(1 year ago)
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Madam Deputy Speaker (Dame Eleanor Laing)
Before we resume the debate, I remind hon. Members that, as Mr Speaker said last week, in addition to being present at the start of the debate, after a Member has spoken in the debate, they must, as an absolute minimum, remain in the Chamber for at least the next two speeches, and preferably for the majority of the debate. It is unfortunate that I am having to repeat this, but we have had some difficulties in recent weeks where Members think they can come in, make a speech and go away again. Taking part in a debate means being here for the whole of that debate. Of course, the occupant of the Chair will allow a Member to go out for a short while, but not for hours and hours. Cigarettes An amount equal to the higher of — (a) 16.5% of the retail price plus £316.70 per thousand cigarettes, or (b) £422.80 per thousand cigarettes. Cigars £395.03 per kilogram Hand-rolling tobacco £412.32 per kilogram Other smoking tobacco and chewing tobacco £173.68 per kilogram Tobacco for heating £325.53 per kilogram”.
It is also essential that every Member who has spoken in a debate should return to hear the winding-up speeches from both the Opposition spokespersons and the Minister. I remind hon. Members that that sometimes includes the spokesperson for the Scottish National party. If, for any reason, hon. Members are unable to return to the Chamber for the wind-ups in today’s debate, for which approximately 46 people have indicated that they wish to catch my eye, they should please let me know now and I will withdraw their request to speak. I remind Members that records are kept when Members speak and fail to return, and that is taken into account when deciding whether to call Members in subsequent debates.
It should not be necessary to say this, but I have to say it: both the Minister and the Opposition spokespersons responding to the debate are expected to remain in the Chamber for the majority of the debate, so that they are able to respond effectively to points raised by other hon. Members.
I should draw the House’s attention to a minor correction that has been made to resolution 21. A revised version of the resolutions paper is available in the Vote Office and online. It includes a note setting out the correction that has been made.
Rates of Tobacco Products Duty
Debate resumed (Order, 23 November).
Question again proposed,
That—
(1) In Schedule 1 to the Tobacco Products Duty Act 1979 (table of rates of tobacco products duty), for the Table substitute—
“TABLE
(2) In consequence of the provision made by paragraph (1), in Schedule 2 to the Travellers' Allowances Order 1994 (which provides in certain circumstances for a simplified calculation of excise duty on goods brought into Great Britain) —
(a) in the entry relating to cigarettes, for “£393.45” substitute “£422.80”,
(b) in the entry relating to hand rolling tobacco, for “£351.03” substitute “£412.32”,
(c) in the entry relating to other smoking tobacco and chewing tobacco, for “£161.62” substitute “£173.68”,
(d) in the entry relating to cigars, for “£367.61” substitute “£395.03”,
(e) in the entry relating to cigarillos, for “£367.61” substitute “£395.03”, and
(f) in the entry relating to tobacco for heating, for “£90.88” substitute “£97.66”.
(3) The amendments made by this Resolution come into force at 6pm on 22 November 2023.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
The Secretary of State for Work and Pensions (Mel Stride)
Securing good jobs for more people is the best way out of poverty, and the best route to raising living standards. That is why, in his autumn statement, the Chancellor announced a cut in the main rate of employee national insurance from 12% to 10%. That is why we have raised the national living wage, representing a boost of more than £1,800 to the annual earnings of a full-time worker. That is why we are delivering the next generation of welfare reforms to help thousands more people into work. That is why, Madam Deputy Speaker, we on the Conservative Benches will never tire of reminding Opposition Members of our record since 2010: nearly 4 million more people in work; numbers on company payrolls at a near-record high; the unemployment rate around halved; more than a million fewer people in poverty; and UK economic inactivity lower than the G7, the EU and the OECD average, and down nearly 300,000 from its pandemic peak.
As Conservatives, we believe in making sure that those who can work have every opportunity to do so. Indeed, that is precisely how we can afford a strong welfare safety net for those who are unable to work and support for the most vulnerable in our society.
Sir Edward Leigh (Gainsborough) (Con)
If we were to insist on work visas being given only to people who are on average UK earnings, would that not create a virtuous circle by which only skilled people came here, and care homes would be forced to pay proper wages, ensuring that more people came off my right hon. Friend’s books and got into productive work?
Mel Stride
My right hon. Friend is attempting to tempt me into matters that I know are under discussion at the highest levels of Government at the moment around the policy that we should adopt on immigration, but I will not be drawn immediately in that direction.
Stephen Crabb (Preseli Pembrokeshire) (Con)
I am grateful to my right hon. Friend for giving way. Let me return to the record of the past 13 years. At various points in that time, there has been no shortage of people in this House and outside who have been very quick to predict an explosion in unemployment—whether that was when we were introducing the public spending restraint under the coalition Government or when we were coming out of the covid pandemic. Does not the fact that those predictions were wrong demonstrate two things? The first is the underlying resilience of the British economy and labour market, and the second is the success of the measures taken by numerous Ministers in his Department over the years always to make work pay and to make sure that our welfare system is reformed to encourage work incentives?
Mel Stride
As usual, my right hon. Friend makes characteristically insightful remarks about the UK economy, not least about unemployment, where he is right: the expectation during covid was that unemployment would rocket up to the kind of levels that we last saw in the 1980s. The fact that no such thing happened is a testament to many of the Ministers, as my right hon. Friend suggests, and not least to our current Prime Minister, who as Chancellor came forward with the furlough scheme and the support for business.
Our commitment to supporting the most vulnerable is clear, including in the substantial the Government have provided to help families with the cost of living. That includes the millions of cost of living payments, landing directly into the bank accounts of those on the lowest incomes, as well as to millions of pensioners and disabled people. Of course, one of the most important actions that we have taken to help families is to deliver on the Prime Minister’s pledge to halve inflation. A compassionate Government recognise that, for the poorest families, cost of living pressures remain, which is why we are increasing universal credit and other benefits by 6.7% from next April in line with September’s inflation figure.
A compassionate Government recognise that rising rents are affecting private renters on the lowest incomes, which is why we are increasing the local housing allowance to the 30th percentile of local market rents from April next year. A compassionate Government back their pensioners, which is why we are honouring the triple lock, with an increase to the full state pension of 8.5 %. That is the second biggest ever increase, following last year’s increase of 10.1%.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Will the Secretary of State comment on the number of deaths that are anticipated, as I mentioned last week, due to elements of the policy proposals around forcing people into work, and taking their benefits off them if they are unable to fulfil that?
Mel Stride
I will come to benefit reform momentarily, but let me assure the hon. Lady—I know that this is a particular concern of hers, and she is right to be concerned about these matters—that my Department is extremely concerned to ensure that all changes in our benefit reforms are proportionate and are introduced in the most sympathetic and supportive way possible. Underlying those reforms, however, is a simple belief: we believe that where people want to work—where they have the ability to work—work is good for them. We want to open our door to as many people as possible, including many who are currently long-term sick and disabled, to give them exactly that opportunity.
John Redwood (Wokingham) (Con)
I have declared my business interests in the Register of Members’ Financial Interests. Noting the good words from the Chancellor in favour of self-employment, and noting the national insurance measures to help, are there things that the Department for Work and Pensions is doing, or can do, so that self-employment is an option for people who are currently without work but who may have a lot to offer?
Mel Stride
My right hon. Friend is right to draw attention to the self-employed and to the national insurance changes that my right hon. Friend the Chancellor announced in his autumn statement. Of course, my Department does a huge amount to support the self-employed. Many of our programmes are open to self-employed people to ensure that we are there to support them with the wages that they are able to bring home in self-employment, and we will continue to do exactly that.
A compassionate Government also need to be honest about the significant challenge that we face with the rising number of people leaving the labour market due to ill health or disability. Around 2.6 million people are currently off work with a long-term physical or, increasingly, mental health condition. Given the positive impact that work has, not just on finances but on health and wellbeing, there is a clear need to do more to help and encourage those people. In a tight labour market, with employers looking to fill nearly 1 million vacancies, there is also a wider economic imperative. Every time someone returns to work, they benefit and everyone benefits. It helps the economy to grow, debt to fall and inflation to decline still further.
Just as importantly, given the waste of human potential that inactivity often represents, there is a moral case to act. That is why, with the £2.5 billion-worth of investment over the next five years, our back to work plan will help thousands of disabled people and those with health conditions to stay in work, or if they fall out of it, to move quickly back with the right support. A key part of our approach is bringing together employment and health support, because we know that work and health go hand in hand.
Liz Twist (Blaydon) (Lab)
What steps is the Secretary of State taking to ensure that Access to Work schemes will be readily available, funded and put in place much more quickly than they are now?
Mel Stride
The Access to Work scheme is a fantastic scheme for encouraging those with disabilities to go into work. It is one of the reasons why disability employment is an area in which we have had so much success. In 2017, we set a 10-year target of getting 1 million more disabled people into work. We exceeded that target by 40% in just five years. Access to Work is part of that. The funding for Access to Work, as the hon. Lady will know, can exceed £60,000. It is an enormous commitment by a caring and compassionate Government to ensure that those who may need the assistance actually receive it.
That approach is at the heart of our new WorkWell service, which is integrating employment and health support at the local level. We will reform the fit note process to ensure that it is not a simple pass to sickness absence, but more of a prescription for the right support that is needed to keep someone close to work or to resume work after a period of illness. We are also doubling the number of placements available on our universal support programme, to help 100,000 people each year into roles, with up to 12 months of ongoing wraparound support to help ensure that they stay in work.
Lia Nici (Great Grimsby) (Con)
I applaud my right hon. Friend and the Chancellor for bringing in all these new initiatives to make people get back to work. Grimsby has a higher unemployment rate than the national average, although it is coming down. Will he or one of his Ministers commit to meeting me to talk about what we can do to encourage more employers to become disability confident and to offer work placements to those people who are currently out of work, but are capable of getting back in to work?
Mel Stride
I know my hon. Friend is a very powerful champion for employment in her Great Grimsby constituency and I will indeed make sure that a Minister is available for the discussions she has sought.
Given that we know how important high-quality occupational health is for helping people with health conditions to stay in work, we will support businesses to develop voluntary minimum levels of intervention that employers can adopt to help to improve employee health.
My right hon. Friend the Secretary of State for Health and Social Care is also introducing measures to reinforce our efforts to join up employment and health support by tackling one of the main reasons for sickness absence. Our expansion of access to mental health services will support almost 400,000 extra people through NHS talking therapies, and an additional 100,000 places will be made available through individual placement and support to help people who experience severe mental health conditions to start and stay in employment. With that significant expansion of extra support, we are breaking down the barriers that for too many have been a roadblock to the rewards of work. That requires bold reform.
Mel Stride
While the world of work has transformed significantly in recent years, the way we assess someone’s ability to work, or to prepare for work, has not changed for over a decade—not since the work capability assessment was last comprehensively reviewed in 2011. Since then, we have seen the rise of flexible working and new legislation giving workers the right to request it from day one of a new job. We have seen big increases in hybrid and home working, and there is a much greater understanding on the part of employers of the importance of reasonable adjustments and how to support disabled people in the workplace.
Mel Stride
Those changes have opened many more opportunities for disabled people and those with health conditions to participate in work, and for employers to benefit from their talents, but the fact is that too many people who could work are being denied access to those opportunities because they are deemed not fit to work or even to prepare for work. The proportion of people going through a work capability assessment and receiving the highest level of health-related benefits, where there is no requirement to look or prepare for work, rose from 21% in 2011 to 65% in 2022.
However, crucially, one in five in that group would like to work in the future with the right support, and more than half of those who felt that they could work within the next two years saw a fear of not being able to return to benefits as a barrier to work. With our new chance to work guarantee, we are removing that barrier and that fear for millions of disabled claimants who want to try work.
The reform will effectively abolish the work capability assessment for the vast majority of existing claimants who have already been assessed and do not have any work-related requirements. They will be free to do some work without the prospect of having to be reassessed and potentially losing their benefits if a job does not work out. It brings forward a major part of our longer-term plan, set out in the health and disability White Paper published earlier in the year, which will see the work capability assessment abolished completely.
In the meantime, for new claimants, we are ensuring that the work capability assessment is fit for the modern world of work and reflects the greater opportunities for disabled people. To that end, we are updating some of the criteria we use to assess whether someone can work or prepare for work, including the “mobilising” and “getting about” activities, as well as the substantial risk rules. Those reforms will come in from 2025, and it is important to emphasise that we will continue to protect the most vulnerable and those with the most significant limitations.
Mel Stride
The changes will help many more people who can work—who want to work—to gain all the benefits of a job. That is my mission. It is a mission that extends to helping anyone who falls out of work, for whatever reason, to get back into work quickly. It is a mission to ensure that a spell out of work does not turn into the scourge of long-term unemployment, because we know that the longer someone remains out of work, the harder it is for them to return. That is why we are ensuring that people who are deemed fit to look for work are put on a stronger path to employment, rather than being parked on benefits indefinitely.
Stella Creasy
Another scheme intended to help ensure that people can get back into work is the expansion of childcare. Last week’s report showed us that the Office for Budget Responsibility believes that the Government’s childcare reform will mean a reduction in welfare spending, and that the £5.2 billion pledged to childcare will need to be only £4.6 billion—a reduction of more than 10% in the funding available for childcare. We all agree that childcare will help people back into work, so will the Secretary of State take this opportunity to pledge on the record that the Government will put directly into childcare the full £5.2 billion that our constituents were promised in March?
Mel Stride
I was expecting a devastating, killer intervention, given how keen the hon. Lady was to intervene, but it never quite arrived. She will know that in the Budget, the Chancellor made a substantial investment—the hon. Lady mentioned the figure £5 billion—in childcare. In my Department that is huge, because it means that we will deal with the retrospective nature of the first month’s payment, and that the amount available to those wishing to take advantage of childcare will be increased by some 49%.
Through our back to work plan, we are phasing in more intensive support and more rigorous requirements on jobseekers much earlier in their claim. We are accelerating the point at which claimants are required to undergo a more intensive 12-month work-search regime, which will kick in six months, rather than nine months, after the start of a claim. Anyone who has not moved into work by the end of that will be required to accept a mandatory work placement or other intensive activity to improve their chances of employment.
For those who refuse that support, it is right that there should be consequences. If a claimant does not accept those new conditions without good reason, their universal credit claim will be closed. As a result, no claimant should reach 18 months of unemployment in receipt of their full benefits if they have not taken every reasonable step to comply with jobcentre support. We will back that up with closer monitoring to ensure that the rules are being followed, including by tracking claimants’ attendance at jobs fairs and at interviews organised by jobcentres. That will mean that work coaches have the information that they need to know whether claimants are meeting their commitments. As part of this more rigorous approach, we will continue looking at the impact of more intensive support at seven weeks into a claim being delivered through our additional jobcentre support.
These back to work reforms strike at the heart of the quid pro quo that defines the contract between the state and individual. We are saying, “The Government will provide you with the support you need to move into work, but if you fail to keep your side of the bargain—if you refuse to engage or ignore available job opportunities —we will stop your benefits.”
Steve McCabe (Birmingham, Selly Oak) (Lab)
I do not think that many people will object to the idea that those who can work should work, and that the Secretary of State’s measures to get people who are capable back into work should be adopted. However, he will be aware that the Work and Pensions Committee has recently been considering vulnerable people who are entitled to benefits but do not get them. What safeguards can he provide to guarantee that the health of people who are ill is not made worse by the pressure that some jobcentres will apply in trying to meet his targets?
Mel Stride
The hon. Gentleman raises a really important point. I have great respect for him, and I have appeared before the Select Committee and been cross-examined by him. He is right to raise those kinds of concerns. They are concerns that we think about on a daily basis in my Department, to make sure that we get it right.
The regime I am outlining is for people who have been intensively supported for 18 months during their job search, who are fit and able—so they are not the people the hon. Gentleman described—and who, when presented at that point with the opportunity for work, decline that work. I think most people up and down the country would feel that it is right that there are consequences at that point.
When it comes to those who cannot work—those who are long-term sick or have significant disabilities—I want more than anybody else, and as much as any other person in this House, whichever side they may be on, to make sure that, as a civilised society, we are there to support them, no questions asked. But we can only do that for the most vulnerable in our society if we have a fair system that carries the support of the general public and can fund itself in the way we need it to.
Our back to work plan is about putting fairness at the heart of our welfare system: fairness for claimants who play by the rules and try their best, and fairness for taxpayers who contribute to the system. Contrast that with the Opposition, who have no plan. The only serious proposal they have for welfare reform is to water down benefit claimants’ requirements to work, which could cost £2 billion. That is not just reckless but unfair. It is no wonder that Labour has never left office with unemployment lower than when it entered it. It is no wonder that under Labour, youth unemployment rose by over 40%, unemployment increased by over 1 million, and more than 1 million people were left to languish on out-of-work benefits for almost a decade. That was not a record in office; it was a national disgrace. On Labour’s watch, countless lives were left to ruin.
The puddle of nihilism that is the Opposition Front Bench has no plan. Labour Front Benchers carp and vacillate from the sidelines, suck their teeth and dither, transfixed on the one hand by the fairer approach that they know in their heart the public demand, but frightened stiff on the other hand by the rank and file behind them. Is the truth not rather simple, Mr Deputy Speaker? They have no plan because compassion demands courage, and by their omissions they tell us that they have neither. This autumn statement protects the poorest and most in need, rewards work by cutting taxes and increasing pay, and takes the long-term decisions on welfare reform by helping people into work, growing the economy and changing lives.
Liz Kendall (Leicester West) (Lab)
My constituent David has a 30-year-old son with autism and severe obsessive compulsive disorder. David says that despite all the challenges his son faces, he has recently moved into independent living and is working really hard to try to find a job. David’s son has lots of skills, especially in computing and research, but because of his autism and, particularly, his OCD, he needs an employer who understands his conditions and will give him a real chance and offer him the work flexibility that someone in his situation needs. He is doing everything he possibly can to find work. He recently applied for a job at Tesco and was really pleased to get an interview, but because the job required a lot of overtime and there are limits on how many hours he can take because he is on employment and support allowance, he could not take up the offer.
This is the reality facing many sick and disabled people across Britain today. They want to work not just for the money, but for the sense of purpose, dignity, independence and self-respect that work brings. They deserve a Government who back their efforts and aspirations and who will tear down the barriers to their success, but under this Government nothing could be further from the truth.
The last few weeks have seen the Prime Minister, the Chancellor and the Work and Pensions Secretary railing against the soaring numbers of people out of work due to long-term sickness. It is as if, after 13 long years, this has nothing to do with them, but these problems have happened on their watch and they only have themselves to blame. Britain remains the only country in the G7 where the employment rate still has not returned to pre-pandemic levels, and 2.6 million people are now shut out of work due to long-term sickness, which is the highest number since records began. What do the Government expect when they have driven the NHS into the ground and let waiting lists soar to 7.8 million, and when social care has been forced to its knees?
And what is the result? There are more and more people over 50 out of work due to long-term sickness, with people struggling with bad hips, knees and joints left stranded on NHS waiting lists and waiting for treatment in discomfort and pain. Many of them are women who are trying to care for their elderly parents or other sick and disabled relatives at the same time, with precious little help from an unreformed social care system after 13 years of this Government.
The number of young people out of work due to long-term sickness has doubled over the last decade and now stands at more than 230,000. Much of that is driven by mental health problems, but it is compounded if such a young person lacks basic qualifications and lives in a part of the country—often a town or coastal area outside our large cities—that is struggling economically.
We know from brutal experience the terrible consequences that long-term youth unemployment brings, and all these problems are far worse in poorer parts of the country. The grim reality is that someone is twice as likely to be out of work due to ill health if they live in the most deprived fifth of areas in England than if they live in the least deprived fifth, with rates of worklessness due to long-term sickness among the over-50s rising three times faster in the north of England than in the south.
This is the reality of Conservative Britain, and it is such an unforgivable waste. It is a waste of individual talent and potential when millions of people who want to work are written off because they cannot get the support they need to get back on their feet. It is a waste for British businesses, which desperately need to recruit staff and use the skills and experience of everyone in our country to thrive and succeed. It is an appalling waste of taxpayers’ money too, with taxpayers paying an extra £15.7 billion a year in higher benefit bills and lost tax revenues compared with before the pandemic.
What are Ministers proposing to deal with a problem so serious that the OBR says it is a significant risk to fiscal sustainability, driving higher taxes and weakening our growth prospects? We heard a lot last week about how more sick and disabled people can work from home. Let us put to one side that, barely 18 months ago, the last Prime Minister but one, the then right hon. Member for Uxbridge and South Ruislip, said that working from home does not work, and the right hon. Member for North East Somerset (Sir Jacob Rees-Mogg) claimed that homeworking reduced productivity and led to higher taxes. I am a strong supporter of home and hybrid working but the reality is that by far the highest levels of homeworking are among people earning £50,000 a year or more. Two thirds of people who work from home have a university degree, compared with only around one in 10 of those with no qualifications. Did we hear anything from the Government about getting sick and disabled people the degrees and professional qualifications they need to secure these high-paid work-from-home jobs, or about how to get the internet access, computers, home adaptation aids and other support that they need, given that so many disabled people are living in poverty? We did not.
Instead, as I am afraid the Secretary of State repeated today, we heard a rehash of old plans that would not be needed if they had worked in the first place, and of measures so inadequate, unambitious and ineffective that they will fail to tackle the root causes of worklessness and get Britain working again.
The much-lauded reforms to fit notes and the new “expert group” on occupational health to drive improvements in employee health at work were both announced six years ago, in the “Improving lives” strategy that the Chancellor published when was he was Health Secretary back in 2017. The new mandatory work placements were first announced back in 2011, when the Government said jobseekers who need initial support to get back to work can be referred on to mandatory four-week work placements. I am all in favour of work placements and better occupational health, which I have campaigned for in my constituency for years, but reannouncing old programmes that clearly have not worked is not a plan for success.
As for the Government’s changes to the work capability assessment, Labour has been warning for years that benefit assessments are not fit for purpose and should be replaced with a simpler, clearer system that gets decisions right the first time and focuses on what people can do, not just what they cannot, as part of much wider reforms that give practical help and support to get people into work and to stay in work. But that is not what the Government are proposing and their plans are not a recipe for success.
That is not just my assessment, or the assessment of disabled people’s organisations and charities; it is what the Office for Budget Responsibility says in its response to the autumn statement. A reasonable person might think that the results of a successful back to work plan would probably start with fewer people out of work due to long-term sickness and disability, but that is not what the Government’s plans achieve: the OBR says that 600,000 more people will be on sickness and disability benefits after the Government’s plans. Might we expect a higher overall employment rate? Sorry, wrong again: the OBR forecasts that this will remain static at just 60.6%. What about lower spending on sickness and disability benefits overall? I am afraid we would be wrong again; the OBR says that spending on sickness and disability benefits will increase by a staggering £33 billion over the forecast period—that is up by a whopping 75%. That is the result of the Government’s plans.
Britain desperately needs an alternative plan to get Britain working again, and that is what Labour will deliver. Our top priority will be ensuring that everyone who can work, does, because rights to taxpayer support must go hand in hand with the responsibility to take up work and training when they are offered. Conditions have always been part of the social security system since the original Beveridge report, and under Labour that will always remain the case. But Beveridge also said that the state has a responsibility to do everything within its power to help people get back on their feet, including through an NHS that focuses as much on prevention and rehabilitation as on cure, and an economy that delivers full and productive employment across the country. That is why Labour’s fully costed, fully funded plan will tackle the root causes of worklessness, drive down NHS waiting lists, overhaul jobcentres, transform skills, reform social security and make work pay.
That starts with our long-term plan for the NHS, because we know that a healthy nation is the key to a healthy economy. We will invest an extra £1.1 billion a year, paid for by abolishing the non-dom tax status, to provide 2 million more NHS appointments and clear the NHS backlog. We will recruit 8,500 more mental health staff, with support in every school and in every community to tackle mental health problems early on, paid for by closing private equity bonus loopholes, because when half of all serious mental illness starts before the age of 18, we have to get that help and support early on.
We will go further still. We will overhaul jobcentres, so that they provide personalised help tailored to individual needs—not the one-size-fits-all approach that drives too much of what the Government do. Jobcentres will also have new duties to work in partnership with the local NHS, employers and others. There will be a new focus on helping people to progress out of low pay, because we do not just want people to get a job; we want them to get on in their job and to use their talents and skills to the full. That is crucial to improving productivity and putting money in people’s pockets.
Mel Stride
The hon. Lady has substantially described our plan. What she has not said is whether she supports it. Does she support our plan?
Liz Kendall
I do not support a plan that leads to £33 billion more spending at the end of the forecast period and 600,000 more people on sickness and disability benefits because the Government have failed to tackle the root causes of worklessness or to put a proper plan in place. I know that the Secretary of State is desperate to say that people on the Opposition Benches do not support conditions or the requirement to work, but work is our party’s name. We believe that the benefits of work go beyond a payslip to the dignity and self-respect that good work brings. We will devolve employment support, so that it works for local issues and local needs, because the man, or even woman, in Whitehall can never know what is best in Leicester, Liverpool or Leeds.
Instead of demonising disabled people, we will put in place a proper plan to ensure that those who can work, do. Our “into work guarantee”, backed by the Centre for Social Justice and the Social Security Advisory Committee, will provide real incentives for sick and disabled people, allowing them to try work without fear of losing their benefits if things go wrong. It seems that the Government have finally nicked our proposals, just as they did with our NHS workforce plan. I have no idea what took them so long. Unlike the Government, however, who have let waits for Access to Work support soar, we will drive those waits down so that people can get the adaptations, equipment, travel and other support when they need it, rather than having to wait for weeks on end.
