The Secretary of State for Culture, Media and Sport (Lucy Frazer)
Since 2020, our economy, like those across the globe, has been challenged by a pandemic, a war in Ukraine and the spiralling cost of energy in the aftermath of Putin’s illegal invasion of Ukraine. We have seen very difficult times for households up and down the country, but despite the most challenging economic headwinds in modern history, since 2010 our growth has been higher than every large European economy. Economic growth underpins jobs, it underpins household budgets and it underpins living standards. Having stabilised the public finances and delivered certainty to markets, my right hon. Friend the Chancellor of the Exchequer last week set out a plan that will ensure more investment, more jobs and better public services.
Today, I will set out how the Budget continues to support many of the sectors I am proud to represent at the Department for Culture, Media and Sport, particularly the creative industries, which the Chancellor last year identified as one of our five priority sectors of growth. The creative industries do not just enrich our lives; they enrich the nation’s finances, and they are an economic powerhouse. These industries are growing at twice the rate of the rest of the economy. They are responsible for over 2 million jobs, and they were worth £124 billion to our economy last year alone.
I start by just recognising the UK’s world-leading success in these industries. Netflix, Amazon Prime, Apple and Disney all want to expand their footprint here and to add “Made in Britain” labels to their productions. “Barbie”, the highest grossing film of 2023, was made not in LA, but just down the road in Leavesden, which I was delighted to visit recently with my hon. Friend the Member for Watford (Dean Russell). Companies such as Warner Bros are choosing Hertfordshire over Hollywood, and that production alone contributed £80 million to our economy and supported nearly 700 jobs. We have also seen huge success in the indie film sector, with films such as “Rye Lane” and “Scrapper”.
This success is down to huge innate British talent, hard work, skills and creative excellence across the country, but it has not happened by accident. Conservative Governments have been supporting and stimulating our creative industries with tax reliefs for over a decade. From film to animation, video games and theatre, these tax reliefs have helped to attract significant global investment into the UK. Every year since 2012, we have introduced tax reliefs to support investment and create jobs—tax reliefs that the Labour party voted against every single time.
Alex Sobel (Leeds North West) (Lab/Co-op)
The Secretary of State talks about a number of productions and studios, all of which are in the south of England. What support will the Government give to ensure that we have post-production and production facilities in the north of England—for instance, by matching Mayor Tracy Brabin’s ambition to have a studio in West Yorkshire?
Lucy Frazer
The Government are supporting creativity across the country. In June, I announced £50 million, which we know from experience will leverage £250 million of investment, for creative clusters across the UK. Only recently, I was at Aviva Studios in Manchester. The £100 million invested in Manchester is the biggest investment since the Tate Modern. The hon. Member will have heard in the Chancellor’s statement about the significant investment in Teesside, particularly in the creative industries.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
But the Tories have truly wrecked the nation’s public finances. Under the Conservatives, debt has tripled from £1 trillion to almost £2.6 trillion. Does the Secretary of State agree that according to respected independent statistics, despite the Chancellor’s Budget, households in Slough and across our country will be £870 worse off on average under the Chancellor’s tax plan?
Lucy Frazer
The Chancellor’s tax plan is allowing people across the country to benefit from around £900 if they are an average earner, and we know that every time the Labour party leaves office there is higher unemployment. Last time the Labour party was in government, it left a note that said there was “no money left”.
Let me tell the House what impact the Conservative plan has delivered over the last decade. As I said, there have been tax reliefs in every Budget over the past 10 years, and every time they were voted down by the Labour party. The impact of that year-on-year investment is clear. Statistics show that more than 1 million jobs in the creative industries have been created since 2010. There has been almost a doubling of the economic value of creative industries to more than £124 billion since 2010, with exports up 210% in that time. Recently published figures confirm that the sector has grown by more than 10% since the pandemic. The Conservative party is powering one of our world-leading industries.
Mr Toby Perkins (Chesterfield) (Lab)
The Minister is talking about the state of the nation’s finances in 2010, and at that point we had a national debt of £1 trillion. We now have a national debt of £2.6 trillion. Does she think that the Conservatives have sorted out the nation’s debt when it is now almost three times higher than it was?
Lucy Frazer
I hope the hon. Gentleman was listening when the Chancellor delivered his Budget. He highlighted that debt will be reducing next year, with the Office for Budget Responsibility forecasting that we will meet our fiscal rule to have debt falling as a share of the economy.
