18:59 - The House divided: - Ayes: 214 / Noes: 288 - Question accordingly negatived.
19:13 - The House divided: - Ayes: 285 / Noes: 0 - Question accordingly agreed to.
The Chief Secretary to the Treasury (John Glen)
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“welcomes the Government’s action to halve inflation, grow the economy and reduce debt; supports the Government’s extensive efforts to support families up and down the country with the cost of living through significant support to help with rising prices, worth an average of £3,300 per household including direct cash payments of at least £900 to the eight million most vulnerable households; notes the use of a windfall tax on energy firm’s profits to pay around half of the typical family’s energy bill through the Energy Price Guarantee, also notes the fact that the Government has frozen fuel duty for 13 consecutive years to support motorists; welcomes the expansion of free childcare to all eligible parents of children aged nine months to four years old; and notes that Labour will fail to grip inflation or boost economic growth, with their plans for the economy simply leading to unfunded spending, higher debt and uncontrolled migration.”
Even in times of economic challenge, this is a Government who prioritise helping families face down the cost of living. I think Members across all sides of the House recognise that having come through the covid crisis, families and businesses across the country have felt additional global headwinds. After two decades of low inflation, the world has been confronted with fast-growing prices. We are not alone. While we tackle this, our friends in Ukraine are at war and we are supporting them diplomatically, militarily and economically. We have faced down those challenges while supporting our economy and, because of the action we took, we avoided a recession. Our sensible, credible economic plan is working. The International Monetary Fund said we are on the right track, unemployment remains very low by historic standards, and measures in the spring Budget deliver the largest permanent increase in potential GDP that the Office for Budget Responsibility has ever scored in a medium-term forecast, as a result of Government policy.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
I realise that this will bring back painful memories for the right hon. Gentleman, but he may recall that the previous Prime Minister crashed the economy. The UK has been uniquely impacted. The issues with Ukraine and covid are impacting the rest of the world, but they are impacting the UK in a slightly different way because of the previous Prime Minister’s actions. I know that the right hon. Gentleman wishes to erase all memory of that, but he must acknowledge that her actions have had a consequence, and the British taxpayer is still paying the price.
Paul Bristow
Could my right hon. Friend help me? Some of the faces on the Opposition Benches seem so glum because we have avoided a recession—could he explain why?
John Glen
My hon. Friend is right. I approach the job of government with a sense of humility about the challenge we face.
I recognise that we have made significant progress in recent months—that has been generally acknowledged. I will now set out where else we will make progress. Although it is welcome that wholesale energy prices have been falling, many families remain under significant pressure. The Government understand that. Food prices are contributing to headline inflation. Rising food prices, however, are not a unique issue to the UK, as my hon. Friend the Member for Wantage (David Johnston) pointed out. It is a problem that advanced economies are facing. For example, as he correctly pointed out, in Germany, food price inflation is above 22%. We are fully alive to the fact that some people remain in real distress. I want to assure Members and their constituents that we will always stand ready to help where we can.
Dr Luke Evans
Is it not about compassion in government? That is why pensioners on a fixed income and people on benefits will receive a 10% increase. Also, the fourth iteration of the household support fund is there directly to help the most vulnerable to get through those tough times.
John Glen
My hon. Friend is absolutely right. In a moment I will set out exactly what interventions we have made and how we are continuing to intervene to support the most vulnerable in our communities across the United Kingdom.
The best thing we can do to help people’s money go further is to deliver on our plan to halve inflation and grow the economy. In doing so, we will meet the Prime Minister’s five pledges to the British people. Three of those are economic—two of which I have mentioned—and reflect people’s priorities. Inflation makes us all poorer. It has to be tackled head-on, which is why, working closely with the Bank of England, we are bearing down on it. We are also growing the economy.
John Redwood (Wokingham) (Con)
Will the Minister confirm the IMF figures that in 2020 to 2022—that important three-year period after we left the EU—the UK was the fastest growing economy of the G7? The Opposition’s forecast that the UK might be a poorer performer this year is just a forecast, and most forecasts are usually wrong.
John Glen
As always, my right hon. Friend is on the money. The point is that forecasts predict many different things. I have been in the Treasury for nearly five years; forecasts for every fiscal event rarely prove to be true at the next fiscal event.
We must continue to focus on taking the right decisions, decision by decision, and prove those forecasters wrong. That means long-term, sustainable and healthy growth that pays for our NHS and schools, finds jobs for young people and provides a safety net for older people, all while making our country one of the most prosperous in the world. It also means reducing debt, which we are on track to do. In fact, because of the decisions we have taken and the improved outlook for the public finances, underlying debt in five years’ time is now forecast to be nearly three percentage points lower than back in the autumn. That means more money for our public services and a lower burden on future generations—deeply held Conservative values, which we put into practice today. It is these steps that will make our country and our people better off. We are also taking action to shelter the most vulnerable while we achieve these longer-term ambitions for the economy.