That is not all. Our mission to break down the barriers to opportunity will overhaul skills, so that no one is ever written off, whatever their age, including with new technical excellence colleges and by reforming apprenticeships. We will make work pay with a real living wage and by banning zero-hours contracts and fire and rehire. We will help parents balance work and family life with breakfast clubs in every primary school and more rights to flexible working through our new deal for working people.
Above all, our driving mission in government that will drive everything we do will be getting growth across every part of our country, because that is the key to our future success. We will get Britain building again by overhauling planning with ambitious new housing targets and first dibs for first-time buyers. We will get Britain investing again, providing the long-term certainty and stability that businesses need, which have been so fatally undermined by this Government. With our national wealth fund, we will leverage private sector investment to create the jobs of the future and make Britain a clean energy superpower. We will get Britain innovating again with our modern industrial strategy and plans to make this country the best place to start up and grow a business.
This autumn statement, hot on the heels of the damp squib of a King’s Speech, proved—if proof were ever necessary—that after 13 long years, the Government have run out of road and run out of ideas. Conservative voters, and even Conservative Members, could be forgiven for wondering what on earth their party is for. They say that they are the party of lower taxes, but the tax burden is the highest for 70 years, and working families are paying £4,000 a year more in taxes in this Parliament alone. They promised to take back control of our borders and stop the boats, but so far this year 27,000 people have arrived on small boats this year, their flagship Rwanda policy is in tatters, and, at 745,000, net migration is the highest recorded in history.
The Conservatives claim to be the party of home ownership, but home ownership has fallen under this Government, with couples now having to spend on average a decade saving for their first deposit, up from only three years under Margaret Thatcher. The armed forces have been cut and cut again, with the Army now employing a third fewer troops than it did in 2010, despite all the risks and threats that we face. Our criminal justice system is on its knees, with violent crime rising, court backlogs soaring and judges being told not to jail convicted criminals because the Tories have failed to build enough prisons. So much for being the party of law and order. That is before we even consider the dire state of our public services, where our schools are literally crumbling, patients are left dying in ambulances, and local government is on its knees.
Britain deserves so much better than this. I know from talking to people across the country, from Hastings to Erewash and from Swindon to Selby, that they are desperate for change, but the Conservatives cannot be the change from 13 years of their own failure. Under the leadership of my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer), we have changed the Labour party, and we stand ready to change the country. Let us have a general election, and let us have it now.
Several hon. Members rose—
Mr Speaker
Order. Before I call John Redwood to speak, I inform the House that I apologise that I was absent at the beginning of today’s sitting due to a change in flight times after spending the last 30 hours meeting my counterparts in Israel and the Occupied Palestinian Territories following the devastating crisis in Israel and Gaza. I thank my counterparts for meeting me at this sad and difficult time.
My advice for Back Benchers is to take up to eight minutes. If we can try to work to that, we will get everybody in on the same basis.
John Redwood (Wokingham) (Con)
I have my business interests declared in the Register of Members’ Financial Interests.
Underneath the exchanges of words, I welcome the outbreak of agreement, given that the Labour party now strongly supports the idea of helping more people into work. I suspect that the Opposition will not vote against the main items in the autumn statement because they understand that the Government have had success in keeping so many people in work and promoting employment over the years, despite some extremely difficult situations. They also understand that that is an important thing for a responsible Government to do, and not just to get the benefit bill down. As Labour has eloquently said, life can be so much more worth while when people have suitable work, suitably supported, that gives them a sense of purpose and of contributing to their communities.
I wish to draw brief attention to the issue of getting inflation under control and the inadequacy of forecasts by the Office for Budget Responsibility and the Bank of England. It is extremely difficult for Ministers to conduct consistent policy when the forecasts are zinging around so much and giving different and often misleading ideas of what is feasible and what is not. I welcome the other place’s most recent report on the Bank of England, which highlights how the Bank has been unable to come up with realistic inflation reports over the last three years and has therefore taken inappropriate action. First, it loosened monetary policy in the covid recovery phase, and now its monetary policy is too tight as it seeks to adjust its past mistakes. I hope that the Bernanke review will get on with the important task of adjusting the Bank’s models and coming up with a better answer to help guide our counsels, and particularly those of our Ministers.
I find it odd that we have a Monetary Policy Committee that is not interested in money and credit. As the other place’s report suggests, perhaps it should look at putting money and credit into its thinking—more diversity of thought is recommended—and into the models to try to get them to work. What is the point of the committee sitting around trying to make decisions if the main data it is using—namely, what it thinks the inflation rate will be—can be massively out? It thought that the inflation rate would stay at a pretty consistent 2%, when it was en route to 11%. That was why, for many months, the Monetary Policy Committee did not take appropriate action to rein in potential inflation. Now it is pretty sure that inflation will come under control, but it still has had difficulties and is constantly having to change its inflation forecasts in the meantime, as has the OBR.
The review rightly points out that when looking at money and credit in the economy, we need to look at the experience elsewhere in the world. Of the five most important central banks of the world, including the Bank of England, those in Asia have lived through exactly the same big escalation in food and energy prices as a result of the dreadful war in Ukraine. The two major central bank economies in Asia are very vulnerable, because they import a lot of food and energy, but their inflation stayed around 2%, whereas the three western central banks, including the Bank of England, took much more aggressive monetary action, printing a lot of money and buying an awful lot of bonds, and experienced the inflation rate going up to around 10%. They should pause and ask why.
The review also rightly says that the Bank of England should be more accountable to Parliament—not to the Government, in any way to prejudice its independence—because it is in the process of losing us the most colossal sums of money. Successive Chancellors have guaranteed the Bank of England against all losses from their bond buying programmes, which started under Labour at the end of the first decade of the century and were escalated by the current Government in response to covid. We are now looking at a possible loss of £170 billion, based on the latest figures that it has revealed. Every penny of that has to be paid by the Treasury on behalf of taxpayers as and when it is incurred.
There is absolutely no need for the Bank of England to make those losses bigger and more immediate by wading into the markets at the moment and selling those bonds in a hurry, at very depressed prices—prices that the Bank has deliberately depressed in order to get interest rates higher. It could follow the European Central Bank, which wisely is not selling its bonds at a loss in the market but is awaiting their retirement when they fall due for repayment, when the losses will be less but it can still shrink the balance sheet, which is the main thing it wishes to do.
I hope the Government will look at that, because it has always been a dual-controlled policy: the bond buying required the signatures of successive Chancellors of the Exchequer. It is a matter of legitimate concern for this House when the losses are so colossal, and there is a direct impact on all public expenditure figures, public borrowing and so forth, excluding the Bank of England. As many in the debate will know, we look at the figures both cum the Bank the England and ex the Bank of England. The ex the Bank of England figures look very poor indeed.
I welcome measures in the autumn statement to promote more growth, which is crucial. The way to get inflation down faster is to promote more capacity, so any measure that gets us more capacity is welcome. That is why I am particularly keen that we be much kinder to the self-employed and small businesses. They can do more work immediately, but some of the tax penalties still weigh on them, preventing them from getting self-employed status or winning contracts, or preventing small businesses from growing quickly enough. I repeat my urging for Ministers to look at that: more capacity would be the best way to get inflation down.
I will put in one final plea to Ministers to find some money to cut the taxes on energy. They are making us extremely uncompetitive and are keeping inflation higher for longer. It would be a win-win to get some of the taxes on energy down.
Richard Thomson (Gordon) (SNP)
Against a pretty horrendous economic backdrop, it was with bated breath and no little trepidation that we on the SNP Benches waited to see what the Chancellor would drop. The backdrop is certainly about as far removed as anyone could ever have hoped it would have been going into such a crucial period. Not only is GDP per capita still not above 2019 pre-pandemic levels, but the UK is expected to suffer the biggest fall in living standards since records began in the 1950s. Most people are expected to be worse off in 2027 than they were in 2019. Real incomes are also expected to be lower in 2027 than they were in 2019. A typical household will be worse off by approximately £694 per annum by 2027-28 as a result of the policies of this Conservative Government who are so adamant, in the face of all outcomes and facts, that they get the big decisions right. That is certainly not borne out by the outlook for the economy under their stewardship.
Sadly, there was nothing at all in the Chancellor’s statement that offered any kind of meaningful change for the millions of people in Scotland and elsewhere who are really struggling right now against that economic backdrop. Last week’s announcements were a clear reminder for people in Scotland, if any were needed, that we cannot hope to build a fair, dynamic economy while being tied to UK Governments who, through their actions, do not reflect the preferences, choices or values that people consistently express at the ballot box when they go to vote.
On the statement, there is the old proverb about the couple who stop for directions and are told, rather unhelpfully, “I wouldn’t be starting from here.” Let us not be in any doubt: we certainly would not wish to be starting from here. We would not wish to be labouring with the aftermath of Brexit, which has permanently given the UK economy the effect of trying to drive a car with the handbrake wedged firmly on. We certainly would not be coming off the back of the catastrophic Budget driven by the right hon. Members for Spelthorne (Kwasi Kwarteng) and for South West Norfolk (Elizabeth Truss), which blew up the economy. Despite that, and in spite of everything, the Chancellor did have slightly more headroom—about £20 billion—than had been forecast. The question was: how would he seek to put that to work?
I will start with the few positives I can find. The uplifting of benefits by 6.7% in line with the higher rate of inflation really is the least the Chancellor could have done. It will still leave too many people struggling and wondering how they are going to pay their bills. It was the very least that should have been done on uplifting the rate. Uplifting the local housing allowance was important. My party called for, and we welcome, allowing rates of housing benefit to be paid at rates that more closely match where the market actually is. A freeze in whisky duty certainly does not undo the damage of the spring Budget, where a 10.1% levy was whacked on the spirit, but at least it makes things no worse.
If the House will permit me, I would like to take the opportunity, while I have a captive audience on the Treasury Bench, to explain why whisky duty matters. The Scotch whisky industry supports 10,000 jobs in Scotland and 42,000 jobs across the whole of the UK. It also represents 25% of total UK food and drink exports. One would think that this is an industry that the Government would want to look after, nurture, take care of and give every possible opportunity to succeed. The level of duty affects domestic consumption and also affects the investment that goes into supporting those jobs. But here’s the rub: it also impacts how other jurisdictions in key markets, particularly the Asian markets, react, because many of them take their cue from the level of duty set by the UK Government. If they see the UK Government setting a rate of duty where there is a gigantic differential between indigenous spirits such as Scotch whisky and other drinks in the market, then they have absolutely no qualms about following suit. That depresses potential sales in key emerging markets and reduces the opportunities we have to drive growth and innovation in that key sector at home.
As for the bigger picture, nothing in the Chancellor’s statement offered meaningful change to the millions of people out there who are suffering at the moment. What the statement did offer was a clear reminder that, as I have said, the key powers over the commanding heights of the economy will do nothing for Scotland while they continue to remain under the control of Governments who do not share the values that people vote for. Sadly, as the soaring cost of household bills outpaces the limited help that was on offer in the statement, the reality is that what was offered is far too little, coming far too late for the squeezed majority of households.
The SNP set what I thought were some pretty basic fundamental tests for the statement: a relatively small number of asks that could nevertheless have made a big difference. We asked for a £400 energy rebate, something that the UK Government have sadly failed to provide although energy bills continue to be roughly double what they were in 2021—and moreover, the day after the statement the energy price cap was increased by a further 5%. We challenged the UK Government to match the council tax freeze by the SNP Government in Edinburgh, which will put a disproportionately high amount of money into the pockets of the lowest earners. We also challenged them to match the game-changing Scottish child payment of £25 a week, another measure that is putting thousands of pounds into the pockets of those who need it most. That payment was highlighted in a recent blog by the London School of Economics as one of the key reasons why the level of child poverty in Scotland—although far too high—is still significantly lower than it is in any other part of the UK.
The UK Government could also have given some respite to hard-pressed homeowners, many of whom are looking down the barrel of significant increases in their mortgage payments as a result of higher interest rates. They could have done that by introducing mortgage interest rate relief, but they chose not to do so.
For my part of Scotland, the north-east, we challenged the UK Government to match what the Scottish Government are doing in kick-starting the energy revolution, the green transition that we need—to match the £500 million set aside purely for the north-east—but we got nothing, although we know how crucial that energy transition is to ensuring fairness, retaining human capital and prosperity, and delivering the changes that not only our economy but our planet needs.
We are invited to believe that the goal of the statement was growth. Let me draw attention to two key areas in which the UK Government have, in my view, been found to be badly wanting. The first is capital spending. There are obviously pressures to maintain existing assets, as we all know from the emergence of the problems that reinforced autoclaved aerated concrete has caused in many public sector buildings constructed over the past 40 years. We can see the waste caused by overspending: the horrendous waste of money represented by some of the stations in central London on the Elizabeth line, a railway that did go ahead, and by the cancellation of HS2 and the bits of that line that did not go ahead. However, we need to recognise the importance not just of private sector capital expenditure, but of the key driving, galvanising force that capital expenditure from the Government and the public sector can have. It drives and encourages investment from the private sector, and, crucially, it increases the productive capacity of each and every one of us. It is therefore unfathomable that the UK Government should cut the Scottish Government’s capital budget by 6.7% between 2023-24 and 2027-28—a figure that will potentially become even higher if inflation persists at its current levels—all the while refusing to devolve long-term borrowing powers.
Secondly, there is a persistent negative when it comes to research and development. There are parts of the UK that punch pretty well above their weight in that regard, most obviously the south-east of England and London but also Scotland. However, there are other parts, such as the regions of England and also Wales, where R&D spending is significantly below the share of GDP, and also below the share of the population that might be expected to be able to attract it. Beyond that, the UK’s investment in research and development consistently lags that of EU competitors such as France and Germany, which is a major drag on long-term growth and economic opportunities for all our constituents.
Looking through the additional spends and revenues forgone as a result of the statement, it seems to me—I am happy to be proved wrong—that the Government are committing more to returning full business rates to the combined authorities in Greater Manchester and the west midlands than they are to research and development or anything that might drive that forward. Lest anyone assail me, I have absolutely no grudge against the west midlands of England or the Greater Manchester combined authority—more power to them! I do not know whether the Greater Manchester combined authority extends to Chorley, Mr Speaker—
Richard Thomson
Perhaps some reflected benefit will come through. Those authorities are entitled to every penny that they can get back from this Government, and I wish them well in that endeavour, but it pales in comparison with the strategic importance of research and development, in policy terms and numerically. Until the Government get to grips with the long-term lack of investment in our public sector, our human capital, our physical capital and our R&D, we can expect the country to lag behind.
It is no secret that I come here as a supporter of Scottish independence. I would dearly love to see Governments in Scotland being able to make their own budgets, constrained only by the limits of their own resources, their own choices, their own imaginations and their own political mandates, and with restrictions placed on them by nowhere else. But until that day comes, we are stuck with what this Government and potential UK Governments come forward with, which, I have to say, we find badly wanting.
Mr Ranil Jayawardena (North East Hampshire) (Con)
The House, on both sides, wants to get Britain growing, and that is a great statement of intent. I am delighted that the Opposition parties agree with the Government and the Conservative party on that. I hope they will also agree that it is important that people keep more of what they earn, because they have earned it, they deserve it and that is how we will create the right work incentives to grow the economy in the years ahead. I want to put on record my support for the changes to national insurance, which will be a really important step in delivering exactly that. The fact that 27 million people will be getting a tax cut and that someone employed on a wage of £35,000 will be £450 better off is an excellent step in the right direction, and I hope there will be more to come.
I also welcome the changes for the self-employed, because it is crucial that we focus not only on those employed in large businesses but on those who work for themselves. They are the strivers who get up every morning looking for new opportunities, not only for themselves but for their families and for our wider economy. It is also important for both groups, whether they are employed or self-employed, that there is fairness in the system, and that is why it is right that welfare is looked at again. It is important that this country has a safety net. Across the House, everyone agrees with that simple premise. Those who fall on hard times, those who find themselves in difficulties and those who have particular needs that mean they cannot work at a point in their life deserve our support, and I know that the country is with us on that. But those who do not seek work are the people that the Government are rightly looking at again. I know that the people out there who we work for, the people who pay taxes, are on the Government’s side as we ensure that those who do not seek work are not provided with the support of generous taxpayers across this country.
I also give credit to the Government for the abolition of the lifetime allowance, which was announced earlier than the autumn statement. Again, this is an important statement of intent because it creates the right incentives for people to be able to work in this country. That includes people who want to work longer, given that our health is consistently better and that we can work well into what was traditionally seen as retirement. By seeking to reverse the change, the Labour party is wrong. It would price out—tax out—doctors, policemen and teachers from public service at their peak. Labour’s plan to restore the lifetime allowance would cripple those who want to continue working and contributing to our economy and society, which is something that we should be welcoming; I certainly do.
I said that I hope this is a starting point and that the Government will go further—I believe it is crucial that they do. Although childcare is an important issue for many people in this country, family-friendly taxation is arguably more important. Many people choose to use informal forms of childcare, and many people want to spend more time with their children during their early years. Indeed, 74% of women polled say that they want to spend more time with their children, particularly before they start school, and two thirds want to spend all their time with their children before they start school, but they cannot because the support is not there in the tax system. That makes us an outlier—families are taxed about 26% more in this country than in our OECD counterparts. It is a question of fairness. Individuals pay less tax than the OECD average, but families pay more. I hope the Government will look at that in the months ahead. Indeed, I hope they will look at the excellent report from the Centre for Policy Studies, to which I happened to contribute, outlining some of the options.
The SNP spokesman, the hon. Member for Gordon (Richard Thomson), talked about the squeezed middle. It is crucial that tax thresholds—particularly the 40p threshold—are reviewed. It is wrong of the SNP to say that it is here in defence of the squeezed middle, when the squeezed middle are the ones being taxed the hardest north of the border.
We must go further, too, to prove that we are different from the SNP, and that we recognise that people who strive to progress in their career, who strive to earn more money, should be rewarded. I am led to believe that, had the 40p threshold remained index-linked from the time of Nigel Lawson, it would now be in the order of £80,000, so there is much further to go to make sure the threshold does not affect police sergeants, teachers with 10 years’ experience and the like. That was not its intended purpose. Again, if we are keen to make work pay, and if we are keen to create the right incentives in our economy for people to try to secure more hours, to secure a promotion or to set up their own business, we need to make sure the tax system reflects that.
In addition, those who have done the right thing all their lives by saving hard and putting their hard-earned money into their family home should not be penalised. It is crucial that the Government look again at lifting the inheritance tax threshold from £325,000 to perhaps £1 million, as was proposed by the former Chancellor, George Osborne, in 2007. This would simply do what the Conservative party says it has always wanted to do, and I hope the Front Bench will look at that in the months ahead.
I am conscious of time, so I will move on to spending reductions and capital receipts. When the Government cancelled High Speed 2, I wonder whether they considered privatising the operation, rather than selling off the land piecemeal. There is an opportunity here to build infrastructure for the future, but for the private sector to do it and for the Government to get a capital receipt now. I hope the Government would welcome that, because it is wrong to stymie infrastructure for the future, but it is right that taxpayers’ money is best spent on road projects across this country.
There is a huge amount of spending across Government. One example is in the Department for Transport, where a huge amount of money is being spent on so-called active travel. This is the left getting what it wants, which is everyone moving from their own private transport into Government-controlled transport, or being forced to walk or cycle in 15-minute neighbourhoods. That is not what the people of this country want. They do not want blanket 20 mph speed limits, so those are the sorts of cuts we should seek.
Sarah Edwards (Tamworth) (Lab)
I am grateful to be able to make my maiden speech in this debate on the autumn statement.
For many people, the primary concern is how they will get through to the end of the month. Pockets are empty, cupboards are bare and many are filled with despair. I must apologise, for I know a maiden speech should start with a more uplifting tone, but I would be remiss, in my place on these green Benches, if I forgot to be a voice for my constituents and simply glossed over the crisis in which they find themselves.
It is only right that I pay tribute to the many community organisations that have stitched together the supportive fabric that many now rely upon and the threads that hold it together, such as Heart of Tamworth, whose hub provides a solace from that despair, whether it be through the dementia café or the food pantry. Like a quilt, it always has a warm welcome.
The people of Tamworth and the villages voted for a prosperous future and for change, and it is to my constituents that I turn first. I thank them for placing their trust in me to restore their voice in this House. I am immensely proud to represent the great constituency of Tamworth, complete with its spectacular villages, and I will endeavour to champion the issues that matter to my constituents at every opportunity.
I am proud to be Tamworth’s first female MP. Women have been able to stand for Parliament only since 1918. To date, just 563 female MPs—not even amounting to a full House—have been elected. That sets my recent by-election victory, with the second largest swing since 1945, in an even starker light, making me even prouder to have been elected against the odds. I draw a parallel with my predecessor Brian Jenkins who, also as a by-election candidate, was elected against the odds in 1996. I am grateful to him for his support during my campaign.
I was elected with the knowledge that Tamworth boasts a unique history, having been fortified in 913 with the building of Tamworth castle by Æthelflæd, the lady of the Mercians, whose leadership legacy left behind that stunning heritage asset adored by the town and visitors alike. Our sense of identity is rooted in the stories of the past, and the historic market town of Tamworth is proud of its medieval heritage. With my own passion for heritage, the honour of representing a place with so much tangible heritage is hard to articulate, but I intend to find creative ways to support the regeneration of Tamworth through its priceless heritage and, in particular, its high street, which so many people have told me needs regenerating. People like Sam, a female entrepreneur who runs Roasters, which has been a staple part of the high street for more than 30 years, ensuring that people can always get a hot pork sandwich, complete with the crackliest, crackly crackling they will ever crunch. Or women like Sarah, who runs Christopher’s and provides the town with a gorgeous boutique hotel and restaurant. She kept the business going despite the turmoil that faced hospitality during the pandemic.
The Tamworth Co-operative Society is still an integral part of the town and has featured greatly in its development. Founded by philanthropist and social entrepreneur William MacGregor in 1886, it championed, above all else, fair prices and quality products for the poor and working classes, flying in the face of the profiteering shopkeepers of the time.
As a parliamentarian, it is also important to be humble and not to brag about my constituency, so I will refrain from telling the House that we are also home to the Tamworth Tap, which this year was named by the Campaign for Real Ale as the country’s best pub.
But a high street cannot flourish without people visiting and feeling safe. Concern about antisocial behaviour and a desire to have a closer relationship with local police has made my constituents feel that their town centre needs more visible policing. It is for this reason that I would like to pay tribute to my predecessor Sir Robert Peel, the distinguished parliamentarian and first leader of the Conservative party, who was known for his commitment to his country first and his party second. He was a visionary who sought to improve the social system that supported communities, establishing the Metropolitan police on the principles of policing by consent and its place within the community. The well-known principle that the police are the public and the public are the police is still, to this day, what makes policing in this country stand apart from that in many others.
It is therefore all the more troubling that Tamworth no longer has a police station with a front desk or custody cells, and my constituents have raised with me their concerns over antisocial behaviour and safety within their communities. Policing should have a community focus and should be accessible; it should give people the sense that the police reflect them and their needs. That is why I campaign to have a front desk reopened in Tamworth and for the re-establishment of community policing.
The communities I serve include incredible villages such as Elford, Edingale, Whittington, Drayton Bassett and Shenstone, whose community library boasts an incredible programme of activities and a rather fancy coffee machine that is such a repeat draw that it has almost single-handedly stamped out late returns.
Colleagues will know that I am a devoted dog owner and, as a former Crufts competitor, I have set my sights on the much-coveted, highest political accolade: Westminster dog of the year. Tamworth is a proud dog owning constituency, and I met many along the campaign trail, including little Reggie the lost Pomeranian. Estimates by campaign colleagues who were out door knocking put Tamworth dog ownership at approximately 100%, although I am sure the House of Commons Library would rightly disagree with such a loose application of anecdotal evidence.
In conclusion, Tamworth has a rich, strong history, and my constituents are rightly proud of it. However, reflecting on the current cost of living crisis and the desire for the opportunity to live a life less burdened, they rightly want where they live, and the community they are part of, to thrive. The people of Tamworth voted for a fresh start and a positive vision for their town and villages. During the campaign, they were clear in setting out their priorities for change, and having spent over a decade giving working people a voice in the workplace, I intend to be their voice and champion in the constituency and here at Westminster. Thank you, Mr Speaker.
Mr Tobias Ellwood (Bournemouth East) (Con)
Let me welcome you back from your important visit, Mr Speaker, and begin by welcoming the maiden speech from the hon. Member for Tamworth (Sarah Edwards). She will find this to be quite a robust, feisty place, where perhaps courtesy is not what it should be, but we should commend an exemplary maiden speech and wish her all the best in her parliamentary career.
I am grateful to catch your eye, Mr Speaker, for this important opportunity to comment on the Chancellor’s autumn statement, the Government’s update on the health of the nation’s finances. Members in all parts of the House have recognised that the backdrop to any discussion about our economy would not be complete without recognising the unprecedented, seismic events that have impacted the nation’s finances over the past few years: covid and the Ukraine conflict. Those once-in-a-generation events would have tested any Government, whoever was in power, as indeed they have tested Governments across Europe and beyond. Looking at how we compare with other nations puts the challenges we have experienced in perspective. In 2022, all but one of the G7 nations experienced higher debt-to-GDP ratios than the UK, so we have stabilised the nation’s finances.
It is time to move forward and grow our economy. It is time to take advantage of the welcome fiscal headroom to increase UK productivity; to continue to tackle the cost of living crisis by helping more people back into work; and to map out a clear economic vision for the future. I am sure that reducing national insurance, increasing benefit payments, along with the national minimum wage, and advancing the state pension are changes that will be welcomed, not just by the public but by Labour.