George Freeman (Mid Norfolk) (Con)
It merits recording that the debt figure we are dealing with comes from a £500 billion bail-out of the banks under Gordon Brown, £375 billion of quantitative easing, £70 billion of Brexit relief, £400 billion of pandemic relief, and £40 billion of cost of living relief. That is a significant injection of money by this Government, and the previous one, to help people through tough times.
Lucy Frazer
My hon. Friend, as always, makes an excellent point. It is difficult to forget how this Government, and the Prime Minister when he was Chancellor, supported the livelihoods and economies of people up and down the country. In the creative industries alone, a covid recovery fund of £1.57 billion went to ensure that those industries continued to survive. The International Monetary Fund and others said that that was the fastest and most effective package coming out of covid.
Jim Shannon (Strangford) (DUP)
I welcome what the Government are doing for the creative industries in Northern Ireland. The Northern Ireland film sector has been growing leaps and bounds over the past few years. The extra help that the Government are putting forward for creative industries in Northern Ireland will undoubtedly create more jobs and a boost for the economy. I welcome what the Secretary of State is putting forward. Now that the Northern Ireland Assembly is up and running again, can contact be made with the relevant Minister to see how we can grow the industry even more?
Lucy Frazer
I am delighted that the Northern Ireland Executive are up and running, and keen to continue engagement with them to ensure that we continue to boost the economy in Northern Ireland.
Our creative industries are not just life enhancing and entertaining, and they are not just part of our personal and national identities; they are an economic powerhouse that is dominating the world stage. In the past year, we have built on the huge success of the decade of investment that I spoke about with an industry-led sector vision that sets out a plan to unlock £50 billion of growth, 1 million more jobs and a pipeline of talent by 2030. Both the Chancellor and the Prime Minister recognise that the way we will extend our excellence long into the future is with sustained investment and commitment to those sectors. That is why the Budget that the Chancellor set out last week continued that support and built on that recognition with a package of measures to cement our status as a cultural superpower.
Members should not just take my word for it. The reliefs announced represent a
“once-in-a-generation transformational change that will ensure Britain remains the global capital of creativity”,
according to Lord Lloyd Webber. They include
“the most significant policy intervention since the 1990s”,
according to Ben Roberts, the chief executive of the British Film Institute. They are “game changing” according to “James Bond” producer Barbara Broccoli. Those people are all correct.
There will be £1 billion in additional tax relief for the creative industries over the next five years. We have set permanent high rates of cultural tax relief: of 45% for touring and 40% for non-touring theatre productions and gallery exhibitions, and of 45% for all orchestra productions. There is a new 53% tax credit for UK independent films with budgets of under £15 million, a 40% tax relief on business rates for film studios, and an increased tax relief for the visual effects sector. There is £26.4 million for the National Theatre to modernise its stages and new funding for an extension of the National Film and Television School.
The funding and tax breaks will unlock huge investment in our economy, secure the long-term future of some of our great cultural institutions and help us build a pipeline of talent for the future. We are only five days on from the Budget and the measures are paying dividends already. Later this year, the filming of “Jurassic World 4” will begin at Sky’s Elstree studios. As Sir William Sargent, chief executive of the visual effects company Framestore, said, it is likely that our decision to remove the 80% cap on what productions can claim on visual effects has stopped the visual effects for “Jurassic World 4” from being made abroad. That is our long-term plan for growth, and it is delivering growth within days of the Budget.
However, our ambitions rightly stretch far beyond our world-class creative industries. At the last autumn statement, the Chancellor unveiled 119 growth measures which, taken together, could raise business investment by around £20 billion per year in a decade’s time. He has followed that up with a Budget designed to deliver an economic gear shift for businesses across different industries—from life sciences, to manufacturing, to AI.
There is over £270 million of combined Government and industry investment into cutting-edge automotive and aerospace R&D projects. There are grants of £92 million of joint Government and industry investment into the life sciences and up to £100 million in the Alan Turing Institute, our national institute for AI and data science, over the next five years. There are strategic investments designed to unlock growth and propel our economy forward. These long-term decisions will place us at the vanguard of these pioneering industries of the future, where we belong.
