediate predecessor, Kirsten Oswald, deserves enormous praise for the service she gave to the constituency, which is typified by the fact that when she lost at one general election, she came back, fought again and won. I hope that is not something that is repeated, but it is typical of how much she loves the constituency. Both she and Paul Masterton, my Conservative predecessor, have been a source of constant support and advice, and I thank them for that.
I pay special tribute to my former hon. Friend—he is now just my friend—Jim Murphy, who served the constituency for 18 years. I know from my time knocking doors in the election how fondly he is remembered in the constituency, and it has been wonderful to talk to more long-standing hon. Members and find out that he is still as fondly remembered in this place.
Prior to the election, I spent most of the last decade working with democrats and against dictators around the world, but not all of my predecessors had such a frosty relationship with authoritarians. In 1941, Rudolph Hess bailed out of his Messerschmitt over the fields outside Eaglesham in my constituency, and parachuted to the ground. The Deputy Führer of the Nazi party was seeking to negotiate with Douglas Douglas-Hamilton, a former Member of Parliament for East Renfrewshire, who Hess believed—perhaps unfairly—to be a Nazi sympathiser. Hess was swiftly captured by a local farmer at pitchfork, and then taken to Busby scout hall, apparently by an inebriated member of the national guard at pistol point. He was then taken to the Tower of London, which sits alongside the river that flows outside here. Time may have passed, but I can tell you that my constituents, informed by events in Ukraine and elsewhere, still have as little tolerance for dictators as they did back in the 1940s.
My argument today is that we should think more long term in this House, but I make it in the knowledge that my own place here will only ever be temporary. I will close by saying why I feel that so acutely. My roots are in East Renfrewshire, where I was born and brought up, but my ancestors hail from much closer to this Chamber. My grandfather was born across the river, in Lambeth. He was one of seven children scattered to different orphanages and foster homes when his parents died. He went to his grave believing that his mother had been taken by consumption and then his father had succumbed to old wounds from the great war.
But that story was a lie. It was a lie told to a boy to protect him from a horrible truth that was discovered when we researched our family tree. The truth was that my great-grandfather, overwhelmed by grief and overcome by poverty, decided that his children would have a better future without him—that their life would be better if he ended his. So he walked to Lambeth pier and threw himself into the freezing water that runs past this Parliament.
As the once famous Newton Mearns poet Robert Pollock wrote:
“Sorrows remembered sweeten present joy.”
Today, if you stand at the place where my great-grandfather’s story ended, you can look across the river to where his great-grandson just gave his maiden speech as a Member of Parliament—watched from the Gallery by his own children. However long I serve on the banks of this river, I will always have an eye on the water flying by and my mind on the responsibility we have to our children and grandchildren.
Madam Deputy Speaker (Ms Ghani)
I have no doubt that the hon. Gentleman will do his family very proud—but for me, comfort breaks will never be the same. I call Bobby Dean to make his maiden speech.
Bobby Dean (Carshalton and Wallington) (LD)
I congratulate the hon. Member for East Renfrewshire (Blair McDougall) on that heartfelt speech. It was gracious of him to say that his was not the most beautiful of constituencies, but I think he is at least in the top 600 and possibly even higher after one or two whiskies. I also congratulate the hon. Member for Glasgow North (Martin Rhodes) on his maiden speech. The points he made about engaging with the public and making sure that we restore trust in this place are really important.
I am not going to speak about Scotland in my maiden speech. I am going to start by talking about where I came from. My parents are in the Gallery and I promised to stay grounded, so this is the place I want to start. I grew up on a council estate as the eldest of three boys. My dad worked long hours as a scaffolder and my mum worked two jobs, one in Burton’s by day and one as a cleaner at night. Things were not always easy, and times got so tough at one point that, as a young teenager, I moved into the care of my grandparents. I have found out in recent years that this is called kinship care. It is a pretty formal-sounding name, but it is basically where family agree to take on family. I am very grateful to my Nan and Pops for helping me back on to the right path, and I know that they would have been very proud of me if they had got to see this day.
Of course, it was not just family that got me here. I have had encouraging teachers, supportive friends, guiding therapists, a campaigning wife and a totally unreasonable bunch of people called activists who volunteer a silly amount of time to the cause. To all those that have been involved in my messy pathway to now, and especially to the people of Carshalton and Wallington who have put their faith in me: thank you. I am utterly humbled to be here and I do not take this responsibility lightly.
I had planned on describing my constituency of Carshalton and Wallington as a hidden gem, but since I started in this place a few weeks ago, I have kept bumping into staff that live there, so it is clearly a popular place. For those that do not know, Carshalton and Wallington is on the south London border with Surrey—or in Surrey, depending on who you speak to. I describe it as hidden because, despite being a London borough, you will not find us on the tube map. There are no London underground or London overground services in our borough, and this is an issue that I will return to at a later date. But my constituency is a gem. I am not going to say it is the most beautiful, but it is pretty beautiful. It has beautiful ponds and many award-winning parks, and we have the historic River Wandle and so many good pubs that it is really difficult to avoid them at the weekends.
I would like to take this moment to recognise my predecessor, Elliot Colburn. This House will remember when he bravely spoke out about his own struggles with mental health. I have great respect for his willingness and openness to share his story, and I am certain that his bravery will give courage to others to speak up and seek help, too. I would also like to put on record my recognition of another predecessor, Tom Brake, who served my community of Carshalton and Wallington for over 22 years. He is a true local champion, and he is still spoken about fondly on the doorstep. The House will probably be aware of his tireless campaigning for St Helier hospital, and I plan to take up that issue at a later date, too.
There is much more I would like to share about my constituency over time but, unlike the hon. Member for East Renfrewshire, I will not take up that time now because I am keen to get involved in today’s debate as well. I want to start by joining my hon. Friend the Member for Richmond Park (Sarah Olney) in welcoming the thrust of the Government’s proposals to give more powers to the Office for Budget Responsibility to scrutinise major fiscal announcements. The inappropriately named mini-Budget sent shockwaves across the country, with mortgages soaring, pensions on the brink of collapse and market confidence damaged so badly that I feel we will be dealing with the trust issues caused by that disruption for quite some time.
Yet the state of our country’s finances is not just down to one fiscal event. The populism that infected everything that the last Government did was laid bare by the Chancellor yesterday, and I am so angry about the mess that has been left behind. It is always the most vulnerable that suffer the most when the Government gets things so drastically wrong, and we must never let such reckless gambles be taken with our country’s finances ever again.
While I am optimistic that the fiscal lock will provide the public and markets with some reassurance on this, I do hope that the Government do not feel locked into one particular model of fiscal management. The key lesson to take from the disastrous mini-Budget should be not that there is only one way to run the economy, but that, whatever choices the Government make, they should be informed by good information and stand up to rigorous analysis. It will be my intention from these Benches to encourage the Government to take seriously the calls from many respected economists to ensure that fiscal responsibility goes hand in hand with maximising the growth potential of the country over the long term. This is particularly relevant to major capital investments such as the rebuilding of St Helier hospital in my constituency. Our local NHS trust faces huge costs every year trying to maintain an unfit building. We must not forget that there is a cost to not investing, too.
When talking about growth, let us remember that it has not only a rate but a direction, and that necessarily involves political choices and cannot be left to expert analysis alone. While the OBR can rightly describe what actions will increase growth and by how much, we in this House still have a crucial role to play in selecting what actions will meet all of society’s goals. A purpose-driven industrial strategy, as proposed by the Liberal Democrats, will ensure that we deliver the right sort of growth, not least in relation to green industries.
The Chancellor is right to reiterate that the Government should not commit to any unfunded spending pledges, but there are many ways to fund the investment we so desperately need in our public services, and we do not have to increase tax on ordinary workers to do so. If the Chancellor is stuck for ideas, I would invite her to have a read of the Liberal Democrat manifesto, which includes ideas such as raising capital gains tax and reversing the Tories’ cuts for banks. There are fairer ways of raising the revenue we need, and we should look at them seriously.
It is at this point that I look back up to the Gallery, and I have some regret that my maiden speech was on the intricacies of fiscal responsibility. If Members would indulge me for a moment, before I close, I would like to make a brief translation by putting my points into footballing terms—Dad, this is mainly for you. The former manager played six up front and got hammered, but that does not mean that the new manager has to revert to a defensive five at the back. There are many different styles of play out there, and I think some will have bigger rewards. So let us get the balance right and get our country winning again.
Madam Deputy Speaker (Ms Ghani)
No doubt your mum and dad enjoyed that up in the Gallery. We now have another maiden speech—I call David Burton-Sampson.
David Burton-Sampson (Southend West and Leigh) (Lab)
Thank you very much, Madam Deputy Speaker, for granting me the opportunity to give my maiden speech today, and especially during the first few weeks of this new Labour Government. I welcome you to your new place, and I thank the hon. Member for Carshalton and Wallington (Bobby Dean) for his maiden speech—well done—and my hon. Friends for their maiden speeches.
It is truly the honour of my life to stand here today as the first ever Labour MP for Southend West and Leigh. I am excited to take on the challenges ahead, and I am delighted to represent such a wonderful constituency. I would like to start by giving my recognition and thanks to Anna Firth, my predecessor. Anna was a good constituency MP and should be recognised for her work in standing up for her residents, for championing the fight against knife crime and, of course, for her private Member’s Bill on pet abduction, which she was so passionate about and which gained royal assent just before the Dissolution of the last Parliament—it is a Bill that I wholeheartedly support.
Of course, it would be remiss of me to stand here today and not recognise Anna Firth’s predecessor, Sir David Amess. For however long my constituents choose to keep me in this place, I will always be drawn to the shield behind me remembering Sir David. His murder sent shockwaves not only through this place but through the whole country. Sir David and I, while not agreeing politically, shared many common traits—none more so than our passion for community and the people we serve.
I look across this Chamber and see the shield dedicated to Jo Cox—another wonderful MP whose life was cut short too soon. I was honoured to work closely with Jo’s sister, now my hon. Friend the Member for Spen Valley (Kim Leadbeater), as she established the Jo Cox Foundation in Jo’s memory. Jo’s words about having
“more in common than that which divides us”—[Official Report, 3 June 2015; Vol. 596, c. 675.]
always hold true for me. It is time for much more civility in politics, and the driver of that civility starts here, with all of us.
Southend West and Leigh has a wonderful, diverse community spirit, from Eastwood to St Laurence, Prittlewell to Westborough, and Belfairs to Blenheim and St Luke’s residents, who have just been welcomed into our constituency. So many residents care deeply about their community, but, like many others across the country, opportunity and life chances depend on their circumstances.
My constituency is home to some of the most beautiful seaside properties—it is a beautiful place—but there are still 12.1% of children living in poverty. Grassroots organisations, such as the One Love Project, Trust Links and the now famous Music Man Project, which recently performed at the Royal Albert Hall with Michael Ball and the Bands of His Majesty’s Royal Marines, do amazing work to help bridge the gap. I am pleased that, with this new Labour Government in the service of our country, we will start the work of bridging the gap of opportunity for all.
My constituency has some of the most impressive coastlines. On a sunny day, a bit like today, if you stand overlooking the estuary in Leigh-on-Sea, Chalkwell or Westcliff, your imagination could take you away to some exotic clime. And we are blessed to be the seventh sunniest place in the UK, according to recent data, with 1,884 hours of sunshine a year. There is nothing more tranquil than finding a quiet spot to sit, reflect and watch the world go by while gazing out to sea. From Leigh-on-Sea right up to Shoebury, in the constituency of my hon. Friend the Member for Southend East and Rochford (Mr Alaba), we are incredibly fortunate to have the most amazing places and vistas.
We also have a buoyant fishing industry, with many businesses basing themselves in our historic fishing town of Old Leigh, with cockling being particularly popular. Many visitors and residents alike enjoy the delights of some freshly caught seafood from one of our local fisheries. I am looking forward to working with the Thames Estuary Fishermen’s Association, which is part of the Leigh Port Partnership, to ensure that this industry continues to grow and thrive.
We are fortunate to have a growing international airport. Many remark on what a wonderful experience it is to fly to and from Southend airport, and you can often find yourself moving from the plane, bags collected and into your car or on the train home less than 15 minutes after landing—try it sometime.
Of course, being by the sea, Southend has a popular tourist industry. With connections from London spread over two separate train lines, we are often seen as a seaside magnet for day trippers. We have several groups and individuals who enjoy cold water swimming, such as the Blue Tits Chill Swimmers, who are determined to get me out for an early morning swim. I just hope that rubber rings and arm bands are acceptable. I am delighted that our Government are bringing forward the water special measures Bill, as I know many of my constituents care greatly about the quality of the water in which they bathe.
Football clubs are a focal point of any community and in Southend we are fortunate enough to have Southend United, known locally as the Shrimpers. For some, their football club is a lifeline, giving them the one opportunity to get out of the house at the weekend for the home game. Our club is a community asset, but over recent years it has been sadly under threat. This insecurity has created much worry in the community. However, just over a week ago, we got the news everyone had been waiting for: the club has been saved by a consortium of new owners. I congratulate Councillor Daniel Cowan, the leader of Southend city council, his council officers and the Custodians of Southend United consortium for working with the previous owner to get this complex deal over the line. And, of course, thanks go to the dedicated Shrimpers Trust for standing up for the fans. The situation with Southend United, as we have also sadly seen with other clubs around the country, highlights the need for the football governance Bill, which I was pleased to see included in the recent King’s Speech.
I have been told many times in my life that I would never achieve my dreams. I was the boy from a single-parent family, brought up in social housing. I was the boy who looked different from all the other kids in school and was often harshly reminded of that fact. Often, it felt like I was on an uphill struggle. I felt like I was fighting so much harder than those around me to achieve my goals: from being the first person in my family to go to university through building my professional career and more recently, of course, my political career. I want to thank those mentors I had in my life who believed in me and helped me smash through that elusive glass ceiling. They all know who they are. I hope that I can now be an example and a mentor to others, and that they will see that anything is possible, no matter who you are.
I want to finish by paying tribute to my close family and friends, who have always had faith in me. I especially thank my husband, Mark, who is here today, for his unwavering support for me over the years. He continues to stand alongside me as we enter this new phase in our lives.
I am immensely proud to represent the 103,000 residents in my constituency, and I look forward to giving them the support they need to live a happier, healthier and fairer life, driven by our mission-led Government focused on economic growth—a Government who have learned from the mistakes of the past and will ensure that they never happen again. I welcome the Budget Responsibility Bill, which will bring greater fiscal accountability and economic stability. My constituents, like so many others, will benefit directly from this Government’s exciting programme of change, as laid out in the recent King’s Speech, and I look forward to playing my part in it.
Madam Deputy Speaker (Ms Ghani)
Sir David Amess was a mentor of mine, so thank you for mentioning him. He is very sorely missed.
I call Jess Brown-Fuller to make her maiden speech.
Jess Brown-Fuller (Chichester) (LD)
Thank you, Madam Deputy Speaker. It is wonderful to see you take your place in the Chair.
It is a pleasure to follow the hon. Member for Southend West and Leigh (David Burton-Sampson), who spoke passionately about his constituency and about embracing all that we have in common rather than that which divides us. It was interesting to hear that he lives in the seventh sunniest place. I look forward to coming back to that point later in my speech.
It is an honour to address the Chamber as the newly elected Member of Parliament for the beautiful Chichester constituency. The constituency underwent some boundary changes for this general election, so I would like to start by thanking the two predecessors who represented the residents I now serve.
Gillian Keegan was the MP for Chichester from 2017, and was the first female MP to represent the constituency. She served as Secretary of State for Education and proudly championed apprenticeships, and the opportunity that her own apprenticeship afforded her, after growing up in Knowsley in Liverpool and leaving school at 16. She was well liked by the Conservative party and across the House, and, although our politics are different, I wish her well in her future endeavours.
I also wish to pay tribute to Nick Gibb, the Member for Bognor Regis and Littlehampton from 1997. Both Bersted and Pagham residents mentioned to me on the doorstep during the last few months that he was a popular MP who had served his constituents well, which no doubt added to their frustration when they realised that they were moving to be part of the Chichester constituency, when their hearts belonged with Bognor Regis. I would like to take this opportunity to reassure those residents that my love for the area in which I have grown up knows no bounds. I say to residents from Bersted to Bosham, Selsey to Southbourne, Westbourne to the Witterings, Fishbourne to Funtington, and all the other areas that did not fit within my poor attempt at alliteration: I will champion you all.
Madam Deputy Speaker, today is the final day in the Chamber before recess. I have no doubt that MPs will be rushing back to their constituencies to spend every possible moment there, but if they do manage to steal away for a long weekend, then I relish the opportunity to be a tour guide for a brief moment and tell them why a weekend in Chichester is a weekend well spent. Although my hon. Friend the Member for Eastbourne (Josh Babarinde) has already laid claim to the glory of representing the sunniest town in the UK, Chichester boasts the high accolade of being the sunniest city, with just under 2,000 hours of sunshine per year—and that is not the only way in which this glorious city punches above its weight.
Hon. Members will not be short of things to do, with beautiful coastline, sailing opportunities at Bosham, Dell Quay, Itchenor and Birdham and the sandy beach of West Wittering, as well as a plethora of cultural offerings, from the internationally renowned Chichester Festival theatre to the Pallant House and Oxmarket galleries, the Novium museum and Fishbourne Roman palace, and even a spot of racing—both cars and horses—at the Goodwood racecourse. They could easily spend an afternoon soaking up the history of the city surrounded by Roman walls, immersed in nature at Pagham harbour or Medmerry reserve, or following the River Lavant, a precious chalk stream.
I would not be forgiven, especially by the head of department, if I did not mention the excellent University of Chichester, where I had the pleasure of obtaining my degree. We are also the birthplace of notable figures such as the astronaut Tim Peake and the singer-songwriter Tom Odell, and we are home to Kate Winslet and authors Greg and Kate Mosse.
You can understand, Madam Deputy Speaker, why my very special constituency is a desirable location for those looking to relocate. It is an area with so much to offer. However, with the majority of the district sitting within the South Downs national park, 100% of the housing allocation is built on only 20% of the land, with a lack of infrastructure surrounding those developments and residents reporting a real struggle to get a doctor’s appointment, sign up with an NHS dentist, find school places that can meet their children’s needs or simply travel from A to B through the traffic on the A27.
As we are a low-lying coastal plain, many communities are also subjected to relentless flooding following developments on floodplains and a lack of maintenance on the rife. I am sure that those in the Chamber will appreciate how important water quality is to many industries, including tourism, fishing, water sports and sailing. It therefore pains me to say that some of the most active storm overflows are in my constituency and that Chichester harbour, which is a site of special scientific interest, has been downgraded to an unfavourable declining condition.
The River Lavant has warning signs along its bed, encouraging residents to wash their hands if they come into contact with the water, and those who enjoy cold water swimming in our water are weighing up its health benefits against how regularly they become ill from doing so. Trust in our water companies and the regulator is at an all-time low. The Liberal Democrats have called for measures to address an issue that is a blight on constituencies such as mine.
The average house price in Chichester is an eye-watering £455,000, and residents regularly express dismay at their increasing rents and mortgages after the disastrous mini-Budget. They are trying to make progress in their lives, but are being pulled back under the immense strain of increasing cost pressures. I welcome the Budget Responsibility Bill, which commits to responsible economic governance to go towards ensuring that what we saw in the last Parliament never happens again.
Finally, I pay tribute to those who supported me to be here, standing in this Chamber addressing my colleagues. I thank my wonderful husband Dean, my son Oliver and my daughter Bethany for their understanding and support, which has spanned far longer than this campaign. They are my inspiration, and I am fighting for their future as well as that of every child in this country. I also thank my mum, who joins us in the Gallery—I am not going to look at her; I have just realised I cannot. She had been so looking forward to retiring in May this year, only to be thrust days later into a general election campaign, knocking on doors with me, delivering leaflets and being my childcare. She was fully behind me in trying to achieve the unachievable, because Chichester had had a Conservative MP since 1868, except for a brief spell in 1923 when it flirted with Liberalism for just 12 months.
On 4 July, residents went to the polling stations and voted for change, whether they were traditional Conservative voters or Labour and Green voters lending me their support. We made political history that night. I recognise the weight of responsibility on my shoulders to do every single one of those people proud and to represent the area in which I had the pleasure of growing up. It is a privilege and an honour. I will fight for my special patch of our great country every day.
Madam Deputy Speaker (Ms Ghani)
I call Andrew Pakes to make his maiden speech.
Andrew Pakes (Peterborough) (Lab)
It is a privilege to make my maiden speech while you are in the Chair, Madam Deputy Speaker. Thank you for the opportunity to follow such wonderful maiden speeches, particularly that of the hon. Member for Chichester (Jess Brown-Fuller); I pay tribute to her and to her mother. I also pay tribute to my hon. Friend the Member for Southend West and Leigh (David Burton-Sampson), the first ever Labour Member for his constituency. I thank my hon. Friend the Member for East Renfrewshire (Blair McDougall) for bowing out of the competition with Peterborough over which constituency is the most beautiful.
I can think of no more important debate in which to make my maiden speech than one about securing our economic stability for my city and this country to flourish. As the gateway to the fens, the home of food and farming, Peterborough is willing to play its part in rebuilding our country. I am the fifth MP for Peterborough in seven years—we had three in 2019 alone—so I hope to bring to my tenure as a local MP the much-heralded stability that my party’s Front Benchers talk about.
I pay tribute to my predecessors, who all cared deeply about our city and worked hard to be a voice for our needs on the national stage. It turns out that I have some illustrious predecessors. I feel I may be letting my constituents down: it is fitting, during the Olympics, to pay tribute to David Cecil, who entered Parliament having already won a gold medal at the 1928 Olympics. I look forward to talking about my egg-and-spoon race at school. I would also like to thank my immediate predecessor Paul Bristow and his staff for their incredible hard work looking after residents in need in our city.
I am proud to be part of the largest intake of Co-operative MPs in Parliament’s history. Co-operative and community values run deep in Peterborough. I am the second Labour and Co-operative MP to serve our city; the first was Stanley Tiffany, who was elected in another significant change election in 1945. I note that Tiffany’s first question in the House, in August 1945, was to the then Minister of Health, Nye Bevan, on affordable and rural housing. The answer was that housing was a priority for the incoming Labour Government of 1945. Almost 80 years later, that challenge remains. I am pleased to see that affordable housing will be one of the priorities of the Labour Government coming into power in 2024.
Tiffany’s roots were in the Peterborough and District Co-operative Society. I am incredibly proud to have been elected alongside Labour colleagues on a pledge to double the size of the co-operative economy—a pledge that Tiffany could be proud of. Just a few weeks ago, I met staff at the Co-op store in Eye in Peterborough to hear about the rise in shoplifting and the abuse that too many of them face. Abuse should never be part of the job. I put on record my thanks to the retail workers in Peterborough and around the country who serve us every day. I pledge to work tirelessly with my good friends in the co-operative movement, the trade unions and this House to give retail workers the dignity and protection at work that they need.
We are also home to the wonderful English Mustard Growers co-operative, which was formed in 2009 to keep mustard production alive in the UK after the disastrous harvest of 2007. Many people here will know our crop as Colman’s mustard. Today, there are over 40 growing members, including our very own Michael Sly, who is based at Park Farm in Thorney. In Peterborough, we really do cut the mustard.
Peterborough has welcomed people from across the country and the world for generations as a city, and even more so when we became a new town. I am one of those people who have chosen to make Peterborough my home. The new town promise of a decent home, a good job and a great place to live remains as important today as ever, but it is a promise that has frayed over the past 14 years.
Peterborough is a working city with a rich history; we work hard, care for our community and love our country. We are deeply rooted in an industrial heritage of food, farming and engineering. We are home to a breathtaking cathedral, majestic mosques, and urban landscapes surrounded by the fens and poet John Clare’s country. We exemplify Clare’s words:
“I found the poems in the fields and only wrote them down”.
We are at the heart of sugar beet country and the home of British Sugar. We show how urban and rural can live successfully side by side. We have a rich history and a bright future for food and farming, and I thank the farming community and my good friends in the National Farmers Union for their advice and friendship. In my time in this House, I will always be a champion for food security and for growing more food in this country.
We draw on our engineering heritage of Perkins Engines, Caterpillar and Peter Brotherhood, and can use that heritage to create new, high-skilled jobs and apprenticeships for the future. We are home to a new and growing university campus in the form of Anglia Ruskin University Peterborough, and to a new centre for green technology at Peterborough college, working to transition blue-collar opportunities to green-collar ones in hydrogen, electric vehicles and sustainable construction. We are also home to a rich diversity of communities, languages and traditions, from the Italians who arrived after the second world war to eastern Europeans and a large Kashmiri and Pakistani community. Visiting Azad Kashmir last year with friends from Peterborough remains a highlight of my life. The beauty of that land and of its people impress upon me the need to speak up on Kashmir in this House.
However, we also face challenges. Nearly half the children in my constituency are growing up in poverty, and in some areas, that figure is even higher. For working-class parents such as mine, the promise was that by working hard, their children could get on. The greatest nobility I have known is working-class pride: the pride in good work, seeing your children succeed, and the ability to get on in life. That social contract has been broken, and we are all the poorer for it. I put on record my love and gratitude to my parents for instilling that pride in me and for pushing me to do more. I believe they are watching me on telly today, unless I am up against Tom Daley in the diving.
I also thank the trade union movement I have grown up in and been part of for my whole life for giving me the skills, opportunities and confidence to stand for election, and now to stand in this House making this speech. Over the past few years, I have had the immense privilege to serve as deputy general secretary of Prospect and Bectu, and to serve internationally as one of the trade union delegates to the OECD’s AI expert panel, adding my voice on international issues. The trade union movement makes Britain a better place: every day, the contributions of thousands of workplace volunteers keep people safe at work, help people get on at work, and add to our economic wealth. I am proud to be union made.
I will finish with this point: one of the things that drove me to stand for election this time was the sad passing of my brother in 2016. Richard’s sudden passing from an accident followed by sepsis was tragic, but it also brought home to me that my family were only able to get through it with the help and care of NHS staff, who looked after my brother and my family. Sepsis is something this House has learned more about recently due to the bravery of the former Member for South Thanet, who I pay tribute to. The NHS and our public servants are the best of us, and I give this commitment in the House today: that I will use whatever time I have in this place to champion the NHS, but also to champion awareness of the dangers and terrors of sepsis and what it does to people and their families.
Peterborough stands ready to play our part in rebuilding our country. We have drive, dedication and purpose, and with a Government on our side, we look forward to driving opportunities in Peterborough and around the country.
Madam Deputy Speaker (Ms Ghani)
I look forward to seeing the hon. Gentleman’s campaigns on behalf of his brother Richard. We now have another maiden speech, from Joshua Reynolds.
Mr Joshua Reynolds (Maidenhead) (LD)
Thank you, Madam Deputy Speaker. It is an honour to be called to make my maiden speech as Member of Parliament for Maidenhead, a place I have always been proud to call home. I recognise the fantastic maiden speech made by the hon. Member for Peterborough (Andrew Pakes): his passion for his constituency is clear from his speech, and I know he will be a fantastic representative of his constituents. Next time I am putting mustard on one of my ham sandwiches, I will be thinking of him and his constituency, although maybe not of the pun he made.
As a new MP, I was sent a very early email by the fantastic team at the House of Commons Library with maiden speeches from my predecessors, to get an idea about what I might like to say. But considering that since its inception in 1997 my constituency, Maidenhead, has only had one prior MP, there was not a lot to go on. I must start, therefore, by paying tribute to that predecessor, Theresa May, who represented the Maidenhead constituency for 27 years. During her time on the Front Benches and in No. 10 she made sure that she put Maidenhead first. Once, famously, having spent a week of late nights in negotiations in the EU, she got off the plane in London and headed straight for a school carol concert in the town centre. Although I disagree with her on many things, her dedication to the people of Maidenhead is something that I admire and hope to emulate. Hers are big—often very much reported on by the media—shoes to fill.
Unlike my namesake, Sir Joshua Reynolds, I cannot paint to save my life; but fortunately for me and my constituents, the village of Cookham in my constituency has given us Stanley Spencer, whose work is memorialised in the Stanley Spencer Gallery on the high street. We are lucky to still have a thriving arts scene around Maidenhead and all our villages.
Maidenhead is a special place; it has a rich history. It is where Charles I met his children for the last time, in the Greyhound inn, now home to the NatWest bank, before his execution in 1649. Fortunately, visitors to Maidenhead today would discover a fantastic array of places to eat. The village of Bray has no less than seven Michelin stars to its name, but to find fantastic food in Maidenhead you need not go to a restaurant approved by the Michelin man. You can go to Bakedd, ToMo, Sauce and Flour, The Borough or Seasonality—just some of the fantastic places to eat that Maidenhead has to offer. Any time you fancy a trip down the Elizabeth line, Madam Deputy Speaker, I will be more than happy to take you to any of them.
Part of Maidenhead’s history has always been the bridges over the Thames. Soon after the first bridge was put up, in 1280, the town started to build. The current incarnation of Maidenhead bridge has been standing since the mid-1700s. The toll on Maidenhead bridge was removed on the night of 31 October 1903, in a move that, had it been done today, probably would not have been worthy of attention from the Office for Budget Responsibility. However, it was so significant to residents of Maidenhead that they gathered by the bridge and, as the clock struck midnight, took apart the toll gates and threw them into the river.
Another part of our history—famous for bridges—is the Brunel-designed Maidenhead railway bridge, otherwise known as the “sounding arch”, which opened in 1839, attracting significant attention for its innovative low-rise arch design. Sceptical bosses at the Great Western Railway insisted that he leave the scaffolding in place because they did not believe it to be safe. Rumour has it, though, that Brunel complied with their request. Knowing that it was not necessary, he decided not to attach the scaffolding to the bridge. Sure enough, the wooden structure was soon blown away by a storm, and Brunel’s bridge has stood the test of time ever since.
Maidenhead was also home to the late Sir Nicholas Winton, who is remembered in the Nicholas Winton memorial gardens in Oaken Grove park and in a statue on platform 3 of Maidenhead station. Sir Nicholas, dubbed by the press the “British Schindler”, helped to save the lives of 669 children who were evacuated from Czechoslovakia to Britain as part of the Kindertransport in 1939. Sir Nicholas left us in 2015, having reached the grand age of 106; but his life and legacy as one of the great humanitarians is remembered in the town.
It is fair to say that the Palace of Westminster is slightly larger than Maidenhead town hall, where I was recently a cabinet member for communities and leisure. However, what the town hall lacks in grandeur, statues and stained-glass windows, it makes up for in its television claim to fame. I am of course talking about the fact that it was used as the location for “Carry on Doctor”. When I was working in the town hall, I often saw an excited fan run up to the building to take photos, only to look slightly disappointed, knowing that they had travelled so far to see a 1960s office block. Last but not least on today’s Maidenhead history tour, I cannot fail to mention that the Spice Girls once famously shared a house in Maidenhead before they burst on to the music scene in 1996. I say that even if it was three years before I was born!
Maidenhead is so much more than just the town. I have already mentioned Cookham, which has been part of the constituency since it was established in 1997, and I have mentioned Bray, which moved into Maidenhead from the Windsor constituency, bringing those Michelin stars along with it. It is, however, also home to Binfield, Warfield and Winkfield, which moved into the constituency at this election. They may be the newest parts of the constituency, but they are just as important as the rest of it, and I look forward to spending time in each of them over the next few weeks as we head into recess.
I must pay tribute to Maidenhead’s fantastic primary and secondary schools. They work to give pupils from all walks of life and all abilities the best start that they can have. I am hugely grateful to my teachers at Alwyn, Courthouse and Furze Platts Senior schools for the work and the help they gave me. Without it, I would not be speaking in the House today.
It would be remiss of me, however, not to talk about the challenges that we face locally. A significant numbers of residents in my community live in poverty, and homelessness is on the rise along with reliance on food banks. Our local baby bank, founded by local residents Rebecca and Councillor Amy Tisi, is seeing increased demand for its services. We must take action on fuel poverty, extending free school meals and restoring the basic standard of living that vulnerable residents need the most.
Health services are patchy in Maidenhead, with GP surgeries under phenomenal pressure and the nearest general hospital being in Slough. I am determined to see the walk-in centre reopened at St Mark’s hospital after it was closed down as a temporary measure at the beginning of covid lockdown. I want to see the site expanded to cope with all the new homes and developments that are being built and proposed for the area. My promise to residents is that I will not let up in my efforts to close the health gap in Maidenhead.
Maidenhead is a beautiful constituency, but if we are not careful its waterways, from Binfield cut in the south to the Thames in the north, will become open sewers. I have pledged to residents in Cookham, Hurley, the Walthams, Bray, Binfield, Warfield, Winkfield and North Ascot that I will fight tirelessly to clean up their rivers. I look forward to working with every single one of my colleagues in this House over the next few years to help make that happen.
James Asser (West Ham and Beckton) (Lab)
Thank you, Madam Deputy Speaker, for calling me to make my maiden speech, and may I congratulate you on your election? I also congratulate all those who have spoken for the first time today and over the last two weeks. The speeches we have heard have been an incredible guide to the UK, and should make us all proud of the country we collectively represent. I offer my congratulations to the hon. Member for Maidenhead (Mr Reynolds) on his contribution, and wish him well in his time in the House. May I say, as an MP at the other end of the Elizabeth line and a “Carry On” fan, that I accept his invitation to dinner?
May I first pay tribute to my two immediate predecessors? First, there is my right hon. Friend the Member for East Ham (Sir Stephen Timms), now representing a smaller version of that seat. He marks 30 years as an MP this year, and I know he is well respected in this House. He is a well-known figure to local people and is recognised as a diligent constituency MP. Indeed, canvassing the areas I gained from him, the most common question was, “Where’s Stephen?” As a former councillor in his constituency, I want to thank him for his support.
I also follow on from Lyn Brown, who retired at the election after 19 years’ service in this House and an impressive 36 years total elected service to the borough of Newham. I know Lyn made a big impact in Parliament and leaves a strong legacy. I want to thank her for all her support in the last few years, especially during the election. Her support and advice have been invaluable, and I know that supporting other Members is part of her record in this place.
West Ham and Beckton has a long history, but this is a new seat made up of the southern half of the old West Ham and the Beckton and dock areas of the larger East Ham seat. The area has had multiple constituencies over the years, including at one point Ernest Bevin’s old south London seat of Woolwich East, which took in North Woolwich, the part of Kent that is north of the Thames—a curious but often forgotten bit of history, with a completely baffling county border.
Others who have represented parts of this area in recent times include Jim Fitzpatrick and the irrepressible Tony Banks, but the first Labour MP to represent here was the original Keir—Keir Hardie, the founding father of the Labour party, who was first elected to Parliament in West Ham South in 1892.
In 1906, Will Thorne, the founder of the union that is today GMB, which was founded in Canning Town in the heart of my constituency, was elected to the same seat. When he was elected, there were just 29 Labour MPs. Things have moved on somewhat since then. In fact, I am told that more MPs are members of the GMB than are members of the Conservative party; I thank them for demonstrating that so beautifully this afternoon. I say this not to be controversial, but mainly to drum up some canvassing support for the next election.
This is a big legacy to take on, because West Ham and Beckton has been at the heart of the Labour movement’s history for over a century. It is also at the heart of this country’s economic history. It contains the Royal Docks, which were the centre of much of the country’s shipping and trade until their decline and closure in the early 1980s. The area was also a hub for manufacturing and infrastructure, much of which, but not all, has since gone. Beckton gas works may now be primarily remembered for its spoil heap, which became Beckton alps, and its one-time ski slope opened by Princess Diana, or as a film location for many movies and music videos, most notably “Full Metal Jacket”.
Beckton is, however, still the site of Europe’s largest sewage treatment plant. He is not here any more, but I was hoping that might reassure my hon. Friend the Member for East Renfrewshire (Blair McDougall) a little bit. It was a key part of Bazalgette’s work to clean up London in the Victorian era and today is part of the Thames tideway tunnel. Sadly, river pollution is still a topical issue, two centuries on, as was so eloquently outlined by the hon. Member for Chichester (Jess Brown-Fuller).
