(1 year, 9 months ago)
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Rachel Reeves (Leeds West) (Lab)
The reality of yesterday’s Budget is clear: long-term growth downgraded, household incomes falling, public services on their knees. Families are facing the biggest hit to living standards since records began. The only surprise was a huge handout to the richest 1% of pension savers. Yet again, working people and businesses—the key to our economic success—have been put at the bottom of the pile.
The questions people will be asking themselves after 13 years of Conservative Government are these. Am I and my family better off? Are our school, hospitals and transport systems working any better than 13 years ago? Frankly, is anything in Britain working better today than it did when the Conservatives came into office? The answer to those questions is a resounding no.
Labour believes that the tax burden must be shared fairly. That is why I have announced today that Labour will reverse the changes to tax-free pension allowances. It is the wrong priority, at the wrong time, for the wrong people. Instead, we would create a targeted scheme to encourage doctors to work overtime and not to retire early. That could be done at a fraction of the cost, as the British Medical Association has said.
The Government’s policy to give tax cuts to the wealthiest 1% is unravelling before our eyes. Paul Johnson, the director of the Institute for Fiscal Studies, says that even on the “optimistic” Office for Budget Responsibility costings, it will cost an eye-watering £100,000 per job retained. The Resolution Foundation said:
“The beneficiaries from these reforms stand to gain large amounts, and they are heavily concentrated among the very rich”.
It added that
“this giveaway could lead to inheritance tax ‘abuse’”.
Pensions expert John Ralfe has said that
“this is not about supporting a hard-pressed NHS, it is really a tax giveaway...for the very highest earners.”
Labour recognises the mess that the Government have got into with our NHS workforce planning, and we have called for changes to doctors’ pensions, but we will oppose this untargeted scheme for the wealthiest and we will put this measure to a vote in Parliament next week. I defy Conservative Members to vote in favour of a policy that they know will do absolutely nothing to lift the living standards of their constituents.
Last autumn we saw the Chancellor of the day announce reckless tax cuts to help the richest, too. Why does this keep happening? The reason why the Tories get the wrong answers is that they have the wrong priorities for our country and the wrong analysis of the economy. Wealth does not just trickle down from the top; it comes from the efforts of millions of working people and thousands of businesses. That is Labour’s approach to growth.
Theresa Villiers (Chipping Barnet) (Con)
The right hon. Lady denounces the abolition of the lifetime allowance, but it was actually something that never applied under Labour at all. If Labour is so concerned about its loss, why did it not introduce it in the first place?
Rachel Reeves
Gordon Brown introduced a lifetime allowance for pensions savings, as I am sure the right hon. Lady remembers. However, the point here is about priorities. For all our constituents, there is an average tax increase per household of £650, starting next month with the freezing of the tax thresholds and the increase in council tax. Yet yesterday, the only permanent tax cut provided in the Budget was for people who already have pensions savings of more than £1 million. I just do not believe that that is the priority for our constituents, and I think hon. Members right across the House, if they think about it, know that too.
Mr Deputy Speaker—is that what I call you?
Rachel Reeves
It is wonderful to see you in your place. We were told that this was a “Budget for growth”, but the documents published with this Budget confirm that the UK economy will shrink this year. The Chancellor expects us to cheer at the news that the economy will shrink a little bit less than he previously thought. Is that really what “good” looks like for the British economy?
The Office for Budget Responsibility also confirmed that we will have the weakest growth in the G7 this year and next year, and it saw growth downgraded for each of the last three years of the forecast period. All the while, the UK is the only G7 economy that is still smaller than it was before the global pandemic.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
This Budget will not do a great deal for my Slough constituents who are really struggling to make ends meet and pay their bills, apart from a big tax cut for the very richest in our society. My constituents will have the highest tax burden and the biggest drop in disposable income since the second world war inflicted on them. Does my right hon. Friend agree that this Budget will not actually help to solve the cost of living crisis?
Rachel Reeves
I have spent time in my hon. Friend’s Slough constituency talking to working people and businesses. On the most recent couple of visits there, I do not remember anyone saying, “The big priority for families and businesses in Slough is a tax cut for the 1%.” Instead, they were saying, “Let’s have a targeted scheme for the NHS, as Labour has called for, instead of this blanket approach for the top 1%.”
The Government have, to be fair, given us some growth: growth in stealth taxes, growth in mortgage costs and growth in NHS waiting lists. There is no plan for the future, just a Tory legacy of pain. It will take a Labour Government to spark and sustain growth, lift people’s living standards in every part of the country, meet the challenges of the future and achieve the change that our country desperately needs.
When I meet people in industry, I hear frustration from employers who cannot get and retain the staff that they need. It is a feeling the Tories know all too well, with three Prime Ministers in one year, and the current Chancellor the fourth in that role since just last summer. Yet somehow, it is the same Tory Government. It is a bit like Trigger’s broom in “Only Fools and Horses”, with its 17 new heads and 14 new handles, only much less useful.
After his five months as Chancellor, the right hon. Member for South West Surrey (Jeremy Hunt) might feel that he should qualify for a Conservative party long-service award. In fact, of the past three Chancellors, he is the first to deliver a Budget, although the last Chancellor did last long enough to deliver a mini-Budget that crashed our economy—an extreme experiment in ultra-Tory ideology, using Britain’s economy and people’s livelihoods as their laboratory. It must never happen again.
Alex Cunningham (Stockton North) (Lab)
Our country has some amazing assets and amazing opportunities to invest in the green industries of the future, but we see a lacklustre plan from the Tory Government to exploit them. Does my right hon. Friend agree that this Government of gimmicks have all but given up on leading the way and creating jobs and opportunities as we decarbonise our economy and, in reality, want to import everything from abroad? Surely it is time that they nicked our plan.
Rachel Reeves
I know that in my hon. Friend’s constituency, there are huge opportunities for the jobs and industries of the future—for example, in carbon capture and storage and in green hydrogen.
I will not be churlish: I must admit that there were some good ideas in the Budget yesterday—the ones that my colleagues and I have announced in the last few months, which we are happy to support. There was a fairer deal for people on prepayment meters who are paying a premium—we called for this last August. There was also preventing a fuel duty increase, a plan to help the over-50s back into work and better childcare provision for working parents. They were all called for by Labour and are now backed by the Tories. The truth is, however, that after 13 years of Tory Government, people will rightly ask, “Is that it? Is that really all they think it takes to reverse 13 years of low growth, falling living standards and crumbling public services?”
Of course, we welcome the freeze in energy prices—after all, we proposed it—but politics is about priorities. Labour first called for a windfall tax to help people with their bills 14 months ago. We were clear that keeping energy prices down was our top priority, and that it was wrong for oil and gas giants to profit from the windfalls of war at everyone else’s expense. Yet again, however, the Chancellor chose yesterday to leave billions of pounds of windfall profits on the table, which could be supporting families and businesses during this cost of living crisis. It is a question of who pays, and the Government are turning to the public and saying, “You.”
There seems to be a disconnect between what I heard from the Chancellor yesterday and the experiences of my constituents and many people across the country. The Tories claim that their plan is working, but the Resolution Foundation says that the typical household will be £1,100 worse off as a result of the Government’s policies over the period of just this Parliament. Is that really what success looks like to them?
The reality is that people are still weighed down by a prolonged cost of living crisis that is taking its toll. Debt advice organisations have faced a tidal wave of demand from people, but incredibly, the jobs of thousands of debt advisers are at risk. Let me be clear: more people are struggling not because they have forgotten how to budget, but because Tory Budgets are simply not working for them.
One of the biggest costs people face is their monthly mortgage or rent. The Chancellor said yesterday that the impact of the mini-Budget had disappeared—seriously? He should tell that to the family facing a £2,000 hike in their mortgage payment, as confirmed by the Office for Budget Responsibility yesterday. That means less money to spend on the local high street, meals out with the family or an annual holiday. That is the lasting damage that the Conservatives have done to the living standards of working people. The last thing that the country needed in the middle of a cost of living crisis was a Tory mortgage penalty.
Despite all the damage that the Tories have done, I am optimistic about the future for our country. I have had the privilege of seeing great innovation across Britain, from the development of battery operated trains at Hitachi in County Durham to hydrogen-powered engines at JCB in Staffordshire and pioneering research at Rolls-Royce into carbon neutral aviation. I know the potential that we have as a country. That is what Labour’s green prosperity plan is all about. It is a plan to decarbonise our economy, drive down bills and let British businesses and workers compete in the global race for the jobs and industries of the future.
Iain Stewart (Milton Keynes South) (Con)
The right hon. Lady rightly points to the great innovation, research and development that is happening in British companies. Does she not agree that the measures that the Chancellor announced to help to discount research and development will be a major boost to such industries?
Rachel Reeves
The problem is that last autumn, the Chancellor announced a scrapping of the R&D schemes, but then brought back something this week that we are supposed to cheer about. The plan that Labour has set out will rely on Government and business working and investing together.
As President Biden’s Inflation Reduction Act galvanises green energy in the United States and Governments from Europe to Asia and Australia respond, it is not enough here in Britain to cling to old ideas and old methods while other countries steal ahead in the global race. Our growth plans will be alongside a modern industrial strategy, reform of business rates, changes to the apprenticeship levy and measures to fix the broken Brexit deal in order to increase the order books for British industry. There is so much more that the Government could be doing to boost growth, create good jobs and get Britain’s economy firing on all cylinders, but I heard so little of that in the Chancellor’s Budget yesterday.
The verdict is in. The Federation of Small Businesses says that the Budget leaves “many feeling short-changed” and that
“the Government’s lack of support for small firms in critical areas is glaring.”
It says that
“trickledown economics here simply does not work.”
The British Chambers of Commerce highlights that, yet again, the Government
“failed to reform business rates”,
and the Society of Motor Manufacturers and Traders says:
“There is little that enables the UK to compete with massive packages of support to power a green transition that are available elsewhere.”
The Institute for Fiscal Studies describes capital expensing as “temporary tweaks”, concluding that:
“There’s no stability, no certainty, and no sense of a wider plan.”
As for working people, the TUC points out that:
“Real wages will not return to 2008 levels until 2026”
and that
“workers across the economy will have looked at this Budget and thought ‘was that it?’”.
This is a Government who are struggling to paper over the cracks after their 13 years of neglect and shoddy workmanship. The roof is leaking, the windows are rotten and the foundations are suffering from subsidence. The Tories are totally incapable of building the country and economy that we need.
Alex Cunningham
I am grateful to my right hon. Friend for giving way a second time, even though she would rather not. I wonder whether she has seen the comments from the Federation of Small Businesses, which said that, on investment in the labour market, the measures that small businesses were looking for are missing, and that the measures are well wide of the mark and irrelevant to the 5.5 million-strong small businesses in our communities.
Rachel Reeves
Small businesses are the backbone of our economy, and the words from the Federation of Small Businesses should have a chilling effect on those on the Government Front Bench.
Beyond the economy, growth rates and living standards, if we want any further evidence of the Government’s failure, just look at our public services. Public services play a crucial role in achieving a strong economy and a good society. They adapted during the pandemic and were critical to our response in the fight against covid, with people taking personal risks to keep others safe and supported. Thirteen years of Conservative Government has weakened our public services and devalued the people working in them. Labour would make choices in the national interest.
Yet again, the Budget failed to abolish non-dom tax status. As we know, non-doms have no bigger champion than in Downing Street, but Labour believes that those who make Britain their home should pay their taxes here. The non-dom rules are costing us £3 billion every year. Ending that tax exemption could fund the biggest expansion of the NHS workforce in a generation.
It is not just our NHS that has suffered. We have lost all kinds of community assets over the last 13 years, from libraries to Sure Start centres and youth clubs. Let us take one example: since 2010, 382 swimming pools have closed in England under the Tories. Yesterday, the Chancellor announced a £63 million package to keep the remaining ones open, but, at the same time, the Prime Minister has upgraded the local electricity network to heat his own swimming pool. I wonder whether he will be inviting the local kids who have lost their swimming pools to come and use his facilities.
This Government have no plan to clean up the mess they have made over 13 years. Each and every time they promise to solve a problem, they fail and the country pays the price. We need a Budget for growth, yet growth has been downgraded. We needed to raise living standards, yet household incomes are falling at their fastest rate since records began. We needed a proper windfall tax on the energy giants, but instead they continue to enjoy the windfalls of war. We needed a Budget for home ownership, yet mortgage costs have risen because of the Tories’ kamikaze mini-Budget last year. We needed a Budget with a plan to invest in our NHS workforce, but the Prime Minister and Chancellor chose to defend the non-doms instead.
The Tories have had their chance and they have blown it; they are out of ideas and they are out of time. We need a general election and a Labour Government to give our country its future back.
The Secretary of State for Work and Pensions (Mel Stride)
This Budget and the measures it sets out for providing additional support and encouragement for millions of people to re-engage with the labour market spoke to the very heart of our Conservative principles of compassion, of incentive, of self-reliance and of collective responsibility. Above all, it spoke to that age- old truth that work matters: that work is the source not just of income or paying the bills, and not just of supporting businesses or growth, but of something arguably greater still—of individual pride, of self-worth, of better health, and of making a fundamental contribution to the whole of society. That is the Conservative way.
Chris Stephens (Glasgow South West) (SNP)
The Secretary of State talks about compassionate Conservatism; does he believe the measures in the Budget will increase or decrease sanctions over the next 12 months?
Mel Stride
Our policy and rules around sanctions have not been changed by the Budget, but it is important that where somebody can work and is offered support to work and decides to take benefits and not engage with the system, sanctions can under certain circumstances be appropriate. That is not to say that sometimes people will not have perfectly reasonable reasons for not engaging with the jobcentre, in which case no sanction will be applied. The hon. Gentleman seems so often to be suggesting that there is no scope or role for sanctions whatsoever within our benefit system, and that is not going to help the very people we are out to support.
This Budget will help break down the barriers stopping people moving into work or progressing within it, and it is most particularly a Budget for those who face the greatest employment challenges. It is a Budget for disabled people and those with health conditions, with new and extended employment support, better integration of work and health services, and, through our health and disability White Paper, the biggest reform to the health and disability benefits system for a decade. It is a Budget for older workers, with the removal of disincentives in the pensions tax system, and with more help to retrain and reskill and more tools to help people plan for the future.
Grahame Morris (Easington) (Lab)
I am fascinated by the Secretary of State’s contribution and the improvements in pensions, particularly for high earners, but did the Chancellor forget to mention the injustice to mineworkers and the opportunity presented to address that historical injustice through a fair share of the Mineworkers’ Pension Scheme to assist some of the people who are existing on meagre and modest pensions?
Mel Stride
I am very happy to engage in detail with the hon. Gentleman on the specific point he raises, but as to the general point of removing the pensions lifetime allowance, Labour has to decide exactly what its policy is. The right hon. Member for Leeds West (Rachel Reeves) tells us this afternoon that she is against the policy, but we know that it will mean that thousands upon thousands of additional highly skilled people working in the national health service will as a consequence stay in the national health service where we need them. The shadow Health Secretary, the hon. Member for Ilford North (Wes Streeting), who is in his place on the Front Bench, made exactly the same point not that long ago—[Interruption] —saying that a failure to act could cost lives. I say to the right hon. Lady: what is it? Political opportunism, or standing shoulder to shoulder with our national health service and the millions of people up and down the country who depend on it?
Rachel Reeves
My hon. Friend the Member for Ilford North (Wes Streeting) called for a targeted scheme for doctors. That would be at a fraction of the cost. Can the right hon. Gentleman tell me how many doctors will benefit from this scheme?
Mel Stride
I have made it very clear that thousands upon thousands will be affected. The right hon. Lady is adopting a completely perverse policy in view of the position taken by the shadow Health Secretary until quite recently, when political opportunism around this Budget reared its head. I say that we should stand up for the national health service and the millions of people who depend on it, and we should do what is right for them. That is the right thing to do.
This is also a Budget for parents, with a multibillion-pound extension to childcare support. I note and appreciate the right hon. Lady’s welcome for those proposals. They formed a major centrepiece of the Budget, and I am pleased that she has personally welcomed them.
Mr Dhesi
I am so glad that the Secretary of State is talking about pension reforms, but the Resolution Foundation noted that the beneficiaries of these reforms will predominantly gain large amounts of money, and they will be concentrated among the very rich. Does he agree with the Resolution Foundation’s conclusion:
“The more you think about this policy, the worse it is”?
Mel Stride
I point the hon. Gentleman to page 9 of the distributional analysis that accompanied the Budget, where he will find that those in the lowest income deciles proportionally benefit the most from the measures in this Budget. It is thoroughly progressive. I urge him to look at page 9 of the distribution report, where he will find his answer.
This is also a Budget for people who are looking for work and want to earn more, with more intensive support through jobcentres to help people to get a job or increase their pay. In total, my Department’s measures in this Budget represent an investment of £3.5 billion to boost workforce participation.
Christian Wakeford (Bury South) (Lab)
To go back to the childcare proposals, they have the potential to be transformative, although the Chancellor did say that they will not fully come into force until 2026. For someone who has a one-year-old or a two-year-old now, their child will be too old to benefit. What is being done to help parents who are struggling right now?
Mel Stride
The answer to the hon. Gentleman’s inquiry is in the early measures, which I was going to come on to. The Chancellor has dealt with the one-month requirement for the up-front payment by making it clear that jobcentres will fund that payment. That will come in in the short term, as will the increase in the cap—the maximum amount that those who claim those benefits can receive.
Before I come on to specific measures in detail, I think it is important to put workplace participation in the wider context of a robust and resilient UK labour market and economy. As confirmed again by Tuesday’s labour market statistics, unemployment is at a near-historic low of 3.7%, payroll employment is at an all-time high and economic inactivity continues its downward trend. However, there are still 1.1 million job vacancies, and we have many people who could work and want to work, but who do not work. This Budget will help to unlock that potential and fill the vacancies. It builds on our key Conservative belief that we should make work pay, and on our sustained efforts to reward and incentivise employment to get more people into work. That is why, as well as keeping unemployment low, I am determined to see participation in the labour market continue to rise and inactivity fall. In doing so, we will see more people fulfil their potential and more employers get the skills they need to support their businesses and ensure the economy grows for the future.
Over the past few months, I and my Ministers have been leading work across Government to look in detail at the issue of participation in the labour market. I have looked carefully at the cohorts that make up the 8.9 million inactive people in the economy and the nature of the barriers these groups face, and I and others have thought innovatively about how we can help many of them into the workforce. That involved examining in detail international comparators, as well as engaging with a wide range of stakeholders and experts, and I thank in particular those who served on my expert panel.
It is clear from this work that concerted action across the board is required, and yet it is important to recognise that the level of economic activity in the UK is lower than in the United States, France and Italy. It is below the EU average and below the average of OECD countries. However, it is equally important to recognise that, whereas for most other comparable countries the increase in inactivity that occurred during the pandemic has since returned broadly to its pre-pandemic level, in the UK it has remained elevated. So this Budget focuses on economic inactivity and on the key groups that I considered in my review: disabled people and those with health conditions, the over-50s, parents and carers, and people looking for work or working a low number of hours.
We know that many disabled people and people with health conditions want to work and benefit from the positive impact on health and wellbeing that employment can bring. We have made good progress, contrary to the remarks of the right hon. Member for Leeds West. There are over 1 million more disabled people in work compared with 2017—a milestone that I am particularly proud of and that we marked last year, having delivered on this commitment five years early. That is a record of which this Government can be proud.
Sir Stephen Timms
I am pleased that the White Paper says the Department will keep a focus on the disability employment gap, which is the really telling indicator. Will the new target that the Secretary of State sets relate to that gap, rather than a rather arbitrary number of increased jobs?