I say to the Minister that I was hoping for more support for the tourism and hospitality industry. The value of tourism to Britain is too often overlooked. It is worth £140 billion to our economy, it accounts for 6% of our GDP and 11% of our workforce are employed in this important sector. I welcome the continued extension of the 75% rate relief for hospitality, but I would like us to go further, with a permanent reduction in VAT for tourism. We saw that briefly during the covid crisis. I know that the discussion is taking place and perhaps—please—we will see that measure come out of the hat in next year’s spring statement. Tourism is vital to our economy and to Bournemouth, so reducing VAT in the tourism and hospitality sector is something I hope Ministers will consider.
John Redwood
Does my right hon. Friend agree that the problem is that the OBR’s forecasting never gives any credit for cutting a tax rate in order to get more revenue? This could be a good example of where that would work.
Mr Ellwood
My right hon. Friend is absolutely right. The Centre for Economics and Business Research suggests that there is £10 billion to be made in lost GDP at the moment, as we are not attracting overseas visitors because our taxes are higher than those of our continental counterparts.
Looking at the bigger picture, finances certainly remain tight. The national debt, although falling as a percentage of GDP, as I said, remains too high. Our growth, although larger than Germany’s, is not where it should be. Given that we are the sixth largest economy in the world, we need to look at improving productivity, which remains sluggish, as it has been since 2008. A lot of these economic debates focus, understandably, on the micro level—the line-by-line budget allocations to Whitehall Departments, and the changes to general taxation, benefits and pensions—but how all those fiscal jigsaw pieces fit together is often overlooked. Our world is changing fast. Not only is it becoming more internationally competitive, but there is a question mark as to what our role actually is. I am reminded of what John Foster Dulles, the former US Secretary of State, said:
“Britain has lost an empire and not yet found a role.”
What we saw in the autumn statement was interesting indeed. The world is going digital, as IT changes every aspect of our lives: how we communicate, travel, do business and even strengthen our own security. That is all good news for the UK, as we have the third largest tech sector in the world, after the US and China. We are world leaders in pharmaceuticals, life sciences, creative industries, aerospace, fintech and artificial intelligence. With some of the best universities in the world, along with our globally recognised finance sector, we are well placed to become a high-tech superpower—another silicon valley. That is also good news for Bournemouth, because that is exactly where our area focuses; we are focused not just on tourism and financial services, but on the creative industries.
Jim Shannon (Strangford) (DUP)
I commend the right hon. Gentleman for what he says about the pharmaceutical and engineering sectors, as we have businesses in those areas in my constituency that can do well. One thing that is needed to improve it is reviewing and increasing the child benefit thresholds—perhaps the Government should consider that. It would enable families that work hard to get more benefit, which they cannot do at this moment in time.
Mr Ellwood
In the spirit of brevity, let me just say that I 100% agree with the hon. Gentleman on that.
I began by mentioning the global shocks of covid and Ukraine, and placing them in context. There is clearly a direct correlation between our economy and our security. About half of our GDP is affected by international headwinds. For those of us who follow international events, it is clear that there will be more covids and more Ukraine-sized conflicts. Our world is becoming more dangerous, not less. These threats are growing and becoming more complex and dynamic. There is an increasing blurring, with the scale of direct military threats being matched by those in the economy and, specifically, in the digital space. With authoritarianism on the rise, we have entered an ever-uncertain era of insecurity, akin to the 1930s, with rising populism, new and dangerous alliances forming, increased threats to our international rules-based order and our international institutions unable to hold errant nations to account. This is all causing a number of alarm bells to ring on the global order dashboard. Arguably, the situation is even more grave than the one in the 1930s, because we also face climate change, cyber threats and the pervasive role of the non-state actor in that equation.
So I end by simply calling for greater investment, including in security and defence. Such calls may fall on deaf ears, because of all the domestic challenges we face, but I simply say: look at how our fragile stability is fragmenting; we must be better prepared for the global shocks that our economy will face in the longer term. We are rekindling our statecraft skills, but please may we see an increase in defence spending in the spring Budget?
Several hon. Members rose—
Mr Deputy Speaker (Sir Roger Gale)
Order. I have looked at the clock and at the number of speakers, and after the next speaker I will impose a seven-minute time limit on speeches.
Dame Margaret Hodge (Barking) (Lab)
I congratulate my new hon. Friend the Member for Tamworth (Sarah Edwards) and I wish her well, but she arrives in difficult times, because in 30 years as an MP, I have never seen the country’s finances in such a mess. We have the highest taxes since records began, the highest public sector debt since the 1960s and inflation at a 41-year high, and average households will be £1,900 worse off by the end of this Government.
At the same time, public services are on their knees and the OBR predicts a miserable 0.1% growth rate for the fourth quarter. The Government try to pile the blame on others—covid, Ukraine, the middle east and even their own past leaders—but the whole Conservative Government have done this, having voted through 13 years of flawed measures and disastrous policies that have not helped growth and jobs, but have intensified inequality and increased child poverty. We have had enough, the country has had enough and Britain deserves better.
I will focus on three areas that could make a real difference if the Government made different choices. In 2012, the tax gap—the gap between what HMRC receives and what taxpayers pay—was £34 billion. This year, it is up by nearly £2 billion, and if tax campaigners calculated it, they would probably triple or quadruple that figure. Failing to collect £36 billion is massive—that is £3 billion more than we spend on the whole of primary education across the UK.
Those who benefit most from HMRC’s failure to pursue them are the rich. Last year, only 11 wealthy individuals were prosecuted for tax cheating and only eight were pursued for evasion over two years. However, 420,000 people on low incomes, many not earning enough to pay a penny in tax, were taken to court for filing their tax returns too late.
What about the big multinationals who still aggressively avoid tax? TaxWatch’s analysis of just eight tech companies, including Google, Facebook and Apple, shows UK profits of £9.6 billion, but the tax paid amounted to a miserly £297 million. They avoided £1.5 billion in UK tax. Add the estimated £350 billion annual loss through fraud and money laundering, and we are talking about eye-watering sums, yet prosecutions and convictions by HMRC have both fallen by 75% in the last five years. This wretched failure to pursue tax avoiders, evaders, fraudsters, money launderers and multinationals is a scandalous stain on this Government and destroys faith in our system.
Equally awful is the fact that the Government cannot be trusted to spend our money wisely. Government waste is yet another scandalous stain on the Conservative Government’s record: £15 billion lost to fraud and error across all covid schemes, £1 billion overspent on a contract for a new warhead facility, another billion pounds lost on the Astute nuclear-powered submarines and £2.2 billion wasted on the now abandoned HS2 phase 2 project. The bill for the failed asylum support system has gone up fivefold in four years and cost us a shocking £3.6 billion. The staggering costs of meeting the needs of nearly 300,000 homeless families are at least £18 billion a year. With services so stretched, the waste of taxpayers’ money because of sheer incompetence is unforgivable. People are struggling while the Government squander.
I want to turn to the unfairness in the tax system that the Government deliberately promote. Our system is ridiculously complex, opening opportunities for aggressive tax avoidance. Take the 1,180 tax reliefs, of which 339 are non-structural reliefs, supposedly introduced to help a particular group achieve a particular policy outcome. We have no idea how much those tax reliefs cost or whether they are effective, and there is no accountability for the expenditure, because it is all below the line. One hundred reliefs have been costed, at an estimated £195 billion, which is almost double what we spend on local government and double the £46 billion spent on defence. That sum accounts for only a third of the 339 non-structural reliefs. With little data, and scant scrutiny and evaluation, we are sitting on a time bomb.
Take, for example, the cost of the research and development tax credit—up from £2.3 billion to £5.2 billion in five years, yet without an equivalent increase in R&D investment by companies. The patent box relief was introduced to encourage companies to commercialise their inventions, but has now been exploited as a tax loophole. The moment the KPMG partner seconded to the Treasury to write the technical rules for the relief left the Treasury, he produced a brochure entitled “Patent Box: what’s in it for you”. That relief is costing us £1 billion a year. Entrepreneurs’ relief cost £427 million in 2008-09, but that had ballooned to £2.2 billion by 2018-19, the last year for which I could find proper figures. The relief is supposed to encourage investment, but a survey of those who claimed it found that only 8% said the relief had influenced their decision at the point of investment.
Finally, we talk about making work pay, but we have a system in this country whereby the income that people gain from work is taxed at a higher rate than the income they gain from wealth. No such system can ever justify that we are a country that enables work to pay.
Jim Shannon
The rise in taxation for working-class people has implications for their childcare costs. Does the right hon. Lady agree that when it comes to childcare costs, it is impossible to make ends meet, and that working-class people and those on the poverty line need more help? Unfortunately, I do not see that help.
Dame Margaret Hodge
I agree entirely with what the hon. Member says. I simply point out that if we got the money in that was owed to us, spent it wisely and taxed fairly, we would be able not only to pay for childcare costs but to have the high-quality childcare that is essential to ensure that we equalise life chances.
This Government have failed. They have failed to get the money in, they have wasted billions and they have failed to tax and spend in a fair way. Trust and confidence have been squandered. It is time for them to go.
Matt Warman (Boston and Skegness) (Con)
I welcome the autumn statement, which set out clear dividing lines between the two parties. The Conservative party wants to grow the cake and the Labour party wants to slice it into ever tinier pieces. The Conservative party understands that we will grow the cake by allowing people to fulfil their own potential, rather than imagining that the only possibility is increasing public spending, with the size of the cake set.
I welcome the autumn statement, but first let me talk about rhetoric. Rhetoric matters when we talk about homelessness, it matters when we talk about immigration and it matters when we talk about welfare. To be absolutely clear, this autumn statement raised benefits for working people by 6.7% and pensions by 8.5%. There is a controversial policy that suggests that those who do not engage with the welfare system should, if they proceed in that way for an unreasonable period, lose some of those benefits. It is easy to misrepresent that policy and to pretend that it is a bid to remove benefits from people who deserve them. The reality could not be further from the truth.
This is a policy like the sugar tax; it aims to alter people’s behaviour. In this case, it aims to alter the behaviour of individuals receiving benefits rather than of corporations that make fizzy drinks, but the analogy is, I think, correct. What the policy seeks to do is to encourage people to understand that if they do not do the right and responsible thing as citizens of this country and take the work that we know is out there then there should be consequences. That is not nasty; it is the definition of compassion. We as Conservatives should not be afraid to say that. It is a brave but overdue policy, and we should welcome it.
We should also acknowledge that it is part of a policy that will make a profound difference in particular to people who are able, as we now know from the post-covid environment, to take jobs that involve working from home. I welcome the new conditions around flexible working, which the Secretary of State set out in his opening remarks. As he said, we know that it is possible to work flexibly, but we also know that there is no nirvana of working from home all the time. I welcome in particular the tone that has been struck by the Chancellor and by the new and very welcome Chief Secretary to the Treasury in the way that they have talked about the rights and responsibilities of citizens when it comes to work.
Let me turn to the various issues that are loosely talked about as fiscal drag or tax simplification. The reality is that this autumn statement has overseen a tax cut unprecedented in size and scale for a number of years. Quite simply, that tax cut has come because of the increased headroom that this Government are now able to take advantage of.
The relative complexity of our tax system means that, unfortunately, we are sometimes sucked into an argument about income tax versus national insurance, versus a whole host of other things. We should be honest that the system is too complex. If we did not have the complexity around national insurance, income tax and a whole host of other things, we would be able to have a more honest, straightforward and comprehensive conversation about tax thresholds, about the right and fair level of tax and about where we as Conservatives want to lower it to. We would also be able to have a sensible conversation about some of the cliff edges that have inadvertently crept into the tax system, including around childcare and households that unfortunately have two people earning an amount exceeding the level where, if a single earner in the household exceeds it, the numbers simply do not add up. That is an inadvertent unfairness and one where I think we would all welcome greater simplification.
Another area where greater simplification in this autumn statement is welcome is pensions. I welcome the concept of one pot for life, which will allow us to look beyond the multiplicity of pots that people often accrue over the course of their lifetime, but it highlights the increasing need for the long-term pensions dashboard project to get over the line and underlines the fact that there is a greater opportunity for welcome projects such as open banking to fulfil their potential. All these projects rely on greater digital literacy among the population, and they rely on the Treasury to make further progress on the digital projects that will unleash things such as the pensions dashboard and projects such as making tax digital. All these things will allow greater simplification and greater fulfilment of potential by a host of different parts of our society, and I think we would all welcome some of those projects coming to fruition as quickly as possible.
Overall, I welcome an autumn statement that cuts taxes for 27 million working people. It sees us all benefit, but it also acknowledges that, given the extraordinary few years we have all lived through, from covid to the war in Ukraine, there is much that this Government have to continue to be fiscally responsible for. The call to cut taxes is a sensible one, but it must be done in the measured way that this autumn statement begins to do it.
Derek Twigg (Halton) (Lab)
The first duty of any Government is to defend the country and keep its citizens safe, but the autumn statement had nothing to say about strengthening our military capabilities at a time of real concern about the size of our armed forces. We are facing a real crisis in recruitment and retention at a time when our armed forces are running hot, straining themselves to meet growing commitments with less. The defence of the UK starts in Ukraine. We should be stepping up support to help Ukraine through the winter and into 2024, but the Prime Minister is stepping back from UK leadership in Ukraine with no new military funding next year.
My constituents in Halton are looking on in despair as the Government again fail to provide the real-terms support to help them get through the toughest of times. This autumn statement is yet another crushing disappointment at a time when many people in my constituency and across the country consider whether they can afford to heat their homes, pay for food, or even meet the basic cost of staying in their own homes.
The Chancellor seems to have no idea about what matters to real people every day. We know that spiralling energy bills are causing huge anxiety for millions of people. The Chancellor has touted his national insurance cut as a “victory for working people”, but it will be wiped out immediately by the 5% increase in the energy price cap. Citizens Advice tells me that more than 50% of clients seeking debt advice are spending more money on essential bills and costs than they have coming in, and in Halton that figure is significantly higher. In 2023, Citizens Advice in Halton supported 1,713 clients to access the local food bank or other localised social welfare groups. That is almost as many as it assisted in 2019, 2020 and 2021 combined.
The autumn statement also provides little comfort to those who worry about how the Tory mortgage bombshell will continue to affect them. Average rents have increased by 25% since 2019, but the local housing allowance has remained static since April 2022. People need immediate help. By April, many more people will have been evicted. Our local housing list is stretched to breaking point, and, thanks to a lack of action by the Government, that list is getting longer by the day.
People need immediate help. The latest figures from Halton Borough Council state that we have had 3,156 homeless presentations, an increase of more than 50% on the previous year. Due to the increase in homelessness, there is extreme pressure on the local authority to secure temporary accommodation for homeless residents, but unfortunately demand far outstrips supply.
How can the Chancellor claim to be helping working people when so many people have to rely on charity simply to put food on the table? According to End Child Poverty, 32.1% of children in my constituency are living in poverty. The Resolution Foundation says that personal taxes are going up, not down, with the tax cuts announced in the autumn statement dwarfed by the previously announced tax rises in the form of the freezing of national insurance and income tax thresholds for six years.
Charities are also on the frontline when it comes to supporting those in the community who face hardship through illness. Marie Curie illustrates the harrowing reality when it tells us that, each year, 90,000 people die in poverty in the UK. The Chancellor insists that the best way to tackle poverty is through work, but what does he say to those who are far too seriously unwell to work and will die before they are old enough to claim their state pension? Where is the targeted support for them? Will he commit to exempting terminally ill people from having to look for work?
The Chancellor has done nothing to address the crisis in local government funding. On a population basis, Halton has lost £899 per resident, while the national average cut is £581 per resident, a difference of £318. Therefore, Halton’s reduction in funding per head of population has been 55% greater than the national average—a terrible thing for local authorities to cope with. Councils continue to buckle under the strain of rocketing demand for social care. To give a local example, 28% of delayed discharges at Whiston Hospital are Halton people who require some form of social care.
Areas that see increased demand need increased support. I continue to hear from families who cannot access specialist support for their children in school. Once again, education has been left by the wayside. SEN is in crisis. These are some of our most vulnerable children. Local authorities and schools have no idea how to keep up with demand. They and the children’s families are in crisis. On top of that, school transport budgets for children with special educational needs and disabilities will become unsustainable for local authorities nationwide as costs are predicted to triple to over £1.1 billion over the course of this decade. According to Stop School Cuts, every school in my constituency faces cuts to its spending power. Again, the Chancellor failed to do anything about that in the autumn statement.
As a result, schools will have to reduce their educational provision, for example by increasing class sizes or reducing individual support. Time and again, constituents have contacted me to complain that the most basic services are unavailable to them. Last month, we lost one of our only remaining dentists who provided NHS treatment. A huge number of patients scramble to access emergency dentistry. That is an utter disgrace. Other constituents are facing years-long waits for operations, while some report that they are unable to access mental health services. That is what is happening in reality on the ground, which the Chancellor’s autumn statement completely ignored.
After 13 years of Tory Government, what is their economic legacy? People across the country face the highest tax burden since the second world war, mainly because of the five-year freeze of personal allowances. Households will see the biggest fall in living standards since the 1950s. Growth forecasts are dire. For far too many people, the only growth that they will see is that of poverty. The Government have no answers. They have failed to address Britain’s long-standing productivity problem. Public services are in crisis. Nothing works. It is a record of unbelievable incompetence by the Government. The autumn statement offers no prospect of change. We know that the time has come for change, but more importantly, the British people know it and they want to get rid of this failing and incompetent Tory Government.
Stephen Crabb (Preseli Pembrokeshire) (Con)
I rise to make a few remarks in support of the Chancellor’s autumn statement, emphasising two themes that came out strongly from it. They have been consistent themes for the Government over the past 13 years we have been in office: boosting incomes, particularly for those in the lowest income brackets, and improving our benefits system to ensure that we have a dynamic labour market and individuals can fulfil their maximum potential.
Before I go into those points, it is worth underlining again where we were 13 years ago when we took office. The minimum wage was less than £6 an hour, the state pension was less than £100 an hour—no pensioner will forget the derisory 75p increase that they got from Gordon Brown—and we had a welfare system where more than 1 million people had been languishing out of work for almost 10 years, out of the reach of any meaningful engagement from local job centres. We should not forget either that, while the Labour party might this afternoon present itself as a party of welfare reform, spending restraint and sensible economics, for most of the past 13 years it set its face against every step that we took to try to improve our benefits system. What we have now is not perfect—no benefits system ever is—but it is so much better than what was in place under the previous Labour Government. We know that because Labour Ministers who served in the Department for Work and Pensions before 2010 were themselves highly dissatisfied with the benefits system. Those with particular reforming instincts were doing their best, fighting an uphill battle to see improvements. We should not trust the Labour party as a party of benefit reform.
Briefly on boosting incomes, a national living wage of £11.44 an hour is transformational for constituencies such as mine in Pembrokeshire, where for decades there has been a culture of low pay, as there has been right across Wales. Thousands of people in my constituency will benefit from that increase to the living wage. Increasing the state pension by the full triple lock boost will ensure that pensioners continue to see the full value of their pension increase. That comes at a cost. All of us who defend the triple lock need to bear in mind that it has significant long-term costs, and we need to speak to how they will be met in the future, but the triple lock that this Conservative Government introduced in 2010 has been transformational in lifting pensioners out of poverty in my constituency, and all across the United Kingdom.
Jim Shannon
One of the reasons the triple lock is in place is the confidence and supply agreement between the Democratic Unionist party and the Conservative party. It was one of the things that we insisted upon. When it comes to giving credit for things, I want to keep the record straight.
Stephen Crabb
The hon. Member makes a strong point on behalf of his party. Lots of people claim credit for the triple lock. Again, all of us who defend the triple lock need to bear in mind the long-term costs and be ready to speak to how the country will afford them. The answer that successive Governments have found of just pushing the state pension further out of reach by increasing the state pension age is not a long-term sustainable plan.
On benefit reform, I strongly support what the Government are trying to do in linking together more closely the work of local jobcentres with that of health authorities, health boards and the Department of Health and Social Care overall. Successive Ministers have found huge institutional resistance to the NHS and the DWP working together—two massive spending Departments that have levers to do something really positive in getting people with long-term sickness and disabilities back into work. It is really encouraging to see much greater levels of co-operation than at any time in the past 20 or 30 years.
The point that has been made several times this afternoon about obligations is really important. There was speculation that the Chancellor would not uprate working-age benefits by the higher level of autumn inflation rates, but he did so. That was entirely consistent with what the Conservative Government have done consistently through the pandemic and the cost of living challenges, which is to help people on the lowest incomes. The Government doing the right thing and choosing to be consistent in that underlines the point about obligations, and the social compact that needs to be at the heart of our welfare system. Government Members have talked about that, as have those on the Labour Front Bench. An adequate benefits system supports people on the lowest incomes and provides a strong and secure safety net. There needs to be a sense of obligation around that as well.
As I said, there were Labour welfare Ministers who struggled with how to engage people who had been long-term sick and had long-term health needs to get more meaningful interaction, so that they could perhaps begin a journey back to work if that was appropriate. It is one of the biggest public policy challenges that we as a Government have faced. If the Labour party forms the next Government, it will wrestle with that, too. Governments of countries around the world that share a similar demographic to ours, with an ageing population and increasing numbers of elderly and sick people, are wrestling with these challenges. There are no easy solutions.
Mr Jayawardena
Does my right hon. Friend agree that fundamentally this is just a question of fairness? It is about supporting those who genuinely need our help, but when people choose welfare because they choose not to look for work, hard-working taxpayers should not pay the bill.
Stephen Crabb
I agree with my right hon. Friend to a point. There is always an issue of fairness, and perceived fairness, when it comes to the distribution of taxpayers’ money to people.
I question whether there are large numbers of people out there who want to live their lives not working or contributing to our society. If I really press them, the people I meet in my constituency who are struggling with long-term illnesses and have been out of work for a long time, say they would love to be working. They would love to visualise themselves in a job and playing a full part in the economy. The truth is that many of them need support. Some of them need a bit more than just warm words of encouragement, and that is why I have always defended the appropriate use of sanctions and conditionality in our benefits system.
This time of assistive technology, flexible working and homeworking should be a new golden age for people who sadly live with long-term health conditions to be able to get back into the workplace. I am really pleased that Government Ministers are grappling with that and thinking about the long-term steps that could be taken to help people back into work. As I say, that is one of the great public policy challenges of our time.
Ms Lyn Brown (West Ham) (Lab)
I want to talk about some of the massive challenges we face in Newham, because frankly the autumn statement offers precious little to solve them.
I will start with the scourge of knife crime. In Newham, our communities have been brutalised by knife attacks over many years. August alone saw 38 attacks that caused injury—the highest number for five years—leaving many young lives destroyed, families devastated and communities broken by fear and struggling to heal. The truth is that social problems make young people vulnerable to the gang grooming that leads to that violence. Many young people are growing up with little stability, without even a safe place to call home and with parents racked by the stress of unpayable bills and insecure work.
Far from inspiring confidence, the autumn statement confirmed that the average household is set to be almost two grand worse off by the next election than they were at the last. Those households will know that 40% of the benefits coming from the autumn statement are going to the wealthiest 20% of the population. That unfairness weakens our entire society, because poverty creates vulnerability to grooming. It destroys a young person’s trust that our society can provide a decent chance and a future for them.
My community tries to work its way out of poverty, yet it is nigh-on impossible. The lower quartile of earnings in Newham is £1,792 a month, but paying the lower quartile of private rents leaves just £492, before food, energy or transport costs, or the costs of raising a family, are even considered. Our children know it. They see their parents struggling. Gangs are using fake job ads to target children on the social media sites they use, clearly aimed at children who know their parents are up against it—children who want to help make ends meet. When mum and dad are having to take on more hours to pay the bills, meaning there is no one in the house in the evening or at weekends, that is the impact.
Those pressures are huge, but Newham’s housing crisis is truly brutal. Tens of thousands of families simply cannot afford private rents, and social housing supply remains minuscule compared with the level of need. The consequence is that 8,363 children are estimated to be homeless in Newham alone. There are more children trapped in temporary accommodation in those 14 square miles than there are in entire regions of the country combined—more than in the east midlands, Yorkshire and the Humber, and the north-east put together. That temporary accommodation is unsuitable for families, or frankly for anyone, with mould, damp and terrible overcrowding.
All that causes chaos in young lives. It massively disrupts education and makes it harder for teachers, social workers or GPs to spot the signs that a young life is going off the rails so that they can intervene. It creates added costs for our stretched public services, which are scrambling to keep up, and enormous and rapidly increasing costs to the council. The council is spending more than £20 million a year on temporary accommodation costs alone. That is money that it cannot spend on improving children’s lives or on youth work to help to make children at risk of involvement in knife crime more resilient. It cannot spend it on keeping the streets clean or on supporting our schools so that they can deal with difficult behaviour without excluding children and practically handing them over to the gangs.
I welcome the Government’s boost to the local housing allowance—I really do. It will do something to slow down the rate at which homelessness is getting worse. But, frankly, it is not a solution. Far more strategic action is necessary, and so is more recognition that those problems are interconnected and that our councils and our public services are best placed to solve them. As we know, the Tory pre-election Budget is balanced on massive future cuts to our public services and our councils. The Tories are robbing the next Government in a last-ditch attempt to save themselves. I honestly do not know how Tory Members can look their constituents in the face and tell them that they think the planned cuts are practical or achievable.