Many industries have gone, and shipbuilding at Harland & Wolff and the Thames ironworks are just a memory—although the local football team the ironworks, which started in West Ham, is doing all right—but companies in some traditional industries, including Britvic and Tate & Lyle, still have big local factories at the heart of the community, and that is. The constituency is also a key element of London’s economic future. The ExCel exhibition centre brings in 4 million visitors every year. London city airport is London’s most central airport and is important to the City of London. We are also the new home of London City Hall and have London’s only enterprise zone, which aims to create 35,000 new jobs and tens of thousands of new homes on brownfield sites. Education is also thriving, including at the University of East London and the London Design & Engineering university technical college.
Locally, we like to celebrate our heritage, and you will find many parks, buildings and roads named after local heroes from the arts, sports, politics and public life, such as local boxers and footballers, the speedway stars of the ’30s, ’40s and ’50s who used to thrill on the racetrack at the old West Ham stadium in Custom House, and local factory worker and suffragette leader Minnie Baldock, who founded the first London branch of the Women’s Social and Political Union. The same goes for momentous events in London’s history; the meeting in 1931 of Mahatma Gandhi and Charlie Chaplin is marked by the Gandhi Chaplin memorial garden, which is on the site of the house where they met.
Most recently, to mark the move of City Hall, we honoured Sri Lankan first world war veteran and pioneering race relations campaigner Kamal Chunchie, who fought for better lives for the local black and Asian community, and who, in 1926, founded the Coloured Men’s Institute, where City Hall now stands, to further that aim. He speaks to the diversity of my constituency. We are one of the most diverse places in the country, with communities from every part of the world working and living alongside one another. It is what makes the area such a great place to live and to represent. Each community that arrives adds to the mix, but also joins in those long-standing east London traditions of hard work, community spirit and plain speaking.
Kamal Chunchie also reminds us that while much focus is placed on the changes that have happened since 1945, there has been diversity much longer. In the 1920s, Canning Town had the largest black community in London. Migration has been a fact of east London life for centuries. German immigration into east London in the Victorian era is part of my family history. The debate around those who choose to make the UK their home is frequently too narrow, and too often driven by populist voices. We forget our history at our peril, but east London is a testament to its vibrancy.
My constituents do not lack ambition, aspiration or talent—they have it in inspirational quantities—but too often, they lack opportunity. Poverty is a real issue and, in recent years, has become much worse. Locally, we have seen children going to events in the hope of getting food because they are hungry; parents sleeping in shifts on mattresses on the floor because there is not enough room for the whole family to have beds; and children forced to do their homework in the bathroom because there is no other space for them to do it. This Government were elected on a mandate for change. For many of my constituents, that is not an aspiration; it is a necessity. My early Labour predecessors were sent here to represent those who had no voice, those who needed to be lifted out of poverty and those who deserved a better life. I am under no illusion; more than a century on, that demand is still real. I have been sent here to support change, and to fight to improve lives.
It is my great regret that my father is no longer alive to see me elected. It would have meant a lot to him. His advice to me was, “Make sure you always do your best, because no one can ask more of you.” In my election acceptance speech, I promised my best to my constituents, and I repeat that promise today. I will do the best I can for everyone in West Ham and Beckton, and I will give my best to this House, too. I believe that together we can achieve the absolute best for our country and the people of my constituency. The people of West Ham and Beckton deserve no less.
Madam Deputy Speaker (Ms Ghani)
I call Llinos Medi to make her maiden speech.
Llinos Medi (Ynys Môn) (PC)
Diolch yn fawr, Madam Deputy Speaker. Before I begin, I extend my deepest condolences on behalf of Plaid Cymru to all the families affected by the horrific attack on innocent children in Southport. I congratulate the hon. Member for West Ham and Beckton (James Asser) on his maiden speech. His constituency has some similarities with mine, which is is a place of hard work, community spirit and plain speaking. We will get along well.
It is an honour to deliver my maiden speech. I am deeply humbled by the fact that the people of Ynys Môn, my home island that I love so dearly, have put their faith in me as their MP, and I will work hard to be worthy of that trust. Ynys Môn is known for its political unpredictability. We have been represented by four different parties since the 1950s, making elections here quite the spectacle—a treat for political anoraks, but nerve-racking for candidates. The people of Ynys Môn keep their representatives on their toes, and I thank them for that. It reminds me that in every decision and every debate, they come first.
Reflecting on my constituency’s rich political history, I first mention Megan Lloyd George, the first female MP for a Welsh constituency and a pioneer for women in politics. She served Ynys Môn as a Liberal and an advocate of home rule for Wales. Her legacy paved the way for greater female representation in this House. She was followed by Labour’s Cledwyn Hughes, whose parliamentary career of 28 years included his tenure at the Welsh Office, during which the Welsh Language Act reached the statute books in 1967. That was a significant milestone in the history of our language.
Cledwyn Hughes was followed by a Conservative, Keith Best, until 1987, when Ynys Môn made history by electing its first-ever Plaid Cymru MP. I owe Ieuan Wyn Jones a huge debt of gratitude, and I am honoured to follow in his footsteps. His legacy remains unmatched, and I thank him for his continued support and guidance. Labour’s Albert Owen took the reins in 2001. Albert served our island diligently for 18 years, always ready to work across party lines to serve the people of Ynys Môn. The constituency turned blue again in 2019. I pay tribute to Virginia Crosbie, whose work ethic I greatly admire.
Now Ynys Môn is Plaid Cymru green again. It was yet again very close; there were 637 votes in it. Yes, Ynys Môn is the gift that keeps on giving on election night, but I am very aware that this nail-bitingly close result makes it my duty to work even harder to earn the trust of the people in all communities on Ynys Môn, whether they voted for me or another party, or even chose not to vote.
Budget responsibility is the topic of today’s debate, which offers me an opportunity to reflect on my professional background. From 2017 until my recent election, I was the leader of Ynys Môn county council. During that time, I witnessed at first hand the human consequences of the austerity measures imposed by successive Governments. Those decisions forced us to make cuts to essential services—decisions made not by choice, but by necessity, due to the reckless fiscal policies set in Westminster. I recognise the important principle of budget responsibility behind this Bill. It is a sensible step to ensure that the Government’s plans are independently assessed by the Office for Budget Responsibility before implementation. That oversight is important to prevent the fiscal mismanagement that led to the previous Government’s disastrous mini-Budget, which included the largest package of tax cuts in 50 years without any efforts to make the public finance numbers add up. Such a situation must never be allowed to occur again.
However, I have a niggling concern that the Government might use the chaos of their predecessors as an excuse to shy away from taking bold economic decisions. Child poverty in Ynys Môn stands at a staggering 35%. We need bold measures, such as the abolition of the two-child cap on benefits, and real investment in our services and infrastructure to tackle the pressing issues. I fear that tinkering around the edges will not be enough to drive growth in our economy. We need real investment to attract well-paid jobs and bring some dynamism back into our economy.
Just today, we saw the Secretary of State for Wales refuse to commit to the electrification of the north Wales main line. We recognise the fiscal difficulties facing the Government, but investment in the economy should not simply be seen as a cost to be cut. I urge the Government not to let the shock of the mini-Budget deter them from making the necessary investment in our communities.
As council leader, I saw how the previous Conservative Government undermined our plans for the Wylfa nuclear site. We had plans to create high-quality, long-term jobs and build skills and supply-chain opportunities. Our efforts also focused on ensuring that any development would respect our island’s unique environment and culture and the Welsh language. Sadly, the Conservative Government pulled the plug in 2019.
Now more than ever, we need clarity and commitment from the new Government. Like many areas, Ynys Môn is bleeding young people, who leave in search of better opportunities. We need high-skilled, well-paid jobs to sustain our communities and ensure that they flourish.
My journey into politics was not typical. As a farmer’s daughter, I grew up understanding the value of hard work, watching my father, a first-generation farmer, establish a farm alongside my mother. I left school at 16 and undertook a care course. By the age of 18, I was working as a carer in our care homes. I have been a carer, a teaching assistant and a youth worker. I have also had several other roles, including selling eggs and milk recording on milk farms. In 2013, I entered politics, standing as a county councillor. Like many women, I initially lacked the confidence to step forward—I was forced into it—but by 2015 I had become the leader of the opposition, and in 2017 I became the first female leader of Ynys Môn council.
My personal journey has not been typical, either. In 2015, I found myself homeless with my two children. It was tough, but now I am the MP for Ynys Môn. [Hon. Members: “Hear, hear!”] As for the most important lesson from my experience, I want to inspire other women to believe that “If she can do it, I can do it.” I aim to bring women along on this journey, regardless of their starting point. I will always be filled with pride when women come up to me to say, “Thank you. I’ve gone for it because of you.” I am not here for myself. I want people in Ynys Môn who might also have been through a tough time to see my work here and be inspired to put themselves forward.
Ynys Môn is known as Gwlad y medra, which translates to the land of the can-do. That attitude has always guided my approach to politics, and will continue to do so in my work here. I look forward to cracking on with the job. I will work with colleagues from across the House with a can-do attitude to secure a brighter future for the people of Ynys Môn. I thank my two children, Elliw and Twm, for their continued support, which has ensured that their mother is stood here as the MP for Ynys Môn. Diolch yn fawr iawn.
Madam Deputy Speaker (Ms Ghani)
I call Rosie Wrighting to make her maiden speech.
Rosie Wrighting (Kettering) (Lab)
I congratulate you, Madam Deputy Speaker, on your elevation.
It is a privilege to follow such amazing maiden speeches this afternoon, including from the hon. Member for Ynys Môn (Llinos Medi), whom I admire for taking women along her journey with her. I had the privilege of meeting the hon. Member for Maidenhead (Mr Reynolds) last week; it is an honour to share this House with other young Members on both sides. I share the concern of my hon. Friend the Member for West Ham and Beckton (James Asser) about the pollution in our rivers and thank him for bringing that issue to the House.
Nothing prepares you for the pride you feel representing the area that you were born and raised in, and the pride that I feel addressing this House as the Member for Kett’ring—or, for those who are not from there, Kettering. I pay tribute to my predecessor, Philip Hollobone. Philip was an assiduous Parliamentarian who attended this House as often as possible and spoke here frequently to raise issues of concern to the people of Kettering. Despite our political differences, Philip has shown me kindness in recent weeks.
On the line of Philips who have represented Kettering, I also thank Phil Sawford, Kettering’s last Labour Member, who made his maiden speech in this House on 28 July 1997—coincidentally, also the day I was born. Phil’s impact as a Labour MP in Kettering was evident throughout the campaign, as his work was referenced on countless doorsteps.
I owe a continued debt of gratitude to the Sawford family. Andy Sawford, the former Member for the Corby constituency—parts of which have moved into the Kettering constituency, with Little Stanion, Cottingham and Middleton—played a crucial role in the campaign. During his time in this House, he ensured that north Northamptonshire’s voice was heard. He provided me with guidance and an unwavering belief from the outset that we could bring the necessary change for Kettering.
The Kettering constituency is located in the heart of England, although I am not sure it is as sunny as some of the constituencies represented here. It is home to natural beauty, from the Weekley Hall wood to the River Nene, and the people of Kettering have achieved amazing things, such as establishing the local wellbeing cafe Johnny’s Happy Place, and hosting a cheerleading team that has won world titles. And we even have James Acaster.
Kettering is proud of its stamp on history. The town played a significant role in the abolitionist movement, particularly through the efforts of William Knibb, an influential critic of slavery. Kettering has a rich arts heritage, with notable figures such as novelist J. L. Carr and painter Alfred East. The constituents of Kettering are pleased by and grateful for the contributions of Dame Sarah Gilbert, a scientist born in Kettering who played a key role in developing the first vaccine during the pandemic.
Kettering is known for its industrial links to shoe and boot manufacturing, so it is no wonder that I went on to have a career in the fashion industry. There are semi-rural areas, and the urban town of Kettering alongside the smaller towns of Rothwell—more commonly known as Rowell—and Desborough, which is known for its co-operative heritage and is home to the last shoe and boot manufacturer, Cheaney. Burton Latimer is where Weetabix are made—the scent of Weetabix can often be smelled in the air. My own village, Geddington, is famous for its historic Queen Eleanor cross and its strong sense of community. We have unique communities across the towns and villages in the constituency. You may not have been to Kettering, but you most likely have sat on a swing made by Wicksteed. Members on this side of the House have almost certainly distributed leaflets that were printed in the constituency in recent months.
Growing up in Kettering had its challenges, despite all the good things it offered. I was raised in a single-parent family. My mum, who is a local youth worker, made significant sacrifices to demonstrate to me and my brother Joe that, despite the odds being against us at times, we could still strive for great things if we wanted to. Today, I come into this Chamber as the youngest woman here—a young woman who has not come from privilege and the first woman to represent Kettering.
Under the last Government, my generation faced significant hardships. There is a lot of talk about gen Z, but many in my generation have had challenging experiences, such as education being moved to our living rooms; growing up on social media and experiencing the dark place that it can be, especially during the campaign; fear of a climate crisis in our lifetime; renting in insecure housing, with the idea of home ownership only a distant dream; and trying to build a career in the midst of a cost of living crisis. It is this that has led to my generation’s trust in politicians being so low.
I am here today having campaigned and joined the Labour party because I believe in the upcoming change, not just for my generation but for all generations. In my constituency, the need for change could not be more apparent. The maternity ward of Kettering general hospital, where I was born eight weeks early and cared for as a premature baby, now has RAAC—reinforced autoclaved aerated concrete—and a floor is closed off. After unfunded promises of a new hospital from the previous Government, I will fight for the people of Kettering to get the healthcare they deserve.
Kettering currently has the highest crime rates in Northamptonshire. Predominantly, violent and sexual offences are reported. But with Labour, we can see a shift towards community policing and increased support for youth services, to prevent young people from taking part in county line gangs. I know that every day in my constituency people are struggling with the cost of living crisis. That is why this Bill is so important. We must work to get a stable economy and lower energy bills with the launch of Great British Energy.
I will never forget the trust that people across the Kettering constituency have put in me. Kettering, a community with vast potential, requires a supportive Government to achieve incredible things, and that is what it now has. Thank you for the warm welcome, Madam Deputy Speaker, from the House staff and MPs on both sides. I intend to work hard here in Parliament and in my constituency for all the residents of the towns and villages. I look forward to the honour of representing Kettering in the years ahead.
Madam Deputy Speaker (Ms Ghani)
The hon. Lady may be the youngest woman here but she definitely packs a punch.
Members, please refrain from using “you” or “your”, because you are talking through the Chair and I do not think you mean me.
Jim Shannon (Strangford) (DUP)
It is a pleasure to follow the hon. Member for Kettering (Rosie Wrighting). I wish her well in her new role. She brings youth with her, but also experience of how life is. That is important when it comes to representing people here.
It is lovely to see you in your place, Madam Deputy Speaker. I wish you well in your new role—well done. We have been incredibly blessed today with all the maiden speeches we have heard. Each Member showed their talent, skill and clear love of their constituency. We are all greatly encouraged. As I said to the hon. Member for Ceredigion Preseli (Ben Lake), we have seen MPs who will bring a lot to the debates we have in this Chamber, whether on the Department for Work and Pensions, roads, farming, fishing, bigger issues such as human rights around the world, or whatever it might be. Each MP will bring their expertise and their point of view, which will enrich this House and encourage us, so I am pleased to have heard those speeches. It is a real pleasure and a privilege for me to sit and hear them.
I commend the hon. Member for Ynys Môn (Llinos Medi). I loved the wee thing she said at the end about her can-do attitude. Every one of us can do in this House. The hon. Lady has told us we can do, so I think we can do from now on. I look forward to working with everyone on the things we can agree on. The issue for many of us in this House is not our differences. I suppose I maybe look at things in a slightly different way, but I do not often see the politics; I see the person. If we do that, we can see the goodness that we can all bring to the debates here.
I am very pleased that you have allowed me the opportunity to speak briefly about the Bill, Madam Deputy Speaker. I will not take too long. I was pleased to see the additional brake or fiscal lock, as it is clear that Governments should take cognisance of high-level support and opinion. I believe the Bill will secure just that. The Minister and the Labour Government are bringing the Bill forward for the best reasons, which is welcome, and I am very pleased to see it.
However, I do believe that advice should be considered here. It is the role of Governments to do what is right, with a total vision for the country, and we must always ensure that the decisions are made in this House by elected representatives and not by unelected Members behind closed doors. I know that our Government and our Minister will be aware of the need to strike a balance between taking reasoned opinion and taking instruction, and I know the Minister will take that on board. He has always spoken in a reasoned way in the House and I know that he will not be found wanting today when he gives his reasoned opinion at the end of the debate.
I firmly believe in the need for the OBR’s opinion. The reason for that will be clear when we consider the political motivation that seeks to force the Government to spend more than £300 million on Casement Park in Northern Ireland, which could plainly necessitate tax increases because no part of the budget will allow the money to be allocated. I hope the Government will not pursue the project, and wanted to put that on the record.
As I said yesterday following the Chancellor’s statement, I welcome the news that junior doctors will receive their much-needed pay rise. I do not think anyone in this nation will not be encouraged to know that they will receive the increase that we all think they should have. The Government have made that money available, and hopefully it will go in the right direction. The junior doctors’ pay rise is a necessity, and the changes that will be necessary to generate it can be easily understood. Not one of us does not owe our NHS a vast thank you for all it has done.
When we were living through covid, many of us lost family members and loved ones, and we will be eternally grateful for the role that the NHS played. What is not so easily understood is why the tax paid by the average person in Warrington or Wrexham may be increased to fund a Gaelic Athletic Association project—I am referring, again, to Casement Park—which will generate income for a private sporting body, to the exclusion of other sports. I leave that comment on the record. The drive for this is political, not practical, and I hope that the OBR would express the reasoned view that raising taxes for such purposes does not instil confidence in the financial future of the nation.
I hope the Bill will remind Members that every project we undertake must be paid for from the public purse, in these times when the average person is struggling to lead his or her life, in contrast to the position five years ago. The hon. Member for Richmond Park (Sarah Olney) spoke earlier about poverty across this great United Kingdom. In my constituency poverty levels have risen dramatically, especially among children. I can honestly say, for the record, that I confidently believe that the Labour Government and the Minister will address these issues throughout this great United Kingdom of Great Britain and Northern Ireland for the children in my constituency who are experiencing levels of poverty that they have never experienced before, and the adults who struggle to pay their bills—every Member has brought an illustration of that to the debate—so I am encouraged to see the Labour party in the role it now has.
We have holes in the economy in Northern Ireland as a result of under-investment. Our pay structures need to be revamped and our education sector needs improvements to deal with the changing needs of our children. I am thinking in particular of those with special educational needs and disabilities. I remember having meetings about that with a Minister back home in Northern Ireland, and I am hopeful that some of the changes that we talked about have been implemented, but I am seeing demands on SEND education that I have never seen before in all my years as an elected representative—as a councillor, and as a Member of the Northern Ireland Assembly. Our health sector needs an overhaul as well, and all this will take central funding, but we also need a change in the way that happens. We do not need massively high levels of middle management, and we do not need agency staff when we could give our nurses a 10% pay increase that would be cheaper than employing those staff. These are things that we need to change.
Earlier, in an intervention, I asked the Minister about the Northern Ireland Assembly, the Welsh Assembly and the Scottish Parliament. The Minister kindly confirmed that he would have a role involving integration and interaction with the regional Administrations. I am particularly encouraged that he will be visiting Northern Ireland, and the Assembly, in September this year. That shows me that the Minister—my Minister here, through the Labour Government— says what he means and will carry it out, which is good news—I welcome that. Culture and heritage are also important, but they can never take precedence over heart operations or chemotherapy. No debate on budget responsibility can overlook this foundational aspect. I hope that this will serve as a timely reminder to us all that we have responsibilities in this House that outweigh party politics. That must always be the first decision that we make in this House.
Madam Deputy Speaker (Ms Ghani)
I call Matthew Patrick to make his maiden speech.
Matthew Patrick (Wirral West) (Lab)
Thank you for the opportunity to deliver my maiden speech in this important debate, Madam Deputy Speaker. The matter of budget responsibility is important to my constituents in Wirral West, because they know the cost of getting it wrong—the cost to public finances, public services and public trust. I know they will support the measures we are introducing.
May I congratulate my hon. Friend the Member for Kettering (Rosie Wrighting), my many hon. Friends and hon. Members on making their maiden speeches today? They have been beautiful, telling stories of constituencies and personal journeys. I think there is a theme to many of them—a theme about civility in public life, about ambition for everybody, and about the number of hours of sunshine that each of the various constituencies receives. I will no doubt look that one up.
I will focus my remarks today on the place and the people who have brought me here. In so doing, I hope to explain why I believe in the power of argument, disagreement and nuance. Hon. Members will know that my constituency is in the Wirral peninsula. What the House might not have realised is that we are quite particular about how you refer to the Wirral—it is never “Wirral” but “the Wirral”, and you are rarely “in it” but, rather, “on it”.
The rich history of Wirral West—one of Vikings, James Bond and a Prime Minister—would not be out of place in a Hollywood blockbuster. The Vikings came to the Wirral in 900 AD, and they brought with them their own Parliament, which they called “Things”. That is how one of the most beautiful villages we enjoy, Thingwall, was named. Hon. Members will probably be grateful that I am going to skip forward a few centuries of history to bring us closer to the present day. Daniel Craig—the most recent James Bond and, in my view, the best 007—was brought up, played rugby and went to school in West Kirby and Hoylake, and former Prime Minister Harold Wilson, who did so much for lifelong learning with the Open University and introduced important social reforms, lived in Spital.
Our past may be worthy of Hollywood, but our present and beautiful natural environment would not be out of place in a David Attenborough documentary. Its physical beauty has been captured by many of the finest photographers, but even they will tell you that there is no substitute for seeing it for yourself—from walking to Hilbre Island and watching as the seals swim through the River Dee, to admiring our golf courses, which are famous for hosting the Open.
Those people lucky enough to call Wirral West their home are part of what makes it so special. They bring passion to everything they do, and they carry that passion with a warm welcome and great dignity. That passion runs through each of the towns and villages. It is passion for one another and for our area, helping to expand opportunities to everyone. I cannot imagine another place with as many community groups, churches and businesses that work so hard to do such good, including scouts and guides groups, the Royal National Lifeboat Institution, our schools and hospitals, and community hubs such as the Hoole Road hub—so many groups that support all people, whatever the difficulties they face. It is community spirit that has powered us through some difficult times, and I hope that this new Government can help to bring back some hope so that we can look forward to better days.
Wirral West, with its expanded boundaries, has been most recently served by two people: Margaret Greenwood and my hon. Friend the Member for Birkenhead (Alison McGovern). Margaret Greenwood is deeply passionate about our NHS and our environment, and those are two passions that I share. As an MP, Margaret knew that getting our NHS back on its feet is vital so that it can deliver world-leading care. We are fortunate in Wirral West to have two hospitals: Arrowe Park and Clatterbridge. I know the Secretary of State for Health and Social Care is particularly fond of the latter, given the support it gave to his family. I think back to the conversations I had in the election campaign, to the people waiting sometimes years for crucial operations and the stress that that waiting added to their daily lives. I will be thinking of those people as we do the work to turn the NHS around.
As Margaret often reminded us, there is no escaping the threat that is climate change. It came up often on the doorstep. People on the Wirral, from teachers to scientists and from environmentalists to parents are worried, like so many, about the threat of climate change. They know that it does not respond to strong rhetoric, borders or weapons. It is only action, joined up with our partners around the world, that will help us to tackle climate change and save the environment. When I see the wind farms off our Wirral shores, I am proud that we can be a home of green energy and green jobs, delivering the bold action that is desperately needed.
My other predecessor, who now serves Birkenhead, had a deep impact on my own journey—ambitious for me personally and many people like me, from working-class communities; ambitious for all of us, encouraging us, believing that we too can stand tall in places, even ones as grand as this. I grew up in Birkenhead. It is a wonderful place, but it is not without its struggles. Standing here now is a testament to my hon. Friend and to her encouragement and ambition for people like me. She will know that, as proud as we rightly are, some people from ordinary backgrounds can fulfil their ambitions, but it is still only some people, and there is much more that we must do. I will not rest until some people having opportunity becomes everybody having opportunity. The enormity of that task is matched only by its importance. It would be daunting, but for the fact that I know I am not alone in that mission. I am proud to stand alongside my hon. Friend the Member for Birkenhead and all of my hon. Friends in this great task.
The Wirral has had many politicians who have made an important contribution to public life. They include my hon. Friend the Member for Wallasey (Dame Angela Eagle) and her championing of women and the LGBT community, and Baron Hunt of Wirral, although Members will realise that I think it should be Baron Hunt of the Wirral, but I will come back to that. He comes from a different tradition from me but he has served people in this country with bravery and distinction. And of course, there was Frank Field, who we sadly lost earlier this year.
Frank was a dear friend of mine, and I miss him terribly. He was the first MP I met. He was interested in what everyone had to say, and as hon. Members across the House may know from personal experience, he was quite interested in disagreement, too. He was fascinated when what you had to say differed from his own views, and it was Frank who taught me that disagreement did not need to be tolerated in politics but rather to be sought out and embraced. He taught me that, if you believe in something, you should feel free to say it, and that as long as you do so with reason, respect and humility, you should enjoy the consideration of others. Because we cannot reward the absolutists. Those who know everything with total certainty are, I think, the people we should most fear.
I am conscious, standing here, of the responsibility placed on me to represent the interests and people of Wirral West, and I will do that fiercely. I am deeply aware that representation is as much about listening as it is about speaking. The most interesting and informative conversations that I had on the election campaign were with people who disagreed with me. I learned much from them. In this House, while I bring from my career expertise in local government and economic policy, which I hope will benefit others, I intend to tap into the accumulated knowledge of hon. Members from all sides of the House. There has not been enough listening in our politics of late, and I believe that, if we are to restore faith in this House, which I believe we must, listening to our constituents and to one another is a vital step.
Frank and I spoke often about a whole range of issues and, even towards the end of his extraordinary life, he maintained a fascination with politics, with what it could do for people and with the disagreements that lay at its heart. A small part of his enormous legacy will be these three commitments that I make to this House. My commitment is to listen in good faith to arguments made in good faith. My commitment is to change my mind when it is right to do so. And my commitment is to stand up for the things that I believe in, so that others might do the same. That is what Frank would have expected, it is what the people of Wirral West rightly expect and it is what this House and our politics deserve.
Madam Deputy Speaker (Ms Ghani)
So it is “the Wirral” or “on the Wirral”—that is definitely noted. We now have Luke Charters.
Mr Luke Charters (York Outer) (Lab)
Thank you, Madam Deputy Speaker, and congratulations on your elevation to the Chair.
I am proud to stand here as part of a changed Labour party that won the public’s trust on the economy. I am so glad that we did, because we would otherwise still be at the behest of those on the Opposition Benches, who did so much to damage the public’s finances. My constituents paid the economic price for their economic incompetence—the £22 billion black hole uncovered yesterday is just one example. Ultimately, that is why the Opposition paid the price at the ballot box. The people of York Outer and this country resoundingly sent a message at the general election: never again!
If anyone needs reminding why, they should take themselves back to 23 September 2022, when we had £45 billion of unfunded tax cuts, with no consultation with the OBR. The pound fell below $1.09 for the first time since 1985. The central bank had to undertake emergency liquidity operations by purchasing long-dated gilts. Banks and building societies entered into a chaotic spin, with fixed-rate mortgage products being pulled—at one point, over 1,000 products were withdrawn in a single day. As the former Member for South West Norfolk once said, that is a disgrace.
Amidst all the chaos, there is a simple point: the mini-Budget did not meet the needs of the British people. Let us take some of the businesses that closed in the dying embers of the last Government. A music shop believed to be the oldest in the UK closed only a few months after the mini-Budget. Banks Musicroom had been in York since 1756, but ultimately market conditions saw it shut down in early 2023. The stationery company Thomas Dick, in Clifton Moor, which closed earlier this year, had been open 90 years but faced chaos and supply chain issues that left it no longer viable.
The decisions we make in this place have real consequences, and the impact we can have on people is very real. Before my election to this new role, my friend the Mayor of York and North Yorkshire ran a small business on our high street. I remember him talking just before the mini-Budget about what the impacts might be; he warned just how dangerous the mini-Budget would be, and he was right.
But it is not just about the impact on businesses. Last weekend, I visited Hoping Street Kitchen, a fantastic volunteer-run project that helps homeless people and those facing poverty across York. I was deeply inspired by its volunteers, sense of community and unwavering commitment to improving the lives of others. A volunteer told me first hand how crumbling public services, a lack of affordable housing and long mental health lists have created an unimaginable crisis. The project has gone from providing 30 to 40 meals a week during 2021 to providing 100 a week in 2024.
That is why it is critical that we implement our national mission to rebuild public services, build more homes and offer more NHS appointments. But it is also why I am speaking in this debate: this Bill is so important because it is the only way we can grow those public services with a stable economy. We saw yesterday just how difficult that challenge will be, which is why we must protect our economy now.
The Bill respects our institutions, rather than undermining them, and a prime example is how it gives real oversight to the Office for Budget Responsibility. It also includes provisions for the Treasury Committee to have a greater say in key fiscal moments. However, with the heightened responsibilities that the Bill gives the OBR, we need to think about the most effective ways in which the OBR could be properly scrutinised by Parliament, and the Bill could make more specific provisions on the Treasury Committee’s scrutiny role of the OBR. This week, I met the team from the Institute for Government that authored a report earlier this year on how Select Committees can better hold regulators to account. I commend that report, and I would welcome a debate on how this place best scrutinises the OBR.
What the Bill really protects against, however, is knee-jerk reactions and fantasy Budgets. If we are to get the growth we so badly need, we must behave like an established economy, not an emerging one that came out of the mini-Budget. That is why the Chancellor’s presence at the G20 over the weekend and her warm words about Britain being open for business are so important. If we can fix the lamentable legacy that the Conservative party left, we will have real cause for optimism. I was pleased that the right hon. Member for Godalming and Ash (Jeremy Hunt) commended the work of the OBR in his first speech as shadow Chancellor, but it felt somewhat jarring for him to flippantly suggest:
“We all understand the politics of a Bill that allows the Government to make endless references to the mini Budget”.—[Official Report, 22 July 2024; Vol. 752, c. 408.]
George Orwell once said:
“The secret of rulership is to combine a belief in one’s own infallibility with a power to learn from past mistakes.”
The Conservative party clearly has some way to go in that regard, but under this Government the green shoots of economic recovery are already starting to show. We may have inherited a particularly difficult situation, but the evidence of stable markets and an increase in the pound show the confidence in the security that this Government bring. After all, I made it clear in my maiden speech how welcome it is that the country has some good Yorkshire representation in No. 11, embodying the value of frugality.
We know there are tough decisions to make, and we are not hiding that from the British people: just take yesterday as a prime example of our approach. This Bill seeks only to offer greater transparency over decision making and it treats taxpayers’ money with respect. That is why I am proud to sit on the Government Benches, and it is why the people of York Outer can be confident that this is a Government that will serve them well.
Madam Deputy Speaker (Caroline Nokes)
I call Yuan Yang to make her maiden speech.
Yuan Yang (Earley and Woodley) (Lab)
First, I would like to congratulate my fellow Members on their wonderful maiden speeches. My hon. Friend the Member for York Outer (Mr Charters) made remarks about budget scrutiny that I agree with. My hon. Friend the Member for Wirral West (Matthew Patrick) spoke cinematically of his peninsula and about the role of reason in political debate. My hon. Friend the Member for Kettering (Rosie Wrighting) and I seem to share a birthday week, and I very much welcome the diversity of generations we see across the Chamber. The hon. Member for Ynys Môn (Llinos Medi) spoke powerfully about her experience of homelessness; I am glad to hear such testimony in the House today. I share a predecessor with the hon. Member for Maidenhead (Mr Reynolds); he displayed an exemplary knowledge of railway bridges, and we share concerns about Sonning bridge and the congestion on it.
I welcome you to your place, Madam Deputy Speaker, and thank you for calling me in this debate on budget responsibility. During the Minister’s remarks, I strained to find a joke to make about national accounts, but I deemed that it would be too much of a liability. I then considered making a joke about fiscal take, but I thought that was too taxing. I assure you, Madam Deputy Speaker, there are no more jokes about economics in my speech. Joking aside, I first became engaged in politics while studying economics 16 years ago, and I very much welcome a change in the way that we manage our economy.
I am proud to stand before Members today representing my home constituency of Earley and Woodley, a new seat on the east and south of Reading. Most of the households in my constituency have never been part of a Labour seat, so for many residents I am their first Labour MP in history. I will work hard continuously to earn the trust of every one of my constituents, although it may be some time before I win over the former Member for Maidenhead, Theresa May.
I want to thank four of my predecessors. My hon. Friend the Member for Reading Central (Matt Rodda) is well loved by his former constituents in my seat. His hard work, alongside the work of his predecessors and our Labour group on Reading borough council, connected the Elizabeth line to Reading.
My other predecessors have retired from the House of Commons. For Theresa May, that retirement is extremely well earned. She stepped up to lead our country at a time of crisis, proving the maxim that it takes a woman to clean up the mess the men have left behind. Even at the height of her national responsibilities, she was always present and well respected in her constituency. John Redwood, the former Member for Wokingham, was a man of conviction and authenticity. I respect that very much in a politician, even though I do not share many of his convictions. Finally, Alok Sharma, the former Member for Reading West, displayed international leadership, convening crucial climate talks as the President of COP.
For the first time in history, we now have three constituencies in Reading and, what is more, three Labour MPs. Earley and Woodley has become a new constituency because of the families who have chosen to settle there, moving out from central Reading, London, the rest of the UK and, indeed, the rest of the world. It is a success story for house building as well as for multiculturalism. It is a beautiful area, stretching from Sonning, on the banks of the Thames, to Shinfield, on the banks of the Loddon. In Earley, my family and I live within dog-walking distance of four lakes and woodlands. I want to ensure that future generations have access to nature and to affordable housing, because both have been under threat for too long.
Sonning has a long history, featuring in the Domesday Book, but most of the area in my constituency has been built more recently. After the first world war, Reading contributed to the national campaign to house returning soldiers, by building homes in Whitley and Whitley Wood. The area is now home to Reading football club. There is high-flying history in Woodley, too, which produced aircraft during the second world war.
Most of the houses in Earley, including my own, were built from the 1960s onwards. At one point in the 1980s, the area was the largest housing development in Europe. Shinfield parish, which covers Spencers Wood, Three Mile Cross and Grazely, has had the most recent developments. Alongside Shinfield Studios, the largest new film studios in the UK, we have the Shinfield Players, a community theatre.
However, our constituency is not without its challenges. In many parts of the constituency, the building of infrastructure has not kept pace with the needs of residents, and we need a new Royal Berkshire hospital. We need to ensure that new investments benefit local people. We face deprivation, too, and I will support our grassroots community organisations to work alongside local authorities on regeneration. For those living in our new builds, reform of the leasehold system is much needed, and I look forward to working on all these points with our new Government.
At the heart of my constituency is the University of Reading, which does world-leading research into climate science and meteorology. We are also home to the European Centre for Medium-Range Weather Forecasts. Now, there has been much competition in the debate this afternoon about who has the sunniest constituency. Although my constituency may not enter that competition, it surely holds the power to adjudicate the winner.
The research prowess of the University of Reading, as well as the Thames valley cluster of science and technology giants, has made our area prosperous as well as diverse. We are proud of our diversity; our diversity makes us stronger. Yet there are those who seek to divide us and to weaponise our country’s problems to turn us against ourselves. It is clear that we face many problems and that the politics of the past has failed to deliver, and in conversations with residents I have heard again and again the despair that has crept into our democracy, but I fundamentally believe that our democracy is worth fighting for.
I was born in 1990 in China, a country without the right to vote. Three decades later, another crackdown on democracy has led to hundreds of thousands of Hongkongers seeking refuge in the UK. It is never easy to leave your home or to move countries. I came here with my parents as a four-year-old and it took them many years to find stable work. I still remember my mother, the evening before I started secondary school, telling me, “Don’t compare yourself to the other kids. Their families have money and connections. We don’t and we don’t know anyone in this country.” As a 10-year-old, I did not know what having connections meant, but I did learn not to compare myself to the other kids, and I think that my mother’s advice has stood me in good stead.