Mel Stride
The right hon. Gentleman will know that hitherto we have indeed focused on a gap. The Department will come forward with something to say on that in the not-too-distant future, and he will have to wait until that point to know the exact kind of target, although I recognise that the current measure has value.
The measures we have set out in the Budget and in our health and disability White Paper will help to remove barriers, so that disabled people have the same opportunity as anybody else to thrive in work. Some 20% of those who have been assessed through the work and capability assessment as having limited capability to work and to look for work say that they want a job at some point in the future, but one of the barriers to work is the health and disability benefits system itself. For too many disabled people, the system feels like it focuses on what they cannot do, rather than what they can do.
Having listened to disabled people, the White Paper that we published at Budget yesterday sets out how we will fundamentally rewire the benefits system, changing it from a system that can often leave people feeling that moving towards work is too risky and that they might not be able to return to benefits if that work does not work out. I want to give people the confidence to try work without the worry that they will not be able to access benefits again promptly if a job does not last. Under our new approach, people will have the confidence that they will receive support for as long as it is needed. Our reforms will also provide additional support to those disabled and long-term sick who request it.
These reforms have been years in the making and follow the Green Paper that we published in July 2021. We have engaged widely on these changes, including with disability charities and disabled people’s organisations, as well as with disabled people themselves who have been through the current process and understand how and why it needs to change. Just as we have taken a measured approach to developing this way forward, so we will operationalise this approach with care.
Chris Stephens
The Secretary of State is being generous in giving way. A number of disabled charities are sceptical about the package that he is putting together because of the severe delays to the Access to Work scheme, which are blocking people from going into employment. How does he plan to tackle that in the coming year?
Mel Stride
As I just suggested, we will take a measured and appropriate approach to the delivery of a fundamental reform of how these benefits will work. It will involve primary legislation, most likely in the next Session next year, and it will be rolled out some time after that. There will be plenty of time to ensure that we have thorough engagement with stakeholders, disabled people and those who represent them, to ensure that we get exactly those matters right.
In addition, our new Work Well partnerships programme —delivered through the health system—will pilot a new model for delivering integrated work and health support in local areas, providing employment-based targeted health support to prevent people from falling out of work or to enable a return to work quickly. For those who need more intensive help, there will be universal support. We will work directly with employers to quickly match people with jobs and provide up to 12 months of personalised place and train support. This approach means that after helping someone into work, we will stay with them to ensure that they remain in employment.
We are also investing to expand the additional one-to-one support that work coaches are already providing to disabled claimants in one third of jobcentres. From the spring, we will start to make this extra support more widely available, so that it is in place across the entire jobcentre network by 2024. We will also work with the occupational health sector and employers to reform the market and improve access to quality occupational health services. That will include testing financial incentive and support models to help small and medium-sized businesses and the self-employed overcome barriers to occupational health services.
Mel Stride
It gives me great pleasure to give way to my illustrious predecessor.
Chloe Smith
My right hon. Friend is very kind. May I say how pleased I am to see this work making progress? Does he agree that all these factors together make for a golden opportunity to encourage employers to rise to the challenge and do more? All the support that he is laying out, and the major reforms that have been put on the table, also represent an opportunity for employers to recognise that they, too, will get support to encourage somebody to start with them, stay with them and succeed in their workplace.
Mel Stride
My right hon. Friend is absolutely right, and I thank her for what she did when she was Secretary of State, and before that as Minister for Disabled People, Health and Work. I am fully aware of the contribution that she made, having spent some months in the Department. She is right that we need to think about not just providing support on what one might say is the supply side, but making sure that employers are in the right place so that the demand is there. We see that across the various cohorts, including with Disability Confident and with those who interface with our 50-plus job champions, to make sure that they engage with more elderly workers in an appropriate way. She is right to raise that point.
There is little doubt that the experience and skills of older workers are a huge asset to our economy, but more than 1 million over-50s have taken early retirement. With them, they taken many skills and much experience from which business could benefit. Let me slay one myth: that older people will never return to work. We know that four in 10 50 to 65-year-olds who have left their jobs since the start of the pandemic would consider returning to work. Last year, we introduced a package of additional support for the over-50s, including DWP’s network of 50-plus champions, which is carrying out outstanding work. My right hon. Friend the Chancellor introduced significant encouragement to the over-50s through the changes he made to the lifetime allowance for pensions yesterday.
We know many people overestimate how far their savings and pensions will go in retirement, so to help more people in their 40s and 50s get a reality check about what retirement decisions mean for their long-term wealth and wellbeing, we are digitising the midlife MOT. This will deliver a fivefold increase in the number universal credit claimants who access the tool each year in jobcentres. We will also work with employers and pension providers to help nudge people to access it.
Gaining new skills and getting the right training and experience are vital to helping people move back into work, and that is why we are significantly expanding the number of placements in the DWP’s sector-based work academy programmes by 40,000 in the next two years, with around £30 million in funding just announced. Our new type of apprenticeship, returnerships, to be introduced by the Department for Education, will bring together the Government’s existing skills programmes, focusing on flexibility and previous experience and speeding up training.
Turning to parents and carers, we know that 1.7 million people say they are economically inactive because they have caring responsibilities. One of the biggest barriers to work is the affordability of childcare. To help parents return to work, the Budget expands the support on offer by providing 30 hours a week of free childcare for 38 weeks a year to eligible working parents of children aged nine months to 3 years. We will also increase support for parents on universal credit by paying the initial childcare costs for parents on universal credit up front, instead of in arrears, which we know creates one of the biggest barriers to moving into work. We are, as I have already stated, increasing the maximum amount that can be claimed.
It is right that people who can work and are available for work are helped to do so wherever possible. That is why I have put a particular focus within the DWP on testing and implementing new and innovative interventions that help unemployed people on universal credit to move into work and to support people who work only a small number of hours to progress. Through our additional jobcentre support pilot, we are rolling out daily work support across 60 jobcentres. That will occur over two weeks at two crucial points in a claimant’s journey when they are most at risk of falling out of the labour market.
We are also increasing the administrative earnings threshold in universal credit to increase conditionality. We are stepping up jobcentre engagement for partners in universal credit households who are not working or who have low earnings. Because this Conservative Government are on the side of young people, we are expanding the DWP youth offer to enable more people on universal credit to see a work coach in a youth hub or to benefit from the expertise of our youth employability coaches.
This Budget, together with our White Paper, will fundamentally change and enhance the effectiveness of the benefits system. It will provide more practical and financial support. It will boost participation in the workforce. It will turbocharge our labour market. It will unleash untapped talent up and down the country. It will pump renewed life into our businesses. It will strengthen our economy, and so strengthen our communities. It will still and will always be there to place an arm around those who need help the most. We on the Government Benches will never forget the power of work to change lives and to give to each and every one of us that vital chance—that gift—that employment brings.
Chris Stephens (Glasgow South West) (SNP)
First, I refer the House to my declaration in the Register of Members’ Financial Interests, as I will be making some remarks about public sector pay.
In this House a couple of years ago, I made a comparison that the Government were rather like those wicked characters the Warleggans in the period drama “Poldark”. I did not quite realise that that was a premonition on my part, because once again we have a Budget that benefits the rich on the backs of the very poor. The real issue here is what the Budget does not say and the huge disappointment it was.
Ministers confirmed this week that they are reneging on the promise given to me three years ago to publish the Department for Work and Pensions review of the factors driving food bank usage. The Chancellor referred repeatedly in his speech to the Prime Minister’s ambitions and objectives. One thing that the Chancellor did not mention was the Prime Minister’s stated wish to eliminate the need for food banks. Why no mention? Why no review? Why no costed plan to deliver on that particular ambition? The most vulnerable yet again are being failed by the Government and by the state. What possible reason or reasons can there be for not publishing what should be vital research to address the very factors that cause too many of our citizens across these islands to turn to food aid provision? Is it because the very factors that do so are the responsibility of the Government?
As we have been reminded by the leader of the Public and Commercial Services Union, of which I am the parliamentary chair, more than 40,000 civil servants—people on the Government’s own payroll—are having to resort to food aid provision. We know that many of those relying on it are people who have received a sanction from the Department for Work and Pensions, but we also know that some who are using it actually work for the Department, and are themselves responsible for and employed in delivering benefits to the poorest. Yet the Budget tells us in no uncertain terms that more people, not fewer, will be sanctioned. It is hard to reach any conclusion other than that the failure by Ministers to publish the Department’s own research on food bank use is due to decisions made by Ministers past and, I regret to say, present.
We had an exchange with the Secretary of State about sanctions, during which he said that there were some circumstances in which they were appropriate. However, we know from the Government’s own figures that the number of sanctions has skyrocketed in the last year. In response to recent written parliamentary questions, the Department has said it “would incur disproportionate cost”—yes, the answer to a written question contains the words “disproportionate cost”; I know that some Members will find that unusual—to find out how many children were living in households where a sanction had been applied, how many people living in sanctioned households were receiving hardship payments, how many people with a sanction had a medical condition, or how many people had been in hospital or attending a medical appointment when they were deemed to have failed to comply and were therefore sanctioned.
Patricia Gibson (North Ayrshire and Arran) (SNP)
My hon. Friend is talking about the impact and the scale of sanctions. Does he agree that the people who are sanctioned are pushed further and further into poverty, which goes against the Government’s own stated objective of getting people into work? The further into poverty people are, the more difficult it is for them to enter the workplace.
Chris Stephens
That is exactly what happens. What is also happening is that people who receive sanctions then miss out on cost of living payments, so they incur not just one punishment but a double punishment—and that, too, is pushing people into poverty.
Mel Stride
I have enormous respect for the hon. Gentleman, as he knows, but I genuinely wish to clarify one point. Is he at least saying that there are some circumstances in which a sanction is appropriate?
Chris Stephens
I will come on to that point, and yes, I will say that; but how can be it be humane to proceed with a ramping up of sanctions without knowing the basic facts, when Members are asking questions about, for example, how many children are living in households where a sanction has been applied? Does the Secretary of State not accept that with more people at risk of being sanctioned, now is the right time to roll out the yellow card benefit warning system for which many of us have been arguing, to ensure that misfortune does not lead to people being left destitute?
There are some things that the Secretary of State could do before sanctions are applied, and I believe that such a warning system is one of them and would help people into work. The Department did consider it, and we thought, when I was a member of the Work and Pensions Committee, that it was heading in that direction, but then it changed course. Perhaps the Secretary of State will want to look at the issue again. I would encourage him to look at the great work done by the Committee in this regard, and particularly at its suggestion that the yellow card system would be appropriate.
The fact remains that the measures in the Budget require those who are struggling on low incomes to jump through extra hoops, such as attending jobcentres even when they are working in what we all agree are vital roles, for example as teaching assistants or care workers. The earnings threshold has more than doubled in the space of just a year. This puts hundreds of thousands more people at risk of benefits sanctions, although we know sanctions do not work ethically, practically or economically. The Chancellor needs to understand that, no matter what he is promising for the future, far too many people are struggling to survive now.
There remains a large degree of scepticism about the employment support package, which the Secretary of State talked about today and the Chancellor referred to yesterday. Some believe that tighter sanctions will likely be a disaster for people on universal credit, and they will not help people into work, as my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) said. The Federation of Small Businesses has said that the proposals to help people with poor health to get back to work are “ill-designed” and poorly thought out, and some “won’t happen for years”. Those with health conditions and disability have been let down by a Government who have ignored employers’ views on what can best help. The FSB continued:
“Small measures on subsidising occupational health are welcome but not the big bang needed.
“Measures on the over 50s are token efforts at best…The principle of what’s announced on childcare is positive—but this Government’s Achilles heel is in delivery”.
So, as the FSB says, we will believe it when we see it.
The Royal National Institute of Blind People has said:
“For those of working age, employment should be a route to coping with rising costs. “
But it remains of the view that urgent action is needed
“to fix the Access to Work scheme—a scheme where, right now, thousands of people are facing severe delays of many months to get the support and equipment they need to do their jobs”.
I hope that the Secretary of State will note its comments, because Access to Work is clearly not helping enough people and the delays are preventing people from getting into work.
Not everyone is convinced that the childcare reforms will help get people into work. Even if the money is there to pay for childcare, there is no workforce—the pay is very bad—to deliver it. The UC changes in the administrative earnings threshold will mean more Department for Work and Pensions staff caught up in in-work conditionality, as well as swathes of extra work for staff in jobcentres. There was no mention in the Budget about whether there are any extra staff to deliver what we believe will be huge amounts of additional work. The Secretary of State is saying that there will be, so while he is answering that question, perhaps he can say what pay rise he is going to give DWP staff as well. They took industrial action yesterday. [Interruption.] I am chair of the Public and Commercial Services Union parliamentary group, but my union is Unison, of which I am a proud member. I think that answers the question from the Exchequer Secretary. I would have thought he would have done his research to have known that. Perhaps there is a very real need for civil service pay to be addressed, and I will come on to that later.
Another issue that has not been tackled is deductions. One measure that would have cost the Government very little but could have resulted in many fewer people needing to use food banks would have been to ease significantly the rate of deductions from UC. Better still would have been to waive deductions resulting from official error, or to introduce a one-off amnesty on deductions. Why no action on that, the single biggest factor affecting people going to food banks? Despite almost half of all households on UC now facing a deduction, during the last six-month period, ending January 2023, just 14 cases were fully waived and a further five were partially waived. So will the Secretary of State revise the guidance to ensure every household subject to a deduction is automatically informed of their right to request a waiver?
On public sector pay, the Budget offered nothing. As the Prime Minister sorts out his swimming pool heating, it is incredible that public swimming pools were the only public services mentioned for support in the Budget speech. Although the pension cap cut might help our NHS to retain doctors, the measure could have been limited to medicine or the NHS, rather than being a lifetime tax cut for the wealthy. The only mention, without actually announcing more money, was that cutting public sector debt would lead to more money for public services. Public sector pay bodies have noted that only a 3.5% pay rise is affordable under current Treasury allocation; as the IFS said, that is a political choice. The TUC has said that the lack of support for public services and for public pay is the “elephant in the room”. The Budget goes nowhere near a high-wage, high-skills economy.
With strikes all over the country, it is striking that the Budget said nothing about them. Public transport, public health and even public sector TV hosts are on strike, but the Government seem to prefer to fight a culture war over Gary Lineker than pay attention to ensuring that our public services have the funds they need.
The Government are again scrambling to fix the economic problems of their own making. Yesterday’s Budget is a huge disappointment to people, businesses and charities left paying for the UK Government’s mistakes. They created a crash a few months ago—there is selective amnesia about that—and they have not yet said sorry for it. There is, however, one thing on which I agree with the Chancellor, who said:
“Independence is always better than dependence.”—[Official Report, 15 March 2023; Vol. 729, c. 844.]
We could not have put that better ourselves.
Several hon. Members rose—
Mr Deputy Speaker (Sir Roger Gale)
Order. I remind hon. Members that, unlike the procedure on Budget day, there will be wind-up speeches today. That means that we shall go into the wind-ups at around 4.30 pm. Given that there are 25 or so Members standing, I am not going to impose a formal time limit, but I urge colleagues to confine their remarks to somewhere in the region of seven minutes. That will not, of course, include the maiden speech that may be made later this afternoon.
Chloe Smith (Norwich North) (Con)
May I—possibly in advance of myself—welcome the hon. Member for West Lancashire (Ashley Dalton) to the House? I worked closely with her predecessor on the British Sign Language Act 2022, and I look forward to her also taking a close interest in related matters.
I support this Budget, because I think that the Government can help British businesses to grow and British people to succeed. The Chancellor is right to try to do both by focusing on employment, because he can help more people into jobs. Three quarters of UK companies struggle with labour shortages, although we are not alone in that internationally. With over 1 million job vacancies, employers have to find talent in new places. They should be open to the nearly 9 million people who have not recently looked for work—people who are, in the jargon, “economically inactive”.
That is more than one in five people of working age. They include people who have retired early, are long-term sick or disabled, or have caring responsibilities. Among those 9 million people, there are 1.7 million who say that they want jobs. If businesses do not match those people with their 1.1 million vacancies, the country is stunted. Too many people are being wrongly written off.
My right hon. Friend the Secretary of State for Work and Pensions is right, then, to look at why fewer Brits are participating in the economy. The Chancellor knows what all our constituents know—namely, that taxes must stretch to pay for every person who is on benefits rather than in work. I think we all also know that immigration is not the solution to businesses’ gaps if billions of pounds are spent in failing to get British workers fit for where their talents can take them. I understand the Government’s acknowledgement in this Budget that the UK labour market can have access to talent from abroad where needed. I see the Migration Advisory Committee’s recommendations to address short-term pressures, but as the MAC does its wider shortage occupation list review, which will conclude this autumn, I urge my right hon. Friend the Work and Pensions Secretary not to waver in putting the health and skills of our own workforce first.
Every unfilled vacancy is a missed chance for a person to gain skills and experience. The cost of having millions of people who are not in work but who could be in work is both billions of pounds and an appalling waste of opportunity. The human price of 2.5 million people out of work with long-term sickness is an even greater tragedy. We should be moving heaven and earth to treat them and help them to be well.
We know that work is good for health, but the NHS does not link up with work. Musculoskeletal problems and mental ill health are two of the most widespread constraints on people’s functional ability, but in many cases they are treatable. I welcome the Budget’s tailored employment support in mental health and MSK health services, as well as the expansion of the well-established and successful individual placement and support scheme. Those measures and a few others will support people with long-term health conditions to access the services they need, effectively manage their conditions and feel supported to return to or reman in employment. I will be particularly interested to see the results of the pilot of the new programme, Work Well.
In the autumn, the Chancellor correctly prescribed:
“The NHS must help people into work.”
It was welcome that he explained yesterday that, to implement this idea successfully, the Department for Work and Pensions and the Department of Health and Social Care will work together. That is vital. When I served as Minister for Disabled People, Health and Work, and later as Secretary of State, we made some progress, but there is much more to do to demand, define and deliver what citizens really need from public support across both health and welfare.
The Budget is sensible in further promoting occupational health; businesses also have to invest more to help people to stay healthy in the workforce, because British firms need a strong workforce of their own and have every interest in retaining brilliant people once they have recruited them.
I wish to touch on the doubters who say that the Budget targets too few people given the gaps in our workforce, the million vacancies out there and the millions of people who could work. To that argument I say that it is not all about what the Government can do; it is about employers and society as well. The Chancellor is right to pull the levers that he has, but he does not have all the levers. Businesses must plan and invest in both skills and health to get the workforce that they need.
Society must recognise the urgent imperatives of inclusion. If our buildings, high streets and transport networks are not physically open to people with disabilities, and the boulevards of our culture contain blocks as well, some people simply cannot take part. I argue for universal design—for inclusive design from the outset—for tangible and intangible things throughout our society, because it allows everyone to take part from the start. That is the right thing to do and, what’s more, it is the smart thing to do for businesses as well.
Across Government, business and society, now is the time for high ambitions. That is one reason why I welcome the bold reforms to welfare that are set out in the “Transforming Support” White Paper. The other reason that I welcome that publication is that I wrote most of it. I hope it remains a great read.
Work will not be right for all, but it is wrong that too many people are written off from even trying a job. Everyone should have the same opportunity for a fulfilling working life, regardless of whether they have a disability or health condition. Many disabled people say they would like to work, with the right support, and thousands had their say as part of the process to put the White Paper’s ideas together. We focused, therefore, on stepping up employment support; improving trust and transparency in the system overall; and reforming the system for the future so that it focuses on what people can do rather than what they cannot.
People need to have the confidence that they will have the support they require for as long as it is needed, without the worry of losing out if they try work. We should not encourage people to “pass a test” by proving how ill they are; we should not sustain a distortion and disincentive in the welfare system that stops people from trying work if that is suitable for them.