Let us face it: our NHS and many other services are on the verge of collapse and utterly failing to deliver for our communities. What we are hearing from the Government does not match the reality that my constituents see all around them. Surely to heavens we must repair our public services and give all our young people a future, with genuinely accessible opportunities in education and in work. We need to restore our children’s trust in a future where they are truly rewarded for their contributions to our society and for their massive potential. After 13 years of Tory failure, that will only come about with a Labour Government.
Nickie Aiken (Cities of London and Westminster) (Con)
The measures announced by the Chancellor of the Exchequer in his autumn statement are sensible and responsible and will make a real difference to the people and businesses across the two Cities.
The Government have taken a pragmatic approach to delivering tax cuts. We all know that the cost of the measures to support businesses and households through the covid pandemic and the energy price shock caused by Putin’s illegal invasion of Ukraine drove up spending and meant that tax cuts were impractical for a long time. However, as we continue to rebuild our economy, improve productivity and focus on growth, we do so by following competent and careful economic management. That is why I was pleased to see my right hon. Friend the Chancellor announce fully funded tax cuts that will have a real impact on both families and businesses. The autumn statement was the biggest package of tax cuts announced as a fiscal event since the 1980s.
For me, there were two major headlines. First, there was the permanent extension of the full expensing policy, which will act as a springboard to help UK companies to invest in the latest technologies and machinery and create highly skilled jobs. Secondly, of course, there was the 2% reduction in national insurance—a tax cut for 27 million people, which will ensure that they will keep more of their earnings to spend or save as they wish.
The Chancellor was also right to prioritise helping people into work to boost the economy. Just last week, I was pleased to join the then employment Minister, my hon. Friend the Member for Hexham (Guy Opperman), on a visit to the Italian café and deli Ben Venuti in Pimlico, where we discussed the Government’s new hospitality sector-based work academy programme trial run, in partnership with the trade body UKHospitality, to encourage more people into careers in the hospitality sector. That programme, and last week’s announcement of a further £50 million to support apprenticeships, clearly show that the Government recognise that getting people into work, and helping them to train, retrain and develop their careers—no matter their age or background —is the best way to help people and support the economy. I am delighted that my hon. Friend the Member for Hexham is now the Under-Secretary of State for Transport and will see the Pedicabs (London) Bill through this place.
Not only will the autumn statement provide more opportunities for people to get into new and exciting careers, but the Chancellor has announced significant support for households. Raising local housing allowance rates to the 30th percentile of local market rents in April 2024 will benefit 1.6 million low-income households, which will be £800 a year better off on average. That will certainly be welcome news for thousands of households across the two Cities.
I am proud that my constituency is embracing the life sciences sector, having attracted thousands of jobs to the Paddington basin development. I am delighted that the Imperial College Healthcare Trust’s new Fleming Centre is being created in Paddington, backed by £5 million of seed funding announced in the autumn statement. It was where penicillin was first discovered, and the new centre will help us in the global fight against antimicrobial resistance and further establish the two Cities as an important centre for the growing life sciences industry.
I would be remiss not to mention the important work undertaken by the City of London Corporation as it strives to ensure that our financial and professional services remain the best in the world, and that the square mile remains the place in which companies from every corner of the globe want to do business. We know that that has a massive and positive knock-on effect, supporting more than two million jobs across the UK, so it is good to hear that the Chancellor is pressing ahead on the pension reforms that were unveiled with the signing of the Mansion House compact in the City in July this year.
The measures announced in the autumn statement protect not only economic prosperity but our communities. Nobody can be immune from the dreadful scenes in the middle east. Sadly, we have seen the repercussions of terror attacks, and of the ongoing conflict in Gaza, on our own streets. I have been appalled by the testimonies that I have heard from the Jewish community in my constituency, who are genuinely scared of the 1,350% rise in antisemitic incidents in London alone. I therefore welcome the Chancellor’s announcement in the autumn statement of £3 million of additional funding this year for the Community Security Trust, and of a further £7 million over the next three years, for organisations such as the Holocaust Educational Trust, to help tackle antisemitism.
I must take this opportunity to highlight one measure that, sadly, we did not see in the autumn statement. It is one that would have profound economic benefits for Cities of London and Westminster, the capital and the whole country: tax-free shopping for international visitors. I recognise that the autumn statement delivers support for the retail, hospitality and leisure industries by extending the retail, hospitality and leisure relief scheme, which will continue to provide eligible occupied retail, hospitality and leisure properties with 75% relief on business rates. That is all welcome, but new research from the Centre for Economics and Business Research shows that if the former tax-free shopping scheme had not been scrapped, the total spending from international visitors would have been £3.3 billion more in 2022. The reason for that is the dynamic nature of international visitors’ spending habits. Although they would receive a tax break on their shopping, they would still pay VAT in restaurants, theatres, pubs, bars, clubs, hotels and, of course, black cabs. Places such as Knightsbridge and the west end—particularly Oxford Street, Bond Street and Regent Street—have been feeling the pinch since international tax-free shopping disappeared. Large international luxury brands all report seeing a fall in their revenues compared with their outlets in Milan and Paris. We need that scheme back.
The Government recognise the tremendous opportunities that lay ahead for the economy and the United Kingdom, and I applaud the Chancellor for his work to strengthen the economy so that we can now focus on growth and prosperity for all. I look forward to working with him to ensure that the economy continues to bounce back from the pandemic and flourish for years to come.
Peter Dowd (Bootle) (Lab)
From listening to some Conservative Members, one might think we were in some sort of economic Shangri-La. The only positive element about the autumn statement is that it was not the previous Chancellor’s statement, so I congratulate the Chancellor—perhaps this could be passed on—on not being the previous Chancellor.
In substance, the change of staff in Downing Street means that the country is not quite as far up the creek without a paddle as we may have been under the last Administration, but that is of small comfort to the millions of people who are still paying more for less, so I am sure the Chancellor will understand if I do not give him a high five. He is like a dentist telling the patient that they need only four teeth taken out without anaesthetic rather than five, and dressing that up as good news.
The autumn statement was an act of neglect. The facts from the Office for Budget Responsibility speak for themselves: real growth is down, debt interest is up, inflation is slowing but high, and productivity is in its boots. After 13 years of blundering, every indicator is pointing in the wrong direction. The Conservative party has spent months making lofty pronouncements about long-term decisions, but the Chancellor’s statement looked no further than the next election. By now, this House and the British public are used to the wide gap between their claims and fiscal reality.
Does anyone remember the “long-term economic plan” from 2014? What happened to that? What about “strong and stable” in 2017? Where has that gone, and where are northern powerhouse and HS2? It is strange that we did not hear any of those phrases in the statement. Of course, the Chancellor could not even bring himself to mention “a brighter future”—the slogan that adorned his party conference just a few weeks ago. The statement shows that the Conservatives have not learned a single lesson from their 13 years in power. They have not hit one of their fiscal rules in 13 years.
Once again, we see the old approach, which the public now roundly reject: attacks on our public sector, which is always refused the resources that it needs; and, as we have heard this afternoon, the scapegoating of social security claimants—particularly disabled people—through cuts to the social security system, to pay for the Government’s economic chaos. We can see from the polls that the public are tired of the same old Tory approach put forward in the autumn statement. They are tired of NHS waiting lists of nearly 8 million people waiting for healthcare, including 14,000 people in my constituency and constituents of every Member in this Chamber. Almost 200 schools are at the point of collapse because the Government decided to halt the Building Schools for the Future programme. The number of bus services has been halved since 2011, leaving more people isolated and unable to access services. And it goes on: the housing market is in a parlous state; mortgage defaults are going through the roof, if people have one; and many landlords are out of control and using no-fault evictions. In huge swathes of the country, it is almost impossible for people to get a mortgage, let alone pay it.
I will concentrate on two elements. First, on tax, the Chancellor tried to buy off the electorate with headline-grabbing changes to national insurance, but those policies only thinly conceal the true picture of what is happening under this Government. The frozen tax thresholds mean that those who make their living from work will pay tens of billions of pounds more while taxes on the wealthy remain largely flat—that is a political choice; it is as simple as that. Over the pandemic, the top 10% accrued £50,000 each in additional wealth, according to the Resolution Foundation. The list goes on.
In reality, the changes to national insurance that were announced last week will be paid for by cuts in services. The Institute for Fiscal Studies has shown that the statement bakes in a real-terms cut, to the tune of £22 billion by 2028, to departmental budgets. That almost exactly matches the £20 billion that was spent on the national insurance proposals announced last week, and of course there will be more cuts in local government, right across the piece. It has been 13 years of blight, with tax cuts paid for by denuding public services and implemented by a deluded Government, and a weaker safety net. It is the same old Conservatives in action.
What about national borrowing? The Tories would have us believe that they borrow less and pay back more, but I will quickly fact-check that claim. The only fact we need to know is that the Tories make it up as they go along: the reality is that they borrow more and pay back less. That is fairly well documented—one or two Conservative MPs may want to ask their researchers to check that with the Library.
Turning to public services, what is that £20 billion of cuts going to look like? It will be dreadful. The Resolution Foundation says that the pain now being proposed is “implausible” in its scale. The Institute for Fiscal Studies broke down those cuts in more detail and found that if some Departments continue to be protected, that means 3.4% cuts across the board for others. That £20 billion of cuts means more bankrupt councils, longer waiting lists in the courts and fewer police—in short, a continued decline in the quality of our lives, and more pressure on the social fabric that my hon. Friend the Member for West Ham (Ms Brown) spoke about. It all adds up to the greatest fall in disposable incomes since 1955. The Joseph Rowntree Foundation calls the plans “fundamentally inadequate” to deal with the 4 million people in this country who are in destitution.
What we need—what we are all calling for, including my communities in Bootle—is a general election as soon as possible to get that shower out.
Peter Aldous (Waveney) (Con)
I congratulate my right hon. Friend the Chancellor on his autumn statement, which was well thought through, soundly based and properly reasoned. Post covid, with war in eastern Europe and the middle east and with the ongoing cost of living crisis, his task is an incredibly difficult one. With 110 growth measures, he has rightly recognised the need to boost growth, but as he has stressed, that growth must be secured on sound foundations and must not take the form of a reckless, debt-fuelled rush for growth. There are areas of reform that I believe he should have covered, such as business rates, social care funding and special educational needs. However, this autumn statement is very much a step in the right direction, and provides a platform on which he and the Government can build in the coming weeks and months.
I will briefly cover three areas, the first of which is investment in skills. My right hon. Friend the Chancellor recognises the importance of that investment to improve productivity and secure sustainable economic growth. In that respect, the announcement of £50 million to increase the number of apprenticeships in key growth areas is to be welcomed. However, there remains a need for a long-term strategy to enhance skills. I look forward to an update on the work of Sir Michael Barber, which was announced in last year’s autumn statement; a significant uplift in revenue funding for further education colleges and training providers; and a review of the apprenticeship levy, which was a welcome initiative when it was introduced in 2017, but is in need of reform so that it can perform to its full potential.
Secondly, we need to continue to protect the most vulnerable. Covid’s tail has been harsh and long and, along with the Russian invasion of Ukraine, has created the kind of cost of living crisis that we have not seen for 100 years. Last year and this year, the Government have stepped up to the plate to support people. As such, many of last week’s announcements are to be welcomed, including increasing the national living wage, increasing all working-age benefits in full by 6.7%, boosting pensions by 8.5% in line with the triple lock, and significantly increasing the local housing allowance.
There is no doubt that there is both a skills shortage and a skills mismatch in the UK at present. It is in that context that I am supportive of the back to work plan, which the Secretary of State for Work and Pensions went through earlier. However, I emphasise two notes of caution. First, the deficit in investment in skills and training that has been prevalent for most of this century means that a lot of people are a long way from the workplace. We should not underestimate the challenge of equipping those people with the skills they need to first hold down jobs, and then embark on rewarding career paths. Secondly, there are people—those with deteriorating neurological conditions, for instance—who are very worried about the forthcoming review of the work capability assessment. We must do all we can to support them through what will be a period of upheaval, and ensure that we avoid situations where those who are palpably unable to work are asked to do so under the threat of sanction. My concerns have been allayed to a large degree by what my right hon. Friend said in his opening speech, but it is important to emphasise those points.
Thirdly, in the east of England and particularly along the Suffolk and Norfolk coast, there is enormous potential for long-term, rewarding jobs in the low-carbon energy sector. In that context, last week’s various announcements to promote the renewables sector are very welcome. What I would emphasise is that to make the most of that great opportunity, it is vital that as the Government implement their levelling-up agenda, the east is not overlooked. In his speech, my right hon. Friend the Chancellor announced some new investment zones to follow on from those that were revealed in the autumn statement, none of which was in the east of England. We have a successful enterprise zone in Lowestoft and Great Yarmouth, and I hope we can look at reinvigorating it.
My final point on the need for levelling up in the east of England is that we are the lowest-lying region in the UK, and we have a long and porous coastline. That means that we are particularly vulnerable to flooding and coastal erosion, which are being accelerated by climate change. In recent days, many homes have disappeared over the cliff in Pakefield in my constituency. That has brought despair and desperation to many, and moreover creates risks from dangerous cliffs and the exposure of world war two sweeper markers, which have been detonated today. Thanks are due to the emergency services for all that they are doing, working in appalling conditions to keep people safe, but communities are at severe risk—not only Pakefield, but communities right up and down the Norfolk and Suffolk coast.
Over the course of the next few weeks, we must look very closely at the coastal protection budget and its operation. I urge my right hon. Friend the Chancellor to liaise very closely with my right hon. Friend the Member for North East Cambridgeshire (Steve Barclay), who is getting up to speed with his new and challenging brief at the Department for Environment, Food and Rural Affairs.
Mr Virendra Sharma (Ealing, Southall) (Lab)
What does this autumn statement do for the people of Ealing, Southall? In the 13 years since the Conservative Government came into office, there has been nothing but failed plans and weak growth. This is not about the politics; it is about real people. More than 4,000 people in Ealing, Southall cannot find work—that is 6.8%, nearly double the national rate. The Chancellor promised growth. He told us that he was delivering growth, but where is it? Growth projections are down for this year, next year, and the year after. I hope the Chancellor is ready to fend off any Members of the other place who are keen for his job, as the Prime Minister has made it clear that he does not think the talent is in this Chamber.
From a botched Boris Brexit to a Trussonomics fiasco, and flailing around from one crisis to the next, this Government know the writing is on the wall, because we see slow growth, stagnating pay, higher taxes and falling incomes. Household incomes will still be 3.5% lower next year in real terms than they were pre-pandemic. Across the OECD, we have one of the worst rates, while near peers and neighbours France, Ireland and Japan have higher household incomes than before covid-19.
From speaking to my constituents, I know that the cost of heating, water and food—the staples they need—just keep going up. Many cannot cope, and no one here can have failed to notice. I am proud to work with groups such as Ealing food bank, and many temples, gurdwaras and mosques across my constituency and the country do the same in feeding and clothing those who need it. Ealing food bank is meant to be an emergency service for those in the most dire need, but week in and week out the same people are there, unable to feed their families, their children and themselves because of what this Government have done to the economy. Either this Government cannot agree a plan, or they do not have one.
Whether people have managed to get on the property ladder or still want to, this Government have it in for them. Mortgage rates have further to rise, and the OBR has yet again revised projections up. While people are already facing doubled mortgage rates, the peak is yet to come in 2027. On planning and building, the Government’s announcements do nothing to meet the scale of new homes that need to be built. There have been 16 Housing Ministers since they came to office, which shows just how seriously they take the role: more Housing Ministers than houses built by the Ministers. That is in stark contrast to Labour. At conference, we announced a comprehensive package that will help to build 1.5 million homes in five years.
Across west London, poor management of the electricity grid by the Government has held up and delayed the development of housing and jobs. Under-investment and poor planning are choking growth and sending prices up, yet on electricity the Prime Minister and the Chancellor remain ideological, with an extra cost of £180 each and every year for every family. That is the cost of banning onshore wind, and with clean energy dropped, solar crashed and no new carbon storage, this Government seem committed to looking backwards, not forwards.
So I ask: with youth unemployment in Ealing, Southall at nearly double the national rate, what is there for future generations? There are no jobs to be had, there is nowhere to live and there is no environment left, and we have seen the worst hit to living standards on record. Will his record as Chancellor be to lead on this in the biggest tax-raising Parliament on record, or will he be remembered for simply tinkering at the edges and leaving Labour to deal with it?
Simon Baynes (Clwyd South) (Con)
The Chancellor’s autumn statement strikes the right balance between providing tax cuts for individuals, mainly through the two percentage point reduction in national insurance for 27 million people, and the biggest tax cut in modern British history of £11 billion for business. All this has been made possible by careful management of the nation’s finances and the halving of inflation over the last year.
Since the Prime Minister and the Chancellor took office on 25 October last year, I have strongly supported their economic policy, which has put the defeat of inflation and a reduction in Government borrowing as the top priorities. This is the route to growth, rather than a dangerous policy of unfunded spending increases and unfunded tax cuts that would lead only to a latter-day Barber boom. The Chancellor’s economic policy is following in the footsteps of the Thatcher, Major and Cameron Governments, all of whom bequeathed sound public finances and robust economic growth to their successors, and the Government’s policy is working.
Contrary to the unfounded scare stories peddled by the Opposition parties, the UK has grown faster than Germany and France since the pandemic, and Government borrowing is set to fall from 5% of GDP last year to 1.1% of GDP by 2028-29. Having listened to the litany of criticisms from the shadow Secretary of State for Work and Pensions, the hon. Member for Leicester West (Liz Kendall), I hope that she will also be admonishing her friends in the Labour Welsh Government for their appalling mismanagement of the NHS in Wales, where waiting lists per capita are far higher than in England.
The autumn statement is impressive in its breadth of detail, but time is short so I would like to highlight a few key areas in addition to the personal and business tax cuts I have already mentioned. Given its great natural beauty, my constituency of Clwyd South has many hospitality businesses, so I was very pleased by the Chancellor’s extension of the retail, hospitality and leisure relief—a measure that I and many of my colleagues campaigned for—for another year, and his announcement that alcohol duty will be frozen until August next year.
I am also glad that the Chancellor dispelled the uncertainty about the pensions triple lock by confirming an increase of 8.5% for next year, and that he is raising all working-age benefits in full by 6.7%, with both increases well above the current rate of inflation. The Government are also right to tackle long-term unemployment by strengthening support for those who want to work, while toughening sanctions for those who are not looking hard enough, as was outlined by my right hon. Friend the Secretary of State for Work and Pensions at the start of the debate. If I may, as an idea for the Budget next year, I suggest that the Chancellor considers raising the VAT threshold to help small businesses such as the Two Doves café in Overton in my constituency.
I am also delighted by the Chancellor’s announcement that one of the 12 new investment zones will be located in Wrexham and Flintshire. As the MP for Clwyd South, I represent half of the Wrexham County Borough Council area. Having pressed the case for the investment zone with the Government on multiple occasions, including on the Floor of the House, I was honoured to be mentioned by the Chancellor in his statement alongside my hon. Friend the Member for Wrexham (Sarah Atherton), and to visit Airbus in Broughton with him the day after the statement.
The strength of the case put forward for the investment zone lay in the highly effective campaign by a cross-party group of politicians and business owners, chaired by Joanna Swash, chief executive officer of Moneypenny, and including representatives of Wrexham and Flintshire councils—they deserve a great deal of credit in this process—as well as JCB, Airbus, Net World Sports, Theatr Clwyd, the North Wales Mersey Dee Business Council, Wrexham University and Advanced Manufacturing Research Centre Cymru.
Not only is this a major win for north-east Wales, but the autumn statement also extended the level of funding and tax relief available to investment zones to £160 million over a period of 10 years to provide greater certainty to investors. Previously, each zone was set to receive £80 million of support over a five-year period. It is estimated that this could leverage an additional £1.7 billion of investment for Wrexham, Clwyd South and Flintshire, and help create thousands of new jobs.
In conclusion, I warmly welcome the autumn statement, which will lead to a continued fall in inflation and Government borrowing, and, due to the depth and breadth of its well-targeted measures, ensure the growing strength of our economy across all regions of the UK in the years to come.
Andy McDonald (Middlesbrough) (Ind)
The Government have tried some sleight of hand with this so-called “autumn statement for growth” just as the OBR has revised its projections for the economy downwards. Indeed, the OBR’s figures for the coming years tell a very different story from the Chancellor’s: GDP growth was nil in the three months to September, while the OBR has revised growth for next year down by more than half from 1.8% to 0.7%, for the year after that down from 2.5% to 1.4%, and for 2026 marginally down as well. These figures are cause for alarm, signalling a potential economic downturn. In fact, retail sales are already falling and unemployment is rising. The OBR now forecasts that unemployment will go even higher than previously thought, reaching 4.6% by 2025.
If we have learned anything from the past 13 years of the Tories at the helm of the economy, it is that working people and the most vulnerable in our society are always the ones who are made to pay the price for their damaging decisions. A clear example is the Chancellor’s spin over the cuts to national insurance, which in reality will give back to workers less than a quarter of the £44.6 billion that will be taken away from them in frozen tax thresholds by 2028. As my hon. Friend the Member for Halton (Derek Twigg) advised, the 5% energy price cap rise will impact as well. These national insurance cuts will not do anything to help those earning less than the threshold, who are mostly low-paid, part-time workers and those in the gig economy lacking basic employment rights and protections, and they will disproportionately impact women.
Furthermore, the total absence of additional funding for public services will hit those most in need the hardest. Taking £1.2 billion out of the pockets of disabled people and affecting 700,000 people with a one-third cut in their benefits and increased conditionality, while handing businesses £12 billion in tax giveaways, is totally unconscionable. But it serves as a reminder, if we ever needed one, of whose interests the Conservative party serves. It is not its billionaire backers who will be impacted by the record waiting lists in the NHS, as they all have private healthcare, nor will it be their children whose education is negatively impacted by cuts to school budgets. How can the Government claim to be promoting economic growth when the very fabric of our society is fraying at the seams after more than a decade of crippling austerity?
At the local authority level, as well, we are seeing councils across the country teetering on the brink of collapse. They have enormous holes in their finances. What do we on Teesside get from the Government in response? We get the condescending slur of “holes” of a different variety.
Thanks to the Conservatives’ decision to slash local government funding, along with the disgraceful mismanagement of the previous administration in my town, Middlesbrough Council has been put in the unwelcome position of having to sell its major income-generating assets to try to deliver a balanced budget. While food banks creak under the strain and thousands of children go to school hungry, we have the farce of Members on the Conservative Benches blaming the newly elected Labour administration for clearing up the mess left by others.
Another matter that the Chancellor addressed in his statement that has a major impact on my constituency relates to freeports. The Government have announced their intention to extend the duration of the tax reliefs available in freeports from five to 10 years. The Chancellor explained that this decision was made in part thanks to “tenacious representations” by
“the unstoppable Mayor of Tees Valley”.—[Official Report, 22 November 2023; Vol. 741, c. 332.]
I must say that that description of the Mayor is not incorrect. He has certainly been unstoppable in locking the taxpayer into dreadful deals that set up private investors with all the reward but none of the risk, which is left to the public purse. In the latest edition of Private Eye we are told how the reckless boasting of Lord Houchen regarding the announcement of British Steel setting up an electric arc steel recycling plant on Teesside—on its own land—has left the Chinese-owned company with the British taxpayer over a barrel. Too eager to claim credit for something that has nothing to do with him and to present the deal as done while the company is still in negotiations with the Government over subsidies, he has potentially cost the public purse astronomical amounts of money. Such is the arrogance displayed by the Mayor, his office even put out a video showing him hand-signing a legal agreement with the caption “new electric arc furnace”, although on closer inspection the document turned out to be an old one for a solar farm.
This sums up how the Conservative party operates: all smoke and mirrors, when behind the façade its decisions only leave the British public worse off, much like this tawdry “autumn statement for growth”. The Home Secretary really let the Tory party mask slip with his foul-mouthed outburst last week, but he and his colleagues should be in no doubt that the people of Teesside and people across the country have long memories and will let their voices be heard at the ballot box as soon as they get their chance.
Several hon. Members rose—
Mr Deputy Speaker (Mr Nigel Evans)
As I will be leaving the Chair shortly, I just want to wish everybody a happy Lancashire Day—and how better to follow that than by calling a proud Cornishman, Steve Double.
Steve Double (St Austell and Newquay) (Con)
Thank you, Mr Deputy Speaker.
It is a pleasure to contribute to this debate on the autumn statement because there is so much in it to be welcomed, but most importantly I welcome the pragmatic approach being taken to see inflation fall and address the challenges in our public finances in a responsible manner.
It is important that we acknowledge the difficult circumstances that are the backdrop to this statement: the once-in-100-year challenge of the covid-19 pandemic, followed so quickly by the Russian invasion of Ukraine and the shock that sent through the global energy markets, mean that this Government are having to face a set of economic and public finance challenges that we have not seen in living memory. One of those challenges on its own would have been enough; the difficulty created by having to deal with both in such quick succession cannot be underestimated.
The Government rightly spent the money they did to protect jobs and businesses and to support households through the pandemic and the energy crisis, but we are often quick to forget all that they did. We must also remember that the money has to come from somewhere. We must not forget, either, that no matter how loudly those on the Opposition Benches shout, on almost every measure we introduced to support households and the economy, the Opposition said it was not enough and we should do more.
We will also never forget that the Leader of the Opposition wanted lockdowns to be longer and harder. We know that if the Opposition had been in government for the last three years, lockdowns would have been longer, more money would have been spent, the recovery would have been slower, and debt would be higher and we would have to be raising taxes even more in order to pay for it all. In the light of that backdrop, it is remarkable that the Chancellor has been able to announce the measures he has, and that has only been possible because of our responsible approach to managing the economy.