I thank my parents very much for supporting me throughout my campaign, and I feel lucky that we call Earley and Woodley our home. To all those families arriving here, wherever they are from and wherever they started off in life, I want to say that wealth or connections should not be a prerequisite for your children’s success. I am proud to be part of a Labour Government who will do our utmost to break down the barriers to opportunity.
I joined the Labour party after university, because I saw opportunities drying up for my generation. I studied economics during the financial crisis and graduated during the onset of austerity. While studying my masters in economics, I realised how much economic debate had become detached from the real-world crises around us. With fellow students, I set up Rethinking Economics, a charity that campaigns for better economics education.
I have spent most of my career trying to make economics and business news engaging and accessible, starting at The Economist and then spending eight years at the Financial Times, where my colleagues taught me so much and supported me so well. I will miss them, but in the words of Cynthia Freeland: “I fully understand that I am now no longer part of the pack, but part of the prey.” And so it should be in a democracy with media freedoms—although less bloodlust would be welcome across this House, I am sure.
I have worked in places without media freedoms. I have interviewed labour activists, protesters and fellow journalists who gave up their own freedom for their causes. Some are still in jail today. When I stood for election, some of my friends told me I was brave, given the abuse and violence against women and girls in our society and in politics, which I have suffered and which we must address, but I think I would be lucky to have a fraction of the bravery of some of my former interviewees. Their determination makes me even more determined to defend and improve our democracy, which has to be constantly renewed through our actions.
Our democracy has to be renewed through reform—through empowering our communities, widening participation in democracy and ending the corrupting influence of money in politics. Our democracy also has to be renewed through delivery—through building a fair economy that can support people. It is my greatest honour to be part of a Government that will do both.
Madam Deputy Speaker (Caroline Nokes)
I call Euan Stainbank to make his maiden speech.
Euan Stainbank (Falkirk) (Lab)
I pay tribute to my hon. Friend the Member for Earley and Woodley (Yuan Yang), especially for her commitment in her career before coming to this place to economics education and journalism, a noble profession and one that is critical in today’s world. I thank all hon. Members across the Chamber who have given their excellent maiden speeches, and I pay tribute to the parliamentary staff and the Speaker’s Office, who have been utterly exemplary in introducing new Members to our roles over the last few weeks.
It is the honour of my life to be elected for the Falkirk constituency. Falkirk is my home: it is where I was born, where I grew up and where I have spent the vast majority of my adult working life. The name for those from Falkirk is “Bairns”, or “the Bairns”, and the historical understanding is that true Falkirk Bairns are those born within the boundaries of the old borough of Falkirk, as I was—and here I will beat my hon. Friend the Member for Kettering (Rosie Wrighting) and the hon. Member for Maidenhead (Mr Reynolds)—27 days into the new millennium. As my partner Innes told me on the night after the election, if it turns out I did not get here early enough to be the Baby of the House, I can be proud enough to be the Bairn of the House.
I pay tribute to my predecessor John Mc Nally for his nine years of service to the people the people of Falkirk and to his office staff. I also thank John for his 10 years prior to that serving the people of Herbertshire and Denny and Dunipace on Falkirk council. I first spoke to John last month, when he popped by an event hosted by the Forth Valley Sensory Centre and the Royal National Institute of Blind People Scotland on the very important topic of town centre accessibility with all the candidates vying for the Falkirk seat. The stories I have heard about John from those in the Forth Valley Sensory Centre, as well as throughout the community, show him as a caring and passionate representative, always ready to lend a hand to anybody in need. I wish him well in future.
Accessibility is a cause that I am passionate about. How accessible our streets are can often be the difference between somebody being forced to stay home or being able to access their community. I encourage all hon. Members, especially Scottish Members, to read the RNIB report “Street Credibility: making Scotland’s streets accessible for people with sight loss”, an excellent guide to how we can use our role to make streets safer and easier to access for everyone.
I would like to take hon. Members through my constituency and the towns, villages and estates that make it up. We start with the Braes villages where my grandfather John and my late grandmother Janet are from, Limerigg and Slamannan. Across the Braes there is also Avonbridge, Standburn, California, Shieldhill and Whitecross. As we travel north down the Braes we get to Maddiston, Brightons, Rumford, Redding, Reddingmuirhead, Wallacestone and Polmont. As we go through Westquarter and Laurieston, the tops of the Callendar Park high flats peek out as we enter the town of Falkirk and the Falkirk South ward that I was honoured to represent for the last two years.
Surrounding the town are the estates of Hallglen and Lionthron, Bantaskin, where my mum Susan was raised, and Tamfourhill, where she first lived. Up north, past the stadium and the Kelpies, we find Middlefield, New Carron, Bainsford and Langlees. To the west, we pass through Camelon, where the Union and Forth & Clyde canals bisect at the famous Falkirk wheel, towards Bonnybridge, Dennyloanhead, Head of Muir, Greenhill and the Carron valley, where we find the town of Denny and the villages of Dunipace, Banknock, Longcroft and Haggs.
As my hon. Friend the Member for East Renfrewshire (Blair McDougall) stated in his maiden speech today, and as many others in the Chamber have said, it is our people who make our communities. Those wonderful communities host most of my family and friends. When my dad Duncan made Scotland his home in 1992—I know my hon. Friend the Member for Glasgow North (Martin Rhodes) said in his maiden speech that he moved in the same year—both he and my mum Susan, a Falkirk native, wanted a community that I and my brother David would feel we could call our home for life. I am proud to represent my constituents in this place, but even prouder that I am representing my neighbours.
We will all be better off under a Government who seek to unite and serve, rather than a Government who seek to divide. I know that this Labour Government will serve the people of my constituency better than we were served before. Prior to politics, my experience of service was earned in the hospitality sector: from the age of 16, I was pouring pints and serving tables at hotels and restaurants; even earlier than that, I was running a match-day kiosk at Parkhead.
I swiftly moved on from the latter job—the only place to be at 3 pm on a Saturday is the Falkirk stadium, the home of the Invincibles. This year, Falkirk football club became the first non-Glaswegian men’s team to go unbeaten for an entire league season in Scotland since the 19th century. I am looking forward to welcoming the sizeable number of Jambos in the Scottish parliamentary Labour party to our league cup fixture on 17 August, when I am hoping we can bring back memories of when we ended their invincible tilt in January 2015. [Laughter.] It was a bit niche, that one.
Not everybody has recognised the value of my experience in the hospitality industry, as a recent online comment from a detractor illustrates:
“Euan can’t be the MP, that’s the boy who used to work at that tapas place.”
I humbly thank the people of Falkirk for electing the boy, who—prior to my entry into politics two years ago—did indeed work at Christie’s Scottish Tapas in Falkirk, the well-deserved winners of the Scottish restaurant of the year award in 2024. I went back to Christie’s on the day after the election to celebrate in the best way possible, in the heart of Falkirk’s town centre. If any Member is planning a visit to the stunning Kelpies in Helix Park, the one-of-a-kind Falkirk wheel, the historic Callendar House estate or the newly restored Rosebank distillery—and I suggest they do all four—I strongly recommend a subsequent refreshing trip to one of Falkirk’s incredible cafés, restaurants and bars. Among the highlights are Christie’s Scottish Tapas, Behind the Wall, the Sanam Tandoori, Finnegans café and the Wheatsheaf Inn, which are even harder to avoid than the restaurants in Carshalton and Wallington.
Both my trip to my old bit on the day after the election, and my online detractor declaring my electoral incompatibility based on my pint-pouring past, reminded me that the service provided by those working in hospitality is not properly valued by all of us who use it. If our feet are still sore from canvassing, I know at first hand that that is nothing in comparison to the shift people put in cooking, cleaning and serving, day in, day out. If anybody in this Chamber thinks it is all just so easy, I recommend that they fasten their apron, get behind the cooker and get ready for the lunch rush.
On behalf of hospitality workers, the most important message that I can pass on is “Make sure we are paid properly.” The experience of hospitality workers, who often deal with low pay and insecure work despite their work ethic, displays the fundamental reasons why Labour’s new deal for working people, manifested in the forthcoming employment rights Bill, matters so much. Despite servicing the essential elements of our economy and our communities, substantial parts of our working population are being told, when they look at their payslip, that their work does not matter.
The same impression is felt acutely by those working in the public sector—our teachers and school staff, NHS and social care workers, refuse collection workers and now especially college lecturers and staff, such as those at Forth Valley college in my constituency. I welcome the significant pay offer that this Labour Government announced yesterday; I encourage the Scottish Government to use any consequential funding that will flow from it to settle the disruptive and long-standing disputes and give Scottish public sector workers the pay rise that they deserve.
For far too long, age-discriminatory bands have indicated to young workers that their time is worth less than anybody else’s. We have had a relatively stagnant minimum wage that does not reflect the spiralling cost of living; zero-hours contracts, which I have worked on; and fire-and-rehire practices that prevent workers from having control over their lives. Those are all things that this Labour Government will change emphatically for the better.
As one of the first Members to be born in this millennium, I share and echo the concerns set out in other Members’ maiden speeches about the low turnout across the country, but especially the consistently low turnout among young people. Many young people have spoken to me on the doorstep about how they feel alienated from politics and are losing trust in politics as a route to positive outcomes.
This disconnect should not exist. As a councillor, I spoke to so many passionate young people with bold and exciting ideas about how to change their communities for the better. I want especially to mention the young people at the Falkirk Youth Voice forum, the Scottish Youth Parliament Members for the constituencies of Falkirk East and Falkirk West, and the Falkirk Champs Board, all of whom I have worked closely beside. I was honoured to be invited to participate in a panel discussion last Tuesday that was hosted by the Duke of Edinburgh scheme; I draw hon. Members’ attention to its Youth Voices 2024 study, which explores the issues that matter most to 3,000 young people from across the UK.
Work like this can be a road map to using our time here to make young people believe in politics as a force for good again. The starting place to mending this bridge is having representatives who listen to young people and work with them for better outcomes. Votes at 16 will be a substantial step in the right direction: I look forward to their being introduced in due course by this Labour Government.
We must also make young people’s priorities our priorities and clearly show ambition for our future when tackling issues such as the cost of housing, the cost of living, mental health, the climate crisis, the moral stain of child poverty, and the NHS. While many young people understand that we must efficiently progress our progressive economic agenda, they deserve to see substantial progress by the end of this Parliament. I look forward to further credible plans being put forward by this Labour Government to make sure we can tackle those issues. I am especially looking forward to the first Labour Budget in the autumn, when I will work tirelessly on behalf of the people of Falkirk, advocating to see us permanently and sustainably end the cruellest policies enacted during the past 14 years. As the people of Falkirk demanded change at this election, the young people of Falkirk, Scotland and the United Kingdom demand that they now see change. I will use my seat and my voice to champion them.
Madam Deputy Speaker (Caroline Nokes)
We now come to the Front-Bench contributions.
Alan Mak (Havant) (Con)
I begin, Madam Deputy Speaker, by congratulating you on your election and wishing you well in the Chair, as well as congratulating the new ministerial team, who I hope will enjoy their time at the Treasury as much as I did. I also congratulate all hon. Members across the House who made their maiden speech in today’s debate: the hon. Members for Glasgow North (Martin Rhodes), for East Renfrewshire (Blair McDougall), for Southend West and Leigh (David Burton-Sampson), for Carshalton and Wallington (Bobby Dean), for Chichester (Jess Brown-Fuller), for Falkirk (Euan Stainbank), for Peterborough (Andrew Pakes), for Maidenhead (Mr Reynolds), for West Ham and Beckton (James Asser), for Ynys Môn (Llinos Medi), for Kettering (Rosie Wrighting), for Wirral West (Matthew Patrick), and for Earley and Woodley (Yuan Yang). All spoke very well, with eloquence and passion, and we on the Conservative Benches wish them well for the rest of their time in this House.
In contrast to those positive, uplifting maiden speeches, we have also heard Labour Ministers talking the country down, claiming to have inherited the worst set of circumstances since the second world war. Frankly, Labour’s approach is more OTT than OBR. To prove Labour wrong, we do not have to go as far back as 1945: we only have to revisit 2010. When we took over from Labour, unemployment was at 8%; the Conservatives nearly halved it to 4.4%. In 2010, the deficit was 10.3% of GDP, thanks to Labour’s reckless borrowing; it is now 4.4%, and is forecast to fall to 1.2% in the coming years. In 2010, inflation was 3.4%; today, it is back at 2%, the Bank of England’s target. Let us not forget that the final years of the last Labour Government saw Britain experience the deepest recession since quarterly data started being published—in fact, Labour Britain was in recession for longer than any other G7 country at the time, and we were the last to exit. That is why in 2010, Labour left us with that infamous note saying, “There’s no money left”. In contrast, this month we left Labour with the fastest-growing economy in the G7, low inflation, low unemployment and 12 months of consecutive wage growth.
We Conservatives believe in sound public finances, fiscal responsibility and independent forecasts as the foundations of economic stability. That is why it was a Conservative Government who created the OBR in the first place, and it is why we are keen to safeguard its reputation for independence and focus. In that context, this Labour Bill feels more like gimmickry than government. It is clear that the Bill is really designed for one purpose and one purpose alone: to distract everyone ahead of Labour’s tax rises in the autumn Budget. Is it any wonder that the IFS says that Labour’s fiscal lock proposal is “largely performative”, or that even the Resolution Foundation describes the policy’s impact as “relatively small”?
When the Conservatives created the OBR, our legislation recognised that for it to be effective and respected, it had to maintain a delicate balance between independence and accountability. Independent forecasts, free from Treasury interference, would give the public more confidence in them, avoiding the scenario that happened under the last Labour Government where their growth forecasts were out by as much as £13 billion on average. At the same time, elected politicians accountable to this House would retain control over fiscal decisions, because those are ultimately political judgments that should not be delegated to unelected bodies.
However, today’s Bill challenges the delicate balance that we left in place. In fact, the most recent independent review of the OBR, carried out by the OECD, specifically warns against what it describes as “mission creep”. Presciently, the OECD says that attempts to expand the OBR’s current remit risk drawing the organisation into areas where it does not currently have sufficient capacity or expertise, creating confusion about its role, and diluting its effectiveness. We on the Conservative Benches agree: the OBR should not be dragged into making actual or perceived political judgments, giving unelected officials the ability to essentially veto or shape decisions that are in substance political.
Quite frankly, the Bill and Labour’s proposals are full of unanswered questions, which need answering today and throughout the Bill’s passage. For example, is the OBR really equipped to decide what counts as a spending emergency? Should the OBR really be empowered to reasonably disagree with Ministers, who are elected, ignore their opinions and strike out on its own? The Bill gives the OBR more powers; but what measures will the Government introduce to make the OBR more accountable to the House and its Members?
Can the Government explain why their fiscal lock completely ignores policies with large, indirect fiscal impacts but whose up-front costs do not reach the GDP threshold, such as Labour’s new open-door immigration policy, or their watering down of laws that protect us from French-style strikes? Why has the Chancellor announced over £25 billon of spending in 25 days without an OBR forecast? Despite claiming a black hole in the public finances, Labour has already spent £8.3 billion of taxpayers’ money on a public energy company, £7.3 billion on a national wealth fund and around £10 billion on inflation-busting public sector pay deals without asking for any improvements in productivity in return. Do they have a forecast for any of that spending, or has the fag packet been thrown away?
When the Minister gets to his feet, can he confirm that there will be no more tax rises beyond those already included in Labour’s manifesto? Having already taken away the winter fuel allowance from millions of pensioners, will he rule out tax rises on people’s pensions, capital gains and council tax?
It was a Conservative Government who created the OBR to end Labour’s culture of inaccurate, politicised forecasts. The OBR has established itself as a fixture of the economic and political landscape, and we support it. But we have significant concerns about the Bill, and believe it will benefit from further scrutiny and improvement by the whole House at its next stage, so we do not oppose that additional scrutiny.
The Bill reveals the true fears and underlying motives of this Labour Government. It is an admission, and a confirmation, that one of the first laws they bring forward, after 14 years in opposition, is designed to save Ministers from their own Back Benchers’ spending demands, and stop themselves from crashing the economy, as they have done on so many occasions before. The Bill shows that they have finally realised what everyone else already knew: this country can never trust Labour with our economy.
The Exchequer Secretary to the Treasury (James Murray)
I welcome your election to the Chair, Madam Deputy Speaker. It is a privilege to close this debate on the Budget Responsibility Bill on behalf of the Government. I thank all hon. Members for their contributions; in a moment I will address many of the points that they have raised.
Let me start by reminding the House why the Bill is so important and what it is designed to achieve. At the general election earlier this month, the British people voted for change. They voted to turn the page on 14 years of economic failure. People across Britain voted to remove the Conservatives from power. They voted to remove the party that crashed the economy, and whose Ministers we now know were reckless with the public finances right till the very end. People voted to give Labour the chance to serve. With that honour afforded to us, we have got to work straightaway in fixing the mess the previous Government left and getting our economy growing.
That economic growth is at the heart of our national mission as a Government. That growth underpins our plans in government to make people in every part of the UK better off and to get public services back on their feet in a sustainable way. We know that a crucial foundation for sustained growth is economic stability and fiscal responsibility. We have brought that stability and fiscal responsibility back into the heart of government. Our fiscal rules are non-negotiable. As the Chancellor set out yesterday, meeting them is a principle on which this new, Labour Government were elected, and that will guide her at October’s Budget.
But we want to go further in restoring the trust that was so badly damaged by the Conservatives during their time in office, by embedding fiscal responsibility not just into our country’s government but also into its laws. That is why one of the first Bills to be presented to the House of Commons by our new Government was the Budget Responsibility Bill whose Second Reading we are debating today. The Bill will hardwire fiscal responsibility into significant financial decisions of any future Government, and it will prevent any party ever again being able to play fast and loose with the public finances.
We saw under the previous Government what happens when politicians fail to show respect for taxpayers’ money. People across Britain are still feeling the impact of Liz Truss and Kwasi Kwarteng’s recklessness nearly two years on from the economic disaster they created. The Conservatives’ recklessness in 2022 showed just how much damage unfunded spending commitments can cause. Ministers at the time unleashed economic turbulence that pushed up people’s mortgages and rents and made people across Britain worse off, though it hit the least well-off the hardest. We must never let that happen again.
Budget responsibility must never be optional. That is why Labour will hardwire this responsibility into Government through our fiscal lock, which will mean that all significant fiscal announcements in future will be guaranteed independent scrutiny from the Office for Budget Responsibility. This Bill empowers the OBR to independently produce an assessment of a Government’s fiscal plans if it judges that the fiscal lock has been triggered. That will make sure that there is always proper scrutiny of a Government’s fiscal plans, and guard against large-scale unfunded commitments and disasters such as the Conservatives’ so-called mini-Budget ever happening again. This Bill is a crucial step in fixing the foundations of what we have inherited.
I will take a pause from focusing on the substance of the Bill to thank so many hon. Members for their truly excellent maiden speeches. We had a real tour around Britain, and I feel I have got to know places in all corners of our country through their passionate speeches about the places and people they are all so proud to represent.
We began with my hon. Friend the Member for Glasgow North (Martin Rhodes), who spoke about Kelvingrove park, which I went to when I visited Glasgow. He spoke about the serious work of Government, and the importance of delivery and rebuilding trust in politics.
My hon. Friend the Member for East Renfrewshire (Blair McDougall) said that the hard decisions we make today are what create a better tomorrow. There is no better summary of the position we find ourselves in today. He spoke passionately about the history of his constituency and the importance of a better future for the next generation.
The hon. Member for Carshalton and Wallington (Bobby Dean) spoke movingly about his upbringing and how it has influenced his politics. He also spoke about his anger at the previous Government’s recklessness. I have to say that while I enjoy going to the pub when there are big games on, I do not know that much about football, so I actually understood the fiscal bit of his speech more than the football analogy.
James Murray
I am just being honest—honesty in politics!
My hon. Friend the Member for Southend West and Leigh (David Burton-Sampson) made a very important point that we should all heed about civility in politics. He spoke about the diverse community spirit in his area, but I am not going to even begin to compete with him on how impressive the coastline is in my landlocked suburban constituency.
The hon. Member for Chichester (Jess Brown-Fuller) spoke about how special and sunny her constituency is. She began a new competition; now it is not only who has the most beautiful constituency, but the sunniest. I was very touched by her recognition of the importance of family for both inspiration and practical support in politics.
My hon. Friend the Member for Peterborough (Andrew Pakes) spoke about his Co-operative and trade union values, which I think many of us Labour Members share. I did not know until he spoke about the connection between Peterborough and mustard, so that is something I have learned today. I thought that his focus on the promise of new towns really sums up our sense of optimism for the future. There is the idea of being proud of one’s heritage, and honest about the challenges that we face, but he is also ready to achieve more in the future with a Government who support him. I wish him great stability in his seat.
The hon. Member for Maidenhead (Mr Reynolds) gave a particularly rich history of his constituency, which went from bridges to “Carry On” movies, and he also mentioned the Spice Girls. I think a Spice Girls CD was the first I ever bought, but he may not know what a CD is. That sums up the different perspectives we come from.
My hon. Friend the Member for West Ham and Beckton (James Asser) spoke about the Royal Docks, where I spent much time in a previous role working at City Hall; I saw the great potential that that area of the capital city has. He eloquently set out the combination of heritage and diversity, past and present, that makes his constituency such a lively and wonderful place to represent. I make him an offer: when he is jumping on the Elizabeth line to visit the hon. Member for Maidenhead, he can stop off at West Ealing to say hello to me.
The hon. Member for Ynys Môn (Llinos Medi) spoke honestly about the importance of keeping people in this place on their toes. That is right; the electorate do keep us on our toes, and one of the great benefits of our system is the way in which we are brought down to earth every time we go back to our constituencies on Thursdays or Fridays. However great and important the debates in this place are, when we knock on that door or sit down in our surgery, we are brought right back down to earth. It is a great feature of our political system, and she was right to draw attention to it.
My hon. Friend the Member for Kettering (Rosie Wrighting) spoke about how proud she was of the history of the place that she now represents and where she grew up. I was very moved to hear her speak about her mum’s role as a local youth worker, and how that inspired her to do what she is doing in life. I wish her well as one of the youngest MPs in this place.
My hon. Friend the Member for Wirral West (Matthew Patrick) spoke about the natural beauty of his constituency—he was not the first Member to do so today—and the passion of the people there. His comments about politics being as much about listening as speaking were particularly thoughtful. We should all bear that in mind in this place. He made an important point about learning from those with whom we disagree, or maybe only appear to disagree, and about breaking down barriers through listening and having conversations.
My hon. Friend the Member for York Outer (Mr Charters) spoke about businesses and voluntary projects in his constituency. He underscored how important it is that taxpayers’ money is treated with respect. I know that the residents of York Outer will be very well served by the excellent new MP we heard from today.
My hon. Friend the Member for Earley and Woodley (Yuan Yang), whom I enjoyed campaigning with during the general election, managed to inject some humour into economics, which is quite an achievement for a maiden speech. I am not even going to begin to try to replicate that in my comments just now, but she spoke passionately about the importance to those in her constituency of having access to nature and affordable housing. I know from what she said, particularly about her personal experience, that she will be a true champion for breaking down barriers to opportunity.
Finally, we heard from my hon. Friend the Member for Falkirk (Euan Stainbank), and it was worth the wait to hear his wonderful speech. He gave a fantastic whistle-stop tour of his constituency, and made many excellent recommendations of where to eat and drink next time we are in the area. What really came across is how connected he is to the community he represents, through his neighbours, his friends and his family. He used a phrase that sums up well what I and other Government Members want to do: unite and serve.
Those were all the maiden speeches we had today. It was a truly excellent tour of not just the country, but the talent we have in this place following the general election. I wish all hon. Members very well for however many years they spend in this place.
We heard from other Members about the substance of the Bill, including the shadow Ministers. They both seemed a bit confused about whether they support the OBR and the Bill. I am glad that they confirmed that they support the Bill and will not vote against it, but at one point the hon. Member for Grantham and Bourne (Gareth Davies) seemed to defend Liz Truss over her handling of the economy. He must be pretty much the last person in the country willing to do so; it was certainly brave of him. We Government Members are clear on why the OBR is so important and what its role should be. The Bill sets out to strengthen that.
The hon. Gentleman asked what the purpose of the fiscal lock might be. The fiscal lock will prevent the sidelining of the OBR by giving it the power to start an assessment if the Government announce fiscally significant policies without one. I remind him that the current shadow Chancellor said, at the time of the disastrous mini-Budget, that some of the difficulties were caused by the lack of a forecast, so this is something that the Opposition agree with.
The shadow Minister also asked about the definition of an emergency. We are very clear that in emergencies—for instance, during the pandemic—it may be necessary for the Government to take rapid action. In those cases, it would not be appropriate to hold back the response to the emergency until a forecast could be produced. Finally, he asked whether the OBR reports triggered by the fiscal lock will be published. I can answer him simply: they will. That is set out in section 8 of the original Budget Responsibility and National Audit Act 2011.
I welcome the support from the Lib Dem spokesperson, the hon. Member for Richmond Park (Sarah Olney), for the Bill. She asked about the definition of “significant”, a point also raised by my hon. Friend the Member for Walthamstow (Ms Creasy). The threshold set out in the draft charter for budget responsibility, which we have on the gov.uk website, is 1% of GDP in any single financial year. The purpose of the legislation is to prevent large irresponsible fiscal announcements that could undermine economic stability, and that requires a threshold targeted at fiscally significant announcements. That is why we have chosen that figure in the draft legislation and the draft text published on gov.uk.
Let me mention two other Members who spoke in the debate. I welcome the support of the hon. Member for Angus and Perthshire Glens (Dave Doogan) for the Bill. I think that his only criticism was one word in the terminology, and we can probably live with that. He said that he was nauseous from hearing us talk about being a Government of service, but he may have to get used to feeling nauseous, because we will proudly be a Government of service every day that we have the honour to serve.
Finally, I am glad that this is not an exceptional debate in which the hon. Member for Strangford (Jim Shannon) does not make an intervention. I welcome his support for the Bill, and for the Government’s wider actions in resolving the junior doctors’ industrial dispute. I reassure him that, like my right hon. Friend the Chief Secretary to the Treasury, I recognise the importance of working with political representatives from all nations in the UK.
As my right hon. Friend said at the beginning of this debate, a crucial first step to achieving sustained economic growth is delivering economic stability. This Bill will help provide that stability and ensure that fiscal responsibility is not only embedded in our approach to government, but locked into how government works from this point on. It will make sure that there is always proper scrutiny of the Government’s fiscal plans, reinforcing credibility and trust, and making sure that no Government can ever again play fast and loose with the public finances. The Bill is a key step in fixing the foundations of our country as we set out to get the economy growing and to make families across Britain more secure and better off.
We now know that the Conservatives called the election to run away from the problems that they had covered up, rather than taking the tough decisions to fix them. While they may have run away from the problems that they created, they cannot run away from their record in office. People in Britain will not forget the last Government’s recklessness in 2022, which showed just how much damage unfunded spending commitments can cause. Budget responsibility will never be optional under Labour, as it was under the Conservatives. We have brought fiscal responsibility back into the heart of government, and we will hardwire it into law through our fiscal lock. That is what this Bill will achieve. This Bill will draw a line under the economic recklessness of recent years and make it clear that it must never be allowed to happen again. Budget responsibility underpins our national mission to make people across Britain more secure and better off. For that reason and others, I commend this Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Budget Responsibility Bill: Programme
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Budget Responsibility Bill:
Committal
(1) The Bill shall be committed to a Committee of the whole House.
Proceedings in Committee, on Consideration and on Third Reading
(2) Proceedings in Committee shall (so far as not previously concluded) be brought to a conclusion four hours after their commencement.
(3) Any proceedings on Consideration and proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion five hours after the commencement of proceedings in Committee of the whole House.
(4) Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee of the whole House, to any proceedings on Consideration or to proceedings on Third Reading.—(Jeff Smith.)
Question agreed to.
Budget Responsibility Bill: Money
King’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Budget Responsibility Bill, it is expedient to authorise the payment out of money provided by Parliament of any expenditure incurred by the Treasury in consequence of the Act.—(Jeff Smith.)
Question agreed to.
Business of the House (Today)
Ordered,
That at today’s sitting, notwithstanding the provisions of Standing Order No. 122B, the Speaker shall put the Questions necessary to dispose of proceedings on the Motion in the name of the Prime Minister, Rishi Sunak and Ed Davey relating to Select Committees not later than one hour after the commencement of proceedings on the Motion for this Order; such Questions shall include the Questions on any Amendments selected by the Speaker which may then be moved; proceedings on that Motion may continue, though opposed, after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Lucy Powell.)
Budget Responsibility Bill
Wednesday 4th September 2024
(1 month, 4 weeks ago)
Commons ChamberRead Full debate Budget Responsibility Act 2024 Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 4 September 2024 - (4 Sep 2024)
16:52 - The Committee divided: - Ayes: 109 / Noes: 366 - Question accordingly negatived.
17:09 - The Committee divided: - Ayes: 73 / Noes: 375 - Question accordingly negatived.
The Chairman of Ways and Means (Ms Ghani)
I remind Members that, in Committee, Members should not address the Chair as “Deputy Speaker”. Please use our names when addressing the Chair. “Madam Chair” or “Chair” are also acceptable.
Clause 1
Announcement of fiscally significant measures
Nigel Huddleston (Droitwich and Evesham) (Con)
I beg to move amendment 9, page 1, line 14, at end insert—
“(c) or any changes to the government’s fiscal targets.”
This amendment requires the OBR to produce and publish a section 4(3) report at the time new fiscal rules are announced by the Treasury.
The Chairman
With this is will be convenient to take the following:
Amendment 2, page 1, line 25, at end insert—
“(2A) In any case where the Office has acted in accordance with subsection (2), it may notify the Independent Adviser on Ministers’ Interests of the circumstances in any case where it considers those circumstances may be relevant to—
(a) the Ministerial Code, or
(b) the functions of the Independent Adviser on Ministers’ Interests.”
This amendment enables the OBR to notify the Independent Adviser on Ministers’ Interests where the OBR considers that any instance where the Treasury had not requested a report under section 4A(1) in advance may give rise to consideration of compliance with the Ministerial Code.
Amendment 5, page 1, line 25, at end insert—
“(2A) Where the OBR prepares a report in accordance with subsection (1) or (2), it must take account of the impact of the measure or measures on—
(a) the UK’s compliance with, and
(b) the fiscal cost of meeting,
the UK’s net zero target as set in section 1(2) of the Climate Change Act 2008.”
This amendment requires the OBR to report on the impact of fiscally significant measures announced by Government on the UK’s statutory net zero target.
Amendment 1, page 2, line 4, at end insert “or
(b) the measure, or combination of measures, is likely to have an impact on—
(i) the cost of government borrowing,
(ii) interest rates, or
(iii) the rate of growth of gross domestic product.”
This amendment broadens the definition of fiscally significant measures to those which fall below the costing threshold, but have wider fiscal effects, by affecting either the cost of government borrowing, interest rates or rates of economic growth.
Amendment 6, page 2, line 4, at end insert
“or if the condition in subsection (3A) is met.”
See the statement for Amendment 7.
Amendment 7, page 2, line 6, at end insert—
“(3A) The condition in this subsection is that the measure, or combination of measures, forms part of category of measures with a cumulative impact on—
(a) public sector net debt,
(b) public sector contingent liabilities, or
(c) both,
that exceeds a specified percentage of the gross domestic product for a specified period.
“Specified” means specified in, or determined in accordance with, the Charter for Budget Responsibility”
The purpose of this amendment is to extend the definition of fiscally significant measures to include measures with a cumulative impact on public sector net debt or contingent liabilities when taken together with other measures in the same category, such as public projects with private sector partners.
Amendment 3, page 2, line 16, leave out “28” and insert “56”.
See the statement for Amendment 4.
Amendment 4, page 2, line 17, at end insert—
“(6A) After the publication of a draft under subsection (6), the Treasury must consult—
(a) the Office for Budget Responsibility,
(b) the Treasury Committee of the House of Commons, and
(c) such other persons as the Treasury considers appropriate.
(6B) When a modified Charter so as to include provision by virtue of this section is laid before Parliament, the Treasury must also lay before Parliament a report on the outcome of consultation under subsection (6A).”
The purpose of this amendment is to impose a requirement on the Treasury to undertake a full consultation and publish the outcome of that consultation prior to revision of the Charter for the purposes of the Bill.
Clause 1 stand part.
Clause 2 stand part.
Amendment 10, Title, after “measures” insert
“and of any changes to the government’s fiscal targets”.
This amendment is consequential to Amendment 9. It would amend the long title of the Bill.
Nigel Huddleston
Thank you very much, Madam Chair. May I first take the opportunity to congratulate you on your election? I promise to try not to try your patience over the coming weeks, years and so on, but we will see how things go.
I wish primarily to speak today to amendment 9 and, of course, consequential amendment 10, which effectively seek to ensure that the fiscal lock proposed in the Bill should also include any changes to the fiscal rules and would require the Office for Budget Responsibility to produce a report on their effect on public finances. The Office for Budget Responsibility was of course constructed by a Conservative Chancellor following the poor forecasting record of the previous Labour Government. Between 2000 and 2010, the then Labour Government’s forecasts for economic growth were out by an average of £13 billion, and their forecasts for the budget deficit three years ahead were out by an average of £40 billion. Their forecasts therefore lacked credibility, and to re-establish confidence and credibility the OBR was created by the Conservative Government.
Labour lacked economic credibility in the past, and I am afraid it still lacks it now. The facts simply do not stand up the false claim that the Government have inherited the worst economic circumstances since the second world war; they transparently have not. Contrary to the rewriting of history that the current Labour Government are attempting, when we took over from Labour back in 2010, inflation was 3.4%. When they took over from us, it was 2.2%. The annual deficit is half what we inherited in 2010, unemployment is about half what it was in 2010, and we handed Labour the fastest economic growth in the G7. The dominant political and economic narrative since the second world war is in fact, as has been widely commented on, that every single Labour Government end up with unemployment higher at the end of their time in power than when they took over from the Conservatives preceding them.
The British public should not be taken for fools. Just because Labour keeps claiming something, that does not mean that it suddenly becomes true, which is why clarity over plans and rules is so important. The fiscal rules are of course restrictions on fiscal policy set by the Government to constrain their own decisions on spending and taxes. The fiscal rules set by the previous Government said that the debt to GDP ratio should be falling within a five-year horizon, and that the ratio of the annual budget deficit to GDP should be below 3% by the end of the same period. Labour’s manifesto for the election proposed the following fiscal rules: balancing the current budget, so that day-to-day costs are met by revenues, and that debt must be falling as a share of the economy by the fifth year of the forecast. On the surface, therefore, the debt rules appear to be broadly the same under the new Government. The Government have even said that they have an “ironclad” commitment to reduce Government debt. It is therefore critical what definition of debt is used for the fiscal rules. Clearly, any changes to the fiscal rules are financially significant decisions because they affect how much the Government can borrow and spend.
On Second Reading, the Exchequer Secretary to the Treasury said:
“Our fiscal rules are non-negotiable.”—[Official Report, 30 July 2024; Vol. 752, c. 1263.]
Great, but why then has the Chancellor repeatedly failed to rule out that she will change the definition of debt in her fiscal rules to allow, presumably, for massive borrowing? The Government cannot run from the scrutiny that they should be subjected to if they are considering making such a change. We believe that our amendment requiring an OBR report on changes to the fiscal rules is entirely consistent with the Government’s stated policy intent, and should therefore be fairly uncontentious. After all, on Second Reading, the Chief Secretary to the Treasury said that
“the announcement of a fiscally significant measure should always be accompanied by an independent assessment of its economic and fiscal implications, in order to support transparency and accountability.”—[Official Report, 30 July 2024; Vol. 752, c. 1211.]
We agree, and not accepting our amendment would be contrary to those goals, because clearly changing the fiscal rules would be a fiscally significant measure in anybody’s book. Furthermore, the Chief Secretary said that
“fiscal discipline and sound money is the bedrock of our plans.”—[Official Report, 30 July 2024; Vol. 752, c. 1213.]
Well, changing the fiscal rules would be changing the foundations and that bedrock.