Hand in hand with reform goes more support, so the new universal support scheme will be welcomed. I hope that the Chancellor and my right hon. Friend the Secretary of State have heard the cross-party determination— I add my own voice to it—that access to work should keep pace. We have seen strong progress with more disabled people being in work, and we should build on this momentum by setting a new disability employment goal and capitalising on employers’ willingness and need to find new talent.
I also wish to reflect on the other employment measures that the Chancellor announced yesterday. He is right to take an approach that spans all the elements of the problem of economic inactivity—or, in other words, do things for all the people who want to work and whose talents are wanted—so we should welcome the childcare measures, the measures for the over-50s, the focus on flexible working and more. We should also look around the globe: we could learn from Sweden and from Japan’s ageing society; on ill health and disability, we could look to Australia; and on making sure that the workplace and everything related to it is open to all, Canada’s Accessible Canada Act sets a clear vision of a country with no disabling barriers by 2040.
We need a range of solutions, because people’s positions, problems, motivations and incentives vary. But make no mistake: we face an urgent imperative. We need to take steps now, because the goals of growing the economy and halving inflation are important ones. Continued labour shortages block growth and bring inflation. The Prime Minister is morally right to cut NHS backlogs anyway, but he must also do so with this urgent need in mind: to get British people and the British economy back on their feet together.
The Prime Minister will also need to demand delivery across all of government to deliver such a big and important goal. I would like to see continued accountability, under one Secretary of State, for the labour market and all the levers that the Government hold to help people to start, stay and succeed in work. This should include the wide-ranging work of the Minister for Disabled People, Health and Work and the ministerial disability champions who need to drive transformation across all of government—national and local—on behalf of disabled people who should not have to battle bureaucracy daily.
Together, Government and employers can bridge the gap in our labour market. Without the action outlined in this Budget, the gap will get even bigger, which would be a tragedy for millions of Britons. With the action in this Budget and the progress on which it builds—of which I am proud to be a part—we can help more British people to succeed. Everybody’s talents should be included in growing our economy.
Ellie Reeves (Lewisham West and Penge) (Lab)
Today, I want to ask a simple question: exactly who does our economy work for? If the past 13 years are anything to go by, it is certainly not ordinary working people. We are seeing: wages flatlining; inflation soaring; mortgages rising; a generation forced to pay extortionate rents because buying a property is a forgotten dream; public services rolled back; and schools, hospitals and local authorities with slashed resources, but with demand through the roof. This is the Tory’s record after 13 years in power. What do they have to say? “Can’t pay your rising bills, then get a better paid job, take on more hours, cut your consumption.” In so many cases, this is not just out of touch, but insulting. It is insulting to the teacher in my constituency who has been living in temporary accommodation. She cannot afford private rent let alone get on the property ladder, so, for the past four years, where has she and her two children been living? She has been living in one room in a dilapidated hostel. Should she get a better job? It is insulting to the care worker who is already working 14-hour shifts and barely able to afford food and other essentials after paying her bills. Should she take on more hours? It is insulting to the family of the elderly lady who passed away this winter because she could not afford to heat her home. She could not even follow the advice to cut her consumption because she could not afford heating in the first place.
My constituents are paying the price of this Government’s failure to get the economy working for them. Instead, what have they received from this Government? They have received: a mini-budget that crashed our economy, pushing pension funds to the brink; dither and delay in taking on the oil and gas giants as they made their eye-watering windfall profits; and the highest tax burden in 70 years because the Government failed to unleash the sustained growth of which our country is capable. Indeed, we are the only G7 country with a smaller economy now than before the pandemic. But what would you expect when the Tories have spent more time trying to hold their party together than making any effort to hold our country together?
There is another way, a different approach that can fix our economy. Labour would give our country certainty, attracting foreign investment and getting our economy moving again. We would invest in the industries of the future, creating high-paid, skilled jobs, ensuring that we are a world leader in clean energy. We would make our tax system fairer, working in the interests of ordinary working people.
Instead, what did we get from this Government in yesterday’s Budget? A £1 billion handout for the richest 1% and their pension pots. Labour would scrap the non-dom status, end tax breaks for private schools and private equity bosses and reverse the changes to the tax-free pension allowance, using the money to give our schools and hospitals the resources they need for more doctors, teachers and nurses.
I started by asking who our economy worked for. The sad truth is that it works for far too few of us: not the elderly couple using food banks who are now having to consider giving up their pets to keep up with rising prices and higher bills; not the mother and her three children with respiratory issues living in a small, damp and mould-infested home who are now facing homelessness because their landlord is putting up the rent; and not the mother with terminal cancer, a priority patient, who collapsed on the floor unable to move, waiting more than four hours for an ambulance while her partner and young daughter watched and waited. Our country can no longer afford the Tories. It is time for a Government who understand what ordinary working people are going through, who make the tax system fairer, who ensure access to decent housing, and who deliver strong public services. All of that is possible, but only when there is a Labour Government.
George Eustice (Camborne and Redruth) (Con)
I give my advance apologies to the Minister and to Opposition Front Benchers for the fact that I will not be able to stay for the wind-ups due to a family commitment.
I believe there is much to welcome in this Budget. In particular, the availability of capital allowances will be very important for our manufacturing sector. I believe that manufacturing in this country has been undervalued for far too long. Allowing full offsetting of capital investment is going to be particularly important to those manufacturers, who in turn have a crucial role to play in the levelling-up agenda, since they are the ones out there in the country who will offer the high-paid jobs and do the research and development. But today, I want to focus on a different matter, which is the Government’s announcement on childcare. It is undoubtedly the case that this announcement will be welcomed by some, but for me it is only half a policy, because as the Chancellor said yesterday, its aim is to help those who want to return to work to do so. The operative words there are “those who want to”.
The Chancellor cited a poll that showed that 50% of mothers would return to work if they could afford it. A couple of things come out of that: first, half of mothers do not want to return to work, even if they could afford to. We should support them too, and we should value that choice. Secondly, if we did a different poll of mothers who had returned to work and put their children in childcare, and asked them a different, converse question—“Would you choose to spend more time with your child in those precious first few years if you could afford to?”—I think a very large number of those mothers would say yes. If we went further still and did a poll of mothers who now have teenage children, and asked them whether they regret not being able to spend more time with their children when they were under the age of five, in those precious pre-school years, I think many of them would say that they regretted not being able to do so, and often would have done if they were able to afford to.
The truth is that many mothers—many parents—return to work because they cannot afford not to, because there is a relentless cultural pressure that suggests that they must, and because they have concerns about losing their footing on the career ladder. It is a sorry state of affairs that our society does not value motherhood more than it does, and that the term “stay-at-home mother” is today almost a derogatory one. I also believe that the Treasury economists have got their numbers wrong on this. At the heart of the problem is the fundamental flaw in the way that GDP is measured. Let me give an illustrative example of two mothers with young children who are neighbours, if each of those mothers chooses to stay at home to look after their toddler, they are deemed economically inactive. However, if those same two mothers were to come out of their front door in the morning, swap toddlers and look after one another’s children for the day, and invoice one another at the end of the day, they would suddenly become economically active. The economists in the Treasury have something they can measure: something they can express in GDP, something they can value in the only way they know how to value things, which is money that can be measured. But has the economy actually grown as a result, or have we simply captured the social capital that is inherent in motherhood, monetised it, and forced it into a box where it can be measured? If we step back and look at what we have actually done in such a scenario, we can see that all we have really done is needlessly separate two mothers from their children for no better reason than to accommodate an inadequate economists’ formula. Current Government policy, one-sided as it is, is carrying on in that way. I think it is doubtful that it will create the growth that the Treasury hopes for, but what it will definitely do is enable Treasury bean counters to double-count the economic activity of two mothers looking after their children.
At the heart of this is something we have always known, particularly on the Government Benches, which is that GDP is not an accurate measure of the wealth of a nation. The Conservative party has always recognised that. Indeed, when David Cameron became Prime Minister in 2010, he said that
“it’s time we focused not just on GDP but on GWB—general wellbeing.”
He went on:
“Wellbeing can’t be measured by money or traded in markets. It’s about...above all, the strength of our relationships.”
Behind that central Conservative belief were a string of creative policies. Chief among them was the idea of a transferable tax allowance to support families, so that a partner who chose to stay at home and care for their child could have their tax allowance transferred to the working member of the household, and they could afford to have one of the parents stay at home and look after the child. I think it is an absolute tragedy that David Cameron never got to introduce that policy, because the family and a belief in the family was probably what defined him more than anything else. I do not know why he did not do it—I suspect he was ground down by bean counters in the Treasury—but my challenge to the Government today is to pick up the baton. They should reject the shallow and inaccurate mentality of economists, recognise the value of the family, recognise that GDP is not the only measure of a nation’s wealth, and bring forward proposals for a transferable tax allowance.
If a transferable tax allowance is deemed unattractive, the Government should look at what other countries have done. I understand that in France there is a slightly different system, in which tax allowances are linked to the number of children in a household. It achieves the same objective in a more targeted way, and perhaps we could consider pursuing that.
I know there is an obsession in the Treasury that taxation should be done on an individual basis, but that is entirely inconsistent with the approach we take to the benefit system, in which benefits are allocated on a household and family basis. The Treasury needs to make up its mind about whether it believes that benefits or tax should be done individually, or on a family or household basis, but it makes no sense whatsoever to have two different systems.
During the pandemic and during lockdown, I think some people reappraised their work-life balance, and perhaps some of the economic inactivity we obsess about today is because some people decided they wanted to spend a bit more time with their family. The Government could recognise and understand that, and try to accommodate it, rather than dishing up a menu of rhetoric around boot camps, productivity and so forth.
I hope the Government will pick up some of the proposals to recognise the family through the tax system. The Conservative party has been asking the Government to do this and, in particular, I pay tribute to my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates) for her groundbreaking work in this area. I urge Ministers to recognise that the failure to recognise the family in this way in the Budget must be corrected at the earliest opportunity.
Mr Deputy Speaker (Sir Roger Gale)
I call the Chair of the Work and Pensions Committee.
Sir Stephen Timms (East Ham) (Lab)
Thank you, Mr Deputy Speaker, and I apologise for my late arrival in the debate.
It is striking how hard it is for Conservative Chancellors to resist the temptation to hand out big tax cuts to the wealthiest while raising tax for ordinary people. We can sympathise with the Chancellor in that he meets many such people—many people among the 1% wealthiest pension savers in the country—who are very courteous and very nice to him over convivial dinners, and they explain to him their frustrations with the Government’s pensions tax policy. These are good eggs, and who could possibly begrudge them a £1.2 billion tax cut? But the reality is that pension tax relief is already massively skewed in favour of the best-off, and the Chancellor, when times are hard, has decided to give another billion to the wealthiest in pension tax relief.
I do welcome the adoption of the Select Committee recommendations on support in universal credit for the costs of childcare, which was announced yesterday. As the Secretary of State explained, allowing the costs to be paid up front from universal credit and lifting the cap—absurdly, it had not been raised since 2005—will remove very important barriers to work, including a barrier to those who are working part-time from working full-time.
There is much to welcome in the health and disability White Paper, which says that the system will be changed so that it focuses on
“what people can do, rather than what they can’t”.
That is laudable, but precisely the same form of words was used by Alistair Darling to introduce changes to the incapacity benefit system 25 years ago. Whether the detail turns out to be a good thing will depend on the detail, which is largely absent. The Secretary of State spoke about consultation. The Government’s ill-fated disability strategy came to grief in the courts because had not adequately consulted disabled people. We must hope that that lesson has been learned.
Nobody will mourn the work capability assessment, which the White Paper says will be replaced by
“a new personalised health conditionality approach”.
Can Ministers tell us what that means? The White Paper goes on to explain that it
“will provide more personalised levels of conditionality and employment support”,
but I am afraid that leaves us none the wiser. The problem is that, despite being years late, much of the vital detailed work does not seem to have been done yet.
I welcome some of the specific proposals to reform PIP—for example, I am pleased that the call to match people’s primary health condition with a specialist assessor will at least be tested. Many PIP assessments come up with the wrong answer, as we know, because when people appeal against the determination, the great majority win their appeal—in fact, the proportion who do so has been going up. The White Paper proposes to place more weight on the PIP assessment in future, so it is even more important that we get it right. The only way to do that is to record all the assessments, so that if the decision is subsequently found to be wrong, it is possible to go back, work out why and consider how to avoid the same mistake being made again in future.
The White Paper says that there will be an increase in recording, which is a good thing, but the Select Committee proposed five years ago that all assessments should be recorded, with an opt-out for the claimant if they did not want their assessment to be recorded. In the new contract for assessments to be agreed this year, the Department should instruct providers to record assessments by default with a clear opt-out option. That proposition is supported by all three assessment providers. It will ensure that there is an objective record of the assessment, which will reassure claimants and allow assessment quality to be audited. When recordings are available and the findings of assessments are overturned, the recordings should be checked at least on a sample basis to see whether an erroneous outcome could have been avoided.
I welcome the White Paper’s commitment to test the feasibility of sending a copy of the assessor’s report to claimants automatically before the decision is made, which was also recommended by the Select Committee five years ago. I hope that the feasibility testing will be brief so that that can be introduced across the system soon.
It is disappointing that there is still not yet a target for disability employment in the White Paper. The Government congratulate themselves on achieving the previous very undemanding target early, but I am pleased that the White Paper says:
“Our goal to reduce the disability employment gap remains.”
In the 2015 election campaign, David Cameron announced a target to halve the disability employment gap. Unfortunately, that target was quickly scrapped as soon the general election was out of the way. I hope that a clear target on the disability employment gap will now be adopted.
Much will depend on the support that disabled people receive from work coaches. Polling by the charity Scope found that half of jobseekers with complex disabilities do not feel supported by work coaches. The initial training for work coaches does not seem to cover the barriers to work faced by disabled people, and jobcentres lack the specialist assistive technology that many disabled people need to look for and apply for work.
The White Paper refers to the potential of the UK shared prosperity fund to provide employment support. It is disappointing that there will be, I think, a two-year gap between the European social fund ending and the UK shared prosperity fund being allowed to support employment projects. A witness to the Select Committee yesterday suggested that the flexible support fund might be expanded, at least temporarily, to try to bridge that gap.
That could lead to a large amount of important employment support capacity not being lost, which it will be if the gap is allowed to take effect.
Lastly, I appeal to the Secretary of State to spare us the embarrassment of the Department’s appealing against the ruling this week by the Information Commissioner that the Department’s research on the impact of benefit sanctions must be published. The Department promised to publish it. As was her wont, his predecessor but one, the right hon. Member for Norwich North (Chloe Smith), decided to hide as much as possible if it contained any hint of a question mark about the Department’s policies. I welcome his review of that approach, and I hope he will show with this particular case that things have now changed.
Theresa Villiers (Chipping Barnet) (Con)
The worst health emergency for 100 years and the worst energy price shock for 50 years have done severe damage to our economy in the last few years, but the Budget has demonstrated the positive impact of the difficult decisions taken in the autumn statement to repair the public finances and restore stability after the damage done by global economic turmoil. As we have heard, unemployment is near a 50-year low, productivity is higher now than it was before the pandemic, and the OBR predicts that we will not go into recession, that inflation will fall and that growth is returning. That means we are on track to meet the first three of the Prime Minister’s five priorities, which are to halve inflation, grow the economy, reduce debt, cut NHS waiting times and stop the boats.
At the heart of the Budget and the Government’s wider economic policy is helping people with cost of living pressures. Taken together, the measures in the Budget and those previously announced are worth £94 billion over this year and next—one of the largest support packages in Europe—which is an average of more than £3,300 for every household in the country. In advance of his statement, I asked the Chancellor for the continuation of Government support for energy bills. I also made the case for families struggling with childcare costs, raising the issue alongside others in Parliament just a week or two ago, so I am really pleased with the plan to extend the 30 hours of free childcare for working parents to cover children from the age of nine months to four years. It is also very welcome that the childcare component of universal credit can now be paid up front.
This package is a truly radical set of changes, and investing in early years education and childcare is a sound economic move. Not only will it bring more parents back into the workplace to help address labour shortages; high-quality early years provision can also be an engine of social mobility, helping children to get the best start in life in order to enable them to realise their potential and succeed in their aspirations. The increase in the rates to be paid to childcare settings for delivering the free entitlement is a crucial part of this endeavour. It has been a key ask of the sector, but what is now proposed is still a very big change and implementation will not be easy, so I will be scrutinising progress carefully as a member of both the all-party parliamentary group for nursery schools, nursery and reception classes, and the APPG on childcare and early education.
I welcome the changes to the pension tax rules, which have been pushing experienced GPs and hospital doctors to cut their hours and retire early, just when we need them most. I have raised that problem with successive Health Secretaries and Chancellors of the Exchequer. The lifetime allowance is, I am afraid, a classic example of where taxes get so high that they deter work and depress economic activity. It is not just about the very high taxes paid if a person hits the lifetime allowance limit; it is also about the uncertainty, which means that doctors have cut their hours even if they have not hit the limit, because they fear reaching it. Both are causing problems with the retention of our hard-working doctors, so I believe that the changes announced by the Chancellor yesterday will play an important part in reducing those NHS waiting times in the way that we all want. I hope that it will also mean that my constituents have faster and better access to GP appointments.
Finally, I want to highlight some areas where further action is needed in relation to Budget matters. Implementation of reforms relating to the regulatory climate for artificial intelligence and the approval of medicines, as announced yesterday, are welcome, but I would like to see a more concerted push to improve regulation to make it more targeted and more agile and to ensure that it keeps up with technological change. This area can play a crucial role in raising productivity, boosting growth and making this country the science super-power that the Prime Minister wants it to be. It is also crucial to raising living standards in the long term.
The taskforce on innovation, growth and regulatory reform set out a blueprint for starting this reform process, and I would ask the Minister to report back on progress in implementation of the taskforce’s recommendations. I welcome the indication by the Chancellor that he will come back with a plan for one of TIGRR’s key proposals —to unlock productive investment from pension funds—but we do need to get on with this. The freedom to make our own choices on regulation and design these rules according to our own national interest is a key benefit from Brexit, and we need to grab the opportunity that it presents.
Lastly, I fully back, of course, the caution shown in this Budget on the public finances. Bearing down on inflation and getting debt under control must be our top priority. But as the economic situation, I hope, continues to improve, I would ask my right hon. Friend the Chancellor to strive to find the room for further pay increases for the public sector and, of course, for wider tax reductions in the longer term.
Clive Efford (Eltham) (Lab)
When I looked at the clock as the Chancellor finished speaking yesterday, I was shocked that his speech had been only an hour. The speech was well padded out. I thought at one stage that he was going to tell us how much the Government planned to spend on paper clips in the next year. He started by announcing that we were not going into a recession, expecting praise for not taking us into a recession that the Conservatives had brought us to the brink of in the first place. It was a bit like an arsonist asking to be thanked, having set light to your house, for then ringing the police. Average energy bills have doubled in the past 18 months, the average mortgage is up by £2,000, and household incomes are lower in real terms than 13 years ago. Those are the worst figures since records began.
We have had 13 years of cuts to our public services, leaving them in a parlous state, and we went into covid with record numbers on NHS waiting lists—2.5 million people. We now have an estimated 7 million people waiting for hospital appointments. According to a Nuffield Trust report published last year, our NHS is short of 12,000 doctors and 50,000 nurses and midwives, and we will need over 500,000 more NHS and care workers by 2030. Where was anything in the Budget to deal with that crisis? Oh, we did have one thing; we had a tax cut for the wealthiest 1% to keep doctors in the NHS. Only the Tories could turn a crisis in the NHS into an excuse to cut taxes for the wealthiest 1% in this country.