I welcome the 2% cut in national insurance, which will put hundreds of pounds back in the pockets of those in work. I welcome the increase in pensions by inflation and the retention of our commitment to the triple lock; the 8% rise will mean the state pension will be £3,750 a year more than in 2010, which is a testament to this Government’s support for and commitment to pensioners. I welcome benefits being increased by 6.7%, in line with inflation; I represent a constituency where 13,500 households are on universal credit and it is vital that benefits keep pace with rising prices. I very much welcome the increase in the local housing allowance, too; it is particularly important in Cornwall that the Government have been able to do that, because we have among the highest rents when compared with average incomes.
I also welcome the support to businesses, especially the extension of the 75% reduction in business rates for many high-street businesses. That is so important, particularly for hospitality businesses in mid-Cornwall that in recent years have been facing some of the most difficult times. I also welcome the rise in the national living wage to £11.44 an hour. That will give a substantial pay rise to so many workers in St Austell and Newquay, but we have to be clear that although the Government set that figure, it is businesses that will have to find the money from their revenues to pay it. I therefore encourage the Treasury team to continue to look in the coming months at what more can be done to support our small businesses. Although the measures announced are welcome, many businesses will still face challenging times in the months and years ahead.
I was delighted that the Chancellor made clear that the content of the autumn statement was only the start of tax reductions, and we look forward to more. If I may be so bold, I will suggest one. I welcome the new Financial Secretary, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston) to his place, and he will be familiar with this idea. I encourage him to use his new position to influence the Treasury to look again at cutting VAT for tourism and hospitality. When that was cut through the pandemic, we saw how positive it was in boosting that important part of our economy, so I encourage him to look at that again.
My final point is on the care sector, which is already struggling in so many ways and is concerned about the impact of the rise in the national living wage. Will the Treasury look again at what more can be done to support that sector in the coming months, because otherwise absorbing the rise in the living wage will put even more pressure on a system that is already creaking?
I very much welcome the autumn statement. With the backdrop of the challenges we are facing, it is welcome that we have been able to come forward with these measures. We have made the right decisions at this time, and I look forward to more to come in the months ahead.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
Just listening to some of the comments from right hon. and hon. Members, we could be forced to think we were living in a different Britain. I think about the emails I receive from constituents who are struggling and crying out for the Government to help. I think about the people worried about the changes to their benefits—people who through no fault of their own cannot work—and yet the Government say, “If you do not work, you will lose your benefits.” Even trying to get through to the Department for Work and Pensions is a struggle and a challenge for a number of those people. I hope that, in introducing the proposals in this autumn statement, the Government think about how we care for the most vulnerable in society.
This autumn statement marks just over a year since the disastrous mini-Budget, and we can all remember that. When so many people in the UK were struggling, the then Prime Minister thought that the best thing to do was to lift bonuses for bankers and give tax cuts to the rich. When so many were just trying to get their feet back on the ground after covid, we saw tax cuts being awarded to some of the richest in our country. That is not how we should be responding. The current Prime Minister is trying to say that he represents change, but this autumn statement is a watered-down version of the same flawed priorities that are failing my constituents and others right across the country. As a result, my constituents are paying a lot more of their hard-earned money simply to put food on the table.
I visited one of our food banks in Waterloo, just across the bridge from here, which is busy every day. A few weeks ago, the owner of that food bank, Bishop John Francis and I visited St George’s cathedral, which has opened a food pantry. We need those services now, because people—including even those who are in work—are struggling to buy the basic things. The terminology “in-work poverty” should shame us. These people are working, yet they cannot make ends meet. Sadly, that is nothing new.
The fact is that for the past 13 years, my constituents and many across the country have been let down badly. Their local services have been cut to the bone, waiting times across our hospitals are out of control, and their wages are growing nine times slower than they were under the last Labour Government. They have been let down because this Government’s priorities are not the country’s priorities. This Government’s priority seems to be them and their friends, and that is sad. It is no wonder that so many people feel disillusioned with politics and think we do not care about their everyday issues.
I think about those people who come to my advice surgery begging for help and asking if the Government will listen to their claims and fund local councils so that basic services can be restored. When I was growing up, those services were there to help people, but they have now been decimated. Actions speak louder than words, and for proof of that we need only look at who the Prime Minister has brought back in. The key architect of the austerity measures is now back at the heart of Government. That shows that nothing has changed.
My constituents have been waiting far too long, and sadly this Government have shown time and again that they will not change and will not listen to people’s concerns. People are coming to us as their MPs to talk about their priorities, and it is important that we make sure those changes happen. Those priorities include building the homes required; ending zero-hours contracts so that people can have decency and a fulfilling job; ensuring that women can go back into the labour market with affordable childcare; and building affordable homes, as opposed to homes that no one can afford to buy. This Government say they will end no-fault eviction, yet at every opportunity they move the goalposts. People are being demonised just for their sexuality, yet the Government say, “We do not care.” I hope that the Government will listen and change, and recognise that this autumn statement does not help people in Vauxhall and across the country. The only thing that will help those people is a general election and a new Government.
Giles Watling (Clacton) (Con)
First, I applaud the Ministers in His Majesty’s Treasury. Sticking to electorally hard positions goes against the natural political grain, but doing so has halved inflation. The autumn statement has done a great deal for every man, woman and child in Clacton and the wider nation. Despite this all-consuming effort to tame the tiger of inflation, which is working, we have still managed to protect the £78 million that is being invested in Clacton. I thank the Government for listening to my repeated pleas to look after coastal communities. That is levelling up.
I welcome a number of the measures, but I do so in a cautious manner. First, I welcome the fact that we have protected and fulfilled our manifesto pledge to keep the pension triple lock in place. I have fought for the past three months to keep our commitment to pensioners, and I am thrilled that the effort has won out in the end.
The tax reliefs for the English freeports are being extended from five to 10 years, with an additional £150 million investment opportunity fund. That potentially is great news for the Harwich freeport, but serious connectivity issues need to be dealt with in Clacton. If the people from Jaywick in Clacton do not see the benefit of this economic expansion, I will regard the whole freeport thing as a failure. Economic growth, particularly when backed by the state, cannot come without societal good.
I would also like to have a word regarding the banks. I thought our central bank was painfully slow to respond to the blatantly obvious inflationary bubble post-covid. Our current rate of 5.25% is a result of the backdrop of being too low for too long, and the subsequent climb was far too incremental, starting in December 2021. Our high levels of interest at a time of falling inflation could well represent the banking sector profiting out of the Bank of England’s tardiness, and that cannot be right. The Bank of England needs to respond in a reasonable way or risk the ire of the business community and of this House. We need to lower interest rates as soon as possible, to save some of the businesses in my constituency that are on the brink.
The bulk of my comments, however, come directly from and relate to our wonderful sunshine coast in Clacton. I reached out to a number of businesses and promised to be their voice, fulfilling my pledge to be Clacton’s man in this place. Here is what they had to say. Gavin Smith of Hedingham and Chambers buses—a firm doing amazing work, and I want to help it do better—wanted me to tell the Treasury that the £2 billion for development of zero-emission buses technology is great news, and it wants to work with that.
Of course, employees will welcome the 2% NI cut, but the massive 25% corporation tax rate hits business hard. The Cameron-Osborne years, which were just referred to, proved that lower and competitive taxes yield more for the Treasury due to the stimulus that gives to investment in the private sector. We must return to that fact of life that we as Conservatives all know.
There is one clear voice of concern from the sunshine coast, and it is one that I support. The minimum wage increase to £11.44 is excellent for so many, but for more than two decades Governments have been using a disingenuous term. They say, “We are increasing pay”, but let us be clear that they are not increasing pay but telling others to increase pay. What does that mean in real terms? For Amazon, a firm that saw profits explode thanks to covid spurring online sales and which had $513 billion of global revenue in 2022, it means little. For leisure businesses such as the Lifehouse in Weeley, it is devastating. Peter Murphy, its chief executive officer, told me that it expected its fixed costs to increase by £500,000. The company is a model business—it employs locally, gives to charity, has regenerated historic grounds, and even its restaurant menus show where produce has been sourced from in the immediate area—but it faces extinction unless something is done.
Hospitality and social care are the mainstay of our economy in Clacton, and they are not like Amazon, which measures profits in tens and hundreds of millions or billions and can pay more without a second thought. These businesses have high human resource headcounts and have to live with very tight margins. We need to protect them from increasing costs.
In this day and age, to treat all private entities as if they have the same capacity is madness. The mandates should be like tax on profit—they should fall heavier on the broadest shoulders. I am fine with the idea of special taxation on certain giants to retire the covid debt, the interest on which is a millstone around the national neck, but we cannot pretend that wages are Government money. They are businesses’ money, and that is not inexhaustible.
With falling inflation and key investments, we are well on the way to recovery. However, the message from Clacton is that that recovery is led by businesses, not by Whitehall. That means we need get the costs off their backs and let them do what they do and know best.
Helen Morgan (North Shropshire) (LD)
I draw hon. Members’ attention to the fact that I am a vice-president of the Local Government Association. I am afraid that the autumn statement will have come as a disappointment to many living in my North Shropshire constituency and rural places across Britain. After years of mismanagement, the Conservative Government have left hard-working people to pay for their mistakes. Some elements of the statement were welcome, such as lifting the freeze on housing allowance and increasing the national living wage, but they will not change the daily reality for many of my constituents who are struggling with stealth tax hikes and spiralling mortgage repayments.
I turn first to the Chancellor’s announcement to increase the national living wage by almost 10%. My Liberal Democrat colleagues and I welcome the increase for the lowest paid, but, for people in rural areas, it will not offset the impact of the cost of living crisis. People in rural Britain spend an average of £800 more a year on fuel because of poor public transport, and those who are off grid are still paying about twice the amount for their heating oil than they were before Russia’s invasion of Ukraine. I therefore urge the Government to support off-grid residents with their energy bills by implementing an off-grid energy cap so that those affected do not have to continue to choose between heating and eating.
The Chancellor has increased the living wage but failed to help local councils fund those increased wages. I have heard from councils run by all political parties that they are currently struggling to provide good services because of the crippling costs of social care, special educational needs and disabilities support, and temporary housing. Councils will have to pay either directly or to their contractors the cost of those increased wages, yet the Chancellor is asking them to find that money from their existing budgets.
That brings me to the closely related subject of social care. There were no announcements of any new investment in adult social care, or indeed children’s social care, in the Chancellor’s statement. For anyone who provides or receives social care, that will be incredibly worrying. Social care services are already under immense pressure, waiting lists for care assessments and provision are at all-time highs, and there are serious retention and recruitment problems in the sector—and they are especially acute in rural places such as Shropshire. Not only did the Chancellor fail to address that in his statement, but his unfunded announcement of an increase in the national living wage will only put further pressure on those services.
Shropshire Council has reported that it spends 85% of its budget on social care. Since I was elected, I have spent a significant amount of time talking to care providers in North Shropshire. They report struggling desperately to meet the need for care packages; they often cross-subsidise them through their private work. But care providers for adults with learning disability, autism spectrum disorder or lifelong high levels of need often do not have such private work, so with central Government not funding the increased wage costs—or local government unable to raise its own finance—there is a risk of a huge crisis in the sector. Crucially, a social care service under more pressure will have dangerous knock-on implications for bed availability in hospitals and—where I am, this is the most acute problem—ambulance waiting times.
After hearing the autumn statement, many people will feel they are about to relive last winter’s NHS nightmare, which the Government have repeatedly promised to prevent. For example, in the last week, NHS Shrewsbury, Telford and Wrekin Integrated Care Board has urged my constituents to stay away from A&E if at all possible because it knows that the department will be under extreme pressure with limited bed availability. The root cause of that is in delays in discharging patients who are well enough to leave hospital. That will only be exacerbated if care providers are unable to recoup their staffing costs from the local authority paying them to provide that care. It is a disgrace that the Government have not recognised the desperate need for investment in adult social care, and as such hospitals are bracing for another incredibly difficult winter.
Conservative Ministers have not got a clue about how to get the economy back on track. They simply do not understand that a healthy economy needs a healthy population, and that requires a healthy NHS and a healthy care sector. The Tories have cut taxes for the big banks and let fossil fuel extractors off the hook from the windfall tax. Liberal Democrats urge the Government to look again at those taxes to fund the sectors that will allow the economy to grow again.
I turn to the Chancellor’s decision to lift the freeze on local housing allowance to support more households with paying their rent. I am sure that is good news for the 8.5 million people who the National Housing Federation estimated are living with unmet housing need this year. A lack of affordable and social housing is a real issue in North Shropshire, where the average house price is 8.6 times average earnings, according to the all-party parliamentary group for rural business and the rural powerhouse, of which I am a member. About 175,000 people are on rural housing lists at the moment, and homelessness is increasing, especially among young people.
I draw the House’s attention to two key shortfalls to the announcement. First, the Chancellor did not commit to ruling out reinstating a freeze in the future, so the policy could be reversed, with the result that councils cannot easily plan ahead their financial budgets. Secondly, it did not apply to temporary accommodation, so the maximum subsidy will remain capped at 90% of rates in January 2011. In my constituency alone, the number of households living in temporary accommodation has more than doubled since 2018, placing yet more strain on council budgets.
Councils of all political parties have recently written an open letter to the Chancellor to explain the unprecedented demand for temporary accommodation and its associated astronomical increase in costs on their budgets. They need urgent clarification that housing allowance will not be frozen again in future and that they will be subsidised to manage this difficult problem going forward.
On mobile signal investment, I welcome the Government’s announcement that 10 regions will be awarded funding for 5G connection for businesses and residents. Mobile connection is an issue that I have significant personal experience with. A mobile signal is essential to a functioning community and paves the way for successful and growing businesses. It will surprise no one that all those areas of the UK that do not receive a 4G signal are classed as rural. Thirteen per cent of my constituency is a partial notspot, and 50% of indoor spaces in North Shropshire do not receive a 4G signal from any of the top four operators. That significantly impacts businesses in my constituency as they struggle to operate without a signal. Therefore, while 5G technology is welcome, I hope that the Government will understand that, to level up rural Britain, a 4G signal needs to be available first.
To conclude, I am worried about the stability of local government to provide essential services, the impact on the health service and the levelling-up of rural Britain.
Nigel Mills (Amber Valley) (Con)
It is real pleasure to welcome a much more optimistic and extensive statement than I had thought. A few weeks ago, we heard stories that inflation was higher and stickier than we thought, interest rates were forecast to be higher for longer, and it could be a miserable statement to sit through. Then, we heard stories that we may not be able to increase pensions by the triple lock and benefits by inflation. Then, we heard the rumours that our priority was inheritance tax, and I thought I would be here opposing the autumn statement, but fortunately I can wholeheartedly welcome it.
My constituents will be particularly pleased by the support to pay their bills: the national living wage is up by nearly 10%, the state pension by 8.5% and benefits by the full rate of the consumer prices index from September. More unexpected was the increase in local housing allowance back to the 30th percentile, which is much needed. The system has been creaking, and we need to maintain it at that level. The Government should be commended for all those measures. On a local note, I welcome the investment zone announced for Derby, Derbyshire and Nottinghamshire. We look forward to seeing the full detail, but it looks to be positive for local growth. Businesses in my high streets and the hospitality sector will welcome the business rate reliefs that were announced.
I want to touch on three topics: the corporation tax changes, the pension changes and the various measures to make work pay. To give some certainty, we should have a long-term, predictable plan for what our tax system should look like, so I welcome the 2% reduction in national insurance down to a nice, round, easy-to-calculate 10p in the pound. That fits quite well with the 20p income tax rate, so we have a nice, neat 30p in the pound and people understand what they are paying. They know that if they earn more than £50,000, that goes up to 40p, and they have to add the 2p national insurance, or a bit less. That is a clear and predictable way of taxing people’s earnings.
Now, we need to work out where the starting points in the bands should be, because that has gone a bit out of control. We were trying to get to the stage where someone could earn the minimum wage and not pay any income tax, but that is now thousands of pounds away. I urge the Government, having made this welcome step, to set out a plan for setting a much higher starting point for paying income tax and national insurance. It should be heading back towards a point where someone working full time on the minimum wage does not pay much tax.
Equally, on corporation tax, the plan we had 13 years ago for a stable business tax system appears to have drifted away. I support the full expensing, but that is a pretty radical and permanent change to our corporation tax system. There is a huge compliance need for businesses to track all their fixed assets and split them between the general pool, the long-life asset pool, the short-life asset pool, the vehicles and the structures rules, working out what is a non-allowable structure and what is not. All those things are hugely complex. We are now allowing full expensing for the vast majority of spend. We should think about whether we need all those rules, or whether we could sweep them away and just have some anti-avoidance restrictions. What should we do with the legacy situation? It will be a bit bizarre to have full tax relief for the capital I have spent this year, but still having to work out and claim relief for what I spent 15 years ago, which is still working its way through the pool. That looks to be a long and unwieldy system. Could we find a way of running off those legacy balances a bit more quickly, so we can lose that complexity?
On the pensions changes, I support the pot for life approach that the Government are consulting on. The counter argument is that it takes away the link between employers and their employees’ pension, but the simple fact that we had to auto-enrol 10 million people into a workplace pension suggests that those employers were not bothered about the pension they gave their staff, because they were not giving them one at all. Trying to boost the individual’s engagement with their pension savings is a prize worth having. If someone moves job to an employer with a good pension scheme, they can choose to stay there—they do not have to stay in their pot for life. I think that we will need a clearing house to avoid costs on employers, because otherwise small employers with 12 employees will be left trying to work out how to pay 12 different pension schemes a month. That sounds a bit too complex.
I have been banging on for years that auto-enrolment has got stuck being cheap and easy for employers, but does not produce the best returning pension for savers, so I welcome the references in the Green Book to a new duty on employers to think about the quality of their pension scheme for their scheme members. That will help move auto-enrolment in the right direction to the best staff pension.
I largely welcome the various welfare changes. Clearly, it is right that a welfare system be conditional. People who can work and look after themselves and their families should do so, and to those who cannot we should give as much support as we possibly can. That is an undisputable foundation of the welfare system. However, it has gone a little out of kilter. Far too many people are successful at being out of work for life. We need to find a way of changing that. However, I would warn the Secretary of State to be cautious about the message that people get, because they tend to hear the bad news, not the good news. All the good news about extra support and the chance to work guarantee are drowned out by noise about stricter assessments. People still do not trust the system as they should. We should be careful not to lose the good messages in the necessary bad ones. The evidence shows that if people feel supported, trust the work coach they are working with and feel they have a predictable journey that supports them, they will engage with it. If they are worried that if they make a step and it does not work, and they are reassessed and tell the work coach, that will be used against them next time, they will not engage. We must tread carefully.
I accept the need to ensure that the work capability assessment is getting people in the right place. Only people who are never fit for work should be declared not ever fit for work. That has to be right, but I urge some caution in that language. I note the rather strange thing at the end, quite rightly reinstating the rule that if someone does not comply with the terms of the benefit, they lose the benefit. That rule was there pre-universal credit, and it is right, so I am not sure how it will cost £10 million a year to reintroduce it. Perhaps we have not scored that yet, and we will see that detail in future.
Mr Kevan Jones (North Durham) (Lab)
Let me begin by congratulating the Prime Minister on raising relaunches to an art form that should be admired. It began in his conference speech, when he announced that he was the new agent of change. That lasted about a week of Tory party infighting. Then, we had the King’s Speech three weeks ago. There was no change in that; it was all very much the same from a Government who have run out of steam and ideas. Third time lucky: with the autumn statement he had a chance to turn the corner to improve our economy, invest in public services and support working people. But what did we get? A party political autumn statement, purely focused on attempting to move the dial of the opinion polls for the next general election.
The headline grabber was the national insurance cut, but it does not take an economist to work out that people will be paying more taxes. Going into the autumn statement, the increase in NI was about 10p. We have now been given back 2p, so to use the analogy of the hon. Member for Boston and Skegness (Matt Warman) about cake, it was like taking the cake away and giving back two small slices. Then, because of the freezing of personal allowances later this year, not only will those two slices be taken again, but the Government will have everything else in the cake tin. Added to that, inflation is still high: in the last two years it has risen by 16%, with food inflation up 28%. The Prime Minister claims to have got inflation down, but it has had nothing to do with him—it is down to the Bank of England. That will not con people, because prices in the shops are still rising.
How did we get here? As my hon. Friend the Member for Leicester West (Liz Kendall) said, the Government say it is, “Nothing to do with them, mate”. That has been the line all along. This has been the accumulation of 13 years of not only austerity but a way of dismantling the state. The criminal justice system is in absolute crisis; health is broken; local government is bleeding on its feet; education is in a dire situation. In local public health, drug and alcohol services and others have been slashed because of the effects of Government spending. We have had flatlining growth and, as my hon. Friend the Member for Bootle (Peter Dowd) said, people paying more for less.
The Secretary of State for Work and Pensions tried to present a cuddly image, saying that the Government’s welfare changes were all about getting people into work. I have no problem with genuinely supporting people into work, but the hon. Member for Boston and Skegness let the cat out of the bag when he said that they were about changing people’s behaviour—as though people somehow choose to be on welfare. We just heard the hon. Member for Amber Valley (Nigel Mills) say that he would get a bit nervous if the language around that gets too harsh, but that is exactly what the Conservatives are going into the election with. They will say, “We’ve cut taxes and we’re going to be hard on the feckless poor,” which is how they see people on welfare.
We are in this situation because of the pressures on people’s daily lives. The Secretary of State’s only suggestion on mental health was for more talking sessions. Well, I am sorry but if we do not replace the money for local government, social services and other infrastructure at a local level, mental health crises will increase. We have the ludicrous idea that the answer for people who are on welfare because of their mental health is to get them working from home. I support people with mental health issues going into work, but it must be the right type of work. The idea that sitting at home will help people’s mental health is, frankly, ridiculous.
I was shocked that there was no continuation of funding for the suicide prevention programme. Suicide is the biggest killer of men, but the programme will run out in March because there was no extra funding in the autumn statement. It would cost £1.40 per person to address that crisis, the shameful stigma of suicide and the suicide rates in this country, which are still far too high.
On local government, the Government’s botched announcement last week on levelling up came against the background of a sector that has had a 30% cut in its real-terms funding. Durham County Council has lost £262 million a year and the Government produce their shuffle trick and say, “Why aren’t you still producing services?”, implying that it is somehow inefficient. The cost is then moved on to local council tax payers. This is part of the Conservative Government’s deliberate strategy over the past 13 years of dismantling those parts of the state that we have always recognised as being vital to the coherence of our local communities.
I want to raise one issue relating to sub-postmasters. People know that I have been campaigning for them for well over 13 years. I just hope that money is set aside in the Treasury for full compensation. On a personal note, the person who got me into this, my constituent Tom Brown, unfortunately passed away last night. Tom was prosecuted by the Post Office. He will not get justice. He goes to his grave without the justice that he deserves—one of far too many.
There is no change in the autumn statement. It is time for change, as other colleagues have said. The only way we will rebuild Britain, rebuild our communities and rebuild the state—not a state that tells us what to do, but a state that is there for our constituents and our communities—is if we have a general election and elect a Labour Government.
Jack Brereton (Stoke-on-Trent South) (Con)
It is a pleasure to speak in this debate, not least because the Chancellor confirmed, as many of us predicted, that the Government would not just meet the target of halving inflation by the end of the year, but do significantly better. Forecasting is, of course, never an exact science. As the OBR report says:
“The economy has proved to be more resilient to the shocks of the pandemic and energy crisis than anticipated.”
That is probably the closest we will get to, “Sorry, we got it wrong,” from the OBR. It got the baseline so badly wrong, with GDP standing 3% higher, it has had to revise down rates of subsequent growth to take account of the higher starting point. Even then, it still admits that GDP will be 0.5% higher than the March forecasts. That has enabled the autumn statement to reflect the success of the Government’s policies, delivering the largest tax cuts since the ’80s. This is an autumn statement for jobs and growth, putting more money in people’s pockets, helping people to keep more of the money they earn and ensuring that work always pays.
Last Friday, I held a jobs and advice fair for the over-50s in my constituency, helping scores of people who were looking for new employment, skills or training opportunities. Local employers have hundreds of vacancies right now, so boosting skills and addressing employment gaps is vital. For employers, I particularly welcome the largest tax cuts in modern history. Full expensing being made permanent is absolutely what industries in Stoke-on-Trent need, and it will significantly encourage further investment in prosperity and jobs growth.
There are more jobs available in Stoke-on-Trent than people unemployed, so the autumn statement’s focus on getting people into meaningful work is very welcome. As we know, the routine of a meaningful working life is beneficial to mental health, but that can be tragically hard to see for some suffering from severe mental health challenges and other health challenges. I am sure we have all had heartbreaking conversations with constituents in that position, and of course there should always be the support in place for those who need it most, but all the evidence tells us that it is right that we support them into the security of work and help them to improve their condition, because work can make a huge difference in helping people get over both health issues and mental health issues. The expansion of the individual placement and support scheme, providing intensive and tailored expert support for those with severe challenges, is welcome, as is the expansion of talking therapies for those with moderate and mild conditions.
It is right to reform the fit note process, so that treatment is prioritised over time off. In total, £1.3 billion over five years will help 700,000 people with health conditions to find jobs: good for the economy, good for employers and, most importantly, good for them and their families. It is not being cruel to be kind; it is being kind to be kind. It is only if that kindness and support is rejected that sanctions, reluctantly, will have to be used as a last resort. For those who are capable of working but refuse to do so—those who do not engage—I think most of our constituents would want us to ensure that action is taken to support them into work. Indeed, the Chancellor has ensured that the carrots, as it were, for being in work have increased across the board. The cuts in national insurance payments, the increase in the national living wage and the increase in the minimum apprenticeship wage are all welcome, making work the most attractive option, alongside uprating benefits and the state pension.