The Government recognise how hard the last few years have been on people’s and families’ finances. That is why the Prime Minister set five clear and unambiguous priorities, consistent with those of people across the country who have battled with the rising cost of living. The Prime Minister, the Chancellor and the entire Cabinet have been laser focused on those priorities, and we have made significant progress in delivering on them.
Mr Dhesi
The Secretary of State speaks about tax reliefs and long-term decisions, but thanks to this Government we now have the highest tax burden since the second world war. Will she confirm the Office for National Statistics figures showing seven consecutive quarters of falls in GDP per capita since 2022? Does she agree that that is the longest period of stagnation since the 1950s?
Lucy Frazer
The hon. Member makes a number of points. On taxes, we are sticking with the plan, which is to get taxes down. We are doing that by yet again reducing national insurance contributions. There are reductions for 29 million people and tax cuts for 27 million working people from April. He mentioned the tax-to-GDP ratio, where the UK tax system remains competitive: we have a lower tax-to-GDP ratio than any other European country in the G7. Germany’s is at 39.3%, France’s is at 46.1% and Italy’s is at 42.9%, based on 2022 figures.
Sir Edward Leigh (Gainsborough) (Con)
On tax cutting, there has always been a social contract in this country by which people pay national insurance until they become of pensionable age, and then they do not pay national insurance. Therefore, cuts in national insurance do not help pensioners, and in particular aspiring pensioners, who have put something aside. What I would like to know from the Secretary of State—I see alongside her the Exchequer Secretary to the Treasury, who said this change might take decades—is what is the long-term plan to protect pensioners? National insurance cannot just be abolished and replaced with nothing. It can only be replaced with higher tax, from which pensioners do not benefit.
Lucy Frazer
My right hon. Friend knows that we want to reduce taxes on working people. It is not right that they have double taxation. He will also know about the importance of protecting pensioners, which is why, throughout our time in government, we have protected them, with one of the key ways of doing that being through the triple lock.
I will highlight the progress made on the five priorities that the Chancellor and the Prime Minister set out some time ago. Debt is falling in line with our fiscal rules, inflation has halved and growth is a full 1.5 percentage points higher than predicted. That has only been possible because of the decisions taken by this Government, such as putting an average of £900 back into the pockets of 27 million workers in the space of four months. There is further to go, and the Budget will help us get there, creating more success stories like our creative industries across our economy and across the entire United Kingdom.
While the Labour party snipes aimlessly and endlessly from the sidelines, we are targeting funding where it is needed most. While the Labour party talks the economy and indeed the rest of the country down, we are backing working families and British businesses with tax cuts and tax breaks. While the Labour party U-turns on its U-turns, we are putting our economy on track for new jobs, new growth and new investment. The Conservative Government have a plan, and that plan is working. I commend the Budget to the House.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the shadow Health and Social Care Secretary.
The Exchequer Secretary to the Treasury (Gareth Davies)
It is my pleasure to close the second full day of debate on this year’s spring Budget. This is a Budget for long-term growth, and today we have heard a number of excellent speeches about the importance of growth in our economy.
Despite multiple forecasters suggesting that growth would be historically poor, our economy grew last year and will grow this year and every year until the end of the next period. That is because we are recovering from the global pandemic shocks of recent years far better than anyone expected. Inflation is down to 4% and is on track to hit the 2% target by the end of Q2. Mortgage rates have come down from their peak, real wages are rising and the IMF has already predicted that we will grow faster than Germany, France and Italy in the next five years.
I recognise that we are living through a level of geopolitical uncertainty and risk that, for many of us, is unprecedented in our lifetime. As my right hon. Friend the Member for Ashford (Damian Green) said, we are navigating choppy waters. As we seek to balance optimism with uncertainty, we seek to pave a path towards responsible, sustainable growth that will support families and firms in every part of this country.
To that end, this Budget has three key objectives: to reward work, to grow the economy, and to improve public sector productivity. These objectives work together, because higher growth means more opportunity, more prosperity and more funding for public services. That is why we are cutting national insurance contributions again for working people, because a simpler, fairer tax system must be at the heart of our economy, as my right hon. Friend the Member for North East Hampshire (Mr Jayawardena) has consistently championed. It will mean more money in people’s pockets, more revenue for businesses and more growth in our economy.