Someone with a £2 million pension pot will get a tax saving of £275,000. How is that justifiable? Yet next month the tax thresholds will be frozen. For a basic rate taxpayer, that is £500 a year, for a higher rate taxpayer, that is £1,000, but in this Budget it is somehow justifiable to make that tax cut to the richest 1%. It is just not fair. In the past decade, we have seen the Conservatives stand by while a disproportionate share of national income has gone to the wealthiest. The OBR has confirmed that the cost of living crisis means that living standards will fall by 5.7% over the next two years. Average real-terms household incomes are at a 50-year low due to a decade of consistent low growth. The Resolution Foundation’s “Stagnation nation” report, published late last year, shows that in each decade since the 1970s, average household incomes rose by 33% until 2007, but since the Tories took power, weak productivity growth has fed directly into flatlining wages and sluggish income growth, with real wage growth falling below zero in the 2010s.
The Government’s own figures show that incomes have grown by an average of 9% since 2008—0.7% a year—having grown by an average of 2.2% in each of the previous 20 years. Their excuse is to blame everyone else, but everyone else internationally has been through the same shocks as us. How do the Tories explain the fact that average household incomes in the UK are 16% lower than in Germany and 9% lower than in France, having been higher than both in 2007?
Wealth inequality in this country has grown under the Conservatives, and a failure to tax the assets of the super-rich is leading to widening inequality. The more wealth someone accumulates, the less tax they pay. The Government should be looking at how we tax wealth and tackle that growing inequality. Since the banking crash in 2007-08, it has become easier to borrow money, which has meant that the wealthiest people have been able to buy assets, and we do not tax those assets. I would like to see a discussion about a tax on wealth above £10 million. A 1% tax on that wealth would raise £11 billion. I have spoken to many people who are in that tax bracket, and they say that a 1% tax on their wealth at that level would not cause them to take flight and go abroad—they would not notice it. No one is going to up their family and their children’s future because they would pay 1% tax on their wealth above £10 million.
We could equalise capital gains with income tax rates. There is cross-party support for this measure, which could raise £15.2 billion. It is not a radical suggestion, because it is what Nigel Lawson did back in the 1970s. I welcome the fact that the Government are offering tax relief for investment in R&D, because that could reward people who pay their tax in that way.
It is not fair that people who pay rent to somebody who has bought properties pay national insurance contributions on their wages, but the person they pay rent to does not pay national insurance contributions on the income from that rent. We should look at expanding the range of national insurance to make the system fair. The Labour party supports reform of non-dom status, which would raise £3.2 billion.
There is money in the system that we can use to resolve many of the problems we face with the crisis in our public services. It is a travesty that, given the strikes we are facing and the crisis in the national health service, there was nothing about that in the Chancellor’s statement yesterday. It is time for a new form of government. It is time for a Government who will tackle inequality and create a fairer taxation system that will benefit the whole country, not leave people to sink or swim. We need an active Government who will be on people’s side, intervene when necessary and do what is necessary to create a fairer and more equitable society.
Richard Drax (South Dorset) (Con)
I welcome the hon. Member for West Lancashire (Ashley Dalton) to the House, and I refer the House to my entry in the Register of Members’ Financial Interests.
We are the party of low taxes, or we are nothing. It is a core Conservative value that we believe people should keep more of their money. In that regard, I commend the Chancellor for scrapping the pensions allowance. It is rather strange that the Opposition are wailing about it when they themselves wanted to remove it, albeit just for doctors. This reform will not just help doctors, but help to retain headteachers, police chiefs, senior officers in the armed forces, air traffic controllers, prison governors and many others.
However, what concerns me is the tax pressure on those who receive less. We are still facing the highest burden of taxation since the end of the second world war. I fear we are falling into the socialist trap of raising expectations that the Government will provide all the answers; they cannot, and should not try to. The consequence is higher and higher taxes to pay for services such as extra childcare. I entirely endorse the excellent speech by my right hon. Friend the Member for Camborne and Redruth (George Eustice) on the problems that this policy could raise. While welcomed by many, it fails to recognise that if families paid less tax, they would have more disposable income to pay for services such as childcare, rather than relying on the Government. Raising the tax threshold, especially at the higher rate, would help in that regard. The insistence that the Government can spend people’s money better than them is not our philosophy.
I accept in full that we are paying a heavy price for locking the country down during the pandemic, and now dealing with a major war in Europe, but this is not the time for faint hearts and overcaution, especially with a general election looming. For we know—we have just heard—where Labour will take us: myriad new taxes, a rise in existing ones, and a party driven sadly by the few, not the many, and by envy, punishing those who work hard and want to provide for their families. Let us stop reinforcing Labour’s values and start reminding the country of ours.
On that note, despite the many calls for corporation tax not to be raised from 19% to 25%, the increase will go ahead. Despite being mitigated by some capital allowances, it is a regressive and regrettable move. This after the Chancellor pledged to reduce corporation tax to 15% last year when he stood for the leadership of our party—how right he was then. Yesterday’s Budget rightly placed great emphasis on growth, and while I am all for getting people back to work, I am not in support of a tax hike on those who create the jobs in the first place. Beyond that, the increase will be a major and negative factor for companies deciding where and how much to invest. Let us not forget that the corporation tax of our nearest competitor, the Republic of Ireland, is a meagre 12.5%. As my right hon. Friend the Member for Wokingham (John Redwood) said of an earlier Chancellor:
“Lawson brought intellectual self confidence and energy to the task of being Chancellor. He fearlessly slashed income tax and corporation tax rates. Extra revenue poured in as growth improved.”
Surely that is what business needs: a visionary Conservative Government committed to creating an environment that gives wealth creators the incentives to take risk and create the prosperity and jobs that all of us in this House want. Unfortunately, that is not evidenced when we look at the oil and gas industries.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Will the hon. Gentleman give way?
Richard Drax
I will not, because we do not have time and others wish to speak.
Because of pandering to the green lobby and unachievable targets, oil and gas companies face punitive tax rates such as the 50% corporation tax rate and a 35% windfall levy. As the war in Europe has reminded us, energy security is paramount. Over-reliance on supply from overseas has left many countries—not just us—vulnerable to fluctuation in prices and supply. Regrettably, we are a long way from ending our reliance on fossil fuels, so surely it is common sense to encourage investment here at home, not to increase our carbon footprint by importing from abroad.
Before I conclude, I must mention defence. While the extra £11 billion over five years is to be welcomed, it is not nearly enough, with little—if any—of that money going to our conventional forces. This at a time when the world is increasingly unstable. Arbitrary figures for defence spending plucked out of thin air by both sides demean our armed forces and us in the House. In the face of some very real threats, a thorough appreciation needs to be undertaken and the defence budget set accordingly. To be an effective NATO partner, we need the mass to sustain a prolonged and major confrontation. Right now, we do not have it.
I conclude on a point of caution. As I hinted strongly at the start of my speech, this over-reliance on Government to provide the solution to everything must stop. It is simply unsustainable. Our Conservative Government would do well to recall the words of JFK in his inaugural address:
“Ask not what your country can do for you—ask what you can do for your country.”
Ashley Dalton (West Lancashire) (Lab)
Thank you, Mr Speaker, for the opportunity to make my maiden speech in this debate. It is a particular honour to be called to do so by a fellow Lancastrian and my constituency neighbour.
I take my place as my predecessor, Rosie Cooper, leaves frontline politics. A servant to West Lancashire for over 17 years, Rosie conducted herself with the utmost dignity and respect throughout her tenure as a Member of Parliament. Despite facing some of the most heinous and challenging circumstances anyone in this place could face, Rosie displayed great resilience and continued to serve West Lancashire with grace and diligence.
Everyone in this place entered politics to make a difference. As Rosie leaves to take up a new role in the NHS, which I know is so important to her and her politics, she can genuinely say she made a difference. Through the British Sign Language Act 2022, which was brought about by her private Member’s Bill, Rosie secured equitable recognition for people who use BSL as their primary language—a group of people that in the most recent census was 22,000-strong. I know that they and many others are truly thankful for her hard work and unwavering commitment.
You will know, Mr Speaker, that on the way into my constituency you pass a road sign that reads simply “In West Lancashire we’ve got it all”, and it is no exaggeration. With a Roman market town, villages recorded in the Domesday book, the growers and farming communities of the Lancashire plain, and a 1960s new town, West Lancashire truly does have it all.
Look back at the gingerbread women of Ormskirk—women in the 1700s who knew their own worth, and with a recipe so successful it is still used today, took their place in Ormskirk’s economy; and look forward to the innovators and community builders of the future being moulded by the thriving Edge Hill University. West Lancashire’s story is one of making your mark.
For me, West Lancashire’s best asset is its people. The people of West Lancashire represent what it means to be British. They are hard-working, innovative and, most of all, ambitious. But all too often, their ambition is frustrated by a lack of opportunity. I hear stories from my constituents in Skelmersdale—Skem—that they feel trapped and confined by their circumstances. It is a great sadness that for many people in Skelmersdale, their ambition for their children is that they leave Skem—that they get out to get on. Opportunities that exist in Manchester or Liverpool are opportunities that should be accessible to folk in West Lancashire, but they simply are not. West Lancashire is brimming with potential but is literally being left behind.
During the by-election, while I was out campaigning, Sandra stopped me in the street to talk about what is important to her. She probably recognised me from the hundreds of leaflets that she had had through her door. Sandra was really proud of her grown-up children working hard to provide for their own families, but she told me that they were each working two or three jobs and were barely able to just get by. As proud as she is of her children, Sandra told me that getting by should not be this hard. When the best that hard work can deliver is just getting by, something has gone wrong.
Yet, like the gingerbread women of the 1700s, West Lancashire still dares to succeed. There are people like Paula and Maureen, who started the Sewing Rooms in Skelmersdale, a social enterprise to tackle social exclusion and train and employ women in the textiles industry. In the face of a global pandemic, they made masks. When faced with a cost of living crisis, they developed, made, and sold thermal cooking bags that use little to no energy to cook hot food. On the back of that success, they have won the contract to design and make the kit for the Great Britain gymnastics team at the Special Olympics world games in Berlin this year. There are people like 19-year-old Rossi Forrest, who sold me my Christmas tree last year from the new nursery and garden centre in Bickerstaffe that he started from scratch. And people like Jo, who sells pyjamas and underwear on historic Ormskirk market, and whose thermal vests and long johns kept me warm during a long—very long—winter by-election.
Across West Lancashire, people are working hard and daring to succeed. But in the face of a cost of living crisis and a stagnating economy, it is too often an uphill struggle. It should not be this hard. This Budget was an opportunity for the Government to show that they believe in West Lancashire as much as I do. Instead, it is another sticking plaster on 13 years of economic failure, with small businesses and sole traders once again expected to fend for themselves. The people of West Lancashire are ambitious, but their ambition is not being matched by government. While wages are down, mortgage repayments are up. Whilst living standards are down, the tax burden is up. When my constituents need an economy that is moving, we are at a standstill. This is not a Budget for Sandra. It is not a Budget for Paula and Maureen. It is not a Budget for Rossi, and it is not a Budget for Jo, either.
Politics is often spoken about in abstract terms, as though it is something that happens to someone else, somewhere else, separate from our communities. When I stand to speak, 100 years since the first women were elected to this place and nearly 300 years since the gingerbread women of Ormskirk made their mark, I speak with the voices of Sandra, Rossi and Jo, and all the other people of West Lancashire, because the politics in here must meet the ambition of the communities out there. What we choose to do shows where our priorities lie. Our priorities are born out of what we stand for. On the Labour Benches we stand for meeting the ambition of the people of West Lancashire and beyond, not for getting by but for getting on.
Iain Stewart (Milton Keynes South) (Con)
May I start by warmly congratulating the hon. Member for West Lancashire (Ashley Dalton) on a fine maiden speech? Many issues divide us in this House, but one that unites us is the utter apprehension that we feel before making our maiden speech, and the enormous relief we feel afterwards. She did her family and her constituency proud. I echo her comments about her predecessor Rosie Cooper, who I enjoyed working with on many issues. I hope, similarly, to have a collegiate working relationship with her successor. Let me give the hon. Lady a little friendly advice: after a Budget, she should take time to read through the detail of the Red Book, because sometimes we find unpleasant surprises but sometimes we find very welcome announcements. That is what happened to me yesterday afternoon.
As Chair of the Transport Committee, it will probably not surprise colleagues that I will start by talking about transport matters. A very welcome announcement in the Red Book was the Government recommitment to the next stage of East West Rail, which goes through my constituency. When fully opened, it will create a really important rail transport link connecting Oxford, Milton Keynes, Bedford and Cambridge. It is not just a transport link; it will help unlock enormous economic developments in the area and create the jobs of the future in many of the high-value clusters that we have along there. As well as the announcement that details will be coming out soon, there is the additional investment for local authorities to plan for developments around the new stations. That is an important part of putting in new transport infrastructure. It is not just about the line itself, important though that is in aiding modal shift, but how it helps much wider economic growth.
On a local basis, I welcome the excess of £1 million to fix potholes in Milton Keynes—I can tell those on the Front Bench that we sorely need it. Also on the transport front, but looking more widely across the country, it is a positive step that additional powers and funding are going to the mayoral combined authorities to develop integrated transport solutions for those cities and towns across the country. In particular, I welcome the ability to develop cross-modal ticketing options. Access to good transport underpins the economy and people being able to attain new jobs, and I very much welcome those announcements.
Looking longer term at transport, the Budget included some significant measures to help underpin future investment, looking not just at what the Government are spending, but how that can work in tandem with the private sector and institutional investors to help give us the assets we need in the longer term. In particular, there were the measures to extend the remit of the UK Infrastructure Bank.
Many Members have commented on the changes to pension funds. I add this point: the ability of institutional investment funds to help support the development of our infrastructure is an enormous opportunity. On the insurance side, the Association of British Insurers has identified that the post-Solvency II changes could unlock an additional £100 billion of investment for our infra- structure over the next 10 years. Similarly, there is great opportunity with pension funds. Encouraging people to save more into their pension funds does not just help retain people in the workforce; it helps create those institutional funds that can be invested to all our advantage.
The other welcome development that I will touch on is the creation of the new investment zones, which is another step in the right direction along with measures such as freeports, innovation accelerators and the various levelling-up funds. It will help stimulate partnership working between the public sector, the private sector and academic research and development. The principal of Strathclyde University, Sir Jim McDonald, has a great phrase—“the triple helix”—about combining those three and unlocking their potential to develop new technologies and how that then spreads out into the wider economy.
The one bit of advice I give to my hon. and right hon. Friends is that these schemes are great in themselves, but more can be done. When I was a Minister in the Scotland Office, my portfolio of responsibilities included growth deals in Scotland, which have proved to create effective partnership working among the public, private and academic sectors. Some of those deals are coming to their planned end and some of the levelling-up funds will conclude in the next year or two, so there is an opportunity to look at what comes next and to combine these different types of Government investments, institutional investments and working with the private sector to let local areas develop their economies to thrive in the future. I should declare a little interest: I am writing a paper on this for the think-tank Onward. It is still in production, and I doubt it will ever hit the bestseller shelf at Waterstones, but I hope it will contain some useful ideas, and I think it will probably command cross-party support because there is a growing consensus that the right way forward is to unlock and help realise locally generated ambitions. Central Government do not always have the answers; I am not breaching any confidences in saying that, and it applies to Governments of all political stripes.
The steps the Government have taken thus far with the investment zones, accelerators and so forth are good in themselves, but there is an opportunity to blend them so that the whole is greater than the sum of the parts. I look forward to contributing to the debate on that, but this is a Budget to be welcomed for the measures I have outlined and many others as well.
Andrew Western (Stretford and Urmston) (Lab)
I congratulate my hon. Friend the Member for West Lancashire (Ashley Dalton) on her outstanding maiden speech. Having known her before her election to this place, I knew she would quickly make an impact and she certainly did that with her contribution today.
In his Budget speech yesterday, the Chancellor said:
“In November we delivered stability; today it is growth.”—[Official Report, 15 March 2023; Vol. 729, c. 847.]
That is a bold statement, and upon closer inspection one may even say a brazen one: brazen not only because that stability was required because of the Conservative Government’s kamikaze Budget and their crashing of the economy, but more pertinently because on this Chancellor’s watch our economy will not grow, but will shrink, by 0.2% this year. In fact, we only avert technical recession this year because the pain is distributed in such a way that it avoids two successive quarters of output decline—not because this Government have averted economic shrinkage, and not because they have delivered the laser-like focus on growth that our economy needs. Far from it, the evidence tells us that this Government have been asleep at the wheel: while we in the UK see economic contraction this year, every other G7 country is forecast growth. While we in the UK see an economy that is still some 0.8% smaller than before the pandemic, every other G7 economy has grown to be larger than it was before the virus intervened.
Conservative Members tell us to look at the longer-term picture: they say that this was always going to be a difficult year and their action has lessened the blow. That is nonsense, because this claim fails to take into consideration that growth projections for years three to five of the forecast period are revised down, and at the same time our underlying debt is set to increase from 92.4% of GDP this year to 93.7% of GDP next year. This is Tory Britain: they crashed our economy last year, and they have no plan to put it right this year.
But let me turn to what this Budget says about the Conservative approach to basic fairness. The uplift in the annual tax-free allowance on pension contributions, from £40,000 to £60,000, benefits only those whose retirement funds constitute the largest 1% of pension pots in the country. Alongside lifting the lifetime allowance, that amounts to a huge tax break for some of the wealthiest people in the land. That this announcement came on the very same day that the OBR informed us we will have the lowest real living standards since records began speaks volumes about the appalling priorities of this Government.
I have said before in this place that politics is ultimately about choices, and this Tory Government have made the wrong choices yet again. Not once in his speech yesterday did the Chancellor mention the words “fair” or “fairness,” and I cannot say I am surprised. They have form on fairness, and time and again they show us whose side they are really on.
I accept that we need to address the shortage of doctors somehow, particularly as the Government continue to reject Labour’s fully costed proposal to scrap non-dom status and fund the largest workforce expansion in NHS history. So while I welcome the pension changes as they pertain to NHS staff, this should have been a bespoke offer available only to them, and in my view it should initially have been a pilot so that we could assess its future impact. Moreover, although the Government claim to want to help over-50s back to work, their unfair tax break for the wealthiest 1% has created a perverse situation whereby some over-50s may well be able to retire sooner, because their pension pots will have grown large enough for them to do so at a younger age than they had planned. Joined-up government? Don’t make me laugh. We have a Government at sixes and sevens, and a Chancellor without the clarity of purpose that is needed to turn our economy around.
How do we know this? Well, let us recap. The Government want to level up, but we have the lowest investment in the G7. The Prime Minister wants debt to go down, but debt as a share of GDP will be up next year. The Chancellor wants to help with living costs, but we have the worst real living standards since records began. The Health Secretary wants to fix the NHS workforce, but the Prime Minister will not scrap non-dom status to fund it. The Work and Pensions Secretary wants to get over-50s back to work, but the Chancellor has just given a huge tax break to the richest, which means that they may well retire earlier than ever. It is preposterous. You could not make it up.
We have had 13 years of this grotesque contradiction between words and action, this lack of vision, this fundamental mismanagement. The Government have no idea, no clue, and no plan for economic growth. They have crashed our economy, they have undermined our standing in the world, and they have decimated our public services. We are seeing sticking-plaster politics time and again, rather than the long-term solutions that our country needs. Because they are unable or unwilling to unleash the ambition of the British people to realise the fastest growth in the G7, we languish at the bottom of the pile.
The Chancellor said yesterday that this Budget showed that his plan was working, but the reality is that this tired, out-of-touch, failing Government have no credible plan at all. It is time for a change. It is time for a Labour Government. For me, the next general election cannot come soon enough, and given this half-hearted attempt at a Budget for growth, it cannot come soon enough for the Conservative party either.