I was very happy to hear the Chancellor say that that is as much a moral imperative as an economic one. This is about fairness for everyone. No one should be written off and left on the scrapheap, as we saw with so many under the last Labour Government. Equally, no area should be left behind and the levelling-up agenda that we have enjoyed since Brexit must continue to deliver meaningful change. The UK has grown faster than other countries throughout Europe, but we must ensure that every single part of the UK, including communities in Stoke-on-Trent, benefit from that increased prosperity. That includes the transforming cities fund package, generously funded by the Government but delayed by covid—and, I have to say, by Network Rail and Stoke-on-Trent City Council. Shockingly, the city council’s current Labour leadership has even delayed our levelling-up projects, revisiting some of them and revising down some of the ambition that will have a massive impact on what we were hoping to deliver. The ambitious leadership we need for our city is very much lacking when it comes to the Labour administration at the council.
That must not happen to our restoring your railway projects under the Network North proposals. We, as Conservative MPs who are leading the bids, are absolutely focused on ensuring we deliver on reopening Meir station and the Stoke to Leek line. It is vital that we invest in improving our local transport—our vital local rail, road and bus links. Where the autumn statement delivers, rewarding work and putting more money in people’s pockets, so the cancellation of phase 2 of HS2 must deliver transport improvements to help communities in Stoke-on-Trent and across north Staffordshire to better access work and skills opportunities. That investment will put the money that was going to be wasted on phase 2 into things that will make a real difference, ensuring that we connect communities and deliver access to employment opportunities. That will deliver the step change that we need in local rail, road and bus connections. That is vital for communities like Meir in my constituency and right across Stoke-on-Trent and north Staffordshire.
Together, these measures will unleash employment growth and help us to level ourselves back up to where we belong, supporting our fantastic, world-leading industries —our manufacturing industries, on which our city was built—ensuring that we can deliver growth in jobs and employment, ensuring that work is rewarded through improvements in pay and conditions, and ensuring that people have access to better employment opportunities in the future.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. As I still have to get 16 speakers in, I shall have to reduce the speaking time limit to six minutes.
Liz Twist (Blaydon) (Lab)
There is much in the autumn statement on which I could comment, but I want to focus on one area. Having heard what was said by my neighbour, my right hon. Friend the Member for North Durham (Mr Jones), I was tempted to say the same, for I shall be touching on very similar themes.
Like many people, I hear regularly from disabled constituents who are desperately worried about their finances and their benefits. They feel that DWP assessments are designed to catch them out rather than help them, when it is appropriate, into good employment. For them, the autumn statement has been a source of great anxiety, with fears that the Government are doubling down on a culture that many have experienced as inflexible, ineffective, and even downright callous. Debra, a constituent who contacted me this weekend, has been on PIP and ESA for a long time, owing to a debilitating lifelong illness, and is now desperately worried that she will find herself in difficult circumstances as a result of the changes. There is an urgent need for the Government to clarify the details and put more flesh on the bones so that constituents like Debra are not worried sick about what will happen to them in the future.
Of course people who are able to work should be provided with the right support to help them to do so, because, as my right hon. Friend said, a job can be a source of structure and self-esteem, and people with mental health problems in particular are especially sensitive to the negative effects of unemployment. Crucially, however, as we have also heard, these jobs need to be good and appropriate. Insecure, demanding and low-paid work can be as bad for a person’s mental health as unemployment.
Last week, during a television interview, the Chief Secretary to the Treasury said that disabled people must “do their duty” and work from home, but figures from the Office for National Statistics show that only 16% of adults currently work exclusively from home in any given week, and that people are more likely to be able to work from home if they are in the highest income band and educated to degree level or above—groups to which people who suffer severely from mental illness, for example, are statistically less likely to belong.
I fear that disabled people competing for a small pool of fully remote jobs will find themselves pushed even further into poor-quality and insecure work. For others, particularly those with mental health problems, there is a risk that being pushed into homeworking will only serve to compound their social isolation and their difficulty in paying bills. We must be clear about the fact that while we need to provide better access to remote working, it cannot be a substitute for access to good-quality, hands-on support.
I want to say something about sanctions, because there is a well-established link between losing benefits, facing serious hardship and experiencing a deterioration in mental health, sometimes causing hospital admission. Previous research has established that people who are sanctioned also take longer to move into paid work, and that when they do, their earnings are lower. We need a holistic approach that covers the impact of the colossal NHS waiting lists—in particular those for mental health treatment, which are preventing many people from being able to work. We cannot ignore that fact when considering this issue. We need to consider the impact of young people’s experiences of education and living in poverty, and how they accumulate to exclude them from access to good jobs.
Along with mental health charities, I welcome the extension of the NHS individual placement and support scheme to provide intensive employment support for people with severe mental health problems, but I hope that the Government will consider the merits of that approach for more common mental health conditions, as well as taking a broader view of the factors that impede employment among people with poor mental health. Sadly, as we have heard, we did not see any new proposals for evidence-based preventive programmes, and I am particularly disappointed that we did not see the continuation of the vital funding to support local suicide prevention plans that is set to run out this year. As we have also heard, the cost of retaining that vital service is very small. The need for a public health approach to mental health has never been greater, and we need the Government to assess and show an understanding of the traumas that people have experienced, rather than creating new ones.
Finally, I want to say a little about childcare. Having spoken to staff at a nursery in my constituency, I know there is a real fear that the Government’s plans are not meeting the costs that are needed to provide high-quality childcare, and something must be done about that.
The Tories are desperately looking for a reset moment, but it is not the autumn statement.
Wendy Morton (Aldridge-Brownhills) (Con)
As someone who spent many years in business myself, I will begin there. We started our family business back in 1991 with an enterprise allowance of £40 a week from the Government. It is not possible to make business risk-free, but it is possible to create the conditions that support entrepreneurs. SMEs are the real wealth creators of our economy, and in this, the week leading up to small business Saturday, I am proud to support those in my constituency. Microbusinesses, with up to nine employees, constitute 89% of the businesses in my constituency. These are the people who get up early in the morning, put in the hard yards, and take risks with their money. They are the backbone of local economies.
I welcome the measures in the autumn statement that back British business, such as the extension of rates relief for the hospitality, leisure and retail sectors. Freezing alcohol duty will help the local micropubs, such as The Turtles Head, that are the heart and soul of so many communities. Measures on class 2 and class 4 national insurance contributions to help the self-employed are also welcome. However, we need to continue to look at ways in which to go further. The extension of full expensing will be welcomed by the larger companies, but I fear that it will make little difference to too many small businesses. That is why I feel that we need a cut in corporation tax from its current high rate of 26% to its former level of 19%. That, I think, would be another tool to lead us towards the growth that we all want to see.
The increase in the national living wage will be greatly welcomed by many employees, but some businesses and community organisations in my constituency tell me of the challenges that it will pose to them. For some, it will risk pushing up prices to service users. I therefore urge the Government to exercise a bit of caution, and to continue to look at that balance.
As for personal taxation, I welcome the 2% cut in the main rate of employee national insurance from 6 January next year, which will bring relief to some 27 million workers, but I think we should recognise that we must not stop there. With wages rising, there is a real risk that people will pay more income tax. Let us not forget about the need to go on looking at the tax-free allowance thresholds—and I, for one, will be continuing to push for increases. I feel that that makes sense, because we need to address the fiscal drag.
Turning to welfare reform, the commitment to the triple lock will mean a fantastic 8.5% increase from the start of April 2024, which is equivalent to £900 a year. I know that that will help the pensioners in my constituency, and that is good news. The plan to work is also welcome. It is just not fair for the majority of British people to work while some people think they can get away without working. The key to employment is the Government working with training providers, education providers and employers, with everyone working closely together to understand where the skills gaps are today and where they are likely to be in the future. Our young people, our students and those returning to work later in life need a pathway of apprenticeships and education that will lead them smoothly and successfully into a job.
In the west midlands, we are fortunate to have our brilliant Mayor, Andy Street, who absolutely understands that. The announcement of three new investment zones, including one in the west midlands, is especially welcome, providing the opportunity to drive £5.5 billion of growth across our region and creating 30,000 new jobs. The autumn statement also seals the deal on the single settlement to provide the deeper devolution deal that we want and to end what has been described as a begging-bowl culture for so many devolved areas. That settlement has been pioneered by our west midlands Mayor, Andy Street.
The decision to invest a further £50 million in apprenticeship pilot schemes will be invaluable too. I note that the Minister for Skills, Apprenticeships and Higher Education, my right hon. Friend the Member for Harlow (Robert Halfon), is nodding on the Front Bench, and I remind him that he is welcome to come to Aldridge-Brownhills to visit our apprenticeship provider. It is important that we do not neglect the traditional industries, which still provide an economic powerhouse in places such as the Black Country. We cannot afford to leave those communities and businesses behind. Our ambition of levelling up will be fully realised only when we embrace all sectors of industry, whether new or traditional.
The focus on supply-side reform is also much needed to deliver growth, particularly in areas such as planning, but I caution Ministers that, while that is welcome, we must ensure that our local authorities have the planning expertise and capacity to deal with the applications. I also ask Ministers to consider extending any such new policy practices to other organisations—for example, the Environment Agency. We have a situation in my constituency where it is taking up to 71 weeks just to validate permits and licences, so I am rather hoping that someone on the Front Bench or in the Department for Environment, Food and Rural Affairs will have taken note of that and will come back to me on it.
In a time of continued global uncertainty, especially given the war in Ukraine, I welcome our commitment to spending 2% of our GDP on defence. I also welcome the extra commitment of £10 million to support the Veterans’ Places, Pathways and People programme. We have moved the dial forward, and I am sure we will continue to move it further forward.
Steve McCabe (Birmingham, Selly Oak) (Lab)
It is difficult to know whether what we had last week was an autumn statement or a pre-election mini-Budget. It was big on promises and very optimistic, but the growth figures are disappointing and inflation is falling slowly—very slowly. The Chancellor says he is putting money in people’s pockets, despite the Bank of England wanting us to spend less. He has agreed to freeze the small business rates multiplier for another year, but the increase in the minimum wage, though welcome for employees, will largely offset any benefits that businesses gain from the rates freeze.
Claire, the enterprising woman who runs Aspire, a hair and beauty treatment business in my Selly Oak constituency, has told me that this will mean gaining on business rates but losing on wage increases. Claire—who, through her own efforts and determination, has opened not one but two shops and held her business together during the pandemic by sheer hard work and creative advertising on social media—does not begrudge her 15 staff a wage increase. She acknowledges that they need it, but despite working all the hours she can, she has to accept less for her and her family because she cannot increase prices; otherwise, she will shrink her customer base, because they are all struggling with the cost of living crisis.
The Chancellor wants to be seen as promoting growth and cutting taxes, yet the tax burden is at its highest since the second world war, living standards are set to fall 3.5% below pre-pandemic levels—the worst reduction since the 1950s—and growth is at 0.6% compared with 2.1% in the United States, 2.5% in Spain, 2.3% in Portugal, 2% in Ireland and 1% in France. It is also hard to reconcile the image of tax-cutting Tories with the Office for Budget Responsibility’s forecast that 4 million people are going to end up paying more tax due to fiscal drag. According to the Institute for Fiscal Studies, no Parliament has presided over larger tax increases since the 1950s. Who would have expected nurses and police inspectors to be paying the top rate of tax? They are hardly wealthy.
The Chancellor claims that he has reduced the debt. He has; it is now a mere £2.7 trillion and projected to be about 98.6% of GDP and not the 100% that he feared. But even this wonderful feat has only been achieved by sleight of hand, as he has excluded Bank of England debt from his figures. The much-vaunted national insurance reduction of £450 pales into insignificance when set against monthly rises in mortgage payments of £300 or more. Higher interest rates, and therefore higher mortgage repayments, are expected to hit around 4 million families. Against this harsh reality, it turns out that the Chancellor is barely giving working people enough back to be able to afford a weekly portion of fish and chips.
There are also too many households with nothing put away for a rainy day. Our savings ratio is lower than competitors such as Germany and France, and mortgage payment increases are estimated to take the number of households with no savings to around 7 million. That is one in four UK households. And where was the update on the energy social tariff, promised in last year’s autumn statement? It turns out that not even the consultation has taken place, so this winter people relying on medical devices will have to make a choice. Many of those with disabilities and with conditions that react badly to the cold will suffer as they struggle with higher bills.
The Chancellor’s big offer for businesses is full expensing, in what he called the largest tax cut for businesses in modern history. For every £1 million a business invests, it will get £250,000 off its tax bill in the same year. Alas, it is hard to find any estimate of just how many businesses will benefit. Can the Minister say just how many companies he expects to replace £1 million-worth of plant and machinery in a single year? Even those that do benefit will still suffer due to corporation tax.
For many businesses, the rise in the minimum wage will be accompanied by a 6.7% increase in business rates, adding to the pressure on them at a time when supplies, raw materials and other costs are increasing but their prices are not, all of which puts pressure on jobs. I have yet to come across a company in my constituency that appears to qualify for any energy support from this Government. It does not matter if it is the excellent Howard Yarnold, a family firm that specialises in the design, manufacture and fitting of commercial and domestic windows, Loaf, the popular organic bakery, or Aspire, which I have mentioned—nobody gets any help. If this was a plan for jobs and enterprise, it has failed.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
Before beginning my critique, I would like to welcome some of the Chancellor’s announcements. First, I welcome the decision to maintain the benefits calculation based on September’s inflation figure. Considering that energy and food prices are still rising, it would have been callous to change policy, as was briefed beforehand. I also welcome the increase in the minimum wage for those on the lowest wages and the unfreezing of the local housing allowance, albeit I read over the weekend that the unfreezing is only a temporary measure.
On moving those on disability benefits back to work via home employment opportunities, I agree that, if these opportunities exist, we need to help people by offering tailored support. In my view, these reforms would have fitted better within a wider Government strategy to promote homeworking.
I also welcome the extension to business investment relief. The UK faces chronic, long-term productivity challenges, and a key part of addressing them is encouraging businesses to invest for the future. Regrettably, this was not complemented by extra support for public investment. There was no increase in the Government’s capital budget, which has been frozen at a pathetic 1% of GDP. Surely this has to be increased to address our productivity challenges, with the investment targeted at those parts of the UK that have historically underperformed.
The Resolution Foundation estimates that the UK’s approach to public investment represents
“an institutional failure of the British state”.
It says that, had the UK followed the OECD average over the last two decades, an extra £500 billion would have been pumped into the UK economy, resulting in long-term economic benefits.
In the autumn statement, the Government claimed credit for halving inflation since its peak, thereby meeting one of their self-proclaimed key priorities for this year. Inflation at over 4% means that prices are still rising, of course—they are just rising at a slower rate. This means that, next year, energy costs are forecast to be around twice as high as they were before the price spike. I am disappointed that there was nothing in the autumn statement to help the most vulnerable with their bills. With higher energy prices, the Treasury is raking in extra revenue from VAT. Surely some of that revenue could have been used to provide a scheme to help those in dire need.
Furthermore, the OBR report indicates that inflation will remain higher for longer than predicted in its March forecast. As the OBR states, the assumption is that interest rates will remain higher than forecast, at a time when the central bank estimates that over half the impact of the rate rises over the past two years has yet to be felt. The OBR report indicates that economic growth will be slower than even its March forecast, with GDP growth estimated to be only 0.6% this year and 0.7% next year. It states that cumulative real growth from 2023 to 2027 will be 2.4% lower than forecast in March.
The OBR’s revised figures on real household disposable income indicate that living standards will fall at the fastest rate since records began in the 1950s. Living standards will not recover to the pre-pandemic level until 2027-28. The Resolution Foundation estimates that the average worker will be £1,900 worse off in real terms at the end of this Parliament compared with the start.
The real income of the average worker lags way behind the OECD average. Whereas the OECD average for real wage growth between the financial meltdown in 2008 and 2023 was a measly 8.8%, the UK is firmly in the relegation zone at only 2.7%. Such has been the weakness of wage growth that the Resolution Foundation estimates that the average worker is £11,000 per annum worse off after 15 years of wage stagnation, following the financial crash of 2008, compared with pre-2008 trends.
The proverbial rabbit in the hat was the higher-than-expected two percentage point cut to national insurance. This comes at a cost of £46.8 billion per annum over the forecasting period, according to the Treasury’s figures. However, the Chancellor did not comment on the impact of freezing income tax allowances and thresholds, which has resulted in a tax bonanza for the Treasury as a result of so-called fiscal drag. If my understanding of the OBR report is correct, fiscal drag will result in more than £201 billion of extra revenue for the Treasury over the next six financial years. That is the economic equivalent of nabbing the electorate’s wallet and expecting them to be grateful that a fiver has been placed in their pocket.
Once again, the OBR report highlighted the harm that Brexit has caused to the economy. It found that long-term trade intensity will be reduced by 15% as a result of the UK Government’s decision to operate outside the European economic frameworks. Meanwhile, it also found that the flagship post-Brexit trade agreement, the comprehensive and progressive agreement for trans-Pacific partnership, will add only 0.04% to GDP in the long run. Despite this major elephant in the room, we face an election in which no UK political party is willing to entertain the one obvious economic move that could be taken to improve matters for the country, namely reintegrating economically as much as possible with the rest of our continent.
The political debate between the parties in this place has completely converged on the economy. As we face an election, the obvious question is where will future growth come from? Public investment is at historically low levels, exports are struggling as a result of a kamikaze Brexit, and consumer spending is likely to remain suppressed as living standards decline. In this environment, it is a bit far-fetched to expect business investment to step up and fill the void. I wish the official Opposition well when they inherit the mess in front of us.
Alex Davies-Jones (Pontypridd) (Lab)
As ever, it is a privilege to speak on behalf of the people in my community of Pontypridd and Taff Ely in today’s autumn statement debate. I congratulate my hon. Friend the Member for Leicester West (Liz Kendall), the shadow Secretary of State for Work and Pensions, on a storming speech at the Dispatch Box this afternoon and thank her for sharing the inspirational story about the challenge faced by David’s son in trying to access employment. People with neurodiversity have an abundance of skills to contribute to our economy and to the workplace, but they need a proper pathway and a proper plan for suitable work for everyone. David and I have something in common: not only are we exasperated by this Government, but we are both parents to children with autism. Although my son is not going to be entering the workplace any time soon, I hope that he does so under a Labour Government here in Westminster, so that he, like everyone, has the opportunities and aspirations to achieve a decent world of work.
To be frank, the feeling in Pontypridd is crystal clear: the Government’s plan simply is not working. The Prime Minister and the Chancellor have promised to get the economy growing, but instead it is flatlining. Working people and households have been hit with rising prices for their food and utilities, and the Government should be ashamed that so many people across the country can no longer afford the basics. Leadership starts at the top, but the Prime Minister seems to be more concerned about securing his future employment and appeasing the likes of billionaires such as Elon Musk than supporting ordinary working people across Britain. Only the Labour party is serious about growing the economy. It is clear to see that my right hon. Friend the Member for Leeds West (Rachel Reeves) is utterly determined to make working people in all parts of the country better off by growing the economy, boosting wages and bringing down bills. Let’s face it: this Government cannot even get the basics right.
Labour’s better-off plan will cut household bills by up to £3,000 a year over the next decade. I am proud that it is this party, on these Benches, that has a clear path forward. It is the absolute least that people across the UK deserve after far too many years of false promises and distraction from this Government. Over the next decade, Labour’s better-off plan will save families £500 a year by insulating homes to make them more energy efficient. People will also save £900 a year as we build cheaper, cleaner power across the country through the creation of Great British Energy, a new, publicly owned clean generation company. For homeowners, £1,200 a year on mortgage bills will be saved by our building 1.5 million homes over a Parliament to keep housing affordable.
The Chancellor’s top lines, well-rehearsed as they are, simply cannot conceal the truth, because it is crystal clear that this Government have presided over 13 years of economic failure. When I speak to people across my area, the message is crystal clear: enough is enough. Colleagues on the Benches opposite must know the reality; rats and sinking ships come to mind. Economic growth has been revised down for next year, the year after and the year after that. None of the Chancellor’s announcements will come as any form of compensation to undo the damage done by a flailing economy. We all saw it with our own eyes and felt it in our own pockets. The Conservative party oversaw the near collapse of the entire British economy last year, which was a disaster for businesses and individuals. Only Labour can be trusted on the economy and we have a plan from day one. That includes supporting our high streets, which have been utterly neglected at the hands of this Government.
I have repeatedly warned in this place of my frustrations over the closure of banks on the high street. Last week, yet another high street bank announced that it is shutting its doors and abandoning customers in Pontypridd. This time it is NatWest, but over the last few years HSBC, Lloyds and Barclays have all shut up shop too. The Chancellor claims that his plans will put more money in people’s pockets. How ironic will it be if the banks continue to disappear and access to cash becomes a thing of the past? In my maiden speech, I said how proud we were in Pontypridd to have the Royal Mint in our constituency. It is not lost on me that my constituency makes all of the coins in the country yet we see far too little investment or money in people’s pockets. So I urge the Government to think carefully about the desperate position in which this is putting people who require access to face-to-face banking services and access to cash. What plans do this Government have to compel banks to do the right thing and stay on our high streets to support businesses and vulnerable people who rely on their services? We have supported the banks and they should support us. My fear is that there is no plan.
Let us be clear: people across the country deserve so much better. We have an unelected Prime Minister and unelected Foreign Secretary, and manifesto commitments broken and abandoned one after another. Is it any wonder that people in the country are crying out for change. It is clear among the people up and down this country that they want a general election—they need a general election. They cannot afford any more years of this Tory Government. It is time for serious change, because this Government have played hard and fast with people's finances for far too long and we are all paying the price. Enough is enough.
Janet Daby (Lewisham East) (Lab)
It is a privilege to follow my hon. Friend the Member for Pontypridd (Alex Davies-Jones), who made a powerful speech about her constituency. I share her frustration about bank closures on high streets. Like many Members across the Chamber, I have experienced the disaster of bank closures and the way that affects constituents’ ability to access their banks. It should not be like that—our high streets need investment and should be invested in.
The autumn statement should improve our economy and, most importantly, tackle the cost of living crisis, but it simply does not do that. The Government seem unaware that growth has been downgraded for the next three years. This will be the biggest tax-raising Parliament on record and we have seen the biggest hit to living standards on record. Local authorities continue to be on their knees in public service provision. Although I welcome the announcements to honour the triple lock in the state pension and to raise benefits in line with September inflation figures, I have significant concerns about many areas of the statement.
I am concerned about aspects of Government policy around getting people back into work. Dr Roger Barker, director of policy at the Institute of Directors, states:
“We would like to have seen more substantive measures to address the problem of skills shortages, which continue to be a problem for our members.”
It seems as if the Government are ignoring skills shortages that prevent people from moving from one job to another, or into certain jobs altogether. Many people are asking what will happen to those people who are penalised and whether people with disabilities will be disproportionately affected, as that is not clear.
Because of time constraints, I will focus on NHS waiting lists. Surely it makes sense to invest in getting people well and back to work, so they can be free from pain, able to function and do their desired job. There are a shocking 7.8 million people on NHS waiting lists and 2.6 million people are out of work because of long-term sickness, so surely it makes sense to focus on investing in the NHS—that cannot be said enough.
If the Government are serious about getting people into work, I ask them, as the chair of the all-party parliamentary group on sickle cell and thalassemia, to focus on sickle cell. It is the UK’s most common and fastest growing genetic disorder, yet one of the least researched. I encourage the Government to invest in research into sickle cell, which historically has had less investment compared with many other conditions. I ask the Government to call for dedicated sickle cell research by the National Institute for Health and Care Research and other UK research institutes.
Constituents who are in work often email me to say that once they have paid their rent and their energy bills, they do not have enough to meet their basic needs. Before coming to this place, I set up the Whitefoot and Downham Community Food Plus Project, which tackles food poverty. Although it is a success, foodbanks should not be a norm in our society. However, I feel they have become an acceptable norm to the Government, although not to Members on the Opposition Benches. We demand that people have the right to food. People need to be able to choose and buy food, but they also need to pay for fuel, rent and mortgages. These are the priorities of many of my residents.
Labour has a plan to cut household bills by up to £3,000 a year over the next decade. Labour is the party to take people out of poverty and to ensure everyone is better off. It is time for a general election.
Ruth Jones (Newport West) (Lab)
It is a pleasure to follow my hon. Friends the Members for Lewisham East (Janet Daby) and for Pontypridd (Alex Davies-Jones). They both made powerful speeches about the importance of getting this country back on the right track.
Last week, in what I hope will be the final autumn statement of this out-of-date Conservative Government, the Chancellor lifted the lid on 13 years of Conservative economic failure. My constituents in Newport West and people across the country were told to expect an autumn statement for growth, but instead, as my hon. Friend the Member for Pontypridd said, growth has been revised down next year, the year after and the year after that. Indeed, the UK economy would now be £150 billion bigger if it had continued to grow at the same rate as when Labour was in power up until 2010. Rather than delivering a plan for growth and a plan to properly get our country back on track, we were left with the full scale of the damage that this Government have done to our economy over 13 years. Nothing that was announced in the autumn statement will remotely compensate for the pain and suffering my constituents have had to endure.
A constituent wrote to me last week:
“I am a student midwife and a single mum. I live in my parents’ house as I cannot afford to rent a house in the current market. We actually spend some nights in my converted van. As you can imagine, living with your parents aged 42 with a child is difficult.”