In the Budget, we announced that the energy price guarantee would remain at £2,500 per year until July 2023. That was funded in part by the energy profits levy that this Government introduced last year, recognising that profit levels in the sector had increased significantly due to very high oil and gas prices caused by global circumstances, including of course Russia’s invasion of Ukraine. The levy is expected to raise just under £26 billion between 2022-23 and 2027-28, on top of around £25 billion in tax receipts from the sector in the same period through the permanent tax regime. The energy price guarantee measure will save the average family a further £160 on top of the energy support measures already announced, bringing total Government support for energy bills to £1,500 for the typical household since October 2022.
It is worth recapping those measures. This Government have helped all domestic electricity customers with £400 off their energy bills through the energy bills support scheme. The energy bills support scheme alternative funding provides £400 to around 900,000 households that are not supplied by domestic electricity contracts and are unable to receive support automatically through the energy bills support scheme.
Our support has not stopped there. Alongside holding down energy bills, freezing fuel duty and increasing universal credit, we are giving up to £900 in cost of living payments to households on means-tested benefits. Starting from today, over 8 million families across the UK will receive the first £301 cost of living payment from the Government. That is the first of up to three payments for those on means-tested benefits, totalling £900 through 2023-24. Those entitled do not need to apply for the payment or do anything to receive it. The payments will be accompanied by a payment of £150 for people on eligible disability benefits this summer and a payment of £300 on top of winter fuel payments for pensioners at the end of 2023.
These are carefully designed interventions, targeted at the most vulnerable across communities in the United Kingdom. The latest payment follows on from the £650 cost of living payment delivered to households on means-tested benefits by the Government in 2022, with an additional £150 for individuals on disability benefits and £300 for pensioner households.
The Government of course need to recognise that some people will fall into difficulties. They have enabled local authorities to provide additional support with the cost of household essentials through a 12-month extension to the household support fund in England worth £1 billion, including Barnett funding. We are also ensuring that more than 10 million working-age families will see an increase in their benefit payments from April 2023, based on the September inflation figure of 10.1%.
While we shelter the most vulnerable, the public also rightly expect us to look further to the future, making sure we are taking steps to grow sustainably and securely in the long term. This Government are unashamedly pro-growth, because expanding the productive capacity of the economy is the only way to solve the productivity puzzle, which has dogged us for decades, and improve living standards for all.
One reason we are held back is because a great number of people have left the labour market altogether. As a Conservative, I believe there is virtue in work and getting people into work is the best way to avoid the ills and perils of poverty. There has been an increase of more than 1.5 million working households since 2010, which shows that we are on the side of working families. That includes our new game-changing childcare offer that will entitle working parents in England to 30 hours of free childcare per week, once their child is nine months old, and close the gap between parental leave ending and the current childcare offer.
In addition to making provision on free childcare, the Budget set out to remove barriers for the long-term sick and disabled, for jobseekers and for older people with our pension tax reforms. Part of the plan is welfare reform to support those who have been disengaged from the labour market. My right hon. Friend the Secretary of State for Work and Pensions has introduced a White Paper setting out reforms that will support more people who are long-term sick or disabled to try work without any fear of losing their benefits. Other policies that we announced at the Budget will then ensure that those individuals are better supported to stay and succeed in work. Overall, the Office for Budget Responsibility expects the spring Budget package to result in 110,000 more individuals in the labour market by the end of the forecast period.
The UK saw the fastest growth in the G7 over 2021 and 2022. Cumulative growth over the 2022 to 2024 period is predicted to be higher than that of Germany or Japan, and at a similar rate to that of France or the US. We have halved unemployment, cut inequality and reduced the number of workless households by 1 million. We have protected pensioners, those on low incomes and those with disabilities. We are continuing to lay the groundwork for a vibrant, innovative and growing economy that benefits communities and families up and down the country.
Having sat and listened to the shadow Minister—I was not smiling, but reflecting on what I heard—I think it is very unfortunate that the Labour party continues to play politics and snipe from the sidelines without a clear and coherent plan.
Tom Randall (Gedling) (Con)
I notice that the Opposition motion refers to freezing council tax; the shadow Minister also mentioned freezing council tax under Labour. However, Labour-run Gedling Borough Council is increasing council tax by 2.98% this year, in spite of the fully costed Conservative amendment that would have enabled a council tax freeze. Does my right hon. Friend agree that whereas Labour’s rhetoric is about freezing taxes, the reality is tax, tax and tax again?
John Glen
Absolutely, and I think the good people of Gedling will come to the right conclusions next week.
What is really clear is that this Conservative Government will get on with the business of resetting the conditions for growth after this enormously difficult period. We are setting the conditions for protecting the vulnerable and delivering for the British people. As a united Government, we remain focused on what really matters for the British people. I urge the House to reject the Labour motion.