Transparency and clarity are important in relation to the public finances, because Ministers should never forget that it is not their money that they are spending; it is the public’s money. The public have a right to know how their money is being spent, and government is about making difficult choices with limited resources. With Government spending being above £1.2 trillion per year, the British public recognise that the Government clearly have choices. It is not an endless supply of money, but it is a very, very large amount. In the last few weeks, the new Labour Government chose to spend the public’s money on pay settlements for their union friends rather than on supporting pensioners. Those settlements are estimated to cost about £10 billion. They also chose to spend £8.3 billion on a public energy company and £7.3 billion on a national wealth fund, so far from inheriting a £22-billion black hole, they have actually just spent £25 billion creating one within their first few weeks of coming to power.
Andrew Griffith (Arundel and South Downs) (Con)
My hon. Friend is making a fantastic speech on the importance of being responsible with our public finances. Much of the Bill is concerned with responsibility and transparency. Does he know whether the Government published an impact assessment when they took away the winter fuel allowance?
Nigel Huddleston
I thank my hon. Friend for that point. My understanding is that the Government have not published an impact assessment, as would normally be the case for something with such a significant impact. I think that speaks to the whole narrative that we are hearing from the Government: claiming one thing when the facts speak differently. As I said, far from inheriting a £22 billion black hole, they have actually spent, or committed to spending, an additional £25 billion. That is a choice that they made, so the claim that the Labour Government are having to take the winter fuel allowance away from millions of pensioners as a response to unexpected financial constraints simply does not stack up against the facts, or indeed the words of the Chancellor herself, who on 25 March 2014—yes, a decade ago—said:
“We are the party who have said that we will cut the winter fuel allowance for the richest pensioners and means-test that benefit to save money”.—[Official Report, 25 March 2014; Vol. 578, c. 174.]
That is a direct quote in Hansard from the current Chancellor, so no, the Government’s restriction of winter fuel payments is not a response to financial circumstance; it is a long-established, clearly stated Labour policy intent—a deliberate policy choice, but a policy that they conveniently forgot to tell the public about in the run-up to the last election.
I hope, however, that the Government can be straight with the public on this point about the fiscal rules, accept the amendment that we are proposing, and provide assurance to all Members and the outside world that there is no sleight of hand here. We want the Bill to work as they say it is intended to, and to include financially significant decisions, such as on the levels of Government borrowing and the fiscal rules. I would therefore appreciate it if the Chief Secretary to the Treasury confirmed in his wind-up that the Government do not intend to change the definition of debt in their fiscal rules or practise some accounting trick to hide the level of Government borrowing, and that they do indeed wish to be clear and transparent about the public finances. If Labour Members vote against our amendment, it will merely prove that they are planning to change their fiscal rules in the Budget to borrow more money, increase debt, and run away from independent OBR scrutiny—the very opposite of the stated intent of the Bill.
Madam Deputy Speaker (Ms Ghani)
I call Dr Jeevun Sandher to make his maiden speech.
Dr Jeevun Sandher (Loughborough) (Lab)
Thank you, Madam Chair, for allowing me to give my maiden speech in this House. Like every Member across this House, it is the greatest honour, privilege and responsibility of my life to represent my community of Loughborough, Shepshed and the villages. I rise at the most difficult moment for our communities and our country since the second world war, when many feel despondency, despair and anger. I know that every Member across this House wants our communities to succeed and to contribute to our national success. That is what my community has done before and will do again, with hope and determination.
My story does not begin in Loughborough. I was not born there—unlike my neighbours, who are now my friends, and who have made it my home. My story instead begins in rural Punjab, 4,000 miles away, where my father was born almost 70 years ago. His chances of dying before his fifth birthday were one in four. Today, a child born in the same place is around nine times less likely to die. That is what economic growth means. It means less suffering, it means less misery and it means less death. That is why I became an economist: to build prosperity and to lessen misery.
I learned my trade in the Treasury and then went to work in Somaliland, one of the poorest nations on Earth, where I helped to write its economic policy, its budgets and its national development plan. That was where I saw the horrors of climate change lead to drought, hunger and death, but also where I learned that even in the darkest of hours and the most difficult of moments we can build prosperity.
Now I stand here as the elected Member of Parliament for my community. It says something remarkable about our nation that the fact that I, the son of immigrants, am standing in this Chamber is in and of itself unremarkable. It speaks to our common culture—a culture forged of different backgrounds, a culture that not only rejects the violence we saw over the summer, but completely rejects its reasoning too.
My election represents an historic first for my community. I am a member of an under-represented minority—I am, of course, the first Member of Parliament elected by the men and women of Loughborough to have a beard. To the organisers of the beard of the year competition I say, “Call me.” Luckily for me, my dad is not eligible for that particular competition. I know that the right hon. Member for Islington North (Jeremy Corbyn) has won the award several times; I hope he does not mind me winning the prize this time, as long as I let him win the argument.
My predecessor in this place, Jane Hunt, was not a contender for that award, but no one can doubt her commitment to team Loughborough, and every single Member across this House and across my community will wish her the very best, especially as she has recovered from cancer. Her predecessor, Baroness Morgan, has talents that are well known both in this and the other place. Before her was my good friend and mentor Andy Reed. Members who know Andy will know that he is still a leading figure in sports policy, and they will also know that Andy is the nicest man in British politics. It is his character that I hope to live up to in this place.
However, I rise to speak at the most difficult time for our communities and our nation since 1945. Our communities are in crisis. Wages in my constituency are £10,000 lower than they would be had we grown at new Labour rates. The divides caused by deindustrialisation have widened from cracks into chasms, with young men who used to leave school and get good jobs now 20% less likely to get any job; in our most deprived neighbourhoods, life expectancy falling before the pandemic; more than any fact or figure, the despair, the despondency and the anger; across and beyond our shores, war in Europe once more, with democracy in danger; and, most seriously of all, a planet that is burning.
For my community, this was the hottest summer we have ever known, followed by the worst flooding we have ever seen, destroying homes. The Prime Minister and I saw that destruction when we visited the homes of Ian and Alan. No one should wake up in the morning to find their home destroyed by flooding, but that will only become more common in the years ahead. What we do in the next decade will determine the fate of our communities, of democracy and of our planet. Either we will rise to this moment, build prosperity for all, protect democracy and stop emitting carbon, or everything we hold dear will crumble and fall.
Previous generations have shown us that we can rise to this moment that threatens us. Our country stood alone against fascism in Europe and won. I think today of my constituent William Williams, 104 years old, who flew Spitfires in the war. As his generation rose to their moment, so can we. My community have shown me that we can. When the waters came and the floods rose, my constituents Caz and Carl did not pause to think if they could help, but only how they could help. They organised collections, they provided refuge, and they looked after perfect strangers. It is their spirit that I carry into this place—asking not if, but how. How can we build prosperity and protect our planet from burning? We can do so by investing in a green transition that creates good jobs and gets wages rising for the people and places left behind when the factories closed. That is what we can achieve, and we are seeing it work already in the United States.
The Chairman of Ways and Means (Ms Ghani)
A very strong maiden speech, without a script in hand—your parents will be proud.
Andrew Griffith
It is a delight as ever to serve under your chairmanship, Ms Ghani. I congratulate the hon. Member for Loughborough (Dr Sandher) on his maiden speech and his kind comments about his predecessor Jane Hunt, a great colleague of this House. It was one of my great pleasures in my previous role as Minister for science and research to visit the fine university he now represents; I wish him and them well, and I wish him all the best of luck with those on his Front Bench in procuring the financial support he seeks.
This is a disreputable Bill, if we are brutally honest. It is a piece of political theatre, which all of us on both sides of this House should think very strongly about giving our support to. This history of this place is of legislation made in haste, which this House subsequently repents at leisure. I say this in all seriousness and in the spirit of this place: at a time when there is low trust in politics, did our constituents—did the hon. Gentleman’s constituents, when they trooped to the ballot box and returned him to this place only weeks ago—seriously expect that our role would be to give away even more of our responsibilities? Can any of us, hand on heart, say that our constituents know what and who the OBR is? Did the electors of Bristol North West, Hampstead and Highgate, Richmond Park or, indeed, Arundel and South Downs send us to this place only to give away our duties and responsibility to the unnamed, unknown and unelected officials—well-meaning, no doubt—of the Office for Budget Responsibility? Hands on the face of a stopped clock are sometimes more accurate than the OBR forecasts, as they are at least correct twice a day for sure.
In truth, this legislation, put together at breakneck speed, has more holes than a Swiss cheese. If we look at clause 1(3), who decides the “costing”? Proposed new section 4A exempts any measure that is intended, at the time of its introduction, to be temporary. Members of this House will be familiar with the fact that income tax itself, one of the largest ever fiscal measures, was intended to be temporary; perhaps the Minister will address that fact when he winds up. Income tax was introduced by Pitt the Younger in 1799 as a temporary measure. Well, here we are, 225 years later, and that temporary measure is still going extremely strong.
Who defines what is and is not a fiscal measure—a measure with a potential impact on the GDP of this country? Many things decided in this House will have a direct or indirect impact on the GDP of this country; the decision by Tony Blair to take us to war without a vote in this House undoubtedly had an impact on our GDP. Decisions to introduce a four-day working week—if this House so chooses to make them, as is its right—would have a material impact on the GDP of this country. The Centre for Business and Economic Research estimates that every bank holiday costs this country a sum approaching £3.6 billion. Three, four, five or six bank holidays add up to a 1% impact on GDP, which I speculate may be the threshold for the OBR to intervene.
On trade deals, if those on the Government Benches fulfilled their ambition to realign with Europe—to federate and once again abrogate our trade to Europe—that would potentially have a material fiscal impact on GDP. There are very few domains of this House—very few of the decisions that our constituents have sent us here to legislate and decide on their behalf—that would not potentially fall foul of this rule.
Ms Stella Creasy (Walthamstow) (Lab/Co-op)
I will delight the hon. Gentleman, because, as I am sure he saw on the amendment paper, I have tabled an amendment that would look at trade deals. One of the reasons why I felt compelled to do that, and explore this question that he raises about the economic impact, is that while he was in government and, indeed, a Treasury Minister, the Government did not publish any information for the very trade deals he is talking about. I will always welcome a sinner who repenteth but, for the avoidance of doubt, is he saying that he now believes there should be independent scrutiny of things such as the trade and co-operation agreement?
Andrew Griffith
It is good to have a proper debate. I certainly think that if we want and seek good government—which, like the human condition, is not a perfect state, but a state that we should seek constantly to perfect—the highest levels of transparency and the very important exercise in Government publishing of impact assessments when they make material decisions, as required by Cabinet Office guidance, are things that the whole House should join hands and agree on. It is one of the reasons why I asked my colleague, my hon. Friend the Member for Droitwich and Evesham (Nigel Huddleston), whether the Government had published an impact assessment on their callous decision to withdraw the winter fuel allowance from so many pensioners. The hon. Member for Walthamstow (Ms Creasy) will well know that the process of trade deals undergoes extensive scrutiny in this House, and I took one of those trade deals through that process of scrutiny in a former life.
I will conclude, because I simply want to alert hon. Members to what they are potentially doing as they seek to support this Bill. It is not for partisan or political advantage, but about the important role of Parliament, which has been litigated many times in this Chamber and in debate.
Graham Stringer (Blackley and Middleton South) (Lab)
Unsurprisingly, I have listened to the hon. Gentleman’s speeches on a number of occasions, and I agree with quite a lot of what he is saying about transparency. Does he agree that the burden of his argument is that we cannot make a Government behave better or govern more effectively by quango? This quango was set up by George Osborne to trap an incoming Labour Government and restrict and slow them down, and it is an odd thing that we see this quango being gilded.
Andrew Griffith
As ever, the hon. Member makes an important and weighty contribution. He is exactly right about the direction of travel. On both sides of the House, we will all find our own particular point on the envelope when it comes to the balance around organisations that can hold us to account and, in particular, hold a mirror to Government and ensure that this House acts with the best, most accurate and well-meaning data.
My core point is that we are sent here by our constituents. I again congratulate the hon. Member for Loughborough, who has been sent here on behalf of his constituents and has given a fine speech today, but I do not believe—he may intervene and correct me—that the citizens of Loughborough, whether they voted for Jane Hunt or for him, intended that one of the very first actions he and we would take as legislators would be to award more of our powers and place more fetters on ourselves. This is the right Chamber for accountability. We should hold ourselves to account; we have a number of ways in which to do that to ourselves. The hon. Member for Blackley and Middleton South (Graham Stringer) makes a very real point about quangos, arm’s length bodies and how we hold ourselves to account.
That is my point. I understand that many colleagues wish to get in. I support the amendment put forward by my hon. Friend the Member for Droitwich and Evesham, because it is quite right that we have rules. I was an accountant by training, and the first thing we learn—whether someone is an accountant or in performance sport—is that we play by the rules as they are; we do not seek to rig the rules in our favour.
Ms Creasy
It is a pleasure to speak in the same debate as the maiden speech given by my hon. Friend the Member for Loughborough (Dr Sandher). I am sure other speeches are coming that will show just how impressive the new generation of MPs is across the House.
It is also a joy to follow the hon. Member for Arundel and South Downs (Andrew Griffith), because I have always enjoyed the experience of listening to him. When he was a Treasury Minister in the previous Government, I watched him, debated with him and tried to encourage him to take on the buy now, pay later lenders—that is related to what I will say about legal loan sharking. But I have to be honest: being lectured by former Conservative Ministers about fiscal probity is a bit like being lectured by Toad of Toad Hall about safe driving, given the experiences of many of our constituents, which have led to the need for this legislation.
I put on record my support for this legislation, because frankly anybody who has had to renegotiate a mortgage since the Liz Truss Budget knows exactly why it is needed and why we must protect the British public from the consequences of bad decision making at a national level. As we saw in many examples under the previous Administration, the public have paid the price for that and will continue to do so.
Andrew Griffith
Of course, the legislation does not fetter previous Governments, but it would fetter the discretion of the hon. Lady’s own Front Benchers. In that context, does she not have the same confidence in her Front Bench that many others seem to enjoy?
Ms Creasy
I am a bit disappointed that the hon. Member did not seek to call me Ratty. I am also quite struck by the fact that he, a former Conservative Treasury Minister, rises not to hold himself accountable for the consequences of decisions made by the previous Government, or indeed to defend them, but simply to say, “You will be held to a higher fiscal standard.” We on the Labour Benches welcome a higher fiscal standard; that is the purpose of the legislation. Political decisions will still be made, but we will make them with the benefit of independent information. He will know that there were many debates in the previous Parliament, and indeed in those before it, in which independent information about and verification of the economic impact of policies mattered but were missing. Indeed, he mentions trade deals, which are an example of where we did not have independent information. I will comment on that only briefly, because my amendment has not been selected—he will be as disappointed as I am about that.
Ms Creasy
Yes. But in that time, many of us have had persistent concerns, and one of mine has always been the private finance initiative. The Government are asking all of us to make and support some very tough decisions because of the economic mess that the country now finds itself in. My view is that we must look at all outgoings in that process. If somebody came to a constituency surgery because they had multiple outstanding loans and could not pay their rent, we would look at the debts that they held. That is the challenge with private finance: it is the legal loan-sharking of the public sector. Amendments 6 and 7 are about the process of getting a grip on our debts and ensuring that we learn from the damage that private finance has done.
Let us be clear: nobody can absolve themselves from private finance. Governments of all persuasions have sought to use that process—the ability to put only the repayments on the books, rather than the substantial cost of borrowing. That started under John Major; yes, there were multiple PFIs under the previous Labour Government; and indeed, the previous Conservative Government continued to use private finance until 2018. That is why, as of February this year, there are still 700 PFI schemes representing a capital value of £57 billion, but for which we will pay back £151 billion in the years ahead. We are asking pensioners to pay more for heating their homes, but we should be asking how we can pay less for the private finance debts that we have built up.
Private finance was about being able to build things such as schools and hospitals. Anybody who has an outstanding PFI debt in their constituency, or a school or hospital that urgently needs rebuilding, such as Whipps Cross hospital in my constituency, understands the importance of being able to access private finance. For the avoidance of doubt, I am not saying through my amendments that we should never work with the private sector; I am saying that PFI was a catastrophically bad deal and that, cumulatively, it would meet the legislation’s targets of 1% of GDP, so it is a fiscally significant policy. My amendments are about trying to understand how we will deal with cumulative debt and cumulatively fiscally significant policies.
Graham Stringer
I agree completely with my hon. Friend. As a member of the even older guard than hers—
Graham Stringer
I am certainly the old guard from the start of the previous Labour Government. That is relevant because I had a discussion at the time with the then Paymaster General, Geoffrey Robinson, about the cost of PFIs for hospitals. His answer was succinct: “If you want the hospitals, you have to go down the PFI route.” He said that because the Treasury rules were so rigid about finding money for socially needed projects—hospitals in that case—the Government had to work around them, at what would eventually be a huge cost to the taxpayer. There is a warning there about rigid rules and not dealing with reality.
Ms Creasy
It will not surprise my hon. Friend that I agree with him not just about his football team but in his analysis. The legislation is about having better fiscal rules and tougher constraints when Governments make decisions. We saw with the Liz Truss Budget how catastrophic those decisions can be.
Many Members will have come across PFI in their constituencies, but it is worth putting on the record just how big it is, because that is relevant to the legislation. We are talking about 700 projects, but each project can be hundreds of individual buildings. One of those 700 projects is made up of 80 schools, for example, which shows the scale that we are talking about. About half of PFIs are held between the Department of Health and Social Care and the Department for Education. That is how we built desperately needed schools and hospitals, but the cost is absolutely critical.
Some NHS trusts are now spending 13% of their total budget on PFI repayments—£2 billion a year for some. In practical terms, that means that some trusts are spending more to repay what is essentially a payday loan for the public sector than they are spending on drugs for their patients. It is a huge drain on our public finances. In 2020, during the pandemic, Norfolk and Norwich University Hospitals NHS Foundation Trust paid £66 million to service its PFI commitments—the same amount that it spent on lab equipment, surgical tools and personal protective equipment. University College London Hospitals NHS Foundation Trust has already paid out £200 million in dividends to the company that owns its PFI, so the money is not just going to repay a debt for building a hospital; it is going out in pure profit to those companies. That is why I draw the parallel with payday lenders and buy now, pay later companies: once you are hooked in, you have to keep paying the debt.
It is not just a problem in the NHS. Hanson academy in Bradford has reached a debt of £4.16 million because of its PFI debt. It is now referred to as the UK’s “orphan” school because nobody wants to run it or take it over, given its financial position. Liverpool city council pays £4 million a year for Parklands high school, which was, again, built under PFI but is no longer needed because of falling school rolls. The council has roughly £42 million left to pay back on that contract for an empty, dead building. The equity solutions company that owns it has posted profits of £340,000 from that project this year alone.
PFI companies have made £111 million in pre-tax profit from education projects alone. That is about £800,000 per project, and the equivalent of 5,5000 new teachers’ salaries. The companies took on the risk of those deals to rebuild our public infrastructure, but the reality is that we do not let schools and hospitals go bust, so they took on the ability to print money. That is what the deals are doing. I will wager that every new and returning MP has had a conversation with someone in local government, a local hospital or a local school who talks about the damage that PFI is doing to their budgets, as if it is non-negotiable.
My amendments are about changing that culture. One challenge is that we have let those companies run rampant. That does not mean that we should not work with the private sector; it means that we should learn lessons, and I think we could learn some very simple ones. For a start, a lot of the companies are incorporated in overseas territories, which raises questions about the amount of tax that they are paying on those deals. Tax was originally part of the Treasury assessment of the deals, which was why working in that way was considered good value for money, and why my hon. Friend the Member for Blackley and Middleton South (Graham Stringer) was told that it was the best way to get a school or hospital.
We could also learn from payday lending by capping what the companies pay. After all, we cap the returns on defence projects. It makes no economic or ethical sense that we cap what can be earned from a military contract, but when someone builds a school or a hospital, they have free rein.
Above all, we need to know how much we owe, because even the Infrastructure and Projects Authority within Government could not get a grip on the total reality of our PFI commitments to date. That is partly because this has been done at a local government level, through devolution and in silos within companies, but it seems a very simple thing: even if those debts are being held overseas, the people paying them are very much here. In Northampton, there are 42 schools costing £30 million per annum, including £4.2 million in pre-tax profits in 2021-22, and Northampton’s budgets as a local authority are in a very difficult position right now. The firm that owns all those schools is based in Guernsey. In Birmingham, 11 schools are part of the Birmingham Schools Partnership, owned by Innisfree. Innisfree owns 260 schools across this country, as well as my local hospital in Whipps Cross. It is based in Jersey and is making millions of pounds in profit from these deals. We have never consolidated those loans to ask ourselves whether we could renegotiate them as a country and therefore claw some money back, because we do not know who we owe what to, or how much it is going to cost.
Amendments 6 and 7 deal with the challenges posed by the threshold of this legislation. It is absolutely right to set a threshold for what is fiscally significant, and individual PFIs would not go anywhere near a threshold of 1% of GDP, which is about £28 billion. However, when we add them up, it is very clear from what we already know about our PFI commitments that they do. As such, these amendments are intended to probe the Government about how we deal with debts and spending that might not meet that threshold individually, but might do so cumulatively, and to look at what we can do in the future to make sure that if we work with the private sector—again, I am not saying that we should never do so; I am saying that we should learn from PFI—we make better decisions. After all, this legislation is about making better-informed, independent decisions.
That is why I also tabled amendment 8, to learn the lessons from trade deals. The hon. Member for Arundel and South Downs is right: the Government’s decision to go for the trade and co-operation agreement—the hardest of Brexits—has cost us an estimated 4% of GDP, so again, that would be a fiscally significant decision. It would be as catastrophic as that Liz Truss Budget—indeed, many of us can see that it has been—but we did not have an independent assessment. Amendment 6 and amendment 7, which is an enabling amendment, would ensure that we have an independent assessment of cumulative spending looking at these issues.
I know that the Minister is as interested as I am in what we can do to tackle the drain that PFI represents and work better with the private sector. I hope that this legislation and the concept of putting PFI on the books is the start of a conversation about better public spending, and I hope that Toad of Toad Hall will recognise that maybe this time it is good that they are in the passenger seat.
Sarah Olney (Richmond Park) (LD)
I will speak in favour of amendments 1 to 4, which were tabled in my name. Once again, I welcome this Bill and this Government’s intent to rebuild trust with the financial markets and across our economy as a whole. The Liberal Democrats are optimistic about the new Government’s stated commitment to building a strong platform for economic growth, particularly after years of Conservative turmoil. I remain hopeful that this Bill can support fiscal responsibility and transparency and help prevent a repeat of the Conservatives’ disastrous mini-Budget. The amendments tabled in my name would strengthen the legislation so that that aim can be achieved.
I welcome the concern that the hon. Member for Arundel and South Downs (Andrew Griffith) has shown for my constituents in Richmond Park and their thoughts about this legislation, but I wonder where his concern for my constituents was when the Government of which he was a part cheered on, championed and voted for that disastrous mini-Budget that so undermined our stable economy, to the detriment of the wellbeing of individuals, communities and businesses.
Liberal Democrats understand how much our constituents have suffered from the increase in mortgage payments, higher fuel bills and escalating food prices. We understand the disastrous effects of the chaos and uncertainty wrought by the previous Conservative Government in their horrendous mismanagement of the economy, and we know that future prosperity can only be built upon a firm foundation. We know the heavy burden that our constituents continue to feel in their pockets and their personal finances, and we know that they deserve better.
As I have previously acknowledged, the broad positive response that this Bill has evoked across the business and finance sector is indicative of the desire for stability, and we welcome the engagement from economists—such as the new hon. Member for Loughborough (Dr Sandher), who I wish well in the beard of the year contest—and industry experts who advise of the beneficial impact this Bill will have on confidence in the public finances. We have carefully scrutinised the details of the Bill to make sure it will achieve its intended aims.
In particular, we have looked closely at the threshold for fiscally significant measures, which will be set at 1% of GDP or approximately £30 billion, and whether the proposed fiscal lock could be circumvented by Governments announcing major changes that fall just below that threshold. Although we understand that the bar has been set relatively high to prevent a large-scale irresponsible fiscal event such as the disastrous mini-Budget, we are aware of the limitations this places on the Bill, especially when it comes to measures that might have relatively small up-front costs to the Government but significant indirect fiscal or economic effects. I therefore ask Treasury Ministers whether a GDP measure alone can adequately capture the impact on the economy of a spending or taxation measure, and whether the Government should examine the possibility of using additional criteria when setting the threshold.
Several hon. Members rose—
The Chairman of Ways and Means (Ms Ghani)
I thought I would offer some tips to colleagues in the Chamber. If you are bobbing, you will be called. If you are on the list, but are not bobbing, you are indicating to the Chair or the Speaker that you no longer wish to be called, so if you hope to be called, bob throughout the debate. If you are on the list and committed to bobbing, but leave the Chamber, you are indicating to the Chair or the Speaker that you no longer wish to be a priority on the list. However, you can speak to the Chair or the Speaker and ask permission to leave and return, and you will then remain where you were in the priority list. Unless Members stand, I do not know whether they wish to contribute to the debate, so who wishes to bob?
Several hon. Members rose—
Amanda Martin (Portsmouth North) (Lab)
Thank you, Ms Ghani. I start by commending my hon. Friends for their impassioned speeches, particularly my hon. Friend the Member for Loughborough (Dr Sandher). He will be pleased to know that I will not be a contender this year in the competition that he mentioned. Maybe later, menopause depending.
It is a huge honour to stand before you today as the newly elected Member of Parliament for Portsmouth North. This moment is not lost on me; I am filled with immense emotion at the thought of representing the place where everyone I love lives. Portsmouth is a city rich in history, innovation and, most importantly, community spirit and pride. It is also a place of firsts. Throughout our city’s storied history, we have been pioneers in many fields, be it shipbuilding, maritime trade or cultural advancement. Portsmouth has always led the way, and it is that spirit of innovation that I intend to champion while in this House.
I am deeply humbled to make my maiden speech in this debate highlighting the importance of fiscal standards, because during the election campaign so many people told me that their mortgage had gone through the roof, or that they had lost the ability to buy or rent their first home, or indeed any home, because of the actions of the last Government.
I understand personally what it is like when a full-time job does not even cover the bills. My gramps was a train driver. He taught me the importance of hard work and public service. He introduced me to the trade union movement and to the Labour party, which I am proud to say have been at the centre of my adult life. My mum was a factory seamstress and my dad was a plumber and then a police officer. As a kid, times were tough, but our house was always full of love, humour and determination. My dad worked three jobs and my mum set about making childhood the very best it could be. My gramps navigated the tracks with precision and care, my mum sewed with love, and my dad served his community. I know I will bring the same attitude to my time in this House, because the opportunity here is so very precious.
Like so many of my colleagues on the Government Benches, I was the first in my family to go to university and the first to become a teacher, but thankfully not the last to enter what I still deem to be the very best profession in the world. The right education really does empower young people and give them belief and the opportunity to succeed, whatever their background and circumstances. I am so very proud to be part of a Government who will bring down the barriers to opportunity and tackle child poverty, working across Departments to ensure that all kids get the best start in life.
Having been a teacher for 24 years, I know that not everyone has the start in life that I feel privileged to have had. Being allowed to try things and fail was a great lesson. My working-class background means that I sometimes seem a bit impatient. This is because I know that people from my background must fight harder, and do not often get a second chance, so they have to seize every opportunity as it arises. As an MP, I want to champion children and young people from all backgrounds across my city, so that they are given every chance to succeed and fulfil their potential, whatever that may be and wherever that may take them. The children and young people in Portsmouth deserve nothing less.
Portsmouth, as I have said, is a city of firsts. The first dry dock in the world was built there in 1495. The first ragged school was established there in the name of John Pounds in 1818. We were the first to have a steam railway in 1837, and the first co-operative society in Britain was set up there in 1796 by dockyard workers fed up with being ripped off by local tradesmen. The first oil-fired HMS Queen Elizabeth was built there in 1913; the second ship is very close to my heart. In 1956, the first football league game played under floodlights took place there; it was Portsmouth versus Newcastle. In 2024, the Portsmouth women’s football club turned professional for the first time. Another first is the nursery on Whale Island’s naval base; it is pioneering a brilliant programme to help children deal with separation and the unique challenges of having a parent in the military who is serving away.
Portsmouth also produced the first female Secretary of State for Defence, and as I raise this first, I would like to pay tribute to my predecessor. Penny Mordaunt’s service to our city, and particularly her role in the coronation of our King, is to be celebrated. In this House she had many roles in Government. She has always championed the Royal Navy, and from what I hear, she loved her time in the parliamentary hairdressers’. However, the sword now passes to me, and I will continue her lead as I champion our Royal Navy and our great city, both here and at home.
Now for my final first for our great city. For the first time in our city’s history, both Portsmouth MPs are Labour MPs. We build on the work of our predecessors: Lord Frank Judd; Sarah McCarthy-Fry; and my very dear friend, mentor and freeman of our city, Syd Rapson. Together, my good friend the new Minister with responsibility for early education, my hon. Friend the Member for Portsmouth South (Stephen Morgan), and I will work night and day to be champions of change for the city we call home, Portsmouth.
I am so very proud of the positive campaign we ran in Portsmouth North. We unashamedly focused on the need for opportunity and for real change. I want to put on record my thanks to the many people who helped me get here, including the Pompey Belles, my amazing family of 17, friends and the dozens of volunteers from Portsmouth Labour and beyond.
As I begin my journey in this House, I know that the need for change has never been so great. As this debate highlights, after 14 years of Tory rule, there are so many uncertainties for the people in my city. People are struggling; the money just does not go far enough. Schools are underfunded and understaffed. Appointments in primary care, the NHS and dentistry are, in some areas, almost impossible to get. Youth services outside the voluntary sector stretch only to offering support with probation. Our high streets are a mess, and housing is in complete chaos.
However, not everything is about money and pay. This is about pride. Pompey people are proud people. They do not shout about successes, unless they are in football. They rarely grumble—equally, unless it is about football. Many of them just get their heads down, roll up their sleeves and get on with it, and many feel betrayed and let down by those who should have been there for them. For some, trust in politicians has disappeared, and I can understand why. People on the doorstep and in the street are wary and fed up with broken promises. Many feel alone, isolated and betrayed. Coming from one of the most trusted professions in the country to one of the least, I get it. I know that, as the MP for Portsmouth North, the chance for opportunity and real change lies with me—real change, that people can see, feel and be part of; positive change that they can proudly shout about. As Alan Ball said,
“This is Portsmouth, people went to war from this city”.
It is a city that deserves the very best, and I aim to give my very best in representing and serving it.
What of the city of Portsmouth? We officially turn 100 years old in 2026, and a raft of famous figures have helped shape our city, including Charles Dickens, Isambard Kingdom Brunel and James Callaghan, a Labour Prime Minister in whose honour I hope next year to secure a blue plaque. As rich in culture as our city is, it is also full of unsung people who should be right up there with the famous people I listed. These include—this is in no way an exhaustive list—Shamila from Portsmouth City of Sanctuary, Roni at Pamodzi, Isabelle from Loaves of Love, Laura at STEMunity and Mandy, an award-winning community volunteer. They are just a few of the people in my city making it great.
I feel extremely privileged to have seven magnificent wards in my constituency, and to have lived, worked or had family and friends in every single one of them. They are all special and unique in their own right, from Paulsgrove, Drayton and Farlington to Cosham, Hilsea and Nelson, and Copnor and Baffins. They are also all very much Pompey, and when you walk down the street it would not be uncommon to hear, “Oi, mush, don’t be a squinny”, or “Oi, you loon”, or “din”.
As a whole, Portsmouth North is made up of those magnificent seven wards, with 70,000 constituents, 35 schools, our brilliant Queen Alexandra hospital, 11 GP practices, hundreds of charities, small, family-run, large, regional and national businesses, a municipal and thriving international ferry port, seven allotments, 27 pubs, one mobile and four static libraries, a shoreline, the best view in the world to watch the sun rise or set at Portsdown hill with a cracking burger van, a pond, a marshland, a forest—albeit a mini one—and the training ground for the football club who are simply the best. As a season ticket holder and a trust board member, it is sad to say that Fratton Park resides in the south of my city, but I get the brilliantly named John Jenkins training ground.
The Chairman of Ways and Means (Ms Ghani)
That speech will delight every corner of Portsmouth North.
I call Dave Doogan.
Dave Doogan (Angus and Perthshire Glens) (SNP)
It is a great pleasure to follow the hon. Member for Portsmouth North (Amanda Martin) and that rundown of her fantastic constituency. I want to go there now that I have heard about it, although she might be surprised to know that I am quite familiar with that part of the world around Portsmouth North, Fareham, Gosport, Hayling Island and Southsea. It is a beautiful part of the world, and while it cannot compete with Scotland in scenery, it certainly wins the day when it comes to weather in the summertime. She might also be surprised to know that there is a fairly high concentration of Pompey supporters in Perthshire. That is a legacy of the Royal Naval aircraft workshops outside Perth, when people used to go down to the Royal Naval aircraft yard in Gosport, and picked up a loyalty to Pompey from there. I offer many congratulations, not least on a fantastic maiden speech but also on those exceptional shoes.
I am concerned, indeed troubled as many people will be, about the role of the Treasury and Chancellor in the last couple of months. We are here to talk about budget responsibility, and I wonder what answer we would get if we were to ask the 80% of pensioners on these islands who are about to be stripped of their winter fuel payment what they think is responsible about that budget intervention. We could ask the millions living in poverty across these island—a disgrace in and of itself—what they think about budget responsibility in their lives, now double scuppered by Labour’s two-child cap. We could ask the millions of working poor across these islands, who are trying to do right by their children, their employer, and just pay their bills to get by, and who put their kids to bed every night and then sit up all night worrying about everything, what difference this fiscal lock will make to their lives.
The Chancellor’s first two acts on taking up her role was to make life harder for the poorest families in society who have the least. Once she had dispatched them, she turned her fire on pensioners, removing their winter fuel allowance. Austerity 2.0—it does not matter to Scotland whether austerity comes in a Labour or Tory wrapper, it is still as caustic. That is relevant because the Chancellor wants us to believe that the Bill and the fiscal lock will make everything okay, but it does not. The Office for Budget Responsibility will take no view on the qualitative merits or otherwise of any Treasury decision, but merely on the quantitative dimension in fiscal terms. There are no locks in the Bill to protect the people of these islands from this Labour Chancellor.
We hear ad nauseam that the Chancellor had no choice in any of these actions, and the worst inheritance since the war, and it goes on and on. Well:
“The numbers may be a little bit worse than they thought at the time, and I think there were some things that were hidden from view, but the overall picture over the next four or five years is very, very similar to what we knew before the election.”
Those are not my words, but those of Paul Johnson, the director of the Institute for Fiscal Studies. If that is not good enough, the SNP warned throughout the election that if Labour stuck to Tory spending plans, taxes would rise and/or budgets would be cut, and here we are. The SNP even challenged Labour in Scotland on that point during the election, and the leader of Labour in Scotland, Anas Sarwar, said,
“read my lips: no austerity under Labour”.
He is not saying that now is he, because he cannot. Perhaps the Chancellor, or those on her Front Bench, can advise us about whether Mr Sarwar was having a stumble with the truth that day, or whether they had forgotten to let their branch office in Scotland in on the plan. Despite all that, the Chancellor and her Treasury Front Bench persist in their claims about a £22 billion black hole to defend their indefensible attacks on the poorest in society. It is unacceptable, and the Bill, if enacted, will do nothing to protect communities from that.
I am also troubled by the language that those on the Treasury Front Bench seek to use to accrue some form of disproportionate credit for bringing forward the Bill. At its core, the Bill is nothing more than an additional provision to the existing Act, and the exaggerated language around it exposes the weakness of the Government’s position on this fiscal lock. Nothing is either locked in or locked out by the Bill. The OBR cannot stop any Budget or fiscal adjustment, good, bad or indifferent. That is Parliament’s role, as other right hon. and hon. Members have pointed out. On Second Reading I pointed that out to the Minister, who declined to concede on the absolute fact that the position is as I have just set out. I hope he has had a chance to reflect on the so-called fiscal lock, which is nothing more than an administrative assessment of Treasury plans on which nothing is contingent. The hon. Member for Walthamstow (Ms Creasy) said that she is keen for those on the Treasury Front Bench to be held to a higher fiscal standard. Fair enough, but the Bill will not do that. This is in abstract the narrowest one-dimensional protection from bad fiscal policy.