She goes on to say:
“I have friends on benefits who would love to train as nurses or midwives, but they are afraid of being financially disabled, so stuck in a vicious cycle of low-paid jobs claiming benefits. It is like the Tory Government want people to be unskilled and poor instead of thriving and skilled. I would love to be part of that change.”
That is what she said to me. This is exactly what we need: a Government who invest in and upskill our people; a Government who do not walk by on the other side; and a Government who care.
After 13 years of the Conservatives, the economy simply is not working. Debt as a proportion of GDP will be 28% higher next year than it was when the Tories came to power. Worse than that, debt is forecast to surpass £3 trillion for the first time ever. I look forward to seeing that achievement writ large on the side of the Tory campaign bus when the election comes.
The people of Newport West know that this 13-and-a-half-year-old Government are presiding over the biggest tax-raising Parliament on record. Measures announced by the Chancellor last week are equivalent to handing back £1 for every £8 of the rise in tax since 2019-20.
With the freeze in the personal tax allowance threshold, a couple on an average wage will still be £350 worse off per year, even after the autumn statement. The freezing of tax thresholds, or “fiscal drag”, is set to raise £44.6 billion by 2028-29, with nearly 4 million more people paying income tax and 3 million more paying the higher rate.
We know that the Conservatives are the party of high taxes, low investment and no growth, and we will not let them forget it. Despite all the promises made by Lord Cameron, and every Prime Minister who has come after him, working people up and down this country are still worse off. The number of emergency food parcels distributed by Trussell Trust food banks has shamefully increased in Newport West. I pay tribute to all the volunteers who give their time to ensure that those in need do have some food on their table. In 2018, the total number of parcels distributed between April and September was 1,971. In the same period this year, it is 3,041. More and more people in Newport West are desperate for help and more and more people need a Government in Westminster who will actually get things done for them.
Madam Deputy Speaker, I have said it before and I will say it again, this Prime Minister and his friends have let down the people of Newport West, of Wales and of our United Kingdom. The only way—the best way—to change course, to deliver for our people and to move forward is with a Labour Government, and the sooner the better.
Ian Byrne (Liverpool, West Derby) (Lab)
In his autumn statement last week, the Chancellor announced plans to compel people living with long-term physical and mental health conditions and disabilities to find work, and to increase sanction penalties, which the Government have said will involve people losing access to free NHS prescriptions and legal aid. Claimants who do not find a job within 18 months will be forced to undergo mandatory work placements, while those failing to comply with the rules face having their benefits cut. The Chancellor said that the work capability assessment—the test used to determine whether someone is “fit for work”—will be reformed to reflect the availability of homeworking.
This situation is both cruel and distressing. We should be asking what more needs to be done to support our most vulnerable members of society, not seeing how harshly we can penalise them. The Disability Benefits Consortium, a national coalition of more than 100 charities, described the plan as a
“cynical attack on disability benefits that will have a devastating impact on those on the lowest incomes”.
Just one in 10 jobs advertised this year has offered homeworking as an option, while access to support, which might help to keep people in work for longer, including mental health support and social care, is already strained and absolutely cut to ribbons. The reality is that the Chancellor last week set out a plan that will ramp up sanctions and further demonise disabled people. Dr Sarah Hughes, the chief executive of Mind, said in response to the autumn statement:
“The reality is that the vast majority of people with mental health problems want to work but are consistently let down by poor support across the board…the UK government must urgently rethink these plans.”
I fully support those views, and those expressed by Disability Rights UK, an organisation run by and for disabled people, which responded to the Chancellor’s plans by saying:
“For the past few months there has been a seemingly relentless attack on vulnerable, long-term sick and Disabled people on benefits…For Disabled and vulnerable people benefits are essential to survive financially. The fact is that for many people, benefits is their sole income because work is not an option. For those who could and want to work vague threats around the removal of benefits, removal of free prescriptions and sanctions if not accepting the first job offered are not helping, in fact they are causing those already in the throes of long-term ill health and lifelong disability to suffer worsening health issues.
The benefits system is the fault here, not the recipient. The UN special rapporteur on poverty and human rights said in 2018 that the UK benefits system could be branded ‘cruel and inhuman’…calling cuts to the welfare system ‘ideological’ and ‘tragic’.”
A famous quote from Gandhi comes to mind:
“The true measure of any society can be found in how it treats its most vulnerable members.”
Tragically, once again the Government do not come close to measuring up. Once again, they are using the benefit system to target and humiliate the country’s most vulnerable people. Last week, the political editor of the Liverpool Echo, Liam Thorp, wrote:
“The images of the emaciated body of six-stone Stephen Smith, a desperately unwell man who was denied vital benefits before his tragic death, left an indelible mark on my mind and the minds of many others. Stephen was one of many victims of a cruel, government-led culture that targets the vulnerable and punishes those in our society who need support.”
At six stone, Stephen won his tribunal with the help of the much-missed Terry Craven against the Department for Work and Pensions, on its decision to declare him fit for work and deny him vital benefits. Stephen was the victim of a cruel welfare system. As the Government plan their latest attack on claimants, they show that they have learned absolutely nothing from his tragic death.
Keir Mather (Selby and Ainsty) (Lab)
I will make some brief remarks on the tone of the autumn statement and the expectations that it creates in contrast with the reality that so many face at home in Selby and Ainsty.
First, on wages and personal taxation, the Chancellor appears bullish that a 2% cut to national insurance or a £1-an-hour increase in the minimum wage is enough for a nurse in South Milford, a shop worker in Selby or a teacher in Riccall, but local people in my constituency need only look at their bank balances, mortgage rates or receipts at the till to see how empty those supposedly generous promises are. A £1-an-hour minimum wage increase will not touch the sides for families when food inflation remains at 10%. Parents will keep putting items back on the shelf at the supermarket, and shoplifting for staples such as baby formula will continue to rise—formula for which, incidentally, the price has risen by 45% in the past two years. A 2% increase in national insurance amounts to little when the Government have already implemented tax rises equivalent to a 10% NI increase since the last election.
The Government have presided over the largest fall in living standards since records began, and this is the first Parliament in modern British history where people will be worse off at the end than they were at the beginning. In the face of that damning context, the Government should come clean about the fact that their announcements will do little to offset the high-tax, high-interest-rate, high-inflation economic reality that the Conservative party has created.
Secondly, we should, it appears, be grateful for the hard choices that the Chancellor has made to create the headroom for these measures—as if decreasing inflation had been achieved by the party that wilfully endorsed the catastrophic mini-Budget of the right hon. Member for South West Norfolk (Elizabeth Truss) last year, and not by the efforts of the Bank of England and the economic sacrifice of mortgage holders across Selby and Ainsty, and across the rest of our country.
The deeper point is that these tax cuts are not pain free. Instead, they will be financed by baking in an era of austerity that the Resolution Foundation has called “implausible”. This is an irresponsible Chancellor, dodging the hard choices and leaving a future Government to foot the bill. He said that
“borrowing is just a deferred tax on future generations.”—[Official Report, 22 November 2023; Vol. 741, c. 328.]
However, I need not remind one of the architects of the austerity agenda that spending cuts that are too deep will drain Britain of its productive capacity, continue to stifle growth, and cause the poorest in our society to suffer. Once again it will be my generation who are forced to pay the price for this decade of Tory recklessness.
The Secretary of State has announced that we are leaning into an era of “compassionate” government as a result of this autumn statement, so I turn to the work capability assessment and the reforms that will, in the words of an executive member of the charity Scope,
“ramp up sanctions and demonise disabled people.”
The Government have an obligation to solve the long-term labour shortages and economic inactivity that prevent economic growth. Instead, their reforms amount to little more than a transparent gimmick that will punish the most vulnerable in society while the Government do too little to address the sky-high waiting lists that hold back our labour market.
Despite their claims to be the voice of change, this autumn statement shows that we are dealing with the same old Conservatives. People in Selby and Ainsty pay more to get less, and the most vulnerable suffer along the way. My hon. Friend the shadow Chancellor said it best when she asked whether people would
“feel better off after 13 years of Conservative Government”—[Official Report, 22 November 2023; Vol. 741, c. 342.]
and another piecemeal autumn statement. The answer, for mortgage holders, business owners, young families, doctors, nurses, teachers and all those who rely on our public services, is a resounding no. As ever, we repeat the call for this Government to call a general election to deliver the Labour Government that the people of Selby and Ainsty so desperately need.
Beth Winter (Cynon Valley) (Lab)
Diolch yn fawr, Madam Deputy Speaker. In response to the statement last week, Mark Drakeford, the Welsh First Minister, said that
“we urgently needed long-term investment in our public services and growth in our economy”.
He was right. This statement delivers some of the last gasps of the Tory Government. As has already been said, the Chancellor talked about growth, but the OBR has revised down its growth estimate. The Chancellor also talked about cutting inflation, but again the OBR says it will remain higher for longer.
Growth is stalling because investment is falling. We need to generate an even more ambitious proposal for public investment. With departmental budgets losing value across the board thanks to inflation, our public services are being decimated. The OBR has identified this period as
“the largest reduction in real living standards since ONS records began”.
This autumn statement means that the people living through a cost of living crisis will continue to struggle and suffer: 14 million people living in poverty, including 4 million children, 10 million people going hungry and 6 million people living in fuel poverty. It is shameful that in the fifth-richest nation in the world there are so many millions of people suffering.
On welfare reform, I have, like others, been inundated with constituents who are struggling because of the inadequacies of the current social security system. One lady said that her family found the assessment and reassessment processes complicated, intrusive, degrading and unfair. The family are appealing a decision to refuse a renewal application, and the entire experience has caused extreme stress, anxiety and financial hardship. That is just one example of people failed by a process that is completely not fit for purpose, and the further conditions and sanctions announced will make it far worse. As someone who worked for many years in welfare benefits advice, I can assure hon. Members that nobody chooses not to work—and shame on those on the Government side who made comments to that effect. It is simply not the case.
On public services, as my old council leader, Andrew Morgan, said last week, local services in south Wales are “on their knees”, as they are elsewhere throughout the country. Local authorities are struggling with falling revenue and the inability to provide vital services, and we are seeing increasing community agitation against service cuts during the worst cost of living crisis in living memory. Those cuts are the responsibility solely of this Tory Government.
In my Cynon Valley constituency and the area served by Rhondda Cynon Taf County Borough Council, there are protests against food price rises and council service closures and outsourcing. People are seeking alternative answers and models for increasingly difficult questions. People in our community, I am pleased to say, want to look at alternatives such as community wealth building, by which we would generate and retain wealth within our own community—it is called cymunedoli, or communitisation. I assure the House that I will continue to work alongside constituents to organise for the change that we need.
Wealth generated in Wales has been extracted from our country since the industrial revolution, so I will continue challenging the dogmatic neoliberal economic approach taken by this Tory Government. Sadly for Wales, the purse strings remain here in Westminster, and Wales is still being exploited. The UK has failed to fund making coal tips safe, has failed to fund our HS2 consequentials, and has failed in the levelling-up agenda. We need a proper, fair, needs-based settlement for Wales. Across the UK, we need public investment, decent public services and pay restoration for public servants, and we need to scrap sanctions on social security. We must stop investing in fossil fuels; otherwise, we will accelerate the climate catastrophe. We need to increase Treasury revenue to fund that change through progressive wealth taxes, including inheritance, land and property taxes.
In my home of Cynon valley and the south Wales valley, we have a strong history of being at the forefront of change and of working-class organisation and struggle. We are organising again, and we demand to be treated fairly and with respect. We can, and we will, deliver change for our communities. We deserve better, and our future generations deserve a future.
Zarah Sultana (Coventry South) (Lab)
Errol Graham starved to death in his own home. When his body was found, he weighed just 4½ stone. Errol was a grandfather. He was disabled and suffered from severe mental ill-health. He lived alone in his flat, where, at the time of his death, he had no hot water, no heating and no income for food and utilities. A few months before he died, Errol’s out-of-work and housing benefits were stopped. Reviews into Errol’s death criticised the Department for Work and Pensions for its handling of his case and found that the authorities repeatedly missed opportunities to help him.
Errol’s death was utterly tragic, but it was not unavoidable or isolated. A BBC investigation found that since 2012, 82 people have died after alleged DWP activity such as the termination of social security support. The lives of disabled people across the country are made more difficult, more insecure and more beset by fear and anxiety because of the cruel and callous policies enacted by Conservative Governments. I highlight that because a central feature of this autumn statement is a renewed assault on the rights of sick and disabled people. That assault ranges from the threat of totally withdrawing disabled people’s out-of-work benefits if they cannot find work after 18 months to new sanctions that could see people losing access to free NHS prescriptions and legal aid. Rather than demonstrating that damning lessons of past DWP failures have been learned, those policies are recipes for more tragedies and more people dying alone in desperate need.
As my right hon. Friend the Member for Hayes and Harlington (John McDonnell) highlighted earlier in the debate, that scapegoating comes on the back of the Government’s desperate attempts to demonise other marginalised groups—none more so than migrants and refugees. In both instances, the Government are playing divide and rule. They say that the problem with our public services is not school budgets being slashed, NHS funding cuts or privatisation; instead, they tell the British public that their problem is the migrant next door or the disabled person down the road. The intent is the same: to distract and divide, even if it means punishing the poor and vulnerable, and heaping misery upon misery.
It is little wonder that the Government are doing so now: as the Office for Budget Responsibility has made clear, Britain faces the biggest hit to living standards since records began. The outlook is set to get worse, with the OBR highlighting that this autumn statement bakes in a new round of austerity cuts. The real value of Government departmental spending is set to be slashed by nearly £20 billion by 2028.
Behind those cuts, and behind the demonisation of the poor and marginalised, is a myth that pervades our politics: the myth that there is not enough to go round. It is true that there is not enough to go round for ordinary people, as our constituents know too well. Millions of people are struggling to make ends meet. More than 14 million people are living below the poverty line, including more than 4 million children, and last year the Joseph Rowntree Foundation found that 3.8 million people experienced destitution. That is defined as severe poverty, where people cannot afford basic needs—that does not mean just struggling to pay the bills and keep food on the table, but choosing between heating and eating, a choice that becomes more and more painful as winter bites.
While the majority of people are struggling to make ends meet, it is simply a myth that there is not enough to go round, because last year, for example, the wealth of Britain’s billionaires grew by more than £30 billion, up to nearly £700 billion. I will break that down: that is seven followed by 11 zeroes. That obscene wealth is matched by the profits of some of the biggest companies in the country, from the four biggest banks—Lloyds, Barclays, HSBC and NatWest, which saw pre-tax profits rocket by 79% this year—to the likes of Amazon, which saw global profits nearly triple this year to around £8 billion. I take this opportunity to pay tribute to the brave workers at Amazon’s Coventry warehouse, who became the first in UK history to go on strike after they were offered a pay rise worth just 35p. I was proud to join them again on the picket line on Friday in that company’s biggest ever global strike.
What is true of Amazon is true of society as a whole: the problem is not that there is not enough wealth, but that the super-rich are hoarding all the wealth, and that can be tackled. An annual wealth tax of just 1.5% on assets over £10 million, for example, would raise £12 billion a year. Equalising capital gains tax with income tax rates would raise another £15 billion a year, and ending the non-dom tax break for the super-rich would raise a further £3 billion a year. That is money we could use to invest in our communities, to reverse 13 years of austerity, and to build a social security system that treats sick and disabled people with the dignity and respect they deserve. It could do everything from funding universal free school meals and ending the cruel two-child limit to properly funding our schools and hospitals, rebuilding collapsing infrastructure and giving hope to everyone in every corner of this country. This failed Tory Government will never do that, so it must be the mission of the next Labour Government.
Sarah Dyke (Somerton and Frome) (LD)
As the 562nd woman to be elected to this place, I welcome the hon. Member for Tamworth (Sarah Edwards), who is the 563rd and also another Sarah.
This Conservative Government have left families to struggle, without access to vital health services and with food inflation at 10%, while trying to manage sky-high mortgage repayments. The Government’s response is to claim to cut taxes while taking £45 billion a year through frozen thresholds and stealth tax hikes, and punishing those who are too sick to work or are unable to afford vital medical treatment. My constituents across Somerton and Frome have told me that they want access to three things: dentists, GPs and pharmacies. This autumn statement will do nothing to resolve the national crises that those essential health services are facing. The Government seem unable to understand that a healthy economy needs a healthy population, and both those things require a healthy NHS.
I am unsure whether this Government are aware of just how bad things are in rural Somerset. Our dentist services are in decay: in 2022, only 38% of adults in Somerset were able to access a dentist in the previous two years. That statistic is no surprise, given that there is only one dentist delivering NHS services for every 1,773 people in the county. Many dentists in Somerton and Frome tell me they are closing their lists, and there are no NHS dentists currently taking on new adult patients. On the doorsteps, I meet more and more people who, shockingly, have turned to DIY dentistry out of desperation. The Government should have heeded Liberal Democrat calls to begin to address this crisis, because access to dentistry is an essential part of healthcare, not a cosmetic benefit.
According to the Resolution Foundation, going into the autumn statement the Chancellor had fiscal headroom for additional spending worth an extra £13 billion a year. The Liberal Democrats would have used that windfall to tackle the NHS crisis and end DIY dentistry and the dental deserts we now see across Somerset, giving people the quality care they deserve and allowing more people to return to work to grow our economy. Instead, the Government are slashing the NHS budget by £5 billion next year.
My constituents are also unable to access GP services. A constituent has recently informed me that they contacted their GP regarding severe inner ear pain, but they were unable to get an appointment with their local GP. This forced them to seek expensive private treatment for something that, if left untreated, would have had a detrimental impact on their quality of life. Another constituent struggled to get an appointment to look at a hernia, but after waiting in pain for weeks, they were forced to go private. They were then diagnosed with an incarcerated hernia—a condition that can be life-threatening if left untreated.
The number of GPs in Somerset has declined by 59 since December 2016, and a fully qualified GP in Somerset now has 2,157 patients. However, this is not isolated just to Somerset. People living in South Cambridgeshire, for example, are also feeling the acute effects of a lack of GP services. Here, there is one fully qualified GP for every 2,420 patients, which is 120 more patients per fully qualified GP than the England average. The Liberal Democrats would have used the extra £13 billion to deliver 8,000 more GPs and create 65 million more appointments every year.
Finally, pharmacies play a vital role in rural areas. Pharmacists are qualified clinical professionals who help remove some of the immense burden on hospitals and GPs, yet the Government continue to treat them as an afterthought. We are about to see a pharmacy in Wincanton close, which will only increase pressures and force residents to travel further to access a pharmacy. Community pharmacies are facing financial pressures and a recruitment crisis. We need to ensure their viability and sustainability nationwide. The Liberal Democrats would provide urgent emergency funding to keep pharmacies open and reverse closures, alongside providing pharmacies with greater prescribing rights to ease pressures on GPs.
Instead of investing in our NHS, growing the economy and helping people with the cost of living crisis, all the Conservatives have to offer is more chaos and mismanagement. The Liberal Democrats have a long-term plan for the NHS, but this Government either do not get it, or they simply do not care.
Michael Shanks (Rutherglen and Hamilton West) (Lab)
I want to start where a number of my hon. Friends have in this debate, which is talking about community facilities that are filling gaps where the Government are failing. A few weeks ago, I visited a fantastic community resource in Burnbank in Hamilton in my constituency, which is providing emergency food parcels, but also doing a lot to support people back into work through things such as improving IT skills so people can improve their CVs. Far from the image that the Government might like to give about people not in work, they are doing everything they can to find employment, and the least the Government could have done last week was to meet them halfway.
There are a number of things in the autumn statement that I do support. The increase in the minimum wage, however it has been rebranded, is welcome, although it has not kept pace with the real living wage, which means that the wages of many of the lowest earners are still not keeping up with their costs. I welcome the commitment to uprate benefits by the September rate of CPI, although since that is the convention anyway I am not sure the Chancellor deserves any applause for it.
The reality is that a year on from the ill-fated mini-Budget we have a Government engaged in smoke and mirrors, giving out with pre-election frenzy what they have taken away tenfold before. We have a Government who claim to improve living standards while the OBR finds the complete opposite: the largest reduction in living standards since records began in the 1950s.
Perhaps most damaging of all, the rates of poverty and destitution in the UK are forecast to go up, not down. That in itself is a damning indictment of any Government, and I confess that I struggle to comprehend it. The Joseph Rowntree Foundation reveals that a staggering 3.8 million people experienced destitution last year, more than double the figure in the last five years—and, most shamefully of all, that figure includes 1 million children. The social security system, our great collective invention to provide the cradle-to-grave support that people need when they need it most, is not touching the sides of this crisis. Some 72% of those destitute were in receipt of benefits.
One of the most affected groups is those with a disability and chronic health problem; some 63% of people experiencing destitution fit into that category. I will focus my remarks on that group, and I draw the House’s attention to my entry in the Register of Members’ Financial Interests: I am the trustee of two charities working with people with disabilities.
Alongside the failure to provide the kind of boost to living standards that would have made a real difference, the Chancellor sought to use his autumn statement to demonise those with long-term conditions who rely on benefits. On work capability assessments, the removal of the mobility descriptor will mean those with severe mobility issues being placed in the limited capability for work group, meaning they will receive less support every month and be expected to prepare for work they might simply not be able to do.
Disabled people have enormous potential and, as many of my hon. Friends have said, I do not think anyone would suggest that those who are able to get into work should not be given the support to do so, but the key is to understand the support they need. The Multiple Sclerosis Society recently highlighted the issue of workplaces not providing the reasonable adjustments necessary to provide for flexible working. I recently spoke to a person in my constituency who has very severe epilepsy. Resistant to most epilepsy medication, if he has a seizure he requires emergency medication and for a number of days afterwards is completely exhausted. For people with such neurological conditions there is not a uniform pattern of health issues; they change from day to day and week to week. The holistic support provided to people to get into work must reflect that.
Much of what the Chancellor said seems to be predicated on the assumption that the world of work has changed since the pandemic and that everybody is somehow now able to work from home, but I would be curious to know what evidence he has to base that on. What proportion of current job vacancies are listed as home-based, and what proportion have flexible working arrangements? Disabled people predominantly occupy lower-paid jobs and, as a number of colleagues have said, most vacancies for homeworking tend to be in the higher pay band and higher-qualified sectors.
It is clear that the Chancellor’s lack of understanding of disabled people’s real lived experience means this patronising side note in the autumn statement will do real damage. Charities have lined up to criticise it as stigmatising, with the assumption yet again that disabled people do not want to work and are somehow a drain on our economy. A constituent with spina bifida who does fantastic work on integration with refugee communities in Glasgow has had cuts to her benefits and care package, meaning she might not be able to continue in work any longer. She put it very well, saying she
“feels like a cost, a negative on a balance sheet not a person with abilities and aims in life.”
We need to reframe this whole conversation.
When considering the autumn statement in the round, we must look at these specific measures that are not doing anywhere near enough to lift people out of poverty. For a particular group of people who are most likely to experience destitution, not only will the autumn statement not make their lives better, but it will actively make them more difficult. That should never be the aim of a Government, and I hope this will lead to a rethink on some of the specific measures outlined last week.
Claudia Webbe (Leicester East) (Ind)
The Chancellor’s autumn statement is yet another assault on the poor, long-term sick and disabled—one that is both deadly and economically illiterate. Thirteen years of Conservative policies have caused untold misery for the poor, and especially for disabled people, and have been linked to hundreds of thousands of excess deaths. A University of Glasgow study last year found that more than 330,000 excess deaths were the result of austerity, and that austerity had not just halted the decades-long increase in UK life expectancy, but thrown it into complete reverse, especially among poor people. Rather than respond to the appalling effects of those policies by changing course, the Government are now intensifying their attack on the poor, sick and disabled, scapegoating and demonising them for the Government’s failure to grow the economy.
This country already has by far the worst out-of-work benefits of any comparable European nation and one of the harshest conditionality regimes, yet the Chancellor will now punish claimants for not engaging with state-sanctioned coercive therapy while the Government usurp the role of medical experts in deciding who is fit for work. Capitalism and oppression rely on the exploitation of human labour, and it seems that not even the exploitation of disabled people’s labour is off the table in the competitive drive to accumulate even more wealth for the rich. People’s wellbeing is a secondary concern for capitalism, and oppression through vicious sanction is the necessary corollary.
The escalation of the already punitive sanctions regime will see the working class, including the long-term sick, cut off even from support with healthcare. The awful consequences of those moves are not hard to predict, especially for those with long-term complex health conditions or disabilities, or those suffering poor mental health.
As long ago as 2014, NHS data showed that more than four in 10 people claiming out-of-work disability benefits—more than double the figure from the previous survey—had attempted suicide because of the punishing and attritional fit-for-work regime. Under successive Conservative Governments, the treatment of disabled people has been so horrific that the UN Committee on the Rights of Persons with Disabilities condemned the UK for creating “a human catastrophe”. To the shame of this Government, the UK has 14 million people in poverty, well over 4 million of them children. Children from families with a disabled or long-term sick member are more than twice as likely to live in poverty. That figure was measured before the impact of the pandemic and the cost of living crisis.
The Government claim that the sanctions they intend to apply in cutting off universal credit to the poor will not be applied to those with children or to people with disabilities, but medical professionals and disability campaigners point out that, based on the Government’s track record, the new regime will clearly be used to legitimise discrimination against people with chronic illnesses or disabilities. That is unequivocally against the European convention on human rights, but also fundamentally counterproductive.