Peter Gibson (Darlington) (Con)
Let me begin by congratulating the hon. Member for West Lancashire (Ashley Dalton) on her maiden speech, and on her warm tribute to her predecessor.
I welcome this Conservative Budget, and commend the Chancellor for the measures that he has announced. He is delivering on the Government’s priorities: to halve inflation, grow the economy and reduce debt, so that we can create better-paid jobs and opportunities across the United Kingdom. I know that this Budget for growth will guarantee a better future for the people of Darlington, and for people up and down the country.
The focus of today’s debate is employment. At the outset, I want to highlight the fantastic new data which shows that the claimant count in Darlington has decreased by 11.3% in the past year, and is now below the point where it was before the pandemic. This is good news for Darlington, because it means that the Government are helping to get more of my constituents back to work and my plan to deliver more jobs as the MP for Darlington is delivering also. This Conservative Government, working with our Conservative council—led by the fantastic Jonathan Dulston—and the Conservative Tees Valley Mayor, the amazing Ben Houchen, have ensured that Darlington and the wider region are blessed with new opportunities for local people to build their careers in the town where they grew up, championing our ambition to allow people to stay local but go far. Nothing can demonstrate that better than the delivery of the Darlington Northern Economic Campus, thanks to my honourable friend the Prime Minister. With civil service jobs from eight different Government Departments, there are fantastic job opportunities—more and better opportunities than we have ever had before—enabling people to play a real part in shaping the future of our country. Indeed, I regularly look to see which civil service jobs are being advertised. As of yesterday, there were 314 jobs advertised that are potentially based in Darlington. In addition, with 80% of those jobs at the northern economic campus in Darlington going to local people from our region, we are truly empowering our community.
We know that employment is the best route out of poverty and this Budget is delivering on removing barriers to employment that have prevented many of my constituents from continuing their working lives. I warmly welcome the announcement to extend childcare, enabling parents to return to work, and also the further support that we see for disabled people. Abolishing the work capability assessment will ensure that we make the system better for disabled people and that they find the job that is right for them. I know from my own constituency casework that many disabled people want to work and to contribute to society, and these steps will help with that.
I have welcomed the unprecedented investments that this Government have made in the Tees Valley on many occasions in this House, such as the £14.6 million awarded to Darlington-based engine maker Cummins to develop a hydrogen combustion engine. Cummins is a fantastic local employer, and these investments will allow it and other such businesses to continue to deliver high-skilled jobs for local people in cutting-edge green technologies well into the future. With that in mind, the £20 billion investment to develop one of the first carbon capture and storage clusters in the north-east is also hugely welcome, putting us well on the way to making net zero Teesside a reality.
Investment zones are another hugely welcome step. The Tees Valley Combined Authority has been one of the areas identified for this policy, which would see the Tees Valley potentially getting a further £80 million over the next five years. This will be a great boost to our economic growth, bringing in more jobs and more investment. I welcome the measures in this Budget to encourage further investment in the Tees Valley and the continued transformative impact that that will have on the region.
As we are discussing employment, it is important to remember that there are limited levers the state has to control the ability of people to get into work. In my own constituency of Darlington, we have a number of organisations that work with local people to ensure that their potential is not wasted. Let me take the opportunity to praise the work of the Morrison Trust and the Conservative-led Darlington Borough Council’s youth employment initiative, which has done such an amazing job. By recognising individual needs and targeting support, both have been hugely successful in supporting people in Darlington into work—people who had been finding it hard to get a job for a variety of reasons.
I also pay tribute to First Stop, which, through work that I have done with it, has secured £50,000 of funding from the Harrison Centre for Social Mobility. First Stop provides information, advice, guidance and support to people who are experiencing difficulties in their lives that may make them vulnerable to a range of outcomes. In addition to providing one-to-one sessions, it also provides workshops, training and activities, including job clubs each week.
There are a couple of things that I would have liked to have seen in the Budget. First, I would have liked the enhancements that we have seen in the west midlands and Manchester devolved areas to be applied to the Tees Valley—I hope that they will come in due course. I draw the House’s attention to my entry in the Register of Members’ Financial Interests and to my role as co-chair of the all-party parliamentary group on hospice and end of life care, and I would have liked to have seen further specific support for this sector, but I will maintain the pressure on my local integrated care boards to deliver what is needed for our local hospices.
In conclusion this is a Budget for growth. This Conservative Government have set out a plan to meet the real challenges faced by our country, boost economic growth and continue our commitment to our ambitious levelling-up agenda. This Budget is good for the country, good for the Tees Valley and good for the people of Darlington.
Christian Wakeford (Bury South) (Lab)
It is an honour to follow the hon. Member for Darlington (Peter Gibson), although he appears to have listened to a slightly different Budget statement yesterday.
I would like to start by welcoming my hon. Friend the Member for West Lancashire (Ashley Dalton) to her place and congratulate her on her magnificent maiden speech. It is certainly an achievement to not mention any roundabouts whatsoever when talking about West Lancs.
This Budget was a huge opportunity for the Government to make amends for the previous Prime Minister they burdened us with and the kami-Kwasi Budget that they unleashed on the country. But it is an opportunity that the Government missed. This could have been a Budget for workers, but it was not. This could have been a Budget for health, but it was not. This could have been a budget for justice, but it was not. This could have been a Budget for growth, but it really was not. This could also have been a Budget for education, but guess what? It was not.
What we got was a sticking-plaster Budget from a Government on life support. There was nothing for public sector workers, nothing to tackle court backlogs, nothing for dentistry and nothing for health inequalities. Growth has been downgraded and we have the biggest fall in living standards since records began. Is it any wonder that the proud people of this country are living without any hope, wondering how they will get by? They lie awake at night waiting for the next heating bill and are filled with dread as that brown envelope comes through the letterbox. They have no chance to save, their dreams of buying a home are dashed, the fridge grows ever emptier and they have no money to fill it. This is a Budget that lets the people of this country down. Quite frankly, they deserve better.
I will, however, go on record to give credit to the Chancellor for the action on pegging alcohol duty to inflation. Having previously accompanied alcohol-related charities to a meeting with the Exchequer Secretary, I know that that is hugely welcome and I thank him for it. The action taken on prepayment meters will also help many of my constituents. Such actions can and will save lives, and I give credit where it is due on those two matters.
However, among G7 countries we have the lowest rate of business investment and are likely to have the weakest economy and to be the only country with negative growth. The list of self-inflicted problems on the Chancellor’s desk must have been piling up so high that it was possible to see them from Trafalgar Square.
The problem that persists is that of childcare. One third of parents who use formal childcare say that they have to rely on some form of debt just to pay for it. One in four parents also say that childcare costs now account for more than three quarters of their take-home pay. Although action is welcome, without any new investment I am afraid that it is doomed to fail. It does not benefit people who have children now, and there are so many questions about whether it will benefit them at all. Will it cut the cost of childcare? Will it deliver high-quality childcare for every family? Will it deliver the growth that our country needs?
But not to worry, because the Budget had some of the tax cuts for which Government Back Benchers have been begging. To be fair, the Government have borrowed the money—£1 billion, to be precise—from the magic money tree. I am afraid, however, that this is not good news for nurses, junior doctors or people who work in retail, and it is definitely not good news for posties, firefighters, teachers or cleaners. In fact, it is not really good news for anyone other than the Government’s friends in the City, who they seem to care about so much. Yes, abolishing the lifetime allowance and increasing the annual allowance paid into pensions will affect about 1% of people in this country, but they happen to be the wealthiest 1%. That is the Chancellor’s answer to the cost of living crisis—giving more bankers a tax cut.
I heard the Chancellor this morning trot out the line that this is to help doctors, but that gives rise to a question. If this really is about doctors, why not introduce a bespoke scheme similar to that suggested by the shadow Health and Social Care Secretary, my hon. Friend the Member for Ilford North (Wes Streeting)? A conscious and political choice has been made to ignore the people of this country who are struggling to make ends meet, while at the same time giving all higher earners the benefit of a further tax cut.
If the Chancellor wanted to help the NHS, he would have found the money to pay for nurses and junior doctors, and to bring down waiting lists, but they were not mentioned in the Budget statement. Right now, a junior doctor on the lowest band level in Bury earns less per hour than a barista in Pret. They have also experienced a wage decrease of more than 14%, while nurses have experienced a decrease of more than 10%. People in Bury South are waiting on average eight weeks for a mental health appointment, 28 days for a GP appointment and over a year for an operation. That is before we get to the complete impossibility of accessing a dentist. In 2023, this is the Government’s legacy for the NHS, and it is not one that anyone is proud of.
Let me be clear: only a Labour Government will improve the NHS, reform the justice system, raise education standards and provide growth to the country. Only a Labour Government can protect the country from this reckless Conservative party, which is increasingly out of touch and out of ideas, and thankfully, running out of time.
Jackie Doyle-Price (Thurrock) (Con)
It is a pleasure to participate in the debate. I congratulate the hon. Member for West Lancashire (Ashley Dalton). I have to say that I like her style: I like people who can bring subjects to life and talk with real empathy about the experience of their constituents. I look forward to hearing more of her speeches, but I suspect that we will have a few more ding-dongs than the spirit in which I am addressing her now suggests.
That brings me to the speech from my former hon. Friend, the hon. Member for Bury South (Christian Wakeford). He paints a rather Dickensian picture, but that view is not widely shared—certainly not by my constituents, who are not without hope. They recognise that we are going through a challenging period and that it is incumbent on all of us as a nation to put our shoulders to the wheel and get on with it.
The hon. Member for Eltham (Clive Efford), who is no longer in his place, talked about the level of earnings and economic growth today compared with 2007. In 2008, we went through a massive financial crisis that required significant taxpayer intervention, which reminds us that when the taxpayer has to intervene, it does not come for free—there are consequences for the wider economy and everybody in it. Just as having to deal with that financial crisis made us poorer in the long run, so too does fighting a fatal disease and defending freedom against the actions of a dictator.
All those things that we collectively decide to take action on cost the taxpayer—every taxpayer in this nation—and have an impact on our economy, but those are the choices that we make, because they are the responsible and right thing to do. Nothing comes for free; everything has to be paid for by taxpayers. The more tax we take from them, the more we limit their ability to contribute to the economy.
Every Budget is a balance of decisions about how best to support those who need it, of course, and how best to fund our public services, as well as how best to generate the revenue to pay for them. Sometimes, those policies pull in different directions, but we should never forget that all the money that we take from taxpayers is theirs. When we make a change to the pension tax regime, therefore, we are not giving money away to the rich; we are letting them keep more of what they earn, which is the right thing to do. The virtue of that is not only that they keep more of what they earn, but that we incentivise doctors to work for longer and address that capacity within the health service, and we incentivise everyone to work more and contribute to the economic life of the country.
Collectively, we in this place spend an awful lot of time—I say this as somebody who spent their whole career in the public sector, which makes me somewhat unusual on the Conservative Benches—debating public services and how much we should pay public sector workers, because that is what we decide to fund from here. I often think, however, that we take for granted the private sector’s ability to generate the wealth that pays for those services.
That is why yesterday’s Budget was important. Opposition Members can find ways to criticise it, but it focused on the need to tackle inflation, which we all know impoverishes people and kills jobs, so it is right to nip it in the bud. We also know that inflationary pressures are made not here but by global factors, which is why we need to ensure that we are not too short-termist in addressing some of those demands. If we agree to high wage demands for public sector workers, they will fall through to the private sector. Last week, I met a local employer who employs 200 people and, frankly, his business cannot sustain the wage demands he is facing from his employees without making job cuts. That is the reality of the situation. So the more we can do to combat inflation, the more we can restrict the damage it will do to our economy in the long run.
As I said earlier, we really need to champion our private companies and make sure that we are providing the best possible conditions for them to flourish. I want to highlight a few success stories, because I am very proud of the businesses I represent in my constituency, and some of them are great British brands. Not many Members will know that the mayonnaise in their sandwich will have been made in Purfleet in my constituency. If they go to the opera, everything they see on stage will have been made in Thurrock. Every newspaper they buy has come through the port of Tilbury. These are the businesses that really keep our life going. We are looking to the future, too. We have a new investment in Tevva trucks in Tilbury, which is bringing the manufacture of hydrogen-powered trucks to this country.
There is plenty to be hopeful about and plenty to be ambitious about. What we need to do is make sure that we are creating the best possible conditions for our businesses to flourish, to provide high-paid jobs and to generate the wealth of this country. That is what we are going to do on the Government Benches, and everybody will be better off if we succeed.
Kate Osborne (Jarrow) (Lab)
I start by welcoming my hon. Friend the Member for West Lancashire (Ashley Dalton) to her place, and congratulate her on a fabulous maiden speech.
The Government have spent 13 years failing the majority in this country, keeping us in a vicious cycle of economic and political failures. The spring Budget yesterday promised more of the same. With this Budget, the Government have failed my Jarrow constituents. The majority of people in this country know someone who is relying on a food bank or someone who cannot afford to pay their energy bills. The only people who do not seem to know anyone who is struggling are those sitting on the Government Benches. They cannot be listening to their constituents, even though some of them love posing for smiley pictures at food banks. The 40% of civil servants who are using food banks are not smiling. The nurses, firefighters, teachers, care workers and other key workers using food banks are not smiling. I say to the Chancellor yes, they can budget; they are much better at it than him, it seems.
The 700,000 workers who took strike action over pay yesterday are also not smiling. In fact, very few people in the country are smiling. The falls in household disposable incomes this year and next will be the worst in a century. People across the UK are struggling to afford food, rent, heating and childcare. Mortgages are £2,000 a year higher than they were before the Government’s mini-Budget last September. These costs have escalated during the cost of living crisis, but these issues have been ongoing since long before inflation reached its highest point in 40 years because of their failure to govern.
Under this Government, pensioner poverty is up, child poverty is up and fuel poverty is up, and public services such as the NHS, schools, local government and so much more are on their knees. Yet for workers, real wages are down. In fact, one in five pensioners—more than 2 million people—are living in relative poverty in the UK, an increase of more than 200,000 pensioners living in poverty in the last year alone. I have been holding cost of living advice roadshows, and at the event in Boldon in my constituency, my constituent Joan, who is 94 years old, told me that she is struggling and that living now is harder than it was for her family in the 1930s. This Government pretend to be on the side of pensioners, to get their votes, but they fail them again and again. The Chancellor attempted to make a thing of helping pensioners, but the reality is that his spring Budget helps only those who are already well off; pensioners in poverty will receive no help. As the shadow Chancellor said, this is a £1 billion pensions bung for the top 1%.
People reliant on incapacity benefits could lose hundreds of pounds a month as a result of the Chancellor’s reforms to the welfare system; once again, the Conservative party attacks some of the most vulnerable in society. The Chancellor’s delivering for women has been much lauded, because of the provision of childcare, yet this Budget does nothing to tackle the financial discrimination women face on a daily basis, the gender health gap, the pay gap or the cost of living crisis, the burden of which falls in the main on women. As for childcare, the CBI has estimated that extending the free hours scheme to one and two-year-olds would cost £8.9 billion a year, more than double what the Chancellor awarded, so how will nurseries deliver it? Relaxing minimum staff-to-child ratios will not work and, yet again, less affluent parents will be affected the most. It is no wonder that so many people are saying that enough is enough, and that real change is needed. This Government, once again, failed to prioritise the majority or even those who need support the most, instead protecting the wealthiest in society.
In Jarrow, 40% of constituents are unable to afford to turn on the heating. That comes as no surprise, as electricity prices in the UK have risen by 66.7% and gas prices have risen by 129% in the 12 months to January 2023. The so-called “price freeze” does not help the many who are struggling to pay the already high costs. After accounting for Government support, typical household net energy bills will be 17% higher again in 2023-24 than this year. This is just unsustainable; millions more will be driven into fuel poverty.
Small businesses were once again neglected, and the Government’s false rhetoric on levelling up continues. More still goes to London and the south-east than the north will ever see, but I hope the promise for money for South Tyneside is actually delivered. It came as a surprise to the leader of South Tyneside Council, whom I spoke to this morning, that we were mentioned in the Budget; despite our bid being described as a strong bid with a very good-quality delivery plan and costs, it was rejected. The Government refused to provide the scores for the bid, even though the levelling-up Minister said that full feedback would be given. So can today’s Minister confirm whether the Chancellor’s announcement yesterday now means that the bid has been successful after all? Or is this money earmarked for something else? The town centres in Hebburn and Jarrow, and the redevelopment of our cultural centre, Jarrow Hall, is much needed. Will the Chancellor actually deliver this investment now or is this just more empty rhetoric?
In conclusion, as we always see from this Government, in the main the Chancellor’s Budget serves the most wealthy in our society, with £9 billion in tax cuts to corporations and £6 billion in cuts to fuel duty—yet nothing from this Government for our teachers, lecturers, nurses, junior doctors, NHS staff or civil servants. Poverty is a political choice. This spring Budget has proved that the Tories will make that choice over and over, callously disregarding the devastating impact on communities. With this Budget, the Government have once again failed my Jarrow constituents.
Mary Kelly Foy (City of Durham) (Lab)
I congratulate my hon. Friend the Member for West Lancashire (Ashley Dalton) on her wonderful and passionate maiden speech, and welcome her to her place.
The Budget does not even come close to resolving the cost of living crisis faced by so many of my constituents right now. The Chancellor said that Britain will not enter a “technical recession” this year; that is of little comfort to my constituents. For more than 12 years, people in Durham and the north-east have suffered thanks to the austerity politics of the Conservative party. Child poverty is sky high in Durham, food bank use has rocketed, and people across the country face record-breaking waiting times for NHS services.
Not just in my constituency or the north-east but for working-class people across our country, incomes are down, housing costs are up and public services have been trashed. What was the Chancellor’s response to this malaise? “Back to work.” He may as well have said, “On your bike.” There is nothing to sort out the cost of living crisis, nothing to sort out the housing crisis and nothing to sort out the crisis in our public services.
We needed a people’s Budget; instead, we got a bankers’ Budget. We needed to see a pay rise for our workers, who have been forced to strike because of poverty pay, but we did not get one. We needed to see a long-term commitment on the energy price cap, but we did not get one. It is yet another Budget in which the Conservative party has not prioritised working people. In fact, our country is in the midst of the longest pay squeeze for more than 200 years—not that our multi- millionaire Chancellor and Prime Minister would know.
Now, the Chancellor wants to force disabled people back to work with an even stricter sanctions regime. Sanctions are ineffective and harmful and have led to deaths. If only the Government went after the tax evaders who owe us billions with the same obsession.
If the Government had wanted to encourage people back to work, and to stay in work, they could have increased the minimum wage, scrapped fire and rehire and taxed the rich—the sort of policies that would give people dignity in work and get our country out of the rut that the Conservative party has created; the policies that Labour will implement once we are in government. Instead, the Chancellor has given £9 billion in tax cuts to corporations and at least £2 billion in tax cuts for the pensions of the highest earners.
Even the Government’s flagship childcare policy will require working parents to wait for more than two years to see it rolled out. As my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) has pointed out, the cost of childcare does not end when children go to school. Where is the funding for universal breakfast clubs? Where was the announcement for a real green industrial strategy? Where was the funding for our NHS—both for its workforce and for patients? Without proper investment, staff will continue to leave the NHS and health inequalities will worsen.
This has been a dark week in our politics. On Monday, we debated the immoral Illegal Migration Bill—or the anti-refugee Bill, as it should be called. The Bill scapegoats refugees—people fleeing from climate change and from war. Now we have a Budget that fails to resolve the real issues that working people in our country face. Whether it is at home or abroad, the Conservative party does not care for working people or the most vulnerable people. The nasty party is well and truly back, with its divide-and-rule politics.