Labour Members are seemingly addicted—the Bill evidences this—to some sort of pound shop exaggeration, and a troubling reliance on hyperbole when detailing something profoundly ordinary. The fiscal lock and the Bill will not protect the devolved nations and their budgets from the austerity of the Labour Front Bench. Before the general election, when Labour in Wales was facing NHS budget pressures, the now Secretary of State said that
“all roads lead to the Tories”
and Westminster, in accordance with those budget pressures. Now, after the election, we have a Labour Government, the SNP in Scotland is facing those same budget pressures, and it is the SNP’s fault. They cannot have it both ways. They have got the job and they need to own it.
The Chancellor claimed that the SNP should raise income taxes to pay for her cut to the winter fuel allowance in Scotland. The cheek of it! I remind those on the Treasury Front Bench that 70% of taxes raised in Scotland go directly to the Treasury. We have paid our dues, and shame on the Chancellor for trying to get Scottish taxpayers to pay twice to compensate for her axe wielding. The double standards of it all are staggering. She wants the Scottish Government to raise income taxes in Scotland, which is precisely what she refused to do ahead of the UK general election. Why will she not mirror the Scottish Government’s progressive income tax regime to increase taxes slightly on those of us who are better off, and reduce taxes slightly for those on the lowest incomes? That would raise nearly £16 billion for the Treasury. If she had done that and followed the SNP Scottish Government’s lead, she would not have had to attack our pensioners’ winter fuel allowance. A significant element of budget responsibility is ensuring that people own their decisions and their own mess. Labour will find that SNP Members are keen to help them in that pursuit. In summary, there is nothing particularly to object to in this inherently ordinary and transactional provision in the Bill, except for the behaviour of the Government advancing it.
The Chairman of Ways and Means (Ms Ghani)
I call Will Stone to make his maiden speech.
Will Stone (Swindon North) (Lab)
Thank you, Ms Ghani, and congratulations on your position. I also congratulate my hon. Friend the Member for Portsmouth North (Amanda Martin) on her inspiring speech. I feel like I know her constituency a little better now, and I commend all those who have delivered their maiden speeches today and in recent weeks. You have all been fantastic.
It is truly an honour for me to make my maiden speech in a debate on budget responsibility, and I am proud to be elected in this new Labour Government—a Government committed to fiscal responsibility, credibility and accountability. We will ensure that taxpayers’ money is managed and spent wisely, not recklessly as the previous Administration did. I have the absolute pleasure of representing Swindon North, the town where I was born, raised and am proud to call my home. I am also proud of the fact that I am the first Member of Parliament in Swindon North’s history to have been born in the town.
I pay tribute to my predecessor, Mr Justin Tomlinson, who served as the Member of Parliament for North Swindon for 14 years. Justin was a ferocious campaigner and he also supported many local community groups and was incredibly passionate about football, namely our local club, Supermarine FC. While we do not align politically, Justin has my respect, so I thank him for his service.
I would also like to mention another former Member of Parliament for Swindon: one of my mentors, the Labour peer Lord Michael Wills. I have learned so much from Michael. Even though he is going through an incredibly tough time with his health, he has always been there to support and guide me with his expert knowledge. Michael is not only a top-notch politician, but a published author of crime novels. I only recently found that out, but I guess it is not too much of a surprise, considering he was once a Minister of State for Justice. I am truly privileged to follow in his footsteps. If I am half the parliamentarian he was, I will have done Swindon proud. I hope the House will join in wishing him a speedy recovery, and I hope to repay his trust in the Chamber.
I am the first Brazilian jiu-jitsu black-belt to be elected to Parliament, and I used to run my own academy. Ms Ghani, I promise this is somewhat relevant. When I left the Army, I had offers to teach Brazilian jiu-jitsu across the world, from Abu Dhabi to Arizona, but I picked Swindon. I am often asked, “Why did you choose Swindon?”, but it is an easy answer for me: I love Swindon. I love my hometown. It is a wonderful town built on industry and is full of passion and hope. Our history is a proud history of reinvention. We started life as a farming town with a focus on pig markets, then we transitioned and became a hub for the railways in the 19th century. Generations of railway workers and their families benefited from the cradle-to-grave healthcare that is rumoured to have inspired the great NHS. As technology developed, so did Swindon, and we became home to the likes of Rover, Honda and Mini, but what is next?
We are at a pivotal point in history for my town. Where does Swindon go next? My hope is that it will go as it always has: into the future, at the forefront of new technologies and green technologies. I hope that my right hon. Friend the Member for Doncaster North (Ed Miliband) hears that. It is my mission to foster green growth in Swindon and see the town thrive again with high-skilled, well-paid jobs. I believe that in a growing, stable economy, we can see that happen. Swindon is not just famous for its high number of roundabouts—if anyone in the Chamber has ever visited, I am sure they will remember those fondly—as we have also had the pleasure of not one, but two James Bond movies being filmed in the town.
It is impossible to talk about Swindon without mentioning its people. The people make Swindon what it is: a kind, welcoming, industrious place full of passion, innovation and a desire to support others, including strong local charities such as BEST, a charity at the forefront of tackling antisocial behaviour through mentoring and sports, the Kelly Foundation, which supports people suffering with mental health issues, and Changing Suits, which is breaking down barriers in diverse communities to ensure that people get the help they need. I want to say how proud I am of the residents in Swindon. We have seen tough times across the country, with riots sparked by division invading many communities, but they did not come to Swindon because in Swindon we know that diverse communities can stand strong together against extremism. We will not let division and hatred divide us; we will unite together and stand strong.
Swindon, for all its qualities, is not without its fair share of challenges—challenges that I will face head on. Our people are among the least likely in the country to go on to higher education. We have growing levels of knife crime and antisocial behaviour, raw sewage being pumped into our streams and residents of large housing estates being affected by unjust management companies and fleecehold. However, I am confident that with our renewed Labour party and our ambitious agenda set out in the King’s Speech—whether that is recruiting and retaining teachers, increasing police presence on our streets, providing mental health professionals in schools or reforming leasehold and fleecehold—all backed and fully costed in a fiscally responsible Budget, the people of Swindon North will experience the positive change they deserve.
To finish, I am proud to be here representing such a fantastic group of people. It truly is the opportunity of a lifetime, so once again, I say thank you so much to the people of Swindon North who have put their faith in me. I will not let you down.
The Chairman of Ways and Means (Ms Ghani)
I call Marie Goldman to make her maiden speech.
Marie Goldman (Chelmsford) (LD)
First, I congratulate Members who have also made their maiden speeches in the Chamber this afternoon. In particular, I congratulate the hon. Member for Swindon North (Will Stone). I wonder whether his skills as a Brazilian jiu-jitsu black-belt led him to apply to be an extra in those movies that he mentioned. I will be watching out for him in the fight scenes.
Mr Bayo Alaba (Southend East and Rochford) (Lab)
I would like to commend the hon. Member for Chelmsford (Marie Goldman) for a great speech. I know Chelmsford well—it is a beautiful town—and I commend her passion for supporting young people in schools and their journey, which is very important and something that we need to protect.
Thank you, Ms Ghani, for allowing me today to make my first contribution to the House. I think it is right to start off by thanking my predecessor as MP, Sir James Duddridge, for 19 years of dedicated service. He became MP in 2005 when Southend East and Rochford was newly redrawn. The rural areas to the north of Southend have been brought back within the constituency for the first time in many years. Throughout many boundary iterations, from Southend East and Rochford to Rochford and Southend East and back again—you can see the creativity in renaming the constituency—the area has always been Tory-held, up until now. I am particularly proud to speak here today as the seat’s first ever Labour representative.
The constituency consists of not just the city of Southend but the villages of Great Wakering, Canewdon, Barling, Paglesham, Stambridge and Shoeburyness, the suburbs of Southchurch and Thorpe Bay, and Rochford itself. It is a beautiful constituency, rich in culture, where you should bring your walking boots as well as your swimming costume. It is the place where Dame Helen Mirren went to primary school and home to the Cliffs Pavilion, which hosted Oasis in 1995—that might be tricky next time round depending on who can get tickets.
As a Southender, I am contractually obliged to mention that Southend is the site of the longest pier in the world, at 2,158 metres, with the option to walk or take a purpose-built train. I made the mistake some years ago of walking it with my son—he is a little bit older now, and he is up in the Gallery. My calves were struggling by the end of it.
From watching the maiden speeches of Labour colleagues past and present, I have been struck by the nature of the local industry that is so often name-checked. Tin, pottery, steel, textiles and coal are among the staple products in historical Labour seats. Those are noble and important goods—they are Labour goods—but they are not the stock-in-trade of my own seat. Southend’s primary industry and expertise has always been tourism: good times, escapism and happy memories. Those are our exports.
Southend is a city that allows people to meet a sea turtle, admire a vintage car, win a large teddy bear and even have their palm read, often during the course of a single day. It is a place where past generations have gone in search of freedom and pleasure, and it is hard in today’s world to think of a calling more important than that. Indeed, the musician Billy Bragg immortalised one of the roads that takes people to Southend in his 1985 song “A13 Trunk Road to the Sea”. The chorus name-checks Shoeburyness, and Bragg later said that he hoped his song would imbue the A13—I know this is a bit of a reach—with the same romance as route 66 in America, “The Road to Your Dreams,” which runs from Chicago to Los Angeles. That was a lofty lyrical ambition indeed, and it was always going to be a hard ask, but speaking as someone who grew up in the east end of London in that era, I can confirm that the idea of Southend always carried a certain magic. That is one reason why I feel so privileged to represent the area today.
Another reason is the constituency’s military heritage. At the eastern part of my seat we find Shoebury garrison, an area steeped in military history, and in the north is Southend airport, which now serves holidaymakers but in a past life was Rochford airfield, a fighter base that helped to fend off fascism during the second world war. As a former soldier, I was stationed in the Southend area for a short while. One of my great pleasures when canvassing is running into old Army friends still living in the seat—if they are prepared to open the door to me.
For me, as someone who left school with no qualifications, got into a lot of trouble as a young boy and needed a second chance, night school and the military provided a lifeline. I quite simply would not be here today in the mother of all Parliaments without the opportunities that gave me and the ethos of service that it instilled in me.
To properly understand Southend, we need to understand its proud military history. The city is built on a unique blend. The discipline and the dignity of the armed forces is combined with the creativity and the freedom of the arts—a place for both the soldier and the singer, if you like. But there is a risk of getting too misty-eyed. Coastal areas such as mine have been on the economic sharp end for 30 or 40 years. The root cause of that, most notably, is budget air travel, and that is not going away. Recent years have brought fresh challenges. Southend’s economy was at the sharp end during the covid pandemic. The city is still in its recovery phase. Many of the jewels in Southend’s crown—the Kursaal venue on the seafront or the Freight House in Rochford—remain unused or underused. I am determined that these buildings will come back to life again, as part of our future.
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
I call Will Forster to make his maiden speech.
Mr Will Forster (Woking) (LD)
Thank you, Ms Nokes, for giving me this opportunity to make my maiden speech. Before I do, I pay tribute to the hon. Member for Southend East and Rochford (Mr Alaba), who spoke of his and his constituency’s proud military past. I am sure that he will see his constituency through these tough challenges and on to a brighter future.
It goes without saying that it is a great privilege and an honour of a lifetime to be here, having been elected by the people of Woking. I thank them for electing me as their Member of Parliament. However, I must begin by addressing the Bill and severe crisis facing my local authority, Woking borough council. Despite being relatively small, the Conservatives left Woking with more than £2 billion of debt following risky investment decisions. This legacy is one of negative equity, service cuts and unsustainable debt repayments. It could be argued that the Conservatives in Woking invented Truss economics before the former right hon. Member for South West Norfolk had her small stint as Prime Minister. What has happened in my constituency shows why the Bill is so important. I fear that, without support from the new Government, the situation in Woking, like the rest of local government, will only worsen. My constituents will suffer the most, and that is unacceptable when it is not their fault. I urge the Government to step in and provide the assistance we so desperately need to ensure that my community can recover and thrive.
Most people might think of Woking as a modern constituency, but it has a rich history that stretches back through the centuries. Woking was mentioned in the Domesday Book. Sutton Place, famous for being the former home of Paul Getty, dates from 1525, and is one of the oldest unfortified houses in the country. Woking palace—now sadly a ruin—was a royal residence for both Henry VII and Henry VIII. As a result, Woking football club, my local team, is affectionately known as the Cards, after Cardinal Wolsey.
Several Acts of Parliament have had an especially profound impact on Woking. For example, the Basingstoke canal was authorised by Parliament in 1778. The canal runs through much of Woking constituency. It has shaped our area, and is a popular cycling and walking route and a haven for nature. But like so many places in the country, Woking as we know it today was shaped by the railways. With steam, stone and iron, Woking was cast into the proud town it is today. In the mid-1800s we laid the foundations to become the great commuter town we are.
Woking is also a wonderfully diverse and welcoming place, home to the Shah Jahan mosque, the oldest in the country. A vibrant Muslim community has developed in the town as a result. More recently, we have welcomed Ukrainian refugees, and I attended many events to support our new Ukrainian residents with my predecessor, our former MP Jonathan Lord. That was a powerful example of cross-party co-operation, and I thank Jonathan for his service as Woking’s MP, especially on this humanitarian issue where there was no disagreement whatsoever. Although we were opponents at the last election, I wish him and his family well for the future. Woking’s MP before Jonathan was Humfrey Malins, who founded the Immigration Advisory Service in 1992, which to this day provides free asylum and immigration advice to those who need it. He got a CBE for his work. Woking has a proud history of electing MPs who welcome immigration, and I am pleased to follow that tradition.
Our town is also known for its connection to McLaren; it hosts its Formula 1 team and luxury cars are built there. I was privileged to make a visit only yesterday. As a young child of around 11, I remember watching with excitement as McLaren toured the town with its Formula 1 cars, driven by Mika Häkkinen, to celebrate their success. McLaren is winning again, much like the Liberal Democrats.
The town also takes great pride in being home to the World Wide Fund for Nature. We have pressing issues, such as sewage in our rivers and the fight against climate change. I am already working alongside the five other newly elected Liberal Democrat MPs in Surrey to hold Thames Water to account for sewage dumping in our local rivers and streams. One of my first acts as an MP is to bring all the surrey MPs together to meet Thames Water to petition it for improvements and a better service.
Woking is fortunate to be surrounded by green spaces. I love walking my dachshund Toffee on Horsell Common, where HG Wells famously landed his aliens in “War of the Worlds”. So it was not a great surprise when Ed Davey’s Liberal Democrats turned up and started campaigning with their out-of-this-world stunts. Of course, I’m only “woking”—I wouldn’t dare call my Liberal Democrat colleagues aliens.
Getting back to the matter at hand, my constituency has a much-loved local hospital, Woking community hospital. Despite feeling like I was born and bred in Woking, I was not actually born in the constituency. Actually, no one has been born in a hospital in Woking for generations. I was born in Frimley Park hospital, one of the nearby hospitals we depend on, as Woking lacks maternity services. However, Frimley Park is plagued with RAAC—reinforced autoclaved aerated concrete—and its future is far from certain. I will work with my hon. Friend the Member for Surrey Heath (Dr Pinkerton) to press the Government for a solution to rebuild Frimley Park hospital.
Another major issue is the cost of rent and mortgages. As someone under 40—just—I understand these issues deeply. They have been raised consistently by local people on the doorstep. The increased cost of mortgages and rents in the past two years is a further reason why the Bill is so important.
My journey into politics began because of Surrey county council’s failure to protect vulnerable children. At the time, it was rated the worst county council in the country because of that failure. We cannot allow vulnerable children to be failed again.
The wider theme of why I was elected, and indeed why so many of my hard-working Liberal Democrat colleagues have been elected, is that we understand our communities’ local issues. I have worked for 15 years in local government and served as deputy leader of Woking Council. I have seen first-hand the crippling issues that some councils face. When I look at the faces of the Liberal Democrat MPs here, I see people who have worked hard in local government for years. What a glorious theme for this new Parliament: a cohort of 72 who understand the local issues our communities face, and a force for good in the country and in the Chamber when we need it most.
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
I call Jake Richards to make his maiden speech.
Jake Richards (Rother Valley) (Lab)
Thank you, Ms Nokes. It is such a great privilege to speak in this debate and make my maiden speech after the hon. Members for Woking (Mr Forster) and for Chelmsford (Marie Goldman). My hon. Friend the Member for Southend East and Rochford (Mr Alaba) made a fantastic speech about the city in his constituency, which I have had the great privilege of swimming in. His speech did due justice to that great place. My hon. Friend the Member for Swindon North (Will Stone) made a faintly terrifying speech about his Brazilian jujitsu skills, and he certainly did justice to Swindon, too.
It is a great honour to speak in the Chamber as the Member of Parliament for Rother Valley. For so many on the Labour Benches in particular, making our maiden speeches is the conclusion of long and hard-fought campaigns in which we were ultimately victorious. In the early hours of 5 July, which just happened to be my birthday, we celebrated the end of 14 years of Conservative Government and the first Labour Government of my adult life, but we also humbly accept the responsibility that we have been given. In the context of an often bitter and heated political campaign, and from the thousands of valued conversations I had in my constituency, one cannot avoid the fact that we as a country face daunting and urgent challenges.
We cannot overlook the deep apathy towards the ability of politics, and indeed this place, to effect change. There has been the rise of online disinformation blaming bogeymen who do not exist. Conspiracy theorists and keyboard warriors purposefully ignore the complexities of the world around us for attention. Political culture too often thrives on division and controversy, not the common good. The hyperactive vitriolic politics seen so often across the Atlantic is seeping into our discourse here, undermining constructive dialogue. There is an epidemic of alienation among our young people, with levels of self-harm and suicide in my constituency increasing all the time. Children are arriving at school still in nappies and too often without breakfast in their bellies. Waiting lists for mental health support now stretch to half a decade, with many young people reaching their majority by the time they are seen. Too many people in my constituency feel they have to leave their village or town to get on in life. There is a disillusionment that their home, their community, their place is no longer offering the security and hope that people deserve. There is a fear for the future. I was told so often during the election campaign, “What’s the point of politics? This country is broken.”
Perhaps some of those factors came to the fore over the summer recess, when a group organised to attend a hotel just a few miles from my constituency in Wath, planning to set that building on fire knowing full well there were innocent people inside. The pictures on our televisions were difficult to comprehend. I spoke to a young mother who had been made homeless and was being temporarily accommodated there with her children. The terror she described will haunt me forever.
But from the gloom of that violent act came hope. The day after the hotel was attacked, I reached out to the Muslim community in my constituency and was invited to a meeting after evening prayer. I arrived eager to show solidarity, but anxious about the fear and damage that the community would have suffered—and yes, there was plenty of concern. But the first question I encountered was not one of anger or retribution, but instead a comment urging me to speak with the perpetrators of the violence in order to better understand the causes and motivation. It was a moment of great generosity and sensitivity, and one that will always stay with me.
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
I call Clive Jones to make his maiden speech.
Clive Jones (Wokingham) (LD)
Thank you very much for calling me, Madam Chair. I congratulate the hon. Member for Rother Valley (Jake Richards) on his very interesting speech—I learnt an awful lot about his constituency. I have also learnt a lot today about Southend East and Rochford, Portsmouth North and Swindon North, and especially about my colleagues, my hon. Friends the Members for Woking (Mr Forster) and for Chelmsford (Marie Goldman). I actually knew quite a lot about them before, but it was nice to hear some more. I particularly liked the speech from the hon. Member for Loughborough (Dr Sandher), who suggested that the Minister might like to get his chequebook out. Let me say to him, “If you are getting your chequebook out, I would like you to spend some money for the constituents of Wokingham.”
Members on these Benches have a strong sense of social justice. This comes to us from many directions during our lives. Fifty years ago, I had an inspirational social and religious studies teacher, John Featherstone, to whom I am grateful for helping to instil these values in me. This sense of social justice will, I hope, guide me during my time in this House. I am very pleased that John is up there in the Gallery today.
It is a pleasure to represent the constituency of Wokingham, whose boundaries somewhat changed at the last general election. I would like to pay tribute to my three predecessors, who each represented part of the constituency. From James Sunderland, the former MP for Bracknell, my constituency inherited the parishes of Finchampstead and Wokingham Without. I always found James approachable and straightforward, and I understand that his constituents found the same.
Sir John Redwood was the MP for the former Wokingham constituency for a remarkable 37 years—a tremendous stint of public service—during which he had a profound influence on public policy. He served in Margaret Thatcher’s Government as a junior Minister, and in John Major’s Cabinet as Secretary of State for Wales, where he is best known for his enthusiastic miming of the Welsh national anthem.
The wards of Thames and Twyford were represented by Theresa May—now Baroness May of Maidenhead—for 27 years. She was a dedicated public servant who served as Home Secretary and Prime Minister. She also has a well-deserved reputation among her former constituents, who hold her in high regard and talk about her warmly, with affection and with much respect. Although our politics are different, I wish all of my predecessors well in their future endeavours.
It is an honour and a privilege to be elected to represent the people of Wokingham, where I have lived for much of the last 50 years. I went to school there, and my children went to school there. They were born in the nearby Royal Berkshire hospital, where I am proud to be a governor. It is also the hospital where doctors found my cancer in 2008 and began my successful treatment. In 2016, they were there to help me again, and diagnosed a need for a quadruple heart bypass. Without the Royal Berkshire hospital, I would not be standing here today. Our NHS staff are wonderful, and clinicians at the Royal Berkshire hospital deserve all the praise that is heaped on them by my constituents.
Today we are debating the Chancellor’s Budget Responsibility Bill. In a previous debate, she announced the pausing of the new hospital building programme, which included the Royal Berkshire hospital. Parts of the building date back to 1839, and staff have to work in offices where the windows do not open, and they regularly have to walk around buckets that are there to catch dripping rainwater. I must repeat my plea to both the Chancellor and the Secretary of State for Health and Social Care for a speedy decision as to when the much-needed rebuild of our beloved hospital will happen.
If I may, Madam Chair, I would like to give you a short tour of the Wokingham constituency. In the north is the world-famous Henley regatta course at Remenham and the very successful Leander rowing club—one of the most successful sports clubs in the world. I was delighted that the former Prime Minister chose to visit the Leander Club during the recent general election, and even more so that his visit coincided with a boat trip that I and my hon. Friends the Members for Henley and Thame (Freddie van Mierlo) and for St Albans (Daisy Cooper) were making to highlight the dumping of raw sewage into our waterways. It was fun to wave at the Prime Minister from that beautiful stretch of river, and the media all seemed to enjoy it as well.
Wokingham has wonderful, picturesque villages. Wargrave was first recorded in 1061 and features in the Domesday Book. The village of Twyford dates from 871, when Alfred the Great’s army escaped Viking pursuers by crossing the River Loddon. Wokingham has a thriving and growing brewing sector that is establishing great reputations among beer lovers, including the Loddon brewery, the Elusive brewery and the Siren brewery. The Stanlake Park wine estate in Hurst is one of the oldest wine producers in England.
The Chancellor will know that our town centres and village centres, like many others in the UK, are finding life difficult. The cost of living crisis created by the previous Government continues to limit people’s spending power, and online competition is ruthless. Business rates are a huge issue for our local retailers, who make our high streets the great places they are, and I do hope that the Chancellor and Ministers will look into the reform of business rates at the earliest opportunity.
Wokingham town received its market charter in 1219. I thoroughly recommend the market, especially the fruit and veg stall and the fishmonger. My wife likes me to buy flowers for her from Darren’s flower stall. She says they last longer than any supermarket flowers. Using this market is good value for money and it is an important part of our local character.
Today, the constituency is gaining a reputation as a home for life sciences businesses. I was pleased, when leader of the council, to be involved in the early stages of discussions with Lonza, a Swiss public company that will be investing several hundred million pounds in the constituency over the next few years.
Wokingham has many charities in which volunteers work hard to improve the lives of our residents. I will mention just a few: the Wokingham food bank, First Days, Wokingham in Need, Building for the Future, Citizens Advice, Age UK Berkshire, Wokingham United Charities and the Cowshed. The dedication and hard work of the volunteers in these charities and many others is truly inspirational.
In the southern part of the constituency, in Arborfield, there is a former Royal Electrical and Mechanical Engineers garrison, with which the town had an important relationship for many years.
John Walter, a newspaper editor and politician, and the son of the founder of The Times, lived on the Bearwood estate. He was a Whig MP for the county of Berkshire before 1832—early beginnings of what I hope will become a long-standing tradition in our area.
Madam Chair, from your chair you must be thinking that this 59th Parliament has so many young faces, and I hope you will be including me in that category. I bet you are wondering, “What is his secret?” It is very simple: I worked in the toy industry for many years, running manufacturing and importing businesses. Playing with toys every day for the last 30 to 40 years is what makes me look so young. Our toys made many young people and their parents happy. I am hoping to be just as successful in my second career, helping the people of Wokingham to improve their lives. If I can achieve this, I will have had two worthwhile careers.
Finally, I am grateful to the many people—in particular, my family and friends—who have helped me in my campaigns to be elected to the House of Commons, some of whom are in the Gallery today. Wokingham has never before elected a Liberal Democrat MP. I will work tirelessly to represent my constituents and I will endeavour to make them feel recognised and supported. I come here idealistic and hopeful, hoping that we can make the public feel the same about our institutions, and I want to ensure that we do them justice on these battered but far from broken green Benches.
Sonia Kumar (Dudley) (Lab)
It is a great pleasure to follow the hon. Member for Wokingham (Clive Jones), and to listen to the excellent speeches made in this Chamber.
It is an honour to address the House as the new Member of Parliament for Dudley. The last Labour MP to represent Dudley was Ian Austin, now Lord Austin, who served as Minister for the West Midlands in the last Labour Government. He was a passionate and dedicated servant of the town in which he grew up. My immediate predecessor, Marco Longhi, also had a deep passion for the heritage of Dudley. In his contributions to the House, he sought to protect the historical buildings not just in our town but throughout our country.
I now look forward to playing my part in protecting and preserving our heritage, and to go further by preserving our remarkable healthcare system. Working at the Dudley group NHS foundation trust as a physiotherapist, I saw patients from across our town—from Gornal, Castle and Priory, St Thomas’s, Brockmoor and Pensnett, St James’s, Sedgley, and Upper Gornal and Woodsetton. Seeing at first hand the ongoing issues faced by our NHS, and hearing at first hand the challenges my patients encountered, served as the catalyst for my decision to enter this House.
My primary goal is to enhance the wellbeing of my residents in Dudley, and to secure an NHS that is equipped to meet the evolving needs of our country. The NHS, founded by a Labour Government, is truly a remarkable institution, and its history, achievements and challenges remind us of the importance of investing in a comprehensive and fair healthcare system.
Dudley is the capital of the Black Country, and I know my constituency neighbours will agree. It has a long and proud history, celebrated on Black Country Day. Dudley was the driving force behind the industrial revolution. It is home to Dudley castle, which was built by the Normans and is where people can visit the delightful Dudley zoo.
Yet Dudley’s attractions go back even further. Wren’s Nest national nature reserve is part of the Black Country UNESCO geopark. It has one of the oldest lime works in the UK, and the rock there is 428 million years old. Wren’s Nest contains over 700 different types of fossils. People come from all over the world to find fossils, and I invite hon. Members to walk around Wren’s Nest with me to look at the spectacular landscape and to see if they can find a fossil of their own to take home.
Perhaps nothing displays the pride of the people of Dudley as much as our Black Country Living Museum. This magnificent tourist attraction not only promises a bostin’ day out; it has also been used as a filming location for, among others, the TV series “Peaky Blinders” and films such as “Stan & Ollie”. The museum has recently added a new attraction to show what life was like in the 1940s, 1950s and 1960s. A few years ago, the museum had an exhibition to mark 100 years since the granting of women’s suffrage. It is a measure of the progress we have made since then that I can now make my maiden speech as Dudley’s first female MP.
Like the Black Country Living Museum, Dudley has changed through time. In the past, Dudley smelted iron ore, mined coal and limestone, and built a canal network that stretched across the country. Now, the Dudley-based Black Country Innovative Manufacturing Organisation is a world-class centre for rail innovation, helping towns and cities across the world meet the challenges of the 2020s.
This Bill will also help us meet the challenges of the future. It will protect market stability and public trust, and ensure the Government’s fiscal plans are independently and transparently scrutinised, future-proofing our economy. That will help business owners like my father, Ashok Kumar, who arrived in this country at the age of nine. He set up his own business and is still working as a greengrocer 45 years on. He taught me the importance of hard work and heritage. As a new MP, nothing gives me more pleasure than talking to business owners like my dad.
I would like to finish by paying tribute to two extraordinary women, without whom I would not be in this Chamber today. My sister has been my guiding light from the moment I was born. She has supported me unconditionally and encouraged me to pursue my dreams, and today, as every day, she teaches me to never give up. My maa, Rajinder Kaur, taught me the values of community, faith and resilience. She was an aspiring Bollywood actress. While those dreams may have fallen short, her legacy will be etched in history by being mentioned in this House today.
Hon. Members will be pleased to know this speech is nowhere near the length of a Bollywood movie, and is coming to a close. I finish by turning once more to the people of Dudley. It is an honour to represent them and our great town in this House. I promise I will work as hard as I can to bring prosperity and happiness to our town, and I will not let them down.
Ellie Chowns (North Herefordshire) (Green)
I pay tribute to the hon. Member for Dudley (Sonia Kumar) for her excellent maiden speech. Indeed, we have heard more than half a dozen excellent maiden speeches today, several of which touched on the climate crisis and the future of children in our country, themes that relate to my amendment. I was touched to hear the passion with which all the new Members spoke about their experiences and commitments.
My amendment 5 requires the OBR to report on the impact of fiscally significant measures announced by the Government on the UK’s statutory net zero target. The justification for my amendment is that we simply cannot separate the economy and the climate—they are interlinked. To deliver the green economic transformation that we so urgently need, as referenced by hon. Members speaking earlier, every single policy must be aligned with the UK’s net zero target and every Government spending decision should be as well.
It makes sense to increase the OBR’s remit on net zero to specifically consider the impact of climate risks on economic stability, and how far policies introduced at fiscal events will reduce or increase these risks. Fiscal events, namely Budgets and spending reviews, lock in what is happening in our economy for years to come, even generations, so it beggars belief that they are not properly taking account of climate impacts. Whether those policies are spending on new roads, subsidies and tax breaks for oil and gas, investment in renewables infrastructure or giveaways like a freeze on fuel duty, they all have direct impacts on the UK’s prospect of meeting our net zero targets. Those impacts should be made clear and considered explicitly in the policy-making paper. We need to be thinking about the impacts of today’s economic policies on the prospects for future generations.
The costs of failing to take an approach that considers climate impacts are eye watering. A 2022 report by the Grantham Institute found that climate change damages to the UK are projected to triple by 2050 and more than double again 50 years later, so climate prudence and fiscal prudence are one and the same thing. Given that the OBR’s main duty is to assess the health of the UK economy and the sustainability of its public finances, it needs to be charged with assessing whether fiscal events are reducing or increasing climate risks to the economy.
Bringing net zero into the OBR’s mandate is consistent with the Government’s five missions. Indeed, in announcing its clean energy superpower document, Labour said that it will add net zero mandates to all relevant regulators that need it. I would argue that the OBR is a relevant regulator that needs a net zero mandate. That is why I am proposing this probing amendment today. As other Members have mentioned, it would also represent increased transparency around how fiscal policy choices are impacting the UK’s progress towards our net zero targets and help ensure that future Governments also consider that.
It is also an important stepping stone towards a net zero test, which would assess the aggregate climate and nature impact of every fiscal event. Again, this is something that Labour committed to in opposition. In his winding-up remarks, will the Minister comment on whether he is able to ensure that this test is integrated into the legislation that he is proposing?
I hope that Labour will use this opportunity to commit publicly to introducing a net zero test in Government, and will take a step towards doing that by backing my amendment.
The Second Deputy Chairman
I call Lauren Edwards to make her maiden speech.
Lauren Edwards (Rochester and Strood) (Lab)
Thank you for giving me the opportunity to speak, Madam Chair.
I pay tribute to the many hon. Members who have given such impressive maiden speeches today. It is an honour to follow my hon. Friend the Member for Dudley (Sonia Kumar) who gave such a passionate speech about her constituency, and who certainly did her family very proud. Although she has left her place, may I also commend the hon. Member for Chelmsford (Marie Goldman) for her excellent speech, which, as somebody born in Australia, I particularly appreciated for its reference to the Australian opera singer, Dame Nellie Melba?
Financial market stability and public trust in announcements on fiscally significant measures are, funnily enough, not issues that come up regularly on the doorstep. But the real-life consequences when these two important pillars of our society are lacking was central to the recent conversations that I had across Rochester and Strood.
The cost of living pressures, already challenging for most, were heightened as families found that they had to pay, on average, hundreds of pounds more just to put a roof over their heads. The cause of that additional pressure—the former Truss Government’s mini-Budget—was a deeply undesirable situation that this Bill seeks to prevent from ever happening again. One reason given for the adverse market reaction to that mini-Budget was the lack of forecast by the Office for Budget Responsibility—an omission which, in turn, contributed to a lack of investor confidence in the plans. Political parties, whatever their colour, can have the best policies in the world, but if they are not backed with economic competence and market confidence in those who are holding the purse strings, no one will be better off for them.
We cannot and should not play fast and loose with the economy, so, like many others, I take great comfort from the Bill. That includes the chair of the OBR himself, Robert Hughes, who says that the Bill will address a gap in the current law and
“serve to strengthen the legal foundations for fiscal management.”
It is surely only right that policymakers, when making major fiscal decisions, base those decisions on up-to-date economic and fiscal outlooks, published at the same time to give maximum transparency.
I dwell so much on economic stability as I view it as a necessary precondition for economic growth—this Government’s chief mission—and because, in recent years, there has not been enough focus on the latter in places such as Medway. I am immensely proud to call Rochester and Strood my home and honoured to have been given the opportunity by its residents to represent them here in this place. I will work hard every day to ensure that residents’ voices are heard in this Chamber and to get a better deal for everybody in Rochester and Strood. I will do that by continuing to drive regeneration work in my constituency, work that I began as a former cabinet member on Medway council. I will work with the Government and the private sector to bring more investment to our towns and villages, support the local business community to thrive, and provide more opportunities for young people, so that they do not feel that they need to move away to get on in life.
Rochester and Strood has many strengths, not least the military presence at Brompton barracks, home of the Royal Engineers. The River Medway, which runs the length of the constituency, has so much potential for industry, leisure and tourism, and a very rich maritime history from the days of Chatham dockyard. We have a burgeoning creative community centred at Chatham Intra, developing green industries out on the Hoo peninsula, and high-quality technical colleges and universities. However, we also have high levels of deprivation in the constituency, not enough good-quality and affordable housing, an overburdened hospital, and not enough infrastructure, including health services, public transport and banking services, to support our communities, particularly on the more rural Strood side of the constituency.
Fred Thomas (Plymouth Moor View) (Lab)
Thank you, Madam Chair. Before I talk about Plymouth, may I celebrate the amazing speeches that we have heard this afternoon, and pay tribute to the wealth of experience and passion, not just on the Government Benches but across the Chamber? It is really heartening. My hon. Friend the Member for Rother Valley (Jake Richards) spoke about the spirit that we have all seen in the communities that we represent, and the confidence that he has in that spirit to overcome some of the challenges that we are facing as a nation and in our communities. I completely share that.
Let me now talk about Plymouth, the city that I call home and the city that I am so proud to represent in this place as the Member for Plymouth Moor View. I want to talk about our people, our institutions, our rolling hills, grey warships glinting in the south coast sun and the noise that 43,000 Argyle fans make on match day. I want to talk about the gritty determination of staff at one of the biggest hospitals in the country, and I want to talk about hope.
I will frame this speech with two principles that I lived by during my time in the Royal Marines, principles that are well known amongst the armed forces community in Plymouth. First, a leader must be a dealer of hope. When the chips are down, leaders have to step forward and give hope. I believe that is our job in Parliament too. In Plymouth, communities come together to give each other hope. There is immense strength and resilience in the streets, the housing estates, the front rooms and wherever folks get together and organise to change the lives they and their neighbours are living, making simple, tangible changes by addressing the needs in front of them.