The Economic Secretary to the Treasury (Andrew Griffith)
This is a Government who will always support those who need it the most, a Government on the side of working families and a Government who are implementing generational, landmark policies to get the economy growing and ensure that everyone shares in its success. Just look at the impact of decisions made from the autumn statement 2022 onwards. It shows beyond doubt that Government support for households in 2023-24 provides low-income households with the largest benefit in cash terms and as a percentage of income. In fact, on average, households in the bottom half of income distribution will see twice the benefit of households in the top half, in cash terms. Because of the rises in tax thresholds introduced by successive Conservative Governments, for the first time ever, people in our country can earn £1,000 a month without paying a penny of tax or national insurance.
I thank my right hon. and hon. Friends for their contributions: my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom); and my hon. Friends the Members for Guildford (Angela Richardson); for Poole (Sir Robert Syms); for Clwyd South (Simon Baynes); for Runnymede and Weybridge (Dr Spencer); for Broadland (Jerome Mayhew); for Wantage (David Johnston), for Aylesbury (Rob Butler); for Mansfield (Ben Bradley) and for Peterborough (Paul Bristow). They all made salient comments about the support this Government are giving at this time when the cost of living has been rising.
As my right hon. Friend the Chief Secretary to the Treasury reminded us, the best way we can help people get through a period of rising prices is by bearing down on inflation. At the same time, we are cutting debt and growing the economy, which is the best way to lift living standards. But we also know at this time that some people need additional, targeted support. In the face of cost of living headwinds, we demonstrated our values by protecting struggling families with a £2,500 energy price guarantee, one-off payments and the uprating of benefits. Aside from the measures on energy, we made changes that mean the average driver has saved about £200 in total since the 5p fuel duty cut was introduced.
David Linden (Glasgow East) (SNP)
The Minister speaks about the support the Government have given in terms of the cost of living payment. Why is it then that, when someone has already been punished with a sanction, the Government punish them twice by not giving them the cost of living payment?
Andrew Griffith
I understand that the hon. Member and his party are not happy campers these days, but we are giving more money per head to households in Scotland than we are in the rest of the United Kingdom, which is why he should get behind the many benefits of being part of this Union. On this very day, more than 8 million families across the United Kingdom will receive in their accounts a £301 cost of living payment from the Government, and that is just the first of three payments that will be made, giving a total of £900 to low-income and vulnerable families.
One measure that touches almost everyone in this country is childcare. In the Budget, we on the Conservative Benches confirmed the biggest expansion of free childcare in living memory. Our new offer will close the gap between parental leave ending and the current childcare offer. It will reduce costs for parents who can get back to work and make sure that a career break does not become a career end. It will improve the lives of millions of people. It is the right thing to do, but we can only afford to do that because of the fiscal discipline that we have exercised.
I am delighted that, as people go to the polls next week, the Opposition have given them a reminder of where they stand, for which I am grateful. Conservative councils charge £80 a year less than Labour on a band E property. Under the last Labour Government, council tax doubled. Under Labour Wales, it has more than trebled. Not for the first time, Labour says one thing and does another. Its motion today calls for a council tax freeze, and yet, far from freezing, I looked at the increases in every one of the constituencies of those on the Opposition Front Bench: Leeds up 5%; Wolverhampton up 5%; Camden up 5%; Ealing up 5%; Greenwich up 5%. A full house of Labour councils charging the maximum that they are allowed in council tax.
Enough, Madam Deputy Speaker: enough of the Opposition giving us rhetoric not record; enough of the economic illiteracy from Opposition Front-Bench spokesmen; and enough of these ChatGPT-does-socialism-type speeches that we have heard this afternoon. We should never forget Labour’s record on the economy: working people and your children pay the price. Labour has ditched its rule not to borrow to fund day-to-day spending, so we know its plan to stick billions on the nation’s credit card. [Interruption.] Labour Members can intervene if I am incorrect. No Labour Government have ever left office with unemployment lower than when they came to power. Under the last Labour Government, unemployment rose from 2.1 million in 1997 to 2.5 million by the time they left office in 2010—more people denied the security and the chance in life of a good job.
Finally, let us never forget, when Labour left office in 2010, how the then Chief Secretary wrote—[Hon. Members: “Ah!”] What did he write? He wrote:
“Dear Chief Secretary, I’m afraid there’s no money left.”
We are a Government focused on delivering the British people’s priorities. We are making sure that we are helping those in financial strain. We are focused on the future and we are delivering not just for growth that comes when a country emerges from a downturn, but for long-term sustainable healthy growth.
Since the Conservative Government came into power in 2010, we have grown more than major economies such as France, Italy or Japan and around the same as Europe’s largest economy, Germany. We have halved unemployment. We have cut inequality and reduced the number of workless households left to us by 1 million. Output is now higher than pre-pandemic levels. There is still much to do, but we are on track to deliver—
Sir Alan Campbell (Tynemouth) (Lab)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Question agreed to.
Question put accordingly (Standing Order No. 31(2)), That the original words stand part of the Question.