Ronnie Cowan (Inverclyde) (SNP)
In every community throughout the UK that has a high level of employment, people experience better health, both physical and mental, less crime, better school outcomes and longer life. The result is less strain on the health service and criminal justice system. Admittedly, that is a simplified summary and we can, and no doubt will, debate wages and work conditions—at a time when the strength of the trade unions is being attacked by this Conservative and Unionist Government, it is right that we do so—but I want to focus today on the positives.
I want this Government to help an industry that employs local people and could generate huge profits, pay its tax to the Exchequer and help to offset the environmental damage we are doing to our precious planet. That would be a win-win-win scenario. I was drawn to the Red Book section on green industries, which starts at paragraph 3.83; I wondered whether it was in there, but it was not. To my absolute horror, nuclear energy was. It is almost as if the nuclear industry does not create pollutants. It is almost as if generation after generation will not be left to clear up our mess. No matter what title this Government give it—the latest being “environmentally sustainable”—nuclear is not green.
I was pleased that carbon capture got a shout-out, but that was at the end of the section on green industries investment, so in eager anticipation I read the part in chapter 3 entitled, “Growing the Economy: Creating a culture of Enterprise”. Here we go at last, I thought, but no. What better way is there to grow the economy and help the local community than by creating jobs so that people have a disposable income to spend locally, thereby benefiting the local community and all associated supply chains? All the usual Budget day suspects got a nod, but nothing new—no enterprise. There is nothing that could employ local people and generate huge profits, which would help them to pay their tax to the Exchequer and to offset the environmental damage that we are doing to our precious planet.
I will have to lead the UK Government by the nose, which is a pity, because evidence of the benefits of this industry has been available for centuries. Indeed, it was promoted and even enforced by King Henry VIII in the 16th century. Back then, a quarter of all arable land was dedicated to growing hemp. Before the Government recoil in horror, hemp is not cannabis—don’t come over all unnecessary on me. It is estimated that a medium-sized economically viable establishment would employ 120 people, all paying tax. Hemp production was encouraged in the 16th century in order to manufacture rope and canvas for the King’s Navy, but now we can also make clothing, shoes, biodegradable plastics, insulation panels, food, paper and biofuels. Currently, the Government are spending billions of pounds on retrofitting homes through the ECO4 and ECO+ schemes, but they are using products made from petrochemicals, which release harmful volatile organic compounds emissions into the air of buildings.
Why not encourage local farmers to grow hemp and supply local contractors with carbon-negative natural fibre alternatives at scale? What could be a better use of public money? In fact, there are more than 50,000 known uses for the hemp plant, so finding markets for hemp would not be a problem. It will sell, it will be profitable, and the Government could reap the benefit, but it does not end there. A hectare of hemp absorbs 22 tonnes of atmospheric carbon during its four-month growing cycle. Hemp produces four times the biomass of the same-sized area of forest, making it a far more sustainable source of material. Hemp does not need pesticides, insecticides or even fertiliser to grow in the UK. Hemp has natural antimicrobial properties, so it passively cleans the air in buildings. Hemp has a high capacity for moisture absorption, allowing for a controlled atmosphere within buildings. Hemp construction materials act as a long-term carbon sink.
A £60 million investment would create a facility that is capable of growing 32,000 acres of hemp per year, which would sequester more than 207,000 tonnes of CO2 per annum. That is just the CO2 photosynthesised by hemp in its four-month growing cycle, and does not include the carbon sequestered into the soil or the net effect of replacing high embodied carbon products from international supply chains and their emissions. As a wee bonus, hemp regenerates the soil it grows in, so it would work well in crop rotation. Winter wheat and spring barley yields increase by 16% to 18% when they follow hemp in rotation, and hemp cleans groundwater because it has a deep root and a root mass that absorbs residual pesticides and insecticides from the soil, preventing run-off into streams and rivers and thereby avoiding costly remediation by the water companies to achieve UK drinking water standards.
The barrier to this industry’s raising the funds it requires is simple: licensing. To make the industry a success, the Government need only open their mind to the reality of what hemp is and distribute licences appropriately. The industry will take care of the rest. Hemp is not a plant from the past; it is a plant that can pave the way to a cleaner, greener future, and its benefits are clear for all to see if we are prepared to open our eyes and ears to the possibilities. Finally, if raising tax from it is the trigger that is required, so be it. But we should not wait too long, because the world is switching on to this and we in the UK are being left behind in our nuclear bunkers.
Taiwo Owatemi (Coventry North West) (Lab)
I start by congratulating my hon. Friend the Member for West Lancashire (Ashley Dalton) on her brilliant maiden speech. She has done both her family and her constituents proud, and it is an honour to have her in the House.
Yesterday, I listened carefully to the Chancellor’s Budget. As with every Budget, there were announcements that I welcomed, and some where I thought opportunities were missed and the Government could, and should, have gone further. First, I welcome the Government’s suicide prevention support for those with poor mental health, which is vital for our communities. However, there was no additional funding announced to better support NHS services, so I am concerned that the measures that are needed to prevent people from falling into further mental health difficulties in the first place are missing. Prevention is always better than cure, and I am afraid that this Government do not seem to recognise that.
After years of substandard housing, I also welcome the Government’s additional funding for our veterans. These brave men and women have put their lives on the line to protect us and keep us safe, so the very least that we can do is provide them with good accommodation and a place to call home.
This Budget was a chance for the Government to unlock Britain’s promise and potential, but instead, they decided to continue papering over the cracks of 13 years of economic failure. My constituents in Coventry North West are being failed by a Conservative party unprepared to take the necessary bold steps to boost employment for everyone across the UK—not simply creating more jobs in the capital, but delivering for communities across the country. Coventry has seen a spike in the out-of-work benefit claimant count across all age ranges in the past month, and has an overall unemployment rate that is significantly higher than not only the national average, but the regional trend, making it all too clear that this Government are failing to reach groups in my city who need support. I am talking about the young, without whose economic input any growth remains merely a mirage. Without fundamental reforms to jobcentres, support for community groups and active engagement with employers, the Government look set to waste an entire generation of talent, to the severe detriment of us all.
Earlier this year, the further education college in Coventry was forced to stop offering new apprenticeships. That college told me that it found it almost impossible to recruit staff to teach the courses, and instead was having to rely on agency staff. That is just one instance of a wider trend: the Government talk about breaking down barriers to work, but up and down the country, they are still failing the next generation on getting them the skills needed to prosper in the workplace of the future. That is having a disastrous effect on businesses in Coventry, which are crying out for skilled workers. It is even more heartbreaking when I talk to young people in my constituency: they consistently tell me how desperate they are for training, yet because of long-term underfunding and a failure of leadership, they miss out on those opportunities, and vacancies continue to be at a record high.
The Chancellor should have taken the opportunity of yesterday’s Budget to reassess the apprenticeship levy and its scope. For there to be any substantial increase in employment, the Government should support training costs, shorter apprenticeship courses and a wider range of apprenticeships. Getting people into work as quickly as possible must be a priority. In government, Labour will localise employment support, because we know that people embedded in their communities know what is needed in their areas. That is only right: no longer should politicians and civil servants in Westminster make employment decisions for places they know little about. My constituents must be allowed to control their own future.
The reality is that Britain has been falling behind since 2010. The UK has grown more slowly than its peers. Productivity has grown by a paltry 0.4%—the second slowest rate in the G7—with wages lower now than they were in 2010, and because of this crippling economic mismanagement, the Government have consistently failed to invest in our workforce.
The cost of living crisis is hitting people particularly hard because incomes have been squeezed during the past 13 years of Conservative government. In my constituency, ordinary families, disabled people and pensioners are facing difficult choices. Mums are skipping meals so that their children do not. Families are struggling to buy new school shoes and uniform for their children. Older people are hesitating to put the heating on because they are worried about the costs. That is a damning indictment of this Government’s economic failure.
With men earning £162 more per week and £3 more per hour than the women in my city, helping women get back to work and making sure they are paid their fair share is central to the long-term health of the economy. Currently, one in five women in their 50s is caring for an older, sick or disabled relative, rendering them economically inactive, and yet there has been nothing from the Government to tackle the care crisis that would help my constituents get back to work. Only a Labour Government will do what is necessary: uplift skills across the country, invest in apprenticeships, localise employment support and finally get Britain back to work.
I want to make three points on childcare, which is a major issue affecting families in my constituency. I have gone through the details of the Budget, and it is clear to me that the announcement failed to meet the needs of families in my constituency. First, families need immediate support to meet their childcare needs, not a mere promise that they should hold on until 2026. Secondly, the number of early years settings available is decreasing every year, and some families are having to wait as long as 18 months to secure a place for their child so are unable to fully utilise the support available.
Thirdly, early years centres such as Georgie Porgies Pre-School in my constituency need urgent help to keep their doors open. Many of these centres will want to offer the additional hours that the Chancellor announced but are financially struggling. What they wanted to hear from the Chancellor’s Budget was a plan to update the current childcare operating system, an increase in line with inflation of payments per child, per hour, and a scrapping or a reduction of business rates. None of that was announced yesterday, and yet again, special educational needs and disability schools have been neglected, with no announcement on how we will support settings such as Springfield House in Solihull that provide respite care for families in my constituency. It seems that the Government continue to neglect those with the greatest needs.
Rachel Hopkins (Luton South) (Lab)
The Budget is an opportunity for a Government to demonstrate their priorities, and what we saw yesterday is a Conservative Government content to oversee the managed decline of the economy while dishing out a bung to the richest 1% and their pension pots, at the same time as working people continue to suffer. The Resolution Foundation has stated that 67% of the childcare and pension tax changes will go to the richest half of households. The policies in the Budget do not amass to a plan that commits to the serious long-term ambition that the UK economy needs, with no belief in the potential of the UK and no plan to tackle the declining living standards of my constituents. Quite simply, the House has been presented with a Budget that barely papers over the cracks of 13 years of failure and makes no attempt to tackle the systemic issues damaging our communities.
Despite the Chancellor’s claims yesterday, the Office for Budget Responsibility downgraded the UK’s long-term growth forecast and confirmed that the hit to living standards over the past two years is the largest since comparable records began. The UK is forecast to be the weakest economy in the G7 this year and the only country that will see negative growth, and we know that it is working people who will pay the price under the Conservative Government, with wages lower in real terms now than in 2010. That decline started with the Conservatives and the Liberal Democrats stripping our economy during the coalition years, which paved the way for the difficulties our communities now face.
This Budget represented a huge opportunity to break from 13 years of stagnation and unlock Britain’s potential, but that opportunity was well and truly ignored. The question for me is, where do yesterday’s announcements leave my Luton South constituents? Will they feel better off under this Tory Government in the months and years ahead? The answer is no. The average yearly wage in Luton is around £2,000 below the UK average. Not only does the Budget fail to take meaningful steps to close this gap; it also allows for more and more people to be forced into hardship. As the Resolution Foundation points out, the freeze to income tax thresholds since 2022-23 means that typical households will be £1,100 worse off by 2027-28, seeing their living standards continue to fall.
I know that many Conservative Members will point to employment levels, but they mask the surge in the number of people who are suffering in-work poverty, many of them relying on insecure contracts in the gig economy or multiple low-paid jobs. Low wages mean that people rely on universal credit and housing benefit to just about keep a roof over their heads. That is increasingly not enough, however, because the Government have frozen housing benefit for three years while rents have risen at their fastest rate in 16 years. Prosperous, thriving communities are not built on insecure, low-paid employment. Instead, pursuing decently paid and secure jobs with strong employment rights should be a key part of a Government agenda that prioritises creating a fairer society and a stronger economy.
What is in the Budget for the hard-working people of Luton South? Nothing but a continued squeeze on their living standards. Instead of sticking-plaster politics, we need an aspirational plan for the future. As the UK has the lowest business investment in the G7, the Conservative Government should be committed to working with businesses to encourage investment, not just giving out tax breaks and crossing their fingers. Indeed, the Institute for Fiscal Studies has criticised the Government’s lack of long-term certainty as “ridiculous”, and the Resolution Foundation has said that the measures will not increase business investment.
Small and medium-sized businesses in Luton South that have weathered the turbulence of the pandemic now need backing to return to firing on all cylinders. As the Federation of Small Businesses has said, however, yesterday’s measures are almost as though the Government think the small business community does not exist. The UK will benefit from the creation of good, well-paid, future- proof jobs in our communities only if the Government create the environment for businesses to grow.
With Luton’s historic connection to the automotive sector through the Vauxhall plant, we needed the Budget to include support to tackle the increased costs, and to facilitate the transition to manufacturing electric vehicles, all while rules of origin restrictions quickly approach. But Make UK has said that the Budget
“does little to tackle the real and immediate threat manufacturers face with rocketing energy bills”
and the Society of Motor Manufacturers and Traders has said that it includes
“little…that enables the UK to compete with the massive packages of support to power a green transition that are available elsewhere.”
Just look at Spain. Its Government have announced a huge investment into the electrification of automotive manufacturing. Without Government action, we will fail to meet our climate targets or reap the benefits of delivering net zero. The UK and Luton’s proud traditions of automotive manufacturing, and the supply chains, need backing.
We need to build a better Britain, and it is clear once again that Conservatives are just not up to the job. As I said at the beginning of my speech, a Budget is an opportunity for a Government to demonstrate their priorities, but these Conservative priorities are not on the side of my Luton South constituents. We know that a Labour Budget would be, and it would be underpinned by a focus on delivering the highest sustained growth in the G7, creating good jobs and growing productivity across our country. We are ready to deliver the transformative change that communities such as Luton and the UK deserve.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
I congratulate my hon. Friend the Member for West Lancashire (Ashley Dalton) on her excellent maiden speech in this Budget debate.
How could the Chancellor devise a Budget that was so out of touch with the problems facing our country? In the context of a cost of living crisis that is sweeping our nation, devastating household budgets and squeezing already low wages, the Government have offered very little in this Budget to help ordinary working people. It is clear that the Government are out of touch and out of time.
When I meet my Slough constituents, they are concerned about paying their bills, earning a fair wage, having an affordable roof over their heads and keeping their families safe. In my regular advice surgeries—five a month, including on a Sunday morning—constituents do not come to me asking for less to be done to tackle modern slavery, for the richest to get a tax cut, or for the economy to stagnate. Yet that is exactly what is being delivered by 13 years of Tory government. It is Tory MPs’ priorities over the public’s priorities.
Even when it comes to addressing real issues that matter to those who are struggling, the Chancellor’s announcements were woefully inadequate. On childcare, he has announced measures that will not be fully up and running until after an election, long after the Tories will, I hope, have been booted out of power by the British people. There is no real plan to magic up extra capacity to cater for the additional provision that has been promised. On pensions, their gift to the top 1% prioritises those who need it least. It is a nearly £1 billion giveaway to benefit only a small number of high-earning individuals.
The Government have tried to copy and paste Labour policy on energy bills, but they have implemented too little too late; they are failing our country and all they have managed to come up with is a windfall tax that has more holes in it than a Swiss cheese. At every turn, the Budget creates inequalities and solidifies the failures of the past 13 years. The Government are creating a stagnant economy. There is a chronic lack of ambition among Ministers. It is not just Opposition parties who highlight the continued failures. The Office for Budget Responsibility forecast shows that the UK’s current account deficit will be just above 6% of GDP—the widest gap since the 1940s. According to the CBI, we are investing five times less in green industries than Germany and roughly half what France and the USA invest. The highly respected Institute for Fiscal Studies has heavily criticised the lack of long-term certainty provided in the Budget, calling the lack of strategy “damaging”.
In critical business centres such as Slough, this has a real impact. We are proud to be home to Europe’s largest trading estate in single ownership and some of the country’s most iconic and influential brands, which rely on responsible stewardship of the economy.
We have a potential labour force of 2.6 million people living within an hour’s drive. We have the highest GDP per capita in the country, for a unitary authority. This has all been achieved in spite of the Government, not because of them.
We must truly harness our business power, and ensure that local communities reap the benefits, particularly as we build back from the pandemic, yet businesses are struggling more than ever. This lack of ambition and the Government’s persistent underfunding of vital services has left constituents short-changed, paying for Government incompetence. Under the Tories, UK Government funding for Slough Borough Council has been slashed to less than half of what it was in 2010. It is no wonder that local councils up and down our country are struggling under this Government’s watch. These cuts leave constituents desperate to see investment in tackling issues that they face every single day—crime, NHS waiting lists and housing shortages. Where were the measures to tackle this, when house building has halved in 50 years, forecasts show that mortgage rates will be twice as high for my constituents as they were in 2021 and house prices have risen to eight times an average salary? Those are all problems of the Government’s own making, all being ignored by our Chancellor. It is all slogans and no substance.
My constituents can see right through this facade. People can see the difference when they pay for their weekly shop, try to use cash-strapped public services, or check their bank accounts. They can see who the Government have prioritised in this Budget. There have been endless failures on crime, housing, bills, wages and growing our economy, but there is a better way. Labour will ensure the highest sustained growth in the G7, creating good jobs and boosting productivity in every corner of the UK—all things my constituents rely on for a better quality of life, and something that they so richly deserve.
Grahame Morris (Easington) (Lab)
It is a great honour to follow my hon. Friend the Member for Slough (Mr Dhesi) and his excellent speech. In the time that I have, I wonder if I might focus on one specific issue —council tax and its failings. I was very interested in the contribution of my hon. Friend the Member for Eltham (Clive Efford), when he spoke about the advantages of a wealth tax for those with more than £10 million in assets. It should not be discounted—I think there is a lot of merit in it. My hon. Friend the Member for Leeds East (Richard Burgon) has also advocated such a policy.
We heard a lot from the Chancellor yesterday. There were a lot of Es flying around— [Interruption.] I was paying attention, Madam Deputy Speaker. There are a couple of Es in levelling up, but unfortunately Easington did not get any levelling-up money. That is meant to be the Government’s priority.
It would be worthwhile for the Government to address the fundamental unfairness of council tax. I want to explore why replacing council tax with a proportional property tax should command the support of those on the Opposition and Government Benches. It is advocated by the Fairer Share campaign, which I recommend the Minister and other Members have a look at. Fair taxation is the foundation on which Labour can build a better Britain and help to secure the missions recently set out by the Leader of the Opposition. For the Conservatives, abolishing council tax in favour of a proportional property tax would demonstrate a long-term and systematic commitment to levelling up. It would help to alleviate and mitigate the cost of living crisis and deliver a tax cut—a council tax cut—to more than 75% of households in the country, and 100% of households in Easington.
The problem with council tax is very simple. In the days ahead, the majority of people will receive a council tax bill. At Prime Minister’s questions, a lot of political capital was made about Conservative councils being better than Labour councils, but the truth is that almost all councils, irrespective of their political colour, are facing huge pressures. Most people will face a council tax increase of about 5%. The County Councils Network reported in February that three in four councils will increase council tax by the maximum amount permitted. This is an issue that cuts across all parties. My county council, Durham County Council, is led by a Conservative-led coalition. It faces a £10.2 million deficit, despite raising council tax by the maximum—5%—and proposing cuts of £12.4 million.
The truth is that the system is broken. It is the poorest households that pay more and get less, while councils remain unable to fund vital services. Currently, households are taxed based not on their ability to pay, but on the 1991 valuation of their home and the area in which they live. That means that local authorities must impose tax levels on their residents to cover the costs of essential statutory services such as caring for looked-after children and adult social care regardless of the wealth, or lack of it, in those communities. For that reason, an £8 million townhouse in Westminster bizarrely, or perversely, ends up paying less council tax each year than somebody living in a £150,000 home in my constituency. The most affluent areas have other advantages, with Westminster City Council better placed to raise revenues through business rates, fees and charges such as car parking charges compared to poorer local authorities like mine.