We have Whitleigh Big Local, the Four Greens Community Trust and Connecting Youth CIC, to name just a few, working in partnership with the local community to improve the things that matter and to bring hope. I want to use my position in this House to empower our community to effect change and generate hope that life will get better and that families can be lifted out of poverty.
Today, relative child poverty in Plymouth Moor View is at 23%, set against the regional figure of 17%. I will not accept rising child poverty, because the second principle that I live by, one I believe a lot of us share, is this: “The standard you walk past is the standard you accept.” If we see something that we know is wrong and we keep walking, we are effectively saying we are happy with that situation. The harder option is not to walk past, but to take action.
Derriford hospital in Plymouth serves almost 2 million people across Devon and Cornwall. I have met the nurses, paramedics, doctors and volunteers, who do fantastic work under immense pressure. They are people who do not just walk past. However, the hospital is up against it: in June alone, there were 5,000 instances where a patient waited more than four hours in A&E. That represents a series of personal tragedies for the patients affected. With the new Government, I will work tirelessly to change that story.
Away from the hospital, the beating heart of our city is Plymouth Argyle football club, which is in its second season now in the championship, making it one of the top clubs in the English football league. Yet in Plymouth, many families struggle to afford access to sport for their kids. I am a keen footballer and I believe in the power of sport to set young people up for life. I will use my platform to improve access to sport in Plymouth, because a standard where this country has the finest football leagues, watched the world over, but our own youngsters cannot afford to play is not a standard I will walk past. I pay tribute to the excellent work that the Argyle community trust and the Plymouth football boot bank do already to broaden access to sport in Plymouth.
As a former Royal Marines commando, it is a particular privilege to represent the city that is home to not only the largest naval base in western Europe, but the Royal Marines, who are still headquartered in Plymouth. Ours is a city where so many residents have served in uniform, and I take this opportunity to thank every single one of them for their service and dedication. I also pay tribute to my predecessor for his heartfelt efforts to raise the profile of the veterans agenda.
For centuries, Plymouth has had a proud military history, and the Prime Minister recently called it
“the frontline of defence in this country”.
Navy, Marines and Army personnel have deployed from Plymouth for hundreds of years. The tradition of proud military service runs through our city like the writing in a stick of rock. Now, as we find ourselves as a country in another moment of critical international instability, Plymouth is again a keystone of our national security. Devonport dockyard is the home port for the frigates, survey vessels and amphibious shipping that are crucial for our safety. It is also where the submarines that host our nuclear deterrent are maintained, and will be for generations to come. We are also home to highly skilled small and medium-sized enterprises such as MSubs—makers of unmanned submersible craft used in the most special military projects—Barden bearings and Collins Aerospace, whose cutting-edge engineering is integral to the UK’s modern weapons systems.
From our military institutions and our manufacturing base to our hospital, our football club and our dockyard, we stand up and we serve in Plymouth. We give a lot to this nation, but for all this—if I can borrow a phrase from a friend and a constant source of advice, my hon. Friend the Member for Plymouth Sutton and Devonport (Luke Pollard)—Plymouth does not get its fair share. I will work tirelessly with the Government to change that, because in Labour we respect service, and ours will be a Government of service—a Government of hope. As I served my country before in uniform, so I will serve my city now in office. As I was trained to do in the Marines, I will strive to be a dealer of hope. When it comes to taking action, I will remember, along with colleagues on both sides of the House, that the standard we walk past is the standard we accept.
Lucy Rigby (Northampton North) (Lab)
I pay tribute to my hon. Friend the Member for Plymouth Moor View (Fred Thomas) on his fantastic maiden speech and to all hon. Members who have made such brilliant maiden speeches in this afternoon’s debate. It is a privilege to follow them and to make my own maiden speech in the context of such an important Bill.
Northampton has sent Members to Parliament since 1283, and it is the honour of my life to be among them as the Member of Parliament for Northampton North. One of those former Members, I am proud to say, was the trailblazing Margaret Bondfield—the first woman to serve in Cabinet in this country, the first to be appointed to the Privy Council and the first to chair the TUC. I hope, in the course of my time here, that we might find ways to see Margaret’s name given greater recognition and prominence, as I believe is due. Some 51 years after Margaret Bondfield’s arrival in this House, the good people of my constituency elected Maureen Colquhoun—a trailblazer herself in relation to many issues, including being the country’s first openly gay MP.
I want to pay particular tribute to my two immediate predecessors: Sir Michael Ellis and Sally Keeble. Sir Michael stepped down at the last election, having served Northampton North for 14 years and served the country as a Minister in multiple roles. He is also remembered locally for performing lifesaving CPR on a constituent having a coronary episode—I am more than aware that that sets me a very high bar for looking after my constituents. Like Sir Michael, Labour’s Sally Keeble served Northampton North for well over a decade and served her country in government too. Sally has many achievements—notable among them was the taking through of one of the last pieces of legislation under the previous Labour Government to protect developing countries from vulture funds. Sally remains a dedicated and committed public servant. I do not mind admitting that I spoke to plenty of residents during the election campaign who told me that while they really appreciated my doorstep pitch for their support, they would be voting for Sally Keeble.
I am aware of the examples of good service in this place that have been set for me, and I hope to live up to them, so I want my constituents to know that serving our community in Northampton will be my first and highest priority for as long as I remain in this place. This place could, in fact, be in my constituency, because Northampton has been the seat of Parliament on more than 30 occasions. King John even moved the Treasury to Northampton in 1205, when he fell out with a few people in London over something akin to the disastrous mini-Budget—an option that I suspect those supportive of the Treasury’s current location will be glad to know was not suggested, as far as we know, to the former right hon. Member for South West Norfolk.
We are a town of deep pride in both our present and our past. We are the largest town in England. We have buildings of neo-gothic splendour; strong communities; beautiful green spaces such as Eastfield Park, Abington Park and the Racecourse; and not one but two shoe armies: Premiership champions Northampton Saints, and the mighty Cobblers. Our boot and shoemaking industry has provided many Members of this House with their footwear over the years, including, I am proud to say, the former Prime Minister and Member for Sedgefield, who wore the same lucky pair of Church’s brogues at every Prime Minister’s questions for 10 years, which just goes to show where a good pair of Northampton shoes can get you.
The Chief Secretary to the Treasury (Darren Jones)
It is a pleasure to serve under your chairship, Ms Nokes. May I start by congratulating hon. Friends and others on delivering their maiden speeches? It has been a pleasure to be in the Chamber to hear them this afternoon. They will clearly be great champions for their constituencies.
I will take a few moments to remind the House of why we are taking forward the important clauses in the Bill, and to set out the Government’s views on the proposed amendments. At the general election, the Government received a mandate for economic growth. That is the only route to improving prosperity, and it is now our national mission. A crucial first step to achieving it is to deliver economic stability. We have seen what happens without stability: at the 2022 Conservative mini-Budget, huge unfunded fiscal commitments were made without proper scrutiny, and key economic institutions such as the Office for Budget Responsibility were sidelined. That is why we have made a commitment in our manifesto to a fiscal lock that will strengthen the role of the OBR, and why we have taken quick action to deliver on that commitment. That will reinforce credibility and trust by preventing large-scale unfunded commitments that are not subject to an independent fiscal assessment, and proves that we are a responsible Government who will not play fast and loose with the public finances as the previous Government did.
The Bill sets out the legal framework for the operation of the fiscal lock, and builds on the Budget Responsibility and National Audit Act 2011. In line with that established legal framework, some of the technical detail underpinning the fiscal lock will be set out via an upcoming update to the charter for budget responsibility, a draft of which the Treasury has published to support scrutiny of the Bill today.
I will now talk through the Bill’s two clauses. The first is the main substantive clause, setting out the operation of the fiscal lock. It introduces a new section 4A into part 1 of the Budget Responsibility and National Audit Act 2011, which relates to budget responsibility and was used to legally establish the OBR.
Clause 1 makes five key changes. First, new subsection (1) of section 4A guarantees in law that from now on, every fiscally significant change to tax and spending will be subject to scrutiny by the independent OBR. It will require that before a Government Minister makes any fiscally significant announcement to Parliament, the Treasury always requests that the OBR prepare an economic and fiscal forecast. This builds on existing legal frameworks requiring the OBR to produce at least two forecasts per year. Importantly, the OBR’s assessment should include the extent to which the Government are meeting their fiscal mandate. That requirement applies when two or more announcements are made and the combination of measures is fiscally significant, irrespective of whether the measures are announced at the same time. It will also apply separately to costs and savings, so that those cannot be offset against each other.
New subsection (2) strengthens the role of the OBR by requiring it to produce an independent assessment if it judges that the fiscal lock has been triggered. If a fiscally significant announcement is made without the Treasury having previously requested a forecast, the OBR is required to inform the Treasury Committee of this House of its opinion, and then prepare an assessment as soon as is practicable.
New subsection (3) defines a measure or combination of measures as “fiscally significant” if they exceed a specified percentage of GDP. In line with the existing legal framework, the precise threshold will be set via an update to the charter for budget responsibility, a draft of which will be published on gov.uk. The threshold level itself will be set at announcements of at least 1% of nominal GDP in the latest forecast—as an example, this year, that 1% threshold would be £28 billion.
New subsection (4) ensures proper scrutiny of the Government’s fiscal plans without preventing them from responding to emergencies such as the covid-19 pandemic. It sets out that the fiscal lock does not apply in respect of measures that are intended to have a temporary effect and are in response to an emergency. The charter will define “temporary” as any measure that is intended to end within two years. To safeguard against this subsection being used to avoid proper scrutiny, as set out in the updated charter, the OBR will have the discretion to trigger the fiscal lock and prepare a report if it reasonably disagrees.
Finally, new subsection (6) prevents any future Government from choosing to ignore the fiscal lock by simply updating the charter for budget responsibility alongside a fiscally significant announcement. It achieves this by requiring the Government to publish any updates to the detail of the fiscal lock, such as the threshold level at which it is triggered, at least 28 days before the updated charter is laid before Parliament.
Clause 2 sets out when the Bill will come into force and to whom it applies. Subsection (1) confirms that it deals with reserved or excepted matters, and that its provisions extend and therefore apply to England, Wales, Scotland and Northern Ireland. Subsections (2) and (3) allow for the commencement of the legislation to occur at the appropriate time, as is usual practice. We expect this will take place ahead of the upcoming Budget on 30 October.
I will now turn to the amendments that right hon. and hon. Members have tabled.
Karl Turner (Kingston upon Hull East) (Lab)
Before my right hon. Friend does so, will he give way?
Karl Turner
Is this Bill not designed to prevent the recklessness of the previous Tory Government, who effectively crashed the economy, leaving this new Labour Government with the responsibility of putting things right?
Darren Jones
My hon. Friend has hit the nail on the head. Indeed, I might go so far as to say that that was one of the reasons we achieved such a large mandate at the last general election, with so many hon. Friends on the Government Benches. We will never play fast and loose with the economy, as Members on the Conservative Benches did, and this Bill will prevent that from happening again in the future.
I start with amendments 9 and 10, tabled by the shadow Chancellor. They would require the OBR to publish a report whenever His Majesty’s Treasury announces new fiscal rules. The purpose of the Bill is to ensure that no Government can make large-scale announcements of tax and spending without being subject to independent assessment. The Government’s robust fiscal rules will support economic stability, but do not change tax and spending. It is those decisions that matter, as we saw when the previous Conservative Government announced £45 billion of unfunded commitments in the 2022 mini-Budget.
Andrew Griffith
The Minister can answer this briefly as well. Could he confirm that he has no plans to change the fiscal rules?
Darren Jones
The hon. Gentleman is enjoying himself, but he knows the answer: wait for the Budget.
The amendments from the official Opposition are therefore not necessary. To answer the question from the shadow Financial Secretary, the hon. Member for Droitwich and Evesham (Nigel Huddleston), as I have been invited to do so, the Chancellor has already confirmed that the Government will set out the precise details of our fiscal rules at the Budget on 30 October, alongside an updated OBR forecast.
amendments 6 and 7, tabled by my hon. Friend the Member for Walthamstow (Ms Creasy), focus on the definition of “fiscally significant” measures to which the fiscal lock will apply. They would extend the definition to include measures that have a cumulative effect on public sector net debt or contingent liabilities. I welcome my hon. Friend highlighting this issue, on which I know she has worked for many years. The draft charter text states that measures will trigger the lock when the combined costing is at least 1% of GDP in any year, and specifically:
“The costing of a measure is the direct impact of a policy decision on the public finances”.
It is difficult to set and interpret a threshold consistently for contingent liabilities as they can often be large in maximum exposure, but low in expected or reasonable worst-case losses. Effective management of contingent liabilities is important, and transparency is key to good fiscal management. The Government plan to announce new significant contingent liabilities at fiscal events to make sure there is transparency with Parliament. We will of course continue to notify Parliament of new contingent liabilities, as set out in “Managing Public Money”.
The amendments would also place a condition on policies with a cumulative impact on public sector net debt, and my hon. Friend noted public-private partnerships as an example. She was referring to PFI and PF2 models, which the previous Government had no longer proceeded with, and there has been no change to this policy. As the Chancellor said in her Mais lecture earlier this year, we will also report on wider measures of public sector assets and liabilities at fiscal events to ensure transparency across the whole balance sheet, which includes non-debt liabilities. Reporting transparently on the Government’s stock of contingent liabilities is key to ensuring we do not take excessive risk. I can therefore confirm today that the Government will publish a report on our contingent liabilities. I expect the contingent liability central capability to do this in early 2025. Having said all that, I recognise the issues my hon. Friend raises, and I will arrange to meet her to discuss them further.
Moving on to the Liberal Democrat amendments, amendment 2 was tabled by the hon. Member for Richmond Park (Sarah Olney). As she said, it would enable the OBR to notify the independent adviser on Ministers’ interests if the fiscal lock was triggered. I remind hon. Members that the purpose of this Bill is to ensure that never again do we find ourselves in a situation, like at the 2022 Liz Truss mini-Budget, in which fiscally significant measures are announced without accompanying OBR analysis. If a future Government were to act in this way, the Bill provides a clear remedy. The OBR is empowered to independently notify the Treasury Committee and to produce its own report. This would be available for full scrutiny by stakeholders and Parliament, which would be able to hold Ministers to account in the normal way. We therefore do not consider the amendment necessary.
Amendment 1, also tabled by the Liberal Democrats, would broaden the definition of fiscally significant measures to cover anything that is likely to have an impact on the cost of Government borrowing, interest rates or economic growth. The Bill is focused on preventing irresponsible large-scale fiscal announcements that could undermine macroeconomic stability, such as at the mini-Budget. To support that, we need clear and robust legal frameworks that ensure the provisions are triggered only when appropriate. This requires precise definitions that everyone, including the OBR in particular, can understand clearly and work with practically. It would therefore not be helpful, in the Government’s view, to have a broader, vaguer definition that might repeatedly trigger the fiscal lock under many different circumstances.
Amendments 3 and 4 would require the Treasury to consult the OBR and the Treasury Committee before the charter can be updated for the purposes of the fiscal lock, and to publish a report on the outcome of any such consultations. It is of course important that the views of the OBR and of Parliament are taken into account when making changes to the charter. However, I hope the hon. Member will accept that it will not be necessary to set out this specific process in primary legislation, because the Bill already includes an important safeguard on the fiscal lock, which is the requirement that any changes to the charter for budget responsibility are published in draft at least 28 days before they are laid in the Commons. That will ensure that the OBR, the Treasury Committee, this Parliament and all stakeholders will have a clear opportunity to make representations to the Treasury and to publish their views, as they see fit.
Amendment 5, tabled by the hon. Member for North Herefordshire (Ellie Chowns), would require the OBR to take net zero targets into account when preparing a report on fiscally significant announcements. Strong legal frameworks are already in place in the Climate Change Act 2008 to support the transition to net zero in 2050. The Act legislates for interim five-year carbon budgets, and requires the Government to report on those periodically. Parliament and its Select Committees already scrutinise that in great detail. The Green Book, the Treasury’s guidance on how to appraise policies, projects and programmes, requires Departments to assess the climate and environmental impacts of policy proposals, with major bids and proposals at fiscal events being assessed accordingly in that way. We therefore do not consider the amendment to be necessary.
Ellie Chowns
Does the Minister agree that having committed to give a net zero mandate to all relevant regulators, the OBR is indeed a highly relevant regulator?
Darren Jones
And it is equipped to do the job it is supposed to do, alongside the other regulatory body that holds the Government to account, the Committee on Climate Change.
In conclusion, I hope I have been able to provide some assurances and that hon. Members will be content to retract their amendments. If not, I urge the House to reject them. I thank other Members for their contributions to the debate. I gently invite the hon. Member for Arundel and South Downs (Andrew Griffith) to reflect on his own party’s record in crashing the economy through unfunded tax cuts, losing control of public spending and ruining family finances, before offering advice to this Government on fiscal responsibility. I say to the SNP spokesperson, who is not in his place, that I was surprised to see so many discredited Conservative party lines to take in his speech. Who knew that the SNP and the Tory party were one and the same thing?
With this Labour Government our commitment to fiscal discipline and sound money is the bedrock of all our plans. The Bill will guarantee in law that from now on every fiscally significant change to tax and spending will be subject to scrutiny by the independent OBR. That delivers on a key manifesto commitment to provide economic stability and sound public finances by strengthening the role of the independent OBR. That is a crucial first step to achieve sustained economic growth, and I commend the Bill to the House.
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
I call shadow Minister Nigel Huddleston.
Nigel Huddleston
I will not detain the House long by repeating the arguments that I made in my opening comments, but I am disappointed by the Minister’s response, and in particular by his refusal to accept our amendments. It is alarming that he is refusing to do so because, as I outlined, I believe they are consistent with the goals of the Bill overall, and I think the credibility of the Bill will be seriously undermined if it does not include the fiscal rules. I like the Minister a lot. We go back a way and have always had civil conversations, but if he does not believe or consider the level, type and definition of debt to be “fiscally significant”, then with the greatest respect perhaps the Treasury is not the right home for him. They are transparently fiscally significant, and an important part of the consideration we are talking about today.
Darren Jones
I thank the hon. Gentleman for giving way, and for inviting me to suggest whether I should try to find a job in another Department. I just point out that, having arrived at the Treasury, I have seen the impact of fiscally significant levels of debt after 14 years of the Conservative Government. Has he got anything to say to the House on that matter?
Nigel Huddleston
Yes, I have indeed. As I outlined in my original statement, the arguments the right hon. Member is making do not stack up with the facts. The economic circumstances that Labour inherited are better in many areas than those we inherited from them back in 2010. The economy is the fastest growing in the G7. On unemployment, every Labour Government since the second world war has increased it while in power, for us to then clear up and reduce it when we take over. Inflation was lower when Labour took power then when we inherited it, and annual debt was higher when we took over in 2010.
Labour Members keep saying all those things, but the challenge is that it does not stack up with the facts. They make arguments about the level of debt, as I outlined earlier, but they have already announced £10 billion for inflation-busting salary increasing for their union mates, £8 billion on energy provisions, and £7 billion on the national wealth fund. That is £25 billion of additional money that they have spent. If there is a black hole in the finances, it is clearly one of their own making by the announcements they have made since coming into government. That £25 billion is a huge amount of money, but I will finish discussing those points, because we had this debate earlier.
Nigel Huddleston
I will not give way at the moment, because I want to move on to some more positive things.
The Comptroller of His Majesty’s Household (Chris Elmore)
There is loads of time.
Nigel Huddleston
We have Third Reading as well, so let us enjoy ourselves. Just because the Government keep repeating the narrative does not make it true. I am sure they will continue to do so, but the £25 billion of additional spending that I have just outlined is a choice they have made. The arguments they are having to make—that they are having to cut payments to pensioners in response to the circumstances they have inherited—are not true because, as I outlined in my opening speech, it is a deliberate, long-stated policy choice articulated by the current Chancellor a decade ago. It is not a response to circumstances, but deliberate Labour policy.
On a more positive note, I congratulate all those who have made their maiden speeches today: the hon. Members for Loughborough (Dr Sandher), for Portsmouth North (Amanda Martin), for Swindon North (Will Stone), for Chelmsford (Marie Goldman), for Southend East and Rochford (Mr Alaba), for Woking (Mr Forster), for Rother Valley (Jake Richards), for Wokingham (Clive Jones), for Dudley (Sonia Kumar), for Rochester and Strood (Lauren Edwards), for Plymouth Moor View (Fred Thomas), and for Northampton North (Lucy Rigby). They have made incredible contributions. The breadth of experience that they bring to this Parliament is astounding, and I am largely talking here about Government Members. I say it with a great degree of respect, because in many circumstances—in fact, in nearly every single circumstance—they have replaced good friends of mine who contributed significantly to this House. They all have big shoes to fill, but what they have said today was impressive. In particular, those who spoke without notes are a lesson to us all.
What a beautiful tour we had around the United Kingdom. Everyone who spoke today spoke eloquently about their constituencies and their constituents and showcased their rich heritage and rich history. It was incredibly impressive. I am sure their constituents will be proud of what they have said. With that, I will finish my comments, but the debate will continue.
Question put, That the amendment be made.
Darren Jones
I beg to move, That the Bill be now read the Third time.
I will not take up too much more time, but I will provide a final reminder of how important this legislation is. At the general election, the Government received a mandate for economic growth. Sustained growth is the only route to improve prosperity and to improve the living standards of the British people. It is now our national mission.
Economic stability is key to achieving this. We have seen what happens without it, when huge, unfunded fiscal commitments are made without proper scrutiny and when key economic institutions such as the OBR are sidelined. We cannot let ourselves get into that position again. Unfunded, unassessed spending commitments not only threaten the public finances, they can threaten people’s incomes and mortgages, as we saw under the previous Government.
I therefore encourage Conservative Members—who have told us today that, after 14 years of Conservative government, the economy has never been so good—to reflect, if only for a moment, on why they lost all credibility for economic competence and suffered the worst election result in their history.
Once again, I congratulate all my hon. Friends and other hon. Members on their excellent maiden speeches today. I thank hon. and right hon. Members on both sides of the House for their contributions, and I thank the Clerks and officials who have supported the Bill’s rapid passage.
The Budget Responsibly Bill forms a small but vital part of our plan to restore economic stability and deliver economic growth. For these reasons, I commend it to the House.
Alan Mak (Havant) (Con)
I thank everyone who has contributed to the debates on the Bill, both today and before the summer recess, especially new Members who have made their maiden speech: the hon. Members for Loughborough (Dr Sandher), for Portsmouth North (Amanda Martin), for Swindon North (Will Stone), for Chelmsford (Marie Goldman), for Southend East and Rochford (Mr Alaba), for Woking (Mr Forster), for Rother Valley (Jake Richards), for Wokingham (Clive Jones), for Dudley (Sonia Kumar), for Rochester and Strood (Lauren Edwards), for Plymouth Moor View (Fred Thomas) and for Northampton North (Lucy Rigby). They all spoke incredibly well, with passion and eloquence, and we wish them well for their time in the House.
We Conservatives believe that sound public finances, fiscal responsibility and independent forecasts are the foundation of economic stability, which is why it was a Conservative Government who created the OBR more than a decade ago, and it is why today we tabled our amendments to improve the Bill and stop Labour moving the goalposts on the fiscal rule. By voting against our sensible proposal, Labour Members have shown they are not serious about our public finances. What are they trying to hide? It is clear that the purpose of the Bill is to distract everyone from Labour’s economic record and pave the way for tax rises in the autumn Budget.
Let us examine Labour’s economic record. The party has been in government for just nine weeks and has already carried out nine acts of economic vandalism. It has removed the winter fuel allowance from 10 million pensioners despite promising not to; caved in to its union paymasters by agreeing inflation-busting pay rises; failed to commit to investing 2.5% of national income on defence; cancelled vital infrastructure upgrades on the A27 and A303; cut funding for a vaccine manufacturing plant that would protect our health; imposed Whitehall diktats to concrete over our green spaces; stopped Conservative plans to build 40 new hospitals; scrapped funding for a next-generation supercomputer, undermining our status as a tech superpower; and appointed Labour donors to senior civil service jobs without open competition. Nine weeks, nine acts of economic vandalism.
We know there is more harm to come, with Labour’s autumn Budget set to raise taxes. During the election campaign, Labour promised over 50 times not to raise people’s taxes, but the Labour Government are planning to do just that. It will be hard-working people, pensioners and businesses who will pay the price. May I invite the Chief Secretary to the Treasury to return to the Dispatch Box to rule out raising taxes on working people, such as drivers, savers and business owners? At the same time, will he rule out changing the fiscal rules to allow for more Government borrowing and debt?
Darren Jones
I always welcome the opportunity to return to the Dispatch Box, and I thank the shadow Minister for inviting me to do so. Opposition provides an opportunity for reflection. While he is offering his thoughts on our two months in office—two months of great relief for the British people—does he have anything to say about his 14 years in office before the election?
Alan Mak
I think the answer from the Chief Secretary to the Treasury is no, which confirms everything we already knew. It means that the people can never trust Labour with our economy, that Labour will raise taxes and cut investment at every opportunity and that Labour’s honeymoon is well and truly over.
Question put and agreed to.
Bill accordingly read the Third time and passed.
House of Commons Commission
Resolved,
That
(1) in pursuance of section 1(2)(d) of the House of Commons (Administration) Act 1978, Rachel Blake be appointed to the House of Commons Commission, and
(2) in pursuance of section 1(2B) of that Act, the appointment of Shrinivas Honap as an external member of the Commission be extended to 30 September 2026.—(Lucy Powell.)
Madam Deputy Speaker (Judith Cummins)
I call Tim Farron to present a petition. The Member is not present.
Budget Responsibility Bill
Thursday 5th September 2024
(1 month, 3 weeks ago)
Lords ChamberRead Full debate Budget Responsibility Act 2024 Read Hansard Text Amendment Paper: Committee of the whole House Amendments as at 4 September 2024 - (4 Sep 2024)
Budget Responsibility Bill
Monday 9th September 2024
(1 month, 3 weeks ago)
Lords ChamberRead Full debate Budget Responsibility Act 2024 Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 4 September 2024 - (4 Sep 2024)
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, at the general election, our manifesto made it clear that sustained economic growth is the only route to improving the prosperity of our country, raising living standards, and sustainably funding public services. That is why it is our central economic mission.
On her first day in the Treasury, the Chancellor received new economic analysis from Treasury officials on the lost growth of the past 14 years. This analysis showed that, had the UK economy grown at the average rate of other OECD economies, it would now be over £140 billion larger. This could have brought an additional £58 billion in tax revenues in the last year alone—money that could have revitalised our schools, hospitals and other public services. We have therefore urgently begun the work to deliver on the mandate for change delivered by the British people at the election to fix the foundations of our economy, rebuild Britain and make every part of our country better off.
Our approach to growth rests on three pillars: stability, investment and reform. We have set out ambitious reforms, most importantly to the planning system, the single biggest obstacle to our country’s economic success. We have ended the ban on onshore wind and set out reforms to the skills system. With regard to investment, we have established the national wealth fund, committed to an industrial strategy council, and begun the creation of GB Energy. But the first, and most critical pillar, is economic stability—it is the rock on which all else must be built and the essential precondition for growth.
Over the last 14 years, with five Prime Ministers and seven Chancellors, instability has deterred investment, undermined family finances and, most importantly, held back growth. Many of the crises we faced during that time were of course global in origin—pandemic, war and an energy shock—but other countries faced those same shocks. The reason why we in the UK were hit harder than other comparable countries can be explained only by the choices made by the previous Government here at home: austerity, which choked off investment; a rushed and ill-conceived Brexit deal; and the disastrous Liz Truss mini-Budget, which crashed the economy and sent mortgage rates spiralling.
We believe that stability must begin with respect for our economic institutions. For much of the UK’s history, the strength of our economic institutions has bestowed credibility in international markets and underpinned our economic success. Politicians who seek to undermine those strengths, as we saw in the last Parliament, play a dangerous game. Under this Government, the Bank of England’s Monetary Policy Committee will continue to have operational independence in the pursuit of its primary objective of price stability, and, in line with our manifesto, we will support and strengthen the Office for Budget Responsibility, hence the Bill we are debating today.
The OBR was, of course, introduced by a Conservative Chancellor to deal with a lack of independence in forecasting and the problems that had caused. It was a commendable move, bringing greater transparency and independent scrutiny to fiscal policy. But while the previous Government then went on to undermine it—Liz Truss notoriously saying that she wanted to
“see the back of the OBR”—
the Labour Party continued to support it. Now, in government, we will strengthen it.
This Bill therefore fulfils a simple but important step to help restore economic stability: it brings transparency and independent scrutiny into law by ensuring that every fiscal event that makes significant changes to taxation or spending will be subject to an independent report from the OBR. In doing so, it delivers on a manifesto commitment.
Let us be clear about why this Bill is needed. While the existing fiscal framework requires at least two OBR forecasts a year, there is currently no requirement on the Treasury to subject announcements on all fiscally significant measures to independent OBR scrutiny. In effect, that means there are times when the Government can make fiscally significant announcements while opting out of both transparency and scrutiny. This was a key factor in the disastrous Liz Truss mini-Budget, which did so much damage to our economy and to households, who are still paying the price for it today.
The previous Government knew the measures they were taking were unfunded and unaffordable, but as they were not bound to a forecast, they wilfully prevented one from taking place. This absence of scrutiny was a key factor in the adverse market reaction that followed. As the now shadow Chancellor said at the time, the mini-Budget damage was in part
“caused by the lack of a forecast””.—[Official Report, Commons, 17/10/22; col. 395.]
This cannot be allowed to happen again, so this Budget Responsibility Bill takes five important steps.
First, the Bill requires that, before the Government make any fiscally significant announcement in Parliament, the Treasury must ask the OBR to prepare a report which takes that announcement into account. This builds on the existing process whereby the Chancellor commissions the OBR for an economic and fiscal forecast to accompany a fiscal event. It guarantees in law that, from now on, every fiscally significant change to tax and spending will be subject to independent scrutiny from the OBR.
Secondly, the Bill gives the OBR new powers independently to decide to produce a report if it judges the measures in a fiscal event to be fiscally significant. If a fiscally significant announcement is made without the Treasury having previously requested a forecast from the OBR, the OBR is required to inform the Treasury Committee in the House of Commons of its opinion, and then prepare a report as soon as is practicable.
Thirdly, the Bill defines a measure, or combination of measures, as “fiscally significant” if they exceed a specified percentage of GDP. The Charter for Budget Responsibility will then set the precise threshold. Setting the threshold in this way provides clarity for the OBR and external stakeholders about what constitutes a fiscally significant announcement and ensures that the Government can set it at the right level going forward, recognising economic conditions. The Treasury has published a draft of the updated charter. This notes that the threshold level will be set at announcements of at least 1% of nominal GDP in the latest OBR forecast.
Fourthly, the Bill ensures that these arrangements do not apply to Governments responding to emergencies. The Bill does this by not applying in respect of measures that are intended to have a temporary effect and which are in response to an emergency. The charter will define “temporary” as any measure that is intended to end within two years. This recognises that it is sometimes reasonable, as it was during the pandemic, for the Government to act quickly and decisively without an OBR report, if that is needed in response to a shock. Of course, in emergencies it may be appropriate for the Chancellor to commission a forecast from the OBR to follow measures that need to be announced or implemented rapidly, and that would happen in the usual way. Alongside any such announcement, the Treasury will be required to make clear why it considers the situation to be an emergency. As set out in the updated charter, the OBR will have the discretion to prepare a report if it reasonably disagrees.
Fifthly and finally, the Bill requires the Government to publish any updates to the detail of these arrangements, such as the threshold level at which they are triggered, in draft form at least 28 days before the updated charter is laid before the House of Commons. This is an essential safeguard in the Bill, preventing any future Government from choosing to ignore these arrangements by updating the charter without clear parliamentary consent. In line with this Bill, and as the Chancellor announced in July, she has commissioned a full forecast to accompany the Budget on 30 October, following the important principle that significant fiscal policy decisions should be made at a fiscal event and accompanied by an independent OBR report.
In the Chancellor’s July Statement to Parliament, and in light of the scale of the overspend left by the previous Government, of which the OBR has confirmed it had not been informed, she also announced additional measures to strengthen the fiscal framework. These require the Treasury to share with the OBR its own assessment of immediate public spending pressures, enshrining that rule in the Charter for Budget Responsibility and establishing that spending reviews will take place every two years, with a minimum planning horizon of three years, to avoid uncertainty for departments and to bring stability to our public finances.
The changes introduced in this Bill are an important step in bringing much-needed stability to our economy. By empowering the OBR and ensuring that an independent report will accompany all fiscally significant announcements, it will improve transparency and accountability. Economic stability is central to economic growth—objectives that I hope will be shared across your Lordships’ House. I beg to move.
Lord Altrincham (Con)
My Lords, we thank the Minister for bringing forward this important Bill. Perhaps we should also thank the OBR for its very good work over these past 14 years. We in Parliament have been concerned about the supervision of financial regulators, and we did a lot of work last year on strengthening the supervision of other financial regulators in the Financial Services and Markets Act. Separately this afternoon, the Industry and Regulators Committee has been looking at a whole range of independent agency regulators with a very mixed performance.
It is worth pausing for a moment on the Office for Budget Responsibility itself, which is widely admired across government, in Parliament and, as the Minister says, by the current Government. It is to its credit that it managed to find a way to work closely with government, but independently and transparently. We should mark this with respect, given how stressed the government finances are.
A core objective of the OBR is, of course, the sustainability of the public finances. Perhaps we should look at how that has been since it was set up, following the 2011 Act. In 2012, public sector debt to GDP was 74%. One way or another—by spending the fiscal headroom across various Governments, and following the different issues that arose—we are now at 98%, which is a rise of around 2% per year in debt to GDP. This kind of budget responsibility is becoming almost unaffordable to the public exchequer, and things will have to change.
They will have to change because the scale of public spending—to the tune of £1 trillion a year—requires very good forecasting, and some of the forecasting that underpins this tight nexus between the Treasury, the OBR and their own reviews has been challenged. The OBR substantially missed the inflation change; lots of other agencies missed it—less in the private sector than in the public sector—and that is a problem because it hints at a closeness between the OBR and the Treasury because it was agencies of government that all missed the inflationary change. The OBR reviews its own forecasting very carefully, so when it reviews that error, it will tend to look at supply shocks in Ukraine and downplay quantitative easing and rates. That is one area of weakness, but there are others that will affect this concept of the fiscal announcement.
The OBR has struggled with basic numbers around population. It tended to underestimate population and is now scrambling to increase population in its model, which currently has a population of 57 million adults in the UK in 2029. This number is extraordinarily sensitive, obviously, for estimates of average wages and welfare spending. The OBR says that modelling those kinds of assumptions is very difficult because they are modelled off much lower levels of immigration than we are currently seeing, and these are the kind of numbers that would trigger enormously different fiscal outcomes in the Treasury/OBR model. There are other numbers in the forecast which are very sensitive, and the OBR itself mentioned this, but it is important that we reflect on this as we think about how this kind of fiscal brake might work. The OBR is modelling the expected tax take out of the economy to reach 37% of GDP in 2029. It is essential, of course, that it does reach that kind of level, but it is unknowable whether the economy can really sustain that level of taxation. It is a modelled outcome—we must all collectively hope it can work, but it might not, and therefore inherent in the actual forecasts are very significant fiscal risks.
One other area to mention in the OBR numbers that will underpin the Budget in October is the huge variable of accounting for the economics between the Treasury and the Bank of England. This is an extraordinarily enigmatic subject, not particularly well explained by the OBR itself, whereby the Bank can, at its discretion, impose costs on the Treasury which themselves could become very significant in these fiscal numbers. My question to the Minister is: what should we expect the costs of the asset purchase scheme to be between the Treasury and the Bank of England for this year? Will that be an area in which the Treasury can balance the numbers that it believes are a black hole? The kind of scale of adjustment is easily that big—for example, the Bank of England could easily stop issuing gilts for the coming months, seemingly at its discretion—so maybe the Minister could clarify that.