As economists have pointed out, it is overwhelmingly clear that if we want to grow the economy, we need to redistribute wealth, invest in communities and put more money into the pockets of the poor, the working classes and the worst-off, because they will spend it locally and increase economic activity. Instead, the Chancellor has announced tax cuts for the wealthy and for corporations—money that will end up in offshore bank accounts, where it does nothing for our economy. This latest assault on the poor and disabled will do the opposite of what the Chancellor claims to be trying to achieve.
Our country desperately needs politicians who put physical, emotional and economic health above an ideological commitment to helping the rich and hitting the poor, the sick and the disabled. Tragically for the millions of struggling poor people in this country, the Chancellor and the Prime Minister are again doing the opposite of what they need. The Government’s proposals are part of an ideological attack on the working class. The Chancellor’s statement betrays those who most need help. It is simply unfit for purpose.
Hywel Williams (Arfon) (PC)
The autumn statement may have been intended as something of a pre-election sweetener, but for most people in Wales it has a bitter taste. The intended big news was, of course, the tax cuts and, in Wales as elsewhere, a few small persuaders for some favoured Tory marginals—but not for others, as we will see at the next election. The reality is the biggest drop in living standards since records began and, as we have heard, the highest tax burden since the second world war. The Chancellor’s speech gave little relief and even less hope to Welsh households and leaves our public services in an even more desperate condition.
On Thursday, we will no doubt hear right hon. and hon. Members on the Government Benches making a great deal of the intended cut to national insurance. I look forward to hearing at least one of them also noting that tax thresholds have been frozen, pushing 4 million low-paid workers into income tax and 3 million people into a higher tax band, which strikes me as something of an own goal for the Conservative party at the next election. The wholly predictable regional truth is that the national insurance cut predominantly favours London and the south-east, where it offers an average gain of £316 annually, while those in Wales, for example, stand to gain £211. That amplifies rather than relieves Wales’s economic plight.
Our public services continue to wither without the investment needed. Buses, railways, healthcare, sustainable energy and other such initiatives in Wales are desperate for proper funding, yet the projections for departmental budgets show a £19 billion cut. We have been through many years of crisis, yet our economy is not prepared for the shocks of the future—an ageing population, higher Government debt, higher interest rates, energy insecurity and, of course, climate change—because we are seeing the consequences of failure to act over 13 long years.
A report published today by the Energy and Climate Intelligence Unit finds that, due to the combination of energy cost and climate change impacts across 2022 and 2023, household food bills have increased by an average of £605. Climate costs account for 60% of that—£361 per household.
Wales desperately needs to break from the economic doom loop caused by chronic short-termism. The autumn statement tightened the trap of short-term thinking. It is a cycle in which we are told that investment is not possible because we cannot afford it, but failure to invest weakens our economy even further.
Plaid Cymru has outlined fair and ambitious plans for Wales, which include replacing the Barnett formula with a funding system based on need. We would also devolve the Crown Estate to Wales, as has been done in Scotland, ensuring that the profits of our natural resources are invested back into our communities. But we also need practical help for the immediate cost of living pressures faced by ordinary people. For example, we ask for moderate measures to help with petrol and diesel costs. Major supermarket fuel retailers are enjoying record profit margins by overcharging at the pumps, despite reduced wholesale fuel prices.
We called on the Chancellor to pressure the large fuel retailers to reduce prices when wholesale costs fall. The rural fuel duty relief scheme currently gives 5p relief to rural areas in England and Scotland. Extending it to Wales would have helped people in rural areas who are sadly reliant on cars due to our terrible public transport system, but the Chancellor chose not to act.
We urged the Government to address the severe geographical disparity in energy bill standing charges. Residents in Wales pay £80 more than Londoners every year, though we produce much more electricity than London. The stark inequality requires urgent action by the Treasury and further underlines the need for a fairer energy pricing system, including the development of a social tariff but, again, the Chancellor chose not to act.
Wales deserves more than empty promises. We are asking for—indeed, we are demanding—fairness, investment and a genuine commitment to rid our communities of poverty and the lack of opportunity. The autumn statement delivered none of that. It is further proof to us that London-based economic policymaking will never work in the interests of Wales.
Richard Foord (Tiverton and Honiton) (LD)
Last week, as the Chancellor of the Exchequer set out his autumn statement, there was much anticipation about what kind of rabbit would be pulled out of the hat. Despite the Chancellor’s upbeat delivery, the performance was less Harry Potter magic and more Paul Daniels-style trickery.
Almost all of the Government’s financial headroom—the amount they have left over after their commitments—was blown on a small tweak to national insurance contributions. The Chancellor lauded the changes, suggesting that they would save people hundreds of pounds every year, but he failed to mention that even with the changes, the average person will pay more in tax overall. I can see that the cost of covid must be paid for, but I object to the spinning of a larger tax burden as a smaller one. That is partly because the Chancellor continued a freeze on tax thresholds—the level at which our constituents start to pay tax. Higher inflation means that many more will be dragged into paying more tax, whether at the higher or the basic rate. That is giving with one hand while taking substantially more with the other. The Resolution Foundation has identified that under the plans, taxes will rise by the equivalent of £4,300 per household in the decade from 2019. Even by the end of this Parliament, it expects that households will be £1,900 worse off than at the beginning of it.
In Government, the Liberal Democrats delivered tax cuts for millions by doubling the amount someone could earn before they started paying tax. By contrast, this Conservative Government are one of the highest taxing Governments in history, allowing increasing numbers of low and middle-income earners to be dragged into paying ever increasing amounts of tax. It is simply not sustainable. We need more efficient spending of public money, with targeted investment, to ease the squeeze and save us money down the line. For example, of the £784 billion of taxpayer money that the UK Government spent last year, £39.3 billion was given to households as an energy subsidy. It would not have been necessary to give away so much of that taxpayer money had Lord Cameron, as Prime Minister, not cut the “green crap”.
There were a couple of welcome measures in the statement. I was pleased to see the extension of the business rate discount, including for retail, hospitality and leisure businesses, of which we have many excellent ones in my part of east Devon. The decision to keep the triple lock on pensions was also welcome, and ensures that pensions rise to match earnings, giving pensioners peace of mind and financial security. I called for that in Treasury questions less than a fortnight ago, so it is pleasing to see it rise in line with earnings at 8.5%. But the rest of the autumn statement was notable for what the Chancellor did not say. There was no additional money for the NHS or social care, despite the fact that the winter cold is already starting to set in. I am genuinely puzzled by that. It is a disastrous oversight that risks inflicting real challenges on our dedicated health professionals and our communities in the year ahead.
The Secretary of State for Work and Pensions is lucky: like me, he represents a constituency in Devon. That means he knows how much people in Devon value our community hospitals. In my own corner of Devon, Seaton Community Hospital is at risk of having a whole ward of the facility stripped away to be sold off or even demolished. That is due to the continued squeeze on local healthcare budgets, with Devon NHS alone facing an almost £40 million shortfall. The Chancellor’s statement did nothing to address that grim situation.
There was also a distinct lack of funding to help clean up our rivers and beaches. Because of the wayward activities of water companies and the fact that the Government have just left this issue to Ofwat, we are seeing huge levels of raw sewage put into our once pristine local rivers and beaches. That is harming biodiversity and putting the health of people and animals at risk. The scandal also pervades England’s chalk streams. For example, those that empty into the River Itchen near Winchester contain unique biodiversity and ecosystems. Our sites of special scientific interest also see sewage dumping and ecological vandalism.
How would I sum up the autumn statement? Overall, it sums up the current Conservative Government: out of touch. Floundering for a buoyancy vest, their party ship continues to list and sink. Our communities deserve better. Devon deserves better.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the shadow Chief Secretary to the Treasury.
Darren Jones (Bristol North West) (Lab)
It is a pleasure to close this debate, and the debate on the autumn statement as a whole, on behalf of the Opposition. I pay particular tribute to my hon. Friend the new Member for Tamworth (Sarah Edwards) for her excellent maiden speech and welcome her to the House, and to the shadow Work and Pensions Secretary, my hon. Friend the Member for Leicester West (Liz Kendall), for her comprehensive and damning opening on the Government’s record.
I also pay a particular tribute to my right hon. Friend the Member for North Durham (Mr Jones) and express my condolences for the loss of his constituent. It is a tragedy that he did not see justice from the Post Office Horizon scandal before he died, but I know that he and his family will be proud of the work that my right hon. Friend has done over many, many years to bring justice to those who have been affected.
More broadly, we have heard a range of excellent speeches, including from my hon. Friends the Members for Halton (Derek Twigg), for West Ham (Ms Brown), for Bootle (Peter Dowd), for Ealing, Southall (Mr Sharma), for Vauxhall (Florence Eshalomi) and for Blaydon (Liz Twist), to name just a few who set out from their constituencies how, even though the Conservatives tell us things are doing alright, the lived reality for families across the country is anything but. We also heard from my right hon. Friend the Member for Barking (Dame Margaret Hodge) about the amount of money the Government have wasted over many, many years, and what that could do to support people in constituencies across the country, including Blaydon, Lewisham East, Newport West, Liverpool, West Derby, Cynon Valley, Coventry South, and Rutherglen and Hamilton West. Lastly, we heard from my hon. Friends the Members for Middlesbrough (Andy McDonald), for Birmingham, Selly Oak (Steve McCabe), for Pontypridd (Alex Davies-Jones) and for Selby and Ainsty (Keir Mather) about 13 years of Conservative failure on the economy and the consequences for their constituents.
Over the course of the past few days of the debate—and noting, if I may say so, how few Conservative Members contributed to the debate today to defend the Government’s record—it has been clear that we on the Labour Benches have the ideas and the energy to turn the economy around, while on the Conservative Benches, after 13 years of Conservative failure on the economy, it seems the Tory bandwagon has run out of fuel, leaving its Back Benchers arguing on the side of the road about who should be given the keys next while the real world moves on, leaving our country and the British people behind.
Let me now turn to the autumn statement itself. Well, what can I say, Madam Deputy Speaker? A fiction, a fantasy, a fallacy, an all-round F grade for an autumn statement that failed to deliver the change that our country needs. Even the independent Institute for Fiscal Studies has pointed out, with some surprise, that
“a lot of these numbers… are sort of made up.”
But it is worse than that, because the Conservatives want the public to believe in their financial folklore. When he announced his autumn statement last week, the Chancellor said:
“we are sticking to a plan that is working.”—[Official Report, 22 November 2023; Vol. 741, c. 337.]
The plan is working? Really? We all know that, irrespective of which side of the House we sit on, if we asked our constituents, “What in this country is working right now?”, they would say “Absolutely nothing at all.” How strange, therefore, that this Conservative Government, who appear to be so lacking in vision for our country, can be so good at playing make-believe.
The Conservatives keep telling us that we have never had it so good—that everything is fine—but here in the real world, people have real problems: unaffordable food bills, unaffordable mortgage bills, unaffordable energy bills. Many Conservative Members seem to think those are not problems for working people across the country, but, remarkably, this is the first Parliament on record—the first Conservative Parliament—in which, by the end of the Conservatives’ time in office, people and their living standards will have fallen, not improved. Those are the hard realities that people are facing.
We know why people are facing these financial pressures, and why living standards in the UK are falling. Irrespective of what we are told by Conservative Ministers, economic growth has been downgraded, not upgraded. The tax burden weighs heavier than ever, not lighter, and high inflation is lingering, not fleeting. On every measure on the dashboard of the UK economy, the red lights are flashing. The Conservatives would have us believe that tax is down when it is up, that the cost of living crisis has ended when energy bills are going up once again, and that this autumn statement will somehow stimulate economic growth when even the Governor of the Bank of England has said of growth that
“there’s no doubt it’s lower than it has been in much of my working life.”
The Tories want to spin a tale that the latest Conservative Prime Minister is the hero of the story, a real-life Robin Hood bringing tax cuts to help working people, but there are a few serious holes in that story. First, the Prime Minister is not new to the scene, but has played a prominent role in this Conservative Government for many years—a Conservative Government who have introduced 25 tax rises in this Parliament alone, and a further 12 Tory stealth taxes just in the autumn statement. Secondly, it is this Conservative Government who decided to put income tax and national insurance thresholds on ice, which means that millions of people are being dragged into paying more tax. Thirdly, as a consequence, the tax cuts are not cuts in real terms at all. The Conservatives’ 25 tax rises have seen working people hand over an extra 10p in every pound they earn. So while I welcome the last week’s announcement of a 2p cut in national insurance, I do so with a very slow clap.
Everyone at home knows that the Conservatives may be giving out a few hundred quid in the autumn statement with one hand, but they have already taken thousands of pounds more from us, each and every year, with the other. In real terms, low and middle-income earners will still be worse off than they were before the Conservatives came to power, and that is a shameful record of failure. The Prime Minister is not Robin Hood; rather he is the Sheriff of Nottingham, because never have we paid so much in taxes and had so little in return. People at home will rightly be asking, “What on earth am I paying for? I cannot get an appointment with the GP, and I cannot find a dentist. Why is my pay not keeping up with the cost of living? Why is my rent”—or mortgage—“so much more expensive than it was before the Conservatives crashed the economy, and why will my energy bills, I am told, start to go up again?”
The Chancellor may have announced 101 policies for growth, but after 13 years of Conservative failure it is just too little, too late. That is why we in the Labour Party are focused on economic growth. Only by getting the economy back on track will we make the British people better off again. While it is obvious that Labour is the party of good work for working people, we are now the party of business too—working in partnership to deliver the investment that the country needs, co-investing alongside business to deliver a more secure, cheaper energy system, and unblocking the bottlenecks that prevent businesses from creating the good jobs that people want in the industries of the future.
The Prime Minister is hosting his global investment summit today, but we hear from investors and businesses week in, week out that it is all too late. Even IFM Investors, the Australian infrastructure investor which has pledged investment today, has said that
“government dysfunction and inefficient planning processes”
have meant that there are not many “attractive opportunities” left in the UK. The message could not be clearer.
The UK is at risk of relegation, and change is required. That is why my Friend the shadow Chancellor and I launched the British Infrastructure Council last week, and it is why my review on how we deliver major projects and infrastructure better in this country will set out how a Labour Government will get Britain building again. Alongside that laser focus on economic growth, built on the Labour party’s bedrock of fiscal responsibility —[Interruption.] There is chuntering from the Conservative Benches, but people at home will remember one year ago when the Government crashed the economy and interest rates and mortgage rates went through the roof, and those people are still suffering with the cost of living crisis today. Let people at home look at Ministers on the Government Benches laughing when those people cannot afford to pay their bills. Let them look at Conservative Members and decide whether they want even more after 13 years of Conservative failure or whether, quite frankly, it is time for change.
Public services are one of those things that need to change. My work in what I hope will be a future Labour Government will also be focused on reforming our public services, which have been left on their knees after 13 years of the Conservatives. In his autumn statement, the Chancellor has shown that he would rather just throw what money he has left at a problem than roll up his sleeves. With the interest on our national debt costing the British public more than £112 billion this year alone, he clearly has a different idea to me of what it means to be fiscally responsible with our money. Last week, the Chancellor demanded that public services should be 0.5 % more productive each year for the next 10 years, but he did not say how.
Instead, I stand here with my colleagues in the Labour party ready to modernise our public services. If we win the next election, we will improve outcomes for people who rely on those public services, we will improve the quality of work for our public servants and we will get the public sector budget back under control, because the British people deserve better. In contrast, the Conservatives seem happy to ignore the waste and inefficiencies of their spending over these past 13 years. Why? Because the hard work of reforming our public services and our economy requires strong and accountable leadership, not fleeting changes between 13 Ministers in one Department, five Prime Ministers and so many more. This Conservative Government are not strong and accountable for delivering our public services. They are weak, weak, weak. The only answer to fixing the last 13 years of this Conservative Government is to close the book on their failure, to say goodbye to those last 13 years and to have a Labour Government who will unleash a decade of national renewal, so I ask the latest Conservative Prime Minister to do this country a favour and call an election.
The Financial Secretary to the Treasury (Nigel Huddleston)
Well, we have seen it, haven’t we—the same old Labour, never knowingly missing an opportunity to talk the country down yet again. I will return to that theme in a moment because it is very serious. I am delighted, in my first debate in this House as Financial Secretary, that I get to offer the closing words in our debate on the autumn statement. I also thank my right hon. Friend the Secretary of State for Work and Pensions for opening today’s debate. His speech was a compelling argument for the value of work. This is an autumn statement that is good for the businesses of this country and good for the people of this country. We know that the two things go hand in hand.
Peter Grant (Glenrothes) (SNP)
The Minister referred to his colleague in the DWP. Earlier today, we heard one of his colleagues in the Home Office confirm that the Government had no intention of allowing asylum seekers to work to help pay the cost of their accommodation. How does it make sense to say that the way to stop a disabled person being a burden on the taxpayer is to force them to work when they are not fit to, but that the way to stop an asylum seeker being a burden on the taxpayer is to ban them from working even if there is a job they want to do?
Nigel Huddleston
The hon. Gentleman is missing the purpose of the reforms that my right hon. Friend the Secretary of State for Work and Pensions clearly outlined earlier today. Perhaps if he had been in the Chamber, he could have listened to it directly.
When this Government came to power, we inherited not only higher unemployment from Labour, as always, but a lopsided welfare system that discouraged people from even seeking work. In the last 13 years, by reducing workless households, tackling low pay and reforming the welfare system, we have helped hundreds of thousands of families out of poverty. In the wake of covid-19, we have nearly 1 million vacancies in the economy, yet more than 7 million adults of working age, not including students, are still not working. Even Opposition Members seem to recognise that many of them want to work, and therefore we will be spending £1.3 billion over the next five years to help nearly 700,000 people with physical and mental health conditions to find jobs. And we will provide a further £1.3 billion of funding to offer extra help for the 300,000 people who have been unemployed for over a year, to help them find work.
The Government also recognise that, to get more people working, we must back business, as it is business that creates the jobs and pays the wages that lift up our communities, as my hon. Friend the Member for Clacton (Giles Watling) articulated. We will help the households of this country by boosting business through a variety of measures outlined in the autumn statement. Of course, the much-asked-for full expensing will be pivotal. We are also providing £4.5 billion over five years to support strategic manufacturing sectors that already have, or can gain, a competitive edge, namely in aerospace, automotive, clean energy and life sciences, as mentioned by my right hon. Friend the Member for Bournemouth East (Mr Ellwood) and others.
As my right hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) mentioned, we are also supporting small businesses in this autumn statement. For those smaller businesses that are so integral to their communities, we are freezing the small business multiplier and extending the 75% business rate support for retail, hospitality and leisure businesses for another year. I thank my right hon. Friend the Member for Bournemouth East and my hon. Friends the Members for Cities of London and Westminster (Nickie Aiken) and for St Austell and Newquay (Steve Double), and others, for highlighting the importance of the tourism sector, which they know I care passionately about.
We are also establishing new investment zones throughout the country that will generate billions of pounds of investment, as my hon. Friends the Members for Amber Valley (Nigel Mills) and for Clwyd South (Simon Baynes) highlighted.
There are other things we can do to ensure that work rewards workers, such as increasing their rate of pay and making sure they keep more of their earnings, which is exactly what we have done. We are abolishing class 2 national insurance contributions and cutting class 4 contributions. Alongside these cuts, we are raising the national living wage by 9.8% to £11.44 an hour and, of course, we are cutting the main rate of employee national insurance by two percentage points, giving a tax cut to 27 million workers. The Opposition may not appreciate that, but I assure them that their constituents do.
These measures will create work, get people into work and make sure that work is rewarding, as Conservative Members have recognised, particularly my right hon. Friend the Member for North East Hampshire (Mr Jayawardena) and my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton).
Before briefly addressing some of the other points that have been raised, I take this opportunity to congratulate the new hon. Member for Tamworth (Sarah Edwards) on her maiden speech. She started well by praising her constituents, which is always a good move, and I wish her well in this House.
The hon. Member for Gordon (Richard Thomson) mentioned R&D, and the Government will merge the existing R&D expenditure credit scheme and small and medium-sized enterprise scheme from April 2024. This will simplify and improve the system, helping to drive innovation in the UK economy. That message of simplification was also pushed by my hon. Friend the Member for Boston and Skegness (Matt Warman). These reforms represent an overall increase in support to R&D companies of around £200 million a year by 2028-29.
The hon. Member for Gordon also mentioned the Scotch whisky industry. It is somewhat surprising, therefore, that his party’s Members have singularly failed to support any one of the new trade deals that we have signed and are signing, despite the fact that they support every single nation and region of the United Kingdom and are transparently in the interests of their constituents.
Nigel Huddleston
No, the hon. Gentleman has had plenty of time. I hope he will support the CPTPP deal when it comes before the House. Cigarettes An amount equal to the higher of — (a) 16.5% of the retail price plus £316.70 per thousand cigarettes, or (b) £422.80 per thousand cigarettes. Cigars £395.03 per kilogram Hand-rolling tobacco £412.32 per kilogram Other smoking tobacco and chewing tobacco £173.68 per kilogram Tobacco for heating £325.53 per kilogram”.
I always support Scotch whisky, which is a success story that we should all champion. It is a £6 billion export industry, and we can all be proud that 51 bottles of Scotch whisky are exported every second. Let us create more opportunities by supporting these trade deals.
The right hon. Member for Barking (Dame Margaret Hodge) mentioned the UK tax gap, and she is absolutely right to highlight that important matter but, of course, she is well aware that the tax gap is on a long-term downward trend. We have one of the lowest tax gaps in the world. The tax gap was 7.5% under Labour, and it is now at a record low of 4.8%, which is something she forgot to mention.
Perhaps most importantly, there is the context in which we have made this autumn statement, as was mentioned by many hon. Members, particularly my right hon. Friends the Members for Wokingham (John Redwood) and for Preseli Pembrokeshire (Stephen Crabb), and my hon. Friends the Members for Waveney (Peter Aldous) and for St Austell and Newquay (Steve Double). I refer to the fact that we have faced difficult times, with not just one but two global shocks that have had an impact on, and reverberated around, the world. That meant that we were required, expected and proud to intervene in a way that we have not had to do since the second world war. The figures are astounding: more than £350 billion provided during the pandemic to make sure that we supported lives and livelihoods; and, in the light of the invasion of Ukraine, a further £100 billion of support to help those facing cost of living challenges, including our paying nearly half of people’s energy bills last winter.
The Opposition seem to have a collective sense of amnesia about that; it is astounding that they do not understand that all of this money needs to be paid back. Their constituents, who are managing their finances every day, completely understand that you cannot spend money you do not have and if you get into debt, it needs to be paid off. Today, not only are the Opposition criticising us for high taxes, but their solution then seems to be spending even more. That is absolute economic incompetence and shows that they are completely unfit for office. The reality is that Conservatives increase taxes out of necessity and then reduce them out of choice, whereas the Labour party increases taxes out of necessity and out of choice. That is a fundamental difference between our parties, and therefore at the first opportunity we have had to reduce taxes, because the economic circumstances are better—how disappointing is good economic news for those on the Opposition Benches—and we are now in a better economic position, we are now reducing taxes.
Another important theme we have seen from those on the Opposition Benches is this utter pessimism and lack of confidence and faith in the UK economy. We are not pretending, for one minute, that everything is perfect; we know, as constituency MPs, that many people in our constituencies, right across the country, are suffering—we are all aware of that. However, constantly talking the UK down is not only incorrect, but bad for business and for the UK economy. I hope that the Opposition Members understand that when they are talking Britain down, they are talking workers, businesses and their constituencies down. Expectations and confidence matter, as they are what lead to investment in the UK. Because of the confidence in the UK economy, we saw investment announced last week by Nissan, this very day we have the global investment summit taking place and we are seeing billions of pounds more of incremental investment coming into the UK. That is because other countries have confidence in the UK economy, as do Conservative Members. The Opposition are signalling that they do not, and that is a terrible signal to send to the world. Again, if you do not have confidence in the UK economy, you are not fit for office.
The Opposition are talking Britain down. We have seen a huge amount of incremental investment. The Opposition do not like to understand that, for example, we have the second highest level of foreign direct investment in the world, after only the US. Just recently, we have overtaken France and moved from being the ninth largest to the eighth largest manufacturing country in the world. Because of our exporting success, we have gone from being the sixth biggest to the fifth biggest exporter in the world, and we have the second largest export of services of any country in the world. The Opposition may not like those facts, but they are true and provide every reason why we are keen to talk Britain up.
Today, we have seen a positive debate and measures in the autumn statement that back both business and our citizens. From a platform of progress, this is an autumn statement for growth, which will bring jobs, opportunities and prosperity to every corner of the country. I commend the autumn statement to the House.
Question put and agreed to.
Resolved,
That—
(1) In Schedule 1 to the Tobacco Products Duty Act 1979 (table of rates of tobacco products duty), for the Table substitute—
“TABLE
(2) In consequence of the provision made by paragraph (1), in Schedule 2 to the Travellers' Allowances Order 1994 (which provides in certain circumstances for a simplified calculation of excise duty on goods brought into Great Britain) —
(a) in the entry relating to cigarettes, for “£393.45” substitute “£422.80”,
(b) in the entry relating to hand rolling tobacco, for “£351.03” substitute “£412.32”,
(c) in the entry relating to other smoking tobacco and chewing tobacco, for “£161.62” substitute “£173.68”,
(d) in the entry relating to cigars, for “£367.61” substitute “£395.03”,
(e) in the entry relating to cigarillos, for “£367.61” substitute “£395.03”, and
(f) in the entry relating to tobacco for heating, for “£90.88” substitute “£97.66”.
(3) The amendments made by this Resolution come into force at 6pm on 22 November 2023.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
The Deputy Speaker put forthwith the Questions necessary to dispose of the motions made in the name of the Chancellor of the Exchequer (Standing Order No. 51(3)).