This is the opposite of levelling up. It is widening the economic gap between London and the regions, as well as between the richest and poorest in society. The theme of the Budget yesterday was boosting employment, and the key to that aim is strengthening regional economies to sustain additional employment. A proportional property tax strengthens local economies and supports employment by cutting taxes in the regions by £6.5 billion. A huge annual economic stimulus of £6.5 billion would empower people to participate in their local economy. For the poorest communities such as mine, the average household saving could be as high as £900 a year.
The Government’s refusal to invest in our poorest communities will hold back regeneration, growth and employment. Rather than the Government’s tax and spend investment policy, a proportional property tax is much more efficient at allowing the poorest communities to keep more of their own money to spend and invest in their own local economy as they see fit. That might be a philosophy that the Conservatives could agree with.
The success of the levelling-up fund should be judged on the extent to which it narrows the economic divisions in our country. In fact, those divisions are widening and inequality is growing. The north-east region as a whole received just £108.5 million, compared with £210.5 million and £151.3 million allocated to the south-east and London respectively.
I am disappointed that the Chancellor said nothing in the Budget about the regressive council tax. I am proud that the Durham County Council Labour group is the first in the country to call for the introduction of a proportional property tax to replace the iniquitous council tax. It is a simple and fair tax applied equally, no matter whether someone lives in Peterlee, Pimlico, Belgravia, Blackhall, Horden, Hartlepool or Hounslow. The Government can deliver a tax cut to more than 18 million households, support regional economies and help levelling up. A proportional property tax is a levelling- up tax. I hope that both the Government and the Opposition will support it.
Catherine West (Hornsey and Wood Green) (Lab)
I rise to speak in the context of the devastating news that the tax burden is the highest in 75 years. I will make two points: one on families in my constituency and one on the impact on the high street. We have seen zero improvement and the degradation of public services, as emphasised in the speech by my hon. Friend the Member for Easington (Grahame Morris). Public services have not improved. Local authorities have received a 40% funding cut since 2010, and people are complaining of not being able to see GPs or get basic operations done in the NHS.
Despite a big leg-up for millionaires in yesterday’s Budget, there is precious little for working families. Every day I hear devastating stories from families living in overcrowded council homes, or struggling with a 20% increase in privately rented homes or a major spike in mortgage payments. I welcome the relief on energy bills for another three months and prepayment meter charges being brought in line with direct debit payments. For households experiencing deep poverty, that measure will make a difference.
The plight of local families is being felt on the high street, in the closure of shops, bank branches, pubs, cafes and the post office. We are told in Wood Green that due to the collapse in family budgets, WHSmith is folding, and so is our post office. Lack of money in people’s pockets means devastated high streets. Our high streets needed a rescue package yesterday, but there was precious little on offer for small businesses.
Schools are seeing the impact of energy bills. I was at a meeting recently at Stroud Green Primary School, and many Hornsey schools told me that this year, above any other, they see their budgets collapsing. One big difference to family budgets is the introduction of universal school meals for all primary school children being brought in as a one-off emergency measure this financial year in London. That will have a big impact on food scarcity in the local communities.
The sense of strain has made families feel very isolated and unsupported. I welcome the debate we have had around the mental health of children as a result of some of the announcements in the Budget, yet some of them are coming in far too late; they are being announced now, but are to be introduced only in 2026. That is far too late: we need to see things in this academic year, not be waiting several years.
In a powerful debate in Westminster Hall in the last week we heard the shocking statistic that over 200 school- children are lost to suicide every year. This is the impact of the stress and strain on working families. Even before the pandemic, mental health waiting lists were soaring, and I have heard from many constituents, as we have heard from many Members today, about children waiting months or years for the support they need.
Teachers tell me that they are struggling with the increasing number of children who clearly need specialist support. While my borough is subject to extra help for special educational needs from the Department for Education, this must come in at the same time as improvements to the public sector, because sometimes there are not enough therapists or specialists to assist children with special educational needs. Some families have told me they have had to wait up to 18 months for an assessment of their child’s needs, putting huge strain on schools; they do not have the expertise to provide extra support from their budgets, which of course have not really increased since 2010. The Government’s flagship special educational needs and disabilities review is all words but no action, and while I welcome the announcement on building new schools, when will they open their doors? We need to speed up the delivery of some of the announcements made yesterday.
There is the same problem with the Chancellor’s childcare offer. There is no support for this academic year, and the programme will not come in until 2026. And I think the Chancellor might have stolen an idea from Labour on wraparound care, because I am sure I saw my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) going to breakfast clubs and after-school clubs where they do exist. We know from the Foundation Years Information and Research group that early years funding is needed now, not in two years. I hope the Chancellor understands the desperate urgency of this situation.
Sadly, when it comes to support for families and schools, the Budget is littered with disappointments and delays. I hope the Minister will take back to the Department the urgency of the matter. With the mental health crisis and parents struggling, what we really need is a fresh approach as soon as possible.
Alex Cunningham (Stockton North) (Lab)
While she has gone off for a well-earned cup of tea, I add my tribute to my hon. Friend the Member for West Lancashire (Ashley Dalton). She has good reason to love her constituency, and I am sure that our mutual friend, Claire, from my constituency would also congratulate her today. I also declare my interest as chair of the all-party groups on carbon capture, utilisation and storage and on the chemical industry, because I am going to mention both.
The Government have been keen to talk up the Budget, which the Chancellor claims will sort out the broken economy, an economy wrecked by successive Tory Governments. If they are so confident that this is a Budget that will make a difference to all our people, they should test it by putting it to the country with a general election now. They will not do that, because they know the public can see through the latest round of gimmicks that do very little to help struggling families.
The OBR confirms that the hit to living standards over the past two years is the largest since comparable records began. The UK will be the weakest economy in the G7 this year, and the only country that will see negative growth. Wages are worth less than they were 13 years ago. Yes, we have a short extension to the energy support scheme, but as ever with this Government, the greatest support seems to be funnelled towards the richest 1%; many a CEO and City banker will have been raising a glass of champagne to the Chancellor in the City last night.
I join the Carbon Capture and Storage Association in welcoming the Chancellor’s allocation of up to £20 billion of support for the early development of carbon capture, usage and storage. I just hope it means that the much-promised project for Teesside, which I have been championing for donkey’s years, will at last be confirmed, but we lack detail on what will be happening and where and when. So, we still have a Government-controlled roll-out, rather than unleashing industry as we have seen under the US Inflation Reduction Act 2022.
Ruth Herbert, chief executive of the Carbon Capture and Storage Association, says:
“We look forward to seeing which projects have been chosen to move to construction, the forward timeline for selecting the next CCUS clusters that need to be operational this decade, and a swift passage of the Energy Bill through Parliament, to finalise the regulatory framework for the industry.”
We have had enough anguish over the years on Teesside, as elsewhere, and I know that everyone involved is hoping and praying that this will not be yet another false dawn for carbon capture and storage and something will actually happen. When we look beyond the initial clusters, it is clear that further support will be needed to decarbonise all the UK’s industrial regions.
As a Teessider, I am pleased to see the Chemical Industries Association react positively to the Budget, although it made the point that
“there remain massive and urgent challenges if it is to truly compete on a global stage.”
The association’s chief executive, Steve Elliott, said
“chemical business leaders will feel this is better than first feared, especially with confirmation of full expensing of qualifying capital investment in year one…investment zones…the extension of the climate change agreement scheme”
as well as the support for CCUS. However, he also made the point that
“this still leaves the UK lagging behind some key competitor countries…Companies are already taking those decisions on future investments—especially in the green technology arena—so we would urge the Chancellor to accelerate any UK response to America’s Inflation Reduction Act.”
I join the association in that view.
I welcome the idea of investment zones and will back the provision of one for Teesside, but, as with so many other promises for our area, we are yet to see the previous promises of tens of thousands of jobs fulfilled. There have been a few hundred, but that is a long way from tens of thousands. The CBI has said that the UK is being left behind in the global race for good green jobs: as we have already heard today, it is investing five times less in green industries than Germany, and roughly half what France is investing.
The previous Labour Government gave the green light to 10 new nuclear power station sites, but the Tories have not managed to complete one in the last 13 years, and yesterday’s announcement offered nothing that had not already been announced. While there was some good news for large-scale companies, small businesses were left waiting for news that never came. The Federation of Small Businesses was disappointed with the Budget, saying:
“On investment and labour market—the measures that small businesses were looking for are missing.
Measures announced by the Chancellor are well wide of the mark and irrelevant to the 5.5 million strong small business community. They are caught in between irrelevant tax reductions for big businesses, and just energy support for households…This is a particularly painful set of announcements, considering the sacrifices they made to stay afloat in the face of Covid, rampant inflation and the energy supply shock.
Proposals to help people with poor health back to work are ill-designed and poorly thought out”
—and this is a business organisation—
“and some won’t happen for years. Those with health conditions and disability have been let down by a Government that’s ignored employers’ view on what can best help.”
Health is always a priority for me when it comes to Budget speeches, and yes, in my 13th Budget speech in a row, I plead with the Government to address the health inequalities in my area, to reinstate the plan cancelled 13 years ago, and to build us our new hospital in Stockton. I do not know if it was one of the 40 pledged by the Government, but that pledge is straying further and further from reality, and did not even warrant a mention yesterday.
I will end with a topic of which the Tories seem to have little or no understanding: poverty. Since the Tories came to power, the number of children living in poverty in the Tees Valley has skyrocketed to over 40%, the highest level in the country, and the proportion of children living in absolute poverty continues to rise in every single north-east local authority area. Research by the TUC has revealed that the north-east also has the highest rate of child poverty in key worker families, up by 18,000 in the last two years. The chair of the North East Child Poverty Commission, Anna Turley, said yesterday that the Chancellor showed
“a deeply concerning level of complacency about child poverty, and the scale of the challenge we face both as a country and particularly here in the North East.”
The childcare announcement is significant, and I give it a cautious welcome. I sat on the last Childcare Bill Committee some seven years ago, and warned then that the plans would not fly because of lack of investment. The Minister then said the market would create itself. It did not, and costs remain high and places available restricted. I hope that this time they will get it right. Children and families in my constituency and across the country deserved a Budget that would pull them up out of hardship and allow them to thrive and fulfil their potential, not one that makes the lives of the wealthier even easier. Our Government of gimmicks cannot sort the mess they have created, so it is time to test their plans with the people, as I said at the beginning of my remarks, and call a general election.
Kirsty Blackman (Aberdeen North) (SNP)
I can understand why, when it comes to policies on spending, on tax and on the Budget, we have an ideological divide across this Chamber. I can understand that the Conservatives want to go down a different route to those of us who are left of centre, but I cannot understand the experiential divide that seems to occur. I do not understand how those of us on the Opposition Benches are being approached by constituents who have lost all hope, who have nothing to look forward to and who are looking at their energy bills wondering how they are possibly going to make it through the next few days, let alone through the next few months, yet those on the Government Benches do not seem to be experiencing that. The hon. Member for Thurrock (Jackie Doyle-Price) said that her constituents had not lost all hope. A number of Members seem to be standing up talking about things that do not affect or are not the highest priorities for our constituents.
I have been representing communities and individuals in Aberdeen in an elected role for the past 15 years, and I have never seen such levels of desperation as those we currently face. I have never seen the numbers of people who are contacting our surgery or our office talking about suicide. I have never seen these levels of worry and debt—and I was an MP for Aberdeen when the oil price crashed, when we saw major impacts and job losses in our city.
The fact is that an absolute lack of hope is being offered, and this week’s Budget could have done something to alleviate that. The Government should have gone far further than a freeze on energy prices. They should have been looking at what people’s energy bills were previously and working to reduce them, not simply freezing them. As our leader in Westminster, my hon. Friend the Member for Aberdeen South (Stephen Flynn) said yesterday, the reality for people in Scotland is not that an average household is paying £2,500—in Scotland, it is £3,500. One of the Conservative Members yesterday stood up and talked about the fact that we had had a warm winter. It was -8˚C in Scotland this week in some places. It absolutely has not been a warm winter. People are freezing, unable to afford their energy bills.
If we want to talk about and think about boosting employment, boosting jobs and boosting growth—boosting employment and boosting jobs are two different things—we need to make changes. The UK Government need to make changes in their approach. The first thing they could do, given the amount of in-work poverty, is increase the minimum wage to something that people can actually afford to live on and pay their bills with.
The reality is that that real living wage is going to have to go up, because inflation is going up. We can take the total measure of inflation and look at that, but food prices are going through the roof. The Government and the Bank of England can do what they like to reduce inflation, but no matter by how much mortgages are rising and how much people are squeezed, they will still have to buy pasta, rice and potatoes. They will not be able to stop buying those things. Inflation will continue on the things that matter the most to people, even if we manage to discourage some incredibly rich people from buying yet another fancy sports car—that is brilliant; that will really reduce inflation! That will not reduce the costs for our constituents that are currently spiralling, and it will not reduce the costs where it matters.
We need to see a proper increase in universal credit. We need to see that money that was taken away—the uplift introduced during the pandemic—reinstated. We need to see proper decision making by this Government, not their saying, “Universal credit is broken so we will increase the number of sanctions.” That does not help my constituents who are having to go to food banks or those who are working and having to have their wages topped up by universal credit. It costs the Government money to top up those wages, by the way. We could be in a situation where they increase the national minimum wage to a better level, and then they would get more tax as a result and end up in a situation where fewer people required universal credit. I do not see why that is not a win-win for the UK Government.
To create the jobs and growth that we need to see, one of the biggest things that the UK Government could do is to encourage immigration. Brexit has done what it can to reduce the number of people working in our NHS. People are talking about not being able to get a doctor’s appointment, but that is not because too many people are coming into the country; it is because of the exodus from our NHS as a result of Brexit and the way that the UK Government continue to treat doctors, nurses and anybody who comes here from another country. The Illegal Migration Bill will only add to the hostile environment that has been created.
The changes to post-study work visas will do the same. They create investment in our country, which is wonderful, so reducing them would be a significant problem. We need the Government to rethink immigration. For example, if asylum seekers, many of whom are highly qualified, are escaping desperate circumstances and want to work, were allowed to work, it would help some of our communities where there is a lack of people working.
I am pleased to see the changes that allow NHS doctors to have their pensions, but those changes should have been restricted to NHS workers—not for all doctors in the private sector or people in other roles. All the issues that I have heard from my constituents relate specifically to doctors, and that is the issue that we have raised.
On CCS, I am pleased to hear that something is happening, but the previous version of the Acorn Project was pulled by the Chancellor during a Budget speech 10 years ago. We need investment in the Acorn Project in Peterhead, Aberdeenshire.
Sir Mark Hendrick (Preston) (Lab/Co-op)
I start by apologising for being slightly late for the debate and I appreciate your indulgence, Madam Deputy Speaker, in allowing me to take part. I also extend my congratulations to my hon. Friend the Member for West Lancashire (Ashley Dalton) on an excellent maiden speech. I am sure she will make a major contribution to the House in her time here.
In the short time available, I will focus on energy. In January 2022, the Labour party urged the Government to introduce a windfall tax on oil and gas producers. The Government copied the policy to some extent, although they changed the name to the energy profits levy, and effectively implemented it from May 2020. The tax on what were becoming record profits was limited to 25%, but the tax rate introduced for companies producing renewable energy was set at 45% because of their much larger percentage profits. Although I agree that those profits should be taxed, the large difference between the levy on oil and gas revenues and on renewable energy source revenues makes it seem like the Government are applying higher taxation on companies for their good behaviour.
In the Budget, the Government have provided for a three-month extension of the energy price guarantee, which limits typical bills to £2,500 at a cost of £3 billion. Although that is good for the consumer, it effectively subsidises energy production with taxpayers’ money and it still allows energy companies to retain huge profits. In 2022, Shell reported profits of £32.2 billion—the highest in its 115-year history—and BP made profits of £23 billion in the same year, up from £10.6 billion. Those are grotesque figures that make millionaires and billionaires even richer while my constituents, and those of many other hon. Members, struggle to put food on the table and pay their mortgages, and nurses have to go to food banks to feed their families.
I welcome the commitments in the Budget to renewable energy and to carbon capture and storage. I am glad to hear that Great British Nuclear will be formed immediately with a mandate to run a so-called down-selection process for small modular reactors. The Government will match fund a proportion of private investment, but they have not specified whether the winners will be guaranteed orders or sites. Details of the selection process are expected at the end of March, but no firm date has been given. It has not been specified how many technologies will be chosen, and whether this will be open just to light water designs or to advanced nuclear designs, such as Newcleo’s lead-cooled fast nuclear reactors. Advanced modular reactor technology represents the next step in nuclear technologies beyond recent small modular reactors. These reactors will burn plutonium, which is a waste product, and Newcleo is offering to invest in them from private funding without recourse to public funding. It is a win-win situation for the UK, and I believe Great British Nuclear must take these new advanced reactors seriously.
I would also like to speak about artificial intelligence. On a positive note, as a vice-chair of the all-party parliamentary group on artificial intelligence, I welcome the Government’s announcement of £900 million for a new supercomputer facility to help the UK’s AI industry. AI technology will revolutionise the way we live, work and play. It is vital for the UK’s future that we develop it as much as possible for the benefit of ordinary people, not just to make money for rich corporations at the expense of poor people in this country.
As a final point, I am a little bit bemused that the Government’s Budget did not include help for social enterprises and co-operatives. I know the Government have co-operated on my private Member’s Bill—it is now in the House of Lords—which I welcome, but I had hoped there would be some support for co-operatives and mutuals in this year’s Budget.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the shadow Business Secretary.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
Thank you, Madam Deputy Speaker, for calling me to close the Budget debate this evening. I begin by acknowledging all 28 speeches we have heard today, but I want to pay a particular tribute to my hon. Friend the Member for West Lancashire (Ashley Dalton) for her outstanding maiden speech. I thought she captured the history and pride of her constituents, but also their ambitions and aspirations, in a truly impressive way. I also want to refer to the fact that she is a graduate of the Jo Cox women in leadership scheme. For the shadow Chancellor and me—we were both asked to speak on the day Parliament was recalled following the loss of Jo—to be able to open and close this debate and see a graduate of that scheme take her place and give a maiden speech like that, of such quality, is truly one of the legacies that Jo deserves. I know the whole House will share that sentiment.
As we have heard, this Budget has come at a time of profound importance for the country. Many Members have said that too many of their constituents are not just struggling to afford the little things that make life worth living, but finding it a stretch to afford the basics. We see every public service squeezed to breaking point. Frankly, very little in this country is working as it should. At the same time, there is an urgent need to proceed with net zero, and win the prize of the jobs and industries that will sustain our economy for generations to come. Acknowledging these challenges is not talking Britain down; it is facing reality head-on.
Yet, after looking at those challenges, what was the Chancellor’s big idea yesterday? What was the rabbit out of the hat and the only thing we did not know was coming? It was that huge tax giveaway for thousands of the very highest earners, during a cost of living crisis. I think we have learned something in this debate today, because we have found out that the Government cannot even tell us how many doctors that will benefit. I do not think they are unwilling to tell us; I do not think they know. As my right hon. Friend the Member for East Ham (Sir Stephen Timms) said, they never seem to miss an opportunity to give something away to those at the top.
Most of all, we have had another Conservative Budget and another set of lost opportunities to rise to the challenges we face. Fundamentally, it is a Budget for growth that downgrades growth. Many Members have rightly highlighted that the cost of living crisis is dominating the lives of their constituents and the hard-working people who have seen their wages stall while prices have risen.
Grahame Morris
My hon. Friend is very kind to give way, and he is making an excellent speech, but can I just ask his opinion about left-behind areas? It is all very well for the high earners who are getting advantages with their pension pots, but does he see the benefits, particularly in former mining communities, of implementing the recommendation of the Business, Energy and Industrial Strategy Committee report and returning the investment fund and the full miners’ pension scheme surplus to retired miners and their widows, who are struggling with the cost of living crisis, not least with huge fuel bills?