I end with the Chekhov question. Chekhov used to say that when you see a revolver on the mantelpiece in the first act, it will always be fired before the final curtain. I ask the Minister whether we can expect the fiscal announcement, beautifully described in Clause 1 as the “section 4(3) report”, to take place in this Parliament.
Lord Macpherson of Earl’s Court (CB)
My Lords, this is a sensible Bill to strengthen a sensible institution. The creation of the Office for Budget Responsibility, together with the granting of operational independence to the Bank of England, has transformed macroeconomic policy-making in the UK, and it is no coincidence that the premium the UK has had to pay on its debt, relative to its G7 partners, has declined over the last 25 years.
Economic forecasting is a thankless task. Forecasts are invariably wrong. The late Denis Healey’s commented that he would like to do for economic forecasters what the Boston Strangler did for the reputation of door-to-door salesmen. In an ideal world, forecasts would not be necessary. However, Governments have to plan public spending and the taxes necessary to pay for it. They need to do so over the medium term to better understand the implications for borrowing and the debt market. Somebody has to make the projections on which the decisions that determine the well-being of the nation are based.
Over my career at the Treasury, I worked on well over 60 fiscal events. For over 50, the Chancellor determined the forecast. It is fair to say that, on the vast majority of those occasions, the Chancellor did not seek to interfere with the forecast that Treasury officials presented to him. Even then, he often had to resist pressure from the First Lord of the Treasury to raise the growth rate just a little to make tax cuts or public spending increases more “affordable”—I emphasise the inverted commas surrounding the word affordable.
Whether or not Prime Ministers or Chancellors interfered, the perception of the markets was that they did. The result was that the forecast’s credibility was always called into question and that the taxpayer had to fund an interest rate on government debt that was slightly higher than it needed to be. Two years ago, that term came to be known as the “moron premium”. I emphasise that the OBR is no better at forecasting than other institutions; the importance is that its forecasts are perceived to be unbiased, and this is borne out by the evidence.
On the detail of the Bill, I welcome the Government putting a number on what constitutes fiscally significant. It may be a little on the high side—most fiscal events over the last 30 years have made a fiscal adjustment of less than 1% of GDP—but I see the problem in setting it too low and triggering an endless round of forecasts.
I also welcome the Government’s determination to improve the credibility of public spending projections. We should be in no doubt that an incredible spending forecast is the source of the problem with which the Government are now wrestling. Had the previous Government been required to populate their spending plans with policy decisions, I rather doubt that they would have announced successive cuts in national insurance contributions.
The measures set out in the Chancellor’s letter to Richard Hughes of 29 July are a big step forward: in particular, a clear timetable for spending reviews and a requirement for the Treasury regularly to update the OBR on emerging spending pressures. Allowing the OBR to publish, in effect, corrected spending plans will improve decision-making, even if it makes life more difficult for the Chancellor in the run-up to an election.
As the Government consider further reforms to the OBR framework, I encourage the Treasury to focus on another issue that also muddies the waters in the run-up to an election: the costing of opposition policies. Every four or five years, we have to go through the absurd theatre of the Chancellor of the day publishing, to great fanfare, official costings of their opponents’ policies. Of course, they are not official costings, since the assumptions are determined by Ministers and their special advisers. The Opposition are always rightly indignant at the time, claiming that the process is terribly unfair. I had to field unhappy telephone calls from shadow Chancellors from both main parties. But, once in government, parties have an uncanny knack of forgetting about the unfairness.
While the present Government are still in their early days of missionary zeal, I encourage them to resuscitate the 2015 proposal of the then shadow Chancellor, Ed Balls, to put opposition costings in the hands of the OBR, as happens in countries such as Holland. I ask the Financial Secretary to raise this issue with the Chancellor when he returns to the Treasury.
Lord Eatwell (Lab)
My Lords, the OBR was created by George Osborne to
“remove the temptation to fiddle the figures”.
An entirely non-political evaluation of major fiscal measures was certainly a good idea; unfortunately, it has not yet been achieved. The failure to attain political independence may be attributed to two elements that are not dealt with in the Bill yet are essential to its purpose.
First, key inputs to the OBR’s work are the estimates of future spending provided by the Government. We now know that these can be politically manipulated to ensure that fiscal targets seem to be met. As the Institute for Government commented at the time of the Conservative Budget this Spring,
“the figures that Hunt announced … are based on entirely fictitious future spending plans”.
Since the election, we have learned that not only were the Conservatives fiddling the figures that they provided to the OBR, but they were concealing spending plans too. In the light of post-election findings, Mr Hughes confirmed that the OBR was made aware of the extent of pressures on departmental budgets only in late July. Happily, the Financial Secretary has just outlined the measures that are to be taken to verify the data supplied by the Government. These measures are most welcome.
The second key political element undermining the value of the OBR’s current assessments is the current formulation of the charter. The current charter embodies three targets that the OBR is required to assess; unfortunately, none of them is based on sound economics.
First, there is the objective to have public sector net debt—excluding the Bank of England—as a percentage of GDP falling by the fifth year of the rolling forecast period. As the noble Lord on the Opposition Front Bench just pointed out, this means that whenever the Bank of England sells part of its stock of government debt to the private sector, it automatically tightens the noose around government spending. An important part of monetary policy has damaging consequences for fiscal policy—how foolish is that?
More importantly, the objective treats all government expenditure as having the same economic relevance. A crazy unfunded tax cut is assigned the same economic impact as investment in industrial infrastructure. As the Chancellor of the Exchequer argued in her Mais Lecture while still the shadow Chancellor,
“our fiscal rules differ from the government’s. Their borrowing rule, which targets the overall deficit rather than the current deficit, creates a clear incentive to cut investment that will have long-run benefits … I reject that approach”.
Unfortunately, the next objective, to ensure that public sector net borrowing does not exceed 3% of GDP by the fifth year of the rolling forecast period, is simply a dynamic version of the first objective and is, therefore, subject to the same rejection that the Chancellor has made.
The third and final objective is to ensure that expenditure on welfare is contained within a predetermined cap. One of the important operational aspects of economic policy is the value of the automatic stabilisers in the economy: when the economy booms, welfare spending automatically goes down; in a slump, welfare spending automatically goes up. The notion of a cap would emasculate the automatic stabilisers—again, a silly thing to do.
In short, none of the current objectives in the charter makes sound economic sense. It forces the OBR to make forecasts that are simply not relevant for the Government’s stability and growth objectives. It is imperative that the charter is revised prior to the Budget on 30 October. Given the requirement that revisions of the charter must be presented to Parliament 28 days before coming into effect, will the Minister tell us whether we can expect a revised charter to be presented before 1 October?
To conclude, the OBR is a very good idea, as is this Bill, but major operational aspects need urgent correction. I look forward to hearing from the Financial Secretary how these deficiencies are to be dealt with.
Baroness Noakes (Con)
My Lords, I have a number of regrets about the Bill. My first regret is that it is a money Bill. It is customary that this House does not challenge the decision of the Speaker in the other place, and I will not do so. It is not, however, a Bill that has any direct fiscal impact, but it makes changes to a body that has become an integral part of the country’s economic management. I believe the Bill would have benefited from a normal Committee, where we could have scrutinised it in detail. For example, noble Lords might recall that when income tax was first introduced in 1799, it was labelled a temporary tax, which raises interesting questions about this Bill’s exclusion of temporary measures from the OBR’s new powers.
Secondly, I regret that the Government have not taken the opportunity to ensure that the OBR’s forecasting is fit for purpose. My noble friend Lord Altrincham raised several of the issues here. On its own internal assessment, the OBR is not particularly good at forecasting. It claims, with no sense of irony, that its performance is in line with that of the Bank of England. The noble Lord, Lord Eatwell, from whom we have just heard, pointed out in his speech on the gracious Speech in July that the OBR was set up to reinforce austerity and is ill-suited to underpin the Government’s growth ambitions. In the same debate, I argued a similar point: the OBR does not use dynamic modelling, so growth measures will struggle for a full evaluation in the OBR’s calculations. These areas would have been a better target for the Government’s reforming zeal.
Thirdly, I regret that the Bill does not ensure that the OBR operates to high standards of governance. I cannot think of another public sector body which has an executive chairman and does not have a majority of non-executive directors. Like most independent quangos, its external accountability arrangements are weak. It is quite simply dangerous to allow a public body, which can exert great influence on the Government’s fiscal policies, to exist with weak internal governance alongside weak external accountability.
Lastly, I regret that the Government have used this Bill to peddle untruths for political purposes. At Second Reading in the other place, the Chief Secretary said:
“The country cannot afford a repeat of the calamitous mini-Budget of September 2022, when Liz Truss and Kwasi Kwarteng’s reckless plans unleashed economic turmoil that has loaded hundreds of pounds on to people’s mortgages and rents”.—[Official Report, Commons, 30/7/24; col. 1211.]
The Minister repeated the substance of that in his opening remarks. The fact is that interest rates were already on the way up in the fight against inflation, and they remain high for the same reason. They did spike immediately after the mini-Budget, but the Bank of England’s own internal analysis shows that two-thirds of the 103 basis points spike in the 16 days after the mini-Budget was due to the Bank’s own mismanagement of the risks inherent in LDI strategies. Furthermore, the Bank had already unsettled financial markets by failing to raise interest rates in line with the US and with market expectations. It does not reflect well on either of the Chancellors who succeeded Kwasi Kwarteng that they have turned a blind eye to these truths.
It was political opportunism that led to the creation of the OBR, and it is the same motivation driving this Bill. This is a poor foundation for legislation.
Lord Hain (Lab)
My Lords, two years ago the Tory faithful showed that they had no firmer grip on reality than Liz Truss by choosing a Prime Minister who engineered her own downfall and now blames absolutely everybody else. The infamous Truss mini-Budget provoked a crisis of confidence in Britain’s public finances by sidestepping the Office for Budget Responsibility, and this Bill will ensure that cannot happen again. The financial turmoil around the Truss mini-Budget, with its reckless £46 billion package of unfunded tax cuts and cavalier attitude to government borrowing, added to the economic chaos that seven successive Tory Chancellors caused over 14 years in office since 2010, dumping an appalling legacy in Labour’s lap.
First, they left office with real household incomes lower than when they came into government and working people with the highest tax burden for 70 years. The main reason was appallingly slow economic growth, due in large part to investment being significantly lower than in other G7 economies. Had the UK economy grown as fast as the OECD average over the past 13 years, UK GDP would have been more than £140 billion bigger, providing some £50 billion of extra tax revenue for public services and lower borrowing.
Secondly, the Tories gave up their seals of office on the 76th anniversary of the NHS’s launch with more than 7.6 million patients waiting for hospital treatment in England.
Thirdly, national debt, which stood at 65% of GDP in 2010 even after the financial crisis, is now touching 100%. The Tories have also bequeathed to Labour a huge £22 billion budgetary black hole about which Tory Ministers deliberately kept quiet and with which the Chancellor is now having to wrestle. She is right to stress that 14 years of damage cannot be reversed in one Budget. The OBR estimates that the decade of fiscal austerity imposed by George Osborne and Philip Hammond added up to nearly 9% of GDP—82% by cuts to public spending and 18% cent by tax increases—equivalent in today’s terms to some £200 billion of public spending cuts.
Do not forget that things could have been even worse. The noble Lord, Lord Cameron, admitted in his memoirs that, had he stayed in office after 2016, he would have pursued even more public spending cuts. George Osborne’s last Budget in March 2016 revealed plans for another £60 billion of public spending cuts, which would have brought total Tory cuts to £260 billion. Fortunately, Liz Truss lost office before she could attempt similar economic and social vandalism—but then, in this summer’s election, Rishi Sunak’s dishonest promise of national insurance cuts of £13 billion and defence spending rises of £7 billion per year would have doubled the black hole that the Chancellor discovered.
When critics claim that the Chancellor has embarked on George Osborne-type austerity, she is absolutely right to insist that giving public sector workers their first real-terms pay increase in 10 years is certainly not that. Osborne’s first Budget announced a two-year public sector pay freeze. Jeremy Hunt now claims:
“Labour have inherited a growing and resilient economy”.
He says that because UK GDP grew in the first half of this year, yet GDP shrank in the second half of last year as the economy sank into recession. We may have stopped going backwards but we are not yet any further forward than we were an economically destructive and financially irresponsible Conservative year ago. The Bank of England now expects growth to slow, not speed up, in the third and fourth quarters of this year—another sign of Tory failure and nothing like the rapid turnaround that we experienced under the last Labour Chancellor in 2009 as the economy recovered from the terrible global financial crisis.
This Bill is designed to block any repeat of such Tory antics and to establish a future under Labour of economic growth and stability. It will not be easy, but thank goodness we have grown-ups running the country again.
Lord Frost (Con)
My Lords, I find this a peculiar Bill. There are a number of odd things about it.
First, as my noble friend Lady Noakes mentioned, it seems odd that this is a money Bill. I do not challenge the decision, obviously, but it does not seem to affect the Government’s powers to raise taxes or spend in any way. I cannot help but notice that, as far as I can tell, the original Budget Responsibility and National Audit Act, which created the OBR, was not a money Bill, so it is odd that this one is. I do not question the decisions on this point but it does seem odd; I agree that it would have benefited from more scrutiny.
This feels more a constitutional Bill in some ways, but it is weak there too. The Minister billed it as a lock on government actions, and others have described it as such, but it does not actually stop the Government doing anything; it only requires the OBR to write a report if they do so, so it seems misconceived in those terms too. One has to ask what the point of the Bill is. It is, of course, a process Bill, but it is also a political Bill. It is written entirely to give an opportunity for the Government and the Labour Party to contrast their activity with the Liz Truss mini-Budget and the decisions taken in 2022. We have heard plenty of that already in this House today.
I think Labour will find two problems with that. First, as my noble friend Lady Noakes has already mentioned, the Bank itself says that two-thirds of the problem was its own mishandling of the LDI crisis. It is hard to see how, if this Bill had been in force and a report had been required, it would have had any effect on that aspect of the autumn 2022 problems. The other problem that the Government will find is that the world does move on. Their own so-called fiscal black hole, which they have already spent a large time creating, is where attention will move. They may regret this Bill before long, to judge by the Niagara Falls of public money that seems likely to pour out of the Treasury in the months and years to come.
I do not think that we are meant to take this Bill seriously. Outsiders recognise that; the IFS itself says that the proposal is “largely performative”. Even the Resolution Foundation describes its impact as “relatively small”. The real impact of the Bill will be to reinforce the position of the OBR in the constitution, but I am doubtful about that for two reasons.
First, for some of the reasons that have been said, the OBR is not a particularly effective institution. It clearly reinforces the Treasury view of the world. It has a poor record, as others have said and as it itself acknowledges. It is negative about Brexit and it repeats the zombie 4%-cut-to-GDP figure that was produced six years ago on the basis of reports put together before we even left the EU. It is doubtful about incentives and what makes a free economy tick. Forecasting is difficult—people bring their priors to it—but the answer is not to do it better or do more forecasts; the answer is to remove the privileged status of the OBR and the forecasts it gives in our economic decision-making. That is the first reason.
The second is that this Bill forms part of the tendency over the past 20 to 25 years to tie down elected Governments with Platonic guardians who think they know better than Governments. This is an intellectual error that began, reasonably enough, with Bank independence in 1997, but it cannot be extended to every single situation. Just because it is good for running monetary policy does not necessarily make it desirable to have independent controls on fiscal policy, to give independence to one regulator after another or to give independence to institutions with wider economic policy effects, such as the Climate Change Committee and many others. These are very different things. You cannot solve the problems that the country faces by constantly giving further independence to unelected institutions and bureaucratic processes.
I am afraid that this error has time to run yet. It is sapping democracy and will make it more difficult to deal with new economic challenges. I hope that, one day, we will reverse this trend and look at this panoply of constraints on government action with a much more sceptical eye.
Baroness Wheatcroft (CB)
My Lords, I welcome this Bill, short though it may be. We have already heard different views of the Liz Truss mini-Budget. I would merely say that it does seem advisable to try to thwart cavalier, determined efforts to avoid scrutiny by the OBR; it makes one slightly suspicious. However, the OBR can only be as effective as the information with which it is provided. It should be a cause of concern that the OBR chairman, Richard Hughes, has intimated that he was not kept fully in the picture towards the end of the previous Administration. We need to be very wary about a repeat of that.
I believe the whole basis of government accounting is flawed. It focuses solely on the short term, to the detriment of the country’s longer-term interests. Take the current controversy over the winter fuel payment. I will not enter into the rights and wrongs of that decision—we have already heard about those today, and will hear a lot more—although it seems to be a very costly exercise in terms of political capital, for very little financial gain.
However, the £22 billion black hole that we keep hearing about that the Government intend to fill, in part with the proceeds of cutting the winter fuel allowance, is actually more of a bottomless pit, for a major contributor to that £22 billion is the pay rise for public sector workers. That pay rise brings with it huge ongoing costs that do not feature because public sector pensions are not provided for. That is a massive obligation which is simply swept under government carpets. According to the whole of government accounts, public service pensions are the largest single liability on the Government’s balance sheet. In 2021-22 they were calculated at £2.6 trillion—greater than the national debt.
The idiocy of this system of accounting was highlighted in a recent article by John Crompton, a former investment banker who has also done three stints at the Treasury. He suggests that the latest public sector pay awards, cited as contributing £9.4 billion to that black hole, could also bring unfunded liabilities of between £3.5 billion and £4 billion every year. Crompton calls this treatment of government liabilities “downright misleading”, and I am afraid it is. The short-term saving from cuts such as the winter fuel allowance will be wiped out year after year by numbers that do not appear in the accounting at superficial levels.
So, while I welcome the Bill as a minor improvement, I ask the Minister whether he agrees that the time has come for a much more radical rethink of government accounting. Yes, cash flow is important, but, as every household knows, concentrating solely on income and expenditure is not the way to build a healthy economy. Major infrastructure projects, such as those cited by the noble Lord, Lord Eatwell, are essential. Cancelling them because of a short-term need to cut expenditure, as this Government have done, may be foolhardy. A proper net worth finances method of accounting, dealing with government expenditure over the longer term, would enable a much more effective long-term view to be taken of the costs and benefits of investment. A change to a more sensible fiscal framework would make for much healthier, better management of public finances, and it would contribute to the growth that we absolutely need.
The Minister explained that the Government have three aims as far as the Bill and the economy are concerned: stability, investment and reform. I ask him to really be serious about reform.
Viscount Chandos (Lab)
My Lords, this is a short Bill, which, as it is—in my view, rightly—designated as a money Bill, your Lordships’ House cannot amend. I propose to speak briefly. I add my voice in support of the Bill and of the persuasive reasoning set out by my noble friend the Minister in his opening remarks.
More unusually, I find myself in a position of agreeing with the noble Lord, Lord Frost. Yes, there is a political aspect to the Bill’s introduction. Ben Zaranko from the Institute for Fiscal Studies wrote that it
“is broadly sensible but largely performative … rather theatrical … some future Chancellor determined to misbehave”—
this sounds familiar—
“could almost certainly find a way to get around it”.
He concludes, however,
“but it nonetheless serves as a welcome commitment to fiscal transparency”.
That commitment should not have needed to be codified but the reasons that it is in fact necessary and welcome lie not just in the debacle of the Truss-Kwarteng fiscal event—that mini-budget, self-immolation or whatever—but in the persistent indifference, arguably contempt, shown by the last four Conservative Governments towards the principles of good governance and towards the institutions of the state, old and new.
Restoration of confidence in the professionalism of government and the stability of the UK economy is needed; this Bill is a useful contribution to that. Forecasting, to paraphrase Professor Niels Bohr—or Yogi Berra—is difficult, particularly about the future. Criticisms from some quarters of the OBR’s track record are not, however, well founded, so not a reason for dismissing the validity and importance of its assessment of any proposed large fiscal event.
The Bill increases fiscal transparency, rather than delegating decision-making to an unelected body. Extraordinarily, the shadow Exchequer Secretary, traumatised perhaps by his membership of the previous Government, lamented in the House of Commons in July that
“nowhere in the Bill … is the OBR empowered to prevent a Government from taking fiscally significant action of any kind”.—[Official Report, Commons, 30/7/24; col. 1215.]
The newly elected Labour Government face many challenges in the direction of the UK economy, arising from both the legacy of the Conservative Governments and geopolitical, demographic and technological trends. They are not abdicating responsibility for those decisions but seeking to ensure that those decisions are taken—and can be judged—in the context of the best possible independent analysis. This Bill is an important symbol and insurer of this, and I look forward to its passing all stages in this House and receiving Royal Assent—the first Bill to be enacted by this Government.
Baroness Bennett of Manor Castle (GP)
My Lords, in introducing this Bill the Minister said that
“economic stability is … the rock on which all else must be built”.
I respectfully suggest that that is a reflection of what has been described as “Treasury brain”, a subject that the noble Lord, Lord Macpherson, and I have previously had some discussions on. I would posit that the rocks on which our society depends are the health, energy, talents and skills of its people; the state of its environment; and the capacity of its infrastructure and services, from the quality of the housing to the facilities of our NHS. I pick up here the points made by the noble Lord, Lord Eatwell, and the noble Baroness, Lady Wheatcroft.
There is also the question: what is the economy for? The economy is there to meet the needs of the people and to care for our environment. We are not all here to work for the economy; I fear that is all too often forgotten. Also too often forgotten is the fact that the economy is a complete subset of our physical and natural world, and the understanding that we cannot have infinite growth on a finite planet. The UK is now using its share of the resources of more than three planets. We have to go back to one-planet living fast and that is the frame in which we always have to think about the economy.
Mainstream economic thinking has a phrase that it is very attached to: “ceteris paribus”. That is the Latin for “all other things being unchanged or constant”. I welcome the fact that the Office for Budget Responsibility has been showing increasing awareness of the fact that things are not staying the same in terms of the environment, physical and human, that the economy is operating in. I note that, since 2017 it has been producing the Fiscal Risks and Sustainability report, the last of which was presented to Parliament in July 2023. That report now lists 57 risks, some of which may be described as purely economic, but many of which relate to the state of the physical and human world. The OBR is picking up on some of the risks we are facing.
I particularly draw to the attention of noble Lords in this House who like to question spending towards the country reaching net zero, that the OBR says that there is the risk of a
“delayed transition to net zero raising … fiscal cost”.
I also note that four risks have been added to this latest report:
“persistent and high inflation, rising global trade tensions, global security threats, and cyber-attacks”.
At least the first three of those are very much related to the climate emergency. We are seeing the impact that the climate emergency is having, for example, on food prices—which, I am afraid, is only going to keep getting worse. “Ceteris paribus” certainly does not apply to the state of our world; the old economic verities will not hold, if, indeed, they ever did.
It is also worth noting that the OBR report talks about one of the unchanged continuing risks being
“the risks of financial crises and … non-payment of taxes”.
I note that, in your Lordships’ House, with backing from the now-Government and now-Opposition, we recently passed the Financial Services and Markets Act. That contains a push to grow the financial sector, which the OBR has identified as a significant risk to all of our futures.
Picking up the point on climate spending, the OBR said that if we do not act and invest now, the
“public investments needed to support the decarbonisation of power, buildings, and industry could reach £17 billion a year”
by 2030. As our own independent Climate Change Committee has been making clear, if we invest now, we save ourselves—or if you want to phrase it that way we save “the economy” —very significant costs and risks in future.
Finally, I particularly note the OBR’s reference to the number of people of working age not being in paid employment. The figure in the 2023 report is 2.6 million people of working age not in the labour force for health reasons. That figure reached 2.83 million in April. If we are going to look at our economic future, we have to think about investing in a healthier society. The OBR says that, although there is much talk about people being on NHS waiting lists, it is only a small part of the problem. We have a deeply unhealthy society, and that is something the Treasury and Government need to be thinking about when looking at their spending plans.
Baroness Lawlor (Con)
My Lords, I am grateful to the Minister for his exposition of the Bill. I declare a special interest, having worked on and published a number of independent analyses of the fiscal, monetary and regulatory problems of the UK economy as director of Politeia, the think tank at which I am now research director.
No one with the public finances at heart can fail to support a measure that strengthens transparency and a rules-based approach to the UK’s public finances. I am a devotee of fiscal stability and the need for rules, written or, as in previous times, understood. As the German economist Ludger Schuknecht has explained, many serious problems arise not because of bad rules, but because of the failure to implement the rules by using tools such as medium-term budgetary frameworks, spending reviews, financial risk analysis and independent fiscal councils to help achieve these aims.
But are the Bill and the structures—including the OBR, which it relies on—the way to ensure sustainable public finances and tighter fiscal discipline? I am unsure, and I have the following questions. First, is the Bill requiring an OBR assessment for financially significant measures or empowering the OBR to offer such an analysis, should it deem a measure such, enough to control unsustainable public spending and public debt? Is there any obligation on the Government to change their spending or debt policy if an OBR analysis predicts potentially dire consequences for the economy? If not, there is no fiscal lock, contrary to the Government’s suggestion, but simply fiscal advice. If so, that raises constitutional questions about unelected bodies and the power they exercise.
Secondly, the Government want to allow a higher ceiling for debt as a proportion of GDP by the fifth year of the cycle, from 1% to 1.2% of GDP, made public in advance of the Budget. Should we expect a further relaxation of the three previous rules for fiscal discipline and, if so, which will be relaxed, which will be changed and which will become less transparent? Will further changes be assessed by those who, like me, are sceptical of lax fiscal discipline?
Thirdly, no single forecasting institution can, or should be expected to, take the burden of advising a Government on tax and spending alone. We have heard today of some of the problems with the OBR which it has the modesty to recognise. Will the Government be open and invite other forecasters and assessments, equally independent of the Treasury and the OBR, to be sure to have other views?
Fourthly, what public spending will count as fiscally significant? I know the 1% of GDP measure has been provided, but here are two sorts of public spending that may be open-ended and not fall within the threshold, although they will eventually. The first is public sector pay rises. Rises of 5% or 6% for the 3.5 million public sector workers have been announced, adding to the potential for pay inflation, with other rises reported to be in the offing, including 22% mooted for doctors. Will the Minister agree that such pay rises should prompt an OBR report, particularly if they will likely continue to increase and reach the high threshold?
The second is the costs of immigration. According to Home Office figures, quite apart from legal migration—which is nearer to 1 million this year, net migration being lower—illegal migration via channel crossings amounted to 9,000 illegal immigrants crossing to the UK in July, August and the first week of September. Since no scheme in place is likely to deter these crossings, will the Minister confirm whether the additional management, administrative and legal costs—these have been itemised by previous Governments—for processing individual cases and providing public services, including housing and subsistence, will be averaged in an annual figure and considered as significant in order for an assessment by the OBR?
Lord Davies of Brixton (Lab)
I support the Bill—after all, it is in the manifesto—but it has faced some criticism. The comments of Ben Zaranko have already been mentioned. It ill becomes a Member of the Opposition to criticise legislation as performative, since that is practically all they did over the last five years.
The legislation is not performative but declaratory—it is setting out a declaration of intent, and it is to be welcomed for that. But—and there is always a but—I see in the Bill potential weaknesses, which arise from the exceptions in new subsection (4), and this issue of what counts as “temporary”. After all, the freeze in fuel duty each year is temporary, but it is now apparently part of our constitution. But I am more concerned about the term “emergency”. Is it a term of art? Who is going to determine what counts as an emergency? It is not defined in the Bill, and it has not been used in the charter. Ultimately, there is no track record of how it is interpreted in this context or who is going to decide.
We have an interesting case study here. Of course, we had a fiscal event on 29 July. I shall steer away from talking about winter fuel payments again. My assumption is that it was not large enough to trigger the size test, but did it trigger the emergency or the temporary test? I shall be interested in hearing my noble friend’s comments on how that undoubtedly fiscal event fitted in with the requirements of this legislation.
I was going to speak at more length on that but, inevitably, I was diverted by the comments made by the noble Baroness, Lady Wheatcroft, who came up with the perennial saw that there was some sense in including liabilities for future unfunded public service pensions in the national accounts. The whole point about unfunded pensions is that they are unfunded, and it makes no sense at all to treat them as though they were funded. However, if you are going to do the sums—or I could do them for you—and say what the current value of the future liabilities of these schemes will be, logically you should also have a figure for the future revenues that are going to meet those liabilities. It is not funded, so the future payments are exactly matched by the future taxation revenue that will pay those liabilities. You have to include both figures if you are going to account for them, and they are equal and opposite by definition. Including them in the national accounts makes no sense.
Lord Moylan (Con)
My Lords, I always think that legislation, of which this is not the only example, which arises in reaction to a single event is almost certain to be foolish, pointless and dangerous and to lead us astray. That is particularly so when reflection has shown that the initial understanding of that event—in this case, I am talking about the mini-Budget—was flawed, and that in fact it was not the mini-Budget and its fiscal measures that caused the market volatility.
It is now accepted—even by the Bank of England, I believe, in a recent paper—that about two-thirds of the volatility was caused by the Bank of England’s own misregulation of some dodgy LDI schemes in pension funds, which I do not claim to understand. Possibly the noble Lord, Lord Davies of Brixton, would understand them, given his background. They were happening in something like the equivalent of the darknet of the pensions industry, and they were what caused most of the problem. Perhaps we would be better off having a Bill that penalised the Bank of England for misregulating pension funds and other financial institutions within its purview, which might actually keep it on its toes.
My second point has already been made to some extent by my noble friends Lord Frost and Lady Lawlor. This Bill is a further step in the de-democratisation of our governmental decision-making. It is the transfer, in effect, of power from elected Ministers, who are accountable to the electorate, to unaccountable institutions on the basis of the claim that they are somehow independent. They simply have a view as to how certain changes in taxation and expenditure are going to affect the economy. It is perfectly possible for somebody else to have a different view—in fact, it is perfectly possible for a Chancellor of the Exchequer to have a different view. The noble Viscount, Lord Chandos, tried to persuade us that that was not in fact so, but of course the whole point of the Bill is to trammel and put handcuffs on the Chancellor of the Exchequer—and, of course, the first people who will be penalised by this and come to regret this legislation will no doubt be the current Chancellor of the Exchequer and her successors, if she has any, over the next few years. But that is the whole purpose of the Bill beyond its performative measure.
My third and final point was simply to say that I wanted to follow up on the remarks of the noble Baroness, Lady Wheatcroft. She said something to the effect that we were looking at our public accounts the wrong way. I agree with her to some extent but I want to make a different point. We have this enormous focus on the fiscal rules, which are essentially about the level of debt that the Government can carry—but that is a secondary matter.
The really crucial matter is what level of national income the Government should dispose of. To some extent, that is a political question, because inevitably the Labour Party will take the view that the Government should dispose of a larger sum and the Conservatives would probably take the view—I hope—that they should dispose of a smaller sum. It is not quite clear where the Liberal Democrats would stand on that crucial question. But that is the essential point that should drive all our politics. However, it is not simply a political matter; it can also be considered with regard to the effectiveness of that spending and whether that spending, as it increases, achieves a proportional improvement in the outcome of public services or whether it runs into what might be described as diminishing returns. I would say that the evidence is clear that at a certain point increased public expenditure starts to run into the problem of diminished returns when you measure the outputs that the Government actually achieve. Spending more money on the health service might produce more hospitals but does it produce better health outcomes? Are death rates from certain illnesses improving, and so forth? When you measure those things, it is clear from the evidence that simply spending more money does not produce proportionate outcomes.
The Government really need to focus on questions of that character, because the question of how you fund that expenditure, whether through debt or taxation, is an important one but essentially secondary.
Lord Murphy of Torfaen (Lab)
My Lords, I very much support the Bill. The debate has been extremely interesting, although noble Lords seem to want to rewrite recent history. The purpose of the Bill is to reflect on what happened when Liz Truss was Prime Minister. There is a revisionist view going around that she was not so bad after all. The idea that you can have £46 billion of unfunded tax cuts everybody knew was bonkers, which of course was why she did not involve the Office for Budget Responsibility and why she sacked an eminent civil servant, the Permanent Secretary to the Treasury, because he disagreed with her.
It is ironic that the Office for Budget Responsibility was brought in by the Government of the noble Lord, Lord Cameron. It was not a Labour proposal. We have had all this business about how it is not democratic and how we have to go to the people and all the rest of it—but it was brought in by a Conservative Government, apparently in response to what they regarded as the profligacy of the Labour Government of which I happened to be a member. At the very end of that Government, in 2008, 2009 and 2010, when we were facing the international financial crisis, and I was a member of the National Economic Council, the problems that we faced were global. Over the past number of months, the Conservatives have argued, rightly, that many of the problems that they faced in government were global, with Covid and the war in Ukraine, as well as the problem with energy supply.
Of course, the truth lies somewhere in the middle, but there is no doubt in my mind that if Gordon Brown had not tackled the financial crisis as he did, it would have been much worse not just for our country but for the whole of the western world. I recall having to meet the Prime Ministers of Canada and Japan because he had called together the leaders of all the major economies in the world to resolve this matter.
Having formed the OBR, the Conservatives, having used what they regarded as the profligacy argument, embarked on a terrible period of austerity which effectively eroded our public services to the extent that they are at rock bottom. It has been 14 years of austerity and now we are told that, in the last year of that, there was no comprehensive spending review, no effective management of revenue spending in the departments and no funding for policies announced during the last six or seven months, and the result of all that is that it is all the more important for there to be an Office for Budget Responsibility to give an independent and transparent account, analysis and assessment of where we are in our economy.
The noble Lord, Lord Frost, said we should not have these bodies; they should be elected and we should rely on the good sense of the British people to assess and make a judgment on the economic mess in which we now find ourselves. Well, they did. They gave the Labour Party a majority of nearly 170 and virtually destroyed the Conservative Party in the House of Commons. They did give a verdict on the Liz Truss mini-Budget and that is why we have a Labour Government and why the Conservative Party will be out of office for a very long time.
Lord Bilimoria (CB)
My Lords, Rachel Reeves said:
“This Government’s defining mission is to deliver economic growth. However, growth can only come through economic stability and a commitment to sound public money so never again can a government play fast and loose with the public finances. This new law is part of our plan to fix the foundation of our economy so we can rebuild Britain”.
The decision by Labour gives the OBR the most power it has ever had since the Chancellor at the time, George Osborne, set it up in 2010. Of course, we know that forecasts can be wrong. The noble Lord, Lord Macpherson, said that they are invariably wrong, but he made an interesting point: what about opposition forecasts? Will the Minister respond to that?
The noble Lord, Lord Macpherson, also said very clearly that forecasts are based on assumptions. I know that. We in business continually make assumptions on all our forecasts and they are not always correct. Laith Khalaf, head of investment analysis at AJ Bell, said:
“Ironically Liz Truss and Kwasi Kwarteng did more to burnish the credentials of the OBR than any politicians since its inception. As things stand, the OBR is now more commanding than ever”.
The Bill will mean that the OBR, which monitors and checks the UK Government’s financial plans, has the power to make an assessment on announcements over the course of a financial year that make permanent tax or spending commitments worth more than 1% of the UK economy. That 1% is just over £2 trillion—just over £20 billion. My noble friend Lady Wheatcroft spoke about the black hole of £22 billion. This number keeps getting bandied around: it is not even 1% of GDP, yet it is made out to be the only reason why taxes need to be put up. If taxes are put up in the Budget coming forward—taxes such as CGT equated to income tax—it will be so damaging to the country and its economy and to investment.
The OBR provides independent analysis. It is meant to be absolutely independent. The Chancellor must request the OBR to produce forecasts at least twice a year. The initial Cabinet Office briefing note stated that the Bill’s purpose was
“to capture and prevent those announcements that could resemble the disastrous Liz Truss ‘mini-budget’”.
The briefing was republished with the reference to Ms Truss removed. Will the Minister confirm that? The absence of public OBR analysis is considered to be a factor in the negative reaction of the financial markets that followed. After Kwasi Kwarteng’s Statement, as we know, market volatility led to increased government borrowing costs and the devaluation of the pound against other international currencies. My friend Sir Anthony Seldon has just released his new book, Truss at 10: How not to be Prime Minister.