Just as importantly, it will send a clear and unequivocal message that work must always pay. This is a fundamental Conservative value, as is our support for families. My right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) made a powerful speech about the importance of the institution of the family, which is something on which he and I have consistently agreed.
We have heard many comments about specific industries today, and this Budget contains a suite of measures, across sectors and industries, to keep our economy growing. The hon. Member for Mitcham and Morden (Dame Siobhain McDonagh), who is sadly not in her place, mentioned life sciences, and I can tell her that, building on the £520 million of funding announced for the life science manufacturing sector in last year’s autumn statement, in this Budget we have announced £84 million of joint Government and industry investment from existing funds. The Chancellor announced in the Budget speech that AstraZeneca intends to invest £650 million in Cambridge and Liverpool to boost our life sciences sector and to support the innovation so brilliantly championed by my hon. Friend the Member for Mid Norfolk (George Freeman).
Several Members recognised the support for the creative industries. There is one thing that we do better than almost any other country, and that is making films and television. From “Pride and Prejudice” to “Paddington 2”, our creative industries make us a soft-power superpower, but they are also a key driver of economic growth that supports more than 2 million jobs domestically. That is why we have announced a film studio business rates relief to reduce bills by some 40%, a tax credit for UK independent films, and more funding for the National Film and Television School. This Government will also make the current tax reliefs for theatres, museum and gallery exhibitions and orchestras permanent from 1 April 2025. No other country provides tax reliefs for orchestras, museums and galleries as we do.
This was a Budget for the performance sector, and we were subjected to a characteristic 40-minute performance by the shadow Health Secretary, who is, sadly, no longer in his place. Sometimes people talk too much but say too little. In 40 minutes, he failed to mention that in Wales, where Labour is in charge of the NHS, people are almost twice as likely to be waiting for treatment as they are in NHS England. This Conservative Budget is delivering £2.5 billion extra for the NHS and investing £3.4 billion to unlock £30 billion of productivity gains. Investment is going into places such as the constituency of my hon. Friend the Member for North Herefordshire (Sir Bill Wiggin), who gave a brilliant speech about the diagnostic centre at Hereford County Hospital, and into maternity services, as championed consistently by my hon. Friend the Member for Truro and Falmouth (Cherilyn Mackrory).
My Lincolnshire neighbour, my right hon. Friend the Member for South Holland and The Deepings, asked how we are supporting pensioners. As my right hon. Friend the Member for Ludlow (Philip Dunne) pointed out, we are doing that through the triple lock, which we introduced several years ago. The state pension will increase by 8.5% in April and is £3,500 higher than it was in 2010. As my hon. Friend the Member for Basildon and Billericay (Mr Baron) highlighted, we are taking action to boost pension returns through the Mansion House compact and a series of other capital market reforms. My hon. Friend the Member for Southend West (Anna Firth) gave an excellent speech about supporting small business, and rightly highlighted the Chancellor’s decision to increase VAT thresholds from £85,000 to £90,000. My hon. Friend the Member for Penrith and The Border (Dr Hudson) highlighted the importance of the rural economy and spoke comprehensively about the damage the Labour party did to our economy up to 2010.
I would genuinely like to congratulate all Members from across the House on their contributions this evening, but I particularly appreciated the brass-necked wind-up from the official Opposition. Let us never forget that in 2010 Labour left office with fewer people in work, more debt to pay off and a deficit ballooning out of control. Let us contrast that with the UK in 2024, where, despite having to deal with the worst pandemic in 100 years, the worst war in mainland Europe since 1945 and the highest energy spike since the 1970s, this year we will have: inflation back to target; unemployment at record lows; wages rising; taxes on work falling; 4 million more people on a payroll since 2010; 3 million fewer people paying any income tax at all; the fastest decarbonisation in the G7; the highest state pension we have ever seen; and total departmental spending up 7% in cash terms this Parliament. The last thing this country needs now is five years’ hard Labour. For it is the Conservatives who will push people up who want to succeed, not pull them down when they do succeed; who believe in the dignity of work, which best delivers prosperity; and who know that growth cannot and should not solely come from the Floor of this House of Commons, but instead should come from the thermal insulation factory floors of Darlington and the ceramics factory floors of Stoke-on-Trent. The workers and businesses will drive our growth. This is a Budget for them, and I commend it to the House.
Ordered, That the debate be now adjourned.—(Mike Wood.)
Debate to be resumed tomorrow.