Jonathan Reynolds
I am grateful to my hon. Friend for his question. He will know that he represents several members of my family, so I have personal knowledge of his constituency, and they think he is a very fine Member of Parliament. Because of my family and my personal heritage of growing up in County Durham and mining communities, I know the issues he talks about, particularly those around profit sharing and the surplus and reserves of the mineworkers’ pension scheme. There is a case to look at there, and I would be more than happy to engage with him on those issues for the benefit of his constituents and those of other Members in the Chamber.
We are seeing people cutting back on all they can, but still being left with too much month at the end of their money. The British public need only ask the following questions. Are they better off after 13 years of this Government? Are they safer? Are the public services they rely on working better than a decade ago? No, no, and no again. At the core of that failure is the hard truth that, over 13 years, the Government have turned the UK into the worst-performing major economy in the world. That failure is at the heart of what is hitting people’s pay packets and public services. As we have heard many times in the debate, the British economy is the only developed economy in the world that has still not recovered to its pre-pandemic size.
Catherine West
My hon. Friend is making an excellent speech. Does he agree that without reforming housing—be it the overly pricey private sector, the lack of social homes or the mortgage crisis created by the last Budget—there can be no real growth?
Jonathan Reynolds
I am grateful to my hon. Friend for raising those points, because housing is another area that we heard very little about in the Budget yesterday. Perhaps that was because of the mortgage premium that many people in this country are paying as a result of the last Conservative mini-Budget, if we are still able to call it that—the impact certainly was not mini. My hon. Friend makes some very good points about what that means for her constituents.
We have seen the lowest business investment of any G7 nation, and wages are at the same level as they were in 2008. I spend pretty much all my time talking to businesses, and I often genuinely find myself thinking, “With all the brilliant things in this country, how have this Government managed to do so badly?” The big story of the Budget is the same as ever: low growth, high taxes and poor public services. To truly realise the ambition of this country, we have to change course from that. Half measures on childcare, which will take years to come to fruition and just pile more costs on to providers and parents, will not cut it. Saying we want to be a science superpower or a leader on clean energy is not the same as delivering the measures to actually do it, and spending millions of pounds on a handful of very wealthy people getting even bigger pensions will not drive the kind of dynamic labour market we need. The big, bold and radical ambition for this country will come only from a Labour Government.
Crucially, the Budget comes at a time when we can no longer put off the major decisions on net zero, because our competitors are pulling ahead. The Inflation Reduction Act in the United States and the Net-Zero Industry Act in the EU have radically affected the relative competitiveness of the UK, which is a point that my hon. Friend the Member for Stockton North (Alex Cunningham) made particularly well. When it comes to climate change and the chance to reindustrialise parts of Britain, we are presented with the fierce urgency of now.
This year, we have already had bad news from Ford, which is cutting jobs in Essex. We have had bad news from British Steel, which is cutting jobs in Scunthorpe. We have had bad news from AstraZeneca, which has chosen Ireland over Cheshire. This is the challenge that I wanted the Budget to rise to, because I want to see the Government put up a fight for Britain. After 13 years, I am sick of austerity, poor public services and stagnation. If, like us, people want hope, optimism and change, it should be clear by now that it will not come from doing more of the same.
We all know that the Government have a poor record on crime, but perhaps even we did not expect them to be so brazen as to commit an act of burglary themselves by taking so many of Labour’s ideas for the Budget. Indeed, we have heard many speeches today extol the benefits of childcare reform, keeping the energy price freeze and ending the injustice of prepayment meters. I say to Ministers that they are very welcome, as we are more than happy to share our ideas with a Government who have seemingly run out of their own. But rather than have the half-fat versions of our plans, why not go the whole way and bring the fundamental change that this country needs with a full Labour Government?
At the top of that list is that Labour believes that this country needs an industrial strategy, one that is not about picking winners; an industrial strategy means having a plan to keep Britain competitive in the global race. This Government have a curious mix of big state, top-down targets and a kind of total libertarianism in how to deliver them. For example, it is Government policy to force residential and commercial property to meet higher standards in just four years’ time or be removed from the market; to decarbonise home heating; and to phase out petrol and diesel vehicle sales in just seven years’ time. But the Government are not on track to meet any of those targets because there is no plan to deliver any of them. Just to retain our existing automotive industry we will need 10 battery gigafactories, but we have one. Germany has 10 times that capacity, and every day we fall further behind, more jobs and industries go elsewhere.
Only private investment and public investment pulling in the same direction can deliver the wall of money we need to renew this country. We accept that we cannot possibly equal the awesome fiscal firepower of the United States, but we can make the UK more competitive, we can target funding where it will make a difference and we can make markets deliver what we need. Let us consider a sector such as steel. We know that we must make the transition to green steel or face the likely end of the UK steel industry. Governments from across the world—Sweden, Austria, Canada, Germany—are partnering with their steel sectors to go green. We know that there is market demand for that here in the UK, but we have not got a Government willing to be the partner that industry needs. So Labour’s industrial strategy will work in partnership with industry to keep Britain competitive, not with random pots of money with no return to the taxpayer or endless changes to the corporation tax and investment regime, but with a long-term plan to make Britain investible again.
Labour also believes in a fundamentally different approach to our economy and our politics. We know what every good business leader knows: sustained growth comes from working people, and they are our biggest asset. So where is the employment Bill the Government pledged? Where is the promise, 12 months on, that there will be no more P&O Ferries ever tolerated again in the UK? Basic rights, such as sick pay, holiday pay and protection against unfair dismissal, should be for everyone. That is why we in the Labour party will always be the party of good work and good wages, and where this Government have failed to act, we will act, with our new deal for working people to do just that.
I did welcome one part of the Budget: the trailblazer announcements on devolution to my area in Greater Manchester and to the west midlands. We believe that the country is too centralised, and too often that leads to poor public services and the inefficient use of public money. But why should only two parts of England get the chance to shake themselves free from the dead hand of this Conservative Government? Why can the remaining 90% of the country not have that option too? That is why we will give every community the power it needs to shape its own destiny.
For all the talk of going for growth, at the core of this Budget is the same old Conservative malaise: the lack of ambition and vision that has turned us back into the sick man of Europe. I have sat through 13 years of Conservative Budgets, and as the years go on their claims get thinner and thinner. Last year, when inflation was rising, it was all down to global forces, but this year when it has peaked and it is set to fall, all of a sudden that is down to Conservative genius. Frankly, the British people are not fooled.
Listening to Government Members today, it seems they want to congratulate themselves on a job well done because a Conservative Chancellor got to his feet and this time has not crashed the markets, because we narrowly and technically avoided a recession, and because the growth forecasts are bad but not quite as bad in the short term as last time. Is that what the Conservatives have come to? Is that the measure of success? Have we set a bar so low that we will trip over it as we leave the Chamber today? People are paying more than £1,000 more on their mortgages right now because of recent Conservative actions. Investment and jobs are leaving our shores because of those actions. Our constituents are stuck on waiting lists because of those actions. The lack of action on tackling that is unforgivable.
We believe that Labour has the ambition to match Britain’s potential. We will take this country from the bottom of the G7 to the top. We will have the highest sustained growth of our competitor countries and deliver the public services that people can rely on. We will deliver more doctors and nurses to get waiting lists down; police officers back on the streets; higher wages and better jobs in industries that people will be proud to work in; and a plan to reindustrialise Britain, to give back our hope and our future. That is why it is clear that only a Labour Chancellor can deliver the change that our country so desperately needs.
The Exchequer Secretary to the Treasury (James Cartlidge)
It is a real pleasure to conclude today’s debate. I am glad that the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) welcomed the measures in relation to the north-west and the Mayor. I join him in congratulating the hon. Member for West Lancashire (Ashley Dalton) on her brilliant maiden speech, which I very much enjoyed. I especially enjoyed hearing about the women of Ormskirk and their famous gingerbread. I understand that King Edward VII is rumoured to have stopped the royal train in Ormskirk to get his supply of gingerbread to take with him to Balmoral. Her speech was delivered with great passion and I was particularly pleased to hear her tribute to her predecessor, with which we all agreed.
Yesterday, the Chancellor delivered a Budget for growth —a Budget that builds on the decisions we took in the autumn to deliver stability and sound money; that provides a blueprint for prosperity that will spur on the economy and make us one of the most prosperous nations in the world; and that spreads opportunity. At the heart of the Budget is the steps we are taking to spread the opportunities of employment, to tackle labour shortage and to tear down the walls that stop people working.
Many Opposition Members said there was nothing in the Budget about public sector workers. I hope they will join me in welcoming the fantastic news we heard, less than an hour ago, that an agreement has been reached that will provide a fair and reasonable pay deal for health workers, from nurses to paramedics and midwives, thereby ending strike action across the NHS.
On the subject of workers in our brilliant NHS, we have seen today the most extraordinary U-turn yet by the Labour party. We should remember that barely six months ago the shadow Secretary of State for Health and Social Care, the hon. Member for Ilford North (Wes Streeting), told us that Labour policy was not to have a specific scheme for the NHS but to abolish the lifetime cap. Let me quote what he said six months ago:
“I’m not pretending that doing away with the cap is a particularly progressive move. But it is one that sees patients seen faster, and will inevitably save lives. I’m just being hard-headed and pragmatic about this.”
We totally agree with him.
Mr Dhesi
Perhaps the Minister would like to retract his statement, because I think he is inadvertently misleading the House. When the shadow Secretary of State said that, he referred specifically to that scheme for doctors, not for everybody. He was not talking about giving the 1% throughout our whole country—the rich—that huge tax cut.
James Cartlidge
The quote says,
“doing away with the cap”.
The removal of the cap is a tax measure that applies to all people who qualify for it. There is a really important point that Opposition Members probably want to listen to: there is a real danger in making up policy as one goes along. To be clear, our tax change will come in immediately, or as soon as we can possibly do it—it will come in on 6 April—but it is our view that a specific scheme for the NHS would take up to a year to put in place. Were we to bring forward an NHS-only scheme, the Department of Health and Social Care would have to consult on that scheme and then respond to the consultation. Only after that could it start to develop the scheme, because it could not predetermine the consultation. After that, the Department would have to transfer eligible people into the scheme. All that assumes that there would not be legal challenges from those who would argue that such a scheme should apply to other key people in the public sector, such as headteachers, senior police officers and senior people in the Ministry of Defence who might think that they too work hard in our public services. The Labour party has made it up as it has gone along. The fact is that Labour has U-turned from a perfectly sensible policy back to being ridden with the politics of envy, which we have heard from every single Opposition Member today.
Turning to some of the speeches, my right hon. Friend the Member for Norwich North (Chloe Smith) made an excellent contribution. She speaks with great expertise and passion on the matter of getting the disabled into work. She made the very important point that that is not just for the Government and that we also need to talk about the role that employers can play. I hope she will be pleased to hear that in the build-up to the Budget I, along with my hon. Friend the Minister for Employment and the small business Minister—my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake)—engaged directly with employer groups and worked with them to come up with some of the Budget’s proposals, particularly the extension of the occupational health subsidy pilot, the returneeship policy and boot camps for over-50s. Those are very positive measures.
The hon. Member for Glasgow South West (Chris Stephens) said that all the measures we have taken are on the backs of the poor, while the hon. Member for Jarrow (Kate Osborne) and other Opposition Members said that we have let down those on the lowest incomes. I remind the House that this year it is possible, for the first time, to earn £1,000 a month without having to pay any income tax or national insurance. We have doubled the personal income tax allowance since 2010, and in the last year we have increased benefits in line with inflation. On energy support, this financial year we have given a £650 cost of living payment to those on benefits, and in the financial year to come it will be £900. Those are not the actions of a Government turning their back on the poor. This is a Government taking difficult decisions to balance the books of this country, but in a compassionate way that helps those who have the least.
Chris Stephens
If the Government are doing so much for the poor, can the Minister tell us why in-work poverty is on the rise and why 40,000 civil servants, who work for this Government, are having to use food banks?
James Cartlidge
The key statistic is that since 2010 we have cut unemployment by 1.2 million. We have near record lows in unemployment and almost record highs in employment. Of course, we want to go further.
I am glad that the Chairman of the Work and Pensions Committee, the right hon. Member for East Ham (Sir Stephen Timms), welcomed some of the Budget’s measures, particularly the important increase in the universal credit childcare cap and aspects of the White Paper. I am sure he is looking forward to engaging in detail with my right hon. Friend the Work and Pensions Secretary, who is sitting next to me.
My right hon. Friend the Member for Chipping Barnet (Theresa Villiers) was absolutely right to say that the Prime Minister has set these targets and that this year we are making fantastic progress on three of them. Inflation is set to more than halve this year. That is not a minor detail. Inflation—driven, after all, by Putin’s invasion of Ukraine—has been the biggest reason why there have been problems with growth in countries all around the world. She also made very important points about the extension of the energy price guarantee. Yes, inflation is falling, but that shows that we continue to take steps to support people with the cost of living. We know that those pressures have not completely gone away. The elevated prices of food and other products in our shops have all come from that surge in energy prices. That is why we have extended the energy price guarantee and continued the freeze on fuel duty and the 5p tax cut on petrol and diesel for motorists.
The hon. Members for Eltham (Clive Efford) and for Easington (Grahame Morris) both put forward some very interesting proposals, which I hope have been noted by shadow Front Benchers, for a range of new wealth taxes to undermine the competitiveness of the UK. If there has been a theme among Opposition Members today, it has been a return to the politics of envy and of undermining aspiration and competitiveness.
My hon. Friend the Member for South Dorset (Richard Drax) made an excellent point. We may exchange views on which taxes we should take action on, but he reminded us of the reason why we have had to take those difficult decisions. It is because of huge external factors that Opposition Members do not like to talk about. They include a pandemic, followed, literally, on 24 February, the day on which the pandemic regulations ceased, by Putin’s invasion of Ukraine. It has been an extraordinarily challenging time, requiring us to put in place £390 billion of additional support. We can debate whether it should have happened, but it did happen and, as my hon. Friend the Member for Thurrock (Jackie Doyle-Price) has said, that has consequences for taxes and we have had to take those difficult decisions.
I also agree with the very important point made by my hon. Friend the Member for South Dorset about energy security. He is absolutely right. We are proud of the huge progress that we have made in reducing our emissions, at a faster rate than any other G7 country. Last year, 40% of our electricity was from renewables. The figure in the United States was just 20%. Yes, we welcome the steps that the US is taking through the Inflation Reduction Act 2022, but no one should be under any illusion that we are not making huge steps forward ourselves. However, we must always remember the role of energy security, which is why my hon. Friend the Member for South Dorset is right that, rather than turning our back on the North sea as others have suggested, we should be maximising the UK’s domestic supplies of energy. That is why I hope that colleagues will welcome the steps that we are taking in respect of small modular reactors. There was also the important announcement, which was welcomed by several Opposition Members, including the hon. Members for Preston (Sir Mark Hendrick) and for Stockton North (Alex Cunningham), of £20 billion investment in carbon capture and storage.
I am delighted that my hon. Friend the Member for Milton Keynes South (Iain Stewart), the Chair of the Transport Committee, welcomed the news on East West Rail, which we have had exchanges on in previous Treasury questions. He is absolutely right about the central role that new infrastructure plays in driving growth and connectivity, and I hope that the announcement brings great benefit to his constituents.
Alex Cunningham
I am grateful to the Minister for acknowledging the support for carbon capture and storage, but this must be the start of the investment. We need another wave of investment followed by another wave after that. Are the Government really committed to it?
James Cartlidge
We have announced £20 billion of funding, which shows the strength of our commitment. We want to decarbonise and continue our rapid progress to net zero, but, along the way, we must maintain energy security, otherwise what have we learned from what has happened in the past 12 months, following the invasion of Ukraine? Our constituents want to know that we will do everything possible to grow the supply of UK domestic energy.
Sir Mark Hendrick
Is the Minister aware of Newcleo, a British company, that will burn waste plutonium in Cumbria without public subsidy or recourse to public funds, but purely with private investment?
James Cartlidge
I am not aware of that specific company but the hon. Gentleman is welcome to write to me. None the less, he is right to talk about the need for private investment.
Another important step that we took in the Budget, which the hon. Member for Inverclyde (Ronnie Cowan) referred to—I am not sure whether he was supportive of it—was changing the taxonomy so that we encourage more private investment into nuclear, which is so important.
James Cartlidge
I apologise, but I cannot give way. I only have two and a half minutes left. The hon. Gentleman made a very entertaining speech and I enjoyed what he said on hemp, and I hope that he writes to the Secretary of State for Environment, Food and Rural Affairs to pursue that.
Yesterday, the Chancellor unveiled the biggest ever employment package. In the knowledge that, following Brexit, we will move from an employment model based on unlimited low-skilled migration to one based on high wages and high skills, we brought forward a set of major reforms to remove barriers to work. We have incredible potential. The World Bank has said that, out of all big European countries, we are the best place in which to do business. In the sectors of the future, we lead the world—whether that is financial services, life sciences, advanced manufacturing, creative industries or tech, but those sectors, and the entire economy, need a pipeline of talent. That is why we are introducing reforms that say to those who are long-term sick or have a disability that we will help you into, and at, work; reforms that ensure that those who can and want to work, do work, because independence is always better than dependence; reforms that help some of the most experienced people back into work; and reforms that mean women are no longer held back by the cost of childcare. With those reforms, we can grow our economy.
Ordered, That the debate be now adjourned.—(Scott Mann.)
Debate to be resumed Monday 20 March.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
On a point of order, Madam Deputy Speaker. You will be aware that, earlier today, the Chancellor of the Duchy of Lancaster came to the House to make a statement on the security of Government devices. Apparently, in the future, Ministers and officials will not be allowed to have TikTok on their Government-provided device. I am sure that much of the support in the Chamber for that came as a result of the presumption that many of us made: that it would mean that we would no longer have to endure the sight of the Secretary of State for Energy Security and Net Zero on this young person’s app. It is now reported, however, that the right hon. Gentleman—who, I understand, wishes to be known as “the wolf of Whitehall” in future—has posted a meme on the app saying, “I’m not leaving.” Madam Deputy Speaker, how do we get some clarity on the Government’s messaging here? Surely a risk is a risk, whether it is on a Minister’s private phone or one provided by the Government?
Madam Deputy Speaker (Dame Rosie Winterton)
I thank the right hon. Gentleman for that point of order. As he says, there was a statement about this issue earlier. I am afraid that it is, in fact, not a matter for the Chair to rule on this particular aspect of TikTok and anybody’s name on it, but the right hon. Gentleman has obviously put his point on the record. I am sure that if Members sitting on the Treasury Bench feel that there is anything they need to feed back to any particular Department, they will do so. I think that we had probably better leave it at that, frankly.
Ed Davey (Kingston and Surbiton) (LD)
On a point of order, Madam Deputy Speaker. At Prime Minister’s questions last week, I raised the case of Jean, after her grieving grandson asked me to raise it in Parliament in order to highlight the tragic impact of long ambulance delays. After speaking with Jean’s grandson last night, I now understand that some of the details provided to me, which I relayed to this House, were not accurate. While the substantive point remains—Jean did call for an ambulance and was told that she would have to wait for at least eight hours—Jean did not pay for her parking, and she did not die within the first hour of arriving at the hospital. I wish to correct the record by withdrawing those particular remarks.
Madam Deputy Speaker
I thank the right hon. Gentleman for that point of order about what is obviously a very sad case that he raised at PMQs. I am grateful to him for coming to the House—I presume that this is as soon as he knew that the information had been incorrect. I am sure that the whole House appreciates the fact that he has corrected the record. Thank you.