The fiscal mandate is a Government’s guiding fiscal objective, so tax and spending policy decisions should be made with this in mind. It is to ensure that public sector net borrowing does not exceed 3% of GDP by the fifth year of the rolling forecast period. The noble Lord, Lord Eatwell, made a very good point that I ask the Minister to respond to: what is the effect of this on automatic stabilisers? According to the Treasury, the effect of Kwasi Kwarteng’s and Liz Truss’s mini-Budget, which would have reduced income tax by around £45 billion, would have been to reach a trend rate of growth of 2.5%—that was a noble objective. It was reported that the OBR had provided the Chancellor with a draft forecast, but this was not made public. Opposition parties and the Conservative chair of the House of Commons Treasury Committee urged the Chancellor to publish the forecast, and the lack of that OBR analysis has been cited as the major factor that contributed to the negative reaction to the mini-Budget in the financial markets.
We can go into the analysis—by the BBC, for example—of key aspects and consequences of the mini-Budget: unfunded tax cuts, a funding shortfall, market reaction, an impact on interest rates and pension funds, Bank of England intervention, loss of market confidence, political and economic repercussions, reform and an emphasis on credibility. The noble Baroness, Lady Noakes, made a very important point: why is this a money Bill? This means we have a limited influence on the Bill; I do not think that this should have been a money Bill.
To conclude, the Bill has received support from many quarters, including from the CBI, of which I was president for two years, from June 2020 to June 2022. Louise Hellem, chief economist at the CBI, said:
“Market stability is a key foundation to enabling economic growth and business investment. Ensuring large changes in tax and spending policy are always subject to an independent assessment by the Office for Budget Responsibility will give businesses and investors additional confidence in the stability of the public finances”.
Lord Sikka (Lab)
My Lords, this Bill produces comfort for Chancellors, even though the OBR acknowledges that there are shortcomings in its work. Right at the outset, can the Minister explain why the Bill does not permit the OBR to publish forecasts at its own volition or at the request of parliamentary committees? Why that particular restraint? The OBR’s reports are promoted as apolitical, but that does not mean that it is free from institutional biases. Neither the Treasury nor the OBR makes a distinction between capital and revenue expenditure. Both are lumped together to produce a forecast of government spending and debt, which is of little use in charting the long-term course of the economy. Does the Minister agree that these items should be separated?
The OBR forecasts government debt, but asks no questions about the composition of the debt. For example, government debt includes Treasury bills and gilts held by the Bank of England’s asset purchase facility, which amount to £643 billion. It is really a hangover from the quantitative easing period and should not be part of the government debt. The left hand of the government creates the money, then the right hand buys the Treasury bills with it, and, somehow, £643 billion turns up as a government debt. I cannot see any economic logic to this, and it really constrains the Government’s policy options. I hope the Minister can explain why the Government are content for this overstatement of their debt: it ought to be looked at.
The OBR asks few searching questions and rarely steps beyond the conventional. With apologies to the philosopher Bertrand Russell, I am reminded of the story of the inductivist turkey that became famous for its forecasting abilities. It collected daily data, noting the times when the flock was fed and watered. Soon, it began to predict when the daily feeding and watering events would occur. Everybody was in awe and it became a celebrity.
The OBR of the turkey world checked the calculations and confirmed that the predictions were accurate, but some had different questions. They wanted to know why they were fed and watered every day; why they were weighed every day; why they were caged; and why it was that some were taken out and never seen again. Such questions were not the flavour of the day, and the critics were whipped into silence. The rulers decided that the inductivist turkey should receive a specially minted gold medal. The next day, it was Christmas.
So it is here: key assumptions and wisdom are not questioned by either the OBR or the Treasury because they are all intoxicated with getting the forecasts right. The entire life of the OBR has been accompanied by policy failures: the flatlining of the economy; cuts in real wages; falling living standards; investment strike by the state; crumbling infrastructure; and people dying while awaiting a hospital appointment. The OBR never looks at the multiplier effect of the Treasury assumptions or the composition of the government debt but Chancellors are still comforted because, somehow, the OBR has said that everything is okay.
If the authentication of financial forecasts by so-called independent parties is so desirable, why do the Government not apply the same logic to other arenas, such as pensioner poverty, child poverty, income and wealth inequalities, mental health and social care targets? Perhaps, when he is replying, the Minister can explain the political indifference to the social squalor created by relying on forecasts.
Viscount Trenchard (Con)
My Lords, I congratulate the Minister on his appointment, if it is not too late to do so. I was delighted to learn from his interview with the Financial Times that he is working on breaking down
“very big obstacles to inward investment”.
This Bill is intended to contribute to financial stability; I imagine that the Government think that periods of relative financial instability have constrained foreign direct investment. That may or may not be true, but is it not also the case that foreign investors are more likely to invest in countries with relatively low rates of tax and relatively light and proportionate regulatory regimes?
The Government also make much of their democratic credentials but the effect of this Bill is to transfer power away from the democratically elected Government and the Chancellor of the Exchequer—accountable to the House of Commons—to an independent body that is, however well regarded it may be as a fount of prudential wisdom and the most formidable number cruncher bar none, still a quango. There are too many quangos and they have too much power, which has been relentlessly but steadily drawn away from Ministers. Most new substantive Acts of Parliament create a separate independent quango with its own offices, board of directors and substantial costs that are met by either taxpayers or consumers.
I was rather sceptical about the OBR when it was created by George Osborne. I did not believe that there was any chance that it would be a more accurate predictor of the consequences of any fiscal changes on the economy than the Treasury. Graham Stringer, speaking in another place last Wednesday, suggested that George Osborne created the OBR in order to trap an incoming Labour Government, restrict them and slow them down; he described it as
“an odd thing that we see this quango being gilded ”.—[Official Report, Commons, 4/9/24; col. 340.]
Is it not obvious that, as is reported in the media, the existence of the fiscal rules as adjudicated by the OBR severely limits the Government’s choices? Does the Minister agree that these limitations were behind the Chancellor’s decision to cancel infrastructure spending to meet public sector pay demands?
I am not sure that having the OBR really protects us at all from financial instability. I am pretty sure that the average voter does not have a clue what it is or what it does—but we have it, and we should make sure that it is as cost-effective as possible. I am sympathetic to the attempt made by my honourable friend in another place, Nigel Huddleston, who sought to amend the Bill to ensure that any changes in the fiscal rules would trigger a requirement for the OBR to issue a report. As the Government have committed to reduce the national debt, it is also critical that we understand the definition of debt in connection with the application of the fiscal rules. Without certainty in respect of these two points, it is hard to accept that the fiscal lock will be effective.
As was discussed in another place last week, it is also unclear what happens when a fiscal measure intended to be temporary—I understand that this means up to two years—runs on beyond that time limit. The example of income tax was given; it was introduced as a temporary measure in 1799 by Pitt the Younger. I ask the Minister whether there should be constraints on Ministers taking significant decisions on other measures that are not fiscal ones if it is considered that, severally or cumulatively, they may have an effect on GDP of over 1%.
Does the Minister not agree that it would be much better if the revisions to the Charter for Budget Responsibility had been published already? I agree with the noble Lord, Lord Eatwell, on this. Can the Minister tell your Lordships whether there will be an opportunity to debate the changes to be made to the charter in due course? The separation of the charter revisions from the Bill itself gives the impression of undue haste. I am tempted to agree with those who think that the Bill is not necessary and is as much concerned with political theatre as with making changes that will have any real positive effect on the operations of the OBR.
Lord Liddle (Lab)
My Lords, I strongly support this Bill and congratulate the Financial Secretary on the very able speech with which he introduced it. I do not see how an attempt to prevent a repeat of Liz Truss can be regarded as performative. Surely everybody would want to see that consequence.
My worry is that this Bill does not go far enough. In the past two years, we have seen a real failure of fiscal responsibility in the way in which Rishi Sunak and Jeremy Hunt justified big cuts in national insurance on the basis of public spending forecasts that were, as the noble Lord, Lord Macpherson hinted, completely unrealistic. This has now landed us in a very difficult position. When they made their public spending forecasts, they did not take account of public sector pay, which is part of Chancellor Reeves’ black hole of £22 billion. They did not take account of the need for social care reform, without which, as Wes Streeting has said, there cannot be any wider reform of the NHS.
In an excellent report published just today by Unison, we learn that local councils are at risk of going bust. There is also a crisis in our courts and prison system. The Conservatives committed themselves to a defence target of 2.5%, which they seriously said could be achieved by “efficiency savings”. These were completely unrealistic public spending forecasts on which tax decisions were taken. Worst of all, in order to finance them, the Government pencilled in a cut in public investment from about 2.6% of GDP to 1.9%, which is actually the reverse of what the country needs: a big increase in investment.
So, we have a big structural deficit on our current account that we have to correct. We can try efficiency savings, benefit freezes or putting off change and reform in the hope that growth will naturally increase, but I argue that tax will have to be part of the solution to this, because the public were misled by the last Government. However, when I say “tax”, I do not believe some people from our own side, who seem to think that we can deal with this problem by simply taxing the top 1%. Yes, the broadest back should bear the heaviest burden, but it should be broader than that to work without economic damage.
We need tons of investment to launch a new nuclear energy programme, invest in our railway infrastructure, reconfigure the national grid, apply AI to public services, build new towns which have adequate social housing and fund the modern industrial strategy based on promoting a new wave of entrepreneurialism from our excellent science base. I believe that we need tough fiscal rules; we have to plan for current spending and revenue to be brought quickly into balance. But at the same time, I agree with my noble friend Lord Eatwell that the rules have to be sufficiently flexible to accommodate worthwhile, spend-to-save measures in public services and invest-to-grow measures for the wider economy. I believe that, although fiscal rules matter, a convincing growth strategy matters even more to the financial markets, and the bond markets will back our ambitions as long as our investment plans are well conceived.
Labour has a unique or huge opportunity ahead of it. We certainly need prudence and certainly need to be disciplined, but we also need radicalism—a radicalism from what I would describe as the politics of the centre ground.
Baroness Kramer (LD)
My Lords, I am pleased to welcome the Bill. My colleagues in 2010 were very closely involved in the creation of the OBR in order to provide an independent analysis of the UK economy free from party politics. The noble Lord, Lord Macpherson, talked about the importance of the absence of political bias, and I think the noble Lord, Lord Murphy of Torfaen, echoed that same set of thoughts. We on these Benches believe that the OBR serves Parliament and the nation well.
A report from the OBR is not an examination judgment such as a “Good”, “Outstanding” or “Failing” from Ofsted. It is an analysis with which one can agree or disagree, but it enables policy and decisions to be made with deeper insight and challenged with greater insight. Obviously, forecasts must be part of that or the analysis is near meaningless.
Many noble Lords speaking today have suggested that there need to be further reforms, whether it is of fiscal rules, accounting rules or methodologies, and all that is worth looking at. We heard from the noble Lords, Lord Eatwell, Lord Altrincham, Lord Sikka and Lord Liddle, and the noble Baronesses, Lady Noakes, Lady Wheatcroft and Lady Lawlor. I have to say that I have a particular sympathy with the noble Lord, Lord Liddle, but it was also suggested by someone else—the name has escaped me—who challenged the current arrangement whereby the Treasury lays down the future spending plans that will be part of the OBR’s forecast. I would see much more scope for challenge there.
None of this is perfect, but to me it seems important that the OBR’s view does not dictate what policy or decisions will be. I say to the noble Viscount, Lord Trenchard, and the noble Lords, Lord Moylan and Lord Sikka, and the noble Baroness, Lady Bennett, who came at this issue from many different angles, that any politician or Chancellor with some backbone can accept or reject the conclusions that will come from the OBR, but presumably they will then have to explain in some detail why, and that process of challenge is crucially important.
A modern economy and a modern Government are so complex that, frankly, except for a small handful of institutions that have very extensive resources, it is extremely difficult to try to understand the primary elements of economic performance. It is really like trying to unravel a bowl of spaghetti if you come at it with the kind of tools, for example, that I would or many of my colleagues would have. But it is not just those outside of government that can use the OBR analysis; it is also data either to agree with or to challenge. I know from my very brief period inside government that the OBR view at least does something to check some of the groupthink that almost inevitably grows up inside government and which is a constant risk. Here is one of the opportunities to challenge that groupthink.
Frankly, I was stunned in 2022 when the then Prime Minister Liz Truss and her Chancellor Kwasi Kwarteng suddenly announced a mini-Budget with the biggest tax cuts in 50 years and soaring borrowing with no OBR analysis or economic forecast attached. The Bank of England, which also had no advance warning, had to step in to prevent financial meltdown as the markets went into shock, both from the content of the mini-Budget but also from the manner of its doing. I will not dwell on the consequences, because, as I think the noble Lord, Lord Liddle, said, the country gave its verdict at the last election, except to say that to this day ordinary people are still hurting, and hurting badly, from the consequences of that Budget and the manner of its introduction.
Why did the Truss Government turn their back on the OBR? They could easily have requested a draft forecast, and indeed one was offered by the OBR. I think it was because we had a series of Tory Governments which found economic truth at best “inconvenient”, and especially the consequences of Brexit—I heard that in some of the speeches today—and the permanent scarring of the economy that followed. Ministers would talk about the 2008 financial crash, Covid and the energy crisis arising from the Russian invasion of Ukraine. However, from on high or through self-denying ordinance, the B-word was banned, despite being far more damaging and a far more permanent blow. We heard speech after speech, month after month and year after year, in which there was omertà on that particular set of issues. As far as I can see, the OBR has never hesitated to name both the problem and the causes of a problem and to lay out its rationale. It can be challenged, but it has not flinched.
I very much hope that this new Government would never behave in the same way as Liz Truss—or any other Government, quite frankly; I hope that lessons have been learned. But the problem is that the horse has bolted. Financial markets will always suspect that a British Government are capable of the arrogance, self-interest and ideology to produce sweeping fiscal policy without any kind of unbiased or objective analysis—I think the noble Viscount, Lord Chandos, made that point. That indeed is the value of this piece of legislation.
This is a money Bill, so I cannot propose amendments. Were it not so, it would indeed be nice to be able to go through a process of probing amendments at the very least to try to understand more about some of the terminology, to understand what a “fiscally significant” event is and more about the issues of “temporary” and “emergency”. The noble Lord, Lord Davies of Brixton, raised similar points on trying to get greater clarity on this issue. I join others—I think the noble Lord, Lord Liddle, was the last to mention this—on wanting to understand how change can happen through the Charter for Budget Responsibility. We are going to be notified 28 days in advance, but I would love to have seen, at least from a Minister, some commitment to bring such issues to the Floor of the House for debate, which is where they belong—and remember that the Charter for Budget Responsibility was set up under the umbrella of primary legislation that started in this House. However, we are where we are, and when it comes indeed to the heart of the issue, do we support the Bill or do we not? We do.
Baroness Vere of Norbiton (Con)
My Lords, this has been an interesting debate with thoughtful contributions from all sides of your Lordships’ House.
From these Benches, we believe that information about the public finances should be open and transparent so that the public can hold the Government to account over decisions they make when it comes to spending taxpayers’ money. That is why the Conservative Government created the Office for Budget Responsibility in 2010, to ensure value for taxpayers’ money and that the Government of the day were making responsible decisions with the public finances. We therefore welcome the opportunity to ensure that this remains the case, but sadly that opportunity is not before your Lordships’ House this evening.
The Bill is so narrow in scope and effect that it can be assessed only for what it is; a naked opportunity to play political games and engage in a bit of political theatre, using a rushed and ill-thought-through Bill to fill a bit of parliamentary time. Its publication back in July was accompanied by an astonishingly overtly political statement from the Cabinet Office, as was noted by the noble Lord, Lord Bilimoria; this statement had to be swiftly withdrawn. This is clear evidence that the Bill is the Government playing political games, as was also noted by my noble friend Lord Frost. To my mind, the Government are not taking the issues of transparency and accountability seriously when it comes to public finances, and this hastily assembled Bill reflects that.
The furore around the statements made on the publication of the Bill was one of the first missteps from this Government, missteps that have continued and intensified. Later this week, the disastrous decision to cut the winter fuel payment will be debated in your Lordships’ House. The Government have decided to buy off the train drivers—with no strings attached—from the pockets of pensioners. The impact of this cut is clearly significant, not only on pensioners themselves but on the public services that support them. But there is no impact assessment accompanying the cut, and certainly no report from the OBR. The timing of the cut could only be described charitably as ill conceived—out of the blue, with no notice, as we head into the winter period. It is all beginning to look a little ragged, and the Government have been in place for only just over two months.
I return to the Bill: what does it actually do? Not much. To summarise, I say that it sets a rather high and woolly trigger threshold for a tax and spending change above which a third-party body, the OBR, would have to write a report. There is no brake, no lock, no stop. It does not stop anybody from doing anything—much as, I hear from many noble Lords, they would like it to do so.
The Minister in his opening remarks rehashed quite a large quantity of doom-and-gloom, “Oh my goodness, we didn’t know what we were getting into” lines about the nation’s finances, echoed by the noble Lords, Lord Hain and Lord Liddle. I struggle to follow the relevance when it comes to this legislation. Many noble Lords, including my noble friend Lord Moylan, pointed to the 2022 fiscal event as the single and only driver for this legislation.
The measures in the Bill are described by the Minister and the Treasury as a “fiscal lock”, which sounds very decisive. I have been trying to figure out who or what is being locked, fiscally or otherwise. It is not a lock. It is another example of the Government taking a very well-understood English word and simply redefining it to mean something else for political expedience. As my noble friend Lady Lawlor noted, it is merely fiscal advice—a report. The Bill does not create a lock. It does not empower the OBR to stop, to brake, or to prevent the Government taking fiscally significant action of any kind. I do not think that it was a lamentation by the Exchequer Secretary in the House of Commons, as noted by the noble Viscount, Lord Chandos, when he mentioned that it did it not do that; it was simply a statement of fact. This Bill is so riddled with holes and high thresholds that I cannot see it having much effect at all, other than to use up a bit of parliamentary time while other more contentious Bills are being argued about with the unions and other stakeholders behind the scenes.
Yet there was an opportunity to improve this frankly underwhelming Bill. As noted by my noble friend Lord Trenchard, my opposition colleagues in the Commons tabled a helpful amendment which would have improved transparency and accountability. The amendment laid in the Commons would have required the OBR to publish a report not only when there are significant and permanent tax and spending changes but when fiscal rules, including the metrics used, are changed. Fiscal rules are important. They set the boundaries within which the Government have committed to operate tax and spending decisions. Fiscal rules are an important pillar, contributing to economic stability. It must be right that the Government should not be able to change their fiscal rules and the underlying metrics without some analysis and assessment of the impacts to enable scrutiny. As noted by my noble friend Lord Trenchard, changing the metric for the debt rule would allow for billions of pounds of higher borrowing, which would be funded by working people and other taxpayers. If large ad hoc tax and spending changes are to be subject to OBR analysis, surely ad hoc changes to the fiscal rules should also apply. These are, after all, very significant fiscal decisions and, as I said, contribute to economic stability. Sadly, the Government declined to accept the amendment.
This Government are beginning to show signs of fiscal incontinence, and I fear that they will seek to conjure up headroom by tinkering with the fiscal rules. Right on cue, only today the Trades Union Congress voted in favour of reforming the
“unnecessarily restrictive and arbitrary fiscal rules”,
citing a £500 billion public investment deficit. That is a pretty big increase. Is that the sort of quantum that the noble Lord, Lord Liddle, has in mind? It is going to need quite a shift in the fiscal rules and quite some jiggery-pokery with tax rates. Rather than playing the hand that the Government have been dealt from the current pack, they may seek to simply swerve the difficult decisions and magic up a bigger pack of cards. Will the Minister confirm that, despite extreme pressure from the TUC, individual unions and the noble Lord, Lord Liddle, the Chancellor will stick to the current fiscal rules and metrics which guided the difficult decisions made by the last Government? Or will she make her difficult decisions substantially easier by changing the debt rule and piling the burden on to working people?
It is worth commenting on how the Bill works in practice, and I will turn to triggering the lock—or, in other words, exceeding the rather high and woolly threshold at which a third-party body must write a report. There are at least two elements to be considered by the OBR when deciding whether to write this report. The first is the size and nature of the tax and spending change. In the text of the draft Charter for Budgetary Responsibility, the Government state that “fiscally significant” is equivalent to 1% of nominal GDP in any single financial year in the forecast period. This is quite a substantial amount: just under £30 billion.
I accept that public sector spending is around £1.2 trillion and, as a percentage of that total, this is actually quite small. But realistically, discretionary spending is far less than that. Therefore, the Bill is setting a threshold which would be a massive change over and above what might be considered basal. It is so high as to be substantially meaningless—which possibly reverts to the rationale for the Bill in the first place being that single event. Furthermore, the impact must be in a single year, not the discounted value of the impact in the years in the forecasted period. Again, a carefully crafted but significant change could fall equally over many years and therefore escape scrutiny.
As importantly, how is the costing of the change decided? Who defines what is and is not a fiscal measure—a measure with a potential impact on the GDP of this country? I agree with the comments made by my noble friend Lady Lawlor, who also questioned the scope of what might be considered significant. Is the Minister able to give your Lordships’ House additional context about how that figure was arrived at and what will be in and out of scope? Might there be a temptation for a Chancellor to make one, two or more announcements totalling just under £30 billion, or 1% of GDP, over several years, and in doing so still substantially change the fiscal picture of our nation?
The second factor is that the change is excluded if it is temporary—if it will unwind within two years and is in response to an emergency. The world of the Treasury is littered with tax and spend decisions which were “temporary” and “emergency” at the time yet still became a permanent part of the fiscal picture. Many noble Lords mentioned income tax, which of course is one of the most famous, but I am sure there are many others—I think fuel duty was also mentioned.
This stipulation that temporary emergency measures be excluded puts the OBR in a difficult position. The OBR must decide what counts as a spending emergency and what does not—the point made by the noble Lord, Lord Davies of Brixton. The OBR is not part of decision-making within government, and it is reasonable to assume that the OBR will not have all the information available with which to reach a rather rapid judgment about whether something is an emergency.
If the OBR disagrees with Ministers, the process by which it would do so, and the consequences, are unclear. Would the OBR notify the Treasury of its decision, and would the Treasury then delay the announcement, or not? Would the OBR continue its work and produce a report, and over what timeframe? Would the OBR have full access to all the information relating to a temporary emergency measure? What impact would all this have on the markets?
I hope the Minister agrees that, in the haste to get this Bill into the current legislative gap, there are still significant questions to be answered. Has he considered whether the OBR should be under the same obligations when temporary emergency measures are announced but given the latitude to produce the report after the announcement has been made?
I have some questions around OBR decision-making, assuming that the measure is in scope of the arrangements currently in the Bill. How much notice will the OBR get that a fiscally significant announcement is planned? How much time will the OBR have to prepare and present its assessment, and how detailed will that assessment be? Is it the Minister’s expectation that a fiscally significant announcement will be accompanied by an assessment or a statement from the OBR setting out the reasons why one is not appropriate? There is a big grey area there in which I am sure the markets will show great interest. Will the OBR publish a summary of the information that it used to reach its determination one way or the other?
I note that the information in the draft Charter for Budget Responsibility text published on 18 July was quite limited. I would be grateful if the Minister could let your Lordships’ House know whether there will be any further guidance for the OBR around this, because I see pitfalls everywhere—where it may be charged with being too political when politics should not be part of what it does.
I listened with great interest to the wise words of many noble Lords when it came to the OBR’s governance and operations, particularly those of my noble friend Lady Noakes and, of course, my colleague and noble friend Lord Altrincham. The OBR cannot itself be beyond scrutiny, and I hope that the Minister will consider their words, alongside wider input into how we measure and present our public finances from the noble Lords, Lord Eatwell, Lord Davies of Brixton and Lord Sikka and the noble Baronesses, Lady Wheatcroft and Lady Bennett. There is an opportunity to continue to debate how public finances appear in front of the public, and it is incredibly important.
To conclude, the Bill before your Lordships’ House can be described only as a disappointment. It is with sorrow that I reflect on the political theatre accompanying it in political statements from the Cabinet Office and in contributions in the Commons and, to a lesser extent, your Lordships’ House. When he took office, the new Prime Minister seemed to imply that this Government would occupy the highest pedestal and would be above petty and theatrical politics. It is clear now that this is not the case. This Bill will be the first to receive Royal Assent under the new Labour Government; part of me thinks that is oddly appropriate. This Bill cannot be amended in your Lordships’ House, so to the statute book it will go.
Lord Livermore (Lab)
My Lords, it is a pleasure to close this debate on the Bill. I am grateful to all noble Lords for their contributions and questions.
As promised in our manifesto, we will support and strengthen the Office for Budget Responsibility. This Bill delivers on that simple but important step to help restore economic stability by bringing transparency and independent scrutiny into law, ensuring that every fiscal event which makes significant changes to taxation or spending will be subject to an independent report by the OBR.
Let us remind ourselves why this Bill is needed. Although the existing fiscal framework requires at least two OBR forecasts a year, there is currently no requirement on the Treasury to subject announcements on all fiscally significant measures to independent OBR scrutiny. In effect, that means that there are times when the Government can make fiscally significant announcements while opting out of both transparency and scrutiny. As the noble Baroness, Lady Kramer, said, this was a key factor in the disastrous Liz Truss mini-Budget, which did so much damage to our economy and to households, which are still paying the price for it today.
The previous Government knew that the measures they were taking were both unfunded and unaffordable but, as they were not bound by a forecast, they wilfully prevented one from taking place. That cannot be allowed to happen again. This Bill takes five important steps, which, in combination, will deliver on that commitment.
First, it requires that, before the Government make any fiscally significant announcement to Parliament, the Treasury must ask the OBR to prepare a report which takes the announcement into account. This guarantees in law that, from now on, every fiscally significant change to tax and spending will be subject to independent scrutiny from the OBR. The noble Baroness, Lady Lawlor, suggested that certain announcements should have been accompanied by such a forecast under these arrangements, a question also raised by my noble friend Lord Davies of Brixton and the noble Baroness, Lady Vere of Norbiton.
I will look first at the Chancellor’s July Statement. It did not represent a change to the funding allocated to departments or to borrowing plans. This Bill is aimed at ensuring independent scrutiny of significant fiscal announcements that would represent risks to macroeconomic stability. The threshold is set at 1% of GDP or more in any year. None of the policy announcements mentioned by the noble Baroness would qualify as fiscally significant within the definition of the Bill. However, that 1% is of course cumulative, and, unlike the previous Government at the time of the disastrous mini-Budget, when they wilfully prevented a forecast from taking place, the Chancellor has commissioned the OBR to deliver a full economic and fiscal forecast, which will be presented alongside the Budget on 30 October. This is when the Government will set out their fiscal plans, including how they meet our fiscal rules, in the usual way.
My noble friend Lord Eatwell spoke about those fiscal rules, as did the noble Baronesses, Lady Wheatcroft, Lady Lawlor and Lady Vere, my noble friends Lord Sikka and Lord Liddle and the noble Viscount, Lord Trenchard. The Government’s manifesto set out robust fiscal rules which will ensure that the current budget moves into balance, so that day-to-day costs are met by revenues, and debt must be falling as a share of the economy by the fifth year of the forecast. The Chancellor will set out the Government’s full fiscal plan, including the precise details of those fiscal rules, in the usual way: at the Budget in October, alongside an economic and fiscal forecast produced by the OBR. A revised OBR charter will be published at that point.
To further address the point made by the noble Baroness, Lady Wheatcroft, I point out that the Chancellor said, in her Mais Lecture earlier this year, that she
“will report on wider measures of public sector assets and liabilities at fiscal events, showing how the health of the public balance sheet is bolstered by good investment decisions”.
The noble Lord, Lord Altrincham, asked about the costs of the asset purchase scheme. The OBR provides detailed projections of the underlying cost arising from QT and the impact on different fiscal metrics. The latest OBR forecast for the financial year 2024-25 put HMT transfers to the APF at £34.5 billion. The separation of fiscal and monetary policy is essential, so the Government do not comment on the conduct or effectiveness of monetary policy.
Secondly, the Bill gives the OBR the power to decide independently to produce a report, if it judges the measures in a fiscal event to be fiscally significant. The noble Lord, Lord Frost, raised the question of how much impact this Bill will have, a point also made by the noble Viscount, Lord Trenchard, and the noble Baroness, Lady Vere. As my noble friend Lord Liddle said, we need look back only at the disastrous Liz Truss mini-Budget and at the current cost of the average mortgage—£300 a month higher than before that mini-Budget—to see how serious the impact of sidelining the OBR can be.
Of course, the noble Lord, Lord Moylan, is correct to say that the problems with that mini-Budget went much wider than just the absence of a forecast. As the noble Baroness, Lady Kramer, said, the announcement of £46 billion of unfunded tax cuts led to an unprecedented increase in borrowing costs. As a result, the value of sterling fell to a record low against the dollar, with a near collapse in the pension market. As my noble friend Lord Murphy rightly said, explicitly sidelining the OBR meant that no one knew how any of this would be paid for or how it would impact on the then Government’s fiscal rules. There is no doubt that this contributed to uncertainty in the markets. As the now Shadow Chancellor said at the time, the mini-Budget damage was, in part,
“caused by the lack of a forecast”.—[Official Report, Commons, 17/10/22; col. 395.]
The noble Baroness, Lady Vere, described this Bill as political theatre. However, what is particularly notable is the lack of an apology to the British people from the noble Baroness in her speech this evening for the damage that the Liz Truss mini-Budget did to family finances. I know that they are determined not to apologise, but I am not sure that is a wise strategy. As long as they refuse to do so, they may well continue to pay the electoral price for it.
To address the question from the noble Baroness, Lady Lawlor, and my noble friend Lord Sikka, this Bill will prevent the sidelining of the OBR by giving it the power to start an assessment if the Government announce fiscally significant policies without one. This means that the mini-Budget, and any other fiscally significant announcements like it, would have been subjected to the scrutiny of an independent OBR report. This Bill ultimately is about transparency and scrutiny.
The noble Lords, Lord Frost and Lord Moylan, and the noble Viscount, Lord Trenchard, whom I thank for his kind words, criticised some independent regulators. I respectfully disagree. This Bill ensures transparency and accountability. It does not give the OBR policy-making powers. As my noble friend Lord Sikka and the noble Baroness, Lady Kramer, rightly said, policy is very much for the elected Government. By adding a further level of scrutiny to fiscally significant announcements, this Bill takes nothing away from the power of this Parliament—in fact, greater transparency surely increases accountability. This Bill requires that policy-making is subject to proper scrutiny. Independent scrutiny of the public finances promotes greater accountability to the public, provides certainty for the markets and investors, and supports economic stability. We have seen what happens when the OBR is sidelined—higher interest rates and mortgage misery for millions.
The noble Baronesses, Lady Noakes and Lady Vere, raised the question of the OBR’s accountability. The OBR is accountable to Parliament. The Treasury Committee in the Commons can call in the chair and other OBR members, and both oral and written evidence submitted by the OBR are available on the Parliament website. It must also consent to the appointment of the OBR chair. In addition, a full update to the charter will be published on 30 October alongside the Budget, on which Members in the other place will vote in the usual way.
The noble Lord, Lord Macpherson, and my noble friends Lord Eatwell and Lord Liddle, noted that the Chancellor’s Statement in July set out robust reforms to further increase transparency in the public finances. In the light of the scale of the overspend left by the previous Government, mentioned by my noble friends Lord Hain and Lord Murphy, and the noble Baroness, Lady Wheatcroft, about which the OBR had not been informed, the Chancellor also announced additional measures to strengthen the fiscal framework. These require the Treasury to share with the OBR its own assessment of immediate public spending pressures, enshrining that rule in the Charter for Budget Responsibility and establishing that spending reviews will take place every two years, with a minimum planning horizon of three years to avoid uncertainty for departments and to bring stability to our public finances. The noble Lord, Lord Macpherson, asked about further reforms to the OBR, and I will of course look at his suggestions.
The noble Lords, Lord Altrincham and Lord Frost, and the noble Baroness, Lady Noakes, questioned the OBR’s forecasting record and some of the assumptions that the OBR makes. As my noble friend Lord Chandos said, this Bill concerns the scrutiny and transparency around fiscally significant announcements. However, I note that the IMF has said that the OBR’s analysis
“can be considered as best-practice, and could be used as a benchmark by other advanced countries”.
Meanwhile, the OECD has described the OBR as a
“model independent fiscal institution”.
The OBR’s forecasts for GDP and the public finances have typically been more accurate than the previous forecasts made by the Treasury. As the noble Lord, Lord Altrincham, said, the OBR is required by primary legislation to publish an annual assessment of the accuracy of its forecasts. All previous forecast evaluation reports are available on the OBR’s website.
The third element of this Bill is to define a measure or combination of measures as “fiscally significant” if they exceed a specified percentage of GDP, with the OBR charter then setting the precise threshold at 1% of GDP. The noble Lords, Lord Macpherson and Lord Bilimoria, and the noble Baroness, Lady Vere, discussed the setting of the 1% threshold. The purpose of the legislation is to ensure that large-scale fiscal announcements that could undermine macroeconomic stability cannot take place without independent scrutiny. This requires a threshold that is targeted at fiscally significant announcements. The current threshold will ensure that the provisions are triggered only when appropriate to support macroeconomic stability.
To answer the noble Viscount, Lord Trenchard, and the noble Baroness, Lady Vere, the 1% of GDP threshold is cumulative and treats savings and costs separately. This means that announcements made by government to Parliament in any financial year in the forecast period can be added together and trigger these arrangements. It will not be possible to simply announce savings to offset costs to avoid it. The Treasury will keep track of announcements as they are made over time and share these with the OBR as requested. This is an important part of how these arrangements will hold the Government to account on spending commitments.
Fourthly, this Bill ensures that measures do not apply to responses to emergencies. The Bill does this by not applying in respect of measures that are intended to have a temporary effect and which are in respect of an emergency. The OBR charter will define “temporary” as any measure that is intended to end within two years. In an emergency—for example, during a pandemic such as Covid-19—it may be necessary for the Government to take rapid action. In these cases, it would not be appropriate to hold back the response to the emergency until such time as a forecast could be produced.
My noble friend Lord Davies of Brixton and the noble Baronesses, Lady Kramer and Lady Vere, sought clarity on the definition of “emergency”. Given the unexpected and unpredictable nature of events, it is not possible to set out a precise definition of an emergency in legislation. However, the Bill contains clear limitations to ensure that no Government can inappropriately avoid independent scrutiny on its significant fiscal announcements.
The first of these limitations is that the updated Charter for Budget Responsibility notes that, when the Treasury believes something is an emergency, it would need to make it clear why it considers the situation to be an emergency. Secondly, this can be relevant only for temporary measures which are intended to end within two years. Thirdly, as set out in the updated charter, this will not simply be for the Treasury to decide. The OBR will have the discretion to prepare a report if it reasonably disagrees on whether the situation in question is an emergency. If it were to reasonably disagree, the OBR would be required to notify the Treasury Committee in the House of Commons of its opinion. I repeat that, in emergencies, it may be appropriate for the Chancellor to commission a forecast from the OBR to follow measures that need to be announced or implemented rapidly. That would happen in the usual way.
Finally, the Bill requires the Government to publish any updates to the detail of these arrangements, such as the threshold level at which they are triggered, in draft form, at least 28 days before the charter is laid before the House of Commons. This is a key safeguard in the Bill, preventing any future Government from choosing to ignore these arrangements by updating the charter without clear parliamentary consent.
The noble Baroness, Lady Noakes, and the noble Lords, Lord Moylan and Lord Bilimoria, raised the question of scrutiny of this Bill in your Lordships’ House. As the noble Baroness, Lady Noakes, and the noble Lord, Lord Frost, noted, this is for the Speaker in the House of Commons to determine under the Parliament Act 1911. This Bill focuses on the scrutiny of fiscally significant announcements—tax and spend—which is the remit of the other place. To reassure the noble Viscount, Lord Trenchard, the House of Commons will debate and approve the updated charter.
The changes introduced in this Bill are an important step in bringing much-needed stability to our economy, so that we never again see a repeat of the disastrous Liz Truss mini-Budget and the damage that it did to family finances. By empowering the OBR and ensuring that an independent assessment will accompany all fiscally significant announcements, it will improve transparency and accountability. Economic stability is the rock upon which all else must be built; it is the essential prerequisite for growth. This Bill is an important step as we fix the foundations of our economy, rebuild Britain and make every part of our country better off.
Royal Assent
Tuesday 10th September 2024
(1 month, 3 weeks ago)
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